Investment Management Client Alert August 2025

BMF Publishes Draft Bill on Fund Risk Limitation Act

On 8 August 2025, the German Federal Ministry of Finance (Bundesministerium der Finanzen) (BMF) published a draft bill for the Fund Risk Limitation Act (Fondsrisikobegrenzungsgesetz) (FoRG). This marks the newly formed government's resumption of the implementation of the Alternative Investment Fund Managers Amending Directive (AIFMD Review). A draft bill on this subject (known as the Fund Market Strengthening Act (Fondsmarktstärkungsgesetz)) had already been published under the previous coalition (Ampelkoalition).

The implementation of the AIFMD Review remains largely unchanged, such as with regard to liquidity management tools (LMTs). The previous legal requirements regarding the redemption period and the suspension of redemptions for open-ended real estate funds are now expressly stipulated as continuing to be mandatory. This then also counts as a selected LMT, meaning that open-ended real estate funds and, if applicable, special AIFs only need to select one additional LMT in accordance with Section 284 of the German Investment Code (Kapitalanlagegesetzbuch) (KAGB).

Also the national amendments provided for in the draft Fund Market Strengthening Act will largely remain in place. These include, for example, the expansion of the choice of legal form for open-ended real estate and infrastructure funds. Among other things, a new addition is a defence (Einrede) for a capital management company (Kapitalverwaltungsgesellschaft) (KVG) managing a special fund against its creditors. If such a KVG enters into obligations for a special fund on behalf of investors, but the fund's liquidity is insufficient to cover the KVG's claims for reimbursement of expenses, the KVG may temporarily refuse payment.

Furthermore, the FoRG implements an EU amending directive aimed at harmonising the requirements for clearing by Undertakings for Collective Investments in Transferable Securities (UCITS), credit institutions, and investment firms with the amended EU Market Infrastructure Regulation (EMIR 3.0). 

It is planned that the implementation of the AIFMD Review and the further national fund-specific amendments will come into force on 16 April 2026 and the amendments relating to clearing requirements on 25 June 2026.

BMF Draft Bill on the Location Promotion Act

BMF is drafting a bill for a Location Promotion Act (Standortfördergesetzes) (StoFöG). One of the goals of the StoFöG is to improve companies' access to financing.

In the fund sector, the StoFöG takes up the facilitations for investments in infrastructure and renewable energy that were already envisaged under the previous government in the Future Financing Act II (Zukunftsfinanzierungsgesetz II), for example, by creating corresponding investment opportunities for real estate funds. In addition, the proposed amendments to the Investment Tax Act (Investmentsteuergesetz) are intended to prevent tax disadvantages, such as those caused by energy-producing funds being classified as commercial (gewerblich).

Furthermore, the StoFöG serves to implement or provide accompanying national legislation for a number of EU requirements. For instance, within the framework of the EU Listing Act, amendments are to be made regarding multiple voting rights shares. In connection with the review of the Markets in Financial Instruments Regulation (MiFIR), the prohibition on accepting rebates for the forwarding of execution orders will be implemented. Additionally, the establishment of the central European portal for information on financial services, capital markets and sustainability, as set out in the European Single Access Point (ESAP) Regulation, will be implemented.

BaFin Consults on Draft MaRisk for Investment Firms

On 6 August 2025, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) BaFin) published a draft of a new circular on the “Minimum Requirements for Risk Management of Investment Firms” (Mindestanforderungen für das Risikomanagement von Wertpapierfirmen) (WpI MaRisk). With this circular, BaFin aims to create a dedicated supervisory framework for the risk management of small and mid-sized investment firms, which since 27 June 2021 are no longer supervised under the German Banking Act (Kreditwesengesetz) but under the Investment Firms Act (Wertpapierinstitutsgesetz) (WpIG). In the absence of a dedicated circular, these institutions must currently still apply the circular on the “Minimum Requirements for Risk Management” for banks (Mindestanforderungen für das Risikomanagement) (MaRisk BA) mutatis mutandis and in accordance with the principle of proportionality, which poses a certain challenge. According to its own statements, however, BaFin intends to continue its existing supervisory practice for investment firms despite the new circular, insofar as this is reasonable and legally required. For this reason, the WpI MaRisk is based on the MaRisk BA in terms of both structure and content. The publication of a dedicated circular tailored specifically to the companies in question is to be welcomed in order to counteract possible uncertainties in interpretation. For large investment firms in the meaning of the WpIG, nothing changes. They will continue to be bound by the MaRisk BA in the future. The consultation is open until 19 September 2025, and comments can be submitted to BaFin until that date.

ESAs Publish Further Answers on the EU Disclosure Regulation

On 4 August 2025, the European Supervisory Authorities (ESAs) published four additional answers to questions regarding the application of the EU Disclosure Regulation (SFDR) and its related delegated regulation.

Among other things, the ESAs clarified that the percentages required for the minimum targets of social or environmentally sustainable investments (if planned) under the pre-contractual disclosure obligations in Articles 8 and 9 of the SFDR (see Annexes II and III of the Delegated Regulation) do not have to correspond in total to the sustainable investments reported in the asset allocation. However, this discrepancy must be explained. The ESAs state that the calculation of the largest investments to be disclosed in periodic reports should follow sector-specific rules (e.g. the regulations on fund annual reports in the AIFM Directive or the KAGB). No specific provisions were made for calculation. Finally, in connection with the reporting of principal adverse impacts on sustainability factors (PAIs), the term “water consumption and recycling” was explained in more detail, as was the determination of square metres for energy consumption.

ESMA Publishes Updated List of Adjusted Thresholds for the Obligation to Notify Directors' Dealings

The European Securities and Markets Authority (ESMA) has published an updated list, in accordance with Article 19(9) sentence 2 of the Market Abuse Regulation (MAR), which names the national competent authorities of the member states that have decided to increase or decrease the thresholds for the notification of transactions of persons discharging managerial responsibilities and closely associated persons (Directors' Dealings). Article 19(8) MAR sets the general threshold for this notification obligation at €20,000. However, Article 19(9) sentence 1 MAR allows the competent authorities to increase this threshold to €50,000 or to decrease it to €10,000 at a national level. So far only Malta (with a threshold of €10,000) and Denmark (with a threshold of €50,000) have made use of this option. It remains to be seen whether the BaFin will also make use of the option to increase or decrease the threshold for the notification of Directors’ Dealings.