BERLIN (AP) — The German government on Wednesday approved a bill that will allow hedge funds to be sold in the country for the first time starting next year, part of an effort to boost the Germaninvestment fund industry.

From Jan. 1, hedge funds will be allowed to sell shares to institutional and private investors. Investment firms currently can’t launch hedge funds in Germany, and foreign hedge funds aren’t authorized for public distribution.

Hedge funds use leveraging and complex trading methods — including short selling and investing in commodities, foreign currencies or troubled companies’ debt — to achieve gains no matter what the market does.

Under the investment fund bill approved by the Cabinet, Germany also will give equal tax treatment to domestic and foreign funds from next year, a move that experts have said could attract up to Ç150 billion (US$167 billion) into the country’s capital markets over the next three years.

The modernization “improves conditions for investment funds by promoting German fund companies’ competitiveness” against European rivals, the Finance Ministry said in a statement.

The bill is part of a wider effort to promote financial markets. The government wants to grant retail investors more rights and pave the way for Europe-wide regulation of cross-border securities transactions.

The measures require approval by the German parliament, expected in November.

(dj-gm)