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Special inspections at both institutions revealed shortcomings in the business organisation. The institutions’ IT systems and processes did not meet the requirements of the German Banking Act (Kreditwesengesetz – KWG). For this reason, BaFin had already increased the own funds requirements for Fondsdepot Bank GmbH and FNZ Bank (formerly ebase). A special commissioner will now monitor the institutions’ actions to promptly remedy the shortcomings in their business organisation.
In addition, there has been an increasing number of complaints to Fondsdepot Bank GmbH. The complaints were made because numerous securities orders had not been executed. Securities were often only transferred with a delay. BaFin has ordered the institution to promptly process the outstanding orders. The special commissioner is to review whether the bank has taken suitable measures to avoid a further backlog in the future.
The two institutions are planning to merge their business activities. The special commissioner will also monitor whether they observe the supervisory and consumer protection requirements during this process.
Immediately following the order, the institutions stated that they were in agreement with the measures ordered by BaFin. The notices have been final and binding since 9 April 2024.
Proper business organisation
The purpose of a proper business organisation is to ensure that credit institutions comply with the legal provisions and meet business and operational requirements. Section 25a (1) of the KWG stipulates how this is to be done. Suitable and effective risk management is a significant element of proper business organisation. This includes adequate personnel, technical and organisational resources.
The business organisation also includes complaints management. Credit institutions must establish effective and transparent complaints management strategies and procedures that allow them to promptly handle customer complaints. In addition, under section 69 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), institutions must ensure that client orders are executed or transmitted to third parties promptly.
On the basis of section 25a (2) sentence 2 of the KWG, BaFin can take action should it conclude that an institution’s business organisation has shortcomings. For example, BaFin can issue an order requiring the institution to remedy the respective shortcomings. BaFin can furthermore order that an institution’s measures to remedy the shortcomings be monitored by a special commissioner, as in the case of FNZ Bank SE and Fondsdepot Bank GmbH.
