The total fine includes EUR 14.8 million for derivatives sales violations in Spain for events happening in 2021, EUR 4.6 million for telephone recording failures, and EUR 3.65 million for account switching service breaches.
According to BaFin, investment services enterprises must take and implement appropriate precautions through adequate organisation to ensure the proper provision of solutions and to minimise delays in efforts to identify and remedy problems in the event of disruptions to business operations. The fines stem from the bank’s delay in adequately addressing and investigating disruptions related to the sale of currency derivatives in Spain.
Following the allegation, BaFin notes that the Deutsche Bank took too long to investigate and remedy the shortcomings. The company did not make appropriate organisational arrangements to speed up the investigation of the breaches of the law and to implement measures to rectify the situation.
Besides being linked to the sale of derivatives in Spain, the violations are also connected to other two failings at the bank’s Postbank branch, highlighting compliance lapses within its operations. Postbank violated the requirement to record telephone conversations related to investment services. This rule reinstated after exceptions granted during the COVID-19 pandemic expired. When it was reinstated, the company failed to take measures to ensure the content was once again electronically recorded. The branch also faced issues with the account switching service, with numerous applications remaining unprocessed or delayed.
Additionally, the Spanish National Securities Market Commission (CNMV) also fined against the bank based on delays in resolving the compliance breaches. The compliance failures further contributed to the fines imposed by BaFin, and procedural shortcomings resulted in a portion of the fines demanded. The bank notes that it accepted the fines and is working on improving its controls and processes.
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