Regulatory framework and authorities
How (in very general terms) is fund management regulated in your jurisdiction? Which authorities have primary responsibility for regulating funds, fund managers and those marketing funds?
Fund management is regulated in Germany by the German Capital Investment Code (KAGB). The KAGB implements the EU Undertakings for Collective Investment in Transferable Securities (UCITS) Directive (2009/65/EC) and the Alternative Investment Fund Managers Directive (AIFMD). The Federal Financial Supervisory Authority (BaFin) is responsible for regulating funds, fund managers and those marketing funds.
Is fund administration (support services provided to funds such as book-keeping, preparing reports, trade settlement, etc) regulated in your jurisdiction?
Fund administration is not regulated per se in Germany. The regulation depends on whether the services fall within a specifically regulated environment. As a rule, general assistance in fund administration is not regulated, such as the preparation of reports or distribution notices.
Certain administrative services are regulated by professional services laws. Before offering bookkeeping services on the market, a minimum of three years’ professional experience is required. Trade settlement is typically licensable as the financial service of the execution of orders on behalf of clients or the banking activity of trading on behalf of others.
What is the authorisation or licensing process for funds? What are the key requirements that apply to managers and operators of investment funds in your jurisdiction?
Regulation of funds is primarily exercised through regulation of managers. It requires that the manager is either fully licensed or registered with BaFin under the KAGB. If a fund is internally managed it needs a licence or registration.
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Lexology_Getting the Deal through_Fund Management 2023_Chapter Germany
This article is an excerpt from: Lexology, Getting the deal through, Fund Management 2023 (generated 04 July 2023)