NORDEA PENSION FUND EQUITY 100 NORDEA PENSION FUND INTEREST PLUS

Transcription

1 NORDEA PENSION FUND EQUITY 100 NORDEA PENSION FUND INTEREST PLUS Prospectus

2 Table of Contents General Information... 3 About the Funds... 4 The Basis of Activities... 4 Investment Objectives... 4 Description of Typical Investor... 5 Investment Policy... 5 Performance in Previous Periods... 8 Investment Risks... 9 Unit and NAV per Unit Rights and Obligations attached to Units NAV Fees and Expenses Transactions with Units Issue and Redemption Price of a Unit Purchase of Units Exchange of Units Sale of Units Succession of Units Taxation Information about the Funds Publishing Information regarding the Funds Amending the Rules of the Funds Liquidation of the Funds Management Company and Depositary Management Company Depositary

3 General Information This prospectus is the offering prospectus of the units of Nordea Pension Fund Equity 100 and Nordea Pension Fund Interest Plus (hereafter together Funds and separately Fund ) in the meaning of the Investment Funds Act (in Estonian: Investeerimisfondide seadus) of the Republic of Estonia (hereafter Prospectus ). The rules of the Funds (hereafter Rules ) are an integral part of this Prospectus. This Prospectus should be read together with the Rules. Main information about the Funds: Name Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus Legal status Date of establishment of the Funds State of registration of the Funds Management company of the Funds Location of the Funds and Management Company Depositary of the Funds Funds units Trading with the Funds units Transactions with units Register of units and the Registrar Unit prices Information regarding units Public contractual investment funds which meet the criteria of voluntary pension funds provided for in Estonian legislation Nordea Pension Fund Equity Nordea Pension Fund Interest Plus The Funds are registered in the Republic of Estonia. Nordea Pensions Estonia AS, registry code (hereafter Management Company ) Liivalaia 45, Tallinn 10145, Estonia AS SEB Pank, register code , registered address at Tornimäe 2, Tallinn 15010, Estonia (hereafter Depositary ). A unit is a registered non-material security, which represents the unit-holder s share in the assets of the Fund. The Fund has one class of units. The nominal value of a unit is 0,64 euros. The units of the Funds are not tradable on any stock exchange or regulated securities market. Funds units can be bought and sold at any banking day in compliance with the Rules and the Prospectus. See transactions with units on page 13. The Register of Funds units is kept by the registrar of the Estonian Central Register of Securities (hereafter Register ), AS Eesti Väärtpaberikeskus, registry code , registered address at Tartu mnt 2, Tallinn 10145, Estonia (hereafter Registrar ). The net asset value (hereafter NAV ) of the Fund and NAV per unit, and the issue and redemption prices of a unit will be calculated for each banking day on the following banking day. NAV of the Fund and NAV per unit, and the issue and redemption prices of a unit are published no later than at 17:00 1 of the day of calculation on the website of the group of the Management Company ( NAV of the Fund and NAV per unit, and the issue and redemption prices of a unit are calculated in euros. Unit-holder can request information regarding the transactions made with units and balance of unit-holder s securities account from the account administrator of unit-holder s securities account in the Register (hereafter Account Administrator ) or the Registrar. 1 All references in the Prospectus to the time are references to the Estonian time (GMT+2). 3

4 Distribution of income The Funds income is not paid out to unit-holders but is reinvested. Fees See fees and expenses on page 12. Disclosure of information Financial year of the Funds Reporting Auditor of the Funds Important information and documents relating to the Funds are made available on the website of the group of the Management Company and at the location of the Management Company. The financial year of the Funds is from 1 January to 31 December. Accounting of the Funds is managed by the Management Company. Annual reports of the Funds are made available within 4 months after the end of the Funds financial year at the latest. AS PricewaterhouseCoopers, registry code , registered address Pärnu mnt 15, Tallinn 10141, Estonia Supervising Authority Financial Supervision Authority, registered address: Sakala 4, Tallinn 15030, Estonia (hereafter FSA ) About the Funds The Basis of Activities The Fund is a pool of money raised through public issue of units, and of other assets acquired from investing this money that belongs collectively to unit-holders and that is managed by the Management Company. The basis of the Fund s activities and the relations between unit-holders and the Management Company have been laid down in the legislation of the Republic of Estonia and the Rules of the respective Fund. Investment Objectives The main objective of the Funds is to provide the unit-holders with an additional source of income when they reach their retirement age. The objective of the Funds activities is long-term capital growth. The profitability of the Funds is not guaranteed to unit-holders. Description of risks related to investments is presented in the section Investment Risks of the current prospectus. In order to achieve this objective the assets of the Funds may be invested in different securities and deposits of credit institutions. The Nordea Pension Fund Equity 100 may invest up to 100% of the market value of the Fund s assets in instruments bearing equity risk whereas the percentage of such instruments may vary from 0% to 100% of the market value of the Fund s assets. The Nordea Pension Fund Interest Plus may invest up to 20% of the market value of the Fund s assets in instruments bearing equity risk whereas the percentage of such instruments may vary from 0% to 20% of the market value of the Fund s assets. 4

5 Description of Typical Investor Due to tax benefits the Funds are most suitable for investors who are Estonian residents. Investors should select the Fund based on their return expectations, risk tolerance and investment horizon. Fund Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus Funds risk level* Equity risk up to 100% of investments. High risk level. Equity risk up to 20% of investments. Lower-than-medium risk level. Length of investment More than 10 years. More than 3 years. Investors prior presumable investment experience No prior investment experience is required for making investments in the Fund. If the investor holds no prior investment experience, we suggest to consult with a financial advisor before choosing the Fund to aknowledge the investment risks involved and their connection with potential gains. Investors risk tolerance The Fund is suitable for an investor expecting long-term capital gain and who can tolerate short-term significant fluctuations in the value of the unit. Investor must have a high risk tolerance. When investing in the Fund, the investor must be willing to accept the risks caused by the volatility of the equity markets. The Fund is suitable for an investor expecting long-term capital gain and avoiding essential decrease of the value of accumulated assets, and who, at the same time, can tolerate short-term fluctuations in the value of the unit. Investor may have lower the average risk tolerance. When investing in the Fund, the investor must be willing to accept also the risks caused by the volatility of the equity markets. * When investing into equity markets, a possibility of large fluctuations in the equity prices has to be taken into consideration, which is very important when the investment horizon is short term. Investments into bond markets are considered to be safer than investments into equity markets on account of which the investments into bonds hold a lower risk. The risk level of the Fund mainly depends on the level of investments in instruments bearing equity risk in the Fund s investment portfolio, which in Fund Equity 100 is up to 100% and in Fund Interest Plus is up to 20%. Investment Policy The Management Company is responsible for investing the Funds` assets considering the objectives of the Fund s activities, the interests of unit-holders, and limitations established by law and the Rules of the respective Fund. The Management Company does not apply sector or regional approach when investing the Fund s assets. The Fund s assets may be invested in all currencies. Weighting of each asset class, type of issuer, region and sector allocation of the Fund s assets will be determined in the course of the everyday management of the Fund in compliance with the Rules. The basic principles of investment policy and more detailed information on investment restrictions as well as risk-spreading requirements are specified in the Rules of respective Fund. 5

6 The following is a brief overview of the Funds investment policy: Brief overview of the Funds investment policy Permissible assets: Investment in Securities Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus 1) deposits of credit institutions; 2) shares and other similar tradable rights; 3) bonds, convertible bonds and other tradable debt obligations issued; 4) subscription rights and other tradable rights granting the right to acquire securities specified in clauses 2) and 3) above; 5) money market instruments; 6) tradable depositary receipts (instruments specified in clauses 2) - 6) hereafter Securities ); 7) derivative instruments; 8) shares, units and rights of investment funds. The assets of the Fund may not be invested in precious metals and Securities which grant rights with regard to precious metals or derivative instruments related to commodities. If Securities have characteristics of derivative instruments, then the provisions pertaining to derivative instruments apply to such Securities. The issuer of a Security acquired by the Fund may be either a state, federated state or regional or local government, a company or an international organisation. The Fund s assets may be invested in Securities which are freely transferable and meet at least one of the following requirements: 1) the Securities are traded on a regulated securities market of a contracting party to the European Economic Area (EEA) 2 Agreement or a member state of Organisation for Economic Cooperation and Development (OECD) 3 ; Albania, Argentina, Armenia, Azerbaijan, Bahamas, Bahrain, Belarus, Bermuda, Bosnia and Herzegovina, Brazil, Cayman Islands, Channel Islands, Chile, China, Colombia, Croatia, Egypt, Georgia, Ghana, Hong Kong, India, Israel, Jordan, Kazakhstan, Kenya, Kuwait, Kyrgyzstan, Lebanon, Macedonia, Moldova, Montenegro, Morocco, Nigeria, Oman, Qatar, Republic of South Africa, Russia, Serbia, Singapore, Tajikistan, the Isle of Man, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan; 2) the Securities are not traded on regulated securities markets of states specified in clause 1) above but, pursuant to their conditions of issue, the Securities will be admitted to the regulated securities market of a state specified in clause 1) above within twelve months after issue of the Securities; 3) the Fund s assets may be invested in money market instruments not specified in clauses 1) and 2), which are generally traded on money market, which are marketable, whose value can be precisely determined at any time, and which meet the requirements provided for in the Investment Funds Act. 2 EEA contracting parties as of the date of the Prospectus are Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Liechtenstein, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. 3 As of the date of the Prospectus, OECD member states are countries listed in the footnote 2 above and following countries: Australia, Canada, Chile, Israel, Japan, Mexico, New-Zealand, South Korea, Switzerland, Turkey and the United States of America. 6

7 Fund s assets in the amount of 10% of the Fund s assets market value may be invested in Securities not specified in clauses 1) 3) above. In compliance with the Rules, the value of Securities issued by one person may form up to 35% Fund s assets market value if the issuer or guarantor of such Securities is a contracting party to the EEA Agreement, another state specified in clause 1) above which guarantees conditions for investment with a degree of risk similar or smaller than a contracting party to the EEA Agreement or an international organisation to which at least one contracting party to the EEA Agreement belongs. Investment in shares Investment in money market instruments Maximum 100% of the Fund s assets. Maximum 100% of the Fund s assets. Maximum 20% of the Fund s assets. Investment in deposits of credit institutions Investment in investment funds Investment in real estate funds Investment in derivative instruments Management Fees Upper Limit for Acquired Investment Funds Maximum 100% of the Fund s assets. The maturity of such deposits may not exceed 12 months. The assets of the Fund may be invested in units, shares and rights of investment funds up to following limits: 1) up to 100% of the Fund s assets may be invested in units, shares or rights of a UCITS or other open-ended public investment funds complying with requirements provided for in the Investment Funds Act and the Rules; 2) up to 50% of the Fund s assets market value may be invested in units, shares or rights of investment funds not specified in clause 1) above, which are not traded on a regulated market of a state specified in clause 1) under Investment in Securities above provided that the value of the units, shares or rights of the investment fund can be determined precisely and reliably on the basis of the market price or other relevant evaluation. The value of units, shares or rights of the same investment fund may not exceed 10% of the Fund s assets market value. The value of the shares, units and rights of other investment funds managed by the Management Company may not exceed 50% of the Fund s assets market value. Maximum 70% of the Fund s assets market value. The assets of the Fund may be invested in derivative instruments only for the purpose of achieving its investment objectives or hedging the risks. Obligations the value of which exceed 10% of the Fund s assets market value may not be assumed on account of the Fund in derivative transactions, except a transaction entered into for the purposes of managing foreign exchange risks. The effective limit of the management fee of investment funds acquired in the assets of the Fund may not exceed 3% of the market value of the assets of the acquired Fund per annum. The Management Company has, on account of the Fund, the right to guarantee an issue of securities, take a loan, enter into repurchase or reverse repurchase agreements and conclude other securities-borrowing transactions in an amount which totals up to 10% of the Fund s assets market 7

8 value. The term of a loan taken or obligation assumed on account of the Fund may not exceed 3 months. In addition to investment restrictions referred to above, all other investment restrictions and requirements for spreading risks provided for in legislation and the Rules are taken into account when investing the assets of the Fund. Performance in Previous Periods One year performance in previous periods 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 33.85% 19.12% % 14.22% 11.54% 8.18% 0.92% Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus % 6.58% 6.02% 1.72% 7.03% 3.13% Nordea Pension Fund Interest Plus was launched on , thus due to short period of activity, previous reference data of annual performance of the Fund per calendar year is not available. Performance is calculated for the calendar year and based on the Fund's net asset value. Funds cumulative annual average performance of last 2, 3, 5 and 8 years Nordea Pension Fund Equity 100 Nordea Pension Fund Intrest Plus ,52 % 7,07 % 9,35 % 10,59 % 2,42 % 3,82 % 4,09 % n/a Fund Interest Plus units public offering started on Due to short period of Fund Interest Plus activity reference data, annual performance of the Fund per five calendar years is not available. Performance of the Fund since launch until (per annum) Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus 11,02 % 4,13 % Launch of the Fund is considered to be the date when the Management Company started public offering of the Funds units. Fund Equity 100 units public offering started on Fund Interest Plus units public offering started on

9 Change in NAV per Fund Unit Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus The performance of the Fund in previous periods does not imply a promise or a reference to the performance of the Fund in the following periods. Investment in the Fund may bring profit or loss to unit-holders and the preservation of the value of money invested in the Fund is not guaranteed. Investment Risks Investing in the Funds is accompanied by various risks that may affect the profitability of the Funds and the price of the Funds units. The activities of the Funds may or may not be profitable; thus, there is no guarantee to unit-holders that they will get back the amount invested in the Fund or that it will grow. The main investment risks related to Funds are described below. The presentation of risks takes into account that Investor of the Fund is informed at average level, observant, reasonable, is aware of his / her investment aims, and if necessary requests additional information from the Management Company. Market risk the risk that the securities or other assets value may increase or decrease and thus affects the value of the Fund s assets. In order to mitigate market risk, sufficient information about assets into which Fund s assets will be or have been invested is being acquired, the Fund s investments are diversified between different markets and derivative instruments may be used. Credit risk the risk that an issuer of a security belonging to the Fund s assets or a counterparty to a transaction made on account of the Fund does not fulfil its obligations in part or in full (e.g. a company cannot redeem on time the bonds issued by it). In order to reduce credit risk, Fund s investments are diversified between different issuers and counterparties with low credit risk are preferred. Settlement risk risk that a transaction is not settled in the settlement system of securities or assets at the prescribed time or in the full amount due to the failure of a counterparty to a transaction to fulfil its obligations at the prescribed time or in the full amount. In order to minimise settlement risk, the trading is generally carried out on organised markets operating on the principle delivery versus payment. Liquidity risk the risk of failure to liquidate open position or to realise the Fund s assets by the due time at the prescribed fair price. In order to minimise liquidity risk, Fund s investments are diversified and a part of the Fund s assets may be invested in deposits of credit institutions, in short-term debt 9

10 securities and in other securities with high level of liquidity. Also, derivative instruments may be used to reduce liquidity risk. Foreign exchange risk the risk that due to movements in exchange rates the value of an investment changes in an undesirable direction. Derivative instruments may be used for hedging foreign exchange risk. Depositary risk the risk of loss or destruction of assets managed by the Depositary due to the Depositary s insolvency, bankruptcy, negligence, or wilful act. In order to mitigate depositary risk, the Depositary is chosen carefully, i.e. supervised and financially stable entity is chosen to be the Depositary. Issuer risk the risk that the price of a specific security may move in an undesirable direction upon appearance of unfavourable circumstances dependent on the issuer (e.g. due to management errors). In order to minimise issuer risk, Fund s investments are diversified between issuers and the activities of issuers are being analysed and monitored. Inflation risk the risk that due to inflation the real value of the investment may decrease as the prices increase faster than the investments value. Political risk the risk that adverse developments or events (e.g. changes in legal environment) take place in countries in which the Fund s assets have been invested that could significantly influence the value of the investments. In order to reduce political risk, Fund s investments are diversified across different countries. Legal risk the risk that the legislation related to the operation of the Fund, including the legislation regulating the tax system, may change. The above stated risks can not be considered fully exhausted and only the main risks involved with investing are covered. In some instances the above stated risks may converge. Overview of Risks Regarding the Funds Activity the Most and Other Important Circumstances. Risk level of Nordea Pension Fund Equity 100 is high because the maximum share of equity investments in total assets of the fund is 100%. NAV per unit mainly depends on the development of equity markets. Rapid and extensive fluctuations of the equity markets have impact to NAV per Fund unit and may lead to high fluctuations in NAV per Fund unit. Therefore the main risk to be considered when investing in the Fund is equity market risk. Risk level of Nordea Pension Fund Interest Plus is lower-than-medium because the maximum share of equity investments in total assets of the fund is 20%. NAV per Fund unit is affected the most by changes in the interest rates and the sustainability of issuers of debt instruments, which can also adversely affect NAV per Fund unit. The main risks which the investor has to account with are the risk of change in the interest rates, credit risk and inflation risk. In less extent, NAV per unit depends on the development of equity markets. In addition to the usual investment risks, the unit holder has to account with the possibility that certain events take place in the Funds activity that can have a great influence on the unit holders investments in the Fund. For example the redemption of the Fund units may be suspended in accordance to the Fund rules and legal regulations, the Fund may be merged with another voluntary pension fund or the Fund may be terminated. Also the Funds Rules maybe altered in a significant way. Many of the mentioned events can happen without prior notification and may therefore be taken unexpected by the unit holder. The possible impact of using derivative instruments on Fund s risk level If derivative instruments are used for hedging the risks, then using derivative instruments decreases the Fund s risk level. According to the Funds Rules, assets may be invested in derivative instruments also for the purpose of achieving its investment objectives. In case derivative instruments are used for the purpose of achieving the Fund s investment objectives, using derivative instruments can also increase the Fund s risk level. Investment in derivative instruments involves specific risks: (1) derivative instruments have temporal constraints and may involve an obligation to deliver the underlying assets at maturity; (2) provision of a small security is usually required for the acquisition of derivative instruments and therefore derivative instruments involve high leverage. Thus, a small change in the price of the underlying 10

11 assets of a future or a swap agreement can cause profit or loss, which is great compared to the size of the assets set as a security and which may cause a bigger loss than the value of the assets set as a security. Unit and NAV per Unit A unit represents the unit-holder s share in the Fund s assets. The Fund has one class of units. The nominal value of a unit is 0,64 euros. A unit is divisible. The fractions of units that emerge from dividing units are rounded up to three decimal points. Units are held in registered form and no unit certificates will be issued. Units are registered in the Register by the Registrar. The units are not tradable on any stock exchange. A unit may not belong to several persons at the same time. Units may belong to the joint property of spouses. Units may only be acquired or owned by natural persons and the Management Company or person who has operated as a management company in compliance with the law. Rights and Obligations attached to Units The rights and obligations attached to a unit with respect to a unit-holder will enter into force upon issuing a unit and will terminate upon redeeming a unit. A unit is deemed issued upon registration thereof with the Register and a unit is deemed redeemed upon cancellation thereof with the Register. Ownership of a unit is proved by an entry in the Register. A unit does not grant to unit-holder the right to make decisions regarding the transactions made with the assets of the Fund. General meetings of unit-holders will not be held, i.e. unit-holders cannot participate in management of the Fund through general meetings. A unit-holder may not request that the common ownership be terminated or the unit-holder s share be separated from the Fund s assets. Units of the Fund are inheritable. Units may not be transferred or encumbered. In case of unit-holder's estate bankruptcy or in case of the assets in enforcement procedure, has the trustee in bankruptcy or the bailiff the right to submit a statement to the registrar of the Fund redeeming units or in case of the liquidation of the Fund for the disbursement. The unit-holders have the following rights deriving from their ownership of units: - to demand that the unit-holder s units be redeemed or exchanged according to the Rules and legislation; - to bequeath the unit-holder s units; - to enter into the insurance contract for supplementary funded pension for the total amount of redeemed units; - to own a share of the Fund s assets corresponding to the number of units owned by the unitholder; - to receive, when payments are made, pursuant to the Rules, a share of the income of the Fund in proportion to the number of units owned by the unit-holder; - to receive, pursuant to the Rules, a share of the assets remaining upon liquidation of the Fund in proportion to the number of units owned by the unit-holder; - to demand that the Management Company compensate for the damage caused by breach of its obligations; - to request that the Registrar or the Account Administrator issue a certificate or a register extract concerning the units owned by the unit-holder; - to access at the registered address of the Management Company following information: the name of person making the investment decisions and information on the size of holding of the Management Company in the Fund. A unit-holder must exercise the rights attached to units in good faith and in accordance with legislation and the Rules. The objective of exercising the rights of a unit-holder may not be causing damage to other unit-holders, the Management Company, the Depositary or third persons. A unit-holder is not personally liable for the obligations of the Fund assumed by the Management Company on behalf of the Fund, or for obligations the performance of which the Management 11

12 Company has the right to demand from the Fund pursuant to the Rules. The liability of the unit-holder for performance of such obligations is limited to the unit-holder's share in the assets of the Fund. NAV NAV of the Fund and NAV per unit depend on the gain or loss from the Fund s investment activities. Fund s income will not be distributed to unit-holders but will be reinvested. Unit-holder s profit or loss is reflected in the changes of NAV per unit. NAV of the Fund will be determined based on the market value of the assets of the Fund from which liabilities of the Fund are deducted. NAV per unit equals NAV of the Fund divided by the number of units issued and not redeemed as at the point of valuation. NAV of the Fund and NAV per unit are calculated in euros. NAV of the Fund and NAV per unit, and the issue and redemption price of a unit will be calculated for each banking day on the following banking day no later than at 12:00. NAV per unit and issue and redemption price of a unit are rounded up to five decimal points. This information is available on the website at no later than at 17:00 on the day of calculation. Fees and Expenses Fees and expenses Nordea Pension Fund Equity 100 Nordea Pension Fund Interest Plus Fees paid by the unit-holder Issue fee of a unit* Maximum issue fee is 1% of NAV per unit. Issue fee is not applicable if single lump sum payment is euros or more. The Management Company will apply issue fee dicounts starting from the beginning of next calendar year as follows: (a)the Issue fee will be up to 0.5% if the total value of units in the Fund and units in other voluntary pension funds under the management of the Management Company held by the Investor at midday on the last working day of calender year exceeds euros and is less than euros. (b) There will be no Issue fee if the total value of units in the Fund and units in other voluntary pension funds under the management of the Management Company held by the Investor at midday on the last working day of calender year is euros or more. (a) Midday is at 12:00 in the Estonian timezone. Redemption fee of a unit** 1% of NAV per unit A unit-holder pays also any possible transaction fees and service charges which may be demanded by brokers or other intermediaries upon purchase or sale of Fund s units. Management fee *** Depositary fee **** Other expenses ***** Fees and expenses paid by the Fund Up to 1,5% per annum of the Fund s last calculated net asset value Up to 0,13% per annum of the Fund s last calculated net asset value According to the price list of the service provider Up to 1,2% per annum of the Fund s last calculated net asset value Up to 0,13% per annum of the Fund s last calculated net asset value 12

13 The upper limit of annual fees and expenses paid out of the Fund 3% of the annual average market value of the Fund s assets Fees and expenses paid by the Management Company The Management Company must pay any other fees and expenses related to management of the Fund, including costs related to auditing of Fund s reports. *, ** The Management Company may, at its sole discretion, decide to waive or reduce the issue or redemption fee for any period of time. Issue and redemption fee of units is not charged upon exchange of units if the Management Company manages both pension funds related to the exchange. *** Management fee will be deducted from the Fund s assets value on a daily basis and will be paid for services provided during a preceding month. For some periods, the Management Company may apply a lower management fee rate. Fund assets will not be invested in investment funds which charge fixed management fee (excluding possible performance fee) for more than 5% per annum of the investment fund s assets market value. **** The value added tax specified by law is added to the depositary fee. The depositary fee is deducted from the Fund s assets value on a daily basis and paid to the Depositary on the basis of an invoice submitted by the Depositary for services provided during a preceding month. ***** By other expenses transfer costs and fees directly related to transactions made on account of the Fund and costs related to taking loans on account of the Fund (including costs related to repurchase agreements and reverse repurchase agreements and other securities-borrowing transactions) are meant. Transactions with Units The following types of transactions can be done with Fund s units: purchase of units (issue of units), exchange of units, sale of units (redemption of units for receiving payment from the Fund or for entry into the insurance contract for supplementary funded pension), succession of units. By submitting a purchase order or an exchange application, the unit-holder confirms that he or she has familiarised himself or herself with the Rules and Prospectus to the required extent, approves the Rules and Prospectus and undertakes to adhere thereto. A person may, at the same time, acquire and own units of different voluntary pension funds. Issue and Redemption Price of a Unit Units will be issued for the issue price. The issue price of a unit is the NAV per unit to which amount the issue fee is added. Units will be redeemed for the redemption price. The redemption price of a unit is the NAV per unit, from which amount the redemption fee is deducted. Purchase of Units In order to acquire Fund s units, a person must have a securities account in the Register. Securities account may be opened at the mediation of account administrators of the Register or an insurer subject to the status of account administrator of the Register. At the time of preparing this Prospectus the account administrators of the Register are AS Citadele banka, AS Eesti Krediidipank, Swedbank AS, AS LHV Pank, Nordea Bank AB Estonia branch, Danske Bank A/S Estonian branch, Versobank AS, AS SEB Pank and Tallinna Äripanga AS. To acquire units of the Fund, a person must submit a purchase order to the Management Company at the mediation of the Account Administrator or an insurer subject to the status of account administrator of the Register. Units may also be obtained directly through the Registrar by transferring money to a special purpose subscriptions account of the Registrar (hereafter Account of the Registrar ). In order to transfer money to the Account of the Registrar, payment order with following requisites must be made: For acquiring units of Nordea Pension Fund Equity 100: 13

14 Beneficiary s name: AS Eesti Väärtpaberikeskus Beneficiary s account: Beneficiary s bank: EE Nordea Bank AB Eesti filiaal Amount: amount for which a person wishes to acquire units of the Fund Details: Reference number: securities account no. of the person acquiring units For acquiring units of Nordea Pension Fund Interest Plus: Beneficiary s name: AS Eesti Väärtpaberikeskus Beneficiary s account: Beneficiary s bank: EE Nordea Bank AB Eesti filiaal Amount: amount for which a person wishes to acquire units of the Fund Details: Reference number: securities account no. of the person acquiring units Accounts of the Registar in other banks are: Swedbank AS EE AS SEB Pank EE Danske Bank A/S Eesti filiaal EE In case of obtaining units directly through the Registrar, the payment order on the basis of which the payment is received by the Registrar is deemed to be the purchase order. Purchase order may be submitted at any banking day. The issue price of a unit is determined on the basis of the next NAV per unit calculated after the day of receipt of the corresponding purchase order. The day of receipt of the purchase order is deemed to be the banking day when the payment under the purchase order is received to the Account of the Registrar. If the payment under the purchase order is received to the Account of the Registrar on the respective banking day after 16:00, then the next banking day is considered to be the day of receipt of the purchase order. The number of units to be acquired by the unit-holder is calculated by dividing the amount received to the Account of the Registrar with the issue price of a unit. Units will be issued and registered in the unit-holder s securities account on the banking day immediately following the day of receipt of the purchase order. Issue of the units is organised by the Registrar. Payments on behalf of the person to acquire units of the Fund can be made also by third persons. Exchange of Units A unit-holder has the right to exchange the units of the Fund for the units of another voluntary pension fund if exchange of units is not prohibited under legislation. The minimum number of units exchanged is not limited. To exchange units, the unit-holder must submit a written application containing the information provided by legislation to the Management Company at the mediation of the Account Administrator. The application for exchange of units may be submitted at any banking day. Units will be exchanged without delay, but not later than within 2 weeks from the day of receipt of the application for exchange of units. Upon exchange of units, the issue and redemption price of a unit is determined on the basis of the next NAV per unit calculated after the day of receipt of application for exchange of units. The day of receipt of the application for exchange of units is deemed to be the banking day when the application for exchange of units is received by the Management Company. If the application for exchange of units is received by the Management Company on the respective banking day after 16:00, then the next banking day is considered to be the day of receipt of the application for exchange of units. Upon exchange of units, the units of the Fund will be redeemed and the units of another pension fund will be issued. As a result of an exchange, the unit-holder will acquire, for the redemption price of the 14

15 units of the Fund, maximum number of units of another voluntary pension fund. No payments will be made to the unit-holder upon exchange of units. Upon exchange of units, the unit-holder will pay the redemption and issue fee. Issue and redemption fee of units will not be charged upon exchange of units if the Management Company manages both pension funds related to the exchange. The exchange of units is organised by the Depositary. Sale of Units Supplementary funded pension payments will be made to a unit-holder as payments from the Fund or, in case the insurance contract for supplementary funded pension has been entered into, on the basis of the insurance contract. In order to make payments from the Fund or for entry into the insurance contract, units of the Fund will be redeemed as described below. Payments from the Fund A unit-holder is entitled to funded pension payments from the Fund To redeem units, a unit-holder must submit a sale order to the Management Company at the mediation of the Account Administrator. Sale order may be submitted at any banking day. The redemption price of a unit is determined on the basis of the next NAV of a unit calculated after the day of receipt of the corresponding sale order. The day of receipt of the sale order is deemed to be the banking day when the sale order is received by the Registrar. If the sale order is received by the Registrar on the respective banking day after 16:00, then the next banking day is considered to be the day of receipt of the sale order. The amount payable to the unit-holder for redeeming units is calculated by multiplying the number of units specified in the sale order with the redemption price of a unit. Units will be redeemed in no more than 3 banking days from the day of receipt of the sale order by the Registrar (T+3), except in case of suspension of redemption of units. Upon making funded pension payments, units will be redeemed in the order in which the units were acquired. The redemption of units is organised by the Registrar. Payments on the basis of insurance contract for supplementary funded pension A unit-holder may demand that the units of the Fund be redeemed and the insurance contract for supplementary funded pension be entered into with an insurer who is chosen by the unit-holder for the redemption price of the units. To redeem units, the unit-holder must submit a written to the Management Company at the mediation of the Account Administrator. The application may be submitted at any banking day. The redemption price of a unit is determined on the basis of the next NAV per unit calculated after the day of receipt of the application. The day of receipt of the application is deemed to be the banking day when the application is received by the Management Company. If the application is received by the Management Company on the respective banking day after 16:00, then the next banking day is considered to be the day of receipt of the application. The redemption of units and transfer of the insurance premium prescribed in the insurance contract to the insurer will be organised by the Depositary in cooperation with the insurer within 15 banking days following the day of receipt of the application. No payments will be made to the unit-holder from the Fund upon the redemption of units for entry into the insurance contract. Compulsory redemption of units The Management Company has the right to compulsorily redeem the units belonging to the unitholder in cases specified in the Money Laundering and Terrorist Financing Prevention Act (in Estonian: Rahapesu ja terrorismi rahastamise tõkestamise seadus) in accordance with the procedure specified in the Rules. Suspension of redemption of units 15

16 The redemption of units may be suspended upon decision of the Management Company or by a precept issued by the FSA. The Management Company may suspend the redemption of units of the Fund for up to 3 months if the money in the accounts of the Fund is insufficient for payment of the redemption price of the units or if the regular management of the Fund may be harmed by the payment of the price and if the securities and other assets of the Fund cannot be promptly sold or if the interests of other unit-holders would be materially harmed thereby. The Management Company must promptly inform the FSA and the Depositary of suspension of the redemption of units and the reasons therefore. The FSA may oblige the Management Company to suspend the redemption of units if this is necessary in order to protect the legitimate interests of the unit-holders. The Management Company must promptly publish a notice concerning suspension of the redemption of units on the website No units will be issued or redeemed during the time redemption of units of the Fund is suspended. Succession of Units Units of the Fund are inheritable. A successor who is a natural person has the right to demand transfer of all the inherited units or of a part thereof into the securities account of the successor, or the redemption of the units. A successor who is a legal person has the right to demand monetary payment for each unit inherited by the successor in the amount of the redemption price on the date the demand is submitted. The successor may place respective request within one year after its inheritance right has been been verified, but not later than 10 years after opening of the succession. Money which is not claimed within the abovementioned term will remain in the Fund, and the corresponding units will be cancelled. In order to redeem units or demand transfer of units into the securities account of the successor, a successor must submit an application and a succession certificate to the Management Company at the mediation of the Account Administrator. If a unit-holder has no successors, any units which belonged to him or her will be cancelled and the right of intestate succession of local government and state provided for in the Law of Succession Act (in Estonian: pärimisseadus) does not apply. The rights and obligations arising from the cancelled units are deemed to be extinguished, and the money corresponding to the units will remain in the Fund. Taxation Taxation of the Fund Income or profits of the Fund are not subject to Estonian taxes at the Fund level. Taxation of unit-holders The Estonian state has established tax incentives to encourage people to invest into their pension. Under the Income Tax Act (in Estonian: Tulumaksuseadus), a resident natural person has the right to deduct contributions to supplementary funded pension (including amounts paid to acquire units of a voluntary pension fund) from his or her income. The deductions during one period of taxation are limited to 15% of the taxpayer s income of the same period of taxation. However, amount of deductions is limited to 6000 euros in maximum. Same deductible limits are applicable also in case payments to the Funds are partly or fully maid on behalf of the person by his or her employer. In such case, the employer shall not withhold the income tax when respective payments do not exceed above given limits. The following payments made to a resident unit-holder from a voluntary pension fund are taxed with the income tax rate of 10%: - payments made after the unit-holder has reached 55 years of age but not before five years have passed since the first acquisition of units which are redeemed in order to make the payments; 16

17 - payments made in the event of the total and permanent incapacity for work of the unit-holder; - payments made in the event of liquidation of the pension fund. Redemption of units to enter into an insurance contract for supplementary funded pension is not taxed. Pension paid to a resident policyholder on the basis of an insurance contract for supplementary funded pension after the policyholder has attained 55 years of age or after his or her total and permanent incapacity for work has been verified is not taxed if the insurance contract prescribes that payments are made in equal or increasing amounts at least once every three months until the death of the policyholder. Exchange of units of a voluntary pension fund for units of another voluntary pension fund is not considered to be a payment from the fund. Therefore, exchange of units is not taxed. In cases not specified above, payments from a voluntary pension fund are taxed with the income tax rate effective at the moment of making the payment. To get a detailed overview of the applicable tax system, unit-holders are urged to consult with a tax specialist. The tax system applicable to a unit-holder depends on the residence of the unit-holder. A unit-holder who is not an Estonian resident is urged to consult with a tax specialist regarding his or her taxation in case of investing in the Fund. Information about the Funds Disclosure of Information about the Funds Any person can access the following information and documents at the registered address of the Management Company and on the website of the group of the Management Company ( the Prospectus, the Rules, the latest annual report of the Fund, the latest investment report of the Fund, and internal rules and procedures of the Management Company for determination of NAV. On request, unit-holders receive a copy of the Prospectus, the Rules, the latest annual report of the Fund as well as the latest investment report of the free of charge. Annual reports of the Funds are made available within 4 months after the end of the Funds financial year at the latest. The Management Company publishes on each banking day NAV of the Fund and NAV per unit, the issue and the redemption price of a unit on the website In case circumstances that substantially affect the activities or the financials of the funds managed by the Management Company (including the Funds) or NAV per unit should become evident, respective information will be published without delay on the website Amending the Rules of the Funds The Management Company may decide amendment of the Rules at its sole discretion. After amended Rules have been approved by, if required by law, or submitted to the FSA under the conditions and pursuant to the procedure provided for in the Investment Funds Act, the relevant notice and amended Rules will be published on the website Amendments will enter into force one month after publication of the notice unless the notice prescribes a later date for entry into force. Liquidation of the Funds The Management Company s supervisory board may decide to liquidate the Fund only if the Management Company has failed to transfer management of the Fund to another management company. The Depositary may decide to liquidate the Fund if management of the Fund has been transferred to the Depositary and the Depositary has failed to transfer management of the Fund to another management company. To liquidate the Fund, the Management Company or the Depositary must obtain a relevant approval from the FSA. 17

18 Upon obtaining approval for liquidation of the Fund from the FSA, the Management Company or the Depositary must without delay publish a notice regarding the liquidation of the Fund in a national daily newspaper and on the website specifying in the notice the information required by law. From the day following publication of the liquidation notice, the issue and redemption of the Fund s units will be suspended. Liquidation must be concluded within a period of six months starting from the publication of the liquidation notice. The time limit may be extended on authorisation by the FSA if requested by the Management Company or the Depositary; however, as a result of the extension, the period of liquidation must not exceed 18 months. Upon liquidation of the Fund, the Management Company or the Depositary must transfer the assets of the Fund, collect the debts of the Fund and satisfy the claims of the creditors of the Fund. Up to 2% of NAV of the Fund, as at the day of adopting the liquidation decision, may be used to cover the expenses of liquidation of the Fund on account of the Fund. If the actual liquidation expenses exceed this amount, the Management Company or a person who operates as a management company will be liable for the expenses exceeding that amount. The Management Company must distribute the assets remaining upon liquidation between the unitholders in proportion to the number of units owned by each unit-holder. Payments to the unit-holders may only be made in money. The Management Company must publish a notice concerning distribution of the assets subject to distribution on the website Units will be deleted and the rights and obligations arising therefrom will be terminated from the date on which payments are made. The redemption fee may not be charged upon deletion of units. If in course of the liquidation of the Fund it appears that the Fund is insolvent, then the Management Company or a person who operates as a management company will be liable for satisfaction of any unsettled claims against the Fund, except for claims which have arisen after transfer of the management of the Fund to the Depositary and the satisfaction of which is therefore the Depositary s obligation. Management Company and Depositary Management Company The Funds are managed by fund management company Nordea Pensions Estonia AS with a registered address at Liivalaia 45, Tallinn 10145, Estonia. The Management Company is a public limited liability company registered in the Estonian Commercial Register on February 13 th 2008 with register code The Management Company holds a license No /61 with an unlimited term issued by the FSA on for managing pension funds. The Management Company is supervised by the FSA. The Management Company in owned 100% by Nordea Life Holding AB. The share capital of the Management Company is euros. Nordea Pensions Estonia AS manages four mandatory pension funds and two voluntary pension funds: Nordea Pension Fund A Plus, Nordea Pension Fund A, Nordea Pension Fund B, Nordea Pension Fund C, Nordea Pension Fund Equity 100 and Nordea Pension Fund Interest Plus. The members of the Supervisory Board of the Management Company are: Hanna Jacobsson Member of the Supervisory Board. Ms Jacobsson has Master s Degree in Mathematics and Economics from Stockholm University and completed actuarial studies there for qualification at the Swedish Society of Actuaries. Ms Jacobsson has been working in various leading positions in Skandia group during Ms Jacobsson joined the Nordea Group in August 2016 and is since then CFO of Nordea Life Holding AB. Johan Bertil Ludvig Nystedt Member of the Supervisory Board. Mr. Nystedt studied financial and business administration at Stockholm School of Business (MSc). He has participated in various training courses covering management training as well as life insurance and finance related issues. In 2010 he participated in Nordea LEAD (accelerated executive leadership development) programme. During Mr. Nystedt was holding the position of Management Consultant in the global management consulting, technology services and outsourcing company Accenture. In 2006 Mr. Nystedt joined Nordea Life & Pensions Sweden as the Chief Financial Officer. During he was the Head of Finance, since 2012 Chief Financial Officer of Nordea Life and Pensions Group and since 2016 CEO of Nordea Life & Pensions Sweden. Mr. Nystedt is also a Member of the Supervisory Board of IPAS Nordea Pensions Latvia and AS Nordea Latvijas atklātais pensiju fonds. 18

19 Raimo Kullervo Voutilainen Member of the Supervisory Board. Mr. Voutilainen has graduated from the University of Helsinki (MSc) and Helsinki School of Economics (PhD). He has held several expert and leading positions in Finnish banks and insurance companies since He is specialized in bancassurance and has been responsible for establishing and leading several bankowned life insurance companies. He joined Nordea Life Assurance Finland Ltd in June 2007 as the project manager for expanding Nordea Life and Pensions to the Baltics, from 2010 he is a Member of the Management Board and Head of Business Development and Actuarial Services of Nordea Life Assurance Ltd. Currently Mr Voutilainen is holding the position of Research Director at Nordea Life Assurance Ltd. Mr. Voutilainen is also a Member of the Supervisory Board of IPAS Nordea Pensions Latvia and AS Nordea Latvijas atklātais pensiju fonds. The members of the Management Board of the Management Company are: Angelika Tagel Chairman of the Management Board. Ms. Tagel has graduated from the Tallinn Technical University and has improved her education on the MBA program at the University of South- Carolina. She has more than 20 years of work experience in the financial sector. Since 2006 she has been working for the Nordea Bank Finland Plc Estonian branch as an adviser. In , she was a Member of the Management Board at the FSA, responsible, inter alia, for the supervision of investment and pension funds. Starting from 2008 Ms. Tagel is acting as Head of Nordea Life and Pensions in the Baltic countries. Ms. Tagel is also Chairman of the Management Board of IPAS Nordea Pensions Latvia and a Member of the Management Board of AS Nordea Latvijas atklātais pensiju fonds. Olli Enqvist Mr. Enqvist has graduated from the Faculty of Economics of the University of Vaasa. He acquired Helsinki Exchange Securities Broker's License in 2000 and passed the financial advisor's exam on levels 1 and 2 in Mr. Enqvist obtained the licence of CEFA (Certified Effa's Financial Analyst) in 2006 and the licence of CAIA (Chartered Alternative Investment Analyst) in 2008 and the licence of CFA (Chartered Financial Analyst) in Previously he has been dealing with the development of company investment products of Nordea Group. He has also managed Nordea Private Sales Department and Private Banking Department. At present Mr. Enqvist is the Fund Manager for II pillar and III pillar pension funds in Nordea Pensions Estonia AS. Mr. Enqvist is also a Member of the Management Board of IPAS Nordea Pensions Latvia and Head of Unit Linked Investments for Nordea Life Assurance Finland Ltd. Tea Rööp Member of the Management Board. Ms. Rööp has graduated from the Tallinn Technical University. She has more than 15 years of work experience in the accounting and financial analysis areas. Since 2008 she has been working as Chief Accountant for Nordea Pensions Estonia AS. In , Ms. Rööp was Deputy Chief Accountant at the Ministry of Economic Affairs and Communications. Martin Rajasalu Member of the Management Board. Mr. Rajasalu has graduated from the Estonian Business School. He has more than 15 years of work experience in the pension and insurance areas. In , Mr. Rajasalu was working as Head of Customer Support at QBE Estonia AS and as Head of Development at SEB Elukindlustuse AS (SEB Life Assurance). Since 2010 he has been working as Sales Manager at Nordea Pensions Estonia AS. Fund manager Olli Enqvist (see details above) Rights and obligations of the Management Company in managing Fund s assets The Management Company has the right to dispose of and possess the assets of the Fund and other rights arising therefrom. The Management Company concludes transactions with Fund s assets (including invests Fund s assets) in its own name and on the account of the Fund. Upon investing Fund s assets the Management Company must: obtain sufficient information on the assets it plans to acquire or has acquired on account of the Fund, monitor the financial and economic situation of the issuer whose securities it plans to acquire or has acquired on account of the Fund and obtain sufficient information about the solvency of counterparties with whom transactions are made on account of the Fund. The Management Company must manage the assets of the Fund separately from its own assets and from assets of other funds and pools of assets managed by the Management Company. The assets of the Fund do not form part of the bankruptcy estate of the Management Company and the claims of creditors of the Management Company will not be satisfied out of such assets. 19

20 The Management Company has the right and duty to submit a claim in its own name on behalf of unit-holders or the Fund against the Depositary or third parties if failure to submit such claim will result or may result in significant damage to the Fund or its unit-holders. The Management Company is not required to submit such claim if the Fund or unit-holders have already submitted a claim. Transfer of duties of the Management Company The Management Company has the right to transfer to third parties for the purpose of better conduct of the Management Company s business following duties related to managing the Fund pursuant to the Investment Funds Act: - investing the Fund s assets; - organising the issue and redemption of the Fund s units; - issue of documentation proving the right of ownership to the unit-holders, if necessary; - organising the sales and marketing of the Fund s units; - providing necessary information to the unit-holders and other customer service; - keeping account of the Fund s assets and organising accounting of the Fund; - determining NAV of the Fund; - organisation of maintenance of a register of Fund s units; - monitoring compliance of the activities of the Management Company and the Fund with legislation, including applying a relevant internal audit system; - activities directly related to the activities listed above. Transfer of duties to third parties does not exempt the Management Company from liability related to management of the Fund. Investment of the Fund's assets to the extent determined by the Management Company may be transferred to a third party only if the transfer is in compliance with the investment policy determined by the Management Company and with any decisions of the Management Company concerning the application of such policy.the Management Company has transferred following duties to third parties: Duty Organising the issue and redemption of the Fund s units Issue of documentation proving the right of ownership to the unit-holders, if necessary Organising the sales and marketing of the Fund s units Providing necessary information to the unitholders and other customer service Organisation of maintenance of a register of Fund s units Internal audit Activity directly related to determining NAV of the Funds Third party Registrar (AS Eesti Väärtpaberikeskus)* (in cooperation with the Depositary (AS SEB Pank) and the insurer, if necessary) Registrar (AS Eesti Väärtpaberikeskus) Nordea Bank AB Estonian branch Nordea Bank AB Estonian branch (in cooperation with the Management Company) Registrar (AS Eesti Väärtpaberikeskus) Nordea Bank Danmark A/S, registry code , Strandgade Copenhagen, Denmark (foreign registered credit institution, under supervision of the Danish Financial Supervision Authority) Nordea Investment Management AB, Denmark, Branch of Nordea Investment Management AB, Sweden, registry code , Strandgade 3, 0900 Copenhagen, Denmark (foreign registered portfolio management company, under supervision of both the Swedish and 20

21 Investment of the assets of the Funds (partially and as regards making investment decisions upon investment of the assets of the Funds) Danish Financial Supervision Authority). Nordea Investment Management AB, Denmark, Branch of Nordea Investment Management AB, Sweden, registry code , Strandgade 3, 0900 Copenhagen, Denmark (foreign registered portfolio management company, under supervision of both the Swedish and Danish Financial Supervision Authority). * The activities of the Registrar are regulated by the Estonian Central Register of Securities Act (in Estonian: Eesti väärtpaberite keskregistri seadus). The Registrar is supervised by the FSA. Depositary The Depositary of the Fund is AS SEB Pank, registered address Tornimäe 2, Tallinn 15010, Estonia. AS SEB Pank was incorporated on 15 th of December, 1992 and holds a termless credit institution licence EP-11 PO, which was issued on 12 th of January, The Depositary is supervised by the FSA. Activities of the Depositary The Depositary safe-keeps the assets of the Fund and performs other duties entrusted to it by legislation. The Depositary has the right to enter into contracts with third parties for the safekeeping of Fund assets, the performance of transactions therewith and the transfer of other duties of the Depositary. The Depositary must choose a third party which safekeeps the Fund s assets with due diligence in order to ensure the reliability of the third party. Before the transfer of duties and thereafter, the Depositary is required to verify whether the level of the organisational and technical administration of a third party and its financial situation are adequate to ensure the performance of obligations. If the Depositary delegates safe-keeping of the Fund s assets to third parties, then the Depositary will be liable for direct proprietary damage caused to the Fund or unit-holders, if the Depositary has not chosen the third parties safekeeping the Fund s assets with required due diligence or has failed to exercise supervision over third parties. The Prospectus is approved by the Management Board of Nordea Pensions Estonia AS on