Knowledge Base
Collective Investment / Third-Party Asset Management
Framework and operations of collective investment schemes and third-party asset management. Covers UCITS, AIFs, management companies, and related regulatory obligations.
Skills
Questions
Who must be informed immediately when the gates mechanism is triggered?
When a gates mechanism is triggered, it is essential to inform the AMF immediately to ensure transparency and regulatory compliance. This information must also be communicated promptly to the affected unitholders.
What is the minimum frequency for calculating the net asset value of UCITS?
The monitoring process must verify that the publication of the net asset value complies with the frequency defined in the prospectus. For UCITS, this minimum frequency is daily, as it ensures a regular and transparent valuation of the portfolio for investors.
What is the maximum threshold authorised for triggering gates in a fund with monthly valuation?
The gates mechanism caps redemptions to protect the fund. The maximum threshold varies according to the valuation frequency. For monthly valuation, this threshold is set at 20% of net assets.
What are the three fundamental principles that the control process must verify for investor entry and exit operations in UCITS and AIFs?
According to the Code monétaire et financier and the AMF General Regulation, the three fundamental principles to verify are unknown-price valuation, equal treatment of unitholders, and free entry and exit for open-ended funds except in exceptional circumstances. These principles ensure that investors are treated fairly and that transactions are carried out transparently.
The suspension of subscriptions and redemptions can be decided without justification if it is in the interest of unitholders.
The suspension of subscriptions and redemptions can only be decided if exceptional circumstances justify it and if it is necessary in the interest of unitholders or the public. A decision without justification would not comply with the relevant articles of the Code monétaire et financier and the AMF General Regulation.
The publication of the net asset value must be made on the management company's website only if it is calculated on a daily basis.
The publication of the net asset value must comply with the frequency defined in the prospectus, but it must always be made available on the management company's website, regardless of the frequency (daily, bi-monthly, etc.). This ensures transparency and access to information for all investors.
Categorize items by dragging them to the appropriate zones
Items to categorize:
Late trading
Market timing
Late trading consists of placing orders after the cut-off time while benefiting from the day's net asset value. Market timing consists of exploiting time zone differences between markets. Both practices must be monitored to ensure fairness among unitholders.
Swing pricing
Click to see answer
Swing pricing is a net asset value adjustment mechanism that passes on portfolio rebalancing costs to incoming or outgoing investors. It is used to prevent transaction costs from being borne by remaining investors.