Clearstream Europe AG, headquartered in Frankfurt am Main, must ensure that its business organization is compliant with Germany’s regulations.

This order was issued by the German Federal Financial Supervisory Authority (BaFin).

A special audit of Clearstream Holding AG revealed that Clearstream Europe AG, an operating subsidiary of Clearstream Holding AG, did not fully meet the regulatory requirements for its liquidity management and monitoring processes. The institution thus violated the relevant provisions of the German Banking Act (KWG).

BaFin subsequently ordered the rectification of these deficiencies. Clearstream Europe AG must regularly report on the progress of the rectification process to BaFin and the Deutsche Bundesbank. Despite the identified deficiencies, the overall compliant business organization of Clearstream Europe AG is ensured.

Proper business organization is intended to ensure that credit institutions comply with legal regulations and take all necessary business actions within the framework of proper business organization. How this is to be done is regulated by Section 25a Paragraph 1 of the German Banking Act (KWG). A key aspect of proper business organization is ensuring appropriate liquidity management and monitoring processes.

If BaFin concludes that an institution’s business organization has deficiencies, it can take action. The basis for this is Section 25a Paragraph 2 Sentence 2 of the KWG. BaFin can, for example, order the institution in question to remedy the deficiencies.