Compliance in Frankfurt

Compliance in banking means making sure a bank follows the laws and rules that apply to it, and proving that it does. For German banks the minimum standard is set by BaFin's circular on the minimum requirements for risk management, MaRisk (in German). Its module AT 4.4.2 requires a compliance function that works toward effective procedures for keeping to the legal rules that matter for the institution, and that watches the legal environment for changes.

The wording puts the main responsibility on the business units themselves, and the compliance function coordinates and advises. Larger institutions generally set it up as an independent unit and name a compliance officer, kept apart from the markets and trading divisions. A compliance management system is the written version of all this: the policies, controls, training and reporting lines through which a bank manages its compliance risk. The compliance in banking answer in the knowledge hub explains the basics.

Frankfurt's second compliance world is the capital market. The Frankfurt Stock Exchange runs its own Trading Surveillance Office (Handelsüberwachungsstelle, HÜSt), an independent body of the exchange that records all trading and settlement data, evaluates it and investigates irregularities on Xetra, the Frankfurt floor and the Eurex derivatives exchange. When it finds a breach, it informs the exchange's management and the Exchange Supervisory Authority, and the case can go to the Sanctions Committee, with measures that range from a warning to the revocation of a listing.

Inside banks and investment firms, capital markets compliance watches for insider dealing and market manipulation, manages conflicts of interest and keeps records of employee trades, under the securities law that BaFin supervises from its Frankfurt office.

Two more duties land on most compliance desks in Frankfurt banks. Sanctions compliance means screening customers and payments against the EU lists, with the Deutsche Bundesbank as the authority for financial sanctions and freezes to report to it. Know your customer under section 10 of the Geldwäschegesetz sets five checks, from identifying the contracting party to monitoring the relationship while the account is open. For credit institutions, section 25h of the Kreditwesengesetz adds the duty to run data processing systems that flag unusual or unusually large payments, which compliance and anti-money laundering teams in Frankfurt tune and review together.

The Frankfurt School's Certified Compliance Professional program lets participants specialize in anti-money laundering or in capital markets compliance, and the school says it builds on more than 15 years of program experience. Participants join a network of compliance professionals in the financial sector along the way.

Compliance work in Frankfurt now crosses into two neighboring fields. Anti-money laundering gains a new supervisor in the city with the EU's AMLA, and AI governance becomes a compliance topic because the EU AI Act sets duties for high-risk AI such as credit scoring. For the IT side, DORA puts ICT risk and third-party contracts under the same scrutiny, and regtech in Frankfurt covers the reporting systems behind it.

Finance Loop is the meeting place for compliance officers, risk managers and the lawyers and technologists who work with them. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg.

Finance Loop supports When Banks Say 'No', a compliance seminar at the NEXTOWER in Frankfurt for compliance, treasury and legal teams on payments in challenging markets. It highlighted fAInance, a Frankfurt conference by Sopra Steria and Fraunhofer IAIS on AI governance, risk and compliance, and its partner Frankfurt Data Science ran "AI Governance. From Policies to Practice." at TechQuartier. At the Bybit EU Crypto Evening at TechQuartier, Mykolas Majauskas, Senior Director of Policy, spoke on compliance under MiCAR.

Compliance in banking means keeping to the laws, supervisory rules and internal policies that apply to a bank, and organizing that with controls, training and reporting. In Germany, MaRisk AT 4.4.2 requires a compliance function that works toward effective procedures and monitors changes in the law.

A compliance management system is the set of policies, controls, training, monitoring and reporting lines through which a firm manages its compliance risk. In a bank it covers regulatory compliance under MaRisk, anti-money laundering, sanctions, data protection and, for securities business, market conduct rules.

Compliance topics in Frankfurt run at seminars such as When Banks Say 'No', at AI governance formats like those of Frankfurt Data Science, and at conferences such as fAInance. Current dates are in the events overview and the calendar on this page.

A compliance conference brings compliance officers, lawyers, supervisors and vendors together to discuss new rules and how firms apply them. In Frankfurt, compliance topics often sit inside finance and AI conferences, for example fAInance on AI governance and compliance.