Notice to the Shareholders FLEXIFUND Luxembourg SICAV UCI Part II - AIF Registered office: 10, rue Edward Steichen, L-2540 Luxembourg Luxembourg Trade and Companies Register No. B 44523 Website: www.bnpparibas-am.com EQUITY CHINA A MERGING SUB-FUND MERGER EFFECTIVE AS OF SEPTEMBER 29, 2017 (OTD) We hereby inform you that the Board of Directors of FLEXIFUND (the Company), in agreement with the SICAV PARVEST have decided to merge the Sub-fund Flexifund Equity China A (the Merging sub-fund) into the Sub-fund Parvest Equity China A-Shares (the Receiving sub-fund), on the basis of Article 32 of the Company s Articles of Association, the following share classes (the Merger): Merging: Flexifund sub-fund ISIN code Sub-fund Class LU0558232517 Classic - HKD * Sub-fund Receiving: PARVEST sub-fund Class ISIN Classic - HKD LU1596576550 * LU0194829361 I - I - LU1596577525 Equity China A Equity China A-Shares I - LU0194829361 * I - LU1596577442 - LU0194829528 P - * LU0194829528 LU0825856213 P - - * * - - * The holders of share classes valued in as reference currency are informed that the reference currency of the receiving share classes is the. 1) Effective date of the Merger The Merger will be effective from Friday September 29, 2017 (Order Trade Date - OTD). 2) Background to and rationale for the Merger The Merger aims to provide better liquidity to shareholders with a daily dealing feature. While migrating to a UCITS regime allows a wider client reach, which offers a better opportunity to grow the sub-fund and operate in a more efficient manner, merging into a well-established umbrella also adds value by reducing the OCR due to the economy of scale. Page 1 of 6
3) Impact of the Merger on the Merging Shareholders Please note the following impacts of the Merger: The last redemption and conversion out orders in the Merging sub-fund will be accepted free of charge until the cut-off time on Tuesday September 19, 2017. Orders received after this cut-off time will be rejected. Through the Merger, you will become a shareholder of the Receiving sub-fund. The Merging sub-fund is dissolved without liquidation by transferring all of its assets and liabilities into the Receiving sub-fund. The Merging sub-fund will cease to exist from the effective date of the merger. 4) Impact of the Merger on Receiving Shareholders Please note the following points: The Receiving sub-fund will be launched on the effective date of the merger. First orders will be accepted on Friday September 29, 2017 (OTD). 5) Organisation of the exchange of shares If you accept the terms of the Merger, you will receive in the Receiving sub-fund a number of shares based on the following exchange ratios: Merging: Flexifund sub-fund ISIN code Sub-fund Class LU0558232517 Classic - Exchange ratio 1/1 1/10 LU0194829361 Equity China A I - 1/100 LU0194829361 HKD I - * 1/x * 1/x LU0194829528 P - * 1/100 LU0194829528 LU0825856213 P - - Receiving: PARVEST sub-fund Sub-fund Class Equity China A-Shares Classic - HKD I - ISIN LU1596576550 LU1596577525 * 1/100 I - LU1596577442 * 1/100 * 1/x - - - Page 2 of 6
As a principle, the number of shares you will receive into the Receiving classes will be calculated by multiplying the number of shares you currently hold in the Merging classes by the respective above mentioned exchange ratios. As an exception, regarding the 1/10 and 1/100 exchange ratios, the number of shares to be received in the Receiving classes will correspond to one (1) share of the Merging share class for, respectively, ten (10) and one hundred (100) shares of the Receiving share class. As regards the 1/x exchange ratios, it will be calculated on Friday September 29, 2017, as follows: - by dividing the net asset value (NAV) per share of the Classic () Merging share class, valued in HKD and, calculated on Friday September 29, 2017 by the corresponding NAV per share of the Classic share class (LU0558232517), which will be first absorbed by the Classic Receiving share class and taking into account the exchange rate for the HKD valuation, on Friday September 29, 2017, based on the valuation of the underlying assets set on Thursday September 28, 2017; - by dividing the net asset value (NAV) per share of the (LU0825856213) Merging share class, calculated on Friday September 29, 2017 by the corresponding NAV per share of the P share class (LU0194829528), which will be first absorbed by the Receiving share class, on Friday September 29, 2017, based on the valuation of the underlying assets set on Thursday September 28, 2017. Please note that, at the merger date, the NAV of the Receiving sub-fund will be calculated with 4 decimals in order to avoid any theoretical rounding impact. The criteria adopted for valuation of the assets and, where applicable, the liabilities on the date for calculating the exchange ratio will be the same as those used for the NAV calculation as described in the chapter Net Asset Value of the Book I of the Luxembourg Prospectus of the Company. Registered shareholders will receive registered shares. Bearer Shareholders will receive bearer shares. Since 18 February 2016, physical bearer shares have been cancelled. The cash equivalent of such cancelled shares has been deposited with the Luxembourg Caisse de consignation. The reimbursement of this cash may be requested by shareholders who can prove their ownership. No balancing cash adjustment will be paid for the fraction of the Receiving share attributed beyond the third decimal. 6) Material differences between Merging and Receiving sub-funds The differences between the Merging and Receiving sub-funds are the following: - Differences between both structures FLEXIFUND and PARVEST: FLEXIFUND is an alternative investment fund (AIF) under the form of a SICAV governed by the provision of Part II of the law of 17 December 2010 governing undertakings for collective investment (the Law), while PARVEST is an undertaking for collective investment in transferable securities (UCITS) under the form of a SICAV and governed by the provisions of Part I of the Law. However, since July 21, 2016 the merging sub-fund applies the same investment restrictions, investment strategy and has a similar investment policy than the Receiving sub-fund, which are as follows: Page 3 of 6
FLEXIFUND Equity China A PARVEST Equity China A-Shares Features Merging sub-fund Receiving sub-fund Investment objective Increase the value of its assets over the long term. Increase the value of its assets over the medium term. This sub-fund invests primarily in shares or partnership shares in the capital of companies based in the People s Republic of China, or in divisions of shares, fully or partially paid up, in registered or This sub-fund invests at least 75% of its assets in equities bearer form, issued by such companies. and/or equity equivalent securities issued by companies that On a secondary basis, it may also invest in Chinese have their registered offices or conduct the majority of their government bonds, bonds, convertible bonds and business activities in the People s Republic of China, or in warrants issued by companies based in the People s divisions of shares, fully or partially paid up, in registered or Republic of China and, if deemed appropriate by the bearer form, issued by such companies. manager, in any other transferable securities admitted Exposure to Mainland China securities will be made by on the official list of a stock market. investments via the RQFII and/or Stock Connect, and/or P- Investment strategy Since the sub-fund invests in warrants, potential Notes. investors should be aware of the greater volatility of The remaining portion, namely a maximum of 25% of its these instruments and consequently of the net asset assets, may be invested in debt securities, Money Market value of the sub-fund. Instruments, financial derivative instruments (e.g. futures, In order to achieve its objectives, the sub-fund may options) for hedging and trading (investment) purposes or invest up to 10% of its assets in other UCITS or cash, provided that investments in debt securities of any collective investment undertakings with similar kind do not exceed 15% of its assets, and up to 10% of its investment policies. assets may be invested in UCITS or UCI. As indicated under point 1 of Appendix 1 "Investment Restrictions" of the Luxembourg Prospectus, the subfund can engage in a loan for maximum 25% of its assets. - Differences between Merging and Receiving sub-funds: features FLEXIFUND Equity China A Merging sub-fund Accounting currency Specific market risks - Counterparty risk - Operational and Custody risk - Derivatives risk - Warrant risk - Emerging market risk Specific risks - Risks related to investments restrictions in some countries - Alternative Investment Strategies Risks Specific risks related to investments in Mainland China - Change in PRC Taxation Risk - Risks related to QFII/RQFII investments - Risks related to Stock Connect Valuation Day Terms of subscription/conversion/ redemption Centralisation of orders For each day of the week on which banks are open for business in Luxembourg and China (a Valuation Day ), there is a corresponding net asset value which is dated that Valuation Day. Orders will be processed exclusively based at an unknown net asset value calculated each Friday in accordance with the rules set out below, only on trading days in Luxembourg. If this day is not a Valuation Day, orders will be processed at the net asset value calculated on the next full bank business day. 14:00 CET three working days before the Valuation Day (D-3) PARVEST Equity China A-Shares Receiving sub-fund Specific market risks - Operational & Custody Risk - Emerging Markets Risk - Warrant Risk - Risk related to investments in some countries Specific risks related to investments in Mainland China - Changes in PRC taxation risk - Risks related to RQFII investments - Risks related to Stock Connect For each day of the week on which banks are open for business in Luxembourg, Shanghai and Shenzhen (a "Valuation Day"), there is a corresponding net asset value which is dated the same day. Each Valuation Day 16:00 CET for STP orders, 12:00 CET for non STP orders on the Valuation Day (D) NAV calculation and publication date Valuation Day (D) Day after the Valuation Day (D+1) Page 4 of 6
- Differences between Merging and Receiving share categories: features FLEXIFUND Equity China A - Classic and Classic Merging share categories Minimum Holding 25.000,00 None - Distribution Fee, except for the Classic which has a in 3.02% (3.06% for Classic ) - Maximum: 1.00% Conversion Fee Maximum: None Maximum: 1.50% Minimum holding currency Minimum holding None FLEXIFUND Equity China A - I Merging share category 2.04% - 0.01% None FLEXIFUND Equity China A - P Merging share category currency - Distribution Fee 2.98% - Maximum: 1.00% - 0.01% PARVEST Equity China A-Shares Classic and Classic Receiving share categories, except for the Classic which has a in 2.23% (estimated) - Maximum: 1.75% - Maximum: 0.40% PARVEST Equity China A-Shares I and I Receiving share categories Institutional Investors: 3 million per sub-fund Or 10 million in the Company UCIs: None, except for the I which has a in 1.06% (estimated) - Maximum: 0.85% - Maximum: 0.20% - 0.01% PARVEST Equity China A-Shares Receiving share category 1 million per sub-fund Managers: none 1.38% (estimated) - Maximum: 0.90% - Maximum: 0.40% Conversion Fee Maximum: None Maximum: 1.50% Minimum holding FLEXIFUND Equity China A - Merging share category 1 million PARVEST Equity China A-Shares Receiving share category 1 million per sub-fund Managers: none currency 2.03% 1.38% (estimated) - Maximum: 0.90% - Maximum: 0.40% Conversion Fee Maximum: None Maximum: 1.50% SRRI, risk management process (Commitment Approach) and any other characteristic not included in the above table are the same in both Merging and Receiving sub-funds. Page 5 of 6
7) Tax Consequences This merger will have no Luxembourg tax impact for Merging shareholders. For more tax advice or information on possible tax consequences associated with this merger, it is recommended that shareholders contact their local tax advisor or authority. 8) Right to redeem the shares Your options: If you are comfortable with this Merger, you do not need to take any action, Should you not approve this Merger, you may request the redemption of your shares free of charge until the cut-off time, on Tuesday September 19, 2017, In case of any question, please contact our Client Service (+ 352 26 46 31 21 / AMLU.ClientService@bnpparibas.com). 9) Other information The investment universe of the Merging sub-fund is included in the investment universe of the Receiving subfund. Therefore, the portfolio will not be adapted as a consequence of this Merger. All expenses related to this merger, including audit costs, will be borne by the Merging sub-fund. The merging operation will be validated by PricewaterhouseCoopers, Société Coopérative, the auditor of both Companies. The exchange ratios will be available on the website www.bnpparibas-am.com as soon as they are known. The KIIDs of the Receiving sub-fund are also available on the website www.bnpparibas-am.com where you are invited to acquaint yourself with them. This notice will also be communicated to any potential investor before subscription. Please refer to the Luxembourg Prospectus of both Companies for any term or expression not defined in this notice. The Board of Directors of the Company accepts responsibility for the accuracy of the contents of this Notice. For any additional information, please do not hesitate to contact your Relationship Manager. Alternatively, you may also contact the Singapore Office BNP PARIBAS ASSET MANAGEMENT Singapore Limited at their business address, 10 Collyer Quay, #15-01 Ocean Financial Centre, Singapore 049315 (Telephone No. 6210 1288 or 6210 3994). The Boards of Directors August 18, 2017 Page 6 of 6