BNP PARIBAS L1 Abbreviated as BNPP L1 An open-ended investment company incorporated under Luxembourg law Prospectus APRIL 2011
BNP Paribas L1 Abbreviated to 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 informed that since 1 July 2011, the Company is submitted to the Luxembourg Law dated December 17, 2010 relating to undertakings for collective investment and implementing European Directive 2009/65/CE (UCITS IV). All references to the Luxembourg Law and the risk related disclosures in relation to global exposure and Over the Counter (OTC) derivatives have been updated accordingly. 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, BNP Paribas Investment Partners Asia Limited, at (852) 2533 0088. The Board of Directors 22 December 2011
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 This document forms part of and should be read in the context of and together with the Hong Kong Prospectus dated April 2011 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 set out in the table on p.3 and p.9 to p.13 of this document (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 1
Warning: In relation to the funds as set out in the Prospectus, only the Sub-Funds set out in the table on p.3 and p.9 to p.13 of this document are authorised by the SFC pursuant to section 104 of the SFO and hence may be offered to the public of Hong Kong. Please note that the Prospectus is a global offering document and therefore also contains information of funds which are not authorised by the SFC. No offer shall be made to the public of Hong Kong in respect of any unauthorised funds. The issue of the Prospectus was authorised by the SFC only in relation to the offer of the SFC authorised Sub-Funds to the public of Hong Kong. Intermediaries should take note of this restriction. 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 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 Sub-Funds 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. In addition, investors should note that authorisation with the SFC of BNP Paribas L1 Sustainable Equity World has been ceased with effect from 12 January 2012. Authorisation with the SFC of BNP Paribas L1 Opportunities Euro Plus and BNP Paribas L1 V350 will be ceased with effect from 9 May 2012. These subfunds are no longer available for sale to the public in Hong Kong and are not available to retail HK 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 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. CM\SUGO\.. \05042812.doc 3
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 fund 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 Sub-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 is, the riskier is 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. 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: CM\SUGO\.. \05042812.doc 4
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 Sub-Fund 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 Sub-Fund 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 Sub-Fund s investment objective and policy, it is 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 Sub-Fund is allowed to invest up to 10% of its assets directly in China A Shares market. For clarification, in any case, the Sub-Fund 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 Sub-Fund 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, 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 CM\SUGO\.. \05042812.doc 5
issuer. These terms may lead to delays in implementing the Sub-Fund 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 Sub-Fund 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 Sub-Fund 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 Sub-Fund may provide for withholding tax for capital gains on China A Shares which will impact on the Sub-Fund. The issuers of the access products may reserve the right to request the Sub-Fund 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. Matter for clarification In respect of the Risk profile section in Part II of the Prospectus, Hong Kong investors should note that the information is provided for reference only. Before making any investment decisions, investors should consider their own specific circumstances, including, without limitation, their own risk tolerance level, financial circumstances, investment objectives etc. If in doubt, investors should consult their stockbrokers, bank managers, solicitors, accountants, representative banks or other financial advisers. CM\SUGO\.. \05042812.doc 6
Fortis Investment Management USA Inc. will be renamed as BNP Paribas Asset Management Inc. on 15 December 2011. Use of Financial Derivative Instruments Investors should note in particular that each Sub-Fund may invest substantially in financial derivative instruments ( FDIs ) for investment purposes; as well as for hedging purposes. There is risk of total/significant loss resulting from the use of FDIs for investments. Investors should refer to the Prospectus for further information relating to the above, a copy of which is available from the offices of the Hong Kong Representative of the Company whose contact details are set out herein. Investors should note that the types of FDIs into which the relevant Sub-Fund(s) may invest can be difficult to value and may entail increased market risk. Such investments could expose the relevant Sub-Fund(s) to losses greater than the cost of the FDI and may increase substantially the Sub-Fund(s) volatility, compared to a corresponding sub-fund which only uses FDIs for hedging purposes. A general description of relevant FDI risks and a general description of associated counterparty risks are set out below. Investors should also refer to the Prospectus for further information relating to the below mentioned instruments. Hong Kong investors may also contact the Hong Kong Representative for further information regarding the risk management procedures employed by the relevant Sub-Fund(s). General description of financial derivative instruments risk The relevant Sub-Fund(s) may from time to time utilise both exchange-traded and over-the-counter derivatives as part of its investment policy and for hedging purposes. These instruments may be volatile, involve certain special risks and may expose investors to a high risk of loss. Transactions in over-the-counter derivatives, such as credit derivatives, may involve additional risk as there is no exchange market on which to close out an open position. Given the leverage effect embedded in financial derivative instruments, such investments may result in higher volatility or even total losses in the Sub-Fund s assets. The prices of derivative instruments, including futures and options prices, can be highly volatile. Price movements of forward contracts, futures contracts and other derivative contracts are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly markets in currencies and interest rate related futures and options. Such intervention is often intended to directly influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. The use of financial derivative instruments also involves certain special risks, including: 1. dependence on the ability to predict movements in the prices of securities being hedged and movements in interest rates; 2. imperfect correlation between the price movements of the derivatives and price movements of related investments; 3. the possible absence of a liquid market for any particular instrument at any particular time; 4. possible impediments to effective portfolio management or the ability to meet redemptions; CM\SUGO\.. \05042812.doc 7
5 possible legal risks arising in relation to derivative contract documentation, particularly issues arising relating to enforceability of contracts and limitations thereto; and 6. settlement risk as when dealing with futures, forwards, swaps, contracts for differences the relevant Sub-Fund(s) liability may be potentially unlimited until the position is closed. The relevant Sub-Fund(s) may invest in certain derivative instruments, which may involve the assumption of obligations as well as rights and assets. Assets deposited as margin with brokers may not be held in segregated accounts by the brokers and may therefore become available to the creditors of such brokers in the event of their insolvency or bankruptcy. The relevant Sub-Fund(s) may invest in over the counter (OTC) derivatives. A list of the FDI instruments most commonly used by the relevant Sub-Fund(s) is set out below under the heading LIST OF RISK FACTORS ASSOCIATED WITH THE USE OF FINANCIAL DERIVATIVE INSTRUMENTS BY THE RELEVANT SUB-FUND(S). It should be noted that all OTC transactions expose the investor to the credit risk of the counterparty. General description of OTC counterparty risk Some transactions in FDIs by the Sub-Fund(s) may be entered into with counterparties on an off exchange basis, more commonly referred to as OTC transactions. OTC transactions expose the investor to counterparty risk. In the event that the counterparty to the transaction is unable to meet or otherwise defaults on its obligations (for example due to bankruptcy or other financial difficulties) the relevant Sub-Fund(s) may be exposed to significant losses greater than the cost of the FDI. The risk of default of a counterparty is directly linked to the creditworthiness of that counterparty. In respect of a default on a foreign exchange transaction, it is possible that the entire principal of a transaction could be lost in the event of a counterparty default. As a UCITS III compliant Sub-Fund, the relevant Sub-Fund(s) exposure to an individual counterparty may not exceed 10% of the relevant Sub-Fund(s) FDI exposure on an aggregated basis. Counterparty risk may be further mitigated through the use of collateral agreements. However, collateral arrangement is still subject to the insolvency risk and credit risk of the issuers of the collateral. The Management Company ensures that a rigorous counterparty assessment and approval process is followed. General description of the use of structured products Investors should note that each Sub-Fund may make investments in structured products. Structured products are synthetic investment instruments specially created to meet specific needs that cannot be met from the standardized financial instruments available in the markets. Structured products can be used as an alternative to a direct investment; as part of the asset allocation process to reduce risk exposure of a portfolio; or to utilize the current market trend. A structured product is generally a pre-packaged investment strategy which is based on derivatives, such as a single security, a basket of securities, options, indices, commodities, debt issuances and/or foreign currencies, and to a lesser extent, swaps. An investor's investment return and the issuer's payment obligations are contingent on, or highly sensitive to, changes in the value of underlying assets, indices, interest rates or cash flows. It is possible that adverse movements in underlying asset valuations can lead to a loss of the entire principal of a transaction. In the case of principal protected products, the investor is also exposed to the credit risk of the issuer of the product. CM\SUGO\.. \05042812.doc 8
The Shares General The relevant dealing procedures and minimum thresholds for subscription, conversion and redemption of shares in a relevant Sub-Fund and determination of net asset value per share of a Sub-Fund are set out in the Prospectus under the heading THE SHARES sub-heading SUBSCRIPTION, CONVERSION AND REDEMPTION OF SHARES, in Part I of the Prospectus and in the relevant Sub-Fund supplement in Part II of the Prospectus. Only the following share classes of the relevant Sub-Funds (as relevant) in the table below are available for subscription in Hong Kong. However, potential investors should check with the Hong Kong Representative or its distribution agents as to whether a particular share class in a Sub-Fund is open for subscription at a particular time. The Hong Kong Representative of the Company and its Sub-Funds is BNP Paribas Investment Partners Asia Limited on 30/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong. Hong Kong investors may contact the Hong Kong Representative by telephone at (852) 2533 0088 or in writing to 30/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong if they have any enquires or complaints in respect of the Company. Sub-Funds 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 Class of shares available in Hong Kong Classic - Capitalization Classic - Distribution Classic QD Classic MD Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR - Distribution Classic QD Classic MD Classic - Capitalization Classic - Distribution Classic H USD - Capitalization Classic H USD - Distribution Classic H EUR - Capitalization Classic H EUR - Distribution Classic USD - Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H USD - Capitalization Classic H USD - Distribution Classic USD - Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic - New Distri Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H USD - Capitalization 9 CM\SUGO\.. \05042812.doc
Classic H USD - Distribution Classic MD Classic USD - Capitalization Classic USD Distribution 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 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 Classic - Capitalization Classic - Distribution Classic QD Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR - Distribution Classic MD Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - New Distri Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization 10 CM\SUGO\.. \05042812.doc
Classic USD Distribution 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 Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR - Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD - Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR - Distribution Classic - Capitalization Classic - Distribution Classic H USD - Capitalization Classic H USD Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution 11 CM\SUGO\.. \05042812.doc
BNP PARIBAS L1 Equity World Technology BNP PARIBAS L1 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 (will be deauthorised with effect from 9 May 2012 and is no longer available for sale to the public in Hong Kong and not available to retail Hong Kong invetors) BNP PARIBAS L1 Opportunities USA BNP PARIBAS L1 Real Estate Securities Pacific BNP PARIBAS L1 Real Estate Securities World Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Capitalization Classic - Capitalization Classic - Capitalization Classic - Capitalization Classic - Capitalization Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic H EUR - Capitalization Classic H EUR Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization Classic USD Distribution Classic - Capitalization Classic - Distribution Classic USD Capitalization 12 CM\SUGO\.. \05042812.doc
Classic USD Distribution BNP PARIBAS L1 V350 (will be deauthorised with effect from 9 May 2012 and is no longer available for sale to the public in Hong Kong and not available to retail Hong Kong investors) Classic - Capitalization Classic - Distribution Classic H USD - Capitalization Classic H USD Distribution Classic USD Capitalization Classic USD - Distribution Investors should note that the Prospectus also contains references to the other share-classes in the Sub-Funds, which are not currently available to retail Hong Kong investors. Investors should also note that the fee structure of Classic Capitalization, Classic Distribution, Classic MD, Classic QD, Classic USD, Classic H EUR, Classic H USD and Classic-New Distri class is the same. Dealing Procedures for Hong Kong Investors Save as the Board of Directors may otherwise permit from time to time, applications in Hong Kong for subscription, conversion or redemption of shares in a relevant Sub-Fund must be submitted via the authorised distributors. A current list of authorised distributors may be obtained from the Hong Kong Representative. Investors should note that different authorised distributors may have different dealing cut-off times which may be earlier than the cut-off times specified in this document and the Prospectus and investors should check with the relevant authorised distributors accordingly. Applications sent directly to the transfer agent in Luxembourg (or any other person) may be rejected. Hong Kong investors should also note the procedures set out in the Prospectus under the section headed THE SHARES, sub-heading SUBSCRIPTION, CONVERSION AND REDEMPTION OF SHARES in Part I of the Prospectus, the relevant Sub-Fund supplement in Part II of the Prospectus and the following: Investors are reminded that all applications are subject to acceptance by the transfer agent in Luxembourg. Investors are reminded that no money should be paid to any intermediary in Hong Kong who is not licensed or registered to carry on Type 1 (dealing in securities) regulated activity under Part V of the SFO or a person who does not fall within the statutory or other applicable exemption from the requirement to be licensed or registered to carry on Type 1 (dealing in securities) regulated activity under Part V of the SFO. Save as the Board of Directors may otherwise permit from time to time, Hong Kong investors who wish to subscribe for, redeem or convert shares in any Sub-Fund should complete and submit the application form to the authorised distributors. Authorised distributors, upon receiving the dealing applications from Hong Kong investors, will forward the relevant dealing applications to a transaction servicing agent (the Agent ) appointed from time to time by BNP Paribas Investment Partners Asia Limited. The deadline for the authorised distributors in Hong Kong to forward the dealing applications to the Agent is 6 pm (Hong Kong time) on a Hong Kong business day. The Agent will then collate any dealing applications received on each Hong Kong business day and forward them directly to the Transfer Agent in Luxembourg for further processing. For these purposes, a Hong Kong business day is a day on which banks in Hong Kong are open for normal banking business but does not include Saturdays, Sundays or public holidays. CM\SUGO\.. \05042812.doc 13
Hong Kong investors should note that in order for a dealing application to be executed at the asset value on a given valuation day, it must be received by the Transfer Agent in Luxembourg before the time and date specified in the detailed conditions for each Sub-Fund in Part II of the Prospectus. Orders received after this deadline will be processed at the asset value on the next valuation day after the valuation day in question. In order to be accepted by the Company, orders for subscription (or redemption) must include all necessary information relating to the identification of the subscribed shares (or in the case of redemptions, the shares in question) and the identity of the subscriber (or in the case of redemptions, the shareholder) as more particularly set out in the Prospectus. Subscription of shares will be processed using any of the available valuation currencies of the relevant share class of the relevant Sub-Fund (the NAV currency ). Redemption of shares will be processed using the NAV currency selected for the processing of subscription orders. In case investors who wish to have the redemption orders processed in a different currency from the currency selected for processing the subscription orders, the foreign exchange conversion will be applied to the redeeming shareholders. Subscription of Shares Payment for shares should be made in one of the valuation currencies of the shares concerned (the NAV currency ); and Payment must be made by telegraphic transfer. Payment made by personal cheque or banker s draft will not be accepted. The Company reserves the right to postpone subscription requests if it is not certain that the appropriate payment will reach the designated bank accounts with the required payment time or if the order is incomplete. Applicants should refer to the application form for payment details. Redemption of Shares Redemption proceeds will be paid in the NAV currency used for processing the subscription order (which is also the default currency for processing the redeemed shares), to the bank account as previously specified by the redeeming shareholder in the subscription application form, normally within 7 (seven) Hong Kong business days, but not later than one calendar month from the relevant valuation day unless the market(s) in which a substantial portion of investments of the relevant Sub-Fund is made is subject to legal or regulatory requirements (such as foreign currency controls) thus rendering the payment of the redemption proceeds within the aforesaid time period not practicable. In such case, the extended time frame for the payment of redemption proceeds shall reflect the additional time needed in light of the specific circumstances in the relevant market(s). Such relevant markets which are more likely to be subject to legal or regulatory requirements are those emerging or developing countries. Currently, no Sub-Fund is subject to the extended timeframe for the purpose of payment of redemption proceeds. Should there be any Sub-Fund which requires to have the extended timeframe for the purpose of paying redemption proceeds, at least one month s prior notice will be given to the HK shareholders of the Sub-Fund concerned and that this document will be updated accordingly. Conversion of Shares Shareholders may convert some or all of their shares in a Sub-Fund into shares of another Sub-Fund and/or class (provided that such other Sub-Fund and/or class is authorized for sale to the public in Hong Kong and available to Hong Kong investors). All terms concerning subscription and redemption of Shares shall equally apply to conversion of Shares. Shareholders should refer to the Prospectus for details of the conversion process. CM\SUGO\.. \05042812.doc 14
Investors should refer to the Prospectus for details of the shareholder transaction fees on subscription, redemption and conversion of Shares and for further details on the subscription, redemption and/or conversion process. Fees and Expenses The relevant fees and expenses of the Company and each Sub-Fund are set out in the Prospectus and the relevant Sub-Fund supplement. Hong Kong investors should note that at least one month s prior notice (or such other period as may be agreed with the SFC) will be given to affected Hong Kong shareholders in the Company if there is any increase beyond the maximum level of the fees payable to the Management Company, the portfolio managers or the Custodian Bank, as prescribed in the Prospectus. Unless otherwise agreed with the SFC, at least one month s prior notice will be given to affected Hong Kong shareholders in the Company for an increase of management fees from the current to the permitted maximum rate. In addition, for so long as the Company and the relevant Sub-Fund(s) are authorised by the SFC in Hong Kong, the Board of Directors have determined that any expenses arising out of any advertising or promotional activities in connection with the Company and/or the relevant Sub-Fund(s) will not be paid out of the assets of the Company or the relevant Sub-Fund(s). Unamortised Establishment Costs of each Sub-Fund There are no unamortised establishment expenses at the level of the relevant Sub-Fund(s) as at the date of this document. Publication of Prices The relevant net asset value per share of each Sub-Fund shall be published daily in both the South China Morning Post and the Hong Kong Economic Times. Suspension The calculation of the net asset value, and the issue, redemption and conversion of the shares of one or more Sub-Funds may be suspended in the situations set out in Appendix 6 of the Prospectus headed SUSPENSION OF THE CALCULATION OF THE NET ASSET VALUE AND THE ISSUE, CONVERSION AND REDEMPTION OF SHARES. Any temporary suspension of dealing in shares of any Sub-Fund shall be notified to the SFC immediately and, where possible, all reasonable steps will be taken to bring any period of temporary suspension to an end as soon as possible. Notice will be given to shareholders or be published in the South China Morning Post and the Hong Kong Economic Times as soon as possible and at least once a month during the period of such suspension. Securities Lending and Repurchase Transactions The relevant information relating to securities lending and/or repurchase transactions by the Company and/or the Sub-Funds are set out in Appendix 2 of the Prospectus headed TECHNIQUES AND FINANCIAL INSTRUMENTS at item 3 and item 4 respectively. Securities lending transactions may be transacted through BNP Paribas group affiliates and other external counterparties. All incremental income accruing from securities lending transactions will be shared between the Company and Management Company. The income CM\SUGO\.. \05042812.doc 15
from the securities lending is allocated 50 % to the Company and 50 % to Management Company. The securities lending fee will be disclosed in the annual report of the Company. Repurchase transactions may be transacted through BNP Paribas group affiliates and other external counterparties. The income generated from repurchase transactions will be fully accrued to the relevant Sub-Fund of the Company. In relation to securities lending transactions, investors should be aware that the borrower of the securities lent may fail to return the relevant securities to the Sub-fund(s) and there is a risk that the counterparty(ies) of the guarantee may fail to deliver the guarantee or the guarantee may be lesser than the value of the securities lent due to factors such as adverse market movement, downgrading of the credit rating of the counterparty, insolvency of the counterparty etc. Furthermore, any potential delays in the return of the securities lent may adversely affect the ability of the Sub-fund(s) to meet delivery obligations under securities sales transactions or redemption requests. The Sub-fund(s) may also be subject to the potential exchange risks or market risks inherent to the assets collateralised as guarantee. Repurchase transactions represent a low risk for counterparts involve because if the seller (of securities) defaults and is not able to reimburse cash, the buyer is allowed to keep the securities (considered here as a collateral) and sell them to cover its loss. Nevertheless, there can be a credit risk in this situation if the security has lost value since the outset of the transaction; to cover this risk, margining can be put in place at the start date of the operation. Reports and Accounts The Company s financial year ends on 31 December in each year. Annual audited accounts (in English) will be available within 4 (four) months after the conclusion of each financial year and unaudited half yearly reports (in English) will be available within 2 (two) months of the period they cover. Notice will be given to the shareholders as and when the aforementioned reports are available. Electronic versions of these reports will be available on the website at http://www.bnpparibas-ip.com.hk. Hong Kong investors can contact the Hong Kong Representative should they want to obtain a printed copy of the aforementioned reports. Hong Kong Taxation Under current Hong Kong law and for so long as the Company and the relevant Sub-Fund maintains its authorisation under Section 104 of the SFO (or any other relevant legislation to be enacted from time to time), the Company and the relevant Sub-Fund will not pay tax on profits attributable to the Company and/or the relevant Sub-Fund. Hong Kong resident shareholders in the Company will not be subject to any Hong Kong tax on distributions paid by the Company or the relevant Sub-Fund on capital gains realised on the redemption of any shares in the Company or the relevant Sub-Fund unless such acquisition, redemption or conversion of shares is or forms part of a trade, profession or business carried on in Hong Kong. Since the Company does not maintain its register of shareholders in Hong Kong, no Hong Kong stamp duty is payable in respect of transactions in the shares of the Company. The above information is not exhaustive and shareholders in the Company and/or the relevant Sub-Fund and potential investors are advised to consult their professional advisors concerning possible taxation or other consequences of purchasing, holding, selling or otherwise disposing of the shares under the laws of their country of incorporation, establishment, citizenship, residence or domicile. CM\SUGO\.. \05042812.doc 16
As is the case with any investment, there can be no guarantee that the tax position or proposed tax position at the time of an investment in the Company or a Sub-Fund will endure indefinitely. Rebates, Transactions with Connected Persons and Soft Commissions No cash rebates will be retained by the Management Company or its connected persons. All transactions carried out by or on behalf of the Company must be at arm s length and executed on the best available terms for transactions of the kind and size concerned. Transactions with connected persons of the Management Company, portfolio managers or directors of the Company may not account for more than 50% of the Company s transactions in value in any one financial year of the Company. Soft commissions Soft commissions in the form of the provision of goods or services by brokers are permitted if such goods or services are of demonstrable benefit to the Company. For the avoidance of doubt, examples of goods and services that are not permitted include travel, accommodation, entertainment, general administrative goods or services, general office equipment or premises, membership fees, employee salaries or direct money payments. The Management Company, the portfolio managers, the investment advisors and any of their connected persons (as defined in the SFC Code on Unit Trusts and Mutual Funds) shall not retain the benefit of any cash commission rebate from brokers or dealers in respect of any business placed for or on behalf of the Company. Any such cash commission rebate received from any such brokers or dealers shall be for the account of the Company. Details of any such commissions will be disclosed in the annual and semi-annual report and accounts of the Company. The execution of transactions will be consistent with best execution standards and brokerage rates will not be in excess of customary institutional full-service brokerage rates. Management and Sub-Delegation The Board of Directors has appointed the Management Company. Details of the Management Company are set out in the Prospectus. The Management Company has delegated its discretionary investment management functions in respect of each of the Sub-Funds of the Company to one or more portfolio managers listed in the Prospectus under the heading General Information sub-heading Management Company (except for the following portfolio manager: BNP Paribas Investment Partners Japan Ltd, Fortis Portföy Yönetimi A.Ş., BNP Paribas Asset Management Brasil Ltda, BNP Paribas Asset Management SGR S.P.A., CamGestion, FundQuest, FundQuest UK Limited, Overlay Asset Management, and Neuflize OBC Investissements) in order that investors can benefit from the specific investment management expertise of the same. In addition, Fischer Francis Trees & Watts Singapore Limited ceased to be an investment manager for the Company with effect from 9 January 2012. Details of the relevant portfolio manager(s) responsible for a particular Sub-Fund will be listed in the annual report of the Company. The discretionary portfolio manager(s) managing a Sub-Fund may change from time to time on an investment centre basis and as such it will not be possible to give prior notification to affected shareholders in respect of such changes. CM\SUGO\.. \05042812.doc 17