Investment Funds Update - Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles: November 2016 - Issue 9: Germany

by Dechert LLP

Dechert LLP

German Investment Fund Association Extends Rules of Conduct

The general meeting of the German Investment Fund Association BVI (Deutscher Fondsverband) agreed to revised rules of conduct for the fund industry which will be implemented as of January 1, 2017 with a transitional period of nine months. Crucial modifications to the rules of conduct which were first introduced in 2003, are the introduction of the general principle “comply or explain”, the inclusion of guidelines regarding responsible investing and the removal of legal obligations which are now laid down in the German Investment Code (Kapitalanlagegesetzbuch – “KAGB”) such as mandatory measures when dealing with a conflict of interest or the disclosure of ongoing expenses. The BVI’s rules of conduct are voluntary industry standards taking into account the trustee relationship between investment funds and their investors.

Read the revised rules of conduct (in German)

BaFin Consults Draft Circular on Regulatory Requirements to the Business Organization of Insurance Companies

Until 18 November 2016, BaFin is consulting on a draft circular on regulatory requirements for the business organization of insurance companies (“MaGo”). The draft circular summarizes various minimum requirements which follow from an interpretation of the reformed Insurance Supervision Act (Versicherungsaufsichtsgesetz – “VAG”) and the Commission Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EG. The draft circular covers governance aspects and aims at consolidating universal aspects of the business organization of insurance companies without replicating the requirements of the VAG, the Delegated Regulation or EIOPA’s guidelines. The draft circular particularly explains main terms such as “proportionality” (Proportionalität) or “administrative, management or supervisory body” (Verwaltungs-, Management- oder Aufsichtsorgan) and takes into account first experiences from the supervisory practice with Solvency II. The circular will replace the repealed circular regarding regulatory requirements for the risk management (MaRisk VA) and will apply to German insurance companies governed by Solvency II.

Read the draft circular (in German)

BaFin Consults Draft “InvMaRisk” Covering Loan Originating Funds

BaFin published to certain industry organizations a draft of the revised “InvMaRisk” for further consultation on 8 November 2016. The deadline for the consultation phase of the revised version of the so-called “Minimum Requirements on Risk Management for Investment Companies (Mindestanforderungen an das Risikomanagement für Kapitalverwaltungsgesellschaften - „KAMaRisk“) will end on 23 November 2016.

In respect to Loan Originating Funds, KAMaRisk will implement as a technical compliance standard the statutory compliance requirements for loan funds as introduced by the UCITS-V-Transformation Act (OGAW-V-Umsetzungsgesetz) and stipulate (i) special compliance requirements on the origination of loans as well as (ii) minimum requirements on the risk management of German investment companies (“KVG”) managing AIFs which are granting loans for the account of their AIFs (Direct Lending) or which invest into (secondary) loans.

Read a specialist article published by BaFin on the subject (in German)

Latest Investment Fund Statistics for Germany 

The German Investment Fund Association BVI issued its latest investment statistics report in October, providing 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 statistics in full.

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Dechert LLP

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