Fund for Joint Account and the Dutch UBO-register

The Fund for Joint Account (fonds voor gemene rekening or FGR, hereafter “FGR”) is a fund structure that is commonly used in the Dutch funds domain involving a few to many investors.

As per November 23, 2021 the Dutch legislator accepted the proposal for law requiring a FGR to report its UBOs to the Dutch Chamber of Commerce. The Dutch legislator considers an FGR as a trust-like entity. This has disclosure effects regarding investors. In the UBO register the name, the FGR, date and place of inception and objective of the FGR must be registered. All people involved in the FGR need to be registered as a UBO, meaning the manager of the FGR, de initiator (settlor) and the beneficiaries (investors).

Initially the legislator proposed to impose a disclosure obligation of all investors regardless their actual stake, the final law imposes a threshold of 3% at a minimum. As a consequence a potential maximum of 32 investors need to be registered. The law imposes disclosure of interests of the UBOs in bandwidths from 3%-25%, 26-50%, 51%-75% and finally 76%-100% so investors need to be monitored on their individual stake. Publicly disclosed information of the UBOs are the first and surname, nationality, month and year of birth as well as the country of residence.

If such disclosures are undesired because of for example privacy concerns a manager needs to contemplate restructuring the fund into a specific legal entity thereby preventing public disclosures.

It is expected that requirements go into force as per January 1, 2022. Existing FGRs need to report the UBOs ultimately three months after this date.

 

Dutch senate passed the act for balanced gender diversity at the top of large companies

On September 28, 2021, the Dutch Senate (Eerste Kamer) adopted the legislative proposal on balanced gender diversity at the top of large companies (the “Act”, in Dutch: Wetsvoorstel inzake evenwichtige man/vrouwverhouding in de top van het bedrijfsleven), which is expected to enter into force on January 1, 2022.

Measures
The Act introduces two measures: (i) a diversity quota for supervisory boards of companies listed on Euronext Amsterdam (irrespective of whether they are a two-tier board company and/or subject to the so called “large company regime”) and (ii) the obligation for large NVs and BVs to set an appropriate and ambitious self-determined target and to prepare a plan of action (the “Target Plan”) in order to promote gender diversity on the management board, supervisory boards and within senior management. “Large” companies are required to publish their Target Plan (included in the annual director’s report) yearly within 10 months after the end of each book year and report their progress to the Social and Economic Council (SER).

Transitional provision
The abovementioned reporting requirements apply to the financial year starting on or after January 1 of the year the Act entered into force. Effectively this means that if the Act’s effective date is January 1, 2022, the large companies will have to monitor their progress during the financial year 2022 and will account for this in their directors’ report in 2023.

Evaluation and sunset clause
The Act will be evaluated five years after taking effect and it will lapse after eight years.

For more detailed information with regard to the measures, we refer to our previous blog on this topic: https://vancampenliem.com/blog/legislative-proposal-on-balanced-gender-diversity-at-the-top-of-large-companies/

For more information, please contact:

Rachelle Giller

Rachelle Giller

Anna Zhu

Anna Zhu