InvG

InvG stands for Investmentgesetz, the German Investment Act, a federal law that governs the regulation of investment funds and investment companies in Germany. The Act provides the framework for the authorization, operation and supervision of investment funds, investment managers, and related market activities within the country. It defines key terms such as investmentvermögen (investment assets), Investmentgesellschaften (investment companies), and Investmentfonds (investment funds), and sets rules on structure, governance, valuation, risk management, and investor protection. The InvG also prescribes licensing requirements for fund managers, including capitalization, professional qualifications, and internal control mechanisms. In addition, it imposes rules on marketing and distribution, including disclosure duties, prospectus standards, and suitability considerations for investors.

Supervision under the InvG is primarily exercised by the Federal Financial Supervisory Authority (BaFin), with cooperation from other regulatory bodies as needed. Funds must comply with investment restrictions, diversification requirements, and liquidity standards. The InvG interacts with EU-wide regulatory frameworks, notably directives related to collective investment schemes, and it influenced the development of subsequent national regimes aligned with EU standards.

Historically, the InvG was introduced in the 1990s in Germany as part of EU harmonization and to regulate the growth of the investment fund sector. In 2013, most of its regime was superseded by the Kapitalanlagegesetzbuch (KAGB), which consolidated Germany’s investment law to align with the EU’s capital market reforms. Transitional provisions maintained references to InvG during the migration period. Today, InvG remains primarily of historical or transitional relevance, while ongoing regulation of investment funds in Germany is governed by the KAGB and related BaFin guidance.