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Monthly Dose of Germany: February 2024
We would like to share some interesting insights into the German Legal market and recent developments as well as interesting events and publications with you. This edition of our "Monthly Dose of Germany" is presented by our Czech Desk, headed by Peter Karmann.
Cross-jurisdictional overview on the national implementation of the Digital Services Act
The Digital Services Act (DSA) is a new EU legislation that regulates online platforms and services, aiming to create a safer and more transparent digital environment for users. This overview follows the national implementation of the DSA across nine jurisdictions and discusses
- What is the DSA?
- Legislative process of the DSA
Compliance Checklist for Your Chinese Subsidiaries
With special consideration to shareholder liabilities and personal liabilities under the new Chinese Company Law
On July 1, 2024, the new Chinese Company Law will come into force.
The possible legal forms of a Chinese company have not changed and remain as limited liability company, stock corporation, and a branch of a (e.g.) European company. The new Chinese Company Law applies to all existing companies on the Chinese mainland. A total of 228 articles have been added or amended. This is the most significant change to China's Company Law since it first came into force in 1993. The new Chinese Company Law has significantly amended the rules on registered capital and created new models for accelerating capital contributions, and forfeiture of shareholder rights, which not only tightens shareholder liabilities but also the personal liabilities of members of the board of directors, of supervisors, and of the management (General Manager and/or Vice General Manager).
The following compliance checklist is directed to all European shareholders who have Chinese subsidiaries (in the forms of a Wholly European-Owned Enterprise or a Joint Venture incorporated as a limited liability), as well as to individuals who take up the position of a director in the board of directors, of supervisors or management positions of the Chinese subsidiaries.
The Secondary Credit Market Act is changing the market for non-performing loans
The Secondary Credit Market Act came into force on December 30, 2023. The requirements for proper business organization pose challenges for credit service providers.
The purpose of the Secondary Credit Market Act (KrZwMG) is to implement into German law the Secondary Credit Market Directive ((EU) 2021/2167) of November 24, 2021, which relates to the obligations of credit service providers and credit purchasers in connection with NPL transactions. It entered into force on December 30, 2023. The implementation of the Directive will lead to a significant change in the NPL market. It is likely to be controversial whether this is a phenomenon of regulatory dialectics or rather a preventive supervisory measure.
Buy Now Pay Later (BNPL): Consumer Credit Directive sets New Rules for Online Retail Financing
Buy Now Pay Later (BNPL), the easy and convenient financing of online purchases for consumers, is offered as a payment option on the websites of most providers of goods and services. To better protect consumers from over-indebtedness, the European lawmakers are revising the Consumer Credit Directive to create stricter rules that BNPL providers will have to follow in the future. These rules are expected to apply in Germany by the end of 2026 at the latest.
Read more about:
- Extension of the rules for consumer loans to all forms of BNPL
- Strict new rules for BNPL
- Conclusion
Product Governance for consumer loans, deposits, accounts and payment transactions
New Organizational Requirements for „simple” Retail Products
Product Governance requirements are familiar - from the MiFID II regulations for financial instruments. From 1 May 2024, new product governance rules will also apply to consumer loans, deposits, accounts and payment transactions.
On 30 October 2023, the German Federal Financial Supervisory Authority (BaFin) published a circular letter on the monitoring and governance of banking products in retail banking - Rundschreiben 08/2023. Based on Sec. 25a para. 1 of the German Banking Act (KWG) and 27 para. 1 of the German Payment Services Supervision Act (ZAG), BaFin is thus implementing the EBA Guidelines on product oversight and governance arrangements for retail banking products (EBA/GL/2015/18), published in 2015, into German supervisory practice.
Investment Firm Remuneration Ordinance
The final version of the German Ordinance on Remuneration Systems in Investment Firms (Wertpapier-Institutsvergütungsverordnung, WVV) was published in the Federal Law Gazette (Bundesgesetzblatt) on 11 January 2024. We summarise the key provisions of the WVV in this Client Alert.
This article covers:
- Personal scope of application of the WVV
- General requirements for the content of the remuneration systems
- General requirements for the variable remuneration of MRT
- Double proportionality principle
- Remuneration governance
- Group-wide regulations on remuneration
- Entry into force of the WVV ... and new Audit Report Ordinance
On the Modernization of German Arbitration Law
An overview of the White Paper of the Federal Ministry of Justice
On 18 April 2023, the Federal Ministry of Justice (BMJ) published a White Paper on the modernization of German arbitration law. The goal is clear: The modernization of the statutory provisions on arbitration law in the German Code of Civil Procedure (Sections 1025 et seq. ZPO) is intended to strengthen Germany as an arbitration location overall. It should become even more attractive for the settlement of commercial disputes.
New restrictions introduced to the Hungarian FDI ruleset
The regulations on foreign direct investments in Hungary that came into force at the beginning of this year now grant the Hungarian state a pre-emptive right to strategic Hungarian companies whose main or secondary activity is the operation of solar power plants. In addition, it has now been clarified that changes in shareholders directly at the level of the strategic Hungarian company trigger an investment law notification obligation.
Article by dr. Péter Göndöcz, dr. Márk Chiovini (both Deloitte Legal Hungary)
Translation by Dr. Marcell Baumann (Deloitte Legal Germany)
Read full article here.
Download report here.
"Monthly Dose" Employment Law: January 2024
Current case law in employment law
The January 2024 edition of our Monthly Dose Employment Law explains the judgments of
- the German Federal Labour Court (Bundesarbeitsgericht, BAG) on the obligation to provide information in the context of a transfer of operations on non-applicable collective agreements,
- the BAG on the termination without notice of an employee due to insulting statements in a private chat group consisting of a limited circle of work colleagues,
- the German Regional Labour Court (Landesarbeitsgericht) Hamm on the burden of presentation and burden of proof for remuneration claims arising from overtime,
- the LAG Nuremberg on the evidential value of the delivery of a notice of termination by registered, and
- the LAG Mecklenburg-Vorpommern dated 28 September 2023 (5 Sa 1/23) on the recovery of salary due to non-performance of work in the home office.
Further, we provide a summary on recent legislative developments in German Employment Law, which came into force on 1 January 2024.
Article by Dr. Lars Hinrichs, Elisa Ultsch, Theresa Bayer, Leonie Grigoleit. Dr. Theresa Kohl and Stefan Weste
Read full article here.
Transaction News
We at Deloitte Legal Germany are constantly advising on numerous complex transactions and challenging projects.
We would be delighted to explain our services portfolio to you and discuss with you how we at Deloitte Legal Germany can assist you with your projects, whether in the field of Corporate Reorganizations, M&A transactions, including carve-outs, general commercial, employment law, IT/IP or LMC/LMS. Just reach out to us!
In order for you to better understand how we have helped other clients, we would like to hereinafter showcase information on two projects that our teams have recently advised on.
Deloitte Legal advises Salzgitter Maschinenbau AG on the sale of its three businesses to AEQUITA
A Hanover-based Deloitte Legal team led by Corporate/M&A partners Dr. Harald Stang and John-Patrick Scherer has advised Salzgitter Maschinenbau AG on the sale of its three operating businesses to AEQUITA in an organized sales process.
Deloitte Legal advises City of Munich on the merger to form "Münchner Wohnen"
A Düsseldorf-based Deloitte Legal employment law team led by partner Klaus Heeke has advised the City of Munich as shareholder on the merger of GWG Städtische Wohnungsgesellschaft München mbH with the GEWOFAG Group to form "Münchner Wohnen". The merger created the largest municipal housing company in Southern Germany with effect from January 1, 2024.
Deloitte Legal Webcast Series
In our German language Deloitte Legal Update webcast series, we address current legal issues and developments that are important for corporate practice.
In our upcoming "Legal Update" webcast we will discuss:
Legal Update Webcast #5/2024 - Contract Metadata and Beyond
In this webcast, we will look at the importance of contract metadata and highlight the key aspects to focus on when developing or revising a contract metadata model.
Our Legal Management Consulting expert, Klaus Gresbrand, will provide a general introduction to the topic and then focus on the types of metadata, goals for contract metadata design, metadata strategies to improve data quality and user acceptance and the future of metadata.
Wednesday, 13 March 2024 | 11:00 - 12:00 a.m.
Register here (Webcast in German language)
You can download the presentations of our recent webcast here:
- Dealing with cyber threats: Recognize, react and secure: Helmut Brechtken, Nikola A. F. Werry and Frank Fischer took a closer look at typical / current attack scenarios; responses to cyber attacks from a legal perspective as well as insurance cover and settlement of claims
- Sound Compensation Update 2024/1: (in German language) Dr Lars Hinrichs and Elisa Ultsch took a look at the final version of German Ordinance for remuneration systems in investment firms (Wertpapier-Institutsvergütungsverordnung) and explained its regulatory changes and options for their proper implementation and provided an outlook on the expectations of the auditor(s) in the audit of remuneration systems as part of the annual audit.
- Distressed M&A - The Fine Art of the Bespoke Deal Session 1: Frank Tschentscher, Marcus C. Spangenberger and Moritz Freiherr Schenck provided us with. insights on the presuppositions, different transaction structures, corporate crisis, the stakeholders, the sales process and tactical considerations regarding distressedn M&A transactions
In our Webcast Archive, you can find a list of previous webcasts and also download the corresponding presentations.
Should you be interested in topics discussed during one of our German language webcasts, do not hesitate to contact the respective presenters – they will be delighted to provide you with additional information in the English language.
