In our last international edition of the Financial Services updater our German desk in London discussed a substantial change in German banking regulation, which is going to come into effect in Q1 or Q2 of 2009: the introduction of a new case for regulation (“Anlageverwaltung” - collective portfolio management - CPM). In particular, closed-ended hedge funds, or other closed ended funds investing in financial instruments, that have German investors could be subject to CPM. Our German desk in London has produced a client briefing entitled Widening the scope of German banking - Are you performing “Anlageverwaltung”?  

When the client briefing was written, it was unclear whether there would be any changes made to CPM during the legislative process. On 21 January 2009, there was a public hearing of the financial committee of the German parliament which published its recommendations on 11 February 2009: no changes to CPM are proposed. It is therefore highly probable that CPM (as described in our client briefing) will come into effect soon.