The Federal Ministry of Finance wants to set up a comprehensive compliance system for the first time to prevent employees from using inside information for private stock market transactions. That goes from a service instruction of Finance Minister Olaf Scholz (SPD) that is available to SPIEGEL. Accordingly, certain transactions are forbidden for some of the ministry employees in the future and reporting requirements will be introduced.
With the new guidelines, Scholz draws conclusions from the scandal surrounding the former Dax group Wirecard. In the course of coming to terms with the affair, it turned out that employees of the financial supervisory authority Bafin had, until shortly before the collapse, on a large scale with shares and other financial instruments on the price development had bet from Wirecard. Even employees from departments responsible for trade surveillance gambled with company papers - a clear conflict of interest. Basically, such transactions were not prohibited to Bafin employees, but an investigation is now underway against an employee on suspicion of insider trading.
So far, the federal ministries have practically no rules as to whether and under what conditions employees are allowed to trade on the stock exchange. Scholz now wants to change that. This is the only way to avoid "giving the public the impression that BMF employees could gain advantages over other private investors in financial transactions because of their position and knowledge," says the preamble to the new guidelines.
However, the rules initially only apply to areas and employees who have “a special responsibility and a position of trust” because they deal with topics relevant to the financial market and thus have access to sensitive, possibly price-sensitive information. Such employees of the so-called category one are not allowed to trade in stocks, bonds or derivatives - for example warrants - of "companies in the financial and real economy" if there is a connection to their work in the ministry. There are some exceptions, such as when employees inherit or receive shares.
"Other ministries have to follow suit"
In any case, employees in category one must report their private financial transactions - unless they are prohibited - to the ministry's new compliance office within ten days of the end of a calendar month. In addition, they are obliged to submit a declaration on January 31st of each year that their information on the stock exchange transactions was complete. The compliance department monitors whether the rules are being adhered to.
The new rules have been in effect since March 31st. According to the instructions, the guidelines are to be extended to other areas of the ministry at a later date.
In the past few months, the opposition had increased the pressure with several small inquiries to draw conclusions from the Wirecard scandal in the ministries themselves. The FDP had applied for compliance rules for the ministries to be added to the law to strengthen financial market integrity (FISG). The FISG is currently going through the legislative process.
The FDP financial expert Frank Schäffler sees himself confirmed by the new guidelines of the Ministry of Finance. "The new compliance rules in the BMF were long overdue," Schäffler told SPIEGEL. However, the Ministry remains behind the possibilities, a duplicate procedure, in the course of which every stock exchange transaction of an employee is automatically recorded, would create more security from his point of view. "The reform in the BMF can only be the beginning," continues Schäffler. All other ministries and relevant federal authorities would have to follow suit.