Weekly Finance Reviews

Posts Tagged ‘Mutual Fund Collective Investment Contract’

Based on legal rules, mutual funds are divided into:

* Mutual fund companies form
The Company collects funds by selling shares of the prime (IPO), then use those funds to invest in various types of securities.
o Mutual fund open (open-end investment company); where investors can buy shares of mutual funds and resell without being limited the number of shares issued.
o Mutual fund closed (close-end investment company); investors can only purchase through the stock exchange where shares of mutual funds registered with a certain amount.
* Mutual Fund Collective Investment Contract (KIK)
This is the most common form, where there is a contract between the MI and the custodian banks that binds the holder of units (UP). MI is authorized to manage the collective investment and custodian banks have the authority to conduct collective care. KIK mutual funds but did not issue new shares via UP to the size of the amount specified in the Articles of Association. Investors who participate will get a proof of participation in the form of a confirmation letter from the custodian bank. Read the rest of this entry »