82,891
edits
Amwelladmin (talk | contribs) |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
{{ucits5anat|22(7)|UCITS}} | {{ucits5anat|22(7)|UCITS}} | ||
The famous rule which rules out [[PB]] style [[rehypothecation]] for [[UCITS V|UCITS 5]] funds. | The famous rule which rules out [[PB]] style [[rehypothecation]] for [[UCITS V|UCITS 5]] funds. | ||
===But I can still [[rehypothecate]] up to 100% [[indebtedness]], right? ''Right?''=== | ===But I can still [[rehypothecate]] up to 100% of a {{tag|UCITS}} fund’s [[indebtedness]], right? ''Right?''=== | ||
I mean, the fund ''owes'' me, man. It ''owes'' me. | |||
Expect optimistic [[prime brokerage]] [[sales]]folk to argue that the limited exception will cover PB rephypothecation as long as the PB limits itself to 100% of the fund’s [[indebtedness]]. Alas, this is wishful thinking. The permitted exception to the bar on reuse is designed to allow {{tag|UCITS}} funds to participate in fully collateralised [[Agent lender|agent lending]] programmes. In that case a custodian lends client assets into the market on the client’s behalf (and as its [[agent]]) to earn a positive additional return for the fund. This is a very different thing to allowing a prime broker to play with the fund’s assets to defray its own financing costs from its margin lending on those very assets. To wit: | Expect optimistic [[prime brokerage]] [[sales]]folk to argue that the limited exception will cover PB rephypothecation as long as the PB limits itself to 100% of the fund’s [[indebtedness]]. Alas, this is wishful thinking. The permitted exception to the bar on reuse is designed to allow {{tag|UCITS}} funds to participate in fully collateralised [[Agent lender|agent lending]] programmes. In that case a custodian lends client assets into the market on the client’s behalf (and as its [[agent]]) to earn a positive additional return for the fund. This is a very different thing to allowing a prime broker to play with the fund’s assets to defray its own financing costs from its margin lending on those very assets. To wit: | ||
*“[[Reuse]]” is defined to include transfer, sale and loan | *“[[Reuse]]” is defined to include transfer, sale and loan |