What the law requires
§ 25b (1) KWG requires an institution to take adequate precautions against excessive additional risks, depending on the nature, scale, complexity and risk content of an outsourcing of material activities and processes. An outsourcing must not impair the orderliness of the business or the business organisation, and risk management must stay adequate and effective and include the outsourced activities. The institution must keep a register of all material and non-material outsourcings (§ 25b (1) sentence 4 KWG).
§ 25b (2) KWG says that outsourcing must not transfer the responsibility of the managing directors to the provider. The institution stays responsible for complying with the statutory provisions that apply to it.
§ 25b (3) KWG requires a written agreement that sets out the institution’s rights, including instruction and termination rights, and the provider’s corresponding duties. BaFin’s rights of information and audit, and those of the institution’s auditors, must stay secured, also for providers in other states. For a material outsourcing to a provider in a third country, the agreement must ensure that the provider names a domestic agent for service of process.
AT 9 no. 2 adds the method. The institution assesses the risks of an outsourcing in a risk analysis that covers all relevant risks, and it decides on that basis which outsourcings are material.
The circular entered into force on 30 June 2026. Where it creates additional requirements in individual cases, a transition period runs until 1 January 2027, according to BaFin’s transmittal letter.