LIETUVOS RESPUBLIKOS Official translation republic of lithuania LAW ON Collective Investment UNDERTAKINGS 3 July 2003 No IX-1709 (As last amended on 19 March 2009 – No XI-204) Vilnius CHAPTER I GENERA

this Article in respect of each sub-fund. 3. The instruments of incorporation of an umbrella collective investment undertaking must also indicate: 1) the currency in which financial reports of the collective investment undertaking will be drawn up; 2) the procedure for exchanging units or shares of one sub-fund into the units or shares of another sub-fund of the same collective investment undertaking; 3) the procedure for establishing new sub-funds. Article 42. Requirements Set Forth for Umbrella Collective Investment Undertakings and Their Management Companies 1. The management company of an umbrella collective investment undertaking or an investment company with variable capital must comply with the requirements set forth in this Law and other legal acts and applicable to collective investment undertakings of an appropriate sort and type and their management companies. 2. The provisions of this Law and other legal acts governing the activities of a collective investment undertaking, with the exception of provisions of Section One of Chapter II and Articles 59, 72 and 90 of this Law shall be applied individually to each sub-fund. 3. Assets of the sub-funds constituting an umbrella collective investment undertaking must be entrusted to a single depository for safe-keeping. 4. The assets constituting each sub-fund must be accounted for separately from the assets of other sub-funds constituting the same collective investment undertaking. 5. The assets constituting one sub-fund may not be used for discharging the liabilities to participants in another sub-fund constituting the same collective investment undertaking and to third parties. 6. An umbrella collective investment undertaking must have a common full prospectus. Simplified prospectuses may be drawn up for each sub-fund individually. 7. A management company or an investment company shall manage the list of owners of units or shares of a collective investment undertaking individually according to each sub-fund. Ownership certification documents shall indicate the name(

1. s)of a specific sub-fund(s). 8. A management company or an investment company with variable capital shall be prohibited from making any deductions from assets of a collective investment undertaking in respect of the transactions concluded between its sub-funds. 9. Merger of sub-funds of an umbrella collective investment undertaking shall be subject to the requirements set forth by this Law for the merger of investment funds. Article 43. Peculiarities of an Umbrella Investment Company with Variable Capital 1. One share of an umbrella investment company with variable capital shall, irrespective of the value thereof, entitle a shareholder to one vote at the general meeting of shareholders. 2. When addressing at the general meeting of shareholders of an umbrella investment company with variable capital an issue related to the interests of participants in only one sub-fund of the company, the voting right shall be vested only in the participants in that sub-fund. Article 44. Exchange of Units or Shares of a Sub-Fund A participant in a collective investment undertaking may exchange the units or shares of a sub-fund held by him into the units or shares of another sub-fund of the same collective investment undertaking, unless the instruments of incorporation of the collective investment undertaking provide otherwise. When exchanging units or shares of a sub-fund, it shall be prohibited to make any deductions relating to the distribution or redemption of units or shares of the collective investment undertaking, with the exception of the deductions directly relating to the cost of exchanging of the units or shares. CHAPTER V SECTION ONE INVESTMENT FUND Article 45. Formation of an Investment Fund 1. The rules of an investment fund shall be approved by a decision of a management company. The management company may start collecting the investors' funds intended to constitute the investment fund only after the Securities Commission approves the rules of the fund, a simplified prospectus if required and a full prospectus. 2. A decision of the board regarding the formation of an investment fund must indicate: 1) the name of the investment fund; 2) the name and registered office of a depository; 3) the initial amount allocated for the formation of the investment fund. Article 46. Rules of an Investment Fund The rules of an investment fund shall determine the relations between a management company and participants in the investment fund. The rules must indicate: 1) the name of the investment fund enabling identification of the sort of a special fund, and the information on the basis of which it shall be possible to determine whether the fund is a harmonised or a special collective investment undertaking; 2) the names and registered offices of the management company and a depository; 3) a strategy for investment of the assets constituting the investment fund, investment restrictions and specialisation in the geographical area or economic branch, the information that the fund has a benchmark index and the venues where the procedure for forming the benchmark index may be accessed; 4) rights and duties of participants; 5) rights and duties of the management company in the management of the investment fund, the transactions which the management company may enter into and carry out on the account and for the benefit of the investment fund; 6) the methodology of calculation of the remuneration payable to the management company, the depository and the distributor as well as the amount of the fee and the procedure for paying it; 7) a finite list and methods of calculation of other expenses covered with assets comprising the investment fund; 8) conditions of and procedure for replacing the management company and the depository; 9) conditions of and procedure for selling and redeeming units; 10) grounds and procedure for suspending the redemption of units; 11) the procedure for valuating assets, calculating and publishing the value of a unit; 12) the procedure for establishing the redemption and sale price; 13) the procedure for publishing information about the investment fund; 14) the frequency of distribution of the income of the investment fund, methods of and procedure for disbursing them; 15) grounds and the procedure for dividing the investment fund; 16) the procedure for amending the rules of the investment fund. Article 47. Rights of Participants of an Investment Fund 1. A participant of an investment fund shall have the following rights: 1) to receive a portion of income of the investment fund in accordance with the procedure laid down by this Law and the rules of the investment fund; 3) to receive the remaining portion of the investment fund which is being divided; 4) to receive information about the fund as specified by legal acts; 5) other rights established by this Law and the Rules of the fund. 2. A participant in an investment fund of the open-ended type shall have the right to require the management company at any time to redeem the units of the investment fund held by him. Article 48. Remuneration and Other Expenses Covered by the Funds Comprising an Investment Fund 1. Remuneration to a management company for the management of an investment fund, to a depository for the depository's services and other expenses relating to the investment fund shall be paid using the funds comprising the investment fund. 2. Only the expenses relating to the management of an investment fund and provided for in the rules of the investment fund may be paid using the funds comprising the investment fund. The aggregate amount of these expenses may not exceed the maximum level of the fund's expenses provided for in the rules of the investment fund. All other expenses which are not provided for in the rules of the investment fund or which exceed the established level must be covered by the management company. Article 49. Distribution of Profit of an Investment Fund 1. Participants in an investment fund shall be paid a portion of investment income (payments in cash) only where this is provided for in the rules of the investment fund. The rules of the investment fund must also provide for the periodicity of such payments, the share of investment income (profit) that will be allocated for those payments, and the payment procedure. 2. The profit of an investment fund shall be distributed through the depository of this investment fund. Article 50. Expiry of the Right of a Management Company to Manage an Investment Fund The right of a management company to manage an investment fund shall expire: 1) upon transfer of management to another management company; 2) upon revocation of the management company's licence; 3) upon commencement of the compulsory procedure of liquidation of the management company; 4) upon institution of bankruptcy proceedings against the management company; 5) in other cases specified by legal acts or the rules of the investment fund. Article 51. Division of an Investment Fund 1. An investment fund must be divided in the cases specified by its rules. 2. Upon taking of a decision regarding division, redemption and distribution of units shall be terminated. 3. Where it emerges in the course of division that the assets constituting an investment fund are not sufficient to discharge the obligations assumed on its account, the outstanding liabilities must be discharged by a management company. 4. After creditors claims are met, the funds obtained from the sale of the assets constituting an investment fund must be distributed among participants in the investment fund in proportion to their holdings in the fund. 5. Where a court is hearing the claims regarding the liabilities which must be discharged from the assets of the investment fund, the investment fund may be divided only after the court’s decisions in such cases become effective. Article 52. Merger of Investment Funds 1. A management company may effect merger of the investment funds managed by it (merger by the formation of a new entity or merger by acquisition) only subject to obtaining a prior authorisation of the Securities Commission. 2. It shall be prohibited to merge: 1) a harmonised and a special fund where the merger would result in the operation of the special fund alone; 2) special investment funds of different types; 3) special investment funds of different sorts; 4) umbrella funds; 5) the funds whose rules provide for different amounts of deductions and other expenses covered from the assets constituting an investment fund. 3. The Securities Commission shall refuse to authorise a merger of investment funds where: 1) the merger would be in contradiction to provisions of paragraph 2 of this Article; 2) there is a ground for believing that the merger will infringe the interests of participants in at least one of the funds being merged; 3) the pooling would be effected in violation of the requirements of other legal acts. 4. A management company must, not later than within one month from the receipt of an authorisation by the Securities Commission, give a proper notice to participants in funds of the merger of the funds and of the way thereof as indicated in paragraph 1 of this Article. The proper notification of the participants shall mean publication of the information listed in the first sentence of this paragraph in the daily newspaper(
2. s)indicated in the rules of the fund being merged and giving a written notice to each participant in the investment funds being merged. The notification must indicate: 1) the names of the investment funds being merged and the investment fund to operate following the merger; 2) contact data of the management company; 3) the period upon the expiry of which the issue or redemption of units of the investment fund(
3. s)which will discontinue operation following the merger shall be terminated, and the merger of investment funds will be effected. This period may not be shorter than 2 months from the last proper notification of participants as provided for in the second sentence of paragraph 4 of this Article; 4) consequences of the merger of the investment funds in relation to participants in the funds; 5) the right of participants in the investment fund(
4. s)which will discontinue operation following the merger to require, within the period laid down by the management company on the basis of subparagraph 3 of paragraph 4 of this Article, redemption of the units of the investment funds held by them without charging the redemption fee; 6) the rules of the investment fund which will operate following the merger or the venue where they may be accessed. 5. The units held by participants in the funds being merged at the time of the merger shall be converted free of charge into units of the investment fund which will operate following the merger. 6. Participants in the investment fund(
5. s)the activity whereof will be terminated following a merger of funds who have not exercised their right to require redemption of the units held by them within the period laid down on the basis of subparagraph 3 of paragraph 4 of this Article shall become participants in the investment fund which will operate following the merger. 7. A management company must immediately, but not later than within 5 working days, notify the Securities Commission in writing of the effected merger of investment funds and make an appropriate announcement in a daily newspaper indicated in the rules of the fund which will operate following the merger. 8. The investment portfolio of the investment fund which will operate following the merger shall be subject to the provisions on a temporary derogation from the investment rules as stipulated in this Law. The term for the temporary derogation from the investment rules shall start running from the date of effecting of the merger of the investment funds. The date of effecting of the merger of the investment funds shall be the date of making the latest entries in personal unit accounts upon conversion of units of the investment fund(
6. s)which will discontinue operation following the merger into the units of the investment fund which will operate following the merger. 9. The Securities Commission shall have the right to lay down a detailed procedure for merging investment funds and notifying participants in the investment funds being merged. Article 53. Modification of the Investment Strategy of a Collective Investment Undertaking 1. The investment strategy of a harmonised collective investment undertaking may not be modified to the extent that the collective investment undertaking turns into a special collective investment undertaking. The investment strategy of a harmonised collective investment undertaking and a special collective investment undertaking may not be modified to the extent that they turns into a collective investment undertaking not subject to this Law. 2. In the event of a material modification of the strategy of a collective investment undertaking or where modification of the strategy results in the change of the type or sort of the collective investment undertaking, participants must be given a prior notice thereof in accordance with the procedure laid down in the instruments of incorporation or prospectuses of the undertaking. 3. In the cases provided for in paragraph 2 of this Article, a management company must create a possibility for participants of a collective investment undertaking to require, within a sufficient time limit which may not be shorter than 2 months from the proper notification of the participants of the intended modification of the investment strategy of the collective investment undertaking, redemption of the units or shares of the fund held by them without any additional deductions. The participants must be informed of this right by a notification referred to in paragraph 2 of this Article. SECTION TWO INVESTMENT COMPANY WITH VARIABLE CAPITAL Article 54. Articles of Association of an Investment Company with Variable Capital 1. In addition to the requirements set forth for a company's articles of association by the Law on Companies, the articles of association of an investment company with variable capital must indicate: 1) the name of the company enabling identification of the sort of a special investment company with variable capital, and the information on the basis of which it shall be possible to determine whether this company is a harmonised or a special collective investment undertaking; 2) the procedure for selling, redeeming and settling for shares; 3) an investment strategy, the information that the company has a benchmark index and the venues where the procedure for forming the benchmark index may be accessed; 4) grounds and procedure for suspending share redemption; 5) the procedure for distributing income (including dividends) among shareholders (periodicity of payments, the share of profit allocated for the dividends); 6) the rules for the valuation of net assets and share pricing; 7) the structure of expenditure and the procedure for covering thereof, the amount of remuneration to a depository, also the company's highest possible amount of the expenses covered from assets of the company; 8) conditions of and procedure for replacing the management company and the depository. 2. The amount of the authorised capital and the number of shares need not be indicated in the articles of association. They may indicate the maximum amount for which shares may be issued. The par value of shares shall be indicated only where they have a par value. 3. The procedure for electing and removing from office the head of the administration and management bodies of a company shall be indicated only where the management of the company’s assets is not delegated to a management company. 4. The articles of association of an investment company with variable capital and amendments of and supplements to them shall be registered in the Legal Entities’ Register only after they are approved by the Securities Commission. Article 55. Redeemable Shares of an Investment Company with Variable Capital 1. All shares of an investment company with variable capital may be only ordinary registered shares. 2. An investment company with variable capital shall be prohibited from issuing preference shares, bonds or non-redeemable shares. 3. An investment company with variable capital shall be prohibited from holding its own shares. Article 56. Agreement on the Management of Assets 1. An agreement on the management of assets concluded between a management company and an investment company with variable capital must provide for: 1) objectives and forms of investment activities; 2) methodology of calculation of remuneration for the management company and the procedure for paying it; 3) functions of the board which the management company undertakes to perform; 4) powers of the management company in its relations with the depository and other institutions; 5) the information which the management company will furnish to the investment company with variable capital; 6) the composition and market value of the investment portfolio whose management is delegated; 7) liability for a failure to perform obligations; 8) conditions of and procedure for terminating the agreement. 2. A copy of an agreement on the management of assets shall be filed with the Securities Commission and the depository. CHAPTER VI General Investment Rules for HARMONISED Collective Investment Undertakings Article 57. Objects of Investment 1. The assets of a harmonised collective investment undertaking may be comprised only of: 1) the transferable securities and money market instruments admitted to trading on a market that is considered regulated and operating in the Republic of Lithuania or another Member State according to paragraph 30 of Article 3 of the Law on Markets in Financial Instruments, and/or 2) the transferable securities and money market instruments admitted to trading in another Member State on a market operating according to the established rules, recognised, supervised and accessible to the public, provided this market is indicated in the instruments of incorporation, and/or 3) the transferable securities and money market instruments admitted to trading in another state (with the exception of the Member States) on a market operating according to the established rules, recognised, supervised and accessible to the public, and/or 4) newly issued transferable securities where the conditions of issue provide for a commitment to admit these securities to trading on a regulated market and where the securities will be admitted to trading not later than within one year from the date of issue (where such a market is situated in the state indicated in subparagraph 3 of this paragraph, it must be indicated in the instruments of incorporation), and/or 5) units and shares of the collective investment undertakings indicated in paragraph 1 of Article 61 of this Law; 6) fixed-term deposits with maturity not exceeding 12 months which may be withdrawn on demand from a credit institution whose registered office is in a Member State or another state in which prudential supervision is not less stringent than in the European Union, and/or 7) the derivative financial instruments referred to in paragraph 1 of Article 62 of this Law, and/or 8) the money market instruments indicated in paragraph 2 of this Article. 2. Investment in the money market instruments which are not admitted to trading on a regulated market may be allowed only provided the issue or issuing body of such instruments is itself regulated for the purpose of protecting investors and their savings, and these instruments: 1) are issued or guaranteed by the government, regional or local authority or central bank of a Member State, the European Central Bank, the European Union or the European Investment Bank, the government of a non-Member State or one of the members making up a federal state or an international organisation to which at least one Member States belongs, or 2) are issued by an undertaking whose securities are admitted to trading on the regulated markets referred to in subparagraphs 1-3 of paragraph 1 of this Article, or 3) are issued or guaranteed by an undertaking subject to prudential supervision in accordance with the requirements set forth by the European Union law or the requirements which are not less stringent than in the European Union, or 4) are issued by a company meeting the criteria approved by the Securities Commission, whose capital and reserves amount to at least EUR 10 million and which draws up consolidated financial reports and performs the function of financing of the group of companies, where the transferable securities of at least one company belonging to the group are admitted to trading on a regulated market, or which is used to issue the securities financed by bank loans, and the investment into such money market instruments are protected at least to the extent referred to in subparagraphs 1, 2 and 3 of paragraph 2 of this Article. 3. An investment company with variable capital may acquire movable and immovable property only to the extent such property is essential for its direct business. 4. No more than 10% of net assets may be invested in transferable securities and money market instruments not referred to in paragraph 1 of this Article. 5. Assets of a collective investment undertaking may not be invested in precious metals or the securities entitling to them, but may be invested in money. 6. The Securities Commission shall be entitled to specify the requirements set forth for the investment objects of harmonised collective investment undertakings. Article 58. Diversification of the Investment Portfolio 1. No more than 5% of the net assets comprising the assets of a harmonised collective investment undertaking may be invested in transferable securities or money market instruments of a single issuing body, with the exception of the cases specified in paragraphs 2, 5 and 6 of this Article. 2. It shall be allowed to invest in the transferable securities or money market instruments of a single issuing body more than 5%, but not more than 10% of net assets, provided the total amount of such investments does not exceed 40% of the value of the net assets (this restriction shall not apply to deposits and derivative financial instruments traded on a non-regulated market, provided their issuing body is subject to supervision by the supervisory authority). 3. The investments made in deposits with a single credit institution may not exceed 20% of net assets comprising the assets of a collective investment undertaking. 4. The aggregate amount of investments in transferable securities or money market instruments of a single issuing body, deposits and liabilities arising from derivative contracts undertaken with the same person may not exceed 20 % of the value of net assets of a collective investment undertaking. 5. Investments in the transferable securities or money market instruments of a single issuing body issued or guaranteed by a Member State or local authority thereof, other state or international organisation of which at least one Member State is a member may not exceed the aggregate amount of 35% of the value of net assets of a collective investment undertaking. The Securities Commission may allow investment of a larger share of net assets in the transferable securities or money market instruments referred to in this paragraph where investors’ interests are adequately protected, investments are made in transferable securities or money market instruments of at least 6 issues, and investment in transferable securities or money market instruments of a single issue does not exceed 30% of net assets. 6. Investments in the bonds issued by a credit institution which has its registered office in a Member State and is subject to special public supervision under law by that state for the purposes of protection of interests of bond-holders, while the amount derived from the issue of these bonds is invested in the assets which, during the whole period of validity of these bonds, are sufficient to cover claims of the bond-holders and which, in the event of insolvency of the issuing body, would be used on a priority basis to meet claims of the bond-holders for reimbursement of the principal and payment of the accrued interest, may not exceed 25% of net assets. When more than 5%, but not more than 25% of the net assets are invested in the bonds issued by a single issuing body, the aggregate amount of these investments may not exceed 80% of the net assets. 7. The transferable securities and money market instruments provided for in paragraphs 5 and 6 of this Article shall not be taken into account when calculating the amount of investment subject to the limit of 40 % according to paragraph 2 of this Article. The limits specified in paragraphs 1, 2, 3, 4, 5 and 6 of this Article may not be combined, thus the aggregate amount of investment in the transferable securities and money market instruments of a single issuing body, deposits and the liabilities arising from derivative contracts with this person may not exceed 35% of the net assets comprising the assets of a collective investment undertaking. 8. Investment in the transferable securities and money market instruments issued by the companies belonging to a group subject to the requirement of drawing up of consolidated financial reports may not exceed 20% of net assets. Article 59. Prohibition from Acquiring Significant Influence over an Issuing Body 1. The shares held by a management company or an investment company with variable capital in an issuing body together with the shares in that issuing body held by the harmonised collective investment undertakings managed by the management companies may not carry over 1/10 of all voting rights at the general meeting of shareholders of the issuing body. 2. A collective investment undertaking may acquire no more than: 1) 10% of all non-voting shares of an issuing body; 2) 10% of all bonds and non-equity securities of other forms of an issuing body; 3) 25% of units or shares of another collective investment undertaking; 4) 10% of the money market instruments of a single issuing body. 3. The prohibition specified in subparagraphs 2, 3 and 4 of paragraph 2 of this Article may be disregarded at the time of acquisition where the aggregate value of those transferable securities or money market instruments cannot be calculated. 4. The limits stipulated in subparagraphs 2 and 4 of paragraph 2 of this Article shall not apply to the transferable securities or money market instruments issued and guaranteed by a state or local authorities. Article 60. Peculiarities of an Index Investment Fund or an Index Investment Company with Variable Capital 1. An index fund or an index investment company with variable capital shall be a fund or a company whose instruments of incorporation provide for a sole aim, namely, to replicate the composition of the index of shares, bonds or non-equity securities of other forms recognised by the Securities Commission, including the use of derivative financial instruments or other instruments or techniques provided for in paragraph 3 of Article 62 of this Law, by directly or indirectly investing in the investment instruments forming the index. The Securities Commission shall have the right to recognise only the indices which meet all of the following conditions: 1) the composition of the securities portfolio replicating the index is sufficiently diversified; 2) the index represents an adequate benchmark of the market to which it refers, and the provider thereof uses a recognised methodology which generally does not result in the exclusion of a major issuer (the issuer comprising the largest part of the index) of the market to which it refers; 3) the index and its calculation procedure are published in an appropriate manner, and the index provider is independent from the undertaking replicating the index, however, they may belong to the same closely linked group of undertakings where that group has in place an efficient system for management of conflicts of interest. 2. Investment in shares, bonds or non-equity securities of other forms of a single issuing body may not exceed 20% of net assets of an index fund or an investment company with variable capital may be. With the consent of the Securities Commission and where that proves to be necessary due to exceptional market conditions in a regulated market where a single issuing body is dominant, up to 35% of the net assets may be invested in its shares, bonds or non-equity securities of other forms. In this case, a simplified prospectus of a collective investment undertaking must contain the information justifying such exceptional conditions. Article 61. Investment in Other Collective Investment Undertakings 1. Investment in units and shares of collective investment undertakings shall be allowed only provided they fulfil the following conditions: 1) the undertakings are licensed in the Republic of Lithuania or a state where they are subject to supervision not less stringent than that established in the European Union, and the Securities Commission co-operates with an appropriate foreign supervisory authority; 2) the level of protection for rights of participants in the undertakings, including regulation of segregation, borrowing, lending and gratuitous transfer of assets, is not less stringent than that laid down under this Law; 3) the undertakings publish half-yearly and annual reports about their activities to enable assessment of their assets and liabilities, profit and activities over the reporting period; 4) not more than 10% of their net assets may be invested in units or shares of other collective investment undertakings. 2. No more than 10% of net assets of a collective investment undertaking may be invested in each of the undertakings referred to in paragraph 1 of this Article. The aggregate amount invested special collective investment undertakings and the collective investment undertakings that are not regulated under this Law may not exceed 30% of the net assets. 3. A close link shall be deemed to exist between collective investment undertakings if they are managed by the same management company or such management companies in which more than a half of members of management bodies are the same persons or which are controlled by the same person or one of which holds more than 10% of votes at the general meeting of shareholders of the other management company. Units or shares of the collective investment undertakings which are linked by close links may be acquired only for the value of net assets. Article 62. Investment in Derivative Financial Instruments 1. It shall be allowed to invest solely in the derivative financial instruments (including exclusively cash-settled instruments) which meet the following conditions: 1) are admitted to trading on the markets referred to in subparagraphs 1,

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of this Law or are traded outside the abovementioned markets; 2) are linked to the investment instruments referred to in paragraph 1 of Article 57 of this Law, financial indices, interest rates, currencies or currency exchange rates in which a collective investment undertaking has the right to invest as indicated in the instruments of incorporation; 3) the counterparty to the transactions concluded outside the markets referred to in subparagraphs 1,

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of this Law conforms to the criteria laid down by the Securities Commission and is subject to supervision by the supervisory authority; 4) the instruments traded outside the markets referred to in subparagraphs 1,

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of this Law are subject to verification and reliable and accurate valuation on a daily basis and can be sold or otherwise disposed of for a consideration at any time at their fair value.

1. A management company or an investment company with variable capital must: 1) manage risk in a manner which enables it to monitor and measure at any time the risk of the positions and their contribution to the overall risk profile of the investment instrument portfolio; 2) accurately and independently assess the risk of non-standardised derivative financial instruments; 3) communicate to the Securities Commission, in accordance with the procedure laid down by it, the types of derivative financial instruments, the underlying risks, the quantitative limits and the methods chosen to assess the risks associated with transactions in derivative financial instruments and assumed by each collective investment undertaking.
2. The Securities Commission shall lay down a procedure following which a management company or an investment company with variable capital shall be entitled to use the investment and other instruments related to transferable securities or money market instruments with a view to ensuring an efficient management of investment instruments. Under no circumstances shall the use of such techniques or investment instruments mean authorisation to diverge from the investment objectives as laid down in the instruments of incorporation.
3. A collective investment undertaking shall ensure that its global exposure relating to derivative financial instruments does not exceed the value of its net assets. The exposure must be calculated taking into account the current value of a derivative financial instrument, the counterparty risk, future market movements and the time available to liquidate the positions and the circumstance that the derivative financial instrument is incorporated into a transferable security or money market instrument. Investment in derivative financial instruments may not exceed 35% of the value of net assets of a collective investment undertaking, provided that the limits laid down in Article 58 of this Law are not exceeded. When calculating compliance with the limits laid down in Article 58 of this Law, investment in index-linked financial derivative instruments shall be computed separately.
4. The commitment risk in the transactions in derivative financial instruments concluded outside the markets referred to in subparagraphs 1,

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of this Law may not exceed 5% of the value of net assets of a collective investment undertaking, and where the counterparty is a credit institution referred to in paragraph 6 of Article 58 the commitment risk may not exceed 10% of the value of the net assets. Article

1. Informing about the Investment Policy
2. The prospectuses and any other promotional literature of a collective investment undertaking must include a prominent statement of the investment policy where: 1) a considerable portion of the net assets has been invested in any category of assets other than transferable securities or money market instruments or where the investment policy is index-based; 2) the value of net assets is likely to have a high volatility due to the portfolio composition or the investment policy.
3. Upon the request of an investor, a management company or an investment company with variable capital must also provide supplementary information relating to the quantitative limits that apply in the risk management of a collective investment undertaking, the methods chosen to this end and to the most recent evolution of the risk related to the main instruments. Article
4. Temporary Derogation from Investment Rules
5. A collective investment undertaking or its management company may derogate from the investment limits laid down in this Chapter when it exercises the pre-emptive rights attaching to the transferable securities or money market instruments held by it. In such cases and also when provisions of investment rules are violated for the reasons beyond the control of a management company or an investment company with variable capital, the derogation must be eliminated without