RISP news
July 17, 2025
Draft bill of a CSRD implementation law published
The Federal Ministry of Justice and Consumer Protection has published a draft bill on the implementation of Directive (EU) 2022/2464 as regards corporate sustainability reporting as amended by Directive (EU) 2025/794 and an accompanying synopsis. The law introduces new reporting obligations for German companies.
These are the main changes:
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Sustainability report: From the financial year 2025, large corporations must add a sustainability report to their management report. This obligation applies to companies that are large within the meaning of the German Commercial Code or are capital market-oriented and are not micro-corporations. The sustainability report must form a clearly recognisable section of the management report.
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Content of the sustainability report: Companies must provide information on the impact of their activities on sustainability aspects and on the impact of sustainability aspects on their business. The report must contain a description of the business model and strategy, including information on resilience to sustainability-related risks and opportunities. Companies must disclose how their strategy is aligned with the transition to a sustainable economy and limiting global warming to 1.5 degrees Celsius.
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Audit requirements: Section 324b HGB stipulates that sustainability reports must be audited by an auditor of the sustainability report. These auditors must have special qualifications and are listed in a separate register. The Auditors' Code will be amended accordingly. § Section 13c introduces an additional examination for the auditor of sustainability reports.
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Exemption of subsidiaries: The draft extends the exemption provisions for subsidiaries. According to Section 289b HGB, subsidiaries can be exempted from the reporting obligation if the parent company prepares a corresponding group report that complies with European standards.
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Simplified reporting obligations: Simplified reporting obligations apply to capital market-orientated medium-sized and small companies. They can limit the sustainability report to certain core disclosures, as stipulated in Section 289d HGB.
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Format of the sustainability report: Sustainability reports must be prepared in a standardised electronic format. This is intended to improve the comparability and digital processing of the information.
The changes are to come into force in stages: Large public interest entities with more than 500 employees must already report for financial years from 2025. Other large companies will follow in 2027 and 2028.
Planned amendments to the KAGB by the CSRD implementation law
The KAGB will be amended in several areas by the new Sustainability Reporting Act in order to exempt investment funds from the general sustainability reporting obligations.
The exemptions for investment funds from the sustainability reporting obligations take into account the special structure and function of investment funds. They are primarily investment vehicles for investors and have different transparency and reporting obligations than operating companies. For investment funds, sustainability information is typically communicated via other channels and regulations, in particular the Sustainable Finance Disclosure Regulation (SFDR).
July 10, 2025
EU Commission adopts measures to simplify the taxonomy
The EU Commission has adopted a series of measures to simplify the application of the EU taxonomy, the EU's classification system for sustainable economic activities and investments. The changes are intended to reduce the administrative burden for EU companies while preserving core climate and environmental objectives.
The Taxonomy Regulation entered into force in 2020, and its reporting requirements apply since 2022. By providing a common sustainability reference point for financial and non-financial companies, the Taxonomy supports investments that contribute to a sustainable transformation of the EU economy in line with the objectives of the European Green Deal.
The most important measures are:
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Financial and non-financial companies are exempt from assessing Taxonomy-eligibility and alignment for economic activities that are not financially material for their business. For non-financial companies, an activity is not considered material if it accounts for less than 10% of a company's total revenue, capital expenditure (CapEx) or operational expenditure (OpEx). This measure is intended to reduce the administrative burden on companies and help them to focus more on reporting and financing their core business activities.
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In addition, non-financial companies are exempt from assessing Taxonomy alignment for their entire operational expenditure when it is considered non-material for their business model.
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For financial companies, key performance indicators like the green asset ratio (GAR) for banks are simplified, and they are granted an option not to report detailed Taxonomy KPIs for two years.
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Taxonomy reporting templates are streamlined by cutting the number of reported data points by 64% for non-financial companies and by 89% for financial companies.
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The criteria for ‘do no significant harm' to pollution prevention and control related to the use and presence of chemicals are simplified.
The changes have been adopted in the form of a Delegated Act amending the Taxonomy Disclosures, Climate and Environmental Delegated Acts and transmitted to the European Parliament and the Council for their scrutiny. The changes will apply once the scrutiny period of 4 months, which can be prolonged by another 2-month period, is over.
The measures laid out in this Delegated Act will apply as of 1 January 2026 and will cover the 2025 financial year. However, undertakings are given the option to apply the measures starting with the 2026 financial year.
June 26, 2025
Gas derivatives: General administrative act on the imposition of position limits
BaFin has published a general administrative act on the adjustment of position limits for THE natural gas future contracts of European Energy Exchange AG (EEX), which will take effect from 26 June 2025.
BaFin is required to set position limits for each significant commodity derivative offered on a German trading venue. A commodity derivative is considered significant if its open interest, i.e. the sum of all outstanding net positions, corresponds to at least 300,000 lots on average over a one-year period. Open interest in THE natural gas futures averages at least 279,235,000 MWh, which is significantly above the required threshold.
The corresponding market area has changed due to amendments to the German Gas Network Access Ordinance (‘Gasnetzzugangsverordnung’). Since 1 October 2021, the two German gas market areas originally operated by THE, Gaspool (GPL) and NetConnect Germany (NCG), have been merged into a single German gas market area. Since then, there has only been one national market area for Germany, called Trading Hub Europe (THE), for which Trading Hub Europe GmbH acts as the market area manager.
BaFin has set the limit for the spot month at 6 per cent of the deliverable volume, which corresponds to 17,938,800 MWh. This reduction below the reference value is justified by the inherent volatility of the market and the special market situation, which is characterised by the emergency plan gas alert level that remains in force. For the other months, BaFin sets a limit of 19 per cent of the open contract positions, which corresponds to 53,054,650 MWh.
The general administrative act was already submitted for consultation in December 2024 and coordinated with ESMA. An objection to the order can be raised with BaFin within one month of its announcement. BaFin reserves the right to revoke the general ruling in accordance with Section 54 (5) WpHG in order to be able to react flexibly to new facts.
June 18, 2025
Applications from Swiss asset managers are being processed again in the USA
FINMA has announced that the US Securities and Exchange Commission (US SEC) will resume processing registration applications from Swiss asset managers.
Swiss institutions that offer investment advice and wealth management services and want to operate cross-border in the USA must register with the US SEC as Registered Investment Advisers. This registration requirement applies to all entities wishing to provide such services on the US market. However, the US SEC had suspended the processing of new registration applications for several years, which made market access more difficult for Swiss institutions.
Following discussions between FINMA and the US SEC, the US authority will now resume processing both new and pending applications from Swiss asset managers immediately. This development enables FINMA-supervised institutions to resume or expand their business activities in the USA.
The negotiations between the two supervisory authorities led to the clarification of important modalities for SEC examinations of FINMA-supervised Registered Investment Advisers. In particular, the procedures for direct transmission of information under Article 42c of the Financial Market Supervision Act (FINMASA) and on-site examinations under Article 43 FINMASA were regulated. These legal provisions form the basis for cooperation between the supervisory authorities and ensure compliance with both Swiss and US legislation.
Institutions with a FINMA licence may contact ria@finma.ch for further information on supervisory cooperation. FINMA is thereby providing a direct contact option for questions regarding the practical implementation of the new regulations.
May 28, 2025
Updated FAQ on the ELTIF Regulation
BaFin has updated its FAQ documentation on the ELTIF Regulation.
The main change concerns question 3 on the duration of the ELTIF. While the previous version from February 2024 still stated a specific maximum duration limit, BaFin has now revised its position.
It is the European Commission’s opinion that the duration of an ELTIF is regulated, inter alia, by Article 18 (1), (2) and (3) and by Delegated Regulation (EU) 2024/2759. These regulations define circumstances under which the duration of an ELTIF is consistent with the life cycles of the ELTIF's individual assets.
As the ELTIF Regulation takes legal precedence over the corresponding national regulations in accordance with Art. 1 (3), BaFin's previous administrative practice with a maximum duration limit of 30 years for closed-ended ELTIFs will no longer apply. The duration of an ELTIF can be determined individually by the KVG for each ELTIF in compliance with the requirements of the ELTIF Regulation. Even an indefinite duration is possible for a closed-ended ELTIF.
May 22, 2025
ESMA guidelines for fund names mandatory for all investment funds
BVI informs that ESMA's guidelines on the use of sustainability-related fund names will be mandatory for all investment funds from 21 May 2025. The guidelines have already been binding for new issues since 21 November 2024.
The ESMA guidelines categorise the terms used in fund names into six categories: Environmental, Social, Governance, Sustainability, Transition and Impact. Their use is linked to specific requirements. ESMA is thus creating de facto product categories that provide an EU-wide minimum standard for sustainability.
The adjustments made by the investment companies ensure that the fund names correspond to the actual focus of the investment strategies. The ESMA guidelines improve transparency and provide guidance for investors, who can now rely on compliance with minimum standards for ‘ESG’ or ‘green’ funds.
Most importantly, the new standards require at least 80 per cent of investments to correspond to the eponymous category. In addition, funds that fall into the sustainability category must have at least 50 per cent sustainable investments within the meaning of the Sustainable Finance Disclosure Regulation (SFDR). Furthermore, the exclusion criteria of the Climate Transition Benchmarks must be complied with. For the Environmental, Sustainability and Impact categories, further exclusions are added in accordance with the standard of the Paris-Aligned Benchmarks.
BVI points out that there are still regulatory ambiguities that make it difficult to implement the guidelines. For example, the method for sustainable investments under the SFDR is still not standardised. Investment fund companies have developed different approaches to assess sustainable investments and determine these partly at company level and partly by looking at individual economic activities. Providers that choose the stricter activities approach and only assess investments in companies as sustainable on a pro rata basis are often unable to reach the 50 per cent threshold of the ESMA guidelines for the sustainability category. As a result, funds with a more ambitious sustainability approach may have to forgo the sustainability reference in the fund name.
BVI emphasises that the removal of a sustainability suffix from a fund name does not necessarily mean that the sustainability investment strategy has been changed. On the contrary, this may also be due to inappropriate restrictions on investment opportunities as a result of the new regulations. Funds without a sustainability suffix in their name can still be offered in investment advice to investors with sustainability preferences.
May 22, 2025
AMAS: Revised specialist information on the issue of real estate fund units
The Asset Management Association Switzerland (AMAS) has published a revised version of its specialist information factsheet on the issue of real estate fund units. The document, which was first published on 25 May 2010, serves as a guide for Swiss fund management companies and SICAV when planning and implementing issues in the real estate fund market.
The aim of the specialist information factsheet is to ensure consistent handling of issues in the Swiss real estate fund market. In accordance with Point 17 of the Directive for Real Estate Funds of 2 April 2008, fund management companies and SICAV are obliged to take into account the relevant AMAS specialist information when issuing units.
Legal basis and framework conditions
The legal basis for the issue of property fund units is set out in Article 66 of the Collective Investment Schemes Act (CISA) and Article 97 of the Collective Investment Schemes Ordinance (CISO). The regulations stipulate that new units may be issued at any time. A key principle here is that new units must always be offered to existing investors first as part of a subscription rights issue, unless the fund contract or the investment regulations stipulate otherwise.
The fund management company or the SICAV is responsible for deciding on the implementation of an issue and determining the terms and conditions of the issue, as stipulated in Article 97 paragraph 2 CISO. The operational execution of the issue, on the other hand, is the responsibility of the custodian bank in accordance with Article 73 paragraph 1 CISA.
Market valuation and time of issue
Various market factors must be taken into account when deciding on an issue. These include the expected performance on the capital and financial markets, the assessment of the relevant property market segments and the current agio. These factors influence both the decision to carry out an issue and the planning of the issue volume.
An important aspect of issue planning is the timeliness of market value estimates. In order to calculate the net asset value and determine the issue price, the valuation experts must in principle check the market values of all properties, as stipulated in Article 97 paragraph 3 CISO. However, the practice of the Financial Market Supervisory Authority FINMA provides for a simplification: A review of the market values is not required if an issue is carried out and finalised no later than 60 days after the deadline for publication of the annual report, which corresponds to no more than six months after the end of the financial year.
Issue forms and subscription rights
The specialist information factsheet distinguishes between two basic forms of issue: the issue of a fixed number of new units as part of a fixed underwriting and the issue of a variable number of new units as part of a best-effort issue.
In the case of a fixed underwriting, the fund management company announces the exact number of units to be issued and the corresponding subscription ratio before the start of the subscription period. Units not subscribed for will be taken over by the fund management company after the end of the subscription period and then placed on the market with due care.
In a best-effort issue, on the other hand, only the planned maximum number of shares to be issued is communicated. This form of issue must be clearly communicated as such to investors. The specified subscription ratio remains fixed and may not be adjusted once it has been communicated.
Two methods may be used with regard to subscription rights: Issues with trading of subscription rights, in which the subscription rights of listed property funds are listed and freely traded on a Swiss stock exchange for the subscription period, or issues without trading of subscription rights, in which no official subscription rights trading takes place during the subscription period.
Price calculation and publication obligations
The calculation of the issue price is based on the current net asset value per unit, which is based on the net asset value as at the last closing date, taking into account the accrued or budgeted income and expenses for the current financial year up to the payment date. In addition, the issue commission and any ancillary costs are added in accordance with the respective fund contract or investment regulations.
The specialist information factsheet sets out publication requirements that cover various phases of the issuing process. These include the pre-information of investors at least ten working days before the start of the subscription period, the publication of the issue conditions at least one working day before the start of the subscription period and the provision of an issue prospectus.
Timing and payment
The issue process follows a structured timetable. The subscription period generally lasts up to ten working days, during which subscription rights for the subscription of new shares can be submitted or registered for sale. On the payment date, which is up to ten working days after the end of the subscription period, all investors who have subscribed to new shares must pay the corresponding amount.
The result of the issue will be announced at the latest on the payment date. In the case of a firm underwriting, the fund management company may publish the number of new units to be issued, whereas in the case of a best-effort issue, the number of new units actually to be issued will be announced in the designated mandatory publication media.
May 14, 2025
Sustainability reporting mandatory for all listed companies in Taiwan
On May 5, 2025, a comprehensive revision of the "Procedures for Listed Companies on Preparation and Filing of Sustainability Reports" was published on the Law Source Retrieving System of Taiwan, the official journal of Taiwan.
The revised rules require all listed companies in Taiwan to prepare and submit an annual sustainability report in Chinese, preferably approved by the board of directors. The reports must be prepared according to Global Reporting Initiative (GRI) standards and cover relevant economic, environmental, and social topics, including human rights aspects.
A notable new requirement is the disclosure of climate-related information. Companies must now report on their climate protection measures in a dedicated chapter. Depending on industry sector and company size, there are staggered deadlines for implementing greenhouse gas inventories and their verification. Large companies are already subject to these obligations from 2023/2024, while smaller companies have longer transition periods.
Additionally, companies must disclose their reduction targets, strategies, and action plans by specific deadlines. Particularly stringent reporting requirements apply to companies in certain industries such as financial services.
The regulations also require disclosure of the average and median salaries of all full-time employees without management positions and their changes compared to the previous year.
All sustainability reports must be prepared by August 31 of each year and published on the company website and in the information system specified by the Taiwan Stock Exchange Corporation (TWSE). Companies are also required to integrate procedures for preparing and verifying sustainability reports into their internal control system.
April 22, 2025
Regulated investments: Revision of IDW audit guidelines
The IDW (Institut der Wirtschaftsprüfer in Deutschland e.V.) has updated three important audit guidelines for regulated investments due to changed requirements for the audit opinion according to IDW PS 400 (revised 10.2021).
The first update, IDW Audit Guideline 9.400.13 (03.2025), covers issuing audit opinions for investment stock corporations under Section 121 Para. 2 Sentence 1 KAGB. It addresses both variable capital investment corporations (Sections 108 ff. KAGB) and fixed capital investment corporations (Sections 140 ff. KAGB), while including provisions for sub-funds and providing wording templates for audit opinions.
The second update, IDW Audit Guideline 9.400.14 (03.2025), addresses the preparation of auditor reports for liquidation reports of special funds under Section 105 Para. 2 KAGB and provides example formulations for the auditor's report.
The third update, IDW Audit Guideline 9.400.15 (03.2025), covers issuing audit opinions for investment limited partnerships. It applies to both open investment limited partnerships (Section 136 Para. 1 KAGB in conjunction with Sections 124 ff. KAGB) and closed investment limited partnerships (Section 159 Sentence 2 in conjunction with Section 136 Para. 1 KAGB in conjunction with Sections 149 ff. KAGB). This guideline focuses on audit procedures regarding specific reporting requirements and proper allocation of profits, losses, contributions, and withdrawals to capital accounts.
These updated guidelines have been published in IDW Life issue 4/2025 and are available as print-on-demand from IDW publishing. IDW members can also download the wording templates as Word documents from the members' area. These updates are significant for auditors working with various investment entities, who must now follow the new requirements when issuing audit opinions.
March 20, 2025
BaFin consultation: Guidance Notice on the influence of investors on investments and disinvestments of investment funds
On 14 March 2025, the German Financial Supervisory Authority (BaFin) published a draft of a Guidance Notice for public consultation that specifies the scope of investor influence on investment decisions by capital management companies permitted under supervisory law.
The Guidance Notice is based on Section 17 KAGB, according to which capital management companies are responsible for the management of their investment funds. The draft clarifies that excessive investor influence contradicts this fundamental principle and defines the limits under supervisory law.
According to the draft, the final decision on the acquisition and disposal of assets must always lie with the capital management company or its portfolio managers. Direct instructions from investors in relation to individual securities are not in accordance with Section 17 KAGB and are therefore not permitted. The same applies to veto rights or reservations of consent by investors for individual securities, since in this case the ultimate decision-making authority would no longer lie with the portfolio manager.
In contrast, non-binding ‘investment ideas’ or ‘recommendations’ from investors are unproblematic as long as the decision-making authority of the portfolio manager is not called into question. Veto rights or reservations of consent in investment committees are also permissible, provided they only relate to the abstract definition of the investment strategy within the framework of the contractually agreed investment guidelines, for example when deciding on investments in certain types of securities, regions or sectors.
An important aspect of the Guidance Notice is the documentation obligation. To be able to provide evidence that no influence incompatible with Section 17 KAGB has taken place, portfolio managers must document every form of investor influence. This not only serves as proof of proper business organisation in accordance with Section 28 (1) KAGB, but is also intended to create an awareness of the supervisory limits among all parties involved.
BaFin will accept comments on the draft Guidance Notice until 31 March 2025. These can be submitted by email to Konsultation-08-25@bafin.de with the subject line ‘Stellungnahme im Rahmen der Konsultation 08-25 (GZ: FR 1903/00063#00001)’.
February 21, 2025
BVI proposes EU index family
The BVI is proposing a new EU-wide index family - the European All Shares Index Family (EUASIF) - which will include all listed EU companies. The proposal aims to promote market integration and development in various sectors and company sizes and to create more visibility for smaller EU markets.
The EUASIF would not replace existing indices but complement them. It is designed to include a comprehensive range of indices such as an EU total market index, thematic indices such as an EU ESG index, size-based indices such as an EU microcap index and sector indices to meet the different needs of investors, issuers and stock exchanges.
The idea was originally suggested by the Centre for European Policy Studies (CEPS) in 2020 and was developed in the context of the planned EU Savings and Investments Union (SIU). A central aspect is the elimination of geographical labels, which have a negative impact on smaller and newer EU member states.
The EUASIF could help to create a more integrated and dynamic capital market environment in the EU. This would benefit smaller markets and also smaller companies, which are traditionally underrepresented in the major indices, and is intended to support the Savings and Investment Union (SIU). The creation of sectoral and thematic sub-indices, including those focussing on ESG criteria, could also promote sustainable and responsible investment.
The EUASIF could be implemented via the Consolidated Tape (CT) as part of the MiFIR reform, which aggregates market data from multiple trading venues. This would provide a comprehensive overview of the market and improve data quality and consistency. ESMA is currently working on the selection of a CT provider for EU equities and ETFs, expected to be operational by 2026.
The BVI proposes initial public funding of the EUASIF for five years to support its establishment. In the long term, the project should be self-sustaining through licence fees. Indexing should be offered at low cost in order to minimise the burden on market participants and maximise positive effects, such as increased stock exchange listings and new financial products.
February 14, 2025
Amendments to the Investment Regulation: more opportunities for infrastructure investments
An amendment to the Investment Regulation was originally planned as part of the 2nd Company Pension Strengthening Act (Betriebsrentenstärkungsgesetz/BSG 2). However, a corresponding draft bill was not pursued further following the collapse of the German ‘Ampel’ government. The amendments to the Investment Regulation included therein have now been implemented by means of an amending regulation. The ‘Eighth Regulation on the Amendment of Regulations under the Insurance Supervision Act’ was published in the Federal Law Gazette on 6 February 2025 and is applicable from 7 February 2025.
The amendment creates new opportunities for infrastructure investments. Pension funds, death benefit funds and small insurance companies will have more flexibility when investing in infrastructure, as these investments will no longer count towards the often already exhausted quotas for alternative investments.
Key points of the amending regulation are:
1. Introduction of an infrastructure quota
Direct and indirect investments used to finance infrastructure assets and infrastructure companies are not counted towards the existing investment quotas for up to 5 per cent of the security assets.
These investments must be eligible in accordance with Section 2 of the Investment Regulation, and they must be used for the construction, expansion, renovation, maintenance, provision, holding, operation or management of infrastructure.
According to the BSG 2 draft bill, the new quota is intended to facilitate infrastructure investments by not counting the corresponding investments towards the existing mixed quotas and therefore not competing with other investments. At the same time the infrastructure quota does not limit investments in infrastructure to 5 per cent; instead, they can continue to be included in the other mixed quotas in accordance with their investment form pursuant to Section 2 (1).
2. Extension of the opening clause
As part of the so-called opening clause in accordance with Section 2 (2) AnlV, investments that do not comply with the diversification requirements of Section 4 (1) to (4) AnlV may also be acquired in future. These investments are generally limited to 5 per cent of the security assets; an increase to up to 10 per cent is possible with the approval of the supervisory authority.
3. Increase of the risk capital ratio
The existing risk capital ratio in accordance with Section 3 (3) sentence 1 has been increased from 35 per cent to 40 per cent. The draft bill states that this is intended to increase pension funds' scope for capital investment.
January 24, 2025
BaFin Supervisory Notice on crypto-asset services under MiCAR published
BaFin has published a Supervisory Notice on the new regulatory requirements for crypto-asset services under EU Regulation 2023/1114 (MiCAR). MiCAR became effective EU-wide on 30 December 2024, bringing significant changes for the crypto industry.
The BaFin document defines the different types of services that are subject to authorisation and clarifies authorisation requirements and exemptions for institutions that are already licensed.
The following key points of the MiCAR are clarified:
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Scope and definition of the term ‘crypto-asset’:
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Crypto-assets are defined as digital representations of value or rights that can be transferred using distributed ledger technology.
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This definition includes asset-backed tokens, e-money tokens and other crypto-assets such as Bitcoin and Ether tokens.
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Non-fungible tokens (NFTs) and tokenised financial instruments (security tokens) are exempt from this regulation.
2. Regulated services (in accordance with Art. 3 para. 1 no. 16 MiCAR) include
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the depository and administration of crypto-assets,
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the operation of a trading platform,
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the exchange of crypto-assets for money or other crypto-assets,
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the execution, receipt and transmission of client orders for crypto-assets
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the placement of crypto-assets,
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the provision of consultancy and portfolio management and
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transfer Services.
3. Authorisation to provide crypto-asset services may be granted to
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legal entities and
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other companies with an equal level of protection regarding the interests of third parties (e.g. commercial partnerships).
4. In addition to this authorisation, the MiCAR establishes a notification procedure (transmission of certain information to BaFin, at the latest 40 working days before the crypto-asset service is offered for the first time) for companies already licensed elsewhere. This applies to:
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CRR credit institutions (may provide all crypto-asset services after notification),
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central securities depositories (depository and administration of crypto-assets),
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securities, financial services and credit institutions (crypto-asset services that are equivalent to the (ancillary) securities services and financial services or banking transactions for which they have a licence),
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electronic money institutions (depository and administration of crypto-assets and transfer services),
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capital management companies (receipt and transmission of client orders for crypto-assets, consulting on crypto-assets and portfolio management of crypto-assets, provided they have a licence for investment brokerage, investment consulting and financial portfolio management),
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Operators of regulated markets as defined by MiFID II (operation of a trading platform for crypto-assets).
5. Authorisation for the provision of crypto-asset services is required:
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for the commercial provision of services (i.e. the operation is intended to be of a certain long-term nature and the operator pursues it with the intention of making a profit).
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This applies to companies based in or operating in Germany.
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Providers from third countries also require authorisation if they actively offer crypto-asset services to EU/EEA clients.
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Cross-border provision of crypto-asset services is possible within the EEA (Art. 65 MiCAR).
6. Not subject to the authorisation requirement are
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the exclusive provision of crypto-asset services within a corporate group, for parent, subsidiary and sister companies (so-called group privilege),
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liquidators or administrators acting in the course of insolvency proceedings,
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the ECB and the central banks of the Member States, when acting in their capacity as monetary authorities, or other authorities of the Member States,
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the European Investment Bank and its subsidiaries,
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the European Financial Stability Facility and the European Stability Mechanism as well as
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international organisations operating under public law.
Companies operating or planning to operate in the crypto-asset sector should use the Supervisory Notice as an orientation aid to fulfil the regulatory requirements of MiCAR. In cases of doubt, BaFin recommends consulting them or the relevant head office of the Deutsche Bundesbank directly.
January 20, 2025
Financial Market Digitisation Act creates uniform legal framework for crypto assets and digital financial services
The German Act on the Digitisation of the Financial Market (Finanzmarktdigitalisierungsgesetz — FinmadiG) was published in the Federal Law Gazette on 27.12.2024. Under the supervision of BaFin, it creates a comprehensive legal framework for crypto assets and digital financial services in Germany and transposes important EU regulations into national law.
One of the main objectives of the FinmadiG is to increase digital resilience and counteract new money laundering risks. This is intended to strengthen confidence in new digital financial infrastructures and promote the integrity and stability of the financial system.
The FinmadiG is particularly relevant for financial services institutions, credit institutions, capital management companies and the new providers of crypto asset services. However, securities institutions, payment institutions and e-money institutions must also take the new regulations into account.
Key points of the law
Implementation of European requirements
The FinmadiG implements two key EU regulations: The DORA Regulation, which already came into force on 16 January 2023 and which since 17 January 2025 imposes uniform requirements for the use of information and communication technologies (ICT) for the entire financial sector, and the MiCA Regulation on markets for crypto-assets, which has been in force since 29 June 2023 and became applicable in phases in 2024.
New Crypto Markets Supervision Act
The centrepiece is the Crypto Markets Supervision Act (Kryptomärkteaufsichtsgesetz - KMAG) introduced in Article 1. It regulates the supervision of crypto asset issuers and service providers under the supervision of BaFin as the central authority. The KMAG contains comprehensive provisions on authorisation procedures, risk management, IT security, custodial safekeeping of client funds as well as measures against market abuse and corresponding sanctions.
Amendment of existing laws
The other articles of the FinmadiG modernise key financial market laws such as the German Banking Act (Kreditwesengesetz), Securities Trading Act (Wertpapierhandelsgesetz), Capital Investment Code (Kapitalanlagegesetzbuch), Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz) and Money Laundering Act (Geldwäschegesetz). Particular attention should be paid to the changes to the Capital Investment Code, which now contains a separate definition of crypto assets and creates new regulations for investments in digital assets by investment funds. BaFin has been given extended supervisory powers to monitor the IT security of capital management companies. In addition, the auditing and documentation obligations in the digital sector will be significantly expanded.
Transitional periods facilitate implementation
The FinmadiG came into force in stages: Most regulations on 30 December 2024, organisational regulations as early as 1 July 2024 and certain technical regulations on 28 December 2024.
The law provides for important transition periods: The audit of the DORA obligations will only become mandatory for financial years from 2025 - the first audits will therefore take place in 2026. This provision will give the affected financial companies, including capital management companies and securities institutions, additional time to implement the DORA requirements.
January 9, 2025
Gas derivatives: BaFin publishes draft general administrative act on the imposition of position limits
The German Financial Supervisory Authority BaFin has published a consultation on the adjustment of position limits for THE (Trading Hub Europe) Natural Gas Future contracts on the European Energy Exchange (EEX). Market participants may submit their comments until 10 January 2025.
BaFin is required to set position limits for each significant commodity derivative offered on a German trading venue. A commodity derivative is considered significant if its open interest, i.e. the sum of all outstanding net positions, corresponds to at least 300,000 lots on average over a one-year period.
The planned general administrative act, which is based on Section 54 (1) and Section 56 (1) sentence 2 WpHG and Article 16 of Delegated Regulation (EU) 2022/1302, provides for the position limits to be set at 15,077,000 MWh for the spot month and 47,273,000 MWh for the other months. This regulation is due to come into force on 10 March 2025.
The imposition of limits is necessary as the average open interest of 216,000,000 MWh is significantly above the statutory threshold of 300,000 tradable units. Since October 2021, there has only been one single gas market area in Germany under Trading Hub Europe. The German gas market has undergone a fundamental change since 2022 due to the loss of Russian supplies, with security of supply now being ensured by Norwegian pipeline gas and LNG imports.
BaFin is pursuing several objectives with the position limits: They are intended to prevent market abuse, contribute to orderly pricing and settlement conditions and prevent market-distorting trading positions. They are also intended to ensure convergence between derivatives and spot market prices. It is furthermore worth noting that a market correction mechanism for the TTF contract has been in place since February 2023, which takes effect when prices exceed EUR 180 per MWh (Regulation (EU) 2022/2578). In accordance with Section 54 (5) WpHG, the authority expressly reserves the right to adjust or revoke the general administrative act, if necessary, in order to be able to react flexibly to market developments.
The planned introduction of a position limit for THE (Trading Hub Europe) Natural Gas Future contracts is important for all companies trading this contract on EEX. These companies should take the changed position limits into account.
December 18, 2024
EMIR 3.0 published and will enter into force on 24 December 2024
On 4 Dec 2024 the EU has published Regulation (EU) 2024/2987, which forms part of the legislative package known as EMIR 3.0. This package primarily aims to increase the competitiveness of EU central counterparties (CCPs) and foster clearing activities in the EU, while maintaining adequate safeguards for market participants and financial market stability. EMIR 3.0 also seeks to address the risks arising from excessive reliance on systemically important third-country central counterparties (Tier 2 CCPs).
Regulation (EU) 2024/2987 modifies the European Market Infrastructure Regulation (EMIR), the Money Market Funds Regulation (MMFR), and the Capital Requirements Regulation (CRR) to bring about needed changes to achieve these objectives.
The key provisions of the new regulation are as follows:
(1) Active account obligation and related clearing requirements:
The regulation requires counterparties subject to the EU clearing obligation to hold at least one active account at a CCP established in the EU to clear a "representative number" of contracts of relevant derivatives. The active account obligation applies to both financial and non-financial counterparties, so long as they exceed the current clearing threshold of €3 billion in respect of these derivatives. The regulation further requires that counterparties with outstanding notional clearing volumes of at least €6 billion in relevant derivatives must clear a minimum number of trades at EU CCPs. In this context, it shall be noted that counterparties clearing at least 85% of their relevant derivatives at EU CCPs are exempt from the active account obligation.
(2) Active account operational requirements:
All firms subject to the active account obligation must ensure that their active accounts are permanently functional. This includes maintaining legal documentation, IT infrastructure, and internal processes to support the continuous operation of the account. Firms must be prepared to redirect a large volume of transactions from Tier 2 CCPs to EU CCPs on short notice. Additionally, the active account must accommodate all new trades in the relevant derivatives at any time. The accounts must further undergo annual stress-testing to evaluate their ability to handle large transaction volumes and ensure operational readiness. The European Securities and Markets Authority (ESMA) is tasked with drafting additional rules to specify these requirements.
(3) Notification and reporting requirements relating to the active account obligation:
Firms becoming subject to the active account obligation (see description above) are required to notify ESMA and their national competent authorities (NCAs) of the obligation and set up corresponding clearing accounts at an EU CCP within six months. Additionally, firms must report their activities and exposures in relevant derivatives to their NCAs every six months.
(4) Central clearing exemptions:
The regulation exempts EU counterparties (financial and non-financial) from central clearing obligations where the other counterparty is a pension scheme located in a third country, provided that this pension scheme is authorized and excluded from clearing requirements under its national laws and the pension scheme's objective is to provide retirement benefits for savers. Similarly, the regulation exempts post-trade risk reduction (PTRR) services. This exemption is designed to facilitate risk reduction across the market without imposing undue compliance burdens on counterparties engaged in PTRR activities.
(5) Reporting requirements concerning third country clearing activities:
The regulation introduces an additional reporting requirement for counterparties to derivatives as regards their clearing activities with non-EU CCPs. Specifically, EU-based entities are required to provide detailed reports to their NCAs on their exposure and clearing volumes at third-country CCPs. The reporting must include:
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details on the types of derivatives cleared, the notional amounts, and the frequency of clearing at non-EU CCPs;
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information on operational arrangements and resources to manage risks associated with clearing through third-country CCPs; and
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details about counterparties resources and systems in place to ensure operational readiness to "transfer" clearing of relevant contracts to an EU CCP.
(6) Expansion of acceptable collateral:
The regulation broadens the scope of assets eligible to be used as collateral for clearing obligations. Specifically, it allows public and commercial guarantees to qualify as acceptable collateral under specific conditions to provide counterparties with greater flexibility in meeting their collateral requirements. Public guarantees must be issued by EU Member States or other recognized public entities, while commercial guarantees must be provided by entities demonstrating adequate creditworthiness. ESMA is tasked with developing corresponding regulatory technical standards (RTS) to define the detailed eligibility criteria and ensure consistent application.
(7) Exemption of stock options and equity index options from margin requirements:
Stock options and equity index options are exempt from bilateral margin requirements, recognizing their unique characteristics and relatively lower systemic risk compared to other derivative instruments. This exemption applies to non-centrally cleared stock options and equity index options traded over the counter (OTC). ESMA, in collaboration with NCAs, is tasked to periodically assess the market impact of this exemption and ensure that the risk associated with these instruments remains low and the exemption is justified.
(8) Increased transparency of CCPs and clients providing clearing services:
The regulation introduces several provisions aimed at enhancing the transparency of clearing activities of CCPs and others providing clearing services for those relying on these services. Specifically, firms must disclose:
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details on their clearing fees, charges, and cost components associated with their services;
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details on their margin methodologies, collateral requirements, and risk management practices;
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information about available clearing services and arrangements, including account segregation options and operational details.
Again, ESMA is tasked to develop corresponding RTS to provide a uniform disclosure standard.
(9) Adjustment of the methodology to calculate clearing thresholds:
The regulation revises the framework for calculating clearing thresholds to ensure a more precise measurement of counterparties' exposure to OTC derivatives. These thresholds ultimately determine whether financial and non-financial counterparties are subject to clearing obligations for certain derivatives.
As part of the EMIR 3.0 legislative package the EU has also published Directive (EU) 2024/2994, to modify the Capital Requirements Directive (CRD), the Investment Firms Directive (IFD), and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS Directive to address excessive concentration risk to central counterparties by investment firms and financial institutions and to ensure a level playing field in the treatment of OTC and exchange-traded derivatives concerning concentration risk limits for collective investment schemes.
The directive is to be transposed into national law by 25 June 2026 and introduces the following key provisions or obligations:
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The directive modifies the UCITS Directive by eliminating the counterparty limits for OTC-derivative transactions that are cleared through CCPs authorized or recognized under EMIR (Regulation (EU) No 648/2012).
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The directive modifies the CRD and IFD to require financial institutions and investment firms to establish adequate processes to identify, manage and monitor risks associated with CCPs offering systemically important services, including concentration risks, and requires those firms to develop adequate risk mitigation strategies in this context.
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The directive requires national competent authorities (NCAs) to assess and monitor institutions' practices for managing concentration risks and the effectiveness of their strategies to mitigate such risks.
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The directive requires the European Banking Authority to develop guidelines by June 2026 to incorporate CCP-related concentration risks into stress-testing frameworks of financial institutions, including investment firms.
Finally, the directive introduces provisions to empower NCAs to take corrective action if they find that institutions or investment firms are exposed to excessive concentration risk arising from exposures towards a CCP. This includes the authority to require institutions to reduce their exposures, realign their clearing accounts, or implement other measures to mitigate excessive exposures.
It shall be noted that - despite the fact that Regulation (EU) 2024/2987 will already be effective on 24 December 2024 - many of the addressed issues will require further clarifications through guidance from the ESMA or level 2 legislation in the form of technical standards. Thus, many aspects cannot be complied with until further RTS or implementing technical standards (ITS) are adopted and published by ESMA. These standards will provide the necessary details for operationalizing key provisions of EMIR 3.0, such as threshold calculations, reporting requirements, and collateral eligibility criteria.
December 18, 2024
Anti-Money Laundering Act: BaFin updates interpretation and application notes
On 29 November 2024, the financial supervisory authority BaFin published an update of its interpretation and application notes on the German Money Laundering Act (AuA AT).
The AuA AT are binding BaFin guidelines that specify the practical implementation of money laundering obligations for supervised companies. They provide detailed guidance on the interpretation of legal requirements, such as client identification, transaction monitoring, internal security measures and reporting obligations, and therefore serve as an important practical guide.
The update takes into account various legislative changes such as the Future Financing Act, the Whistleblower Protection Act and the drafts of the Financial Crime Prevention Act and the Financial Market Digitisation Act.
There are significant changes and clarifications in the following areas:
Updating obligations pursuant to Section 10 (1) No. 5 GwG:
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New maximum periods for updating customer information apply:
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Annual update in the case of increased risk (Section 15 GwG)
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Five-yearly update for normal risk (Section 10 GwG)
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Risk-appropriate update for low risk (Section 14 GwG)
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Beneficial owners:
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The new AuA AT contain the clarification that the so-called notification of receipt of the transparency register does not serve as sufficient proof of registration.
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With regard to the registration of fictitious beneficial owners, the previous regulations are maintained.
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Duty to report suspicions in accordance with Section 43 (1) sentence 1 nos. 1 and 3 GwG:
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A transaction that has been reported in accordance with Section 43 (1) GwG may only be carried out if the third working day following the report has elapsed without the Financial Intelligence Unit (FIU) or the public prosecutor's office prohibiting its execution. However, a further halt to the transaction may be necessary, for example, if there are clear indications of money laundering or terrorist financing.
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If the company obliged to report does not receive a response from the FIU within 21 calendar days, the application of enhanced due diligence obligations is no longer required solely based on the submitted suspicious activity report. Further application may be necessary if there are other anomalies.
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If the FIU reports back that the SAR requires further analysis, enhanced due diligence obligations continue to apply. The duration of the application is at the risk-based discretion of the company.
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In addition to these three central topics, the AuA AT also contain information on the areas of risk management, internal security measures, due diligence obligations and record-keeping obligations.
The update serves as a preparation for the EU Anti-Money Laundering Regulation, which will apply from 10 July 2027, without anticipating its requirements. The new version of the AuA AT is applicable from 1 February 2025 and replaces the previous guidelines from October 2021.
December 10, 2024
UK plans innovative platform for trading shares in private companies
The UK Treasury has published a response paper on the proposed regulatory framework for a new ‘Private Intermittent Securities and Capital Exchange System’ (PISCES).
PISCES will provide a platform for private companies to trade their securities in a controlled environment and will act as a bridge between private and public markets. It will incorporate elements of public markets, such as multilateral trading, as well as elements of private markets, such as greater discretion over how company disclosures are distributed and when trading happens.
PISCES is a key part of the UK Government's strategy to revitalise the capital markets through measures to stimulate innovation and growth. As a reform of the secondary market, PISCES platforms are expected to complement ongoing measures to speed up capital raising for companies and increase productive investment in UK assets from spring 2025.
At the same time as the response paper, the UK Treasury has published a final draft of a piece of legislation that will be submitted to Parliament for approval. It has also published a draft policy note summarising the key provisions of the final legislative framework, which are as follows:
(1) PISCES setup:
PISCES will initially be set up in a sandbox for a period of five years. Following the sandbox phase, the Treasury intends to introduce legislation to permanently integrate PISCES into the UK financial market as a recognised and regulated trading venue. Companies wishing to operate a PISCES platform must have the appropriate regulatory authorisations under Part 4A of the Financial Services and Markets Act 2000. In particular, they must hold a licence to ‘arrange deals in investments’ or operate as a Multilateral Trading Facility (MTF) or Organised Trading Facility (OTF).
(2) PISCES investor qualifications:
Due to the higher risks associated with trading shares on PISCES, trading will be restricted to institutional and professional investors. This includes entities such as pension funds, private equity firms and other organisations that are classified as professional clients under the Financial Conduct Authority (FCA) guidelines. In addition, PISCES trading will be available to high net worth and sophisticated retail investors as defined by the Financial Promotion Order and to employees of companies whose shares are traded on the platform.
(3) Obligations of PISCES operators:
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Regulatory approval and licensing: PISCES operators must obtain the above-mentioned approval and licence from the FCA to operate within the new sandbox.
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Operational model and trading rules: Operators are allowed to customise their trading venues based on their business objectives, the needs of participating companies and the preferences of investors. In this context, they may set access restrictions for both issuing companies and investors, establish trading volume limits and define trading windows. These trading rules must be publicly accessible and designed to ensure transparency and fairness when trading on PISCES.
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Disclosures: Operators must ensure that investors have access to relevant and accurate information about the securities they wish to buy or sell. This includes access to financial information and other relevant material from participating companies (issuers).
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Price discovery and transparency: PISCES operators must ensure pre- and post-trade transparency to facilitate price discovery. In particular, they must publish indicative prices and volumes before trading and share transaction details after execution.
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Market integrity and abuse prevention: Operators must put in place systems and controls to detect and prevent abusive trading practices, including systems to monitor trading activity and identify trading irregularities.
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Review of authorisation requirements: PISCES operators must verify that all investors trading on the platform fulfil the eligibility criteria set out above.
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Documentation and monitoring: Operators must collect and keep detailed records of trading activity and information on issuers. These records must be made available to the FCA on request
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Exit and transition obligations: PISCES operators who decide to exit the sandbox must follow certain procedures. They must notify the FCA in advance and provide detailed plans for winding down activities or moving to a permanent trading venue, where permitted by law. They are also responsible for informing participating firms (issuers), investors and other stakeholders of the planned exit to ensure transparency and minimise disruption. In addition, they must take safeguards to protect the interests of participants, e.g. by ensuring that all ongoing transactions are properly settled and that no outstanding liabilities or obligations remain.
(4) PISCES eligibility criteria for private issuers:
Securities admitted to PISCES must be freely transferable and cannot already be listed on any other public or regulated trading platform in the UK or overseas. Private issuers may need to amend their articles of association or other corporate governance documents to enable free transferability. In this context, private companies are also permitted to admit different classes of shares to trading (e.g. voting and non-voting shares) to meet the needs of their investors and company management.
Companies are not permitted to execute buybacks of shares via PISCES. This restriction ensures that trading activities remain investor-centred and reduces the potential for market manipulation by issuers. In addition, companies must disclose information deemed essential for fair trading, including:
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inside information that could significantly affect the price of shares.
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information on share ownership and related party transactions.
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relevant price information, such as historical transaction data during trading windows.
This information must be made available within the private perimeter of PISCES (i.e. within a closed network of the operating platform) to ensure that participating investors are adequately informed prior to trading but information is retained within the platform to guard against public distribution.
Finally, companies admitted to PISCES are subject to all traditional market abuse provisions relating to insider dealing, market manipulation and the unlawful disclosure of inside information. PISCES operators are obliged to carry out controls to monitor and prevent abusive practices.
(5) Securities settlement:
It is at the discretion of the PISCES operators to decide whether the securities must be deposited with a Central Securities Depository (CSD) as part of the admission process. This flexibility allows operators to take into account commercial factors such as cost efficiency for participating issuers and the potential to attract investors through streamlined settlement options. In addition, the regulatory framework allows companies and PISCES operators to individually agree on alternative settlement arrangements to meet company-specific needs.
November 27, 2024
US sanctions in connection with violence in the West Bank
The US Treasury Department's Office of Foreign Assets Control (OFAC) has imposed sanctions on ‘Amana the Settlement Movement of Gush Emunim Central Cooperative Association Ltd (Amana)’.
Amana is an important part of the Israeli extremist settlement movement and maintains ties to various individuals who have been sanctioned by the U.S. government and its partners for acts of violence in the West Bank. OFAC also sanctions a subsidiary of Amana, Binyanei Bar Amana Ltd (BBA). BBA is a construction and development company that builds and sells homes in settlements and outposts in the West Bank.
The following individuals have been added to OFAC's ‘Specially Designated Nationals and Blocked Persons’ (SDN) List:
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KOSHLEVSKY, Shabtai (Hebrew: שבתי קושלבסקי) (a.k.a. KUSHELEVSKY, Shabtay; a.k.a. KUSHLEVSKI, Shabtai), West Bank; DOB 09 Jul 1983; nationality Israel; Gender Male; National ID No. 037769874 (Israel) (individual) [WEST-BANK-EO14115] (Linked To: HASHOMER YOSH).
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LEVI, Itamar Yehuda (Hebrew: איתמר יהודה לוי) (a.k.a. LEVY, Itamar), Susya 9040100, West Bank; DOB 20 Jan 1980; nationality Israel; Gender Male; National ID No. 37362951 (Israel) (individual) [WEST-BANK-EO14115] (Linked To: EYAL HARI YEHUDA COMPANY LTD).
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SABAH, Zohar (Hebrew: זוהר סבח) (a.k.a. AL-SABAH, Zohar; a.k.a. SABACH, Zohar), Mevo'ot Yericho, West Bank; DOB 21 Jul 1996; nationality Israel; Gender Male; National ID No. 315965525 (Israel) (individual) [WEST-BANK-EO14115].
The following entities have been added to OFAC's SDN List:
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AMANA THE SETTLEMENT MOVEMENT OF GUSH EMUNIM CENTRAL COOPERATIVE ASSOCIATION LTD (a.k.a. BAR AMANA SOCIETY & ASSOCIATIONS; a.k.a. "AMANA" (Hebrew: "אמנה")), West Bank; Israel; Organization Established Date 18 Feb 1979; Company Number 570025742 (Israel) [WEST-BANK-EO14115].
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BINYANEI BAR AMANA LTD (a.k.a. BINYANEI BAR AMANA CONSTRUCTION AND DEVELOPMENT), West Bank; Israel; Organization Established Date 08 Feb 1990; Organization Type: Construction of buildings; Company Number 511454365 (Israel) [WEST-BANK-EO14115] (Linked To: AMANA THE SETTLEMENT MOVEMENT OF GUSH EMUNIM CENTRAL COOPERATIVE ASSOCIATION LTD).
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EYAL HARI YEHUDA COMPANY LTD (Hebrew: חברת איל הרי יהודה בעיימ) (a.k.a. EYAL JUDAEAN MOUNTAINS COMPANY LTD), Susya 9040100, West Bank; Organization Established Date 02 Dec 2015; Organization Type: Construction of utility projects; Registration Number 515349660 (Israel) [WEST-BANK-EO14115] (Linked To: LEVI, Yinon).
As a result of this action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.
Additionally, OFAC issued a new general licence (GL 1) to permit the wind down of current engagements with Amana and BBA. All payments for the benefit of these entities must be made to a blocked account. It should be noted that the licence is limited until 10 January 2025.
ACL’s RISP Tool: Supporting Compliance and Operational Efficiency
As part of our Regulatory Intelligence Service Portal (RISP), we have received and analysed approximately 3,800 similar notifications in recent days. Our portal is updated on a daily basis with information from relevant authorities, including the US Office of Foreign Assets Control (OFAC) or the British Office of Financial Sanctions Implementation (OFSI), enabling us to provide our users with the most up-to-date information and support in meeting sanctions compliance requirements.
With RISP, compliance teams benefit from:
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Automated horizon scanning: RISP proactively monitors regulatory updates from various authorities, including those related to sanctions, ensuring our clients are promptly informed of new or amended regulations.
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Analysis and reporting: Our analysts then process the reports as well as the corresponding legal texts and provide a summary of their content. The information provided includes not only details of the sanctions themselves, but also the licences that are associated with them.
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Application in practice: Our service provides support for internal processes related to compliance with regulatory requirements in the area of money laundering prevention and (trans)national sanctions, enabling you to meet the evolving requirements as an obligated party. This streamlines your company's ability to meet its obligations. We provide our clients with access to a range of sanctions lists in various formats, which can be imported and processed automatically in other systems.
November 12, 2024
European Commission publishes delegated regulation on ELTIF
The European Commission (EC) has published on EUR-Lex new Delegated Regulation (EU) 2024/2759, which supplements the framework for European long-term investment funds (ELTIFs) under Regulation (EU) 2015/760, the ELTIF Regulation.
Specifically, the new delegated regulation seeks to provide clarity on key aspects of the ELTIF Regulation, particularly as regards the use of derivatives for hedging purposes, the design of redemption policies and liquidity risk management tools, the design of transfer request matching policies and related disclosures, the disclosure of costs, and the assessment of a buyers’ market and valuation of assets an ELTIF seeks to divest.
The following summary presents the key points made in the delegated regulation. For more detailed, comprehensive information, please refer to the original legal text.
(1) Derivatives for hedging: The regulation clarifies that ELTIFs may use financial derivatives strictly to hedge specific risks tied to their investments, not for speculative purposes. This hedging can only occur if the derivatives directly align with the fund's risk exposure. If no direct derivative is available relating to an exposure, ELTIFs may use derivatives within the same or a similar asset class, provided that they effectively mitigate the risks they are intended for. ELTIF managers must thereby ensure these derivatives reduce risk in normal and stressed market conditions, and that risk reduction is verifiable.
(2) The life of an ELTIF: Article 18(3) of the ELTIF Regulation requires that the life of an ELTIF must be consistent with the long-term nature of its investments. The new regulation clarifies the criteria that ELTIF managers shall consider to assess this consistency, such as the liquidity profile of each asset individually and the overall liquidity profile of the ELTIF portfolio. Fund managers must also evaluate the timing of asset acquisitions and disposals to ensure they align with the economic life-cycles of these assets and the ELTIF itself. Other factors which shall be considered in the assessment include the ELTIF’s investment objective, cash management needs, and expected cash flow, alongside the possibility to renew or end exposures to particular assets.
(3) The design of redemption policies: Typically, the ELTIF Regulation requires an ELTIF to have policies in place to prohibit premature redemptions of units or shares before the end of the life of the ELTIF. However, Article 18(2) permits an exemption from this requirement, provided that certain conditions are fulfilled such as the fund has a clear redemption policy aligned with its long-term investment strategy and liquidity risk profile. The new delegated regulation now specifies the content of such (premature) redemption policies and possible alignments in the future. Specifically, it requires that the redemption policy must clearly define under what conditions investors can redeem their shares, the time frames during which redemptions may take place, and the frequency of possible redemptions. The policy must also include provisions as to the notice period required of investors to request a redemption and the procedures that investors must follow when submitting requests, as well as how these requests will be processed. If any redemption restrictions apply, for example the application of minimum holding periods or redemption limits, these must also be part of the redemption policy. In case of holding period requirements, ELTIF managers are required to specify the duration of the holding period and any other conditions that may apply in this context. In case of redemption limits - which must be an essential part of ANY ELTIF policy where the ELTIF seeks to allow premature redemptions - the ELTIF manager must determine and calibrate this limit (as a percentage of the ELTIF's investments in assets defined as eligible investments of UCITS under Article 50 of the UCITS Directive) based on factors such as expected cash flows and the liquidity profile of the ELTIF's assets. In this context, it may be worth noting that an ELTIF manager is only allowed to count anticipated cash inflows for redemption purposes if there is a high degree of certainty these inflows will occur. Any speculative inflows like "possible" new subscriptions must be excluded from the determination of the redemption limit.
(4) Other matters related to redemption policies: The new delegated regulation also requires ELTIF managers to keep the redemption policy well-documented and consistent with the fund’s investment strategy. The manager is further expected to conduct periodic liquidity stress tests and use the results of these tests to ensure the fund can handle redemption requests even under challenging market conditions. Additionally, if circumstances change significantly, the ELTIF manager is obliged to adjust the redemption policy accordingly, such as the redemption frequency or notice periods, and communicate these changes to its regulator. Finally, the delegated regulation also requires that where an ELTIF allows for the redemption of shares prematurely, it must hold a specified minimum amount of liquid assets depending upon the notice period set out in the redemption policy and the permissible redemption frequency. To provide sufficient flexibility, fund managers may thereby choose from three options as outlined in Annex I of the delegated regulation.
(5) Liquidity management tools: To manage liquidity effectively, the delegated regulation stipulates that ELTIF managers may but are not required to use liquidity management tools. If they decide to use such tools to protect existing investors from the effects of frequent redemptions and thus shareholder dilution, managers shall select from any of the following three tools (as quoted):
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(a) anti-dilution levies;
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(b) swing pricing;
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(c) redemption fees.
They may also use other tools but must be prepared to justify their use.
(6) Transfer requests matching: To facilitate liquidity and transferability, the ELTIF regulation, specifically Article 19(2a) thereunder, allows ELTIFs to match transfer requests between exiting and incoming investors during a fund’s life. The new delegated regulation now specifies the content of such transfer request policies. Specifically, the policies must include transparent procedures for this matching process, including the timeframe for transfer considerations (matching window), deadlines for submitting transfer requests, any dealing issues such as the settlement date and payout terms, or any costs related to such transfers. In situations where there is an imbalance in requests (e.g. more investors seek to exit the fund versus investing in the fund), managers should allocate transfers on a pro-rata basis as defined in Article 8 to ensure the fair treatment of all investors. The delegated regulation also specifies the information that must be made available to investors upon matching and executing transfer requests.
(7) Asset disposal criteria: Article 21 of the ELTIF Regulation requires that - when ELTIFs plan to dispose of assets - managers must evaluate potential buyers and consider any market risks that may affect the sale. The delegated regulation now specifies the factors that ELTIF managers shall thereby take into account such as
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whether or not the potential buyer can complete the purchase without needing excessive financing,
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the maturity profile of the asset to be sold, or
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risks from political or economic changes that might impact demand for the asset in question.
As far as the valuations of assets to be divested from is concerned, the delegated regulation specifies that such valuation must be conducted near the disposal date to ensure accuracy, although valuations completed within the previous six months may be reused if they remain relevant.
(8) Cost disclosures: Finally, the delegated regulation specifies all the costs that shall be disclosed to investors in an ELTIF prospectus and the format in which such costs shall be presented in accordance with Article 25 of the ELTIF Regulation. Specifically, to promote transparency, the regulation requires comprehensive disclosure of ALL costs associated with ELTIF investments. This includes costs related to fund setup, asset acquisition, management fees, performance fees, and distribution (a list is provided in Article 12). The delegated regulation also requires that fees be presented in a consistent format and that fees classified as "others" and the overall cost ratio be presented as a percentage of a fund's net asset value to help investors understand the total cost impact on their investment. In case of the overall cost ratio, the regulation further mandates the use of two decimals and stipulates that the cost ratio must be computed and updated annually and must be calculated on an "all taxes included’ basis".
ELTIF managers or prospective managers should carefully review the new delegated regulation and ensure to establish redemption and transfer request policies in line with the provisions provided in the text. Also, fund managers must (re)assess their liquid asset holdings to ensure they align with the requirements under Article 5 and the Annex and review their prospectuses to ensure that all costs are adequately covered and presented to investors. We also recommend investors in ELTIFs to take note of the delegated regulation to stay up-to-date on possible redemption options and cost disclosures in marketing material.
ACL’s RISP Tool: Supporting Compliance and Operational Efficiency
ACL’s Regulatory Intelligence Service Portal (RISP) can play a key role in helping ELTIF managers and compliance teams adapt to these regulatory requirements. RISP offers continuous, automated monitoring of regulatory updates and industry best practices, enabling fund managers to stay informed about new obligations. With RISP, compliance teams benefit from:
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Automated Regulatory Tracking: RISP systematically screens for updates from regulatory bodies, industry groups, and relevant authorities, ensuring that ELTIF managers are promptly informed of any new or amended regulations.
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Customized Alerts and Analysis: RISP delivers alerts tailored to the user’s context, providing targeted analysis, indexing, and classification of regulatory information to facilitate compliance alignment.
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Comprehensive Document Management: The platform centralizes regulatory information, allowing fund managers and compliance officers to access a full-text collection of all pertinent documents, supporting seamless tracking and historical referencing of compliance records.
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Data Analytics and Reporting: RISP’s analytics and reporting features assist in generating insights, conducting compliance audits, and preparing documentation, enhancing transparency for internal and regulatory audits.
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Integration and Knowledge Sharing: Through integrations with fund management and compliance software, RISP streamlines compliance processes, reduces redundancies, and facilitates knowledge transfer between departments, supporting ongoing compliance readiness.
October 29, 2024
Government draft of the Fund Market Strengthening Act published
The Federal Government has passed the draft of a Fund Market Strengthening Act, which implements the EU Directive 2024/927 (AIFMD II) amending the UCITS and AIFM Directives into German law. The most important changes compared to the draft bill include the adjustment of the outsourcing notifications, expanded lending options for special AIFs and a redesign of the regulations on liquidity management instruments (LMTs). The specific design of the LMTs for open-ended real estate and infrastructure funds and the transitional provisions for existing funds are still open.
Key changes compared to the draft bill include adjustments to outsourcing notifications, expanded lending opportunities for special AIFs, and a redesign of requirements concerning liquidity management tools (LMTs). The specific implementation of LMTs for open-ended real estate and infrastructure funds, as well as transitional provisions for existing funds, are still to be determined.
The new law is set to come into force largely on April 16, 2026, with some regulations taking effect as early as July 1, 2025. Capital management companies, custodian banks, fund providers and investment companies in Germany should carefully examine planned changes, in particular the new regulations on outsourcing notifications, lending options for special AIFs and the introduction of liquidity management instruments. Providers of open-ended real estate and infrastructure funds should pay particular attention to the outstanding issues relating to liquidity management instruments. All affected companies should prepare for the gradual introduction of the new regulations from July 2025 to April 2026 and closely monitor further developments.
With its Regulatory Intelligence Service Portal (RISP), Averroes Concept Lounge (ACL) can support clients from the financial sector in a variety of ways when it comes to implementing the ‘Fund Market Strengthening Act’:
1. Automated monitoring and analysis of regulatory developments
RISP enables continuous and automated monitoring of regulatory requirements, including the new EU Directive 2024/927, which introduces significant changes in areas such as liquidity risk management, depositaries and lending by AIFs. This helps financial firms to be aware of changes at an early stage and to respond quickly to new requirements.
2. Professional assessment and interpretation
ACL's experts can analyse the complex regulatory texts and provide firms with clear, practical guidance. This includes the interpretation of new requirements, such as the introduction of at least two liquidity management tools, as well as adjustments regarding lending by investment funds.
3. Assist in the adaptation of internal processes
ACL can assist in reviewing and adapting internal processes and systems to ensure compliance with new regulatory requirements. This could include, for example, implementing the required liquidity management tools or adapting reporting and outsourcing processes.
4. Reporting and documentation
Using RISP, financial firms can optimise their regulatory reporting and ensure that all required reporting is timely and accurate. This can be particularly useful with respect to new regulatory reporting requirements and the use of special agents by BaFin.
5. Consulting on new market opportunities
Through its systematic screening and in-depth analysis, ACL can also advise companies on new market opportunities arising from the introduction of closed-end mutual funds or the facilitation of citizen participation in renewable energy projects.
Overall, ACL and RISP can help financial companies not only when it comes to compliance with regulatory requirements but also benefitting strategically from the new regulations by identifying market opportunities and strengthening their competitive position.
October 18, 2024
ESMA publishes updated Sustainable Finance implementation timeline
The European Securities and Markets Authority (ESMA) has published an updated infographic providing – in the form of a timeline - an overview of regulations on sustainable finance that came into force since the beginning of 2020 or will come into force in the coming years.
Source: ESMA - European Securities and Markets Authority
This includes the requirements under the Taxonomy and Sustainable Finance Disclosure Regulation (SFDR) and their respective delegated acts as well as the Corporate Sustainability Reporting Directive (CSRD), the European Sustainability Reporting Standards (ESRS), the Benchmark Regulation, the EU Green Bonds Regulation and the ESMA Guidelines on fund names using ESG or sustainability related terms.
Each requirement is briefly outlined in the infographic with the relevant application dates. In the latest update, ESMA has added various new entries. Among others:
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21.11.2024: Application date of the ESMA Guidelines on funds’ names (apply to all newly created funds)
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2025: Undertakings previously subject to the Non-Financial Reporting Directive (NFRD) report under the European Sustainability Reporting Standards (ESRS)
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01.01.2025: Non-financial undertakings disclose KPIs on taxonomy-alignment under the Taxonomy Disclosures Delegated Act ((EU) 2021/2178) (additional activities & environmental objectives)
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21.05.2025: Guidelines on funds’ names: End of transition period for funds existing prior to application date
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March-June 2025: EU Green Bond Regulation: Consultation on remaining technical standards
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mid-2025: SFDR L1 Review (?)
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end-2025: End of the third country benchmarks transitional provision for the Benchmark Regulation (BMR)
The consulting firm Averroes Concept Lounge (ACL) and its product, the Regulatory Intelligence Service Portal (RISP), can effectively support clients in the financial sector in implementing the ESMA regulations on sustainable finance.
August 28, 2024
SEC adopts reporting improvements for registered investment companies and provides guidance on liquidity risk management programs for open-end funds
On August 28, 2024, the U.S. Securities and Exchange Commission (SEC) announced the adoption of a final rule to enhance the reporting requirements of mutual funds, including closed-end funds, open-end funds, and exchange-traded funds, and to provide further guidance to open-end funds with respect to their liquidity risk management programs.
Essentially, the rule aims to improve disclosure by funds to enable investors to make more informed decisions about their investments and to allow the SEC to better oversee mutual funds in the U.S. The final rule comes nearly two years after a related consultation in November 2022 that proposed far more stringent and demanding provisions than those adopted by the Commission.
The following text briefly summarizes the most important provisions of the final rule:
Form N-PORT reporting
Form N-PORT collects comprehensive data on a fund's portfolio holdings, including specific details about each security, its valuation, and liquidity classification. It also gathers information on the fund's risk exposures, such as interest rate, credit, and liquidity risks, along with data on the use of derivatives and borrowings. The form aims to collect sufficient information to allow for continuous monitoring of the fund's financial position and risk management practices. Currently, before the implementation of the final rule, monthly Form N-PORT reports must be filed quarterly within 60 days after the end of each fiscal quarter, but only the last month's report of each quarter (i.e. March, June, September, and December) is made public. Under the new rule, investment funds must file Form N-PORT monthly within 30 days after month’s end. Additionally, the SEC will make available All Form N-PORT reports within 60 days after the end of the month to which a report refers.
Form N-CEN reporting
Form N-CEN collects comprehensive annual data from open-end and exchange traded funds, including information on fund structure, operations, service providers, and compliance practices. It thereby requires in-scope funds to disclose details about their legal status, investment advisers (fund managers), and third-party service providers and gathers certain financial data, such as net assets and distribution payments during the year. Form N-CEN must be filed annually within 75 days after the end of the fund's fiscal year. Under the final rule, the SEC will collect additional information on service providers investment funds use to meet their liquidity risk management program requirements (open-end funds only). Specifically, the SEC will require the disclosure of:
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the name of each liquidity service provider;
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the legal entity identifier (if available) and location of each provider;
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the asset classes for which the liquidity service provider offered classifications;
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whether the liquidity service provider is affiliated with the fund or its investment adviser; and
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whether the service provider was hired or terminated during the reporting period.
Guidance as regards certain fund liquidity risk management program requirements
The SEC has clarified some of the provisions under the SEC's liquidity rule under 17 CFR § 270.22e-4, which was adopted in 2016 and requires open-end funds to implement liquidity risk management programs to ensure they can meet redemption obligations and reduce the dilution of shareholder interests. The rule mandates regular assessments, management, and periodic reviews of liquidity risk, including the classification of portfolio investments into prescribed liquidity categories.
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Clarification of the frequency of liquidity classifications: The SEC has clarified that funds are required to review liquidity classifications more frequently than monthly if certain market conditions or investment-specific considerations materially affect the classification of investments. Such conditions or events may include situations of significant market volatility, such as during a financial crisis or other market disruptions, a downgrade in the credit rating of an issuer or a default event of an issuer, or significant geopolitical developments, such as the imposition of economic sanctions or the materialization of armed conflict or other political instability.
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Definition and treatment of cash: The SEC has clarified that "cash" in the context of the liquidity rule refers specifically to U.S. dollars, not foreign currencies or cash equivalents. If a fund holds foreign currencies or cash equivalents denominated in non-U.S. dollars, these do not automatically qualify as "cash" for liquidity classification purposes. In this case, funds must assess how long it would take to convert those assets into U.S. dollars. Although the SEC does not state what is considered "too much time" when it comes to converting investments into U.S. dollars for liquidity classification purposes, the Commission expects funds to exercise careful judgment based on their individual circumstances, taking into account factors such as market conditions, the type of asset, and the potential impact on the fund's ability to meet redemption requests.
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Highly liquid investment minimums: The liquidity rule currently requires funds that do not primarily hold highly liquid assets to establish and periodically review a highly liquid investment minimum. This minimum is intended to ensure that funds can meet redemptions without significantly diluting the interests of remaining investors. In the final rule, the SEC has now clarified that funds should tailor their highly liquid investment minimums based on their unique investment strategies and portfolio characteristics. For example, funds that invest significantly in less liquid or illiquid assets such as bank loans are advised to set a higher highly liquid investment minimum. Similarly, funds with investment strategies that historically experience or are expected to experience higher volatility in investor flows should consider higher highly liquid investment minimums. The SEC has also clarified that - while borrowing arrangements (such as lines of credit) can be considered in the determination of the highly liquid investment minimum- the Commission cautions that liquidity risk management should primarily be conducted through the construction of the fund’s portfolio, rather than relying heavily on such arrangements.
Effects for market participants
Investment fund managers need to closely review the final rule and take adequate steps to prepare for the revised reporting requirements. This includes the setup of revised reporting processes to align with the modified frequency of Form N-Port reporting and the implementation of policies for the collection of additional data on their liquidity service providers. Open-end funds are also strongly recommended to review the guidance issued by the SEC on liquidity risk management and reflect upon own processes to ensure compliance with the SEC's expectations as regards the frequency of liquidity classifications, the classification of cash and cash equivalents in non-U.S. dollars, and the determination of highly liquid investment minimums for funds with otherwise rather non-liquid investments.
Averroes Concept with its Regulatory Intelligence Service Portal (RISP) can support clients in a variety of ways with the implementation of the final rule:
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Regulatory Compliance Consulting: The experts of ACL can help investment companies understand and implement the new SEC rule, ensuring compliance with the reporting and disclosure obligations of Form N-PORT and Form N-CEN. They can assist in reviewing existing practices, identifying gaps, and helping funds meet the 30-day reporting timeline for Form N-PORT and the updated requirements for Form N-CEN, particularly in relation to service provider disclosures and liquidity management.
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Technology and Data Solutions: Given that investment companies must report comprehensive data on portfolio holdings, risk exposures, and liquidity management, ACL can provide expertise in developing or optimizing technology solutions for data collection and reporting. Its focus on technology enables it to streamline the filing process, ensuring that monthly and annual reports are timely and accurate, thereby leveraging on automated processes where possible.
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Liquidity Risk Management Programs: The SEC's liquidity rule under 17 CFR § 270.22e-4 requires frequent liquidity classifications and stringent liquidity risk management practices, taking into account the new clarifications issued by the Commission. ACL can provide advisory services to help funds tailor their liquidity strategies, establish appropriate highly liquid investment minimums, and improve their liquidity risk management frameworks. This could include helping funds assess how non-U.S. dollar assets should be classified and offering strategic advice on managing liquidity under volatile market conditions.
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Training and Education: The new SEC rule may require staff education and upskilling. Averroes can provide workshops, training, or ongoing support to help investment fund teams understand the intricacies of the new rule and how to implement it effectively.
August 27, 2024
Guidelines on ESG fund names published in all EU languages
The European Securities and Markets Authority (ESMA) has released translations of its Guidelines on funds’ names using ESG or sustainability-related terms across all official EU languages. These guidelines, effective from 21 November 2024, aim to prevent greenwashing by ensuring that funds accurately represent their investment strategies. They establish clear criteria for funds using terms like "transition," "environmental," "impact," and "sustainability." These criteria are both prescriptive, detailing required ESG investments, and restrictive, specifying disqualifying investments for such terms.
National authorities must notify ESMA of their compliance status by 21 October 2024. Existing funds have until 21 May 2025 to align with these guidelines, while new funds must comply immediately after the enforcement date. Fund managers are required to review and adjust their fund names and strategies to align with the guidelines, documenting all evaluations and decisions to avoid greenwashing accusations. These measures ensure that fund names accurately reflect their sustainability focus, protecting investors and maintaining transparency in sustainable finance.
The consulting firm Averroes Concept Lounge and its product, the Regulatory Intelligence Service Portal (RISP), can effectively support clients in the financial sector in implementing the ESMA Guidelines on ESG or sustainability-related terms in fund names. This support is provided in several ways:
1. Automated Monitoring:
RISP offers continuous, automated monitoring of regulatory requirements, including the new ESMA Guidelines. This ensures that clients are always informed about the latest requirements and do not miss any important changes.
2. Expert Assessment:
ACL's experts analyze and evaluate regulatory publications, providing clients with informed insights on how the new guidelines will affect their existing and planned funds.
3. Systematic Screening:
Through systematic screening of publications from regulatory authorities and industry associations, ACL ensures that clients can react promptly to potential regulatory changes, giving them a competitive advantage.
4. Implementation Support:
ACL can assist clients in reviewing and adjusting their fund names and investment strategies to ensure compliance with the new guidelines. This also includes documenting all relevant decisions to minimize the risk of greenwashing accusations.
ACL helps clients efficiently and transparently implement the complex requirements of the ESMA Guidelines.
August 26, 2024
Draft bill for a 'Fund Market Strengthening Act' published
The Federal Ministry of Finance has published the draft bill for a "Fund Market Strengthening Act." This draft aims to implement the recent changes to the UCITS and AIFM directives in the German Capital Investment Code (KAGB). The focus is on the new EU regulations regarding transfer agreements, liquidity risk management, supervisory reporting, custodianship and depository services, as well as lending by alternative investment funds. These changes are largely implemented without deviations to ensure compliance with EU standards.
Introduction of closed-end public investment funds and open-end investment companies
The draft also introduces the concept of closed-end public investment funds and allows open-end real estate and infrastructure funds to be structured as open-end investment companies. It also facilitates public participation in renewable energy projects. In addition, BaFin is empowered to appoint special representatives at investment management companies.
Implementation of Directive (EU) 2024/927 on delegation agreements, liquidity risk management, regulatory reporting, provision of custody and depositary services and lending by AIFs
The German fund market has progressed well in recent years, but there is still room for improvement. A strong and resilient fund market is seen as crucial for financing infrastructure and economic transformation. The new EU Directive 2024/927 amends Directives 2009/65/EC and 2011/61/EU regarding delegation arrangements, liquidity risk management, regulatory reporting, depositaries and custody services and lending by AIF. The Directive, which must be transposed into national law by 16 April 2026, aims to create a single set of rules across Europe for reporting, outsourcing, the use of liquidity management tools and lending by AIFs.
1 to 1 Implementation of Directive (EU) 2024/927
The proposed law will implement the changes required by the new EU Directive. The introduction of mandatory liquidity management tools will help avert systemic risks from the European investment fund market and thus stabilise the German and European financial markets. The adjustments to the rules for fund managers who grant loans through investment funds will help to create a level playing field in the EU. The changes to KAGB will enable German fund providers to offer competitive products and provide investors with better and more diverse investment opportunities, such as community energy projects.
At least two suitable liquidity management instruments
The draft law requires open-end fund managers to select at least two appropriate liquidity management tools to enhance market stability. BaFin will have a better overview of outsourced functions, particularly to third countries, and will be able to appoint special representatives and require reporting of significant outsourcing incidents. Amendments to the credit rules for investment funds will harmonise them with the new EU standards, thus ensuring a level playing field. National regulations will also be adapted, including the introduction of closed-end public investment funds and facilitating public participation in renewable energy projects.
Implications for market participants
It is important for AIFM to review the draft carefully as it contains new rules on transfer agreements, liquidity risk management, supervisory reporting and the provision of custodial and depositary services and lending by AIFM. They also need to prepare for the possibility that BaFin may appoint special representatives for them in the future. Investment funds and custodians need to familiarise themselves with the new EU legal requirements and ensure that their processes and practices are compliant. Real estate and infrastructure funds should consider the possibility of registering as open-end investment companies in order to benefit from the new rules. Stakeholders in the renewable energy sector who are planning to involve citizens should familiarise themselves with the planned simplifications and take them into account in their projects.
With its Regulatory Intelligence Service Portal (RISP), Averroes Concept Lounge (ACL) can support clients from the financial sector in a variety of ways when it comes to implementing the draft ‘Fund Market Reinforcement Act’:
1. Automated monitoring and analysis of regulatory developments
RISP enables continuous and automated monitoring of regulatory requirements, including the new EU Directive 2024/927, which introduces significant changes in areas such as liquidity risk management, depositaries and lending by AIFs. This helps financial firms to be aware of changes at an early stage and to respond quickly to new requirements.
2. Professional assessment and interpretation
ACL's experts can analyse the complex regulatory texts and provide firms with clear, practical guidance. This includes the interpretation of new requirements, such as the introduction of at least two liquidity management tools, as well as adjustments regarding lending by investment funds.
3. Assist in the adaptation of internal processes
ACL can assist in reviewing and adapting internal processes and systems to ensure compliance with new regulatory requirements. This could include, for example, implementing the required liquidity management tools or adapting reporting and outsourcing processes.
4. Reporting and documentation
Using RISP, financial firms can optimise their regulatory reporting and ensure that all required reporting is timely and accurate. This can be particularly useful with respect to new regulatory reporting requirements and the use of special agents by BaFin.
5. Consulting on new market opportunities
Through its systematic screening and in-depth analysis, ACL can also advise companies on new market opportunities arising from the introduction of closed-end mutual funds or the facilitation of citizen participation in renewable energy projects.
Overall, ACL and RISP can help financial companies not only when it comes to compliance with regulatory requirements but also benefitting strategically from the new regulations by identifying market opportunities and strengthening their competitive position.
