On December 28, 2022, the amended “Regulation on Notifications in Accordance with Section 2c of the German Banking Act (Kreditwesengesetz – KWG) and Section 104 of the German Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG)”, the Owner Control Regulation (Inhaberkontrollverordnung – InhKontrollV, also referred to as Holder Control Regulation by BaFin), became effective. The amendment expands the scope of the documents and declarations to be submitted, but at the same time contains partial relief for the party subject to the notification requirement.
Consideration of the changes to the KWG and the VAG
The amendments to the InhKontrollV take into account the changes to the German Banking Act and the German Insurance Supervision Act that have been made in recent years. For example, due to the amendment of Section 2c (1) of the KWG, the reporting obligations are also extended to include the unintentional acquisition as well as the unintentional increase of the shareholding. In addition, the revised version of the InhKontrollV now also incorporates the “Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector” issued by the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA).
Larger scope of documents and declarations to be submitted
The amendment has increased the overall scope of documents and declarations to be submitted. For example, pursuant to Section 8 No. 8 and No. 9 of the InhKontrollV, more comprehensive information must be submitted in the future regarding new managing directors and their secondary activities. In addition, the newly inserted Section 8a InhKontrollV imposes extended notification obligations on legal entities incorporated in a non-EU member state, sovereign wealth funds, private equity funds, and hedge funds. Finally, the newly worded Section 9 of the InhKontrollV requires notifying parties to provide additional information on their reliability.
Relief for notifying parties
Under certain conditions, notifying parties are granted relief by the revised Section 16 InhKontrollV. From now on, for example, a party required to notify does not have to provide documents and declarations again if it has already submitted them to Federal Financial Supervisory Authority (BaFin) in the past two years and the information remains unchanged. Previously, this period was limited to one year. If there is only a change from an indirect to a direct significant participation, exemption period is, if the information remains unchanged, unlimited, but a notification is still required.
The BaFinJournal announcement on the new Owner Control Regulation can be found here (German version only).
