INVESTMENT LAW

Investment Law



Investment Law

Introduction

Changes to the German investment industry, including a combination of new types of fund offerings and a liberalization and improvement of the previous regulatory scheme, have been implemented by an Act amending the German Investment Act and related provisions of other laws (Investmentanderungsgesetz, the “Act”). The general purposes of the changes, detailed below, are to modernize the German investment industry and make it more attractive to potential domestic and foreign investors. In addition, the Act serves to harmonize German statutory law with EU Directive 2007/16/EU (the “Eligible Assets Directive”), which has the practical effect of simplifying or easing many of the previous requirements. At the same time, the changes are intended to improve corporate governance of German funds and to strengthen and improve measures to protect the interests of German investors.

Discussion

In some cases, the new model of international law as global governance claims authority with mechanism as effective as direct effect and supremacy (the main example is, of course, European Union institutions, without entering into the debate of the nature of such legal order , i.e. supranational versus international). And it does so by borrowing power from whom used to monopolize it (or intend to): the state. In other words, the new international law “diminishes the authority and power of a state by restraining its internal decision-makers.”14 After all, that is the precise reason why international governance mechanisms were created in the first place.

This means that the impact of international law on domestic public law is not trivial: constitutional law (and administrative law too) “loses its claim to regulate comprehensively the exercise of public authority within the territorial limits of the state.”15 As Cottier & Hertig observe, “the Constitution itself can no longer pretend anymore to provide a comprehensive regulatory framework of the state on its own. . . [T]he national Constitution today and in the future is to be considered a 'partial constitution,' which is completed by the other levels of governance.”16The consequence is that new global governance mechanisms are changing our views not only of international law, but also of domestic public law. Before, domestic public law used to be considered part of the domaine reservé of the state, and therefore, the exclusive province of government monopoly. Today, domaine reservé, both as a political and juridical concept, is over. With this general background in mind, I plan to turn the attention now toward the BIT generation, and view it as one more manifestation of the general trend depicted. The challenge is then, precisely, to ask the normative questions of authority and legitimacy that commentators and scholars noted before in the precise context of foreign investment.

KAGs No Longer Treated As Credit Institutions

As part of its effort to harmonize German law with the Eligible Assets Directive and to create more attractive investment vehicles, the Act amends the definition of investment management company (Kapitalanlagegesellschatt, “KAG”) such that a KAG is no longer considered to be a credit institution. The primary effect of this change is that KAGs ...