Denim UCITS in conformity with the European Directive 2009/65/E

Transcription

1 Prospectus Denim UCITS in conformity with the European Directive 2009/65/E The English version of this document has been translated under the responsibility of VESTATHENA from the French version of the prospectus approved by the AMF Last update: January 24, 2018 VESTATHENA Simplified stock company with capital of 3,570,000 Euros AMF approval number GP Rue de Monceau - Paris 8 ème Téléphone : Télécopie : RCS Paris SIRET : Code APE : 6612 Z

2 I. Main features 1. Form of UCITS Name: Denim («the Fund») Legal form and member state in which the UCITS was established: Fonds Commun de Placement (Mutual fund) under French law Inception date and intended duration: The fund was created on 27 September 2002 for a period of 99 years. Overview of the management offer: Shares Features ISIN code Target subscribers Distribution income of Denomination currency Initial Net Asset Value (NAV) Minimum initial subscription Share A FR All subscribers Capitalisation EUR Share B Share Euro Zone Differentiated FR FR All subscribers, more particularly institutional investors Mutavie Company Capitalisation EUR 1,000 1,000 Capitalisation EUR Indication of the place where the latest annual report and the latest interim report are available: The Fund s last annual and periodic documents are sent out, within eight working days upon written request to: VESTATHENA 65, rue de Monceau Paris FRANCE contact@vestathena.com KIIDs and full Prospectus are available on the website 2. Participants Management Company: VESTATHENA ( The Management Company ) Simplified joint stock company, 65 rue de Monceau Paris - FRANCE Portfolio Management Company approved by the Authorité des marchés financiers (Financial Markets Authority) on 30 June 2014 under GP No Depositary and Custodian: BNP Paribas Securities Services, Société en Commandite par Actions (SCA) Registered ofice: 3, rue d Antin Paris France Postal address : Grands Moulins de Pantin 9, rue du Débarcadère Pantin France Credit institution approved by the French Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution - ACPR) Page 2 / 17

3 - Description of the responsibilities of the Depositary and potential conflicts of interest: The Depositary has three types of responsibilities: monitoring the compliance of the decisions of the Management Company (as defined in Article 22.3 of the Directive), monitoring of cash flows of the UCITS (as defined in Article 22.4), and custody of the UCITS' assets (as defined in Article 22.5). The primary objective of the Depositary is to protect the interests of the shareholders/investors in the UCITS, which always prevail over commercial interests. Potential conflicts of interest may be identified, in particular whether the Management Company also maintains commercial relations with BNP Paribas Securities Services SCA in parallel to its appointment as Depositary (which may be the case whether BNP Paribas Securities Services calculates, by delegation of the Management Company, the Net Asset Value ("NAV") of the UCITS for which BNP Paribas Securities Services is the Depositary, or when a group relationship exists between the Management Company and the Depositary). To manage these situations, the Depositary has implemented and maintains a management policy for conflicts of interest with the objective of: - identifying and analysing situations involving potential conflicts of interest - recording, managing and monitoring situations involving potential conflicts of interest: based on permanent measures in place to manage conflicts of interest, such as segregation of duties, separation of hierarchical and functional lines, monitoring of internal insider lists, and dedicated IT environments; by implementing on a case-by-case basis: o preventive and appropriate measures such as the creation of ad hoc watchlists, new Chinese walls, or verifying that transactions are properly processed and/or informing affected customers; o or by refusing to manage activities that may give rise to conflicts of interest. - Description of any custodial functions delegated by the Depositary, list of delegates and subdelegates and identifying conflicts of interest likely to arise from such delegation: The UCITS Depositary, BNP Paribas Securities Services SCA, is responsible for the custody of the assets (as defined in Article 22.5 of Directive 2009/65/EC, as amended by Directive 2014/91/EU). In order to provide services related to the safekeeping of assets in a large number of countries, enabling the UCITS to achieve their investment objectives, BNP Paribas Securities Services SCA has appointed sub-custodians in countries where BNP Paribas Securities SCA services would have no local presence. These entities are listed on the following website: The process of appointment and supervision of the sub-custodians is carried out in accordance with the highest quality standards, including the management of potential conflicts of interest that may arise in connection with these appointments. Up-to-date information on the above-mentioned points will be sent to the investor upon request. Centralising agent for subscription and redemption orders: VESTATHENA Centralising agent for subscription and redemption orders under delegation: BNP Paribas Securities Services Registrar under delegation: BNP Paribas Securities Services Page 3 / 17

4 Statutory Auditor: PwC 63, rue de Villiers Neuilly sur Seine Cedex France Signatory : Frédéric Sellam Marketer: VESTATHENA The marketer list is not exhaustive insofar as the Fund is registered with Euroclear France and its shares may be subscribed or redeemed through financial intermediaries who are not known to the Management Company. Administrative management and accounting: BNP Paribas Securities Services, Société en Commandite par Actions ( Limited Partnership with Shares ) Registered office: 3, rue d Antin Paris - France Postal address: Grands Moulins de Pantin 9, rue du Débarcadère Pantin France Advisors: None II. Operating and management procedures 1. Main features Features of the shares: Each shareholder has a right of co-ownership of the Fund assets in proportion to the number of shares held. The registrar and the transfer agent are BNP Paribas Securities Services. The fund is registered with Euroclear France. No voting rights are attached to shares as the decisions are made by the Management Company. The document untitled Politique d exercice des droits de vote and, if a voting has been exercised, the report detailing the conditions, is available on the website or can be sent to shareholders upon request to the Management Company. All shares are in bearer form. The share A is decimalized into ten thousandths. The share B is not decimalized. The share Euro Zone Differentiated is decimalized into ten thousandths. Closing date: Last trading day of September First closing date: 30/09/2003 Information on the tax system: The Fund itself is not subject to taxation. However, shareholders may incur taxation on any revenue distributed by the Fund, where paid, or when selling the securities themselves. The Fund is eligible for French Equity Savings Plan (PEA). The tax system applicable to the unrealised and realised gains or losses related to the Fund depends on the tax provisions applicable to the particular situation of investors and/or those in force in the countries where investments are made. Page 4 / 17

5 The attention of the investor is especially drawn to any element concerning his particular situation. In the event of uncertainty about his tax situation, we advise him to obtain information from a professional tax adviser. 2. Special provisions ISIN Code: Share A: FR Share B: FR Share Euro Zone Differentiated : FR Classification: Equities of the Euro Zone countries UCITS of UCITS or AIF: up to 10% of the net assets Management objective: Obtain, over a five-year recommended horizon, a performance higher than of its benchmark EURO STOXX 50 Net Return (with net dividends reinvested). Benchmark: The benchmark EURO STOXX 50 Net Return (with net dividends reinvested) comprises 50 of the largest stocks in the Euro zone, selected on the basis of their market capitalization, liquidity and sector representativeness. For more information on the index: Investment strategy: Strategy used: The Fund seeks a long-term capital appreciation higher than that of its benchmark. The Fund is specialized in equities (and similar securities) denominated in Euros and issued by companies listed on the major Eurozone markets. The portfolio manager seeks to identify the investment opportunities based on long-term criteria. Companies are analysed from different angles, focusing on company's positioning and its competitive advantages, industrial trend of the markets in which it operates, medium term business plan and strategy, quality and integrity of the management, indebtedness, cash flow generation and remuneration policy towards minority shareholders. This in-depth analysis leads the portfolio manager to establish an intrinsic value of the company, which will be compared to the stock market value and will enable to construct the portfolio and to calibrate fund positions rationally. Investments will be made primarily in companies with at least one of the following three criteria: (i) Growth, i.e. companies that can generate visible growth in earnings and cash flows; (ii) Valuation, i.e. companies whose market valuation appears attractive according to growth prospects and cash flow generation; (iii) Momentum, i.e. companies whose end-markets are in recovery and which growth in earnings and cash flows hasn t been yet identified. In addition, these companies will always have sound balance sheets, ie with a level of indebtedness under control and a reliable management team. The sector and geographic breakdown of the Fund is monitored a posteriori. It may be adjusted to avoid any excessive concentration on a particular business sector area. Asset categories (excluding integrated derivatives): Equities Page 5 / 17

6 The Fund will be permanently exposed to a minimum of 75% of its net assets to equities of Euro Zone eligible for Equity Savings Plan. The Fund may invest up to 100% of the net assets in large and mid-cap stocks, and to a very limited extend in small-cap stocks. The Fund does not invest in emerging countries. Debt securities and money market instruments The Fund may use the French or European money market instruments to manage its cash position up to a maximum of 25% of net assets. The issuers may be public, para-public or private. These instruments should be rated at least "Investment Grade", e.g. rating higher than BBB- (according to Standard & Poor's rating system or Moody's equivalent rating system). The analysis of the credit quality of securities is not exclusively or mechanically based on credit ratings issued by the rating agencies, but also based on the fundamental analysis of issuers carried out by the Management Company UCITS, AIF units or shares The Fund may invest up to 10% of its net assets in units or shares of UCITS governed by French or European law and / or AIFs addressed to non-professional clients or AIF that meets the conditions of Article R of the French Monetary and Financial Code ( Code Monétaire et Financier ), whether or not managed by VESTATHENA, and of any classification. Derivative instruments: The investment strategy is not intended to use derivative instruments. However, in the management process, the portfolio manager reserves the right to use the following derivative instruments: Type of markets: Regulated Risks on which the portfolio manager wishes to intervene: Equity Currency Nature of the operations: all operations must be limited to the achievement of the management objective Coverage Nature of used derivative instruments: Futures Strategy for using derivatives to achieve the management objective: Coverage of equity risk Coverage of exchange risk The Fund cannot exceed its exposure to derivative instruments 100% of the net assets. Securities incorporating derivatives: The Fund may use securities incorporating derivatives up to 10% of its net assets, the strategy for using these derivatives being the same as that described for derivatives. The used instruments are warrants, convertible bonds, etc. These financial instruments will be principally held as a result of transactions affecting the fund securities, the Fund will not be intended to acquire this type of asset. Deposits: None Cash loans: The Fund may occasionally find itself in debt and may make use of cash loans, up to a limit of 10% of its net assets. Temporary purchases and sales of securities: Page 6 / 17

7 The Fund may make temporary acquisitions and sales of securities: i. Securities lending by reference to the Monetary and Financial Code ( Code Monétaire et Financier ); ii. Securities borrowing by reference to the Monetary and Financial Code; All of these transactions are limited to the achievement of the management objective either to optimize cash management or to optimize the fund's performance. Additional information can be found under fees and commissions part. Management of financial guarantees: In connection with temporary sales of securities it can receive the financial assets considered as collateral and intended to reduce its exposure to counterparty risk. The financial guarantees received will mainly consist of cash or/and government bonds that are eligible for the temporary sales of securities. Any financial guarantee received will respect the following principles: Liquidity: Any financial guarantee related to securities must be very liquid and be able to be traded quickly on a regulated market at a transparent price; Negotiability: Financial guarantees are negotiable at any time; Valuation: Financial guarantees received are evaluated on a daily basis. A prudent discount will be applied to securities that may present high volatility or regarding its credit quality; Credit quality of issuers: Financial guarantees have strong credit ratings; Investment of guarantees received in cash: They are either invested in deposits within eligible entities or invested in government bonds with high credit quality (rating that meets the criteria of short-term money market UCITS or AIF) or invested in short-term money market UCITS or AIF, or used in REPO transactions with a credit institution; Correlation: Guarantees are issued by an independent entity of the counterparty; Diversification: Counterparty risk in over-the-counter transactions may not exceed 10% of net assets when the counterparty is one of the credit institutions as defined in the law regulations, or 5% of its net assets in other cases; the exposure to a particular issuer does not exceed 20% of the net assets. Conservation: The financial guarantees received are invested with the Depositary or by one of its agents or third parties under its control or by any third party depositary subject to prudential supervision and which has no link with the provider of financial guarantees; Prohibition on re-use: the financial guarantees other than cash could not be sold, reinvested or pledged as guarantee. Risk profile: The Fund will be invested in financial instruments selected by the portfolio manager as part of the investment strategy described in the previous paragraph. These instruments will be subject to the evolutions and uncertainties of the financial markets on which the Fund will be invested. The Net Asset Value is subject to volatility related to financial instruments held in the Fund. In these circumstances, the invested capital may not be fully repaid, including for an investment made over the recommended investment period. The main risks to which the investor is exposed are: Equity risk: Fluctuations in equity markets may result in significant changes in net assets that may result in a decline in the net asset value of the Fund; In particular, there is a risk associated with the presence in the Fund of small- and mid-cap stocks whose price fluctuations may exceed those of large-cap stocks; In the event of a decline of the stock prices of small- and mid-cap securities held in the Fund, impact negatively the net asset value of the Fund. Risk of capital loss: The Fund will be impacted by equity market drops to the level of investment in these markets. The investor is warned that his capital is not guaranteed and that he may not recover the capital originally invested. Page 7 / 17

8 Risk related to discretionary investment: The discretionary management style applied to the Fund is based on stock picking and on anticipations of different markets. There is a risk that the Fund may not be invested in the best-performing securities at all times. Risk related to concentrated Fund: Risk related to the possible concentration of the Fund on securities belonging to specific sectors (precious metals in general); In the event of price decreases of fund's holdings belonging to specific geographical areas or sectors, the net asset value of the Fund decreases. Liquidity risk: The risk of holding in the portfolio of stocks with lower capitalization which are more sensitive to significant buying / selling movements. Interest rate risk: In the event of an increase in interest rates, the value of the fixed-rate securities held in the Fund decreases and, as a result, may result in a decrease of the net asset value of the Fund. Credit risk: It represents the possible risk of a degradation of the issuer's rating or of a default that will have a negative impact on the price of the security and therefore on the net asset value of the Fund. Foreign exchange risk: Currency risk exists because the Fund holds securities denominated in a currency other than the Euro; the fluctuation of the Euro against other currencies may adversely affect the net asset value of the Fund. Counterparty risk: Counterparty risk is the result of all over-the-counter financial contracts entered with the same counterparty, in particular temporary acquisition / sale of securities. Counterparty risk measures the risk of loss for the Fund in the event of default of the counterparty that is unable to meet its contractual obligations before the transaction has been finally settled. In this case, the net asset value may decline. Ancillary risks: These risks are incidental because management does not expose the Fund up to 10% of its net assets. The ancillary risks mainly concern the holding of liquidity on an ancillary basis. It may be justified to meet current or exceptional payments in the event of the sale of securities related to the assets of the Fund (time to reinvest in other financial instrument), and in the event of an unfavourable market condition, whether investments are suspended for a period of time. The ancillary risks will not exceed 10% of the assets of the Fund. Risk related to convertible bonds: The value of convertible bonds depends on several factors: level of interest rates, price fluctuations of the underlying assets, price changes of the embedded derivatives in the convertible bond, changes in the credit spread; these different elements may lead to a decrease of net asset value of the Fund. Guarantee or protection: None Subscribers concerned: Share A: all subscribers Share B: all subscribers, more particularly institutional investors Share Euro Zone Differentiated : dedicated to MUTAVIE Company The investor subscribing for shares of this Fund is seeking an equity investment instrument. The minimum recommended investment period is 5 years. The shares of this UCITS have not been registered under the U.S. Securities Act of Consequently, they may not be offered or sold, directly or indirectly, on behalf of or for the benefit of a "U.S. person" as defined by the U.S. "Regulation S". Furthermore, the shares of this Fund also cannot be offered or sold, directly or indirectly, to "U.S. persons" and/or to any entities held by one or more "U.S. persons" as defined by the U.S. "Foreign Account Tax Compliance Act (FATCA)". Page 8 / 17

9 The Fund has opted for the status of a French non-declaring financial institution deemed to be in conformity with Article 1471 of the Internal Revenue Code of the United States as described in Paragraph II, Section B, of the Annex II of the agreement signed on 14 November 2013 between the French and American Governments. The amount that can be reasonably invested in the Fund depends on the investor's financial situation. To determine this, investors must take into account their personal wealth, their current and medium-term needs, but also their desire to take risks or, on the contrary, favour a prudent investment. Investors are strongly advised to diversify their investments sufficiently so as not to expose them solely to the risks of the Fund. Methods for determining and allocating income: Shares A, B and Euro Zone Differentiated : capitalisation of net income and net realized capital gains. Features of the shares: Shares Features ISIN code Subscribers concerned Distribution of income Currency Initial NAV Minimum initial subscription Share A FR All subscribers Capitalisation EUR Share B FR All subscribers and more particularly institutional investors Capitalisation EUR Share Euro Zone Differentiated FR MUTAVIE company Capitalisation EUR Subscription and redemption methods: Subscriptions and redemptions of shares are received by BNP Paribas Securities Services (Les Grands Moulins de Pantin, 9 rue du Débarcadère, Pantin). They are centralized each trading day (D) at 11 AM and are executed on the basis of the next net asset value, the settlement being in D+3. The net asset value is calculated daily and published on D+1, with the exception of legal holidays in France and the closing days of the French financial markets (official calendar: Euronext Paris SA). It is available on request to the Management Company (VESTATHENA, 65, rue de Monceau, Paris). For shares A, subscription orders may be made either in amount or in number of shares, each share may be split into ten thousandths and redemption orders may be made in number of shares, each share may be divided into ten thousandths. For shares B, subscription and redemption orders may be made in whole shares. For shares Euro Zone Differentiated, subscription orders may be made either in amount or in number of shares, each share may be split into ten thousandths and redemption orders may be made in number of shares, each share may be divided into ten thousandths. Information on fees and commissions: Page 9 / 17

10 Subscription and redemption fees: Subscription and redemption fees increase the subscription price paid by the investor or reduce the redemption price received by the investor. Fees paid to the Fund are used to cover the costs incurred by the Fund for investing or divesting assets. The fees not paid to it are paid to the Management Company or marketers. Fees charged to the investor levied on subscriptions and redemptions Subscription fee not paid to the Fund Subscription fee paid to the Fund Redemption fee not paid to the Fund Redemption fee paid to the Fund Base Net Asset Value x number of shares Net Asset Value x number of shares Net Asset Value x number of shares Net Asset Value x number of shares Rate Share A: 4% VAT maximum Share B: None Share Euro Zone Differentiated : 4% VAT maximum None None None Operating and management fees: This fee covers all costs charged directly to the Fund, apart from transaction fees. Transaction fees include intermediation fees (brokerage, etc.) and turnover fees, if any, that may be collected by the depository and the Management Company. In addition to operating and management fees, there may also be: outperformance fees. These are paid to the Management Company when the Fund exceeds its objectives. They are therefore charged to the Fund. turnover fees charged to the Fund. Fees charged to the Fund Base Rate Management fees, including administrative fees external to the Management Company (Statutory auditors, custodian, lawyers, distributors, etc.) Net Assets Share A : 2% VAT* Share B : 1% VAT* Share Euro Zone Differentiated : 1.80% VAT* Maximum indirect fees (commission and management fees) Net Assets None Maximum turnover fees paid : To Depositary/Custodian : 100% The Management Company does not earn turnover fees. They are totally levied by the depositary. Fixed fee per transaction Charged by BNP Paribas Securities Services, according to its custody role Equities: From 8 to 25 EUR depending on exchanges UCITS/AIF: From 3 to 45 EUR depending on the Fun Page 10 / 17

11 Outperformance fee Net Assets Shares A and B : 20% of any performance beyond Euro Stoxx 50 Net Return (with net dividends reinvested). Share Euro Zone Differentiated : None *The Management Company did not opt for VAT taxation. Thus, these fees are invoiced without VAT and the amount incl. tax (VAT) is equal to the amount excl. tax. The outperformance fees pay the management company when the fund has exceeded its objectives. They are therefore invoiced to the Fund. The outperformance fee is based on a comparison between the annualized net performance of the Fund and the performance of a notional fund (hereinafter referred to as the "benchmark fund"), generating the benchmark performance and recording the same subscription and redemption pattern as the actual fund. If, over the financial year, the Fund's annualized net-of-fee performance is higher than the annualized net-of-fee performance of the benchmark fund, the variable portion of the management fees will represent a maximum of 20% of the difference between the Fund s performance and the benchmark fund s performance. If, over the financial year, the Fund s annualized net-of-fee performance is lower than the benchmark fund s one, the outperformance fee is zero. During the financial year, if applicable, any outperformance will be subject to a provision for variable management fees when calculating each net asset value of the Fund. In the event of an underperformance of the Fund relative to the benchmark between two net asset values, any provision previously made will be readjusted by a reversal of the provision. Reversals of provisions are capped at the level of previous allocations. This variable portion will be definitively collected at the end of each financial year only if, during the financial year, the Fund's annualized net performance is greater than that of its benchmark. In the event of redemptions, the proportion of the provision of the outperformance fee corresponding to the shares redeemed is acquired by the Management Company on the "crystallization" principle. The entire performance fee is paid to the Management Company at the end of the fiscal year. These costs (fixed part and possibly variable part) will be directly charged to the income statement of the Fund. The reference period for variable costs will be from the last working day of September to the last working day of September of the next year. For more details on the fees actually charged to the Fund, please refer to the Key Investor Information Document (KIID). When the Fund carries out temporary acquisitions / sales of securities, all income from these transactions is acquired by the Fund, VESTATHENA does not receive any remuneration for these transactions. VESTATHENA has established a policy for the selection of intermediaries in which it defines the selection criteria and the way it controls the quality of execution of the selected intermediaries. The selection of the financial intermediaries is based on the four following criteria: the quality of the execution of the trades, the quality of the back office for the settlement, the total cost (cost of the financial instrument plus cost linked to execution) and the quality of the meetings organized with the managements. The weight given to each criterion depends on the nature of the investment process. Page 11 / 17

12 Intermediaries will be periodically reassessed to ensure that they continue to provide, on a permanent basis, the expected quality as required in the selection policy. VESTATHENA conducts an annual review of its best selection policy. For additional information, shareholders may refer to the annual report of the Fund available on request to the Management Company. III. Commercial Information Distribution conditions: The shares of the Fund are exclusively distributed by VESTATHENA. The fund has only capitalization shares. Information for Holders: In order to enable the subscribers to have regular information on the evolution of the Fund, VESTATHENA makes available to investors a monthly performance report available upon request to the Management Company. ESG criteria: Information on environmental, social and governance (ESG) criteria is available on the company's website Remuneration policy: All the provisions of the remuneration policy would be applied to "risk takers": the latter are identified with regard to the functions performed but also to their overall remuneration level, especially whether the latter is in the same remuneration tranche and their professional activity may have a significant impact on the risk taken by the Management Company, the UCITS or the AIF managed. Within VESTATHENA, "risk takers" correspond to all employees. The policy applies to the following monetary compensation: (i) the fixed part of the remuneration of employees and (ii) the variable part of the remuneration of employees. Details of the remuneration policy are available on the website of the Management Company. IV. Investment rules In accordance with the provisions of articles L and R and subsequent of the French Monetary and Financial Code ( Code Monétaire et Financier ), the asset allocation rules provided by the Monetary and Financial Code and the risk dispersion rules applicable to this Fund must be respected at all times. If this limit exceed independently of the will of the Management Company or following the exercise of a subscription right, the Management Company will have as its primary objective to regularize this situation taking into account the interests of the holders of the Fund. V. Global risk The global risk is determined using the commitment approach. VI. Rules for asset accounting and valuation The Fund complies with the accounting rules prescribed by the regulations in force, in particular the UCITS accounting plan. Its accounting currency is the euro. The method of accounting for income is that of interest received. Page 12 / 17

13 Securities included in the Fund's assets are accounted excluding trading charges. The calculation of the net asset values of each category of shares of the Fund is carried out taking into account the valuation methods specified below: Shares: The shares held in the Fund are valued daily on the basis of the closing price or collated market price after closure of financial markets and, if necessary, converted into euros according to the exchange rate available in Paris at 5:30 PM on the valuation day. Debt securities: The bonds are valued daily on the basis of the closing price or collated market price after closure of financial markets or on the contributor chosen by the Management Company and, if necessary, converted into Euros according to the exchange rate available in Paris at 5.30 PM on the valuation day. French Treasury bills are valued daily on the basis of the prices collated at 5.30 PM in the market or on the designated contributor. Other negotiable debt instruments are valued according to the yield curve representative of interest rate swaps in Euros (fixed rate versus OIS) adjusted by a margin representing the characteristics of the security. For redeemable rate debt securities, the valuation for the remaining period until the next revision date is carried out in accordance with the method described above. The valuation of debt securities includes the accrued interests on the day of computing of the net asset value. Futures contracts on regulated markets: Contracts and options traded on regulated markets are valued according to the available prices at the closure of the financial market. Foreign exchange forwards: Forward foreign exchange transactions are valued using the adjusted daily foreign exchange rates and taking into account contango/backwardation and calculated on the basis of the maturity of the contract. UCITS /AIF units or shares: UCITS managed by VESTATHENA are valued on the basis of the net asset value of the valuation day (if it corresponds to a valuation date of the target UCITS) and the units and shares of UCITS managed by other Management Company on the basis of the last known net asset value. Units and shares of UCITS are valued on the basis of the last known net asset value. Temporary sales and acquisition of securities: Securities received under repurchase agreements are valued at their contract value. Securities sold under repurchase agreements continue to be valued at market prices. Temporary sales contracts are valued at their contract value plus accrued interests. Loans and borrowings of securities are valued at their market value. Deposits: Deposits are valued at their market value. For securities (shares, bonds) whose prices are not available at the valuation day, nor recovered on a market or a contributor, and for other balance sheet items, the Management Company adjusts the fund's valuation in function of the variations that the current elements make them probable. Page 13 / 17

14 CLAUSE I: ASSETS AND SHARES ARTICLE 1 Co-ownership shares Regulations DENIM UCITS IV in conformity with the European Directive 2009/65/E Co-ownership rights are expressed in shares, with each share corresponding to the same fraction of Fund assets. Each shareholder has a right of co-ownership to Fund assets in proportion to the number of shares held. The term of the Fund is 99 years beginning at the inception date, except in the event of early dissolution or extension provided for in these Regulations. The shares may be divided, grouped or split by tenths, or hundredths, or thousandths, or ten thousandths, referred to as fractional units, upon decision of the Board of Directors of the Management Company or its Chairman. The different categories of shares may: benefit from different income distribution methods (distribution or capitalisation); be denominated in different currencies; have different management fees; have different subscription and redemption fees; have a different nominal value; be systematically hedged against risk, in part or in full, as defined in the Prospectus. This hedging is achieved by means of financial instruments minimising the impact of hedging transactions on other categories of units of the UCITS; be confined to one or more marketing channel. The provisions of the regulation governing the subscription and redemption of shares are applicable to fractional shares whose value will always be proportional to that of the proportion they represent. All other provisions of the regulation relating to the shares shall apply to fractions of shares without the need to specify such shares unless otherwise provided. The Board of Directors of the Management Company or its Chairman may, on its own decisions, proceed to the split of the shares by the creation of new shares which are allocated to the shareholders in exchange of the old shares. ARTICLE 2 Minimum assets Shares may not be redeemed whether the assets of the Fund fall below 300,000 euros. If the assets remain below this amount for a period of thirty days, the Management Company shall take the necessary steps to liquidate the UCITS in question, or to carry out one of the operations mentioned in Article of General Regulation of Financial Markets Authority (transfer of the UCITS). ARTICLE 3 Issue and redemption of units Shares are issued at any time at the request of the shareholders, based on their net asset value plus, if applicable, any subscription fees. Redemptions and subscriptions are carried out according to the terms and conditions set out in the Prospectus. Shares of the Fund may be admitted for listing in accordance with the regulations in force. Subscriptions must be fully released on the day of net asset value calculation. They may be made in cash and / or contribution in financial instruments. The Management Company has the right to refuse the proposed financial instruments and, to this end, has seven days from the filling date to make known its decision. In the event of acceptance, the financial instruments offered are valued according to the rules set out in Article 4 and the subscription is made on the basis of the first net asset value following the acceptance of the financial instruments in question. Page 14 / 17

15 Redemptions are made exclusively in cash, except in the event of liquidation of the Fund when the shareholders have signed their agreement to be redeemed in securities. They are settled by the issuing account holder within a maximum period of five days following the valuation of the share. However, under exceptional circumstances, where reimbursement requires the prior disposal of assets held in the Fund, this period may be extended up to a maximum of 30 days. Except in case of inheritance or donation-sharing, the sale or transfer of shares between holders, or from holders to a third party, is assimilated to a redemption followed by a subscription; In the case of a third party, the amount of the sale or transfer must be supplemented by the beneficiary, if necessary, in order to attain at least the amount of the minimum subscription required by the Prospectus. In application with the Article L of the Monetary and Financial Code ( Code Monétaire et Financier ), the redemption by the Fund of its shares, as well as subscription of new shares, may be temporarily suspended by the Management Company, when exceptional circumstances require and the interests of the shareholders ask for. If the net assets of the Fund are lower than the amount set by the regulation, no redemption of the shares may be realised. ARTICLE 4 Calculation of the Net Asset Value The net asset value of the shares is computed in accordance with the valuation rules set out in the Prospectus. Contributions in kind may only consist of securities, stocks or contracts in which UCITS are authorised to invest; such contributions shall be valued according to the valuation rules used to calculate the net asset value. CLAUSE II: FUNCTIONING OF THE FUND ARTICLE 5 The Management Company The Fund is managed by the Management Company in accordance with the strategy defined for the Fund. The Management Company shall act on behalf of the shareholders in all circumstances and can only exercise the voting rights of the securities included in the Fund. ARTICLE 5a Operating rules The instruments and deposits in which the UCITS may invest and the investment rules are specified in the Prospectus. ARTICLE 6 The Depositary The Depositary shall undertake the tasks entrusted to it by the laws and regulations in force and those that were contractually assigned to it by the Management Company. In particular, they must ensure the legality of decisions taken by the Management Company. They shall, if necessary, take any precautionary measures they deem necessary. In the event of any dispute with the Management Company, they shall inform the Financial Markets Authority. ARTICLE 7 The Statutory Auditor A statutory auditor is appointed for a period of six years, following approval by the Financial Markets Authority, the Board of Directors or the Executive Board of the Management Company. It certifies the regularity and the sincerity of the accounts. The Staturory Auditor may be reappointed. Page 15 / 17

16 The Statutory auditor is required to inform the Financial Markets Authority as soon as possible of any decision concerning the UCITS he finds in the course of his duties: 1. He shall indicate any irregularities and inaccuracies related to the Fund susceptible to impact significantly the financial situation, net income and assets; 2. To affect the conditions or the continuity of its exploitation; 3. To lead to refusal to certify the accounts or to the expression of reservations; The valuations of the assets and the determination of currency exchange parities in conversion, merger or demerger transactions shall be supervised by the statutory auditor. He shall evaluate any contribution in kind under his responsibility. He shall certify the accuracy of the composition of the assets and other elements prior to publication. The auditor's fees are determined by mutual agreement between the auditor and the Board of Directors or the Executive Board of the Management Company on the basis of a work schedule specifying the duties considered necessary. He shall certify the situations on the basis of which interim distributions are made. The Statutory Auditor certifies the statements that justify any interim distribution. The auditor's fees are part of management fees. ARTICLE 8 Financial statements and management report At the close of each financial year, the Management Company shall establish the summary documents and a management report of the Fund for the past financial year. The Management Company shall draw up the Fund's inventory at least twice a year and under the supervision of the Depositary. The Management Company shall make these documents available to the shareholders within four months of the end of the financial year and shall inform them of the amount of income to which they are entitled: these documents are either sent by post at the express request of the shareholders, or made available at the Management Company. CLAUSE III: INCOME ALLOCATION PROCEDURES ARTICLE 9 Procedures for allocating income and amounts available for distribution Net income for the financial year is equal to the total interest payments, arrears, dividends, bonuses and lots, fees and all earnings from securities held in the Fund (and/or each sub-fund) portfolio, plus earnings from sums held as liquid assets, minus management fees and borrowing costs. Income distributed by an UCITS is made up of: 1. The amount that may be distributed is the net earnings for the year, plus retained earnings and plus or minus the net revenue accruals for the year; 2. Net-of-fee realized profits minus net-of-fee realized losses for the financial year, plus similar net income that have not been distributed or capitalized during prior financial year, and plus or minus the balance of accrued income. The amounts mentioned at part 1 and part 2 may be distributed, totally or partially, independently of one another. Methods of computation and allocation of distributable income are detailed in the Prospectus. CLAUSE IV: MERGER SPLIT - DISSOLUTION - LIQUIDATION Page 16 / 17

17 ARTICLE 10 Merger - Split The Management Company may transfer all or part of the assets held in the Fund to another UCITS which it manages, or it may split the Fund into two or more other mutual funds which it will manage. Shareholders must be notified before any such merger or demerger takes place. A new statement will then be issued showing the number of units held by each shareholder. ARTICLE 11 - Dissolution Extension If the Fund's assets remain below the amount laid down above in Article 2 for thirty days, the Management Company shall inform the Financial Markets Authority and dissolve the fund. The Management Company may dissolve the fund early. It shall inform the shareholders of its decision, and applications for subscriptions or redemptions will not be accepted after this date. The Management Company shall also dissolve the Fund in the event of a redemption application for all of the shares, or where the Depositary is relieved of its responsibilities and no other depositary has been appointed, or on expiry of the term of the fund, if not extended. The Management Company shall inform the Financial Markets Authority by post of the date and of the procedure adopted for the dissolution. Subsequently, the Management Company shall send the auditor s report to the Financial Markets Authority. The Management Company may decide to extend a fund in agreement with the Depositary. Its decision must be made at least three months prior to expiry of the Fund's term, and must be notified to the shareholders and the Financial Markets Authority. ARTICLE 12 Liquidation In the event of dissolution, the Management Company or Depositary shall act as liquidator, failing which a liquidator shall be appointed by the court at the request of any interested party. To this end, they are vested with the most extensive powers for liquidating assets, paying creditors and distributing the available balance to shareholders in cash or securities. The Statutory Auditor and the Depositary shall continue to perform their duties until the liquidation operations have been completed. CLAUSE V: CONTESTATION ARTICLE 13 Jurisdiction Choice of Domicile Any disputes concerning the Fund that may arise during the operation thereof, or upon its liquidation, whether between shareholders or between shareholders and the Management Company or Depositary, shall be subject to the jurisdiction of the competent courts. Page 17 / 17