Pooled Investments: Rapid Fire
Chapters in this video
- 0:00 Investment Company Act of 1940 and the three statutory buckets
- 1:18 Open-end versus closed-end: the pricing showdown
- 2:51 Margin, shorting, and the seven calendar day redemption rule
- 3:40 Unit investment trust: the unmanaged time capsule
- 4:34 ETF legal structure and authorized participant arbitrage
- 5:31 The 75/5/10 diversified fund test and POP versus NAV
- 6:40 Hedge fund 2 and 20 and private fund investor exemptions
- 7:07 Rapid-fire exam recap
What this video covers
- The three statutory types under the Investment Company Act of 1940: management companies (open-end and closed-end), unit investment trusts (UITs), and face-amount certificates
- Open-end mutual fund pricing at net asset value (NAV) using forward pricing, and why premium or discount to NAV means the fund is NOT open-end
- Closed-end fund mechanics: fixed share issuance, exchange trading, and why margin and shorting are permitted
- Unit investment trust (UIT) structure: fixed unmanaged portfolio, termination date, trustee supervision, no management fee
- Exchange-traded fund (ETF) legal structure as open-end fund or UIT, not closed-end, and the role of authorized participants (APs) in in-kind creation and redemption
- The 75/5/10 diversified fund test under the Investment Company Act
- Public offering price (POP) versus NAV, the 7-calendar-day redemption rule, and private fund exemptions (100 beneficial owner small-investor cap versus unlimited qualified-purchaser exemption)
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