Home › Banking & Credit Institutions › KWG (EN)

KWG (EN) Not yet in force from 11 January 2027

Banking Act
KWG-EN · official text on Gesetze im Internet (German original) — English text is eucite.com's own translation

🇩🇪 Auf Deutsch lesen (original text)

This English text is a careful, terminology-researched translation prepared by eucite.com — not an official government translation. The German original linked above is the legally authoritative text.

Sections

Division 1 General Provisions

• Section 1 — Definitions; power to issue a statutory instrument
• Section 1a — Application of Directive 2013/36/EU and of Regulations (EU) No 575/2013, (EC) No 1060/2009, (EU) 2015/534, and (EU) 2017/2402 to credit and financial services institutions
• Section 1b — Unreliability of sanctioned persons
• Section 2 — Exemptions
• Section 2a — Exemptions for institutions belonging to a group and institutions belonging to institutional protection schemes
• Section 2b — Legal form
• Section 2c — Holders of significant holdings
• Section 2d — Management bodies of financial holding companies and mixed financial holding companies
• Section 2e — Exemptions for mixed financial holding companies
• Section 2f — Approval of financial holding companies and mixed financial holding companies; power to issue a statutory instrument
• Section 2g — Establishment of an intermediate EU parent undertaking for parent undertakings with a registered office in a third country; power to issue a statutory instrument
• Section 2h — Acquisition of a material participation
• Section 2i — Mergers and divisions
• Section 3 — Prohibited transactions
• Section 4 — Decision of the Federal Institute for Financial Services Supervision
• Section 5 — Electronic communication; power to issue a statutory instrument
• Section 6 — Tasks
• Section 6a — Special tasks
• Section 6b — Supervisory review and evaluation
• Section 6c — Additional own funds requirements
• Section 6d — Own funds recommendation
• Section 7 — Cooperation with the Deutsche Bundesbank
• Section 7a — Cooperation with the European Commission
• Section 7b — Cooperation with the European Banking Authority, the European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority
• Section 7c
• Section 7d — Cooperation with the European Systemic Risk Board
• Section 8 — Cooperation with other authorities
• Section 8a — Special tasks in supervision on a consolidated basis
• Section 8b — Responsibility for supervision on a consolidated basis
• Section 8c — Transfer of responsibility for the supervision of institutional groups, financial holding groups, mixed financial holding groups, and institutions belonging to a group
• Section 8d
• Section 8e — Supervisory colleges
• Section 8f — Cooperation in the supervision of significant branches
• Section 8g — Cooperation in the supervision of branches and credit institutions belonging to the same third-country group
• Section 8h — Cooperation with resolution authorities
• Section 9 — Duty of confidentiality

Division 2 Provisions for institutions, institutional groups, financial holding groups, mixed financial holding groups, and mixed holding companies

• Section 10 — Supplementary requirements for the own funds resources of institutions, institutional groups, financial holding groups, and mixed financial holding groups; power to issue a statutory instrument
• Section 10a — Determination of the own funds resources of institutional groups, financial holding groups, and mixed financial holding groups; power to issue a statutory instrument
• Section 10b — Relationship of the capital buffer requirements to other capital requirements and to the own funds recommendation
• Section 10c — Capital conservation buffer
• Section 10d — Countercyclical capital buffer
• Section 10e — Systemic risk buffer
• Section 10f — Buffer for global systemically important institutions
• Section 10g — Buffer for other systemically important institutions
• Section 10h — Interaction of the systemic risk buffer, the buffer for global systemically important institutions, and the buffer for other systemically important institutions
• Section 10i — Combined capital buffer requirement
• Section 10j — Leverage ratio buffer requirement
• Section 11 — Liquidity; power to issue a statutory instrument
• Section 12 — Potentially systemically important institutions
• Section 12a — Establishing business relationships
• Section 13 — Large exposures; power to issue a statutory instrument
• Section 13c — Intra-group transactions with mixed holding companies
• Section 13d
• Section 14 — Loans of one million or more
• Section 15 — Related-party transactions
• Section 16
• Section 17 — Liability provision
• Section 18 — Loan documents
• Section 18a — Consumer loan agreements and financing assistance for consideration; power to issue a statutory instrument
• Section 19 — Definition of loan for the purposes of section 14, and of borrower for the purposes of sections 14, 15, and 18
• Section 20 — Exceptions to the duties under section 14
• Section 21 — Definition of loan for the purposes of sections 15 to 18
• Section 22 — Power to issue a statutory instrument for loans of one million or more
• Section 22a — Undertaking maintaining the register
• Section 22b — Maintaining the refinancing register for third parties
• Section 22c — Refinancing intermediaries
• Section 22d — Refinancing register; power to issue a statutory instrument
• Section 22e — Appointment of the administrator
• Section 22f — Relationship of the administrator to the Federal Institute
• Section 22g — Duties of the administrator
• Section 22h — Relationship of the administrator to the undertaking maintaining the register and to the refinancing undertaking
• Section 22i — Remuneration of the administrator
• Section 22j — Effects of entry in the refinancing register
• Section 22k — Ending and transferring maintenance of the register
• Section 22l — Appointment of the receiver on the opening of insolvency proceedings
• Section 22m — Publication of the appointment of the receiver
• Section 22n — Duties and legal position of the receiver
• Section 22o — Appointment of the receiver where insolvency threatens
• Section 22p — (repealed)
• Section 23 — Advertising
• Section 23a — Protection scheme
• Section 24 — Notifications; power to issue a statutory instrument
• Section 24a — Establishment of a branch and provision of cross-border services in other states of the European Economic Area
• Section 24b — Participation in payment systems, securities settlement systems, and interoperable systems
• Section 24c — Automated retrieval of account information
• Section 25 — Financial information, information on risk-bearing capacity and liquidity management, refinancing plans; power to issue a statutory instrument
• Section 25a — Special organisational duties; provisions for risk takers; power to issue a statutory instrument
• Section 25b — Outsourcing of activities and processes; power to issue a statutory instrument
• Section 25c — Managers
• Section 25d — Administrative or supervisory body
• Section 25e — Requirements for holders of key functions and tied agents
• Section 25f — Special requirements for the proper business organisation of CRR credit institutions and of institutional groups, financial holding groups, and mixed financial holding groups to which a CRR credit institution belongs; power to issue a statutory instrument
• Section 25g — Compliance with the special organisational duties in cashless payment transactions
• Section 25h — Internal safeguards
• Section 25i — General duties of care in relation to e-money
• Section 25j — Point in time of identity verification
• Section 25k — Enhanced duties of care
• Section 25l — Anti-money-laundering duties for financial holding companies
• Section 25m — Prohibited transactions
• Section 26 — Submission of annual financial statements, management reports, and audit reports
• Section 26a — Disclosure by institutions
• Section 26b — Segregation of assets
• Section 26c — ESG risks in risk management
• Section 26d — ESG risk plan
• Section 27
• Section 28 — Appointment of the auditor in special cases
• Section 29 — Special duties of the auditor
• Section 30 — Determination of the content of the audit
• Section 31 — Exemptions; power to issue a statutory instrument

Division 3 Provisions on the supervision of institutions

• Section 32 — Licence
• Section 33 — Refusal of the licence
• Section 33a — Suspension or restriction of the licence for undertakings with their registered office outside the European Union
• Section 33b — Consulting the competent bodies of another state of the European Economic Area
• Section 34 — Representation and continuation of business on death
• Section 35 — Expiry and revocation of the licence
• Section 36 — Measures against managers and members of the administrative or supervisory body
• Section 36a — Prohibition of activity for natural persons
• Section 37 — Intervention against unauthorised or prohibited business
• Section 38 — Consequences of the revocation and expiry of the licence, measures during winding-up
• Section 39 — Designations "Bank" and "Bankier"
• Section 40 — Designation "Sparkasse"
• Section 41 — Exceptions
• Section 42 — Decision of the Federal Institute
• Section 43 — Register provisions
• Section 44 — Information and inspections of institutions, providers of ancillary services, financial holding companies, mixed financial holding companies, and other undertakings
• Section 44a — Cross-border information and inspections
• Section 44b — Information and inspections concerning holders of significant holdings
• Section 44c — Pursuit of unauthorised banking business and financial services
• Section 45 — Measures to ensure the lasting fulfilment of regulatory requirements
• Section 45a — Measures against financial holding companies and mixed financial holding companies
• Section 45b — Measures in the case of organisational deficiencies
• Section 45c — Special representative
• Section 46 — Measures in the event of danger
• Section 46a — Power to prohibit and order in the case of use of external ratings
• Section 46b — Insolvency application
• Section 46c — Time limits under insolvency law and questions of liability
• Section 46d — Informing the other states of the European Economic Area of reorganisation measures
• Section 46e — Insolvency proceedings in the states of the European Economic Area
• Section 46f — Informing creditors in insolvency proceedings and order of priority in insolvency
• Section 46g — Moratorium, suspension of banking and stock exchange dealings
• Section 46h — Resumption of banking and stock exchange dealings
• Section 46i — Allocation of custodied cryptographic instruments; costs of separation
• Section 47 — Power to make orders under Regulation (EU) No 1286/2014
• Section 47a — Special powers under Regulation (EU) 2022/2554
• Section 48 — Measures in the case of breaches of Regulation (EU) 2017/2402
• Section 48a — Measures in the event of a risk of excessive concentration of exposures to a central counterparty
• Section 48t — Measures to limit macroprudential or systemic risks
• Section 48u — Measures to limit macroprudential risks in the granting of loans for the construction or acquisition of residential immovable property; authorisation to issue statutory instruments
• Section 49 — Immediate enforceability
• Section 50 — Periodic penalty payments
• Section 51 — Levy and costs

Division 4 Special provisions for housing enterprises with savings facilities

• Section 51a — Requirements for the capital adequacy of housing enterprises with savings facilities
• Section 51b — Requirements for the liquidity of housing enterprises with savings facilities
• Section 51c — Other special provisions for housing enterprises with savings facilities

Division 5 Special provisions

• Section 52 — Special supervision
• Section 52a — Limitation of claims against members of governing bodies of credit institutions
• Section 53 — Branches of undertakings with their registered office abroad; authorisation to issue statutory instruments
• Section 53a — Representative offices of institutions with their registered office abroad
• Section 53b — Undertakings with their registered office in another state of the European Economic Area
• Section 53c — Special requirements for CRD third-country branches
• Section 53d — Parent undertakings with their registered office in a third country

Division 6 Special provisions for central counterparties and central securities depositories

• Section 53e — Holders of significant participating interests
• Section 53f — Supervisory colleges
• Section 53g — Financial resources endowment of central counterparties
• Section 53h — Liquidity
• Section 53i — Granting access under Articles 7 and 8 of Regulation (EU) No 648/2012
• Section 53j — Notifications; authorisation to issue statutory instruments
• Section 53k — Outsourcing of activities and processes
• Section 53l — Power to issue orders; measures in the event of organisational deficiencies
• Section 53m — Content of the authorisation application; requesting documents; dispensing with the hearing
• Section 53n — Measures to improve the financial resources and liquidity of a central counterparty authorised under Regulation (EU) No 648/2012
• Section 53o — Applications under Regulation (EU) No 909/2014; duty of confidentiality
• Section 53p — Power to issue orders for supervision under Regulation (EU) No 909/2014
• Section 53q — Ownership rights in central securities depositories

Division 6a DLT pilot regime under Regulation (EU) 2022/858

• Section 53r — Competence
• Section 53s — Exemptions from the licensing requirement under section 32
• Section 53t — DLT settlement systems and DLT trading and settlement systems
• Section 53u — Documents and applications under Regulation (EU) 2022/858
• Section 53v — Operators of organised markets

Division 7 Penal provisions, provisions on regulatory fines

• Section 54 — Prohibited business, acting without authorisation
• Section 54a — Penal provisions
• Section 55 — Breach of the duty to notify insolvency or over-indebtedness
• Section 55a — Unauthorised use of information on large loans
• Section 55b — Unauthorised disclosure of information on large loans
• Section 56 — Provisions on regulatory fines
• Section 57 — Provisions on regulatory fines
• Section 58
• Section 59 — Fines against undertakings
• Section 60 — Competent administrative authority
• Section 60a — Participation of the Federal Institute and communications in criminal matters
• Section 60b — Publication of measures
• Section 60c — Publication of measures and sanctions for infringements of Regulation (EU) No 909/2014, Regulation (EU) 2015/2365, Regulation (EU) 2016/1011, Regulation (EU) 2017/2402, or Regulation (EU) 2022/2554
• Section 60d — Publication of measures and sanctions against investment firms

Division 8 Transitional and final provisions

• Section 61 — Authorisation for existing credit institutions
• Section 62 — Transitional provisions
• Section 63
• Section 63a — Special provisions for the territory named in Article 3 of the Unification Treaty
• Section 64 — Successor undertakings of the Deutsche Bundespost
• Section 64a — Transitional provision on the Risk Reduction Act
• Section 64b — Transitional provision on section 24(1d)
• Section 64c — Transitional provisions on the Banking Directive Implementation and Bureaucracy Relief Act
• Section 64d
• Section 64e — Transitional provisions on the Sixth Act Amending the Banking Act
• Section 64f — Transitional provisions on the Fourth Financial Market Promotion Act
• Section 64g — Transitional provisions on the Financial Conglomerates Directive Implementation Act
• Section 64h — Transitional provisions on the Act Implementing the Recast Banking Directive and the Recast Capital Adequacy Directive
• Section 64i — Transitional provisions on the Financial Markets Directive Implementation Act
• Section 64j — Transitional provisions on the 2009 Annual Tax Act
• Section 64k — Transitional provision on the Act Implementing the Acquisitions Directive
• Section 64l — Transitional provision on authorisation for investment management
• Section 64m — Transitional provision on the Brexit Tax Accompanying Act
• Section 64n — Transitional provision on the Act Amending the Law on Financial Intermediaries and Investment Products
• Section 64o — Transitional provisions on the EMIR Implementing Act
• Section 64p — Transitional provision on the High-Frequency Trading Act
• Section 64q — Transitional provision on the AIFM Implementation Act
• Section 64r — Transitional provisions on the CRD IV Implementation Act
• Section 64v — Transitional provisions on the First Financial Markets Amendment Act
• Section 64w
• Section 64x — Transitional provision on the Second Financial Markets Amendment Act
• Section 64y
• Section 65 — Transitional provision on the Act Introducing Electronic Securities
• Section 65a — Transitional provision on the Financial Market Digitalisation Act