Bafin threatens centuries of stability with SSD reclassification
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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