The AIFMD has been implemented in Denmark through the Danish AIFM Act (“AIF Act”) and ancillary executive orders (“Danish AIFM Rules”). None of the Danish AIFM Rules define the term “private placement” and there is no private placement exemption under the Danish AIFM Rules in the sense that a fund may be marketed to investors in Denmark without prior approval. Accordingly, alternative investment funds may not be marketed in Denmark unless and until a marketing approval has been obtained from the Danish Financial Supervisory Authority (the “DFSA”) in accordance with the AIF Act.
Consequently, provided that the AIF has been notified correctly, it may only be marketed in Denmark in accordance with the AIF Act. The AIF may also be marketed by a bank or investment company with a license in its EU home country which have been passported to conduct cross-border investment services in Denmark provided that the AIF has been notified correctly in accordance with the AIF Act. This applies irrespective of whether the fund is marketed to professional or retail investors.
‘Marketing’ is defined in accordance with AIFMD Article 4(x) as meaning “a direct or indirect offering or placement at the initiative of the AIFM or on behalf of the AIFM”.
The AIF Act distinguishes between professional investors and retail investors. A professional investor is defined as an “investor which is considered to be a professional client or may, on request, be treated as a professional client within the meaning of Annex II to MiFID”.
To be able to market funds to retail investors, an AIFM must obtain a separate approval from the DFSA in addition to the approval to market funds to professional investors. Funds marketed to retail investors have to comply with several additional burdensome requirements as set out in Executive Order no. 1553 of 19 December 2022 (as amended).
The scope of the AIFM Act is wide and captures most fund structures. However, operational companies and funds that qualify as UCITS are not subject to the Danish AIFM Rules.
Moreover, the following entities are exempted from the AIF Act and are therefore not subject to the marketing restrictions, including but not limited to:
- holding companies
- institutions for occupational retirement provision
- supranational institutions
- national central banks
- AIFMs that manage AIFs where the only investor is the AIFM
- national, regional and local governments and bodies or other institutions which manage funds supporting social security and pension systems
- employee participation schemes or employee pension schemes
- securitisation special purpose entities
- family owned investment units
- joint ventures
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