So You’re Thinking of Starting A Mutual Fund

Cincinnati| November 7, 2013

Cassandra Borchers, Thompson Hine LLP

Brenda Fleissner, Ernst & Young LLP

Dave Carson, Ultimus Fund Solutions

Today’s Presenters

Diversify Client Base and Product Offering

Access to Distribution Channels

Solution for Small SMA Accounts

Investors Looking for Alternative Products

Gain Recognition for Your Strategy

Why Launch a Registered Fund?

BASIC TRUST STRUCTURE

TRUSTEES

TRUSTEES/FUND COUNSEL

(Thompson Hine)OFFICERS

CUSTODIAN

INVESTMENTMANAGER

AUDITOR(EY)

SHAREHOLDERS

ADMINISTRATOR(Ultimus)

FUND ACCOUNTANT

(Ultimus)

TRANSFERAGENT

(Ultimus)

UNDERWRITER/DISTRIBUTOR

(Ultimus)MUTUALFUND

Proprietary Funds

Series Trust

Key Considerations Include Control, Cost and Speed To Market

Adviser vs. Sub-Adviser

Proprietary vs. Series Trust

Open End, Closed End, and Interval Funds

Typical Class Structures

When Do You Need Exemptive Relief?

Registration Process

Audit & Financial Considerations

Naming Officers

Nuts and Bolts of Fund Formation

Majority must be independent

Need a “financial expert”

Define and seek diversity of the board

Consider committee structure

Understanding the Role of Trustees

Leverage and Derivatives

Liquidity and Valuation

Diversification

Investing in Other Funds

“Bad Income”

Investment Strategies – Is There a Rule Against That?

15c and Your Obligations

Expense Caps and "Break Even“

Advisor Financial Capabilities

Fee Disclosure

Performance Fees vs. Fulcrum Fees

Cost of Distribution

Follow the Money

Retail Transaction Fee and NTF Platforms

RIAs

Qualified Plans / Pensions

Variable Annuity / Variable Life

Distribution: Opportunities and Obstacles

General Advertising Rules

Prior Performance

Hedge Fund Conversions

Is Advisor GIPS Compliant?

Performance – The Holy Grail

Role of Service Providers

Board Meetings

Compliance Duties

Prospectus Updates

Annual and Semi-Annual Reports

Other Filings

Care and Feeding After the Launch

www.gcmfa.org

www.ici.org

SEC bibliography (Brenda)

www.ultimusfundsolutions.com/smart-solutions/fund-organization/launch-fund/

Thompson Hine links

Helpful Links