# Suspension of redemption

- Canonical URL: https://www.gerhardmerk.de/suspension-of-redemption
- Post ID: 587954
- Modified: 2023-07-25T21:12:19+00:00
- Language: en

## Definition

Unless otherwise defined, in the case of an investment fund or real estate fund, the decision of the fund management to suspend the redemption of issued share certificates. - Such suspension is permitted by law in special cases for a period of two and a half years. However, the holder of a unit certificate can sell it on the open market, where the price is determined by supply and demand. Under certain circumstances, however, a considerable loss may have to be accepted. - When the subprime crisis escalated into a financial crisis in the fall of 2008, many funds introduced a redemption freeze. This was because portfolio reallocations by large investors led to selling pressure even on thoroughly healthy real estate funds. When the German government issued a security guarantee for savings deposits in October 2008, many unsettled retail investors thought that there was no protective shield for their investments in a fund. They therefore primarily exited real estate funds and put the money into a savings account. - See Real Estate Fund, open-ended, Real Estate Investment Trust. - See BaFin Annual Report 2010, p. 187 (in the wake of the Investor Protection and Function Improvement Act [AnSFuG], the temporary suspension of the redemption of units was extended from two to two and a half years). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1