The draft, which recommends a 10 percent cut in asset values across the industry, is open to comment by interest groups and "can of course be changed again in the parliamentary deliberations," ministry spokesman Michael Offer said in Berlin today. He didn't say which changes the lawmakers might seek.SEB Asset Management AG closed its ImmoInvest fund for redemptions and KanAm Grund KAG closed Grundinvest Fonds on May 6. Both blamed the proposal presented by the government three days earlier for outflows as investors fled the funds.
Lawmakers from Chancellor Angela Merkel's Christian Democrats plan to remove the writedown proposal when the measure comes to parliament, Hans Michelbach, the bloc's deputy finance spokesman in parliament, said in an e-mailed statement on May 7.
"Latest market developments indicate it's necessary to take regulatory action to counter the increase in volatility, in the interest of investor protection," Offer told reporters.
Investors fled German property funds after Lehman Brothers Holdings Inc.'s bankruptcy in September 2008, which forced 12 to close for redemptions.
--With assistance from Simon Packard in London and Brian Parkin in Berlin. Editors: Leon Mangasarian, Kevin Costelloe.
©2010 Bloomberg News
