ashmore ipo fund (open investment fund) terms and … · olaya towers olaya main street p.o. box...
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Ashmore IPO Fund
The public offering of this fund was approved by the Board of the Capital Market Authority pursuant to its Resolution number09-20-2015
dated 20/05/1436 (corresponding to)11/03/2015
ASHMORE IPO FUND
(OPEN INVESTMENT FUND)
Terms and Conditions
Date of these Terms and Conditions
20/05/1436 (corresponding to) 11/03/2015
Potential investors should fully read theseTerms and Conditionsand obtain financial, legal, tax and
other advice before taking any investment decision regarding the Fund.
This is an unofficial translation of the CMA approved Arabic version of the Terms and Conditions.
Investor's are advised to review and rely on the Arabic version as in case of any contradiction, the
Arabic version will prevail. Ashmore Investment Saudi Arabia takes no responsibility for the
accuracy of the English version.
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IMPORTANT NOTICE
Investors should carefully read the Fund's Terms and Conditions and obtain advice from an
independent financial advisor before taking any investment decision regarding the Fund. An Investor
who decides to invest in this Fund shall take full responsibility of any related risks regarding his/its
decision.
These Terms and Conditions have been prepared in accordance with the provisions of the Investment
Funds Regulations issued by the Board of the Capital Market Authority pursuant to Resolution
number 1-219-2006 dated 03/12/1427H corresponding to 24/12/2006Gbased on the Capital Market
Law issued by Royal Decree number M/30 dated 2/6/1424H.
These Terms and Conditions and the public offering of the units in the Fund have been approved by
the Board of the Capital Market Authority on 20/05/1436 H (corresponding to 11/03/2015G).
There is a high level of risk attached to this Fund. Thus, investing in this Fund may not be suitable for
low-risk investors. For more details regarding risk factors related to investing in this Fund, please
review Article 10 of these Terms and Conditions.
The Ashmore IPO Fund is an open ended investment fund regulated by the provisions of the
Investment Funds Regulations. The Fund aims to grow capital through investing primarily in the
initial public offerings of Saudi companies, and in shares of Saudi companies which have been listed
in the Stock Exchangefor not more than three years. The investments of the Fund will be limited to
investments compliant with Shari'a, as permitted by the Fund's Shari'a Committee. For more details,
please read Article 21 of these Terms and Conditions.
The Fund Manager shall be liable for the information set forth in these Terms and Conditions. The
Fund Manager confirms that, to the extent of its knowledge and after usingits reasonable professional
effort,these Terms and Conditions do not contain any false or misleading information and do not
disregard any matters required to be included therein as per the Investment Funds Regulations as of
the issuance date of these Terms and Conditions, or its latest update. Potential Investors should not
perceive the opinion of the Fund Manager as recommendations to subscribe for the units of this Fund.
The Fund Manager did not instruct to any brokers, agents or any persons regarding any
announcements, information or any related information to the issuance of the Fund's units or its sale
except for these Terms and Conditions. The disclosure of such announcements and information shall
be perceived as it is stated by the Fund Manager.
These Terms and Conditions arenot an offer or an invitation to own any units of the Fund by any
person in any jurisdiction where this offering is not legal nor permitted. Any persons who are not
legally permitted to participate in this offering shall not be offered any of the Fund's units.
Investors shall not consider these Terms and Conditions as financial, tax, legal or any other advice.
Investors shall also enquire about the following:
a) legal requirements in their jurisdiction of subscription in regard to buying, owning and
redeeming the units of the Fund;
b) any restrictions they may face in relation to currency exchange; and
c) matters related to income and any tax consequences which may be imposed by their
jurisdiction as a result of owning or redeeming the Fund's units.
Investorsshall depend on their legal and accounting advisors in relation to any legal, tax or other
matters relating to the Fund or investing in the same.
This is a modified version of the terms and conditions of Ashmore GCC Equity Fund which reflects
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the following changes:
a) The job title of Saleh Al-Dahmashi Chairman of the Board of Directors of the Fund was
modified from the Chief Financial Officer to Chief Operating Officer
b) Abdullah Abu Baker shall be appointed member of the Fund's Board of Directors instead of
John D. Sfakianakis.
c) Saleh AlAwad shall be appointed member of the Fund's Board of Directors instead of Hazem
El Sheikh Mubarak
d) Cash Liquidity Concentration: From 50% of the Fund’s assets as cash, or investment in this
percentage in Shari'a compliant money markets to 75% of the Fund’s assets as cash, or
investment in this percentage in Shari'a compliant money markets
e) Concentration of initial public offerings of Saudi companies and shares of Saudi companies
which have been listed on the Stock Exchange for not more than three years: modifying the
minimum rate from 50% of the Fund’s assets value to 25% of the Fund’s assets value.
f) Investments in funds that have Similar Purposes to the Fund changed from 10% to 20% of
NAV.
g) The Fund Manager has the right to invest more than 10% of NAV in the Parallel Market
(NOMU).
h) The allocation from NAV on each issuer will be in line with the Investment Limitations
prescribed in the Investment Funds Regulations.
i) Investments in money market funds changed from 40% to 50% of NAV.
According to our letters sent to the Capital Markets Authority on 03/09/1437H corresponding to
08/06/2016G and 15/09/1437H corresponding to 06/20/2016G and on 15/06/1438 corresponding to
14/03/2017.
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FUND DIRECTORY
Fund Name
Ashmore IPO Fund
Fund Manager
Ashmore Investment Saudi Arabia
Commercial Registration No. 1010420651, dated 07/10/1435H
CMA License No. 14174-22 dated 19/03/1435H (corresponding to 20/01/2014G)
Fund Manager Address
Ashmore Investment Saudi Arabia
3rd
Floor
Tower B
Olaya Towers
Olaya Main Street
P.O. Box 8022, Riyadh 12213
Kingdom of Saudi Arabia
Tel. +966 11 483 9100
Fax +966 11 483 3101
Website: www.ashmoregroup.com
Administrator
HSBC Saudi Arabia Limited
HSBC Building
7601, Olaya Street (Al Mourooj Area)
P.O. Box 9084, Riyadh 11413
Kingdom of Saudi Arabia
Tel: +966 11 299 2338
Fax: +966 11 299 2348
Website: www.hsbcsaudi.com
Custodian HSBC Saudi Arabia Limited
HSBC Building
7601, Olaya Street (Al Mourooj Area)
P.O. Box 9084, Riyadh 11413
Kingdom of Saudi Arabia
Tel: +966 11 299 2338
Fax: +966 11 299 2348
Website: www.hsbcsaudi.com
Registrar
HSBC Saudi Arabia Limited
HSBC Building
7601, Olaya Street (Al Mourooj Area)
P.O. Box 9084, Riyadh 11413
Kingdom of Saudi Arabia
Website: www.hsbcsaudi.com
Tel: +966 11 299 2338
Fax: +966 11 299 2348
Website: www.hsbcsaudi.com
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Auditors
KPMG Al Fozan & Al Sadhan
Salahuddin Street, KPMG Tower
P.O.Box 92876
Riyadh, 11663
Kingdom of Saudi Arabia
Tel: +966 11 874 8500
Fax: +966 11 874 8600
Website: www.kpmg.com.sa
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FUND SUMMARY
Name of the Fund Ashmore IPO Fund
Type of the Fund Open Investment Fund
Fund Manager Ashmore Investment Saudi Arabia
Fund Currency Saudi Riyals
Risk Level High risk (Please refer to Paragraph 10 of these Terms and Conditions)
Benchmark Ashmore IPO benchmark provided by S&P
Investment Objective
To grow capital through investing primarily in the initial public
offerings of Saudi Arabian companies, and in the shares of Saudi
companies which have been listed on the Stock Exchangefor not more
than three years. The investments of the Fund will be limited to
investments that are Shari'a, compliant, as permitted by the Fund's
Shari'a Committee.
Minimum Initial
Subscription
SAR 10,000
Minimum Additional
Subscription
SAR 10,000
Minimum Redemption SAR 10,000
Minimum Retained
Investment Balance
SAR 10,000
Days of Accepting
Subscription/Redemption
Requests
On any Business Day.
Cut off time for receiving
Subscriptions/Redemption
Before 1:00 pm Riyadh time on the Dealing Day in which the Investor
wants its subscription/redemption to become effective.
Valuation and Dealing
Days
Monday and Wednesday of every week, except for public holidays
when the Stock Exchangeis closed. In case the Valuation and
Dealingday happens to fall on a day which is a public holiday in the
Kingdom of Saudi Arabia, the Valuation, Dealing and RedemptionDay
will beon the immediately next Valuation and DealingDay.
Days of announcing the
Price and how to find it
The Business Day following the Valuation Day. Valuation Prices will
be provided upon visit to the offices of the Fund Manager, the website
of the Fund Manager or at Tadawul website.
Payment of Redeemed
Funds
Before the close of business on the fourth day following the Dealing
Day when the redemption requestis made.
Early Redemption Fees: 5% of redeemed units' net value will apply if units are redeemed
within 30days from subscription.
Subscription Fee: A maximum of 2% of the total Subscription amount
Fund Management Fee: 1.75 % per annum of the Net Asset Value of the Fund
Custody Fee: - 0.1% per annum of the Net Asset Value of the Fund if the value of
the assets of the Fund does not exceed SAR 187.5 million.
- 0.09% per annum of the Net Asset Value of the Fund if the value
of the assets of the Fund is between SAR 187.5 million and SAR
562.5 million.
- 0.08% per annum of the Net Asset Value of the Fund if the value
of the assets of the FundAssetsexceeds SAR 562.5 million.
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(The Custody Fee will be SAR 11,250 or more per month)
Administrative
Fee: - 0.06% per annum of the Net Asset Value of the Fund if the value
of the assets of theFund does not exceed SAR 562.5 million.
- 0.05% per annum of the Net Asset Value of the Fund if the value
of the assets of theFundis between SAR 562.5 million and SAR
937.5 million.
- 0.045% per annum of the Net Asset Value of the Fund if the value
of theassets of theFund exceeds SAR 937.5 million.
(The Administrative Fee will be SAR 11,250 or more per month)
Benchmark Fees USD 8,000 (equivalent to SAR 30,000) for the first year of the Fund's
operation, and &USD 7,000 (equivalent to SAR 26,250) for the
subsequent years. These shall be calculated on a daily basis and paid
on an annual basis from the assets of the Fund.
Other Fees: Please refer to the Financial Disclosure summary.
Unit Price at Fund
Inception:
SAR 10
Price Applicable for
Subscription/Redemption
of Units:
If a valid application is received prior to 1 pm on a Dealing Day, then
the price applicable thereto shall be the Unit price declared on the next
notification day following the assessment of the price.
Fund Operation
Commencement Date:
23/03/2015 G
Board Directors of the
Fund:
- Saleh Al-Dahmashi (Chairman – Non-Independent)
- Abdullah Abu Bakr (Member - Non-Independent)
- Saleh Awad (Member – Independent)
- Khalid Muhammed Al-Hukail (Member – Independent)
Shari'a Committee
Members:
- Sh. Dr. Mohamed Ali Elgari
- Sh. Muhammed Ahmed
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TABLE OF CONTENTS
IMPORTANT NOTICE .......................................................................................................................... 2
FUND DIRECTORY .............................................................................................................................. 4
Fund Summary ........................................................................................................................................ 7
Table of Contents .................................................................................................................................... 9
Definitions............................................................................................................................................. 11
1. Name of the Investment Fund ................................................................................................... 13
2. Address of the head office of the Fund Manager ...................................................................... 13
3. Commencement ........................................................................................................................ 13
4. Regulator ................................................................................................................................... 13
5. Date the Terms and Conditions were issued or last updated..................................................... 13
6. Subscription .............................................................................................................................. 13
7. Currency of the Fund ................................................................................................................ 14
8. Investment Fund Objectives...................................................................................................... 14
9. Principal Investment Strategies ................................................................................................. 14
10. Principal Risk of Investing in the Fund .................................................................................... 16
11. Fees and Expenses .................................................................................................................... 20
12. Dealing Costs ............................................................................................................................ 21
13. Winding-up and the appointment of a liquidator ...................................................................... 22
14. Fund Board ................................................................................................................................ 22
15. Fund Manager ........................................................................................................................... 25
16. Custodian .................................................................................................................................. 26
17. Auditor ...................................................................................................................................... 26
18. Annual Audited Financial Statements ....................................................................................... 26
19. Characteristics of the Units ....................................................................................................... 27
20. Other Information ..................................................................................................................... 27
21. Shariah-based investment funds ................................................................................................ 29
22. International investment funds .............................................................................................. 30
23. Initial Offer ........................................................................................................................... 30
24. Investment by the Fund Manager in the Fund ...................................................................... 30
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25. Subscriptions and Redemptions Procedures ......................................................................... 30
26. Valuation of the Fund Assets ................................................................................................ 32
27. Early Redemption Fees ......................................................................................................... 33
28. Termination of the Fund ....................................................................................................... 33
29. Reporting to Unitholders ....................................................................................................... 34
30. Conflict of Interest ................................................................................................................ 34
31. Voting Rights Policies .......................................................................................................... 35
32. Changes to the Terms and Conditions .................................................................................. 35
33. Complaints Procedure ........................................................................................................... 35
34. Governing Law ..................................................................................................................... 35
35. Compliance with the Regulations ......................................................................................... 36
36. Summary of Financial Disclosure ......................................................................................... 36
Annex (1): Shariah Criteria...................................................................................................................42
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DEFINITIONS
Definitions
Fund Manager Ashmore Investment Saudi Arabia
Subscriber, Investor or
Unitholder
holder of Units in the Fund
Fund Ashmore IPO Fund
Stock Exchange Saudi Arabian Stock Exchange
Business Day the day when the Saudi Arabian Stock Exchange is open for dealing.
Investment Funds
Regulations
the Investment Funds Regulations issued by the CMA Board pursuant
to its Resolution Number 1-219-2006 dated 03/12/1427H
corresponding to 24/12/2006G
Board the Board of Directors, of the Fund, the members of which are
appointed by the Fund Manager pursuant to the Investment Funds
Regulations, The Board is responsible for supervising the
management of the Fund. For more details, please refer to the Article
14 of these Terms and Conditions
Kingdom the Kingdom of Saudi Arabia
Unit means units of the Fund held by the Unitholders, which is an
undivided share in the ownership of theassets of the Fund
Valuation Day the day when the Unit price will be determined as detailed in Article
26 of these Terms and Conditions. The Valuation Days will be every
Monday and Wednesday which is a Business Day. When none of
these days is a Business Day, the assets of the Fund will be valued on
the next ValuationDay
Custodian HSBC Saudi Arabia Limited
Administrator HSBC Saudi Arabia Limited
Registrar HSBC Saudi Arabia Limited
Committee for the
Resolution of Securities
Disputes
Committee for the Resolution of Securities Disputes which is
specialised in determining securities disputes governed by the Capital
Markets Law and the Implementing Regulations issued by the Capital
Markets Authority
NAV Net Asset Value after deducting all the Fund's obligations including
fees and expenses
Unit Net Asset Value Net Asset Value divided by the Fund number of Units in the related
Valuation Day
Terms and Conditions the Terms and Conditions of the Fund which are included in this
document
Minimum Initial means the minimum amount a Unitholder may subscribe for in the
Fund when making its initial subscription, as described in Article 6of
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Subscription the Fund’s Terms and Conditions
Minimum Additional
Subscription
means the minimum additional amounts of Units a Unitholder may
subscribe for in the Fund as described in Article 6 of the Fund’s
Terms and Conditions
Minimum Redemption means the minimum amount of Units that may be redeemed, as
described in Article 6 of the Fund’s Terms and Conditions
Minimum Retained
Investment Balance
means the minimum size that shall be retained by aSubscriber at any
time, as described in Article 6 of the Fund’s Terms and Conditions,
which is SAR 10,000 (Ten Thousand Saudi Riyals)
Valuation Point the closing of the Market on the related ValuationDay
Independent Member of
the Board of Directors
an independent member of a fund board of directors should not be an
employee, associated with or a member of the board of directors of
that fund's fund manager or its custodian and should not have any
contractual relationship with the fund manager or its custodian
Value Standards means the analysis of companies selected among the companies listed
on the Saudi Stock Exchange and the study of their financial
statements in view of determining the fair value of their shares to
elect whether to invest in such companies
Non-Independent
Member of the Board of
Directors
a non-independent member of a fund board of directors should be an
employee, associated with or a member of the board of directors of
that fund's fund manager or its custodian and should have a
contractual relationship with its fund manager or its custodian
Dealing Day the day when the Units are bought and redeemed. Dealing Days will
be Monday and Wednesday of every week, except for public
holidays. In case any if any Dealing Day happens to fall on the same
day of a public holiday, the Dealing Day will be on the immediate
next Business Day
IPO initial public offerings of companies' shares
Money Market
Instruments
the deposits and short-term securities and trade financing contracts
(including Muarabaha Contracts) characterized by their high liquidity
and low risks
Book Building offering the offered shares to investing entities to know the level of
demand of those entities for the shares to determine the price of the
initially offered shares
Issuer the person who issues securities or intends to do the same
Shari'a Committee has the meaning set out in Article 21 of these Terms and Conditions
Shari'a Criteria the selection of eligible investing entities will be based on the
approved Shari'a Criteria by the Fund Shari'a Committee as detailed
in Annex 1 to these Terms and Conditions
Authority or CMA Capital Market Authority
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Delegated Party means the authority that the Fund Manager (i) delegates its powers
thereto as a financial institution or more to carry out the role of
advisor, sub-director, administrative, custodian, registrar, guardian,
agent or broker of the Fund and (ii) contracts with parties mentioned
in abovein order to provide investment services, custody or registrar
services concerning the assets of the Fund, directly or indirectly
Related Parties means any party related to the Fund Manager, including, without
limitation, the members of the Board of the Fund, the employees of
the Fund Manager and the Fund advisors
Active Management
Strategy:
A strategy through which the Fund Manager will take investment
decisions based on number of factors such as financial analysis and
forecasts, Fund Manager's experience, constant control of
investments value in order to achieve a fund performance exceeding
the Benchmark
Initial Survey: Consideration of the available investment opportunities and prioritize
those that can be conducted
Exceptions Economic or political crises pr cases leading to a collapse of the stock
exchange market.
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Fund Terms and Conditions
1. Name of the Investment Fund
Ashmore IPO Fund.
2. Address of the head office of the Fund Manager
the Fund Manager can be contacted at:
3rd
Floor
Tower B
Olaya Towers
Olaya Main Street
P.O. Box 8022,
Riyadh 12213,
Kingdom of Saudi Arabia.
Phone No: +96611 483 9100
Fax No: +96611 483 9101
For more information regarding the Fund and Fund Manager, including the latest NAV, please visit
the Fund Manager website at www.ashmoregroup.com or Tadawul website at www.tadawul.com.sa.
3. Commencement Date:
3.1 TheFund will commence accepting subscription requests on Thursday 28/05/1436H,
corresponding to 19/03/2015G until the end of Monday 03/06/1436H, corresponding to
23/03/2015G and that is for 5 days.
3.2 The Fund operation date will commence on 03/06/1436H, corresponding to 23/03/2015G.
4. Regulator
These Terms and Conditions are prepared in accordance with the Investing Funds Regulations. The
Fund is regulated by the CMA and Ashmore Investment Saudi Arabiaislicensed and regulated by the
CMA to practice investment fund management and discretionary portfolio management and advising
in securities pursuant to CMA licence number 22-14174 dated 19/03/1435H (corresponding to
20/01/2014G).
5. Date the Terms and Conditions were issued or last updated
These Terms and Conditions were issued on 20/05/1436H, corresponding to 11/03/2015G, and the latest
update was on 24/09/1437H corresponding to 29/06/2016G.
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6. Subscription
The Minimum Initial Subscription to invest in the Fund is SAR 10,000 (tenthousand Saudi Riyals)
while the Minimum Additional Subscription and Minimum Redemption is SAR 10,000 (tenthousand
Saudi Riyals). The Minimum Retained Investment BalanceisSAR 10,000 (ten thousand Saudi Riyals).
The Fund Manager retains the right to change the Minimum Subscription and the Minimum
Additional Subscription of the Fund upon the approval of the CMA.
7. Currency of the Fund
The Fund currency is Saudi Riyals (SAR). If payment for Units is made in a currency other than Saudi
Riyal, the currency will be exchanged to Saudi Riyals at the prevailing exchange rate by the receiving
bank, and the Investor will be liable of any exchange rate differences without any obligation on the
Fund Manager.
8. Investment Fund Objectives
Ashmore IPO Fund is an open ended fund. The Fund's investment objectives is to achieve over
medium to long-term capital growth by investing primarily in the initial public offerings of Saudi
Arabian companies, and in shares of Saudi Arabian companies which have been listed on the Stock
Exchange for not more than three years. The Fund aims at achieving performance that exceeds the
Benchmark of the Fund(Ashmore IPO benchmark provided by S&P). Benchmark data can be
obtained from the Fund Manager's website. Investments of the Fund will be limited to the Stock
Exchange, and all investments will be in compliance with the Shari'a standards. The Fund will not
distribute any dividends to Investors and will reinvest distributed dividends in the Fund.
9. Principal Investment Strategies
Below is a summary of the main principal investment strategies used by the Fund in order to achieve
its objectives:
9.1. Type(s) of Securities in which the Fund will principally invest:
The Fund will primarily invest inthe initial public offerings of Saudi companies, and in shares of
Saudi companies which have been listed on Tadawul for not morethan three years.
9.2. Concentration Policy:
The Fund will primarily invest in the initial public offerings of Saudi companies, and in shares of
Saudi companies which have been listed on the Stock Exchange for not morethan three years. At all
times, the investments will not be less than 25% of the Fund's net assets. The Fund Manager does not
aim to concentrate the Fund's investments in a specific sector of the Stock Exchange.
a) Subject to the restrictions stipulated in the Investment Funds' Regulations, the Fund
Manager is allowed (for managing liquidity purposes) to invest less than 50% of the Fund's
net assets in investment money market funds which are in compliance with the Shari'a
Criteria and whose units are publicly offered and licensed by the Authority. The Fund
Manager will select these funds based on a number of elements such as the experience of the
fund managers as well as the funds previous investment strategies and performance. The Fund
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Manager is also permitted to invest not more than 20% of the Fund's net assets in other
investment funds which have similar objectives to the Fund. The Fund Manager may invest
the assets of the Fund in its own investment funds. The Fund Manager has the right to invest
more than 10% of NAV in the Parallel Market (NOMU).
The Fund Manager is permitted in exceptional cases or economic crises to keep 75% of its net assets
as cash, or invest this percentage in Shari'a compliant money markets.
a) The Fund's investments are limited to money markets instruments valuated by Saudi Riyals
whether or not classified, provided that they are issued by institutions that hold no less than
(A) credit rating according to Moody's Global Ratings or any equal rating issued by any other
rating agency acceptable to the Fund Manager. The Fund Manager will not invest in non-
classified instruments which are issued by non-classified institutions. The allocation from
NAV on each issuer will be in line with the Investment Limitations prescribed in the
Investment Funds Regulations. The Fund's scope of investments will be updated on a
monthly basis.
The following table states the available types of investments for the Fund and the percentages
allocated to each:
Type of Investment Minimum Limit Maximum
Limit
Initial Public Offerings and Recently ListedShares (three
years or less)
25% 100%
Money Market Investment Funds 0% 50%
Investment funds that have Similar Purposes to the Fund 0% 20%
Cash Liquidation or Money Market Investment Tools 0% 75%
9.3. Types of transactions, methods and tools that may be used on behalf of the Fund for the
purpose of managing its investment portfolio:
The Fund Manager will follow an active management strategy which isbased on the principle of
switching the investment positions of the Fund’s investments,using research tools to conduct initial
surveys by a team of financial analysts in order to establish the list of investments (and subjecting
them to valuation criteria wherever possible),build the Fund’s portfolio, and determine and review the
investment limitson an ongoing basis to ensure compliance with the investment limits and the main
strategy of the Fund.
9.4. Type of securities that cannot be included in the Fund’s portfolio:
The Fund will not invest in any securities other than those mentioned above.
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9.5. Any other restriction on the type(s) ofsecurities that the Fund may not invest in:
The Fund will not invest in any securities that do not comply with the approved Shari'a Criteria. The
Fund shall comply with the investment restrictions set out in the Investment Funds Regulations.
9.6. The borrowing powers of the Fund:
The Fund is permitted to secure Shari'a compliant facilities after obtaining approval from the Shari'a
Committee, provided that the facilities should not exceed 10% of the Fund's net assets, with the
exception of borrowing by the Fund Manager or any of its affiliates to cover redemption requests
pursuant to Article 49 of the Investment Funds Regulation. In all cases, the term of the facilities
should not exceed one year.
9.7. The securities markets in which the Fund is going to invest:
The Fund’s investments are limited to the issued securities in the Kingdom.
9.8. Investment limits in other public investment funds:
Subject to the restrictions stated in the Investment Funds Regulations, the Fund Manager shall have
the right to invest not more than40% of the net value of the Fund in Shari'a compliant money markets
investment funds. The Fund is also permitted to invest not more than 20% of the net value of the
Fund's net assets in other investments funds with similar objectives. The Fund Manager is permitted
to invest the Fund's assets in its owned investment funds. In all cases, the Fund Manager shall not
invest over 50% of the net value of the Fund's assets in other investment funds.
9.9. Dealing in Markets that use Derivatives of Securities:
The Fund will not invest in the derivatives of securities.
10. Principal Risk of Investing in the Fund
10.1. Investment in the Fund is exposed to high risks, as Investors must take into consideration the
main risks of investment in the Fund and be aware of all information in these Terms and
Conditions before investing in the Fund. The risks stated below do not represent all Fund
investment related risks, but it identifies the main risks known to the Fund Manager up to the date
of these Terms and Conditions, which the Fund may be exposed to and may have a negative effect
on the investment revenues and the Fund's NAV in case the risk arises.
The following table summarizes the main risk factors that may negatively affect the Fund's
investments:
Type of risk Effect on the investment amount or the invested assets
Negotiable
Shares and
Market Risks
The Fund invests in the Initial Public Offerings of Saudi Companies' shares,
and in Saudi companies whose shares have been listed on the Stock
Exchange for not more than three years and are subject to market and rate
volatility risks. As such, there is a possibility of a sudden drop inthe value
of the shares and therefore for the loss of part of the capital which may
negatively affect the Fund's investments, its performance and the
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Unitholders.
Risks of
investing in
small Saudi
companies'
stocks.
Investment in small companies' shares is subject to more risks than other
types of investments including non-achievement, by those companies, of
the expected profits as well as the high volatility of shares performance.
Among the other risks is lack of experience, poor management or
insufficiency of their financial resources which are available. If the said
risks materialize, this will lead to volatility of the companies' results and
value of their shares which will negatively affect the Fund's investments, its
performance and the Unitholders.
Limited
Performance
Record's Risks
The Fund has no previous performance record, and therefore the potential
investors may not review the Fund's previous performance prior to taking
investment decisions.
Emerging
Markets' Risks
The Saudi shares market is considered as an emerging market classified as a
high risk market. The main principal risk pertaining to emerging markets is
that of market value concentration in a limited number of companies and
therefore it is subject to greater risks than in other advanced stock markets,
to sharp decline in market rates and reduction of liquidity which could
affect the Fund's investment and performance as well as the Unitholders.
Liquidity Risks The market may undergo a stage of volatility and instability leading to a
shortage in liquidity and difficulty in trading in shares and in investment
funds. This may restrict the Fund Manager's ability to invest or liquidate
some of its investments making it difficult to satisfy the redemption
requests which will negatively affect the fund's investments, its
performance and the Unitholders.
Currency Rates
Related Risks
As the Fund is denominated by Saudi Riyals, the participants whose
currency is not Saudi Riyals are subject to volatility of exchange rates.
Credit Risks The credit risks pertaining to the investment in money market instruments
are those related to the possibility that any debtor may fail to satisfy its
obligations leading to the loss of the invested amount or part thereof or
delay in redemption of the amount. This would negatively affect the Fund's
investments, its performance and the Unitholders.
Legal Risks The companies and the investment funds where the Fund is investing are all
vulnerable to legal risks as they are all subject to regulatory procedures or
penalties to be imposed by the regulatory bodies monitoring their
performance or by other parties. They may be also become parties in any
legal proceedings. In addition, the companies' financial position may also
be affected due to adoption of new rules and regulations, or due to changes
in the existing rules and regulations leading to an adverse affect on the
value of the Fund's investments in those companies or funds which will
negatively affect the Fund's investments, its performance and the
Unitholders.
Risks related to
specific
incidents
The value of the Fund's assets' may be affected by various factors including
political and economical factors as well as those related to the
implementation of the rules and regulations or to the regulatory and
supervisory bodies as well as any changes in the government's policies,
taxation law, interest law or may be affected by certain incidents having to
do with the issuer of shares. This will negatively affect the value of the
investments invested by the Fund, its performance - Unitholders.
Risks of
reliance on the
Fund
Manager's
Employees
The Fund Manager extensively depends on human capital. As such, the
Fund may be affected by the loss of executive directors or the employees
linked to the daily operations of the Fund, and it is very difficult, in the
short term, to replace them with other employees enjoying similar levels of
experience. This could negatively affect the management of Fund's
investments, the Fund's performance and on the investments of the
19
Unitholders.
Political Risks The Saudi market may be affected by the political developments on the
local and international levels such as acts of riots or wars which may have
negative impacts on the Fund's investments, performance and on
theUnitholders.
Economical
Risks
The Saudi economy may be affected by negative impacts as a result of oil
price volatility, exchange rate and inflation which may negatively affect the
Fund's investments, its performance and the Unitholders.
Technological
Risks
The Fund Manager depends on technology in managing the Fund.
However, its information technology systems may suffer un-authorized
access, attacked by viruses or suffer total or partial failures which will in
turn limit the Fund Manager's ability to manage the Fund investments
efficiently, which would negatively affect the Fund's performance and the
Unitholders.
Listing Delay
Risks
The Fund invests in Saudi companies IPO's which rely on the listing dates
fixed in the Saudi market. Any delay in listing the companies' shares would
limit the Fund Manager's investment opportunities which will in turn
negatively affect the Fund's investments, performance and the owners of the
Fund's units.
Decrease of
Allocation
Percentage
As a number of licensed companies and investment funds are invited to
Book Building of orders, it is possible that the share allocation percentage
decreases due to the large number of subscribing companies, funds and
individuals which may cause the Fund to lose the opportunity to increase its
revenues. This would have an impact on the unit price which in turn will
negatively impact the Fund's investments, performance and the Unitholders.
Big
Redemptions
Risks
Upon the receipt of redemption requests exceeding 10% of the Fund's assets
on any trading day, it would be difficult for the Fund to procure sufficient
funds to meet these requests which will result in delaying the redemption
requests. In addition, the Fund may be forced to liquidate part of its assets
at un-suitable times which could negatively affect the Fund's investments,
performance and the Unitholders.
Conflict of
Interest Risks
These risks arise in circumstances where the objectivity and independent of
the Fund Manager's decisions are affected by personal interests, material or
moral, contrary to the Fund's interest, or in case of conflict of interests
between the Fund and other investment funds or portfolios which are
managed by the Fund Manager. This could affect the Fund Manager's
decisions inselectingits investments leading to negative impacts on the
Fund's investments, performance and the Unitholders.
Natural
Calamities
Risks
Natural catastrophes could affect the performance of all economical and
investment sectors which could in turn negatively affect the Fund's
performance beyond the control of the Fund Manager, such as earthquakes,
volcanoes, extreme atmospheric changes and others. This could negatively
impact the Fund's investments and the Unitholders.
Investments
Concentration
Risks
The risks resulting from the concentration of Fund's investments in a
number of the Saudi exchange market sectors, which could leave the Fund's
performance subject to volatilities as a result of the changes taking place in
these sectors. This could negatively impact the Fund's investments, its
performance and the Unitholders.
Borrowing
Risks
In case the Fund borrows money and failing to repay the debts on time for
reasons beyond the Fund Manager's control, this could lead to delay
penalties, or the Fund Manager may be forced to liquidate some of its
investments to repay its debts. This could negatively affects the Funds
investments, performance and the Unitholders.
Issuer's Risks These are the risks of change in the Issuer's financial positions as a result of
20
changes in the management, demand for products or services. These risks
include the Issuer's susceptibility to legal proceedings due to any faults he
could commit which could lead to the reduction in the value of the shares.
This could negatively affect the Fund's investments, performance and the
Unitholders.
Risks of
Investing in
Investment
Funds
Other investment funds, where the Fund invests, are subject to the same
risks stated in paragraph "Principal risk of investing in the Fund" of these
terms and provisions which could negatively affect the Fund's investments,
performance and the Unitholders.
Risks of
Decrease of
Credit Rating
In case of decrease of the credit rating of any of the money market
instruments where the Fund invests, the Fund Manager may be forced to
dispose of the investments. This could negatively affect the Fund's
investments, performance and the Unitholders.
Risks of
Interest Rates
Fluctuation
These are the risks resulting from changes in the interest rates which in turn
affects the value of financial instruments and shares which the Fund invests
in. This could negatively affect the Fund's investments, performance and
the Unitholders.
Disclosure
Risks
Disclosure risks are related to the possibility of having incorrect
information in the IPO prospectus, or omission of material information and
misleading. Given that the Fund Manager depends materially, in taking any
investment decision, on the disclosed information, then the risk of taking a
wrong investment decision remains possible in case material information
was omitted or wrong information was disclosed in the prospectus. This
could negatively affect the Fund's investments, performance and the
Unitholders.
Risks of Future
Financial
Forecasts
Future financial results forecasts and availability of the necessary factors to
realize constant revenues in the future are deemed as important tools upon
which the Fund Manager builds its investment decisions. However, these
forecasts may or may not realize as expected, leading to the deviation of the
Fund's operational results from the set forecasts. After the announcement of
any company's financial results, the market value of its shares may go
contrary to those expectations, as in the case where the profitability of the
companies listing their shares might decrease. This could negatively affect
the Fund's investments, performance and the owners of the unit owners.
Risks of IPO
Decrease
The number of IPO's may decrease in some cases lessening the Fund's
opportunities to realize constant revenues. This could negatively affect the
Fund's investments, performance and the owners of the unit owners.
IPO's Risks Public companies' shares are offered through IPO's. IPO's may have the risk
of limited number of shares available for subscription during the IPO
period. In addition, the Investor's knowledge about the issuing company
may be insufficient or may have a limited history of performance.
Moreover, the issuing companies may be part of new economic sectors, and
some other companies may be under incorporation and may not realize
operational income in the short term which increases the risks of
subscription in its shares. This could negatively affect the Fund's
investments, performance and the Unitholders.
Risks
Pertaining to
Sharia
Principles
The Fund's investments which are restricted to Shari'a compliant
investments could cause the Fund's performance to be lesser than that of
other investment funds not following the Shari'a principles in its
investments. In addition, in case that some companies' shares are no more
compliant with the Shari'a principles applied by the Fund, the Fund
Manager may be forced to dispose of these shares at unsuitable prices. This
could negatively affect the Fund's investments, performance and the
Unitholders.
21
Reinvestment
Risks
Whereas the Fund shall reinvest the allocated profits, the allocated amounts
may not be invested at the same rates according to which the shares were
purchased in the first instance. This in turn increases the purchasing price
which could negatively affect the Fund investments, its performance and
the Unitholders.
10.2. The Unitholder acknowledges and bears full responsibility for any financial loss that may result
from investment in the Fund. The Unit Price may go down andupon redemption, a Subscribermay
not receive the full amount invested.
10.3. The Unitholder understands that an investment in the Fund is not a bank deposit with a local
bank selling or marketing the securities or related to the Fund Manager, but represents ownership
of a Unit in the Fund.
11. Fees and Expenses
The Fund Manager will require the Unitholder to pay such fees and expenses as set out below.
Subscription Fee:
A subscription fee (paid upfront) of up to a maximum of 2.00%
of the initialSubscription amount / or any additional
Subscription will be payable by the Unitholder to the Fund
Manager, upon investing in the Units of the Fund. This rate may
be decreased by a decision from the Fund Managerat his own
discretion and shall be due to the Fund Manager.
Redemption Fee: The Fund will not charge a redemption fee.
Management Fee:
Early Redemption Fees
A Management Fee of 1.75% shall be paid annually from the
NAV of the Fund to the Fund Manager for the management of
the Fund. The Management Fee will be calculated and accrued
on each Valuation Day and will be deducted at the end of every
month.
5% of redeemed units' net value will apply if Units areredeemed
within 30 businessdays from subscription.
Custody Fees:
The Fund will pay Custody Fees as follows:
0.10% per annum of the NAV of the Fund if the value of
the assets of theFund does not exceed SAR 187.5
million.
0.09% per annum of the NAV of the Fund if the value of
the assets of the Fund isbetween SAR 187.5 million and
SAR 562.5 million.
0.08% per annum of the NAV of the Fund if the value of
the assets of the Fund exceeds SAR 562.5 million.
(The Custody Fees are subject to a minimum of SAR 11,250
22
per month).
Transaction Settlement
Fees: Payment of SAR 140.63 to the Custodian in return for
the settlement of all the executed transactions on the
shares of any company the Fund invested therein, either
by sale or purchase at any single date. This will be
calculated and paid on a daily basis from the total
Fund's assets.
Administrative Fees:
The Fund will pay the Administrative Fees as follows:
0.06% per annum of the NAV of the Fund if the value of
theassets of the Fund does not exceed SAR 562.5
million.
0.05% per annum of the NAV of the Fund if the value of
the assets of the Fund is between SAR 562.5 million and
SAR 937.5 million.
0.045% per annum of the NAV of the Fund if thevalue
of the assets of the Fund exceeds SAR 937.5 million.
(The Administrative Fees are subject to a minimum of SAR
11,250 per month).
Registrar Fees: A minimum of SAR 1,312.50 per month for the first fifty
Subscribers and SAR 187.50 for every ten additional
Subscribers, calculated on a daily basis and deducted monthly
from the total assets of the Fund.
The Custody, Administrative and Registrar Fees will be
calculated and accrued on each Valuation Day based on the
NAV of the Fund and will be settled at the end of every month.
Control Fees:
SAR 7,500 per annum calculated daily and payableat the end of
every financial year from out of the total assets of the Fund.
Saudi Stock Exchange
– Tadawul Fees:
SAR 5,000 per annum calculated daily and payableat the end of
every financial year out of the total assets of the Fund.
Auditor’s Fees: SAR 15,000 for the first year of Fund operation and SAR 25,000
for subsequent years will be calculated daily and will be
deducted at the end of every financial year out of the total assets
of the Fund.
Fees of the
Independent Members
of the Fund’s Board of
Directors:
Annual fee of SAR 10,000 for both independent members of the
Board of Directors, SAR. 5,000 each and will be calculated on
daily basis and paid annually out of the total assets of the Fund.
23
Borrowing Fees:
According to the borrowing cost prevailing in the market, to be
mentioned in the annual report after the end of the Fund’s
financial year.
Benchmark Fees: The amount of USD 8,000 (equivalent to SAR. 30,000) for the
first year of the Fund's operation, and USD 7,000 (equivalent to
SAR. 25,250) for the subsequent years.This will be calculated
on daily basis and paid annually out of the total assets of the
Fund.
Shari'a Committee
Fees
Annual fees of SAR 55,312.50 to be calculated on daily basis
and paid quarterly.
Please refer to the Summary of Financial Disclosure in paragraph 36 of these Terms and Conditions
for additional details on the fees and expenses.
12. Dealing Costs
The Fund shall bear all dealing fees (brokerage) in securities according to the prevailing prices in the
market, to be paid out of the assets of the Fund upon execution of the transactions. The total value of
the dealing fees will be disclosed in the financial summary at the end of every financial year.
13. Winding-up of the Fund
The CMA is permitted to appoint a replacement Fund Manager or a liquidator or to take any other
measures it deems necessary in line with Article 22 of the Investment Funds' Regulations.
14. Fund Board
14.1. Names of the Members of the Fund Board
The Fund is supervised by a Board made up of four members of which; at least two directors of the
Board are independent directors and headed by the Chairman.
Set out below are brief biographical details of each of the membersof the Board.
Saleh K. Al-Dahmashi
(Chairman – Non-
independent member)
Mr. Saleh Al-Dahmashi is the Chief Operating Officer of Ashmore
Investment Saudi Arabia. He joined Ashmore in 2014 from NCCI
where he was Budgeting and Financial Reporting Manager. He has
13 years of banking experience including head of operations for Audi
Saradar Group (Audi Capital). He has a Bachelor degree in
Accounting from Kuwait University.
Abdullah Abu
Bakr (N on-
Mr. Abdullah Abu Bakr is Head of Business Development at
Ashmore Investment KSA. He has more than 16 years of experience
24
independent
member)
of private banking and wealth management for global firms, family
offices and major customers.
Abdullah began his career at Riyad Bank where he spent nearly three
years in the investment industry. He later assumed a key role during
13 years when he expanded the work scope of some local and
international banks including, for example, the National Commercial
Bank, the Saudi Fransi Bank and Deutsche Bank.
His experience includes corporate banking, private banking, assets
and wealth management. Abdullah holds a bachelor's degree in
accounting from the College of Business Administration at King
Saud University, and he is a Certified Financial Planner from the
Saudi Institute of Banking
Saleh Awad (Independent
Member)
Mr. Saleh has worked for nearly 34 years in various departments in
the Saudi Arabian Monetary Agency, including the remittances and
foreign exchange department, the investments public administration
departmentthe investment performance and risks assessment
department that he headed before retiring from his job in April 2016.
Awad participated in several conferences in Saudi Arabia and abroad
and was member of internal and foreignl committes, including his
membership in the Board of Directors of Saudi Fund for
Development from January 2013 till the present time and his
membership in the Board of Directors of Stusid bank in Tunisia from
July 2004 to July 2007.
Mr. Saleh received his Bachelor Degree in Public Administration
from King Saud University in 1982
Khalid Mohammed Al
Hukail (Independent
member)
Mr. Khalid Al Hukail spent 18 years with SABIC in a variety of
commercial, risk management, auditing and market research roles.
Presently he is managing a private establishment (Al-waseet)
providing advisory services to the petrochemical industry. Also
serves as a director of other institutions. Mr. Khalid has a BSc in
Business Administration from Hamline University in Minnesota.
14.2. Responsibilities of the Board members will include, but shall not be limited to, the
following:
Approval of all material contracts and reports involving the Fund.
Overseeing and, where appropriate, ratifying any conflicts of interest the Fund Manager has
identified, according to Article 22 of the Regulations.
Meeting at least twice annually with the Fund Manager’s compliance officer and money
laundering and terrorism financing reporting officer, and overseeing the Fund Manager’s
25
compliance with all applicable laws and regulations.
The approval of any recommendations made by theliquidator in case he was
appointedpursuant to Article 22of the Regulations, except the recommendations related to any
claim by the liquidator concerning the misbehavior or negligence of any member of the Board
of the Fund.
Ensuring that the Fund’s Terms and Conditions are observed, as well as any other documentin
the Regulations, without prejudice to paragraph (e) of Article 13 of the Regulations.
Ensuring that the Fund Manager carries out its obligations in the best interest of the Unit
Holders in accordance with the Terms and Conditions of the Fund, committee's decisions and
provisions of the Fund's Regulations.
To act for the benefit of the Fund and its Unitholders, which includes a duty of loyalty and a
duty to exercise reasonable care.
The members of the Board shall be appointed by the Fund Manager subject to approval of the CMA
and will serve for a term of three years automatically renewable. The Fund Manager reserves the right
to change the Board subject to approval of the CMA. The Board's term will commence after the
CMA’s approval of the Fund Terms and Conditions. The Board will meet at least twice each year to
oversee the Fund Manager’s activities and to ensure compliance with the Regulations and investment
guidelines as set by the Board for the Fund.
14.3. Memberships of the Fund’s Board members in other Investment Funds:
- Mr. Saleh Al-Dahmashi acts as chairman of the Board of Directors (a non-independent
member) in the boards of directors of Ashmore Saudi Stock Exchange Fund,Ashmore Gulf
Shares Fund and Ashmore GCC Diversified Trade Fund
- Mr. Abdullah Abu Bakr acts as non-independent member in the boards of directors of
Ashmore Saudi Stock Exchange Fund, Ashmore Gulf Shares Fund and Fund and Ashmore
GCC Diversified Trade Fund,
- Mr. Saleh Awad acts as an independent member in the boards of directors of Ashmore Saudi
Stock Exchange Fund and Ashmore Gulf Shares Fund and Ashmore GCC Diversified Trade
Fund.
-
- Mr. Khalid Mohammed Al Hukail acts as an independent member in the boards of directors
of Ashmore Saudi Stock Exchange Fund and Ashmore Gulf Shares Fund and Ashmore GCC
Diversified Trade Fund
The members of the Board do not have any memberships in other investment funds not related to the
Fund Manager.
The Fund’s Board members are also Board members of Ashmore GCC Equity Fund and the
independent members do not have any memberships in other investment funds not related to the Fund
Manager.
14.4. Voting Procedures observed by the Fund’s Board Members:
26
A meeting of the Board will be convened at the written request or email sentby the Chairman, at least
15 calendar days prior to the date of the meeting. The Board is permitted to convene due to an
emergency by sending notifications to the members in less than 15 days.The Board will meet at the
Chairman’s discretion at any time other than the periodic meetings. The meetings will take place at
the Fund Manager’s headquarters or at other venues, as decided by the Board. To hold a board
meeting at least three members must be present to form a quorum.
14.5. Remuneration of the Board Members of the Fund:
Independent Board membersshall be remunerated for their services. Please see Summary of Financial
Disclosure stated in paragraph 36 of these Terms and Conditions for the independent Board
memberscompensation.
15. Fund Manager
15.1. The Fund Manager is Ashmore Investment Saudi Arabia, a closed joint stock company
established under the laws of the Kingdom of Saudi Arabia with Commercial Registration
Number 1010420651, dated 07/10/1435H, corresponding to 03/08/2014G, issued in Riyadh, and
licensed by the Capital Market Authority under license number 14174-22 dated 19/03/1435H,
corresponding to 20/01/2014G. The address of the Fund Manager is in the3rd
Floor, Tower B
Olaya Towers, Olaya Main Street, P.O. Box 8022 Riyadh 12213 Kingdom of Saudi Arabia Phone
No: +966 11 483 9100 and Fax No: +966 11 483 9101 website: www.ashmoregroup.com.
15.2. Until the date of preparation of these Terms and Conditions and any date of its update, the Fund
Manager acknowledges that there is no current conflict of interest between the interests of the
Fund and the interests of the members of the Board of the Fund or the Fund Manager. The Fund
Manager will disclose any other important activity or interest related to the members of the Board
or related to the Fund Manager itself that may have a conflict with the interests of the Fund.
15.3. The Fund Manager acknowledges that there is no activity or interest that may have a conflict
with the interests of the Fund. Moreover,the commercial activities or other interests related to the
Fund Manager are not likely to cause any material conflict of interests that may negatively affect
the performance bythe Fund Manager of its duties towards the Fund.
15.4. The Unitholdersacknowledge that the Fund Manager has full authority to delegate to one or more
financial institutions to act as an advisor, sub-Manager, administrator, custodian, registrar, trustee,
custodian, agent, or broker of the Fund and to contract with such party to provide investment or
custody or registrar services of the Fund Assets directly or indirectly hereinafter referred to as
“Delegated Party”.
The Fund Manager shall provide the Fund with the services of specialized employees in the field of
supervision, management and accounting for the management of the Fund in an effective manner.
This shall include the notation of the subscription and redemption operations, the sale and purchase
operations, financial transfers and ratification of the accounts’ balances and provision of information
in respect thereof, in response to the inquiries of aUnitholder. The Fund Manager shall be authorized
by the Board to delegate any of the above-mentioned tasks to a third party.
The Fund Manager has delegated certain functions to third parties as set out below:
27
- The custody of the Fund to HSBC Saudi Arabia Limited on the terms of a custody Agreement
between the Custodian and the Fund Manager.
- The administration of the Fund to HSBC Saudi Arabia Limited on the terms of an
administration agreement between the Administrator and the Fund Manager.
- The Registrar functions to HSBC Saudi Arabia Limited on the terms of a registrar agreement
between the Registrar and the Fund Manager.
15.5. The Fund Manager is consideredan authorized person under the CMA license number 14174-22
issued on 19/03/1435H, corresponding to 20/01/2014G pursuant to the Authorised Persons
Regulations.
16. Custodian
16.1. HSBC Saudi Arabia Limited has been appointed as the Custodian of the Fund.
16.2. Address of the Custodian:
HSBC Building, 7601, Olaya Street North (Al Mourooj Area)
P.O. Box 9084 Riyadh
11413, Kingdom of Saudi Arabia,
Tel. +966 11 299-2338
Fax +966 11 299-2348
Website: www.hsbcsaudi.com
17. Auditor
17.1. KPMG Al Fozan and Al Sadhan will be the official auditor of the Fund.
17.2. Address of the Auditor:
KPMG Al Fozan & Al Sadhan
Salahuddin Street, KPMG Tower
P.O.Box 92876
Riyadh, 11663
Kingdom of Saudi Arabia
Tel 00966 11 874 8500
Fax 00966 11 874 8600
Website: kpmg.com.sa
18. Annual Audited Financial Statements
18.1. The Fund Manager will prepare audited financial statements for the Fund and review them
pursuant to the standards issued by the Saudi Organisation for Certified Public Accountants
(SOCPA).
18.2. The Fund Manager will provide Investors with the annual audited financial statements free of
charge within 90 calendar days of the Gregorian year end. The Fund will also provide Investors
28
with the semi-annual unaudited financial statements within 45 calendar days of the end of such
period. Investors and Potential Investors will be permitted to claim a copy of such financial
statements free of charge upon written requests to the investment funds management of the Fund
Manager, or through the Fund Manager website www.ashmoregroup.com and Tadawulwebsite. In
addition, audited financial statements will also be mailed to the Authority.
19. Characteristics of the Units
Upon the ultimate discretion of the Fund Manager pursuant to these Terms and Conditions, it may
issue an unlimited number of Units in the Fund, all of the same class. Each Unit represents an equal
common interest in the Fund. If the Fund was liquidated, subscribers will share the Fund's net assets
by the percentage of owned Units in the Fund at the time.
20. Other Information
20.1. The Subscribers may contact the Fund Manager to obtain any other information related to the
Fund.
20.2. The Fund Manager or any of its subsidiaries, managers, officials, employees, agents, or
managers, officials, employees or agents of its subsidiaries (“Related Party”) shall not be liable
towards the Unitholder for any loss, damage, costs, expenses or any obligations due from the
Unitholder or the Fund Assets, unless this is as a result of willful misconduct of the Related
Party,its bad faith, gross negligence or fraud.
20.3. The Unitholder shall not have any rights related to the Fund's investments, or any part thereof,
which include without limitation, voting in general assemblies for companies listed on the Stock
Exchange and invested in by the Fund. A Unitholder may not transfer or assign any of its rights
without the written consent of the Fund Manager. The Fund Manager shall not be liable for any
act or omission or the solvency of agents and financial institutions used in the ordinary course of
business.
20.4. The Unitholder is aware and agrees that the above services are offered against fees to be levied
on the Fund's account. With respect to authority delegations, the Unitholder understands that the
Fund Manager shall not disclose any information regarding the Unitholder to the Delegated Party
unless any applicable law or regulation in any applicable jurisdiction requires such disclosure.
20.5. The Fund Manager shall open an account with a local bank in the Kingdom of Saudi Arabia in
the name of the Fund in order to deposit any amounts in connection with the Fund in accordance
with these Terms & Conditions and the Regulations.
29
20.6. Taxation considerations and Zakat
Unitholders and prospective Subscribers should seek professional advice as to the tax consequences of
acquiring, holding, redeeming or otherwise disposing of Units. Subscribers should note that, if
required and permitted to do so by law, the Fund Manager may pay from the Fund any taxes due in
respect of the Fund, if any, to be revealed in the annual and semi-annual financial statements. The
current and prospective Subscribers who are not resident in the Kingdom should note that any
investments in the Fund may be subject to Saudi withholding tax.
The Fund Manager shall not pay any zakat on behalf of the Subscribers. Subscribers shall be
responsible for the payment of any zakat on the Units they hold in the Fund.
20.7. Anti-Money Laundering
Additional documentation beyond the subscription form may be required to comply with applicable
anti-money laundering legislation and to verify the identity of Subscribers. This information will
remain confidential. The Fund Manager and the Administrator reserve the right to request such further
documentation or information from a prospective Subscriberas may be required. Failure to provide
documentation and to prove identity to the satisfaction of the Fund Manager or the Administrator may
result in the rejection of a subscription or in a compulsory redemption.
20.8. The Fund Manager will render the following services in connection with the investment,
management and realisation of the cash and the Fund Assets:
- identifying and evaluating suitable investment opportunities for possible investment by the
Fund;
- advising on the merits, structure and financing of any acquisition or disposal of any
investment;
- investing and reinvesting the assets of the Fund in investment opportunities;
- negotiating and arranging acquisitions, disposals and other transactions in or relating to the
investment opportunities of the Fund;
- providing any undertakings to any party the Fund deals with as it may see appropriate;
- making available one of its individual executives or nominate some other suitable person to
serve on the board of any investee company (but in no event where such appointment or
nomination of a board member would in itself result in adverse tax consequences for the Fund
or the Fund Manager);
- exercising voting, management, consultation and other rights attaching to or related to the
investments;
- monitoring the performance of the assets of theFund and making recommendations in relation
thereto;
- engaging consultants, technical advisers, counsel, accountants or such other persons as the
Fund Manager may deem necessary or advisable in carrying out the above duties;
- assisting in engaging such support services as the Fund shall require;
- preparing material (including valuations) for inclusion in reports of the Fund; and
- generally assisting in transactions to which the Fund is a party.
30
The carrying out of the Fund Manager’s duties hereunder shall be subject to:
- the Terms & Conditions;
- the Regulations, issued by the CMA's Board, based on the Capital Market Law and the rules
made thereunder, including the Authorised Persons Regulations and all other applicable rules
and regulations that may be in force from time to time; and
- any other matter to which a prudent investment manager and adviser should reasonably pay
regard to in the proper discharge of its duties.
21. Shari'a-based investment funds
21.1. Names of the Shari'a Committee and their profiles
The responsibilitiesof the Shari'a Committee are to approve the Shari'a Criteria which identifies the
companies which are eligible for investment (i.e. the companies the Fund may invest in), and
reviewing the documents of the Fund to make sure they are compliant with the Shari'a Criteria. The
table below states the names of the members of the Shari'a Committee and their profiles:
Name Position Qualifications
Shaikh/Dr. Mohamed Ali Elgari Member of the Shari'a
Committee
Islamic Economics Professor at
the King Abdulaziz University
in Saudi Arabia. He is currently
affiliated with a number of
organizations and financial
institutions asa member of the
Sharia’a committees in addition
to being member in the
International Islamic Fiqh
Academy, as well as member in
Accounting and Auditing
Organization for Islamic
Financial Institutions
(AAOIFI);
Sheikh Mohamed Elgari also
achieved his PhD in Economics
from the University of
California.
Sheikh. Muhammad Ahmad Member of the Shari'a
Committee
Sheikh Mohammed has over 10
years of experience in academic
Shari'a consultation, Islamic
banking and financing related to
redesigning traditional products,
as well as restructuring of
investment funds in banks,
insurance companies, securities
31
management companies, shares
sector and try to find scientific
solutions in order to be able to
obtain Shari'a solutions
correctly and rapidly.
Sheikh Mohammed holds the
international certificate from
Dar Al Oloum University
managed by mufti Taqi
Othmani, and the international
fiqh certificate from Ahsan Al
Oloum University.
21.2 The Shari'a Committee members are individually paid the annual amount of SR.55,312.50 in
return for their services, and these amounts areto be paid up from assets of the Fund.
21.3 Shari'a Criteria
Annex 1 of these Terms and Conditions states the criteria which the Shari'a Committee will apply to
make sure of Shari'a complying investments.
22. International Investment Funds
The Fund Manager will not invest in this type of Fund.
23. Initial Offer
No minimum amount is required from subscriptions prior to the start of the Fund activities.
Subscription funds will not be invested in money market instruments or funds prior to commencement
of the Fund's operation.
24. Investment by the Fund Manager in the Fund
The Fund Manager shall not invest in the Fund.
25. Subscriptions and Redemptions Procedures
25.1. Dealing days on which Units may be sold and redeemed
The days on which these requests are processed are Mondays and Wednesdays of every week.
25.2. Deadline for Submission of Instructions related to the Purchase and Redemption of Units
The subscription and redemption applications may be received during any Business Day. The
deadline for submitting the instructions related to the purchase or redemption of Units when the Fund
Manager receives the subscription application and the amounts related to the purchase of the required
Units or the redemption application in the Fund is before 1 PM (Kingdom of Saudi Arabia’s time) on
the Dealing Day. In the event the application or the Subscription amount is received after such
specified time, it shall be handled as an application for the following Dealing Day.
32
25.3. Maximum Period of Time between the Subscription and Investment in the Fund
If the subscription application is received before 1 PM on Mondays and Wednesdays, it shall be
effective on the same Dealing Day. If received after this time, it will be processed on the following
Dealing Day.
25.4. Procedure to provide instructions in connection with the subscription and redemption of
Units
- Procedures to submitinformation related to the purchase of Units:
Unitholders wishing to purchase Units can do so by completing and delivering to Ashmore
Investment Saudi Arabia a completed and signed Subscription Application Form and including the
necessary proof of identity and evidence of deposit of the necessary monies in the account of the Fund
at the approved bank, in addition to a signed copy of these Terms and Conditions.
- Procedures to submit information related to the redemption of Units:
Unitholders can request the redemption of part or all of their Units upon completing and signing a
redemption form and delivering the completed form to the Fund Manager. The Unitholders may
obtain aRedemption Form from the Fund Manager directly. Redemptions are subject to the conditions
set out in the Fund Summary of these Terms and Conditions, according to which the Minimum
Redemption is SAR 10,000 and the Minimum Retained Investment Balance is SAR 10,000.
25.5. The Maximum Period of Time between the Redemption and Payment of the Redemption
Revenues to the Unitholders
The redemption amounts will be provided to Unitholders prior to the close of business of the fourth
day following the Valuation Day on which the redemption price was determined.
25.6. The minimum number and value of Units to be owned, sold or redeemed by aUnitholder
Minimum Subscription Amount/Minimum Redemption:
The Minimum Initial Subscription is SAR 10,000
The Minimum Additional Subscription is SAR 10,000
The Minimum Redemption is SAR 10,000
Minimum OutstandingInvestment Amount:
The minimum outstanding investment amount is SAR 10,000, and if any redemption will lower the
Subscriber’sinvestment in the Fund below SAR 10,000, the Fund Manager shallrequire that
theSubscriberresubmit the Redemption Form before the Cut-Off Time and set the redemption amount
requested according to the following principle:The Subscribershall maintain an investment of not less
than SAR 10,000.
25.7. Authorityof the Fund Manager and circumstances in which it may suspend, postpone or
rejecta Subscription or Redemption
The Fund Manager shall have the right to reject the subscription in the following cases:
33
a) If such subscription leads to a breach of the Regulations applicable to the Fund and those that
may be imposed by the CMA from time to time.
b) If the Subscriberis not able to meet the requirements of these Terms and Conditions.
c) If the Subscriberis not able to submit a signed and approved subscription application.
d) If the Subscriberis not able to pay the required subscription amount.
If the subscription application is rejected in whole or in part for any reason whatsoever, the Fund
Manager shall return the unused part of the subscription amount to the Subscriber in addition to the
subscription fees received by the Fund Manager to issue the Units to the Subscriber in proportion to
the accepted or rejected parts, by means of a cheque sent by mail or through a bank transfer.
The Fund Manager shall have the right to reject or postpone, in whole or in part, any redemption
request in the following cases:
a. If the total aggregate requests for redemption on any DealingDay exceeds ten (10) per cent of
the NAV of the Fund on the relevant Dealing Day, andin case the Fund Manager has received
redemption requests exceeding 10% in any Dealing Day, selected requests will be
[postponed]partly or fully based on the precedence of the redemption requests submitted first.
The proceeds of all redemptions will be paid in the denominated currency of the Fund by
crediting the Unitholder's account with their bank, in accordance with the Unitholder’s
instructions and transfer charges will be deducted.
b. In the event that the dealing and trading in the Stock Exchange has been suspended on the
dealing day in a manner such as it becomes difficult to refund or value the Units, the deferred
redemption requests will be effected prior to subsequent redemption requests on the following
DealingDay and priority shall be given to the requests first submitted.
In case the Fund Manager foresees, at its discretion, that valuation of the Fund's assets is not
reliable for certain reasons such as share market being closed on the Dealing Day, the Fund
Manager may postpone the valuation of the Fund's assets and suspend the Investors' rights in
purchasing or redeeming units of the same for no more than two days from the final date of
submission of private instructions to purchase or redeem the units provided that the Fund
Manager should obtain a prior written consent of Fund Board. The Fund Manager shall execute
the postponed or suspended requests on the first following Dealing Day proportional to the
chronological order of requests.
25.8. As an exception to paragraph (a) of Article 50 of the Investment Funds Regulations, it is
permitted for a Unitholder to own more than 10% of Units from the NAV of the Fund. As the
Fund has received the Authority's approval to exempt the Fund from Paragraph (a) of Article 50
of the Investment Funds Regulations.
26. Valuation of the Fund Assets
26.1. Method of Determination of the Total Assets Value of the Fund:
The Total Assets Value of the Fund shall be calculated by adding the value of each asset based on the
closing price of the shares in the Fund’s portfolio on the relevant Valuation Day.The value of the
Fund's net assets invested in IPOs will be determined based on the subscription price following the
allocation process of the relevant IPO shares. The value of the assets invested in the Money Market
Instruments will be determined based on the cost of the contract in addition to profits due up to the
34
day where the Valuation Point is made. In case of investment in other investment funds, the last
declared unit price will be used for valuation purposes.
The Net Assets Value of the Fund will be calculated by subtracting the total liabilities of the Fund
from its total assets, as follows:
a. Deducting the fixed expenses, including without limitation the fees of the members of the
Board, the Auditor’s fees and other fees stated in paragraph 11 of these Terms and
Conditions.
b. Deducting the management fees from the total Fund Assets value after deducting the fixed
expenses.
c. Deducting the custody fees, registrar fees and administration fees from the total Fund
Assetsvalue after deducting the fixed expense and the management fees.
26.2. Number and time of Valuations
The Fund shall be evaluated on Mondays and Wednesdays at the close of business of the Stock
Exchange at 5 PM. The Unit Price will be announced on the Business Day following the Valuation
Day. If the Valuation Day happens to be the same day of a public holiday in the Kingdom of Saudi
Arabia where the stock exchange is closed, then thevaluation of the assets of the Fund will take place
on the next Valuation Day.
26.3. Method of Calculation of the Subscription and Redemption Prices
The Unit Price on subscription or the Unit Price on redemption shall be represented in the NAV per
Unit calculated by the Administrator on the next Valuation Day on which the Units have been
subscribed for or redeemed. The NAV of the Fund for the purpose of purchasing or redeeming of
Units is calculated by subtractingthe total liabilities of the Fund from the total asset value of the Fund
. There are no fees other than those specified in Paragraph 11 of these Terms and Conditions. The
Unit Price is determined by dividing such resulting figure by the total number of outstanding Units on
the relevant Valuation Day. The Unit Price upon commencement of subscriptions shall be SAR 10.
26.4. Place of Publications of the Unit Price and Number of Publications
The Fund Manager will publish the Unit Price on its official website and the Tadawul website on the
Business Day following each Valuation Day which is Tuesday and Thursday of every week.
27. Early Redemption Fees:
In case the Unitholder requests the redemption of Units within 30working days of his/its subscription
the following will apply:
- Early redemption fees of 5% of the net value of the redeemed Units will be applied and shall be paid
to the Fund.
- These fees will be calculated on first in first out basis.
There are no circumstances where Investors may be exempted from early redemption fees.
28. Termination of the Fund
28.1. The Fund Manager reserves the right to terminate the Fund and it shall start the liquidation
35
procedures of the Fund by means of a notice not exceeding sixty (60) calendar days addressed to
the Subscribers after obtaining the CMA’s approval.If the Fund Manager deems that the value of
the assets of the Fund managed by the Fund or the expected rate of return is not sufficient to
justify the operation of the Fund or in case of any change in the rules, regulations or
circumstances that the Fund Manager may consider liquidation of the Fund, or in case of an
anticipated event that may lead to the consideration of the existence of the Fund as irregular, the
Fund Manager shall, after obtaining the consent of CMA, decide to terminate the Fund and shall
notify the Unitholders at least 60 calendar days in advance of the liquidation of the Fund.
28.2. In case of termination of the Fund, the assets ofthe Fundwill be liquidated as soon as possible, its
liabilities discharged and the remaining proceeds of such liquidation distributed to the Subscribers
in the proportion to the number of Units held by a Subscriber against the total number of Units in
issue. The net proceeds of liquidation will be distributed within thirty (30) Gregorian calendar
days from the date of completion of the liquidation.
29. Reporting to Unitholders
29.1. The Fund Manager shall submit to eachSubscriber registered on the Fund Manager’s register
through registered mail and on a quarterly basis (every three months), a report including:
a. NAV of the Units.
b. Number of Units owned by the Subscriber and their net value.
c. Record of the transactions of each Subscriberseparately, including any paid distributions to
the as of the last report submitted to the Subscribers.
29.2. The Fund Manager will provide a copy of the audited financial statements of the Fund according
to Article 36 of the Regulations, to each Unitholder upon its request to the Fund Manager. The
audited financial statements shall be made available to the public within a period not exceeding
90 calendar days from the end of the financial year of the Fund, without any charge. The initial
examined reports will be made available within 45 calendar daysfrom receiving a notice.
30. Conflict of Interest
The Fund Manager does not presently have any conflict of interest that may affect its tasks and duties
in connection with the Fund. In any event, the Fund Manager will seek to avoid any conflict of
interest arising between the Fund Manager’s interests or the relevant parties and the interests of
investors in the Fund, by placing the interests of Investors above the interests of the Fund Manager
and other relevant parties. However, the interests of any given Subscribershall not supersede those of
other Subscribersin the Fund. In case of potential conflict, the Fund Manager shall disclose it to the
Board to take a decision in this regard.
In case of conflict of interest, the Fund Manager will:
- use best efforts to equitably resolve conflicts of interest between the Fund and any other
collective investment schemes where the Fund Manager is a party, or where its affiliates or
clients are involved or any other investment portfolios managed by the Fund Manager.
- allocate investment opportunities between (i) the Fund, (ii) other collective investment
schemes with which it or its affiliates are involved and (iii) Clients of Investment Portfolios'
managed by the Fund Manager.
36
- treat each Unitholder equally and will not give any preference to any individual Subscriber.
The full procedures to be followed for dealing with conflicts of interest of the Subscribers will be
made available upon written request and free of charge.
31. Voting Rights Policies
After consultation with the Fund Manager’s compliance officer, the Board shall agree the general
policies in relation to voting rights available to the Fund due to its holdings which compromise its
investment portfolio. The Fund Manager, upon its sole discretion, will decide to exercise or not any
voting rights after discussions with its compliance officer.Unitholders will be provided with the
voting policies on demand.
A Unitholder cannot require the Fund Manager to vote in any particular manner, or to abstain from
voting, on any underlying shares held by the Fund.
32. Changes to the Terms and Conditions
The Fund Manager may, at any time and at its sole discretion to amend these Terms and Conditions,
andin case the amendment is material, it is required to obtain the CMA’s prior approval for such
amendments. The Fund Manager shall notify the Unitholders by mail orelectronic mailof the proposed
changes and furnish them with a copy of the amended Terms and Conditions. The amendments will
become effective sixty (60) calendar days from the date of any such notice.
33. Complaints Procedure
33.1. Any complaints that may arise should be submitted by aUnitholder to the following address:
Head of Compliance
Ashmore Investment Saudi Arabia
3rd
Floor
Tower B
Olaya Towers
Olaya Main Street
P.O. Box 8022 Riyadh, 31221, Kingdom of Saudi Arabia
Tel. +966 11 483 9100 Fax +966 11 483 9101
33.2. Full procedures for dealing with complaints will be made available by the Fund Manager upon
written request. In the event that the competent judicial authorities or the CMA request the results
of any complaint made by any Subscriberin the Fund, the Fund Manager shall provide them with
all the documents in respect thereof.In case no settlement was reached or no reply was given
within seven (7) Business Days, the Subscriber shall have the right to file its complaint with the
CMA – Subscribers Complaints Department. The Subscriber shall also have the right to file its
complaint before the CMA Committee for Resolution of Securities Disputes, 90 calendar days
from the date of filing the complaint at the CMA, unless the CMA notifies the complainant that it
may file the complaint with the committee before expiry of such period.
37
34. Governing Law
34.1. The Fund’s Terms and Conditionsare subject to the laws of the Kingdom of Saudi Arabia and the
Regulations issued by the CMA from time to time.
34.2. Any dispute arising between the parties concerning the Terms and Conditions shall be referred to
the Committee for Resolution of Securities Disputes.
35. Compliance with the Regulations
The Terms and Conditions of the Fund and the other Fund documents such as the forms of
subscription and redemption applications shall be compliant with the provisions of the Regulations.
They shall contain full, true and plain disclosures of all material facts relevant to the Fund, pursuant to
the provisions of the Investment Funds Regulations.
36. Summary of Financial Disclosure
1. Fees and Expenses
Summary of the Financial
Disclosure
Subscription Fee not more than2.00% of the subscription amount paid in advance.
Fund Management Fees 1.75% annual fees, deducted from the NAV of the Fund.
Redemption Fee N/A
Early Redemption Fee 5% of redeemed units' net value will apply if units were redeemed in
90 days after purchase.
Management Fee 1.75 % per annum of the NAV of the Fund calculated daily and
payable monthly
Custody Fee - 0.1% per annum of the NAV of the Fund if the value of the
assets of the Fund do not exceed SAR 187.5 million
- 0.09% per annum of the NAV of the Fund if the value of the
assets of the Fund is between SAR 187.5 million and SAR
562.5 million
- 0.08% per annum of the NAV of the Fund if the value of the
assets of the Fund exceeds SAR 562.5 million
(in all cases, Custodian Fees will not be less than SAR 11,250 per
month).
Transaction Settlement
Fee:
- Payment of SAR 140.63 to the Custodian in return for the
settlement of all transactions executed on the share of any
company invested therein by sale or purchase on a specific
date. It will be calculated and paid on daily basis from the
assets of the Fund.
Administrative Fee - 0.06% per annum of the NAV of the Fund if the value of the
assets of the Fund does not exceed SAR 562.5 million
- 0.05% per annum of the NAV of the Fund if the value of
theassets of the Fund isbetween SAR 562.5 million and SAR
38
937.5 million
- 0.045% per annum of the NAV of the Fund if the value of the
assets of the Fund exceeds SAR 937.5 million
(in all cases, Administration Fees will not be less than SAR 11,250
per month, calculated daily and payable monthly).
Registrar's Fee : A minimum of SAR 1,312.50 per month for the first fifty Subscribers
and SAR 187.50 for every ten additional Subscribers, calculated daily
and payable monthly from the total assets of the Fund.
Benchmark Fees: USD 8,000 (equivalent to SAR 30,000) for the first year of Fund's
operation, and USD 7,000 (equivalent to SAR 26,250) for the
subsequent years. They shall be calculated on daily basis and paid on
annual basis.
Board Members
Compensation
The total fees for Board members is SAR 10,000 annually for both
independent members representing SAR 5,000 per each independent
Board member, calculated on daily basis and payable annually from
the total assets of the Fund.
Shari'a Committee
Compensation
SAR. 55,312.50 to be calculated on daily basis and deducted annually
from the total assets of the Fund.
Dealing Costs The Fund shall bear all dealing fees and charges incurred in selling
and buying of equities in the Saudi Equity Market. They will be
stated in the annual report after the end of the financial year of the
Fund
Auditor’s Fee SAR 15,000 for the first year of Fund's operation and SAR. 25,000
for the subsequent years. This will be calculated on daily basis and
shall be payable annually from the totalassets of theFund.
Fee for publishing Fund
information on the
Tadawul website
SAR 5,000 per annum, calculated daily and payable annually from
the total assets of the Fund .
Supervisory Fee SAR 7,500 per annum calculated daily and payable annually from the
total assets of the Fund .
Borrowing Fees As per the prevalent borrowing cost in the market, stated in the
annual report after the end of the Fund’s financial year
The expenses stated above are approximate and the actual expenses will be stated in the annual report
of the Fund.
2. Illustrative example of calculation of the fees based on the Fund assets
Hypothetical investment of SAR 100,000 in the Fund of a size of SAR 10,000,000 and the annual
return being 10%.
39
Types of Fees Rate of Fees of the NAV
(Annual)*
Value of the Fees Net Assets
Value (Annual) in SAR**
Subscription Fee 2% (of the subscription
amount)
2,000
Management Fee 1.75% 1,7,50
Custody Fee 0.10% 100
Transaction Settlement Fees*** 0.42% 422
Administrative Fee 0.06% 60
Registrar's Fees**** 0.157% 157
Independent Auditor’s Fees 0.15% 150
Board members Fees 0.10% 100
Shariah Committee's Fees 0.553% 553
Supervisory Fees 0.075% 75
Fee of publishing the information
on Tadawul
0.05% 50
Benchmark Fees 0.30% 300
Total fees and expenses 3.715% 3,717
Net revenue achieved during the
period
6.285% 6,283
Investment amount at the end of
the period
106,283
* Fee value percentage = (fee value out of net asset value ÷ the invested amount) x 100
** Fee value out of net asset value = (annual fee amount ÷ fund volume) x invested amount.
*** Assuming that the number of transactions completed is 300 in a year
**** Assuming that the number of Subscribers is 50 or less.
Note: the above example presumes that the Unit price did not change for a period of one year since
the subscription. The subscription fees are paid directly from the Investor.
3. This paragraph describes the basis of calculation of the fees, method of collection and time of
payment:
Actual fees and expenses for the year of 2016
Types of Fees Method of
Calculation of Fees
and Expenses
Remarks
Subscription Fee Paid in advance before
subscription in the
Fund
Management Fee Calculated on a daily
basis from the NAV
of the Fund and
payable monthly
(Fund Assets x
percentage)
1.73% 2,693,968.00 Borne by the
Fund
40
Custody Fee
Calculated on a daily
basis and payable
monthly with a
minimum of SAR
11,250 per month
0.10% 157,387.00 Borne by the
Fund
Transaction
Settlement Fee
The payment of SAR.
140.63 to the
Custodian in return for
the settlement of all
transactions executed
over a share of any
company of the
companies where
investments are made
by sale or purchase on
a specific date. Will
be calculated and paid
on daily basis out of
the Fund's total assets
0.01% 18,703.00 Borne by the
Fund.
Administrative
Fee
Calculated on a daily
basis and payable
monthly with a
minimum of SAR
11,250 per month
0.09% 135,199.00 Borne by the
Fund
Registrar Fee
Calculated on a daily
basis and payable
every month with a
minimum of SAR
(1,312.50) per month
for 50 Subscribers and
SAR 187.5 for every
10 additional
Subscribers
0.01% 15,750.00 Borne by the fund
Independent
Auditor’s Fee
Calculated on a daily
basis and payable
annually (SAR
15,000) for the first
year and (SAR.
25,000) for the
subsequent years.
0.02% 25,000.00 Borne by the
Fund
Fee of publishing
the Fund’s unit
prices on Tadawul
Calculated on a daily
basis and payable
annually (SAR 5,000)
0.003% 5,000.00 Borne by the
Fund
41
Benchmarking
Fees
USD 8,000
(equivalent to SAR
30,000) for the first
year of Fund's
operation, and USD
7,000 (equivalent to
SAR 26,250) for the
subsequent years.
They shall be
calculated on daily
basis and paid on
annual basis.
0.02% 26,250.00 Borne by the
Fund.
Board Members
Fee
Calculated on a daily
basis and payable
annually (SAR
10,000)
0.006% 10,000.00 Borne by the
Fund
Shari'a Committee
Fees
annual fees of SAR
55,312.50
0.04% 55,313.00 Borne by the
Fund
Other Fee 0.00% 120.00 Borne by the
Fund
Supervisory Fee
Calculated on a daily
basis and payable
annually (SAR 7,500)
0.005% 7,500.00 Borne by the
Fund
Total expenses 2.03% 3,150,190.00 Borne by the
Fund
Average NAV for
the year 2016.
155,947,349.00
4. Holding Fund
Not applicable.
5. Dealing Expenses
The value of the dealing expenses for the year end 2016 is SAR 190,227.93 which is equals to 0.12%
of net assets value.
42
6. Prior Performance:
Fund Total
Revenues
Benchmark Total
Revenues
Benchmark Total
Revenues
Benchmark
2015 2015 2016 2016 3 years 3 years
Ashmore
IPO Fund
-2.47% -27.09% 0.61% -7.35% N/A N/A
6. Remuneration of the Independent Members of the Board
Annual fees amounting to SAR 10,000 for both independent board members representing SAR 5,000
each will be calculated on a daily basis and shall be deducted annually from the Fund NAV.
7. Financial Arrangements of the Foreign Fund
Not applicable.
8. Early Redemption Fee
5% of redeemed units' net value will apply if units were redeemed in thirty (30) business days after
subscription.
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Fund
Benchmark
43
Annex 1
Shari'a Criteria
1- At all times, the investments of the Fund shall be in compliance with the following Shari'a Criteria
sat by the Shari'a Committee:
1.1 It is not permitted to invest in companies which activities are as the following:
1.1.1 Financial activities which are not in compliance with Shari'a like conventional banks and
conventional insurance companies.
1.1.2 Producing and/or dealing with alcohol and tobacco.
1.1.3 Producing and/or dealing with weapons.
1.1.4 Producing and/or dealing with pork and its derivatives.
1.1.5 Producing and/or dealing with non-Shari'a compliant meat.
1.1.6 Managing casinos or producing its machines.
1.1.7 Producing and/or dealing with adultery media and cinemas.
1.1.8 Restaurants and/or hotels which serves alcohol and/or operate nightclubs.
1.1.9 Any other activities not permitted by the Shari'a Committee.
1.2 The Fund is permitted to invest in Shari'a compliant companies who have been subject to a
financial anaylsis and do not breach the below criteria:
- Companies which avail conventional facilities equal to or more than 33% of the market value
of its assets.
- Companies with a total debt of more than 49% of its assets according to its financial
statements.
- Companies which invest liquidity in short-term instruments such as bank deposits or
securities with a conventional interest equivalent to or more than 33% of market value of its
assets.
- Companies in which the revenue sharing from non-Shari'a compliant activities is more than
5%, whether this revenue is interest or any other non-permissible income.
1.3. The Fund Manager should seek the approval of the Shari'a Committee before buying the shares of
any private company.
44
3. The Fund Manager may invest in short-term Shari'a compliant deposits or current accounts in
Islamic banks, in addition to investing in the shares of a private company in order to secure the Fund
expenses or enter into transactions and other investment opportunities.
Purification
After getting the approval of the Shari'a Committee, the Fund Manager should [identify] the income
generated form non-Shari'a sources and such income into a private account in order to give it to
charity. Purification process should take place as per the following:
- Identify the income generated form non-Shari'a sources for every company the Fund invests
in;
- Divide the total amount of the income generated form non-Shari'a sources on all shares to get
the non-permissible income's share;
- Multiply the divided amount in the number of invested shares to get the final amount of the
income generated form non-Shari'a sources; and
- Repeat the same steps with all companies the Fund invests in order to transfer it to charity
under the supervision of the Shari'a Committee.
45
Undertaking
I/We hereby confirm that I/We have received, read and understood these Terms and Conditions of
Ashmore IPO Fund and confirm my/our acceptance of the Terms and Conditions by signing a copy of
this document.
Name Name
………………………………… …………………………………
Signature Signature
………………………………… …………………………………
Date Date
………………………………… …………………………………
STAMP (for institutions).
This is an unofficial translation of the CMA approved Arabic version of the Terms and Conditions.
Investor's are advised to review and rely on the Arabic version as in case of any contradiction, the
Arabic version will prevail. Ashmore Investment Saudi Arabia takes no responsibility for the
accuracy of the English version.
46