Structuring Mutual Funds in the U.S., England, Germany & Luxembourg


Charles E. Rounds, Jr. & Andreas Dehio, Publicly-Traded Open End Mutual Funds in Common Law and Civil Law Jurisdictions: A Comparison of Legal Structures, 3. NYU Journal of Law & Business 473 (2007). A mutual fund established in England or one of the states (U.S.) is a trust, even one that is structured as a corporation. This is the case notwithstanding the fact that U.S. federal statutory law misleadingly refers to a mutual fund as an investment company. See, e.g., the Investment Company Act of 1940. England and most of the states (U.S.) are common law jurisdictions. On the other hand, the Anglo-American trust has no place in Germany’s jurisprudence, Germany being a civil law jurisdiction. Germany does have some trust analogues, but they are imperfect ones. The Treuhand is the most notable example. How then do Germany and Luxembourg, the latter now a mutual fund powerhouse, legally structure their mutual funds? How does the legal structure of a mutual fund operating in Germany or Luxembourg compare with the legal structure of a mutual fund operating in a common law jurisdiction? This article endeavors to answer these and other such questions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Charles E. Rounds, Jr.
Suffolk University Law School

Professor of Law, Suffolk University Law School. Tenure granted: 1990. Author: Loring and... View Profile »

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