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CISI Transfer Agency study materials
CISI Transfer Agency study resources

CISI Transfer Agency: Fund structures, fund types and the role of the transfer agent

CISI Transfer Agency · Work through your exam, one topic at a time.

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Fund structures, fund types and the role of the transfer agent

Fund structure questions test whether you can separate a legal wrapper from a sub-fund from a share class, and then explain what that means for the register, for segregation of liabilities, and for TA processing.

Legal wrappers

  • SICAV, PLC and ICAV: corporate vehicles. An Irish ICAV is a single legal entity with segregated liability between sub-funds.
  • FCP (fonds commun de placement): contractual co-ownership, no legal personality, represented by the ManCo.
  • Unit trust and OEIC: UK authorised forms; a trustee or depositary holds assets; the OEIC (ICVC) is corporate.
  • LP, ICC and protected cell companies: partnership and cell structures used mainly for alternatives.

Fund types

UCITS are open-ended, retail and invested in eligible assets, with diversification rules (the 5/10/40 limit) and borrowing restricted to 10% of NAV on a temporary basis. AIFs take wider strategies and bring AIFMD depositary, remuneration and reporting duties. Money market funds are classified as LVNAV, VNAV or CNAV under the EU MMF Regulation, with maturity and liquidity limits. ETFs trade on exchange, but the TA still maintains the creation/redemption register.

Umbrella, sub-fund, class

The hierarchy matters: umbrella, then sub-fund (a segregated pool), then share class (currency, hedging, distribution policy, fee level). The register records holdings at class level, with sub-fund and umbrella held as reference data. Hedged classes hedge class currency against the base currency, with hedge costs allocated to that class alone.

Worked example

An investor subscribes GBP 50,000 into the Sterling Hedged Distributing class of a sub-fund within an Irish ICAV. The TA must identify the correct sub-fund and class in the register, apply the class-level FX hedge at pool level rather than the investor's account, record distributing status so income is paid rather than accumulated, and confirm the correct ISIN. Were the class accumulating, equalisation would be tracked separately for the investor's CGT cost base.

Traps

  • Treating sub-funds as separate legal persons - segregation comes from statute and contract, not separate incorporation.
  • Confusing a share class with a sub-fund; they are not different investment pools.
  • Assuming a hedged class eliminates all currency risk for the investor.
  • Forgetting the umbrella remains one entity for certain legal and filing purposes.