Chapter 7: 3 Flashcards
What is an OEIC?
Open-ended investment company (OEIC) is another form of CIS.
What are OEIC’s referred to as?
Investment companies with variable capital (ICVCs) by the FCA.
Which ICVC is found in Western Europe?
Societe d’Investissement a Capital Variable (SICAV).
What’s a SICAV?
Investment company with variable capital.
Where are SICAV’s set up?
Luxembourg by asset management firms so they can be distributed to investors across Europe or further afield.
How is an OEIC structured?
As a company, with investors holding shares.
Where do OEIC’s invest?
Invest shareholders money into a diversified pool of investments.
How do OEIC’s differ from conventional companies?
Established under special legislation and not companies acts.
What makes OEIC’s open-ended?
Because they’re not subject to share repurchase restrictions, create new shares, and redeem existing ones according to investor demand.
When an OEIC is set up, what is a requirement?
An Authorised Corporate Director (ACD) and depository are appointed.
What is an ACD responsible for?
Day-to-day management of the fund, including managing investments, valuing and pricing the fund, and dealing with investors.
Who undertakes these responsibilities?
ACD can itself, or can delegate to third parties.
Where are OEIC investments held?
By an independent depository.
What is a depository responsible for?
For looking after investments on behalf of OEIC shareholders and overseeing the activities of the ACD.
Who maintains the register of shareholders?
The ACD.
