05.10.2018 | KPMG Law Insights

Alternative Investments Legal | Issue 09/2018

Dear Readers,

After the first thunderstorms have passed just in time for the beginning of autumn, we can enjoy the Munich Wies’n on beautiful late summer days. For the real estate industry, ExpoReal 2018 is yet another seasonal highlight, ensuring an exciting October.

KPMG, together with the Institute for Corporate Governance in the German Real Estate Industry, has published a study on compliance structures and processes in the real estate industry, which we will be happy to discuss with you at ExpoReal – visit us at our booth C2.120.

Away from this haptic universe of experience, there is some news in the regulatory world of alternative investments that we report on in this issue.

Among other things, the CSSF has published a fact sheet on substance requirements for Luxembourg AIFMs. BaFin also published a leaflet on the electronic notification procedure provided for in Section 331 KAGB.

We wish you an insightful reading and remain

With best regards

Dr. Ulrich Keunecke

European Commission

Amendment to Delegated Regulation (EU) 2015/35 regarding capital requirements for securitizations and STS securitizations held by insurance companies and reinsurance companies

In the EU Official Journal of September 10, 2018, the “Commission Delegated Regulation (EU) 2018/1221 of June 1, 2018 amending Delegated Regulation (EU) 2015/35 as regards the calculation of regulatory capital requirements for securitizations and simple, transparent and standardized securitizations held by insurance undertakings and reinsurance undertakings” has been published. The amendments have become necessary in the context where the revised securitization framework and the provisions of Commission Delegated Regulation (EU) 2015/35 overlap. Therefore, the regulatory framework applicable to insurance and reinsurance companies needs to be adapted to avoid duplication of regulation and ensure clarity and consistency.

The Regulation shall enter into force on the twentieth day following its publication and shall apply from 01 January 2019.

Related links
You can find the delegated regulation at this link.


Circular on substance requirements for Luxembourg AIFMs

The CSSF has published with Circular 18/698 of August 23, 2018, extensive guidelines regarding organization, substance and information systems and reporting. The circular also addresses, among other things, the minimum number of senior executives and the number of mandates that senior executives may hold.

Related links
Further information can be found here and the circular here.


ESMA FAQs on investment funds in AIFMD in German language

BaFin published a translation of selected questions of the Q&As on the AIFMD on August 31, 2018. The translations are not binding. Only the official original English versions of the Q&A on the ESMA website are binding in each case.

Related links
The translation can be viewed here.

European Commission

Tougher fight against money laundering for a stable banking and financial sector

On September 12,2018, the European Commission proposed to further strengthen the supervision of EU financial institutions to better combat money laundering and terrorist financing.

The Commission’s proposal is to update previous proposals by making targeted changes to the supervisory rules and regulatory framework of the European Supervisory Authorities and to give responsibility for combating money laundering in the financial sector solely to the European Banking Authority (EBA). This should ensure the best possible monitoring of money laundering and ensure effective coordination between the various authorities across the member states.

In this context, the EBA’s mandate is to be made more precise, unambiguous and comprehensive, and it is to be provided with appropriate powers and resources.

Related links
The proposal can be viewed here.


Crowdfunding: advertising violations on crowdinvesting platforms

BaFin informed in BaFin Journal 09/2018 that it has investigated violations of competition and disclosure obligations within the meaning of 12, 13 a of the German Investment Act (VermAnlG) in the case of crowdfunding. The focus was on the brokerage of prospectus-free investments in accordance with Section 2a of the German Investment Companies Act (VermAnlG) by means of a crowdinvesting platform.

BaFin registered grievances regarding the “risk warning” pursuant to Section 12 (2) VermAnlG in 94% of the cases of 50 active crowdinvesting platforms and a violation of the requirements regarding “return warning” pursuant to Section 12 (3) VermAnlG in 26% of the cases. In 17% of the cases, there were also access restrictions with regard to the asset investment information sheet pursuant to section 13a (2) VermAnlG. Several types of violations have been identified in a variety of crowdinvesting platforms.

BaFin informed the operators of the crowdinvesting platforms of the findings in a non-formal procedure.

Related links
The ad can be viewed here.

KPMG study

Compliance in the real estate industry

KPMG AG Wirtschaftsprüfungsgesellschaft, together with the Institut für Corporate Governance in der deutschen Immobilienwirtschaft e.V. (ICG), has published a study on compliance structures and processes in the real estate industry. The aim of the study was to identify an industry-specific further development of compliance standards in the real estate sector.

The following topics are explained in the study:

  • What is the current perception of compliance in the real estate industry?
  • What constitutes a compliance management system (CMS)?
  • What is the status quo of CMS in the real estate industry?
  • What are the findings from each of the compliance subclusters, including goals/ risks, organization, monitoring/ improvement, communication/ culture?

What fields of action exist for the real estate industry?

Related links
The study can be viewed here.


Outgoing AIF Notification” or “Outgoing AIF Update” leaflet

On July 20, 2018, BaFin published a fact sheet for the marketing of units or shares in EU AIFs or domestic AIFs managed by an AIF capital management company to professional investors in other member states of the European Union or in signatory states to the Agreement on the European Economic Area pursuant to Section 331 of the German Investment Code (Kapitalanlagegesetzbuch, KAGB).

The information sheet contains information on the electronic notification procedure provided for in section 331 KAGB for the marketing of EU AIFs or domestic AIFs to professional investors in other member states of the European Union or in signatory states to the Agreement on the European Economic Area. It includes, in particular, instructions on electronic notification (“Outgoing AIF Notification”) via the Reporting and Publication Platform (MVP) and notification of changes (“Outgoing AIF Update”).

Related links
The fact sheet can be viewed here.

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