Rules for share transactions by Bafin employees tightened

D.he financial regulator Bafin, which was criticized after the Wirecard accounting scandal, bans its employees from certain private share transactions until further notice. The news agency Reuters learned from the ministry that this was due to the tightening of internal regulations already announced by Federal Finance Minister Olaf Scholz (SPD). The ban is based on the code of conduct for the Bafin board of directors and the Bundesbank.

Finance State Secretary Jörg Kukies confirmed the changes at Bafin – a consequence of conspicuous transactions with Wirecard papers before the bankruptcy of the payment processor. “This is a good and necessary step that the Bafin is already taking in anticipation of our reform plans,” said Kukies. “It is imperative that even the appearance of a conflict of interest is avoided as quickly as possible.”

Investments in funds remain possible

Specifically, bans will apply in future to financial instruments, i.e. shares, bonds and derivatives of companies that are supervised by the Bonn authority. The responsibility for one subsidiary is sufficient. The ban also applies to all EU financial companies, even if they are not under the control of Bafin. Investments in funds – including ETFs that track certain indices on the stock exchange – are still possible, but must be disclosed. Bafin employees should continue to have the opportunity to build up their assets and make provision for old age.

Wirecard went bankrupt in June after air bookings worth billions became known. The public prosecutor’s office is investigating, among other things, falsification of accounts, fraud, market manipulation and money laundering. It is one of the biggest financial scandals of the post-war period. The Bafin is accused by many experts of having largely failed in the supervision. The authority itself has admitted omissions, but also referred to a lack of powers.

Lots of private transactions with Wirecard shares

According to earlier information from the Federal Ministry of Finance, Bafin employees increasingly traded Wirecard papers in the months before the bankruptcy. In the first half of 2020, 2.4 percent of all reported private financial transactions were transactions with Wirecard shares or share derivatives. In 2018 as a whole, the proportion was 1.2 percent, and 1.7 percent in 2019. The Ministry of Finance, to which the Bafin is subordinate, initially saw nothing unusual in this. In the meantime, however, it is also revising the rules for doing business with its own employees.

The private Wirecard business of the Bafin employees became known in August through a parliamentary request from the Greens. “Stricter compliance rules for Bafin employees are a correct measure,” said the Green finance politician Danyal Bayaz now to Reuters. “Finally, Finance Minister Scholz sees a mistake – and corrects it. Without our persistent inquiries, he would still claim today that everything was in perfect order. “

Bafin’s ban on its own employees is one of the consequences of the accounting scandal. Scholz has presented a package of measures with further proposals that are currently still being agreed within the federal government. Among other things, it provides for more rights of intervention for the Bafin and a more frequent rotation of the auditors.


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