From time to time investments that you hold may undergo some material changes known as corporate actions. For example, there could be:

A change of name, investment objective or policy
A change to the level or nature of charges that apply to your investment
A closure or suspension of your investment
A merger of your investment into another
A change to the type, structure or regulation of your investment
An application of additional charges such as a special dilution levy, or
The investment may cease to be available through the Service

You may be unable to buy or sell investments via the service while we process certain corporate actions such as mergers or closures. It is not normally possible to carry out transactions on investments about to undergo such actions from around five business days prior to the effective date of the action.

We aim to keep you informed of corporate actions that may affect your investments, but you should always speak to your adviser for more information on any changes and how they may affect you and your investment.

Some common types of corporate action include:

Fund Closures:

In the event of a fund closure, the fund manager will provide a future date at which point all trading in the fund will cease and all remaining holdings at this date will be compulsorily redeemed. This could occur, for example, if the fund can no longer be managed at its current size. The Fund Manager must apply to the FCA for approval before a Fund Closure can be performed.

Soft Closures:

Sometimes, the Fund Manager may cease to permit new investments to allow better management of the fund at its current size. This could occur, for example, when a fund has become too large and the Fund Manager therefore feels it can no longer be managed efficiently. This is a soft closure. (An alternative measure is where, as a control, the Fund Manager may impose an initial charge on the fund in order to restrict new investment.)

Mergers:

One or more Fund Managers may decide to bring together two or more funds. This results in the objectives being harmonised, and costs minimised.

Dilution Levy:

A dilution levy is an adjustment made to the price of units or shares in a pooled investment vehicle, to reflect the costs of large inflows or outflows of capital to protect on-going investors. This is usually expressed as a percentage of the fund value.

An asset manager may impose a dilution levy / adjustment in order to protect the existing shareholders from the additional transaction costs incurred in buying and selling the underlying securities, as a result of large inflows or outflows from the fund.

Asset Suspension:

This is where the Fund Manager decides to temporarily cease all asset trades. Sale and redemption requests maybe cancelled or held and executed after the end of the suspension dependent on the circumstances. For more details regarding the processes for asset whilst they are suspended and once suspensions are lifted click here.

Assets can suspend dealing only in specific circumstances. Before making the decision to suspend a asset, the manager and trustee or depository must have considered all alternative options. The FCA specifies the rules for Suspensions and how they must be managed.

If you have any questions, please speak to your adviser or our Customer Support team.