Articles 88 to 96 of the Capital Requirements Directive IV (CRD IV) introduced higher corporate governance requirements as one of the lessons learned from the 2007-2008 financial market crisis. These requirements were transposed into German law in 2013 by the Act Implementing the Capital Requirements Directive (CRD IV-Umsetzungsgesetz) and in 2020 by the Risk Reduction Act (Risikoreduzierungsgesetz) for management board members in Section 25c of the Banking Act (Kreditwesengesetz) and for supervisory board members in Section 25d of the Banking Act. The requirements set out in the – at that time valid – EBA Guidelines concerning the assessment of suitability of management body members and key function holders and the EBA Guidelines on internal governance were also taken into account in this context. The revised EBA Guidelines on internal governance and the revised joint EBA and ESMA Guidelines on the assessment of the suitability of members of the management body and key function holders have been applicable since 31 December 2021.
Germany’s transposition reflects its two-tier system, in which management and supervision are exercised by two separate bodies. The requirements specified for the management board members and supervisory board members, respectively, are that they must have the necessary professional knowledge, skills and experience, be trustworthy and be able to commit sufficient time to perform their functions. Furthermore, the maximum permissible number of directorships that a management board member or supervisory board member may hold is restricted. In addition, institutions have to set up committees that support the supervisory board in performing its duties, depending on the institutions’ size, internal organisation and the nature, scope, complexity and riskiness of their activities. Moreover, significant institutions are required to set up risk, audit, nomination and remuneration committees. Significant institutions are those that have had total assets amounting to at least €15 billion over the preceding three years or are supervised directly by the ECB or are categorised as having the potential to pose a systemic threat.
Information is to be submitted using the forms annexed to guidance notices and the Reports Regulation (Anzeigenverordnung). One copy is to be filed with BaFin and another with the responsible Bundesbank regional office. BaFin and the ECB also offer the option of transmitting electronic documents that replace hard copies. BaFin informs the ECB of notifications reported by institutions deemed significant under the SSM Regulation if these are not submitted electronically.
On 15 June 2022, the ECB activated the new fit and proper (FAP) questionnaire in the IMAS portal.
Under Section 1(4) of the Regulation Concerning Reports and the Submission of Documentation under the Banking Act (the Reports Regulation – Anzeigenverordnung), as of 1 July 2023 all undertakings for which the European Central Bank is deemed to be the supervisory authority under Section 1(5) number 1 of the Banking Act (Kreditwesengesetz) shall use the ECB’s IMAS portal to report members of management bodies (management board and supervisory board members). Undertakings subject to BaFin supervision can submit reports using the templates provided under the Reports Regulation or BaFin’s MVP portal.
If undertakings use the IMAS portal or the MVP portal, there is no need for them to submit reports in parallel to the Deutsche Bundesbank and BaFin using the Reports Regulation templates.