BaFin, the German financial supervisory authority, has overhauled its statutes on its overall organisation and with regards to the functioning of its board of directors in order to give more powers to its president.
The new rules reinforce the president’s office in particular for the strategic management of BaFin, budget and organisational matters.
Mark Branson, the incoming new president who will take up his post on 1 August, will be solely responsible for the regulator’s budget. Up until now, the board of directors was responsible for decisions regarding the budget collectively.
According to Section 2 of the organisational statute of the financial supervisory authority (OsBaFin), the president determines the strategic direction of the regulator nationally and internationally. This also includes determining BaFin’s communication strategy.
According to the rules, the president assumes control relating to BaFin’s revewing processes, monitoring market innovations, coordination of supervision and of the task force.
The board of directors and executive directors will in future be relieved from administrative tasks, but board members will advise the president on strategic matters.
The changes come after the Wirecard scandal last year which has undermined the credibility of the financial supervisory authority – BaFin was accused of having ‘looked away’ and not acted timely and decisively to uncover issues with regards to the now-insolvent firm.
The government proposed a draft law to strengthen financial market integrity – Finanzmarktintegritätsstärkungsgesetz FISG – which came into force on 1 July, as part of an action plan to fight balance sheet fraud and strengthen control of capital and financial markets following the Wirecard case.
Finance minister Olaf Scholz appointed the new president, Mark Branson, from the Swiss Financial Market Supervisory Authority (FINMA) to replace Felix Hufeld.
BaFin’s reformed statutes create three new units under the president’s authority. One unit is responsible for the coordination of supervision and its task force. Supervisory activities will tend to look in depth into complex and innovative business models of banks, insurers and companies operating in the securities industry.
The task force, which is due to start in mid-August, is a sort of rapid deployment force to carry out investigations of companies on site if necessary. The unit will be in charge of supervisory activities and the task force.
Experts at the second new division, the Data Intelligence Unit, will analyse and evaluate large amounts of data by using quantitative analysis tools.
The transformation unit, instead, has been created to support BaFin’s further development in a dynamic market environment.