Banking license

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Under bank license is understood in the banking regulatory permission to operate a financial institution or a bank-like business. In most legal systems, anyone wishing to conduct banking business requires approval from the competent authority for banking supervision . This is part of banking regulation .

General

The principle of freedom of trade has been breached for some branches of industry worldwide . Where the state considers a dangerous prognosis to be probable, the legislature moves away from the principle of freedom from permission and subjects certain economic activities to preventive state control. The state can guarantee this through a permit for the establishment of certain companies . The financial sector is also one of these branches of industry, so that the state requires a license to operate credit institutions and insurance companies .

Germany

General

The permission reservation of the Banking Act (KWG) serves to protect the functionality and integrity of the German credit and financial market and thus also its customers. This creditor protection extends beyond the safeguarding of liquidity and the investor protection mentioned in Section 6 (2) KWG to the economically important function of granting credit. Thus, precautions should also be taken against an inadequate credit supply and the unexpected withdrawal of credit. In addition, the purpose of the reservation of permission is that banking business may only be carried out by companies that are subject to constant banking supervision and that are members of a compensation scheme for German banks . It is a so-called intervention management, so that the freedom of trade protected by constitutional rights and the general freedom of action are limited and a strict interpretation of the legal provisions is required.

Grant

Banking license is the colloquial term in Germany for permission to conduct banking business. It is banking regulations distinguish between full banking license (the depository institution) and a part of banking license ( Wertpapierhandelsbank , payment institution, e-money institution or other institution). The full banking license allows all banking transactions to be carried out, while the partial license is limited to some or only one banking transaction (e.g. guarantee transactions).

According to Section 32 (1) sentence 1 KWG, a permit is required for anyone who wants to conduct banking business in Germany on a commercial basis or to an extent that requires business operations to be set up in a commercial manner. According to the text and the scheme of the system operating satisfies one of the in § 1 , para. 1, sentence 2 KWG finally enumerated banking transactions. For the commercial operation of the banking business, it is sufficient that it is geared towards making a profit and is set up for a certain period of time. Conducting a banking business does not only include the conclusion and processing of the legal transactions listed in sentence 2 of the KWG regulation, but also the essential steps leading to the conclusion of a contract. The term of operation is borrowed from general commercial law . There it extends beyond legal transactions to other commercial-advertising activities in order to ensure efficient trade supervision. Correspondingly, the regulatory purpose of Section 32 (1) Sentence 1 KWG requires, according to the BVerwG, an interpretation of the term “operating” that includes all the steps that are essential for the preparation and implementation of the specific banking business. For this purpose, the reservation of permission does not start with the conclusion of individual legal transactions, but rather covers the entire business activity including the preparation of the specific conclusion of a contract. The regulation thus contains a preventive prohibition with reservation of permission, which starts with preparatory actions for banking transactions.

to fail

According to Section 33 (1) KWG, the permit must be refused if, in particular, the initial capital is not available in sufficient quantities or if the owner or manager is unreliable or technically unsuitable. In general, approval cannot be granted if the initial capital according to Article 9 Paragraph 1 of Directive 2006/48 / EC of June 14, 2006 does not amount to at least 5 million euros. The professional qualification includes that the managers have sufficient theoretical and practical knowledge of the relevant business as well as managerial experience. A professional aptitude for the management of an institute is to be assumed regularly if three years of managerial activity at an institute of comparable size and type of business can be proven. The reliability of an owner or store manager, according to § 1. 1 of the display Regulation for KWG by authorities certificate verified. The aim of an authority clearance certificate is that decisions other than those relevant to criminal law, namely all official decisions, are entered (e.g. revocation of a commercial license). Even with the indeterminate legal term of personal reliability , trade law regulations ( § 35 GewO) can be used. In addition, it is required that at least two natural persons must act as full-time managers ("four-eyes principle"). Other reasons for not issuing a banking license are not permitted ( Section 33 (3) KWG); the BaFin needs of the application within six months of receipt of (full) application documents communicate their decision (§ 33 para. 4 Banking Act).

Automatic expiry reasons are listed in Section 35 (1) KWG. Thereafter, the license expires if it is not used within one year of granting it or the institution has been excluded from the compensation scheme in accordance with Section 11 of the Deposit Protection and Investor Compensation Act . If an institution lacks investor protection , its banking license automatically expires. If BaFin becomes aware of facts that would justify the refusal of the license, the license can be revoked (Section 35 (2) No. 3 KWG). If an institution persistently violates statutory provisions, the license can also be revoked (Section 35 (2) No. 6 KWG).

withdrawal

If banking transactions are carried out without the permit required under Section 32 KWG, Section 37 Paragraph 1 Clause 1 Alt. 1 KWG, the Federal Financial Supervisory Authority shall order the immediate cessation of business operations and the immediate settlement of these transactions vis-à-vis the company and the members of its bodies. The branches of foreign institutions are faked as domestic institutions in section 53 (1) sentence 1 KWG and are subject to a supervision modified in accordance with section 53 (2) KWG. Intervention by the supervisory authority by way of prohibition is prescribed in accordance with section 37 (1) sentence 1 KWG if the credit institution operating without the required permit does not comply with the request to cease business activities. In the case of banking transactions that are not permitted, section 37 (1) of the KWG provides for the immediate cessation of business operations. In § 3 of the Banking Act which banking transactions are illegal is determined. If a business is found that does not have a banking license in accordance with Section 32 KWG, which operates financial services or carries out prohibited transactions, BaFin is entitled to effect the immediate cessation and processing of business operations. The supervisory authority is also entitled to use a suitable liquidator ( Section 36 (1) KWG).

Designation "Bank", "Sparkasse"

According to Section 39 (1) KWG, the use of the designations “bank”, “banker” or “Sparkasse” in the company name is generally only permitted for credit institutions that have a license under Section 32 KWG. This specific regulation is intended to prevent misleading and deception in the context of the company truth about the type of business ( Section 18 (2) HGB) in commercial transactions . This designation protection is intended to protect both consumers and traders from being misled.

Austria

The banking license is called a concession in Austria. Companies that conduct banking business in accordance with Section 1 (1) BWG may only be run in the legal form of an AG, GmbH, cooperative, savings bank or SE (but not partnerships or sole traders). According to § 2 Paragraph 1a BWG, the manager is the natural person who is provided for by law or the articles of association to manage the business and to represent the KI externally. An application for the granting of the required license in accordance with Section 5 Paragraph 1 Number 1 BWG must be rejected if the applicant does not have the required legal form. The managers are personally responsible to the supervisory authority (Section 39 BWG); in the case of collegial management, this applies to all members of the management. The managers can be dismissed by the FMA due to a lack of personal reliability (Section 70 (4) No. 2 BWG).

Switzerland

The banking license is called a banking license in Switzerland. The banking license issued by the Swiss Financial Market Supervisory Authority (FINMA) is subject to the condition that both the licensing requirements of the Banking Act and the extended information obligations and minimum requirements laid down by the National Bank are met at all times. The authorization must be available prior to entry in the commercial register (Art. 3 Paragraph 1) and is only granted under the conditions listed in Art. 3 Paragraph 2 of the Banking Act. Only the actual banking activity (asset management) requires a license; In contrast, payment transactions, "commodity trading" and "trade finance" as non-core activities do not require a license. When issuing a new banking license, it is important to have a credible and valuable business plan as well as a personal guarantee for proper business operations. According to Art. 26 Banking Act, FINMA can restrict the business activities of a bank or close the bank.

United Kingdom

Issuing banking licenses in the UK is the responsibility of the FSA .

Luxembourg

In Luxembourg, the granting of banking licenses is anchored in the law of 5 April 1993 on “Authorization to conduct business activities of credit institutions and their exercise” of the Banking Act.

Individual evidence

  1. ↑ Government reasons for the draft law on the credit system of May 25, 1959, BT-Drucksache 3/1114, p. 19 under 1
  2. ↑ Government justification for the draft law on the credit system of 25 May 1959 BTDrucks 3/1114 S. 27
  3. ↑ BVerwG, judgment of September 22, 2004, Az .: BVerwG 6 C 29.03 = BVerwGE 122, 29, 48
  4. ↑ BVerwG, judgment of April 22, 2009, Az .: 8 C 2.09
  5. ↑ BVerwG, judgment of 14 July 2003, Az .: BVerwG 6 C 10.03
  6. ↑ Directive 2006/48 / EC of June 14, 2006
  7. ↑ Advertisement Ordinance on the KWG (PDF; 60 kB)
  8. ↑ Bernhard Fiedler: The special commissioner as an instrument of intervention for banking and insurance supervision . 2010, p. 196 ( limited preview in Google Book Search, accessed on March 27, 2017).
  9. ↑ BVerwG, judgment of September 22, 2004, Az .: BVerwG 6 C 29.03 = BVerwGE 122, 29, 48; P. 49.
  10. ^ Thomas Ratka, Roman Alexander Rauter: Handbook of Managing Director Liability . 2008, p. 294 ( limited preview in Google Book Search, accessed on March 27, 2017).
  11. ↑ Federal Law on Banks and Savings Banks Art. 1 para. 2 Banking Act . Retrieved March 27, 2017 (PDF; 212 kB).