IMPORTANT: Hong Kong Exchanges and Clearing Limited ( HKEx ), The Stock Exchange of Hong Kong Limited ( SEHK ), Hong Kong Securities Clearing Company Limited ( HKSCC ) and the Securities and Futures Commission ( SFC ) take no responsibility for the contents of this Announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Announcement. SFC authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. This document is important and requires your immediate attention. If you are in any doubt about the contents of this Announcement, you should seek professional advice. Investment involves risks which may result in significant loss as there is no guarantee on investment returns. The Manager accepts full responsibility for the accuracy of the information contained in this Announcement and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief, there are no other facts the omission of which would make any statement misleading. CSOP ETF SERIES (a Hong Kong umbrella unit trust authorized under Section 104 of the Securities and Futures Ordinance (Cap. 571) of Hong Kong) CSOP FTSE China A50 ETF (Stock Code: 82822) ANNOUNCEMENT ADDITION OF A NEW HONG KONG DOLLAR COUNTER OF CSOP FTSE CHINA A50 ETF UNDER DUAL COUNTER MODEL effective 8 November 2012 CSOP Asset Management Limited ( Manager ) notifies unitholders that with the launch of dual counter trading for the units of the CSOP FTSE China A50 ETF ( CSOP A50 ETF ), investors can buy and sell units of the CSOP A50 ETF ( Units ) in Renminbi ( RMB ) and/or Hong Kong dollars ( HKD ) on the SEHK with effect from 8 November 2012. Investors should exercise caution in dealing with Units of the CSOP A50 ETF. - 1 -
Introduction of Dual Counter Trading (RMB and HKD Counters) Units of the CSOP A50 ETF are denominated in RMB and are currently quoted and traded only in RMB. The CSOP A50 ETF intends to launch dual counter trading for its Units and the Manager has been granted approval by the SEHK for the dual counter trading. With effect from 8 November 2012 ( Effective Date ), the CSOP A50 ETF will have a HKD counter for trading on the SEHK in addition to its existing RMB counter. The HKD traded Units will be accepted for deposit, clearing and settlement in Central Clearing and Settlement System ( CCASS ). Investors would be able to buy or sell the Units of the CSOP A50 ETF in the RMB and/or the HKD counter commencing from the starting of the trading hour of SEHK on 8 November 2012. Despite the dual counter arrangement, the creation and redemption of new Units (whether RMB traded Units or HKD traded Units) in the primary market are in RMB only. Holders of Units traded in both counters (which remain denominated in RMB) are of the same class and they are entitled to identical rights and therefore treated equally. More information with regard to the dual counter is available in the frequently asked questions in respect of the dual counter published on the HKEx s website www.hkex.com.hk/eng/prod/secprod/etf/dc.htm. Trading Arrangement for Dual Counter Units of the CSOP A50 ETF traded under the two counters can be distinguished by their stock codes, their stock short names and a unique and separate International Securities Identification Number ( ISIN ) as follows:- Counter Stock Code Stock Short Name Trading Lot Size Trading Currency ISIN (assigned to each counter) RMB counter 82822 CSOP A50 ETF-R HKD counter 02822 CSOP A50 ETF 200 Units RMB HK0000112307 200 Units HKD HK0000127412 Investors should note that the market price on the SEHK of HKD traded Units and of RMB traded Units may deviate significantly due to different factors such as market liquidity, supply and demand in each counter and the exchange rate between the HKD and the RMB (in both the onshore and offshore markets). For further details please refer to the Prospectus. Inter-counter Transfer Investors will be able to buy Units in the CSOP A50 ETF traded in RMB and subsequently transfer them into HKD traded Units and sell them on the HKD counter and vice versa, subject to their brokers/ intermediaries or CCASS participants providing both HKD and RMB trading services at the same time and offering intercounter transfer services to support dual counter trading. Such inter-counter transfers are effected and processed within CCASS only. In addition, investors can buy Units traded in one counter and sell them in the other counter on the same trading day. Investors should consult their brokers/intermediaries on the fees and costs (if any) which may be payable by the investors in connection with the inter-counter trading. Investors should note that some brokers / intermediaries may not provide inter-counter day trade services and even if a broker / intermediary is able to provide such service, it may impose an earlier cut-off time, other procedures and fees. - 2 -
Distributions Policy Distributions (if declared) will be declared in the Base Currency of the CSOP A50 ETF (i.e. RMB). Each Unitholder will only receive distributions in RMB (whether holding RMB traded Units or HKD traded Units). Unitholders are advised to check with their brokers/intermediaries on the arrangements concerning distributions. Please refer to the section headed 5. Distribution Policy in Appendix 1 of Part 2 of the Prospectus for further details. Publication of Website Information From the Effective Date, the website of the Manager in respect of CSOP A50 ETF (www.csopasset.com/etf) will be updated. In particular, the near real-time estimated Net Asset Value ( NAV ) per Unit and the last closing NAV per Unit of the CSOP A50 ETF will also be provided in HKD (although it should be noted that the near real time estimated NAV per Unit in HKD and the last closing NAV per Unit in HKD are indicative and for reference only). The near real-time estimated NAV per Unit of CSOP A50 ETF in HKD is updated during SEHK trading hours. The near real time estimated NAV per Unit in HKD does not use a real time HKD:RMB foreign exchange rate - it is calculated using the estimated NAV per Unit in RMB multiplied by an assumed foreign exchange rate using the fixed offshore RMB ( CNH ) exchange rate quoted by Reuters at 3:00 p.m. (Hong Kong time) on the previous dealing day on which SEHK is opened for trading. Since the estimated NAV per Unit in RMB will not be updated when the underlying A-shares market is closed, any change in the estimated NAV per Unit in HKD during such period is solely due to the change in the assumed foreign exchange rate. The last closing NAV per Unit in HKD is calculated using the last closing NAV per Unit in RMB multiplied by an assumed foreign exchange rate using the CNH exchange rate quoted by Reuters at 3:00 p.m. (Hong Kong time) as of the same Dealing Day. The official last closing NAV per Unit in RMB and the indicative last closing price per Unit in HKD will not be updated when the underlying A-shares market is closed. Please refer to the Manager s website at www.csopasset.com/etf for details. Additional Risks Investors should note that there are additional risks involved in respect of inter-counter trading, in particular:- With the launch of the dual counter trading from 8 November 2012, the CSOP A50 ETF will be one of the first exchange traded funds traded in both RMB and HKD. The novelty and relatively untested nature of dual counter may bring additional risks for investment in the CSOP A50 ETF for example where for some reason there is a settlement failure on an inter-counter day trade. Where there is a suspension of the inter-counter transfer of Units between the HKD counter and the RMB counter for any reasons, for example, operational or systems interruption, Unitholders will only be able to trade their Units in the currency of the relevant dual counter. Due to market liquidity, market supply and demand in the RMB and HKD counters and the exchange rate between RMB and HKD in both onshore and offshore markets, the market price on the SEHK of Units traded in HKD may deviate significantly from the market price on the SEHK of Units traded in RMB. The trading price of HKD traded Units or RMB traded Units is determined by market forces and so will not be the same as the trading price of Units multiplied by the prevailing rate of foreign exchange. Investors who bought Units on the HKD counter may be subject to currency exchange risk as the assets of the CSOP A50 ETF are denominated in RMB. Investors without RMB accounts may buy and sell HKD traded Units only. Such investors will not be able to buy or sell RMB traded Units and should note that distributions for Units are made in RMB only. As such, investors may suffer a foreign exchange loss and incur foreign exchange associated fees and charges to receive their dividends. Further, not all brokers/intermediaries and CCASS participants may be familiar with and able to buy Units in one counter and to sell Units in the other or to carry out inter-counter transfers of Units or to trade both counters at the same time. This may inhibit or delay dealing in both RMB traded Units and HKD traded Units and may mean investors may only be able to trade their Units in one currency. - 3 -
Investors should therefore consult their brokers/intermediaries on the services that the brokers/intermediaries may provide in this regard along with the associated risks and fees. Please refer to the section headed 11.4 Dual Counter Trading risks in Appendix 1 of Part 2 of the Prospectus for further details on risks associated with dual counter trading. Rationale for the Launch of Dual Counter Trading The Manager believes that the introduction of the dual counter trading for the CSOP A50 ETF will benefit investors of the CSOP A50 ETF by providing them with the flexibility to trade the Units of the CSOP A50 ETF in RMB and/or HKD. SEHK Approval The trading of Units in the HKD counter on the SEHK with effect from the Effective Date has been approved by the SEHK. The HKD traded Units of the CSOP A50 ETF will be accepted as eligible securities by the HKSCC for deposit, clearing and settlement in CCASS with effect from the Effective Date. Stamp Duty Remission Approval has been given by the Financial Services and the Treasury Bureau for remission or refund in full of stamp duty payable or paid in respect of any contract notes or instruments of transfer relating to transactions in Units in the CSOP A50 ETF for the HKD counter in addition to the RMB counter. Market Making Arrangement The Manager will ensure that there is at all times at least one market maker for Units traded in the RMB counter and from the Effective Date, at least one market maker for Units traded in the RMB counter and one market maker for Units traded in the HKD counter (although the same entity can act as the market maker for both counters). The termination notice period for at least one market maker for Units of the CSOP A50 ETF for each counter will be not less than ninety (90) days. The list of market markers in respect of the CSOP A50 ETF is available on www.csopasset.com/etf and from time to time will be displayed on www.hkex.com.hk. Amendments to Prospectus The dual counter arrangements as described above will be reflected in the revised Prospectus of the CSOP A50 ETF and the revised Product Key Facts Statement with disclosure enhancements relating to additional risk factors, creation and redemption applications of Units (primary market), trading of Units on the SEHK (secondary market), distribution policy, publication of information and other consequential changes to the text of the Prospectus to make it consistent with the dual counter arrangements generally. Both of which together with this Announcement will be published on the Manager s website at www.csopasset.com/etf and HKEx s website at www.hkexnews.hk from 1 November 2012. The revised Prospectus and the revised Product Key Facts Statement will also be available at the Manager s office. For Further Information If you have any queries or require further information in relation to any aspect of this Announcement, please contact our Customer Service Hotline at (852) 3406 5688. By Order of the Board CSOP Asset Management Limited Chief Executive Officer Ding Chen 1 November 2012-4 -
As of the date of this Announcement, the board of directors of the Manager comprises 7 Directors namely, Ms. Ding Chen, Mr. Gao Liangyu, Mr. Qin Changkui, Mr. Zhang Gaobo, Mr. Benoit Descourtieux, Mr. Bao Wenge and Mr. Qiu Guolu. - 5 -