Bafin identified deficiencies at Flatexdegiro

The financial regulator has criticized the organization and corporate governance at the Frankfurt-based neobroker. Flatexdegiro has apparently already responded.

As early as November, the Frankfurt-based online broker Flatexdegiro had received the results of a special audit by the financial supervisory authority Bafin, according to a statement from the start-up. Bafin had thus objected to deficiencies in the start-up's organization and corporate governance. The company release also reveals that day-to-day business is going worse than expected. The business forecast for the current year has been adjusted again and the considered dividend will probably not be paid.

Flatexdegiro has, according to its own information, already initiated initial measures to respond to the Bafin requirements. It had been hired its own risk chief. In addition, there have been organizational changes in the management of the Internal Controls, Risk Management and Regulatory Reporting departments. The Supervisory Board and Executive Board also decided to capitalize the company with a further 50 million euros from its own resources.

Flatexdegiro has grown strongly in recent years. Between 2019 and 2021, according to the neobroker, the number of transactions processed has increased almost sevenfold from 12 million to 91 million. Customer assets under custody tripled to about 42 billion euros during that time, it said. Now Flatexdegiro is no longer a "small and non-complex" institution in the eyes of Bafin, leading to increased regulatory requirements for the group.