In June 2024, the final texts of the European AML Package were published, including the new Anti-Money Laundering Regulation (AMLR), which establishes rules to combat money laundering and terrorist financing. In this memo, we focus on the impact of this regulation on the definition of UBOs in common account funds (FGRs).
Under current Dutch law, a mutual fund is legally equated with a trust. This creates discrepancies compared to other EU member states and leads to practical difficulties and competitive disadvantages for Dutch fund managers, especially compared to countries such as Ireland, France and Luxembourg.
A mutual fund is a contractual relationship between the fund manager, depositary and participants, and may include many private investors. Under current rules, participants of such funds must be registered as UBOs, which is difficult to implement in many cases. This disparity has resulted in adverse administrative burdens and complicates the international competitiveness of Dutch funds.
The new AMLR, which entered into force on July 20, 2024, provides a harmonized approach to identifying UBOs of collective investment undertakings (such as FGRs). This new regulation states that UBOs must be identified regardless of the legal form in which the institution is set up, and provides clarity by providing a single uniform definition of UBOs for UCITS and AIFs.
In line with the new administration's ambition to remove national headlines, we stress that it is essential to stop equating mutual funds with trusts, as is currently done in the Dutch regulations. Instead, they should fall under the specific UBO definition included in the AMLR. This will avoid double administrative burdens and ensure a level playing field for Dutch fund managers in the European market.
