GERMANY Law and Practice Contributed by: Tarek Mardini, Antonia Puglisi and Enzo Biagi, POELLATH
4.13 Anticipated Changes for Investors German Investment Ordinance (Anlageverordnung) The German Investment Ordinance ( Anlageverord- nung or AnlV) governs the investment activities of institutional investors not fully subject to the Solvency II. This includes, in particular, pension funds and small insurance companies. The AnlV governs eligible asset classes, diversification requirements and quantitative limits to ensure that investments are secure, profitable and sufficiently liquid. A key element of the AnlV is the system of investment quotas, which limits the exposure to certain asset types and promotes risk diversification. Recent reforms introduced a dedicated 5% infrastruc - ture quota, allowing institutional investors to make direct and indirect investments (equity or debt) infra - structure projects, such as construction, operation or maintenance. These investments no longer count against other quotas and offer flexibility in classifica - tion depending on the investment vehicle used. Additionally, the risk capital quota – which covers, among other things, equity investments, private equity and corporate participations – was raised from 35% to 40% of the guaranteed assets. Utilisation of this quota remains subject to the investor’s internal risk assessment and supervisory expectations. Eligible Assets Directive On 26 June 2025, ESMA submitted its final report on the revision of the Eligible Assets Directive (Directive 2007/16/EC, “EAR”) to the European Commission. The report introduces important changes regarding the interpretation and scope of “transferable securi - ties”, a key concept under the UCITS Directive that determines which assets are eligible for UCITS invest - ments. While the proposals do not yet have binding legal effect, they are expected to have a material impact once implemented by the European Commis - sion. Although primarily aimed at UCITS, the proposed changes may also affect certain open-end special
AIFs used by institutional investors in Germany. This is because the rules under the KAGB governing the eligibility of assets for open-end special AIFs refer to the UCITS Directive’s definition of transferable secu - rities. As a result, the revised interpretation of trans - ferable securities under the EAR could indirectly limit the types of assets such German AIFs are permitted to hold. At the core of ESMA’s proposals is a strict look-through requirement. In the future, a holding in a closed-end fund would only qualify as a transferable security if the fund invests exclusively in assets that UCITS are permitted to acquire directly. In addition, closed-end funds would need to be authorised and supervised under a regime equiva - lent to EU standards, effectively requiring EU AIFMs with full authorisation. Moreover, investments in other funds would be capped at 10% of assets, ruling out fund-of-funds and feeder structures. If implemented, the proposed changes could signifi - cantly restrict the ability of institutional investors to access certain closed-end fund strategies via vehicles that rely on the transferable securities definition under the UCITS regime. In August 2025, the German Federal Ministry of Finance published a draft of the German law to Strengthen the Economic Site of Germany ( Standort- fördergesetz ). The draft law expands the catalogue of eligible assets for German specialised investment funds pursuant to the German Investment Tax Act to interests in closed-end AIFs. At the same time, the draft amends the KAGB to allow open-end German “Spezial-AIF” with fixed terms to acquire units of all fund types (including closed-end funds/ELTIFs). As a practical result, if implemented, closed-end AIFs will not need to meet the criteria of “transferable securi - ties” to be eligible assets for open-end German “Spe - zial-AIF” for German regulatory and tax law purposes in future.
132 CHAMBERS.COM
Powered by FlippingBook