BNP Paribas L1 Abbreviated as BNPP L1 An open-ended investment company incorporated under Luxembourg law Prospectus SEPTEMBER 2010
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Notice to Shareholders This document is important and requires your immediate attention. If in doubt, please seek professional advice. Shareholders are reminded to note that the annual management fee of the Classic share classes of BNPPL1 Equity High Dividend USA has been increased from 1.5% to 1.65% effective 1 September 2010. The increase of 0.15% is payable to the selection advisor of the subfund. This change was previously informed to shareholders by way of the notice dated 30 July 2010; and will be reflected in the upcoming HK offering document. The Board of Directors of the Company accepts responsibility for the accuracy of the contents of this notice. If you have any questions, please do not hesitate to contact the Hong Kong Representative at (852) 2533 0088. Luxembourg, August 2011 The Board of Directors
BNP Paribas L1 Short-form BNPP L1 (the Company) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange RCS Luxembourg N B 32.327 NOTICE TO SHAREHOLDERS This document is important and requires you immediate attention. If in doubt, please seek professional advice. In order to streamline the BNP Paribas Group range of funds offered to the clients and to ensure optimal management of the assets, the Company's Board of Directors decided by a resolution adopted on January 7, 2011, in accordance with Article 32 of the Company s Articles of Association and Appendix 8 of the Full Prospectus and in agreement with the Board of Directors of the Luxembourg SICAV PARVEST, to merge certain PARVEST sub-funds and BNPP L1 sub-funds. In order to facilitate the merger transaction, the Board of Directors of BNPP L1 has decided to suspend the subscription, conversion and redemption of shares for the following BNPP L1 subfunds on the relevant date as specified below pursuant to Article 15(f) of the Articles of Association. Target sub-funds Lots BNPP L1 V350 Lot 1 BNPPL1 Bond World High Yield Lot 1 BNPP L1 Equity Best Selection Asia ex-japan Lot 2 BNPPL1 Equity China Lot 2 BNPP L1 Equity Best Selection Europe Lot 2 BNPPL1 Equity Europe Emerging Lot 2 BNPPL1 Equity Europe Growth Lot 2 BNPPL1 Equity Germany Lot 2 BNPPL1 Equity World Consumer Durables Lot 2 BNPPL1 Equity India Lot 2 BNPPL1 Equity World Emerging Lot 2 BNPPL1 Equity World Energy Lot 2 Lot 1: Merger effective on July 11, 2011. In order to facilitate the merger transactions, subscription, conversion and redemption orders received on July 7, 2011 for the target sub-funds will be suspended and processed at the same time as orders received on July 8, 2011 at the NAV calculated on July 11, 2011. The NAV for these target sub-funds will not be calculated for July 8, 2011. Lot 2: Merger effective on July 18, 2011. In order to facilitate the merger transactions, subscription, conversion and redemption orders received on July 14, 2011 for the target sub-funds will be suspended and processed at the same time as orders received on July 15, 2011 at the NAV calculated on July 18, 2011. The NAV for these target sub-funds will not be calculated for July 15, 2011. The expenses relating to this merger will be borne by BNP Paribas Investment Partners Luxembourg, the Company's management company. However, stamp duty will be borne by the target sub-funds. The shareholders of the target sub-funds will not be otherwise affected by these mergers.
BNP Paribas L1 Short-form BNPP L1 (the Company) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange RCS Luxembourg N B 32.327 Shareholder in Hong Kong should contact the Hong Kong Representative of the Company, BNP Paribas Investment Partners Asia Limited, at 30/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong (Tel: 852 2533 0088) for any enquiries. The Board of Directors of the Company accepts responsibility for the accuracy of the contents of this document. May 2011 THE BOARD OF DIRECTORS
BNP Paribas L1 SICAV under Luxembourg law UCITS Registered office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Notice to Shareholders This document is important and requires your immediate attention. If in doubt, please seek professional advice. Fischer Francis Trees & Watts, Inc, a US based portfolio manager, will be appointed as one of the portfolio managers of the subfunds of BNP Paribas L1 with effect from 1 July 2011. In particular, Fischer Francis Trees & Watts, Inc will be the portfolio manager of the following subfunds: BNPPL1 Bond Best Selection World Emerging BNPPL1 Bond Europe Plus BNPPL1 Bond USD BNPPL1 Bond World BNPPL1 Bond World Emerging Corporate BNPPL1 Bond World Emerging Local BNPPL1 V350 The change of portfolio manager will be made free of charge for the shareholders. The Board of Directors of BNP Paribas L1 accepts responsibility for the accuracy of the contents of this notice. If you have any questions, please do not hesitate to contact the Hong Kong Representative at (852) 2533 0088. 13 May 2011 The Board of Directors 1
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Notice to Shareholders This document is important and requires your immediate attention. If in doubt, please seek professional advice. The following changes will be incorporated in the next version (April 2011) of the prospectus: Calculation of NAV Fastnet Luxembourg S.A is replaced by BNP Paribas Securities Services Luxembourg branch as NAV Calculation Agent from 4 April 2011. The following changes will come into effect on 1 April 2011: The following entities have been removed from the prospectus: - Alfred Berg Kapitalforvaltning AS - Neuflize OBC Investissements (NOI), which has been acting as investment advisor for the Opportunities Europe subfund; SRI Advisory Committee The Company is dispensing with the services of this committee which has been advising on the following subfunds: Sustainable Equity World, Green Future and Green Tigers. Net asset value (NAV) calculation dates In principle, the NAVs will be calculated on each bank business day in Luxembourg even if it is not a full bank business day. Minimum holding/subscription For Bond Europe Plus, the 10-share minimum in the Classic-New Distri class will be deleted. Name of subfund The name of Equity Best Selection World will be changed to Equity World Minimum Variance. Investment Policy The changes to the investment policies of the subfunds of the Company are set out as follows: Opportunities USA Principal investments are increased from a 60% to 75% minimum; ancillary investments are reduced from a 40% to 25% maximum. Convertible Bond Asia and Convertible Bond World Removal of the obligation that issuers of invested assets be listed on a stock market. Equity China, Green Tigers Addition of the following details concerning investments in Chinese A and B shares: The subfund is allowed to invest up to 10% of its assets in type "A" shares listed on the Shanghai or Shenzhen markets that are theoretically reserved for private Chinese investors. The subfund s total (direct and indirect) exposure to type A shares (shares listed in RMB on the Shanghai or Shenzhen stock exchange, in principle reserved for private Chinese investors) and type B shares (shares listed in foreign
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 currencies on the Shanghai or Shenzhen stock exchange, reserved for foreign investors) shall not exceed 35% of its assets. Green Future, Green Tigers and Sustainable Equity World: Removal of the paragraph referring to investment advice from the SRI Advisory Committee. World Commodities The ceiling on investment in other UCIs or UCITS is increased from 5% to 10%. Equity Best Selection World Both its investment objective and investment policy are modified. The existing as well as the new investment policy for the affected subfunds are set out below for investors ease of reference. Existing Investment Policy New Investment Policy Convertible Bond Asia This subfund invests at least 2/3 of its assets in convertible or similar bonds whose underlying shares are issued by companies that have their registered offices or conduct a large proportion of their business in Asia and are admitted to the official listing on an Asian securities exchange, and in derivative financial instruments on this type of asset. The manager will seek to achieve a balance between the debt character of convertible bonds and their dependence on their respective underlying shares. In this respect, the subfund will take advantage of bond yields and will also be sensitive to the performance of the underlying shares. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 5% of its assets may be invested in other UCITS or UCI. After hedging, the subfund s exposure to currencies other than the euro may not exceed 25%. Convertible Bond Asia This subfund invests at least 2/3 of its assets in convertible or similar bonds whose underlying shares are issued by companies that have their registered offices or conduct a large proportion of their business activities in Asia, and in derivative financial instruments on this type of asset. The manager will seek to achieve a balance between the debt character of convertible bonds and their dependence on their respective underlying shares. In this respect, the subfund will take advantage of bond yields and will also be sensitive to the performance of the underlying shares. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 5% of its assets may be invested in other UCITS or UCI. After hedging, the subfund s exposure to currencies other than the euro may not exceed 25%. Convertible Bond World This subfund invests at least 2/3 of its assets in convertible or similar bonds whose underlying shares are issued by companies admitted to the official listing on a securities exchange, and in derivative financial instruments on this type of asset. The manager will seek to achieve a balance between the debt character of convertible bonds and their dependence on their respective underlying shares. In this respect, the subfund will take advantage of bond yields and will also be sensitive to the performance of the underlying shares. The remaining portion, namely a maximum of 1/3 of its Convertible Bond World This subfund invests at least 2/3 of its assets in convertible or similar bonds whose underlying shares are issued by companies, and in derivative financial instruments on this type of asset. The manager will seek to achieve a balance between the debt character of convertible bonds and their dependence on their respective underlying shares. In this respect, the subfund will take advantage of bond yields and will also be sensitive to the performance of the underlying shares. The remaining portion, namely a maximum of 1/3 of its
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 10% of its assets may be invested in other UCITS or UCI. After hedging, the subfund s exposure to currencies other than the euro may not exceed 25%. assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 10% of its assets may be invested in other UCITS or UCI. After hedging, the subfund s exposure to currencies other than the euro may not exceed 25%. Equity Best Selection World Investment objective To increase asset value in the medium term Investment policy This subfund invests at least 2/3 of its assets in shares or other similar securities of a limited number of companies that are characterised by the quality of their financial structure and/or their potential for positive earnings growth and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 10% of its assets may be invested in other UCITS or UCI. Equity Best Selection World (to be renamed as Equity World Minimum Variance) Investment objective To increase asset value in the medium term. The subfund is managed to maximise absolute return and minimise portfolio risk by keeping volatility below the average in European markets while taking advantage of the risk premium inherent in any long-term investment. The subfund's market correlation is lower than subfunds with classic long-only strategies. The subfund's strategy tends to outperform declining markets and generally underperform rising markets. Investment policy This subfund invests at least 75% of its assets in shares and/or similar securities of companies that have their registered offices in Europe. The remaining portion, namely up to 25% of its assets, may be invested in any other transferable securities, money market instruments or cash, provided that the investments in debt securities of any kind do not exceed 15% of its assets and the investments in other UCITS or UCI do not exceed 10%. The subfund's exposure to currencies is not hedged. The subfund's strategy will focus on minimising risk by selecting low volatility securities which are not correlated with the market and which offer value growth potential. The manager will follow a forecasting and risk-optimisation process when constructing the portfolio. The manager will aim for low standard deviation and will not excessively expose the portfolio to any particular security. In addition, the manager will use a yield forecasting system adapted to market fluctuations. This process enhances the subfund's performance by assisting in stock selection. This subfund may invest in derivative financial instruments on the abovementioned types of assets for hedging purposes only, within the limits defined in Appendix 2 of Part 1 of the Full Prospectus. Equity China This subfund invests at least 2/3 of its assets in shares or other similar securities of companies that have their registered offices or conduct the majority of their business activities in China, Hong Kong or Taiwan and in derivative financial instruments on this type of asset. Equity China This subfund invests at least 2/3 of its assets in shares or other similar securities of companies that have their registered offices or conduct the majority of their business activities in China, Hong Kong or Taiwan and in derivative financial instruments on this type of asset.
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 5% of its assets may be invested in other UCITS or UCI. The subfund is allowed to invest up to 10% of its assets in type "A" shares listed on the Shanghai or Shenzhen markets and that are theoretically reserved for private Chinese investors. Green Future This subfund invests at least 2/3 of its assets in shares or other similar securities of companies whose technologies, products and services bring sustainable development solutions to environmental problems and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 5% of its assets may be invested in other UCITS or UCI. The manager will favour companies that develop technologies focused on sustainable development. In choosing these companies, it will select those that represent the best balance between level of sustainability and risk profile. The investment research process and methodology are subject to the advice of an independent committee of experts (the "Sustainable and Responsible Investment (SRI) Advisory Committee") that is composed as described in Book I of the Full Prospectus. The SRI Advisory Committee will produce at least one report per year on the SRI process in terms of robustness, pertinence and integrity. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 5% of its assets may be invested in other UCITS or UCI. The subfund is allowed to invest up to 10% of its assets in type "A" shares listed on the Shanghai or Shenzhen markets that are theoretically reserved for private Chinese investors. The subfund s total (direct and indirect) exposure to type A shares (shares listed in RMB on the Shanghai or Shenzhen stock exchange, in principle reserved for private Chinese investors) and type B shares (shares listed in foreign currencies on the Shanghai or Shenzhen stock exchange, reserved for foreign investors) shall not exceed 35% of its assets. Green Future This subfund invests at least 2/3 of its assets in shares or other similar securities of companies whose technologies, products and services bring sustainable development solutions to environmental problems and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 5% of its assets may be invested in other UCITS or UCI. The manager will favour companies that develop technologies focused on sustainable development. In choosing these companies, it will select those that represent the best balance between level of sustainability and risk profile. Green Tigers This subfund invests at least 2/3 of its assets in shares or other similar securities of companies whose technologies, products and services bring sustainable development solutions to environmental problems in Asia and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 10% of its assets may be invested in other UCITS or UCI. Green Tigers This subfund invests at least 2/3 of its assets in shares or other similar securities of companies whose technologies, products and services bring sustainable development solutions to environmental problems in Asia and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 10% of its assets may be invested in other UCITS or UCI.
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 The manager will favour companies that develop technologies focused on sustainable development. In choosing these companies, it will select those that represent the best balance between level of sustainability and risk profile. The investment research process and methodology are subject to the advice of an independent committee of experts (the "Sustainable and Responsible Investment (SRI) Advisory Committee") that is composed as described in Book I of the Full Prospectus. The SRI Advisory Committee will produce at least one report per year on the SRI process in terms of robustness, pertinence and integrity. The subfund is allowed to invest up to 10% of its assets in type "A" shares listed on the Shanghai or Shenzhen markets and that are theoretically reserved for private Chinese investors. Opportunities USA This subfund invests in a limited number of asset groups selected on the basis of financial market movements and on the manager's expectations. Each asset group - representing a particular investment sector or theme, for example - will be represented by a diversified group of transferable securities. To do so, the subfund invests at least 60% of its assets in shares or other similar securities of companies that have their registered offices or conduct the majority of their business activities in the United States of America and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 40% of its assets, may be invested in any other transferable securities, money market instruments, financial derivatives or cash, and up to 5% of its assets may be invested in other UCITS or UCI. It will focus its ancillary investments in convertible bonds, bonds and treasury notes, provided such investments are in transferable securities issued by companies that have their registered headquarters in or conduct the majority of their business activity in the United States of America. The manager will favour companies that develop technologies focused on sustainable development. In choosing these companies, it will select those that represent the best balance between level of sustainability and risk profile. The subfund is allowed to invest up to 10% of its assets in type "A" shares listed on the Shanghai or Shenzhen markets and that are theoretically reserved for private Chinese investors. The subfund s total (direct and indirect) exposure to A type shares (shares listed in RMB on the Shanghai or Shenzhen stock exchange, which are in principle reserved for Chinese investors) and B type shares (shares listed in foreign currencies on the Shanghai or Shenzhen stock exchange and reserved for foreign investors) shall not exceed 35% of its assets. Opportunities USA This subfund invests in a limited number of asset groups selected on the basis of financial market movements and on the manager's expectations. Each asset group - representing a particular investment sector or theme, for example - will be represented by a diversified group of transferable securities. To do so, the subfund invests at least 75% of its assets in shares or other similar securities of companies that have their registered offices or conduct the majority of their business activities in the United States of America and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 25% of its assets, may be invested in any other transferable securities, money market instruments, financial derivatives or cash, and up to 5% of its assets may be invested in other UCITS or UCI. It will focus its ancillary investments in convertible bonds, bonds and treasury notes, provided such investments are in transferable securities issued by companies that have their registered offices in or conduct the majority of their business activity in the United States of America. Sustainable Equity World This subfund invests at least 2/3 of its assets in shares or other similar securities of companies that comply with the sustainable development criteria that cover the social responsibility and/or environmental responsibility and/or "Corporate Governance" and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 10% of its assets may be invested in other UCITS or UCI. The subfund follows a "Best in Class +" process. The issuers whose practices are considered as the Best in their Class are judged on the basis of specific criteria in regard to Sustainable Equity World This subfund invests at least 2/3 of its assets in shares or other similar securities of companies that comply with the sustainable development criteria that cover the social responsibility and/or environmental responsibility and/or "Corporate Governance" and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, provided that investments in debt securities of any kind do not exceed 15% of its assets, and up to 10% of its assets may be invested in other UCITS or UCI. The subfund follows a "Best in Class +" process. The issuers whose practices are considered as the Best in their Class are judged on the basis of specific criteria in regard to
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 environmental and social conduct and corporate governance. The subfund will also select (1) issuers whose products and services contribute to resolving problems linked to the environment and sustainable development, and (2) issuers whose products and services will have positive and sustainable impacts on the environment and the social climate. This justifies the "+" in the Best in Class approach. The investment research process and methodology are subject to the advice of an independent committee of experts (the "Sustainable and Responsible Investment (SRI) Advisory Committee") that is composed as described in Book I of the Full Prospectus. The SRI Advisory Committee will produce at least one report per year on the SRI process in terms of robustness, pertinence and integrity. World Commodities This subfund can be exposed to the Dow Jones-UBS Commodity Total Return Index and/or to any index representing commodities, combining all sectors, that complies with the recommendations of European Directive 2007/16/CEE. The exposure to indices is obtained by using a synthetic replication method. To do so, the subfund invests in derivative instruments on the index, such as swaps (index swaps, for instance), options, futures, forward contracts linked to the abovementioned indices, on a regulated or overthe-counter market. In particular, the subfund can enter into swap agreements (variable or fixed interest rate swap against index performance). The exposure to indices representing the overall trend of prices for commodities of any kind, via derivative financial instruments may vary between 0 and 100% of the subfund s net assets. This subfund invests at least 2/3 of its assets in bonds or other similar securities, money market instruments, transferable securities linked to prices for commodities of any kind, and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 5% of its assets may be invested in other UCITS or UCI. environmental and social conduct and corporate governance. The subfund will also select (1) issuers whose products and services contribute to resolving problems linked to the environment and sustainable development, and (2) issuers whose products and services will have positive and sustainable impacts on the environment and the social climate. This justifies the "+" in the Best in Class approach. World Commodities This subfund can be exposed to the Dow Jones-UBS Commodity Total Return Index and/or to any index representing commodities, combining all sectors, that complies with the recommendations of European Directive 2007/16/CEE. The exposure to indices is obtained by using a synthetic replication method. To do so, the subfund invests in derivative instruments on the index, such as swaps (index swaps, for instance), options, futures, forward contracts linked to the abovementioned indices, on a regulated or overthe-counter market. In particular, the subfund can enter into swap agreements (variable or fixed interest rate swap against index performance). The exposure to indices representing the overall trend of prices for commodities of any kind, via derivative financial instruments may vary between 0 and 100% of the subfund s net assets. This subfund invests at least 2/3 of its assets in bonds or other similar securities, money market instruments, transferable securities linked to prices for commodities of any kind, and in derivative financial instruments on this type of asset. The remaining portion, namely a maximum of 1/3 of its assets, may be invested in any other transferable securities, money market instruments, derivative financial instruments or cash, and up to 10% of its assets may be invested in other UCITS or UCI.
BNP Paribas L1 Short-form BNPPL1 (the Company ) SICAV under Luxembourg law UCITS class Registered Office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Shareholders who do not agree to these changes may request to redeem their shares at no cost until 31 March 2011. The Board of Directors of the Company accepts responsibility for the accuracy of the contents of this notice. If you have any questions, please do not hesitate to contact the Hong Kong Representative at (852) 2533 0088. Luxembourg, Feb 2011 The Board of Directors
BNP Paribas L1 SICAV under Luxembourg law UCITS Registered office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Notice to Shareholders This document is important and requires your immediate attention. If in doubt, please seek professional advice. Neuflize Private Assets, a France based portfolio manager, will be appointed as one of the portfolio managers of the subfunds of BNP Paribas L1 with effect from 1 April 2011. In particular, Neuflize Private Assets will replace BNP Paribas Asset Management as the portfolio manager of BNP Paribas L1 Opportunities USA. The change of portfolio manager will be made free of charge for the shareholders. The Board of Directors of BNP Paribas L1 accepts responsibility for the accuracy of the contents of this notice. If you have any questions, please do not hesitate to contact the Hong Kong Representative at (852) 2533 0088. January 2011 The Board of Directors 1
BNP Paribas L1 SICAV under Luxembourg law UCITS Registered office: 33, rue de Gasperich, L-5826 Howald-Hesperange Luxembourg Trade and Companies Register No. B 32.327 Notice to Shareholders This document is important and requires your immediate attention. If in doubt, please seek professional advice. Impax Asset Management Limited, a UK based portfolio manager, will be appointed as one of the portfolio managers of the subfunds of BNP Paribas L1 with effect from 1 April 2011. In particular, Impax Asset Management Limited will replace BNP Paribas Investment Partners Belgium SA, Zweigniederlassung Deutschland (i.e. BNP Paribas Investment Partners Belgium S.A., Germany Branch) as the portfolio manager of BNP Paribas L1 Green Future. The change of portfolio manager will be made free of charge for the shareholders. The Board of Directors of BNP Paribas L1 accepts responsibility for the accuracy of the contents of this notice. If you have any questions, please do not hesitate to contact the Hong Kong Representative at (852) 2533 0088. January 2011 The Board of Directors 1
HONG KONG COVERING DOCUMENT AND INFORMATION FOR HONG KONG INVESTORS BNP PARIBAS L1 Société d'investissement à capital variable or SICAV An open-ended investment company incorporated under Luxembourg law IMPORTANT INFORMATION BNP Paribas L1 is a Luxembourg incorporated UCITS III investment company housing multiple subfunds (the funds ). The funds can invest in equities, debt securities, financial derivative instruments as well as other funds. The funds may invest in derivatives (up to 100%) and structured investment products e.g. credit default swaps and collateralized debt obligations. Some funds may also invest in below investment grade debt securities. These types of investments can involve material additional risks, for example counterparty default risk or insolvency, and may expose the funds to significant losses. Some funds may have significant exposure to emerging markets, single country or single sector and are likely to be subject to a higher than average volatility. Emerging markets may have higher legal, regulatory and political risk. Some funds may invest either directly or indirectly in the China A Shares and China B Shares market. Investing in China may involve a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity, regulatory, accounting and reporting risks. Such funds may also be exposed to risks associated with the changes in current Chinese tax laws. In particular, such funds may be subject to potential China capital gain tax (which may have retrospective effect). Currently no tax provision has been made in this regard. In the event that such tax liability is imposed, the relevant amounts will be deducted from the funds assets which may have an adverse effect on the value of the funds. Some funds may take short positions using derivatives and have a net short exposure. Losses on short positions may be unlimited and lead to entire loss of the funds. CM\SUGO\.. \05042812.doc 1
IMPORTANT This document forms part of and should be read in the context of and together with the Hong Kong Prospectus dated September 2010 as supplemented from time to time (the Prospectus ). Investors should refer to the Prospectus for full information and terms defined therein have the same meaning in this document unless otherwise defined herein. If you are in doubt about the contents of the Prospectus or this document, you should consult your stockbroker, bank manager, accountant, solicitor or other independent financial adviser. The Management Company and the Board of Directors of BNP PARIBAS L1 (the Company ) accept full responsibility for the accuracy of the information contained in this document and the Prospectus and confirm, having made all reasonable enquiries, that to their best knowledge and belief there are no other facts the omission of which would make any statement in this document and the Prospectus misleading. The Company is an investment company with variable capital (SICAV) incorporated under the laws of Luxembourg. The Company takes the form of an umbrella fund, which is a multi-sub-fund investment vehicle, with liabilities consisting of several sub-funds, each representing assets comprising a collection of holdings, various rights and specific commitments that correspond to a distinct investment policy, governed as applicable by its own investment restrictions. Further details of the Company are set out in the Prospectus. The Company and each of the following sub-funds (each a Sub-Fund and collectively the Sub-Funds ) have been authorised under Section 104 of the Hong Kong Securities and Futures Ordinance (the SFO ) by the Securities & Futures Commission (the SFC ) in Hong Kong. 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. The SFC does not take any responsibility as to the accuracy of the statements made or opinion expressed in the Prospectus and this document. CM\SUGO\.. \05042812.doc 2
BNP PARIBAS L1 Bond Asia ex-japan BNP PARIBAS L1 Bond Best Selection World Emerging BNP PARIBAS L1 Convertible Bond Asia BNP PARIBAS L1 Convertible Bond World BNP PARIBAS L1 Bond World Emerging Corporate BNP PARIBAS L1 Bond Europe Plus BNP PARIBAS L1 Bond World High Yield BNP PARIBAS L1 Bond USD BNP PARIBAS L1 Bond World BNP PARIBAS L1 Bond World Emerging Local BNP PARIBAS L1 World Commodities BNP PARIBAS L1 Equity Asia Emerging BNP PARIBAS L1 Equity Best Selection Asia ex-japan BNP PARIBAS L1 Equity Best Selection Europe BNP PARIBAS L1 Equity Best Selection USA BNP PARIBAS L1 Equity Best Selection World BNP PARIBAS L1 Equity China BNP PARIBAS L1 Equity World Consumer Durables BNP PARIBAS L1 Equity World Consumer Goods BNP PARIBAS L1 Equity World Energy BNP PARIBAS L1 Equity Europe BNP PARIBAS L1 Equity Europe Emerging BNP PARIBAS L1 Equity World Finance BNP PARIBAS L1 Equity Germany BNP PARIBAS L1 Equity Europe Growth BNP PARIBAS L1 Equity USA Growth BNP PARIBAS L1 Equity World Health Care BNP PARIBAS L1 Equity High Dividend Pacific BNP PARIBAS L1 Equity High Dividend USA BNP PARIBAS L1 Equity High Dividend World BNP PARIBAS L1 Equity India BNP PARIBAS L1 Equity Indonesia BNP PARIBAS L1 Equity World Industrials BNP PARIBAS L1 Equity World Materials BNP PARIBAS L1 Equity Russia BNP PARIBAS L1 Sustainable Equity World BNP PARIBAS Equity World Technology BNP PARIBAS Equity World Telecom BNP PARIBAS L1 Equity USA BNP PARIBAS L1 Equity World Utilities BNP PARIBAS L1 Equity World Emerging BNP PARIBAS L1 Green Future BNP PARIBAS L1 Green Tigers BNP PARIBAS L1 Model 1 BNP PARIBAS L1 Model 2 BNP PARIBAS L1 Model 3 BNP PARIBAS L1 Model 4 BNP PARIBAS L1 Model 5 BNP PARIBAS L1 Model 6 BNP PARIBAS L1 OBAM Equity World BNP PARIBAS L1 Opportunities Euro Plus BNP PARIBAS L1 Opportunities USA BNP PARIBAS L1 Real Estate Securities Pacific BNP PARIBAS L1 Real Estate Securities World BNP PARIBAS L1 V350 Apart from the subfunds listed in the table above, other sub-funds of the Company and other funds which may be mentioned in the Prospectus are not authorised for sale to the public in Hong Kong and are not available to retail Hong Kong investors. BNP Paribas L1 Equity Asia ex-japan, BNP Paribas L1 Equity Brazil, BNP Paribas L1 Equity High Dividend Europe, BNP Paribas L1 Equity Japan, BNP Paribas L1 Equity Latin America, BNP Paribas L1 Opportunities Europe, BNP Paribas L1 Bond Euro, BNP Paribas L1 Short Term Euro and BNP Paribas L1 Short Term USD mentioned in the Prospectus were merged into other funds in March 2011 and their authorisations with the SFC have been ceased. In addition, the authorisations with the SFC of BNP Paribas L1 V150, BNP Paribas L1 Equity Europe Small Cap and BNP Paribas L1 Equity Best Selection World (renamed as BNP Paribas L1 Equity World Minimum Variance with effect from 1 April 2011 ) have been / will be ceased with effect from 9 November 2010, 10 March 2011 and 1 July 2011 respectively. The subfunds mentioned in this paragraph are no longer available for sale to the public in Hong Kong and is not available to retail Hong Kong investors. Risk Factors and Additional Disclosures General Risk Factors Funds can help diversify your investment but may not protect your investment from the impact of wider economic issues. Before investing in the Company and/or any Sub-Fund, potential investors should consider the risks involved. Risks associated with investment in the funds may include, amongst others, equity market, bond market, foreign exchange, sector, interest rate, inflation, credit, counterparty, liquidity, reliability of credit agency ratings, political risks and any combination of these and other risks. Investors are referred to Appendix 3 of the Prospectus (headed INVESTMENT RISKS ) for risks associated with each Sub-Fund. Neither the Board of Directors, the Management Company, nor the portfolio managers nor the CM\SUGO\.. \05042812.doc 3
investment advisors guarantee the performance of the Company and/or any Sub-Fund or the repayment of capital from the Company and/or any Sub-Fund. Prospective investors should be aware that the price of shares in the relevant Sub-Fund and the income from it (if any) may go down as well as up. There is no assurance that the investment objectives of the relevant Sub-Fund will be achieved. In addition, investors should note that with regard to Sub-Funds that focus on investing in a single sector, geographical area or country, these compartments are highly specialised. Although the Sub-Funds investment portfolios may be diversified in terms of the underlying investments, the relevant Sub-Funds are likely to be more volatile than a broad-based fund, such as a global equity fund and they may be more susceptible to fluctuations in value resulting from adverse conditions in the sectors or countries in which the compartments invest. Early Termination Risk Investors should note that the Sub-Funds may be subject to early termination due to liquidation. Investors should refer to Appendix 8 headed LIQUIDATION, MERGER AND ABSORPTION PROCEDURES in the Prospectus for further information about the circumstances under which the Company or any Sub-Fund may be liquidated. In case of an early termination, investors may not be able to redeem their holdings in the Sub-Funds at or above the price that they have subscribed into the Sub-Funds and may be therefore subject to a loss of their investments. Sub-Fund Specific Risk Factors and/or Additional Disclosure Additional disclosure for Sub-Funds that may invest in REITs Investors should note that insofar as any Sub-Fund directly invests in REITs, any dividend policy or dividend payout at the Sub-Fund level may not be representative of the dividend policy or dividend payout of the relevant underlying REIT. Hong Kong investors should also note that the relevant underlying REIT may not necessarily be authorised by the SFC in Hong Kong. Additional disclosure for BNP Paribas L1 V350 BNP Paribas L1 V350 may take short positions using derivative instruments; which could expose the funds to a net short exposure. Losses on short positions can in theory be unlimited and in the case of a fund investment losses on a short position could lead to a loss of the entire value of the fund. Investors should read the following information together with the investment policy of the BNP Paribas L1 V350 as mentioned in the Prospectus. Volatility Volatility is one measure used to assess the risk of a fund as it helps to describe the likely range of returns achieved. In statistical terms, it is the standard deviation of the return distribution. Volatility can be calculated using monthly returns data. Greater volatility of monthly returns means that there is a wider range of likely returns in the future, or greater uncertainty regarding the fund s likely future returns. Commonly, the higher the volatility, the riskier the fund. BNP Paribas L1 V350 targets volatility in the region of 350 basis points, broadly comparable with the volatility of a typical long only global bond fund. CM\SUGO\.. \05042812.doc 4
Positive Absolute Returns BNP Paribas L1 V350 is not managed against a specific benchmark, which may fluctuate over time in line with underlying market movements. Instead, BNP Paribas L1 V350 aims to generate a positive absolute return that does not follow a market cycle. There is no guarantee that this can be achieved. The following strategies are used with the aim of generating positive absolute returns for BNP Paribas L1 V350: Credit Management The active management of the credit risk dimension of BNP Paribas L1 V350, meaning the selection of corporate debt issuers and managing overall exposure to credit, both long and short. Duration Management Duration is a measure of the sensitivity of the price (the value of principal) of a fixed income investment to a change in interest rates. Since BNP Paribas L1 V350 has no benchmark, any duration exposure will be an active investment decision taken by the manager. Currency Management The active management of currency exposure within BNP Paribas L1 V350, taking long and short positions in currency pairs to take advantage of the strengthening and weakening of the exchange rates of those currencies. Additional disclosure for BNP Paribas L1 Equity China To provide further clarity of the subfund s investment policy as described in the Prospectus, investors should note that BNP Paribas L1 Equity China s total exposure (via both direct and indirect investments) to China A Shares and China B Shares will not be more than 10% of its assets and currently the subfund does not invest in China A shares directly. At least one month s prior notice will be given to Hong Kong shareholders if the fund s exposure to China A Shares and China B Shares exceeds 10% of its assets in future and this document will be updated accordingly. Additional disclosure for BNP Paribas L1 Green Tigers In relation to the subfund s investment objective and policy, it was disclosed in the Prospectus that the portfolio manager may seek to achieve the objective through direct or indirect investment in China A Shares and China B Shares and the subfund is allowed to invest up to 10% of its assets directly in China A Shares market. For clarification, in any case, the subfund s total exposure (via both direct and indirect investment) to the China A Shares and China B Shares markets will not exceed 35% of its assets. Notwithstanding the above and for the avoidance of doubt, currently the subfund has no direct investment in China A Shares and only has exposure to the China A Shares market indirectly by way of participation notes. Risks of securities market of China and access products Investing in the securities market of China is subject to emerging market risks as well as China specific risks which may result in a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity, regulatory, accounting and reporting risk. The legal and regulatory framework in China is less developed. Generally, there is greater market volatility, lower trading volume, CM\SUGO\.. \05042812.doc 5
greater political and economic instability, greater settlement risk, greater risk of market shut down, more governmental limitations on foreign investment and more governmental control of currency conversion and future movements in exchange rate than those typically found in developed markets. Exposure to China A Shares may be obtained through investments in access products such as participation notes and other similar securities and instruments. Access products may not be listed and are subject to the terms and conditions imposed by their issuer. These terms may lead to delays in implementing the subfund s investment strategy due to restrictions on the issuer acquiring or disposing of the securities underlying the access products. Investment in access products can be illiquid as there is no active market in access products. In addition, the subfund is exposed to the credit risk of the issuer of the access products. An investment in the access products does not entitle the access products holder to the beneficial interest in the shares nor to make any claim against the company issuing the shares. Investment through access products may incur costs which may in turn lead to a dilution of performance of the subfund when compared to a fund investing directly in similar assets. Fluctuation in the exchange rate between the denomination currency of the underlying shares and the access products will affect the value of the access products, the redemption amount and distribution amount on the access products. Taxation The qualified foreign institutional investors who issue the access products to the subfund may provide for withholding tax for capital gains on China A Shares which will impact on the subfund. The issuers of the access products may reserve the right to request the subfund to pay up the withholding tax for capital gain tax on demand or to withhold from the sales proceeds upon disposal of the access products. After taking into account professional advice and current market practice, currently the board of directors does not make any provision in connection with any potential China capital gain tax liability. However, the board of directors reserve the right to provide provisions for tax on gains derived from the disposal of China securities, based on professional advice and current market practice. With the uncertainty of whether and how gains on China A Shares in particular are to be taxed, the possibility of the rules being changed and the possibility of taxes being applied retrospectively, any provision for taxation made may be excessive or inadequate to meet final China tax liabilities which may have an adverse effect on the value of the fund. Specific risk disclosure and additional disclosure of BNP Paribas L1 World Commodities BNP Paribas L1 World Commodities is exposed to commodity sector risks, mainly through commodity linked derivatives and transferable securities linked to raw materials. This fund may have a higher than average volatility in comparison to traditional securities. Prices of commodities and the value of the commodity-linked financial derivative instruments may be influenced by a number of factors, including but not limited to overall market movements, changing supply and demand relationships, changes in interest rates, exchange controls, commodity index volatility, as well as factors affecting a particular industry or commodity, such as weather conditions, other natural phenomena, livestock disease, embargoes, tariffs and other government policies affecting commodities. The index mentioned in the Prospectus has CM\SUGO\.. \05042812.doc 6