Fund distribution

BaFin publishes revised FAQ

On July 5, 2022, BaFin published its revised "Frequently Asked Questions on the Distribution and Acquisition of Investment Assets under the KAGB" (reference WA 51-Wp 2137-2021/0293). (hereinafter the "BaFin FAQ").

This was preceded by a consultation in late summer of last year (the "BaFin Consultation 16/2021").

The following points can be highlighted from the revised BaFin FAQ:

  • Submission of pre-marketing notices (see BaFin FAQ, No. 1.2):
    • BaFin clarifies that, in addition to AIFMs, third parties can also submit the now required notifications on the start of pre-marketing to BaFin. This is done by proxy and requires a (written) power of attorney.
    • A required pre-marketing notification is not supplemented by a sales notification but can be combined with it.
    • The BaFin FAQ now contains generic information on the required degree of concretization of the notified investment strategies and concepts.
  • Pre-marketing in case of distribution to (semi-)professional investors (cf. BaFin FAQ, No. 1.4):
    BaFin clarifies that "reverse solicitation" is not only given if the initiative to acquire units originates from the investor, but also if the investor's initiative relates to the launch of the fund.
  • Institutions pursuant to § 306a (1) KAGB (cf. BaFin FAQ, No. 2.3.2):
    Under certain conditions, the mere processing of customer orders does not constitute investment advice or brokerage pursuant to the German Banking Act (the "KWG") or the German Securities Institutions Act (the "WpIG"). Several different institutions may now be designated.
  • Information duties according to § 297 KAGB (cf. BaFin FAQ, No. 3.2):
    The explanations on the information duties in the advisory-free business have been shortened considerably. Instead, there is a reference to § 63 (7) sentence 12 of the German Securities Trading Act (the "WpHG"), according to which the subsequent provision of cost information is permissible under certain circumstances for transactions concluded by means of distance communication.
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