During the approval process, BaFin checks whether the capital investment information sheet contains all minimum information in the order required by law. If BaFin considers, after assessing the application, that the documents submitted for approval are incomplete or that the required information has not been presented in the prescribed order, the 10- or 20-working-day time frame is paused until the moment the missing documents or the necessary information in the order required has been received.

BaFin does not, on the other hand check the accuracy of the information provided in the capital investment information sheet. This information must be included in the capital investment information sheet. BaFin does not, therefore, examine the integrity of the offeror or issuer; neither does it scrutinise the viability of the business model. During the approval process, BaFin also does not assess the capital investment information sheet with regard to the relevance of other legal provisions that fall within BaFin’s remit. In particular, BaFin does not check whether the information contained in the capital investment information sheet meets the requirements set out in section 63 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) and whether the intended business activities are subject to authorisation in accordance with other laws (e.g. the German Banking Act (Kreditwesengesetz - KWG), the German Investment Code (Kapitalanlagegesetzbuch – KAGB) or the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG)). With regard to subordination clauses, it should be noted that the legal effectiveness of the agreement intended to exclude the unconditionality of the right to repayment is a question of civil law. Clauses which are invalid under civil law are also not suitable as exclusionary conditions within the meaning of deposit business under banking supervision law. In this case, the accepted funds are unconditionally repayable and the definition of deposit business within the meaning of section 1 (1) sentence 2 of the KWG is fulfilled. The entity formulating the contract is responsible for the associated risks and therefore assumes the risk of a contractual clause being invalid under civil law. Germany’s Federal Court of Justice has increasingly judged such clauses to be invalid.

I. Structure

The information sheet may be no longer than three A4 pages and must at least contain the key minimum information in a clear and comprehensible manner and in the order required by law.
On the first page, directly below the first heading, each capital investment information sheet must contain the following warning in prominent print:

“Purchasing this capital investment entails significant risks and may lead to the complete loss of the invested capital.”
Directly below the warning, the information specified in section 13 (3) to (6) of the VermAnlG must be listed in the prescribed order (e.g. the type and exact name of the capital investment, the investment strategy, the investment policy, the investment object, the time to maturity and the notice period as well as interest payment and principal repayment conditions).

II. Approval process

The approval process begins once the capital investment information sheet has been filed with BaFin. The capital investment information sheet is to be submitted to BaFin Division WA 34 exclusively via BaFin’s reporting and publishing platform (MVP Portal). The necessary registration on BaFin’s MVP Portal is free of charge.
To facilitate timely processing, it is generally advisable to submit the capital investment information sheet together with a corresponding cross-reference checklist, a letter providing further details and the blind pool checklist (Checkliste zum Anlageobjekt i.S.d. § 5b Abs. 2 VermAnlG). The letter should clearly explain the objective of the approval and filing and contain the following information:

• Company and address of the offeror or filing party,
• A valid telephone number for a direct contact person,
• Specification of whether the present filing is an initial filing or an updated filing,
• In the case of an updated filing, it is best to specify which information is being updated,
• If the prospectus exemptions under sections 2a and 2b of the VermAnlG are invoked, details on the broking authorisation of the internet-based services platform are to be provided (e.g. registration number in the register of intermediaries of the Association of German Chambers of Industry and Commerce (Deutscher Industrie- und Handelskammertag – DIHK)).

Moreover, confirmation that the filing party has been appointed as an authorised agent – or confirmation that a representative authorised to accept service has been appointed, as required in the case of issuers domiciled outside Germany in accordance with section 5 (3) of the VermAnlG – is to be included with every initial filing. BaFin sends confirmation of receipt to the filing party once the application for approval to publish the capital investment information sheet has been received. This confirmation of receipt serves to determine the beginning of the assessment period in the approval process.

1. Approval process for capital investment information sheets submitted in addition to a prospectus under section 13 of the VermAnlG

When submitting a prospectus for approval and filing to BaFin, offerors need to apply for the approval of the publication of the capital investment information sheet in addition to applying for the approval of the prospectus. Based on the deadlines for the procedure in the case of prospectuses, the deadlines for the prospectus approval procedure (20 working days) and those for supplement procedures (10 working days) are applicable for capital investment information sheets submitted in addition to a prospectus.

2. Approval process for capital investment information sheets to be drawn up on the basis of sections 2a and 2b of the VermAnlG.

The following applies for the exemption to the prospectus requirement under section 2a of the VermAnlG: capital investments within the meaning of section 1 (2) no. 3-5 and no. 7 of the VermAnlG, for which the selling price for all shares in capital investments offered by the same issuer within a period of 12 months does not exceed 6 million euros (capital investments sold or fully repaid in this period are not counted), must fulfil additional requirements for distribution (see section 2a (3) of the VermAnlG). These capital investments must be brokered via an internet-based services platform by way of investment advice or investment broking, provided that the individual investment thresholds set out in section 2 (3) of the VermAnlG are additionally observed (depending on the individual case, between 1,000 euros and 25,000 euros).

The exemption to the prospectus requirement set out in section 2b of the VermAnlG (social projects) only applies to capital investments offered by issuers with a social objective stated in their articles of association with the following characteristics: maximum total assets of 10,000,000 euros and maximum revenues of 10,000,000 euros in the twelve months preceding the balance sheet date. In addition, no performance fee may be paid for distribution of the capital investments, the selling price for all shares in capital investments offered by the same issuer may not exceed 2.5 million euros, and the agreed annual lending rate may not exceed the values specified in section 2b (1) of the VermAnlG.

III. Conclusion of the approval process

The approval process may conclude as follows:

1. Approval of publication

The publication of the capital investment information sheet is to be approved if the capital investment information sheet contains all the information in the order required under section 13 of the VermAnlG.

A capital investment information sheet may not be published until BaFin has granted approval for publication. The capital investment information sheet must be published on the offeror’s website at least one working day prior to the offer to the public. If the capital investment information sheet is submitted in addition to a prospectus, the capital investment information sheet must also be made available free of charge in the places specified in the prospectus.

If the publication of a capital investment information sheet is approved in accordance with section 2a or section 2b of the VermAnlG, and the capital investment information sheet is subsequently filed with BaFin and published, it must be accessible to anyone and without access restrictions on the website of the internet-based services platform and, if applicable, on the website of the offeror. The capital investment information sheet must thus not only be visible in a password-secured login area. The latest version of the capital investment information sheet must be accessible and made available for the entire duration of the public offer.

It should be noted that BaFin can prohibit the public offer if the offeror, in breach of section 13 of the VermAnlG, has failed to file the capital investment information sheet and publish it in accordance with section 13a of the VermAnlG. This constitutes an administrative offence, which can be punished by imposition of a fine of up to 500,000 euros.

The metadata of capital investment information sheets filed with BaFin under sections 2a and 2b of the VermAnlG since 21 August 2017 are available to view in the prospectus database. The full text of capital investment information sheets filed with BaFin since 1 January 2022 is available there.

2. Approval refused

BaFin will prohibit publication of the capital investment information sheet if it does not contain the information required under section 13 of the VermAnlG or if the information is not presented in the correct order.
It should be noted that BaFin will prohibit the publication of a prospectus if there is any indication that the offeror has not filed a corresponding capital investment information sheet with BaFin.

3. Withdrawal

The application for approval of publication of a capital investment information sheet may be withdrawn in writing at any time prior to the conclusion of the approval process. This may result in a reduction of the fee to be levied.

4. Fees

The individual rates of fees are determined based on the Fees Regulation in respect of Financial Services Supervision (Finanzdienstleistungsaufsichtsgebührenverordnung – FinDAGebV).

IV. Update

The process for updating a capital investment information sheet is different for capital investment information sheets submitted in addition to a prospectus than for those submitted under the exemptions set out in section 2a or section 2b of the VermAnlG. It is not possible to change the key legal characteristics of the capital investment (e.g. time to maturity, interest rate, issuer) after submission. A change of this nature would constitute a new capital investment.

1. Updates to capital investment information sheets submitted in addition to a prospectus

Following approval of the publication and for the duration of the public offer, the information in the capital investment information sheet must be updated immediately if it is incorrect or incompatible with the information in the prospectus or if additional information is published in a supplement to the prospectus in accordance with section 11 of the VermAnlG. In these cases, the supplement procedure requires a formal approval process for the capital investment information sheet to be updated.

2. Updates to capital investment information sheets to be drawn up on the basis of sections 2a and 2b of the VermAnlG

A capital investment information sheet drawn up on the basis of section 2a or section 2b of the VermAnlG must be updated with regard to every significant new factor or material inaccuracy relating to the information in the capital investment information sheet which could influence how the capital investment or the issuer is assessed and which arises or is noted after the publication is approved and during the time of the offer to the public (e.g. current annual financial statements prepared or published, leverage ratio, costs, commissions). In such cases, the updated capital investment information sheet must be filed, with confirmation of receipt from BaFin serving as evidence that the updated version has been filed.

V. Reduced accounting obligations

Annual financial statements must be drawn up for offers of capital investments which are eligible for the exemptions for crowdfunding (section 2a of the VermAnlG), social projects (section 2b of the VermAnlG) or for non-profit projects and religious communities (section 2c of the VermAnlG). In these cases, there is no need to have an auditor audit the statements or to draw up a management report. The accounting obligations arising from the German Commercial Code (Handelsgesetzbuch – HGB) remain unaffected, as do all further accounting rules such as the shorter disclosure deadline for issuers set out in section 23 in conjunction with section 26 of the VermAnlG. Any disciplinary fine proceedings resulting from a delayed disclosure will be conducted by the German Federal Office of Justice, which is responsible for such proceedings. In this regard, issuers should note the rules set out in section 31 of the VermAnlG.

VI. No notification requirements for capital investment information sheets under sections 2a and 2b of the VermAnlG

Offerors offering a capital investment without a prospectus in accordance with section 2a or section 2b of the VermAnlG are exempt from the requirement to notify BaFin of the end of the public offer or full repayment in accordance with section 10 (1) sentence 1 of the VermAnlG.