PROSPECTUS 1 July 2016 THREADNEEDLE INVESTMENT FUNDS III ICVC

PROSPECTUS 1 July 2016 THREADNEEDLE INVESTMENT FUNDS III ICVC

Contents Prospectus of Threadneedle Investment Funds III ICVC... 3 Definitions..... 4 1. Details of the Company... 6 1.1 General... 6 1.2 The structure of the Company... 6 1.2.1 The Funds... 6 2. Shares... 6 2.1 Classes of Share within the Funds... 6 2.2 Available Classes of Shares... 7 2.3 Bearer Shares... 7 2.4 Title to Shares... 7 2.5 Share Denominations... 7 2.6 Limited Issue... 7 3. The Funds and their Investment Objectives and Policies.. 7 4. Buying, selling and switching Shares... 8 4.1 General... 8 4.2 Minimum subscriptions and holdings... 8 4.3 Client money... 8 4.4 Buying Shares... 9 4.4.1 Procedure... 9 4.4.2 Regular Savings Facility... 9 4.5 Selling Shares... 9 4.5.1 Procedure... 9 4.6 Switching/Converting... 10 4.7 Dealing charges... 11 4.8 Restrictions, Compulsory Transfers and/or Redemption.. 11 4.9 Deferred redemption... 12 4.10 In Specie Redemptions... 12 4.11 Issue of Shares in exchange for in specie assets... 12 4.12 Suspension of Dealing... 12 5. Other dealing information... 12 5.1 Dilution levy... 12 5.2 Fair Value Pricing... 13 5.3 Money Laundering... 13 5.4 Market Timing and Late Trading... 13 6. Fees and Expenses...14 6.1 General...14 6.2 Charges payable to the ACD...14 6.3 Investment Manager s fee...15 6.4 Depositary s fee...15 6.5 Depositary s Expenses...15 6.6 Administrator s fee...16 6.7 Registrar s fee...16 6.8 Allocation of Assets, Charges and Expenses to Funds...16 6.9 Ongoing Charges Figure ( OCF )...16 7. Valuation of the Company...16 7.1 General...16 7.2 Calculation of the Net Asset Value...16 7.3 Fair Value Pricing...17 7.4 Pricing basis...17 7.5 Publication of Prices of Shares...18 8. Risk factors...18 8.1 General...18 8.2 Effect of Initial Charge...18 8.3 Suspension of Dealings in Shares...18 8.4 Currency exchange rates...18 8.5 Risk to Capital Growth...18 8.6 Segregated Liability of the Funds...18 8.7 Regulatory Risk...18 8.8 Investment objectives...18 8.9 Emerging Markets...18 8.10 Taxation...19 8.11 Investments in collective investment schemes...19 8.12 Investment in unregulated collective investment schemes20 8.13 Investments in derivatives and forward transactions...21 8.13.1 Use of derivatives and forward transactions for EPM purposes...21 8.13.2 Use of derivatives forward transactions for investment purposes...22 8.14 Exchange Traded Funds...22 8.15 Commodities...22 8.16 Warrants...22 1

8.17 Credit Risk... 22 8.18 Shareholder Concentration Risk... 22 8.19 Liquidity Risk... 22 8.20 Long dated Floating Rate Notes... 22 8.21 No Guarantee of Capital... 22 8.22 Cash Concentration... 22 8.23 Fixed Income Funds... 22 8.24 Concentrated portfolios... 22 8.25 High Yield Bond... 23 8.26 Dilution Levy... 23 8.27 Commodities... 23 9. Management and administration... 23 9.1 Authorised Corporate Director... 23 9.2 Depositary... 24 9.3 Investment Manager... 25 9.4 Registrar... 26 9.5 Administrator... 26 13.1 Termination of a Fund...30 13.2 Winding-up of the Company...31 14. General information...31 14.1 Accounting periods...31 14.2 Distribution of Income...32 14.3 Annual report and accounts...32 14.4 Documents of the Company...32 14.5 Material contracts...32 14.6 Complaints...33 14.7 The Financial Services Compensation Scheme...33 14.8 Privacy Statement...33 Appendix I (Fund details)...34 Appendix II Investment and Borrowing Powers and Restrictions...53 Appendix III Eligible Markets...69 Appendix IV Dilution levy estimates...71 Appendix V Performance of the Funds...72 Directory...77 9.6 Auditor... 26 9.7 Legal advisers... 26 10. Shareholder Meetings and Voting Rights... 26 10.1 Shareholder meetings... 26 11. Policies of the ACD and the Investment Manager... 27 11.1 Conflicts of Interest... 27 11.2 Exercise of voting rights... 27 11.3 Best Execution... 27 11.4 Controversial Weapons... 27 11.5 Responsible Investment... 28 12. Taxation... 28 12.1 General... 28 12.2 The Company... 28 12.3 Stamp Duty Reserve Tax ( SDRT )... 28 12.4 UK Shareholders... 28 12.5 Income equalisation... 29 12.6 Foreign Account Tax Compliance Act... 29 12.7 Capital gains tax... 30 12.8 Inheritance tax ( IHT )... 30 12.9 European Union Savings Directive... 30 13. Winding-Up and Termination... 30 2

Important: if you are in any doubt about the contents of this Prospectus you should consult your professional adviser. Threadneedle Investment Services Limited, the authorised corporate director of the Company (the ACD ), is the person responsible for the information contained in this Prospectus. To the best of its knowledge and belief (having taken all reasonable care to ensure that such is the case) the information contained herein does not contain any untrue or misleading statement or omit any matters required by the FCA Rules to be included in it. Threadneedle Investment Services Limited accepts responsibility accordingly. Prospectus of Threadneedle Investment Funds III ICVC (An open-ended investment company with variable capital incorporated with limited liability and registered in England and Wales under registered number IC593) This document constitutes a Prospectus for Threadneedle Investment Funds III ICVC (formerly known as LV= Investment Funds II ICVC), which has been prepared in accordance with the FCA Rules. The Instrument of Incorporation of the Company is registered with the Financial Conduct Authority (the FCA ). The Prospectus is dated and is valid as at 1 July 2016. Copies of this Prospectus have been sent to the FCA and the Depositary. The provisions of the Instrument of Incorporation are binding on each of the Shareholders who are taken to have notice of them. This Prospectus has been issued for the purpose of section 21 of the Financial Services and Markets Act 2000 by the ACD. The Prospectus is based on information, law and practice at the date hereof. The Company is not bound by any out of date prospectus when it has issued a new prospectus and potential investors should check that they have the most recently published version. Copies of this Prospectus can be provided in large print or electronic format. The distribution of this Prospectus in certain jurisdictions may require that this Prospectus is translated into the official language of those countries. Should any inconsistency arise between the translated version and the English version, the English version shall prevail. Shares in the Company are not available for offer or sale in any state in the United States, or to persons (including companies, partnerships, trusts or other entities) who are US Persons, nor may Shares be owned or otherwise held by such persons. Accordingly, this Prospectus may not be distributed in the United States or to a US Person. The ACD reserves the right to give notice to any Shareholder that is or that subsequently becomes incorporated in the United States or to a US Person to (i) transfer the Shares to a person that is not a US Person or (ii) request a redemption or cancellation of the Shares and the ACD may redeem or cancel the Shares if the Shareholder fails to make such transfer or request within 30 days of that notice provided by the ACD. If you are in any doubt about the contents of this Prospectus you should consult your professional adviser. No person has been authorised by the Company to give any information or to make any representations in connection with the offering of Shares other than those contained in the Prospectus and, if given or made, such information or representations must not be relied on as having been made by the Company. The delivery of this Prospectus (whether or not accompanied by any reports) or the issue of Shares shall not, under any circumstances, create any implication that the affairs of the Company have not changed since the date hereof. The distribution of this Prospectus and the offering of Shares in certain jurisdictions may be restricted. Persons into whose possession this Prospectus comes are required by the Company to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Potential investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters and are recommended to consult their own professional advisers concerning the acquisition, holding or disposal of Shares. 3

Definitions Accumulation Shares means Shares (of whatever Class) in Funds of the Company as may be in issue from time to time in respect of which income is accumulated and added to the capital property of a Fund ACD means Threadneedle Investment Services Limited, the authorised corporate director of the Company ACD Agreement means an agreement between the Company and the ACD as amended from time to time, setting out the terms of appointment of the ACD Act means the Financial Services and Markets Act 2000, as amended from time to time Administrator means HSBC Bank plc, or whoever is appointed from time to time to provide administration and fund accounting services to the Company Approved Bank means, in relation to a bank account opened by the Company: (a) if the account is opened at a branch in the United Kingdom: (i) (ii) (iii) (iv) the Bank of England; or the central bank of a member state of the OECD; or a bank as defined in the FCA Rules; or a bank or a building society which offers, unrestrictedly, banking services; or (v) a bank which is supervised by the central bank or other banking regulator of a member state of the OECD; or COLL refers to the appropriate chapter or rule in the COLL Sourcebook COLL Sourcebook means the Collective Investment Schemes Sourcebook issued by the FCA as amended from time to time Company means Threadneedle Investment Funds III ICVC Corporate Bond means a bond issued by a corporation or supranational organisation Dealing Day means Monday to Friday excluding public holidays and bank holidays in England and Wales and any other days at the ACD s discretion Depositary means HSBC Bank plc, or whoever is from time to time appointed as the depositary of the Company Depositary Services Agreement means the agreement between the Company, the ACD and the Depositary, as amended from time to time, setting out the terms of appointment of the Depositary EEA State means a member state of the European Union and any other state which is within the European Economic Area Eligible Institution means one of certain eligible institutions as defined in the glossary of definitions in the FCA Rules Eligible Shareholder means an existing or new investor of the Company that is eligible at the ACD s discretion to invest in the Class X Shares upon entering into an agreement with the ACD and fulfilling the eligibility conditions set by the ACD from time to time Efficient Portfolio Management or EPM means the use of techniques and instruments which relate to transferable securities and approved money-market instruments and which fulfil the following criteria: (b) if the account is opened elsewhere: (a) they are economically appropriate in that they are realised in a cost effective way; and (i) a bank in (a); or (b) they are entered into for one or more of the following specific aims: (ii) a credit institution established in an EEA State other than in the United Kingdom and duly authorised by the relevant Home State Regulator; or (i) (ii) reduction of risk; reduction of cost; (iii) (iv) a bank which is regulated in the Isle of Man or the Channel Islands; or a bank supervised by the South African Reserve Bank (iii) generation of additional capital or income for the scheme with a risk level which is consistent with the risk profile of the scheme and the risk diversification rules laid down in COLL Auditor means Ernst & Young LLP, or whoever is appointed from time to time to act as auditor to the Company Class or Classes in relation to Shares, means (according to the context) all of the Shares related to a single Fund or a particular class or classes of Share related to a single Fund FCA means the Financial Conduct Authority of 25 The North Colonnade, Canary Wharf, London E14 5HS or any successor organisation FCA Rules means the FCA Handbook of Rules and Guidance as amended from time to time made under the Act including the COLL Sourcebook but excluding, for the avoidance of doubt, any guidance or evidential provisions 4

Fund or Funds means a sub-fund or sub-funds of the Company. Each Fund forms part of the property of the Company but is pooled separately and is invested in accordance with the investment objective applicable to that Fund Gross Accumulation Shares Accumulation Shares that are Gross Paying Shares and are denominated in the base currency of the Company (or, where different, of the relevant Fund) Gross Income Shares Income Shares that are Gross Paying Shares and are denominated in the base currency of the Company (or where different, of the relevant Fund) Gross Paying Shares Shares (of whatever Class) in the Funds of the Company as may be in issue from time to time and in respect of which income allocated thereto is credited periodically to capital (Accumulation Shares) or distributed (Income Shares) in accordance with relevant tax law within any tax being deducted or accounted for by the Company Income Shares means Shares in respect of which income is distributed to Shareholders Instrument of Incorporation means the instrument of incorporation of the Company as amended from time to time Investment Manager means Threadneedle Asset Management Limited, the investment manager of the Funds, further details of which are set out in the section with the heading Investment Manager at page 25 of this Prospectus (as amended from time to time) ISA means an individual savings account under the Individual Savings Accounts Regulations 1998 (as amended from time to time) Larger Denomination Share means a Share issued by the Company as a larger denomination share Limited Issue Fund means a Fund whose Shares are Limited Issue Shares Limited Issue Shares means Shares which, in accordance with the FCA Rules, may only be issued at limited times and in the circumstances as specified in the Prospectus Net Accumulation Shares Accumulation Shares which are Net Paying Shares and are denominated in the base currency of the Company (or, where different, of the relevant Fund) Net Asset Value or NAV means the value of the scheme property of the Company or of a Fund (as the context may require) less the liabilities of the Company (or of the Fund concerned) as calculated in accordance with the Instrument of Incorporation OECD means the Organisation for Economic Co-operation and Development Registrar means International Financial Data Services (UK) Limited, or whoever is from time to time appointed as the registrar of the Company the Regulations means the OEIC Regulations and the FCA Rules Share or Shares means a share or shares in the Company (including Larger Denomination Shares and Smaller Denomination Shares) Share Class or Class of Shares or Class means all of the Shares issued by the Company or a particular class of Shares relating to a single Fund (according to the context) Shareholder means a holder of Shares in the Company Smaller Denomination Share means a Share carrying one thousandth of the rights of a Larger Denomination Share Threadneedle ISA means an ISA, the account manager of which is Threadneedle Investment Services Limited Threadneedle OEIC means the Company or any other OEIC managed by the ACD, further details of which are set out in the section with the heading Authorised Corporate Director at page 23 of this Prospectus Threadneedle Regular Savings Facility means the regular savings facility offered by the ACD through which Retail Shares may be purchased, including a savings facility within a Threadneedle ISA UCITS means Undertaking for Collective Investment in Transferable Securities as described in the UCITS Directive referred to in COLL 3.2.8 UK means the United Kingdom of Great Britain and Northern Ireland US Person means for the purposes of Foreign Account Tax Compliance Act a US citizen or resident individual, a partnership or corporation organised in the United States or under the laws of the United States or any State thereof, a trust if (i) a court within the United States would have authority under applicable law to render orders or judgements concerning substantially all issues regarding administration of the trust, and (ii) one or more US person has the authority to control all substantial decisions of the trust, or an estate of a decedent that is a citizen or resident of the United States. This definition shall be interpreted in accordance with sections 1471 to 1474 of the US Internal Revenue Code of 1986 Valuation Point means the point, whether on a periodic basis or for a particular valuation, decided by the ACD, at which the ACD carries out a valuation of the property of the Company or a Fund (as the case may be) for the purpose of determining the price at which Shares of a Class may be issued, cancelled, sold or redeemed. The current Valuation Point is 14:00 on each Dealing Day VAT means value added tax OEIC Regulations means the Open-Ended Investment Companies Regulations 2001 (as amended from time to time) 5

1. Details of the Company 1.1 General THREADNEEDLE INVESTMENT FUNDS III ICVC is an open-ended investment company with variable capital incorporated in England and Wales with registered number IC593 and authorised by the FCA with effect from 30 November 2007. The Company is a UCITS scheme for the purposes of the FCA Rules and an umbrella company for the purposes of the OEIC Regulations. Shareholders of the Company are not liable for the debts of the Company. Head office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Address for service: The head office is the address of the place in the United Kingdom for service on the Company of notices or other documents required or authorised to be served on it. Base currency: The base currency of the Company is Pounds Sterling. Each Fund and Class is designated in Pounds Sterling. Share capital: Maximum Minimum 6,000,000,000 (six billion pounds Sterling) 1 (one pound Sterling) Shares in the Company have no par value. The share capital of the Company at all times equals the sum of the NAV of each of the Funds. The Company issues and redeems Shares in each of its available Classes at a price related to the relevant NAV. 1.2 The structure of the Company 1.2.1 The Funds The Company is structured so that different Funds may be established from time to time by the ACD with the approval of the FCA and the agreement of the Depositary. On the introduction of any new Fund or Class, a revised Prospectus will be prepared setting out the relevant details of each Fund or Class. The assets of each Fund will be treated as separate from those of every other Fund and will be invested in accordance with the investment objective and investment policy applicable to that Fund. The Funds which are currently available are: Threadneedle UK Corporate Bond Fund Threadneedle UK Short-Dated Corporate Bond Fund Threadneedle UK Medium & Long-Dated Corporate Bond Fund Threadneedle UK Fixed Interest Fund Threadneedle UK Index Linked Fund The Funds, with the exception of the Threadneedle UK Short-Term Money Market Fund, will be managed so as to be eligible as an ISA investment for the purposes of the Individual Savings Account Regulations 1998 (as amended). The new ISA regime ( NISA ) took effect from 1 July 2014 and the Funds are managed so as to be eligible as NISA investments. Details of the Funds currently available, including their investment objectives and policies, as well as the Share Classes available for each Fund, are contained in Appendix I (Fund details). The Company will not have any interest in any immovable property or tangible movable property. Each Fund will be charged with the liabilities, expenses, costs and charges of the Company attributable to that Fund and within the Funds charges will be allocated between Classes in accordance with the terms of issue of Shares of those Classes. Any assets, liabilities, expenses, costs or charges not attributable to a particular Fund may be allocated by the ACD in a manner which it believes is fair to the Shareholders generally. This will normally be pro rata to the Net Asset Value of the relevant Funds. The Funds are segregated portfolios of assets and, accordingly, the assets of a Fund belong exclusively to that Fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the umbrella, or any other Fund, and shall not be available for any such purpose. While the OEIC Regulations provide for segregated liability between Funds, the concept of segregated liability is relatively new. Accordingly, where claims are brought by local creditors in foreign courts or under contracts which are subject to the laws of other countries it is not yet known how those foreign courts will react to provisions of the OEIC Regulations which provide for segregated liability between Funds. The Threadneedle UK Short-Term Money Market Fund is a short-term money market fund (as defined in the FCA Rules) and its investment objective and policy will meet the conditions specified in such definition. 2. Shares 2.1 Classes of Share within the Funds Several Classes of Share may be issued in respect of each Fund, distinguished by their criteria for subscription and fee structure. All Classes are denominated in Sterling. In addition, each Class may be made available in both Income Shares and Accumulation Shares. The Classes of Share presently available for each Fund are set out in Appendix I (Fund details) and in the section headed Available Classes of Shares below. Threadneedle UK Short-Term Money Market Fund 6

The limits for minimum initial investment, minimum subsequent investment and minimum holding of shares may be waived at the discretion of the ACD. If a holding is below the minimum holding the ACD has the discretion to require redemption of the entire holding. All references in this Prospectus to Income Shares and Accumulation Shares are to both net Income and net Accumulation Shares and gross Income and gross Accumulation Shares unless otherwise stated. The Instrument of Incorporation allows gross Income and gross Accumulation Shares to be issued as well as net Income and net Accumulation Shares. Net Shares are Shares in respect of which income allocated to them is distributed periodically to the relevant Shareholders (in the case of Income Shares) or credited periodically to capital (in the case of Accumulation Shares), in either case in accordance with relevant tax law, net of any tax deducted or accounted for by the Company. Gross Shares are Income or Accumulation Shares where, in accordance with relevant tax law, distribution or allocation of income is made without any tax being deducted or accounted for by the Company. Where a Fund has different Classes, each Class may attract different charges and so monies may be deducted from Classes in unequal proportions. In these circumstances the proportionate interests of the Classes within a Fund will be adjusted accordingly. Typically, Retail Shares and Second Retail Shares are available to retail investors seeking income or growth (or a combination of both) over the medium to long-term. Class X shares are only available to Eligible Shareholders. Accumulation Shares Holders of Accumulation Shares are not entitled to be paid the income attributed to such Shares, but that income is automatically transferred to (and retained as part of) the capital assets of the relevant Fund on the relevant interim and/or annual accounting dates. This is reflected in the price of an Accumulation Share. Income Shares Holders of Income Shares are entitled to be paid the distributable income attributed to such Shares. Please note that for holders of Income Shares, income distributions will be used to purchase additional Income Shares, unless the holder requests otherwise. 2.2 Available Classes of Shares The Classes of Shares currently available in the Funds and income allocation dates are set out in Appendix I (Fund details). 2.3 Bearer Shares The Instrument of Incorporation does not permit the Company to issue bearer shares. The Company will only issue registered shares. 2.4 Title to Shares The title to Shares is evidenced by entries on the Register of Shareholders. Certificates for Shares will not be issued. 2.5 Share Denominations Shares are expressed in two denominations Larger Denomination Shares and Smaller Denomination Shares in order to calculate fractional entitlements of less than one Larger Denomination Share: Smaller Denomination Shares are whole Shares which carry a fraction of one thousandth of the rights of a Larger Denomination Share. Whenever the number of any such Smaller Denomination Shares held shall reach one thousand, the ACD shall consolidate the Smaller Denomination Shares into one Larger Denomination Share of the same Class. 2.6 Limited Issue The ACD may, at any time in the future, decide to limit the issue of Shares in respect of a Fund or one or more particular Share Classes of a Fund if the ACD is of the opinion that this is appropriate to do so. The ACD will notify Shareholders if it makes such a determination, setting out the reasons for so limiting the capacity of the relevant Fund or Share Class. The reasons may include situations where, for example, the ACD considers that substantially all of the subscriptions relating to a Business Day, if accepted, could not be efficiently invested; could not be invested without compromising the investment objectives and policies of the Fund; or might materially prejudice existing Shareholders interests. Currently none of the Funds are Limited Issue Funds. 3. The Funds and their Investment Objectives and Policies Details of the investment objectives, policies and other details of the Funds are set out in Appendix I (Fund details). Investment of the assets of each of the Funds must comply with the FCA Rules and the investment objective and policy of the relevant Fund. Details of these investment objectives and policies are set out in Appendix I (Fund details). The eligible securities markets and eligible derivatives markets on which the Funds may invest are set out in Appendix III Eligible Markets. A detailed statement of the general investment management and borrowing powers, including a full list of eligible investments and investment restrictions is set out in Appendix II Investment and Borrowing Powers and Restrictions and Appendix III Eligible Markets. Where the investment policy of a Fund contains words such as primarily, principally or mainly in the description of its investment policy, the relevant Fund will invest not less than two-thirds of the value of the property of that Fund in the specified kind of assets. However, for the purposes described in Appendix II with respect to Funds of the Company that are bond Funds, such a Fund may hold cash or money market securities or other instruments, including derivatives. 7

The aim of any use of derivative or forward transactions is to assist the Manager in meeting the investment objectives of the Fund by reducing risk and/or reducing cost and/or generating additional income or capital with a level of risk which is consistent with the risk profile of the Fund and the risk diversification rules within which it operates. The use of derivatives or forwards for the purposes of EPM or hedging will not materially alter the risk profile of the Fund. Further details are set out in Appendix III Eligible Markets. Where a Fund may invest in derivatives for investment purposes, this will be stated in the investment policy of the relevant Fund. Investors should refer to the information set out in the section of this prospectus with the heading Investments in derivatives and forward transactions on page 21 of this Prospectus. Where the investment policy of a Fund permits it to invest in other collective investment schemes it may invest in other Funds of the Company provided that the investing Fund complies with the FCA Rules and the OEIC Regulations. Bond funds and particularly high yield bond funds are generally permitted to invest in a range of fixed interest securities which includes non-traditional types of debt securities. These may include (without limitation), regulatory capital (such as Tier 1 and Tier 2 capital), subordinated debt and various forms of contingent capital securities including, but not limited to, contingent convertible bonds. These securities may possess features such as coupon deferral or cancellation, resettable coupon rates, loss of capital or conversion to equity. Such investments may be made by the Funds but will only be permitted in accordance with the Fund s investment objectives and policies and within the existing risk profile of the Fund. The effective maturity date rather than the final term to maturity is used for the purposes of the investment and borrowing limits when categorising bonds that have a variable rate or are callable. Where the investment policy of the Fund permits it to invest in equity related securities these may include participatory notes (p-notes) and/or warrants (including low exercise price warrants). 4. Buying, selling and switching Shares 4.1 General Investors can invest in all Funds and Share Classes provided the eligibility criteria are met. The Funds may be sold to retail and non-retail investors. Certain types of share are only available to specific types of investor. Further details of this are set out in the section of this Prospectus with the heading Shares on page 6 of this Prospectus. Please note that the ACD may reject a request to buy, sell or switch Shares if the investor is unable to demonstrate to the satisfaction of the ACD (acting reasonably) that the investor has complied with applicable law and regulation. By way of example only, such circumstances may include an inability to provide appropriate money laundering documentation or confirmation that the investor has received the most recently available Key Investor Information Document for the Fund they wish to invest in. It should be noted that for Funds which are Limited Issue Funds restrictions will apply for new subscriptions into Limited Issue Funds. Details are set out in the section applicable to the Limited Issue Funds in the section with the heading Investment objectives, policies and other details of the Funds. The dealing office of the ACD is open from at least 8 a.m. until at least 6 p.m. UK time on each Dealing Day to receive requests for the issue, redemption and switching of Shares. Prices for the available Funds are calculated every Dealing Day at 2 p.m. UK time. Shares in the Funds that are bought or sold before 2 p.m. will obtain the price calculated on that Dealing Day. Shares in Funds that are bought or sold after 2 p.m. will obtain the price calculated at 2 p.m. on the next Dealing Day. 4.2 Minimum subscriptions and holdings Details of the minimum investment amounts, subsequent investment amounts and minimum holding for each of the Funds is set out in Appendix I (Fund details). The ACD may at its discretion accept subscriptions lower than the minimum amount. If a holding is below the minimum holding the ACD has the discretion to require redemption of the entire holding. 4.3 Client money The ACD does not treat monies received for the issuance of shares or monies payable to the investor upon redemption as client money as long as: (i) in relation to monies for the issuance of shares, the ACD has paid the subscription monies in exchange for shares to the ACD by the close of business on the day following receipt of monies from the investor; or (ii) in relation to proceeds from a redemption, paid the redemption monies to the investor within four business days of receipt of the fully authorised form of renunciation (or other sufficient instruction) and in any event by the close of business on the day following receipt of the monies from the ACD. In the event that the above time limits are not met by the ACD, the ACD will treat the relevant sum received with respect to subscriptions and redemptions as client money as defined under the FCA Rules. This means that the money is held in an account separate from that the ACD uses to hold its own money. The ACD will not calculate or pay to the investor any interest that might arise on those monies. 8

4.4 Buying Shares 4.4.1 Procedure Shares can be bought either by: (i) calling the ACD (followed by written confirmation); Share certificates will not be issued in respect of Shares. Ownership of Shares will be evidenced by an entry on the Company s register of Shareholders. Statements in respect of periodic distributions will show the number of Shares held or accumulated by the Shareholder. Individual statements of a Shareholder s (or, when Shares are jointly held, the firstnamed holder s) Shares will also be issued at any time on request by the registered Shareholder. (ii) sending an instruction to the ACD by fax; or 4.4.2 Regular Savings Facility (iii) sending an instruction by post to the ACD. Contact details can be found in the Directory at page 77 of this Prospectus (ACD Client Services). Any initial purchase of Shares must be accompanied by a completed application form, which can be obtained from the ACD. Completed forms should be sent by fax or post to the ACD. Subsequent investments can be made by telephone, but still require written confirmation. Unless the ACD receives instructions to the contrary, all deals will be processed on receipt and payment immediately becoming due. An agreement must be entered into between the Eligible Shareholder and the ACD before investments can be made in Class X Shares. Settlement is the relevant Dealing Day plus four business days for subscriptions and the relevant Dealing Day plus four business days for redemptions. As part of its credit control policy, the ACD reserves the right to cancel any contract without notice where payment has not been received by the relevant settlement date and will be entitled to recover any losses incurred as well as interest on late settlement. The ACD has the right to reject any application for Shares in whole or part, provided it has reasonable grounds for doing so. If the ACD exercises this right, the ACD will return any money sent, or the balance of such monies to the applicant, at the applicant s risk. Where an investor invests a specific sum of money (rather than a specified number of Shares) and the money subscribed is not sufficient to purchase a whole number of Shares, the ACD will issue Smaller Denomination Shares rather than returning any money to the investor. The ACD, at its discretion, has the right to cancel a purchase deal if settlement is materially overdue and any loss arising on such cancellation shall be the liability of the applicant. For postal applications payment in full must accompany the instruction. Documents the purchaser will receive A contract note giving details of the Shares purchased and the price obtained will be issued by the end of the business day following the later of receipt of (i) the application to purchase Shares or (ii) the Valuation Point by reference to which the purchase price is determined, together with a notice of the applicant s right to cancel (where appropriate). The ACD may make available certain Classes of Shares of any Fund through its Regular Savings Facility. Currently, only Retail Shares are available within this Facility. To invest in this way, Shareholders must complete and return to the ACD the relevant application form and direct debit mandate before contributions may begin. Monthly contributions may be increased, decreased (subject to maintaining the minimum level of contribution) or stopped at any time by notifying the ACD. If, however, payments are not made into the Regular Savings Facility for more than six months and the Shareholder holds less than the minimum holding for that Class, then the ACD reserves the right to redeem that Shareholder s entire holding in that Class. Contributions to the Regular Savings Facility are collected on a monthly basis with Shares being allocated at the Share price ruling at the next following Valuation Point (subject to any applicable initial charge). Confirmations will not be issued to Shareholders investing through a Regular Savings Facility. For Shares purchased through the Regular Savings Facility, the minimum monthly investment is stated in Appendix I (Fund details). 4.5 Selling Shares 4.5.1 Procedure Every Shareholder has the right to require that the Company redeem his Shares on any Dealing Day. However, where the value of Shares held by a Shareholder will be less than the minimum value of Shares for the relevant Fund (as set out in Appendix I (Fund details), the ACD may require that the Shareholder redeems their full holding. Requests to redeem Shares may be made either by: (i) (ii) (iii) calling the ACD (followed by written confirmation); sending an instruction to the ACD by fax; or sending an instruction by post to the ACD. Contact details can be found in the Directory at page 77 of this Prospectus (ACD Client Services). The ACD will issue a cheque or make an electronic funds transfer in payment for Shares within four business days of receiving instructions to redeem them or the later of (a) receipt by the ACD of the form of renunciation (or other sufficient written instructions) duly signed by all the relevant Shareholders and completed as to the appropriate number of Shares, together with any 9

other appropriate evidence of title and (b) the Valuation Point following receipt by the ACD of the request to redeem. Documents the seller will receive A contract note setting out the number and price of Shares sold will be sent to the selling Shareholder (or, when the funds are held jointly, to the firstnamed Shareholder) together (if sufficient written instructions have not already been given) with a form of renunciation for completion and execution by the Shareholder(s) by no later than the end of the business day following the later of the request to redeem Shares or the Valuation Point by reference to which the redemption price is determined. where: N O CP is the number of new Shares to be issued or sold (rounded down to the nearest whole number of Smaller Denomination Shares); is the number of original Shares specified (or deemed to be specified) in the switching notice which the holder has requested to switch; is the price at which a single original Share may be cancelled or redeemed as at the valuation point applicable to the cancellation or redemption as the case may be; 4.6 Switching/Converting A Shareholder may at any time Switch all or some of his Shares of one Class or Fund ( Original Shares ) for Shares of another Class or Fund ( New Shares ) provided they meet the eligibility criteria for the New Shares. The number of New Shares issued will be determined by reference to the respective prices of New Shares and Original Shares at the Valuation Point applicable at the time the Original Shares are repurchased and the New Shares are issued. Switching may be effected by: ER is 1, where the original Shares and the new Shares are designated in the same currency and, in any other case, is the exchange rate determined by the ACD in its absolute discretion (subject to the FCA Rules) as representing the effective rate of exchange between the two relevant currencies as at the date the switching notice is received (or deemed to have been received) by the Company having adjusted such rate as may be necessary to reflect any costs incurred by the Company in making any transfer of assets as may be required as a consequence of such a switch being effected; and (i) (ii) calling the ACD (followed by written confirmation); sending an instruction to the ACD by fax; or SP is the price at which a single new Share may be issued or sold as at the valuation point applicable to the cancellation or redemption as the case may be. (iii) sending an instruction by post to the ACD. Contact details can be found in the Directory at page 77 of this Prospectus (ACD Client Services). The ACD may at its discretion charge a fee on the switching of Shares between Funds. These fees are set out in Appendix I (Fund details) for each Fund. There is currently no fee on a Switch between Classes of the same Fund. Where the value of Original Shares held by a Shareholder will be less than the minimum value of Shares for the relevant Fund (as set out in Appendix I (Fund details)), the ACD may, at its discretion, convert the Shareholder s full holding of Original Shares to New Shares or refuse to effect any Switch. The ACD may impose restrictions on exchanges, but any restriction related to switching to Shares of different Funds must be on reasonable grounds relating to the circumstances of the Shareholder concerned. The number of New Shares to be issued to the holder on a switch will be determined by reference to the respective prices of New Shares and Original Shares at the Valuation Point applicable at the time the Original Shares are redeemed and the New Shares are issued. The following formula will be applied: N = O x (CP x ER) SP The ACD may adjust the number of New Shares to be issued to reflect the application of any charge on switching together with any other charges or levies in respect of the application for the New Shares or redemption of the Original Shares as may be permitted pursuant to the FCA Rules. The ACD may at its discretion make a charge on the switching of Shares between Funds. Any such charge on switching will be deducted from the value of the Original Shares before the purchase of the New Shares but will not in any event exceed the amount of the initial charge at that date for the New Shares. In order to Switch to Class X Shares, the Shareholder of the Original Shares must be an Eligible Shareholder. A switch of Shares in one Fund for Shares in another Fund will be treated as a redemption and sale and will, for persons subject to UK taxation, be a realisation for the purposes of capital gains tax, which may give rise to a liability to tax, depending on the Shareholder s circumstances. A Switch of Shares from one Class to another Class in the same Fund is not, in general, a disposal for the purposes of capital gains taxation. For further information on tax implications for Shareholders, please refer to the section with the heading Taxation section on page 28 of this Prospectus. A holder of Shares may convert (as opposed to switch) Shares of one Class of any Fund for Shares in another Class of the same Fund at the absolute discretion of the ACD and in accordance with all applicable FCA Rules. A fee may be charged for this conversion which will be no more than the aggregate of the prevailing redemption charge (if any) in respect of the Original Shares and the initial charge (if any) in respect of the New Shares and is payable to the ACD. 10

In order to assist Shareholders in complying with their legal and regulatory obligations including complying with the FCA s Retail Distribution Review a Shareholder may convert (as opposed to Switch) shares of one Class of any Fund for shares in another class of the same Fund at the absolute discretion of the ACD. In no circumstances will a Shareholder who switches Shares in one Fund for Shares in another Fund (or who converts Shares in one Fund to Shares in a different Class of the same Fund) be given a right by law to withdraw from, or cancel, the transaction. Shares cannot be switched or converted during a period when dealings in Shares of the relevant Fund or Funds are suspended by the Company pursuant to the FCA Rules and the right of a Shareholder to switch or convert during a period of suspension is similarly suspended. A Shareholder who Switches Shares in one Fund for Shares in any other Fund will not be given a right by law to withdraw from or cancel the transaction. No Switch will be made during any period when the right of Shareholders to require the redemption of their Shares is suspended (as described in the section with the heading Suspension of Dealing on page 12 of this Prospectus. The general provisions on procedures relating to redemption will apply equally to a Switch. A duly completed switching form must be received by the ACD before the Valuation Point on a Dealing Day in the Fund or Funds concerned to be dealt with at the prices at those Valuation Points on that Dealing Day, or at such other date as may be approved by the ACD. Switching requests received after a Valuation Point will be held over until the next Dealing Day in the relevant Fund or Funds. It should be noted that the times at which Shareholders may Switch into Shares of Limited Issue Funds will be restricted. Where applicable. details will be set out in the section with the heading Limited Issue on page 7 of this Prospectus and in Appendix I (Fund details). 4.7 Dealing charges The ACD may impose charges for the issue, redemptions and switching of Shares in the Funds. Details of such fees are set out in Appendix I (Fund details). The initial charge is payable to the ACD and may be used to remunerate intermediaries. To the extent permitted by the FCA Rules, the ACD may agree to waive or reduce the initial charge at its discretion in respect of a subscription by any person, including a holder of Shares in any other collective investment scheme operated by the ACD, where such subscription is at or about the same time as the redemption of units or Shares (or other interests) in that other collective investment scheme and thereby represents a Switch to the Company. For those Funds which allow income to be reinvested, Shareholders may elect to use their dividend income to purchase new Shares in the Fund. For Shares purchased using the reinvestment of dividend income the initial charge will be waived. The ACD may charge a switching fee of an amount up to the initial charge at that date for the new Shares when Shares of a Fund are switched for Shares in another Fund. Details of the switching fee are set out in Appendix I (Fund details). Statements detailing all Share transactions will be sent out to all Monthly Savers at least on a six monthly basis. 4.8 Restrictions, Compulsory Transfers and/or Redemption The ACD may from time to time impose such restrictions as it may think necessary for the purpose of ensuring that no Shares in the Company are acquired or held by any person in breach of the law or governmental regulation (or any interpretation of a law or regulation by a competent authority) of any country or territory, or which would (or would if other Shares were acquired or held in like circumstances) result in the Company incurring any liability to taxation which the Company would not be able to recoup itself or suffering any other adverse consequence (including a requirement to register under any securities or investment or similar laws or governmental regulation of any country or territory). In this connection, the ACD may, inter alia, reject at its discretion any application for the purchase, redemption, transfer or switching of Shares. If it comes to the notice of the ACD that any Shares ( affected Shares ) are owned directly or beneficially in any of the circumstances set out above or if it reasonably believes this to be the case, the ACD may give notice to the holder(s) of the affected Shares requiring the transfer of such Shares to a person who is qualified or entitled to own them without causing the adverse consequences set out above or that a request in writing be given for the redemption of such Shares in accordance with the COLL Sourcebook. If any person upon whom such a notice is served does not within thirty days after the date of such notice transfer his affected Shares to a person qualified to own them without causing the adverse consequences set out above or submit a written request for their redemption to the ACD or establish to the satisfaction of the ACD (whose judgement is final and binding) that he or any beneficial owner is qualified and entitled to own the affected Shares without causing the adverse consequences set out above, he shall be deemed upon the expiration of that thirty day period to have given a request in writing for the redemption or cancellation (at the discretion of the ACD) of all the affected Shares pursuant to the COLL Sourcebook. This may include a situation in which a Shareholder has moved to a different jurisdiction which either does or may give rise to a situation described above. It is not possible for the ACD to be fully informed of current law and regulations in every jurisdiction and accordingly in the interests of Shareholders and to be able to ensure no Shares are held or acquired by any person in breach of the law or governmental regulation (or any interpretation of a law or regulation by a competent authority) or any country or territory or which would result in the Fund incurring any liability to taxation which the Fund is not able to recoup itself or suffering any other adverse consequence. The ACD s policy will be to treat Share or Shareholders moving to 11

jurisdictions other than EEA states as affected Share and may refuse to issue Shares to anyone resident outside of the jurisdictions. A Shareholder who becomes aware that he has acquired or holds whether beneficially or otherwise affected Shares in any of the relevant circumstances set out above shall forthwith, unless he has already received a notice as mentioned above, either transfer all his affected Shares to a person qualified to own them without causing the adverse consequences set out above or give a request in writing to the ACD for the redemption of all his affected Shares. 4.9 Deferred redemption In order to protect the interests of continuing Shareholders in times of high redemptions, where requested redemptions exceed 10% of a Fund s value, and upon giving appropriate notice to Shareholders, the ACD will have the power to defer redemptions at a particular valuation point on a Dealing Day, to the Valuation Point on the next Dealing Day. This will allow the ACD to match the sale of Scheme Property to the level of redemptions, and should reduce the impact of dilution (as described in the section with the heading Dilution levy on page 12 of this Prospectus) on a Fund. Subject to sufficient liquidity being raised at the next Valuation Point all deals relating to the earlier valuation point will be completed before those relating to the later Valuation Point are considered. 4.10 In Specie Redemptions If a Shareholder requests the redemption or cancellation of Shares the ACD may, where it considers the deal to be substantial in relation to the total size of the Fund concerned, arrange that in place of payment of the price of the Shares in cash, the Company cancels the Shares and transfers the Scheme Property or, if required by the Shareholder, the net proceeds of sale of relevant the Scheme Property, to the Shareholder. Before the proceeds of the cancellation of Shares become payable, the ACD must give written notice to the Shareholder that the Scheme Property or the proceeds of sale of the Scheme Property will be transferred to that Shareholder. The ACD will select the Scheme Property to be transferred in consultation with the Depositary. They must ensure that the selection is made with a view to achieving no more advantage or disadvantage to the Shareholder requesting cancellation/redemption than to the continuing Shareholders. 4.11 Issue of Shares in exchange for in specie assets The ACD may arrange for the Company to issue Shares in exchange for assets other than cash, but will only do so where the ACD and Depositary are satisfied that the acquisition of those assets in exchange for the Shares concerned by the Company is not likely to result in any material prejudice to the interests of Shareholders or potential Shareholders. The ACD will ensure that the beneficial interest in the assets is transferred to the Company with effect from the issue of the Shares. The ACD will not issue Shares in a Fund in exchange for assets the holding of which would be inconsistent with the investment objective of the Fund. 4.12 Suspension of Dealing The ACD may, with the prior agreement of the Depositary, and must without delay if the Depositary so requires, temporarily suspend the issue, cancellation, sale and redemption of Shares in any or all of the Funds where due to exceptional circumstances it is in the interests of all the Shareholders in the relevant Fund or Funds to do so. The ACD and the Depositary must ensure that the suspension is only allowed to continue for as long as is justified having regard to the interests of Shareholders. The ACD will notify Shareholders as soon as is practicable after the commencement of the suspension, including details of the exceptional circumstances which have led to the suspension, in a clear, fair and not misleading way and giving Shareholders details of how to find further information about the suspensions. Where such suspension takes place, the ACD will publish details on its website or other general means, sufficient details to keep Shareholders appropriately informed about the suspension, including, if known, its possible duration. During the suspension none of the obligations in COLL 6.2 (Dealing) will apply but the ACD will comply with as much of COLL 6.3 (Valuation and Pricing) during the period of suspension as is practicable in light of the suspension. Suspension will cease as soon as practicable after the exceptional circumstances leading to the suspension have ceased but the ACD and the Depositary will formally review the suspension at least every 28 days and will inform the FCA of the review and any change to the information given to Shareholders. The ACD may, however, during the period in which the issue, redemption and switch of Shares is suspended, agree to issue, redeem or switch Shares at prices calculated by reference to the first Valuation Point after resumption of issue and redemption. 5. Other dealing information 5.1 Dilution levy Each Fund may suffer dilution (reduction) in the value of the Scheme Property as a result of the costs incurred in dealing in its investments and of any spread between the buying and selling prices of these investments. It is not, however, possible to predict accurately whether dilution will occur at any point in time. In order to mitigate this, the ACD may require the payment of a dilution levy. In cases where a dilution levy is made the value of the capital of the scheme property should not be materially affected by dilution. If charged, the dilution levy will be shown in addition to (but not part of) the price of Shares on their issue by the Company or sale by the ACD and as a deduction to the price of Shares on their cancellation by the Company or redemption by the ACD. The ACD has no entitlement to the dilution levy. It will either be paid into the relevant Fund, in the case of an issue of Shares by the Company or sale by 12