Fund Distribution Alert 2021-20

EU: Directive 2019/1160 Transposition Update - Germany

EU: Directive 2019/1160 Transposition Update - Germany


Said Fihri

Partner, ADV – Investment Services

KPMG in Luxembourg


On 2 August 2021, the EU Directive 2019/1160 came into effect in Germany as part of a larger legal package named the Fund Jurisdiction Act (Fondsstandortgesetz – FoStoG). This act aims to strengthen Germany as a fund jurisdiction and domicile and changes several other acts, such as the Investment Code (Kapitalanlagegesetzbuch), the Investment Tax Act (Investmentsteuergesetz), Income Tax Act (Einkommensteuergesetz) and the Value Added Tax Act (Umsatzsteuergesetz).

Below are the main changes in terms of cross-border fund distribution, which go further than the Directive being transposed:

  • Regarding provision of information by means of a durable medium, KAGB § 167 (1) is modified to no longer primarily refer to paper but instead to electronical submission, “provided that the management company or the depositary is aware of corresponding access options of the respective investor”. The previous rule continues to apply to cases such as mergers and master-feeder structure changes.
  • In terms of facilities, the requirement to appoint a German information and paying agent for EU-UCITS is removed with the deletion of the first two sections of KAGB § 309. A new section is included for the provision of facilities services of both UCITS and AIFs distributed to retail investors (KAGB § 306a). The information on these services are to be indicated in the prospectus in accordance with the remaining section of KAGB § 309. Moreover, it specified that such services are to be provided to German investors in German.
  • With the inclusion of pre-marketing of AIFs, the act allows AIFMs to target both professional and semi-professional investors in Germany. For pre-marketing notifications to BaFin as home state authority, a statement is required confirming that the new notification does not pertain to an AIF which was denotified by the AIFM within the last 36 months, and that the investment strategy is not comparable to that of fund which was denotified within this timeframe. Finally, the act provides conditions for the pre-marketing of AIFMs outside the EU/EEA (so called third countries).

Other changes in the act include the possibility to set up special closed-ended special AIFs (Spezial-AIFs) as common funds (Sondervermögen) and closed-ended master-feeder structures, as well as the creation of new domestic fund categories, such as open-ended infrastructure funds (Infrastruktur-Sondervermögen) and development funds (Entwicklungsförderungsfonds).

The Fund Jurisdiction Act is currently only available in German and can be accessed in full here.

For further information on the directive, please consult our fund distribution alert dated 16 July 2019 accessible here.

Please feel free to contact us should you require any additional information.

Said Fihri

+352 22 51 51 7892

Stephanie Zedda

+352 22 51 51 7271