Open ended investment company (OEIC) (or investment company with variable capital (ICVC)) meaning

An open-ended investment company (OEIC), also called an investment company with variable capital (ICVC), is a UK collective investment fund set up as a company whose capital varies as investors buy and redeem shares, typically at net asset value. In practice, it is the corporate alternative to a unit trust. The concept is grounded in legislation. Under FSMA 2000, section 236, an OEIC is a collective investment scheme that satisfies both: (1) the property condition (the scheme property is beneficially owned by, and managed by or for, a body corporate whose purpose is to invest to spread risk and deliver the results of that management to its members); and (2) the investment condition (a reasonable investor would expect to realise their investment within a reasonable period on a basis calculated wholly or mainly by reference to the value of the scheme property). Constitution and operation are set by the Open-Ended Investment Companies Regulations 2001 and the FCA’s COLL Sourcebook (including the authorised ICVC regime). Key features include umbrella structures with sub-funds and share classes, use across UCITS and NURS, the appointment of an authorised corporate director and a depositary, and regular dealing rather than stock exchange listing. Usage is consistent across England...