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.