Training Courses

Unit Trusts & OEICS Workshop

Category: Investment Products

Course level: Introductory to Intermediate

In house

This 3-hour workshop has been designed to provide a fast-track review of Collective Investment Schemes (CISs) in the UK retail market. It will cover the regulations governing CISs, including UCITS II and III.

Case studies using real-life funds form an integral part of the course, to enable delegates to consolidate the information and provide the basis for group discussions.

Objectives

By the end of this workshop, delegates will have a greater understanding of:

  • open-ended products in the market
  • authorised vs unauthorised funds
  • role of the trustee, depositary, manager and administrator
  • how to calculate NAV and dealing price
  • effect of the dilution levy and/or swinging mid price
  • investment and borrowing limits of their products

Length

3 hours

Course Content

Types of Collective Investment Scheme

Unit trusts

SICAVs
OEICs, ICVCs
Authorised vs unauthorised

Comparing OEICs and unit trusts

Constitution of an authorised fund
Categories
Trust Deed & scheme particulars (UTs)
Instrument of Incorporation and Prospectus (OEICs)

Share/unit classes

Retail vs institutional share classes
Charging structures

Business relationships

The role of the trustee/depositary
The manager/ACD of the fund
Sub-contracting investment management
Role of the custodian
Administration

FSA financial promotion regime

Customer classification
UCITS II and Simplified Prospectus
Required information and presentation standards
The changing landscape of fund distribution
FSA polarisation changes

Pricing open-ended funds

Forward vs historic pricing principles
Calculating NAV
Calculating the creation, bid and offer price for dual priced funds
Worked example: Calculating the price of a dual-priced fund
Calculating the mid price for single priced funds
Dilution levy vs swinging mid price
Worked example: Calculating the price of a single-priced fund
Case study: Looking at published fund prices for single- and dual-priced funds

Dealing in open-ended funds

Processing buying and selling orders
Cash vs in specie payments

Creations and cancellations

Role of the trustee (AUTs) vs ACD (OEICS) in creation and cancellation
Handling cashflows in funds
Managing a box
Fractional shares

Pricing errors

FSA rules
Customer compensation rules

Charges and expenses

Initial charges
AMC
Switching fees
Performance fees (COLL)
Focus fund charges

Investment and borrowing powers (COLL 5 and 5A)

Approved securities
Spread and concentration rules
Mixed funds
Using derivatives
EPM rules, shorting opportunities, new rules for cover
Funds of funds
Case study: Looking at the current investment strategy of a CIS using a monthly report

Income distribution

Sources of income
Income accrual
Income distribution
Equalisation
Worked example of equalisation calculation

Taxation

Fund taxes
Corporation tax, withholding tax, SDRT, VAT
Investor taxes
CGT, income tax, SDRT

Corporate governance

Necessary report and content
Shareholder meetings
The IOSCO consultation
IMA SORP
The impact of FSA DP05/03

Changes in the funds industry

UCITS III – what’s new?
COLL – what’s new?

This course would be suitable for:

  • Client services and call centres
  • Finance and accounting
  • HR and training
  • Investment administration and operations
  • IT and software developers
  • Legal & Compliance
  • New entrants
  • Risk management
  • Sales and marketing
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