Syndicate
Other Types of Collective Investments: Unregistered Security Investment Associations
Apart from the funds, there exists other type of institutions that are based on the collective investments: the unregistered securities of investment associations. They present the following characteristics:
- They are institutions with the character of limited associations, meaning that their investors are not participants as in the funds, but shareholders.
- The partners of the unregistered securities associations consists of shares that are usually quoted on the stock exchange markets so the movements of entrance and departure can only be done through the buying or selling of the shares. This limits its participants at the time of trying to enjoy of an immediate liquidity.
- These associations have their own management staff, so they don’t need of management associations, as do the funds.
- The same as the funds, this association is subject of regulations that try to offer the maximum guarantee to the investors.
- They can be of variable capital. In this case the association can buy or sell its own securities on the stock exchange market to try to influence their quotations.
- The variable capital unregistered securities associations are an intermediate solution among the funds, of those that possess its same open structure, and of the limited associations that have the same as them a management council and a general board.
- One of the advantages that they offer to their partners is the facility to quit from the association. In that case, they only have to resell their shares to the own association without having to go to the stock exchange market to find a buyer.
- The shareholders of an unregistered securities association can profit in different ways:
- Through the dividends received
- By selling the rights of subscription when there is an enlargement of capital
- By selling its shares to another investors.