The purpose of the contact point
In their latest journal from 15th June 2016 BaFin announced they will establish a contact point before 2nd July 2016, where so-called whistleblowers will be able to report suspected violations of supervisory law. BaFin emphasizes that the term supervisory law should be interpreted in a broad sense. It includes all laws, legal regulations, general administrative acts and other provisions as well as legal acts of the European Union for which BaFin has the mandate to ensure compliance by the companies and persons it supervises or to investigate breaches of these. The legal foundation for establishing the contact point is Section 4d of the German Financial Services Supervisory Act (Finanzdienstleistungsaufsichtsgesetz, FinDAG).
Who qualifies as “whistleblower”?
The contact point is intended to be reserved for persons who have special knowledge of a company’s internal affairs (e.g. employees or persons with another contractual or trusting relationship to the company). Consumers are asked to keep using the “consumer telephone”.
Protection of the whistleblower
Whistleblowers can make disclosures anonymously. If whistleblowers are not kept anonymous (because they chose not to be) as a rule, neither dates of the reporter nor of persons concerned by the reported shall be exposed. However, BaFin makes clear that personal data will be passed on if this should be required by law for further investigations or subsequent administrative or legal proceedings or if a court was to order the disclosure.
What does BaFin hope to achieve from the contact point?
BaFin hopes that the passing on of such information will be a valuable weapon in their arsenal in uncovering misconduct by individual persons or entire companies within the financial sector as well as counteracting the negative consequences of such misconduct.
What are the consequences of the contact point for the financial sector?
By establishing the contact point the supervisory authority tightens its net since not only BaFin employees but also “external supervisors” will have an eye on the financial sector in the future. Not only unhappy coworkers can be potential whistleblowers. The booming FinTech market and accompanying growing competition can naturally provide a certain motivation for blotting an unpleasant competitor´s copybook in front of BaFin.
Consequently, not only already regulated companies should make sure they meet all supervisory requirements (especially regarding prevention of money laundering, internal revision, risk management, clients’ money insurance, essential outsourcings, etc.). In particular, start-ups should find out about regulatory requirements for their business model beforehand, in order to assess, based on detailed legal advice, whether their business model requires a permission by the BaFin according to Section 8 para. 1 ZAG, Section 8a para. 1 ZAG or Section 32 para. 1 KWG and, if that were the case, whether there are any alternatives to applying for a permission (e.g. white-label solutions).
BaFin is going to publish further details on its contact point in its next journal in July 2016.