Securities loans, collateral

(1) The UCITS capital management company may transfer securities to a third party (securities loan borrower) for the account of the domestic UCITS against remuneration in line with the market, only on the basis that the securities loan borrower must restitute to the UCITS capital management company, for the account of the domestic UCITS, securities of the same type, quality, and quantity (securities loan), where this is provided for in the investment conditions. The income from securities loan transactions accrues to the domestic UCITS. Securities loans may be granted to a securities loan borrower only insofar as the market value of the securities to be transferred, together with the market value of the securities already transferred to the securities loan borrower as a securities loan for the account of the domestic UCITS, does not exceed 10 percent of the value of the domestic UCITS; securities loans to group undertakings within the meaning of section 290 of the Commercial Code are regarded as securities loans to the same undertaking. The UCITS capital management company must be entitled to terminate the securities loan at any time.
(2) The UCITS capital management company may transfer securities under subsection (1) only where it has, before the transfer, or concurrently with the transfer of the securities, had sufficient collateral provided for the account of the domestic UCITS by way of a cash payment, an assignment of balances, or a transfer of ownership of securities or money market instruments, in accordance with subsection (3), second and third sentence. The balances provided by dispositions under the first sentence must be denominated in euro or in the currency in which the units or shares of the domestic UCITS were issued. The balances must 1. be held in blocked accounts with the depositary, or, with its consent, in blocked accounts with other credit institutions with their seat in a Member State of the European Union or another State party to the Agreement on the European Economic Area, or with another credit institution with its seat in a third country in accordance with section 195, second sentence, second half-sentence, or 2. be invested in the currency of the balance a) in debt securities of high quality issued by the Federation, a Land, the European Union, a Member State of the European Union or its government entities, another State party to the Agreement on the European Economic Area, or a third country, b) in money market funds with a short maturity structure in accordance with guidelines issued by the Federal Institute under section 4(2), or c) by way of a repurchase transaction with a credit institution that guarantees repayment of the accrued balance at any time. The income from the investment of the collateral accrues to the domestic UCITS. Securities issued by the securities loan borrower, or by an undertaking belonging to the same group, are impermissible as collateral.
(3) The market value of the securities to be transferred as a securities loan, together with the associated income, constitutes the value to be secured (secured value). The extent of the collateral must be determined having regard, in particular, to the economic circumstances of the securities loan borrower. The collateral may not fall below the secured value plus a mark-up in line with the market. The UCITS capital management company must demand the provision of further collateral without delay where it emerges, on the basis of the daily exchange-trading-day determination of the secured value and the collateral received, or a change in the economic circumstances of the securities loan borrower, that the collateral is no longer sufficient.
(4) The UCITS capital management company must notify the Federal Institute without delay of any shortfall of the value of the collateral below the secured value, setting out the facts.