Outsourcing - BaFin specifies reporting requirements

The German Federal Financial Supervisory Authority (BaFin) has issued four new ordinances that specify the obligations of supervised entities when reporting outsourcing.

Reporting of outsourcing

Under the Financial Market Integrity Strengthening Act (Finanzmarktintegritätsstärkungsgesetz), the obligations regarding the reporting of outsourcing have already been amended. Since 1 January 2022, all entities in the financial sector which are authorised by BaFin have been required to report to BaFin the intention, execution, material changes as well as serious incidents in connection with existing or intended (material) outsourcing. The reporting obligation generally applies to material outsourcing, but in the case of payment institutions and electronic money institutions, as well as capital management companies, the obligation applies to all outsourcing.

New notification ordinances 

In order to specify the reporting obligations and to establish the mandatory reporting method via BaFin’s reporting and publication platform (MVP portal), BaFin has issued the following ordinances, which entered into force on 29 November 2022:-

  • Fourth Ordinance Amending the Notification Ordinance Pursuant to the German Banking Act (Vierte Verordnung zur Änderung der Anzeigenverordnung nach dem Kreditwesengesetz)
  • Second Ordinance Amending the Ordinance on Notifications and Submission of Documents under the Payment Services Supervision Act (Zweite Verordnung zur Änderung der Verordnung über die Anzeigen und die Vorlage von Unterlagen nach dem Zahlungsdiensteaufsichtsgesetz)
  • Ordinance on Notifications of Insurance Undertakings and Pension Funds concerning the Outsourcing of Functions and Insurance Activities under the Insurance Supervision Act (Verordnung über Anzeigen von Versicherungsunternehmen und Pensionsfonds zur Ausgliederung von Funktionen und Versicherungstätigkeiten nach dem Versicherungsaufsichtsgesetz)
  • Ordinance on Notifications and the Submission of Documents Pursuant to Section 36 of the German Investment Code (Verordnung über die Anzeigen und die Vorlage von Unterlagen nach § 36 des Kapitalanlagegesetzbuchs)

Reporting via BaFin’s MVP portal

With the new notification ordinances, reporting in connection with existing or intended (material) outsourcing must now be made in electronic form via BaFin’s reporting and publication platform (MVP portal). BaFin has provided assistance tools regarding the reporting procedure on its website.

Subsequent reporting of outsourcing since 1 January 2022

With regard to credit institutions and financial services institutions, BaFin, together with the Bundesbank, had temporarily waived the reporting requirement until the amended notification ordinance entered into force. No reports on outsourcing were required during this transitional period. Following the amended notification ordinance, any outsourcing since 1 January 2022 must now be subsequently reported via the MVP portal until 1 March 2023.

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