Bafin threatens centuries of stability with SSD reclassification

By Silas Brown
08 Nov 2018

Bafin, the German financial regulator, is seriously considering reclassifying Schuldscheine from loans to securities as the market pushes towards digitisation, according to a senior German debt banker. Such a move would have far-reaching consequences on demand for the product, which has allowed the market to blossom over the past two years, writes Silas Brown.

Under the German Civil Code — the legal basis of a Schuldschein contract — the product is characterised as a loan, and thus sidesteps the complexities of MiFID II and other regulations that affect securities. 

The market enjoys lighter documentation as a consequence, which draws many borrowers to ...

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