The most important in brief
- Management companies (both registered with and authorized by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin)) will be legally obliged to set up an access to the electronic communication procedure provided by the BaFin via the MVP portal.
- The electronic submission channels must be used in relation to all cases newly specified by law. These include, among several other notifiable cases, e.g. applications for registration or authorization, the appointment of statutory auditors, the management of EU-AIFs by way of cross-border services or the intention to market units or shares of EU-AIFs or non-EU-AIFs.
- The extended obligation to use the MVP portal will apply from April 1, 2023.
- In addition, management companies must check every five calendar days whether they have received messages from the BaFin via the electronic communication procedure.
Supplement to the KAGB – Regulation on electronic communication
On April 1, 2023, section 7b of the German Investment Code (KAGB), which has been newly inserted by the German Fund Jurisdiction Act (Fondsstandortgesetz), will enter into force. Its aim is to improve and facilitate digital communication with the public administration. Management companies, investment corporations, depositaries, prospective acquirers and owners of a qualified participating interest will be required to communicate electronically with the BaFin on a large scale. For this purpose, the BaFin will provide an electronic communication procedure via its MVP portal. Details such as the terms and conditions of access and usage are currently consulted in a draft bill for a regulation on electronic communication under the KAGB (Capital Investment e-Communication Ordinance; Kapitalanlage-Kommunikationsverordnung – KAeKV).
Regulated obligations of management companies
Electronic communication concerns circumstances from different stages of the supervisory procedure, beginning with the application for registration or authorization up to regular and ad hoc reporting obligations. Section 7b KAGB lists several dozens of relevant notifications, applications, communications, reports, documents, information and evidence to which the electronic communication procedure must be applied in the future.
Pursuant to section 7b(2) KAGB, management companies are obliged to set up an electronic access and to ensure that regular checks are carried out – at the latest every five calendar days – to determine whether messages have been provided for them via the electronic communication procedure. This shall also apply to administrative acts notified or served in accordance with section 4f or section 4g of the Act Establishing the Federal Financial Supervisory Authority (FinDAG).
The law thus allows for a two-way communication between management companies and the BaFin (section 7b(2) KAGB). A clear determination of messages which the BaFin will communicate in deviation from its conventional transmission channels, by means of the electronic communication procedure, is not yet conclusively possible. The direction of communications from the BaFin to management companies is not specified within the draft bill for the Capital Investment e-Communication Ordinance. However, the BaFin plans to send information, administrative acts, reminders and announcements to users of the MVP portal.
Recourse to the MVP portal
The draft bill of the Capital Investment e-Communication Ordinance clarifies that the BaFin will resort to the already known MVP notification and publication platform for the provision of the electronic communication procedure. The BaFin has informed supervised management companies in a letter dated December 19, 2022, that it will offer three new specialized procedures (notification procedure KAGB for managing directors, management companies and funds; Anzeigeverfahren KAGB zu Geschäftsleitern, KVGen und Fonds) via the MVP from January 1, 2023 and will enable – initially on an optional basis – the establishment of an electronic access. The new specialized procedures, whose activation and handling are explained in more detail in an associated information sheet, are intended to enable management companies to submit electronic versions of various applications, reports and notifications to the BaFin in a cost-efficient, fast, secure and verifiable manner in accordance with the KAGB and accompanying ordinances.
Since November 29, 2022, notifications regarding new delegations or significant changes to existing delegations are already obligatorily to be communicated by means of the MVP portal.
Against the background of the imminent increase in the use of the MVP portal it should be emphasized that the possibility of subcontracting tasks in connection with the electronic communication to service providers are allowed for. Section 7b(2) KAGB expressly permits management companies to mandate representatives in the context of the electronic communication. Hence, e.g. the above-mentioned obligation to check the established access for new messages every five calendar days, could be subcontracted to service providers.