German Federal Government Passes Draft Bill to Amend Financial Market
The German federal government passed the draft bill to amend financial market laws on 6 January 2016 (“Erstes Finanzmarktnovellisierungsgesetz”, FimanoG), which will implement certain EU directives into German law. In total, 4 legislative acts introduced by the EU will be implemented in Germany: (i) the Market Abuse Directive (MAD) and (ii) the corresponding Regulation (MAR), (iii) the Central Securities Depositries Regulation (CSR) and (iv) the Regulation on key information documents for packaged retail and insurance-based investment products (PRIIPs). The new regulations aim at increasing the transparency of financial markets and the further improvement of protection of retail investors. A second law to amend financial market laws is expected to be passed in order to implement MIFID II in Germany at a later point in time.
BaFin Issues Updated Circular on Requirements for Directors and Supervisory Boards
The German financial supervisory authority BaFin published an updated circular on the requirements for directors and members of supervisory boards on 4 January 2016, in accordance with the Banking Act (“Kreditwesengesetz”, KWG) and the Investment Code (“Kapitalanlagegesetzbuch”, KAGB). The circular includes requirements on the documentation to be submitted to BaFin and takes into account the recent changes to the legislation and BaFin’s practical experience in the past.
This circular will especially have an impact on managing directors and members of supervisory boards of investment funds and German investment companies (Kapitalverwaltungsgesellschaften). The latter are for the first time subject of such circular by BaFin. In this regard BaFin specifies e.g. the definition of professional knowledge. In particular BaFin underlines that a board member has to be able to identify situations requiring further external advice.
Furthermore BaFin substantiates examples for conflict of interest, e.g. in the event that a board member has a business relationship with the investment company. For BaFin such conflicts may arise in the event that a company of a board member provides credit facilities, financial products or even insurance services to the controlled investment company or its funds.
Solvency II Entered Into Force
Solvency II entered into force in Germany on the 1 January 2016, marking a new era for insurance companies in terms of risk management. The BaFin has collected extensive information material with regard to Solvency II.
Investment Statistics as of 31 October 2015
The German Investment Fund Association BVI issued its latest investment statistics report dated 30 September 2015, giving an overview of the net assets and net sales within the German investment fund and asset management markets. The statistics are broken down by asset class and provider. They provide information on net assets and net inflows of investment funds and assets outside investment funds.
