Reed Smith In-depth

The German Federal Financial Supervisory Authority (BaFin) published a catalog of questions and answers on the reporting procedure regarding the notification of outsourcing. They apply both to notifications by institutions pursuant to the Reporting Regulation under the Banking Act (KWG-AnzV) and management companies pursuant to the Outsourcing Reporting Regulation under the Capital Investment Act (KAGBAuslAnzV).

In the FAQs, BaFin answers 120 questions in the categories of the submission path, completion instructions, notifications of intent and execution, material changes, serious incidents, subsequent notifications, and portfolio questions. Some of these are discussed below.

Autoren: Felicitas Scriba

Submission route

Within the next amendment to the regulation, BaFin plans to clarify the text of the regulation to the effect that the route via the auditing association should only be optional for group-affiliated credit institutions.

BaFin explains the difference between a third-party reporter and a direct reporter: a third-party reporter reports on behalf of an external company, whereas a direct reporter reports directly on behalf of their own company, e.g., as an employee of that company. In case of an erroneous registration as a third-party notifier, the application can be withdrawn, and consequently, the activation as a direct notifier can be requested.

Following the successful registration of outsourcing procedures with MVP, it is essential that each specialized procedure can be activated independently from all other procedures. The MVP Portal is a service provided by BaFin, intended for those providers who would like to meet BaFin’s notification, reporting, and transmission requirements on the basis of a simple and secure electronic data exchange system or who are required to use the Reporting and Publishing Platform.

In addition, each outsourcing must be a separate notification; a collective notification within the form is not possible. However, an exception in the form of a collective report exists for serious incidents, which can also be carried out centrally by the association for all GenoBanks. This is even welcomed by the supervisory authority and is possible because serious incidents are not reported via the MVP but are transmitted to BaFin or the Bundesbank via secure email.

Outsourcing the submission of reports to a central service provider or through a central outsourcing management in the form of a group report is not possible.