المادة 72: Securities Advertisements and Promotional Materials

Article 72: Securities Advertisements and Promotional Materials

a. A securities advertisement which is communicated to unitholders or potential unitholders in relation to a public fund must satisfy the requirements of this Article and the applicable provisions of the Capital Market Institutions Regulations and the Securities Business Regulations.

b. Any securities advertisement relating to a public fund must include information about how to obtain a copy of the Fund's Terms and Conditions and fund reports to unitholders, and a reference to the disclosure in the Fund’s Terms and Conditions of the risks of investing in the fund.

c. If a securities advertisement includes performance information for a fund or any representations about the performance of a fund or its manager, the securities advertisement must comply with the following requirements:

1) total return information must be shown net of all actual historical expenses of the fund and the securities advertisement may include the total return of a fund that is gross of fees and expenses if the return is presented in addition to, and with no greater prominence than, returns of the fund that are net of actual expenses;

2) total return information for a fund must be presented in comparison to the total return for the same period of an appropriate index or other benchmark disclosed in the Fund’s Terms and Conditions. If the index or other benchmark does not include all elements of total return, the presentation must disclose what elements of return are not included in the index or other benchmark and how that omission affects the comparison of the fund’s total return to the index other benchmark; and

3) the securities advertisement must disclose that the value of an investment in a public fund is variable and may increase or decrease.

d. If any total return is shown for a fund, the securities advertisement must show total returns for periods of one, (3), (5) and (10) years (or since inception if the life of the fund is shorter than these periods, but no performance shall be provided for a period of less than one year).

e. Total returns shown for a fund in accordance with Paragraph (d) of this Article must be current through the end of the most recent calendar quarter (using the same calendar as for the preparation of the fund’s financial statements).

f. If there is any respect in which the fund performance information may be misleading to potential unitholders, the securities advertisement must include relevant explanatory disclosure of the circumstances relating to the performance information.

g. A securities advertisement must include the risk warnings required under the Capital Market Institutions Regulations, as applicable.

h. A securities advertisement may include a list of all of a fund’s portfolio holdings or a list of selected holdings. If a securities advertisement includes only a list of selected holdings, the holdings listed must be selected in an objective, balanced manner, and the securities advertisement must disclose the basis for selecting the holdings listed.

i. A securities advertisement may not include:

1) a projection or prediction of the total return or investment performance of the public fund or of unitholders of a public fund (except that a securities advertisement for a public fund with a guarantee or other principal protection feature may disclose any guaranteed minimum return); or

2) any form of testimonial, that is, statements about the experience of actual or fictitious unitholders of that fund or other funds with the same manager.

j. The fund manager must provide to the Authority copies of any securities advertisement communicated to unitholders or potential unitholders no later than (5) days following the first communication of such securities advertisement.