BaFin comments on approval procedure for investment terms and conditions of UCITS

BaFin comments on approval procedure for investment terms and conditions of UCITS

In a letter to the investment industry, the German Federal Financial Supervisory Authority (BaFin) has commented on the conversion procedure of the UCITS investment conditions to the KAGB as amended by the UCITS V Conversion Act (OGAW V-UmsG). The background is the very short conversion period until March 18, 2016. On this date, the adjusted UCITS investment conditions must enter into force.

In the government draft of the UCITS V Conversion Act, the legislator has provided for the transitional provision of section 355 (5) KAGB draft. The reasons are the tight implementation deadline and the expected number of amendments. According to this regulation, only those amendments to the investment conditions may be applied for which are mandatory for the adaptation to the version of the KAGB applicable as of March 18, 2016.

BaFin now provides details of its administrative practice with regard to the amendments. The terms and conditions of investment shall first be agreed electronically with the supervisor. Subsequently, the capital management companies must submit written applications for approval. However, these are not to be submitted until February 22, 2016. Applications received by BaFin before this deadline would have to receive a negative decision from the supervisory authority. They would otherwise be deemed approved after four weeks (approval fiction, Section 163 (2) Sentence 5 KAGB), but there is no corresponding legal basis until March 18, 2016.

By this date, the sales prospectuses and key investor information of all UCITS must then also be revised and subsequently submitted to BaFin.

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