German Federal Cabinet Approves Investment Risk Limitation Act

November 01, 2007

New restraints on undesirable practices that have developed in certain areas of the financial markets under current German law were recently approved. Among other measures, the Investment Risk Limitation Act ("Act") will increase notification requirements and require disclosure of the objectives underlying the holding of shares in German listed companies at or above certain thresholds. These changes will affect financial investors, including hedge funds and private equity funds. The Act, approved by the German Federal Cabinet (Bundeskabinett) on October 24, 2007, us expected to come into force during 2008, although it is still the subject of political discussion and must be approved by the German Parliament (Bundestag).

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