Every mutual fund, whether it is a proprietary Registered Investment Company (“RIC”) or part of a Series Trust product with multiple advisors, will have a Board of Directors or Trustees (“Board”) that represents and protects the interests of the shareholders of the mutual fund. On an ongoing basis, the Board receives reporting on the activities related to the operations of the mutual funds. Those that need to provide reports would include:

• The Advisor of the fund, as they place security trades that constitute the holdings of the mutual fund;
• The Chief Compliance Officer;
• The Chief Financial Officer; and
• The Distributor, also known as the Underwriter of the funds.

Reporting is broken down into routine quarterly reports and annual reports. The quarterly reports provide a brief overview of the previous quarter’s business of the fund. The type of reports that fall into this category would be:

 

Annual reports, as they might suggest, provide a comprehensive look at the operation of the mutual fund for the past year. This annual meeting provides a forum in which the Advisor and all service providers are re-hired by the Board to continue to provide services to the mutual fund. The annual reporting period for the Advisor to the funds is commonly referred to as 15-c reporting and goes into great detail regarding how the Advisor runs their business and their profitably as it relates to the mutual fund. The types of reports that fall into this category include the ones listed above, and:

 
 

From time to time the Board may request individual reporting on an as-needed basis. Foreside provides CCO, Treasurer and Distributor reports for clients that retain us for those services.

Board reporting is an essential part of helping the Trustees protect the interest of the shareholders and ensure service provider accountability for the operation of the mutual fund.

 


 


This article is not a solicitation of any investment product or service to any person or entity. The content contained in this article is for informational use only and is not intended to be and is not a substitute for professional financial, tax or legal advice.

Home

This article is not a solicitation of any investment product or service to any person or entity. The content contained in this article is for informational use only and is not intended to be and is not a substitute for professional financial, tax or legal advice

Just a Click Away to View

Why do firms outsource their compliance? Foreside president David Whitaker outlines the benefits of outsourcing for asset managers, broker dealers, and RIAs

AssetTVWhitaker

Subscribe Here!