On the Question of the Beneficial Owner of a Legal Entity with its Shares Being Part of a Closed Mutual Investment Fund

Abstract

The article discusses various approaches used in determining the persons under whose control a legal entity is located, if shares in the authorized capital of such a legal entity are part of a closed mutual investment fund. In such situations, the identification of the beneficial owner, for example, for the purposes of fulfilling the requirements of the legislation on countering the legalization (laundering) of proceeds from crime, or for fulfilling the requirements of antimonopoly legislation, is significantly complicated, since under the legislation on investment funds, a mutual investment fund is not a legal entity. In addition, the trustee manages the property that makes up the mutual investment fund on the basis of a trust management agreement. Such a trustee is a professional participant in the securities market – a management company with activities licensed by the Bank of Russia. In turn, the management company of a mutual investment fund, as an independent business  entity, may have controlling persons who are in no way related to the owners of investment units – the legal owners of the property that makes up the mutual investment fund, who do not take any part in real transactions with such property.