Anyone who intends to acquire a significant holding in an institution in Germany, either alone or in concert with other persons or undertakings (proposed acquirer), or to increase an existing significant holding to the extent that the thresholds of 20%, 30% or 50% of the voting rights or capital are reached or exceeded, or that the institution comes under their control, must report this in writing without delay to the Federal Financial Supervisory Authority (BaFin) and the Deutsche Bundesbank in accordance with section 2c of the German Banking Act (Kreditwesengesetz). The aim of this provision is to ensure that supervisors are informed of changes in an institution's ownership structure in good time.
The definition of a significant holding can be found in section 1 (9) of the Banking Act, which in turn refers to Article 4 (1) number 36 of Regulation (EU) No 575/2013 (Capital Requirements Regulation, or CRR). It states the following.
"A qualifying holding means a direct or indirect holding in an undertaking which represents 10% or more of the capital or voting rights or which makes it possible to exercise a significant influence over the management of that undertaking."
When an intended acquisition is reported, the holder control procedure is triggered, meaning that the proposed acquirer is assessed by supervisors within an established time frame on the basis of the criteria listed in the Banking Act, as follows.
- Reliability of the proposed acquirer
- Reliability and professional qualifications of the future senior managers of the institution
- Financial soundness of the proposed acquirer
- Whether or not the institution will continue to be able to fulfil the relevant prudential requirements in the future
- Whether the proposed acquisition is linked to money laundering or terrorist financing
When dealing with the acquisition reports of significant holdings in CRR credit institutions, the assessment is the responsibility of the European Central Bank.
Notifications of the acquisition of qualifying holdings in investment firms within the meaning of MiFID II must be consistent with the provisions of Commission Delegated Regulation (EU) 2017/1946.
The supervisory authority can prohibit the intended acquisition or increase of the significant holding if the required documents to be submitted by the proposed acquirer are incomplete, incorrect or do not fulfil the requirements of the Holder Control Regulation, or if facts are known which warrant the assumption that the abovementioned criteria are not fulfilled.