objectives of funds Flashcards
funds that aim to maximise returns
- defined benefit pension scheme
- collective investment scheme
- investment trust company
funds that aim to meet liabilities
- defined benefit pension scheme
- life assurance company
- general insurance company
types of fund : investment trust companies
venture capital trusts (VCT)
real-estate investment trusts (REITS)
types of fund : insurance companies
general
life (pays fixed sum at death)
legal status of a unit trust and ICVC/OEIC
trust and company
type of fund for unit trust and ICVC/OEIC
open-ended CIS and open-ended CIS
Asset management market review : Authorised fund managers must
- assess the value for money
- take corrective action if it does not offer good value of money
- explain assessment annually in public report
Asset management market review : firms must consider
- quality of service
- fund performance
- authorised fund amanger costs
- economies of scale - and its savings
- comparable market rates
- classes of units
CIS in EU are regulated by
units for collective investment in transferrable securities directive
a UCITS can promote itself in europe if
obtains a UCITS passportf form home regulator
be open-ended
follows all UCITS regulations
UCITS III
managment directive and product directive
UCITS IV more regulatory
- improved ability to passport through mgmnt company passport with home state supervision and simplified regulator-to-regulator communication
- KIID
- Facilitated fund mergers and master-feeder structures
AIFMD
- regulates (hedge) fund managers
- allows cross border EEA selling of funds if :
obtained authorisation by regulator in EU
outside EU if meet certain fiscal and regulatory requirements
requirement for authorisation and reporting applies to AIFs
scope
- above 100mill euro if AIF uses leverage
- above 500mill euro if AIF does not use leverage
requirements
- provide annual reports
- reasonable leverage
- use only regulated brokers
types of pension schemes
- personal private pension ~(stakeholder)
- occupational pension scheme ( defined benefit, defined contribution)
- pensions act 2008 (22yrs and earning above £10,000, NEST)
Occupational pension scheme
- sponsoring company
- members/beneficiaries
- approval by HMRC (no income or capital gains tax liabilities)
- trustee (legal owner of assets)
- investment manager
OPS statement of investment ppls
- type of investments
- risk and how risks will be managed
- realising investment
- whether and how any rights will be used
OPS statement of investment ppls reviewed every
3 years
scheme specific funding requirement
- included in statement of ppls
- trustees required to:
prepare statement of funding ppls, explaining how objective will be met
prepare schedule of contributions
obtain regular actuarial valuations and reports
recovery plan in place if objective not met
pensions regulator objectives
- protect members of work-based schemes
- reduce risk of compensation claims
- promote gd administration in schemes
- maximise employers compliance
- empowered by pensions act 2004
pension protection fund (PPF)
-compensation for members of eligible defined benefit pension schemes on insolvency
can provide:
- 100% benefit to existing pensioners
- 90% benefit to those not yet retired (cap £38k)
FUBNDED BY LEVIES ON eligible schemes
insurance companies products
- term assurance (e.g. to pay mortgage. covers a specific period)
- whole of life (pays at death)
- endowment (sum assured on death or maturity)
- with profits (aims to pay a fixed return)
pensions scheme act 2021 additional protections
[ guidance for trustees on pension transfers
- higher fines for avoidance of duties and info deficiencies - 1mill £
- governance disclosures on climate related risk and opportunities
- funded by compulsory annual levies on all eligible schemes
AIF includes
hedge funds
private equity funds
retail investment funds
investment companies
real estate funds
AIFMD
harmonization that creates permission for AIFM to market their funds under EU passport rather than comply to local regimes
sub threshold AIFM
- small authorised UK AIFM (FCA authorised and has not opted into the AIFMD)
- small registered UK AIFM and either:
- internal AIFM corporate body (investment trust)
- unauthorized manager of property funds which are operated by an FCA authorised operator
- fund manager that applied for Euroepean venture capital funds regulation or european social enterpreneurship funds regulation
sub-threshold AIFMS APPLY
SYSC
COBS
but cannot benefit from EU marketing passport under AIFMD so marketing has to comply with local regimes
AIFMD requires AIFMs to select brokers and counterparties that
- subject to regulatory supervision
- financially sound
- have necessary organisational sgtructure
stakeholder pensions for
(low cost)
self-employed
middle-income employess
powers of pension regulator
- investigate schemes (through scheme reutrn + reports of breaches from whistleblower + reports of notifiable events trustees and employers
- putting things right
- acting against avoidance
powers of pension regulator
- investigate schemes (through scheme reutrn + reports of breaches from whistleblower + reports of notifiable events trustees and employers
- putting things right
- acting against avoidance
