Merger Circulars for the proposed mergers of sub-funds of Global Treasury Funds plc with sub-funds of Goldman Sachs Funds, plc.

Transcription

1 Merger Circulars for the proposed mergers of sub-funds of Global Treasury Funds plc with sub-funds of Goldman Sachs Funds, plc.

2 THIS CIRCULAR IS SENT TO YOU AS A SHAREHOLDER IN GLOBAL TREASURY FUNDS PLC. IT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO THE ACTION TO BE TAKEN, YOU SHOULD IMMEDIATELY CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR OR ATTORNEY OR OTHER PROFESSIONAL ADVISOR. If you have sold or otherwise transferred your holding in Global Treasury Funds plc please send this document and the accompanying proxy form to the stockbroker, bank manager, or other agent through whom the sale was effected for transmission to the purchaser or transferee. GLOBAL TREASURY FUNDS PLC (an umbrella investment company with segregated liability between its sub-funds) PROPOSED MERGER OF STERLING FUND (a sub-fund of Global Treasury Funds plc) INTO GOLDMAN SACHS STERLING LIQUID RESERVES FUND (a sub-fund of Goldman Sachs Funds, plc) THE ACTION REQUIRED TO BE TAKEN IS SET OUT ON PAGE 14. Notice of a Meeting of Shareholders in the Sterling Fund, a sub-fund of Global Treasury Funds plc, to be held on 25 March 2014 is set out on page 15 of this Circular. You are particularly requested to complete and return the relevant enclosed proxy form contained on page 16 of this Circular in accordance with the instructions printed thereon as soon as possible but in any event so that they arrive by a.m. on 23 March The Directors have taken all reasonable care to ensure that the facts contained in this Circular are true and accurate in all material respects and that there are no material facts the omission of which would make misleading any statement herein of fact or of opinion. The Directors accept responsibility accordingly. Dated 3 March 2014 M

3 CONTENTS PAGE Definitions 4 Explanatory Letter from Global Treasury Funds plc 6 Appendix I 15 Notice of Extraordinary General Meeting of the Sterling Fund Appendix II 16 Proxy Form for Shareholders in the Sterling Fund Appendix III 18 List of New Share classes to be received in exchange for Existing Share classes Appendix IV 19 Jurisdiction Table Appendix V 20 Country Specific Information Appendix VI 21 Schedule of Principal Similarities and Differences Appendix VII 27 Directors of GS Funds Appendix VIII 28 Unaudited portfolio details for the Goldman Sachs Sterling Liquid Reserves Fund as at 4 February 2014 All definitions used in this Circular, except where the context requires otherwise, have the meaning attributed to them on pages 4 and 5. M

4 KEY DATES FOR MERGER OF THE STERLING FUND AND THE GOLDMAN SACHS STERLING LIQUID RESERVES FUND Date of dispatch of Circular 3 March 2014 Last time and date for receipt of proxy forms in relation a.m. on 23 March 2014 to the Meeting Date of the Meeting 25 March 2014 Date of dispatch of notification of outcome of the Meeting 25 March 2014 (and notification of any change to the Effective Date) Latest time for dealing in Existing Shares 11 April 2014 Effective Date and Time 7 a.m. on 14 April 2014 First day for dealing in New Shares in the the Goldman Sachs Sterling Liquid Reserves Fund Date of dispatch of letters confirming shareholding in the Goldman Sachs Sterling Liquid Reserves Fund Effective Date within 21 days of the Effective Date The merger of the Sterling Fund with the Goldman Sachs Sterling Liquid Reserves Fund is subject to the approval of the Shareholders in the Sterling Fund. Save where otherwise provided, times referred to above are Irish times. M

5 DEFINITIONS Central Bank means the Central Bank of Ireland; Circular means this circular to be issued to Shareholders in relation to the Merger; Directors mean the directors of GTF; Directive means Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS); Effective Date is 14 April 2014 or such later date as may be notified to Shareholders at the time of the notification of the outcome of the Meeting; Effective Time means 7 a.m.; Exchange Ratio means the number of New Shares which a Shareholder participating in the Merger will receive in the Receiving Fund in exchange for and having an equivalent value to their holding of Existing Shares; Existing Shares means shares held by a Shareholder in the Merging Fund; Group Company means in relation to any company, any body corporate which is from time to time a holding company of that company, a subsidiary of that company or a subsidiary of a holding company of that company; GS Funds means Goldman Sachs Funds, plc, an open-ended umbrella investment company with variable capital incorporated with limited liability and segregated liability between its sub-funds in Ireland under the Companies Acts 1963 to 2012 of Ireland with registration number and established as a UCITS under the Regulations; GS Funds Custodian means BNY Mellon Trust Company (Ireland) Limited; GSAMI means Goldman Sachs Asset Management International; GSAMI Group means GSAMI and any Group Company of GSAMI; GTF means Global Treasury Funds plc, an open-ended umbrella investment company with variable capital incorporated with limited liability and segregated liability between its sub-funds in Ireland under the Companies Acts 1963 to 2012 of Ireland with registration number and established as a UCITS under the Regulations; GTF Administrator means BNY Mellon Fund Services (Ireland) Limited; Independent Auditor means an auditor approved in accordance with Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts; KIID(s) means Key Investor Information Document(s); Meeting means the extraordinary general meeting of the Merging Fund to approve the Merger to be held on 25 March 2014; Memorandum and Articles of Association means the memorandum and articles of association of GTF or GS Funds as appropriate; Merger means the proposed separate and independent merger of the Merging Fund with the Receiving Fund, as more particularly described in the Circular; Merger Agreement means the commercial agreement relating to the merger of GTF and GS Funds which was announced on 21 October 2013; M

6 Merging Fund means the Sterling Fund, a sub-fund of GTF which is to merge with the Receiving Fund, a subfund of GS Funds; Money Market Fund means a short-term money market fund as defined by the European Securities and Markets Authority guidelines on a common definition of European money market funds and the Central Bank's UCITS notices; New Shares means shares in the Receiving Fund to be issued to a Shareholder under the Merger in exchange for their holding of Existing Shares; Prospectus means the prospectus of GTF or GS Funds as appropriate; RBSAMD means RBS Asset Management (Dublin) Limited, a UCITS management company authorised pursuant to the Regulations and appointed to act as manager of GTF; RBSI means the Royal Bank of Scotland International Limited; RBS plc means The Royal Bank of Scotland plc which acts as promoter to GTF; Receiving Fund means Goldman Sachs Sterling Liquid Reserves Fund, a sub-fund of GS Funds which is to receive the assets of the Merging Fund; Regulations mean the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 2011, as amended and includes any relevant notices and guidelines issued by the Central Bank pursuant to the Regulations; Resolution means the resolution to be considered at the Meeting; Shareholder means a holder of Existing Shares on the share register of the Merging Fund; UCITS means an undertaking for collective investment in transferable securities authorised pursuant to the Regulations; and UK means the United Kingdom. M

7 GLOBAL TREASURY FUNDS PLC Guild House, Guild Street, International Financial Services Centre, Dublin 1, Ireland 3 March 2014 Proposed Merger of the Sterling Fund, a sub-fund of Global Treasury Funds plc into Goldman Sachs Sterling Liquid Reserves Fund, a sub-fund of Goldman Sachs Funds, plc Dear Shareholder We are writing to you as a shareholder in the Sterling Fund (the Merging Fund) which is a sub-fund of Global Treasury Funds plc, an Irish domiciled umbrella investment company with segregated liability between its subfunds (GTF). The purpose of this Circular is to describe the proposal to merge the Merging Fund with the Goldman Sachs Sterling Liquid Reserves Fund (the Receiving Fund) on the Effective Date by way of Merger completed in accordance with paragraph (c) under the definition of Merger in Regulation 3(1) of the Regulations. Information on the background and rationale for this proposed merger is set out below. This proposed Merger relates on a broader scale to the five sub-funds of GTF merging with five corresponding sub-funds of GS Funds as set out below. A separate circular is being sent to shareholders in each sub-fund setting out the proposed merger terms in relation to each sub-fund merger. Shareholders in each sub-fund will be asked to vote in favour of the proposed merger as set out in the relevant circular. (i) (ii) (iii) (iv) (v) Merging Fund of Global Treasury Funds plc Dollar Fund Euro Fund Sterling Fund Euro Government Fund Sterling Government Fund Receiving Fund of Goldman Sachs Funds, plc Goldman Sachs US$ Liquid Reserves Fund Goldman Sachs Euro Liquid Reserves Fund Goldman Sachs Sterling Liquid Reserves Fund Goldman Sachs Euro Government Liquid Reserves Fund Goldman Sachs Sterling Government Liquid Reserves Fund To be effective, the proposed Merger requires approval of the Resolution set out in the Notice of Extraordinary General Meeting contained in Appendix I of this Circular to approve the proposed Merger of the Merging Fund. The relevant proxy form is enclosed in Appendix II of this Circular to enable Shareholders to vote at the Meeting. Shareholders who cannot to attend in person are urged to complete and return the proxy form as soon as possible and in any event no later than the date and time set out on page 3 of this Circular. The proposed merger of each of the five sub-funds of GTF with five corresponding sub-funds of GS Funds as set out in the above table is separate from and independent of each other. Therefore, the approval of the merger of one GTF sub-fund is not contingent upon the approval of the merger of any other GTF sub-fund. It is possible that the merger may not be approved in relation to any GTF sub-fund or that it may be approved in relation to one GTF sub-fund but not any other. Background to and rationale for the proposed Merger RBS plc has reviewed the strategic fit of GTF within its overall business model. It has concluded that, in light of market developments and ongoing cost requirements, the sector in which GTF operates is not currently in M

8 alignment with its overall strategy. A merger of the five sub-funds of GTF with five corresponding sub-funds of GS Funds under the Directive has been proposed. The GS Funds have been selected as the proposed counterparty to the merger of all five sub-funds set out in the table above on commercial grounds and in order to promote the success of the Merging Fund and for the benefit of shareholders in GTF as a whole. Shareholders participating in the Merger will benefit from an increased asset base which should create economies of scale. As set out above, RBS plc no longer considers GTF to be a strategic fit within its overall business model and as such the five sub-funds of GTF will be closed by its Directors if they are not merged with another Money Market Fund. On the basis that Shareholders wish to remain invested in a Money Market Fund, the Directors are of the opinion that it would be in the best interests of Shareholders to exchange their Existing Shares for New Shares. Accordingly, the Directors are proposing the Merger whereby the Merging Fund will transfer its net assets to the Receiving Fund which, if approved by Shareholders, will result in those Shareholders directly holding New Shares in the Receiving Fund. In the event that all of the proposed mergers are approved, GTF will then have no active sub-funds and the Directors of GTF will take steps to wind up GTF in accordance with the Memorandum and Articles of Association of GTF. Proposed Merger and the impact on Shareholders in the Merging Fund Transfer of assets The Merger will involve the delivery and/or transfer of the net assets of the Merging Fund to the GS Funds Custodian to be held on behalf of the Receiving Fund in exchange for the issue of New Shares in the Receiving Fund to Shareholders on the Effective Date. Accrued Income The final dividend declared by the Merging Fund prior to the Effective Date will be paid on 1 April Any income of the Merging Fund accrued but not yet paid out by the Merging Fund as at the Effective Date will form part of the assets of the Merging Fund and will be distributed to Shareholders of the Merging Fund on or after the Effective Date. Impact on holding Under the terms of the Merger, Shareholders will receive New Shares having an equivalent value to the value of their holding of Existing Shares on the Effective Date. Shareholders holding fractions of Existing Shares will receive fractions of New Shares in the Receiving Fund. The net asset value of the Merging Fund on the Effective Date will be calculated in accordance with the valuation methodology of GTF as set out in its Prospectus and Memorandum and Articles of Association. The net asset value of the Receiving Fund on the Effective Date and, following the delivery and/or transfer of the net assets of the Merging Fund to the Receiving Fund, will be calculated in accordance with the valuation methodology of GS Funds as set out in its Prospectus and Memorandum and Articles of Association. The valuation methodology for the assets of the Merging Fund is the same as that of the Receiving Fund. Each applies the amortised cost method of valuation in the manner prescribed by the Central Bank for use by Money Market Funds. The net asset value of the Merging Fund and the Receiving Fund will not be known until the Effective Date. Dealings in the Existing Shares will continue until the latest time for dealing in the Existing Shares as set out on page 3 of this Circular. If the Resolution is passed, the Merger will be binding on all Shareholders on the register of members of the Merging Fund on the Effective Date and Shareholders will be issued New Shares without any further action on their part, whether or not they voted in favour of the Merger or voted at all. Impact on rights of Shareholders of the Merging Fund The Merging Fund and the Receiving Fund are existing sub-funds of different Irish UCITS authorised by the Central Bank. Each is a Money Market Fund. A table setting out the New Shares proposed to be received by holders of Existing Shares is contained in Appendix III. Where possible the New Share class will correspond as closely as possible to the Existing Share class. The management fees and distribution fees relating to the Existing Shares and New Shares are set out in Appendix III. It should also be noted that Class 1 (Acc) Shares and Class 1 (Dist) Shares of the Merging Fund M

9 have a distribution fee of 35bps and the corresponding Share Classes in the Receiving Fund have a distribution fees respectively of 30bps and 25bps. Other than any difference in fee structure, the New Shares will operate in a very similar way to the Existing Shares as regards subscriptions, repurchases, conversions and payment of distributions (if any in respect of a particular New Share class) although there may be some differences in dealing deadline times, settlement dates or minimum dealing amounts between Existing Share classes and New Share classes. Shareholders should be aware of relatively low yields arising from the instruments in which the Receiving Fund invests and therefore the overall net yield of the Receiving Fund is also relatively low. Distribution fees and, where applicable management fee rebates may be reduced or no payment made at all at the discretion of GSAMI Group. This reduction or elimination of payments seeks to preserve a positive net yield for the Receiving Fund for the benefit of Shareholders. A similar policy is operated by the Merging Fund and currently this policy is active for the Merging Fund. While there are some differences between GTF and GS Funds, principal differences are set out in Appendix VI, it is not expected that there will be any material difference in the rights of Shareholders before and after the Merger takes effect as Shareholders will still be invested in an Irish UCITS Money Market Fund authorised by the Central Bank. By participating in the Merger, Shareholders are deemed to agree that all representations, warranties, indemnities, confirmations and declarations provided by Shareholders in existing subscription forms shall be deemed to be provided to the Receiving Fund as if the subscription forms had been addressed directly to the Receiving Fund and provided by the Shareholders as such at the Effective Time. Re-designation of Share Classes Existing Shares held in any of Class 1, Class 2, and Class 3 of the Merging Fund may be re-designated by the Directors as shares in another of such classes if the value of Existing Shares held by the Shareholder in the relevant class falls below the minimum holding for that class or if the value of Existing Shares in the relevant class rises above the maximum holding value of Existing Shares for that class. The Receiving Fund will not redesignate shareholders between share classes in this way and therefore the share class in which holders of Existing Shares are invested on the Effective Date will determine the class of New Shares which holders of Existing Shares will receive. Changes to Settlement Periods for Subscriptions and Redemptions for Accumulation Class Holders In order for the Merger to be carried out efficiently, the settlement periods for subscriptions and redemptions of the accumulating classes of Existing Shares will be amended on the last dealing day before the Effective Date so that the settlement period for subscriptions and redemptions will be close of business (Dublin time) on that dealing day. Therefore, for any subscriptions made by the dealing deadline on the last dealing day before the Effective Date, subscription proceeds must be received by close of business (Dublin time) on that day. Redemption proceeds for any redemptions submitted by the dealing deadline on the last dealing day before the Effective Date will be paid out by close of business (Dublin time) on that day. Impact on performance of Merging Fund On the basis that the investment objective and policies of the Merging Fund and the Receiving Fund are substantially similar, the Merger is not expected to impact the performance experienced by Shareholders. No performance fee is currently payable in relation to the Merging Fund. No performance fee is payable in relation to the Receiving Fund. As most of the portfolio of assets of the Merging Fund comprise eligible assets for the purposes of the portfolio of assets which can be held by the Receiving Fund, it is expected that no significant re-balancing of the portfolio of the Merging Fund will be required before the Merger can become effective. If the Merger is approved, reasonable endeavours will be used to ensure any instruments issued by The Goldman Sachs Group Inc. or any member of its group held by the Merging Fund will be disposed of prior to the Effective Date. Impact on Risk Profile Each Merging Fund and Receiving Fund is a Money Market Fund. The synthetic risk and reward indicator M

10 (SRRI) which is set out in the KIID for a UCITS is a measure of a fund s volatility. The SRRI for both the Merging Fund and Receiving Fund is 1. GTF is suitable for investors seeking a moderate return over a short term and who require lower than average risk, and GS Funds is suitable for those who wish to maximise current income to the extent consistent with the preservation of capital and the maintenance of liquidity by investing in a diversified portfolio of high quality money market securities. The risks included in the narrative accompanying the SRRI in the KIIDs for the Receiving Fund differ from those of the Merging Fund but there is no material difference in the risk profiles for both the Merging Fund and Receiving Fund. General Existing Shares are listed on the Irish Stock Exchange. New Shares are listed on the Irish Stock Exchange. Unaudited portfolio details for the Receiving Fund are set out at Appendix VIII. The Merging Fund is a recognised scheme in the UK for the purposes of section 264 of the UK Financial Services and Markets Act 2000, as amended (FSMA) and accordingly can be promoted in the UK by persons authorised to conduct investment business in the UK. The Receiving Fund has also been registered under section 264 of FSMA. The table in Appendix IV lists the jurisdictions in which the Merging Fund is currently registered for marketing and indicates whether the Receiving Fund is also registered in those jurisdictions. Additional country specific information is set out for Shareholders at Appendix V. No application is being made to suspend dealings in either the Merging Fund or the Receiving Fund in order to facilitate the calculation of the Exchange Ratio. Principal Similarities and Differences A table highlighting the principal similarities and differences between the Existing Fund and the Receiving Fund is included at Appendix VI. Accounting Date The accounting year end date of 31 December is the same for GTF and GS Funds. Fund Authorisation and Structure Both GTF and GS Funds are authorised under the Regulations and have the same domicile. The legal form of GTF and GS Funds is the same i.e. they are both established as investment companies, although GTF has appointed RBSAMD as its management company, whereas GS Funds is a self-managed UCITS. Service Providers GTF and GS Funds each have the same administrator and custodian. GS Funds has appointed a separate registrar and transfer agent, RBC Investor Services Ireland Limited, and a separate shareholder service agent, Goldman Sachs International acting through its European Shareholder Services group. GTF and GS Funds have different promoters, investment managers and auditors. Directors Details of the directors of GS Funds are set out in Appendix VII. Key Investor Information Document (KIID) A copy of the KIID of each share class of the Receiving Fund is enclosed with this Circular and is available at Shareholders are encouraged to read the relevant KIID, which contains information on the essential features of the share classes of the Receiving Fund. M

11 Taxation The below summary is only intended as a general guide to some of the main aspects of current Irish and UK tax law and practice applicable to the Merger and may not apply to certain categories of investor. It is not intended to provide specific advice and no action should be taken or omitted to be taken in reliance upon it. If Shareholders are in any doubt about their personal UK and Irish tax position in relation to the Merger, or indeed if they are resident for tax purposes in another jurisdiction, they should seek independent advice immediately from their professional adviser. Shareholders should be aware that, depending on their individual circumstances, there may be some impact in respect of taxation arising from the proposed Merger. Shareholders should carefully consider their position in this regard. Non Irish and UK tax resident investors should in particular consider obtaining appropriate professional advice regarding their position under the proposed Merger. Irish Taxation If the Merger is approved by the Shareholders, the exchange and cancellation of the Existing Shares in return for the issue of New Shares shall not be a chargeable event under Irish tax law. Accordingly, no Irish tax liability will arise for the Shareholders on the cancellation of their Existing Shares and the acquisition of New Shares under the Merger. In the event that New Shares are subsequently disposed of by the Shareholders, Irish tax legislation would deem such New Shares to have been acquired at the date and at the price that the Existing Shares were originally acquired. If the Shareholders request the repurchase of their Existing Shares this would constitute a taxable event for Irish tax purposes and would be subject to the same tax consequences as any disposal of shares in the Merging Fund. A disposal of New Shares will be a chargeable event for Irish tax purposes. However no tax should arise where the Shareholders are Irish tax resident exempt investors or non-irish tax resident investors and the appropriate declarations have in each case been filed with the Receiving Fund prior to the chargeable event arising. Existing subscription forms (containing the relevant declarations) signed by Shareholders have been transferred to the Receiving Fund in lieu of Shareholders being required to sign new declarations. The Revenue Commissioners have confirmed that as a result the Receiving Fund does not need to obtain new declarations from Shareholders. No stamp, documentary, transfer or registration tax would be payable in Ireland by the Shareholders on the disposal of their Existing Shares or on the issue of New Shares. Following the Effective Date, there will be no difference in the manner in which Shareholders are taxed in relation to their holding of New Shares from the Irish taxation treatment currently applied in relation to their holding of Existing Shares. UK Taxation Merging Fund Capital Gains GTF has carried on its affairs with the intention of not becoming resident in the UK or carrying on a trade in the UK. Provided GTF is not resident in the UK and does not carry on a trade in the UK, gains arising on the transfer of the assets of the Merging Fund to the Receiving Fund will not be subject to UK capital gains tax or corporation tax on chargeable gains. Stamp Duty and Stamp Duty Reserve Tax No UK stamp duty or stamp duty reserve tax should be payable on the cancellation of the Existing Shares or on the issue of New Shares. Shareholders Individual Shareholders On the basis that the Merging Fund is not a "reporting fund for the purposes of the UK's Offshore Funds (Tax) M

12 Regulations 2009 (SI 2009/3001), the treatment applicable to individual Shareholders on the disposal by them of shares in the Merging Fund will depend on whether the Receiving Fund is or is not a reporting fund for the purposes of SI 2009/3001. To the extent that any of the classes of the Receiving Fund is a "reporting fund" (which is understood to be the case in relation to the distributing classes of the Receiving Fund), it is expected that UK resident individual Shareholders should be treated as making a disposal of their interest in the Merging Fund for the purposes of the UK offshore funds rules as a result of the Merger (notwithstanding that the conditions of section 136 of the Taxation of Chargeable Gains Act (TCGA 1992) may otherwise be met). This disposal should be treated as made for a consideration equal to the market value of the Merging Fund shares which are being disposed of. Any individual Shareholders who are resident or ordinarily resident in the UK will (subject to any available reliefs) be liable to UK income tax in respect of gains arising from the disposal. To the extent that any of the classes of the Receiving Fund is not a "reporting fund" (which is understood to be the case in relation to the accumulating classes of the Receiving Fund), it is expected that the conditions of section 136 of the TCGA 1992 should be met and there should be no disposal made by UK resident individual Shareholders of their interest in the Merging Fund for the purposes of the UK offshore funds rules as a result of the Merger. Instead, the interest received by Shareholders in the Receiving Fund will be treated as having been acquired at the time of, and for the consideration applicable to, the interest in the Merging Fund which is being disposed of. If any individual Shareholder holds more than 5% of any class of the Merging Fund, the "no disposal" treatment described above will only be available if the transaction has been entered into for bona fide commercial reasons and not for a tax avoidance purpose (section 137(1) TCGA 1992). Clearance has been obtained from Her Majesty's Revenue & Customs (HMRC) under section 138 TCGA 1992 that section 137(1) TCGA 1992 will not apply to this transaction. The "transactions in securities" legislation in Chapter 1 of Part 13 Income Tax Act 2007 (ITA 2007) is an antiavoidance provision which HMRC may invoke in certain circumstances to counter transactions which result in an income tax advantage. These provisions could apply to individual Shareholders as a result of the Merger. A tax charge would, however, only apply if the main purpose, or one of the main purposes, of the person in being a party to the transaction in securities, or any of the transactions in securities, is to obtain an income tax advantage and HMRC serve a counteraction notice. Given that future returns for individual Shareholders should be taxed as income in any event (either when income is reported in relation to the Receiving Fund which is a "reporting fund" or on the disposal of interests in the Receiving Fund which is not a "reporting fund" pursuant to the offshore funds rules), it would not normally be expected that HMRC would seek to invoke these provisions. In any event, clearance has been obtained from HMRC under section 701 ITA 2007 that they will not serve a counteraction notice in relation to this transaction. Corporate Shareholders For UK corporate Shareholders within the charge to corporation tax, as the Merging Fund's investments will predominantly consist of interest-bearing securities and money market securities, the Existing Shares held by them should be treated for the purposes of the UK's loan relationship rules as rights under a creditor relationship (instead of the offshore fund regime described above). For UK tax purposes, a fair value basis of accounting must be used (meaning that any debits or credits for tax purposes should be recognised in line with the accounting treatment of the Merger). The "transactions in securities" rules described above also apply to corporate Shareholders (Part 15 Corporation Tax Act 2010 (CTA 2010)) as a result of the Merger. Given the way that corporate Shareholders are taxed under the loan relationships regime described above, these rules are unlikely to be invoked by HMRC. To confirm this position, clearance has been obtained from HMRC under section 748 CTA 2010 that they will not serve a counteraction notice in relation to this transaction. Tax treatment of future holdings for individual Shareholders and corporate Shareholders M

13 A summary of current UK tax law and HMRC practice applicable to the subsequent holding and disposal of New Shares is set out in the GS Funds Prospectus. Basis of the Merger An extraordinary general meeting of the Shareholders in the Merging Fund is being convened for 25 March 2014 in order to consider and vote on the proposed Merger. The Notice of the Meeting is set out in Appendix I to this Circular. The Notice sets out the text of the Resolution to be proposed at the Meeting. The implementation of the proposed Merger for the Merging Fund is conditional upon the Resolution set out at Appendix I being duly passed as a special resolution of the Shareholders in the Merging Fund. The quorum for the Meeting is two Shareholders present at the Meeting in person or by proxy. The Resolution will be proposed as a special resolution. To be passed as a special resolution, the Resolution must be carried by a majority of not less than 75% of the total number of votes cast in person or by proxy at the Meeting. In view of the importance of these matters, the Chairman of the Meeting will demand that a poll be taken. Where votes are cast on a poll, the Memorandum and Articles of Association of GTF provide that any shareholder present in person or by proxy shall be entitled to one vote in respect of each share held. Shareholders will be notified promptly of the outcome of the Meeting. If the Resolution is passed, the Merger will be binding on all Shareholders on the register of members of the Merging Fund on the Effective Date. Shareholders will be issued with New Shares in the relevant share class having an equivalent value to their holding of Existing Shares without any further action on their part, whether or not they voted in favour, or voted at all. Confirmation of your new holding in the Receiving Fund will be sent to you within 21 days of the Effective Date. The first day for dealing in the Receiving Fund will be the Effective Date. Shareholders who do not wish to take part in the Merger must request the repurchase of their Existing Shares prior to the latest time for requesting such a repurchase, as specified on page 3 of this Circular. Otherwise, in the event that the Merger proceeds, such Existing Shares will automatically form part of the Merger. Although there is no repurchase fee currently applied in relation to the Merging Fund, the Regulations provide that Shareholders will have the right to request a repurchase of their Existing Shares without charge from the date of this Circular up to the latest time for requesting a repurchase of their Existing Shares as set out on page 3 of this Circular. Dealings in the Existing Shares will cease at 1 p.m. on 11 April 2014 for distributing shares and for accumulating shares being the latest time for dealing in the Existing Shares. If the Resolution is passed, no further dealings in the Existing Shares will take place from the latest time for dealing in the Existing Shares, the register will be closed and the Existing Shares shall cease to be of any value or effect (subject to the terms of the Merger) after the Effective Time. Subscription requests received prior to the latest time for dealing in the Existing Shares will be processed in accordance with the Prospectus of GTF. In the event that subscription requests are received for the Merging Fund after the latest time for dealing in the Existing Shares, such requests will be refused, and the applicant will be informed that the Merging Fund is closed for subscriptions. In the event that repurchase or exchange requests are received for the Merging Fund after the latest time for requesting such a repurchase or exchange, as set out on page 3 of this Circular, such requests will be refused and the holding of Existing Shares by the Shareholder will automatically form part of the Merger. Shareholders who form part of the Merger and receive New Shares in exchange for their Existing Shares will be able to exercise their rights as shareholders in the Receiving Fund as and from the first dealing day for dealing in the New Shares as set out on page 3 of this Circular. In the event that the Resolution is not passed, the Merging Fund shall be terminated. If this is the case, Shareholders will receive a further notification after the Meeting outlining what steps will be taken to terminate the Merging Fund. Dealings in the Merging Fund will continue after the Meeting until the Merging Fund is M

14 terminated. In the event that the Resolution is passed, the proposed Merger will involve the delivery and/or transfer to the GS Funds Custodian, to be held on behalf of the Receiving Fund of the net assets of the Merging Fund in exchange for the issue of New Shares to Shareholders. The number of New Shares to be issued to each Shareholder in exchange for Existing Shares will not be known until the Effective Date. The value of the holding of New Shares which a Shareholder will receive under the Merger will equal the value of their holding of Existing Shares immediately prior to the Effective Time. Potential Changes to the Merging and Receiving Funds due to European Securities and Markets Authority Guidelines The European Securities and Markets Authority (ESMA) previously published new regulatory requirements which apply to the portfolio management techniques which may be utilised by the Merging and Receiving Funds. However, the applicability of the new rules concerning diversification of collateral received by money market funds in relation to repurchase agreements and reverse repurchase agreements is currently subject to further consultation by ESMA. ESMA has indicated that it will finalise its guidelines in the first quarter of If ESMA conclude that the new collateral guidelines do apply then, the Merging Funds and the Receiving Funds may need to reduce, in certain circumstances, the use of reverse repurchase agreements, which could have a negative impact on the yield achieved. Expenses of the Merger The Merging Fund will not bear the legal, advisory or administrative costs of the Merger which will be borne by RBS plc. In the case of the expenses of GS Funds in connection with the Merger, GSAMI has agreed to bear the direct legal counsel costs associated with the Merger and any publication or audit costs associated with the Merger. As the Merger will involve an in specie transfer of assets, transaction costs (if any) are expected to be minimal. Review by an Independent Auditor In accordance with the Regulations, an Independent Auditor will validate the following: the criteria adopted for the valuation of the net assets of the Merging Fund on the Effective Date; and the calculation method of the Exchange Ratio as well as the actual Exchange Ratio determined at the Effective Time. Following the Effective Date, an Independent Auditor will prepare a report with details of its findings in relation to the above which will be available to the Shareholders and Receiving Fund shareholders, free of charge, upon request to the GTF company secretary. A copy of this report will also be available to the Central Bank. Data Protection Upon completion of the Merger any personal data relating to Shareholders accounts will cease to be controlled by GTF and will instead be controlled by GS Funds as data controller in accordance with the provisions of the Data Protection Acts 1988 and GS Funds collect, store and process, by electronic or other means, the personal data supplied by its shareholders for the purpose of fulfilling the services required by the shareholders and complying with its legal obligations. The personal data processed includes in particular the name, contact details (including postal or address), banking details, invested amount and holdings in GS Funds of each shareholder. Personal data supplied by shareholders is processed for the purpose of (i) maintaining the register of shareholders, (ii) processing subscriptions, redemptions and exchanges of shares and payments of dividends to shareholders, (iii) performing controls on excessive trading and market timing practices, and (iv) complying with applicable anti-money laundering rules. Each shareholder has the right to access their personal data and may ask for the personal data to be rectified where it is inaccurate or incomplete by writing to GS Funds. In order to facilitate the merger process, GTF/RBS plc have made personal data available to GS Funds, GSAMI Group and their data processors in order to carry out anti-money laundering checks. Upon completion of the Merger, personal data may be transferred to other data processors of GS Funds, which M

15 may be located within the E.U. or in countries outside of the E.U. whose data protection laws may not offer an adequate level of protection. By continuing to hold shares in GTF, holders of Existing Shares consent to the transfer of any personal data held by GTF and/or RBS plc to GSAMI Group and GS Funds, as well as the transfer of any personal data to processors located in Australia, Singapore, Japan, Korea, Hong Kong, India and the U.S, in order to enable them to continue to service accounts relating to New Shares following the Merger. RBS plc/gtf may retain personal data relating to Existing Shares in GTF after the Merger in accordance with the RBS plc/gtf record keeping policy. Documents available for inspection The following documents are available on request from, or are available for inspection at, the offices of the GTF company secretary, Goodbody Secretarial Limited, 25/28 North Wall Quay, Dublin 1, during usual business hours on any business day (Saturdays and Sundays excepted) from the date of this Circular up to and including the date of the Meeting and, if the Resolution is passed, up to and including the Effective Date: Key Investor Information Documents (KIID) relating to the Merging Fund; Memorandum and Articles of Association of GTF and GS Funds; Prospectus of GTF and GS Funds; KIIDs relating to the Receiving Fund; Audited report and accounts of GTF for the period to 31 December 2012; Audited report and accounts of GS Funds for the period to 31 December 2012; and the Regulations. Shareholders or potential investors who submit subscription requests or who ask to receive copies of the above documents during the period from the date of this Circular to the Effective Date will be provided with a copy of this Circular and the relevant KIID of the Receiving Fund. Action to be taken We would draw your attention to the Notice of Extraordinary General, which contains the Resolution, set out in Appendix I of this Circular in relation to the Merging Fund. The documents available for inspection, including the KIIDs of the Receiving Fund which Shareholders are advised to read in advance of voting on the Resolution, are listed above. Shareholders holding Existing Shares in the Merging Fund are urged to complete and return the proxy form set out in Appendix II of this Circular. The proxy form should be returned as soon as possible and in any event no later than the date and time set out on page 3 of this Circular. The requisite approvals of the Central Bank and the Irish Stock Exchange have been obtained in relation to the issue of this Circular. In order to implement the Merger, the following actions must be completed:- the passing of the Resolution by Shareholders to approve the Merger; the implementation of the transfer of the net assets of the Merging Fund to the Receiving Fund; and the issue of New Shares to Shareholders. Following the implementation of the Merger, the Directors will arrange for the filing with the Central Bank of any necessary documents required by the Central Bank in order to note the fact that the Merger has become effective. In the opinion of the Directors, the Merger is fair and reasonable and is in the best interests of Shareholders, as a whole. The Directors recommend that you vote in favour of the Resolution to be proposed. M

16 RBSAMD currently acts as the manager to GTF. RBSAMD is also a shareholder in the Merging Fund and will be counted in the quorum at the Meeting. However, as RBSAMD is a subsidiary of RBS plc, which gives rise to a potential conflict of interest in relation to voting on the Resolution, it shall abstain from voting on the Resolution. If you do not intend to attend the Meeting in person, it is important that you exercise your voting rights in respect of the Meeting by completing and returning your enclosed proxy form so that it will arrive by a.m. on 23 March 2014 at the following address: Goodbody Secretarial Limited 25/28 North Wall Quay Dublin 1 Ireland Fax: (with original to follow by post) Submission of a proxy form will not preclude you from attending and voting at the Meeting in person if you so wish. If you have any queries in relation to the proposed Merger or otherwise in relation to this Circular, please contact Sue Leigh, tel: or Warren Boon, tel: Yours faithfully Director for and on behalf of Global Treasury Funds plc M

17 APPENDIX I NOTICE OF EXTRAORDINARY GENERAL MEETING OF STERLING FUND (the Merging Fund) A SUB-FUND OF GLOBAL TREASURY FUNDS PLC (the Company) NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the Merging Fund, a sub-fund of the Company, will be held at 25/28 North Wall Quay, IFSC, Dublin 1, Ireland on 25 March 2014 at a.m. to consider and, if thought fit, to pass the following resolution, as a special resolution, of the Merging Fund: SPECIAL RESOLUTION: That: the merger, the terms of which are set out in a circular dated 3 March 2014 (the Circular) produced to the meeting and initialled by the Chairman for the purposes of identification to provide for the delivery and/or transfer of all the net assets of the Merging Fund to Goldman Sachs Sterling Liquid Reserves Fund (the Receiving Fund), in consideration of the shareholders who are on the register of shareholders of the Merging Fund on the date of implementation of the merger (Effective Date) being issued new shares in the Receiving Fund having an equivalent value to their holding of existing shares in the Merging Fund, be and is hereby approved on the terms and conditions set out in the Circular; and that all existing shares of the Merging Fund shall (subject to the terms of the merger) be deemed to have been redeemed following the issue of new shares in the Receiving Fund to those shareholders who are on the register of shareholders of the Merging Fund at the Effective Date; and that the Directors of the Company be and are hereby authorised, on behalf of the Company, to enter into and give effect to any and all documents, deeds and/or agreements and to do any act or thing, requisite or desirable, in the opinion of the Directors, for the purpose of carrying the merger into effect. And to transact any other business which may properly be brought before the meeting. BY ORDER OF THE BOARD Director for and on behalf of Global Treasury Funds plc M

18 APPENDIX II FORM OF PROXY OF STERLING FUND (the Merging Fund) A SUB-FUND OF GLOBAL TREASURY FUNDS PLC (the Company) I/We being a shareholder of the Merging Fund, hereby appoint the Chairman of the meeting or, or failing her/him as my/our proxy to vote for me/us on my/our behalf at an extraordinary general meeting of the Merging Fund to be held at 25/28 North Wall Quay, Dublin 1, Ireland on 25 March 2014 at a.m. and at any adjournment thereof. Signature: Date: It is intended that votes will be cast on a poll in accordance with the Memorandum and Articles of Association. Where votes are to be cast on a poll each shareholder is entitled to one vote in respect of each share held. Please insert the number of shares in the space below which you wish to vote FOR or AGAINST the resolution. Special Resolution Number of Shares For Number of Shares Against Abstain That: the merger, the terms of which are set out in a circular dated 3 March 2014 (the Circular) produced to the meeting and initialled by the Chairman for the purposes of identification to provide for the delivery and/or transfer of all the net assets of the Merging Fund to Goldman Sachs Sterling Liquid Reserves Fund (the Receiving Fund), in consideration of the shareholders who are on the register of shareholders of the Merging Fund on the date of implementation of the merger (Effective Date) being issued new shares in the Receiving Fund having an equivalent value to their holding of existing shares in the Merging Fund, be and is hereby approved on the terms and conditions set out in the Circular; and that all existing shares of the Merging Fund shall (subject to the terms of the merger) be deemed to have been redeemed following the issue of new shares in the Receiving Fund to those shareholders who are on the register of shareholders of the Merging Fund at the Effective Date; and that the Directors of the Company be and are hereby authorised, on behalf of the Company, to enter into and give effect to any and all documents, deeds and/or agreements and to do any act or thing, requisite or desirable, in the opinion of the Directors, for the purpose of carrying the merger into effect. M

19 Notes: 1. This proxy form (and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) must be sent to, or deposited at, the offices of Goodbody Secretarial Limited, 25/28 North Wall Quay, Dublin 1, Ireland (the Company Secretary), (facsimile ) attention of: Emma O'Sullivan of Goodbody Secretarial Limited no later than 48 hours before the time appointed for the holding of the meeting or the adjourned meeting. 2. If you wish to appoint as your proxy some person other than the Chairman of the meeting please insert in block capitals the full name of the person of your choice. A proxy need not be a shareholder of the Merging Fund. 3. The proxy will exercise his/her discretion as to how he/she votes or whether he/she abstains from voting on the resolution if no instruction is given in respect of each resolution, and on any business or resolution considered at the meeting other than the resolution referred to in the notice of the meeting. 4. If the appointer is a corporation, this proxy form must be executed under the seal or under the hand of some officer or attorney duly authorised on its behalf. In the case of joint shareholders, any one shareholder may sign however the vote of the senior who tenders a vote by proxy shall be accepted to the exclusion of the votes of the other joint shareholders; and for this purpose seniority shall be determined by the order in which the names of the shareholders stand in the register in respect of the share. 5. The completion and return of the proxy form will not preclude shareholders from attending and voting at the said meeting should they decide to do so. M