Bafin found deficiencies at Flatexdegiro

The financial supervisory authority has criticized the organization and management of the Frankfurt neobroker. Flatexdegiro has apparently already reacted.

The Frankfurt-based online broker Flatexdegiro had already received the results of a special audit by the financial supervisory authority Bafin in November, according to a statement from the start-up. Bafin found deficiencies in the start-up's organization and corporate governance. The company statement 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 planned dividend will probably not be paid.

According to Flatexdegiro, it has already initiated initial measures to meet the Bafin requirements. A dedicated head of risk has been appointed. There have also been organizational changes in the management of the Internal Controls, Risk Management and Reporting departments. The Supervisory Board and Management Board also decided to capitalize the company with a further 50 million euros from its own funds.

Flatexdegiro has grown strongly in recent years. According to the neobroker, the number of transactions processed increased almost sevenfold from 12 million to 91 million between 2019 and 2021. During this time, customer assets under custody tripled to around 42 billion euros. Now, Flatexdegiro is no longer a "small and non-complex" institution in the eyes of Bafin, which leads to increased regulatory requirements for the group.