PRODUCT HIGHLIGHTS SHEET. for. Affin Hwang Structured Income Fund 9

Transcription

1 PRODUCT HIGHLIGHTS SHEET for Affin Hwang Structured Income Fund 9 Date of issuance: 18 October 2016 RESPONSIBILITY STATEMENT This Product Highlights Sheet has been reviewed and approved by the directors or authorised committee or persons approved by the Board of Affin Hwang Asset Management Berhad ( T) and they have collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable inquiries, they confirm to the best of their knowledge and belief, that there are no false or misleading statements or omissions of other facts which would make any statement in the Product Highlights Sheet false or misleading. STATEMENT OF DISCLAIMER The relevant information and document in relation to the Affin Hwang Structured Income Fund 9, including a copy of this Product Highlights Sheet has been lodged with the Securities Commission Malaysia under the Lodge and Launch Framework. The lodgement of the relevant information and document in relation to the Affin Hwang Structured Income Fund 9, including this Product Highlights Sheet, should not be taken to indicate that the Securities Commission Malaysia recommends the (name of unlisted capital market product) or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Product Highlights Sheet. The Securities Commission Malaysia is not liable for any non-disclosure on the part of the (Affin Hwang Asset Management Berhad ( T) responsible for the Affin Hwang Structured Income Fund 9 and takes no responsibility for the contents of this Product Highlights Sheet. The Securities Commission Malaysia makes no representation on the accuracy or completeness of this Product Highlights Sheet, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents. Due to the nature of the underlying investments of the Fund, you may lose your entire investment capital and future income distribution should a Credit Event occurs, a default by the Structurer of the Credit-Linked Note or other legal prohibitions stated herein. The Credit-Linked Note the Fund intends to invest in contains a feature known as First-to- Default or commonly known as a FTD. This constitutes an additional risk to the CLN as a default by any one Reference Entities in servicing its obligations under the Confirmation which will lead to a Credit Event. For further details on the FTD, please refer to page 11 of the Information Memorandum. Investors should note that the FTD feature embedded in the CLN increases the likelihood of a Credit Event occurring. The implication to investors and the Fund should a Credit Event occur is highlighted in page 12 of the Information Memorandum.

2 This Product Highlights Sheet only highlights the key features and risks of this Fund. Investors are advised to request, read and understand the Information Memorandum of the Fund before deciding to invest. 1. What is this product about? PRODUCT HIGHLIGHTS SHEET AFFIN HWANG STRUCTURED INCOME FUND 9 BRIEF INFORMATION ON THE PRODUCT The Fund is a wholesale fund which aims to provide income distribution through investment in Credit-linked Note. 2. Who is this product suitable for? PRODUCT SUITABILITY The Fund is designed for Sophisticated Investors who have a short term investment horizon, seek regular income distribution and have a high risk tolerance. 3. What am I investing in? KEY PRODUCT FEATURES Launch Date 18 October 2016 Offer Period & Offer Price Viable Fund Size Maturity of the Fund / Fund s Maturity Base Currency Investment Strategy The offer period shall be for a period of not more than 45 calendar days from the Commencement Date of the Fund. The offer period may be shortened in the event we determine that it is in your best interest. We will then issue a Communiqué to you, notifying that the Offer Period is shortened and the actual Investment Date will be stated in the same Communiqué. The offer price during the offer period is set at MYR 1.00 only. Units will ONLY be sold during the offer period. We reserve the right not to proceed with the Fund if the Fund has not achieved a viable size of 80 million Units at the end of the Offer Period. The Fund will mature:- (1) on the Maturity Date; or (2) upon the occurrence of Credit Event; whichever occurs first. MYR The Fund will invest a minimum of 95% of the Fund s NAV in a USD-denominated Credit-Linked Note issued by a Financial Institution (the Structurer ), while the remaining balance will be invested in money market instruments, fixed deposits and/or liquid assets. The minimum allocation of CLN however will not be observed nearing the Maturity Date as the maturity period of the CLN may be shorter than the Maturity Date of this Fund. The CLN that the Fund intends to purchase provides exposure to multiple corporation or sovereign referred to as Reference Entities. The CLN will only be sourced from a Structurer with a minimum credit rating of Baa3 by Moody s or its equivalent. Being a holder of the CLN, the Fund will be paid by the Structurer in the form of quarterly coupon payments (the amount is fixed at the onset when the purchase of the CLN is made and stated in the Confirmation). These coupons received by the Fund would be used to provide quarterly income distributions by the Fund to you, subject to the applicable Fund expenses and fees. All income distributions will be in MYR terms. 1

3 At the Maturity Date, the Structurer will pay the Fund the Notional Amount. The payment of proceeds is expected to be paid to you within two (2) weeks from the Maturity Date and will not be more than one (1) months from the Maturity Date. The Fund may also employ derivatives such as foreign exchange forward contracts and cross currency swaps for hedging purpose. Cross currency swaps and/or foreign exchange forward contracts may be used to hedge the principal and/or the returns of the foreign currency denominated investments back to MYR. The employment of derivatives under these circumstances is expected to reduce the impact of foreign currency movements on the Fund s NAV. While the hedging strategy will assist with mitigating the potential foreign exchange loss by the Fund, any potential gains from the hedging strategy will be capped as well. Asset Allocation A minimum of 95% of the Fund s NAV to be invested in CLN; and A maximum of 5% of the Fund s NAV to be invested in money market instruments, fixed deposits and/or liquid assets. Distribution Policy Minimum Initial Investment* Minimum additional Investment* Minimum units held* Subject to the availability of income, the Fund aims to distribute income on a quarterly basis until the Maturity Date. MYR 40,000 MYR 20,000 Any additional investments by you can only be made during the Offer Period 40,000 Units Note: Please refer to the Fund s Information Memorandum for further details of the Fund. 4. Who am I investing with? Relevant parties information: The Manager Manager s Delegate (Fund Accounting and Valuation Agent) The Trustee Trustee s Delegate (Local & Foreign Custodian) Auditor Tax Adviser Solicitor Affin Hwang Asset Management Berhad TMF Trustees Malaysia Berhad TMF Trustees Malaysia Berhad Standard Chartered Bank Malaysia Berhad PricewaterhouseCoopers Deloitte Tax Services Sdn. Bhd. Messrs. Soon Gan Dion & Partners 5. What are the possible outcomes of my investment? The Fund is a close-ended income wholesale fund with the objective of providing income distribution through investment in Credit-linked Note. The CLN that the Fund intends to purchase provides exposure to multiple corporation or sovereign referred to as Reference Entities. The CLN will only be sourced from a Structurer with a minimum credit rating of Baa3 by Moody s or its equivalent. Being a holder of the CLN, the Fund will be paid by the Structurer in the form of quarterly coupon payments (the amount is fixed at the onset when the purchase of the CLN is made and stated in the Confirmation). These coupons received by the Fund would be used to provide quarterly income distributions by the Fund to you, subject to the applicable Fund expenses and fees. All income distributions will be in MYR terms. At Maturity Date, the Fund will * subject to change at the Manager s discretion, the investor may negotiate for a lower amount or value. 2

4 distribute the final quarterly income and maturity proceeds of the Fund, subject to the applicable Fund expenses and fees. The Fund s investment into the Structured Product does not provide a guarantee on capital contributed nor does it guarantee a fixed rate of return. However, the Fund is expected to provide a fixed annual rate of return, and return of capital subject to no occurrence of a Credit Event. Please note that this Fund does not offer protection of your investment. Due to the nature of the underlying investments of the Fund, you may lose your entire investment capital and future income distribution should a Credit Event occurs or other legal prohibitions stated in the Information Memorandum of the Fund. KEY RISKS 6. What are the key risks associated with this product? General risks of the Fund Market risk - Market risk arises because of factors that affect the entire market place. Factors such as economic growth, political stability and social environment are some examples of conditions that have an impact on businesses, whether positive or negative. It stems from the fact that there are economy-wide perils, or instances of political or social instability which threaten all businesses. Hence, the Fund will be exposed to market uncertainties and fluctuations in the economic, political and social environment that will affect the market price of the investments either in a positive or negative way. Fund management risk - This risk refers to the day-to-day management of the Fund by us which will impact the performance of the Fund. For example, investment decisions undertaken by us as a result of an incorrect view of the market or any non-compliance with internal policies, investment mandate, the Deed, relevant law or guidelines due to factors such as human error, fraudulent, dishonesty or weaknesses in operational process and systems, may adversely affect the performance of the Fund. Inflation risk - This is the risk that your investment in the Fund may not grow or generate income at a rate that keeps pace with inflation. This would reduce your purchasing power even though the value of the investment in monetary terms has increased. Loan financing risk - This risk occurs when you take a loan/financing to finance your investment. The inherent risk of investing with borrowed money includes you being unable to service the loan repayments. In the event Units are used as collateral, you may be required to top-up your existing instalment if the prices of Units fall below a certain level due to market conditions. Failing which, the Units may be sold at a lower net asset value per unit as compared to the net asset value per unit at the point of purchase towards settling the loan. Operational risk - Operational risk is the risk of loss due to the breakdown, deficiencies or weaknesses in the operational support functions resulting in the operations or internal control processes producing an insufficient degree of customer quality or internal control by the Manager. Operational risk is typically associated with human error, system failure, fraud and inadequate or defective procedures and controls. Note: Please refer to section Understanding the risks of the Fund of the Information Memorandum for further detail of each risk. Specific risks of the Fund Investment concentration risk - This risk exists because the Fund will only purchase a single investment instrument which is the CLN and as such, there is a lack of diversification. The ability of the Fund to achieve its objective is dependent entirely on the performance of the CLN.. Counterparty risk - As the Fund intends to purchase the CLN from only one seller, i.e. the Structurer, and the purchase forms a minimum of 95% of the NAV of the Fund, counterparty risk becomes more pronounced. CLN risk - The purchase of the CLN carries some risk that is peculiar to the CLN. Country risk Each CLN assumes the risk (such as economic or political climate) specific to the country from which a Reference Entity is selected. The dampening of economic conditions or the instability of the political situation in a particular country where a Reference Entity is located may severely hamper that Reference Entity s ability to service its obligations stated in the Confirmation and thereby heighten the possibility that one or more of the specific events highlighted in the Confirmation may occur and if it does occur, will lead to the Structurer providing a notification of a Credit Event. First-to-default risk - The Structurer has imposed this feature whereby if even one Reference Entity fails to observe the Obligation specified in the Confirmation, that in itself, is sufficient for the Structurer to provide a 3

5 notification of a Credit Event, notwithstanding that the other Reference Entities continue to observe the Obligation diligently. When the Structurer provides a notification of a Credit Event, this risk becomes realised and the whole CLN is considered defaulted. When this happens, the return of your initial investment and expected income distribution may be as little as zero. Structured product risk The CLN is a type of structured product. Investments in a structured product, like all financial instruments, are indirectly subject to market forces which determine demand and supply for such financial instruments. Market forces factors that have an indirect impact on demand and supply for this CLN include implied future direction and volatility of the Reference Entities. The implied direction and volatility factors may be affected by the movement of credit spreads, liquidity, credit risk and any related factors in respect of the Reference Entities. Credit risk - As the name of the instrument suggest, credit risk forms part of the major risk that is associated with investments in a CLN. This risk refers to the possibility of the Reference Entities triggering a Credit Event and thus causing the CLN to early terminate. In return for the Fund assuming this risk, the Structurer will continue to pay to the Fund the agreed coupon payout. Derivatives risk - We may use derivatives for hedging purposes. Valuation of derivatives takes into account a multitude of factors such as price of the underlying assets, volatility of underlying assets, interest rate levels, the correlation between the underlying assets and the derivative, the implied future direction of the underlying assets and other factors. Any adverse changes of the factors mentioned above, may result in a lower NAV. Legal risk - This risk refers to the ability of the Fund to legally continue holding the CLN. Circumstances may arise where a legal prohibition is put in place that may hinder the Fund s ability to continue holding on to the CLN. The legal prohibition may come in the form of a moratorium imposed by a regulatory body; a change in the Guidelines or any other legal means. When this happens, the Fund will require the Structurer to unwind the CLN. The Structurer in unwinding the CLN, is not legally obliged to return the Notional Amount since the Fund did not hold the CLN until the Maturity Date. Instead, the Fund will only receive the bid price provided by the Structurer, determined at the point when the Fund requires the Structurer to unwind the CLN Liquidity risk - Since the purchase of a CLN is made off-market i.e. not through an exchange but rather through negotiated terms with the Structurer, effectively the Structurer is the seller of the CLN and also the only buyer of the CLN when the Fund wishes to make a partial or even a full unwinding of the CLN. The liquidity risk in this context refers to the inability of the Fund to source for another buyer in order to take advantage of better pricing that would be available if there were multiple buyers when the Fund wishes to make a partial or even a full unwinding of the CLN. Repurchase risk - You are reminded to be prepared to commit your investment until the Maturity Date. Any repurchase request made by you will be based on Forward Pricing which is the NAV per Unit at the next valuation point. The NAV per Unit at that valuation point may be lower than your initial investment outlay. You are also reminded that exiting this Fund prior to the Maturity Date will attract a penalty charge and this may further reduce any monies payable back to you. The penalty charge incurred by your repurchase request will be retained by the Fund for the benefit of the remaining Unit Holders. Currency risk - As the investments of the Fund may be denominated in currencies other than the Base Currency, any fluctuation in the exchange rate between the Base Currency and the currencies in which the investments are denominated may have an impact on the value of these investments. You should be aware that if the currencies in which the investments are denominated depreciate against the Base Currency, this will have an adverse effect on the NAV of the Fund in the Base Currency and vice versa. You should note that any gains or losses arising from the fluctuation in the exchange rate may further increase or decrease the returns of the investment. Due to the nature of the underlying investments of the Fund, you may lose your entire investment capital and future income distribution should a Credit Event occurs, a default by the Structurer of the Credit- Linked Note or other legal prohibitions stated herein. The Credit-Linked Note the Fund intends to invest in contains a feature known as First-to-Default or commonly known as a FTD. This constitutes an additional risk to the CLN as a default by any one Reference Entities in servicing its obligations under the Confirmation which will lead to a Credit Event. For further details on the FTD, please refer to page 11 of the Information Memorandum. Investors should note that the FTD feature embedded in the CLN increases the likelihood of a Credit Event occurring. The implication to investors and the Fund should a Credit Event occur is highlighted in page 12 of the Information Memorandum. Note: Please refer to section Understanding of the risks of the Fund of the Information Memorandum for further detail of each risk 4

6 FEES & CHARGES 7. What are the fees and charges involved? There are fees and charges involved and you are advised to consider them before contributing to the Fund. What will I be charged by the Manager? Sales charge 2.00% of the Offer Price and it is not negotiable. We will impose a penalty charge of 5.00% on the NAV per Unit, if repurchase of Units is made after the Investment Date of the Fund. Note: Penalty charge There will not be any penalty fee applicable on the repurchase request made before the Investment Date. The penalty fee is fixed and non-negotiable. It will be retained by the Fund for the benefit of the existing Unit Holders. The penalty fee is not subject to GST. Assuming that the number of Units repurchased is 100,000 and the NAV per Unit is MYR 1.00, the repurchased amount would be:- 100,000 Units x MYR 1.00 = MYR 100,000 Then, the penalty charge would be:- Switching fee Transfer fee MYR 100,000 x 5.00% = MYR 5,000 Not applicable. MYR 5.00 per transfer What are the key ongoing fees charged to the Fund? Management fee Trustee fee The management fee will only be calculated one (1) Business Day prior to the Maturity Date of the Fund (referred to as Calculation Date ). We will earn a 20% management fee which is conditional upon the appreciation in the NAV per Unit on the Calculation Date over and above the hurdle value* (referred to as the Condition ). However, in the interest of investors, we impose a hurdle value, where the NAV per Unit must exceed MYR before we are eligible for a management fee. If the Condition is fulfilled, we are eligible for a management fee which is payable to us on the Calculation Date. * A hurdle value is the minimum value that needs to be achieved before we are eligible to earn the management fee. The hurdle value is calculated by adding the quarterly coupon payment and sales charge (inclusive of GST on the Offer Price). Please refer to section About the Fees and Charges of the Information Memorandum for further details on the calculation of management fee. Up to 0.03% per annum of the NAV of the Fund (excluding foreign custodian fees and charges) Note: Please refer to the Information Memorandum for further explanation and illustration of the Fund s fees, charges and expenses. THE FEES, CHARGES AND EXPENSES QUOTED IN THIS INFORMATION MEMORANDUM ARE EXCLUSIVE OF GST. WE (INCLUDING THE TRUSTEE AND OTHER SERVICE PROVIDERS OF THE FUND) WILL CHARGE GST AT THE PREVAILING RATE OF 6% ON THE FEES, CHARGES AND EXPENSES IN ACCORDANCE WITH THE GOODS AND SERVICES TAX ACT

7 8. How often are valuations available? VALUATIONS AND EXITING FROM INVESTMENT The Fund will be valued on every Business Day and you may obtain the NAV and NAV per Unit of the Fund from our website at our customer service via our toll free number or to 9. How can I exit from this investment and what are the risks and costs involved? It is important to note that we will impose a penalty charge of 5.00% on the NAV per Unit, if repurchase of Units is made after the Investment Date of the Fund. You may request to redeem your investments in the Fund at any point in time by completing the repurchase application form and returning it to us on any Business Day between 8.45 a.m. and 3.30 p.m. Payments will be made to you within 14 days from the day the repurchase request is received by us and provided that all documentations are completed and verifiable. CONTACT INFORMATION 10. Who should I contact for further information or to lodge a complaint? 1. For internal dispute resolution, you may contact our customer service personnel: (a) via phone to : (b) via fax to : (c) via toll free no. : (d) via to : customercare@affinhwangam.com (e) via letter : Affin Hwang Asset Management Berhad Ground Floor Menara Boustead 69, Jalan Raja Chulan Kuala Lumpur Complaints should be made in writing with the following information: (a) particulars of the complainant which include name, correspondence address, contact number, address (if any) and other relevant information; (b) circumstances of the non-compliance or improper conduct; (c) parties alleged to be involved in the improper conduct; and (d) other supporting documentary evidence (if any). 2. If you are dissatisfied with the outcome of the internal dispute resolution process, please refer your dispute to the following regulatory bodies, details of which are as follows: Federation of Investment Managers Malaysia (FiMM): (a) via to : legalcomp@fimm.com.my (b) via online complaint form : (c) via letter to : Complaints Bureau Legal, Secretarial & Regulatory Affairs Federation of Investment Managers Malaysia , 6 th Floor, Wisma Tune No. 19, Lorong Dungun, Damansara Heights Kuala Lumpur OR Securities Industries Dispute Resolution Corporation (SIDREC): (a) via phone to : (b) via fax to : (c) via to : info@sidrec.com.my (d) via letter to : Securities Industry Dispute Resolution Center (SIDREC) Unit A-9-1 Level 9, Tower A Menara UOA Bangsar No. 5, Jalan Bangsar Utama Kuala Lumpur 6

8 3. You can also direct your complaint to the SC even if you have initiated a dispute resolution process with SIDREC. To make a complaint, please contact the SC s Investor Affairs & Complaints Department: (a) via phone to the Aduan Hotline at : (b) via fax to : (c) via to : aduan@seccom.com.my (d) via online complaint form available at (e) via letter to : Investor Affairs & Complaints Department Securities Commission Malaysia No 3 Persiaran Bukit Kiara Bukit Kiara Kuala Lumpur APPENDIX : GLOSSARY Bursa Malaysia Business Day Cash Settlement Amount Confirmation Credit Event Means the stock exchange managed and operated by Bursa Malaysia Securities Berhad including such other name as it may be changed to from time to time. A day on which the Bursa Malaysia is open for trading. The Manager may declare certain Business Days a non-business Day when deemed necessary, such as in the event of market disruption. Means the amount the Structurer will pay to the Fund, being the value of the CLN, when the Structurer provides notification of a Credit Event. Means the contract entered into by the Structurer and the Manager and the Trustee, as the case may be, on behalf of the Fund for the purchase of the CLN. When any one of the Reference Entity defaults on the Obligation because of the occurrence of one or more of the following specific events:- 1) bankruptcy (the Reference Entity becomes insolvent); or 2) failure to pay (the Reference Entity fails to make interest or principal payments in respect of the Obligation when due after a permitted grace period.); or 3) obligation default (the Reference Entity defaults on the terms of the Obligation); or 4) obligation acceleration (where the failure to observe terms of the Obligation result in the Obligation becoming immediately due); or 5) repudiation/moratorium (the Reference Entity or a governmental body declares a moratorium over the Obligation); or 6) restructuring (where the Reference Entity attempts or decides to restructure the terms of the Obligation because the Reference Entity is not able to satisfy one or more terms of the Obligation within a specified time); or 7) government intervention (actions taken or announcement made by any governmental authority that would affect creditors rights and mandatorily changes the beneficial holder of the obligations). Please see further on page 11 of the Information Memorandum Pertinent Information About the CLN. Credit-Linked Note or CLN The CLN that the Fund intends to purchase is a type of structured product whose principal and coupon payments are contingent on the performance of the Reference Entities. Financial Institution Means (1) if the institution is in Malaysia (i) Licensed Bank; (ii) Licensed Investment Bank; (iii) Development Financial Institutions (DFIs); or (iv) Islamic Bank; (2) if the institution is outside Malaysia, any institution that is licensed/registered/approved/authorised by the relevant banking regulator to provide financial services. First-to-default or FTD GST FTD is a feature commonly imposed by sellers of structured products in the nature of the CLN that the Fund intends to purchase. As the Basket consist of multiple Reference Entities, the Structurer has imposed this feature whereby if even one Reference Entity fails to observe the Obligation specified in the Confirmation, that in itself, is sufficient for the Structurer to provide a notification of a Credit Event, notwithstanding that the other Reference Entities continue to observe the Obligation diligently. Because of the nature of this FTD, it may also be considered a risk to the CLN. The trade-off for imposing this FTD to the CLN is that the Structurer will increase the coupon payout or reduce the price of the CLN Refers to the tax levied on goods and services pursuant to the Goods and Services Tax Act 7

9 Information Memorandum Means this offer document in respect of this Fund. Investment Date Means the date on which the Fund first makes investments and it is the actual date the Fund pays for the CLN, which is not more than three (3) weeks from the end of Offer Period. Licensed Bank Means a bank licensed under Financial Services Act Licensed Investment Bank Means an investment bank licensed under Financial Services Act the Manager or AHAM Maturity Date Maturity of the Fund or Fund s Maturity MYR NAV NAV per Unit Notional Amount Obligation(s) Offer Period Offer Price Recovery Rate Reference Entity or Reference Entities Repurchase Charge SC Refers to Affin Hwang Asset Management Berhad. Means the date on which the Fund automatically terminates, which is the 3 January If the Fund is earlier terminated in accordance with the provisions of the Deed or upon the occurrence of Credit Event, the Maturity Date shall mean the date of such earlier termination. It is important to note that the Maturity Date can be extended, if in the opinion of the Structurer that a Credit Event may have occurred in respect of any of the Reference Entities, the Structurer may notify the Fund that the Maturity Date has been postponed to the third (3rd) Business Day following the date as specified in the notice or not more than twenty one (21) days after 3 January For the avoidance of doubt, if the Structurer provides a notification of Credit Event in respect of the issuer of the bond (the Reference Entity), the Fund ceases to be entitled to receive the Notional Amount. Instead, the Fund will receive the Cash Settlement Amount. The Fund will mature:- (1) on the Maturity Date; or (2) upon the occurrence of Credit Event; whichever occurs first. Means the Malaysian Ringgit, the lawful currency of Malaysia. Determined by deducting the value of all the Fund s liabilities from the value of all the Fund s assets, at the valuation point. For the purpose of computing the management fee and the annual trustee fee, the NAV of the Fund should be inclusive (that is, before any deduction) of the management fee and the trustee fee for the relevant day. Means the NAV of the Fund at a particular point divided by the number of Units in Circulation at the same valuation point. Means the amount the Structurer is contractually obliged to pay to the Fund under the Confirmation, being the value of the CLN, on the Maturity Date. The Notional Amount payable to the Fund and distributed to Unit Holders (together with the remaining cash and cash equivalents of the Fund) will not be less than the Offer Price plus the Sales Charge (minus any relevant fees incurred by the Fund) for each Unit held by the Unit Holders. In relation to the CLN, means the types of obligation that the Reference Entities have to satisfy (or service). The types of Obligation will be stated in the Confirmation. On the Trade Date, only those types of Obligation stated in the Confirmation will be applicable to the CLN. The Obligations will include all current AND future obligations within the type stated in the Confirmation. For instance, if loans are stated as a type of Obligation, the Obligation will be in respect of all current loans taken and future loans to be taken by the Reference Entities. Means a limited period where the Units of this Fund are available for purchase. No Units of the Fund shall be available for purchase after the Offer Period. The Offer Price is RM1.00 per Unit during the Offer Period. Means the rate (in percentage terms) for the bond that is able to be recovered from its par value when the Structurer provides notification of a Credit Event in respect of the issuer of the bond (the Reference Entity). Please see further on page 11 Pertinent Information About the CLN. The entities (whether corporate or sovereigns) that determines the performance of the Credit- Linked Note. Reference Entity refers to any one of the Reference Entities. Each of the Reference Entities is assigned a particular bond. When a Reference Entity fails to service the Obligation stated in the Confirmation and the Structurer provides a notification of a Credit Event, the Recovery Rate of that bond, post the notification of a Credit Event, will accordingly, be applied to the Notional Amount. Means a charge imposed pursuant to a repurchase request. Means the Securities Commission Malaysia established under the Securities Commission Act

10 Sales Charge Means a charge imposed pursuant to the Unit Holder s purchase request. Sophisticated Investors Refers to (1) an individual whose total net personal assets, or total net joint assets with his or her spouse, exceed RM3 million or its equivalent in foreign currencies, excluding the value of the individual s primary residence; (2) an individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per annum in the preceding 12 months; (3) an individual who, jointly with his or her spouse, has a gross annual income exceeding RM400,000 or its equivalent in foreign currencies per annum in the preceding 12 months; (4) a corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts; (5) a partnership with total net assets exceeding RM10 million or its equivalent in foreign currencies; (6) a unit trust scheme or prescribed investment scheme; (7) a private retirement scheme; (8) a closed-end fund approved by SC; (9) a company that is registered as a trust company under the Trust Companies Act 1949 which has assets under management exceeding RM10 million or its equivalent in foreign currencies; (10) a corporation that is a public company under the Companies Act 1965 which is approved by the SC to be a trustee under the Act and has assets under management exceeding RM10 million or its equivalent in foreign currencies; (11) a statutory body established by an Act of Parliament or an enactment of any State; (12) a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967 [Act 53]; (13) central bank of Malaysia; (14) a holder of a capital markets services licence or an executive director or a chief executive officer of a holder of a capital markets services licence; (15) a licensed institution as defined in the Financial Services Act 2013; (16) an Islamic bank as defined in the Islamic Financial Services Act 2013; (17) an insurance company licensed under the Financial Services Act 2013; (18) a takaful operator registered under the Islamic Financial Services Act 2013; (19) a bank licensee or insurance licensee as defined under the Labuan Financial Services and Securities Act 2010 [704]; (20) an Islamic bank licensee or takaful licensee as defined under the Labuan Islamic Financial Services and Securities Act 2010 [705]; and (21) such other investor(s) as may be permitted by the Securities Commission Malaysia from time to time and/or under the relevant guidelines for wholesale funds. Unit or Units Units in Circulation Unit Holder or Unit Holders or You Means an undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund and means a Unit of the Fund and if the Fund has more than one class of Units, it means a Unit issued for each Class. Means Units created and fully paid for and which has not been cancelled. It is also the total number of Units issued at a particular valuation point. Refers to the person or persons registered for the time being as the holder or holders of Units of the Fund including persons jointly registered. 9