German law distinguishes as to which type of investors the EU AIF shall be distributed to.
Distribution to Semi-Professional and Professional Investors in Germany
EU AIFs managed by EU AIFMs may be distributed in Germany by using the European marketing passport provided in the AIFMD. The passport permits distribution of the EU AIF to Semi-Professional and Professional Investors in Germany. For EU feeder AIFs the passport is only available if the master AIF is an EU AIF managed by an EU AIFM. In order to obtain such a passport for an EU AIF for Germany, its EU AIFM must notify the home State regulator as to every EU AIF which it intends to distribute in Germany. The home State regulator will notify the Federal Financial Supervisory Authority (“BaFin”) thereof. The requirements are laid down in the national law applicable to the EU AIFM which should be in accordance with Article 32 of the AIFMD. BaFin verifies whether (i) the notification file submitted by the home State regulator is complete, (ii) the home State regulator has issued a statement that the relevant EU AIFM is authorised to manage the relevant AIFs, and (iii) the documents have been submitted in a language customarily used in international finance. BaFin further verifies whether the agreements with distribution partners prevent distribution to retail investors.
Marketing in Germany may commence as soon as the competent authorities in the EU AIFM’s home Member State have informed the EU AIFM that its notification has been transmitted to BaFin. Marketing is subject to further requirements vis-à-vis approaching investors, in particular regarding the form of information disclosure.
Distribution to retail investors in Germany
An EU AIFM may also notify an EU AIF managed by it for distribution to retail investors in Germany. However, it cannot rely in this respect on the EU marketing passport. In order to obtain such marketing permission, the EU AIFM must file a notification to BaFin directly indicating its intention to distribute an EU AIF to retail investors in Germany. Approval is only granted if a number of requirements specified in the German Capital Investment Code are adhered to (e.g. more detailed prospectuses, adherence to certain structural requirements, etc.). Marketing may not commence until formal approval has been obtained from BaFin.