Manage Preferred Shares Processing

You can process preferred shares for closed-end funds. Like a mutual fund, a closed-end fund is a publicly-traded investment company that invests in a variety of securities, such as stocks and bonds, and is actively managed by an investment advisor. A closed-end fund raises capital by selling a fixed number of shares at one time through an initial public offering (IPO). Once the fund raises the initial capital, the fund is “closed” and no longer directly offers shares for sale. Instead, the fund’s shares trade like stock on a secondary market, such as the NYSE or the NASDAQ. 

Unlike a typical mutual fund, closed-end funds do not generate subscription or redemption shares as a result of investor related activity. Instead, to raise capital or generate cash, the funds issue preferred series of shares to investors that act as a short term loans. These shares pay dividends based on a fixed or variable rate in the form of distributions to the shareholder at periodic intervals. Preferred series owners are entitled to payment on their investment in advance of common shareholders.

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