Investment units

(1) The UCITS capital management company may acquire, for the account of a domestic UCITS, units in UCITS. It may acquire units in other domestic collective investment funds and investment stock corporations with variable capital, and units in open-ended EU AIF and foreign open-ended AIF, only where 1. these have been authorised under legal provisions subjecting them to effective public supervision for the protection of investors, and there is sufficient assurance of satisfactory cooperation between the authorities, 2. the level of investor protection is equivalent to the level of protection of an investor in a domestic UCITS, and in particular the provisions on the separate custody of assets, on borrowing and lending, and on short sales of securities and money market instruments, are equivalent to the requirements of Directive 85/611/EEC, 3. the business activity is the subject of annual and half-yearly reports that allow a judgement to be formed of the assets and liabilities, income, and transactions for the reporting period, 4. the units are offered to the public without any numerical limitation, and investors have the right to redeem the units. Units in domestic collective investment funds, in investment stock corporations with variable capital, in EU UCITS, in open-ended EU AIF, and in foreign open-ended AIF may be acquired only where, under the investment conditions or the articles of association of the capital management company, the investment stock corporation with variable capital, the EU investment fund, the EU management company, the foreign AIF, or the foreign AIF management company, no more than 10 percent in total of the value of their assets may be invested in units in other domestic collective investment funds, investment stock corporations with variable capital, open-ended EU investment funds, or foreign open-ended AIF.
(2) On the acquisition of units within the meaning of subsection (1) that are directly or indirectly managed by the same UCITS capital management company, or by a company with which the UCITS capital management company is connected through a material direct or indirect participation, the UCITS capital management company or the other company may not charge front-end loads or redemption discounts for the acquisition and redemption.