THE INTERNATIONAL STOCK EXCHANGE AUTHORITY LTD

PO BOX 623, HELVETIA COURT, BLOCK B, THIRD FLOOR, LES ECHELONS, ST PETER PORT, GUERNSEY

TISE is a registered trademark of The International Stock Exchange Group Limited (Guernsey registered company number 57524). It wholly

owns The International Stock Exchange Authority Limited (Guernsey registered company number 57527), which is licensed by the

Guernsey Financial Services Commission to operate an investment exchange under the Protection of Investors (Bailiwick of Guernsey) Law,

1987, as amended.

CHAPTER 7

INVESTMENT

VEHICLES

GUIDANCE NOTES

2

Chapter 7 Investment Vehicles – Guidance Notes

1) 7.1 - SCOPE OF CHAPTER

a) Interpretation

i) These Guidance Notes are to be used in conjunction with Chapter 7 of the Listing Rules in

order to explain the implications of such rules and provisions, indicate possible means of compliance and/or recommend a particular course of action or arrangement.

ii) Where references are made in Chapter 7 and these Guidance Notes to “directors or other equivalent officers of the investment vehicle” equivalent officers would include, but are not limited to, general partners or designated members of a partnership, trustees, managers and the directors of such entities, as appropriate.

b) Investment Vehicles that are not specifically addressed in Chapter 7

i) Islamic Finance - Shariah Compliant Investment Vehicles

Shariah-compliant investment vehicles wishing to list securities should consult the Authority at an early stage.

3

2) 7.2 - METHODS OF LISTING AVAILABLE TO INVESTMENT VEHICLES

a) Methods Available to Investment Vehicles without Securities Already Listed

i) Investment vehicles without securities already listed may bring securities to listing by means of: (1) an introduction; (2) an offer for subscription; (3) an offer for sale; and (4) a placing.

ii) The Authority may permit investment vehicles to bring securities to listing by other

methods in cases where it is satisfied that the number and distribution of securities in issue will allow the proper operation of the market.

iii) An investment vehicle contemplating a method other than those stated above must consult the Authority at an early stage.

b) Methods Available to Investment Vehicles with Securities Already Listed

i) Investment vehicles with securities already listed may bring securities (whether or not the securities that are the subject of the application are of a class already listed) to listing by any of the following methods: (1) an offer for subscription; (2) an offer for sale; (3) a placing; (4) a rights issue; (5) a consideration issue; (6) a capitalisation issue; (7) a conversion of securities of one class into securities of another class; (8) an exercise of options or warrants to subscribe for securities; and (9) such other method as may be approved by the Authority either generally or in any

particular case. c) Offer for Subscription

i) An offer for subscription is an invitation to the public by or on behalf of an investment vehicle to subscribe for securities of the investment vehicle not yet in issue or allotted.

ii) In the case of offers for subscription, the Authority must be satisfied as to the fairness of the basis of allotment so that every investor who applies at the same price for the same number of securities receives equal treatment.

d) Offer for Sale

i) An offer for sale is an invitation to the public by or on behalf of the holders or allottees of securities to purchase securities of the investment vehicle already in issue or agreed to be subscribed.

ii) In the case of offers for sale, the Authority must be satisfied as to the fairness of the basis

of allocation so that every investor who applies at the same price for the same number of securities receives equal treatment.

e) Preferential Allocation

i) In an offer for sale or subscription:

4

(1) existing shareholders, directors, employees and past employees of the investment vehicle or its subsidiaries may be included in the list of clients of the Sponsor or any securities house assisting with the offer, with whom a proportion of the securities on offer are being placed firm, subject to the aggregate amount reserved for allocation to such persons being disclosed in the Listing Document; and

(2) details of preferential allocation of securities not placed firm and made to existing shareholders, directors, employees and past employees of the investment vehicle or of its subsidiaries must be disclosed in the Listing Document.

f) Placing

i) A placing is the obtaining of subscriptions for or the sale of securities by an investment vehicle or intermediary (such as the sponsor) privately from or to persons selected or approved by the investment vehicle or intermediary.

ii) The Authority may not permit a new investment vehicle to be listed by way of a placing if there is likely to be significant public demand for the securities.

iii) The Authority may allow preliminary arrangements and placings to be made to dispose of securities before the start of dealings where it is necessary to comply with the requirement that a minimum prescribed percentage of any class of listed securities must at all times be held by the public.

iv) The Authority may require a list of placees to be provided to it.

g) Introduction i) An introduction is a method of bringing securities to listing that does not involve an issue

of new securities or any marketing of existing securities because the securities are already widely held by the public.

ii) For an introduction, the securities must be of such amount and so widely held that their

marketability when listed can be assumed. To satisfy itself of this the Authority may request to examine the investment vehicle’s share register.

iii) An introduction will not be permitted if a change in the nature of the business is in

contemplation or, if within six months prior to listing, there has been a marketing of those securities, except where the investment vehicle is seeking a secondary listing on the Exchange.

h) Rights Issue

i) A rights issue is an offer to existing holders of securities to subscribe for further securities in proportion to their holdings by the issue of a renounceable provisional letter of allotment (or other negotiable document) that may be traded (as “nil paid” rights) for a period before payment for the securities is due. The renounceable provisional letter of allotment (or other negotiable document) must specify the time, which must not be less than twenty-one days, in which the offer may be accepted.

ii) In a rights issue the Authority may grant a listing of securities in “nil paid” form. Upon the

securities being paid up and the allotment becoming unconditional in all respects, the listing in “nil paid” form will be amended without any need for further application for a listing of fully paid securities.

5

iii) If existing holders do not take up their rights to subscribe in a rights issue: (1) the securities to which the offer relates must be offered for subscription on terms that

any premium obtained over the subscription price (net of expenses) is to be retained for the account of such holders, except that if the proceeds for an existing holder do not exceed three pounds sterling, the proceeds may be retained for the investment vehicle's benefit;

(2) the securities may be allotted or sold to underwriters, if on the expiry of the subscription period no premium (net of expenses) has been obtained; and

(3) no excess applications are permitted without the prior permission of the Authority. A director or equivalent officer of the investment vehicle will not, save in exceptional circumstances, be permitted to subscribe for or purchase excess securities without those securities being offered to existing holders on the same terms.

iv) In every rights issue the investment vehicle may make arrangements to dispose of

fractional entitlements, provided that such arrangements are disclosed in the Listing Document.

i) Capitalisation Issue

i) A capitalisation issue is an allotment of further securities to existing shareholders, credited as fully paid up out of the investment vehicle's reserves or profits, in proportion to their existing holdings, or otherwise not involving any monetary payments.

ii) A capitalisation issue includes a bonus issue and a scrip dividend scheme under which

profits are capitalised. iii) No investment vehicle shall proceed with a capitalisation issue involving a payment up of

securities out of reserves, unless it has obtained the prior written confirmation of its auditors that its reserves are sufficient for this purpose.

j) Consideration Issue

i) A consideration issue is an issue of securities for the acquisition of assets including, but not limited to, real property, securities and intangibles.

ii) A vendor consideration placing, which is a marketing by or on behalf of vendors of

securities allotted to them as consideration for an acquisition, will be treated as a placing and not a consideration issue.

k) Exchange, Substitution and Conversion of Securities

i) Securities may be brought to listing by an exchange, substitution or conversion of securities into other classes of security.

l) New Investment Vehicles and Disclosure of Advisers' Interests

i) If following an offer for sale, offer for subscription or placing by a new investment vehicle, any of the new investment vehicle's advisers becomes interested in 3% or more of any class of securities being marketed (calculated exclusive of treasury shares), the interest must be notified to the Authority before dealings in the securities commence.

ii) Advisers for the purpose of this Guidance Note include the Sponsor and its associates, its

lawyers, reporting accountants and any other financial advisers appointed by the investment vehicle in connection with its application for listing.

6

3) 7.3 -GENERAL PRINCIPLES AND CONDITIONS FOR LISTING

a) Duly Incorporated / Established

i) If there is in any doubt as to whether the jurisdiction of the investment vehicle’s place of

incorporation or establishment will be acceptable to the Exchange, the Exchange should

be consulted at an early stage.

b) Management – Expertise and Independence

i) An investment vehicle must ensure that the directors or equivalent officers and any

investment manager have the necessary experience and expertise and are able to

demonstrate their independence (as referred to in greater detail in Guidance Notes 3(d)

and (e) below) and must include this information in the Listing Document as required by

the relevant paragraphs of Appendix IX, Part B (Listing Documents: Disclosure

Requirements).

c) Spread of Risk

i) In certain circumstances an investment vehicle may not be required to be invested with

the aim of spreading investment risk. If an investment vehicle does not intend to invest

with the aim of spreading risk the Exchange should be consulted at an early stage.

ii) The investment policy (as set out in its constitutional documents or equivalent document)

must be disclosed in the Listing Document and must be sufficiently precise and detailed

to allow investors to form an adequate assessment of the assets in which the investment

vehicle is investing.

d) Conditions for Listing - The Securities i) Provisions Relating to Securities for which Application is Made

(1) Exceptions to Listing Rule 7.3(2)(a)(x): (a) open-ended investment vehicles; (b) securities issued through the exercise of options and/or warrants which are

granted subject to the provisions contained in the Listing Document; and/or (c) securities issued in respect of an employee share scheme which are issued subject

to the provisions contained in the Listing Document; (d) securities issued at a discount of more than 10% of the middle market price (or

the net asset value if there is no middle market price for the securities) if: (i) the issue at that discount has been specifically approved by the majority of

the holders of that class of securities or offered first on a pro rata basis to those holders; or

(ii) the issue is an issue of securities for cash or the sale of treasury shares for cash under a pre-existing general authority to disapply the pre-emption rights of existing holders of the securities.

(2) There are no provisions of Guernsey or Jersey law equivalent to section 561 of the Companies Act 2006 of England and Wales which confers pre-emption rights on existing holders of securities in connection with the allotment of securities. As existing holders of securities in the UK are afforded protection under the above statute, there is no rule equivalent to Listing Rule 7.3(2)(a)(x) in the listing rules of the

7

United Kingdom Listing Authority (the "UKLA"). However, as no similar protection is available to existing holders of securities under Guernsey or Jersey company law, it has been deemed necessary to retain Listing Rule 7.3(2)(a)(x) in the Listing Rules. In relation to applications where there are to be dual listings on the London Stock Exchange and the Exchange, it is often the case that the Listing Document, which is usually prepared under the Listing Rules of the UKLA, does not cover this point as the position is already dealt with by statute. The constitutional documents prepared in accordance with Guernsey or Jersey law are generally silent on this point, although they can be drafted so as to confer specific pre-emption rights on holders if it is felt appropriate. In the circumstances, the policy of the Listing and Membership Committee is to grant derogation upon request from the need for the Listing Document or the constitutional documents of the investment vehicle to include reference to this Listing Rule, subject to an undertaking from the directors or equivalent officers of the investment vehicle to observe this requirement for so long as the securities of the investment vehicle are listed on the Exchange.

(3) The middle market price of securities means the middle market quotation for those securities as derived from the Official List or any other recognised stock exchange the securities are listed on at the relevant date.

(4) Where there is no middle market price for the securities of an investment vehicle the

net asset value will apply unless otherwise agreed with the Exchange. When

calculating the net asset value per security any treasury shares held by the investment

vehicle are not to be taken into account.

ii) Transferability (1) Nil or partly paid securities will be regarded as fulfilling the condition set out in Listing

Rule 7.3(2)b, provided that the Exchange is satisfied that: (a) transferability is not restricted other than in the circumstances listed below; or (b) where there is an unpaid call on the securities,

and that any such restrictions do not prevent dealings in the securities from taking place on an open and proper basis.

(2) The Exchange may, as a special condition of listing, impose or permit limits on: (a) the categories of investors that may be permitted to invest in a listed investment

vehicle; (b) the minimum transaction size of holdings held by board or equivalent body

members in which the securities of a listed investment vehicle may be traded.

(3) Securities may be subject to transfer restrictions or compulsory redemption in the following circumstances: (a) where the holding of such securities may result in a regulatory, pecuniary, legal,

taxation or material administrative disadvantage for the investment vehicle or the holders of its securities as a whole; or

(b) to maintain a minimum holding per holder, as specified in the Listing Document.

(4) In exceptional circumstances approved by the Exchange an investment vehicle may take power to disapprove the transfer of securities provided that the exercise of such power would not disturb the market in those securities.

8

(5) The Exchange may require a letter of undertaking from the directors or equivalent

body of an investment vehicle in relation to any lien over the securities or any power of refusal to transfer securities.

iii) Securities in Public Hands (1) Where an application for listing has been made for a class of securities of an

investment vehicle (other than an exempt investment vehicle) at least 25% of that class must, no later than the date on which dealings commence, be in the hands of the public (whether directly or indirectly) in such proportions so as to satisfy the Exchange that there will be an adequate market in the securities.

(2) For calculation purposes, options issued by the investment vehicle in respect of that class of securities will be taken into consideration when calculating the percentage of a class of securities in the hands of the public.

(3) For calculation purposes, treasury shares will not be taken into consideration when calculating the percentage of a class of securities in the hands of the public.

(4) For the purposes of Chapter 7, the following are not recognised as a member of “the public”: (a) any related party; (b) any person whose acquisition of securities has been financed directly or indirectly

by a related party; and (c) any person who takes instructions from a related party in relation to the

acquisition, disposal, voting or other disposition of securities of the investment vehicle registered in his name or otherwise held by him.

(5) For the purposes of Chapter 7, the Exchange will recognise each of the following entities set out in the non-exhaustive list below as an “exempt investment vehicle”: (a) REITS; (b) limited partnerships; (c) investment vehicles which are structured so as to be tightly held; and (d) any other investment vehicle which is not a closed-ended investment vehicle.

iv) Market Capitalisation

(1) Except where securities of the same class are already listed, the expected aggregate market capital of the securities for which application for listing has been made (in aggregate where there are multiple sub-fund, classes or cells) must be at least 500,000 pounds sterling or the foreign currency equivalent.

e) Conditions for Listing – Directors i) Corporate Directors

An investment vehicle may appoint a corporate director if it is permitted to do so under the law of the jurisdiction in which it is domiciled incorporated or established, however in such a case the Exchange expects the investment vehicle to have a majority of natural persons as its directors

ii) Director Declaration Forms (1) Only directors that are natural persons are required to make the declaration set out

in Appendix IV or Appendix V (Directors’ Declaration).

9

(2) In the case of a corporate director, the Exchange will require the Director's

Declaration to be completed by the directors of that corporate entity. Where a corporate director has itself corporate directors, the Exchange would expect the majority of those directors to be natural persons.

iii) Responsibility of Directors (1) The directors are responsible for the information contained in the Listing Document

and must state such responsibility in the Listing Document as required under paragraph 2 of Appendix IX – Part B.

(2) The directors' responsibility in relation to information contained in the Listing Document provided by third parties (relating to countries into which an investment vehicle may invest and sourced statistical information) may be limited to the proper extraction of such information from the sources shown.

iv) Independence of Directors (1) Where an investment vehicle is a company, other than an open-ended investment

vehicle, there must be a minimum of three directors of which two must be independent of any appointed investment manager, any appointed investment adviser and/or any of their related parties.

(2) A director will be considered to be independent where: (a) he has no executive function with the investment manager, investment adviser

and/or their related parties; and/or (b) he has an executive function with any other service provider but is not responsible

for carrying out work on behalf of the investment vehicle.

(3) A custodian or auditor is not permitted to act as a director of a listed investment vehicle, in respect of which it acts as custodian or auditor.

(4) For the avoidance of doubt, a director who serves on the board of one or more other investment vehicles managed by the same investment manager may be considered independent of that investment manager in the absence of any other connecting factor.

f) Conditions for Listing - Investment Managers i) Any investment manager appointed must either:

(1) be regulated and/or authorised or be otherwise acceptable to the Authority; or

(2) where the investment vehicle is a self-managed investment vehicle which does not

have a regulated and/or authorised investment manager, it must ensure that:

(a) the directors or equivalent officers of the investment vehicle collectively have

relevant expertise in relation to managing the assets in which the investment

vehicle is investing (within the context of investment management experience);

(b) where the directors or equivalent officers collectively do not possess the relevant

investment management experience in relation to the assets in which the

investment vehicle is investing, there is a separate independent investment

10

advisor or investment body appointed that has suitable experience and expertise

(to the satisfaction of the Authority) with a suitable track record; and

(c) that all principal and key parties appointed in relation to the investment vehicle

are satisfactory to the Authority.

g) Conditions for Listing - Constitutional Documents

i) The constitutional documents of an investment vehicle must include provisions for the investment vehicle to impose sanctions on a holder of listed securities who is in default in complying with a request for the disclosure of the immediate or beneficial owner of securities.

ii) The following requirements apply in relation to such sanctions:

(1) sanctions may not take effect earlier than fourteen days after service of the notice;

(2) for a holding of securities of less than 0.25% of the relevant class (calculated exclusive of treasury shares) the only sanction the constitutional documents may provide for is a prohibition against attending at meetings and voting;

(3) for a holding of 0.25% or more of the relevant class (calculated exclusive of treasury shares), the constitutional documents may also provide: (a) for a withholding of the payment of any dividends (including scrip issues in lieu of

dividends) on the securities concerned; and (b) for the placing of restrictions on the transfer of securities provided that

restrictions on transfer do not apply to sales to a bona fide unconnected third party (such as a sale through the Exchange or an overseas exchange or by the acceptance of a takeover offer); and

(c) any sanctions imposed upon a holder in these circumstances must cease to apply after a specified period of not more than seven days after the earlier of:

(d) receipt by the company of notice that the securities concerned have been sold to a third party in the manner described above; or

(e) due compliance, to the satisfaction of the investment vehicle, with respect to the information sought.

(4) Nothing in the above shall preclude an investment vehicle from forcing a holder of securities contrary to restrictions set out in the Listing Document to dispose of the securities in the manner described therein.

(5) In the case of closed-ended investment vehicles, the constitutional documents must provide for the purchase of its own securities.

h) Conditions for Listing – Accounts i) Consolidated Accounts

(1) In certain circumstances and upon application to the Authority an investment vehicle may be relieved of the obligation to produce consolidated accounts and may be obliged to submit audited individual accounts rather than group accounts.

(2) Circumstances may include, but are not limited to:

(a) where the investment vehicle is not required to prepare consolidated accounts under its chosen GAAP; or

(b) where consolidated accounts would be misleading for investors in relation to the securities for which listing is sought.

11

ii) Accounting Standards

(1) Accounts must be prepared in accordance with the investment vehicle's relevant applicable law and, in all material respects, with United Kingdom Accounting Standards, United States Accounting Standards, International Financial Reporting Standards or other accounting standards acceptable to the Authority.

(2) The relevant accounting standards shall be those current in relation to the last financial year reported on and, wherever possible, appropriate adjustments shall be made to show profits for all periods in accordance with such standards.

(3) If there is any change in the accounting standards or accounting policies the investment vehicle should provide an Accountant’s Report.

iii) Qualification of Accounts (1) Notwithstanding that an investment vehicle’s accounts are qualified, the investment

vehicle may still be suitable for listing if the qualification does not relate to a matter of significance for investors.

(2) Qualified accounts shall not be acceptable where the qualification does relate to a matter of significance to investors.

(3) Any qualification in the audited accounts in the previous three years of an investment vehicle's operations should be brought to the attention of the Authority.

(4) Where the reporting accountants qualify the accounts they shall: (a) refer to all material matters about which they have reservations; (b) state the reasons for the qualification; and (c) quantify the effect of such qualification if this is both relevant and practical.

(5) The Authority will require to be satisfied that any such qualification has been suitably

resolved and has no impact on the suitability of an investment vehicle for listing.

(6) It is emphasised that these requirements are not exhaustive and that further information may be required, or the required information varied by the Authority, where it considers it necessary.

iv) Auditors (1) Auditors must be a member of a recognised professional body acceptable to the

Authority, must be permitted by that body to engage in public practice and must be bound by rules governing the conduct of the audits which they are undertaking.

(2) Auditors must be subject to the applicable systems of oversight, quality assurance, investigation and penalties issued by their relevant professional body.

(3) Auditors must be independent of the investment vehicle and must comply with the ethical standards (which should include standards in relation to independence, integrity and objectivity) issued by their relevant professional body.

v) Auditing Standards

12

(1) Accounts must be audited in accordance with the technical auditing standards required in the United Kingdom, the United States, International Standards on Auditing or other auditing standards acceptable to the Authority.

13

7.4 - APPLICATION PROCEDURES

a) Initial Application Documents

i) Submission of Documents

(1) The initial and final application documents may be submitted in electronic form by

email to applications @tisegroup.com (or such other address as advised by the

Authority from time to time) marked for the attention of the Listing and Membership

Committee.

ii) Directors’ Declarations

(1) In the case of an investment vehicle, any of whose securities are already listed and

where the Authority is in receipt of Directors’ Declarations for the individuals, the

same Directors’ Declaration need only be submitted for each director if specifically

requested by the Authority.

(2) Where a new director has been appointed post-listing but has not submitted a

Director Declaration, a Director Declaration must be submitted to the Authority,

together with a copy of the current register of directors. Such Director Declarations

may be submitted in electronic form by email to contobs@tisegroup.com (or such

other address as advised by the Authority from time to time) marked for the attention

of the Continuing Obligations Department.

iii) Structure Chart

(1) A structure chart should be submitted, if available, and should include the following

information in respect of the investment vehicle as applicable:

(a) immediate owner(s);

(b) ultimate parent(s)/owner(s);

(c) subsidiaries;

(d) equity security holders;

(e) domiciles of group companies; and

(f) flow of funds.

(2) A structure chart submitted by an investment vehicle will be solely used for the

purposes of the Authority’s internal review and will not be a publically available

document.

b) Final Application Documents

i) Listing Document

(1) The Listing Document may be signed and dated by one or more directors or relevant officers of the investment vehicle (or by their agent or attorney) and submitted to the Authority;

(2) Where a Listing Document is signed and dated by one director or relevant officer, the board resolution containing the resolution approving the director or relevant officer of the investment vehicle to sign and date the Listing Document for and on behalf of

14

every director or relevant officer of the investment vehicle must be submitted to the Authority;

(3) Where the Listing Document is signed by an agent or attorney a certified copy of the authority of any such agent or attorney should also be submitted;

15

5) 7.5 - THE LISTING DOCUMENT a) General

i) The Listing Document must to be submitted to the Authority in draft form for clearance before it is finalised. When material changes are made that affect the disclosure requirements set out in Appendix IX – Part B (Listing Documents: Disclosure Requirements), the Authority requires a black-lined version of the Listing Document to be submitted with a cover note setting out a summary of all the material changes before the Listing Document is finalised.

b) Form and Content i) Responsibility Statements

(1) In exceptional cases, the Authority may require certain additional specified persons either to give, or join in, the responsibility statement, in which case the statement must be adapted accordingly.

(2) Where the investment vehicle is a unit trust, the directors of the investment vehicle’s manager and trustee must be included in the responsibility statement required to be included in a Listing Document. “Manager” in this context means the entity named as manager (or equivalent) within the trust deed or other constitutional document for the unit trust. “Trustee” in this context means the entity named as trustee within the trust deed or other constitutional document for the unit trust

(3) Where the investment vehicle is a partnership, the directors of the general partner or designated member must be included in the responsibility statement required to be included in a Listing Document.

(4) Investment vehicles which take the form of an alternative type of entity should consult the Authority to establish which party should be providing the responsibility statement in the Listing Document and the Authority will advise on a case by case basis.

ii) Risk Warnings (1) The Listing Document must include all relevant risk warnings in a prominent position.

(2) Risks to be considered for insertion in the Listing Document as warnings to potential

investors include, without limitation: (a) risks in respect of the securities to be listed; (b) security risks; (c) valuation risks; (d) market risks; (e) economic risks; (f) credit risks; (g) government risks; (h) staff risks; (i) risks involved should any controlling party/individual withdraw their support; (j) risks involved should any party/individual on which the group relies withdraw

their support; (k) additional risks for smaller holders of securities; (l) risks associated with illustrations included within the Listing Document; (m) risks in obtaining adequate service providers; and

16

(n) any specific industry or regulatory risks.

(3) Where estimated figures or financial projections are included in the Listing Document, adequate risk wording must also be included highlighting that such figures are estimations for information purposed only, cannot be guaranteed and should not be relied upon explicitly.

iii) Conflicts of Interest and Material Interests (1) The Listing Document must include a description of all conflicts of interest and

material interests.

(2) Conflicts of interests would include where the direct or indirect personal interests of

directors, equivalent officers or related parties interfere in any way (or appear to

interfere) with the interests of the investment vehicle as a whole.

(3) A conflict situation can arise when a director or equivalent officer takes actions or has

interests that may make it difficult to perform their work for the investment vehicle

objectively and effectively (for example, as a result of a material interest or material

agreement).

(4) Material interests would include any agreement (whether material or not),

contractual relationship or any other relationship which a director, equivalent officer or related party of the investment vehicle has any mutual or beneficial interest in or, can derive any form of economic benefit from (for example, the receipt of any arrangement or consultancy fees or dividends).

iv) Investment Managers / Advisors (1) Where the investment vehicle has an investment manager or advisor, the Listing

Document should include: (a) a description of the investment manager or advisor’s experience and its relevance

to the investment vehicle’s investment policy; (b) an indication of the amounts of assets the investment manager has under third

party discretionary management; and (c) a summary of the experience of the specific personnel who will be involved in the

management of the underlying investments.

v) Property Investment Vehicles – Valuation Reports (1) Under the disclosure requirements, a valuation report on the investment vehicle’s

land and buildings is to be included within a Listing Document and should be dated no more than three months prior to the date of the Listing Document.

(2) Ordinarily this requirement, particularly for a new application for listing, is not a problem unless there is a delay in launching the investment vehicle. The Listing and Membership Committee would prefer, if at all possible, for the valuation report to be dated no more than three months before the date of listing; however, it is recognised that this may not be practical and could, conceivably, be quite costly. The Listing and Membership Committee will therefore seek to achieve a more current valuation where the timeframe is beyond the three month period to the date of listing by way of a side letter (to be included within the Wrapper Document to the Listing Document)

17

from the expert which sets out any material changes to their valuation report (or an appropriate negative statement).

(3) It should be noted that in the case of an application for listing of an existing investment vehicle with audited accounts or in the case of an existing listed investment vehicle wishing to issue further securities of more than 10% requiring a new Listing Document, the Listing and Membership Committee will consider the valuation report in the context of the timing of the publication of the audited accounts.

c) Financial Information in the Listing Document - Accountant’s Report

i) Material Changes to the Investment Vehicle (1) Material changes would include (but are not limited to):

(a) any significant increase or decrease in the size of the investment vehicle’s assets under management or changes to any key investment;

(b) any change to the investment vehicle’s investment policy; (c) any acquisition or disposal which would have been classified at the date of

application for listing as a substantial transaction; and (d) changes to the investment vehicle’s accounting standards or accounting policies.

(2) Investment vehicles should consult the Authority at an early stage if clarification is required in relation to potential material changes.

ii) Form of Accountant’s Report

(1) In all cases the accountant’s report shall: (a) state whether or not the accounts for the period reported on have been audited

and, if so, by whom; (b) state whether or not any audited accounts have been made up since the end of

the last financial period reported on; (c) express the opinion of the reporting accountants as to whether or not the

relevant information gives, for the purposes of the accountant’s report, a true and fair view of the results for the period reported on and of the assets and liabilities at the end of that period;

(d) name the reporting accountants; and (e) be dated.

iii) Content of Accountant’s Report

(1) The accountant’s report must include:

(a) the results of the investment vehicle in respect of each of the three financial years immediately preceding the issue of the Listing Document (or such shorter period as may be acceptable to the Authority in cases where the Authority has waived in accordance with Listing Rule 7.3(8)(b) the condition of listing that a new investment vehicle must have prepared audited accounts for at least three years);

(b) the results of any acquisition or proposed acquisition since the date to which the latest audited accounts of the investment vehicle have been made up in respect of each of the three financial years immediately preceding the issue of the Listing Document or in respect of each of the financial years since commencement of such business or the incorporation or establishment of such subsidiary (as the

18

case may be) if this occurred less than three years prior to such issue, or such shorter period as may be acceptable to the Authority;

(c) details of the assets and liabilities of the investment vehicle and, if the investment vehicle is itself a holding company, the consolidated assets and liabilities of the investment vehicle and its subsidiaries in each case as at the date to which the latest audited accounts of the investment vehicle have been made up;

(d) the assets and liabilities of any entity acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited accounts of the investment vehicle have been made up;

(e) transfers to and from any reserves arising on: (i) consolidation or acquisition; (ii) the revaluation of assets; or (iii) the translation of accounts denominated in foreign currencies,

if those transfers are not reflected in the results of each of the financial years referred to in Guidance Note 5(c)(ii) and (iii) above;

(f) a statement of the indebtedness as at the end of the period reported on showing,

as regards bank loans and overdrafts and separately as regards other borrowings of the investment vehicle (or of the investment vehicle and its subsidiaries, including any entity which will become a subsidiary by reason of any acquisition) the aggregate amounts repayable: (i) on demand or within a period not exceeding one year; (ii) within a period of more than one year but not exceeding two years; (iii) within a period of more than two years but not exceeding five years; and (iv) in more than five years;

(g) the details of the principal accounting policies that have been applied in respect of the period reported on;

(h) a statement of any significant subsequent events which have occurred to any entity covered by the accountant's report since the end of the period reported on, or an appropriate negative statement; and

(i) any other matters which appear to the reporting accountants to be relevant having regard to the purpose of the accountant's report.

(2) The report on results under Guidance Note 5(c)(ii) and (iii) above must disclose

separately the following information: (a) profit (or loss) before taxation and extraordinary items, including the share of the

profit (or loss) of associated entities, with separate disclosure of any items which are exceptional because of size and incidence;

(b) taxation on profits indicating in each case the basis of computation, with separate disclosure of the taxation on the share of associated entities' profits;

(c) profit (or loss) attributable to minority interests; (d) profit (or loss) attributable to holders of securities before extraordinary items; (e) extraordinary items (net of taxation); (f) profit (or loss) attributable to holders of securities; and

19

(g) rates of dividend paid or proposed on each class of securities (with particulars of each such class) and amounts absorbed thereby and any waivers of dividend.

iv) In the case of a Listing Document, the reporting accountants must report on the

consolidated or combined results and the consolidated or combined statements of assets and liabilities of the investment vehicle, any subsidiaries and any entity acquired or proposed to be acquired since the date to which the latest audited accounts of the investment vehicle have been made up, unless otherwise agreed by the Authority.

v) Where an accountant’s report is not required the following information must be included within the Listing Document: (1) the most recent audited accounts of the investment vehicle satisfying the

requirements of Guidance Note 6(d) (Annual Report and Accounts) where there are any;

(2) the net asset value per security and the net asset value of the investment vehicle at the most recent practicable date;

(3) in the case of a non-regulated entity, or where the Authority otherwise requires it, as a minimum such information as set out in Guidance Note 6(d) (Annual Report and Accounts), where applicable as at the most recent practicable date;

(4) any interim report prepared since the last prepared audited accounts (where such information is unaudited this fact must be clearly stated); and

(5) in the case of a Supplement to the Listing Document and/or in the case of an investment vehicle if the date of the Listing Document is more than nine months after the date to which the most recent audited accounts are made up, the interim report must form part of the Listing Document.

vi) Preparation of Accountant’s Report (1) An accountant's report must be prepared by independent professional accountants

who are qualified for appointment as auditors of an investment vehicle under relevant legislation or otherwise qualified to the satisfaction of the Authority. See Guidance Note 3(h)(iv) in relation to the requirements relating to Auditors.

vii) Accounting Standards (1) The information to be included in any accountant’s report must be prepared in

accordance with the investment vehicle's relevant applicable law and, in all material respects, with United Kingdom Accounting Standards, United States Accounting Standards, International Financial Reporting Standards or other accounting standards acceptable to the Authority.

(2) Any significant departure from such accounting standards must be disclosed and explained and, if it is both relevant and practical, the financial effects of such departure quantified.

(3) The relevant standards shall be those current in relation to the last financial year reported on and, wherever possible, appropriate adjustments shall be made to show profits for all periods in accordance with such standards.

20

viii) Adjustments (1) In preparing the accountant’s report, the reporting accountants shall make such

adjustments as are, in their opinion, appropriate for the purposes of the accountant's report and state that all adjustments considered necessary have been made, or (where appropriate) that no adjustments were considered necessary.

(2) Where adjustments are made, the reporting accountants shall make available a written statement signed by the reporting accountants (a statement of adjustments) for public inspection.

(3) The statement of adjustments shall set out, for each of the years reported upon, each adjustment made and be sufficiently detailed so as to reconcile the figures in the accountant's report with the corresponding figures in the audited accounts.

(4) Where the reporting accountants refer to reports, confirmations or opinions of valuers, accountants or other experts, the names, addresses and professional qualifications of such other persons or firms shall be stated in the report.

(5) The Listing Document or circular to holders of securities must include a statement that any such valuers, accountants or other experts have given and have not withdrawn their written consent to its publication with the inclusion of such references in the form and context in which they are included.

ix) Qualification of Accounts

(1) A qualified accountant's report may be acceptable where the qualification does not relate to a matter of significance to investors but shall not be acceptable where the qualification does relate to a matter of significance to investors.

(2) Where the reporting accountants qualify their accountant's report, they shall: (a) refer to all material matters about which they have reservations; (b) state the reasons for the qualification; and (c) quantify the effect of such qualification if this is both relevant and practical.

(3) The Authority will require to be satisfied that any such qualification has been suitably resolved and has no impact on the suitability of an investment vehicle for listing.

(4) It is emphasised that these requirements are not exhaustive and that further information may be required, or the required information varied by the Authority where it considers it necessary.

d) Supplements to the Listing Document i) For the purposes of Listing Rule 7.5(6) “significant” means significant for the purpose of

enabling an investor to make an informed assessment of the activities, assets and liabilities, financial position, management, prospects, and the profits and losses of the investment vehicle and of the rights attaching to such securities.

e) Recognition of Previously Issued Documents and Additional Disclosure Requirements

i) The Authority may, after consultation with the Sponsor, allow investment vehicles to incorporate wholly or partially or to substitute previously issued documents to form a Listing Document, where application is made for admission of securities by a regulated entity where a relevant document (as defined in (v) below) has been approved by the

21

relevant regulatory authority not more than eighteen months before admission of the securities to listing.

ii) In such cases the Sponsor is required to agree the form and content of the document with the Authority as early as possible in the listing application process in accordance with the requirements of section 7.4 (Application Procedures).

iii) The Authority will take into account in discussions on the acceptable form and content of documents any supplementary information memoranda issued by a regulated entity since approval of a relevant document by the relevant regulatory authority.

iv) Previously issued documents may be incorporated or substituted to form a Listing Document for an application where application is made for admission of securities: (1) that have been traded on an established public securities market acceptable to the

Authority and which imposes disclosure requirements on investment vehicles whose securities are traded on that market for a period covering at least the preceding two years, and information in the opinion of the Authority equivalent in substance to that required to be included in a Listing Document is available to investors prior to the date the admission to listing on the Exchange becomes effective; or

(2) that have been the subject of a public issue; or

(3) that have been issued in connection with a takeover offer; or

(4) that have been issued in connection with a merger involving the acquisition of another company or the formation of a new company, the division of a company, the transfer of all or part of an undertaking’s assets and liabilities or as consideration for the transfer of assets other than cash.

v) A “relevant document” is a document which has been issued not more than twelve months before admission of the securities containing, in the opinion of the Authority, equivalent information to that which would otherwise be required to be included in a Listing Document by the Authority.

22

6) 7.6 – CONTINUING OBLIGATIONS - Part A - GENERAL a) Duty of Notification to the Authority

i) The requirement to notify will be met by the investment vehicle issuing an announcement for display on the Authority’s website.

ii) The requirement to submit information and/or documents to the Authority will be met by the investment vehicle emailing contobs@tisegroup.com (or such other address as advised by the Authority from time to time) marked for the attention of the Continuing Obligations Department.

iii) An announcement to be issued by an investment vehicle for display on the Authority’s website may require prior approval of the Authority, depending on the nature of such announcement.

iv) An investment vehicle should consult the Continuing Obligations department of the Authority at an early stage in order to confirm whether prior approval will be required.

v) Where an investment vehicle has securities listing on another exchange or stock market it must ensure that equivalent information is made available simultaneously and should be announced by the investment vehicle on the Authority’s website within three minutes of any such information being disseminated on the other exchange or stock market.

b) Notifications relating to Corporate Governance i) Director Declarations may be submitted in electronic form by email to

contobs@tisegroup.com (or such other address as advised by the Authority from time to time) marked for the attention of the Continuing Obligations Department.

c) Notifications relating to Periodic Financial Information i) Where a net asset value is not calculated, an investment vehicle must submit (by issuing

an announcement for display on the Authority’s website) an update in respect of the portfolio held by the investment vehicle on a quarterly basis.

d) Annual Report and Accounts

i) An investment vehicle must issue an annual report and accounts and make a copy of it (and the auditors’ report thereon if not already incorporated into the annual report and accounts) available to every holder of securities.

ii) The annual report and accounts must be made available to the holders of securities: (1) before the date of the investment vehicle's annual general meeting (if the investment

vehicle is required to do so pursuant to a notice to the investment vehicle from a holder of securities and within the specified timeframe stated in any such notice); and/or

(2) no later than six months after the end of the financial period to which the accounts relate.

In this context financial period means, firstly, the period beginning on the date on which the investment vehicle was incorporated or established and ending within eighteen months of that date and thereafter, the period beginning on the day after its financial year ended and ending within twelve months of that date.

23

iii) In exceptional circumstances the Authority may grant an extension to these time limits.

iv) The annual report and accounts must:

(1) have been prepared in accordance with the investment vehicle's relevant applicable law and, in all material respects, with United Kingdom Accounting Standards, United States Accounting Standards, International Financial Reporting Standards or other accounting standards acceptable to the Authority;

(2) have been independently audited in accordance with the auditing standards required in the United Kingdom, the United States, International Standards on Auditing or other auditing standards acceptable to the Authority;

(3) be in consolidated form if the investment vehicle has subsidiaries, unless consolidated accounts are not required under the investment vehicle’s chosen GAAP or the Authority otherwise agrees (but the investment vehicle's own accounts must also be made publically available if they contain significant additional information);

(4) provide more detailed and additional information if they do not give a true and fair view of the state of affairs, profit or loss and cash flows of the investment vehicle; and

(5) be submitted (via the Authority’s reporting system) to the Authority on the same day as they are made available to holders of the securities.

v) The annual report and accounts must always include a report by the directors or equivalent officers on the results for the period under review.

vi) The following information must be included in the annual report and accounts, if relevant:

(1) the amount of the charges and expenses (to the extent borne by the investment vehicle) of the manager, the custodian and any agent of the manager or trustee, or any sub-custodian in each annual report on the investment vehicle;

(2) details of any arrangement under which a director or any investment manager has waived or agreed to waive any emoluments from the listed investment vehicle or any subsidiary;

(3) details of any arrangement under which a holder of securities has waived or agreed to waive any dividends (waivers of less than 1% of the total value of any dividend may be disregarded provided that some payment has been made on each security of the relevant class during the relevant calendar year);

(4) the name of any subsidiary or associated undertaking and the country in which it operates;

(5) details of any interests in the securities of the listed investment vehicle of any directors or equivalent officers, their associates or any investment manager disclosed to the listed investment vehicle (distinguishing between beneficial and non-beneficial interests);

24

(6) the name of any investment manager of the listed investment vehicle appointed since the date of listing or last annual report (if later) together with an indication of the terms and duration of their appointment, the basis of their remuneration and any arrangements relevant to the termination of their appointment;

(7) details of any emoluments or other income payable to the directors or equivalent officers and any investment manager, custodian and manager/administrator during the period under review. The scope of the auditors’ report on the financial statements must cover the disclosures made pursuant to this sub-paragraph;

(8) the names and interests (either direct or indirect) of any person other than a director or investment manager in 10% or more of the securities of any class of capital carrying rights to vote at general meetings of the listed investment vehicle insofar as they are known to the listed investment vehicle or its directors or equivalent officers;

(9) details of the authority of any holder of securities for the purchase by the listed investment vehicle of its own securities still valid at the end of the period under review;

(10) particulars of any allotment for cash of securities in a closed-ended investment vehicle, made during the period under review otherwise than to the holders of securities in proportion to their holding of such securities and which have not been specifically authorised by the holders of securities, giving the names of the allottees and the market value of the securities on the date on which the terms of the issue were fixed;

(11) particulars of any material contract or any contract for provision of services subsisting during the period under review, to which the listed investment vehicle, or any subsidiary, is a party and in which any director is or was materially interested, or if there has been no such contract, an appropriate negative statement;

(12) particulars of any material contract or any contract for provision of services between the listed investment vehicle or any of its subsidiaries and any controlling holders of securities subsisting during the period under review;

(13) details of any related party transactions;

(14) an analysis of the investment portfolio; and

(15) in the case of sales of treasury shares for cash made otherwise than through the market, or in connection with an employee share scheme, or otherwise than pursuant to an opportunity which (so far as was practicable) was made available to all holders of the company’s securities (or to all holders of a relevant class of its securities) on the same terms, particulars of the names of purchasers or such securities sold, or proposed to be sold, by the company during the period under review.

25

vii) Where in the opinion of the directors or equivalent officers of the investment vehicle, the number of subsidiaries is such that compliance with Guidance Note 6(d)(iv) above may result in particulars of excessive length being given, compliance with that requirement may be waived by the Authority except in the case of subsidiaries carrying on a business the results of the carrying on of which, in the opinion of the directors or equivalent officers, materially affect the amount of the profit or loss of the group or the amount of the assets of the investment vehicle.

viii) “material contract” is one that represents in amount or value a sum equal to 5% or more, of:

(1) in the case of a capital transaction or a transaction of which the principal purpose or effect is the granting of credit, the aggregate of the investment vehicle’s equity capital and reserves (excluding treasury shares); or

(2) in other cases the total annual purchases, sales, payments or receipts, as the case may be, of the investment vehicle.

ix) Where the annual report and accounts are available on the investment vehicle’s website

or another party’s website, these accounts must be publicly available for at least five years

from the date of publication.

e) Interim (Half-Yearly) Reports

i) An investment vehicle that has listed securities must prepare a report, on its activities and profit or loss for the first six months of each financial year, except for its first financial year if such financial year is not greater than twelve months' duration.

ii) The interim report should conform to United Kingdom Accounting Standards, United States Accounting Standards, International Financial Reporting Standards and other accounting standards acceptable to the Authority.

iii) Where the interim report is not prepared on a basis consistent with that of the annual accounts, the interim report must include a statement of that fact and state that, in the opinion of the investment vehicle's directors or equivalent officers, the interim report enables investors to make an informed assessment of the results and activities of the investment vehicle for the period.

iv) The interim report must be made publically available within four months of the end of the period to which it relates. In exceptional circumstances the Authority may grant an extension to this time limit.

v) To publish the interim report, the investment vehicle must make the interim report available to the holders of its listed securities and supply the Authority with a copy of the interim report, together with an announcement for display by the Authority on its website.

vi) Where the interim report is not prepared under an accepted accounting standard, the interim report shall contain at least the following financial information:

26

(1) a commentary by the directors or equivalent officers (or the investment manager) on the results for the period under review;

(2) total income from investments split between (i) dividends, (ii) interest received and (iii) other forms of income;

(3) net income before taxation;

(4) taxation on net income;

(5) income attributable to holders of securities;

(6) rates of distribution paid or proposed;

(7) income after tax and distributions;

(8) realised and unrealised gains and losses;

(9) net asset value per securities at the period end; and

(10) comparative figures in respect of (2) to (8).

vii) Where the figures in the interim report have not been audited or do not have a report issued by an auditor, a statement to that effect must be included. Where the figures in the interim report have been audited or the interim report includes a review report issued by an auditor, the report of the auditors, including any qualifications, must be reproduced in full.

viii) The Authority may exempt investment vehicles from the requirements in relation to interim reports where an exemption is otherwise justified on the basis of Guidance Note 6(e)(ix) below and the investment vehicle conforms with any conditions imposed by the Authority.

ix) The Authority may authorise the omission from an interim report of specified items of information if it considers that disclosure of such information would be contrary to the public interest or seriously detrimental to the investment vehicle, provided that such omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question. The investment vehicle or its representatives will be responsible for the correctness and relevance of the facts on which any application for such exemption is based. The Authority may also authorise the omission from an interim report of any other information on grounds that it considers such an omission is either necessary or appropriate.

x) Where the interim reports are available on the investment vehicle’s website or another

party’s website, these reports must be publicly available for at least five years from the

date of publication.

f) Documents to be submitted to the Authority

i) Whilst the Authority considers this decision rests with the directors or equivalent officers

of listed investment vehicles, it is considered good practice to notify the Authority as to

whether all resolutions have been passed or not, whether in the course of ordinary

business or otherwise.

ii) With regard to resolutions outside the ordinary course of business which are passed or

not passed, failure to notify the Authority and to make an announcement for display on

the Authority’s website will be a breach of the Listing Rules.

27

7) 7.6 – CONTINUING OBLIGATIONS - Part B – TRANSACTIONS a) Transactions

i) References to a transaction by a listed investment vehicle include a transaction by any subsidiary of the listed investment vehicle.

ii) References to a transaction by a listed investment vehicle exclude: (1) an issue of securities for cash or a transaction to raise finance which, in either case,

does not involve the acquisition or disposal of any fixed asset of the listed investment vehicle or its subsidiaries;

(2) the take up of a related party of new securities or treasury shares under its entitlement in a pre-emptive offering;

(3) transactions by an investment vehicle that has a secondary listing on the Exchange;

(4) in the case of a related party transaction, the grant of options or the receipt of securities by a director in accordance with the terms of an employee share scheme which does not have the effect of conferring benefits only or mainly on directors or equivalent officers of the investment vehicle;

(5) transactions entered into at the beginning of the investment vehicle’s life, so long as such transactions are in accordance with the investment vehicle’s investment policy and represent the investment of the investment vehicle’s initial capital; and

(6) transactions at the end of an investment vehicle’s life that are effected pursuant to a winding-up or similar process approved by the holders of the securities.

iii) For the purposes of this section, references to an acquisition or disposal of assets includes: (1) the entering into or termination of finance and/or operating leases where the

financial effects of such leases have an impact on the balance sheet and/or profit and loss account of the investment vehicle, respectively; and

(2) in the case of related party transactions only, an option to acquire or dispose of assets.

iv) In determining the category into which a transaction falls, regard must be had to the following: (1) Valuations

(a) Acquisitions or disposals of equity capital The value of such capital is to be assessed by reference to the book value of the net tangible assets represented by such capital as disclosed in the latest publically available audited accounts or consolidated accounts (as appropriate) adjusted to take account of subsequent transactions (the “net assets”).

(b) Acquisitions or disposal of assets other than equity capital

The value of such assets is to be assessed by reference to: (i) the consideration; or (ii) in the case of a disposal, by reference to the book value, if that is greater.

28

(c) References to the assets of the acquiring or disposing entity are to the book value

of its net assets or consolidated net assets, as appropriate.

(2) Consideration in the form of equity share capital

The Authority may determine the value of the consideration by reference either to

the market value of such capital or the book value of the net assets represented by

such capital.

(3) Property Investment Vehicles In the case of the acquisition or disposal of properties by an investment vehicle whose assets consist solely or mainly of property (or interests in entities whose assets consist solely or mainly of properties) and whose income is solely or mainly derived from those properties, the properties being acquired or disposed of will be compared with the latest available net book value of the investment vehicle's properties, or publically available valuation, before deducting mortgages.

(4) Subsequent Transactions and Aggregation (a) The Authority will normally aggregate a series of transactions that have taken

place since either: (i) the publication of the last audited accounts; or (ii) the issue of the last circular to holders of securities, whichever is the later.

(b) Such transactions will be treated as if they were one transaction occurring as at the date of the latest transaction if they were all completed within a short period of time or are otherwise related.

b) Substantial Transactions - Tests i) In order to determine whether a transaction would be considered to be a substantial

transaction, an investment vehicle should consider if the transaction falls within any of the following tests:

(1) Gross Asset Test

The value of the assets being acquired or realised represents 50% or more of the assets or consolidated assets, as the case may be, of the acquiring or realising entity.

(2) Net Profit Test

The net profit (after deducting all charges except taxation and including extraordinary items) attributable to the assets being acquired or realised as disclosed in the latest publically available audited accounts represents 50% or more of such net profit of the acquiring or realising group.

(3) Consideration Tests

(a) the aggregate value of the consideration given or received represents 50% or more of the assets or consolidated assets, as the case may be, of the acquiring or realising entity; or

(b) the value of the equity share capital issued as consideration by the acquiring investment vehicle represents 50% or more of the value of the equity capital previously in issue.

29

ii) If a calculation under any of the tests produces an anomalous result, a calculation is

inappropriate or requires any adjustment for any reason the Authority should be consulted at an early stage.

iii) Where the assets of the acquiring or disposing entity include substantial intangible assets, the Authority may be prepared to relax the limits set out in the above tests.

iv) Where an investment vehicle can demonstrate that its balance sheet does not reflect the real value of its business due to the exceptional nature of that business, the Authority may be prepared to agree an alternative test or set of tests to those set out above, on a case by case basis.

c) Related Party Transactions

The following transactions will not be considered as related party transactions for the purposes of the Listing Rules: i) the grant of credit (including the lending of money or the guaranteeing of a loan) to a

related party upon normal commercial terms in the ordinary course of business; or

ii) the grant of an indemnity to a director or equivalent officer of the investment vehicle (or any of its subsidiaries), subject to full disclosure in the annual report and accounts; or

iii) an underwriting (or sub-underwriting) by a related party of all or part of an issue of

securities by the investment vehicle (or any of its subsidiaries) and where the consideration to be paid by the investment vehicle (or any of its subsidiaries) in respect of such underwriting is no more than the usual commercial underwriting consideration and is the same as that to be paid to the other underwriters (if any), subject to full disclosure of the terms and conditions of that underwriting (or sub-underwriting) in the Listing Document.

d) Approval of Holders of Securities

i) Where approval of the holders of the securities is required, such approval may be obtained either by convening a general meeting of the investment vehicle or by means of the written approval of the transaction and obtaining the approval by a holder of securities who holds (or holders of securities who together hold) either more than 50% in nominal value of the securities or (in the case of an investment vehicle with no par value securities) more than 50% of the voting rights in relation to such securities (as applicable) giving the right to attend and vote at such general meeting.

ii) The Authority will normally require that any holder of securities shall abstain from voting at that general meeting and will not accept the written approval of any such holder of securities if such holder of securities has a material interest in the transaction.

iii) In that event, a statement that such holder of securities will not vote must be included in

the transaction circular to holders of securities.

e) Transaction Circulars Where a transaction circular is required to be submitted to the Authority for display on the Authority’s website, it must contain at least the following information:

30

i) particulars of the transaction, including the names of the relevant parties involved; ii) brief details of the general nature of the transaction; iii) a description of the assets which are the subject of the transaction (including the name of

any company or business where relevant); iv) the consideration and how this is being satisfied (including the terms of any arrangements

for payment on a deferred basis); v) the value of the assets (if different from the consideration); vi) where applicable, the profits attributed to the assets (in respect of the two financial years

immediately preceding the transaction); vii) the effect on the investment vehicle as a result of the transaction; viii) in the case of an acquisition:

(1) the information regarding the listed investment vehicle and its subsidiaries specified by the following paragraphs of Appendix IX – Part B: 1, 2, and 10 (if applicable), 22 (if new securities are to be issued as consideration), 29, 30(b), 32, 33, 35, 39, 41, 42, 43, 46 and 48;

ix) in the case of a realisation: (1) the intended application of the sale proceeds; and (2) details of any service contracts of the proposed directors or equivalent officers of the

investment vehicle. (3) the information as regards the listed investment vehicle and its subsidiaries specified

by the following paragraphs of Appendix IX - Part B: 1, 2, 7, 29, 30(b), 31, 32, 33, 35, 39, 41, 42, 43, 46 and 48;

f) Additional Transaction Circular Requirements for Related Party Transactions

i) the items of information as regards the listed investment vehicle specified by the following paragraphs of Appendix IX – Part B: 1, 2, 7, 10 (if applicable), 31, 33, 39, 43 and 48(d);

ii) the name of the related party concerned and the nature and extent of their interest in the transaction;

iii) a statement that (with the exception of any director who is a related party to the transaction) the directors or equivalent officers of the investment vehicle consider that the transaction is fair and reasonable so far as the holders of securities of the investment vehicle are concerned.

g) Supplemental Transaction Circular Requirements Where a further supplemental transaction circular is required, it must contain a full description of the material change to the transaction, together with any relevant updates to the information contained in the original transaction circular.

31

8) 7.6 – CONTINUING OBLIGATIONS - Part C - PURCHASE OF OWN SECURITIES a) Purchase of Own Securities During Closed Periods

i) An investment vehicle may only purchase its own securities during a closed period if it is satisfied that any and all inside information has previously been notified to the Authority.

ii) In order to demonstrate this, an investment vehicle should consider whether, prior to conducting any purchases of its own securities during a closed period, it should make an announcement to the Authority at the start of the closed period or, if later, before conducting any purchase of its own securities, in order to ensure that the investment vehicle is satisfied that all inside information has been notified.

iii) Provided that an investment vehicle has disclosed all inside information at the relevant time, and the purchase of its own securities is conducted in a way which does not otherwise mislead or manipulate the market, the purchase of its own securities outside the exemptions set out in the Model Code may not constitute market abuse in the investment vehicle’s jurisdiction of incorporation or establishment or within the EU.

iv) It is recommended that investment vehicles consult the appropriate market abuse legislation, rules and regulations that they are governed by and subject to, in order to verify and confirm their position in this regard.

b) Notifications

i) Notification of Proposal to Purchase (1) A notification in relation to a decision passed by the board or equivalent body of an

investment vehicle to submit a proposal to holders of the securities for the investment vehicle to be authorised to purchase its own equity shares (other than the renewal of an existing authority) must include the following information: (a) an indication as to whether the proposal relates to specific purchases or to a

general authorisation to make purchases; (b) if the proposal relates to specific purchase, the names of the persons from whom

the purchases are to be made.

ii) Notification of Purchase (1) A notification in relation to any purchase of the investment vehicle’s own securities

by or on behalf of the investment vehicle must include the following information: (a) the date of the purchase; (b) the number of securities purchased; (c) the purchase price for each of the highest and lowest prices paid, where relevant; (d) a statement as to what number of the securities were purchased for cancellation

and what number were purchased in order to be held as treasury shares; and (e) where securities were purchased to be held as treasury shares, a statement of: (f) the total number of treasury shares of each class held by the investment vehicle

following the purchase and non-cancellation of such securities; and (g) the number of securities of each class that the investment vehicle has in issue less

the total number of treasury shares of each class held by the investment vehicle following the purchase and non-cancellation of such securities.

iii) Notification of Purchases, Early Redemptions and Cancellations

(1) A notification in relation to purchases, early redemptions and cancellations must contain the following information:

32

(a) the amount of securities acquired, redeemed or cancelled since the last such notification;

(b) the amount of the class of securities remaining outstanding and whether or not the securities acquired are to be cancelled;

(c) where the investment vehicle purchases or makes an early redemption of securities other than equity shares, the notification must also include: (i) a statement as to what number of the securities were purchased or redeemed

early for cancellation and what number were purchased in order to held as treasury shares; and

(ii) where securities were purchased to be held as treasury shares, a statement of: 1. the total number of treasury shares of each class held by the investment

vehicle following the purchase and non-cancellation of such securities; and

2. the number of securities of each class that the investment vehicle has in issue less the total number of treasury shares of each class held by the investment vehicle following the purchase and non-cancellation of such securities.

iv) The exception in Listing Rule 7.6(19)(g)(i)(2) refers to transactions entered into on behalf

of the investment vehicle by third parties. Such third parties would be Brokers, investment firms, credit institutions, or similar which have been delegated the authority to undertake purchases of securities of an investment vehicle as part of stated buy-back programme and /or which have the authority to make trading decisions concerning the timing of the purchases of the investment vehicle’s securities independently and without interference of the investment vehicle.

c) Circulars i) Circulars to Holders of Securities

(1) A circular seeking authority from the holders of securities for the purchase by an investment vehicle of its own securities must include the following information: (a) where the authority sought is a general one, a statement of the directors or

equivalent officers’ intentions regarding utilisation of the authority sought; (b) the method by which the investment vehicle intends to acquire the securities and

the number to be acquired in that way; (c) a statement of whether the investment vehicle intends to cancel the securities or

hold them in treasury (as treasury shares) if applicable; (d) if the authority sought relates to a proposal to purchase from specific parties, a

statement of names of the persons from whom the securities are to be acquired together with all material terms of the proposal;

(e) details regarding the price, or the maximum and minimum price, to be paid; and (f) the total number of warrants and options to subscribe for securities that are

outstanding at the latest practicable date before the circular is made publically available and both the proportion of issued capital (excluding treasury shares) that they represent at that time and will represent if the full authority to buyback securities (existing and being sought) is used.

(2) Where the exercise in full of the authority sought would result in the purchase of 15% or more of the investment vehicle’s issued securities (excluding securities purchased by the investment vehicle for the purpose of being held as treasury shares) the circular to holder of securities required by Guidance Note 8(b)(i) above must also contain the information required to be contained by Listing Rule 7.6 - Part B (Transactions).

33

(3) The working capital statement required by paragraph 32 of Appendix IX – Part B must be based on the assumption that the authority sought will be used in full at the maximum price allowed and this assumption must be stated.

ii) Circular to Holders of Securities – Consent of Other Classes of Securities

(1) A circular convening a meeting required by Listing Rule 7.6(19)(f)(i) must include the following information: (a) a statement of the apparent effect on the conversion expectations of the holders

in terms of attributable assets and earnings on the basis that the investment vehicle exercises in full the authorisation which it is seeking to purchase its own securities at the maximum price allowed thereunder (where that price is to be determined by reference to a future market price the calculation must be made on the basis of market prices prevailing immediately prior to the publication of the circular and that basis must be disclosed); and

(b) any adjustments to the rights of the holders which the investment vehicle may propose (in such a case, the information required under Guidance Note 8(b)(ii)(1)(a) above must be restated on the revised basis).

iii) Circular to Holders of Securities

(1) Where within a period of twelve months an investment vehicle purchases, warrants or options to subscribe for or purchase its own securities, which on exercise convey entitlement to securities representing 15% or more of the investment vehicle’s existing issued securities (for the avoidance of doubt excluding treasury shares), the investment vehicle must make available a circular to its holder of securities containing the following information: (a) a statement of the directors or equivalent officers’ intentions regarding future

purchases of the investment vehicle’s warrants and options; (b) the number and terms of the warrants or options acquired and to be acquired and

the method of acquisition; (c) where warrants and options have been or are to be acquired from specific parties,

a statement of the names of those parties and all material terms of the acquisition; and

(d) details regarding the prices, or the minimum and maximum prices, paid or to be paid.

(2) The circular need not be submitted to the Authority for approval before publication unless it falls within Guidance Note 8(b)(i)(1) above.

iv) Announcement of Capitalisation Issues and of Sales, Transfers and Cancellation of

Treasury Shares (1) Announcements in relation to treasury shares involving:

(a) capitalisation issues; (b) sales (including sales for cash); (c) transfers (including transfers for the purposes of or pursuant to an employee

share scheme); and (d) cancellation, must contain the following information:

(i) the date of the allotment, sale, transfer or cancellation; (ii) the number of treasury shares allotted, sold, transferred or cancelled; (iii) the sale or transfer price for each of the highest and lowest prices paid, where

relevant; and (iv) a statement of:

34

1. the total number of treasury shares of each class held by the investment vehicle following the allotment, sale, transfer or cancellation; and

2. the number of securities of each class that the investment vehicle has in issue less the total number of securities classified as treasury shares in each class held by the investment vehicle following the allotment, sale, transfer or cancellation.