Autif responded to articles in the press concerning the suspension of fund trading today saying...
Autif responded to articles in the press concerning the suspension of fund trading today saying it 'noted with both disappointment and concern one or two references that have incorrectly implied that some UK mutual fund managers have chosen not to permit transactions in one or more of their funds in an effort to stem a potential selling epidemic.'
The association said: "FSA regulations stipulate that managers can only suspend dealing in a fund if they have 'good and sufficient reason to do so having regard to the interests of participants or potential participants'. Furthermore, they can only do so with the prior agreement of the fund's independent trustee, (or depositary for open-ended investment companies). To prevent people from buying and selling units/shares would therefore not be sufficient reason to suspend dealing."
Autif argued: "It is the regulations that state that managers may only deal at prices based on the net asset value of the fund. If they are not satisfied that those prices can be calculated using reliable price data for the underlying assets, it is absolutely right that managers should refrain from doing so in order to protect the best interests of all unitholders/shareholders, whether wishing to buy, sell or retain their holdings.
If a fund is suspended, it is with the full agreement of the independent trustee/depositary and the FSA must be immediately informed. Similarly, the FSA must be informed when the suspension is lifted.
Investment trusts, which have been able to continue to trade, are quoted companies in their own right and are different in that trading in their shares takes place between buyers and sellers on the stock market and does not lead to a consequent need to buy or sell securities in the underlying portfolio. The routine periodic publication of net asset values for investment trusts, (usually daily or weekly), is for market information purposes only."
Anne McMeehan, Director of Communications stated: "We have received no indication from any of our member companies that they are experiencing any panic amongst their unit and shareholders. On the contrary, investors and their advisers are remaining calm and resilient."
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