Use of omnibus accounts for the marketing of Spanish investment funds

On 30 October 2013, Law 16/2013, of 29 October, which establishes a set of new environmental taxation rules, together with other tax and financial measures ("Law 16/2013"), was published in Spanish Official Gazette (Boletín Oficial del Estado). Law 16/2013 includes an amendment to Law 35/2003, of 4 November, on Collective Investment Schemes ("Law 35/2003") to allow the marketing of Spanish investment funds through omnibus accounts. This amendment will come into force on 1 January 2014.

The purpose of this amendment is to implement a similar system to that already existing in other jurisdictions and to make the Spanish investment funds sector more competitive. The single register of investors kept by fund management companies is replaced by a system where, when the marketing of a fund is agreed between the fund management company and a financial intermediary established in Spain (the "marketing entity") through an omnibus account, the marketing entity may keep the register of the investors in that fund. This register must at all times contain individual details of each of the investors, their balance and the value of their investments, with a breakdown of each transaction, including all the appropriate financial and tax information for the marketing entity to comply its financial and tax obligations.

The marketing entity cannot record investors in a fund, regarding a single class of units, in its own register of investors at the same time as that investor is included in the register kept by the fund management company. All investments in the fund channelled through the same marketing entity must be recorded in the investor’s name in a single register.

When units are recorded in the fund management company’s register in the name of the marketing entity on behalf of the investors in an omnibus account, those investors’ prior individual consent is needed before the system of registration in an omnibus account can be used.

Additionally, new tax reporting obligations are also introduced for fund management companies and marketing entities in cases of units held in the same fund at the same time in the register of investors of more than one institution.

Finally, laws on taxes on personal income tax (Impuesto sobre la Renta de las Personas Físicas), corporate income tax (Impuesto sobre Sociedades) and non-resident income tax (Impuesto sobre la Renta de no Residentes) are also amended to adapt these laws to the new system of registration of investors in omnibus accounts.

For more information please contact Paloma Fierro, Ricardo Plasencia, Jaime Piqueras or your usual Linklaters contact.