Investment conditions

(1) The investment conditions governing 1. the contractual legal relationship of the capital management company to the investors of a retail collective investment fund, or of the EU UCITS management company to the investors of a domestic UCITS collective investment fund, or 2. in conjunction with the articles of association of the retail investment stock corporation with variable capital, the legal relationship of this investment stock corporation to its shareholders, or of the EU UCITS management company to the investors of a domestic UCITS investment stock corporation, must be set out in text form before the issue of the units or shares.
(2) In addition to the designation of the investment fund and the particulars of the name and seat of the management company, the investment conditions must contain at least the following particulars: 1. the principles according to which the selection of the assets to be procured takes place, in particular which assets may be acquired to what extent, the types of investment funds whose units or shares may be acquired for the investment fund, and the proportion of the investment fund that may at most be held in units or shares of the respective type; whether, to what extent, and for what purpose transactions in derivatives may be carried out, and what proportion is held in bank balances and money market instruments; techniques and instruments that may be used in managing the investment fund; the permissibility of borrowing for the account of the investment fund; 2. where the selection of the securities to be acquired for the investment fund is directed at replicating a securities index within the meaning of section 209, which securities index is to be replicated, and that the limits named in section 206 may be exceeded; 3. whether the assets belonging to the collective investment fund are owned by the management company or co-owned by the investors; 3a. which liquidity management tools, from among those named in the list in Annex IIA, points 2 to 8, of Directive 2009/65/EC, or in the list in Annex V, points 2 to 8, of Directive 2011/61/EU, have been selected; 3b. whether, and if so which, liquidity management tools not covered by point 3a have been selected; 4. under what conditions, on what terms, and at which entities investors may demand the redemption, and, where applicable, the exchange, of units or shares from the management company; whether, and under what conditions, the redemption, and, where applicable, the exchange, of units or shares may be restricted; whether, and under what conditions, the notice period for redemption may be extended; 5. the manner in which, and the dates as at which, the annual report and the half-yearly report on the development of the investment fund and its composition are prepared and made accessible to the public; 6. whether income of the investment fund is to be distributed or reinvested, and whether the portions of the issue price attributable to income for units or shares issued may be applied towards distribution (income equalisation procedure); whether the distribution of disposal gains is provided for; 7. when, and in what manner, the investment fund, insofar as it is established for a limited duration only, is wound up and distributed to the investors; 8. whether the investment fund comprises various sub-funds, under what conditions units or shares in various sub-funds are issued, according to what principles the sub-funds are formed and what structural features are assigned to them under section 96(2), first sentence, as well as the procedure under section 96(3), fifth sentence, in conjunction with subsection (4), or section 117(9), for calculating the value of the units or shares of the sub-funds; 9. whether, and under what conditions, units or shares with different structural features are issued, and the procedure under section 96(1), fourth sentence, in conjunction with subsection (4), first sentence, for calculating the value of the units or shares of each unit or share class; 10. whether, and under what conditions, the investment fund may be absorbed into another investment fund, and whether, and under what conditions, another investment fund may be absorbed; 11. according to what method, in what amount, and on the basis of what calculation, the remuneration and reimbursement of expenses from the investment fund are to be paid to the management company, the depositary, and third parties; 12. the amount of the front-end load on the issue of units or shares, or the redemption discount on redemption, and other costs and fees to be paid by the investor, including their calculation; 13. where a flat fee for remuneration and costs is agreed in the investment conditions, an indication of which forms of remuneration and costs make up the flat fee, and a notice as to whether, and which, costs are charged separately to the investment fund; 14. that the annual report and the half-yearly report must disclose the amount of the front-end loads and redemption discounts charged to the investment fund during the reporting period for the acquisition and redemption of units and shares within the meaning of sections 196 and 230, and must disclose the remuneration charged to the investment fund by the management company itself, by another management company, or by a company with which the management company is connected through a material direct or indirect participation, as management fee for the units or shares held in the investment fund; 15. the conditions for a transfer of management to another capital management company and for a change of depositary; 16. where swing pricing is agreed in the investment conditions, the type of swing pricing (full or partial swing pricing) and under what conditions this method is applied; 17. where dual pricing is agreed in the investment conditions, under what conditions this method is applied; 18. where the investment fund provides for the possibility of redemption in kind to professional investors under section 98(4), under what conditions redemption in kind is applied; 19. that illiquid investments may be side-pocketed; 20. where liquidity management tools under point 3b have been selected, the conditions for their application.