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Standard prospectus template of a specialised professional fund (common funds (FCP)
and open-ended investment companies (SICAV))
This document forms Annex III.1 to the AMF instruction on procedures for making disclosures and
introducing changes, preparation of a prospectus and reporting for specialised professional funds and
professional private equity funds – DOC-2012-06
For specialised professional funds set up as a French limited partnership (société de libre partenariat –
SLP), the prospectus comprises their rules and articles of incorporation, which must contain the
information available in Annex III-4 to the AMF instruction on procedures for making disclosures and
introducing changes, preparation of a prospectus and reporting for specialised professional funds and
professional private equity funds – DOC-2012-06
I. General characteristics
1° Form of the specialised professional fund.
For specialised professional funds, the prospectus begins with the following disclaimers:
“AIF X is a specialised professional fund. It is an AIF that is not authorised by the Autorité des Marchés
Financiers and whose operating rules are set down in the prospectus. Before investing in this specialised
professional fund, you must understand how it will be managed and what are the specific risks linked to
the management approach taken. In particular, you must familiarise yourself with the specific operating
and management conditions and procedures of this specialised professional fund:
- Investment and commitment rules;
- Conditions and procedures for the subscription, purchase and redemption of units and shares;
- The net asset value below which the fund will be wound up.
These conditions and procedures are set out in the rules or the articles of incorporation of the
specialised professional fund, in Articles [8, 8a and 23 of the articles of incorporation (in the case of
an open-ended investment undertaking) / 3, 3a and 11 of the rules (in the case of a common fund)],
as are the conditions under which the rules and articles of incorporation may be amended.”
“Only those persons referred to in the “Investors concerned” section may subscribe or buy
[units/shares] in the specialised professional fund X.”
Exceptionally, this second disclaimer is not included if the specialised professional fund is marketed
exclusively outside France and the subscription and purchase of units or shares in this specialised
professional fund is reserved for investors not resident in France.
2° Name:
a) For common funds, name;
b) For open-ended investment undertakings, name or business name, registered office and postal
address, if different.
3° Legal form and Member State in which the specialised professional fund was formed;
4° Date of establishment and expected duration;
5° Summary of investment management proposal;
6° List of sub-funds and different unit classes;
7° Investors concerned (in accordance with Article 423-27 of the AMF General Regulation);
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Standard prospectus template of a specialised professional fund – Annex III.1 to AMF instruction DOC2012-06
8° Minimum subscription amount for each sub-fund or unit class;
9° ISIN;
10° Date and frequency of calculation of net asset value;
11° Medium and procedures used for the publication or communication of the net asset value.
This information is to be presented in a table to ensure that the overall investment management proposal
is understandable.
Example:
Sub-fund 1:
Units
Characteristics
ISIN
Distribution policy
Base currency
A
FR ........................
Accumulation
EUR
B
FR .......................
Income
USD
Other (specify)
Sub-fund 2:
Units
Characteristics
ISIN
Distribution policy
Base currency
A
FR ........................
Accumulation
EUR
B
FR .......................
Income
USD
Other (specify)
12° Where reporting documents, the latest annual report, the latest net asset value of the specialised
professional fund and, where applicable, information about past performance can be obtained.
The latest annual and periodic statements are sent within one week at the request of the holder. Requests
should be sent to:
Company name
Address
Telephone (optional)
Email: [email protected]
These documents can also be found online at www.company.fr (where applicable).
Provide a contact (person/department, time, etc.) for obtaining any further explanations necessary.
State how and when the information required by the fourth and fifth paragraphs of Article 421-34 of the
AMF General Regulation is disclosed.
In the case of a specialised professional feeder fund, include the following information: “Information
documents about the master UCITS or AIF .................................... , incorporated in .................................... and
authorised by .................................... , can be obtained from:
Company name
Address
Telephone (optional)
Email: [email protected]”.
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II. Parties
This section lists the contact information of all the parties involved in the management, custody, auditing and
distribution of the AIF, as well as the obligations upon those parties.
1° Management company.
Name or business name, legal form, registered office and postal address, if different.
Describe, in accordance with IV of Article 317-2 of the AMF General Regulation, how the management company
complies with requirements to protect against potential professional liability risks in connection with its
management of the AIF.
2° Depositary and custodians.
Name or business name, legal form, registered office and postal address, if different.
Main activity of:
a) The depositary;
Where applicable, describe any safe-keeping function delegated by the depositary and any conflicts of
interest that may arise from such delegations.
b) The custodian (specialised professional fund assets);
c) Institutions in charge of centralising subscription and redemption orders (with full responsibility or
under delegation in accordance with Article 422-45 by reference from Article 423-26 of the AMF
General Regulation);
d) The institution maintaining unitholder and shareholder records (fund administration for the specialised
professional fund).
Where applicable, in accordance with Articles 323-35 and 421-34 of the AMF General Regulation, the specialised
professional fund or its asset management company should inform investors, before they invest in the fund, of any
arrangements made by the depositary to discharge itself contractually of its liability in accordance with the
third and fourth paragraphs of Article L.214-24-10 of the Monetary and Financial Code. The professional
fund or its management company should also inform unitholders or shareholders without delay of any
changes affecting the depositary’s liability.
3° Prime broker(s).
The prime broker is a legal entity:
a) Performing clearing and settlement of transactions initiated by a management company for a UCITS
or AIF;
b) Acting as a key counterparty in derivative contracts entered into by an AIF, enabling the latter to
implement its investment strategy, by providing the necessary financing;
Name or business name, legal form, registered office and postal address, if different.
State whether the prime broker is also the delegated custodian for the depositary.
Describe main activity.
A description of any material arrangements of the AIF with its prime brokers and the way conflicts of
interest in relation thereto are managed and the provision in the contract with the depositary on the
possibility of transfer and reuse of AIF assets, and information about any transfer of liability to the prime
broker that may exist.
4° Auditor
Name or business name, registered office, signatory.
5° Marketing agents.
Name or business name, legal form, registered office and postal address, if different.
6° Person responsible for ensuring that criteria relating to the status of investors or buyers are complied
with and that investors or purchasers receive the requisite information.
This person may in particular be:
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a) The depositary;
b) The management company or the open-ended investment undertaking;
c) Any person marketing the units or shares of the specialised professional fund.
This section should not be completed if the specialised professional fund is marketed exclusively outside
France and the subscription and purchase of units or shares in this specialised professional fund is
reserved for investors not resident in France.
Name or business name, legal form, registered office and postal address, if different.
7° Delegated functions.
This section lists the following information for all the delegated functions, including investment,
administrative and accounting functions, within the meaning of Article 313-771 or 318-582 of the AMF
General Regulation:
a) Name or business name of the company;
b) Provisions of contracts with the management company or the investment company that are relevant
to investors, except for those dealing with compensation;
c) A summary of the other activities of the company to which a function has been delegated;
d) Any conflict of interest such as might arise from the delegation of functions.
8° Advisors.
Information about investment advice firms or outside investment advisors, as long as the use of their
services is provided for by contract directly or on behalf of the specialised professional fund. This does not
concern services provided to the management company or the open-ended investment undertaking for its
overall activities that are not directly related to an AIF or a range of AIFs.
a) Name or business name of the advisor;
b) Provisions of contracts with the management company or the investment company that are relevant
to investors, except for those dealing with compensation;
c) A summary of the other activities of the company or the advisor.
The advisor does not make decisions on behalf of the specialised professional fund; such decisions are
the business and responsibility of the open-ended investment undertaking or the management company
of the common fund.
9° For open-ended investment undertakings:
a) Names and job titles of the members of the board of directors or members of the executive board and
supervisory board of the open-ended investment undertaking;
b) Brief description of their main activities outside the company that are relevant to the company.
III.
Operating and management procedures
This section deals with all the operating and management procedures of the specialised professional
fund.
To provide a clearer picture of umbrella funds, the prospectus deals with the operating procedures in two
separate sections: one section described in I describes the arrangements that are common to all subfunds and a specific section, described in II, deals with the specific features of the sub-fund.
General characteristics
This section contains the following information:
1° Characteristics of the units or shares:
a) ISIN. If there are several unit classes or sub-funds, the ISIN should be provided in II only;
b) Nature of the rights attaching to the class of units or shares;
1
For asset management companies subject to Title I, Book III of the AMF General Regulation with regard to their AIF
management business.
2
For asset management companies subject to Title I bis, Book III of the AMF General Regulation with regard to their
AIF management activities (authorisation under the AIFM Directive) or the equivalent domestic law provision for
management companies authorised in accordance with Directive 2011/61/EU in a European Union Member State other
than France.
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c) Recording in a unitholder or shareholder register or specification of the fund administration
procedures;
d) Voting rights:
- For open-ended investment undertakings, describe the voting rights attaching to the shares;
- For common funds, mention that units do not provide voting rights, since the management company
makes the decisions;
e) Nature of units or shares: registered / bearer;
f) Potential stock splits;
g) If applicable, whether units are admitted to trading on a regulated market or multilateral trading facility,
and the admission requirements.
2° Closing date:
Specify the date on which the accounting year ends.
3° Information about tax rules (where relevant);
Details of deductions at source (where applicable).
Individual characteristics
The individual characteristics describe the specific features of the investment management proposed by
the specialised professional fund or for each sub-fund of the specialised professional fund:
1° ISIN.
2° Classification.
Definition of classifications
The management company announces the classification of the specialised professional fund from among the
possibilities on offer.
Classification is subject to the permanent compliance of the specialised professional fund with certain
criteria that must be stipulated in the “investment strategy” section in the prospectus of the fund. It is up to
the manager of the specialised professional fund to decide whether to provide any further explanations.
The classification represents the actual exposure of the specialised professional fund. This exposure must
be calculated according to the formula set out below. The different classes are defined below.
The nationality of the issuer is defined with regard to the country where its registered office is located
(including cases where the issuer is a subsidiary located in a different country from its parent company).
In the specific case of securitisation products or special purpose vehicles with other underlying assets, the
nationality of the issuer is the nationality of the underlying assets. However, the place of registration of the
issuing vehicles must be mentioned in the prospectus.
Specialised professional funds falling within the “equity” classes must have 60% exposure or more to
equity markets at all times. The classification then depends on the location of the equities that the
specialised professional fund holds.
The notion of incidental exposure mentioned in following articles means the consolidated sum of the
exposure to the specific risks described. This means that the contribution of all these risks to the overall
risk profile of the specialised professional fund must be minor. Exposure of more than 10% of the assets
to specific risks cannot be qualified as incidental exposure. On the other hand, merely complying with a
10% exposure threshold in itself is not enough to qualify as an incidental specific risk. The notion of
incidental risk must be captured by assessing the nature of the risks incurred and the contribution that the
relevant assets make to the overall risk profile and the potential return of the specialised professional
fund.
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“French equities” AIF
The AIF has at least 60% exposure to the French equity market at all times. Exposure to exchange rate
risk or to markets other than the French market must be incidental.
The “investment strategy” section must mention the minimum exposure of the AIF to the French equity
market.
“Euro area equities” AIF
The AIF has at least 60% exposure to markets for equities issued in one or more euro area countries at all times,
including possibly exposure to the French market.
Exposure to exchange rate risk or to foreign markets outside the euro area must be incidental.
The “investment strategy” section must mention the minimum exposure of the AIF to euro area equity markets.
“European Union equities” AIF
The AIF has at least 60% exposure to markets for equities issued in one or more European Union countries
at all times, including possibly exposure to the euro area markets.
Exposure to exchange rate risk for currencies other than the euro or the other European Union currencies
must be incidental.
Exposure to market risks other than within the European Union must be incidental.
The “investment strategy” section must mention the minimum exposure of the AIF to the relevant equity
markets.
“International equities” AIF
The AIF has at least 60% exposure to a foreign equity market or to equity markets in several countries at
all times, including possibly exposure to the French market.
The “investment strategy” section must mention the minimum exposure of the AIF to the relevant equity
markets.
“Euro-denominated fixed-income” AIF
The AIF is exposed to fixed-income securities denominated in euros at all times. Exposure to equities is less than 10%
of net assets.
Exposure to securities not denominated in euros and exposure to exchange rate risk must be incidental.
The “investment strategy” section of the prospectus must provide a table showing the range of interest-rate
sensitivity within which the AIF is managed, the location of the issuers (or the underlying assets for
securitisation vehicles) of the securities that the AIF is exposed to, along with the relevant exposure
ranges.
If the range of credit spread sensitivity is materially different from the range of interest rate sensitivity, the
credit spread sensitivity must be mentioned in the “investment strategy” section of the prospectus.
“International fixed-income” AIF
The AIF is exposed to fixed-income securities denominated in other currencies than the euro at all times
(and possibly to euro-denominated fixed-income securities).
Exposure to equities is less than 10% of net assets.
The “investment strategy” section of the prospectus must provide a table showing the range of interest-
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rate sensitivity within which the AIF is managed, the currencies of the securities that the AIF holds, the
level of exchange rate risk incurred, the locations of the issuers (or the underlying assets for securitisation
vehicles) of the securities that the AIF is exposed to, along with the relevant exposure ranges.
If the range of credit spread sensitivity is materially different from the range of interest rate sensitivity, the
credit spread sensitivity must be mentioned in the “investment strategy” section of the prospectus.
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Standard prospectus template of a specialised professional fund – Annex III.1 to AMF instruction DOC2012-06
“Short-term money market” and “money market” funds
This article is based on CESR's Guidelines on a common definition of European money market funds,
dated 19 May 2010.
I. General provisions:
1 Any collective investment marketed or labelled as a money market fund must adopt these provisions.
2 A money market fund shall clearly indicate in its full prospectus whether it is a “short-term money
market fund” or a “money market fund”.
3 A money market fund shall provide appropriate information about its risk/reward profile so that
investors can identify specific risks stemming from its investment strategy.
II. A “short-term money market” fund must:
1. Have the primary objective of maintaining the principal of the fund and aim to provide a return in line
with money market rates.
2. Invest in money market instruments that comply with the criteria in Directive 2009/65/EC, or in term
deposits with credit institutions.
3. Ensure the money market instruments it invests in are of high quality, as determined by an internal
process for gauging high quality, in the context of which the open-ended investment undertaking or
the management company must take into account a range of factors including, but not limited to:
a) The creditworthiness of the instrument;
b) The nature of the asset class represented by the instrument;
c) For structured financial instruments, the operational and counterparty risk inherent within the
investment structure;
d) The liquidity profile.
4. For the purposes of point 3.a), the fund may, if appropriate – though not exclusively – refer to the
short-term credit ratings by credit rating agencies registered with the ESMA that have rated the
instrument and which the “short-term money market” fund deems most relevant. However, the fund
must take care to avoid systematically relying on these ratings.
5. Limit investment in securities to those with a residual maturity until the legal redemption date 1 of no
more than 397 days. The residual maturity means the period remaining before the legal redemption
date.
6. Have a net asset value based on a daily valuation and provide daily subscription and redemption of
shares/units.
7. Ensure that its portfolio has a Weighted Average Maturity (WAM) calculated according to the
procedures defined in CESR's Guidelines of 19 May 2010 under the heading “definitions” of no more
than 60 days.
8. Ensure that its portfolio has a Weighted Average Life (WAL) calculated according to the procedures
defined in CESR's Guidelines of 19 May 2010 under the heading “definitions” of no more than 120
days.
9. When calculating the WAL for securities, including structured financial instruments, base the
maturity calculation on the residual maturity until the legal redemption date of the instruments.
However, when a financial instrument embeds a put option, the exercise date of the put option may be
used instead of the legal residual maturity only if the following conditions are fulfilled at all times:
1
The legal redemption date means the deadline that is contractually agreed in the security’s issue documentation.
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a) The option can be freely exercised by the fund at its exercise date;
b) The exercise price of the put option is close to the anticipated valuation of the financial instrument at
the nearest exercise date;
c) The investment strategy means that there is a strong probability that the option will be exercised at the
nearest exercise date.
10. Take into account, for both the WAL and WAM calculations, the impact of financial derivatives, term
deposits and the techniques and instruments used for efficient investment management (in accordance
with the criteria defined in Article R.214-32-20-IV of the Monetary and Financial Code).
11. Not incur direct or indirect exposure to equity or commodities markets, including via derivatives; and
use derivatives only in line with its money market investment strategy. Derivatives that give exposure to
the foreign exchange market may be used only for hedging purposes. Investment in non-base currency
securities is allowed, provided the exchange rate exposure is fully hedged. (For example, a fund
denominated in EUR cannot hold investments denominated in USD that are not hedged against
EUR/USD exchange rate risk. However, a fund denominated in USD can hold investments denominated
in USD that are not hedged against EUR/USD exchange risk);
12. Limit its investment in other collective investments to those that comply with the “short-term money
market” classification;
13. Have either a constant or a fluctuating net asset value.
III. A “money market” fund must:
1. Comply with points 1, 2, 3, 4, 6, 9, 10 and 11 of Article II above.
Furthermore, a “money market” fund:
2. Must have a fluctuating net asset value;
3. Must limit its investment to securities with a residual maturity of no more than two years, provided the
time remaining until the next interest rate reset date is no more than 397 days. Floating rate securities
should reset to a money market rate or index;
4. Ensure that its portfolio has a Weighted Average Maturity (WAM) calculated according to the procedures
defined in CESR's Guidelines of 19 May 2010 under the heading “definitions” of no more than six months;
5. Ensure that its portfolio has a Weighted Average Life (WAL) calculated according to the procedures
defined in CESR's Guidelines of 19 May 2010 under the heading “definitions” of no more than 12
months;
6. Must limit its investment in other collective investments to those that comply with the definitions of a
“money market fund” or a “short-term money market fund”.
“Funds of hedge funds”
I. The fund has more than 10% exposure to:
1°Shares or units of AIFs or foreign investment funds meeting the criteria set down in point 5 of Article
R.214-32-19, including those investing more than 10% of their assets:
a) In units or shares of UCITS governed by Article D.214-22-1 or AIFs governed by Article D.214-32-31;
b) In units or shares of French UCITS, AIFs governed by paragraphs 1, 2 and 6 of Sub-section 2, of subparagraph 1 of paragraph 1 or paragraph 2 of Sub-section 3 of this section; or
c) In units or shares of AIFs established in other Member States of the European Union or foreign
investment funds invested under conditions identical to those mentioned in b of point 4 of Article R.21493; or
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d) In units or shares of AIFs or investment funds mentioned in point 5 of Article R.214-32-19 whose
investment objective corresponds to the change in an index of financial instruments meeting the criteria
set down in I of Article R.214-32-25;
2° Shares or units of specialised professional funds;
3° Shares or units of alternative funds of funds governed by Article L.214-140 or professional investment
funds governed by Article L.214-144;
4° Shares or units of UCITS covered by a streamlined procedure governed by Article L.214-35 as worded
prior to 2 August 2003;
5° Units of futures funds referred to in Article L.214-42 as worded prior to the date of publication of Order
2011-915 of 1 August 2011 on UCITS and the modernisation of the legal framework for asset
management;
6° Units or shares of feeder UCITS referred to in Articles L.214-22 and L.214-224-57 or, under the
conditions set down in the AMF General Regulation, units or shares of foreign feeder funds whose master
fund meets the criteria set down in point 5 of Article R.214-32-19.
II. A specific disclaimer relating to this management approach is included in the prospectus.
III. The “investment objective” section of the prospectus must indicate an investment objective with
reference to investments in funds applying alternative investment strategies.
IV. The “investment policy” section of the prospectus must mention:
1° The maximum percentage of exposure to the instruments mentioned above;
2° The nature of alternative investment strategies. Where, in contrast to customary practice, the
management company or the open-ended investment undertaking does not rule out concentrating the
fund’s exposure in a small number of investment strategies, the prospectus should draw the attention of
investors to this point;
3° The maximum planned distribution or the target exposure range for each strategy;
4° The nature of underlying funds, with their geographic origin and listing venue (at least indicate whether
underlying funds have been incorporated or formed in OECD or non-OECD member countries);
5° Limits on investments in collective investment undertakings of collective investment undertakings and
in unlisted collective investment undertakings.
V. The “risk profile” section of the prospectus mentions a relevant quantitative risk measurement indicator.
VI. The “subscription and redemption terms and conditions” section of the prospectus mentions:
1° The minimum initial subscription amount;
2° A specific warning if there is a notice period for redemptions.
Charges relating to underlying funds are mentioned in the prospectus as for UCITS of UCITS.
“Structured fund” AIF
I. In accordance with the provisions of Article R. 214-32-39, the investment objective of a structured fund
is to reach a predetermined amount at the end of a set period through the mechanical application of a
predefined formula based on financial market indicators or financial instruments, and to distribute income
that is determined in the same manner, as the case may be.
The words “structured [common fund / open-ended investment undertaking]” are added to the “investment
strategy” section of the prospectus. This section must include a specific investment objective for the
formula.
II. The minimum recommended holding period is replaced by the “duration of the formula” in the
prospectus, which must stipulate the investment period necessary to benefit from the formula.
III. The “risk profile” section of the prospectus includes a special mention if the provider has not
established an official auditable procedure for selecting and assessing intermediaries and counterparties.
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IV. The “guarantee” section of the prospectus must mention the special features of the guarantee. The
“classification” section of the prospectus must be followed with the following language:
“Guarantee”, followed by, depending on the circumstances: “Capital guarantee at maturity” or “The
[common fund / open-ended investment undertaking /] does not provide a capital guarantee at maturity”.
V. When rates of return are indicated for formula patterns, they must be expressed directly in the form of
yield to maturity or their yield to maturity equivalent must be given.
“Diversified” AIF
I. This category covers all UCITS or AIFs that are not part of another category. The investment objective
must stipulate the nature of the investment management implemented, specifying:
a. Full discretionary management;
b. Risk-profiled management.
II. If the investment profile does not correspond to any other classification, this point must be explained in
the “investment strategy” section of the specialised professional fund’s prospectus.
III. The “investment strategy” section of the specialised professional fund’s prospectus must also mention
any exchange rate risk for French residents.
3° Delegation of investment management:
Provide the name of the delegated manager for sub-funds, where applicable. If different sub-funds do not
exist, this information is not required.
4° Presentation of the sections.
All techniques and instruments used (in compliance with the assets provided for in Article L.214-154 of the
Monetary and Financial Code) must be mentioned in the prospectus. The techniques and instruments used must
be consistent with the management style proposed, the resources of the management company or open-ended
investment undertaking and the programme(s) of activity approved by the AMF.
Specific techniques and instruments must be precisely described in the prospectus. The specialised professional
fund may not acquire instruments not mentioned in the prospectus. The use of derivatives must be described in
economic terms, with details of each management technique used.
Example: exposure to the X index of 100% to 130% of assets, representing leverage of 1.3.
For example, the following instruments may be mentioned:
- Conventional financial instruments;
- Futures and options traded on a regulated market;
- Forward foreign exchange transactions;
- Simple interest rate swaps (fixed rate/variable rate – variable rate/fixed rate – variable
rate/variable rate).
The following instruments are deemed to be specific instruments:
- OTC options;
- Credit derivatives;
- Swaps other than those mentioned above, equity swaps, swaps with embedded options, etc.;
- Instruments with embedded derivatives (warrants, EMTNs, Other);
- Securitisation vehicles (FCT, FCC, ABS, MBS, CDO, Other);
- Retail private equity investment funds (FCPR);
- Innovation funds (FCPI);
- Temporary purchases and sales of securities with or without special features, particularly with regard to
compensation;
- Instruments with uncertain liquidity or valuation (unlisted securities, controlled loans, other);
- Other than the instruments mentioned above, any financial instruments eligible for inclusion in the
assets of a specialised professional fund and whose purchase is under consideration.
The sections are the following:
a) Investment objective
This section should give a precise description of the investment objective pursued by the specialised
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professional fund, avoiding general phrases such as “capital enhancement”. The investment objective
must be independent of the types of securities investments planned. However, it may be supplemented
with information about the main asset classes that will be included in the asset composition of the
specialised professional fund or that will be representative of its exposure.
b) Benchmark
The purpose of this section is to provide a yardstick that investors can use to compare the
performance of the specialised professional fund and the risks incurred by it. Depending on the
investment objective of the specialised professional fund, the information disclosed to investors and
the nature of the risks incurred, this benchmark may be a narrowly focused indicator or else a broad
market index, an index recognised by the AMF or any other relevant indicator. This section must
include the name of the benchmark used and a description as well as, where applicable, the targeted
correlation or any other information that may be used to assess the fund’s performance against the
benchmark. If the management company or the open-ended investment undertaking considers that a
benchmark may not be used or might mislead investors, this section should mention and explain this.
c) Investment strategy
The purpose of this section is to explain how the management company or open-ended investment
undertaking will work to achieve the investment objective. Generally speaking, this section must
include:
- A description of the strategies used. The prospectus provides a full description of the different
strategies used to achieve the investment objective. Where applicable, it must specify:
• Any special strategies involving business or geographical sectors, or other types of sectors;
• Whether the specialised professional fund has a strategy to build up a diversified portfolio of
assets;
• Whether the fund has dealings in specific categories of assets;
• The management style used (e.g. relationship between the benchmark and the performance objective
of the fund, or a strategy based on seeking absolute returns);
• The circumstances in which the AIF can use leverage, and authorised types and sources of leverage.
- Description of the categories of assets and derivatives that the specialised professional fund intends
to invest in and how they contribute to achieving the investment objective.
For assets other than embedded derivatives, the prospectus must mention all the asset classes that
will make up the assets of the specialised professional fund. Where applicable, it must also include
the following:
- Financial instruments other than equities, debt securities and money market instruments: description of
the main characteristics of the planned investments;
- Equities: The main characteristics of the planned investments (if they are not redundant with regard
to the information described above), and in particular:
• Distribution of issuers by area and/or business sector;
• Small/medium/large capitalisations;
• Other selection criteria (specify).
- Debt securities and money market instruments: The main characteristics of the planned investments (if
they are not redundant with regard to the information described above), and in particular:
• Breakdown between corporate and government paper;
• Planned level of credit risk;
• Legal nature of the instruments used;
• Duration or sensitivity;
• Other characteristics (specify).
- Shares or units in other French collective investments, foreign UCITS, AIFs established in another
Member State of the European Union or foreign investment funds, specifying:
• Whether they are French or foreign UCITS;
• Whether they are AIFs or other collective investments, specifying the types of funds concerned;
• Whether they are alternative investment funds, specifying whether they are listed;
• Other investment funds (specify).
If the AIF is a fund of funds, state where the underlying funds are established.
If the specialised professional fund purchases collective investments referred to in Article 311-1 A, AIFs or
investment funds managed by the provider or an affiliated company, this must be stated in the
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prospectus of the specialised professional fund in accordance with Article 313-241 or Article 318-142 of
the AMF General Regulation.
The prospectus must state for each of the above categories:
• The holding periods that will be applied;
• Whether there are investments in financial instruments from emerging countries (outside the OECD);
• Whether the management company or the open-ended investment undertaking is subject to any
investment restrictions;
• Whether there are other criteria (specify).
In the case of derivatives, the prospectus must state:
- The nature of the markets that the fund deals in:
• Regulated markets;
• Organised markets;
• OTC markets.
- The types of investments the manager wishes to make:
• Equities;
• Interest rates;
• Foreign exchange;
• Credit.
- The nature of the dealing, since all transactions must be restricted to achieving the investment
objective:
• Hedging;
• Exposure;
• Switching;
• Other (specify).
- The nature of the instruments used:
• Futures;
• Options;
• Swaps broken down by contract type, such as: interest rate swap, currency swap, credit
default swap, total return swap;
• Currency futures;
• Credit derivatives;
• Other (specify).
The derivatives trading strategy used to achieve the investment objective:
• General portfolio hedging, hedging specific risks, securities, etc.;
• Reconstitution of a synthetic exposure to assets or to risks;
• Increasing market exposure and refining the maximum authorised leverage sought.
• Other (specify).
Specialised professional funds must reject any vague language, such as “using futures subject to
regulatory limits”, which makes it impossible to make a proper assessment of the instruments and
strategies used.
In the case of securities with embedded derivatives (warrants, credit linked notes, EMTNs, etc.), the
prospectus must state:
- The types of investments the manager wishes to make:
• Equities;
• Fixed income;
• Foreign exchange;
• Credit;
• Other (specify).
- The nature of the dealing, since all transactions must be restricted to achieving the investment
objective:
• Hedging;
• Exposure;
• Switching;
1
For asset management companies subject to Title I, Book III of the AMF General Regulation with regard to AIF
management.
2
For asset management companies subject to Title I bis, Book III of the AMF General Regulation with regard to AIF
management (authorisation in accordance with the AIFM Directive).
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• Other (specify).
- The nature of the instruments used;
- The embedded derivatives strategy used to achieve the investment objective.
In the case of cash deposits, the prospectus must state the characteristics and level of use of such
deposits and describe how they contribute to achieving the investment objective.
In the case of cash borrowing, the prospectus must contain information about the techniques and
instruments or the borrowing authorisations that are likely to be used in running the specialised
professional fund.
In the case of temporary purchases and sales of securities, the prospectus must include a general
description and a justification of the securities financing transactions used by the AIF. Furthermore, the use
of such transactions must be described accurately:
- The type of transaction used:
• Repurchase and reverse repurchase agreements with reference to the Monetary and Financial Code;
• Securities lending and borrowing with reference to the Monetary and Financial Code;
• Other (specify).
- The nature of the dealing, since all transactions must be restricted to achieving the investment
objective:
• Cash management;
• Optimising the income of the specialised professional fund;
• Contributing to the leverage of the specialised professional fund;
• Other (specify).
- The types of assets that might be involved in such transactions;
- The planned and authorised level of use: the maximum proportion of assets under management
that can be used in such transactions and the expected proportion of assets under management
that will be used in such transactions must be stated;
- Potential leverage.
- The criteria used to select counterparties (including legal form, country of origin and minimum
credit rating).
As with the information disclosures required for securities financing transactions listed above, the AIF
prospectus must also supply information on any total return swaps (TRS) used:
- A general description and a justification of the TRS used by the AIF;
- General data for each type of TRS, in particular:
• the types of assets that can be involved in such swaps,
• the maximum proportion of assets under management that can be used in such swaps,
• the expected proportion of assets under management that will be used in such swaps.
- The criteria used to select counterparties (including legal form, country of origin and minimum
credit rating).
Compensation: statement that further information can be found in the section on charges and fees.
- The maximum level of use of various instruments.
- The generally desired level of use of the various instruments, which corresponds to the routine use of
such transactions planned by the manager.
- Where applicable, any restrictions on the use of leverage, together with any procedures for the reuse
of collateral or assets.
The maximum level of leverage which the management company is entitled to employ on behalf of
the AIF1.
The information provided in the “investment strategy” section of the prospectus meets the disclosure
requirement stemming from Article 313-612 or 318-473 of the AMF General Regulation.
1
According to Articles 7 and 8 of Commission Delegated Regulation (EU) No. 231/2013 of 19 December 2012.
For asset management companies subject to Title I, Book III of the AMF General Regulation with regard to their AIF
management activities.
3
For asset management companies subject to Title I bis, Book III of the AMF General Regulation with regard to their
AIF management activities.
2
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This disclosure does not have any effect on the other risk management methods and measures that the
management company or open-ended investment undertaking must establish in accordance with
Articles 313-53-4 to 313-53-71 and 318-38 to 318-432 of the AMF General Regulation.
Providing an updated version of the prospectus through the GECO database meets the annual filing
requirement for this information set out in Article 313-61 and 318-47.
5° Financial guarantees.
Explicit mention must be made of the fact that the specialised professional fund is entitled to provide
guarantees to third parties. This section provides details about:
a) The nature of the guarantees given by the specialised professional fund;
b) The nature of the commitments of the specialised professional fund that may require such
guarantees;
c) The nature of the parties benefiting from the guarantees.
In addition to a description of the types of assets that are acceptable as collateral received in securities
financing transactions and swaps used by the vehicle, the prospectus must describe the issuer, maturity,
liquidity and diversification of the collateral and its policies regarding correlation.
The prospectus must indicate the custody arrangements for the assets involved in securities financing
transactions or TRS and any collateral received (for example, with a fund depositary), as well as any selfimposed or regulatory restrictions on the reuse of collateral.
6° Special case of feeder funds.
The “investment strategy” section must:
a) State that the specialised professional fund is fully invested in another UCITS or AIF or in cash and
give the name of said UCITS or AIF;
b) Reproduce the “Investment objectives” and “investment strategy” sections of the prospectus of the
master UCITS or AIF;
c) Where applicable, state that the specialised professional feeder fund will deal in forward markets and
specify the nature and the impact of the dealing in forward markets by the specialised professional
feeder fund, indicating, where applicable, that the use of forward markets substantially alters the
exposure of the specialised professional feeder fund compared to a simple direct investment in that
other UCITS or AIF.
To prevent confusion, all the text quoted from the prospectus of the master UCITS or AIF must be clearly
identifiable as such (different font, different colour, etc.).
7° Special case of umbrella specialised professional funds.
If plans call for sub-funds to subscribe units or shares in other sub-funds of the same umbrella specialised
professional fund, the prospectus must state that this is the case and specify the maximum percentage of
assets of the sub-fund invested in other sub-funds of the same umbrella specialised professional fund, as
well as the maximum percentage of each sub-fund’s assets that can be held by another sub-fund of the
same umbrella specialised professional fund.
8° Risk profile.
The purpose of this section is to provide relevant information about the risks associated with the
techniques used to which investors are exposed. This section should not be limited to a description of the
instruments in which the specialised professional fund is invested. It should be able to inform investors about
the specific risks to the specialised professional fund linked to particular markets or asset classes (for
example: volatility, liquidity risk, concentration of the portfolio on certain markets, asset classes or specific risks).
The prospectus is intended to provide a detailed and ranked description of these risks.
For example:
a) Statement of the specific characteristics of the specialised professional fund, particularly with respect
to classifications (minimum exposure to equities market, sensitivity, foreign exchange risk, etc.);
b) Potential impact of the use of derivatives on the risk profile;
c) Specific statement when the net asset value is likely to be highly volatile because of the composition of the
1
For asset management companies subject to Title I, Book III of the AMF General Regulation with regard to their AIF
management activities.
2
For asset management companies subject to Title I bis, Book III of the AMF General Regulation with regard to their
AIF management activities.
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portfolio or the investment management techniques that may be used, or if a money market fund is sensitive
to credit risk;
d) The risk that the specialised professional fund will fail to meet its performance objectives or investors’
objectives (specifying that the latter risk depends on the allocation of the investors’ portfolios);
e) The risk that the capital invested will not be fully returned;
f) The impact of inflation;
g) For specialised professional funds only: Liquidity restrictions stemming from special subscription or
redemption clauses;
h) The risks arising from the use of a prime broker (e.g. risk that the latter will reduce the level of
financing provided, risk stemming from the reuse of securities);
i) Risks stemming from the existence of flexible risk diversification rules and major leverage;
j) Risks stemming from potential changes in other areas (tax rules, for example);
k) Risks associated with the use of leverage.
l) Risks related to securities financing transactions and total return swaps (TRS), as well as risks related
to managing collateral: regulations require that the prospectus include a description of the risks
related to securities financing transactions and TRS, as well as risks related to managing collateral,
such as operating risk, liquidity risk, counterparty risk, custody risk and legal risk, and – if applicable –
risks related to the reuse of collateral.
9° Guarantees or protection.
Among other things, this section specifies all the technical characteristics of the guarantee or protection,
such as the procedures for substituting underlying assets and the mathematical formulas.
10° A description of the main legal implications of the contractual relationship entered into for the purpose of
investment, including information on jurisdiction, on the applicable law and on the existence or not of any
legal instruments providing for the recognition and enforcement of judgments in French territory.
10° Investors concerned and typical investor profile.
The purpose of this section is to state which investors can access the specialised professional fund and
what type of investors it is designed for.
(Give details by unit class, where applicable).
Therefore, this section must:
a) State whether the specialised professional fund is:
- For all investors;
- For all investors, but more especially X (e.g. all investors, but more especially designed for use with unitlinked insurance policies from a given insurance company);
- Dedicated to a maximum of 20 unitholders;
- Dedicated, more specifically, to X (for example, dedicated to subsidiaries of group K).
b) Specify the types of investors concerned, using the list in Article 423-27 of the AMF General
Regulation.
c) State that the specialised professional fund is exclusively marketed outside France (potentially
specifying in which countries). It may be subscribed only by non-French residents.
Where the specialised professional fund is intended to be marketed to a particular type of investor,
this shall be precisely described in the prospectus.
d) Explain the typical investor profile that the specialised professional fund was designed for and the
recommended holding period. Where it is relevant the description of the typical investor profile is
supplemented by information about:
- The risk aversion or appetite of the intended investors;
- The proportion of the customers’ investment portfolios or net worth that can reasonably be invested in the
specialised professional fund;
- Along with a warning about the need to diversify investments.
e) The recommended holding period must be consistent with the investment objective and strategy and the
classes of instruments that the specialised professional fund invests in.
11° Procedures for determining and applying income
(Give details by unit class, where applicable.)
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12° Distribution frequency.
(Give details by unit class, where applicable.)
13° Characteristics of the units or shares (base currencies, fractional units, etc.)
(Give details by unit class, where applicable.)
Optional clause (N.B.: this information must in any event be made available to investors)
Under the conditions laid down in Article 422-23 of the AMF General Regulation, the prospectus must
include a description of how the management company ensures a fair treatment of investors and,
whenever an investor obtains preferential treatment or the right to obtain preferential treatment, a
description of that preferential treatment, the type of investors who obtain such preferential treatment and,
where relevant, their legal or economic links with the specialised professional fund or the management
company.
14° Subscription and redemption procedures.
To provide the clearest possible information, the procedures and conditions for subscription and
redemption must be provided in this section, with all charges and fees described in the corresponding
section.
(Give details by unit class, where applicable.)
a) Subscription procedures and conditions including the minimum initial subscription amount, where
applicable, dates and times for order reception;
b) Information about stock exchanges or markets where the units are listed and traded and stipulation
that a specific prospectus linked to the listing is available (specify how to obtain this prospectus);
c) Options provided to restrict or suspend subscriptions and redemptions;
d) For specialised professional funds:
- Describe any mandatory notice periods;
- Describe any lock-up period for redemption orders;
- Describe any lock-up period for subscription orders;
e) Address of the body designated to receive subscription and redemption requests;
f) Redemption procedures and conditions, suspension options, procedures for switching to another subfund and tax consequences;
g) Procedures for switching to another unit class and tax consequences;
h) Determination of the net asset value and, in particular:
- Method used and frequency with which the net asset value is calculated;
- Information about the means, places and frequency of net asset value publication;
i) A description of the AIF’s liquidity risk management, including the redemption rights both in normal and
in exceptional circumstances, and the existing redemption arrangements with investors;
15° Charges and fees.
(Give details by unit class, where applicable.)
The purpose of the prospectus is to provide an exhaustive description of charges, fees and compensation
paid to different parties and intermediaries, along with further information (indirect management fees, for
example)
a) Subscription and redemption fees are added to the subscription price paid by the investor or
subtracted from the redemption price. The fees accruing to the specialised professional fund
cover the expenses that the fund incurs in investing or disinvesting the assets under
management. The fees that do not accrue to the fund are paid to the management company, the
sales agent, etc.
This information must be presented in a table:
Charges paid by the investor and
deducted from subscriptions and
redemptions
This translation is for information purposes only
Base
Rates
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Subscription fee
not accruing to the specialised professional
fund
Net asset value
x
Number of units/shares
A%, A%
maximum rate, or
special procedures (range,
etc.)
Subscription fee
accruing to the specialised professional
fund
Net asset value
x
Number of units/shares
B%, or special procedures1
(applying
to
all
subscriptions)
Redemption fee
not accruing to the specialised professional
fund
Net asset value
x
Number of units/shares
C%, C%
maximum rate, or
special procedures (range,
etc.)
Redemption fee
accruing to the specialised professional
fund
Net asset value
x
Number of units/shares
D% or special procedures2
(applying
to
all
redemptions)
This information must be supplemented with appropriate data if a specific fee structure is applied.
b)
c)
d)
management fees;
external administrative charges;
Maximum indirect charges (management fees and charges). In the case of a specialised
professional fund that invests more than 20% of its assets in other French collective investments,
foreign UCITS, AIFs established in another Member State of the European Union or foreign
investment funds, state the maximum level of direct and indirect management fees;
e) Movement commissions. The scale of movement commissions to be included in the prospectus
must explain:
- The bases used for:
• Transactions;
• Corporate events;
• Other transactions;
- The rates or amounts applied to these different items (for the sake of simplicity, specialised
professional funds may state a maximum rate for all instruments);
- How the costs are allocated to the different parties.
It must also include a brief description of the procedure for selecting intermediaries and any
applicable comments.
Since, in exceptional cases, a sub-custodian may charge a movement fee for a specific transaction that is
not provided for in the above procedures, the description of the transaction and the movement fees
charged must be provided in the specialised professional fund’s management report.
f)
Outperformance fee
This information must be presented in a table:
1
Charges invoiced to the specialised professional
fund
Management fees3
Base
Rates
Net assets
X% including tax
Maximum rate
1
For example in the case of antidilution levies
For example in the case of antidilution levies
3
Management fees are explained in detail in AMF Position-Recommandation DOC-2011-05
2
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2
3
External administrative charges1
Maximum indirect charges (management fees and
charges)
Net assets
X% including tax
Maximum rate
Net assets
X% including tax
Maximum rate
4
Movement commissions
Charged
for
transaction
5
Outperformance fee
Net assets
each
Scale:
H% for equities
I% for bonds
Other
F%
of
performance in
excess of G
(including tax)
Only the expenses listed below can fall outside the five blocks of charges cited above, in which case they
must be cited below:
contributions due in respect of management of the AIF in accordance with section II, 3, d) of
Article L 621-5-3 of the Monetary and Financial Code;
exceptional, non-recurring taxes, levies, fees, and government duties (related to the AIF);
exceptional, non-recurring legal expenses stemming from debt collection (e.g. Lehman Brothers)
or a lawsuit to assert a right, such as a class action lawsuit.
Information on these charges must be provided ex post in the AIF annual report.
Prospectuses for AIF created from 8 November 2016 onward must take into account the new terms
“management fees” and “external administrative charges” and the new numbering system for the blocks of
charges. The prospectuses of AIF created prior to 8 November 2016 must be updated to reflect the new
terms at the next opportunity for amending the prospectus, and by 8 November 2017 at the latest.
The management company has the option to:
merge the management fees and external administrative charges;
add a maximum total rate for charges that includes management fees, movement commissions
and indirect charges. Thus, the management company may indicate, for example, that “the
maximum total rate for charges shall be X% of net assets annually”.
If the management company or the open-ended investment undertaking prefers a fixed real rate, it may
display a simplified table with the single rate.
The scale of movement commissions to be included in the prospectus must explain:
The bases used for:
• Transactions;
• Corporate events;
• Other transactions;
- The rates or amounts applied to these different items (for the sake of simplicity, specialised
professional funds may state a maximum rate for all instruments);
- How the costs are allocated to the different parties.
It must also include a brief description of the procedure for selecting intermediaries and any
applicable comments.
Since, in exceptional cases, a sub-custodian may charge a movement fee for a specific transaction that is
not provided for in the above procedures, the description of the transaction and the movement fees
charged must be provided in the specialised professional fund’s management report.
Policy for sharing revenues generated by securities financing transactions: the prospectus must state what share
1
External administrative charges are explained in detail in AMF Position-Recommandation DOC-2011-05
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of revenues generated by securities financing transactions is paid to the AIF, and the costs and fees paid to the
management company or a third party, for example, the lending agent. The prospectus must also indicate
whether these parties have any ties to the management firm.
16° Tax rules.
Tax rules of the specialised professional fund and information about eligibility (PEA, DSK and other
schemes) (Optional)
Warning: Depending on the tax rules that apply to you, capital gains and any income linked to holding the
units of this specialised professional fund may be subject to taxation. We recommend that you contact the
marketing agent of the specialised professional fund for more information.
IV. Marketing information
This section must provide information about the measures taken for:
1° Distributing income;
2° Repurchasing or redeeming units;
3° Disseminating information about the specialised professional fund;
If the units are marketed in another Member State, the above information must be provided with regard to
that Member State and included in the prospectus disseminated there.
V. Investment rules
For specialised professional funds, this section reprints in full:
a) In the case of an open-ended investment undertaking: Article 8a of the articles of incorporation, on
investment and commitment rules. This section also states that the procedures for amending these
rules are set out in Article 23 of the articles of incorporation.
b) In the case of a common fund: Article 3a of the rules, on investment and commitment rules. This
section also states that the procedures for amending these rules are set out in Article 5 of the rules.
VI. Risk monitoring
This section describes the risk assessment and monitoring procedures put in place for management of
specialised professional fund. It identifies, where applicable, financial indicators, such as VaR, volatility,
maximum loss, that are appropriate for the strategy implemented and that allow the investor to understand
the nature of the risks and quantify them.
VII. Asset valuation and accounting rules
I. The asset valuation rules are based on valuation methods and practical procedures that are explained
in the notes to the annual financial statements and in the prospectus. Responsibility for establishing the
valuation rules lies with the board of directors or the executive board of the open-ended investment
undertaking, or, in the case of a common fund, the management company.
II. The prospectus explains the valuation methods for each class of financial instruments, deposits or
securities (in compliance with the assets provided for in Article L.214-154 of the Monetary and Financial
Code), including the methods used for hard-to-value assets, and the practical procedures for valuing these
assets. The valuation methods set out the general valuation principles with reference to a market trade or
to specific methods set out in the specialised professional fund’s chart of accounts. These principles are
used to define the practical valuation procedures. “Practical procedures” must be taken to mean, with
regard to each piece of information needed to value assets (yield curve, stock exchange, etc.), the
information sources needed to value assets and, where applicable, the time of day for gathering such
information. These practical procedures ensure that the net asset value is calculated exactly the same
way each time. The prospectus must also provide for alternative practical procedures for use in the event
that the financial data needed to make the valuation are not available, and for notification of the auditor of
the fund if they are implemented.
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For example:
1° In the case of equities, the valuation method calls for the latest known prices to be used when the
valuation of the specialised professional fund is made, whereas the practical procedures specify a time for
each of the regulated markets used and whether opening or closing prices must be used;
2° In the case of money market instruments, the valuation method specifies which options in the chart of
accounts are to be used and the practical procedures specify the information sources and rates to be
used.
The template for this paragraph of the prospectus is as follows:
“Financial instruments and securities traded on a regulated market are valued... However, the instruments
listed below are valued using the following specific methods:
- Financial instruments that are not traded on a regulated market are valued...
- Derivatives are valued...
- Deposits are valued...
- Other instruments.
Financial instruments where the price is not noted on the valuation day or where the price has been
corrected must be valued at their likely trade price by the board of directors or the executive board of the
open-ended investment undertaking or, in the case of a common fund, by the management company.
These valuations and the relevant documentation shall be submitted to the auditor during audits.
Description of other alternative practical procedures for valuation and cases where they are used.”
The prospectus must describe and justify the valuation method used for collateral involved in securities
financing transactions and total return swaps, and state whether or not the method entails daily marking to
market and daily variation margins.
III. This section must specify the method used to recognise income from financial instruments (cum
dividend, ex-dividend, inclusion of weekend interest, other) and transaction charges (charges included or
charges excluded, by class of instrument, where applicable).
VIII. Additional information
This specialised professional fund (or sub-fund) was disclosed to the Autorité des Marchés Financiers on
... (dd/mm/yyyy). It was formed on ... (dd/mm/yyyy). (The formation date corresponds to the fund deposit
certificate for common funds and the date of registration in the RCS for open-ended investment
undertakings).
The prospectus of the specialised professional fund and the latest annual report and periodic statements
are sent within one week at the written request of the unitholder. Requests should be sent to:
Name
Address
Telephone (optional)
Email: [email protected]
These documents can also be found online at www. company.fr, (where applicable).
Provide a contact (person/department, time, etc.) for obtaining any further explanations necessary.
If the specialised professional fund is a feeder fund, include the following information: “Information
documents about the master UCITS or AIF ........................., incorporated in ............................., authorised
by ......................., can be obtained from:
Name
Address
Telephone (optional)
Email: [email protected]
The publication date of the prospectus: dd/mm/yyyy
The AMF website, www.amf-france.org, contains additional information on the list of regulatory documents
and all the provisions relating to investor protection.
This prospectus must be provided to investors before they subscribe.
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Specific provisions
Master and feeder funds
I. The classification of the feeder fund is the same as that of the master fund, unless: the futures market trading
of the specialised professional feeder fund alters its exposure and requires a change in its classification.
II. If the account closing date of the specialised professional feeder fund is different from that of the master
UCITS or AIF, a technical memo must be filed with the AMF explaining the reasons for the difference (the dividend
date of the master UCITS or AIF is not a valid reason), and the measures taken to ensure that the unitholders and
shareholders of the feeder fund enjoy equivalent disclosure and treatment to that which they would enjoy as
unitholders or shareholders of the master UCITS or AIF.
III. The prospectus must mention the direct charges stemming from the specialised professional feeder
fund and the indirect charges stemming from the master UCITS or AIF.
Umbrella AIFs
The prospectus describes the characteristics and specific features of all the sub-funds.
Guaranteed AIFs
I. The guarantee must be granted to the AIF or to the unitholders or shareholders by an institution cited in
Article R.214-32-28 of the Monetary and Financial Code.
II. The nature of the guarantee and its characteristics must be clearly set out in the relevant section. The
information must include:
1° The level of the guarantee:
- full capital guarantee;
- partial capital guarantee.
2° Whether the guarantee includes front-end charges;
3° Subscription dates for obtaining the guarantee;
4° Dates on which the guarantee will be granted;
5° Whether the guarantee is granted to the AIF or directly to the unitholders or shareholders. If the
guarantee is granted directly to the unitholders or shareholders and they are required to request
redemption of their units or shares on a specific date to benefit from the guarantee, this requirement must
be pointed out in a warning that specifies the final net asset value that is guaranteed, along with the
deadline for submitting redemption orders. If the guarantee requires action by the unitholders or
shareholders, such as making a request for redemption at a set net asset value, they must be alerted
individually by letter in a timely manner if there is any likelihood that it will be in their interest to redeem
their units or shares.
AIF investing in other French collective investments, foreign UCITS, AIFs established in another
Member State of the European Union or foreign investment funds
I. Any specialised professional fund must also specify the level of exposure that it is allowed to have to
French collective investments, foreign UCITS, AIFs established in another Member State of the European
Union or foreign investment funds:
1° Less than 10% of the net assets;
2° Less than 20% of the net assets;
3° Less than 50% of the net assets;
4° Up to 100% of the net assets.
II. Disclosure of indirect charges:
If the specialised professional fund invests more than 20% of its assets in the units or shares of French
collective investments, foreign UCITS, AIFs established in another Member State of the European Union
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Standard prospectus template of a specialised professional fund – Annex III.1 to AMF instruction DOC2012-06
or foreign investment funds, the impact of indirect charges and fees must be included in the total current
charges disclosed in the prospectus.
Assessing the exposure of the specialised professional fund
In addition to physical investments, the assessment must include derivatives transactions, futures, options
and similar investments, along with securities with embedded derivatives, in order to measure the exposure
of the specialised professional fund. Equity and bond warrants, calls, puts, CVRs, ADRs, EDRs and other
financial instruments where the underlying assets are financial instruments are to be classified according to
the category of the underlying assets.
The exposure to the specified category must be maintained at all times. The manager does not have to
calculate this exposure each time the net asset value is determined, but must be able to justify the
classification of the specialised professional fund to the AMF or the statutory auditors on demand.
The exposure of a specialised professional fund invested in other French collective investments, foreign
UCITS, AIFs established in another Member State of the European Union or foreign investment funds is
calculated on a transparent basis. Several calculation methods can be used, depending on the amount
of information available about the underlying fund:
- first, assess the actual exposure of the underlying French collective investments, foreign UCITS, AIFs
established in another Member State of the European Union or foreign investment funds to the markets in
question;
- failing that, assess the minimum percentages of exposure to the relevant markets indicated in the
regulatory documents of the underlying French collective investments, foreign UCITS, AIFs established in
another Member State of the European Union or foreign investment funds;
- finally, failing that, include a haircut depending on the investment policies of the underlying French
collective investments, foreign UCITS, AIFs established in another Member State of the European Union
or foreign investment funds with regard to the relevant markets. For example, under this method, a
“French equities” AIF set up under French law and investing in a foreign UCITS where the investment
strategy consists of “being primarily exposed to French equity markets” could assign a factor of 0.5 to its
exposure to this UCITS.
Bonds that can be converted into equities or similar securities must be broken down to assess the interest
rate exposure and credit market exposure of the bond component, as well as the equity market exposure
of the option component.
If the specialised professional fund is specialised in a business sector, a market or a financial instrument,
the “investment strategy” section of the prospectus must set out the minimum percentage of investment
and/or exposure related to such specialisation.
If the minimum exposure rules of a specialised professional fund for specific markets are no longer met
following an event beyond the manager’s control (stock price movements, massive subscriptions or
redemptions, mergers, etc.), the manager must have as its primary objective of its sales to remedy the
situation in the interest of the unitholders or shareholders.
Formula used to measure the exposure of specialised professional funds to a given equity market
a) Items that must be considered:
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Standard prospectus template of a specialised professional fund – Annex III.1 to AMF instruction DOC2012-06
+ Valuation of physical assets invested in the market
+/- Equivalent underlying assets for financial instruments with embedded
derivatives
+/- Temporary disposals or acquisitions of securities
+/- Physical equivalent of derivatives (number of contracts x unit value x
settlement price)
A
+/- Equivalent of underlying assets in swaps that alter the dominant
exposure of the specialised professional fund to the market
- Equivalent of underlying assets for net short calls and long puts
+ Equivalent of underlying assets for net short puts and long calls
b) Calculating exposure:
A x 100
Exposure =
_______________
Total net assets
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