BaFin Issues Circulars on Refinancing Register Administrators and Mortgage Bank Trustees

Key Takeaways

• BaFin has published Circulars 10/2026 (BA) and 11/2026 (BA), setting out its administrative practice and expectations for appointing refinancing register administrators under the KWG and trustees under the PfandBG, including their deputies.
• Institutions must demonstrate that candidates are independent, reliable, and sufficiently expert.
• Compliance teams at covered institutions should review their appointment files and processes against these expectations.

Deep Dive

BaFin has published Circulars 10/2026 (BA) and 11/2026 (BA), setting out its administrative practice and expectations for appointing refinancing register administrators under the KWG and trustees under the PfandBG, including their deputies. Institutions must demonstrate that candidates are independent, reliable, and sufficiently expert. Compliance teams at covered institutions should review their appointment files and processes against these expectations.

The circulars consolidate BaFin's supervisory expectations for two key functions in the covered bond and refinancing framework. Circular 10/2026 (BA) covers administrators of the refinancing register under Sections 22e et seq. KWG. Circular 11/2026 (BA) covers trustees at mortgage banks under Sections 7 et seq. PfandBG. Both apply to deputies as well as principal appointees. For compliance teams, this means BaFin's approach to vetting these roles is now documented and should be treated as the working standard for appointment and extension applications.

The central requirement is that institutions must demonstrate to BaFin that each proposed individual is independent, reliable, and has sufficient expertise. The circulars specify the supporting documents BaFin expects: CVs, certificates of good conduct, declarations of no criminal record, declarations of independence, and extracts from the central business register. They also explain BaFin's administrative procedures, the remuneration of its officials, and the fees associated with appointments. Circular 11/2026 (BA) replaces BaFin's earlier FAQs on the appointment and extension of trustees and deputies under the PfandBG, so any internal procedures built on those FAQs are now outdated.

The press release does not set a compliance deadline or transition period. The circulars are presented as a statement of existing administrative practice rather than new legal obligations. Even so, institutions should assume that BaFin will apply these expectations to new appointments, extensions, and deputy designations from publication (September 14, 2026). Teams should confirm the circulars' full text for any effective-date or transitional details.

Recommended actions: (1) identify all current and planned refinancing register administrator and trustee roles, including deputies, and map upcoming appointment or extension dates; (2) update internal checklists and templates to match the documentation list and independence criteria; (3) retire references to the superseded trustee FAQs; (4) assess existing appointees' independence, such as conflicts arising from other roles or relationships with the institution; and (5) budget for BaFin fees and remuneration costs tied to appointments.

The risk impact is moderate and mainly procedural. Incomplete or inadequately supported submissions could delay appointments or extensions. A lapse in a required function could disrupt covered bond issuance or the integrity of cover assets. Weak independence assessments could also draw supervisory scrutiny. Institutions that prepare complete files early should face limited disruption.

Source: Federal Financial Supervisory Authority