BaFin Publishes Circular on the Authorisation Procedure for Alternative Investment Fund Management Companies
On 15 September 2026, the German Federal Financial Supervisory Authority (BaFin) published its new Circular 12/2026 on the authorisation procedure for AIF management companies pursuant to section 22 KAGB. The Circular took effect on the date of its publication and replaces the previous guidance notice on the authorisation procedure for AIF management companies pursuant to section 22 KAGB.
Table of Contents
With the Circular, BaFin aims to make its administrative practice more transparent for applicants and thereby facilitate faster processing of authorisation applications.
The Circular is addressed to companies intending to apply for authorisation as an alternative investment fund management company (AIFM) pursuant to section 22 of the German Investment Code (Kapitalanlagegesetzbuch – KAGB). It applies equally to internal and external AIFMs, as well as to companies already registered pursuant to section 44 KAGB.
Own Funds and Liquidity
Like the previous guidance notice, the Circular addresses the individual items that may qualify as own funds. However, with regard to evidence of the required own funds, the Circular now clearly distinguishes between newly established and existing companies.
Newly established companies must provide the necessary evidence by means of a bank confirmation stating that the initial capital and, where applicable, any additional required capital has been paid in, is free from third-party rights and is freely available to the managing directors. For existing companies, BaFin now expressly requires confirmation by an auditor.
BaFin now also specifies the amount of additional initial capital that must be maintained for services and ancillary services provided in addition to collective portfolio management. For financial portfolio management, investment advice and/or investment brokerage, the own-funds requirement increases by EUR 37,500. For the safekeeping and administration for others of units or shares in domestic investment funds, EU investment funds or foreign AIFs, it increases by EUR 150,000.
For the first time, the Circular also sets out requirements regarding evidence of the liquidity to be maintained pursuant to section 25(7) KAGB and refers to the relevant FAQs on BaFin’s website.
Two Managing Directors
The Circular explicitly clarifies that the company must appoint at least two full-time managing directors with clearly delineated areas of responsibility: one responsible for portfolio management and one for risk management. In groups with several management companies, the same individuals may, on a case-by-case basis, hold managing director positions in more than one company. The previous guidance notice did not contain similarly clear statements.
Professional Suitability of Managing Directors
Regarding the requirements for the professional suitability of managing directors, BaFin refers to its Guidance Notice on the Suitability of Managing Directors under the KAGB, which remains in force. The Circular provides detailed guidance on the evidence required to demonstrate professional suitability as part of the authorisation procedure.
Referring to the principle of the management body’s collective responsibility, the Circular requires all managing directors to have a basic understanding of portfolio management, risk management and regulatory requirements. In this respect, the Circular is considerably more explicit than section 3 of the Minimum Requirements for Risk Management of Investment Management Companies (KAMaRisk), including in its recently consulted revised version.
A new requirement compared with the previous guidance notice is that, where the applicant intends to manage specific types of assets, the CV of the designated managing director responsible for portfolio management must demonstrate specific theoretical and practical knowledge of precisely those types of assets. The same applies where the company intends to provide services and ancillary services pursuant to section 20(3) KAGB.
Limited Presumption Based on Previous Experience
As a precautionary clarification, BaFin points out that experience gained at a merely registered management company does not necessarily demonstrate the professional qualifications required for a fully authorised AIFM. According to BaFin, this applies in particular to risk management.
Qualifying Holdings
The requirement to provide information regarding the reliability of holders of qualifying holdings in an applicant also extends, where applicable, to the managing directors and shareholders of such holders. The standard set out in the Guidance Notice on the Suitability of Managing Directors under the KAGB now applies uniformly, irrespective of the holder’s registered office or place of residence.
Business Plan
The requirements for the business plan to be submitted are significantly more granular and extensive than under the previous guidance notice. The catalogue of requirements now also includes information on potential investor groups, the planned volume of business broken down by the individual investment funds envisaged and their respective assets under management, the targeted number of employees and the company’s IT infrastructure, to name just a few examples.
Another new requirement is the preparation of a risk-based internal audit plan for the first three financial years in accordance with KAMaRisk.
Specific Requirements for Companies Already Registered
Companies already registered pursuant to section 44 KAGB must identify all AIFs that they intend to continue managing. Investment companies in the legal form of a GmbH & Co. KG or AG that are to be taken over must, prior to authorisation being granted, be converted into a legal form that may be managed by an authorised AIFM. The transitional provision under section 353 KAGB remains unaffected.
BaFin expressly points out that, for AIFs already being marketed, the AIFM must submit the relevant marketing notifications in good time so that marketing authorisation can be granted at the same time as the AIFM authorisation, thereby avoiding any interruption to distribution.
AIFMs already registered cannot benefit from the reduced requirements regarding completeness under section 22(3) KAGB. If they fail to submit all documents required for authorisation, this may constitute unauthorised investment business.
Conclusion and Outlook
With the Circular, BaFin is significantly raising its expectations regarding authorisation applications for AIFMs. At the same time, the detailed catalogue of requirements provides applicants with a considerably greater degree of legal certainty.
With thorough preparation, the authorisation procedure should therefore no longer hold any major surprises. In cases of doubt, applicants would be well advised to take advantage of BaFin’s repeatedly stated offer of early consultation – even before submitting an application for authorisation.
