SUPPLEMENT 4 DATED 27 April 2017 to the Prospectus issued for LGIM Liquidity Funds plc. LGIM Euro Liquidity Fund

Transcription

1 SUPPLEMENT 4 DATED 27 April 2017 to the Prospectus issued for LGIM Liquidity Funds plc LGIM Euro Liquidity Fund This Supplement contains information relating specifically to the LGIM Euro Liquidity Fund (the "Euro Liquidity Fund"), a sub-fund of LGIM Liquidity Funds plc (the "Company"), an openended umbrella fund with segregated liability between sub-funds authorised by the Central Bank on 18 th December, 2007 as a UCITS pursuant to the UCITS Regulations. The Euro Liquidity Fund is a Short-Term Money Market Fund. The Company currently has the following other sub-funds; LGIM Sterling Liquidity Fund, LGIM US Dollar Liquidity Fund and LGIM Sterling Liquidity Plus Fund. The Euro Liquidity Fund is classified by the Directors as a Stable NAV Fund. This Supplement forms part of and should be read in the context of and in conjunction with the Prospectus for the Company dated 15 March 2017 (the "Prospectus") which immediately precedes this Supplement and is incorporated herein. The Directors of the Company whose names appear in the Prospectus under the heading "Management and Administration" accept responsibility for the information contained in this Supplement and the Prospectus. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Supplement and in the Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The Directors accept responsibility accordingly. The Directors have not had any unspent convictions in relation to indictable offences; or been a director of any company or partnership which, while he was a director with an executive function or partner at the time of or within the 12 months preceding such events, been declared bankrupt, went into receivership, liquidation, administration or voluntary arrangements; or been subject to any official public incrimination or sanctions by statutory or regulatory authorities (including designated professional bodies); or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of affairs of any company. Application has been made to the Irish Stock Exchange Plc for Class 1, Class 3 and Class 4 Shares to be issued by the Company in relation to the Euro Liquidity Fund to be admitted to the Official List and to trading on the Main Securities Market of the Irish Stock Exchange. Class 1, Class 3 and Class 4 Shares are eligible for electronic settlement. The Directors do not expect that an active secondary market will develop in the Shares. This Supplement together with the Prospectus constitutes Listing Particulars for the purpose of Listing on the Irish Stock Exchange plc and includes all information required to be disclosed under the code of listing requirements and procedures of the ISE for the listing of investment funds. All references in the Prospectus to the Irish Stock Exchange Limited should be read as the Irish Stock Exchange plc. In addition to those listing disclosures in the Prospectus the Directors have not been subject to any official public incrimination or sanctions by statutory or regulatory authorities (including designated professional bodies). No present Director or any person closely associated has any options in respect of the share capital of the Company. 1

2 Investors should read and consider the section of the Prospectus entitled Risk Factors before investing in the Euro Liquidity Fund. The Euro Liquidity Fund may invest substantially in money market instruments and deposits with credit institutions. Investors attention is drawn to the fact that Shares in the Euro Liquidity Fund are not the same as deposits or obligations which are guaranteed or endorsed by any bank and accordingly, the amount invested in the Euro Liquidity Fund may fluctuate up or down. 1. Interpretation The expressions below shall have the following meanings: "Business Day" means any day (except Saturday or Sunday) on which banks in London are generally open for business, or such other day or days as may be determined by the Directors and notified to Shareholders through an announcement to the Irish Stock Exchange or otherwise. CBI UCITS Regulations Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 as may be amended or replaced from time to time. "Dealing Day" means each Business Day or such other day or days as may be determined by the Directors and notified to Shareholders in advance through an announcement to the Irish Stock Exchange or otherwise provided that there shall be at least one Dealing Day per fortnight. "Dealing Deadline" other means 1.00p.m. Irish time on any Dealing Day or such time as the Directors may determine and notify to Shareholders through an announcement to the Irish Stock Exchange or otherwise provided always that the Dealing Deadline is no later than the Valuation Point. Initial Offer Period means the period determined by the Directors during which Shares in each unlaunched Class are offered for subscription at the Initial Offer Price which will commence at 9.00 a.m. (Dublin time) on the first Business Day subsequent to the date of this Supplement and will close at 5.00 p.m. (Dublin time) on 26 October,

3 "Initial Price" means Investment Manager means Legal & General Investment Management Limited, a limited liability company incorporated in England on the 21 st of January, 1987 under registration number , whose ultimate holding company is Legal & General Group Plc, authorised and regulated by the Financial Conduct Authority to carry out investment management and to whom the Company has delegated discretionary investment management of the Euro Liquidity Fund under an Investment Management and Distribution Agreement dated 5 April 2011 as amended from time to time made between the Company and the Investment Manager. The summary of Investment Management and Distribution Agreement in the section in the Prospectus headed material contracts summarises the terms of the Investment Management and Distribution Agreement under which the Investment Manager has been appointed. "Valuation Point" means 2.00p.m. Irish time on the Dealing Day. All other defined terms used in this Supplement shall have the same meaning as in the Prospectus. 2. Base Currency The Base Currency shall be Euro. The Net Asset Value per Share will be published and settlement and dealing will be effected in Euro. 3. Investment Objective The principal investment objective of the Euro Liquidity Fund is to maintain the principal of the Fund and to provide a return in line with money market rates by providing capital stability, liquidity and income through investment in a diversified portfolio of high credit quality short term fixed income and variable rate securities including but not limited to certificates of deposit, fixed and floating rate notes, fixed rate commercial paper and bonds listed or traded on one or more Recognised Exchanges. In addition, the Euro Liquidity Fund will seek to obtain and maintain a triple-a rating from at least one internationally recognised rating agency (for example, AAAm by Standard & Poor s). 4. Investment Policy The Euro Liquidity Fund will invest in transferable money market instruments which include short term debt securities and notes (including for example, certificates of deposit, commercial 3

4 paper, treasury bills, floating and variable rate notes, eurobonds, government bonds, supranational bonds etc.) issued or guaranteed by banks or other corporations or OECD Governments or their agencies or associated entities, or debt securities which have been established by or sponsored by such governments, agencies or entities. Any investment by the Sub-Fund in listed or traded securities shall be restricted to those securities listed or traded on the exchanges and markets detailed in the Prospectus in the section entitled Recognised Exchanges. The Euro Liquidity Fund may invest substantially in deposits with credit institutions. Investment Process The Euro Liquidity Fund will invest in transferable securities or instruments which have a residual maturity until the legal redemption date of not more than 397 days and have been awarded one of the two highest available short-term credit ratings by each recognised credit rating agency that has rated the security or instrument. The Euro Liquidity Fund may only invest in Euro-denominated instruments that mature in 397 days or fewer from the date of purchase. The weighted average maturity of the Euro Liquidity Fund may not exceed 60 days. In addition, the weighted average life of the Euro Liquidity Fund must not exceed 120 days. The Euro Liquidity Fund will invest only in high-quality securities listed or traded on Recognised Exchanges that the Investment Manager believes present minimal credit risk. The Euro Liquidity Fund may invest in variable or floating rate securities which bear interest at rates subject to periodic adjustment or provide for periodic recovery of principal on demand. Under certain conditions, these variable or floating rate securities may be deemed to have remaining maturities equal to the time remaining until the next interest adjustment date or the date on which principal may be recovered on demand, while at all times ensuring that the maturity limits set out above are complied with. The Euro Liquidity Fund attempts to maintain a stable net asset value of 1.00 per share, although there is no assurance that it will be successful in doing so. The Euro Liquidity Fund shall not invest in below investment grade securities. Repurchase and Reverse Repurchase Agreements Subject to and in accordance with the conditions and limits set out in the UCITS Regulations and the CBI UCITS Regulations, the Euro Liquidity Fund may enter into repurchase and reverse repurchase agreements and when issued and/or delayed delivery securities for efficient portfolio management purposes. Shareholders attention is directed to the section of the Prospectus titled The Company; Repurchase/Reverse Repurchase and Stocklending Agreements. The assets underlying any repurchase/reverse repurchase agreement shall be consistent with the types of assets the Euro Liquidity Fund may invest in and shall not result in a change to the Investment Objective outlined herein. 4

5 Up to 100% of the Euro Liquidity Fund s net assets may be utilised for repurchase/reverse repurchase agreements, however, the Investment Manager does not expect that the Euro Liquidity Fund s exposure to such instruments will exceed 20% of the Euro Liquidity Fund s Net Asset Value. The collateral supporting repurchase/reverse repurchase agreements will consist of high quality money market instruments and will be valued daily at mark-to-market prices and daily variation margin will be used if the value of collateral falls below coverage requirements (due to market movements). Financial Derivative Instruments The Euro Liquidity Fund does not currently use financial derivative instruments. Counterparty Selection Process The counterparty to any repurchase/reverse repurchase agreement entered into by the Euro Liquidity Fund shall be an entity which is subject to an appropriate internal credit assessment carried out by the Investment Manager, which shall include amongst other considerations, external credit ratings of the counterparty, the regulatory supervision applied to the relevant counterparty, country of origin of the counterparty, legal status of the counterparty, industry sector risk and concentration risk ( Internal Credit Assessment ). Any such counterparty to any repurchase/reverse repurchase agreement entered into by the Euro Liquidity Fund must be a credit institution or corporate entity based in the OECD with a minimum credit rating of at least A2. Where such counterparty (a) was subject to a credit rating by an agency registered and supervised by ESMA that rating shall be taken into account by the Company in the credit assessment process; and (b) where a counterparty is downgraded to A-2 or below (or comparable rating) by the credit rating agency referred to in subparagraph (a) this shall result in a new credit assessment being conducted of the counterparty by the Investment Manager on behalf of the Company without delay. Further information relating to the risks associated with investment in repurchase/reverse repurchase agreements is disclosed in the Risk Factors section of the Prospectus. Details of the Collateral management policy adopted by the Euro Liquidity Fund are set out in the section of the Prospectus titled The Company - Collateral Management. Any collateral received by the Euro Liquidity Fund shall comply with the conditions for collateral received by a UCITS set out in the CBI UCITS Regulations, particularly with regard to asset types, issuers, maturity, liquidity and diversification. Investment Restrictions The general investment restrictions are set out in Section 1 and Appendix I of the Prospectus. 5

6 Asset Valuation Investor s attention is drawn to the section of the Prospectus headed Net Asset Value and Valuation of Assets. The Directors have resolved to operate a policy of smoothing in relation to the Euro Liquidity Fund and as such any cumulative net realised capital gains or losses arising within the Euro Liquidity Fund may be spread across the daily yield calculations within such value and time limits as agreed between the Directors and the Investment Manager where this is considered to be in the best interests of Shareholders. 5. Profile of a Typical Investor The Euro Liquidity Fund may be suitable for investors seeking a lower than average risk with returns slightly higher than cash. This investment is more suitable for medium to long-term investors. 6. Share Classes Shares shall be issued to investors as Shares of a Class in this Fund. The Directors may from time to time, create more than one Class of Shares in this Fund in accordance with the requirements of the Central Bank. The Directors may in their absolute discretion differentiate between Classes of Shares as to currency of denomination of a particular Class, dividend policy, hedging strategies if any applied to the designated currency of a particular Class, fees and expenses or the Minimum Subscription applicable. The Classes available in this Sub-Fund and their respective designated currency and Minimum Subscription are as follows: Share Class Designated Currency Minimum Subscription* Class 1 ** Euro 0 Class 3 Euro 10,000,000 Class 4 Euro 20,000,000 *The Directors reserve their right to differentiate between Shareholders and to waive or reduce the Minimum Subscription for certain investors, provided that Shareholders in the same position in the same Class shall be treated equally and fairly. **Shares in this Class are only available to investors who have entered into an agreement with the Investment Manager or an affiliate of the Investment Manager 7. Initial Offer Shares in all Classes will initially be offered for subscription during the Initial Offer Period at the Initial Offer Price and, subject to acceptance of applications for Shares by the Company, will be issued for the first time on the first Business Day after expiry of the Initial Offer Period. 6

7 The Initial Offer Period in respect of any unlaunched Classes may be shortened or extended by the Directors. The Central Bank will be notified in advance of any such shortening or extension if subscriptions for Shares have been received and otherwise on an annual basis. Subsequent Offer After the initial offer of Shares, Shares in the Fund will be issued at the Net Asset Value per Share. 8. Application for Shares Applications for Shares may be made through the Administrator on behalf of the Company. Applications accepted by the Administrator on behalf of the Company prior to the Dealing Deadline for any Dealing Day will be processed on that Dealing Day. Any applications received after the Dealing Deadline for a particular Dealing Day will be processed on the following Dealing Day unless the Directors in their absolute discretion and in exceptional circumstances only otherwise determine to accept one or more applications received after the Dealing Deadline for processing on that Dealing Day provided that such application(s) have been received prior to the Valuation Point for the particular Dealing Day. Initial applications should be made using an Application Form obtained from the Administrator but may, if the Company so determines, be made by telefax or electronically, in accordance with the requirements of the Central Bank, subject to prompt transmission to the Administrator of the original signed application form and such other papers (such as documentation relating to money laundering prevention checks) as may be required by the Directors or their delegate. Subsequent applications to purchase Shares following the initial subscription may be made to the Administrator by telefax or telephone or electronically or such other means in accordance with the requirements of the Central Bank and as may be permitted by the Directors (in consultation with the Administrator), subject to a requirement to promptly submit any original documentation that may be requested from time to time, and such applications should contain such information as may be specified from time to time by the Directors or their delegate. Amendments to a Shareholder s registration details and payment instructions will only be made following receipt of original written instructions from the relevant Shareholder. Fractions Subscription monies representing less than the subscription price for a Share will not be returned to the investor. Fractions of Shares will be issued where any part of the subscription monies for Shares represents less than the subscription price for one Share, provided however, that fractions shall not be less than 0.01 of a Share. 7

8 Subscription monies, representing less than 0.01 of a Share will not be returned to the investor but will be retained by the Company in order to defray administration costs. Method of Payment Subscription payments net of all bank charges should be paid by CHAPS, SWIFT or telegraphic or electronic transfer to the bank account specified in the Application Form. Other methods of payment are subject to the prior approval of the Company (in consultation with the Administrator). No interest will be paid in respect of payments received in circumstances where the application is held over until a subsequent Dealing Day. Currency of Payment Subscription monies are payable in Euro. Timing of Payment Payment in respect of subscriptions should be received no later than close of business on the relevant Dealing Day and the Company reserves the right to defer the issue of Shares until receipt of cleared subscription monies by the Company. If payment in cleared funds in respect of a subscription has not been received by the relevant time, the Company or its delegate may (and in the event of non-clearance of funds, shall) cancel the allotment and/or charge the investor interest at a reasonable rate. The Company may waive either of such charges in whole or in part, provided that Shareholders in the same position in the same Class shall be treated equally and fairly. In addition, the Company has the right to sell all or part of the investor's holding of Shares in the Euro Liquidity Fund or any other Fund of the Company in order to meet such charges. This is in addition to the Company s rights under the heading Application for Shares in the Prospectus. Operation of Umbrella Cash Accounts in the name of the Company Subscription monies received from an investor in advance of a Dealing Day in respect of which an application for Shares has been, or is expected to be, received will be held in a cash account in the name of the Company and will be treated as an asset of the Euro Liquidity Fund upon receipt and will not benefit from the application of any investor money protection rules (i.e. the subscription monies in such circumstance will not be held on trust as investor monies for the relevant investor). In such circumstance, the investor will be an unsecured creditor of the Euro Liquidity Fund with respect to the amount subscribed and held by the Company until such Shares are issued as of the relevant Dealing Day. In the event of an insolvency of the Euro Liquidity Fund or the Company, there is no guarantee that the Euro Liquidity Fund or the Company will have sufficient funds to pay unsecured creditors in full. Investors who have forwarded subscription monies in advance of a Dealing Day as detailed above and which are held in an Umbrella Cash Account will rank equally with all other unsecured creditors of the Euro Liquidity Fund and will be entitled to a 8

9 pro-rata share of monies which are made available to all unsecured creditors by the insolvency practitioner. Therefore in such circumstances, the investor may not recover all monies originally paid into an Umbrella Cash Account in relation to the application for Shares. Your attention is drawn to the section of the Prospectus entitled Risk Factors Operation of Umbrella Cash Accounts. Confirmation of Ownership Confirmation of each purchase of Shares will be sent to Shareholders within 48 hours of the purchase being made. Title to Shares will be evidenced by the entering of the investor s name on the Company s register of Shareholders and no certificates will be issued. 9. Redemption of Shares Requests for the redemption of Shares should be made to the Company care of the Administrator whose details are set out in the Application Form, in writing, by facsimile, telephone, electronically or such other means in accordance with the requirements of the Central Bank and as may be permitted by the Directors (in consultation with the Administrator) and should include such information as may be specified from time to time by the Directors or their delegate. Redemption orders will only be paid to the account of record. Requests for redemption received prior to the Dealing Deadline for any Dealing Day will be processed on that Dealing Day. Any requests for redemption received after the Dealing Deadline for a Dealing Day will be processed on the next Dealing Day unless the Company in its absolute discretion and in exceptional circumstances determines otherwise and provided that such request has been received prior to the Valuation Point for the particular Dealing Day. Redemption requests will only be accepted for processing where cleared funds and completed documents including documentation relating to money laundering prevention checks are in place from original subscriptions. No redemption payment will be made from an investor holding until the original subscription application form and all documentation required by or on behalf of the Company (including any documents in connection with anti-money laundering procedures) have been received from the investor and the anti-money laundering procedures have been completed. In such circumstances, the Administrator will process any redemption request received by a Shareholder, however the proceeds of that redemption shall remain an asset of the Euro Liquidity Fund and the Shareholder will rank as a general creditor of the Company until such time as the Administrator is satisfied that its anti-money laundering and anti-fraud procedures have been fully complied with, following which redemption proceeds will be released. The redemption price per Share shall be the Net Asset Value per Share less any applicable duties or charges and any redemption fee. Please see the section below entitled Fees and Expenses; Redemption Fee for further information in this regard. 9

10 Method of Payment Redemption payments will be made to the bank account detailed on the Application Form or as subsequently notified to the Administrator (in original form). Redemption payments will only be made to the account of record of a Shareholder and not to third party accounts. Currency of Payment Shareholders will be repaid in Euro. If, however, a Shareholder requests to be repaid in any other freely convertible currency, the necessary foreign exchange transaction may be arranged by the Administrator (at its discretion) on behalf of and for the account, risk and expense of the Shareholder. Timing of Payment Redemption proceeds in respect of Shares will usually be paid on the same Dealing Day (and in any event within 10 business days of the relevant Dealing Day) after receipt by the Administrator of all of the required documentation, provided that such documentation is received by the Administrator prior to the Dealing Deadline on that Dealing Day. Any failure to supply the Company or the Administrator with any documentation requested by them for anti-money laundering or anti-fraud purposes may result in a delay in the settlement of redemption proceeds. In such circumstances, the Administrator will process any redemption request received by a Shareholder, however the proceeds of that redemption shall remain an asset of the Euro Liquidity Fund and the Shareholder will rank as a general creditor of the Company until such time as the Administrator is satisfied that its anti-moneylaundering and anti-fraud procedures have been fully complied with, following which redemption proceeds will be released. Operation of Umbrella Cash Accounts in the name of the Company Redemption monies payable to an investor subsequent to a Dealing Day of the Euro Liquidity Fund as of which Shares of that investor were redeemed (and consequently the investor is no longer a Shareholder of the Euro Liquidity Fund as of the relevant Dealing Day) will be held in a cash account in the name of the Company (herein defined as an Umbrella Cash Account) and will be treated as an asset of the Euro Liquidity Fund until paid to that investor and will not benefit from the application of any investor money protection rules (i.e. the redemption monies in such circumstance will not be held on trust for the relevant investor). In such circumstance, the investor will be an unsecured creditor of the Euro Liquidity Fund with respect to the redemption amount held by the Company until paid to the investor. In the event of an insolvency of the Euro Liquidity Fund or the Company, there is no guarantee that the Euro Liquidity Fund or the Company will have sufficient funds to pay unsecured creditors in full. Investors due redemption monies which are held in an Umbrella Cash Account will rank equally with all other unsecured creditors of the Euro Liquidity Fund 10

11 and will be entitled to a pro-rata share of monies which are made available to all unsecured creditors by the insolvency practitioner. Therefore in such circumstances, the investor may not recover all monies originally paid into an Umbrella Cash Account for onward transmission to that investor. Your attention is drawn to the section of the Prospectus entitled Risk Factors Operation of Umbrella Cash Accounts above. Withdrawal of Redemption Requests Requests for redemption may not be withdrawn save with the written consent of the Company or its authorised agent or in the event of suspension of calculation of the Net Asset Value of the Euro Liquidity Fund. Compulsory/Total Redemption Shares of the Euro Liquidity Fund may be compulsorily redeemed and all the Shares may be redeemed in the circumstances described in the Prospectus under the sub-headings Compulsory Redemption of Shares and Total Redemption of Shares. Automatic Redemption- Stable NAV Funds Shares in the Euro Liquidity Fund may be subject to automatic redemptions, at the discretion of the Directors, in circumstances where there is a Net Negative Yield in the Euro Liquidity Fund. Any such automatic redemption will be undertaken in line with the procedure specified in the Prospectus under the sub-heading Automatic Redemptions- Stable NAV Funds. 10. Conversion of Shares Subject to the Minimum Subscription requirements of the relevant Fund or Classes, Shareholders may request conversion of some or all of their Shares in one Fund or Class to Shares in another Fund or Class or another Class in the same Fund in accordance with the procedures specified in the Prospectus under the heading Conversion of Shares. 11. Suspension of Dealing Shares may not be issued, redeemed or converted during any period when the calculation of the Net Asset Value of the Euro Liquidity Fund is suspended in the manner described in the Prospectus under the heading Suspension of Valuation of Assets. Applicants for Shares and Shareholders requesting redemption and/or conversion of Shares will be notified of such suspension and, unless withdrawn, applications for Shares will be considered and requests for redemption and/or conversion will be processed as at the next Dealing Day following the ending of such suspension. 11

12 12. Fees and Expenses Subject to the second paragraph below, the Euro Liquidity Fund shall bear (a) the fees and expenses relating to the establishment of the Euro Liquidity Fund which are not expected to exceed 50,000 and which may be amortised over the first five Accounting Periods of the Euro Liquidity Fund or such other period as the Directors may determine and in such manner as the Directors in their absolute discretion deem fair; and (b) its attributable portion of the fees and operating expenses of the Company. The fees and operating expenses of the Company are set out in detail under the heading "Fees and Expenses" in the Prospectus. The establishment expenses and operating expenses referred to above will typically be borne by the Euro Liquidity Fund unless the Investment Manager and the Directors agree the Investment Manager will discharge such fees and expenses (excluding any taxes) from time to time. Investment Manager s fee The Investment Manager is entitled to charge a percentage fee per annum of the Net Asset Value of the Euro Liquidity Fund (before deduction of fees, expenses, borrowings and interest) in respect of each of the share classes as set out below: Class of Shares Annual Charge* Class 1 Up to 0.10% Class % Class % *The above chart outlines the current Annual Charge for each Class. The Investment Manager is entitled to increase the Annual Charge up to a maximum of 1 per cent per annum of the Net Asset Value of the Euro Liquidity Fund in respect of each Class. Shareholders in the relevant Class will be notified in writing in advance of any proposed increase of such fees up to such maximum. Shareholders in the relevant Class will be given one months notice to redeem their shares prior to the implementation of an increased fee. The Investment Manager shall be responsible for discharging from its fee the fees payable to the Depositary, any sub-custodian (which shall be at normal commercial rates together with value added tax, if any, thereon), the Administrator and the Distributor. The fee payable to the Investment Manager shall accrue daily and be calculated monthly in arrears and will be calculated as of the Net Asset Value of the Euro Liquidity Fund on the relevant Dealing Day and shall be payable monthly in arrears. The Investment Manager may differentiate between the Shareholders of the Euro Liquidity Fund by waiving or reducing the annual management fees charged to certain Shareholders. Any such waiver shall be effected by way of a rebate to the relevant Shareholder s account. 12

13 Redemption Fee It is not the current intention of the Directors to charge a redemption fee. However, the Directors are empowered to charge a redemption fee of up to 2% of the Net Asset Value per Share and may exercise their discretion in this respect if they have reason to believe that any Shareholder requesting redemption is attempting any form of arbitrage on the yield of Shares in the Euro Liquidity Fund. The Directors will give not less than one month's notice to Shareholders of their intention to introduce a redemption fee generally. The Directors may differentiate between Shareholders of the Euro Liquidity Fund by waiving or reducing the redemption fee chargeable to certain Shareholders. Conversion Fee It is not the current intention of the Directors to charge a conversion fee. However, the Directors are empowered to charge a conversion fee of up to 2% of the Net Asset Value per Share to be issued in the Fund into which conversion has been requested and may exercise their discretion in this respect on the giving of one month s notice to Shareholders. 13. Dividends and Distributions Fund with Stable Value and Daily Distributions In order to stabilise the Net Asset Value per Share of 1.00, dividends will be declared out of the net income of the Euro Liquidity Fund on each Dealing Day in proportion to the number of Shares held by Shareholders in the Euro Liquidity Fund. However, there is no guarantee that the Company will achieve stabilisation of the Net Asset Value. Income for dividend purposes will normally consist of all of the Euro Liquidity Fund s net investment income and net realised and unrealised gains (i.e. realised and unrealised gains net of all realised and unrealised losses) subject to certain adjustments. Net income earned on days which are not Business Days will be declared as dividends on the immediately succeeding Business Day. No interest will be paid on accrued but unpaid dividends. Shares begin to accrue dividends on the Dealing Day on which they are purchased and continue to accrue dividends until the Dealing Day immediately preceding the Dealing Day on which the relevant Shares are redeemed. Investors whose subscription monies are not received in cleared funds on the relevant Dealing Day by the Administrator by the time specified in the Application Form may, at the Directors or their delegates discretion, not be entitled to receive or accrue dividends for that Dealing Day and dividends may accrue from the next Dealing Day. Dividends will be declared daily and payable monthly in the form of additional Shares or, at the option of Shareholders at the time of application for/acquisition of Shares, in cash on the first Business Day of each calendar month in respect of dividends accrued in the immediately preceding calendar month. Shareholders who choose to have their dividends paid in cash must do so in respect of the entire shareholding and must notify the Company at the time of 13

14 the original subscription. A Shareholder who elects to receive dividends in cash will be deemed to have made a similar election in respect of any further Shares acquired by the Shareholder in the Company until the Shareholder formally revokes the election by notice in writing to the Administrator, which notice must be received 10 Business Days before the applicable dividend payment date Dividends will be declared to 9 decimal places. If a Shareholder redeems all of his Shares in the Euro Liquidity Fund at any time during a calendar month, all dividends declared up to but not including the Dealing Day on which redemption is effected will be paid to the Shareholder in cash with the redemption proceeds. Dividends which are not claimed or collected within six years of payment shall revert to and form part of the assets of the Euro Liquidity Fund. No entitlement to dividends will accrue in circumstances where the Net Negative Yield (i.e. the yield net of all costs and expenses) attributable to any Class in the Euro Liquidity Fund is negative. Please see the section titled Automatic Redemptions - Stable NAV Funds for further information in this regard. The Directors may at any time determine to change the policy of the Euro Liquidity Fund with respect to distribution. If the Directors so determine full details of any such change will be disclosed in an updated prospectus or supplement and all shareholders will be notified in advance of such change becoming effective. 14. Risk Factors The attention of investors is drawn to the Risk Factors section of the Prospectus. In addition to the risks outlined in the Prospectus, investors should bear in mind the following additional risk factors applicable to the Euro Liquidity Fund; Money market type fund risk An investment in the Euro Liquidity Fund is neither insured nor guaranteed by the any government, government agencies or instrumentalities or any bank guarantee fund. Although the Company seeks to maintain a Net Asset Value per Share of 1.00 in the Euro Liquidity Fund, maintenance of a stable Net Asset Value is not guaranteed. An investment in the Euro Liquidity Fund involves certain investment risks, including the possible loss of principal. Changes to Net Asset Value Although the Directors will seek to stabilise the Net Asset Value per Share at the Initial Price, there can be no assurance that the Euro Liquidity Fund will be able to achieve this objective. The price of Shares as well as the income therefrom may go down as well as up to reflect changes in the Net Asset Value. 14