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27 February 2020 / article

Investment Management News Update – Winter 2019

The Investment Management News Updates: an overview in which our Investment Management Team highlights recent developments.

Loyens & Loeff publications

AFM publishes report on investigation into MiFID II service provision to professional investors (the Netherlands)
The AFM has published the outcome of its research into service provision to professional investors and ECP’s in 2018 and 2019. To read this update, click here

New prudential framework for investment firms published
The directive (EU) 2019/2034 and regulation (EU) 2019/2033 on the prudential requirements of investment firms were published in the official EU journal introducing a new prudential regime for investment firms. To read this update, click here

Desired clarity in the European field of cross border distribution of investment funds (the Netherlands)

In March 2018 the European Commission published, as part of a larger package of measures further developing the Capital Markets Union, proposals for a directive and a regulation which aim to facilitate the cross border distribution of investment funds. Aforementioned directive and regulation have since then, per 1 August 2019, entered into force and shall (for the main part) apply from 2 August 2021. To read the contribution in the journal Tijdschrift voor Financieel Recht (only in Dutch), click here.

Legislative proposal for the Dutch implementation of the UBO-register adopted by Parliament (the Netherlands)
On 10 December 2019, the ‘Act on the registration of ultimate beneficial owners of corporate entities and other legal entities’ (the UBO-register) was adopted by Parliament. In this newsletter we describe the registration requirements for (subsidiaries of) listed companies and the adopted improvements for the protection of privacy of UBOs. We also address the next steps in the implementation process of the Act. To read this update, click here

CJEU rules that Dutch tax rules on dividends paid to non-resident UCITS partly violate EU law
On 30 January 2020, the Court of Justice of the European Union (“CJEU”) issued its judgement in the case of Köln Aktienfonds Deka (“KA Deka”). The CJEU answered two preliminary questions from the Dutch Supreme Court on the compatibility with EU law of differences in the Dutch dividend withholding tax regime, depending on whether the recipient is a non-resident UCITS or a Dutch resident UCITS qualifying as a so-called “fiscal investment fund” (fiscale beleggingsinstelling, “FBI”). The judgement makes clear that the Dutch FBI-regime is at least partly not in line with the EU treaties. The Dutch Supreme Court will now need to apply the CJEU findings to the specific case, click here

The LuxSE updates its Rules & Regulations (Luxembourg)

The LuxSE has substantially amended its Rules & Regulations to integrate recent mandatory legal and regulatory developments as well as to provide increased clarity, transparency and usability for its clients. To read this update, click here

AFM principles for Information Security
The AFM has published a set of Principles for Information Security to provide guidance for financial firms (including inter alia licensed managers of alternative investment funds) and audit firms. The introduction to the principles notes that the management of information security has become increasingly important due to increasing digitalisation of firms and a growth of the threat of cybercrime. The principles provide guidance for financial firms and audit firms in the interpretation of legal provisions, click here

Legislative dates for your diary

13.01.2020  ESAs consultation deadline: on changes to the key information document for PRIIPs, click here
14.01.2020  Legislative consultation deadline: wetsvoorstel plan van aanpak witwassen, click here
03.02.2020  Guideline consultation deadline: Algemene Leidraad Wwft, click here
03.02.2020  Legislative consultation deadline: Wijzigingswet financiële markten 2021, click here
02.03.2020  AFM en DNB consultation deadline: concept-handhavingsbeleid, click here
European Commission consultation deadline: Financial services – improving resilience against cyberattacks (new rules), click here
31.03.2020  ESMA consultation deadline: ESMA consults on the new MiFIR and MiFID II regimes for third-country firms, click here

Effective Dates EU

30.12.2019  Entry into force: Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, and Regulation (EU) 2015/847 on information accompanying transfers of funds, click here
24.01.2020 Publication date: Corrigendum to Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014, click here

Effective Dates The Netherlands
01.12.2019  Entry into force (majority of provisions): Wet van 6 november 2019 tot wijziging van Boek 2 van het Burgerlijk Wetboek, de Wet op het financieel toezicht en de Wet giraal effectenverkeer ter uitvoering van Richtlijn 2017/828/EU van het Europees Parlement en de Raad van 17 mei 2017 tot wijziging van Richtlijn 2007/36/EG wat het bevorderen van de langetermijnbetrokkenheid van aandeelhouders betreft (PbEU 2017, L 132), click here
01.01.2020  Entry into force: Wijzigingswet financiële markten 2019, click here
15.01.2020  Entry into force: Besluit 2019 tot wijziging Beleidsregel geschiktheid 2012, click here


Application of VAT exemption for fund management
On 5 December 2019 the Amsterdam Court of Appeals issued a ruling regarding the application of the VAT exemption for fund management. The application of the VAT exemption was denied for two reasons: 
(i) The strategy of the fund in question – a venture capital fund – was in part to support starting businesses in their growth ambitions and thus not aimed solely towards achieving maximum return on investment.
(ii) The manager of the fund was not registered with the competent regulator (although there was an obligation to do so as the fund qualified as an AIF), click here.

Dutch Supreme Court ruled on the non-resident corporate income tax liability of foreign holding companies
The Dutch Supreme Court ruled on application of an anti-abuse rule, aimed at structures whereby foreign entities are deemed to be interposed to avoid Dutch tax. The case is particularly interesting because it is the first time that the Dutch Supreme Court ruled on the application of this rule. Moreover, the Supreme Court confirmed that the method of determining whether a structure is deemed to be abuse, as applied by the Dutch tax authorities, is compatible with recent EU case law, click here.

Acquisition of real estate companies by fund not subject to transfer tax
The ’s-Hertogenbosch Court of Appeal has ruled on 24 January 2020 that no real estate transfer tax was due by a German real estate fund in respect of the acquisition of the shares in a number of Dutch real estate companies. The acquisition of an interest in a Dutch real estate holding company is only subject to Dutch RETT in case an interest of at least one third is acquired. In this case, a widely held German fund, where no investor had an interest of one third, acquired several Dutch real estate holding companies. The position was taken that for determining whether an “interest” is acquired, that the economic interest is decisive, and not the legal ownership without economic entitlement. In this case, legal title to the shares was held by a custodian of the fund, without an economic interest. The Court of Appeal confirmed this position, meaning that for funds without legal personality, where one party only as a custodian for the legal title, that potentially no RETT is due on acquisitions by those investors who, on a look through basis, have an interest of less than one third, click here

Partial Dutch Supreme Court judgement on tax transparency of German fund and eligibility for dividend tax refunds
On 24 January 2020, the Dutch Supreme Court issued a partial court judgement on a case concerning a German Sondervermögen, which requested of a refund of Dutch dividend tax. The position was taken that the German Sondervermögen is comparable to a Dutch fiscal investment institution (fiscal beleggingsinstelling) and that it should be entitled to a refund of Dutch dividend tax, in order to neutralise discrimination between Dutch and foreign investment institutions. In its partial judgement, the Supreme Court ruled that a German Sondervermögen is in principle comparable to a Dutch mutual fund (fonds voor gemene rekening). However, a key characteristic of a mutual fund is that it invests for mutual account. The Supreme Court ruled that mutual fund-like entities, with only one investor, do not invest for mutual account and should be treated as tax transparent from a Dutch tax perspective. Moreover, the Supreme Court ruled on a technical aspect of the case, stating that a request for a refund needs to be done by the correct party. For those cases where a German Sondervermögen with only one investor is concerned, the request needs to have been done (also) in the name of the investor behind the Sondervermögen. Other questions remained outstanding, pending the European Court of Justice’s ruling on case C-156/17, which was published on 30 January 2020


Should you require any assistance in the field of Investment Management, please contact your trusted adviser of ouInvestment Management Team.

Although this publication has been compiled with great care, Loyens & Loeff N.V. and all other entities, partnerships, persons and practices trading under the name  'Loyens & Loeff', cannot accept any liability for the consequences of making use of this issue without their cooperation. The information provided is intended as general information and cannot be regarded as advice.

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