Public distribution

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Under Public Distribution (English public distribution ) refers to all activities that the issue of fund units have and their placement on the market to target. These include:

  • Buying Shares
  • consultation
  • advertising
  • Sales promotion

Funds that are launched by a German investment company and therefore have to be approved by the Federal Financial Supervisory Authority (BaFin) are approved for public distribution in Germany on the date of launch. In contrast to this, sales of foreign funds in Germany may only begin if two months have passed since the BaFin received the complete notification of sale without the authorities having prohibited the start of sales. A shorter period of two months applies to funds with a “ Europe Pass ” that meet the requirements of the European UCITS Directive .

A characteristic of public distribution is that the activities originate from the fund provider or someone appointed by him, for example from a credit institute or a fund shop. These include advertisements, posters, radio and television spots, the distribution of brochures and lectures. However, if the initiative comes from the customer of his own volition by informing himself accordingly, it is not a matter of sales within the meaning of the Investment Act . If the deadlines are not met, BaFin prohibits further sales. The fund company may then only submit a new application for distribution after one year.

The counterpart to public distribution is private placement .