Published on February 9, 2026, the Act on Promoting Germany as a Place of Business (Standortfördergesetz) aims to boost the German economy. Its objectives include facilitating company financing, strengthening the German fund market and venture capital ecosystem, and streamlining regulatory requirements. A key development from this act is the introduction of a new licensing exemption for third-country market makers, known as the Market Making Exemption (MME), which came into force on February 10, 2026.
The MME exempts third-country undertakings from needing a German license to conduct market making activities, provided they operate as a member or participant of a German stock exchange or trading venue. This exemption remains applicable until the third-country undertaking is registered with ESMA's registry of firms authorized to provide investment services or activities in the EU (as per Article 46 MiFIR).
A market maker in this sense is a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against that person’s proprietary capital at prices defined by that person. This market making definition partially overlaps with the definition used by the EU Short Selling Regulation (EU SSR), which provides for a separate market making exemption that some third-country firms are making use of already.
By contrast, the exemption does not apply to dealing on own account activities outside of a trading venue (such as systemic internalisation). According to the legislator, market makers that are members or participants of a trading venue are subject to the requirements of that trading venue and therefore indirectly supervised by the exchange regulator or BaFin, which justifies waiving the licence requirement (only) for on-exchange activities.
However, the MME does not appear to capture all on-exchange activities. ‘Simple’ dealing on own account as a service to others (Eigenhandel) does not appear to be in scope of the exemption. The provision of liquidity to the markets therefore appears to be a mandatory additional requirement for reliance on the MME. In addition, the MME does also not capture high-frequency trading activities, irrespective of whether they would otherwise qualify as market making, or not.
The MME complements the exemption for proprietary trading (Eigengeschäft) that was already introduced in 2020 (see our blogpost for an overview). The proprietary trading exemption (PTE) permits third-country firms to carry on proprietary trading as a member of a German stock exchange or participant of a German trading venue.
The MME and PTE together therefore provide for a patchwork of German licensing exemptions in the context of dealing on own account. While the MME is a welcome addition to the regulatory framework, uncertainty with respect to the scope of the exemptions continues to be a key issue for third-country firms that want to engage in trading activities in Germany.
