30.11.2016 | KPMG Law Insights

Alternative Investments Legal – Alternative Investments Legal | Issue 11/2016

Dear Readers,

the first advent recently heralded the start of the Christmas season. In this sense, the call for constructive contemplation is also becoming more audible in regulation. Regardless of this, there are again exciting news around the topic of alternative investments, which we present to you in this issue.
In particular, the question and answer catalog on the application of the AIFMD has been updated.

In addition, the EU Commission has proposed to postpone the effective date of the PRIIPs Regulation by one year. The effective date would then be January 1, 2018.

With best regards
Dr. Ulrich Keunecke


ESMA updates question and answer catalog on the application of the AIFMD

On November 16, 2016, ESMA published an update of the Question and Answer Catalogue on the application of the AIFM Directive (AIFMD).

The question whether an AIF marketed in a host member state via an AIFMD passport undergoes a material change in the case of the establishment of a new unit class that would require notification under Art. 32 AIFMD has been answered with “No”. The creation of a unit class to be distributed on a cross-border basis within an already notified (sub-)fund does not constitute a material change to the notification.

ESMA clarifies that in case of a change in the content of existing notifications for the cross-border marketing of AIFs, AIF managers have to submit the complete documentation as defined in Art. 32 f. AIFMD in addition to the revised notification letter. The changes that have been made are to be indicated in each case.

Further, ESMA states that an AIF manager is not exempt from its responsibility to comply with the AIFMD rules even if the AIFM itself does not perform the functions set out in Annex I of the AIFMD. If a third party performs a function listed in Annex I of the AIFMD, this should be considered as if this function had been delegated by the AIFM to the third party. Therefore, the AIFM shall be responsible for fulfilling the transfer requirements set out in Art. 20 AIFMD and the requirement set out in Art. 5 para. 1 AIFMD that the AIFM is responsible for compliance with this Directive.

The performance of functions listed in Annex I of the AIFMD is only permitted for AIFs that are managed internally pursuant to Art. 5 (1) b) of the AIFMD. If AIFs appoint external AIFMs pursuant to Art. 5(1)(a), the external AIFM is responsible for performing the functions set out in Annex I by virtue of its appointment as AIFM. Pursuant to Art. 20 AIFMD, the external AIFM may delegate to third parties the task of performing functions on its behalf. However, a third party in this sense is not the AIF according to Art. 20 (1) AIFMD.

Related links

The updated Q&A on the application of the AIFMD can be found here.

EU Commission

Postponement of PRIIPs regulation by one year

On November 9, 2016, the European Commission proposed to postpone the effective date of the Regulation on key information documents for packaged retail investment products and insurance investment products (PRIIPs Regulation) to January 1, 2018.

The background is that the European Parliament had rejected the Level 2 measure in the PRIIPs procedure in September. This was based on proposals for regulatory technical standards (RTS) from the three EU supervisory authorities (EBA, ESMA and EIOPA) and was intended to clarify the requirements for the key information documents (KIDs) prescribed by the PRIIPs Regulation. Since a smooth application of the PRIIPs Regulation is not ensured without corresponding technical standards, the now proposed postponement of the PRIIPs Regulation has already been demanded by the European Parliament and the Council of the European Union before.

Related links

The PRIIPs shift proposal can be viewed here and the related press release can be viewed here.

EU Commission

EU Commission Calls on European Supervisory Authorities to Revise Regulatory Technical Standards (RTS) on PRIIPs

In a letter dated November 10, 2016, the EU Commission requested the three EU supervisory authorities (EBA, ESMA and EIOPA) to revise their jointly submitted “Regulatory Technical Standards under Articles 8 (5), 10 (2) and 13 (5) of Regulation (EU) No 1286/2014”. The revision of the RTS is related to the postponement of the validity of the regulation on basic information sheets for packaged retail and insurance-based investment products (PRIIPs) by 12 months to January 1, 2018.

Related links

You can find all information about this under this link.


BaFin Consultation 11/2016 – KAMaRisk

On November 8, 2016, BaFin published a draft of the revised InvMaRisk (in future “Minimum Requirements for Risk Management for Capital Management Companies” – “KAMaRisk”) for consultation.

The draft KAMaRisk is intended to adapt the old version of InvMaRisk to the requirements of Delegated Regulation (EU) No. 231/2013 (“AIFM Level 2 Regulation”). Accordingly, numerous regulations were deleted which are now contained in the AIFM Level 2 Regulation. The requirements of InvMaRisk, which specify the provisions of the AIFM Level 2 Regulation, have been incorporated into KAMaRisk. Adjustments were made in particular to the risk management policy, risk controlling, risk reporting, processes relating to the introduction of new products, the emergency concept, compliance and internal auditing.

As another significant change, the KAMaRisk specified the minimum risk management requirements for AIF KVGs that grant money loans or invest in unsecuritized loan receivables for the account of the AIF (section 5 of the KAMaRisk). These are largely based on the requirements for the lending business in BA MaRisk and have been adapted to the special features of lending/investment in the context of collective portfolio management.

Related links

The corresponding notification from BaFin can be viewed here, the clean version of the KAMaRisk draft can be viewed here, and the “track-change version” with the identified changes compared to InvMaRisk can be viewed here.


BaFin Consultation 13/2016: Amendment to MaComp

BaFin is planning amendments to the circular on the minimum requirements for the compliance function and the further conduct, organization and transparency obligations pursuant to sections 31 et seq. German Securities Trading Act (WpHG) for securities services companies (MaComp). It issued a proposal to this effect for consultation on November 16, 2016. On the one hand, BaFin intends to supplement section BT 3.2 of MaComp, and on the other hand, to partially repeal section BT 5. It is accepting comments on the proposed changes until Dec. 14.

Related links

All information about the consultation can be found at this link


Fund industry expands its conduct of business rules

The German fund association BVI has extended the industry’s rules of conduct introduced in 2003. Significant changes include the principle of “comply or explain”, the inclusion of guidelines on responsible investing and the deletion of all obligations regulated by the German Investment Code, such as arrangements for dealing with conflicts of interest or the disclosure of ongoing costs.

The fund companies inform their investors whether and to what extent they comply with the rules of conduct. They may deviate from the principles, but must then disclose this annually and justify deviations. If the rules do not fit the respective investment strategy or business activity from the outset, fund companies do not have to justify the deviations separately.

You can find more information at this link.



German Banking Industry (DK) Publishes Statement on the Draft Bill for the 2nd FiMaNoG

On October 28, 2016, DK issued a statement on the draft bill for the 2nd Financial Market Amendment Act (FiMaNoG). The fact that the draft bill aims to transpose the European requirements into German law as consistently as possible is viewed positively by DK. This is the only way to ensure that the same legal framework applies in all member states.

The statement of DK can be viewed here.

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