Q: What happened?
A: 2018 we wrote to investors in the non-sterling share classes of 25 of our UK-domiciled funds with a proposal to fully merge the assets in these share classes with equivalent Luxembourg-domiciled funds.
These proposals were subject to shareholder approval, which was attained at a series of Extraordinary General Meetings.
Q: Are the new Luxembourg-domiciled funds following the same investment strategies and are they managed by the same investment teams?
A: Yes.
Q: Do the equivalent Luxembourg funds have the same management fees?
A: The Annual Management Charge is the same, but OCF might be slightly higher for a combination of Luxembourg’s taxe d’abonnement and smaller fund sizes. Luxembourg’s taxe d’abonnement is 0.05% per annum for retail investors and 0.01% per annum for institutional investors. The reduced size of the new SICAVs is not expected to have a material impact on the OCF, but in the worst case is forecast to increase by 0.02%. In total this may mean that the OCF could increase by 0.07%.
Q: Do the new SICAV funds have the same performance track record of the original OEIC funds?
A: Yes.
Q: Did shareholders in the SICAV funds receive the same shares they held in the OEIC funds?
A: Shareholders received new shares in the Luxembourg-domiciled funds of the same class and type as their existing shares in the UK-domiciled funds.
Q: What are the ISIN codes for the OEICs and SICAVs equivalents in the funds impacted?
A: You can find all ISINs here
Q: Will investors buying into the SICAVs get the same portfolio as their equivalent OEICs?
The funds are run by the same investment teams and follow the same investment strategies. Their portfolios may not be identical as they will receive different flows, have different assets under management and operate under different tax rates.
Q: What if I hold a fund which has not transferred to Luxembourg and doesn’t have a Luxembourg equivalent?
A: The vast majority of M&G funds being promoted outside the UK have already transferred to Luxembourg with this initiative. We will contact investors in any funds with no Luxembourg equivalent with our plans in due course.
Q: What are the differences between OIECs and SICAVs?
A: For most practical purposes, the OEIC and SICAV structures are very similar, both offering the ability to establish umbrella companies with a number of single-priced sub-funds.
| LEGAL STRUCTURE AND REGULATION |
|
OEIC |
SICAV |
| Definition |
Open-ended investment company (UK-domiciled) |
Société d'investissement à capital variable (Luxembourg-domiciled) |
| Background |
Commonly used in the UK, also used in Western Europe and other regions
Introduced in the UK in 1997 as a flexible alternative to unit trusts
|
Commonly used in Western Europe, also in other regions
Introduced early in the last century
|
| Legal structure / UCITS |
An OEIC can be established as an umbrella company with a number of sub-funds, or as a stand-alone fund
It can issue a range of shares, including hedged shares
It can be established as a UCITS or retail non-UCITS
|
A SICAV can be established as an umbrella company with a number of sub-funds, or as a stand-alone fund
It can issue a range of shares, including hedged shares
It can be established as a UCITS or retail non-UCITS
|
| Regulatory authority |
Financial Conduct Authority (FCA), in the UK |
Commission de Surveillance du Secteur Financier (CSSF), in Luxembourg |
| Corporate governance |
The Authorised Corporate Director (ACD) is responsible for the day-do-day operation of the OEIC |
A SICAV can have a specific management company or be managed by its Board of Directors |
| Role of Depositary / Custodian |
A Depositary is responsible for the custody of fund assets
The Depositary is also responsible for oversight of the ACD to ensure the interests of investors are protected
The Depositary and ACD must be completely independent
|
A Depositary (Luxembourg-based) is responsible for the custody of fund assets and ensuring the interests of investors are maintained
The Depositary is also responsible for oversight of the investment to ensure the interests of investors are protected
|
| Segregation of liability between sub-funds |
Legislation to allow the segregation of liability between sub-funds in an umbrella OEIC provided for under UK law |
Segregation of liability between sub-funds is provided for under Luxembourg law |
Top