Undertakings with their registered office in another state of the European Economic Area

(1) A CRR credit institution with its registered office in another state of the European Economic Area may, without a licence from the supervisory authority, conduct banking business or provide financial services domestically through a branch, or through tied agents notified under section 2(10) that have their registered office or habitual residence domestically, and by way of the cross-border provision of services, including through tied agents that have their registered office or habitual residence in the home member state, where the undertaking has been authorised by the competent bodies of its home member state, the business is covered by the authorisation, and the undertaking is supervised by the competent bodies in accordance with the directives and regulations of the European Union. The first sentence applies correspondingly to CRR credit institutions that also provide payment services within the meaning of the Payment Services Supervision Act. Section 53 does not apply in this case. Section 14 of the Trade Regulation Act remains unaffected.
(1a) (repealed)
(2) Subject to the provisions in Part II, Title 3, of Regulation (EU) No 468/2014, the Federal Institute must, within two months of receiving the documents transmitted by the competent bodies of the home member state concerning the intended establishment of the branch, notify an undertaking within the meaning of subsection (1), first and second sentences, that intends to establish a branch domestically, of the notifications prescribed for its activity to the Federal Institute and the Deutsche Bundesbank, and state the conditions that apply, under subsection (3), first sentence, for exercising the activities planned by the branch, for reasons of the general good. After receiving the supervisory authority's notification, or at the latest after expiry of the period named in the first sentence, the branch may be established and commence its activity. The European Securities and Markets Authority may require access to this information under the procedure and the conditions laid down in Article 35 of Regulation (EU) No 1095/2010.
(2a) Subject to the provisions in Part II, Title 3, of Regulation (EU) No 468/2014, the Federal Institute must, within two months of receiving the documents transmitted by the competent bodies of the home member state concerning the intended commencement of the cross-border provision of services, state to an undertaking within the meaning of subsection (1), first and second sentences, that intends to become active domestically by way of the cross-border provision of services, the conditions that apply, under subsection (3), second sentence, for exercising the activities planned, for reasons of the general good. The Federal Institute publishes on its website the names of tied agents that have their registered office or habitual residence in the institution's home member state and that the institution intends to engage domestically, insofar as the competent bodies of the home member state have communicated these.
(3) The following provisions apply correspondingly to branches within the meaning of subsection (1), first and second sentences, on the basis that one or more branches of the same undertaking are deemed one credit institution or financial services institution: 1. section 3(1) and section 6(2), 1a. section 10(2), 2. (repealed) 3. sections 14, 18a, 22, and 23, 4. section 23a, where it is a CRR credit institution, 5. section 24(1), points 5 and 7, 6. sections 24b, 24c, 25, and 25a(1), sixth sentence, point 2, 7. section 25h(1) to (3), insofar as it concerns requirements to prevent money laundering and terrorist financing, and section 25h(4) and (5), 8. sections 25i to 25k, 25m, 37, 39 to 42, 43(2) and (3), section 44(1), (5), (6), (8), and (9), section 44a(1) and (2), and sections 44c, 46 to 46h, 48u, and 49, 9. section 17 of the Act Establishing the Federal Financial Supervisory Authority. For activities by way of the cross-border provision of services under subsection (1), first and second sentences, section 3(1), where it is a CRR credit institution, sections 18a, 23a, 37, 44(1), (5), (6), (8), and (9), and sections 44c, 48u(1), and 49 of this Act, and section 17 of the Act Establishing the Federal Financial Supervisory Authority, apply correspondingly. Section 23a does not apply to operators of a multilateral trading facility or organised trading facility that offer access domestically by way of the cross-border provision of services.
(4) Where the supervisory authority determines that an undertaking within the meaning of subsection (1), first and second sentences, does not comply with its duties under subsection (3) or Regulation (EU) No 575/2013, or that it is very likely that it will not comply with these obligations, the supervisory authority informs the competent bodies of the home member state without delay. Where the competent bodies of the home member state take no measures, or the supervisory authority considers the measure insufficient on the basis of the information and findings transmitted to it by the competent bodies of the home member state, it may, after informing the competent bodies of the home member state and the European Banking Authority, take the necessary measures. Where necessary, it may prohibit the conduct of new business domestically. Where the competent bodies of the home member state do not agree with the measures to be taken, they may refer the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, and request its assistance.
(5) In urgent cases, the supervisory authority may order the necessary measures before initiating the procedure provided for in subsection (4), where the home member state has not issued reorganisation measures within the meaning of Article 2 of Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding up of credit institutions (OJ L 125, 5.5.2001, p. 15). It must inform the European Commission, the European Banking Authority, and the competent bodies of the home member state of this without delay. These measures must be revoked where 1. the home member state has ordered or issued a reorganisation measure within the meaning of Article 2 of Directive 2001/24/EC, 2. the home member state has ordered or taken the necessary measures for the undertaking to comply with its obligations, 3. the European Commission, after hearing the supervisory authority, the home member state, and the European Banking Authority, has decided that the measures under the first sentence are to be revoked, or 4. the reason for their order has ceased to apply.
(6) The competent bodies of the home member state may, after previously informing the supervisory authority, themselves or through their representatives, examine at the branch the information required for banking supervisory oversight of the branch.
(7) An undertaking with its registered office in another state of the European Economic Area that conducts banking business within the meaning of section 1(1), second sentence, points 1 to 3, 5, 7 to 9, provides financial services within the meaning of section 1(1a), second sentence, points 7, 9, and 10, or payment services within the meaning of the Payment Services Supervision Act, or operates as a financial undertaking within the meaning of section 1(3), may exercise these activities through a branch or by way of the cross-border provision of services domestically, by way of derogation from section 32, without a licence from the supervisory authority, where 1. the undertaking is a subsidiary undertaking of a CRR credit institution or a joint subsidiary undertaking of several CRR credit institutions, 2. its articles of association permit these activities, 3. the parent undertaking or undertakings are authorised as a CRR credit institution in the state in which the undertaking has its registered office, 4. the activities exercised by the undertaking are also conducted in the home member state, 5. the parent undertaking or undertakings hold at least 90 percent of the voting rights of the subsidiary undertaking, 6. the parent undertaking or undertakings have demonstrated to the competent bodies of the undertaking's home member state that the undertaking is prudently managed, and, with the consent of these competent bodies of the home member state, have, where applicable, given a joint and several guarantee for the obligations entered into by the subsidiary undertaking, and 7. the undertaking is included in the supervision of the parent undertaking on a consolidated basis. The first sentence applies correspondingly to subsidiary undertakings of undertakings named in the first sentence, financial holding companies, mixed financial holding companies, and mixed holding companies that meet the conditions named above. Subsections (2) to (6) apply correspondingly.
(7a) Where the supervisory authority takes measures under subsection (4) or subsection (5), in each case also in conjunction with subsection (7), these must be reasoned in writing and notified to the institution.
(7b) A CRR credit institution with its registered office in another state of the European Economic Area may, through a branch domestically, in the course of a mandate as depositary under section 68(2) and (3), third sentence, of the Capital Investment Code, or section 80(2), point 1, and (6), first sentence, of the Capital Investment Code, carry out the activity of maintaining the crypto securities register under section 1(1a), second sentence, point 8, by way of derogation from section 32, without a licence from the supervisory authority, where the branch maintains the crypto securities register exclusively for units or shares in investment funds for which it has been mandated as depositary.
(8) The Federal Institute may apply for a domestic branch of an institution with its registered office in another state of the European Economic Area to be considered significant. Where the institution belongs to an institutional group, financial holding group, or mixed financial holding group at the head of which stands an EU parent institution, an EU parent financial holding company, or a mixed EU parent financial holding company, the Federal Institute directs the application to the body responsible for supervising the group on a consolidated basis, and otherwise to the competent body of the home member state. The application must be reasoned. A branch is, in particular, to be considered significant where 1. its market share, measured by deposits, exceeds 2 percent, 2. a suspension or cessation of the institution's activity would affect systemic liquidity and the payment, settlement, and clearing systems domestically, or 3. it has a certain size and importance, measured by the number of customers, within the banking and financial system. The Federal Institute may require from the institutions under the first sentence all particulars necessary for the assessment under the fourth sentence.
(9) Where the Federal Institute, the competent body of the home member state, and, where applicable, the body responsible for supervision on a consolidated basis have not reached a joint decision on classifying the branch as significant within two months of receiving the application, the Federal Institute itself decides, within a further two months, on classifying a branch as significant, taking into account the views and reservations of the other competent body. This decision must be communicated in writing to the other competent bodies, stating the reasons. Where the Federal Institute or a competent body in another state of the European Economic Area has, by the expiry of the two-month period under the first sentence, requested the assistance of the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the Federal Institute defers its decision under the first sentence until a decision of the European Banking Authority under Article 19(3) of Regulation (EU) No 1093/2010, and then decides in accordance with such a decision. After expiry of the two-month period, or after a joint decision has been made, the European Banking Authority may no longer be requested for assistance.
(10) In joint decisions under Article 113(1) of Directive 2013/36/EU, as amended on 27 November 2024, and in decisions that the competent authorities make, in the absence of a joint decision, under Article 113(3) of Directive 2013/36/EU, as amended on 27 November 2024, the decision of the body responsible for supervision on a consolidated basis is recognised and implemented by the Federal Institute as binding. Where the Federal Institute is responsible, at the level of the individual institution or on a sub-consolidated basis, for supervising subsidiary undertakings of an EU parent institution, an EU parent financial holding company, or a mixed EU parent financial holding company, for whose supervision on a consolidated basis it is not responsible, and, in the cases under section 8a(3), first sentence, points 1 to 4, no joint decision of all competent bodies is reached within the four-month period under section 8a(4), first sentence, the Federal Institute decides alone. In its decision, it appropriately takes into account the views and reservations of the competent body that exercises supervision on a consolidated basis over the institutional group, financial holding group, or mixed financial holding group; the decision must have regard to the risk assessment and to the views and reservations expressed by the other competent bodies within the four-month period. Where the Federal Institute or a competent body in another state of the European Economic Area has, by the expiry of the four-month period under section 8a(4), first sentence, requested the assistance of the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, the Federal Institute defers its decision under the second sentence until the decision of the European Banking Authority under Article 19(3) of Regulation (EU) No 1093/2010, and then decides in accordance with such a decision. After expiry of the four-month period, or after a joint decision has been made, the European Banking Authority may no longer be requested for assistance. The Federal Institute sends the written decision, stating the full reasoning, to the competent body that exercises supervision on a consolidated basis over the institutional group, financial holding group, or mixed financial holding group. Where the European Banking Authority was consulted, the Federal Institute takes its opinion into account and states reasons for any material deviation from it.
(11) Before the Federal Institute orders an inspection under section 44 of a branch active domestically, it must hear the competent bodies of the home member state. The information and findings obtained through the inspection must be communicated to the competent bodies of the home member state where they are important for the risk assessment of the parent institution or for the stability of the financial system of the home member state.
(12) Where the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union takes effect without a withdrawal agreement within the meaning of Article 50(2), second sentence, of the Treaty on European Union having entered into force by that point in time, the Federal Institute may, to avoid disadvantages to the functioning or stability of the financial markets, order that the provisions of subsections (1) to (9) apply correspondingly, in whole or in part, for a transitional period after the withdrawal, to undertakings with their registered office in the United Kingdom of Great Britain and Northern Ireland that, at the time of the United Kingdom of Great Britain and Northern Ireland's withdrawal from the European Union, conducted banking business or provided financial services domestically under subsection (1) through a branch or by way of the cross-border provision of services. This applies only insofar as, after the withdrawal, the undertakings conduct banking business or provide financial services closely connected with contracts existing at the time of the withdrawal. The transitional period beginning at the time of the withdrawal may not exceed a duration of 21 months. The order may also be made by way of a general order without a prior hearing and publicly announced.