Regulatory organization BaFin
BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) the Federal financial Supervisory authority of Germany, the Central body of control over financial markets and companies located in this country. BaFin replaced the three state regulatory authorities in 2002, combining in itself all the functions and powers related to the regulation and supervision of financial markets in Germany. Regulator BaFin is included in the German government, is accountable to the Federal Ministry of Finance and cooperated with the German Federal Bank. Despite the fact that BaFin is the state regulator, it does not depend on Federal budget because it is funded by membership fees of companies under the control of the organization. Under the supervision of the BaFin is over 4 thousand large financial institutions (banks and insurance companies), as well as thousands of brokers and investment funds. The main task of BaFin is the establishment of reliable and transparent activities of financial institutions.
The main functions of BaFin are:
- the creation of normal conditions for the operation of financial markets in Germany;
- issuance of licenses to companies engaged in financial activities;
- regular audit of the accounts controlled organizations;
- supervision over the banking system of Germany and the largest financial companies to assess their solvency and the fulfillment of its obligations;
- the prevention of money laundering and financing of terrorism;
- research activities aimed at identifying financial risks;
- protection of the rights of investors and consumers of financial services;
- control financial markets and prevent financial fraud;
- the application of strict administrative and disciplinary sanctions for companies not fulfilling their obligations properly or in conflict with the law, including revocation of license and liquidation of the company.
The staff of BaFin regularly conducts sudden inspection of brokers, banks and other financial institutions. There were precedents when, as a result of these inspections revealed serious violations, and the German regulator had to withdraw the licenses of several companies. Under German law, no financial institution can carry out its activities without a license of the relevant regulatory authority. To obtain a BaFin license you must pass the audit to verify the company's solvency and sufficient capital to meet their obligations.
Thus, the German regulator BaFin is a reputable and reliable regulatory body standing in the same row with the Cyprus CySEC regulator and the British FCA. BaFin license is time-tested and trustworthy traders, as a good criterion of choosing a reliable broker.
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