Have investment conditions for newly established investment funds approved

If you form investment funds as a capital management company (KVG), investment stock corporation or open-ended investment limited partnership, you must have the investment conditions approved by the Federal Financial Supervisory Authority (BaFin).

According to the legal definition, an investment fund is an undertaking for collective investment that collects capital from a number of investors in order to invest it according to a fixed investment strategy for the benefit of these investors. Operating companies outside the financial sector are not considered investment funds.

The investment conditions regulate, among other things

• the relationship between you as the asset management company and the investors
• the name and registered office of your asset management company
• the principles according to which assets are selected and acquired
• the ownership structure of investment funds
• what conditions apply to the redemption and conversion of units or shares
• whether income from the investment fund is distributed or reinvested
• the principles according to which sub-investment funds are formed
• whether and what costs investors have to pay, e.g. front-end loads, management fees, redemption fees

You may only attach the investment conditions to your sales prospectus once they have been approved by BaFin. In addition, you must make the terms and conditions of investment available to the public in the currently valid version on your website.

• Copy of the investment conditions
• Copy of the articles of association
• Copy of the articles of association, if applicable

Forms: no
Online procedure possible: no
Written form required: yes
Personal appearance required: no

You can only apply for authorization if you are

• a capital management company that is authorized to manage the type of investment fund concerned or
• is an EU UCITS management company that has received authorization from the competent authorities of its home member state to manage UCITS investment funds that it intends to manage in Germany.

§96, § 117 V, § 163, § 110, § 179, § 267 IV KAGB

• In the event of a rejection of the investment conditions by BaFin: Objection. Detailed information on how to lodge an objection can be found in the notification.
• Legal action before the administrative court if your objection is rejected.

To apply for new approval for the investment conditions of an investment fund, proceed as follows:

• Create an informal cover letter in which you apply for re-approval.
• Send the application, including the investment conditions, to BaFin via the notification and publication platform (MVP Portal).
• After receiving your documents, BaFin will check whether your information is complete and may request further documents from you. Furthermore, BaFin may request changes to the submitted investment conditions if they do not meet the legal requirements.
• If you wish to receive written confirmation from BaFin, you must apply for this separately.
• You will receive notification of your application.
• You will also receive a fee notice. Pay the fees.

There is no deadline.

BaFin has 4 weeks to grant the approval.

If the requirements for approval are not met, BaFin will inform you of the reasons within 4 weeks and request any missing or amended information or documents. If BaFin does not meet both deadlines, the approval is automatically deemed granted.

• for open-ended public investment funds: EUR 2,285
• for closed-end public investment funds: EUR 4,940

Fees for open-ended public investment funds: Administrative fine 2.069,00 EUR

Fees for closed-end public investment funds: Administrative fine 3.338,00 EUR

There are no indications or special features.