## Framework Administered Account for Selected Fund Activities: Denmark Subaccount for Selected Fund Activities

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### Background and purpose
- In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund Activities (the “SFA Instrument”).
- This paper requests Executive Board approval to establish the Denmark Subaccount for Selected Fund Activities (the “Subaccount”) under the terms of the SFA Instrument.
- The Fund, represented by the Managing Director, has reached understandings with the government of Denmark (“Denmark”) to finance capacity building, training and related activities.

### Nature, design, and eligible activities
- The resources of the Subaccount shall consist of amounts contributed to the Subaccount by Denmark and earnings that accrue as a result of investment of these amounts (net of any costs associated with such investments).
- The resources of the Subaccount will be used to finance projects that seek to enhance the capacity of Fund members to formulate and implement policies in the macroeconomic, fiscal, monetary, financial and related statistical fields, including training programs and projects that strengthen the legal and administrative framework in these core areas.

### Operational arrangements and modalities
- Denmark and the Fund shall reach understandings upon operational features related to the activities to be financed from the Subaccount, consistent with the understandings that have been reached between Denmark and the Fund and the Instrument governing the SFA.
- Resources will be placed in the Subaccount by Denmark on the basis of Letters of Understandings signed between Denmark and the Fund relating to specific activities to be undertaken.
- The Subaccount will permit Denmark to transfer resources from the Subaccount to any subaccount under the SFA.

### Cost recovery and Fund management
- To help defray the expenses incurred by the Fund in the management of the Subaccount that it will finance, reimbursement equal to 7 percent of the expenses financed by the Subaccount will be paid to the Fund from the Subaccount.

### Compliance and approval
- The essential terms and conditions of the Subaccount are consistent with the terms and conditions of the SFA Instrument, and the activities to be financed from the Subaccount are consistent with the purposes of the Fund.
- It is proposed that the Executive Board approve the establishment of the Subaccount.

*Prepared by the Legal and Finance Departments, and the Office of Technical Assistance Management; Approved by Sean Hagan, Andrew Tweedie, and J. R. Rosales; March 24, 2011.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_032411.pdf_