Strengthening Disclosure Requirements for the Transparency Register
The Transparency and Financial Information Act (TraFinG) is set to be enforced from August 1, 2022, with a transition period ending on December 31, 2022, for all cases except those involving AG, SE, and KGaA, which have until March 31, 2022, to make final notifications. This move is part of the European Union's efforts to prevent money laundering, with the Transparency Register aiming to identify the economically beneficial owners of German companies.
The Transparency Register applies to legal entities under private law and registered partnerships, such as AGs, GmbHs, OHGs, KGs, GmbH & Co. KGs, registered cooperatives, and foundations. However, individual persons registered as "e.K." (registered merchant) in the commercial register are not affected by this reporting obligation. Businesses not registered in the commercial register, such as a GbR, are also exempt.
The enhanced reporting requirement for the Transparency Register will come into force starting August 1, 2022. If no specific person can be identified in an AG or GmbH, the management board or managing directors are considered as the fictitious economically beneficial owners. Companies must register on the website www.transparenzregister.de and enter all required information. Every obliged person is responsible for their registration and the accuracy of the information.
Brokerage firms should ensure they have deposited all required information with the Transparency Register. While the search results do not explicitly mention financial and insurance intermediaries in relation to these Transparency Register updates, it can be inferred that as representatives of interests who influence policy, these intermediaries are likely included within the scope of the register if they lobby or represent clients in dealings with the government.
Starting August 1, 2025, Germany updated the reporting requirements for its Transparency Register to enhance political transparency by requiring representatives of interests (including lobbyists) to register more detailed information and face harsher penalties for non-compliance. This reform is part of Germany’s overhauled Lobbying Act, which considerably broadens disclosure duties and strengthens sanctions such as fines for failure to register or disclose relevant details.
Violations of the reporting obligation can result in fines ranging from 50,000 to 100,000 euros, with higher fines for persistent violations. Therefore, financial and insurance intermediaries engaged in lobbying or similar activities must comply with the expanded reporting requirements starting August 1, 2025, which increases transparency about their activities and enhances the legal consequences of non-compliance.
Related regulatory trends (such as increased transparency and scrutiny in financial services and AI systems used for fraud detection) imply a broader regulatory environment tightening oversight in these sectors. However, for the Transparency Register itself, the primary update centers on extended disclosure requirements and enforcement applicable to all representatives of interests, including those in finance and insurance.
- Financial and insurance intermediaries, as representatives of interests who influence policy, should ensure they are compliant with the expanded reporting requirements on the Transparency Register starting August 1, 2025, considering they are likely included within the scope of the register if they lobby or represent clients in dealings with the government.
- Businesses in the finance and insurance sector, being among the representatives of interests, are expected to meet the extended disclosure requirements and face harsher penalties for non-compliance with the Transparency Register from August 1, 2025, enhancing overall transparency about their activities.
