The board's responsibilities include: dealing with the day-to-day operation of the company, managing the company's investments, buying and selling the OEIC's shares on demand, and ensuring accurate pricing of shares at net asset value. A board of directors usually headed by the authorised corporate director (ACD) – An ACD is a FCA authorised firm that assumes full control of the board.The FSA was split into two during 2013 and the FSA became the Financial Conduct Authority ('FCA') for small and medium-sized firms with the Bank of England taking on responsibility for larger firms with systemic impact. The changes ensure a level playing field for unit trusts and OEICs. These changes brought the formation of OEICs under control of the FSA and removed the automatic inclusion of an ICVC under the UCITS directive allowing scope for non-UCITS investments (e.g., money market funds, property funds and funds of funds). With the advent of a single regulator, the FSA, the previous regulations were replaced by the Open-Ended Investment Companies Regulations 2001 under the Financial Services and Markets Act 2000 section 262. This ensured that OEICs fell within the scope of the Undertakings for Collective Investment in Transferable Securities Directives ( UCITS). These regulations only allow investment in transferable securities (e.g., listed securities, other collective investment schemes, or certificates of deposit). The first commercial OEIC was launched by Threadneedle Asset Management in 1997. The Securities and Investment Board (predecessor to the FCA) regulations, the Financial Services (Open-Ended Investment Companies) Regulations 1997 were approved by the SIB Board on 16 January 1997 and came into effect as from that date. They were enacted under the European Communities Act 1972 section 2(1) and were therefore known as the "ECA Regulations". The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996 first introduced the OEIC, on 11 November 1996 and in force on 6 January 1997. While historically, unit trusts were favoured legal vehicles for investment, in the 1990s it was felt that the UK government should allow a corporate form that could repurchase its own shares without the standard restrictions in the Companies Act. OEICs were developed to be similar to European SICAVs and U.S. By using economies of scale they facilitate access to professional investment management for small investors. This is achieved via investing in different asset classes such as equities, fixed-interest investments, and property. As with other collective investments, the main function of OEICs is to make money for their shareholders. In the UK OEICs are the preferred legal form for new open-ended investment over the older unit trust.Īs an open-ended company the manager must create shares when money is invested and redeem shares as requested by shareholders. The terms "OEIC" and "ICVC" are used interchangeably with different investment managers favouring one over the other. ɔɪk/) or investment company with variable capital (abbreviated to ICVC) is a type of open-ended collective investment formed as a corporation under the Open-Ended Investment Company Regulations 2001 in the United Kingdom. An open-ended investment company (abbreviated to OEIC, pron.
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