Asset Management company is a legal body who carries out professional activity on management of assets of Collective Investment Institutions (CII) on the basis of the licence which is given out by the State share market and securities commission (SSMSC), and cannot unite this activity  with other kinds of professional activity in the securities market.
Asset Management company manages the assets of CII for a remuneration amount of which is fixed according to regulations of each fund.
Asset Management company can simultaneously manage assets of several CII.
Activity of Asset Management company is firmly regulated and limited by the legislation and supervised by the State share market and securities commission.
Principal functions of Asset Management company:
• creation of unit investment funds;
• issue, placement and redemption of securities of CII ; attraction of agents which place/redeem securities of CII among investors;
• management of CII assets: after receipt of cash assets into account of CII, Asset Management company directs them for acquisition of assets to form a portfolio structure of the CII which is specified in the Investment declaration;
• make analysis of the securities market, Real Estate and other markets, which tools are in structure of CII assets;
• searches new objects for investments;
• make regular assets reappraisal, registration of contracts of acquisition and sale of assets, preparation of reporting information for state supervising bodies;
• maintains of current activity of CII.
What is Collective Investment  Institutions?
The first investment fund in the world had been created in August, 1822 in Belgium, some decades later in Switzerland and France. As mass phenomenon they started to develop only after the Second World War, gradually leaving a competition to banks and other financial institutions. Its greatest spread investment funds acquired in Great Britain and the USA. Today more than half of American households are investors of this or that investment fund.
In Ukraine investment funds had started to be created after an adoption of the statute «On Collective Investment Institutions (unit and corporate investment funds)» (2001).
Collective Investment Institutions(CII) are investment funds where means of investors are accumulated for the subsequent profit, which are gained through investment of the means in securities of other issuers,  corporate rights and Real Estate.
In Ukraine there are two kinds of CII: unit (share) and corporate investment funds.
Unit(share) investment funds are assets which belong to investors on the right of common partial property and are under the management of Asset Management company and are taken into account separately from the results of its economic activities.
Unit investment fund:
• is not a legal body, it is created by Asset Management company through sales (placement) of investment certificates of a fund issued by this company to investors;
• during signing of contracts of purchase and sale of fund assets, Asset Management company operates on its own behalf;
• Asset Management company keeps records of results of the fund activity separately from own economic activities and others CII;
Corporate investment funds are legal bodies and created in the form of open joint-stock company, and lead activity exclusively on collective investment.
Corporate investment fund:
• legal body in the form of an open joint-stock company;
• authorized capital of a fund is formed out of money resources, state securities and securities of other issuers allowed to participate in the auctions at stock exchange or trading-information system and objects of the Real Estate. Increase of the authorized capital is carried out exclusively out of cash assets;
• not less than 70 % of average annual cost of assets should be invested in securities;
• can issue and place (to be an issuer) only shares, can involve (loan) credits volume of which does not exceed 10 % of the cost of fund assets, and only for the redemption of the placed shares of fund.
• Asset Management company carries out management of fund (its assets) on the basis of the contract, administrative bodies are the General Meeting of shareholders and Supervisory Board.
Depending on a procedure of activity implementation there are three types of CII:
Open - securities of such fund are sold and bought by investors at any time.
Interval - securities of such fund can be sold to  investor at any time, and their repurchase is carried out on request of investor only during term (interval) fixed in the Prospectus of issue. According to the law such interval should be declared at least once a year.
Closed - securities of such fund are placed in terms defined by Prospectus of issue, freely turn round in the securities market. To redeem the securities of such fund it is possible after the termination of the fund. The fund is obliged to redeem the securities after the expiration of the fund.
CIIs can be terminal or termless.
Terminal CII is created for certain term specified in Prospectus of issue of securities of this CII after the expiration of this term CII stops its activity.
Termless CII is created for uncertain term.
CII of the closed type can be only terminal.
There are also two kinds of CII:
Diversified CII are the investment funds, assets of which can be invested in the limited circle of tools of the market of capitals, according to the norms, established by the legislation.
Non-diversified CII are the investment funds concerning which there are no strict requirements of assets diversification. They can make investments into securities, objects of the Real Estate, corporate rights, and etc.
Open and interval CII can be only diversified.
There are also venture investment funds. They can be corporate or unit (share) non-diversified investment funds and more than 50 % of their assets can consist of corporate rights and securities which are not sold at stock exchanges. These funds make exclusively private placing of the securities issued by them, and lead risky enough investment strategy.
Physical persons cannot be participants of venture corporate investment funds and unit investment funds, and also of non-diversified unit investment funds.