When distributing investment funds and structuring fund documentation, it’s crucial to note cancellation rights (Widerrufsrechte). This not only applies to retail funds (Publikumsfonds) but also special funds (Spezialfonds) if they are distributed to “consumers” within the meaning of the German Civil Code (BGB). Consumer classification in this context could apply primarily to retail investors and even semi-professional investors. While in the open funds sector the German Capital Investment Act (KAGB) contains a special regulation, the general regulations of the BGB apply to closed funds, although…
It’s worth noting that when selling closed funds, it is important to inform investors about their rights to revoke the agreement under BGB, especially in cases where semi-professional investors are involved. In the absence of the KAGB’s special regulations pertaining to open funds, the broader and generally applicable regulations of the BGB fill the legal framework. This implies that any fund distributor must take into account these standard provisions to ensure lawful operations.
Therefore, in the course of managing investment contracts, investors’ cancellation rights should be at the forefront of fund distributions. This is particularly crucial in the realm of closed funds, where general rules of the BGB are in play, rather than the special provision provided by the KAGB for open funds.
It’s clear that navigating these legal obligations requires a thorough understanding of both the BGB and KAGB and their respective applications. For comprehensive insights and further information on the necessity of revocation instructions after the BGB in closed-end fund distribution, you can delve deeper into this topic here.