BaFin Orders Clearstream Europe to Remedy Liquidity Management Deficiencies

Clearstream Europe AG, which is headquartered in Frankfurt am Main, has been instructed to ensure that its business organisation fully complies with German regulatory requirements. The order was issued by Germany's financial watchdog, the Federal Financial Supervisory Authority (BaFin).

According to BaFin, a special audit conducted at Clearstream Holding AG found that its operating subsidiary, Clearstream Europe AG, did not fully meet regulatory standards relating to liquidity management and monitoring. As a result, the institution was found to be in breach of relevant provisions of the German Banking Act (KWG).

Following the findings, BaFin ordered Clearstream Europe AG to rectify the identified shortcomings. The company is required to provide regular progress reports on the remediation process to both BaFin and the Deutsche Bundesbank.

BaFin noted that, despite the deficiencies identified in the audit, Clearstream Europe AG's overall business organisation remains compliant.

Under German law, proper business organisation is intended to ensure that credit institutions comply with legal requirements and conduct their operations in an orderly manner. These obligations are set out in Section 25a(1) of the German Banking Act, with adequate liquidity management and monitoring forming a key component.

Where BaFin determines that deficiencies exist, it is authorised under Section 25a(2), sentence 2 of the KWG to take supervisory action, including ordering institutions to remedy the identified issues.