GERMANY Law and Practice Contributed by: Amos Veith, Jens Steinmüller, Ronald Buge and Stephan Schade, POELLATH
They may also use the AIFMD passport to pro - vide other services and ancillary services (such as MiFID investment advice or discretionary indi - vidual portfolio management). Non-EU Managers Non-EU managers are currently not allowed to perform fund management services in Germany. This might change in the future with regard to AIFMs in those countries for which the passport - ing regime under the AIFMD for third-country managers will eventually become effective. Outside of providing fund management services (eg, managed account solutions), non-EU man - agers may provide certain regulated services in Germany, such as investment advice or discre - tionary individual portfolio management. This requires either that the services are in the scope of an existing relationship with the German man - ager or that the relationship is established at the initiative of the German client (reverse solicita - tion). As an alternative, such service providers may apply to BaFin for an exemption from the German licence requirements (which is a lengthy process). 2.3.4 Regulatory Approval Process The registration procedure for a sub-threshold manager is comparatively simple and takes about one month. A full licensing procedure var - ies between six and 12 months, or even more. For the details on registered and fully licensed managers, see 2.1.2 Common Process for Set- ting Up Investment Funds . 2.3.5 Rules Concerning Pre-Marketing of Alternative Funds A stricter regulation of pre-marketing activities and of the content of marketing materials has applied since the harmonised European regime for pre-marketing of alternative investment
funds came into force in August 2021 (Direc - tive (EU) 2019/1160 and the related Regula - tion (EU) 2019/1156)). The European marketing regime provided by the EU Directive only applies to marketing activities by, or on behalf of, EU managers. The German Implementation Act, however, extends the EU pre-marketing rules to non-EU managers. The commencement of pre-mar - keting of an AIF in Germany by a German or non-German manager (except for “registered- only” managers) needs to be notified to BaFin directly or through the respective regulator of an EU manager, and any subscription by German investors within 18 months following the com - mencement of pre-marketing will require adher - ence to the formal marketing notification and, thus, precludes reverse solicitation. 2.3.6 Rules Concerning Marketing of Alternative Funds Germany understands marketing activities to be any direct or indirect offering or placement of units or shares in an investment fund. Reverse solicitation is currently not regarded as market - ing, but its scope is further limited due to the pre-marketing regime. Marketing materials must be in line with the European Securities and Markets Authority (ESMA) guidelines on the fair and not mislead - ing standard of the content of marketing materi - als. These guidelines mirror the rather strict rules under the MiFID regime. For placement activities in Germany by EU “reg - istered-only” or non-EU managers, the BaFin FAQs maintain the position that placement by a manager, in particular, takes place with regard to a fund if:
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