OEICs & Unit Trusts – People Involved
Unit Trusts
Trustee:
- Must be regulated by the FCA
- Checking that actions taken in the fund are in accordance with the trust deed, eg asset allocation
- Distributing income to investors
- Arranging meetings of unitholders
- Monitoring the calculation of unit prices, both purchasing and selling from and to investors
Manager:
- Must be an authorised person
- Manage the assets in accordance with the trust deed and regulations.
- Notify the trustee/FCA if any rules have been breached.
- Responsible for promotion, advertising, selecting investments and fund administration.
- This role can be contracted out to a third party to do it on their behalf. EG Nationwide ISAs being managed by L&G.
OEICs
Authorised Corporate Director (ACD):
- An ACD is the OEIC equivalent of a unit trust manager
Responsibilities include:
- Ensuring compliance with investor protection requirements
- Maintaining a register of shareholders
- Management of valuation, pricing, dealing and preparation of accounts
- Management of Investments
Questions - Use Your Note Taker To Jot Down Ideas / Calculations
1. Carol works for a small open ended investment company (OEIC). She is responsible for the
preparation of accounts as well as ensuring the OEIC complies with its investor protection
requirements. This means that Carol must be:
a) the authorised corporate director.
b) one of the trustees.
c) the fund’s internal depository.
d) the fund’s independent depository.
A)
The authorised corporate director (ACD) is the equivalent of a unit trust manager. The
responsibilities of ACDs are set out
2. Hope Bank are the trustees of a unit trust. Their responsibilities include all of these, APART from:
a) arranging meetings of unitholders.
b) arranging the auditing of the trust.
c) ensuring adherence to the terms of the trust deed.
d) selecting investments.
D)
It is always the fund manager’s job to select investments – that is why the trustees employ them.
- Further study text reading: Pages 190-192