In 2016, BaFin authorised 14 asset management companies (Kapitalverwaltungsgesellschaft) to manage collective investment undertakings or extended their existing authorisation (previous year: 26). 2 companies surrendered their authorisation (previous year: 1). This meant that, at the end of 2016, 136 companies were authorised in accordance with the Investment Code (Kapitalanlagegesetzbuch) (previous year: 138). In addition, 50 asset management companies registered in accordance with section 44 of the Investment Code (previous year: 74). 8 companies surrendered their registration, 2 of which applied for authorisation in accordance with the Investment Code. The total number of asset management companies registered as at the end of 2016 stood at 260 (previous year: 218). In 11 cases, asset management companies established a branch in another EU member state or offered cross-border services (previous year: 18). A total of 25 companies from other EU countries notified BaFin that they had established a branch or started providing cross-border services in Germany (previous year: 19).

Risk-based supervision

BaFin performed a total of 102 supervisory visits and annual interviews on site (previous year: 90) using a risk-based approach (see Table 26 "Risk classification of management companies"). It accompanied 13 audits and special audits at asset management companies as well as at depositaries and trustees (previous year: 16).

Table 26 Risk classification of asset management companies

Risk classification of asset management companies

Source: BaFin

In the third year since the introduction of the Investment Code, BaFin examined in particular how the asset management companies have implemented the comprehensive requirements in their day-to-day business operations. In this context, its analysis focused particularly on whether the new structures created by the companies proved useful with regard to the statutory conduct of business rules and organisational requirements. For example, BaFin's examination of the risk management system of an asset management company also included an investigation of the specific investments made for a collective investment undertaking. These investment decisions must match the investment strategy and risk profile of the fund, and the asset management company has to review the decision by following a defined process.

BaFin examined in special audits whether the specific obligations for the depositary business had been met. The responsibilities of depositaries and trustees include, among other things, keeping the assets of a collective investment undertaking in safe custody, issuing and redeeming units and calculating unit prices. In this context, they also exercise a control function over the asset management companies.

In addition, BaFin revised the "Minimum requirements for the risk management of investment companies" (Mindestanforderungen an das Risikomanagement für Investmentgesellschaften) and issued a new version in Circular 01/2017 (WA) – "Minimum requirements for the risk management of asset management companies" (Mindestanforderungen an das Risikomanagement von Kapitalverwaltungsgesellschaften – KAMaRisk) – dated 10 January 2017. The main changes relate to amendments to bring the "Minimum requirements for the risk management of asset management companies" in line with Delegated Regulation (EU) No 231/2013 ("AIFM Level 2 Regulation")¹. The AIFM Level 2 Regulation contains, among other things, directly applicable rules on organisational requirements, risk management and outsourcing of AIF management companies. The "Minimum requirements for the risk management of asset management companies" specify some of these provisions in greater detail. Only in the second instance should they be used to determine the "Minimum requirements for the risk management of asset management companies". Secondly, the minimum requirements for the risk management of asset management companies set out minimum requirements for the risk management of AIF management companies that grant loans for the account of the AIF or invest in unsecuritised loan receivables. These requirements are largely based on the rules applicable in the lending business contained in the banking supervisory "Minimum requirements for risk management" (Mindestanforderungen an das Risikomanagement – MaRisk) and have been adapted to the special requirements of collective investment management.

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