How is fund managment regulated in your jurisdiction? Which authorities have primary responsibility for regulating funds, fund managers and those marketing funds?
Fund management ist regulated in Germany by the German Capital Investment Act (KAGB). The KAGB implements the EU Undertakings for Collective Investments in Transferable Securities (UCITS) Directive (2009/65/EC) and the Alternative Investment Fund Managers Directive (AIFMD).
Responsible for regulating funds, fund managers and those marketing funds is the Federal Financial Supervisory Authority (BaFin).
Is fund administration regulated in your jurisdiction?
Fund administration is not regulated per se in Germany. The regulation rather depends on whether the specific 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 orders.
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, the the fund itself needs a licence or registration.
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This article was first published in: Law Business Research, Getting the deal through, Fund Management 2018, pp. 21-27, July 2018