Fund Setup
OEIC: NURs or UCITs?
It all depends on what the objectives of the fund are and what the fund is hoping to achieve in the long term.
The journey for many creating a fund starts with those who are managing investments through model portfolios.
New entrant clients are often unsure what is required to move the model portfolios into a fund (s), Lloyd Expert Consultancy is ideally placed to provide this guidance, information and implementation.
Funds are a cost efficient and effective way of managing client money, so it is no surprise the increase in activity we are seeing from wealth managers wanting to convert model portfolios into funds. Not only does it make it more efficient and effective to manage for the client but benefits the firm as well.
What are the benefits of running a fund?
- Tax efficient
- React to the marketplace more quickly
- Better reporting
- Easier to compare and identify weaknesses, value add to the client
- Level of information and public knowledge is greater, more transparent
- Charges are clearer
Using funds to manage model portfolios will assist in the reporting of costs according to the new MiFID II rules coming in 2018
Part of the fund setup is selection of an ACD and it is important to understand that the regulatory and literature requirements are usually done or supported in large by the ACD which includes,
1. Prospectus
2. KIID
3. MIFID II requirements
4. Objectives
5. Fact sheets
6. IMA
7. Sponsorship Agreement
Lloyd Experts can assist and support in the setup of a fund or range of funds from initiation through to implementation if required. We can take care of the full process or just at as support or guidance.
Regarding the setup and authorisation, recognised funds status, the FCA states that, Investment funds that are structured as collective investment schemes (CIS) must be authorised or recognised by us to be promoted to retail investors in the UK.
We can help you to understand what that means and setup your funds according to your objectives. Get in touch today to arrange a free no obligation meeting with a Lloyd Expert, info@lloydexpert.co.uk
Authorised Funds
An authorised fund, which may also be called an 'authorised CIS', must be established in the UK and take one of the following legal forms:
- Authorised contractual scheme (ACS)
- Authorised unit trust (AUT)
- Investment company with variable capital (ICVC) It must also be classified, based on a marketing strategy, as one of the following:*
- Undertaking for collective investment in transferable securities scheme (UCITS)
- Non-UCITS retail scheme (NURS)
- Qualified investor scheme (QIS)
Recognised Funds
A fund that is established outside the UK must be recognised by us to be promoted to retail investors in the UK. A recognised fund may also be called a 'recognised CIS' or 'overseas scheme'.
A UCITS established in another EEA country must be recognised, under section 264 of the Financial Services Markets Act 2000 (FSMA).
Other funds established in another EEA country, including an alternative investment fund (AIF) authorised in another EEA country, must be recognised by us, under section 272 of FSMA.
For more information, support and understanding please contact Info@lloydexpert.co.uk so we can provide the right Lloyd Expert for you.