Article 27: Approval of the Authority and Consent of Unitholders to Fundamental

Article 27: Approval of the Authority and Consent of Unitholders to Fundamental

Changes

a) A fund manager must obtain the consent of the unitholders in the relevant fund to the proposed fundamental change by way of an ordinary fund resolution.

b) As an exception to paragraph (a) of this Article, the fund manager must obtain the consent of the unitholders in the relevant fund on the proposed fundamental change stipulated in sub-paragraph (9) of paragraph (e) of this Article by way of a special fund resolution.

c) A fund manager, after obtaining the consent of the unitholders specified in paragraphs (a) and (b) of this Article, must obtain the approval of the Authority in the proposed fundamental change to the fund.

d) As an exception to Paragraph (c) of this Article, the Fund Manager, must obtain the consent of the Authority before obtaining the consent of the unitholders in the proposed fundamental change to the fund, specified in Sub-Paragraph (10) of Paragraph (e) of this Article.

e) The term “fundamental change” means:

1) A significant change in the fund’s purposes, nature or class;

2) A change which may have a material adverse effect on the unitholders or their rights in relation to the closed-ended fund;

3) A change which alters the risk profile of the fund; or

4) The voluntary withdrawal of a Fund Manager from its position as the fund manager.

5) It usually causes unitholders to reconsider of their subscriptions in the closed-ended fund.

6) A change which results in any increased payments out of the assets of the closed-ended fund to a fund manager or any member of the fund board or an affiliate of either.

7) A change which introduces any new type of payment out of the assets of the closed-ended fund.

8) A change that materially increases other types of payment out of the assets of the closed-ended fund.

9) Change in the maturity date or termination of the closed-ended Fund.

10) Increase the total value of the ether fund assets by accepting cash or in-kind contributions, or both.

11) Any other cases determined by the Authority from time to time and reported to the Fund Manager.

f) The fund manager must obtain the fund board’s approval prior to any effecting fundamental change.

g) The fund manager must notify the unitholders and disclose details of fundamental changes on its website and any other website available to the public according to the controls set out by the Authority (10) days before of the date in which the change becomes effective.

h) Details of all fundamental changes shall be included in the next fund report prepared by the fund manager pursuant to Article (26) of these Regulations.

i) The unitholders of an open-ended fund have the right to redeem their units before any fundamental changes are effective; without incurring any redemption fees (if any).

j) A traded fund shall be exempted from the unitholders notification requirement set out in paragraph (g) of this Article, provided that the announcement of such is made on the fund manager’s website and the Exchange’s website.