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Side pockets

Side pockets is regulation put in place by the FCA aimed at 'protecting investors in authorised funds following the Russian invasion of Ukraine'. This now means that fund managers can create side pockets and separate suspended assets from non-suspended assets, leaving the non-suspended assets in a fund open and available to be valued and traded as normal.

About side pockets

The creation of a side pocket allows fund managers to continue managing the fund in keeping with its existing investment objective and policy. Customers will benefit from the ongoing performance of the fund's assets that are not suspended, as normal, while still keeping an interest in the suspended assets through the creation of a new side pocket.

Side pockets therefore could allow*:

  • new investors to enter the fund without sharing in the exposure to the affected investments
  • existing investors to sell the units which relate to assets that are not affected investments
  • some funds to end their current suspension of dealing (it is worth noting that the value of the fund, when it reopens, is likely to be less than when it was first suspended due to the assets being moved out of the reopened fund).

*Source: PS22/8: Protecting investors in authorised funds following the Russian invasion of Ukraine (fca.org.uk)

Frequently asked questions

What happens to the assets that are suspended?
What are the tax implications of a side pocket?
Will customers be able to merge the share classes together again in the future?
How long will assets be suspended?
Can customers close their account while they still hold the suspended share class?
Can customers transfer or re-register their suspended share class in or out of Fidelity?
Where do I find information about which funds have launched a side pocket?

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