If money loves an account, then assets – management, and competently. Any asset that does not bring profit to the owner company is useless. Moreover, this state of affairs contradicts the nature of the asset and even the definition presented in any financial dictionary.
Asset management is a responsible occupation and requires a high level of awareness from the process operator. Even when an ordinary citizen wants to open an account and put his savings there, he is engaged in choosing the optimal banking institution for a long time and carefully. What can we say if much larger amounts are deposited? The company’s own assets are managed only in exceptional cases, when there is its own financier on staff, who is able to competently manage the resource entrusted to him. In other situations, companies prefer to seek help from other companies for which asset management is the main area of activity. The main goal of this is to generate a parallel source of income: the company is engaged in its direct work, and the assets are working for it in the meantime.
In the context of this information, it is not difficult to assume why the services of companies that help other enterprises competently manage assets are in stable demand, and the number of companies themselves is growing rapidly.
At the same time, it would be naive to believe that the creation of an asset management company, like, indeed, any other financial enterprise, is a simple and short procedure. When it comes to finances, the state is particularly strict with applicants for the provision of such services. However, it is not difficult to explain such a strategy: these services are initially included in the list of state services, and the provision of a permit is a kind of guarantee from the state, which grants the right to provide them to a private person and vouches for their quality.
Thus, an entrepreneur applying for a financial license will have to prepare a significant package of documentation and prepare for the fact that he will be able to bring the business to the starting position in just a few months. At least if we talk about legal activities. If this prospect does not suit him, it makes sense to purchase a ready-made AMC, which will already have a certificate of state registration, a license, and an established reputation. You can learn more about purchasing a ready-made AMC on this page.
AMC as a key entity in the investment process
Asset management companies are key entities in the investment process that ensure the functioning of investment funds in accordance with the current legislation of Ukraine.
According to Ukrainian legislation, asset management companies (AMCs) and investment funds are in close relationship, which is regulated by the Law of Ukraine “On Collective Investment Institutions” and regulatory acts of the National Securities and Stock Market Commission (NSSMC).
The essence of the relationship:
- Asset management:
- investment funds, as collective investment institutions (CIIs), do not have the right to independently manage their assets. This function is legally delegated to specialized asset management companies (AMCs), which are professional participants in the stock market..
- Functions of the AMC in relation to investment funds::
- the AMC creates an investment fund and registers it with the NSSMC;
- the AMC manages the assets of the investment fund in accordance with the investment declaration and prospectus;
- the AMC makes decisions on the purchase and sale of securities, real estate, corporate rights, bank deposits and other investment instruments permitted by law on behalf of the fund;
- the AMC is responsible for maintaining the fund’s accounting, tax accounting, reporting, as well as for compliance with the requirements for disclosure of information to investors and the NSSMC.
- Legal nature of the relationship:
- the AMC and the investment fund are legally separate entities;
- the AMC acts as a manager acting in the interests of the fund and its investors;
- the relationship between the AMC and the fund is formalized by an asset management agreement.
- Regulation of activities:
- the activities of the AMC are licensed and supervised by the National Securities and Markets Commission of Ukraine;
- investment funds can be corporate (legal entity) or unit trusts (without legal entity status), but in any case the assets are managed by the licensed AMC.
- Liability of the AMC:
- the AMC bears full responsibility for the management of the assets of the investment fund, including liability for losses caused by violation of legislation, investment rules or investment declaration.