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Series Trust

A Series Trust is a type of legal entity that offers a unique structure for the pooling and management of assets, often used in the investment management and fund industry. The Series Trust allows for the creation of individual series or “cells” within a single trust entity, each operating as a separate investment portfolio with its distinct investment objectives, policies, and strategies.

Here are some key features of a Series Trust as part of the DST industry:

  1. Flexibility: Series Trusts are highly flexible, allowing for the establishment of various series or portfolios under one trust umbrella. Each series can have different assets, liabilities, and investment objectives.
  2. Liability Segregation: Each series within the trust operates with limited liability from the other series. This means that the debts and liabilities of one series do not impact the assets and operations of another series.
  3. Operational Efficiency: Having multiple series within a single trust entity can lead to operational efficiencies, such as consolidated administration, governance, and regulatory compliance.
  4. Regulatory Compliance: Series Trusts operate in compliance with regulations such as the Investment Company Act of 1940 and are often used to structure mutual funds, exchange-traded funds (ETFs), and other investment vehicles.
  5. Taxation: Each series within the trust is typically treated as a separate entity for tax purposes, allowing for individualized tax reporting and liability.

Delaware has been a preferred jurisdiction for setting up Series Trusts due to its advanced and flexible statutory regulations, well-developed legal system, and business-friendly environment. The Delaware Statutory Trust Act governs the establishment and operation of DSTs, including Series Trusts, providing a robust legal framework for asset management and investment operations.