January 18, 2022

Volume XII, Number 18

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January 15, 2022

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Germany Introduces Limited-Scope Exemption for Non-European Proprietary Trading Firms Trading on German Trading Venues

On May 28, the German government introduced an amendment to the German Banking Act regarding the license requirements for “third-country” (i.e., non-European) proprietary trading firms seeking access to, or membership of, German trading venues (the Amendment).

Under the Amendments, third-country firms exclusively conducting proprietary trading as an exchange participant on a German trading venue or exchange do not require a license from the German Federal Financial Supervisory Authority (BaFin). However, significantly, this exemption does not cover any such firms that are performing the following activities:

  • market making;

  • acting as a systematic internalizer;

  • principal trading as a service to clients; or

  • high frequency trading.

Eligible third-country proprietary trading firms applying to become exchange participants will benefit from the exemption by operation of law and are not required to submit an application to BaFin.

The Amendment has been noted by the Eurex Exchange and Frankfurt Stock Exchange in their circular notices available here and here respectively.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 164
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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