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Funds ABC

Transfer agent

An entity, which maintains a register of fund participants upon the order of the fund; settling all transactions. 

Fund assets

These are means managed by the fund: securities and money deposits.   

Bear market

Long-term decrease in the value of securities (e.g. bonds, stocks) listed on the stock exchange.   

Participation unit repurchase price

Price serving as a basis for settlement of the order of withdrawal of money from the funds. 

Depository

Bank that stores the fund assets. The main tasks, on the basis of the act on investment funds, include: protection of best interest of the fund participants and fund asset valuation.   

Investment advisor

Person, who makes decisions with regard to investment activities, who has passed the exam for an investment advisor organized by the Commission for Financial Supervision.  

Distributor

Entity acting as an agent in sale and repurchase of the fund participation units 

Valuation date

Any day marked by a regular session at Warsaw Stock Exchange. Date of establishment of value of the fund assets.   

Open fund

A fund, which continuously sales and repurchases participation units as ordered by the customers. The full name of this type of fund is Open Investment Fund. The abbreviation -  OIF – is also often used.

Closed fund

A fund that can be joined at a specific moment in time. In exchange for the money paid, the client receives investment certificates, which may be listed on the stock exchange. Withdrawal of assets from the fund is possible only at specific time intervals, provided in the statute or through sale of investment certificates on the stock exchange. The full name is Closed Investment Fund. The abbreviation CIF is also often used. 

Investment horizon

Period of time, for which we invest money. E.g. if we have 1 000 PLN and we know we have to spend it on a mortgage payment in two weeks, our investment horizon is 14 days.   

Bull market

Long-term increase in the value of instruments (e.g. stocks, bonds) listed on the stock exchange.

Participation units

Title of participation in an open investment fund, reflecting the part of assets of the fund belonging to the participant. Participation units are divisible; in the case of the Millennium funds, they are specified with three decimal places.

Commission for Financial Supervision

The state body for supervision of public trade of securities, in particular, exercising control over investment fund companies and the funds managed by them. 

Investment limit

Maximum level of commitment with regard to a given security, type of security, market. 

Minor

Person below 18 years of age, who have no legal capacity, except for a 16-year-old married woman. 

Statutory Representative

Representative of a person having no legal capacity (e.g. children  aged 13-18 or legally incapacitated persons). Statutory representatives are thus the parents and guardians established by the court and other persons, who have been authorized to represent them.   

Repurchase

Withdrawal of money from the fund on the basis of a repurchase order made.   

Information prospectus

A basic legal document regulating the operation of the fund. An information prospectus contains e.g. information on the company representing the fund, information on persons managing the fund, information on the depository, mode of sale and repurchase of participation units/ investment certificates, the fund statute, description of the risk factors associated with investing in the fund.   

Specialized open investment funds

These are funds similar to open investment fund. The main difference is that they have less investment limitations. For instance, a specialized open investment fund, also known as SOIF, can invest up to 100% assets in participation units of other funds. An open investment fund may invest no more than 20% assets in other funds.   

Investment fund company

A company established  for the purpose of creation and management of investment funds. Such company operates on the basis of the act on investment funds.  Its establishment depends upon permission of the Commission for Financial Supervision, which accepts e.g. the composition of the management board or  the supervisory board of the company, as well as persons managing the funds etc. The company may broaden its range of activity by rendering services of management of external portfolios of securities. 

Fund participant

A person, who has at least a part of a participation unit or an investment certificate of a closed fund.   

Act on investment funds

A legal document that regulates the establishment and operation of investment funds, rights and obligations of participants of these funds. Act of May 27th, 2004 on investment funds, Journal of Laws of June 28th, 2004 no. 146, item 1546 as amended.   

Withdrawal

Written order of withdrawal of funds from IRA. The withdrawal order is not  accompanied by collection of tax on capital gains. The basic prerequisite for making a withdrawal is acquisition of pension rights. Withdrawal may apply only to  the entire value of money accumulated on the IRA.
After withdrawal, the saving party may not join IRA again.   

Transfer payment

Order of transfer of assets accrued on IRA to another financial institution maintaining  IRA. The prerequisite for performance of the order, apart from the written instruction of the saving party, is presentation of a confirmation of conclusion of an agreement for IRA with another financial institution. Such document is issued if, when signing the agreement for IRA, the saving party indicates having established an account at another institution. The transfer payment must encompass all of the funds collected on IRA.   

Return

A written order of withdrawal of means from IRA prior to acquisition of pension rights. A return is associated with charging and payment by the entity maintaining the IRA of taxes on capital gain. The return must encompass all funds collected on IRA. Performance of return does not exclude the possibility of joining IRA again.

 

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