Limitation of leverage and encumbrance

(1) For a closed-ended domestic retail AIF, loans may be raised only up to an amount of 150 percent of the capital of the AIF, and only where the borrowing terms are in line with the market and this is provided for in the investment conditions. The loans raised by companies within the meaning of section 261(1), point 3, must be taken into account, in calculating the limit named in the first sentence, in proportion to the level of the participation of the closed-ended retail AIF.
(2) Section 215 applies correspondingly to the duty of the AIF capital management company to provide information with regard to the leverage employed, and to the power of the Federal Institute to limit the leverage employed, including the related notification duties of the Federal Institute.
(3) The encumbrance of assets belonging to a closed-ended domestic retail AIF, and the assignment and encumbrance of claims from legal relationships relating to these assets, are permissible where 1. this is provided for in the investment conditions and compatible with proper business management, and 2. the depositary consents to the aforementioned measures because it regards the terms on which the measures are to take place as being in line with the market.
(4) The AIF capital management company must ensure that the encumbrance under subsection (3) does not, in total, exceed 150 percent of the capital of the AIF.
(5) The limits named in subsections (1) and (4) do not apply during the period of the initial marketing of a closed-ended domestic retail AIF, but for at most a period of 18 months from the commencement of marketing, provided that this is provided for in the investment conditions. Investors must be notified of the absence of limits in the sales prospectus.