Germany’s Federal Ministry of Finance announced that the Federal Cabinet has approved a draft Fund Risk Limitation Act to limit risks arising from investment funds and transpose new European Union requirements into German law on a one-to-one basis. The package would require the introduction of liquidity management instruments for funds and update national financial market rules in line with the revised EU framework for central counterparty clearing. The draft implements Directive (EU) 2024/927, which amends Directives 2009/65/EC and 2011/61/EU, and Directive (EU) 2024/2994, which amends Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034. Alongside the liquidity management requirements intended to mitigate systemic risk and make fund liquidity management more resilient to external shocks, the bill would further amend the German Investment Code to give German fund managers more flexibility and facilitate the launch of more competitive products, with the stated aim of expanding investor options and enhancing Germany’s attractiveness as a fund domicile.
Ministry of Finance (Germany) 2025-10-29
Germany’s Federal Ministry of Finance secures cabinet approval for draft law mandating fund liquidity management tools and implementing EU fund and CCP reforms
Germany's Federal Ministry of Finance announced the Federal Cabinet's approval of a draft Fund Risk Limitation Act to align national law with new EU requirements. The act mandates liquidity management instruments for funds and updates financial market rules per the revised EU framework for central counterparty clearing. It also amends the German Investment Code to enhance fund manager flexibility and competitiveness, aiming to expand investor options and bolster Germany's appeal as a fund domicile.