German financial market regulator lifts restrictions on real estate quota
BaFin, the German Federal Financial Supervisory Authority, has lifted the investment limits for regulated investors such as life insurance companies or pension funds for an initially indefinite period.
In order to avoid emergency sales for regulatory reasons to comply with the real estate quota, BaFin has lifted the maximum limits for passive overruns of the real estate quota of regulated investors for an indefinite period of time.
A temporary passive exceeding of the real estate quota in accordance with Section 3 (5) of the Investment Ordinance (AnlV) would not be objected to. Investment limits are therefore suspended for an initially indefinite period, the supreme regulatory authority for the financial market in Germany announced. As long as the real estate quota is exceeded, however, no corresponding new investments may be made.
The background to the move is that the share quota of institutional investors has decreased significantly in recent weeks: Within just four weeks, the German Share Index (DAX) recorded an index decline of almost 40%. Despite an interim recovery of the DAX, the quota of other institutional investments, in particular the real estate quota, has increased significantly without any capital dispositions in the form of reallocations between the respective asset classes or investment of "new capital". The already strong real estate investment ratio, which currently exceeds 10% in the insurance segment according to EY and 5% in the Depot A business of the savings banks according to the Deutsche Bundesbank, has thus increased significantly once again. (bw)
