Branches of Undertakings with their Registered Office Outside the European Economic Area

(1) Where an undertaking with its registered office outside the European Union or the European Economic Area maintains a branch in Germany that provides payment services or carries on the e-money business, the branch is deemed an institution within the meaning of this Act. Where the undertaking maintains several branches in Germany, these are deemed a single institution.
(2) This Act applies to the institutions referred to in subsection (1) in accordance with subsections (3) to (6).
(3) The institution must appoint at least two natural persons resident in Germany who are authorised to manage the business and represent the undertaking for the institution's area of business. Such persons are deemed managers. They must be registered for entry in the Commercial Register. For institutions of small size and with a small volume of business, one manager is sufficient.
(4) The institution must keep separate books on the business it conducts and on the assets of the undertaking serving its business operations, and must render accounts to BaFin and the Deutsche Bundesbank. The provisions of the Commercial Code on commercial books for credit institutions and financial services institutions apply correspondingly. 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 resources, must be shown separately. The surplus of liabilities items over assets items, or the surplus of assets items over liabilities items, must be shown undivided and separately at the end of the statement of assets.
(5) The statement of assets to be drawn up under subsection (4) for the end of each financial year, together with a profit and loss account and notes, is deemed the annual financial statements. Section 340k of the Commercial Code applies correspondingly to the audit of the annual financial statements, save that the auditor is chosen and appointed by the managers. The annual financial statements of the undertaking for the same financial year must be submitted together with the annual financial statements of the institution.
(6) The own funds of the institution are deemed to be the sum of the amounts shown in the quarterly return under section 15(2) as operating capital made available to the institution by the undertaking, and as operating surpluses left with it to strengthen its own resources, less the amount of any active clearing balance.