Investment Funds Update - Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - December 2015 - Issue 11: Germany

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BaFin Issues Announcement on Fair Treatment of Investors

BaFin issued an announcement on the fair treatment of investors with regard to information on portfolio data on 13 November 2015. According to the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”), German fund management companies are obliged to disclose data on the composition and the performance of their portfolios to investors at least once a year. However, this does not ensure compliance of certain institutional investors with their reporting obligations pursuant to Solvency II or other regulatory disclosure obligations. BaFin therefore announced that it is acceptable from a regulatory perspective for a fund management company to enter into side letters with those investors to ensure their compliance with their reporting obligations. However, BaFin claims it is not acceptable for UCITS or retail AIFs to give certain institutional investors a preferential treatment, whereas for Special AIFs, the preferential treatment of certain investors is permitted if the fund rules or the articles of association provide for the preferential treatment of certain investors (see section 26 (3) KAGB).

BaFin issues FAQ on German Act Implementing Transparency Directive Amending Directive 2013/50EU

The German provisions implementing the Transparency Directive Amending Directive 2013/50EU (“Transparenzrichtlinie-Änderungsrichtlinie-Umsetzungsgesetz“) are expected to enter into force on 27 November 2015. BaFin issued a FAQ On 28 October 2015 addressing the most important changes that the act will introduce. These changes include the reporting obligations regarding shares with voting rights held in issuers for which Germany is the home state, in particular a new mandatory disclosure form to be filed with BaFin and the issuer, new provisions on attributing voting rights and changes in filing obligations related to holdings of financial instruments.

Six Retail AIFs Registered in Germany in the Third Quarter of 2015

In the third quarter of 2015, the BaFin has approved six retail AIFs for marketing in Germany. The total fund volume amounts to 138 Million Euro, with private equity funds ranking at the top. During the first three quarters of 2015, the BaFin approved a total of 25 retail AIFs with overall equity of 704 Million Euro. View the full BaFin database.

Investment Statistics as of 30 September 2015

In November 2015, the German Investment Fund Association BVI has 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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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