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Stand:updated on 05.07.2012 Investment prospectuses

Prospectuses for investment products offered for public sale are an essential component of investor protection. In order to be able to make well-informed investment decisions, investors must be provided with extensive and reliable information about the issuer and the investment product concerned.

The role of the prospectus

In Germany securities and other investment products may not be offered for public sale without a prospectus; and publication of such prospectuses requires the prior permission of BaFin. BaFin checks whether the prospectus contains the minimum information required by law and whether it has been written in a readily understandable manner. BaFin also ensures that the prospectus contains no contradictory statements.

BaFin does not, however, examine the integrity of the issuer; neither does it scrutinise the product itself. Issuers of investment products must actually make an explicit reference to that fact in their prospectuses. Offerors are expressly prohibited from promoting their products by making statements which may be misleading regarding the scope of BaFin's scrutiny.

In addition, the prospectus constitutes the key basis for determining liability in disputes if it does not contain all the material information required for the investment decision or the information provided does not correspond to the facts.

For any public offer of securities or investment products BaFin provides details of whether a prospectus has been filed with BaFin. The list of prospectuses and investment products that have been filed may be obtained by clicking here.

Overview of the prospectus requirement and the procedure

In accordance with section 6 of the Capital Investment Act (Vermögensanlagengesetz- VermAnlG) a prospectus must be prepared for investment products which are not represented by securities within the meaning of the Securities Prospectus Act (Wertpapierprospektgesetz - WpPG) and which either grant the investor participation in a company’s profits, or which grant participation in assets held or managed by the issuer or a third-party on its own behalf for the account of a third party (trust assets), or for units in other closed-end funds that are offered to the public in Germany, or which grant participation rights (Genussrechte) or which constitute registered bonds (Namensschuldverschreibungen) However, this prospectus requirement only applies if the party offering these securities is not already subject to a prospectus requirement under other regulations and a prospectus has not already been published in accordance with the provisions of the Capital Investment Act. Section 2 VermAnlG sets out a number of exceptions to the requirement to publish a prospectus.

By means of example, investment products which grant the investor participation in companies within the meaning of section 6 VermAnlG include participating interests in partnerships, shares in limited liability companies under German law (GmbH), shares in civil law partnerships (GbR), as well as silent participations in these companies or in certain assets of such companies and interests in foreign companies with other legal forms. Profit-participating loans are not covered.

The prospectuses are to be filed with Bundesanstalt für Finanzdienstleistungsaufsicht, Marie-Curie-Straße 24-28 in 60439 Frankfurt am Main, Germany, either as originals or in electronic form - via the MVP Portal. The filing of the prospectus by fax (Telefax number ++49 228 4108 63110) shall only suffice to trigger the examination period if an original, signed copy of the prospectus is then deposited with BaFin within three business days. One copy of the prospectus, bearing a handwritten signature, must be submitted. In order to accelerate the administrative procedure, three copies of the prospectus (the original and two photocopies) should already be provided when filing the prospectus. When filing the prospectus via RPP, one copy suffices, however.

In accordance with section 2 (3) sentence 1 of the Investment Prospectus Ordinance (Vermögensanlagen-Verkaufsprospektverordnung -VermVerkProspV), the minimum information required in accordance with the Ordinance must be stated in the prospectus in the order in which it is listed in the Ordinance, or a Cross Reference List (Überkreuz-Checkliste) in accordance with section 2 (3) sentence 2 VermVerkProspV has to be filed together with the prospectus. This list shows where in the prospectus the required minimum information can be found.

In order to ensure swift processing by BaFin, offerors are generally recommended to attach the Cross Reference List prepared by BaFin, supported by an informative letter that specifies the address, and in particular the telephone and fax number of the contact person and the recipient of the fee notice, to the prospectus.

It cannot be determined in advance how long the scrutinity procedure will last. According to section 8 (2) VermAnlG BaFin shall inform the offeror within 20 business days of its decision, i.e. whether it approves the prospectus or whether it denies approval of the prospectus. Parallel to the proceedings for securities prospectuses, when the prospectus is incomplete or additional information is required according to section 8 (3) VermAnlG the scrutiny period of 20 business days starts again as soon as the missing information is provided to BaFin; Saturday counts as a business day. As soon as the prospectus meets the statutory requirements, BaFin approves the prospectus.

In accordance with section 9 (2) sentence 1, no. 1 and 2 VermAnlG, the prospectus must be published either by publishing it in the Electronic Federal Gazette (Elektronischer Bundesanzeiger) or by announcing in the Electronic Federal Gazette where the prospectus is available free of charge.

Please note that according to the transitional provision of section 32 (4) VermAnlG until 31 December 2014, publications and announcements according to section 9 (2) sentence 1, no. 1 and 2 VermAnlG have to be made also in a supra-regional official stock exchange gazette, in addition to the publication or announcement in the Electronic Federal Gazette.

In accordance with section 9 (1) VermAnlG, the prospectus must be published at least one business day before the public offer is made.

Example: If a prospectus is published on a Monday, the investments may not be offered to the public until Tuesday at the earliest.

Finally, BaFin must be notified of the publication. Failure to adhere to these publication obligations constitutes an administrative offence which BaFin can punish by means of a fine.

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