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German regulator BaFin to permit UK funds to submit third-country marketing notifications before the end of the transition period

  • Germany
  • United Kingdom
  • Europe
  • Financial services and markets regulation
  • Investment funds and asset management
  • Financial services

20-11-2020

Following the end of the Brexit transition period on December 31, 2020, the UK will cease to have the benefit of the EU financial services passport regulations and UK firms will no longer have the right to distribute their funds in Germany under passporting.  

In order for UK firms to be able to continue to distribute their funds in Germany in accordance with German law, UK funds must first comply with the bilateral third-country marketing notification procedure in the German Capital Investment Code.

Usually the German bilateral third-country marketing notification procedure is only available to funds provided by third country firms.  Under the terms of the Withdrawal Agreement the UK is not to be treated as a third country until the end if the Brexit transitional period. 

To smooth the process of UK firms accessing the bilateral third-country marketing notification procedure, yesterday BaFin announced that it will permit UK Funds to submit third-country marketing notifications now, in the hope that this will enable continuity of distribution to the benefit of German investors.  The BaFin announcement was in German, however, please refer to our English translation of the BaFin announcement.

The bilateral third-country marketing notification procedure is a significant undertaking.  The scope of the documentation to be submitted is substantial and depends upon various factors including whether a UCITS or an AIF is to be marketed.  We urge firms which want to continue to distribute their funds in Germany after the end of the Brexit transition period to take this opportunity to submit their notification now in order to ensure continuity of distribution of their funds in Germany in 2021.

For more information on submitting a notification, or the implications to your business, please get in touch: