On 31 August 2021, the German government issued a draft version of an Ordinance on the issuance of funds units as crypto assets.
Since June 2021, Germany is allowing the introduction of digital securities (including fund units).2 The respective bill contained general rules on the respective civil law and superviso-ry law aspects. Besides introducing digital securities, which are registered centrally, the bill further allowed for a decentralized registration of assets (crypto assets). However, the scope of crypto assets was limited to debt securities.
The recently presented draft Ordinance concerns fund regulatory law and closes the re-maining gap, finally allowing for decentralized registered fund units, i.e. after adoption of the draft Ordinance, the issuance of crypto fund units will be possible in Germany.
According to the draft Ordinance, the legal terms applicable to decentralized debt securities will generally also be applicable to crypto fund units. Though the registers are decentral-ized, a formally responsible institution is necessary for supervisory law reasons. In the case of decentralized debt securities, this role can be assumed by the issuer of the security or a service provider. The draft Ordinance clarifies that the register keeping body in case of crypto fund units has to be the fund custodian. This shall enable the fund custodian to fulfill its supervisory law obligations towards the fund investors.
The German Ministry of Finance is asking for industry comments to be filed before 1 October 2021. After final adoption of the Ordinance, we will comment in more detail.
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