Proposed German Law Would Impose Regulatory Burden on Closed-End Funds

In a move that has surprised and even angered some market players, the German Ministry of Finance put forward a proposal to amend the country’s banking act that, in essence, will require closed-end funds to apply for a license to deal in the securities and derivatives market. If approved, the new legislation would effectively put under supervisory authority a series of investment vehicles that until now have operated without a license, including certain hedge funds, private equity funds and other entities that raise capital among German investors and do business in that country.

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