responsibility finder
Schleswig-Holstein

Applying for permission to operate a capital management company

Source: Zuständigkeitsfinder Schleswig-Holstein (Linie6PLus)

Service Description

If you wish to manage investment funds as a capital management company with its registered office and head office in Germany, you require written permission or you must register.

The capital management company (KVG), formerly known as an investment company or fund management company, manages certain investment funds.

KVGs have been subject to new regulatory requirements in Germany since July 2013. The meaning of the term was expanded in the German Capital Investment Code (KAGB) and simultaneously defined for open-ended and closed-ended investment funds.

With a few exceptions, all KVGs are subject to licensing.

  • KVGs that manage funds are not subject to licensing,
    • whose thresholds do not exceed EUR 100 million in general or EUR 500 million if these funds have no financing leverage and no redemption rights within the first five years and
    • which are exclusively special funds for institutional investors.

Note:
These funds must be registered with the state supervisory authority.

A KVG is either an external KVG or an internal KVG.
An external KVG may only be licensed by BaFin in 3 legal forms:

  • the AG,
  • the GmbH or
  • the GmbH & Co. KG.

The KVG must first have been commissioned by the fund's management board or managing director to manage the fund. If the management decides that no external KVG is to be appointed, the investment fund itself is to be regarded as an internal KVG.

AIF capital management companies are capital management companies that manage or intend to manage at least one alternative investment fund (AIF).
UCITS capital management companies are capital management companies that manage or intend to manage at least one undertaking for collective investment in transferable securities (UCITS).

You must submit the application for permission to operate a capital management company in writing to BaFin.


Process flow

You must submit an informal written application to BaFin for permission to operate a capital management company.

  • Send your informal application together with the required documents to BaFin.
  • BaFin will review your documents. After reviewing your documents, BaFin may contact you in writing by e-mail or post if further documents are required.
  • If necessary, you will receive information on deadline extensions.
  • BaFin will issue a notice of authorization or a notice of refusal of authorization and a notice of fees.
  • BaFin will arrange for the license to be published in the Federal Gazette.
Requirements

The following may apply for a license to operate as a capital management company:

  • Companies with their registered office and head office in Germany that wish to manage investment assets.

Note: An investment fund is said to be managed if at least portfolio management or risk management is provided.

Which documents are required?

You must submit your application:

  • Proof of sufficient initial capital
    • Proof of initial capital of at least EUR 300,000 for an internal KVG and EUR 125,000 for an external one

Note: Additional capital requirements may arise in special individual cases.

  • Proof of at least 2 reliable and professionally suitable managing directors
  • Details of significant shareholdings and close connections
  • Meaningful business plan
    • including projected balance sheets and projected income statements for the next three years as well as a description of the planned internal control procedures and business organization
  • information on remuneration policy and practice
  • a list of all outsourcing companies
  • Information on the investment strategies
  • submission of the contract for the appointment of the depositary for each investment fund
  • Articles of Association/Company Agreement.
What are the fees?
  • Fees for obtaining a permit: EUR 19,185
What deadlines do I have to pay attention to?

none

Processing duration
  • for processing the application: usually 2 to 8 months

Notes:
The permissible processing period for the license application for an AIF management company is generally 3 months after submission of the complete application. BaFin may extend this period by up to 3 months if it deems this necessary due to the particular circumstances of the individual case. The applicant must be informed of the extension of the deadline.
The permissible processing period for the license application for a UCITS capital management company is six months after submission of the complete application.

Legal basis
Appeal
  • objection
  • Administrative court action
Applications / forms
  • Forms: no
  • Online procedure possible: no
  • Written form required: yes
  • Personal appearance required: no

Note:
An online procedure is expected to be possible from April 2023.

Author
Forwarding service: Deep link to the original portal

The text was automatically translated based on the German content.

Technically approved by

Federal Ministry of Finance (BMF)

Professionally released on

24.06.2021

Teaser

If you wish to manage investment funds as a capital management company with its registered office and head office in Germany, you require written permission or you must register.

Process flow

You must submit an informal written application to BaFin for permission to operate a capital management company.

  • Send your informal application together with the required documents to BaFin.
  • BaFin will review your documents. After reviewing your documents, BaFin may contact you in writing by e-mail or post if further documents are required.
  • If necessary, you will receive information on deadline extensions.
  • BaFin will issue a notice of authorization or a notice of refusal of authorization and a notice of fees.
  • BaFin will arrange for the license to be published in the Federal Gazette.

Requirements

The following may apply for a license to operate as a capital management company:

  • Companies with their registered office and head office in Germany that wish to manage investment assets.

Note: An investment fund is said to be managed if at least portfolio management or risk management is provided.

Which documents are required?

You must submit your application:

  • Proof of sufficient initial capital
    • Proof of initial capital of at least EUR 300,000 for an internal KVG and EUR 125,000 for an external one

Note: Additional capital requirements may arise in special individual cases.

  • Proof of at least 2 reliable and professionally suitable managing directors
  • Details of significant shareholdings and close connections
  • Meaningful business plan
    • including projected balance sheets and projected income statements for the next three years as well as a description of the planned internal control procedures and business organization
  • information on remuneration policy and practice
  • a list of all outsourcing companies
  • Information on the investment strategies
  • submission of the contract for the appointment of the depositary for each investment fund
  • Articles of Association/Company Agreement.

What are the fees?

  • Fees for obtaining a permit: EUR 19,185

What deadlines do I have to pay attention to?

none

Processing duration

  • for processing the application: usually 2 to 8 months

Notes:
The permissible processing period for the license application for an AIF management company is generally 3 months after submission of the complete application. BaFin may extend this period by up to 3 months if it deems this necessary due to the particular circumstances of the individual case. The applicant must be informed of the extension of the deadline.
The permissible processing period for the license application for a UCITS capital management company is six months after submission of the complete application.

Legal basis

Appeal

  • objection
  • Administrative court action

Applications / forms

  • Forms: no
  • Online procedure possible: no
  • Written form required: yes
  • Personal appearance required: no

Note:
An online procedure is expected to be possible from April 2023.

Author

Forwarding service: Deep link to the original portal

The text was automatically translated based on the German content.

Technically approved by

Federal Ministry of Finance (BMF)

Professionally released on

24.06.2021

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