Alternative Investments Legal | Issue 01/2018

BaFin

Publication of Interpretative Decision on the Activities of a Capital Management Company and the AIF Investment Company it Manages Externally

BaFin published an “Interpretative Decision on the Activities of a KVG and the AIF Investment Company it Manages Externally” on December 21, 2017. BaFin thus sets out the extent to which an externally managed AIF investment company may continue to enter into unrestricted rights and obligations in legal transactions if it has opted for external management and has commissioned an external capital management company (KVG) to manage it.

Accordingly, with the transfer of collective asset management to the external KVG, the regulatory responsibility to manage the AIF investment company in accordance with the provisions of the KAGB is transferred to the external KVG. The AIF investment company loses the right to manage itself. It only regains this right when it terminates the management agreement with the external KVG and is licensed or registered as an internal KVG with BaFin. If the AIF investment company wishes to continue to perform collective asset management tasks under its own management, only internal management of the AIF investment company can be considered; external management is out of the question.

The decision can be viewed here.

BaFin

Publication of information sheet on distribution pursuant to § 329 KAGB

On January 18, 2018, BaFin published a new leaflet on the distribution of investment funds according to Section 329 KAGB.

The information sheet concerns the notification procedure for the marketing of units or shares in domestic special feeder AIFs or EU feeder AIFs managed by an EU AIF management company or KVG whose respective master AIF is not an EU AIF or domestic AIF managed by an EU AIF management company or a KVG. Furthermore, the notification procedure for the distribution of units or shares in foreign AIF to semi-professional and professional investors in Germany pursuant to section 329 KAGB is explained.

The fact sheet can be viewed here.

EBA

Publication of an opinion on the transition to the new Payment Services Directive (PSD1 to PSD2).

On Dec. 19, 2017, the EBA published an opinion to competent authorities on the transition from the previous Payment Services Directive (PSD1) to the revised Directive (PSD2), which will apply from Jan. 13, 2018.

Market participants and competent authorities face a number of issues and challenges in the transition from PSD1 to PSD2. The opinion addresses questions raised by market participants and competent authorities, including in relation to the transition period provided for in PSD2.

The publication can be viewed here (in English).

EU Commission

Information from the EU Commission on the revised Payment Services Directive (PSD 2) on the occasion of its entry into force

On the occasion of the entry into force of the revised Payment Services Directive PSD2, the EU Commission made the following documents, among others, available on the internet on 12.01.2018:

• Information on PSD2
• Frequently asked questions about PSD2
• Frequently asked questions about the RTS

The goals of PSD2 are:

• Prohibition of surcharges, which are additional costs for payments with credit or debit cards both in stores and electronically;
• Opening the EU payments market to companies offering payment services based on obtaining access to payment account information;
• Introduce stringent security requirements for electronic payments and for consumer financial privacy;

Improve consumer rights in numerous areas. These include reduced liability for unauthorized payments and the introduction of an unconditional refund right (“no questions asked”) for direct debits in euros.

The statement can be viewed here (in English).

German Banking Industry (DK)

Statement on significant risk transfer in securitizations

The EBA has published a consultation on significant risk transfer as part of the new securitization regulation. This primarily deals with the calculation methods for determining whether there is a significant transfer of risk. This is a prerequisite for the applicability of risk weighting from securitization regulation. DK submitted an opinion on this matter on 19.12.2017.

The statement can be viewed here (in English).

European Parliament and European Council

Publication of the Regulation establishing a general framework for securitization in the EU Official Journal

On 28.12.2017, the EU Official Journal No. L 347/35 published Regulation (EU) 2017/2402 establishing a general framework for securitization and creating a specific framework for simple, transparent and standardized securitization and amending Directives 2009/65/EC, 2009/138/EC, 2011/61/EU and Regulations (EC) No. 1060/2009 and (EU) No. 648/2012.

The ordinance can be viewed here.

GDV

Statement on the ESA Review

On January 10, 2018, GDV commented on reform proposals of the EU Commission for the future European financial supervision.

The EU Commission’s proposals are currently before the EU Council and the EU Parliament. Both institutions are expected to finalize their position within the Bulgarian Council Presidency by June 30, 2018. Against this background, GDV assumes that the negotiations between the Commission, Council and Parliament (trilogue) will begin in the fall of 2018 or in the course of the Austrian Council Presidency. The reform could then be implemented in 2019.

The statement can be viewed here (in English).

BaFin

Notes on insurance distribution

BaFin posted a draft circular “Notes on insurance distribution” for public consultation on its website on January 15, 2018.

The circular is intended to replace the previously applicable Circular 10/2014 (VA) and essentially serves to implement the new provisions of the ISA on sales-related aspects in supervisory practice, most of which will apply from February 23, 2018.

In order to ensure timely implementation of Directive (EU) 2016/97 of the European Parliament and of the Council of 20.01.2016 on insurance distribution (IDD) into German law as of 23.02.2018, the “Act on the Implementation of Directive (EU) 2016/97 of the European Parliament and of the Council of 20.01.2016 on insurance distribution and amending other laws” was published on 28.07.2017.

The circular can be viewed here.