Bundesverband Alternative Investments e.V. (BAI)
The use of innovative technologies is of great importance in today's world: digital financial services have become an integral part of a future-oriented and competitive economy. The digital finance package adopted by the European Commission in 2020 aims to support the European Union in the course of the digital transformation and make Europe a stronger digital player. A particular focus is on protecting investors and customers from the risks associated with the digital transformation. The most important legal bases, current BaFin administrative practice and the various BAI statements are listed below.
Legal basis
Electronic Securities Act
The german Electronic Securities Act (eWpG) is a legal framework that regulates the issue and transfer of securities in electronic form. The introduction of the eWpG replaces conventional paper certificates with electronic registers in order to make the trading and administration of securities more efficient and secure.
The eWpG creates a legal framework for the issuance and custody of electronic securities, such as shares, bonds or investment fund units. It sets out the requirements for the issuance, transfer and custody of these electronic securities and regulates the legal status and the rights and obligations of the parties involved.
By switching to electronic securities, the eWpG enables transactions to be processed more quickly and efficiently, as securities are transferred electronically and in real time. It also reduces costs and administrative overhead compared with physical custody of paper certificates. Another important aspect of the eWpG is the protection of investors and the security of electronic securities. The law sets strict security standards for electronic custody and transfer to prevent manipulation, theft and misuse.
The new regulation contributes to the modernization of securities trading and creates a legal basis for digital transformation in the financial sector.
Regulation on crypto fund shares
The Regulation on Crypto Fund Shares regulates the legal requirements for trading and managing shares in investment funds that invest in cryptocurrencies.
Kryptowertetransferverordnung
The Crypto Transfer Regulation regulates the legal requirements for the transfer of cryptocurrencies, establishing anti-money laundering and counter-terrorist financing measures.
DORA Regulation ( EU ) 2022/2554
The Digital Operational Resilience Act is part of the package for the digitalisation of the financial sector and primarily serves to strengthen the resilience of the European financial sector. The DORA regulation is intended to create a standardised framework to regulate cyber security on the financial markets and prevent the risks associated with modern communication technologies. To this end, it places requirements on companies with regard to cyber security, ICT risks and digital operational resilience. The regulations are applicable from 17 January 2025.
DORA VO
Information by EBA
Preparation for DORA application
Factsheet ‘Dry run’ to prepare for DORA
BaFin - DORA
MiCAR
Regulation (EU) 2023/1114 on markets in crypto-assets entered into force on 29 June 2023. As part of the package for the digitalisation of the financial sector, it is intended to help create a European regulatory framework for crypto assets and promote innovation at the same time. The MiCAR differentiates between primary market activities and secondary market services. In particular, it contains transparency and disclosure obligations as well as regulations aimed at preventing market abuse in crypto assets.
MiCAR VO
Begleitende Verordnung zur Überführung des bestehenden Rechtsrahmens in Bezug auf Kryptowerte auf die Verordnung (EU) 2023/1114
BaFin - MiCAR
FinmadiG
The Financial Market Digitisation Act serves to transpose EU law into national law and to create a comprehensive set of regulations. Specifically, it implements the regulatory content of MiCAR, the DORA package and the GTVO and harmonises terminology at German level with European standards. The FinmadiG comes into force on 30 December 2024.
Bundesfinanzministerium - Gesetz über die Digitalisierung des Finanzmarktes
DLT Pilot Regime
The DLT Pilot Regime came into force on 23 March 2023 and provides a legal framework for the trading and settlement of transactions with crypto-assets. It is also part of the European Commission's "Digital Finance Package" and is initially set to run for three years.
REGULATION (EU) 2022/858
Digital Finance Package of the EU Commission
The EU Commission's Digital Finance Package combines a set of proposals and measures aimed at promoting and regulating the digital financial sector in the European Union. The package was developed by the EU Commission as part of its strategy for a digital single market and includes various initiatives to modernize and strengthen the financial sector in the age of digitalization.
A central component of the Digital Finance Package is the creation of a uniform legal framework for digital financial services in the EU. This includes proposals for harmonized regulation of cryptocurrencies, digital securities and crowdfunding platforms. The aim is to improve consumer and investor protection and ensure the integrity of the financial system while promoting innovation and competition.
In addition, the package includes measures to promote cross-border access to digital financial services. Proposals are introduced to simplify and speed up identification and verification procedures to enable consumers and businesses to use financial services seamlessly across national borders.
The Digital Finance Package also focuses on promoting innovation and fintech companies. Measures will be taken to improve access to financing opportunities for startups and small businesses and reduce regulatory hurdles. This is intended to encourage the development of innovative digital finance solutions while ensuring that they meet the required compliance and risk management standards.
The EU Commission's Digital Finance Package aims to strengthen the digital finance sector in the EU, increase consumer confidence and unlock the potential of digital innovation. It is about creating a balanced regulatory framework that ensures the protection of consumers and investors while creating space for innovation and growth. Through these measures, the EU should consolidate its position as a leading player in the global digital financial sector.
Communication of the EU commission to the DIgital Finance Package, dated by September 24, 2020
BaFin administrative practice
The Federal Financial Supervisory Authority (BaFin) has the task of creating clarity and transparency here by defining guidelines and requirements for companies and service providers that offer or use digital financial services. Protecting the integrity and security of the financial system for the benefit of consumers and investors is a top priority. Therefore, its digital finance administrative practice includes measures to combat money laundering, terrorist financing, and other illegal activities. It also sets requirements for data security, risk management and compliance to ensure the stability and integrity of the digital finance sector.
In addition, BaFin continuously monitors developments in digital finance and adapts its administrative practices accordingly to respond appropriately to new challenges and opportunities. It also cooperates with other national and international supervisory authorities as well as stakeholders to create a harmonized and coherent legal framework for digital financial services.
BaFin's digital finance publications play an essential role in creating a safe and trustworthy environment for digital financial services in Germany. It ensures that companies and service providers meet the necessary requirements to ensure the protection of consumers and investors and to strengthen trust in the digital financial sector.
General information provided by BaFin concerning company start-ups and fintech companies
Guidance notice – guidelines concerning the statutory definition of crypto custody business
