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While calculating 5/10/40 UCITDS rule should we be excluding TD (term deposit)
**Term deposits** are **excluded** from the calculation of the 5/10/40 rule, as they are not considered as transferable securities or other eligible assets for UCITS funds . Term deposits are fixed-term contracts with a bank or financial institution that pay a fixed interest rate at maturity. They aRead more
**Term deposits** are **excluded** from the calculation of the 5/10/40 rule, as they are not considered as transferable securities or other eligible assets for UCITS funds . Term deposits are fixed-term contracts with a bank or financial institution that pay a fixed interest rate at maturity. They are not traded on a regulated market and do not have a diversified issuer.
You can find more information about the UCITS investment and borrowing powers in the FCA Handbook and the ESMA Q&A I hope this helps you. 😊
Source:
See less(1) ESMA updates its Q&As on the UCITS Directive
(2) Chapter 5 Investment and borrowing powers – FCA Handbook. https://www.handbook.fca.org.uk/handbook/COLL/5.pdf.
(3) COLL 5.2 General investment powers and limits for UCITS schemes. https://www.handbook.fca.org.uk/handbook/COLL/5/2.html.
What are transferable securities as defined in UCITS?
Transferable securities are anything that you can transfer ownership of without consent of a third party. For e.g.: While purchasing a common stock, you do not require permission from the issuer rather it can be traded freely in the market. A transferable security is an investment which is any of thRead more
Transferable securities are anything that you can transfer ownership of without consent of a third party. For e.g.: While purchasing a common stock, you do not require permission from the issuer rather it can be traded freely in the market.
A transferable security is an investment which is any of the following:
See less(a) a share.
(b) a debenture or an alternative debenture
(c) a government and public security.
(d) a warrant; or
(e) a certificate representing certain securities.
Sec 22e-4 Liquidity Risk Management Program
In my opinion - Yes. If you hold mnpi on an issuer, you (without getting into unfair practice) cannot act on that mnpi which means if its negative news hitting the market, you cannot offload your holdings. Now there are multiple school of thoughts but while dealing with SEC, I try to be conservativeRead more
In my opinion – Yes. If you hold mnpi on an issuer, you (without getting into unfair practice) cannot act on that mnpi which means if its negative news hitting the market, you cannot offload your holdings. Now there are multiple school of thoughts but while dealing with SEC, I try to be conservative as SEC is silent on these scenarios. Since each fund has to devise its own classification of Liquidity buckets, I tend to mark any sell restriction in 40 act accounts as Illiquid.
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