On June 17, 2026, the German regulator, the Federal Financial Supervisory Authority (BaFin), launched a consultation on its new circular “Notes on the amendments to the Capital Investment Code introduced by the Fund Risk Limitation Act”(Hinweise zu Änderungen im Kapitalanlagegesetzbuch durch das Fondsrisikobegrenzungsgesetz) (Circular).
The Fund Risk Limitation Act (Fondsrisikobegrenzungsgesetz – FRiG) is the German Act for the transposition of Directive (EU) 2024/927 (AIFMD 2). The FRiG was published in the Federal Gazette on 14 April 2026 and entered into force on 16 April 2026 for most of its provisions.
The FRiG led to extensive amendments to the German Capital Investment Code. These particularly concern the mandatory introduction of liquidity management tools (LMTs) for open-ended funds, changes to the licensing procedure, and the granting of loans by investment funds. According to the explanatory statement, the FRiG is intended to implement AIFMD 2 without any deviations (no “goldplating”) in order to avoid putting the German fund industry at a competitive disadvantage. However, market participants raised various questions to BaFin regarding the interpretation of the statutory provisions and the applicability of grandfathering rules. The Circular addresses key questions raised by market participants and provides guidance on the interpretation of the new provisions.
First, the Circular addresses the mandatory implementation of at least two LMTs within the liquidity management system of open-ended investment funds. In addition to general requirements for LMTs, the Circular also discusses the specific features of each individual tool. Furthermore, the Circular deals with the changes to the licensing procedure, in particular the additional information required regarding managing directors. Finally, the Circular also addresses loan origination.
The consultation period ends on 6 July 2026.