Investment Funds Update - Europe: Key legal and regulatory updates for the funds industry from the primary European asset management centres and fund domiciles: GERMANY

by Dechert LLP

Germany Proposes Draft Law to Amend Stock Corporation Act

The German Federal Government has proposed a draft law to amend the Stock Corporation Act (Aktiengesetz - AktG) on 7 January 2015. Amongst other things, the proposal includes the following:

  • Non listed German stock corporations may only issue bearer shares (Inhaberaktien) if effective share certificates are excluded, allow the issuing and the share certificate (Sammelurkunde) is deposited with a regulated central securities depository.
  • Stock corporations may issue convertible bonds converting debt capital into equity. 
  • In order to meet regulatory capital requirements more easily, stock corporations may issue preference shares (Vorzugsaktien) without a right for subsequent payment regarding unpaid dividends.

Read the proposed legislation in German (PDF)

German Investment Fund Statistics

In February 2015, the German Investment Fund Association BVI has issued its latest investment statistics report as of 31 December 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.

View the full statistics (PDF)

BaFin Guidance Notice on (Annex IV) Reporting for AIFs and AIFMs 

On 4 February 2015, the German Financial Supervisory Authority, BaFin, has issued an update to its Guidance Notice on reporting obligations for both AIF management companies and individual AIFs pursuant to section 35 (1), (2) and (4) of the German Investment Code (Kapitalanlagegesetzbuch – KAGB) which relate to Annex IV of the Level II Relegated Act of the AIFM. The Guidance Notice explains the reporting regime for AIF management companies, specifying in particular the format, the reporting channel and the start of the submission of reports. The first reporting date is 31 March 2015 (at the latest).

Read the Guidance Notice in German

Germany Proposes Draft Retail Investors Protection Act

The proposed Retail Investors Protection Act, which is expected to be passed in the first quarter of 2015, is designed to improve investor protection and the transparency of offerings on the unregulated market. The new legislation will, inter alia, expand the prospectus requirement and introduce additional information and notification requirements for offerors and introduce a special regime for crowdfunding capital raising structures.

Read the proposed legislation in German (PDF)

Federal Ministry of Finance Guidance on Tax for Closed-Ended AIFs

The Federal Ministry of Finance has issued guidance on 12 February 2015 that broadens the favorable tax regime for investment partnerships applicable to closed-ended AIFs. The guidance is particularly relevant for German and foreign investors investing in closed-ended AIFs and for fund sponsors setting up fund structures with a potential German investor base.

Read the full guidance in German (PDF)

Additional information relating to this subject is available in the Dechert publication "Favorable German tax regime for partnership-type AIFs expanded".


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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