AIFMD Update – German Private Placement Rules

by Akin Gump Strauss Hauer & Feld LLP
Contact

Our Investment Funds group has received an update on the changes to the private placement rules for marketing of alternative investment funds (“AIFs”) in Germany following the implementation of the Alternative Investment Fund Managers Directive (“AIFMD”) on July 22, 2013.

We understand that the new German rules for marketing AIFs distinguish between three categories of investors: (1) professional investors which include banks, investment firms, insurance companies, national and regional governments and large corporate entities; (2) semi-professional investors, which include investors who invest at least EUR 10,000,000, or at least EUR 200,000 (if they also meet the suitability test), or executives and employees of the relevant AIF or its manager (“AIFM”); and (3) retail investors. 

Distribution to professional investors by AIFMs established in countries outside the European Union (e.g. U.S. managers) is subject to the following conditions:

  • the non-EU AIFM must notify BaFin of its intention to market in Germany.  The notification must include a comprehensive list of information and documents. BaFin will then have up to two months (from the date of submission of complete documents) to review and approve the notification
  • the non-EU AIFM must appoint an independent entity performing the functions of a depositary set out in the AIFMD and inform BaFin of the identity of such a depositary
  • the non-EU AIFM must comply with certain initial and ongoing investor disclosure requirements
  • the non-EU AIFM must comply with reporting obligations to BaFin
  • cooperation agreements must be in place between BaFin and the regulator of the jurisdictions of both the non-EU AIFM (e.g. United States) and the non-EU AIF (e.g. Cayman Islands) marketed in Germany.  In addition, the home jurisdictions of both the AIFM and the AIF must not be on the list of non-cooperative countries or territories designated by the Financial Action Task Force.

AIFMs that make private equity investments in German companies must also comply with special notification and disclosure requirements and provisions against asset-stripping.

AIFMs wishing to distribute to semi-professional investors are required to comply with all of the provisions of the AIFMD (in addition to the conditions above) and the notification must include additional information on the AIFM.  Distribution to retail investors is subject to further product-related requirements (including prospectus requirements).

Non-EU AIFMs can continue to market under the existing private placement rules until July 21, 2014, provided that they can demonstrate that the relevant fund was marketed in Germany before July 22, 2013.  As the availability of the transitional relief is dependent on the particular fund having been marketed in Germany (rather than the manager’s prior marketing activities generally), managers should, wherever possible, commence (and document) marketing of the relevant fund in Germany before July 22, 2013.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akin Gump Strauss Hauer & Feld LLP | Attorney Advertising

Written by:

Akin Gump Strauss Hauer & Feld LLP
Contact
more
less

Akin Gump Strauss Hauer & Feld LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.