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    Germany's Federal Financial Supervisory Authority, the Bundesanstalt für Finanzdienstleistungsaufsicht, (BaFin), imposes strict obligations on issuers and regulated firms to inform, record, and retain certain data under Germany’s Markets in Financial Instruments Regulation (MiFID II) and the German Securities Trading Act (WpHG).

     

    BaFin’s stringent record‑keeping requirements focus on a firm’s ability to reconstruct regulated activity—not merely retain records—by showing who knew what, when, and what actions were taken. 

    Key Highlights

    • BaFin assesses whether firms can reconstruct events, not simply store records. 
    • Fragmented systems create evidentiary gaps under audit conditions.
    • Record-keeping failures are often architectural rather than data-related. 
    • Linked audit trails across insider data, trades, and communications are essential for DACH-wide compliance.

    What are Core Record Keeping Expectations Under BaFin?

    BaFin’s record-keeping framework is designed to enable reconstruction of regulated activity—not simply confirm that records exist.

    Firms must demonstrate that records are:

      • Complete — providing a unified view of trading activity, insider governance, and communications, not isolated datasets
      • Retrievable — accessible on demand, without delay or manual assembly
      • Reconstructable — capable of showing who knew what, when they knew it, and what action was taken

    Under MAR supervision, insider list data must be retained for at least six years, with access history maintained throughout. Communications recording rules—aligned with MiFID II as implemented through WpHG—require firms to capture business-related voice and electronic communications intended to lead to a transaction.

       

    Recent Examples of Enforcement Under BaFin Record-Keeping Requirements

    Recent enforcement actions have made it clear that recordkeeping failures will not be tolerated. Often, administrative fines for record-keeping failures are bundled into actions for broader MiFID II or organizational breaches.

    • In February 2025, a large retail banking group in Germany was fined €4.6 million for failing to record client telephone conversations related to investment advice: BaFin enforcement notice
    • In March 2025, a large German banking group was fined €23.05 million for organisational and conduct failures, including the failure to record client telephone conversations: BaFin enforcement notice
    • In April 2025, a Frankfurt-based bank was fined €395,000 for governance and AML shortcomings, including failures related to telephone recording disclosures and record-keeping controls, as published by BaFin: BaFin enforcement notice

    BaFin can impose fines of up to €500,000–€1 million per violation for failures to record, maintain, or retain required records 

     
    Where German Firms Fall Short Under BaFin Audits 

    German firms often meet retention rules at first glance but fail BaFin audits because records cannot be retrieved and linked under supervisory request. 

    When firms manage critical areas of compliance, for example, insider lists, trade records, and employee communications, across separate systems with no unified retrieval capability, consistent gaps will be evident:

      • Audit responses that depend on manual reconciliation across platforms lead to inconsistency and missed data
      • When retention settings differ across systems, the same event may be preserved in one record and absent from another
      • Without a single linked audit trail, firms cannot demonstrate—quickly and definitively—the chain of access, decision, and communication

    For example, when reviewing a potential insider trading event, BaFin may request the insider list, related employee trades, and associated communications. When a firm is dealing with multiple siloed compliance platforms or manual processes, these records must be assembled manually across systems—often producing incomplete timelines and conflicting data points.

    This is not just a technology failure. It is a governance design failure. The data exists; the architecture to make it supervisory-ready under BaFin requirements does not.

     

    MCO Provides the  Record-Keeping Capabilities That Firms Need for BaFin Compliance

    Firms succeed under BaFin scrutiny when record‑keeping supports complete, timely reconstruction of regulated activity.

    MCO (MyComplianceOffice) meets this requirement with a single, integrated compliance platform that captures and manages records across the core areas BaFin reviews.

    MCO enables firms to manage areas of compliance including employee personal trading, communications surveillance, trade surveillance, and the management of insider information within one system, rather than across disconnected tools. MyComplianceOffice's single source of data allows compliance teams to retrieve trading activity, communications, and insider data as part of a unified process when responding to supervisory requests.

    By centralizing how compliance data is captured, managed, and reviewed, MCO helps firms demonstrate that compliance evidence is complete, retrievable, and audit‑ready—supporting the level of reconstructability BaFin expects during supervisory reviews.

    Ready to learn more? Contact us for a demo today!

     

    Related Resources

     

     

    Frequently Asked Questions

    BaFin requires firms to demonstrate the ability to reconstruct regulated activity, including what occurred, who had access to information, and what actions were taken.
    Reconstructing compliance means being able to recreate events after the fact using complete, retrievable records rather than isolated or disconnected data.
    No. BaFin distinguishes between retaining records and being able to retrieve and present them in a coherent, auditable timeline during supervisory reviews.
    BaFin commonly reviews insider information, trading activity, and related communications together to assess compliance with market abuse and supervision requirements.
    Fragmented systems make it difficult to retrieve related records together, increasing the risk that firms cannot reconstruct events clearly or consistently during an audit.
    No. BaFin’s supervisory approach often influences record‑keeping expectations across the DACH region, particularly for firms operating shared compliance architectures.
    Audit readiness depends on whether records can be retrieved, reviewed, and reconstructed efficiently under supervisory pressure—not on whether individual systems are compliant in isolation.
    BaFin evaluates whether firms can provide timely, coherent records that show access, decisions, and actions related to specific events or investigations.

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