The rules implemented by each EU member state under Article 42 of the AIFMD are known as National Private Placement Regimes ("NPPRs"). These rules allow US sponsors to register US funds (and other non-EU funds, e.g., Cayman or Canadian funds) for marketing in most EU member states.
In this article, we will provide an overview of the NPPR processes in Germany and Denmark. Compared to other EU jurisdictions, both Germany and Denmark are often considered to have more cumbersome NPPR registration processes due to their 'gold-plated' adherence to certain AIFMD requirements. Specifically, to register a fund for marketing in Germany or Denmark, sponsors must appoint an EU depositary for the fund. For more information on the role of an EU depositary, please refer to our earlier article, Marketing in the EU under NPPR rules – Depositary duties
NPPR process
Germany
Germany has implemented one of the more onerous marketing application processes across the EU, requiring a full application form (translated into German), along with supporting documents such as the PPM, LPA subscription agreement, and undertakings signed by the sponsor, along with details of the appointed EU depositary.
As of the date of this article, BaFin has imposed a registration fee of €1,641 per fund, along with an annual fee of €113 per fund. Formal approval from BaFin must be obtained before full marketing activities can commence in Germany, and BaFin has up to 60 days to review and approve a marketing application.
Denmark
Similar to Germany, Denmark has also implemented a relatively detailed application process, requiring sponsors to file a marketing application form and submit supporting documents including the PPM, LPA, and details of the EU depositary.
Additionally, the Danish FSA requires a statement of marketing reciprocity from the fund's home jurisdiction, along with confirmation from the SEC that both the sponsor and the fund are covered by the Memorandum of Understanding between the Danish FSA and SEC.
Currently, there is no registration fee payable in Denmark; however, an annual fee of €650 per fund is payable to the Danish FSA.
Formal approval from the Danish FSA must be obtained before full marketing activities can commence in Denmark, and approval times generally take 4-8 weeks (although in some cases, approval can take in excess of 12 weeks).
How can we help?
Our team is currently collaborating with Paul Hastings to support marketing inquiries into the EU and the UK. Zach Milloy, a partner at Paul Hastings, is available to assist with registration requirements. Once NPPR registration is complete, we can provide assistance with ongoing regulatory reporting, specifically Annex IV reporting.
