31.08.2017 | KPMG Law Insights

Alternative Investments Legal – Alternative Investments Legal | Issue 8/2017

Dear Readers,

Even though the summer vacations are still on in some federal states, there has been a lot going on in August in the field of alternative investments, which we would like to present to you in this issue.

Among other things, BaFin has published consultations on the amendment of the KARBV and the KAPrüfbV. The EBA has presented a discussion paper on the approach to FinTech.

There are also current developments in connection with PRIIPS; you will find a corresponding compilation in this issue.

We wish you an insightful reading and remain
With best regards

Dr. Ulrich Keunecke

Federal Law Gazette

Amendment Ordinance to the Remuneration Ordinance for Institutions

The Ordinance Amending the Remuneration Ordinance for Institutions of July 25, 2017 was published in the Federal Law Gazette 2017 Part I No. 54 of August 3, 2017.

The revision primarily transposed the requirements of the EBA Guidelines on Sound Remuneration Policies into German law, which specify the remuneration rules of the European Capital Requirements Directive and Regulation CRD IV and CRR.

The Regulation shall enter into force on the day following its promulgation. Certain provisions are applicable for the first time for assessment periods beginning after 04.08.2017 in accordance with the transitional provisions.

Related links

The read-only version can be found here.


New Remuneration Ordinance for Institutions – key changes

The amended Remuneration Ordinance for Institutions came into force on August 4, 2017. The current revision serves to incorporate the requirements of the EBA guidelines into German supervisory law. BaFin summarized the most important changes of the revision on 16.08.2017. In addition, BaFin is currently in the process of revising the interpretative guide to the Remuneration Ordinance for Institutions.

Related links

You can find the regulation at this point.


Consultation of BaFin on the amendment of the KARBV and the KAPrüfbV

On July 25, 2017, BaFin published for consultation draft amendments to the “Ordinance on the Content, Scope and Presentation of the Accounts of Investment Funds, Investment Stock Corporations and Investment Limited Partnerships and on the Valuation of the Assets Belonging to the Investment Fund” (KARBV) and the “Ordinance on the Subject Matter of the Audit and the Content of the Audit Reports for External Capital Management Companies, Investment Stock Corporations, Investment Limited Partnerships and Investment Funds” (KAPrüfbV).

The amendments are a consequence of the introduction of new regulations for lending and investments in unsecuritized loan receivables for the accounts of certain investment funds by the law implementing the UCITS Amendment Directive 2014/91/EU. These require corresponding additions to the subject matter of the audit and the contents of the audit reports for external capital management companies and for the investment assets they manage, as well as additions to the content, scope and presentation of the accounting for these investment assets and the valuation of these assets for reasons of investor protection and transparency. The same applies to additions in connection with the (future) transmission of audit reports on MVP (Section 3 (6) KAPrüfbV n.F.) and audit and reporting obligations in connection with Regulation (EU) No. 2365/2015 (SFTR) and Regulation (EU) No. 1011/2016 (Benchmark Regulation) – Sections 14a and b KAPrüfbV n.F.). At the same time, the amending ordinances serve to make editorial and clarifying changes and corrections.

Comments could be submitted until 15.08.2017.

Related links

The consultation can be viewed here.


Leaflet on the permission of banking transactions

On August 21, 2017, BaFin published a fact sheet on the requirements to be met by credit institutions wishing to apply for a license to conduct banking business pursuant to Sections 32 and 33 of the German Banking Act (Kreditwesengesetz – KWG) in conjunction with Section 14 of the German Notification Ordinance (AnzV). The fact sheet is intended to assist in the preparation of an application for a banking license.

Related links

You can find the fact sheet here.


Consultation 03/2017 – Amendment of the WpHGMaAnzV and the WpDPV, amendment of the drafts

BaFin has amended the drafts of the revised Ordinance on the Use of Employees in Investment Advisory Services, as Sales Representatives or as Compliance Representatives and on the Notification Obligations Pursuant to Section 34d of the German Securities Trading Act (WpHG-Mitarbeiteranzeigeverordnung – WpHGMaAnzV) and the revised Ordinance on the Audit of Investment Services Companies Pursuant to Section 36 of the German Securities Trading Act (Wertpapierdienstleistungs-Prüfungsverordnung – WpDPV), which are available for consultation.

The consultation was opened on 29.05.2017 with the possibility to comment until 19.06.2017.

The draft regulations were amended as of 24 July 2017 due to the entry into force of individual provisions of the Second Financial Market Amendment Act.

Related links

All relevant information can be found on the BaFin website at this link.


Publication of the law implementing the Payment Services Directive PSD2

On July 21, 2017, the Act Implementing the Second Payment Services Directive was published in the Federal Law Gazette.

Key content includes the expansion of the group of payment services to include so-called payment initiation services and account information services, and the improvement of security in payment processing with regard to customer authentication, among other things. In addition, the directive and the implementing law contain numerous requirements aimed at further improving the protection of payment service users, particularly in the case of unauthorized payment transactions.

Related links

The law published in the Federal Law Gazette can be viewed here.


Final Guidelines published in connection with the Payment Services Directive PSD2

The EBA published the “Final Report: Guidelines on major incident reporting under Directive (EU) 2015/2366 (PSD2)” on July 27, 2017. The guidelines were developed in close cooperation with the ECB. They are valid from 13.01.2018.

Related links

You can find here the press release of the EBA with a further link to the guidelines.


Responses to the Draft Technical Advice on the Regulation for Money Market Funds

ESMA referred to the responses to the draft Technical Advice on the MMF Regulation on 08.08.2017.

Related links

The newsflash with a link to the responses received can be found at the following link.

EU Official Journal

Corrigenda to the PRIIPs Regulation

The following corrections were published in the OJEU No. L 210 of 15.08.2017:

Corrigendum to Commission Delegated Regulation (EU) 2017/653 of 08.03.2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents (KIDs) for packaged retail investment products and insurance investment products (PRIIPs) with regulatory technical standards regarding the presentation, content, review and revision of those KIDs and the conditions for fulfilling the obligation to provide them.

Related links

The EU Official Journal can be found at this link.


Publication of further questions and answers on the Key Information Document (KID) on PRIIPs.

On Aug. 18, 2017, the European supervisory authorities (ESAs) added guidance on Key Information Document (KID) requirements for packaging retail and insurance-based investment products (PRIIPs). The FAQ catalog contains answers to the following areas, among others: Market Risk Assessment, Credit Risk Assessment, Risk Indicators, Derivatives, and Cost Calculation. In addition, the ESAs have published a document with diagrams for the calculation.

Related links

The current catalog can be viewed here (in English).


Discussion paper on the approach to FinTech

The EBA published its “Discussion Paper on EBA’s approach to financial technology (FinTech)” on 04.08.2017. In it, the EBA presents the results of a first Europe-wide stocktaking on FinTech, which the supervisory authority had called for in spring 2017. 22 member states and 282 FinTech companies had participated in the survey. In its discussion paper, the EBA outlines its proposals for future work on FinTech, divided into six areas for action:

  • Permit requirements,
  • the impact on operational risk of credit and payment institutions,
  • the influence of FinTech on the business model of these institutions,
  • Investor Protection,
  • the influence of FinTech on the processing of financial institutions as well as
  • the impact of FinTech on anti-money laundering and terrorist financing.


The consultation period ends on 06.11.2017.

Related links

You can find here the press release of the EBA with a further link to the discussion paper.

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