CISI Transfer Agency key terms

The administrative function that maintains the register of a fund's investors, processes subscriptions, redemptions and switches, settles dealing proceeds and communicates with unitholders on behalf of the fund's manager.

The process of identifying an investor and verifying their identity, address, source of funds and beneficial ownership before a business relationship is established, so the firm knows who it is transacting for.

The risk-based checks a firm performs on clients and their transactions, including identification, verification, purpose and intended nature of the relationship, and ongoing monitoring, proportionate to assessed money-laundering risk.

Additional, more intrusive checks applied to higher-risk clients such as politically exposed persons, or to relationships involving high-risk jurisdictions, complex ownership or unusual funding, including senior sign-off before onboarding.

An individual entrusted with a prominent public function, or a close associate or family member of one, whose senior position may create a heightened corruption risk and who therefore requires enhanced scrutiny and senior approval.

The natural person who ultimately owns or controls an investor, typically identified by a specified percentage shareholding or control threshold, and who must be disclosed and verified during onboarding of corporate or trust clients.

Evidence of where the money used for a particular subscription or transaction came from, such as a bank statement or sale contract, distinct from the broader question of the investor's overall wealth.

An explanation and supporting evidence of how an investor accumulated their overall net worth, for example through business ownership, employment or inheritance, used to assess whether the client's profile is plausible.

The automated or manual comparison of investor and associated names against databases of prominent public figures and their close associates, performed at onboarding and periodically thereafter to trigger enhanced measures.

Checking investors, payees and related parties against official lists of designated persons and entities, with any potential match investigated and, where confirmed, the relationship or transaction blocked or reported.

A confidential disclosure made to the national financial intelligence unit when a firm knows, suspects or has reasonable grounds to suspect money laundering or terrorist financing, usually without tipping off the client.

Unlawfully disclosing to a client or third party that a suspicious activity report has been made or that an investigation is underway, which may prejudice an inquiry and is itself a criminal offence.

The statutory record of a fund's investors showing names, addresses, holdings, certificate or unit details and dates of entry, which determines legal ownership and entitlement to distributions and voting.

The cut-off time on a given business day at which an order is priced, so that subscriptions, redemptions and switches received before it receive that day's price and later orders roll to the next valuation point.

The practice of pricing deals at the net asset value calculated at the next valuation point after an order is accepted, so the investor does not know the exact price when instructing.

The total value of a fund's assets less its liabilities, divided by the number of units or shares in issue to give a price per unit used for dealing and reporting.

The time on a business day at which a fund's assets are valued and its net asset value per unit is struck, forming the basis for prices applied to deals at the associated dealing point.

The reduction in value of an existing investor's holding caused by the costs of buying or selling underlying assets when other investors deal, borne by continuing investors unless a dilution levy or adjustment is applied.

A charge added to the price paid by subscribing investors or deducted from redemption proceeds, designed to pass the estimated cost of the resulting underlying trades to the investors who caused them.

A mechanism that adjusts a fund's net asset value up or down by a set factor when net dealing exceeds a threshold, so the trading costs are absorbed by dealing investors rather than the fund as a whole.

A pricing basis where one price, adjusted for dilution, is used for both subscriptions and redemptions, in contrast to a dual-priced fund quoting separate offer and bid prices.

A collective investment scheme that can create and cancel units on demand, so its size fluctuates with investor subscriptions and redemptions rather than being fixed at launch.

A fund with a fixed number of shares issued at launch that are not redeemable with the fund, so investors buy and sell on a secondary market at prices driven by supply and demand.

A legal structure containing several sub-funds, each with its own investment policy and pool of assets, whose liabilities and gains are ring-fenced from the other sub-funds.

A separately managed and priced portfolio within an umbrella fund, with its own investment objective, assets and investor register, while sharing the umbrella's legal and governance framework.

An investor's instruction to buy units in a fund, accompanied by the subscription monies and any required documentation, which is processed at the applicable dealing point and price.

An investor's instruction to sell back units to the fund, which is processed at the applicable price and settled in cash after the fund cancels the units and updates the register.

The simultaneous redemption from one sub-fund and subscription into another within the same umbrella, often at reduced or nil initial charges and processed under a single instruction.

The date by which cash for a subscription must reach the fund, or by which redemption proceeds must be paid to the investor, usually a set number of business days after the dealing date.

A confirmation issued to an investor or intermediary setting out the details of a completed deal, including units bought or sold, price, dealing date, settlement date and charges applied.

The control process of agreeing the number of units in issue per the transfer agency register to the fund accountant's records and the depositary's records, with differences investigated and resolved promptly.

The daily matching of cash movements and balances in the fund's bank accounts against expected subscription receipts, redemption payments, fees and income, identifying and clearing breaks.

A payment of income or capital from a fund to its investors, declared at a set frequency and paid according to the holdings on the register at the relevant record date.

The date on which an investor must appear on the register to be entitled to a distribution or to vote at a meeting, with dealings after that date not carrying the entitlement.

A unit class where income earned by the fund is retained and reflected in the unit price rather than paid out, so the investor receives no cash distribution but holds a growing capital value.

The use of forward contracts or other instruments to reduce the effect of currency movements on a share class or portfolio, with costs and gains allocated to the hedged class rather than the whole fund.

A division of a fund's units carrying different features such as currency, distribution policy, fee level or hedging, while sharing the same underlying portfolio of investments.

Documented arrangements, including backup sites, systems and staff, that allow the transfer agency to keep processing deals and maintaining records during a disruption such as a system failure or loss of premises.

The risk of loss arising from failed or inadequate internal processes, people, systems or external events, managed through controls, segregation of duties, error logs and regular testing.

A control that divides responsibilities such as dealing input, cash release and reconciliation between different staff, so no single person can initiate and conceal an error or fraud.