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Module Aims
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The course primarily examines the role of the Accounting Agent for a mutual fund. Case studies examining the primary roles and functions of a mutual fund Custodian and Transfer Agent are provided in the syllabus. The case studies are intended to develop student's knowledge of the various service partners in the fund industry.
Students will gain an understanding of the types of transactions handled by a mutual fund accountant and how they effect the daily determination of a fund's Net Asset Value( NAV).
Selected topics include equity transactions, bond transactions, portfolio appreciation and depreciation, daily income and expense accruals, performance indicators, capital stock and distributions. Foreign currency and non-base currency transactions will be examined.
Students will be in a position to compare and contrast various financial instruments and their derivatives. Students will understand the components of a daily NAV and factors that influence daily change in a funds capital structure.
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Learning Outcomes
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Students develop a specialised understanding of the accounting and auditing aspects of the mutual fund industry. This includes the ability to calculate the daily NAV., an understanding of the factors that will impact the daily NAV, and an understanding of the basics of financial statements of a mutual fund. Students will develop an understanding of accounting for non-base currencies in a fund and will understand the role of foreign exchange transactions.
Students will become familiar with the regulatory framework, to safeguard shareholders, and controls employed to ensure compliance.
Students will further develop and improve their understanding of financial instruments, and develop a comprehensive knowledge of all the issues involved in the administration of a fund. Students will be able to track the performance of a mutual fund through their knowledge of various performance indicators. Students will develop their understanding of the terminology and investment strategies detailed in a mutual fund prospectus.
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Indicative Time Allowances
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Hours
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Lectures |
24
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Tutorials |
8
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Laboratories |
0
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Seminars |
0
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Independent Learning Time |
43
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Total |
75
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Placements |
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Assignments |
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NOTE
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Assume that a 5 credit module load represents approximately 75 hours' work, which includes all teaching, in-course assignments, laboratory work or other specialised training and an estimated private learning time associated with the module.
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Indicative Syllabus
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IFSC:
· Brief outline of the IFSC in Dublin.
· Domicile of funds (Onshore and Offshore).
· Central Bank and regulatory framework.
· Comparison of US, European and Irish frameworks.
What is a fund?
· Portfolio theory and emergence of Fund investment.
· Fund definition.
· Legal structures.
· Types of funds.
· Fund structures and Investor profiles.
· Parties to a fund.
· Mutual fund accounting concepts.
· Accounting for non-base transactions.
Equity instruments:
· Equity definition.
· Types of equity instruments.
· Equity derivatives.
· Accounting for equity instruments.
Fixed Income securities:
· Fixed income definition.
· Types of fixed income securities.
· Accounting for fixed income securities.
· Fixed income indicators and terminology.
Money Market securities:
· Money market definition.
· Types of money market securities.
· Accounting for money market securities.
Derivative instruments:
· Derivative definition.
· Types of derivative securities.
· Accounting for derivative instruments.
· Derivative indicators and terminology.
· Role of derivatives in fund strategy.
Corporate Actions:
· Corporate action definition.
· Types of corporate actions.
· Accounting for corporate actions.
Fund expense framework:
· Contractual and non-contractual agreements.
· Accounting for fund expenses.
· Expense analysis and controls.
Portfolio valuation and NAV calculation:
· NAV definition.
· Security trades.
· Primary and back-up security pricing and price evaluation.
· NAV control procedures.
Specialised accounting topics:
· Treatment of unrealised security
appreciation/depreciation.
· Accounting for capital gains and losses.
· Accretion of discount and amortisation of premium on money
market and fixed income securities.
Capital structure and changes to capital:
· Capital stock definition.
· Role of the Transfer agent and Distributor.
· Accounting for capital stock.
· Purchases, redemption's, re-invests.
· The role of the Fund family.
Financial statements of a fund:
· Components of Financial statements.
· Financial statements preparation.
· Financial statements interpretation.
Accounting controls:
· Procedures and methodology.
· Legal and regulatory aspects.
· Internal controls.
Case Studies:
Case study: Transfer agent
· Shareholder registration.
· Shareholder servicing.
· Dealing and documentation.
· Anti-money laundering compliance.
· Other regulatory compliance.
Case study: Trustee and Custodial
· Duties of a Trustee.
· Duties of a Custodian.
· Control procedures.
· Central Bank regulations and compliance.
Case study: Emergence of Hedge Funds.
Hedge fund definition.
· 'Traditional' Vs. Hedge funds.
· Hedge Fund Strategies.
· The future of hedge funds.
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| Assessment | | Continuous Assessment | 0% | Examination Weight | 100% |
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Indicative Reading List
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Central Bank of Ireland, UCITS Notices 1989, Central Bank of Ireland.
Fredman, Albert J. & Wiles, Russ, How Mutual funds work, New York Institute of Finance.
Mahony, Stephen, A-Z of International Finance, Pitman Publishing.
Various Manuals designed by PFPC for case study and accounting conventions.
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Programme or List of Programmes
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| AF | BA in Accounting & Finance |
| BS | Bachelor of Business Studies |
| BSI | Business Studies ( with INTRA ) |
| BSSA | Study Abroad (DCU Business School) |
| BSSAO | Study Abroad (DCU Business School) |
| ECSA | Study Abroad (Engineering & Computing) |
| ECSAO | Study Abroad (Engineering & Computing) |
| HMSA | Study Abroad (Humanities & Soc Science) |
| HMSAO | Study Abroad (Humanities & Soc Science) |
| SHSA | Study Abroad (Science & Health) |
| SHSAO | Study Abroad (Science & Health) |
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