Smith & Williamson Fund Administration Limited can assist with the set up and ongoing operation of open-ended investment companies and unit trusts.
Smith & Williamson Fund Administration Limited (SWFAL) is particularly wellplaced to provide the range of expertise required in the set up and ongoing administration of open-ended investment companies (OEICs) and authorised unit trusts (AUTs). Having launched our first unit trust in 1983 we now manage over 110 funds, valued at approximately £3bn (as at March 2011) and therefore have extensive experience in acting as authorised fund manager (AFM). SWFAL can act as thirdparty administrator for AFMs who do not have in-house administration systems. In addition, we can act for clients wishing to select their own investment manager.
The SWFAL team is divided into five areas.
- Client relationship – provide an efficient and professional client service tailored to the specific needs of individual clients.
- Dealing and registration – maintain the register and process investment transactions.
- Pricing and valuation – maintain records and calculate valuation of shares/units.
- Reports and accounts – prepare periodic reports to share/unit holders including tax provisions, submission of tax computation to HM Revenue & Customs and calculation of income/distribution payments.
- Risk management – due diligence, oversight of and liaison with investment managers.
In order to establish the fund, SWFAL will need to execute a letter of engagement and complete client verification procedures. We will then appoint a lawyer to prepare the necessary legal documentation, including a prospectus, trust deed or instrument of incorporation and application to the Financial Services Authority (FSA), as well as arranging a solicitors' certificate. Such documentation needs to include details such as the name of the fund, investment manager (IM), investment objectives and policy, fee structure, accounting dates, share/unit classes and the trustee/ depositary. We are also able to facilitate the selection of a custodian (subject to the approval of the trustee/depositary).
Upon submission of the application, depending upon the type of fund, the FSA are permitted up to either two or six months in order to grant approval. During this time, it is necessary to ascertain the source and nature of assets of the fund, prepare agreements with the IM, SWFAL as AFM, trustee/depositary and to arrange the opening of bank and custody accounts. Once completed, a fund can typically be launched within five working days upon receipt of FSA approval.
Investment does involve risk. The value of investments can go down as well as up. Investors may not receive back the amount invested. Tax treatment depends on individual circumstances and may be subject to change in the future. This document is only intended to provide an outline of the steps involved in establishing a collective investment scheme. SWFAL cannot give tax or investment advice. You should consult your tax and investment adviser(s) before taking any action based on this information.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
