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In Germany, the regulatory test is not whether a firm has employee trading rules on paper, but whether it can prove that those rules worked when it mattered.
For BaFin, employee personal trading is not a standalone approvals process; it is a test of whether trading decisions were made under the right restrictions at the right time, based on the firm’s understanding of information exposure. And an auditable control chain is not a collection of data points; it is evidence that compliance controls operated in sequence and can be reconstructed as a single timeline.
BaFin evaluates whether firms can prove controls worked in sequence, not just whether records exist
Employee trading becomes a MAR issue when inside information exposure is possible
The critical test is whether firms can demonstrate who knew what, when, and how that impacted a trade decision
Most failures are caused by timing and sequencing gaps, not missing policies
Insider lists and communications are essential to validating decisions, not just documenting them
Strong programs produce a single, connected timeline of evidence across controls
Germany’s employee trading framework is shaped by MAR and BaFin’s supervisory model.
BaFin monitors MAR compliance with its prohibitions and disclosure obligations as Germany’s supervisory authority. BaFin looks beyond whether records exist. It focuses on whether a firm can use those records to show, step by step, what actually happened and when.
BaFin’s Issuer Guidelines (Module C) set out its administrative practice on the prohibition of insider dealing and disclosure obligations, and make clear that the evidential standard is applied to real control scenarios.
Most financial services firms have policy around the management of insider information and employee trading. But the firm cannot demonstrate that a restriction was in place before a trade, or that insider status was updated when information changed, it may still fall short in a BaFin review. The standard is evidentiary, but the failure point is often operational.
Personal account dealing becomes a MAR issue as soon as an employee may have access to inside information — meaning information that is both non‑public and market‑moving in a way that creates a risk of misuse and market abuse if trading occurs while access exists.
Article 7 of MAR defines inside information broadly: precise, non‑public information that, if made public, would be likely to have a significant effect on the price of financial instruments. The practical implication is that the MAR boundary is triggered earlier than many firms expect — at the point of potential exposure.
MAR Articles 17, 18, and 19 do not operate independently:
Compliance hinges on not just whether a trade was approved — it is whether the individual’s insider status was accurate at the time, whether any restriction reflected that status, and whether the firm can prove the control operated before the trade occurred.
Compliance failure often is not about the absence of controls, but a breakdown in timing and connection.
For example, firms may:
These are sequencing failures, not documentation gaps. BaFin’s guidance on Article 18(4) MAR is clear: insider lists must be updated without undue delay when access to sensitive data changes, and each update must specify the date and time of that change.
Failure to accurately make these updates goes beyond late paperwork—it's the inability to demonstrate that restrictions and approvals were applied based on the firm’s actual understanding of access at the time a decision was made.
BaFin’s expectation is not just that records exist, but that they show how a decision unfolded in time.
For employee trading, firms must be able to show a sequence of events that prove compliance controls were in place and working: when access began, when restrictions took effect, what decision was made, and what proof shows the decision was informed accurate insider data at that moment.
Under Section 83 of the WpHG — implementing MiFID II Article 16(7) — BaFin requires firms to produce communications records in connection with investigations into potential breaches of MAR’s insider dealing prohibitions.
If these elements are not aligned in sequence, the control breaks down — even if each component exists independently.
Insider lists sit at the centre of employee trading controls because they capture exposure in time. Under Article 18(3) of MAR, the list must record not just the date but the exact time a person obtained access to inside information. Accurate insider lists provide the time‑based evidence that determines whether a restriction should have existed at the moment a trade was allowed.
Under the German Securities Trading Act (WpHG §80) and BaFin's MaComp Circular, firms must maintain records of compliance activity — the approvals, escalations, and restrictions that form the decision trail around employee trading. These records answer a different question from the insider list: not who was exposed and when, but what the firm decided to do about it and why.
Section 83 of the WpHG adds a further layer of complexity, requiring firms to capture employee communications connected to transactions. These records can also provide evidence that can corroborate that a compliance judgment was made in real time rather than reconstructed after the fact.
The strongest programmes do not treat employee trading, insider management, and recordkeeping as separate workflows.
They operate as a single control framework that:
This allows firms to answer — without manual reconstruction — when the employee became restricted, what information they were exposed to, how that affected the trade decision, and what evidence supports that sequence. If those answers are aligned, the control is defensible.
MCO (MyComplianceOffice) supports German firms by enabling employee trading controls to operate as a connected, auditable framework rather than as isolated policies or records.
Together, these capabilities help firms connect employee trading activity, insider access, and related evidence in a way that supports a defensible, time‑ordered record for supervisory review.
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