Asset class

Fund structures in United Kingdom

Fund structures in the UK typically sit one step removed from the assets they hold: an authorised unit trust, an OEIC, or a limited partnership sits between the investor and the underlying portfolio. The investor holds a unit or an interest, not the asset itself. When a redemption or distribution is refused, the first question is which layer, manager, depositary, or registrar, holds the record that decides the outcome.

Register and custody layer

Three layers usually sit between an investor and the assets. The fund manager runs the vehicle and issues statements. The depositary or custodian holds legal title to the underlying assets, kept separate from the manager for this reason. The registrar maintains the record of who holds units or interests, and is not always the same entity as either the manager or the custodian. For limited partnership structures, a further register sits with Companies House alongside the internal register kept by the general partner. A refusal to redeem or distribute is, in practice, a dispute about which of these records controls. More on how that plays out for this jurisdiction is on the UK jurisdiction page.

The document rarely handed over

Investors are typically given a subscription agreement and periodic platform statements. What is rarely handed over is the custodian's or depositary's own record of what the fund actually held, and how net asset value was calculated on the date a payment was refused. Platform statements are produced by the manager and can restate figures that the underlying custody record does not itself support. That gap is often where a refusal first becomes visible, a pattern set out in more detail in the note on how position and security are held within these structures.

What belongs in a pre-deal report

A report at this stage checks facts, not intentions: the legal form of the vehicle, the identity of the depositary and the registrar, a register extract showing the investor's recorded holding, and the custody statement supporting the net asset value used to calculate the disputed payment. Where a document originates outside the UK or has to be used abroad, its legalisation status matters: the UK is party to the Apostille Convention, in force since 24 January 1965, with a reservation covering 13 territorial extensions [N403]. A paid initial assessment on this footing sets out what the file currently establishes and what it does not, before anything is sent; see the review of payment and redemption defaults for what that covers.