German Market Access for Non-EU/EEA Trading Venues – Special Licence Requirement Soon to be Abolished

At least until now, operators of stock exchanges (trading venues) situated in a non-EU/EEA country (e.g., USA, UK, Switzerland, Canada, Japan, Australia, China) have required a special BaFin authorisation if they provide trading participants domiciled in Germany with direct market access via an electronic system. However, according to a recent draft bill by the German Federal Government, this requirement will soon be abolished. This post provides a brief overview of the topic.

No General MiFID Authorisation Requirement for Onboarding German Trading Participants

Generally, operators of stock or derivatives exchanges that are not located in a member state of the European Union (EU) or the European Economic Area (EEA) (e.g., USA, UK, Switzerland, Canada, Japan, Australia, China) will not trigger the MiFID authorisation requirement under the German Stock Exchange Act (Börsengesetz, BörsG) or the German Securities Institutions Act (Wertpapierinstitutsgesetz, WpIG) when onboarding German trading participants. This holds true, at least, under the principle of reverse solicitation: where the exchange is not actively marketed in the German market, but trading participants located in Germany request trading access on their own initiative.

Special Authorisation Requirement for Non-EU/EEA Exchanges

However, the German Securities Trading Act (WpHG) provides for a special licensing regime. Operators of markets for financial instruments domiciled outside the EU/EEA that do not require a general MiFID licence must obtain a special BaFin licence if they grant German trading participants direct electronic market access. BaFin may reject an application if management is unreliable, retail participants are admitted, home-state supervision or investor protection is not equivalent, or information exchange with home authorities is not ensured. The application must include information such as details of management, proof of reliability, a business plan, organisational and control structures, a German service agent, information on home-state supervisory authorities, the instruments to be traded, and the German participants to receive access. BaFin has issued a decree with further details on the procedure.

Abolishment of Special Authorisation Requirement in Near Future

The German Federal Government now plans to abolish this special licence regime. According to the draft Standortförderungsgesetz published on 10 September 2025, the special authorisation requirement is to be repealed without replacement. The explanatory memorandum states that this amendment will facilitate access for domestic market participants to third-country trading venues and thereby to liquidity outside the EU. The rules had primarily aimed at subjecting the installation of trading screens by non-EU trading venues to a domestic licensing requirement. In light of today’s broad range of trading opportunities for German market participants in third countries, such a requirement is no longer considered appropriate. It is neither mandated by European law nor necessary to safeguard market integrity in third countries, and can therefore be abolished.

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Kronsteyn advises on German and EU stock exchange and market infrastructure law. Your contact person: Hendrik Müller-Lankow, attorney.