Open ended funds meaning

ARCHIVED: This Practice Note is archived and is no longer maintained. UCITS is the acronym for undertakings for collective investment in transferable securities. The expression derives from Directive (EC) 85/611 concerning the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (the Original UCITS Directive), which was adopted in 1985. The purpose of the Original UCITS Directive was to establish a single market for open-ended retail investment funds that offered enhanced protection for investors. The UCITS framework has been updated on several occasions, with the Management Company Directive 2001/107/EU adopted in 2002 and the Product Directive 2001/108/EU implemented in 2005 (together referred to as UCITS III); followed by implementation in 2011 of Directive 2009/65/EC (the UCITS Directive, also called UCITS IV), which repealed and replaced the Original UCITS Directive; and Directive 2014/91/EU (UCITS V), which was transposed into national law on 18 March 2016...

This timeline outlines key developments linked to the Alternative Investment Fund Managers Directive (EU) 2011/61/EU (EU AIFMD) from January 2024 onwards. For earlier developments, see Alternative Investment Fund Managers Directive (AIFMD)—timeline [Archived]. For further guidance on EU AIFMD, see Practice Note: EU AIFMD—essentials. For guidance on the UK Alternative Investment Fund Managers (AIFM) regime, see Practice Note: UK regulation of alternative investment fund managers—essentials. 2026 13 March 2026 — ESMA — Guidelines on Liquidity Management Tools (LMTs) for UCITS and open-ended AIFs. The European Securities and Markets Authority (ESMA) has published guidelines on LMTs for UCITS and open-ended AIFs...

This review forms part of a broader set of FCA actions in 2025 to reshape UK private funds regulation, alongside the 7 April 2025 consultation on wider regulatory reform; the 26 February 2025 ‘Dear CEO’ letter, which assessed how UK fund managers handle conflicts of interest; and the 8 May 2025 findings concerning the conduct of smaller managers (see ‘further reading’ below) Context of FCA review The FCA’s review arises from concerns about the distinctive characteristics of private market assets. Unlike public market assets, these holdings are not traded frequently nor subject to regular price discovery. Consequently, firms rely on judgement-led valuation techniques, creating risks such as misvaluation, conflicts of interest, or insufficient expertise. The FCA also notes that UK private fund managers operate under a range of different structures. Open-ended funds, which permit redemptions throughout the fund’s life, encounter more acute valuation challenges than closed-ended funds, where genuine value and performance are only confirmed when assets are realised There are also vehicles that...

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AIFMD 2 AIFMD 2 signals a decisive turn for EU private credit funds, unveiling a harmonised regime for AIFMs of loan-originating AIFs that replaces disparate national rules with clear, consistent standards to ensure a level playing field. For private credit managers, it enables the structuring of both open-ended evergreen and closed-ended direct lending AIFs across the EEA, with aligned requirements on governance, risk, liquidity, and investor protection overall...

This Practice Note examines core aspects of the UK framework for money market funds (MMFs) that stems from Regulation (EU) 2017/1131 (the EU MMF Regulation). It also looks at suggested changes to the framework, with the Financial Conduct Authority (FCA), HM Treasury and the Bank of England (BoE) working jointly to bolster its resilience and align it with post‑Brexit regulatory objectives. For background on the EU MMF Regulation, see Practice Note: EU MMF Regulation—essentials. What is an MMF? Money market funds (MMFs) are investment funds that invest in short‑term debt instruments and so play a significant role in the short‑term financing of the economy. In particular, MMFs are open‑ended, liquid investment funds that invest in fixed income through short‑term debt, for example money market instruments issued by banks, governments or companies (including treasury bills, commercial paper and certificates of deposit) which pay interest. They therefore form an important connection between demand for, and the supply of, short‑term debt. Further information on the eligible assets of an MMF is...

Brief history Before it went into liquidation, Primeo Fund (Primeo) operated as an open‑ended mutual investment vehicle. It was sponsored by Bank Austria and domiciled in the Cayman Islands. As is typical, it collected capital from investors and deployed those monies. A significant proportion of investors were Austrian private individuals, subscribing for shares in Primeo. At the outset, between 1993 and 1996, Primeo allocated its portfolio to several external managers, including Bernard L. Madoff Investment Securities LLC (BLMIS). The directors’ first allocation mandated that 7.5% of Primeo’s assets be placed with BLMIS. In 1996, reflecting BLMIS’s seemingly strong performance, Primeo bifurcated into two sub‑funds: the existing fund became Primeo Global, while a new vehicle, Primeo Select, was formed to invest solely with BLMIS. By February 2001, a decision was taken to wind down Primeo Global, which had underperformed markedly compared with Primeo Select. Primeo Select maintained a direct relationship with BLMIS until May 2007, when it was reorganised to gain exposure indirectly via Herald Fund SPC (Herald). Under that...

The tax regime applicable to property authorised investment funds (PAIFs) applies to UK open-ended investment companies (OEICs) which: meet a number of prescribed conditions, and have notified HMRC in advance that they wish the PAIF regime to apply to them This Practice Note concentrates on the criteria that must be satisfied for the PAIF rules to apply to an OEIC in practice. As a starting point, for a top-level overview of the PAIF tax regime in its entirety, see Practice Note: Taxation of property funds—overview. Further important elements of the framework are considered in the Practice Notes: PAIFs—tax treatment of the fund and its investors and PAIFs—breaches and exit. There is significant overlap between the PAIF tax rules and the UK tax regime for real estate investment trusts (REITs) in many areas. This reflects their complementary design: the PAIF regime is tailored to open-ended vehicles investing in real estate, while the REIT regime is aimed at closed-ended vehicles with a similar purpose....