Bundesrat Passes Investment Fund Modernisation Bill.

The Bundesrat passed the Investment Fund Modernisation Bill in its November 28 sitting. Formal enactment into law is expected to follow shortly.

The Investment Fund Modernisation Bill passed by the Bundesrat on November 28 is intended to bring the, perhaps, rather conservative, over-regulated German approach into line with modern trends, in order to enable German financial institutions and capital markets to compete on equal terms with their other European counterparts. Among other changes, hedge funds will now be permitted, fund managers will have greater scope for innovative investment strategies and regulatory reporting will be streamlined. There will also be a number of tax changes, mostly in the interests of aligning the control measures with the truly existing risks. An accompanying decree on fund investment in derivatives has been circulated in draft to the financial service industry associations for preliminary comment.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

Mr Andrew Miles

Pricewaterhouse Coopers

Marie-Curie Strasse 24-28

Frankfurt

D-60439

GERMANY

Tel: [phone]

Fax: [phone]

E-mail: [e-mail]

URL: www.pwc.com

(c) Mondaq Ltd, 2003 - Tel. [phone] - http://www.mondaq.com