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In today’s ever challenging investment world, overtaken by Mutual Funds, Hedge Funds, ETF’s and other investment products, it is critical to have a good understanding of the Mutual Fund product, as it is the most widely held investment product in the U.S.
In this 2-Day program we will look at, and gain an understanding of, the structure, organization and Operational Issues of Mutual Funds and all its service providers, including Custodians, Shareholder Servicing and Fund Transfer Agent, Fund Accountant and Fund Administrator. We will look at all the various distribution channels including a detailed discussion of Fund Supermarkets as well as all their operational issues and all the classes of shares distributed in each distribution channel. We will discuss the various Fund classes in detail and look at examples of each class type. We will also discuss the similarities and differences between Mutual Funds, Hedge Funds, ETF’s and Closed End Funds. We will also discuss the various fee structures, by classes of shares and distribution channel.
We will then end with a discussion of today’s regulatory actions, including Breakpoint issues, Late Trading, Market Timing and the appropriateness of these investments by share classes. We will understand the billions of dollars in fines levied by the regulators and what the industry is doing to prevent future occurrences.
Course Objectives:
By the end of this 2-Day course the participants will be able to:
- Describe and explain the Mutual Fund industry structure
- Understand and be able to compare Open-end Mutual Funds with Closed-end Mutual Funds, ETF’s, UIT’s and other investment products
- Understand why Mutual Funds are the biggest investment vehicle in the U.S.
- Identify the roles of all of the various Mutual Fund service providers for:
- Proprietary Funds
- Non-Proprietary Funds
- Explain the reporting requirements for Mutual funds
- Identify all the distribution channels for Mutual Funds and which Classes of Shares are distributed in each channel
- Gain a detailed understanding of the various Classes of Shares and understand which share class is appropriate for each investor
- Understand the reasons for the appropriateness of the various classes of shares for each level of investor and discuss what may be more or less appropriate for each level of investor.
- Understand all the Operational issues involved in processing Mutual Funds
- Proprietary Funds
- Non-Proprietary Funds
- Discuss the order execution through clearing and settlement processing of Proprietary Mutual Funds
- Recognize the order execution through clearing and settlement processing of Non -Proprietary Mutual Funds
- Analyze the back-office functions and the processing of Mutual Fund shares
- Understand the details of a “Fund Supermarket” and the Operations issues involved
- Understand the role NSCC Fund/SERV, Networking and ACAT Transfers play in Mutual Fund processing
- Describe the current issues arising over Breakpoints, Late Trading, Market Timing and the various Classes of Shares
- What is the industry doing to prevent these issues from recurring
- Discuss Best Practices and approaches in dealing with current operational issues
Course categories:Asset Management Inhouse, Mutual Funds Inhouse, Featured Inhouse Courses
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Session 1: Overview of the Mutual Fund Industry (1/2 Day)
Throughout the course the participants will be introduced to a variety of terms. This terminology or glossary is discussed throughout the course. By the end of the session the course participant will be able to:
- Describe the organization of a Mutual Fund
- Identify and discuss various participants
- Fund Directors
- Investment Advisor
- Underwriters/Distributors/Wholesalers/Sales Agent
- Fund Administrator
- Fund Accounting and Financial Services
- Fund Transfer Agent and Shareholder Servicing
- Fund Custodian
- Fund Accountants & Lawyers
- Industry Growth
- Identify Fund Investment Types
- Appropriateness & Suitability
- Define and describe:
- A prospectus
- Blue Sky registrations
· Overview of Mutual Fund Regulations & Compliance
· List the various industry associations
Session 2: Understanding the various Distribution Channels
By the end of the session the course participant will be able to:
- Identify and describe the various Distribution Channels for Mutual Funds
- Define and explain account liquidation and the corresponding operational issues
- Understand the flow of information and monies through the various Distribution Channels
Session 3: Classes of Shares and their appropriateness for investors
By the end of the session the course participant will be able to:
Identify and contrast the following:
- A Shares
- B Shares
- C Shares
- Y Shares
- Z Shares
- Institutional Shares
- Others
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Session 4: Operational Interfaces – Shareholder Servicing & Fund Supermarkets (TA)
By the end of the session the course participant will be able to:
- List and explain major shareholder servicing functions
- Identify transfer agent operations
- Proprietary Funds
- Non-Proprietary Funds
- NSCC/Fundserve/Networking/etc…
- ACAT Transfers
- Analyze each transfer agent function/operation
- Discuss and create flowchart of shareholder transactions
- Examine transfer agent disbursements from fund to shareholder
- Dividends and distributions
- Shareholder redemptions
- Discuss common operational interface problems
- Describe the Operations of Fund Supermarkets
Session 5: Operational Interfaces – Custodian
By the end of the session the course participant will be able to:
Identify and explain custodians including:
- Major custodian functions
- The role of the custodian bank in portfolio operations and expense disbursements
- The role of the custodian bank in shareholder investment transactions
- Fund responsibility in investment portfolio transactions
- Common operational interface problems – a discussion matrix
- Primary differences in responsibilities between book-entry vs. physical
Session 6: Operational Interfaces – Accounting & Fund Accountant
By the end of the session the course participant will be able to:
Identify and explain the fund accountant including:
- Role of the mutual fund chief accounting officer
- Role of the fund accountant
- Responsibilities
- Additional fund accounting responsibilities
- Rule 2a-4
- Common operational interface problems – a discussion matrix
Session 7: Operational Interfaces – Portfolio Transactions
By the end of the session the course participant will be able to:
- Identify and describe portfolio transaction flows
- Investment Manager Profitability Analysis
- Common Operational Interface Issues identified
Session 8: Review of Mutual Fund Breakpoint Issues, Market Timing & Late Trading as well as other recent Issues
By the end of the session the course participant will be able to:
- Discuss recent issues including:
- Background of recent breakpoint issues
- Where to look for Breakpoint issues
- Issues of Late Trading
- Issues of Market Timing and rule 22c-2
- Comparative Analysis of All Operational areas and their Compliance requirements
Session 9: Final Review
· Final Discussions & Questions
· Review Glossary
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