Control of the use of funds

(1) For asset investments under section 1(2) nos. 7 and 8 whose subject matter is the acquisition of a tangible asset or a right in a tangible asset, the leasing of a tangible asset, or, for asset investments under section 1(2) nos. 3 to 8, the passing on of investors' funds for the purpose of acquiring a tangible asset or a right in a tangible asset or leasing a tangible asset, the issuer must appoint an independent controller of the use of funds by the time named in the third sentence. Only lawyers, notaries, tax advisers, statutory auditors or sworn accountants, or companies formed by such professionals, may be appointed as controllers of the use of funds. The appointment, and the agreement on the control of the use of funds, must be concluded by the time the prospectus is submitted, or, in the cases of section 2a or 2b, by the time the asset investment information sheet is submitted. The agreement on the control of the use of funds must be submitted by the issuer, as part of the sales prospectus, by the time named in the third sentence. Where ten years have passed since an issuer's first appointment of a controller of the use of funds, a different controller of the use of funds within the meaning of subsection (1), first sentence must be appointed for new issues.
(2) The issuer must set up a funds-use account over which it may dispose only jointly with the appointed controller of the use of funds. The controller of the use of funds may consent to a use of the funds raised from investors by the issuer only once the conditions laid down in the agreement on the control of the use of funds are satisfied. These conditions must be laid down in the sales prospectus in accordance with the statutory requirements. After release, the controller of the use of funds must check whether the released funds from the asset investment are used in accordance with the purpose of use laid down in the agreement and the other provisions laid down there. The duty named in the fourth sentence exists on an ongoing basis, at least every six months, until all investors' funds have been used, and begins at the latest six months after the start of the public offer. Where the passing on of investors' funds within the meaning of subsection (1) is involved, the control covers the use at all levels. The result of the control of the use of funds must be summarised by the controller of the use of funds without delay in a report, which must be transmitted without delay to the issuer and, electronically and in an electronically searchable format, to BaFin through its notification and publication system. The report must state: 1. the amount of investors' funds collected, 2. the amount of those investors' funds invested in investment objects, 3. the amount of investors' funds used for other expenditure, 4. a list of the other expenditure and a description of the use of investors' funds for the other expenditure, 5. a list and description of the investment objects, or rights therein, already acquired, or of the investment objects already leased, and 6. the total of investors' funds not invested. In the report, the controller of the use of funds must also state whether the use of investors' funds took place as planned.
(3) The controller of the use of funds must, until the asset investment has been fully redeemed, publish the respective report of the ongoing and final control of the use of funds without delay in the Federal Gazette.
(4) Subsections (1) to (3) do not apply where the offer is addressed exclusively to a corporation, or a GmbH & Co. KG whose limited partners are at the same time shareholders of the GmbH or are involved in the GmbH's decision-making, provided the GmbH & Co. KG is not an investment asset and not a management company under the Capital Investment Code.