Legal Aggregation Structure
FundApps deals with three different types of aggregation structures as described in the article FundApps Aggregation Framework, namely the Voting, Management and Legal structures.
The Voting and Management structures are fairly intuitive and easy to define. In contrast, the Legal structure carries a bit more complexity. For that reason, it has been given its own article with the sole purpose of describing the Legal structure.
The Legal aggregation structure serves as:
An abstraction of various descriptions in the jurisdictions monitored where the particular “role” that an entity holds, or the powers it takes is not precisely defined (particularly not as defined as the “Management” structure or the “Voting” Structure).
For example, regulatory guidance might contemplate the disclosure obligations for an investment manager specifically or might outline that the obligation applies to entities that specifically have control/power to vote (exercise the right to vote attached to securities). These are captured by the Management and Voting structures specifically. However, the regulatory guidance might discuss “beneficial owners,” “persons,” “holders of legal title,” and “holders of economic interest” more generally as the description of an entity that has the obligation to disclose.
In such cases, we suggest that a client set up their general corporate tree (including all assets/portfolios despite the power/role they have over the assets) in the “Legal” structure so that the rules in this category are (conservatively) applied, until FundApps (via aosphere) can obtain more precise information on the specific types of “roles” or entities the obligation applies to.
- A superset of the Management and Voting structures so that regulation that applies to entities that have either Voting OR Management power over assets are included. On this point, FundApps is working on functionality to provide the right disclosure for the case of “Management” OR “Voting” power, but until we do so, the Legal tree can serve to highlight where entities have either of those powers/roles.