Swedbank Central Asia Equity Fund

Transcription

1 Swedbank Central Asia Equity Fund Established on RULES (Effective as of ) TRANSLATION FROM ESTONIAN In case of any discrepancies, between this translation and original Estonian version, the text of Estonian version shall prevail.

2 SWEDBANK CENTRAL ASIA EQUITY FUND RULES (hereinafter the Rules) 1. GENERAL PROVISIONS Swedbank Central Asia Equity Fund (hereinafter the Fund) is a public open-ended common investment fund established by Swedbank Investeerimisfondid AS on 12 April The Fund is a UCITS (Undertaking for Collective Investment in Transferable Securities), i.e. the Fund complies with the requirements established for the UCITS by Directive 2009/65/EC of the European Parliament and of the Council and the current legislation of the Republic of Estonia (hereinafter the Legislation) The registered office of the Fund is at Liivalaia 8, Tallinn 15038, Republic of Estonia The Fund is a pool of money collected through the public issue of the Fund units (hereinafter the Units) and other assets acquired through the investment of such money, which jointly belongs to the Fund's unit-holders (hereinafter the Investors) and is managed by the Management Company. The Fund is not a legal entity Management Company The Fund is managed by Swedbank Investeerimisfondid AS (hereinafter the Management Company), registry code The registered office of the Management Company is at Liivalaia 8, Tallinn 15038, Republic of Estonia Depositary The Fund's depositary is Swedbank AS (hereinafter the Depositary), registry code The registered office of the Depositary is at Liivalaia 8, Tallinn 15040, Republic of Estonia Register of Units and Registrar The register of Units (hereinafter the Register) is maintained by Swedbank AS (hereinafter the Registrar) The registered office of the Registrar is at Liivalaia 8, Tallinn 15040, Republic of Estonia Intermediary Intermediary is a person who has entered into a contract with the Management Company for intermediating Units to Investors (hereinafter the Intermediary) The contact details of the Intermediaries and more detailed information about the Intermediaries is provided in the prospectus for public offering of Units (hereinafter the Prospectus). 2. BASES AND OBJECTIVE OF ACTIVITIES OF FUND 2.1. The bases for the activities of the Fund and the Investors' relations with the Management Company are determined by the Rules and Legislation. The Rules have been drawn up in compliance with the Legislation. In the event of a conflict between the Rules and Legislation, the provisions of the Legislation shall be applicable. If provisions of the Rules are in conflict with one another, such provisions shall be interpreted in accordance with the best interests of the Investors. The Rules constitute an integral part of the Prospectus The Fund provides the Investors with opportunities to invest money in the financial markets of Central Asian countries in conformity with the principles provided in the Rules. The objective of the investments and activities of the Fund is long-term growth of the value of the assets of the Fund. 2

3 2.3. The Management Company does not guarantee the Investors either any rate of return on investments into the Fund or the preservation of the initial investment made by the Investor in the Fund. The past performance or the previous history of the activities of the Fund neither guarantees nor indicates the future performance of the Fund or meeting the goals of the Fund When investing in the Fund the Investor shall take into account that investment in the Fund always involves risk. The investments made in the Fund may result in both profit and loss for the Investor. 3. INVESTMENT POLICY OF FUND 3.1. The Management Company follows in the investment of the assets of the Fund the objective of the investments and activities of the Fund and the restrictions established in the Legislation and the Rules For the achievement of the objective of the investments and activities of the Fund, the Management Company, following the investment restrictions of the Fund, invests the assets of the Fund in the securities of issuers of Central Asian countries 1 and the securities of issuers located in the countries outside Central Asia if the essential business interest of such issuers are connected with Central Asia or the success of their activities depends on the economic growth of the Central Asian region The assets of the Fund are invested to the extent of no less than 50% of the market value of the Fund in equities or similar securities Upon investment of the Fund's assets the Management Company has not specialised by sectors of economy. The issuer of securities acquired by the Fund must be a state, local government, company or international organisation. Detailed proportions of the type of asset, the type of issuer, the region or the branch of economy shall be designated by the Management Company in the course of everyday management of the Fund A brief description of the risks related to investment of the assets of the Fund is provided in the Prospectus. 4. INVESTMENT RESTRICTIONS 4.1. The Management Company invests the assets of the Fund: in equity and other similar transferable rights; in bonds, convertible securities, covered bonds 2 and other issued and transferable debt obligations; in subscription rights or other transferable rights to the securities specified in clauses and , which entitle to acquisition of the securities specified in clauses and ; in money market instruments; in transferable depositary receipts of securities (hereinafter all the securities specified in clauses are jointly referred to as the Securities); in deposits with credit institutions; in shares and units of investment funds; in derivative instruments Restrictions on investment in Securities The assets of the Fund may be invested to the extent of up to 100% of the market value of the assets of the Fund in the Securities which are freely transferable and meet at least one of the following conditions: The Securities are traded on the regulated securities markets of Russia, Kazakhstan, Armenia, Azerbaijan, Georgia, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, United States, United Kingdom, Canada, China, Hong Kong, Turkey or Germany; 1 Kazakhstan, Armenia, Azerbaijan, Russia, Georgia, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan 2 The definition of covered bonds in the context of the Rules is provided in subsection 260 (1) of the Investment Funds Act. 3

4 The Securities are not traded on the regulated securities markets of the countries specified in clause but pursuant to their conditions of issue the Securities shall be admitted to the regulated securities market of a country mentioned in the referred clause no later than within 12 months after issue of the Securities The assets of the Fund may be invested to the extent of up to 50% of the market value of the assets of the Fund in money market instruments not specified in clause , which are generally traded on the money market, which are liquid, which value can be accurately determined at any time and which comply with the conditions provided in the Investment Funds Act The assets of the Fund may be invested in freely transferable Securities not specified in clauses and to the extent of 10% of the market value of the assets of the Fund The assets of the Fund are invested to the extent of no less than 50% of the market value of the assets of the Fund in equities, rights of subscription for equities and other equivalent transferable rights (including transferable depositary receipts of securities), which give the right to acquire equities or certify ownership of equities The assets of the Fund may be invested in the Securities issued by one person to the extent of up to 10% of the market value of the assets of the Fund. If the value of the Securities issued by one person forms more than 5% of the market value of the assets of the Fund, the total value of all such Securities may not amount to more than 40% of the market value of the assets of the Fund. The value of the Securities issued by persons belonging to the same consolidation group may not amount to more than 20% of the market value of the assets of the Fund The assets of the Fund may be invested to the extent of up to 50% of the market value of the assets of the Fund in covered bonds, which are issued by credit institutions of a contracting state of the EEA and comply with the requirements provided in the Investment Funds Act. Up to 25% of the market value of the assets of the Fund may be invested in the covered bonds issued by one person, whereas all persons belonging to one consolidation group are considered one person The Management Company shall observe in combined investments in one person the restrictions provided in 263 of the Investment Funds Act On account of the Management Company and on account of any UCITS managed by the Management Company, no qualifying holding may be acquired or held, whether directly or indirectly, in any company through voting shares The Management Company shall neither acquire nor hold on account of the Fund in any single person more than: - 10% of the non-voting shares; - 10% of the bonds issued by the person; - 10% of the money market instruments issued by the person Restrictions on investment in deposits with credit institutions The assets of the Fund may be invested to the extent of up to 50% of the market value of the assets of the Fund in deposits with credit institutions with the term up to 12 months The assets of the Fund may be invested in the deposits with credit institutions of Estonia or another contracting state of the EEA. The assets of the Fund may be invested in the deposits with credit institutions situated in third countries if the prudential rules applicable to such credit institutions conform at least to the same strict requirements that are established in the legislation of the European Community Up to 20% of the market value of the assets of the Fund may be invested in the deposits with any one credit institution, whereas all persons belonging to one consolidation group are considered one 4

5 person. These restrictions shall not apply to the current account of the Fund in the Depositary or to money temporarily transferred into overnight deposit Restrictions on investment in units and shares of other investments funds The assets of the Fund may be invested to the extent of up to 30% of the market value of the assets of the Fund in the units or shares of other investment funds, provided that such other investment fund is: a UCITS established in Estonia or a UCITS of another contracting state of the EEA 3 ; any other investment fund which pursuant to the Legislation or the legislation of another country is deemed to be open-ended public investment fund, which is registered in a country referred to in clause and which satisfies the conditions established in subsection 264 (2) of the Investment Funds Act any other investment fund, in which the assets of the Fund may be invested pursuant to the Investment Funds Act The value of units or shares of any one investment fund may not total more than 20% of the market value of the assets of the Fund The assets of the Fund may be invested in the units or shares of other investment funds managed by the Management Company, including the shares and units of such investment funds which are managed by the Management Company as a third person to whom the duties of a management company have been transferred and the shares and units of funds managed by such companies to which the Management Company is linked by common management or control or by qualifying holding as well as if such company is a third party to whom the management of the investment fund has been transferred provided that the following conditions are met: a) the investment policy of the investment funds differs substantially from the investment policy of the Fund; b) the management company does not charge any subscription or redemption fees It is not allowed to acquire or hold on account of the Fund more than 25% of the units or shares of another investment fund Restrictions on investment in derivative instruments The assets of the Fund may be invested in derivative instruments observing the provisions of the Legislation and the Rules, for the achievement of the investment objectives of the Fund and with the aim of hedging risks arising from the fluctuation of the prices of the assets of the Fund Taking into account the provisions of clause , it is permitted to invest the assets of the Fund in derivative instruments traded on regulated markets, derivative instruments acquired outside a regulated market and other derivative instruments, which conform to the terms and conditions provided in the Investment Funds Act The assets of the Fund may be invested in derivative instruments, which underlying assets are the following assets or which price depends directly or indirectly on the following impact factors: - the deposits with credit institutions compliant with clause ; - the Securities specified in 257 of the Investment Funds Act; - the units or shares of investment funds specified in subsection 264 (1) or (2) of the Investment Funds Act; - the securities indices or other financial indices, interest rates or currencies, in which the assets of the Fund may be invested pursuant to the Rules. 3 The contracting states as at 01 September 2010 are Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and United Kingdom. The countries that join the treaty after the registration of the Rules will also be considered as the contracting states. 5

6 Upon investment of the assets of the Fund in derivative instruments traded on regulated markets, the provisions of 258 of the Investment Funds Act concerning the Securities apply to the diversification of risks, whereas all persons belonging to the same consolidation group are considered one person If the counterparty to a transaction in derivative instruments conducted outside a regulated market is a credit institution, which conforms to the conditions specified in subsection 256 (2) of the Investment Funds Act, the exposure to such person may not form more than 10% of the market value of the assets of the Fund. If the counterparty to a transaction in derivative instruments conducted outside a regulated market is a person not specified above, the exposure to such person may form up to 5% of the market value of the assets of the Fund The assets of the Fund may not be invested in the derivative instruments issued by any one issuer to the extent of more than 10% of the market value of the assets of the Fund The total exposure of derivative instruments in the assets of the Fund and derivative transactions made on account of the Fund may not exceed the net asset value of the Fund Other restrictions It is prohibited to invest the assets of the Fund in immovable property, precious metals and securities, which give rights to precious metals, or derivative instruments related to commodities. The assets of the Fund may be invested in securities backed by immovable property or in the securities the price of which depends on changes in immovable property prices and the assets of the Fund may also be invested in the companies the successfulness of the activities of which depends on changes in immovable property prices It is prohibited to acquire or have a holding on account of the Fund in the Management Company or its subsidiary, and also to acquire or hold any securities issued by the above persons. The above does not apply to investment in the units or shares of other investment funds managed by the Management Company It is prohibited to acquire a holding on account of the Fund in a company belonging to the same consolidation group with the Management Company or acquire securities issued by the above person in any other way than with the intermediation of the regulated market. The above does not apply to the acquisition of money market instruments and investment in the units or shares of another investment fund The assets of the Fund may be invested in a different currency than the base currency of the Fund (euro). The assets of the Fund may be invested in the currencies of the countries specified in clause The investments of the Fund may be denominated in different currencies On account of the Fund it is not permitted: a) to issue debt securities; b) to grant loans 4 and assume obligations arising from a contract of suretyship or guarantee contract, except for acquisition of securities, which were not completely paid, and establishment of a security deposit in transactions with derivative instruments; c) to conduct loan transactions on the basis of clause c) unless the performance of such obligation is covered to the same extent by the securities included in the assets of the Fund; d) to transfer securities, which at the time of entry into the transfer contract were not included in the assets of the Fund On account of the Fund, the Management Company is entitled: 4 For the purposes of this restriction the following is not deemed to be a loan: the purchase of bonds, debentures, loan certificates, commercial papers, etc.; investment in government bonds or bank deposits; contracts for the purchase of proprietary objects into the assets of the Fund or for the sale of proprietary objects out of the assets of the Fund with a specified term and a specified price. 6

7 a) to guarantee an issue of securities; b) to take loans, excluding from persons specified in clause ; c) to conduct repurchase and reverse repurchase transactions and other securities borrowing transactions. The Management Company may assume the above obligations on account of the Fund to the total extent of up to 10% of the market value of the assets of the Fund. The term of any loan taken or obligation assumed on behalf of the Fund may not exceed 3 months No objects included in the assets of the Fund may be pledged, encumbered in any other manner or set as collateral, excluding the case when it is done to ensure the performance of a transaction conducted on account of the Fund or for the purpose of securing a loan specified in clause The Fund may not be a partner in a general partnership, a general partner in a limited partnership, a member of a non-profit organisation or an association or a founder of a foundation The assets of the Fund may not be transferred: to the Management Company; to a member of the Management Board or Supervisory Board, the auditor, fund manager or any employee of the Management Company; to other investment funds managed by the Management Company, excluding upon transfer of securities on a regulated market at the price developed by the moment of transfer; to persons whose economic interests coincide with the persons specified in clauses Upon the transfer of the assets of the Fund in the course of the liquidation proceedings of the Fund or for another purpose to ensure the protection of the best interests of the Fund or the Investors, the assets of the Fund may also be transferred on a regulated market at the price developed by the moment of transfer or another fair price to the Management Company or a company included in the same consolidation group with the above No assets may be acquired on account of the Fund from the persons specified in clause , except for transactions concluded on account of the Fund using the brokerage service provided by the persons specified in clause In addition to the above, the Management Company shall follow in the investment of the assets of the Fund all the restrictions on investments and activities and the requirements for the diversification of risks applicable to the Fund provided in the Legislation. 5. FUND UNITS AND RIGHTS AND OBLIGATIONS ATTACHED TO UNITS 5.1. Unit A Unit is a registered immaterial security, which reflects the Investor's holding in the assets of the Fund There are two classes of Units: Units of class E (hereinafter the E Unit) with a nominal value of 10 euros. The name of the E Unit is Swedbank Central Asia Equity Fund E Unit Units of class I (hereinafter the I Unit) with a nominal value of 100 euros. The name of the I Unit is Swedbank Central Asia Equity Fund I Unit. In case of initial acquisition of I Units, the minimum amount is 100,000 euros. If the quantity of the I Units held by the Investor falls below the aforementioned minimum amount, the Management Company has the right to switch the I Units held by the Investor to E Units in accordance with the terms and conditions for the switch of Units Units are divisible. Shares resulting from division of a Unit (fractional units) are rounded to the accuracy of three digits after the decimal point. The rules of rounding are as follows: figures NNN.NNN0 7

8 to NNN.NNN4 are rounded down to NNN.NNN and figures NNN.NNN5 to NNN.NNN9 are rounded up to NNN.NN(N+1) Rights and obligations attached to Units An Investor's share in the assets of the Fund is determined by the ratio of the number of Units held by such Investor to the total number of all Units of the same class and the ratio of the total net asset value of all Units of the same class to the net asset value of the Fund. If an investor holds several classes of Units, the share of the investor in the assets of the Fund is determined as the sum of the shares corresponding to the different classes of Units Units of the same class grant the Investors equal rights on equal grounds (e.g. transaction with Unit made via different Intermediary can constitute a different ground) Units give the Investor neither the decision-making power nor voting right in conducting transactions with the assets of the Fund. The Fund has no general meetings of the Investors. The Investor has no right to demand termination of the Investors' community or separation of the Investor's share from the assets of the Fund Pursuant to the Rules and the Legislation, the Investor is entitled: to demand that the Management Company redeem the Units held by the Investor; to switch the Units for units of another investment fund managed by the Management Company or for units of another class of the Fund if this is permitted by the rules of the other investment fund managed by the Management Company or the rules of Units of another class of the Fund; to freely transfer and bequeath the Units held by the Investor, whereas the ownership of the Units is transferred only after the corresponding entry is made in the Register; to own a proportional share of the assets and earnings of the Fund, which arises from the number and class of Units held by the Investor, and receive a proportional share of the assets remaining upon liquidation of the Fund, which arises from the number and class of Units held by the Investor; to receive from the Registrar a certificate or extract from the Register concerning the Units held by the Investor; to receive information at the registered office of the Management Company and on the website of the Management Company specified in the Prospectus (hereinafter the Website) concerning the name and contact details of the Management Company, the name of the fund manager of the Fund, the Depositary's name and contact details and the holding of the Management Company in the Fund; to examine the following documents at the registered office of the Management Company and on the Website: a) the Rules; b) the Fund's annual reports for the past three years; c) the latest semi-annual report of the Fund if this is approved after the latest annual report; d) the Prospectus and Key Investor Information; e) the Management Company's annual reports for the past three years; f) the internal rules for determining of the net asset value of the Fund and its Units to receive upon request at the expense of the Management Company transcripts of the documents specified in clauses a)-d); to act in any other manner provided by the Legislation or the Rules No material document certifying ownership is issued for the Unit. The Registrar shall issue to the Investor upon the latter's request a certificate or extract from the Register concerning the Units held by the Investor The Units are registered with the Register. The rights and obligations arising from the Unit shall be created upon the issue of the Unit to the Investor. The Unit shall be deemed issued as of the making of an entry concerning the respective Unit in the Register. The ownership of Units and the rights and obligations of the Investor and Management Company arising from the Units are deemed created as of the making of a respective entry in the Register. The ownership of a Unit is certified by an entry in the Register. 8

9 The rights and obligations arising from the Unit shall be terminated upon the redemption of the Unit. The Unit is considered redeemed upon the deletion of the respective Unit from the Register. The ownership of Units and the rights and obligations of the Investor and Management Company arising from the Units are deemed terminated upon the deletion of the Unit from the Register When conducting transactions and exercising the rights arising from the Units, the Investor is required to act in good faith and in compliance with the Legislation and the Rules. The purpose of exercising the rights of the Investors cannot be to inflict damage to other Investors, the Management Company, Depositary, Registrar or third parties The Investor is not personally liable for the obligations of the Fund undertaken by the Management Company on the joint account of the Investors or for the obligations the performance of which the Management Company has the right to demand from the Fund pursuant to the Rules. The liability of the Investor for performance of such obligations is limited to the Investor's share in the assets of the Fund. The Management Company may not assume any obligations on behalf of the Investors. 6. DETERMINING OF NET ASSET VALUE OF FUND AND UNIT AS WELL AS UNIT SUBSCRIPTION AND REDEMPTION PRICES AND DISTRIBUTION OF INCOME OF FUND 6.1. The net asset value of the assets of the Fund is determined primarily on the basis of the market value of the assets of the Fund. The market value of the assets of the Fund is determined each banking day 5 (hereinafter the Banking Day) on the basis of the market value of the securities and other assets belonging to the assets of the Fund To determine the net asset value of the Fund, the accrued but unsettled fee payable to the Management Company for managing the Fund (hereinafter the Management Fee), the charge payable to the Depositary for depositary services (hereinafter the Depositary's Charge), payables of the Fund (including unsettled transactions) and other permitted costs related to the management of the Fund are deducted from the market value of the assets of the Fund Upon determining the net asset value of the Fund and the net asset value of the Unit, the Management Company proceeds from the principles provided in its internal rules and the Legislation. The aforementioned internal rules are published at the registered office of the Management Company and on the Website The net asset value of the Fund and the net asset value of the Unit are calculated in euros If an event or circumstance which, according to the best professional estimate of the Management Company, affects the net asset value of the Fund, occurs after the establishment of the net asset value of the Fund, the Management Company has the right to revalue the determined market value and net asset value of the Fund and the net asset value of the Unit, provided that failure to perform such a revaluation would harm the interests of the Investors The total net asset value of a Unit class is calculated by deducting the portion of the given class in the liabilities of the Fund, which have been adjusted with the liabilities of the Unit class which arise from the subscription and redemption orders received, but not yet settled by the Management Company, from the portion of the given class in the market value of the securities and other rights belonging to the Fund The net asset value of a Unit is calculated by dividing the total net asset value of the Units of the given class by the number of the Units of the class which have been issued and not redeemed at the moment of calculation, while the number of Units has been adjusted with the liabilities of the Unit class which arise from the subscription and redemption orders received, but not yet settled by the Management Company. 5 For the purposes of the Rules, the Banking Day is any calendar day, except for Saturdays, Sundays and national and public holidays of the Republic of Estonia. 9

10 6.8. The net asset value of the Fund and the net asset value of the Unit and the subscription price (hereinafter the Subscription Price) and the redemption price (hereinafter the Redemption Price) of the Unit are calculated 6 at least once on each Banking Day no later than at 14:00 (Estonian time) and published on the Website. The above net asset value of the Unit and the Subscription and Redemption Prices apply to the orders submitted by the Investor and received by the Management Company during the preceding Banking Day provided that the orders have been submitted and received by the Management Company until 16:00 (Estonian time) of the preceding Banking Day. Orders submitted by the Investors and received by the Management Company after 16:00 (Estonian time) of the Banking Day preceding the Banking Day of calculation are considered received on the following Banking Day. When submitting orders through Intermediaries, the Investor must take account of possible time restrictions of the Intermediary concerning which information can be obtained from the respective Intermediary The net asset value of the Unit and the Subscription and Redemption Prices are calculated with the precision of at least four digits after the decimal point When issuing and redeeming units, the Management Company has the right to charge the Investors the subscription and redemption fees. The Management Company has the right to change, within the limits set by the Rules, or waive charging the subscription and redemption fees at its own discretion. The principles of reducing redemption and subscription fees for the Investors are provided in the Prospectus Units are issued at the Unit Subscription Price. The Unit Subscription Price is the net asset value of the Unit, to which amount the subscription fee may be added. The Unit Subscription Price is calculated on the basis of the net asset value of the Unit, which is calculated first after the Banking Day of receipt of the respective purchase order by the Management Company in conformity with clause 6.8. The subscription fee may be different for the E Unit and I Unit. The rate of the Unit subscription fee is up to 3% of the net asset value of the Unit. Information about the effective Unit subscription fee is provided in the Prospectus and on the Website Units are redeemed at the Unit Redemption Price. The Unit Redemption Price is the net asset value of the Unit from which the redemption fee may be deducted. The Unit Redemption Price is calculated on the basis of the net asset value of the Unit, which is calculated first after the Banking Day of receipt of the respective sales order by the Management Company in conformity with clause 6.8. The redemption fee may be different for the E Unit and I Unit. The rate of the Unit redemption fee is up to 1% of the net asset value of the Unit. Information about the effective Unit redemption fee is provided in the Prospectus and on the Website The Unit subscription and redemption fees are charged to the Investor's account. At the request of the Investor the Management Company notifies the Investor by about the amount of the subscription and redemption fees paid on account of the Investor When conducting transactions with Units, the Investor must take into account possible service fees of the Intermediaries. The Intermediary's service fees are paid by the Investor. The Investor can obtain information about the Intermediary's service fees from the respective Intermediary The income received from the investment of the assets of the Fund is not distributed to the Investors, but is reinvested. The growth or decline of the value of the assets of the Fund achieved in the investment of the assets of the Fund is reflected in the change (growth or decline) of the net asset value of the Fund and the net asset value of the Unit. The Investor's income arises from the growth of the net asset value of the Unit. The Investor becomes liable for taxes on the bases and pursuant to the procedure provided by the Legislation. Taxation of the income earned from the Fund is described in the Prospectus. 7. ISSUE, REDEMPTION AND SWITCH OF UNITS 6 If no Units of a certain class have been issued, the net asset value of the Unit of such class is the nominal value, and the net asset value of the Unit of such class and the Issue and Redemption Prices are neither calculated nor published. 10

11 7.1. Issue of Units The issuer of the Units is the Management Company. The issue of the Units is public, there are no time or volume restrictions. The Units are issued exclusively for money at their Subscription Price. The issue of Units is arranged by the person arranging Unit transactions (hereinafter the Person Arranging Unit Transactions), whose details are provided in the Prospectus The Investor can acquire Units through Intermediaries 7 and the Person Arranging Unit Transactions by submitting a purchase order in the prescribed format to the respective Intermediary or Person Arranging Unit Transactions. The procedure for the issue and acquisition of Units is as well described in the Prospectus By submitting the purchase order the Investor confirms that the Investor has examined the Rules and the Prospectus to the necessary extent, agrees to them and undertakes to adhere to them The number of Units of the respective class to be acquired by the Investor is calculated by dividing the amount received into the assets of the Fund from the Investor on the basis of the purchase order by the Subscription Price of the Unit of the given class on the Banking Day following the day of receipt of the purchase order by the Management Company taking account of the provisions of clause 6.8. The resulting number of Units is transferred to the Investor's securities account no later than on the third Banking Day from the receipt of the purchase order by the Management Company (value date T+3, where T is the Banking Day of receipt of the purchase order by the Management Company) The Unit is considered issued and acquired by the Investor in conformity with clause Redemption of Units At the request of the Investor, the Management Company redeems the Units held by the Investor in accordance with the provisions of the Rules and the Legislation. The redemption of Units is arranged by the Person Arranging Unit Transactions The Investor can redeem units through the Intermediaries 8 and the Person Arranging Unit Transactions by submitting a sales order in the prescribed format to the respective Intermediary or the Person Arranging Unit Transactions. The procedure for the redemption of Units is as well described in the Prospectus Upon redemption of Units a payment in money is made to the Investor from the assets of the Fund for the redeemed Units in the amount corresponding to the number of redeemed Units of the given class and the Redemption Price. The amount payable to the Investor for the redemption of Units of a certain class is calculated by multiplying the number of Units of the given class stated on the sales order by the Redemption Price of the Unit of this class on the Banking Day following the receipt of the sales order by the Management Company taking account of the provisions of clause The amount calculated on the basis of the sales order is paid to the Investor on the third Banking Day following the receipt of the respective sales order by the Management Company at the latest (value date T+3, where T is the Banking Day of receipt of the sales order by the Management Company) unless otherwise provided in the Rules. The respective Units are deleted from the Register and from the Investor's securities account simultaneously with making the payment to the Investor The Unit is considered redeemed and the rights and obligations arising from the Unit are considered terminated in accordance with clause Depending on the agreement on intermediation of Units between the Management Company and the Intermediary, Intermediaries intermediate both classes of Units or only one class of Units. 8 If Units have been acquired through a certain Intermediary and the Units are held in a nominee account opened in the name of the Intermediary, the sales order for the Units must also be submitted through this Intermediary. 11

12 Payments arising from sales orders are made in the order of submission of the respective claims unless otherwise provided in the Rules or the Legislation Switch of Units The Investor can switch the Units of one class to Fund Units of another class or switch Units to the units of another investment fund managed by the Management Company as specified in the Prospectus (in accordance with the requirements established in the Rules for the acquired Fund Unit of another class or the rules of another investment fund managed by the Management Company). The switch of Units is arranged by the Person Arranging Unit Transactions The Investor can switch Units through Intermediaries and the Person Arranging Unit Transactions by submitting a switch order in the prescribed format to the respective Intermediary or the Person Arranging Unit Transactions taking into account clause 6.8. and the fact via whom the Units were purchased. The procedure for the switch of Units and submission of a switch order is as well described in the Prospectus On the basis of the switch order, the Units of the given class are redeemed and Fund Units of another class or units of another investment fund managed by the Management Company are issued in accordance with the Rules and the rules of the other investment fund managed by the Management Company, including the terms and conditions for the issue and redemption. No payments are made to the Investor during the switch The amount, on the basis of which the respective Fund Units of another class or the units of another investment fund managed by the Management Company are issued, is calculated by multiplying the number of switched Units by the Unit Redemption Price on the Banking Day following the day of receipt of the switch order by the Management Company taking account of the provisions of clause 6.8. As a result of the switch the Investor acquires the Fund Units of another class or the units of another investment fund managed by the Management Company to the extent of the Unit Redemption Price in accordance with the Subscription Price of Fund Units of another class or the subscription price of units of another investment fund managed by the Management Company Upon switch of Units for the units of another investment fund managed by the Management Company, upon switch of units of another investment fund managed by the Management Company for Units or upon switch of Fund Units of one class for Fund Units of another class, the Management Company has the right to reduce or waive charging the redemption and subscription fees. The rates of redemption and subscription fees applied to the switch of Units are provided in the Prospectus Upon exchanging Units the Investor must take into account possible service fees of the Intermediaries. The Intermediary's service fee is paid by the Investor. The Investor can obtain information about the Intermediary's service fees from the respective Intermediary The Fund Units of another class or the units of another investment fund managed by the Management Company as specified in the switch order are transferred to the Investor's securities account on the third Banking Day following the day of receipt of the switch order by the Management Company taking account of the provisions of clause 6.8. (value date T+3, where T is the Banking Day of receipt of the switch order by the Management Company) unless otherwise provided in the Rules. The switched Units are deleted simultaneously from the Register and the Investor's securities account If the Units held by the Investor are kept in a nominee account, the securities transfers and payments arising from the purchase, sales and switch orders are made to the nominee account and the current account linked to the nominee account If upon purchase, sale or switch of Units it is necessary to convert currencies, the exchange rate of the respective currencies of the Depositary on the respective Banking Day is used. 12

13 7.6. If the Investors apply for the redemption of Units in an amount exceeding 5% of the net asset value of the Fund by sales and switch orders received on any one Banking Day, the Management Company has the right to postpone all the settlements made on the basis of the sales and switch orders of such day by up to ten Banking Days (T+10, where T is the Banking Day of receipt of the sales or switch order by the Management Company). The term for payment is deemed to exclude the time of a bank transfer Suspension of redemption and issue of Units The Management Company may suspend the issue of Units for up to three months if the issue of Units would materially damage the Investors' interests The Management Company has the right to suspend the redemption of Units for up to three months if at least one of the following conditions is fulfilled: - the money in the accounts of the Fund is insufficient for payment of the Redemption Price of the Units; - the securities and other assets of the Fund cannot be promptly sold; - the calculation of the net asset value of the Fund is hindered; - the payments would harm the regular management of the Fund or the payments would materially harm the interests of the other Investors In the cases provided by the Legislation, the Financial Supervision Authority may issue a precept requiring the Management Company to suspend the issue of Units or obliging the Management Company to suspend the redemption of Units The Management Company gives a notice on the suspension of the redemption or issue of Units on the Website and in the national daily newspaper specified in the Prospectus. 8. RIGHTS AND OBLIGATIONS OF MANAGEMENT COMPANY AND ACQUISITION OF FUND UNITS BY MANAGEMENT COMPANY 8.1. The activities of the Management Company in management of the Fund are established and shall comply with the Articles of Association of the Management Company, the Rules and the Legislation. 8.2 By the declaration of intention made for the acquisition of Units, the Investor consents to the processing of the Investor's data (including personal data) pursuant to the Principles of Processing Client Data in the Estonian Companies of Swedbank, which are available on the website in the branches of the Estonian companies of Swedbank and in the registered office of the Management Company. The persons authorised by the Management Company to process personal data (authorised processors) and their contact details are also available on the above website. The Management Company has the right to send notices and reports about the Fund at any known postal or addresses of the Investor The Management Company has the right to dispose of and possess the assets of the Fund in conformity with the Rules and other rights arising therefrom. Upon managing the Fund, the Management Company conducts transactions in its own name and on collective account of the Investors, i.e. on account of the Fund To manage the assets of the Fund, the Management Board of the Management Company appoints a fund manager who is responsible for coordinating investment of the assets of the Fund and other activities related to the management of the Fund. The fund manager shall comply with the requirements provided in the Investment Funds Act The Management Company invests the assets of the Fund and performs other duties specified in the Legislation and clause 8.10, unless the respective duties have been transferred to third parties through contracts The Management Company must invest the assets of the Fund in compliance with the investment policies provided in the Rules and adhere to the investment restrictions arising from the Rules and the 13

14 Legislation. The Management Company must have sufficient relevant information about the assets that it intends to acquire or has acquired for the Fund and gather sufficient information about the counterparties with whom transactions are made for the Fund The Management Company manages the assets of the Fund separately from its own assets and from the assets and pools of assets of other investment funds managed by the Management Company. The assets of the Fund do not form a part of the bankruptcy estate of the Management Company and the claims of the creditors of the Management Company cannot be satisfied on the account thereof The Management Company has the right and duty to submit in its own name the claims of the Investors or the Fund against the Depositary or other persons if failure to submit such claim will result or may result in significant damage to the Fund or its Investors. The Management Company is not required to submit the above claims if the Investors have already submitted the claims. The Management Company must compensate the Fund or the Investor for any damage caused by violation of its obligations The Management Company is obliged to enter into a contract with the Depositary (hereinafter the Depositary Contract) for the purpose of keeping the assets of the Fund The Management Company may transfer any and all activities related to the management of the Fund to any third person to the extent and in compliance with the procedure prescribed by the Legislation. The transfer of duties to third persons does not relieve the Management Company from the liability in connection with management of the Fund. The persons to whom the duties of the Management Company have been transferred are specified in the Prospectus. Pursuant to the procedure and to the extent established by the Legislation, the Management Company may transfer to third persons the following activities related to management of the Fund: 1) investment of the assets of the Fund; 2) organisation of issue and redemption of Units; 3) issue of documents certifying ownership to the Investors, if necessary; 4) providing the Investors with the necessary information and other customer service; 5) organisation of marketing of Units; 6) keeping account of the assets of the Fund and organisation of accounting; 7) determining of the net asset value of the Fund; 8) organisation of maintaining the Register of Units; 9) accounting of proceeds of the Fund; 10) monitoring of the compliance of the activities of the Management Company and the Fund with the Investment Funds Act and other Legislation, including application of a relevant internal control system; 11) activities directly related to the above The Management Company has the right to refuse to perform a purchase or switch order if in the opinion of the Management Company it is necessary for the purpose of protecting the interests of the existing Investors of the Fund Units may be held by the Management Company. The Management Company notifies the Financial Supervision Authority of the acquisition of Units or the redemption of Units held by the Management Company in the procedure provided in the Legislation. The information about the holding of the Management Company in the Fund may be received pursuant to clause Other rights arising from the Legislation also apply to the Management Company. 9. ACTIVITIES OF DEPOSITARY 9.1. The Depositary keeps the Fund's money, securities and other liquid assets. The Depositary does not organise the keeping of other assets of the Fund, unless otherwise agreed on by the Management Company and the Depositary. The Depositary also performs other duties imposed on it by the Legislation and the Depositary Contract. 14

15 9.2. In performing its duties, the Depositary exercises diligence normally required of a professional engaged in the provision of the service of management of securities and makes all reasonable efforts to ensure the protection of the interests of the Investors. The Depositary acts independently from the Management Company and in the interests of the Fund and the Investors The Depositary has the right to enter into agreements with third persons for the safekeeping of assets of the Fund, making settlements therewith and transfer of other duties of the Depositary pursuant to the procedure prescribed in the Depositary Contract. Upon selecting such persons and also thereafter the Depositary shall exercise necessary diligence and control measures in order to ensure the reliability of the respective persons and make sure that the level of organisational and technical arrangements and the financial condition of such third persons are sufficient for the performance of their contractual obligations. The Depositary shall be liable for the damage caused to the Fund, the Investors and the Management Company as a consequence of the violation of its obligations In keeping the securities and other assets of the Fund with any third parties, the Depositary shall be liable for the direct proprietary damage caused to the Fund, the Management Company and the Investors if the Depositary has failed to fulfil the obligations specified in clause 9.3. and/or has failed to fulfil the obligation of supervision over the third parties unless more stringent requirements are agreed on in the Depositary Contract. The Depositary shall not be liable to the Management Company, the Fund or the Investors for any other damage arising from the activities of the above third parties. 10. REGISTER OF UNITS The Units are registered with the Register. The ownership of a Unit is certified by an entry in the Register. The Investor has the right to rely on the Register entry when exercising its rights and performing its duties to third persons. The Registrar issues at the request of the Investor a certificate or extract from the Register concerning the Units held by the Investor The keeping of the Register by the Registrar is regulated by the Investment Funds Act, other Legislation and the agreement on maintenance of the Register entered into between the Management Company and the Registrar. The registry data are processed electronically The Registrar makes entries in the Register on the basis of the transaction information regarding the Units. A court judgement or another basis that is compliant with the Legislation and accepted by the Registrar and the Management Company may also serve as a basis for an entry The Registrar is required to ensure preservation of the information entered in the Register in a permanently unaltered state and enable reproduction thereof at the request of entitled persons and agencies. Information and documents submitted to the Registrar for an entry to be made shall be preserved by the Registrar for at least ten years as of the corresponding entry. Information and documents shall be preserved in the form of documents or in a format which can be reproduced in writing. The Registrar shall also perform other duties imposed on it, which arise from the Legislation and the agreement on maintenance of the register entered into between the Management Company and the Registrar. 11. SERVICE FEES AND COSTS PAYABLE OUT OF FUND Management fee The Management Company is paid a fee for the management of the Fund out of the Fund (hereinafter the Management Fee). The effective rate of the Management Fee is established by the Management Company. The rate of the Management Fee is: - for E Unit up to 2.75% annually on the net asset value of the Fund; - for I Unit up to 2% annually on the net asset value of the Fund. 15