Violation of WpHG obligations: Bafin imposes fine on Donner & Reuschel

The decision of May 14, 2025, is final. The reason for the sanction is a violation of the German Securities Trading Act (WpHG) dating back to 2021. Specifically, Donner & Reuschel failed to conduct the required target market review for a self-designed financial product in 2021.

Lack of examination of the target market criticized

Under the German Securities Trading Act (WpHG), investment services providers are required to regularly review the financial instruments they offer or market. In doing so, they must determine whether the previously identified target market has changed. This review includes, in particular, determining whether the company's initial assumptions regarding the needs and objectives of end clients still fit the current conditions of the target market.

This obligation is enshrined in Section 80 Paragraph 10 Sentence 1 of the German Securities Trading Act (WpHG). According to the notification, Donner & Reuschel had not considered all events that could have a significant impact on the potential risk for the specific target market.

BaFin can impose a fine for any violation of these review obligations. The legal framework provides for a maximum fine of five million euros or up to ten percent of total revenue.

A spokesperson for Donner & Reuschel confirmed in response to this editorial team's inquiry that Bafin "found a formal violation of a provision of the Securities Trading Act by the bank during a regular audit conducted several years ago. Even though this violation, which dates back to 2021, did not result in any disadvantage for the bank's customers or other persons, the law allows for the imposition of a fine." Bafin has made use of this option.

The spokesperson further explains: "It is our company's policy to comply with legal regulations without exception, and customer interests enjoy the highest priority. Therefore, we have taken measures and adjusted processes to prevent such an incident from occurring again. Follow-up audits have confirmed this accordingly."