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).
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