TOCQUEVILLE VALUE AMÉRIQUE

Transcription

1 TOCQUEVILLE VALUE AMÉRIQUE PROSPECTUS UCITS subject to Directive 2014/91/EU General characteristics Form of UCITS Name TOCQUEVILLE VALUE AMERIQUE Legal form of the UCITS Mutual fund Member State where the UCITS was established French mutual fund Creation date 15 April 1983 Expected life 99 years Summary of management offer ISIN code Income distribution Currency denomination Subscribers Minimum amount of 1st subscription (2) Amount of subsequent subscriptions P Unit: FR Capitalisation mutual fund EUR All subscribers P Unit: 1 unit One tenthousandth of a unit I Unit: FR Capitalisation mutual fund EUR All subscribers, more specifically reserved for Institutional Investors I Unit: 1,000 units One tenthousandth of a unit Unit S: FR Capitalisation mutual fund EUR Reserved for marketing by financial intermediaries other than the management company (1) S Unit: 1 unit One tenthousandth of a unit (1) Subscription to this unit is reserved for investors subscribing via distributors or intermediaries other than the management company: - Subject to the national legislation prohibiting all trailer fees to distributors (e.g. Great Britain and the Netherlands) or - Providing o Advisory service within the meaning of the European MiFID II regulation o Individual portfolio management under mandate o And for which they are paid by their clients (2) As proprietary investments made on their own behalf, the management company is not required to comply with the announced minimum. Available information

2 The latest annual and periodic documents are sent within eight business days upon the unitholder s request to: Tocqueville Finance S.A. (34, rue de la Fédération Paris). These documents are also available on Point of contact where additional explanations can be obtained if necessary: Players Management company Tocqueville Finance S.A. (34, rue de la Fédération, Paris), Portfolio management company approved by the AMF under no. GP Depository and custodians Crédit Industriel et Commercial (CIC), 6 avenue de Provence, PARIS Cedex 09. a) Tasks: 1. Asset safekeeping i. Custody ii. Keeping asset register 2. Checking the legality of the decisions taken by the UCI or its management company 3. Monitoring liquidity flows 4. Managing liabilities by delegation i. Centralising subscription and redemption orders for units/equities ii. Keeping issuance account Potential conflicts of interest: the policy on conflicts of interest is available on the following website: You can also obtain a hard copy free-of-charge by requesting it from: CM-CIC MARKET SOLUTIONS Solutions dépositaires 6 avenue de Provence PARIS B) Delegated agent for custodial tasks: BFCM The list of delegated agents and sub-delegated agents is available on You can also obtain a hard copy free-of-charge by requesting it from: CM CIC MARKET SOLUTIONS Solutions dépositaires 6 avenue de Provence PARIS c) Updated information will be made available to investors upon request made to: CM- CIC MARKET SOLUTIONS Solutions dépositaires 6 avenue de Provence PARIS Delegated agents: Financial management: Anchor Capital Advisors L.L.C. An American portfolio management registered with the Securities and Exchange Commission (SEC), with offices located at One Post Office Square - Boston - Massachusetts Account management and valuation: CM-CIC ASSET MANAGEMENT, a portfolio management company approved by the AMF under no , S.A. with capital of 9,133,800 (4, rue Gaillon, Paris)

3 Statutory auditor Constantin Associés (185, avenue Charles de Gaulle, Neuilly sur Seine Cedex), represented by Jean-Pierre VERCAMER Marketer TOCQUEVILLE FINANCE S.A. Operating procedures and management General characteristics Characteristics of units: Nature of the right attached to the unit class: each unitholder has a right of co-ownership over the assets of the mutual fund in proportion to the number of units held. Liability management: liabilities are managed by the depository CREDIT INDUSTRIEL ET COMMERCIAL (CIC). It is specified that EUROCLEAR France is responsible for the administration of the units. Voting rights: in the case of a mutual fund, no voting rights are attached to the units, as decisions are taken by the management company; information on the mutual fund's operating procedures is given to unitholders, depending upon circumstances, either individually or through the press, or through periodic documents or by any other means in accordance with the AMF's instructions. Form of units: bearer. Units are expressed in ten-thousandths. Subscription and redemptions are acceptable in tenthousandths of units. Closing date: the last trading day in September. Tax regime: the mutual fund is not subject to corporate tax and a tax transparency regime applies to the unitholder. The tax regime applicable to the amounts distributed by the UCITS or to unrealised or realised capital gains or losses by the UCITS depends on the tax provisions applicable to the investor's particular situation and/or the investment jurisdiction of the UCITS. If the investor is unsure of his or her tax situation, he or she should contact a professional tax advisor. Special provisions ISIN code: P Units: FR I Units: FR S Units: FR Classification International equities. Management objective The objective of the Tocqueville Value Amérique mutual fund is to pursue an active investment policy on the North American equity markets to reap the benefits from the growth of the economies in this region. Benchmark index The Tocqueville Value Amérique mutual fund is managed using pure stock picking i.e. without taking into consideration a given benchmark index or a business sector. It is therefore not subject to a specific benchmark index. However, so that unitholders can compare performance retrospectively, the

4 fund s performance trends can be compared to that of the S&P 500 index converted into euros, dividends reinvested. Investment strategy The Tocqueville Value Amérique mutual fund can do business on all international equity markets, and mainly North American (USA, Canada) by focusing research specifically on company shares that the market neglects and/or undervalues, or that are defensive in nature, dividend paid regularly and sustainably and/or due to the reality of their assets and the quality of the balance sheet. The research and stock picking for the Tocqueville Value Amérique mutual fund is based on financial research specially developed internally at Anchor Capital Advisors L.L.C. The management method is based on total independence from indexes or business sectors. These companies will be selected from large-, mid or small-caps, depending on the economic and stock market interest they have acquired as a result of the financial research work carried out internally by the relevant teams at Anchor Capital Advisors L.L.C., referred to above. The fund may also invest in American Deposit Receipts (ADRs) within the limit of up to 10% of its net assets. In addition, the fund may hold bond products. For selecting and monitoring of fixed-income securities, the management company does not use rating agencies exclusively or mechanically. It prefers to use its own credit analysis, which is the basis for management decisions taken in the interests of the unitholders. The fund units are not hedged against currency risk. The assets in the mutual fund s asset mix Equities without embedded derivatives Equities Equities, with a permanently minimum exposed of 90% and a maximum of 100% of the fund's total assets are as follows: North American equities (USA, Canada) for a minimum of 75% of the fund's total assets. As stated in the previous paragraph, these equities will be selected without referring to an index, an index basket or a business sector. We also remind you that the size of the company and the amount of its market capitalisation are not selection criteria for the managers tasked with managing this fund. Equities from all regulated markets in OECD member countries other than the US and Canada for up to 25% of the fund s total assets. Equities from all regulated markets in non-oecd countries for up to 10% of the fund s total assets. ADRs for up to 10% of the fund's total assets. An ADR is issued by a US bank and represents the ownership of one share in a non-us corporation. Debt securities and money market instruments Bonds, treasury bills and other negotiable debt securities (short-term marketable securities, negotiable treasury notes) for up to a limit of 10% of the fund s total assets. The minimum rating that will be used for the selected bond issuers will be B or considered equivalent by the management company. These investment vehicles may be either euro-denominated or dollar-denominated (American or Canadian). UCITS and AIF units or shares The fund may hold up to 10% of units or equities in French or European UCITS subject to Directive 2014/91/EU and AIFs complying with the 4 rules of Article R of the French Monetary and Financial Code. These UCITS and/or AIFs will be either short-term money market UCIs (period less than 1 year, public debt only, rating greater than or equal to AA), or

5 equity investment funds of North American countries (USA, Canada). The use of these external UCITS and/or AIFs (i.e. not managed by Tocqueville Finance) will be, for UCITS and/or AIF equities to expose your fund to business sectors (real estate, technology among others) that would not be hedged directly in the fund (sector funds), or for the use of money market UCITS and/or AIFs, for of managing the cash flow of your fund relationship to daily subscriptions/redemption movements. Derivatives None. Securities with embedded derivatives None. Deposits The mutual fund may use deposits for up to 20% of its assets with a single credit institution. These deposits shall be used exclusively for the purposes of cash management. Cash borrowings None. Temporary purchases and sales of securities None. Contracts constituting financial guarantees N/A. Risk profile Your money will be invested in financial instruments selected by the management company. These instruments are subject to the changes and uncertainties of the stock markets. Your Tocqueville Value Amérique fund is exposed to several risks, which are described below in order of importance. risk of loss of capital: the capital loss occurs when a unit is sold at a price lower than the price paid at the time of subscription. This risk is linked to the fact that the fund is permanently exposed to at least 90% of its total assets on equities and does not provide protection or a guarantee for capital. As a result, there is a risk that the invested capital may not be fully returned. equity and market risk: the net asset value of the fund may experience volatility resulting from the investment of a very large portion of the portfolio on the equity markets. Should the equity markets decline, the net asset value of the fund may drop faster. The fund may be exposed directly and indirectly via shares and/or units of UCITS to small-cap markets. This exposure may, as appropriate, represent more than 50% of the total assets. The volume of these listed securities is reduced, market movements are more pronounced upwards and downwards and faster than on large caps. The net asset value of the fund will then follow this behaviour. liquidity risk: this risk mainly applies to securities with a low transaction volume and for which it is therefore more difficult to find a buyer/seller at a reasonable price at a given time. This risk emerges particularly in large subscriptions/redemptions relative to the portfolio size. A risk related to discretionary management: the discretionary management styles is based on expectations of different market trends (equities). There is a risk that the UCITS is not invested in the best-performing equities. exchange rate risk: the fund in mainly invested in North American equities (USA, Canada), the shares of which are listed in American and/or Canadian dollars. Your fund will therefore be exposed to currency risk. Fund units will not be hedged against currency risk.

6 a risk associated with investing in securities listed on regulated markets in non-oecd countries. This risk will be limited to less than 10% of the fund s assets and will retain an ancillary nature. interest rate risk: the interest rate risk corresponds to the risk linked to a rise in bond market rates, which causes a decline in bond prices and consequently a fall in the net asset value of the UCITS. credit risk: this risk occurs when a bond issuer may not be able to honour their commitments, i.e. coupon payments each year, and repayment of principal at maturity. This failure could cause the fund s net asset value to drop. This may also lead to downgrading the issuer's rating. Subscribers concerned and standard investment profile: This fund is intended for any subscriber (natural or legal person) who wishes to invest in an investment fund invested at more than 90% in equity markets and who accepts the risks related to changes in these markets. The amount you can reasonably invest in this fund depends on your personal circumstances. To determine this, you must take into account your wealth/personal assets, your current needs, and those in 5 years, as well as also your desire to take risks or rather to focus on making conservative investments. It is also strongly recommended to diversify your investments so as not to expose them solely to the risks of this fund. It has been expressly stated that the UCITS covered in this document may be subject to marketing restrictions with regard to legal or natural persons who, due to their nationality, residence, registered office/place of registration or for any other reason, or to a foreign jurisdiction that prohibits or restricts offering certain products or services (notably financial instruments). Shares and units of UCITS managed by Tocqueville Finance have not been registered with the SEC in accordance with the provisions of the US Securities Act of 1933 and are directly or indirectly not available in the United States (including in US territories, jurisdictions and possessions) for US persons as defined in Regulation S". Consequently, shares and units of funds may not be offered, sold, delivered or distributed, directly or indirectly, in the United States or to the United States. Under the US Foreign Account Tax Compliance Act (FATCA), unitholders may be required to provide the Management Company or its agent specific information identifying the "US Person and about their personal identity and places of residence (domicile and tax residence) within the meaning of the FATCA regulation. This information may be sent to the US tax authorities via the French tax authorities. Any breach by the holders of this obligation could result in a 30% lump-sum withholding at source for tax on financial flows originating from the US. Notwithstanding the due diligence performed by the management company in accordance with FATCA, unitholders are requested to ensure that the financial intermediary they used to invest in the UCITS has Participating FFI status. For more information, unitholders should get in contact with a tax advisor. Recommended investment period Greater than 5 years Procedures for determining and allocating amounts distributed The net profit for the year is equal to the amount of interest, arrears, dividends, bonuses and prizes, directors' fees as well as all proceeds relating to the securities comprising the fund's portfolio plus the proceeds from the amounts temporarily available minus the management fees and borrowing costs. Distributable amounts consist of: 1 Net income plus retained earnings and plus or minus the balance of the income adjustment account; 2 Realised capital gains, net of fees, minus realised capital losses, net of fees, recorded during the financial year, plus net capital gains of the same kind recorded in previous financial years not distributed or capitalised and reduced or increased by the balance of the capital gains adjustment account. P, I and S Units: Net income: The mutual fund opted for pure capitalisation. The net result is fully capitalised every year. Frequency of distribution: N/A

7 Net realised capital gains: The mutual fund opted for pure capitalisation. Net realised capital gains are fully capitalised every year. Frequency of distribution: N/A Characteristics of units Units are expressed in ten thousandths and denominated in euros. Original net asset value of the unit P Units: I Units: 100 S Units: 100 Subscription and redemption conditions Subscriptions and redemptions are acceptable in ten thousandths of a unit. Subscription and redemption requests are received daily, centralised with the depository until 4 p.m. and executed based on the next net asset value. The organisation designated to receive subscriptions and redemptions is CREDIT INDUSTRIEL ET COMMERCIAL (CIC) (6, avenue de Provence, Paris). Service OPCVM, telephone: +33 (0) ; fax: +33 (0) The net asset value is calculated each trading day in Paris unless if the French stock exchange (see official calendar for Euronext Paris SA) or the US stock market (see the official calendar for the New York Stock Exchange) is closed or if that day is a holiday in France, within the meaning of Article L of the French Labour Code. This valuation is calculated based on the day s closing prices. The net asset value is available from the management company and the depository the next business day of the calculation date. Net assets or the number of the fund s units are always available to the public on the Tocqueville Finance website and at a telephone number (see page 1 of this memo). Fees and commissions Subscription and redemption commissions Subscription and redemption fees raise the subscription price paid by the investor or lower the redemption price. The fees received by the UCITS are used to offset the costs incurred by the UCITS in investing or divesting the assets it is responsible for. Fees that are not paid to it revert to the management company, marketer, etc. Fees charged to the investor, deducted from subscriptions and redemptions Maximum subscription commission not paid to the UCITS Subscription commission paid to the UCITS Maximum redemption commission not paid to the UCITS Redemption commission paid to the UCITS Base net asset value number of units/shares net asset value number of units/shares net asset value number of units/shares net asset value number of units/shares Fixed-income scale P and S units: 3.50% I Units: None None P and S Units: 1.00% I Units: None None

8 Operating and management fees These fees cover all costs invoiced directly to the UCITS, except for transaction fees. Transaction fees include intermediation fees (brokerage fees, stock market taxes, etc.) and the transaction fee, if any, which may be charged by the depository and the management company. Operating and management fees may be supplemented by: turnover fees invoiced to the UCITS. outperformance commissions. These remunerate the management company if the UCITS has exceeded its objectives. They are therefore invoiced to the UCITS. a portion of the income from the temporary purchase and sale of securities. For more information about fees invoiced to the UCITS, please consult the Key Investor Information Document. Fees invoiced to the UCITS Base Fixed-income 1 Financial management fees Net assets External administrative fees for the management company (CAC, depository, distribution, attorneys) 2 Maximum indirect fees (commissions and management fees) Service providers receiving turnover fees: 3 French stock market - Depository (7%) - Management company (93%) Foreign stock market - Depository (25%) - Management company (75%) Net assets Net assets Deduction for each transaction P Units: % all taxes included Maximum I Units: 1.20% all taxes included Maximum S Units: 1.35 % all taxes included Maximum None None French stock market: 0.36% all taxes included maximum Foreign stock market: 0.60% all taxes included maximum 4 Outperformance fees Net assets None Further details The management company has not entered into any soft commission agreements with brokers or with the depository. For further information, please consult the annual report of the UCITS. Commercial information The repurchase or redemption of units may be requested at any time from the depository. The management company and the depository can provide the net asset value. They can also provide the prospectus, the periodic documents and the annual report.

9 Information on how to take into account in the investment policy, criteria relating to compliance with social, environmental and governance quality objectives, is available on the management company s website as well as in the annual report of the UCITS. Investment rules In accordance with the provisions of Articles R to R of the French Monetary and Financial Code, the asset mix rules provided for in the French Monetary and Financial Code and the risk dispersion rules applicable to this UCITS must be complied with at all times. If these limits are exceeded independently of the management company or following exercising a subscription right, the management company's primary objective will be to rectify this situation as soon as possible, bearing in mind interest of the UCITS unitholders. Overall risk calculation method The overall risk on financial contracts is calculated according to the commitment method. Valuation and accounting rules for assets Revenue accounting The mutual fund accounts for its income using the accrued coupon method. Accounting for portfolio inflows and outflows Accounting for the fund s portfolio inflows and outflows is done exclusive of negotiation fees. Valuation methods At each valuation, the mutual fund s assets are evaluated according to the following principles: For listed equities, bonds and similar securities (French and foreign securities), the valuation is made at the stock market price: The stock market price used depends on the stock exchange listing the security: European stock markets: last price of the trading day. Asian stock markets: last price of the trading day. Australian stock markets: last price of the trading day. North American stock markets: last price of the trading day. South American stock markets: last price of the trading day. If a stock is not listed by approximately 2 p.m., the last stock market price of the previous day is used. For unlisted financial instruments (French and foreign stocks), the valuation is done at fair value

10 These securities are valued using the fair value method. This is the amount at which an asset can be exchanged between well-informed, willing parties in an arm's length transaction. During the period beginning on the date on which an investment was made by the fund and ending no later than 12 months after that date, the fair value is estimated in accordance with the recent investment price method. Pursuant to the price method of a recent investment, the management company uses the cost of the investment itself or the price of a new significant investment made with an independent third party under normal market conditions, except if impairment is apparent. UCITS and/or AIF securities in the portfolio Valuation based on the last known asset value. SPV units Valuation on the last trading day for the SPV listed on the European markets. Temporary purchases of securities Repos delivered for sale: contractual valuation. Paid for at the time of purchase: contractual valuation since redemption of securities by the seller is considered to be sufficiently certain. Securities lending: valuation of securities lent at the stock market price of the underlying value. The UCITS recovers the securities at the end of the loan agreement. Temporary sales of securities Securities delivered under repo agreements: the securities sold under repo agreements are valuated at the market price, the debts representing securities sold under repo agreements are maintained at the price set in the contract. Unlisted securities: valuation using the methods based on asset value and on return, bearing in mind the prices used in recent significant transactions. Negotiable debt securities Negotiable debt securities which, at the time of purchase, have a residual life of less than three months, are valued linearly. Negotiable debt securities purchased with a residual life of more than three months are valuated: At their market value up to 3 months and one day before maturity. The difference between the market value recorded 3 months and 1 day before maturity and the redemption value is linearised over the previous 3 months. Exception: negotiable treasury notes are valuated at the market price until maturity. Market value used: Negotiable treasury notes: actuarial return rate or daily rate published by the Banque de France. Other negotiable debt securities: Securities with a life of between 3 months and 1 year: Negotiable debt securities subject to significant transactions: use of an actuarial method, as the rate of return used is that recorded daily in the market.

11 Other negotiable debt securities: use of a proportional method, the rate of return used is the EURIBOR rate of an equivalent period that may be adjusted by a margin representative of the issuer s intrinsic characteristics. Securities with maturity greater than 1 year: use of an actuarial method. As negotiable debt securities are the subject of significant transactions, the rate of return used is that recorded daily in the market. Other negotiable debt securities: the rate of return used is the rate of negotiable treasury notes with equivalent maturity that may be adjusted by a margin representative of the issuer s intrinsic characteristics. Futures and options transactions Futures contracts: futures contracts are valuated at their market value. The market prices used to value futures contracts are in line with those of the underlying securities. They vary depending on stock market listing the contracts: Futures contracts listed on European stock markets: last price of the trading day. Futures contracts listed on North American stock market: last clearing price of the day. Options: The options in the portfolio are priced: at their market value if listed. at their intrinsic value when no listing can be found. if listed, the market prices used follow the same principle as those governing contracts or securities. Options listed on European stock markets: Options listed on North American stock markets: last price of the trading day. last price of the trading day. Swaps Swaps with a life of less than 3 months are not priced. Swaps with a life of more than 3 months are priced at the market price. When the swap agreement is backed by clearly identified securities (quality and period), these two elements are assessed as a whole. Forward exchange contracts: these are hedges of portfolio securities denominated in a currency other than that of the UCITS s accounts, by borrowing currency in the same currency and for the same amount. Currency futures are priced based on the lender/borrower rate curve of the currency. Off-balance sheet pricing method The commitment ratio on forward financial instruments is calculated using the straight-line method. Futures contracts are calculated at market value. It is equal to the price (or the estimate, if the transaction is carried out over the counter) multiplied by the number of contracts, multiplied by the nominal value. Conditional transactions are calculated at market value, which is the conversion equivalent of the underlying option. This conversion consists of multiplying the number of options by a delta. The delta results from a mathematical model (of the Black-Scholes variety) whose parameters are: the price of the underlying, the term to

12 maturity, the short-term interest rate, the option exercise price and the volatility of the underlying. Dividend swaps against changes in performance are stated at their nominal value plus the pricing difference at the end of the financial year; On the off-balance sheet, back-to-back and non-back-to-back swaps are recorded: For swaps with a life of less than 3 months: at nominal plus or minus the interest differential. For swaps with a life of more than 3 months: Fixed rate vs. variable rate: pricing of the fixed rate leg at market price. Variable rate versus fixed rate: valuation of the variable rate leg at market price. Remuneration policy Tocqueville Finance has set up a remuneration policy to promote sound and effective risk management. In keeping with the interests of unitholders, it does not encourage risk-taking that is inconsistent with the risk profile, regulation and the UCI s governing documents. The remuneration policy has been designed and implemented to constitute an effective lever for attracting, inspiring loyalty and incentivising employees, contributing to the management company s long-term performance, while ensuring compliance with the regulations in force in the financial sector and the convergence of the interests of the identified staff with those of the managed UCI. The remuneration policy provides for a structured remuneration system with a sufficiently high fixed component and a defined variable remuneration for risk-takers to reward long-term value creation. A risktaker is anyone whose professional activities have a significant impact on the risk profile of the mutual fund managed. The Remuneration Committee reviews, at least annually, the principles and changes to the remuneration policy submitted to it. The details of the updated remuneration policy, including a description of how remuneration and benefits are calculated and information on the Remuneration Committee, are available on A hard copy is available free-of-charge upon request from the management company.

13 Management company: Depository: Tocqueville Finance S.A. Crédit industriel et Commercial (CIC) TOCQUEVILLE VALUE AMERIQUE MUTUAL FUND REGULATION ASSETS AND UNITS Article 1 - Co-ownership of units The rights of co-owners are expressed in units, each unit corresponding to the same fraction of the assets of the fund. Each unitholder has a co-ownership right over the assets of the fund proportional to the number of units owned. The term of the fund is 99 years from its creation date except in the event of early dissolution or extension provided for in this regulation. The characteristics of the different unit classes and their conditions of access are set out in the Key Investor Information Document and the fund prospectus. The different categories of units may: - use different income distribution procedures (distribution or capitalisation), - be denominated in different currencies, - incur different management fees, - incur different subscription and redemption fees, - have a different face value. The fund can consolidate or split its units. By decision of the management company s Board of Directors, units may be divided into tenths, hundredths, thousandths or ten-thousandths called fractional units. The provisions of the regulations governing issuing and redeeming units are applicable to fractional units, the value of which will always be proportional to that of the unit they represent. All other provisions of the regulation relating to units apply to fractional units without the need to specify, except where otherwise stipulated. Lastly, the Board of Directors of the management company may unilaterally decide to split units by creating new units to be allocated to the unitholders in exchange for old units. Article 2 - Minimum asset amount Shares cannot be redeemed if the asset value falls below 300,000; in this case, and unless the assets become in the meantime higher than this amount, the management company shall take the necessary steps to merge or dissolve the fund within 30 days.

14 Article 3 - Issuing and redeeming units Units are issued at any time at the unitholder s request based on their net asset value in addition to, as appropriate, subscription fees. Redemptions and subscriptions are carried out under the terms and conditions specified in the prospectus. Mutual fund units may be listed depending on the regulations in force. Subscriptions must be fully paid on the day of the net asset value calculation. They may be made in cash and/or through contribution of transferable securities. The management company is entitled to refuse the securities offered and, for this purpose, has a period of seven days from their filing to inform of its decision. If accepted, the securities contributed are priced in accordance with the rules set out in Article 4 and the subscription is made based on the first net asset value following the acceptance of the securities in question. Redemptions are made exclusively in cash, except in the event of liquidation of the fund when unitholders have agreed to be repaid in securities. They are settled by the depository within a maximum of five days following that of the valuation of the unit. Under exceptional circumstances, however, 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 the case of an inheritance or an inter vivos gift, the sale or transfer of units between unitholders or from unitholders to a third party is treated as a redemption followed by a subscription; in the case of a third party, the amount of the transfer or transfer must, where applicable, be completed by the beneficiary for at least the amount of the minimum subscription required by the prospectus. Pursuant to Article L of the French Monetary and Financial Code, the fund's redemption of its units, as well as the issue of new units, may be provisionally suspended by the management company, when exceptional circumstances require it and if the interest of unitholders so requires. When the fund's net assets are less than the amount set by the regulations, no redemption of the units can be made. The minimum subscription conditions are specified in accordance with the procedures stipulated in the prospectus. Article 4 - Calculation of the net asset value The calculation of the net asset value of the unit is made taking into consideration the valuation rules specified below. Securities traded on a French or foreign regulated market are valuated at the market price. The valuation at the reference market price is carried out according to the terms and conditions determined by the management company. These implementation procedures are specified in the notes to the annual accounts. However: Securities whose price has not been recorded on the valuation date or whose price has been corrected are priced at their probable trading value, which the management company is responsible for. These valuations and their justification are communicated to the auditor at the time of the audit.

15 Negotiable debt securities and similar instruments that are not the subject of significant transactions are priced by using the actuarial method, the rate used being that of issues of equivalent securities allocated, if applicable, by a representative difference of the intrinsic characteristics of the security issuer. However, negotiable debt securities with a residual life lower than or equal to 3 months, and if there is no particular sensitivity, may be priced using the straight-line method. The management company determines the procedures for applying these rules. And they are mentioned in the notes to the annual accounts. UCITS units or shares are priced at the last known net asset value. The management company is responsible for valuating securities not traded on a regulated market at their probable trading value. Securities that are the subject of temporary sale or purchase contracts are valued in accordance with the regulations in force, the application procedures being determined by the management company and specified in the notes to the annual accounts. Transactions involving futures or options instruments traded on organised French or foreign markets are valuated at market value in accordance with the terms and conditions established by the management company. They are specified in the notes to the annual accounts. Futures or options transactions or swaps entered into in over-the-counter markets, authorised by the regulations applicable to UCITS, are valuated at their market value or at a value estimated according to the terms and conditions determined by the management company and specified in the notes to the annual accounts. FUND OPERATION Article 5 - The management company The fund is managed by the management company in accordance with the guidelines defined for the fund. The management company acts in all circumstances on behalf of the unitholders and can only exercise the voting rights attached to the securities included in the fund. Article 5 bis - Operating rules The instruments and deposits eligible as UCITS assets and the investment rules are described in the prospectus. Article 6 - The depository The depository carries out the tasks incumbent upon it pursuant to the laws and regulations in force as well as those contractually assigned to it by the management company. It must in particular ensure the legality of the asset management company s decisions. It must also, if necessary, take any precautionary measures that it deems useful. Should a dispute arise with the management company, it must inform the Autorité des Marchés Financiers (AMF) about this. Article 7 - The statutory auditor Subject to approval by the Autorité des Marchés Financiers, the Board of Directors of the management company appoints a statutory auditor for six financial years. It carries out the checks and controls stipulated by law and, in particular, it certifies, whenever necessary, that the accounts and accounting information contained in the management report are true and fair and comply with the legal requirements.

16 Its appointment can be renewed. It informs the Autorité des Marchés Financiers and the management company of the fund about any irregularities and inaccuracies which it has discovered in the course of its mandate. Asset valuations and determining exchange ratios in the transformation, merger or demerger transactions are performed under the auditor s supervision. It assesses any contribution in kind and is responsible for preparing a report on its assessment and remuneration. It certifies the accuracy of the asset mix and other elements prior to publication. The statutory auditor's fees are set by mutual agreement between the said auditor and the board of directors of the management company based on a work schedule specifying the duties that are considered to be necessary. In the event of liquidation, it will valuate the total assets and prepare a report on the conditions of such liquidation. The statutory auditor certifies the financial statements that justify the distribution of interim dividends. Its fees are included in the management costs. Article 8 - The accounts and management report At the end of each financial year, the management company prepares an inventory of the various assets and liabilities, the income statement, the schedule and the financial situation of the fund, and draws up a report on the management of the fund over the past financial year. The inventory is certified by the depository and all the above documents are checked by the statutory auditor. The management company keeps these documents at the disposal of the unitholders within four months following end of the financial year and informs them of the amount of income to which they are entitled: these documents are either sent by mail at the express request of the unitholders or are made available to them at the management company. PROCEDURES FOR ALLOCATING INCOME Article 9 Procedures for allocation distributable amounts Distributable amounts consist of: 1 Net income plus retained earnings and plus or minus the balance of the income adjustment account; 2 Realised capital gains, net of fees, minus realised capital losses, net of fees, recorded during the financial year, plus net capital gains of the same kind recorded in previous financial years not distributed or capitalised and reduced or increased by the balance of the capital gains adjustment account. The amounts referred to in 1 and 2 may be distributed, in whole or in part, independently of one another. Payment of the distributable amounts is made within a maximum period of five months following the end of the financial year. The fund s net income for the year is equal to the amount of interest, arrears, dividends, bonuses and prizes, directors' fees as well as all proceeds relating to the securities comprising the fund portfolio plus the proceeds from the amounts temporarily available minus the management fees and borrowing costs. The management company decides on the allocation of distributable amounts. For each unit class, if applicable, the prospectus stipulates that the fund will use one of the following formulas for each of the amounts mentioned in 1 and 2 above: The fund opted for pure capitalisation. As such, net income /net realised gains is/are fully capitalised every year except for those that are subject to mandatory distribution under the law.

17 The fund opted for pure distribution. As such, the fund fully distributes its net income net gains realised every year, after rounding them off, within five months following the closing of the annual accounts. During the financial year, the management company may decide to distribute one or more interim payments within the limit of either the net revenue recognised, or the net capital gains realised on the date of the decision. The fund reserves the right to capitalise and/or distribute in whole or in part its net income/net realised gains and/or to carry forward the distributable amounts. The management company decides each year on the allocation of net income/net realised capital gains. In the case of a partial or total distribution, the management company may decide to distribute one or more interim payments up to the limit of either the net revenue recognised, or the net capital gains realised on the decision date. MERGER- DEMERGER- DISSOLUTION - LIQUIDATION Article 10 - Merger Demerger The management company may either contribute, in whole or in part, the assets included in the fund to another UCITS it manages or split the fund into two or more other mutual funds that it will manage. These merger or demerger transactions can only be completed one month after the unitholders have been notified. A new certificate will be delivered for them specifying the number of units held by each unitholder. Article 11 - Dissolution Extension If the fund s assets remain lower than the amount set in Article 2 above for 30 days, the management company shall inform the AMF about this and, unless it is merged with another mutual fund, shall dissolve the fund. The management company may dissolve the fund early if it informs the unitholders of its decision, and from that date subscription or redemption requests are no longer accepted. The management company can also dissolve the fund if a request is made to redeem all of its units, terminating of the depository's duties, when no other depository has been appointed, or at the expiry of the fund if it is not extended. The management company shall inform the Autorité des Marchés Financiers by mail of the date and the dissolution procedure selected. Thereafter, it is to send the Autorité des Marchés Financiers the Statutory Auditor s report. The management company may decide to extend the fund with the depository s agreement. Its decision must be taken at least 3 months before the expiry of the term of the fund and communicated to the unitholders and the Autorité des Marchés Financiers. Article 12 Liquidation In the event of dissolution, the management company or the liquidator appointed by it shall assume the duties of liquidator; otherwise, the liquidator shall be court-appointed at the request of any interested person. To this end, it has the broadest powers to realise the assets, pay any creditors and distribute the available balance between the unitholders in cash or securities. The auditor and the depository shall continue to perform their duties until the end of the liquidation. DISPUTES Article 13 - Jurisdiction - Address for service

18 Any disputes relating to the fund that may arise during the duration of its operation, or during its liquidation, either between the unitholders, or between unitholders and the management company or the depositary, are subject to the jurisdiction of the competent courts.