Branches of undertakings with their registered office abroad; authorisation to issue statutory instruments

(1) Where an undertaking with its registered office abroad maintains a branch domestically that conducts banking business or provides financial services, the branch is deemed a credit institution or financial services institution. Where the undertaking maintains several branches domestically, they are deemed one institution.
(2) This Act applies to the institutions designated in subsection (1) on the following basis: 1. The undertaking must appoint natural persons domiciled domestically who are authorised, for the institution's business area, to manage and represent the undertaking; a minimum number of persons to be appointed is determined under section 33(1), first sentence, point 5. Such persons are deemed managers. They must be registered for entry in the commercial register. 2. The institution is obliged to keep separate books on the business it conducts and on the undertaking's assets serving its business operation, and to render account to the Federal Institute and the Deutsche Bundesbank. The provisions of the Commercial Code on commercial books apply correspondingly in this regard. On the liabilities side of the annual statement of assets, the amount of the operating capital made available to the institution by the undertaking, and the amount of the operating surpluses left with the institution to strengthen its own funds, are to be shown separately. The excess of the liability items over the asset items, or the excess of the asset items over the liability items, is to be shown undivided and separately at the end of the statement of assets. 3. The statement of assets to be drawn up under point 2 as at the end of each financial year, together with an income statement and notes, is deemed the annual financial statements (section 26). Section 340k of the Commercial Code applies correspondingly to the audit of the annual financial statements, on the basis that the auditor is elected and appointed by the managers. The undertaking's annual financial statements for the same financial year must be submitted together with the institution's annual financial statements. 4. Section 33(1), first sentence, point 1, letter d, applies correspondingly to branches that conduct both the deposit-taking business and the lending business. The own funds of the institution are deemed to be the sum of the amounts shown in the financial information under section 25 as operating capital made available to the institution by the undertaking and operating surpluses left with it to strengthen its own funds, less the amount of any active clearing balance. In addition, capital under Articles 61 and 71 of Regulation (EU) No 575/2013, as amended from time to time, is to be attributed to the institution; Articles 25 to 91 of Regulation (EU) No 575/2013, as amended from time to time, apply on the basis that the own funds under the second sentence are deemed Common Equity Tier 1 capital. 5. The licence may also be refused where reciprocity is not ensured on the basis of intergovernmental agreements. The licence must be revoked where and insofar as the undertaking's licence to conduct banking business or provide financial services has been withdrawn by the body responsible for supervising the undertaking abroad. 6. For the purposes of applying section 36(1), the institution is deemed a legal person. 7. The institution must notify the Federal Institute and the Deutsche Bundesbank, without delay, of the opening of new branches and the closure of branches domestically.
(2a) For the purposes of the provisions of this Act that are linked to an institution being the subsidiary undertaking of an undertaking with its registered office abroad, the branch is deemed a wholly-owned subsidiary undertaking of the institution's head office with its registered office abroad.
(3) For actions relating to the business operation of a branch within the meaning of subsection (1), the place of jurisdiction of the establishment under section 21 of the Code of Civil Procedure may not be excluded by contract.
(4) Subsections (2) to (3) do not apply insofar as intergovernmental agreements to which the legislative bodies have consented in the form of a federal statute provide otherwise.
(5) Where a resolution on the dissolution of the branch has been passed, it must be registered for entry in the commercial register of the branch's court, and the notation 'in liquidation' must be used in legal transactions. The licence granted must be returned to the Federal Institute.
(6) The closure of the branch, which is likewise subject to registration, may take place only with the Federal Institute's consent. Consent must, as a rule, be refused where it has not been demonstrated that all of the branch's business has been wound up.
(7) The Federal Ministry of Finance is authorised to determine, by statutory instrument not requiring the consent of the Bundesrat, that the provisions of this Act on foreign undertakings with their registered office in another state of the European Economic Area also apply to undertakings with their registered office in a third country, insofar as this is necessary in the area of the right of establishment or the freedom to provide services, or for supervision on a consolidated basis, on the basis of agreements of the European Union with third countries.
(8) Notwithstanding the provisions of subsection (7), undertakings with their registered office in a third country that have been entered in the register under Article 48 of Regulation (EU) No 600/2014 may provide investment services within the meaning of section 2(8) and (9) of the Securities Trading Act to eligible counterparties and professional clients domestically. In this case, section 53b(1) and (3) applies correspondingly.