(1) The licence must be refused where 1. the funds necessary to conduct the business, in particular sufficient initial capital consisting of Common Equity Tier 1 capital under Article 50 of Regulation (EU) No 575/2013, less the item under Article 26(1), letter f, of Regulation (EU) No 575/2013, are not available domestically; the following must be available as initial capital: a) for investment managers who are not authorised to hold clients' money or securities in the course of providing financial services, and who do not deal on own account in financial instruments, an amount of at least EUR 75,000, b) for other financial services institutions that do not deal on own account in financial instruments, an amount equivalent to at least EUR 150,000, c) for financial services institutions that deal on own account in financial instruments, and for financial services institutions that provide restricted custody business within the meaning of section 1(1a), second sentence, point 12, an amount of at least EUR 750,000, and d) for CRR credit institutions, an amount equivalent to at least EUR 5 million. 2. facts exist showing that an applicant, or one of the persons designated in section 1(2), first sentence, is not reliable; 3. facts justify the assumption that the holder of a significant holding does not meet the standards to be required in the interest of ensuring the institution's sound and prudent management, in particular that one of the criteria named in section 2c(1b), first sentence, points 1 to 6, is met; 4. facts exist showing that the owner, or one of the persons designated in section 1(2), first sentence, does not have the professional qualification required to manage the institution, and no other person is designated as manager under section 25c(5) either; 4a. facts exist showing that a manager does not have sufficient time available to perform their duties; 4b. facts exist showing that a manager is in breach of the requirements of section 25c(2); 4c. the institution would, on the grant of the licence, become a subsidiary undertaking of a financial holding company within the meaning of Article 4(1), point 20, of Regulation (EU) No 575/2013, or of a mixed financial holding company within the meaning of Article 4(1), point 32, of Regulation (EU) No 575/2013, and facts justify the assumption that a person within the meaning of section 2d is not reliable or does not have the professional qualification required to manage the business of the financial holding company or mixed financial holding company; 5. a credit institution or a financial services institution authorised to hold clients' money or securities in the course of providing financial services, or authorised, on the basis of a certificate from the Federal Institute under section 4(1), point 2, of the Retirement Provision Contracts Certification Act, to offer retirement provision contracts, or an undertaking that provides exclusively financial services under section 1(1a), second sentence, point 9 or 10, does not have at least two managers who work for the institution otherwise than on a purely honorary basis; 6. the institution does not have its head office, and, insofar as it is a legal person and not a branch within the meaning of section 53, its registered office, in Germany; 7. the institution is not willing or able to establish the organisational precautions necessary for the proper conduct of the business for which it applies for a licence, in particular a proper business organisation under section 25a(1); 8. the applicant is a subsidiary undertaking of a foreign credit institution, and the foreign supervisory authority responsible for that credit institution has not consented to the establishment of the subsidiary undertaking. For investment advisers, investment brokers, contract brokers, investment managers, or financial portfolio managers who are not authorised to hold clients' money or securities in the course of providing financial services, the investment of own funds by holding positions in financial instruments in the investment book is not deemed dealing on own account for the purposes of solvency supervision.
(1a) (repealed)
(1b) With the Federal Institute's consent in the individual case, investment brokers, contract brokers, or financial portfolio managers who are not authorised to hold clients' money or securities in the course of providing financial services, and who do not deal on own account in financial instruments, may, in connection with the execution of customer orders in financial instruments, hold these financial instruments for their own account, provided 1. the positions are taken on only because the financial services institution is unable to have the order matched exactly, 2. the total market value of all such positions does not exceed 15 percent of the initial capital applicable to the institution concerned, 3. the financial services institution meets the requirements of Articles 92 to 95 and of Part Four of Regulation (EU) No 575/2013, and 4. positions of this kind are taken on only exceptionally and temporarily, and for no longer than is strictly necessary to carry out the transaction concerned.
(2) The Federal Institute may refuse the licence where facts justify the assumption that effective supervision of the institution would be impaired. This is in particular the case where 1. the institution is integrated into a group of undertakings with other persons or undertakings, or has a close link to such a group, which impairs effective supervision of the institution because of the structure of the network of holdings or inadequate economic transparency; 2. effective supervision of the institution is impaired because of the legal or administrative provisions of a third country applicable to such persons or undertakings; 3. the institution is a subsidiary undertaking of an institution with its registered office in a third country that is not effectively supervised in the state of its registered office or head office, or whose competent supervisory body is not willing to cooperate satisfactorily with the Federal Institute. The Federal Institute may also refuse the licence where, contrary to section 32(1), fifth sentence, the application does not contain sufficient particulars or documents.
(3) The licence may not be refused for reasons other than those named in subsections (1), (1a), and (2).
(4) The Federal Institute must notify an applicant for a licence, within six months of the complete documents being submitted for a licence application under section 32(1), fifth sentence, or subsection (1f), whether a licence is granted or refused. Where, within twelve months of the application being received by the Federal Institute, and despite the Federal Institute's request to complete the application within one month, sufficient particulars or documents enabling the Federal Institute to decide on the application are not available, the application must be rejected.