Open ended funds run into a serious crisis towards the end of 2004. Several reasons came together: The construction of the vehicle, the week German property market, discussion on valuation of the property, and the ongoing discussion on the introduction of REITs in Germany. Shortly after the presentation of the German REIT-regime by the German government, the German Ministry of Finance presented a proposal for a reform of the open ended funds in January, 2007. In a first section this paper analyses the reasons for the crisis of German open ended funds. Based on this analysis, the main possibilities of solving the liquidity problems of open ended funds are described in a second section. With these analytic instruments the proposal of German ministry of finance is in a third section described and evaluated.