Crypto securities registry - Submit notifications soon

The Act on the Introduction of Electronic Securities (eWpG) has introduced crypto securities register management as a new service requiring a permission under the German Banking Act. Applications for permission can be submitted to the Federal Financial Supervisory Authority (BaFin). However, it can be assumed that the procedure will take a considerable amount of time.

There is a transition period for companies that have already decided to provide crypto securities registry management:

For entities that commence crypto securities registry management within six months after the Electronic Securities Act entered into force on 10 June 2021, permission shall be deemed to have been granted on a provisional basis if they

1. submit a complete application for permission to operate a crypto securities registry to BaFin within six months of commencing its activities, and
2. give written notice of the intention to provide crypto securities registry management two months prior to commencement.

Therefore, anyone who wishes to take advantage of this transitional provision and commence the activity promptly must submit the notification to BaFin soon and commence the activity by 10 December 2021 at the latest. We recommend sending the notification to BaFin so that it is received there by Friday, 8 October 2021 at the latest. The application for permission must then be submitted within six months of commencement of activities, i.e. by 10 June 2022 at the latest.
The notification of use of the transitional regime shall contain the following information:

• appropriate proof of the funds required for the operation of the business: for the crypto securities registry, this is at least EUR 150,000. As proof, confirmation from a credit institution in the EEA can be submitted, which shows that the capital has been paid in and is free of third-party rights or is freely available.
• the identification of the directors: the name and address of the directors must be communicated in the notification.
• a viable business plan that demonstrates:
  • the nature of the transactions envisaged,
  • the organisational structure of the institution, indicating parent undertakings, financial holding companies and mixed financial holding companies within the group, and
  • the information required for the assessment of the proper business organisation of the institution pursuant to section 25a (1) KWG, including the planned internal control procedures.

Overall, the requirements of the already published draft of the electronic securities register regulation should also be taken into account.

We are happy to assist you with the notification and the application for permission.