Investment Management Client Alert September 2026

EU Parliament Adopts Negotiating Position on the Sustainable Finance Disclosure Regulation

In early September, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) adopted the proposal to revise the Sustainable Finance Disclosure Regulation (SFDR 2.0). The legislative process began with the European Commission’s proposal in November 2025. In particular, the proposal aims to introduce genuine ESG product categories for funds and other financial instruments.

The ECON proposal provides alternative investment funds, whose shares are marketed exclusively to professional investors, with the option to opt out of the product categorization requirements.

Compared to a position paper published in April by the ECON rapporteur, investments in nongreen government bonds that qualify for the ESG quota are to be permitted under less stringent conditions. The exclusion criteria for fossil fuels have again been slightly relaxed.

Based on their published negotiating positions, the three EU institutions (the Council, the Parliament, and the Commission) will shortly begin trilogue negotiations on SFDR 2.0, which will culminate in the final legislative text.

The Federal Financial Supervisory Authority Publishes the Circular on the Minimum Requirements for Risk Management for Small- and Medium-Sized Investment Firms

On 24 August 2026, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht—BaFin) published the circular on the minimum requirements for risk management at investment firms (WpI-MaRisk). The WpI-MaRisk is applicable to investment firms that are categorized as small- or medium-sized. Until now, these investment firms have followed the MaRisk guidelines for credit institutions. BaFin had sought public comment on the WpI-MaRisk in May and early August.

Among other things, the final circular provides for a more proportional approach—rather than a definitive requirement to establish an independent risk management function and an internal audit function—that takes into account the nature, scope, complexity, and risk profile of the institution, using illustrative examples (e.g., number of employees).

The WpI-MaRisk will take effect on 1 January 2027. For investment firms that are categorized as large, the MaRisk for credit institutions will apply.

ESMA Seeks Comments on Guidelines Regarding Updated Prospectus Requirements

On 9 September 2026, the European Securities and Markets Authority (ESMA) published a consultation paper on updating its guidelines regarding disclosure requirements under the Prospectus Regulation. This move is driven in particular by the amendments to the Prospectus Regulation and the associated Delegated Regulation that have been introduced by the Listing Act (Regulation (EU) 2024/2809). The goal is to align the existing ESMA guidelines with the amended disclosure requirements and to reduce the burden associated with preparing prospectuses. 

In particular, the guidelines on disclosure requirements that have been eliminated as a result of the Listing Act are to be removed. This applies, among other things, to disclosures regarding the Operating and Financial Review, capital resources, capitalization and indebtedness, changes in share capital, and equity interests. At the same time, ESMA is proposing new guidelines on the inclusion of management reports in the prospectus. The aim is, in particular, to ensure that the information in the management report is consistent with the rest of the prospectus and understandable to investors. 

Further adjustments relate, among other things, to profit forecasts and estimates, historical financial information, and related-party transactions. In addition, the previously separate ESMA guidelines on risk factors are to be integrated into the general guidelines on disclosure requirements. 

For issuers and other parties involved in the prospectus process, it is particularly important to note that the changes will result in a reorganization and, in some cases, a reduction of the required prospectus disclosures. At the same time, consistency between the prospectus, financial information, and the management report is becoming increasingly important.

The consultation runs through 9 November 2026. ESMA plans to publish the final report and the revised guidelines in the first quarter of 2027.

Court Ruling on Scope of MiCAR Transitional Provision

In a ruling dated 2 July 2026 (Case No. 6 B 953/25), the Hessian Higher Administrative Court (VGH) dismissed an appeal filed by the issuer of an asset-backed token against a public announcement by BaFin. In March 2025, BaFin had posted information on its website regarding supervisory measures taken against the issuer as well as a well-founded suspicion of a violation of the prospectus requirement. The issuer had challenged this by filing a public-law claim for injunctive relief seeking the removal of the announcement.

The central issue was whether the transitional provision of Art. 143(4) MiCAR fully exempts issuers that issued asset-backed tokens before 30 June 2024, and filed an application for admission in a timely manner from the substantive requirements of MiCAR until a decision on admission is made. The VGH ruled otherwise: The provision merely allows the issuers concerned to continue their activities in the same manner as before, without requiring them to already hold an authorization. However, it does not suspend the substantive requirements of MiCAR in their entirety, but rather leaves supervisory powers—such as the public announcement under Art. 114 MiCAR or § 4(4) of the German Crypto Markets Supervisory Act (KMAG)—unaffected.

The Court further clarified that the public announcement under § 4(4) KMAG does not require a lawful administrative act, but at most its effectiveness, and that for a public announcement of a suspicion under § 18(3) of the German Securities Prospectus Act (WpPG), a preponderance of probability of a violation suffices. For classification as an offeror within the meaning of § 2 No. 6 WpPG in conjunction with Art. 2(i) of the Prospectus Regulation, the decisive factor is who is responsible for the public offering and who appears externally as the offeror—regardless of who technically operates the underlying smart contract.

New BaFin Circular on Authorization Procedures for AIF Management Companies

On 15 September 2026, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht—BaFin) published a circular containing detailed information on authorization procedures for AIF management companies pursuant to § 22 of the German Capital Investment Code (Kapitalanlagegesetzbuch—KAGB) (Circular 12/2026 (WA)). The new circular describes BaFin’s administrative practice and replaces BaFin’s previous guidance notice on the authorization procedure for an AIF management company pursuant to § 22 KAGB dated 22 March 2013 (most recently amended on 24 March 2025). In particular, it specifies BaFin’s requirements regarding the content of, and documents to be submitted with, an application for authorization, as well as selected aspects of the granting of authorization.

Key changes include more specific and stringent requirements regarding the professional suitability of managing directors—in particular through the newly introduced principle of collective responsibility and the required minimum level of knowledge for all managing directors in the areas of portfolio management—risk management, and regulatory matters. In this context, BaFin notes that the full delegation of portfolio management or risk management does not release an AIF management company from the obligation to ensure that its managing directors possess the requisite professional suitability for both portfolio management and risk management, while maintaining the separation of functions. In addition, the requirements relating to the business plan are now more detailed and more clearly structured than before. With regard to AIF management companies that are already registered (sub-threshold AIFMs), BaFin clarifies that the reduced completeness requirements under § 22(3) KAGB do not apply to them; in other words, to obtain authorization, they must submit in full all documents required under § 22(1) KAGB.