An anti-dilution levy (ADL) is a charge added to the dealing price paid by subscribing or redeeming investors, to cover the trading costs their dealing causes the fund. It goes to the fund, protecting remaining investors, and is one of the liquidity management tools listed in the revised UCITS and AIFMD (Alternative Investment Fund Managers Directive) rules.
Swing pricingSwing pricing is a liquidity management tool that adjusts a fund's net asset value up on days of net subscriptions, or down on days of net redemptions, by a swing factor reflecting trading costs. The investors who trade bear the cost of their dealing, which protects those who stay. Full swing applies every day; partial swing only above a threshold.
Liquidity management tools (LMTs)Liquidity management tools (LMTs) are measures an open-ended fund can use to manage redemptions in stress, such as suspension, redemption gates, notice periods, redemption fees, swing pricing, dual pricing, anti-dilution levies, redemptions in kind and side pockets. Directive (EU) 2024/927 requires UCITS and open-ended alternative investment fund (AIF) managers to select at least two.
NAV (Net asset value)Net asset value (NAV) is the value of a fund's assets minus its liabilities. NAV per share, or per unit, is the NAV of a share class divided by the number of shares in issue, and it is the price at which investors subscribe to and redeem from an open-ended fund.
Transfer agentA transfer agent, also called a registrar, keeps a fund's register of unitholders and processes subscriptions, redemptions, switches and transfers. It applies the dealing cut-off and price, runs investor due diligence for anti-money laundering, calculates commissions and distributions, and handles investor queries.
Liquidity management tools (LMTs)Liquidity management tools (LMTs) are measures an open-ended fund can use to manage redemptions in stress, such as suspension, redemption gates, notice periods, redemption fees, swing pricing, dual pricing, anti-dilution levies, redemptions in kind and side pockets. Directive (EU) 2024/927 requires UCITS and open-ended alternative investment fund (AIF) managers to select at least two.
UCITS (Undertakings for collective investment in transferable securities)A UCITS is an open-ended investment fund authorised under Directive 2009/65/EC that invests in liquid financial assets under diversification and leverage limits. A UCITS authorised in one member state can be marketed to retail investors across the EU with a passport, and it must appoint a depositary.
AIFMD (Alternative Investment Fund Managers Directive)The Alternative Investment Fund Managers Directive (AIFMD), Directive 2011/61/EU, regulates managers of funds that are not UCITS, such as hedge, private equity, real estate and infrastructure funds. It sets authorisation, capital, depositary, reporting and marketing rules; Directive (EU) 2024/927 (AIFMD II) adds loan origination and liquidity rules.