Issue and redemption of units; liquidity management tools; power to issue statutory instruments

(1) Every investor may demand at least twice a month that, against return of the unit, his or her share of the collective investment fund be paid out to him or her from it; the details must be laid down in the investment conditions. By way of derogation from the first sentence, it may be agreed for a special collective investment fund that units are redeemed only on particular redemption dates.
(1a) The investment conditions may provide that the redemption of units must take place by way of an irrevocable redemption declaration to the capital management company, subject to compliance with a notice period that, in the capital management company's assessment, is appropriate for the collective investment fund. The provisions of section 223(1) and (2), section 227(1) and (2), section 255(2) to (4), and section 283(3) remain unaffected. The units to which the redemption declaration relates must be blocked by the custodian account-holding entity until the actual redemption. For units not held in a custody account domestically, the redemption declaration becomes effective, and the period begins to run, only once the depositary has transferred the redeemed units to a blocked custody account. The investment conditions may, by way of derogation from the third and fourth sentences, provide for a different form of evidence that the redemption is carried out in accordance with the first sentence.
(1b) (repealed)
(2) The capital management company may suspend the issue, subscription, repurchase, and redemption of units where exceptional circumstances exist that make a suspension appear necessary having regard to the interests of investors. For as long as redemption is suspended, no units may be issued. The capital management company must publish the suspension and the resumption of the redemption of units in the Federal Gazette, and additionally in a sufficiently widely circulated financial or daily newspaper or in the electronic information media named in the sales prospectus. Investors must be informed of the suspension and resumption of the repurchase and redemption of units without delay after publication in the Federal Gazette, by means of a durable medium. The third and fourth sentences do not apply to special AIF.
(3) The Federal Institute may, after hearing the capital management company, order the capital management company to suspend or resume the issue, subscription, repurchase, and redemption of units where risks exist to investor protection or financial stability that, on a reasonable and balanced assessment, make a suspension or resumption of the issue, subscription, repurchase, and redemption necessary. The Federal Institute should, after hearing the capital management company, order the suspension of redemption where the AIF capital management company, in the case of a real estate investment fund or an infrastructure investment fund, does not effect the suspension in the case of subsection (2), first sentence, or does not comply with the obligation to suspend in the case of section 257. Subsection (2), second and fourth to sixth sentence, applies correspondingly.
(4) The investment conditions may provide that redemption in kind under Annex IIA, point 8, of Directive 2009/65/EC, or Annex V, point 8, of Directive 2011/61/EU, may be applied as a liquidity management tool under section 30a(1), first sentence, in order to satisfy redemption requests from professional investors. Redemption in kind under the first sentence must correspond to a proportional share of the assets held, except where
1. the collective investment fund is distributed exclusively to professional investors, or
2. the investment policy objective of the collective investment fund is to replicate the composition of a particular index, and this collective investment fund is an exchange-traded fund within the meaning of Article 4(1), point 46, of Directive 2014/65/EU.
(5) A capital management company may, in the interest of the investors of a collective investment fund, side-pocket illiquid investments. Side-pocketing may be used only in exceptional cases, where circumstances exist that make it necessary, and where it is justified having regard to the interests of the investors of the collective investment fund.
(6) The Federal Ministry of Finance is empowered to issue, by statutory instrument not requiring the consent of the Bundesrat, additional provisions for capital management companies concerning the implementation of the side-pocketing of illiquid investments. The Federal Ministry of Finance may transfer this power by statutory instrument to the Federal Institute.