Collective investment schemes

Question 1

Definition managed fund

Answer 1

1) professionally managed

2) collective investment/pooled

Question 2

Categories of funds (criteria)

Answer 2

1) open ended vs closed ended
2) listed vs unlisted
3) guaranteed/capital protected cs unguaranteed
4) harmonised (UCITS) vs alternative (AIF)

Question 3

UCITS eligible investments

Answer 3

1) transferable securities and money market instruments on regulated markets(exchanges
2) recnently issued transferable securities that will soon be on reg. amrket/exchange
3) units of UCITS or, subject to certain conditions, other collective investment udnertakings
4) 12 months deposits with CIs
5) derivatives in reg. markets or OTC (certain conditions)
6) money market instruments NOT in reg. market if regulated to protect incestors and savings
7) ancillary liquid assets

Question 4

Legal sergregation

Answer 4

Legal sergregation of each fund from:

1) any assets/liab of mgmt company
2) any other fund from same mgmt company
3) assets of unit-holders of fund

Question 5

Mgmt company authorisation requirements

Answer 5

1) disclosure of identity/honorability of relevant SHs
2) minimum corporate capital and own funds
3) honorability and experience of relevant managers

Question 6

UCITS activities limits

Answer 6

mgmt company shall not engage in activities other than UCITS mgmt, except for other investments (not covered by UCITS), individual client portfolio mgmt, investment advice

Question 7

Depositary bank obligations

Answer 7

are entrusted with assets of common fund for safe keeping.
not reuse these assets
admit assets only when for UCITS, upon instruction of mgmt company, for the benefit of UCITS and unit holders, with high-quality collateral

also: monitoring function

Question 8

Cross-border activity of mgmt comopanies

Answer 8

UCITS that are authorised by home EU member state can propose to market their units IN ALL EU MEMBER STATES.

Dual supervision -> has to provide investors all info and documents required by home state. These infos must be provided in way and language required by host state also

Question 9

Who does AIFMD apply to?

Answer 9

1) all EU AIFMs managing and AIF, regardless where AIF is established
2) all non-EU AIFMs that manage an EU AIF
3) all non-EU AIFMs that market on or more AIFs, regardsless where AIF is established

Question 10

Conditions for granting authorisation for AIFMs with AuM exceeding EUR100m (or EUR100m if closed ended and unlevered)

Answer 10

1) sufficient initial capital
2) reputable and experienced business conductors
3) SHs ensure sound mgmt of AIFM
4) head office and registered office located in same member state

Question 11

AIFM Remuneration policy

Answer 11

All people with material impact on risk profile must be in same remuneration bracket as senior mgmt and risk takers

Question 12

AIFM Risk mgmt

Answer 12

must be functionally separate from portfolio mgmt - unless there are safeguards against conflicts

Question 13

AIFM valuation

Answer 13

AIFM is reponsivle for proper valuation of fund assets

Question 14

AIFM disclosure to investors

Answer 14

Must disclose:

1) description of investment strategy
2) infor on establishment location
3) type oassets
4) usage of leverage
5) identity of AIFM, depositary, auditor, service providers
6) delegated mgmt descriprion, safe-keeping uction
7) description of valuation procedure
8) description of liquidity risk mgmt
8) fees, charges,…

Question 15

AIF annual report contains what?

Answer 15

1) BS
2) income and expend.
3) activities
4) changes of info
5) remuneration info

Question 16

Passport/Third country AIF

Answer 16

EU AIF can market their funds in all EU

Non-EU can do that too, but must operate under national private placement schemes