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Responsibility Statements and Statements of Disclaimer This Information Memorandum has been seen and approved by the directors of the Manager and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts omitted which would make any statement herein misleading. The Securities Commission Malaysia has approved the issue, offer or invitation in respect of the wholesale funds, the subject of this Information Memorandum, and the approval shall not be taken to indicate that the Securities Commission Malaysia recommends the investment. The Securities Commission Malaysia will not be liable for any non-disclosure on the part of the Manager and takes no responsibility for the contents of the Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the content of this Information Memorandum. This Information Memorandum is not intended to and will not be issued and distributed in any country or jurisdiction other than in Malaysia ( Foreign Jurisdiction ). Consequently, no representation has been and will be made as to its compliance with the laws of any Foreign Jurisdiction. Accordingly, no offer or invitation to subscribe or purchase units in the Fund to which this Information Memorandum relates may be in any Foreign Jurisdiction or under any circumstances where such action is unauthorized. Investors are advised to note that recourse for false or misleading statements or acts made in connection with the Information Memorandum is directly available through sections 248, 249 and 357 of the Act. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT AS TO THE ACTION TO BE TAKEN SHOULD CONSULT THEIR PROFESSIONAL ADVISERS IMMEDIATELY. 2
CONTENTS Section Page Responsibility Statements and Statement of Disclaimer 2 Contents 3-5 Corporate Directory 6 Definitions 7-9 Key Data of the Fund MIM Enhanced Cash MIM Enhanced Cash XI MIM Enhanced Cash XII MIM Enhanced Cash XIII MIM Shariah Enhanced Cash 10-14 15-19 20-25 26-29 30-35 1 1.1 1.2 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 3.3 3.4 3.5 Risk Factors General Risks Risk Management Strategies and Techniques The Manager Corporate Profile of the Manager Financial Position Functions, Duties and Responsibilities of the Manager Profile of the Board of Directors of the Manager Profile of the Key Personnel of the Manager Profile of the Key Investment Team Profile of the Key Investment Personnel Pricing Policy Computation of NAV Forward Pricing Selling Price Buying Price Error in Pricing 36 36-37 38 38 38 39-41 41-42 42-43 43 44 44 44-45 45 46 3
Section Page 4 Communication With Unit Holders 47 5 5.1 5.2 5.3 5.4 5.5 Frequency of Redemption and Creation of Units Approved Fund Size Making an Investment Processing of Application Redeeming an Investment Frequency and Minimum Units Redeemed 48 48 48 49-50 50 6 Policy in Respect of Valuation Point for the Fund 51 7 7.1 7.2 7.3 7.4 7.5 7.6 7.7 8 8.1 8.1.1 8.1.2 8.1.3 8.2 8.2.1 8.2.2 8.2.3 8.3 8.3.1 8.3.2 8.3.3 8.4 Fees, Charges and Expenses Sales Charge Redemption / Repurchase Charge Transfer Fee Switching Fee Annual Management Fee Annual Trustee s Fee Other Expenses The Trustee PB Trustee Services Berhad ( PBTSB ) Profile of PBTSB Financial Position of PBTSB Key Management Staff of PBTSB AmanahRaya Trustees Berhad ( ART ) Profile of ART Financial Position of ART Key Management Staff of ART Malaysian Trustees Bhd ( MTB ) Profile of MTB Financial position of MTB Key Management Staff of MTB Duties and Responsibilities of the Trustee 4 51 51 51 51 51 52 52 53 53 53 54 55 55 56 56-57 58 58 58 59 59
Section 8.5 8.6 8.7 9 9.1 9.2 9.3 Statement of Responsibility by the Trustee Trustee s Declaration Trustee s Delegate Rights and Liabilities as a Unit Holder Rights of Unit Holders Liabilities and Limitation of Unit Holders Power to Call for a Meeting Page 59 59 60 61 61 62-63 10 Transfer Ownership of Units 63 11 Switching 63 12 Leverage 63 13 Winding Up of the Fund 63 14 Appointment of External Auditor 63 15 Cross Trades 64 16 Policy of Stock Broking Rebates and Soft Commission 64 17 Unclaimed Monies 64 18 Policies Adopted by the manager to Avoid Money Laundering 65 19 Consents 65 20 Tax Advisor s Letter 66-80 21 Directors Declaration 81 5
CORPORATE DIRECTORY Manager : Mayban Investment Management Sdn Bhd (421779-M) Registered Address Level 19, Tower C, Dataran Maybank No 1 Jalan Maarof, 59000 Kuala Lumpur Business Address: Level 13, Tower C, Dataran Maybank No 1, Jalan Maarof, 59000 Kuala Lumpur Tel No: 603 2297 7888 Fax No: 603 2297 7880 Board of Directors of the Manager Dato' Mohd Salleh bin Hj. Harun Dato' Johan bin Ariffin Damis Jacobus Ziengs Mohamed Nor bin Abdul Hamid Datuk Karownakaran @ Karunakaran a/l Ramasamy Loh Lee Soon Hans JJ De Cuyper Nor Azamin bin Salleh Trustee : PB Trustee Services Berhad (7968-T) Registered Address: 17 th Floor, Menara Public Bank 146 Jalan Ampang 50450 Kuala Lumpur Tel No : 603 2176 6651 Fax No: 603 2164 3285 Business Address: 17 th Floor, Menara Public Bank 146 Jalan Ampang 50450 Kuala Lumpur Tel No : 603 2176 6651 Fax No: 603 2164 3285 Trustee : AmanahRaya Trustees Berhad ( 766894-T) Registered Address: Tingkat 11, Wisma AmanahRaya No. 2, Jalan Ampang 50508 Kuala Lumpur Tel No : 03-2055 7388 Business Address: Tingkat 2, Wisma TAS No. 21, Jalan Melaka 50100 Kuala Lumpur Tel No : 03-2036 5000 Fax No: 03-2072 0322 Trustee : Malaysian Trustees Berhad (21666-V) Registered Address: Level 19, Menara Prudential No. 10, Jalan Sultan Ismail 50250 Kuala Lumpur Business Address: Level 2, Menara Prudential No. 10, Jalan Sultan Ismail 50250 Kuala Lumpur Tel No: 603 2176 1066 Fax No: 603 2032 1222 Trustees Delegate : Malayan Banking Berhad (3813-K) Custody Services Department Registered Address: 14 th Floor, Menara Maybank 100, Jalan Tun Perak, 50050 Kuala Lumpur Business Address: 4 th Floor, Menara Maybank 100, Jalan Tun Perak, 50050 Kuala Lumpur Tel No: 603 2074 7111 Fax No: 603 2032 1572 / 603 2070 0966 Reporting Accountants and Auditors : Messrs Ernst & Young (AF0039) Messrs. Ernst & Young Chartered Accountants Level 23A, Menara Millennium Jalan Damanlela Pusat Bandar Damansara 50490 Kuala Lumpur Tel No : 603 7495 8000 Fax No : 603 2095 7043 Tax Consultants : Ernst & Young Tax Consultants Sdn Bhd (179793-K) Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara 50490 Kuala Lumpur Tel No : 603 7495 8000 Fax No : 603 2095 9076/78 Principal Bankers / Distributor : Malayan Banking Bernad (3813-K) Menara Maybank 100 Jalan Tun Perak 50050 Kuala Lumpur 6
DEFINITIONS The Act or CMSA Bursa Malaysia Business Day Buying/Repurchase Price CMSRL CPs DOB Deed Eligible Market Fixed Deposit Fund/s or MIM Money Market Series of Funds Forward Pricing The Guidelines Investor(s) Information Memorandum Means the Capital Markets And Services Act 2007, including all amendments thereto and all regulations, rules and guidelines issued in connection therewith. Means the stock exchange managed or operated by Bursa Malaysia Securities Berhad (635998-W). Means a day on which the Bursa Malaysia is open for trading. Means the price payable to a Unit Holder pursuant to a repurchase of a Unit; for the avoidance of doubt, Repurchase Price does not include any repurchase charge which may be imposed. A repurchase charge, if any, may be computed separately based on the redemption amount. Means Capital Markets Service Representative Licence. Means the Commercial Papers. Means Date of Birth. Means the deeds for the respective Fund and any other supplemental deeds that may be entered into between the Manager and the Trustee from time to time as may be modified or varied by a supplemental deed from time to time. Means a market which is regulated by a regulatory authority, operates regularly, is open to the public and has adequate liquidity for the purpose of the Fund. Means money placement with financial institutions ranging from overnight placement to any tenure offered by the financial institutions for the purpose of the Funds. MIM Enhanced Cash ( MIMEC ); MIM Enhanced Cash XI ( MIMECXI ); MIM Enhanced Cash XII ( MIMECXII ); MIM Enhanced Cash XIII ( MIMECXIII ); and MIM Shariah Enhanced Cash ( MIMSEC ). Means that the prices of Units will be calculated based on the NAV of the Funds at a valuation point in the future (the next Valuation Point after the application for Units or request for redemption is received by the Manager). Means the Guidelines on Wholesale Funds and any other relevant guidelines issued by the Securities Commission Malaysia as may be amended, modified or varied by any notes, circular and guidelines issued from time to time. Means any potential Unit Holder(s). Means the Master Information Memorandum in relation to the Funds. 7
Islamic Fixed Deposits Means Shariah-compliant money placement with financial institutions ranging from overnight placement to any tenure offered by the financial institutions for the purpose of the Funds. LPD Means Latest Practicable Date as at 31 May 2011. MARC The Manager or MIM Medium Term NAV per Unit Net Asset Value (NAV) of the Funds NID PDS Means Malaysian Rating Corporation Berhad (364803-V). Means Mayban Investment Management Sdn Bhd (421779-M). Means a period of between one (1) to three (3) years. Means in respect of the Funds, is the NAV of the Fund at a particular Valuation Point divided by the number of Units of that fund in circulation at the same Valuation Point. Means the Net Asset Value (NAV) of a fund is determined by deducting the value of all the Funds liabilities from the value of all the Funds assets, at the Valuation Point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the management fee and trustee fee for the relevant day. Means Negotiable Instrument of Deposits that would include both conventional and Shariah certificates. Means Private Debt Securities. Qualified Investor A Qualified Investor refers to : a) an individual whose total net personal assets exceed RM3 million or its equivalent in foreign currencies; b) a corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts; c) a unit trust scheme or prescribed investment scheme; d) a company registered as a trust company under the Trust Companies Act 1949 which has discretion in the investment of trust assets of a trust with total net assets exceeding RM10 million or its equivalent in foreign currencies; e) a corporation that is a public company under the Companies Act 1965 or under the laws of any other country, which has been allowed by the SC to be a trustee for the purposes of the CMSA and has discretion in the investment of trust assets of a trust with total net assets exceeding RM10 million or its equivalent in foreign currencies; f) a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967; g) a holder of a Capital Markets Services Licence carrying on the business of dealing in securities; h) any other fund manager; i) a person who acquires securities pursuant to an offer, as 8
principal, if the aggregate consideration for the acquisition is not less than RM250,000 or its equivalent in foreign currencies for each acquisition; j) a licensed institution; k) an Islamic bank; and l) an insurance company licensed under the Insurance Act 1996. RAM RM the SC Selling Price Per Unit Shariah Shariah Advisory Panel Short Term Trustee/s Means Rating Agency of Malaysia Berhad (208095-U). Means Ringgit Malaysia. Means the Securities Commission Malaysia. Means the price payable by an applicant for a Unit pursuant to a successful application for Units; for the avoidance of doubt, Selling Price per Unit does not include any sales charge which may be imposed. A sales charge, if any, may be computed separately based on the net investment amount/ purchase amount. Means Islamic Law comprising the whole body of rulings pertaining to human conducts derived from the sources of the Shariah. The primary sources are the Quran, the Sunnah, Ijma and Qiyas while the secondary ones are those established sources such as Maslahah, Istihsan, Istishab, Uruf and Sadd Zara ie. Means the committee appointed by the Manager to MIM Shariah Enhanced Cash. Means a period between one (1) day to three hundred and sixty five (365) days. i) PB Trustee Services Berhad for MIMECXI, MIMECXII, MIMECXIII; ii) Malaysian Trustees Berhad for MIMEC; and iii) AmanahRaya Trustees Berhad for MIMSEC. Unit(s) Unit Holder(s) Valuation Point Means a measurement of the right or interest of a Unit Holder in the Fund and means a Unit (including a fraction of a Unit) of the Fund. Means the person/s who is/are registered pursuant to the Deed as a holder of Units of the Funds. Means at end of day on the Business Day, at which the NAV of the Fund for that Business Day is calculated. 9
KEY DATA OF THE FUND 1. MIM Enhanced Cash Fund ( MIMEC or the Fund ) i) Fund Type Income. ii) Fund Category Money market. iii) Investment Objective The objectives of MIM Enhanced Cash are as follows: To preserve the initial capital; To provide investors with ease of withdrawal (liquidity of T+0); and To achieve returns better than the prescribed benchmark return. Note: The Manager shall aim to preserve the capital to Investors, nonetheless, the Fund is not a capital guaranteed fund or a capital protected fund. T is the day where a request/application to redeem is received by the Manager before the cut-off time. iv) Investment Style & Strategy The Fund will be actively managed. The investment strategy is to invest primarily in a diversified portfolio of liquid, low-risk money market instruments and commercial papers to meet the Fund objectives. The Manager will determine the strategic mix of investments in the different classes of money market instruments depending on the outlook of the economy and the direction of interest rates. Liquidity requirement will be consistently assessed. In the unlikely event of a rating downgrade, the Manager reserves the right to deal with the security in the best interest of the Unit Holders. v) Investor Profile MIMEC is suitable for Qualified Investors: who favor low risk-return profile; who have either a Short Term to Medium Term investment horizon; who seek flexibility to funds; and who wish to obtain a yield exceeds Maybank Overnight Deposit Rates. vi) Asset Allocation Limits 50% to 100% of the Fund s NAV 0 to 50% of the Fund s NAV Investment Instrument Fixed Deposits; and Money market instruments and CP s maturing within (1) month. Fixed income securities issued by the Malaysian Government and/or Bank Negara Malaysia not exceeding three (3) years. 10
MIMEC vii) Benchmark The benchmark of the Fund is the Maybank Overnight Deposit Rates which is available at www.maybank2u.com.my. viii) Approved Fund Size The approved fund size for the Fund is 300 million Units. ix) Initial Offer Price The initial offer price is RM1.00 per Unit. x) Management Fee Management fee is up to 0.25% of the NAV of the Fund per annum. xi) Sales Charge There is no sales charge for the Fund. xii) Permitted Investment Subject to the Deed, the investment policies for the Funds and the requirements of the SC and any other regulatory body, the Manager has the absolute discretion as to how the assets of the Funds are to be invested. Under the Deed, the Funds can invest in a wide range of securities, including but not limited to those as set out below:- Fixed Deposits; Money market instruments such as treasury bills, CPs, banker s acceptance, Bank Negara Malaysia bills, Bank Negara Malaysia negotiable notes and government investments certificates; and Fixed income securities issued by Malaysian government and/or Bank Negara Malaysia. xiii) Investment Restriction The Fund is subject to the following investment restrictions/limits: The value of the Fund s investment in CPs and money market instruments issued by single issuer must not exceed 20% of the Fund s NAV; The value of the Fund s investments in CPs and money market instruments (which does not take into account any direct money market placement with any financial institution) issued by any group of companies must not exceed 30% of the Fund s NAV; Minimum credit rating for CPs is P1 by RAM or equivalent rating by MARC with maturity of not more than one (1) month; and Fixed income securities issued by Malaysian government and/or Bank Negara Malaysia with maturity not exceeding three (3) years. 11
MIMEC The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Fund and value of the investments. However, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through the appreciation or depreciation of the NAV of the Fund (whether as a result of an appreciation or depreciation in the value of the investments, or as a result of repurchase of Units or payment made from the Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within a reasonable period of not more than sixty (60) days from the date of the breach take all necessary steps and actions to rectify the breach. xiv) Valuation of Permitted Investment The valuation bases for the permitted investments of this Fund are as follows: Investments such as placement and Fixed Deposits placed with financial institutions are valued each day by reference to the principal value of such investments and income accrued thereon for the relevant period; CPs, treasury bills, bankers acceptance, Bank Negara Malaysia bills and Bank Negara Malaysia negotiable notes shall be valued daily based on accretion to maturity value of the securities; and Fixed income securities shall be valued daily based on the closing price quoted by Bond Pricing Agency ( BPA ). Where such prices are not available or where the Manager is of the view that the price quoted by the BPA for a specific fixed income securities differs from the market price by more than twenty (20) basis point, the Manager may use the market price by reference to the last available quote, provided such quote was obtained within the previous thirty (30) days and the Manager records its basis for using a non-bpa price. Additionally, the Manager shall obtain necessary internal approvals to use the non-bpa price and keeps an audit trail of all decisions and basis for adopting the market yield. xv) Financial Year End Every 30 May of the calendar year. xvi) Income Distribution Policy & Process There will be no income distribution for the Fund. Any income earned will be automatically reinvested. xvii) Trustee Malaysian Trustees Berhad (21666-V) 12
MIMEC xviii) Trustee Fee The trustee fee is up to 0.0425% of the NAV of the Fund per annum, subject to a minimum fee of RM13,000 per annum. Nonetheless, part of the trustee fee of 0.01% of the NAV of the Fund shall be borne by the Manager. xix) Deed Deed dated 3 March 2008 relating to the Fund entered into between the Manager and the Trustee, that will include any other supplemental deed as may be executed between the Manager and the Trustee from time to time. xx) Specific Risk a) Interest Rate Risk Fixed income securities are particularly sensitive to movements in interest rates. When interest rates rise, the value of fixed income securities falls and vice versa, thus affecting the NAV of the Fund. The magnitude of the drop in price is normally greater for longer-tenure securities rather than shorter-tenure securities as they are more sensitive to interest rate changes. Additionally, interest rate fluctuations do affect the Fixed Deposit returns of the Fund. Interest rates offered by the financial institutions will fluctuate according to the overnight policy rate determined by Bank Negara Malaysia and this has direct correlation with the Fund s investment in Fixed Deposit. The Fund will benefit from higher interest rate and in the event that the interest rate is low the Fund s returns will also be low. b) Credit / Default Risk This risk occurs when the issuer of the investments of the Fund, for example, when a financial institution defaults on its agreement, i.e. unable to service any deposit interest or pay the principal amount upon maturity. In such cases, Investors may suffer significant capital losses with regards to their capital invested and interest foregone. c) Deposit Account Risk When the Fund invests into Fixed Deposits, the interest rates/profits are safeguarded by the financial institutions. However, the investments are not without risk. In the event that the financial institutions become insolvent, the Fund might have difficulty in getting back the money. 13
MIMEC Risk Management Strategies and Techniques Prudent strategies will be adopted in structuring the Fund s portfolio as the Manager will assess the investment prospects of the placements/instruments and securities to the underlying interest rate factors, market outlook and other prevailing factors. The Fund has very limited exposure to market risk by nature of its investments in placing minimum 50% of the NAV of the Fund in Fixed Deposits and maximum 50% of the NAV of the Fund into money market instruments that are highly liquid and Short Term, securities issued by Bank Negara Malaysia and/or by Government of Malaysia. Fixed deposit shall be placed in any strong financial institutions with a minimum A rating by RAM or equivalent rating by MARC. In the event that such rating is not available to the financial institutions, the Manager shall depend on the rating given by RAM or MARC to the holding company of the respective financial institutions. In the event some of the underlying investments of the Fund are not actively traded, Investors are warned that under such circumstances, they may face difficulties in redeeming their investments. It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is not always possible to protect investment against all risks. The various asset classes exhibit different levels of risk. Please note that the returns of the Fund are not guaranteed. The investment of the Fund carries risks and Investors are recommended to read the whole Information Memorandum to assess the risks of the Fund. Investors are reminded that the above list of risks may not be exhaustive and if necessary, they should consult their adviser(s), e.g. their bankers, lawyers, stockbrokers or independent financial advisers for a better understanding of the risks. 14
2. MIM Enhanced Cash XI ( MIMECXI or the Fund ) i) Fund Type Income. ii) Fund Category Money market. iii) Investment Objective MIM Enhanced Cash Xi is a Short Term money market fund that aims to provide investors with an enhanced yield while providing daily liquidity (T+1). Note : T is the day where a request/application to redeem is received by the Manager before the cut-off time. iv) Investment Style & Strategy The Fund is a money market fund that is actively managed to provide liquidity to meet the cash requirements of its Unit Holders while providing a reasonable level of current income. Consequently, the investments of the Fund are largely confined to Short Term money market placements/instruments that are highly liquid. v) Investor Profile MIMECXI is suitable for Qualified Investors: with a very Short Term investment horizon; who have a low risk tolerance; and who seek a regular income stream* from their investments. who wish to obtain a yield that exceeds the Maybank Overnight Deposit Rates. Note* : Regular income stream is dependable on the choice of distribution mode selected by Unit Holders. The income could be in the form of cash or units. For further details, please refer to item on Income Distribution Policy and Distribution Mode of the Fund. vi) Asset Allocation Limits 0% to 100% of the Fund s NAV Investment Instrument Fixed Deposits; and/or money market instruments such as treasury bills, CPs, NID, bankers acceptances as well as Short Term debentures maturing within 365 days with a minimum credit rating of P1 by RAM or equivalent rating by MARC. The strategy is to invest in liquid, low risk Short Term investments. 15
MIMECXI vii) Benchmark The benchmark of the Fund is the Maybank Overnight Deposit Rates which is available at www.maybank2u.com.my. viii) Approved Fund Size The approved fund size for the Fund is 562.5 million Units. ix) Initial Offer Price The initial offer price is RM1.00 per Unit. x) Management Fee Management fee is up to 0.45% of the NAV of the Fund per annum. xi) Sales Charge There is no sales charge for the Fund. xii) Permitted Investment Subject to the Deed, the investment policies for the Fund and the requirements of the SC and any other regulatory body, the Manager has the absolute discretion as to how the assets of the Fund are to be invested. The Fund is permitted to invest in the following: Fixed Deposits; and/or Money market instruments including Treasury bills, CPs, NID, bankers acceptances, as well as Short Term debentures. xiii) Investment Restriction The Fund is subject to the following investment restrictions/limits: The value of the Fund s placement in Fixed Deposit with any licensed financial institutions must not exceed 40% of the Fund s NAV, save for placements with Malayan Banking Berhad and Maybank Islamic Berhad; The value of the Fund s holding in money market instruments issued by any single issuer must not exceed 40% of the Fund s NAV, save for investments in money market instruments issued by Bank Negara Malaysia and government of Malaysia; Short Term debentures maturing within 365 days with a minimum credit rating of P1 by RAM or equivalent rating by MARC; 16
MIMECXI CPs issued by any single issuer must not exceed 40% of the Fund s NAV; and CPs maturing within 365 days with a minimum credit rating of P1 by RAM or equivalent rating by MARC. The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Fund and value of the investments. However, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through the appreciation or depreciation of the NAV of the Fund (whether as a result of an appreciation or depreciation in the value of the investments, or as a result of repurchase of Units or payment made from the Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within a reasonable period of not more than sixty (60) days from the date of the breach take all necessary steps and actions to rectify the breach. xiv) Valuation of Permitted Investment The valuation bases for the permitted investments of the Fund are as follows: Investments such as placement and Fixed Deposits placed with financial institutions shall be valued each day by reference to the principal value of such investments and income accrued thereon for the relevant period; and CPs, treasury bills, bankers acceptance, Bank Negara Malaysia bills, Bank Negara Malaysia negotiable notes and Short Term debentures shall be valued daily based on accretion to maturity value of the securities. Whilst, NID will be valued each day based on the yield to maturity rate on the remaining tenure of the instruments using the interest rate swap quoted by Bank Negara Malaysia. In the event that interest rate swap quoted by Bank Negara Malaysia is not available, the average of the interest rate swaps quoted by three (3) local financial institutions shall be deemed to be the most appropriate valuation to be referred to by the Manager. xv) Financial Year End Every 30 September of the calendar year. xvi) Income Distribution Policy & Process The Fund will distribute income on a quarterly basis, subject to availability. Distribution would be re-invested or paid to Unit Holders via cheque or credited into the Unit Holders bank accounts. Unit Holders are required to indicate their preference in the Unit Application Form upon purchase. There is no incidental cost associated with the re-investment. Distribution will be re-invested or paid to the Unit Holders within seven (7) working days starting from the ex-dividend date. The source of income, if any for the purpose of distribution shall be derived from the realized income and/or capital gain. 17
MIMECXI xvii) Trustee PB Trustee Services Berhad (7968-T). xviii) Trustee Fee The Trustee is entitled to a fee of 0.05% per annum of the NAV of the Funds, subject to a minimum fee of RM 18,000 per annum. xix) Deed Deed dated 3 October 2007, that will include any other supplemental deed as may be executed between the Manager and the Trustee from time to time. xx) Specific Risk a) Interest Rate Risk Interest rate fluctuations do affect the deposit returns of the Fund. Interest rates offered by the financial institutions will fluctuate according to the overnight policy rate determined by Bank Negara Malaysia and this has direct correlation with the Fund s investment in Fixed Deposit. The Fund s investment in Fixed Deposits will benefit from higher interest rate and in the event that the interest rate is low the Fund s returns will also be low. Changes in the level of interest will cause prices of money market instruments to change inversely. This risk can largely be eliminated by holding the instruments until maturity, thereby locking in price and yields. b) Credit / Default Risk This risk occurs when the issuer of the investments of the Fund, for example, when a financial institution defaults on its agreement, i.e. unable to service any deposit interest/coupon payments or pay the principal amount upon maturity. In such cases, Investors may suffer significant capital losses with regards to their capital invested and interest foregone. c) Deposit Account Risk When the Fund invests into Fixed Deposits account, the interest/profits are safeguarded by the bank. However, the investments are not without risk. In the event that the bank becomes insolvent, the Fund might have difficulty in getting back the money. d) Liquidity Risk It is the risk on the ability of the Fund to honor requests for redemption or to pay back Unit Holders investments whereby it is subject to the Fund s holding of adequate liquid assets. This liquidity risk is alleviated by the Fund s primary investments in the Fixed Deposits. 18
MIMECXI Risk Management Strategies and Techniques Prudent strategies will be adopted in structuring the Fund s portfolio as the Manager will assess the investment prospects of the placements/instruments and securities to the underlying interest rate factors, market outlook and other prevailing factors. The Fund has very limited exposure to market risk by nature of its investments in placing 100% of the NAV of the Fund in Fixed Deposits and money market instruments. In the event some of the underlying investments of the Fund are not actively traded, Investors are warned that under such circumstances, they may face difficulties in redeeming their investments. It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is not always possible to protect investments against all risks. The various asset classes generally exhibit different levels of risk. Please note that the returns of the Fund are not guaranteed. The investment of the Fund carries risks and Investors are recommended to read the whole Information Memorandum to assess the risks of the Fund. Investors are reminded that the above list of risks may not exhaustive and if necessary, they should consult their adviser(s), e.g. their bankers, lawyers, stockbrokers or independent financial advisers for a better understanding of the risks. 19
3. MIM Enhanced Cash XII ( MIMECXII or the Fund ) i) Fund Type Income. ii) Fund Category Money market. iii) Investment Objective MIMECXii is a Short Term money market fund that invests in instruments which generate tax exempted income. The Fund is targeted for corporate and institutional investors who are generally risk averse and prefer Short Term investments. The Fund aims to provide liquidity at anytime (T+1) without forgoing interest earned and generate better returns compared to Fixed Deposits and/or over-the-counter repurchase agreements (repo) rates. Note : T is the day where a request/application to redeem is received by the Manager before the cut-off time. iv) Investment Style & Strategy The Fund seeks to provide liquidity to meet the Short Term cash flow requirements of its Unit Holders by investing primarily in liquid, low risk and Short Term investments. It will seek to obtain a yield that exceeds the benchmark by placing up to 100% of the NAV of the Funds in Fixed Deposits and money market instruments that are highly liquid with maturity not exceeding one (1) year and invest into PDS with maturities not exceeding one (1) year. The Manager adopts an active investment strategy in managing the Fund in order to provide a reasonable level of return within the liquidity requirements. v) Investor Profile MIMECXII is suitable for Qualified Investors: with a Short Term investment horizon; who have a low risk tolerance; who seek a regular income stream* from their investments; and who wish to obtain a yield that exceeds Maybank Overnight Deposit Rates. Note* : Regular income stream is dependable on the choice of distribution mode selected by Unit Holders. The income could be in the form of cash or units. For further details, please refer to item on Income Distribution Policy and Distribution Mode of the Fund. 20
MIMECXII vi) Asset Allocation Limits 85% to 100% of the Fund s NAV Investment Instrument Fixed Deposits; and money market instruments. 0% to 15% of the Fund s NAV Short Term fixed income securities issued by the private sector. vii) Benchmark The benchmark of the Fund is the Maybank Overnight Deposit Rates which is available at www.maybank2u.com.my. viii) Approved Fund Size The approved fund size for the Fund is 1 billion Units. ix) Initial Offer Price The initial offer price is RM1.00 per Unit. x) Management Fee Management fee is up to 0.50% of the NAV of the Fund per annum. xi) Sales Charge There is no sales charge for the Fund. xii) Permitted Investment Subject to the Deed, the investment policies for the Fund and the requirements of the SC and any other regulatory body, the Manager has the absolute discretion as to how the assets of the Fund are to be invested. The Fund is permitted to invest in the following: Fixed Deposits; Money market instruments such as treasury bills, banker s acceptance, Bank Negara Malaysia bills, Bank Negara Malaysia negotiable notes, NID with maturities not exceeding one (1) year and CPs maturing one (1) year and below with a minimum credit rating of P1 by RAM or equivalent rating by MARC; and Short Term fixed income securities issued by the private sector. 21
xiii) Investment Restriction The Fund is subject to the following investment restrictions/limits: MIMECXII The value of the Fund s placement in Fixed Deposit with any single licensed financial institutions must not exceed 40% of the Fund s NAV, save for placements with Malayan Banking Berhad and Maybank Islamic Berhad; The value of the Fund s holding in money market instruments issued by any single issuer must not exceed 40% of the Fund s NAV, save for investments in money market instruments issued by Bank Negara Malaysia and government of Malaysia; CPs issued by any single issuer must not exceed 40% of the Fund s NAV; Bank-guaranteed PDS, maturing within one (1) year with a minimum credit rating of AA-rated by RAM or equivalent rating by MARC; AAA-rated PDS by RAM or equivalent rating by MARC maturing within six (6) months or less; and The value of the Fund s investments in PDS issued by any single issuer must not exceed 15% of the Fund s NAV. The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Fund and value of the investments. However, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through an appreciation or depreciation of the NAV of the Fund (whether as a result of an appreciation or depreciation in the value of the investments, or as a result of repurchase of Units or payment made from the Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within a reasonable period of not more than 60 days from the date of the breach take all necessary steps and actions to rectify the breach. xiv) Valuation of Permitted Investment The valuation bases for the permitted investments of the Fund are as follows: The value of any Fixed Deposits placed with financial institutions is valued each day by reference to the value of such investments and the interests accrued thereon for the relevant period. CPs, treasury bills, bankers acceptance, Bank Negara Malaysia bills and Bank Negara Malaysia negotiable notes shall be valued daily based on accretion to maturity value of the securities. Whilst, NID will be valued each day based on the yield to maturity rate on the remaining tenure of the instruments using the interest rate swap quoted by Bank Negara Malaysia. In the event that interest rate swap quoted by Bank Negara Malaysia is not available, the average of the interest rate swaps quoted by three (3) local financial institutions shall be deemed to be the most appropriate valuation to be referred to by the Manager. 22
MIMECXII Fixed income securities shall be valued daily based on the closing price quoted by Bond Pricing Agency ( BPA ). Where such prices are not available or where the Manager is of the view that the price quoted by the BPA for a specific fixed income securities differs from the market price by more than twenty (20) basis point, the Manager may use the market price by reference to the last available quote, provided such quote was obtained within the previous thirty (30) days and the Manager records its basis for using a non-bpa price. Additionally, the Manager shall obtain necessary internal approvals to use the non-bpa price and keeps an audit trail of all decisions and basis for adopting the market yield. xv) Financial Year End Every 31 March of the calendar year. xvi) Income Distribution Policy & Process The Fund will distribute income on a half yearly basis, subject to availability Distribution would be re-invested or paid to Unit Holders via cheque or credited into the Unit Holders bank accounts. Unit Holders are required to indicate their preference in the Unit Application Form upon purchase. There is no incidental cost associated with the re-investment. Distribution will be re-invested or paid to the Unit Holders within ten (10) calendar days starting from the ex-dividend date. The source of income, if any for the purpose of distribution shall be derived from the realized income and/or realized gain. xvii) Trustee PB Trustee Services Berhad (7968-T). xviii) Trustee Fee The Trustee is entitled to a fee of 0.05% of the NAV of the Funds, subject to a minimum fee of RM 18,000 per annum. xix) Deed Deed date 11 February 2008 and supplemental deed dated 12 October 2010 relating to the Fund entered into between the Manager and the Trustee, that will include any other supplemental deed as may be executed between the Manager and the Trustee from time to time. 23
MIMECXII xx) Specific Risk a) Interest Rate Risk Interest rate fluctuations do affect the Fixed Deposit returns of the Fund. Interest rates offered by the financial institutions will fluctuate according to the overnight policy rate determined by Bank Negara Malaysia and this has direct correlation with the Fund s investment in Fixed Deposit. The Fund s investment in Fixed Deposits will benefit from higher interest rate and in the event that the interest rate is low the Fund s returns will also be low. Changes in the level of interest will cause prices of money market instruments to change inversely. This risk can largely be eliminated by holding the instruments until maturity, thereby locking in price and yields. Credit / Default Risk This risk occurs when the issuer of the investments of the Fund, for example, when a financial institution defaults on its agreement, i.e. unable to service any deposit interest/coupon payments or pay the principal amount upon maturity. In such cases, Investors may suffer significant capital losses with regards to their capital invested and interest foregone. Deposit Account Risk When the Fund invests into Fixed Deposits account, the interest/profits are safeguarded by the financial institutions. However, the investments are not without risk. In the event that the financial institutions become insolvent, the Fund might have difficulty in getting back the money. Liquidity Risk It is the risk on the ability of the Fund to honor requests for redemption or to pay back Unit Holders investments whereby it is subject to the Fund s holding of adequate liquid assets. This liquidity risk is alleviated by the Fund s primary investments in the Fixed Deposits. Risk Management Strategies and Techniques Prudent strategies will be adopted in structuring the Fund s portfolio as the Manager will assess the investment prospects of the placements/instruments and securities to the underlying interest rate factors, market outlook and other prevailing factors. The Fund has very limited exposure to market risk by nature of its investments in Fixed Deposits and money market instruments in addition to its other permitted investment of up to 15% of the Fund s NAV into Short Term bank guaranteed PDS with minimum credit rating of AA by RAM and/or its equivalent and PDS issued by private sector with AAA rated by RAM and/or its equivalent. 24
MIMECXII In the event some of the underlying investments of the Fund are not actively traded, Investors are warned that under such circumstances, they may face difficulties in redeeming their investments. It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is not always possible to protect investments against all risks. The various asset classes generally exhibit different levels of risk. Please note that the returns of the Fund are not guaranteed. The investment of the Fund carries risks and Investors are recommended to read the whole Information Memorandum to assess the risks of the Fund. Investors are reminded that the above list of risks may not exhaustive and if necessary, they should consult their adviser(s), e.g. their bankers, lawyers, stockbrokers or independent financial advisers for a better understanding of the risks. 25
4. MIM Enhanced Cash XIII ( MIMECXIII or the Fund ) i) Fund Type Income. ii) Fund Category Money market. iii) Investment Objective MIMECXIII is a Short Term money market fund that invests in instruments which generate tax exempted income. The Fund aims to provide regular income that potentially higher than prevailing money market and traditional Fixed Deposits, stability of capital and a high level of liquidity. The Fund aims to distribute income on quarterly basis. iv) Investment Style & Strategy The Fund seeks to provide liquidity to meet the Short Term cash flow requirements of its Unit Holders by investing primarily in liquid, low risk and Short Term investments. It will seek to obtain a yield that exceeds the benchmark by placing 100% of the NAV of the Fund in Short Term Fixed Deposits. The Manager adopts an active investment strategy in managing the Fund in order to provide a reasonable level of return within the liquidity requirements. v) Investor Profile MIMECXIII is suitable for Qualified Investors: with a Short Term investment horizon; who have a low risk tolerance; who seek a regular income stream* from their investments; and who wish to obtain a yield exceeds Maybank Overnight Deposit Rates. Note* : Regular income stream is dependable on the choice of distribution mode selected by Unit Holders. The income could be in the form of cash or units. For further details, please refer to item on Income Distribution Policy and Distribution Mode of the Fund. vi) Asset Allocation The Fund will place 100% of the NAV in Short Term Fixed Deposits. vii) Benchmark The benchmark of the Fund is the Maybank Overnight Deposit Rates which is available at www.maybank2u.com.my. 26
MIMECXIII viii) Approved Fund Size The approved fund size for the Fund is 2 billion Units. ix) Initial Offer Price The initial offer price is RM1.00 per Unit. x) Management Fee Management fee is up to 0.45% of the NAV of the Fund per annum. xi) Sales Charge There is no sales charge for the Fund. xii) Permitted Investment Subject to the Deed, the investment policies for the Fund and the requirements of the SC and any other regulatory body, the Manager has the absolute discretion as to how the assets of the Fund are to be invested. The Fund is permitted to invest in the following: Fixed Deposits. xiii) Investment Restriction The Fund is subject to the following investment restriction/limit: The value of the Fund s placement in Fixed Deposit with any licensed financial institutions must not exceed 40% of the Fund s NAV, save for placements with Malayan Banking Berhad and Maybank Islamic Berhad, subject always to a money market placement tenure of not more than one (1) year. The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Fund and value of the investments. However, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through the appreciation or depreciation of the NAV of the Fund (whether as a result of an appreciation or depreciation in the value of the investments, or as a result of repurchase of Units or payment made from the Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within a reasonable period of not more than sixty (60) days from the date of the breach take all necessary steps and actions to rectify the breach. xiv) Valuation of Permitted Investment The valuation bases for the permitted investments of the Fund are as follows:- The value of any Fixed Deposits placed with financial institutions is valued each day by reference to the value of such investments and the interests accrued thereon for the relevant period. 27
xv) xvi) Financial Year End Every 30 September of the calendar year. Income Distribution Policy & Process MIMECXIII The Fund will distribute income on a quarterly basis, subject to availability. Distribution would be re-invested or paid to Unit Holders via cheque or credited into the Unit Holders bank accounts. Unit Holders are required to indicate their preference in the Unit Application Form upon purchase. There is no incidental cost associated with the re-investment. Distribution will be re-invested or paid to the Unit Holders within ten (10) calendar days starting from the ex-dividend date. The source of income, if any for the purpose of distribution shall be derived from the realized income and/or realized gain. xvii) Trustee PB Trustee Services Berhad (7968-T). xviii) Trustee Fee The trustee fee is up to 0.05% of the NAV of the Fund per annum, subject to a minimum fee of RM18,000 per annum. xix) Deed Deed dated 3 March 2008 relating to the Fund entered into between the Manager and the Trustee, that will include any other supplemental deed as may be executed between the Manager and the Trustee from time to time. xx) Specific Risk a) Interest Rate Risk Interest rate fluctuations do affect the Fixed Deposit returns of the Fund. Interest rates offered by the financial institutions will fluctuate according to the overnight policy rate determined by Bank Negara Malaysia and this has direct correlation with the Fund s investment in Fixed Deposit. The Fund s investment in Fixed Deposits will benefit from higher interest rate and in the event that the interest rate is low the Fund s returns will also be low. Changes in the level of interest will cause prices of money market instruments to change inversely. This risk can largely be eliminated by holding the instruments until maturity, thereby locking in price and yields. 28
MIMECXIII b) Deposit Account Risk When the Fund places monies into the Fixed Deposits, profits are safeguarded by the financial institutions. However, their investment is not without risk. In the event that the financial institutions become insolvent, the Fund may have difficulty getting back their money. Risk Management Strategies and Techniques Prudent strategies will be adopted in structuring the Fund s portfolio as the Manager will assess the investment prospects of the placements/instruments and securities to the underlying interest rate factors, market outlook and other prevailing factors. The Fund has very limited exposure to market risk by nature of its investment of 100% of the NAV of the Fund in Fixed Deposits. Fixed deposit shall be placed in any strong financial institutions with a minimum A rating by RAM or equivalent rating by MARC. In the event that such rating is not available to the financial institutions, the Manager shall depend on the rating given by RAM or MARC to the holding company of the respective financial institutions. It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is not always possible to protect investment against all risks. The various asset classes exhibit different levels of risk. Please note that the returns of the Fund are not guaranteed. The investment of the Fund carries risks and Investors are recommended to read the whole Information Memorandum to assess the risks of the Fund. Investors are reminded that the above list of risks may not be exhaustive and if necessary, they should consult their adviser(s), e.g. their bankers, lawyers, stockbrokers or independent financial advisers for a better understanding of the risks. 29