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How to buy a CIF (5 tips)

read time: 5 min

13.05.2022

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If you are an investor who has decided to invest in shares of a corporate investment fund, you will be interested in this article, in it we will give advice on what to look for when buying a new CIF:

1. First of all, you should check the seller of shares of the corporate fund for exceeding the thresholds set by the AMC, read more about this in our article “CIF and AMCU: the purchase of CIF”.

2. The registered corporate investment fund must have the following package of documents:

  • Statement of state registration;
  • Statute and description to the statute;
  • Regulations;
  • Certificate of registration of the issue of CIF shares;
  • Certificate of inclusion of information on mutual investment institutions in the Unified State Register of Collective Investment Institutions;
  • An asset management agreement is concluded (within one month after the expiration of the agreement with the asset management company, if the term of such agreement is not extended or an agreement is not concluded with another asset management company – the corporate fund is subject to liquidation);
  • Application for joining the terms of the agreement on servicing securities issues;
  • Payment order confirming payment of state. fees for the issuance of securities for the purpose of forming the authorized capital of the corporate investment fund.

3. It is necessary to find out whether the corporate fund carried out any operations before entering it in the register of Collective Investment Institutions (hereinafter – the CII Register). (According to Article 8 of the Law of Ukraine “On Collective Investment Institutions” CIF has no right to take any action other than those aimed at its creation and entry of information about it in the CII Register in the period between registration in the Unified State Register of Legal Entities and natural persons – entrepreneurs and entering information into the CII Register).

4. It is necessary to inquire which operations the Fund carried out and which assets are in the CIF portfolio, get acquainted with the primary documents. Read the bank statement of the corporate investment fund for the period of its existence. They will pay attention to when the corporate fund made the first payments, whether they precede the date of entering the CIF in the CII register. The ideal option for a buyer of the corporate investment fund is to have funds in the fund’s bank account and no transactions, as this confirms that the Fund has not yet carried out any investment activities. You need to pay attention to the list of costs incurred by the corporate fund and their size. The NSSMC Regulation “On the Composition and Amount of Expenses Reimbursed from the Assets of a Joint Investment Institution” defines an exclusive list of expenses that can be paid from CII funds. The maximum amount of CIF costs is limited by current legislation. Expenses of the CIF that are not provided by the NSSMC, as well as expenses in excess of the amount established by applicable law, are carried out by the asset management company at its own expense.

5. It is necessary to find out which package of services is included in the sale price of the CIF, namely to clarify whether the seller undertakes to accompany changes to the CIF documents in connection with the change of owners, whether additional securities are issued to attract mutual investment and CIF securities issue prospectus. (According to paragraph 1, Article 3 of the Regulation “On the procedure for registration of the prospectus and issue of shares of a corporate investment fund” – Within one year from the date of entering information about the CIF in the CII Register, the asset management company must register with the NSSMC carried out for the purpose of joint investment, and the prospectus of their issue).

You can always apply to our Company to purchase a new CIF. We offer for sale new CIFs, the documents of which comply with current legislation. Corporate investment funds did not operate, the assets are cash. The cost of selling the Corporate Fund’s shares already includes our service for registration of the issue of additional issue shares, which is carried out for the purpose of collective investment, and the prospectus for the issue of CIF securities.

Specialists of AMC “INVEST-TANDEM” monitor the sale of corporate funds from A to Z. We prepare documents for each stage of this process, coordinate them with lawyers of the buyer of the corporate fund and employees, organize the signing of documents and submit them to relevant authorities. Our clients receive a complete package of CIF documents and the registered volume of securities issue, which is necessary for the implementation of their investment project.

Contact us, we will be glad to cooperate.