Own Funds; Authorisation to Issue Statutory Instruments

(1) Institutions must, in the interest of meeting their obligations, have adequate own funds; an institution's own funds may not at any time fall below the amount of the initial capital under section 12, no. 3, or below the amount of own funds resulting from the calculation under the statutory instrument to be issued under subsection (3), whichever amount is higher. Where an institution grants credit within the meaning of section 3(4), its own funds must at all times stand in an appropriate relation to the total amount of credit granted. BaFin must take the measures necessary to prevent, in cases where an institution belongs to the same group as another institution within the meaning of this Act, as an institution within the meaning of section 1(1b) of the Banking Act, as an investment firm within the meaning of the Securities Institutions Act, as a capital management company, or as an insurance undertaking, items eligible for the calculation of own funds from being used multiple times. BaFin may impose a corrective item on the own funds under the first sentence where the calculated figure for the own funds determined by the institution does not appropriately reflect the actual own funds base. The imposition must be revoked or declared void as soon as the conditions for imposing it have ceased to apply.
(2) Institutions must submit to BaFin and to the Deutsche Bundesbank, on a quarterly basis, the particulars required to review the adequacy of their own funds. The statutory instrument under subsection (3) may provide for a different reporting period in particular cases. BaFin may, in assessing the adequacy of own funds, on the basis of an evaluation of the business organisation, risk management, the loss database within the meaning of Article 324 of Regulation (EU) No 575/2013, internal control mechanisms and the institution's actual risks, require that the own funds cover correspond to an amount deviating by up to 20 per cent from the solvency principles.
(3) The Federal Ministry of Finance is authorised to issue, by statutory instrument not requiring the consent of the Bundesrat, in agreement with the Deutsche Bundesbank, more detailed provisions on the institutions' adequate own funds cover (solvency), in particular on 1. the calculation methods, 2. the content, type, scope and form of the particulars required under subsection (2), 3. reporting obligations in the event of non-compliance with own funds requirements, and 4. the permissible data media, transmission channels and data formats for data transmission. The Federal Ministry of Finance may transfer the authorisation, by statutory instrument, to BaFin, on condition that the statutory instrument is issued in agreement with the Deutsche Bundesbank. The leading associations of the institutions must be heard before the statutory instrument is issued.
(4) Institutions holding a licence under section 32(1) of the Banking Act must, in addition to the own funds requirements under this Act, also determine the own funds requirements under Articles 24 to 386 of Regulation (EU) No 575/2013, or under section 1a of the Banking Act in conjunction with Articles 24 to 386 of Regulation (EU) No 575/2013, unless they are exempted from the application of those Articles. Insofar as the requirements under this Act are higher, they must be covered by own funds under subsection (1).
(5) Insofar as the conditions for an exemption under section 2a of the Banking Act in conjunction with Article 7(1) and (2) of Regulation (EU) No 575/2013 are met, BaFin may refrain from applying subsections (1), (2) and (4) to institutions that are included in the consolidated supervision of the superordinate institution.
(6) Section 297(1), section 304(4) and section 305(5), fourth sentence, of the Stock Corporation Act do not apply where the purpose of a transfer of capital is the transfer of own funds under Article 72 of Regulation (EU) No 575/2013.