ABSTRACT

This book provides a detailed analysis of the mutual funds regulations and governance in the UK from the investor protection perspective. It comprehensively describes mutual funds by their function, social utility and legal attributes, examining the level of protection provided to retail investors under the existing regulations.

Mutual funds are externally managed with fund ownership separated out from their management, which carries a potential conflict of interest between the self-interests of the fund management and each fund’s investors. The book provides an in-depth analysis of this agency problem in the mutual funds industry, comparing the competing governance models in the UK and the US and the supervision of the management activities. In the UK, it investigates the main governance mechanisms, including disclosure, the effectiveness of voting rights, and the role of the Financial Conduct Authority in protecting investors. It also considers the role of prudential regulations in protecting mutual funds investors, with particular focus on risk management and mutual funds liquidity crisis. The book further investigates the impact of the withdrawal of the UK from the European Union (Brexit) on the industry and what this means for the future of the Undertakings for Collective Investment in Transferable Securities (UCITS) in the UK. 

The concept of mutual funds is still not clearly understood, so this book will clearly define the different legal and practical aspects of mutual funds. It will be the first substantial study of mutual funds governance mechanisms under the existing mutual funds laws and regulations in the UK.

1. Introduction  PART 1: MUTUAL FUNDS: CONCEPT, GROWTH AND HISTORY  2. Mutual Funds: Meaning, Forms and Operations  3. Mutual Funds: Growth and History  PART 2: MUTUAL FUNDS REGULATION AND GOVERNANCE: THE QUEST FOR INVESTOR PROTECTION  4. Mutual Funds Regulation: The United Kingdom  5. Mutual Funds Prudential Regulation: The United Kingdom  6. Governance of Mutual Funds: Comparative Accounts of the United Kingdom and United States  7. Regulation of Undertakings for Collective Investment in Transferable Securities: The European Union  8. Mutual Funds and Investor Protection in the United Kingdom: Past, Present and Future