BaFin Hands flatexDEGIRO €1 Million Fine Over Delayed Market Disclosure

Key Takeaways

• €1 Million Fine Imposed: Federal Financial Supervisory Authority fined flatexDEGIRO €1,000,000 for breaching disclosure obligations under the Market Abuse Regulation.
• Delayed Inside Information Disclosure: The company failed at the end of 2022 to promptly disclose inside information related to a special inspection at flatexDEGIRO Bank AG.
• Inspection Revealed Organizational Shortcomings: The findings, identified under the German Banking Act, pointed to deficiencies in proper business organization.
• Improper Disclosure Method: Instead of issuing a required ad hoc disclosure, the information was published late and only via a press release.

Deep Dive

Germany’s financial regulator has fined flatexDEGIRO SE €1,000,000 for failing to promptly disclose inside information tied to regulatory findings at its banking subsidiary.

The penalty centers on events dating back to the end of 2022, when flatexDEGIRO did not immediately inform the market about the outcome of a special inspection at flatexDEGIRO Bank. That inspection, carried out under section 44 of the German Banking Act, had identified shortcomings in the company’s business organization.

BaFin determined that those findings amounted to inside information under the Market Abuse Regulation and should have been disclosed to the public without delay. Instead, the company released the information later, and only in the form of a press release rather than through the formal ad hoc disclosure required by law.

The distinction matters. Under MAR, companies like flatexDEGIRO that are domiciled in Germany and have financial instruments traded on an organized market must publish inside information as soon as possible using an ad hoc disclosure. The rule is designed to ensure that all investors receive material information at the same time, rather than allowing gaps that could advantage insiders or distort decision-making.

Inside information, in this context, refers to non-public details that could significantly affect the price of a financial instrument if disclosed. The obligation to publish it promptly is meant to protect both market integrity and investor confidence, ensuring that decisions are made on a complete and timely understanding of relevant developments.

BaFin said the company’s delay in issuing the disclosure, and its reliance on a press release instead, fell short of those requirements and constituted a breach of Article 17(1) of MAR.

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