The focal points
Our compliance activities focus on the prevention of money laundering, terrorist financing, insider trading, fraud, corruption and other criminal activities in our business environment. To cope with the ever-increasing complexity of national and international laws and regulations, NRW.BANK continuously develops its compliance risk management system and adapts it to current developments and challenges.
The relevant regulations, processes and controls are continuously adapted to the legal and regulatory framework as well as to market requirements.
Complying with market standards and acting in the interest of all stakeholders are obligations that guide NRW.BANK. Violations of the rules are vigorously pursued and punished.
Prevention of money laundering and terrorist financing
NRW.BANK expressly supports national and international efforts to combat money laundering and terrorist financing.
The Federal Republic of Germany is a member of the Financial Action Task Force (FATF) and the European Union (EU) and has enacted laws and regulations designed to implement the anti-money laundering principles of both the FATF and the EU. Section 261 of the Penal Code criminalises money laundering. The Anti Money Laundering Act (GwG) and the German Banking Act (KWG) lay down obligations for credit institutions to prevent money laundering and terrorist financing.
To comply with the provisions, a minimum standard of requirements must be met. NRW.BANK:
- appoints a Money Laundering Officer;
- establishes and verifies the identity of its customers;
- identifies the beneficial owners of its customers;
- identifies politically exposed persons among its customers;
- monitors incoming and outgoing payments;
- reports suspicious circumstances/transactions to the authorities;
- regularly trains its employees on the prevention of money laundering and terrorist financing.
Our anti-money laundering measures are regularly reviewed and expanded to reflect the latest standards and requirements.
NRW.BANK also complies with the requirements of the Wolfsberg guidelines on anti-money laundering. The Bank offers its business partners the document for download. Please make use of this offer.
Prevention of other criminal acts
NRW.BANK attaches special attention and care to the prevention of other criminal acts. The Bank pursues a business policy that is binding upon all employees and stipulates that active and passive bribery as well as other forms of corruption may neither be used nor accepted. NRW.BANK firmly rejects criminal acts such as corruption, regardless of their form.
In addition to the management’s Code of Conduct, the Bank has introduced behavioural guidelines against corruption for its employees. These guidelines alert employees to dangerous situations in which they could inadvertently become involved in corruption. Attempts at corruption must be averted immediately and reported to the superior and the Compliance Officer.
The Securities Compliance unit is responsible for compliance with securities supervisory regulations for the protection of customers, the Bank and its employees.
As part of this activity, risks that may arise from a breach of securities regulatory requirements and thus of the implemented securities compliance processes are analysed and reduced. In this context, extensive processes have been established, e.g. to prevent insider trading.
Avoiding conflicts of interest is another key task. In the interest of its customers and business partners, NRW.BANK continuously monitors potential conflicts of interest and implements measures to address them.
Conflict of interest policy
Information on the handling of conflicts of interest in the context of the business activities of the Investments & Municipal Finance Department of NRW.BANK (valid as of November 2007, as updated in September 2023)
NRW.BANK is a credit institution in the legal form of an institution under public law and has its Head Office in Düsseldorf and Münster. NRW.BANK has been commissioned by the government mission to support the federal state and its municipal corporations in meeting their public tasks, particularly in the fields of structural, economic, social and housing policy, and carry out and administer promotional measures in compliance with the benefit regulations of the European Union. NRW.BANK is competition-neutral and guided by the principle of sustainability.
NRW.BANK has a full banking licence and operates as a competition-neutral promotional bank. As a credit institution, NRW.BANK is also subject to the banking supervisory regulations of the Federal Financial Supervisory Authority (BaFin).
NRW.BANK strives to avoid conflicts of interest that may arise in the context of fulfilling its tasks. The Bank has taken a large number of precautions for this. The Managing Board of NRW.BANK is responsible for implementing the corporate governance rules (corporate organisation, corporate policy, corporate strategy, remuneration policy) that are designed to prevent conflicts of interest and monitors them regularly.
Nevertheless, potential conflicts of interest cannot be entirely ruled out and may arise in individual cases. All such cases are handled professionally by NRW.BANK, with strict attention paid to the customer’s interests. NRW.BANK ensures that conflicts of interest are disclosed to customers only if the organisational and administrative arrangements put in place are insufficient to manage the conflicts of interest. Potential conflicts of interest that cannot be avoided in spite of comprehensive control measures will be disclosed to the customers concerned prior to the signing of a contract or a consultation.
In accordance with statutory and regulatory requirements (Securities Trading Act (WpHG) and Directive on Markets in Financial Instruments in Europe (MiFID II)), you will find below detailed information on NRW.BANK’s extensive precautions for managing such conflicts of interest.
Conflicts of interest may arise between NRW.BANK, other companies of NRW.BANK, the management, the employees of NRW.BANK or other parties related to NRW.BANK and the customers of NRW.BANK or between the interests of the customers of NRW.BANK.
NRW.BANK ensures that potential conflicts of interest are identified and handled in an appropriate and efficient manner. The aim is to avoid conflicts of interest before they actually occur.
However, conflicts of interest cannot be ruled out entirely and may arise, in particular, in the provision of investment services
- when providing advice on investments in the context of municipal finance and interest rate management;
- when receiving benefits from or granting benefits to third parties;
- when benefits are granted to employees by customers or other third parties;
- from NRW.BANK’s business relationships with issuers of financial instruments, e.g. in the case of a credit relationship, the participation in issues or cooperations;
- when obtaining information that is not publicly known;
- from personal relationships between employees, the management or parties related to them and other companies or persons;
- when such persons serve on supervisory boards or advisory boards of other companies or
- when using the services of other companies of the NRW.BANK Group pursuing their own business interests.
In its capacity as an investment services enterprise, NRW.BANK must examine at least the following conflict situations:
- Financial advantage: “whether the investment services enterprise or one of the parties listed may achieve a financial advantage or avoid (reduce) a financial loss at the expense of the customer”;
- Conflicting interest: “whether the investment services enterprise or one of the parties listed has an interest in the outcome of a service provided to the customer or a transaction undertaken for the customer which is inconsistent with the customer’s interest in that outcome;”
- Incentives: “whether the investment services enterprise or one of the parties listed has a financial or other incentive to favour the interests of another customer or group of customers over the customer’s interests”;
- Competition: “whether the investment services enterprise or one of the parties listed could engage in the same business as the customer”;
- Benefits from third parties: “whether the investment services enterprise or one of the parties listed could receive or could in future receive a benefit as defined in Section 70 (2) WpHG from a third party in connection with a service”.
This is why NRW.BANK expects its employees to act diligently, honestly, lawfully and professionally at all times, to comply with market standards and, in particular, to always consider the customer’s interests. NRW.BANK’s employees are obliged to observe certain standards and behavioural duties in keeping with the Bank’s mission statement.
In addition, NRW.BANK has committed itself to transparent and responsible corporate governance as laid down in its voluntary Public Corporate Governance Code.
NRW.BANK’s integrity and quality are documented in its professional handling of potential conflicts of interest. At NRW.BANK, an independent Compliance role therefore operates under the direct responsibility of the Bank’s Managing Board. The Compliance role is responsible, among other things, for regularly monitoring the avoidance, identification and management of conflicts of interest in the business units.
The list below shows some but not necessarily all of the key measures and methods taken by NRW.BANK to avoid or resolve actual and potential conflicts of interest:
- Creation of organisational processes and instructions for action to safeguard the customer’s interests in the provision of investment advice within the framework of municipal finance and interest rate management;
- For the approval of financial instruments and any material adjustment of existing financial instruments, a process is in place to review all relevant risks and the definition of the target market before marketing or distributing them to customers. The financial instruments offered or marketed are regularly checked for suitability for the defined target market;
- Clearly defined principles apply to the conduct of business related to investment advice within the framework of municipal finance and interest rate management and the investment of own assets to ensure market-compliant settlement and equal treatment of the customers;
- NRW.BANK provides clear, comprehensive and comprehensible advice to ensure proper and professional customer service;
- The Supervisory Board and the management of NRW.BANK work towards good corporate governance in the Bank;
- Rules on the acceptance and granting of benefits and their disclosure;
- Establishing information barriers to protect confidential information by separating responsibilities and/or by physically separating individual business units;
- Keeping an insider list and a watch list. These measures serve to monitor sensitive information (insider information) and to prevent possible misuse;
- Rules governing personal transactions of NRW.BANK’s employees (“employee transactions”) and disclosure of employee transactions to the Compliance role where conflicts of interest may arise in the course of their work;
- Regular and comprehensive training of NRW.BANK’s employees.
NRW.BANK will disclose any conflicts of interest that cannot be avoided to the customers concerned before providing advice or concluding a transaction. In the case of such a disclosure to private customers, professional customers and eligible counterparties, sufficient details will be communicated.
Further details on how conflicts of interest are handled will be made available upon request.
Code of conduct and benefits
- a) Basic principles
BANK attaches great importance to public trust in its integrity. Especially the acceptance of benefits of any kind is capable of permanently impairing the objectivity and the freedom from conflicts of interest of decisions and causing considerable damage to the reputation of the Bank.
A distinctive feature of NRW.BANK is that it acts as a public law institution sponsored by the State of North Rhine-Westphalia and has a statutory promotional mission. Employees and customers of the Bank must be able to classify their behaviour correctly at all times and therefore need transparent and comprehensible rules.
b) Rules for the acceptance and granting of benefits
(1) It is not permitted to accept or grant benefits that could impair business judgement or lead to a conflict of interest. Furthermore, all actions must be refrained from which could merely give the impression of undue influence on a business partner.
(2) It is not permitted to accept or grant cash in the course of professional activities for NRW.BANK. This also applies to cash-like benefits such as vouchers or other financial and non-financial benefits.
c) Transactions by NRW.BANK employees in the financial markets
(1) Private financial transactions by NRW.BANK employees must be beyond reproach. Information obtained in an official capacity may not be used for personal gain. Employees report insider information they have received about listed companies to NRW.BANK’s Compliance Officer and do not trade in securities of the companies concerned as long as they have insider information or as trading restrictions are in place by the Compliance Officer.
(2) The members of the management bodies shall make every effort to ensure that transactions by related persons, such as spouses or partners, as well as persons living with them in the same household, as well as transactions by their minor children, comply with paragraph 1.