BMI Statement Regarding BaFin Consultation on AIFM Approval Procedures

Key Takeaways

• The Federal Association of Medium-Sized Investment Partners (BMI) has submitted a formal response to BaFin's consultation 17/2025 regarding updates to the information sheet for AIF capital management company approvals.
• The industry group is seeking clarification to prevent legal uncertainty surrounding the management of "old funds" under transitional provisions of the KAGB.

Deep Dive

The regulatory update centers on a proposed change to BaFin's information sheet concerning the approval procedure for AIF capital management companies (AIF-KVG). Specifically, new wording introduced by the regulator suggests that an investment company may not manage closed AIFs of other legal forms within its permit framework. This has created significant ambiguity regarding whether "old funds" (those established under transitional regulations) are subject to the same restrictions as newer AIFs.

For compliance teams, this update represents a critical period of regulatory uncertainty. The BMI argues that the current wording could be interpreted as an "infection" of old funds by new AIF activities, potentially stripping legacy funds of their grandfathered status and subjecting them to full KAGB regulations. If BaFin's interpretation is overly restrictive, firms may face unexpected regulatory burdens and a loss of the legal protections previously afforded to these legacy structures.

While no specific deadline for compliance implementation was set in this consultation response, the document refers to an ongoing consultation process (17/2025). Compliance professionals should monitor the final version of the BaFin information sheet closely. The industry's recommendation is that any such regulatory change must include a "without prejudice" clause to protect the administration of old funds under Section 353 of the KAGB, ensuring that parallel management does not retroactively alter the legal status of existing fund structures.

The risk implications are substantial, particularly regarding operational costs and consumer protection. An arbitrary shift in administrative practice could lead to unnecessary legal disputes, as seen in the Leonidas Associates example cited by the BMI. Furthermore, if the regulatory change is implemented without clear legal backing, it may create an incentive for firms to manage legacy funds through unregulated entities, potentially undermining investor protection and increasing the cost of compliance for medium-sized investment partners.

Source: Federal Financial Supervisory Authority