ACROPOLE CONVERTIBLES EUROPE PROSPECTUS ON 14 MARCH 2014 I – General characteristics 1-1 Form of the Fund Fund name: ACROPOLE CONVERTIBLES EUROPE Legal form and Member State in which the Fund was created: Investment fund (fonds commun de placement) governed by French law Creation date and expected term: 16 October 2006 – 99 years Investment management summary: Unit Initial Net Sub-Funds Classes Asset Value A I D
EUR 1,000 EUR 1,000 EUR 10,000
ISIN code
Distribution of income
Base Minimum Initial Currenc Target investors Subscription y Amount
No
FR0010377143
Accumulation
Euro
No
FR0010383448
Accumulation
Euro
No
FR0010979039
Distribution
Euro
All subscribers Institutional investors Institutional investors
Nil 2,500,000€(*) 2,500,000€(*)
(*) This minimum initial subscription amount, which is given as a number of units, is over 2,500,000 euro. This condition does not apply to asset management companies placing orders on behalf of UCITS.
The Fund may be used as an investment platform for life-insurance policies. Details of the place where the latest annual report and interim statement can be obtained: The latest annual and semi-annual reports shall be sent within one week upon written request by a unit holder to: FINANCIERE DE L’ECHIQUIER 53 avenue d’Iéna 75116 PARIS Tel. 33(0)1 47 23 90 90 Any request for additional information, if required, may be forwarded to the Financière de l’Echiquier Development Department, using the following website address: http://www.finechiquier.fr/en/who-are-we/contact-us/
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
I-2 Parties involved Management company: The management company was authorised on 17.01.91 by the French Financial Markets Authority (AMF) under number GP 91004 (general licence). FINANCIERE DE L’ECHIQUIER 53, avenue d'Iéna 75116 Paris
Depository and custodian: BNP PARIBAS SECURITIES SERVICES S.C.A, with its registered office at 3, rue d'Antin, 75002 Paris Postal address: Grands Moulins de Pantin, 9 rue du Débarcadère, 93500 Pantin BNP PARIBAS SECURITIES SERVICES (BP2S) is a credit institution authorised by the French supervisory body Autorité de contrôle prudentiel et de résolution (ACPR). It is also the issuer-accounting office (the fund's liabilities) and clearing house by delegation on behalf of the fund.
Auditor: MAZARS Represented by Gilles DUNAND-ROUX Exaltis 61, rue Henri Regnault 92075 La Défense Cedex
Promoter: FINANCIERE DE L’ECHIQUIER 53, avenue d'Iéna 75116 Paris The list of promoters is not exhaustive as the fund is admitted for trading on Euroclear. This means that some promoters may not be mandated by or known to the management company.
Delegated activities: Only the administrative and accounting management has been delegated: SOCIETE GENERALE SECURITIES SERVICES Net Asset Value Public limited company under French law Immeuble Colline Sud – 10, passage de l’Arche 92034 Paris La Défense Cedex
Advisers: None.
Clearing house: ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
BNP PARIBAS SECURITIES SERVICES is in charge of receiving subscription and redemption orders.
II - Operating and management procedures II-1 General features Characteristics of the unit classes: - Nature of the right attached to each unit class: every unit holder has a right of joint ownership over the Fund’s assets, which is proportional to the number of units held - Liabilities are held by BNP Paribas Securities Services; - Units are issued on EUROCLEAR FRANCE - Voting rights: no voting rights are attached to the units, as decisions are taken by the asset management company - Form of the units: all the Fund’s units are in bearer form - Unit Classes A (all subscribers) and Unit Classes I and D (institutional investors)
Year-end date: Date of the first financial year-end: last trading day on the Paris stock market in October 2007. Financial year-end date: last trading day on the Paris stock market in December each year. Exceptionally, in 2013 the fund will close on 31 October and on 31 December.
Tax regime: This prospectus is not exhaustive of all possible tax consequences for each investor of subscribing, redeeming, holding and selling fund units. These consequences will vary in line with prevailing laws and practices in the country of residence, domicile or incorporation of the unitholder(s) as well as on the basis of his/her/its personal circumstances. Depending on your tax regime, your country of residence, or the jurisdiction from which you invest in this fund, any capital gains and income from holding fund units may be subject to taxation. You should consult a tax adviser as to the possible consequences of buying, holding, selling or redeeming fund units under the laws of your country of tax residence, ordinary residence or of your domicile. Neither the Management Company nor the promoters accept any responsibility whatsoever for the tax consequences that may arise for investors as a result of a decision to buy, hold, sell or redeem fund units. The fund offers three capitalisation units; all unitholders are advised to consult a tax adviser regarding the regulations applicable in the unitholder’s country of residence, having regard to the rules pertaining to his/her/its particular circumstances (individual, legal entity subject to corporation tax, other situations…). The rules applicable to French resident unitholders can be found in the French General Tax Code. In general, fund unitholders should consult their tax adviser or their usual account manager to determine the tax rules applicable to their particular circumstances.
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II-2 Specific provisions .Classification: Diversified .Investment objective: The Fund actively manages European convertible bonds and equivalent securities, in order to generate an annual performance in excess of the benchmark, the «Exane Convertibles Index Europe».
.Benchmark index: For purposes of comparison in hindsight, unit holders may refer to the benchmark index: «Exane Convertibles Index Europe» (EECIEECI). This index is calculated in euros, with coupons reinvested.
II-2-a .Investment strategy: The Fund manages a portfolio of mixed European convertible bonds and equivalent securities on a discretionary basis. It invests mainly in convertible bonds, exchangeable bonds and similar securities issued by European companies. Convertible bonds usually enable investors to benefit from the upside in equities while benefiting from the protection provided by the bond component of the security. They also have an “asymmetrical” yield profile, since they capture a greater share of the markets’ performance when they rise than when they decline. The Fund emphasises investment in mixed convertible bonds, as they enable this asymmetry to be optimised. In fact, more than other securities, convertible bonds are sufficiently sensitive to movements in the equity markets to take advantage of market rises when they occur, because of their delta. However, they remain sufficiently close to their actuarial floor for that floor to provide protection in the event that markets fall. These securities, which have a high convexity level, are therefore particularly attractive, given their ability to capture performance in the event that markets rise and to minimise the impact of their falls in the opposite case. In order to maximise the risk-return ratio, management follows a strict process and is subject to systematic checks. The management process combines several complementary approaches:
a global allocation that involves exposure to the equity markets, to interest rates, to volatility and to credit a selection of underlying equities; a selection of convertible bonds according to their features, which enables performance and the risk linked to the underlying asset to be optimised.
The process therefore combines fundamental and quantitative analyses, and is based on specific convertible bond analysis. Moreover, it is in line with a thorough framework involving an in-depth analysis of sectors and sensitivity to equity markets. In fact, when seeking performance from this strategy, a greater emphasis is placed on the convertible bonds’ “equity” component than on the inherent bond characteristics (maturity, credit, etc.): managers will select securities where they believe that the underlying equity will appreciate in value while the credit remains stable or improves. Since an assessment by the risk managers of the credit linked to each issuer forms an integral part of the management process, the Fund does not set itself any particular limits in terms of external ratings. Investments in non-rated or high-yield securities may therefore represent up to 100% of the Fund’s assets. ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
As part of the more specific underlying asset selection process, the macro-economic process is followed by an analytical process which combines fundamental and quantitative analyses. A database and “scoring” method enables the full benchmark universe to be screened. The manager therefore rates the equities according to their valuation, their quality, their growth and their momentum. This analysis is meant to be a dynamic process, as it is performed according to different time horizons. The next stage consists in finding convertible bonds with features that reflect and optimise the predefined target portfolio. In this context, several criteria enable the convertible bonds that form the portfolio to be selected, including: -
Limiting the conversion premium Limiting the risk of loss Limiting the price of the contingent option Limiting the credit risk.
The Fund's assets are invested at all times between 60 and 100% in European convertible bonds and similar securities. This category also includes the synthetic exposure created by the fund managers with a view to replicating the risk profile of a convertible. Such a risk profile may be obtained, for instance, by investing in a negotiable debt instrument or a conventional bond and a share option. The Fund may invest up to a maximum of 10% of its assets directly in equities, although it is only likely to come close to that limit in situations where it is waiting to invest, or in very specific situations, such as when the convertible market is more expensive than the equity market, or when bonds convert into equities... In most cases, direct investment in equities is incidental. Regional and sector allocations among the various European markets are at the manager’s discretion. The portfolio’s sensitivity to interest rates is kept within the [0;7] interval. Managers may invest up to 10% of the Fund in UCITS units or shares when they consider that such an investment serves the management strategy, or when it is used to achieve a return on cash holdings. Derivatives may be used to address various kinds of portfolio risk, including currency (see below), equity and interest-rate risk, either as a hedge or to gain exposure (primarily to replicate the risk of a convertible bond and manage interest-rate sensitivity) and credit risk, but only to buy protection (single-name CDS or index-based). The Fund invests primarily in the exchange-traded futures markets (where there is a clearing house), but reserves the right to enter into OTC contracts. The Fund’s policy is to neutralise currency risk relating to investments in assets denominated in currencies other than the euro to the extent possible. It may also take into account the implicit currency risk that appears when a convertible bond and the underlying security are not denominated in the same currency, for example. The manager may also create net exposure to a currency, primarily when that currency is included in their benchmark index. Total net sensitive exposures (i.e. above 1%) to currencies other than the euro shall be less than 10% of net assets in all circumstances. Total risk on the Fund's financial contracts is calculated using the commitment calculation method, and is always less than 100% of net assets. 1. Assets (excluding embedded derivatives) The Fund may invest in all the asset categories listed below, with no sector constraints or dominant geographical region (within Europe). ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
a. Shares: The portfolio may invest directly in European equities within a 10% limit. The manager is only likely to approach that limit in situations where they are waiting to invest or in very specific situations, including where the convertible bond market is more expensive than the equity market, or in technical situations. In most cases, direct investment in equities is incidental.
Examples of technical situations include situations where shares are held: -
following the conversion of convertible bonds, following the exchange of exchangeable bonds, following a call by the issuer, following repayment in shares by the issuer, while waiting to build a synthetic convertible bond. b. Debt securities and money market instruments:
Between 60 and 100 % of the Fund’s assets are permanently invested in European convertible bonds and equivalent securities. This category also includes the synthetic exposure created by the fund managers with a view to replicating the risk profile of a convertible. A risk profile of this type may for example be obtained by investing in a negotiable debt security and in an equity option. The issuers of these instruments may be private or public companies based in Europe, or that have parent companies based there, or where the underlying assets are listed on European markets. These bonds, which are usually issued with maturities of between three and five years, include the following, inter alia: -
-
Bonds convertible into shares. Convertible bonds with equity warrants attached, low-coupon convertible bonds with a call premium, and OCEANE bonds (bonds convertible or exchangeable into new or existing shares) will also be an investment target; Index-linked bonds; Mandatory convertible bonds, ORANE bonds (bonds mandatorily redeemable into new or existing shares) and bonds with redeemable share subscription warrants; Bonds exchangeable into shares; Bonds with equity warrants attached and bonds with redeemable equity warrants attached.
The Fund may also invest in negotiable debt instruments, primarily to invest its short-term cash. c. UCITS: Managers may invest up to 10% of the Fund in UCITS units or shares when they consider that such an investment serves the management strategy, or when it is used to achieve a return on cash holdings. These UCITS may be governed by French law, and may be compliant or non-compliant with the Directive, or may be coordinated European funds, and may be classified as: bond, money-market, equity, diversified or alternative UCITS. The Fund may invest in UCITS managed by the asset management company or a related company. 2
Derivatives
Derivatives may be used to address various kinds of portfolio risk. The Fund invests primarily in exchange-traded futures markets (where there is a clearing house), but reserves the right to enter into OTC contracts, when these contracts are better suited to the management objective, or their transaction costs are lower. The Fund may use all types of futures and options. The main types of applications and of instruments likely to be used, depending on the risks involved, are as follows: ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Equity risk: as a hedge or to replicate the risk profile of a convertible bond; the instruments involved are options and futures. Interest rate risk: mainly to reduce or alter the portfolio’s sensitivity; the instruments are mainly futures and swaps. Credit risk: only to buy protection, through single-signature CDS or index-based instruments. Currency risk: the Fund’s policy is to neutralise currency risk relating to investments in assets denominated in currencies other than the euro to the extent possible. It may also take into account the implicit currency risk that appears when a convertible bond and the underlying security are not denominated in the same currency, for example. The manager may also create net exposure to a currency, primarily when that currency is included in their benchmark index. Total net sensitive exposures (i.e. above 1%) to currencies other than the euro shall be less than 10% of net assets in all circumstances. The instruments used are swaps and forward contracts. 3
Securities with embedded derivatives
When they are required or more beneficial, securities with embedded derivatives (EMTNs, BMTNs, and warrants, etc.) may be used instead of derivative assets or instruments, with the same purpose as that for which the latter would have been used. In this context, all the securities authorised by applicable regulations may be used. 4
Deposits
The Fund may make deposits within a 10% limit. 5
Cash borrowings
The Fund may borrow cash within the regulatory limits, in the event that its liabilities are adjusted. 6
Temporary purchases and sales
None
II-2-b.Risk profile: "Your money will mainly be invested in financial instruments selected by the Management Company. These financial instruments are subject to the market’s movements and fluctuations". Investors are reminded that there is a significant risk that the Fund may fail to achieve its own objectives as well as those expected by investors. The risk assumed by investors generally depends on the structure of their portfolios. Discretionary risk: The discretionary management style applied to the Fund is based on stock selection and on expectations of the performance of different markets. There is a risk that the Fund may not be invested in the best-performing securities at all times. The performance of the Fund therefore may not meet the investment objective. Furthermore the Fund's net asset value may show a negative performance. Risk of investing in convertible bonds: The value of convertible bonds depends on the following factors, among others: yield, credit rating, the equity, the price of the option built into the convertible bond. These factors may lead to a decline in the net asset value of the Fund. ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Risk of loss of capital: As the Fund is not guaranteed, investors may not get back all of the capital they initially invested. Equity market risk: Equity risk relates to a downturn in the equity markets; because the Fund has exposure to equities, the net asset value may fall sharply. Interest rate risks: The Fund is subject to interest rate risks. A portion of the portfolio may prove adversely sensitive to a rise in interest rates and thus lead to a decline in the net asset value of the Fund. Credit risk: This refers to the risk of a downgrading in the credit rating or the default of a private issuer. The value of debt securities in which the Fund has invested may fall, resulting in a decline in its net asset value. The risk is greater for high-yield securities, which may amount to up to 100% of the Fund’s assets, may lead to the risk of a more significant fall in the net asset value. Currency risk: Currency risk concerns the Fund’s investments that are denominated in non-euro currencies. This risk resides in the fluctuations of currencies in relation to the euro and mainly concerns currencies such as the US dollar, the Swiss Franc, Sterling and the Yen. Exposure to non-euro currency risk may not exceed 10% of the Fund’s net asset value. Counterparty risk: This involves the risk of default by a counterparty, which could lead to the latter defaulting on an over-the-counter transaction payment.
II-2-c.Subscribers concerned:
All subscribers.
The Fund is open to all subscribers and may be used as an investment option for unit-linked lifeinsurance policies. The Fund offers four unit classes: - one class open to institutional clients (I Class); - a second unit class open to all subscribers (A Class); - a third class open to institutional clients (D Class). An investor who subscribes to this Fund wishes to benefit from most of the upside in European equity markets while being affected to a lesser degree by any downturn in those markets. The reasonable amount to invest in this Fund depends on your personal situation. In order to determine that amount, you should consider your personal wealth and your current requirements, as well as whether you want to take risks or whether, on the contrary, you prefer a cautious investment stance. Furthermore, you are strongly advised to diversify your investments, in order not to be exposed solely to the risks of this UCITS. Recommended investment horizon: over 2 years.
II-2-d Income calculation and allocation procedures: accumulation, except for D class units for which income shall be distributed. Accounting currency denomination: euro ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Subscription and redemption procedures: Requests for subscriptions may only be made for a number of whole units. Requests for redemptions may only be made for a number of whole units. Orders may be received by your usual financial intermediary every day by 10.00 am at the latest. The requests are pooled by BNP PARIBAS SECURITIES SERVICES up until 11.00 am every day on which the net asset value is calculated (if the Paris Stock Exchange is open, or on the following trading day, except on official public holidays in France), and are executed on the basis of the next net asset value (i.e. at an unknown price). The related settlement is on the third trading day that is a business day and not a public holiday, following the day on which the net asset value is calculated. Date and frequency of net asset value calculations: The net asset value is calculated on every day on which the Paris Stock Exchange is open, or on the following trading day, except for official public holidays in France, on the basis of the closing prices. Initial net asset value: - I Unit Class: - A Unit Class: - D Unit Class:
Eur 1,000 Eur 1,000 Eur 10,000
Place where the net asset value will be published: the asset management company’s offices.
II-2-e Fees and commissions: Entry and exit charges: Entry and exit charges are levied in addition to the subscription price paid by the investor and are deducted from the redemption price. The commissions accruing to the UCITS are used to offset the costs borne by the UCITS when buying or selling the assets entrusted to it. Commissions not accruing to the UCITS revert to the asset management company, or to the marketer, etc. Fees payable by the investor and levied on subscriptions and redemptions
Base
Maximum rate/scale
Subscription commission not accruing to the UCITS
Net asset value
I Class Units : 4% Maximum rate A Class Units: 4% Maximum rate D Class Units: 4%
x Number of units
Maximum rate Subscription fees accruing to the UCITS Redemption commission not accruing to the UCITS Redemption commission accruing to the UCITS
Net asset value x Number of units Net asset value x Number of units Net asset value x Number of units
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Nil Nil Nil
Ongoing charges: These fees cover all the expenses invoiced directly to the UCITS, except for transaction costs. Transaction costs include intermediary fees (broking, stock exchange taxes etc.), and transfer commissions, which may be paid by the custodian and the asset management company, if applicable. The following charges are in addition to ongoing charges: performance fees. These reward the asset management company when the Fund exceeds its objectives. They are therefore invoiced to the Fund; - transfer fees charged to the Fund; - a portion of the income generated by the temporary acquisition and disposal of securities. -
1
Charges invoiced to the Fund Ongoing charges (including tax):
Base
Net assets
External management fees (auditors, custodian, distributors, legal advisors) 2
3
Transfer fees (paid to the asset management company) Outperformance fee
N/A
Rate/Scale (*) A Class Units: 1.40 % incl. tax I Class Units: 0.70% incl. tax D Class Units: 0.70% incl. tax Met by the asset management company
Payable per transaction
(1)
Net assets
Variable commission of 24% (inclusive of tax) of any performance that exceeds the «Exane Convertibles Index Europe» during the Fund's financial year. Exceptionally, the outperformance fee in 2014 will be calculated using a reference period from 1 November 2013 to 31 December 2014 in order to adjust the outperformance fee withdrawal date to the date of close of the accounting year.
(1) As the fund may invest up to 10% in fund units or shares, indirect fees may be taken. These fees are included in the ongoing charges (expressed as a percentage) taken during a year, presented in the KIID for each unit.
Performance fee: Variable commission of 24% (inclusive of all tax) of any performance that exceeds the «Exane Convertibles Index Europe». The reference period is the Fund’s financial year. The fee is calculated and deducted in the UCITS’ income statement at each net asset value calculation date. In the event that the UCITS underperforms the benchmark index before variable management charges are provisioned, this provision will be adjusted through a provision write-back. Provision write-backs are limited to the provision amount. In the event that the UCITS underperforms during a financial year (before a provision is charged for variable management charges), the maximum performance fees payable in respect of that year are limited to 1% of the Fund’s net assets. ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Commissions in kind Financière de l’Echiquier does not receive any commissions in kind, either on its own account or on account of third parties. Remuneration on temporary acquisitions: the Fund shall be able to enter into repurchase transactions at market conditions; the benchmark rate shall be the EONIA.
II-2-f Choice of intermediaries: Intermediaries will be selected on a completely independent basis by the asset management company, according to the prices charged and the quality of the service providers. The asset management company may not put its orders through just one intermediary.
III – Commercial information Requests for information and documents relating to the fund may be addressed directly to the management company: FINANCIERE DE L’ECHIQUIER 53, avenue d'Iéna 75116 Paris www.fin-echiquier.fr The net asset value of the fund is available from the management company itself upon request or on the company's website. Fund unitholders may obtain additional information from the company's website (www.finechiquier.fr) relating to consideration given in Financière de l'Echiquier's investment policy to environmental, social and quality of governance criteria. Additional information for investors in Austria The Paying- and Information Agent in Austria (the "Austrian Paying- and Information Agent") is Erste Bank der österreichischen Sparkassen AG Graben 21 A-1010 Wien Applications for the redemption and conversion of units may be sent to the Austrian Paying- and Information Agent. All payments to investors, including redemption proceeds and potential distributions, may, upon request, be paid through the Austrian Paying- and Information Agent. The full prospectus (composed of the Prospectus and the Investment Fund Rules), the KIIDs and the annual and semi-annual reports may be obtained, free of charge in hardcopy, at the office of the Austrian Paying- and Information Agent during normal opening hours. Issue, redemption and conversion prices of units and any other information to the unitholders are also available, free of charge in hardcopy form, from the Austrian Paying- and Information Agent. Additional information for investors in Germany WP Consulting, Lohweg 11, 50129 Bergheim, has undertaken the function of Information Agent for the Federal Republic of Germany (the “German Information Agent”). Furthermore, we want to point out that no investment units were issued as printed individual certificates. Applications for the redemption of units may be sent to the registered office of the ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Custodian in France: BNP Paribas Securities Services, 3 rue d’Antin, 75002 Paris. All payments to investors, including redemption proceeds and potential distributions may, upon ACE Prospectus 2013-10 (Austrian and German version)_EN - 14 - request, be paid through the Custodian in France. The full prospectus (composed of the Prospectus and the Investment Fund Rules), the KIIDs and the annual and semi-annual reports may be obtained, free of charge in hardcopy, at the office of the German Information Agent during normal opening hours. Issue and redemption prices of units and any other information to the unitholders are also available, free of charge, from the German Information Agent. The issue and redemption prices of units will be published on the fund’s website www.acropoleam.com. Any other information to the unitholders will be published on the fund’s website www.acropoleam.com. In addition, communications to investors in the Federal Republic of Germany by means of a durable medium (§ 167 Kapitalanlagegesetzbuch) in the following cases: suspension of the redemption of the units termination of the management of the fund or its liquidation any amendments to the fund rules which are inconstant with the previous investment principles, which affect material investor rights or which relate to remuneration and reimbursement of expenses that may be paid or made out of the asset pool merger of the fund with one or more other funds the change of the fund into a feeder fund or the modification of a master fund
IV – Investment rules Regulatory ratios applicable to the fund: The legal investment rules applicable to the fund are those that govern UCITS-compliant funds investing less than 10% of their assets in other such funds, as well as those applicable to its AMF classification "EU-COUNTRY EQUITIES". The fund has adopted the commitment method for the calculation of its overall risk.
V – Rules for valuing and recording assets The Fund complies with the accounting rules specified by applicable regulations, and specifically with UCITS accounting standards. All of the transferable securities making up the portfolio have been recognised at historical cost, excluding fees. The portfolio is valued at the time each net asset value is calculated and at the balance sheet cut-off date, according to the following methods: Transferrable securities negotiated on a regulated market: -
-
Listed securities: at their market value, including accrued dividends: closing price. The prices of foreign securities are converted into euros according to the exchange rate at the valuation date. Transferable securities for which prices have not been recorded on the day of valuation are valued at the last officially published rate or at their likely trading value, under the responsibility of the asset management company. UCITS: at the last known net asset value. Negotiable debt securities and swaps with a maturity of over three months: at market value. When the time to maturity becomes equal to three months, negotiable debt securities are
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
-
valued on a straight line basis to maturity. If they are acquired with less than three months to expiry, the interest is amortised on a straight-line basis. Unlisted securities: under the responsibility of the asset management company, taking the management report into account. Temporary acquisitions and disposals of securities are valued according to the conditions specified in the contract. Some fixed-income transactions that have over three months until maturity may be subject to valuation at the market price.
Forward financial instruments French and European markets: daily closing price on the day of valuation. Markets in the American region: previous day closing price. Option market commitments are calculated by converting the options into the equivalent underlying securities. Swap commitments are valued at market value. Currency forward contracts are valued at the closing exchange rate on the day of valuation, taking the premium/discount amortisation into account.
Method for recognition of interest Interest on bonds and debt securities is recorded according to the accrued interest method.
Allocation of net income Income will be capitalised in full for A and I Unit Classes. Income will be distributed in full for the D Unit Class.
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ADDITIONAL INFORMATION FOR INVESTORS IN GERMANY
Right to publicly market shares in Germany FINANCIERE DE L’ECHIQUIER (the “Company”) has notified its intention to publicly market shares in the Federal Republic of Germany and since completion of the notification process it has the right to publicly market shares. Paying and Information Agent in Germany The function of paying and information agent in the Federal Republic of Germany is carried out by: Marcard, Stein & Co AG Ballindamm 36 20095 Hamburg Germany (the “Paying and Information Agent”). Redemption applications may be sent to the Paying and Information Agent for onward transmission to the Company. Shareholders residing in Germany may request that they receive payments (redemption proceeds, distributions, if any, and any other payments) from the Company through the Paying and Information Agent. Copies of the sales prospectus (including the rules of the fund), the key investor information document (KIID) as well as the audited annual account and, if subsequently published, the unaudited half-yearly account may be obtained free of charge in paper form at the registered office of the Paying and Information Agent. Furthermore, the subscription and redemption prices are available free of charge at the Paying and Information Agent. Publications In Germany, the subscription and redemption prices will be published on www.fin-echiquier.fr/de. Shareholder notifications, if any, will be published in the Federal Gazette (“Bundesanzeiger”). In the cases enumerated in Sec. 122 (1) Sentence 5 of the German Investment Act (“InvG”), shareholders additionally will be notified by means of a durable medium in terms of Sec. 42a InvG.
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
RULES FOR THE ACROPOLE CONVERTIBLES EUROPE MUTUAL FUND HEADING 1 – ASSETS AND UNITS
Article 1 – Co-ownership units The rights of the co-owners are expressed in units, with each unit representing the same fraction of the fund’s assets. Each unitholder has a right of co-ownership of the fund’s assets in proportion to the number of units held. The duration of the fund is 99 years from the date of its creation, except in the event of its early dissolution or extension as provided for in these rules. Unit classes: The characteristics of the various unit classes and their access conditions are specified in the fund's prospectus. The various share classes may: - Benefit from different methods of income distribution; (distribution or capitalisation) - Be denominated in different currencies; - Have different management fees; - Have different subscription and redemption fees; - Have a different nominal value; - Include systematic total or partial risk hedging, as set out in the prospectus. Said hedging is provided by means of financial instruments, thus minimising the impact of hedging transactions on other unit classes in the fund; Be restricted to one or more sales networks. The fund has scope to amalgamate or divide its units. The fund management company’s board of directors may decide to divide the units into tenths, hundredths, thousandths or ten thousandths, known as fractions of units. The rules governing the issue and redemption of units are applicable to fractions of units whose value will remain proportional to the value of the unit that they represent. All other rules pertaining to units apply to fractions of units without it being necessary to specify this, except where stipulated otherwise. Lastly, the fund management company’s board of directors may decide to divide units by creating new units that are allocated to unitholders in exchange for old units. Article 2 - Minimum amount of asset No units may be redeemed if the assets of the fund (or a sub-fund) fall below EUR 300,000. If the assets remain below this threshold for thirty days, then the management company shall make the necessary provisions to wind up the fund in question, or to perform any of the operations referred to in Article 411-16 of the General Regulation of the AMF (fund transfers).
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Article 3 – Issue and redemption of units Units may be issued at any moment at the request of unitholders, based on their net asset value plus subscription fees, where applicable. Redemptions and subscriptions are executed according to the terms and conditions defined in the prospectus. The mutual fund units may be listed on an official stock exchange according to prevailing regulations. Subscriptions must be fully paid up on net asset value calculation day. They may be paid in cash and/or by transfer of marketable securities. The fund management company has the right to refuse the proposed securities and, to this effect, has a period of seven days from their submission to communicate its decision. In the event of acceptance, the proposed securities are valued according to the rules set out in Article 4 and the subscription is executed on the basis of the first net asset value following said acceptance. Redemptions are paid solely in cash, except in the event of the fund’s liquidation and where unitholders have indicated that they agree to be reimbursed in securities. Redemptions are settled by the issuance account holder within five days of the unit valuation. In exceptional circumstances, however, if reimbursement requires assets included in the fund to be realised beforehand, this period may be extended to up to 30 days. Except in the event of inheritance or an inter vivos gift, the sale or transfer of units between unitholders, or from unitholders to third parties, is treated as a redemption followed by a subscription; in the case of a third party, the amount of the sale or transfer must, where appropriate, be topped up by the beneficiary so as to attain at least the minimum subscription required by prospectus. In application of Article L. 214-8-7 of the French Monetary and Financial Code, the redemption by the fund of its units, as well as the issue of new units, may be temporarily suspended by the management company where required by exceptional circumstances and in the interests of the unitholders. When the mutual fund’s net assets are lower than the amount set out in the rules, the redemption of units is not permitted. Possibility of minimum subscription conditions, as set out in the prospectus. The fund may cease to issue shares, pursuant to paragraph two of Article L. 214-8-7 of the French Monetary and Financial Code, in objective situations entailing the closure of subscriptions, such as the issue of a maximum number of units or shares, a maximum amount of assets achieved or the expiry of a determined subscription period. Said objective situations are set out in the fund prospectus. Article 4 – Net asset value calculation The net asset value shall be calculated in accordance with the valuation rules specified in the prospectus.
HEADING 2 – OPERATION OF THE FUND ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
Article 5 – The fund management company The fund is managed by the fund management company in accordance with its defined orientation. The fund management company acts in all circumstances on behalf of the unitholders and is the sole entity that can exercise the voting rights attached to the securities included in the fund. Article 5b - Operating rules The instruments and deposits eligible for the fund’s assets, together with the investment rules, are described in the prospectus. Article 6 – The depository The custodian carries out the missions entrusted to it, pursuant to the legal and regulatory provisions in force, as well as those contractually assigned to it. It must notably satisfy itself as to the legality of all the decisions taken by the portfolio management company. Where necessary, it must take whatever precautionary measures are required. In the event of a dispute with the management company, it shall inform the AMF. Article 7 – The auditor Subject to approval by the AMF, the fund management company’s board of directors appoints an auditor for six financial years. The auditor carries out the controls and preparatory work provided for by law. Upon each audit, it certifies the true and fair nature of the accounts and of the accounting material contained in the management report. The auditor may have its mandate renewed. The auditor must promptly notify the AMF of any information or decision relating to the undertaking for collective investment in transferable securities of which it became aware in the course of its duties, and which could: 1) Constitute a breach of the laws or regulations governing this undertaking, and which may significantly affect its financial position, results or assets and liabilities; 2) Adversely affect the operations or its ability to continue as a going concern; 3) Give rise to qualifications or a refusal to certify accounts. The auditor shall supervise the valuation of assets and the calculation of exchange ratios for conversions, mergers or spin-offs. The auditor shall assess all contributions in kind as part of its responsibilities. It shall check the asset allocation and other items prior to publication. The auditor’s fees are agreed jointly with the board of directors or management board of the management company on the basis of an audit plan detailing the work deemed necessary. The auditor shall certify the financial statements used to calculate interim dividends.
Article 8 – The accounts and management report
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
At the end of each financial year, the fund management company prepares the summary accounting documents and a report on the management of the fund during that financial year. The inventory is certified by the depository and all of the above documents are audited by the auditor. The fund management company keeps these documents available to unitholders in the four months following the end of the financial year and informs them of the amount of revenues to which they are entitled. The documents are either sent by mail at the express demand of unitholders or made available at the fund management company’s premises.
HEADING 3 – INCOME DISTRIBUTION PROCEDURES
Article 9 Net income for the financial year is equal to the amount of interest, arrears, dividends, premiums and bonuses, directors’ fees and all proceeds relating to securities in the fund’s portfolio, plus the proceeds of sums temporarily available and less management fees and borrowing costs. The sums distributable are equal to the net income for the financial year, plus retained earnings and plus or minus the balance of revenue accrual accounts relating to said financial year. The fund management company decides the appropriation of income. The sums distributable are fully capitalised, with the exception of those for which distribution is mandatory by virtue of law.
HEADING 4 – MERGER –DE-MERGER – DISSOLUTION - LIQUIDATION
Article 10 – Merger - Demerger The fund management company may either transfer all or some of the assets included in the fund to another fund that it manages, or divide the fund into two or more mutual funds that it will manage. These merger or de-merger transactions may take place no earlier than one month after the unitholders have been notified. They occasion the delivery of a new certification specifying the number of units held by each unitholder. Article 11 – Dissolution - Extension If the fund’s assets remain below the amount set out in Article 2 above for a period of 30 days, the fund management company informs the AMF and proceeds with the dissolution of the fund, except in the event of a merger with another mutual fund. The fund management company may dissolve the fund early. In this case, it informs the unitholders of its decision, and subscription and redemption requests are no longer accepted as of this date. ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-
The fund management company also dissolves the fund in the event of a redemption request concerning all the units, the cessation by the depository of its functions – providing that no other depository has been appointed – or the expiry of the fund’s duration, providing said duration has not been extended. The fund management company informs the AMF by mail of the date and method of dissolution. It then sends the auditor’s report to the AMF. The fund management company may decide to extend the duration of the fund in agreement with the depository. This decision must be taken at least three months before the expiry of the fund’s planned duration and communicated to unitholders and the AMF.
Article 12 - Liquidation In the event of dissolution, the depository or the fund management company is responsible for undertaking liquidation operations. Failing this, the liquidator shall be appointed by the court at the request of any interested party. To this effect, they are invested with the broadest powers for the purposes of realising assets, paying any creditors and allocating the available balance between unitholders in the form of cash or securities. The auditor and the depository continue to exercise their functions until liquidation operations have been completed.
HEADING 5 - DISPUTES
Article 13 - Jurisdiction - Choice of Domicile All disputes relating to the fund and arising during the duration of the fund’s operations or during its liquidation, whether between unitholders or between unitholders and the management company or the depository, are subject to the jurisdiction of the competent courts.
ACE Prospectus 3.14.2014 _ EN for Germany and Austria and Austria-