{"id":12888,"date":"2022-08-11T20:14:36","date_gmt":"2022-08-11T20:14:36","guid":{"rendered":"http:\/\/legalblog.ie\/?p=12888"},"modified":"2024-02-14T21:52:50","modified_gmt":"2024-02-14T21:52:50","slug":"fund-operation","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/fund-operation\/","title":{"rendered":"Fund Operation"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Fund_Manager\" title=\"Fund Manager\">Fund Manager<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Manager_Charges\" title=\"Manager Charges\">Manager Charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Advisory_Services\" title=\"Advisory Services\">Advisory Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Fund_Administrators\" title=\"Fund Administrators\">Fund Administrators<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Trustees\" title=\"Trustees\">Trustees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Trustee_Duties\" title=\"Trustee Duties\">Trustee Duties<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Audit\" title=\"Audit\">Audit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/fund-operation\/#Legal_Advisors\" title=\"Legal Advisors\">Legal Advisors<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Fund_Manager\"><\/span>Fund Manager<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The fund manager manages the funds in accordance with the relevant provisions incorporated in the memorandum and articles of association, trust deed or other constitutional document.\u00a0 It is responsible for the funds&#8217; operation. It has quasi fiduciary obligations.<\/p>\n<p>The fund manager makes the requisite investment decisions advised by the investment manager or advisor.\u00a0 It undertakes purchases and sales of units in the fund and informs investors.\u00a0 It maintains the funds accounts, records and documents. It prepares annual accounts and reports.<\/p>\n<p>The manager or its delegated administrator handles administrative matters, dividends, and distribution.\u00a0 It markets the fund to the public. It liaises with the relevant advisors and service providers.<\/p>\n<p>The fund manager liaises with trustees and custodians in relation to portfolio transactions and the redemption of shares.\u00a0The fund manager arranges annual and other meetings when required.<\/p>\n<p>It maintains share registers and issues share certificate or their dematerialised equivalence.\u00a0 It ensures the fund is operated in accordance with the trust deed and with applicable legislation and is the principal point of contact for investors.<\/p>\n<p>Generally, the fund will subcontract many of its activities while remaining responsible for them.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Manager_Charges\"><\/span>Manager Charges<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The fund manager earns fees through a variety of means.\u00a0 It charges fees for subscriptions.\u00a0 This is generally a percentage commonly up to five per cent of the value of the shares\/units issued.<\/p>\n<p>It may charge an annual administration amount\/charge, which may be a percentage of net assets.\u00a0 The charge accrues daily or monthly.\u00a0 It may charge for other functions either undertaken itself or delegated to a service provider.<\/p>\n<p>Fund managers may earn performance-related fees in certain industries, in particular hedge fund industries, where performance may be based on special skills.<\/p>\n<p>Where there are exit fees charged on the value of redeemed shares, they may be on a stepped basis or a proportion payable for earlier redemptions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Advisory_Services\"><\/span>Advisory Services<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Unless the fund is itself an investment house or service provider likely to appoint an external investment advisor to advise on investment strategy.\u00a0 The advisor may advise only the decision to invest that of the fund manager execution of the decisions it would be trustee or custodian. The fund manager may appoint an external investment manager.<\/p>\n<p>The advisory services are provided under a service contract.\u00a0 The advisors usually paid a percentage of the net asset value of the fund subject to some cases to a minimum per annum.<\/p>\n<p>In hedge funds, the performance basis for the investment managers may be heavily weighted and incentivised.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fund_Administrators\"><\/span>Fund Administrators<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some fund managers may outsource fund administrations to a third-party fund administrator.\u00a0 The manager may retain overall responsibility.<\/p>\n<p>Certain activities may only be outsourced depending on circumstances, including, for example, maintenance books and records, invested liaison, queries and complaints liaison with trustee and custodian.<\/p>\n<p>Fund valuation, support services, cash management, financial management, reconciliation of books as funds with the trustee, and consolidated records.. administrators may provide secretarial services, valuation and accounting services.<\/p>\n<p>Where the fund is established as a unit trust, the primary responsibility for the registrar rests with the trustee.\u00a0\u00a0The registrar maintains shareholder and unit holder records.\u00a0 The books are the primary evidence of ownership of shares and establish entitlement to distributions, et cetera.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trustees\"><\/span>Trustees<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A trustee owes fiduciary duties.\u00a0 In addition, its functions are supplemented by legislation and regulatory obligations.\u00a0 It may be required to be a bank under some regimes.\u00a0 In any event, it will require substantial capitalisation and tested and established systems.<\/p>\n<p>The trustee or custodian must hold the assets, segregate and account for them.\u00a0The trustee must provide independent oversight of the fares of the fund and protect the interest of the investors.<\/p>\n<p>It must state card and say to keep the assets of the fund.\u00a0 It must maintain accounts.\u00a0 It must settle investment frames by delivering assets in cash and ensuring.<\/p>\n<p>Trustee fees are usually paid from the assets of the fund.\u00a0 They will be a percentage of the net assets&#8217; value to carry on fees per transaction.\u00a0 There may be a minimum fund fee provided.<\/p>\n<p>Trustees\/custodians may be part of international groups with the capacity to hold assets in the relevant jurisdiction from which they are placed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trustee_Duties\"><\/span>Trustee Duties<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The trustee\/custodian must ensure the fund does not breach its own constitutional rules or limits.\u00a0 It must ensure that the assets of the fund are properly held and registered.\u00a0 It may be held by the trustee itself or by a nominee.<\/p>\n<p>It must ensure the fund is managed in accordance with the terms of the trust deed or equivalent.\u00a0 It must ensure the fund complies with relevant legislation and regulations.<\/p>\n<p>The custodian\/trustee must maintain a register of unit-holders and approve the promotion of the share in advertising to ensure compliance with regulatory requirements.\u00a0 It must review the operational procedures of the fund manager.This latter obligation may require quasi-auditory review.<\/p>\n<p>The trustee will report on assets on an ongoing basis.\u00a0 This will include reporting on deviations from the requisite asset allocation limits and other guidelines.\u00a0 A standard report will include multi-currency portfolio valuations, transaction statements, statistical analysis, and income statements.<\/p>\n<p>A custodian of a fund has obligations broadly similar to the trustee as set out above. The applicable regulations will give a quasi-fiduciary obligation, notwithstanding that it is not strictly in trust.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Audit\"><\/span>Audit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It is generally a statutory or regulatory requirement that a fund be audited.\u00a0 Even where jurisdictions do not so require, an order is likely to be undertaken in terms of investor confidence.<\/p>\n<p>The audited accounts must be returned to the regulator.\u00a0 The auditor may be obliged to disclose matters of concern to the regulator when prompted. Regulators are likely to require an auditor with a sufficient track record and expertise in fund audits.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Legal_Advisors\"><\/span>Legal Advisors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The legal advisors to the fund would advise on the structuring of the fund.\u00a0 They will assist in making applications for regulatory approval and drafting and reviewing the service contracts with the key fund provider.\u00a0 They advise on applicable regulatory regimes in the jurisdiction.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-12888\" data-postid=\"12888\" class=\"themify_builder_content themify_builder_content-12888 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Fund Manager The fund manager manages the funds in accordance with the relevant provisions incorporated in the memorandum and articles of association, trust deed or other constitutional document.\u00a0 It is responsible for the funds&#8217; operation. It has quasi fiduciary obligations. The fund manager makes the requisite investment decisions advised by the investment manager or advisor.\u00a0 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[167],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/12888"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=12888"}],"version-history":[{"count":7,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/12888\/revisions"}],"predecessor-version":[{"id":31834,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/12888\/revisions\/31834"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=12888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=12888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=12888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}