Open Ended Funds

OEICS (open ended Investment company)

the companies will be quoted on approved stock markets - the shares are valued by reference to their market prices at the valuation point e.g. 9-00 am daily · the assets of the fund are held in the name of a Depository (an independent authorised institution of stature such as a large bank) which is responsible for overseeing the fund as regards investor protection - in particular checking the valuing and pricing of shares in the fund, the payment of income distributions and ensuring that the manager complies with the investment and borrowing powers of the fund

· it is the Depository which has the ability to create new shares or cancel existing shares in the fund at the request of the management company - the number of shares in issue may be expanded or contracted according to demand (hence the term "open end")

· issue and redemption prices are calculated regularly (usually on business days) but must be re-calculated immediately if the value of the portfolio of securities as measured by the movement of the named benchmark stock market index moves by more than 2% - this is to ensure that investors cannot enter and exit the fund to the disadvantage of the other and of long term fund investors

Furthermore, OEICS may be structured as "Umbrella Funds" with different classes of share representing separate sub-funds. Each sub-fund has a different investment objective, the key feature being the ease with which investors may switch sub-funds

(OEICS are regulated by the Financial Services Authority in the UK and they are permitted to be sold to the general public in the same way as Authorised Unit Trusts. They are organised under new legislation in the UK and automatically qualify under the UCITS Directive. As such they may be marketed cross-border to other EC countries subject to local marketing rules)