cimb ftse asean 40 malaysia prospectus

7/31/2019 CIMB FTSE ASEAN 40 Malaysia Prospectus

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RESPONSIBILITY STATEMENTS

This Prospectus has been reviewed and approved by the directors of CIMB-Principal Asset ManagementBerhad and they collectively and individually accept full responsibility for the accuracy of the information.Having made all reasonable inquiries, they confirm to the best of their knowledge and belief, there are nofalse or misleading statements, or omission of other facts which would make any statement in this

Prospectus false or misleading.

CIMB Investment Bank Berhad being the adviser, acknowledges that, based on all available information,and to the best of its knowledge and belief, this Prospectus constitutes a full and true disclosure of allmaterial facts concerning the public offering.

STATEMENTS OF DISCLAIMER

The Securities Commission has approved the issue of, offer for subscription or purchase, or issue aninvitation to subscribe for or purchase units in respect of the public offering and a copy of this Prospectushas been registered with the Securities Commission.

The approval, and registration of this Prospectus, should not be taken to indicate that the SecuritiesCommission recommends the Fund or assumes responsibility for the correctness of any statement madeor opinion or report expressed in this Prospectus.

The Securities Commission is not liable for any non-disclosure on the part of the Manager responsible forthe Fund and takes no responsibility for the contents in this Prospectus. The Securities Commissionmakes no representation on the accuracy or completeness of this Prospectus, and expressly disclaimsany liability whatsoever arising from, or in reliance upon, the whole or any part of its contents.

INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKSOF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN ANYDOUBT ON THE ACTION TO BE TAKEN SHOULD CONSULT THEIR STOCKBROKER, BANKMANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.

Admission to the Official List of Bursa Malaysia Securities Berhad is not to be taken as an indication ofthe merits of the invitation, funds or of its units.

ADDITIONAL STATEMENTS

Investors are advised to note that recourse for false or misleading statements or acts made in connectionwith this Prospectus is directly available through Sections 248, 249 and 357 of the Capital Markets andServices Act 2007.

Securities listed on Bursa Malaysia Securities Berhad are offered to the public premised on full and

accurate disclosure of all material information concerning the issue for which any person set out inSection 236 of the Capital Markets and Services Act 2007, e.g. directors and advisers, are responsible.

LICENSING CONDITIONS OF THE UNDERLYING INDEX

The following is a statement required to be disclosed in this Prospectus under the Index LicenceAgreement entered into between FTSE International Limited, the index licensor and CIMB-GK SecuritiesPte Ltd on 20 September 2006, which was novated to CIMB-Principal Asset Management (S) Pte Ltd on15 June 2007. CIMB-Principal Asset Management (S) Pte Ltd subsequently entered into an addendumwith FTSE International Limited, the index licensor on 19 April 2010.


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The FTSE/ASEAN 40 is not in any way sponsored, endorsed, sold or promoted by FTSE InternationalLimited (FTSE), the London Stock Exchange Plc (LSE) or by the Financial Times Limited (FT) andneither FTSE nor LSE nor FT makes any warranty or representation whatsoever, expressly or impliedly,either as to the results to be obtained from the use of the FTSE/ASEAN 40 Index (the Index) and/or thefigure at which the said Index stands at any particular time on any particular day or otherwise. The Indexis complied and calculated by FTSE in conjunction with PT Bursa Efek Jakarta (Jakarta Stock

Exchange), Bursa Malaysia Berhad, The Philippine Stock Exchange, Inc., Singapore ExchangeSecurities Trading Limited and The Stock Exchange of Thailand (the Exchanges). However, neitherFTSE nor LSE nor the Exchanges nor FT shall be liable (whether in negligence or otherwise) to anyperson for any error in the Index and neither FTSE nor LSE nor the Exchanges nor FT shall be under anyobligation to advise any person of any error therein.

Please refer to Section 2.3 on RISK FACTORS and Section 3.9 of this Prospectus for furtherinformation on the licensing conditions in relation to the Underlying Index contained in the Index LicenceAgreement.

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TENTATIVE LISTING TIMETABLE

The indicative timing of events leading up to the listing of the Units is set out below:

Tentative Dates Event

9 June 2010 : Issuance/Publication of this Prospectus

9 July 2010 : Date of Allotment of Units to Participating Dealer

13 July 2010 : Tentative listing date

There will not be Units set aside for subscription by the public prior to Listing. The Manager has obtainedthe commitment of the Participating Dealer to undertake the initial creation of Units of the Fund bycontributing initial seed money (Seed Capital).

The Participating Dealer has committed to contribute the Seed Capital for the creation of Units. Thepublic may acquire Units on Bursa Malaysia Securities Berhad upon Listing.

Subsequent to the Listing of the Fund on Bursa Malaysia Securities Berhad, Participating Dealer mayrequest for the creation of additional Units in accordance with the terms of the Participating DealerAgreement.

THE INDICATIVE TIMING AS SET OUT ABOVE IS SUBJECT TO CHANGES WHICH MAY BENECESSARY TO FACILITATE IMPLEMENTATION PROCEDURES. IF THERE ARE ANY CHANGESTO THE INDICATIVE TIMING ABOVE, THE MANAGER WILL INFORM INVESTORS VIA THE FUNDSWEBSITE, WHICH IS www.cimbetf.com.



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TABLE OF CONTENTS

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PAGE

DEFINITIONS vii

CORPORATE DIRECTORY xiii

1. INFORMATION SUMMARY 11.1 Summary of the Fund 1

1.2 Fees, charges and expenses in relation to the Fund 4

1.3 Use of proceeds 7

1.4 Summary of the Singapore Fund 7

1.5 Fees, charges and expenses in relation to the Singapore Fund 8

1.6 Other Information 9

2. RISK FACTORS 10

2.1 General risks of investing in ETFs 10

2.2 Risk factors specific to the Fund 11

2.3 Risk factors related to the Underlying Index 17

3. INFORMATION ON THE FUND 19

3.1 An introduction to the Fund 19

3.2 Listing of the Fund on Bursa Securities 19

3.3 Investment objective 20

3.4 Investment policy and strategy 20

3.5 Investment scope and restrictions 20

3.6 Income distribution policy 223.7 Performance of the Fund may deviate from the performance of the Singapore

Fund22

3.8 Correlation 22

3.9 The Underlying Index 23

3.10 Risk management strategies and techniques 27

3.11 Valuation of the Fund Assets 28

3.12 Valuation Point for the Fund 28

4. INFORMATION ON THE SINGAPORE FUND 29

4.1 An introduction to the Singapore Fund 294.2 Investment objective 29

4.3 Investment strategy 29

4.4 Index Return AAPs 30

4.5 Investment restrictions 31

4.6 Income distribution policy 35

4.7 Index rebalancing 36

4.8 Valuation of assets of the Singapore Fund 36

4.9 Operation of the Singapore Fund 37

4.10 Singapore Fund performance 38


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TABLE OF CONTENTS (contd)

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5. FEES, CHARGES AND EXPENSES OF THE FUND 39

5.1 Direct fees and charges to an investor 39

5.2 Indirect fees and expenses to an investor 39

5.3 Other fees, charges and expenses 40

5.4 Impact of fees and charges imposed by the Singapore Fund on the cost ofinvesting in the Fund

43

5.5 Additional remuneration 43

6. FEES, CHARGES AND EXPENSES OF THE SINGAPORE FUND 44

6.1 Fees and charges payable by the Singapore Fund 44

6.2 Other costs of investing in the Singapore Fund 44

7. UNITS OF THE FUND 45

7.1 Pre-Listing Phase 45

7.2 Post-Listing Phase 45

7.3 Creation and redemption of Units 45

7.4 Procedures for creation of Units 45

7.5 Procedures for redemption 48

7.6 Calculation of Issue Price, Redemption Price and IOPV per Unit 50

7.7 Transaction Costs 51

7.8 Trading of the Units 51

8. THE MANAGER 53

8.1 About the Manager 538.2 Roles, duties and responsibilities 53

8.3 Historical financial information 54

8.4 Key personnel of the Manager 54

8.5 The Board of the Manager 55

8.6 The Investment Committee 60

8.7 The Fund Manager 62

8.8 Material litigation and arbitration 62

8.9 The Investment Adviser 63

8.10 Fund Administration and Fund Accounting Service Provider 64

8.11 Direct and indirect unitholding in the Fund 64

9. THE TRUSTEE 65

9.1 About the Trustee 65

9.2 Roles, duties and responsibilities 65

9.3 Experience 65

9.4 Historical financial information 65

9.5 The Board of the Trustee 66

9.6 Material litigation and arbitration 669.7 Trustees Delegate 66

9.8 Trustees statement of responsibility 66


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TABLE OF CONTENTS (contd)

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PAGE

10. THE SF MANAGER 67

10.1 About the SF Manager 67

10.2 Functions, duties and responsibilities 67

11. THE SF TRUSTEE 68

11.1 About the SF Trustee 68

11.2 Duties and Responsibilities 68

12. SALIENT TERMS OF THE DEED 69

12.1 Rights of Unitholders 69

12.2 Liabilities and limitations of Unitholders 69

12.3 Maximum fees and charges permitted by the Deed 70

12.4 Expenses permitted by the Deed 70

12.5 Retirement, removal or replacement of the Manager 72

12.6 Power of the Trustee to remove, retire or replace the Manager 72

12.7 Retirement, removal or replacement of the Trustee 73

12.8 Power of the Manager to remove or replace the Trustee 73

12.9 Termination of the Fund 73

12.10 Unitholders meeting 74

13. APPROVALS AND CONDITIONS 76

13.1 Approvals obtained from SC and conditions imposed 76

13.2 Waiver/Variation approved by SC 76

14. RELATED PARTY TRANSACTIONS/CONFLICTS OF INTEREST 77

14.1 Existing and proposed related party transactions 77

14.2 Interests of directors and substantial shareholders of the Manager 78

14.3 Declaration of experts existing and potential interests/conflicts of interests 78

15. TAXATION OF THE FUND 79

16. ADDITIONAL INFORMATION 85

16.1 Keeping abreast with developments of the Fund 85

16.2 Investor services 85

16.3 Anti-money laundering policies and procedures 85

16.4 Unclaimed monies 86

16.5 Material agreements 86

17. CONSENTS 87

18. DOCUMENTS FOR INSPECTION 88

19. DIRECTORY OF PARTICIPATING DEALERS OFFICES 89


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DEFINITIONS

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In this Prospectus, the following capitalized terms shall unless the defined or the context requiresotherwise have the meanings as set out below:

Application : A Creation Application and/or Redemption Application, as the case maybe.

Application Cancellation Fee : The fee which may, at the discretion of the Manager be charged to eachParticipating Dealer, upon the cancellation of each Application as set outin Sections 5 of this Prospectus.

Board : Board of Directors of the Manager.

Bursa Depository : Bursa Malaysia Depository Sdn Bhd (165570-W).

Bursa Securities : Bursa Malaysia Securities Berhad (635998-W).

Business Day : A day (other than Saturday, Sunday or public holidays in the FederalTerritory of Kuala Lumpur) on which Financial Institutions are open forbusiness and money market transactions are carried on in the FederalTerritory of Kuala Lumpur.

CDS Account : An account established at Bursa Depository for the recording of depositof securities and dealing in such securities by the depositor.

Central Depositories Act : Securities Industry (Central Depositories) Act, 1991.

CIMB : CIMB Investment Bank Berhad (18417-M).

CIMB Bank : CIMB Bank Berhad (13491-P).

CIMB-Principal or theManager

: CIMB-Principal Asset Management Berhad (304078-K).

CIMB-Principal (S) : CIMB-Principal Asset Management (S) Pte Ltd (Company No.200607208K).

Clearing House : Bursa Malaysia Securities Clearing Sdn Bhd (109716-D).

CMSA : Capital Markets and Services Act, 2007.

Code : The Code on Collective Investment Schemes issued by the MAS (asamended from time to time).

Creation Application : An application to create new Units.

Creation Unit Block : The quantity of Units which will be issued upon a successful CreationApplication in exchange for cash, as from time to time determined by theManager, upon consultation with the Trustee and notified to theParticipating Dealer.

DBMB : Deutsche Bank (Malaysia) Berhad (312552-W).

DBS Trustee or the SF

Trustee

: DBS Trustee Limited or its successors

Dealing Deadline : For the purposes of Creation Application(s) and/or RedemptionApplication(s), 10.30a.m. on any particular Dealing Day or such othertime as the Manager (with approval of the Trustee) may from time to timedetermine and notify to the Participating Dealer(s).

Dealing Day : In relation to the Fund, each Market Day during the continuance of theFund, which is also a SF Dealing Day and/or such other day as theManager may, in consultation with the Trustee, from time to timedetermine but shall not include a Market Day on which a force majeureevent occurs or is continuing.

Deed : The principal and any supplemental deed in respect of the Fund madebetween the Manager, the Trustee and the Unitholders of the Fund,agreeing to be bound by the provisions of the Deed.


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DEFINITIONS (contd)

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Distribution Account : An account to which the amount of any income or gain of the Fundcalculated in respect of a Unit on a Market Day and allocated to theUnitholder is credited to.

DTMB or the Trustee : Deutsche Trustees Malaysia Berhad (763590-H).

ETF : Exchange-Traded Fund.

ETF Guidelines : Exchange-Traded Funds Guidelines issued by the SC on 11 June 2009which came into effect on 12 June 2009 as may be amended and/orupdated from time to time.

Financial Institution : (a) if the institution is in Malaysia:

(i) licensed bank;

(ii) licensed merchant bank;

(iii) Islamic bank.

(b) if the institution is outside Malaysia, any institution that islicensed/registered/approved/authorised to provide financialservices by the relevant banking regulator.

Fund : The ETF as established by the Deed (as may be modified from time totime) known as the CIMB FTSE ASEAN 40 Malaysia or other name asthe Manager may determine, subject to the approval of the relevantauthority(ies).

Fund Assets : All the assets (including cash) held or deemed to be held upon trust bythe Trustee pursuant to the Deed including income (which comprises allprofits, dividends and other distributions or income which accrue inrespect of the Fund Assets including all or any part of the capital gainsand losses realised on the sale or disposal of the Fund Assets as theManager may from time to time determine to be treated as income of theFund) but excluding any amount standing to the credit of the DistributionAccount.

Index Licensor or FTSE : FTSE International Limited.

Index Licence Agreement : The agreement dated 20 September 2006 entered into between theIndex Licensor and CIMB-GK Securities Pte Ltd, which was novated toCIMB-Principal (S) on 15 June 2007 and supplemented via anaddendum dated 19 April 2010.

Index Return AAP : Index Return ASEAN Access Product, which means a US dollardenominated ASEAN securities access product, being a security (suchas a warrant, note or participation certificate) linked to the UnderlyingIndex which may have a performance related feature as described in thisProspectus.

Indicative Optimum PortfolioValue per Unit or IOPV perUnit

: The estimated NAV per Unit of the Fund, calculated in the manner setforth in Section 7.6 of this Prospectus.

Investment Adviser : CIMB-Principal (S), in its capacity as Investment Adviser.

Issue Price : The price at which Units are issued or to be issued from time to time andwhich shall be ascertained in accordance with the provisions set out in ofSection 7.6 of this Prospectus.

Latest Practicable Date : 31 March 2010, being the latest practicable date prior to the registrationof this Prospectus whereby the information disclosed shall remainrelevant and current as at such date.

Liabilities : The outstanding liabilities, costs and expenses of the Fund including

without limitation:


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DEFINITIONS (contd)

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(i) unpaid administrative fees and expenses including theManagement Fee (if any) and the Trustee Fee;

(ii) all fees and expenses and all duties, taxes, governmentalcharges, brokerage, transfer fees, or other charges or expensesincurred by the Manager and/or the Trustee in relation to or in

connection with any transaction, dealing or instrument or as aconsequence of such transaction, dealing or instrument;

(iii) accrued charges in respect of or owing in relation to any SFUnits;

(iv) amounts required to meet all present liabilities and anappropriate allowance for any contingent liabilities;

(v) any provision for tax which in the opinion of the Manager shouldbe taken into account and such sum (if any) as estimated by theManager to be paid or reclaimed in respect of taxation related toincome and transactions prior to the relevant date;

(vi) the amount outstanding in respect of any borrowing permitted by

applicable laws and the amount of any unpaid interest andexpenses in respect thereof;

(vii) any other cost or expenses payable but not paid which areexpressly authorised by any of the provisions of the Deed to bepayable out of the Fund Assets;

(viii) any other amounts required to meet liabilities or otherexpenditure which in the opinion of the Manager, with theapproval of the Trustee, should be taken into account and whichhave not otherwise been taken into account in determining theamount of the liabilities in any of the preceding paragraphs ofthis definition; and

liabilities shall (where appropriate) be treated as accruing from day today.

Listing : Admission to the Official List and the listing of and quotation for the Unitson the Main Market.

Listing Requirements : The Main Market Listing Requirements issued by Bursa Securities.

Main Market : Main Market of Bursa Securities.

Management Fee : A percentage of the NAV of the Fund that is paid to the Manager formanaging the portfolio of the Fund as set out in Section 5 of thisProspectus.

Market : In relation to any Underlying Index Security, a Relevant Exchange, andin relation to any futures or derivative instrument, the international stock

exchanges or over-the-counter market, approved by the SF Managerand the SF Trustee.

Market Day : A Business Day on which Bursa Securities is open for trading ofsecurities.

MAS : The Monetary Authority of Singapore or its successors.

MER : Management expense ratio which is the ratio of the sum of fees and therecovered expenses of the Fund to the average value of the Fundcalculated on a daily basis using the following formula:

Fees of the Fund + Recovered expenses of the Fund

Average Value of the Fund calculated on a daily basisx 100

where:


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DEFINITIONS (contd)

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Fees = All ongoing fees deducted/deductible directly fromthe Fund in respect of the period covered by themanagement expense ratio, expressed as a fixedamount, calculated on a daily basis. This wouldinclude the annual Management Fee (if any), theannual Trustee Fee and any other fees

deducted/deductible directly from the Fund;

Recoveredexpense

= All expenses recovered from/charged to the Fund,as a result of the expenses incurred by theoperation of the Fund, expressed as a fixedamount. This should not include expenses thatwould otherwise be incurred by an individualinvestor (e.g. brokerage, tax and levies); and

Averagevalue of theUnit

= The NAV of the Fund, including the income value ofthe Fund, less expenses on an accrued basis, inrespect of the period covered by the managementexpense ratio, calculated on a daily basis.

NAV of the Fund : The value of all Fund Assets less the value of all the Liabilities, at theValuation Point. For the purpose of computing the annual ManagementFee (if any) and annual Trustee Fee, the NAV of the Fund should beinclusive of the Management Fee (if any) and Trustee Fee for therelevant day.

Non-Specialised Fund : A collective investment scheme that invests in equities and/or fixedincome instruments and does not fall within the categories of specializedschemes of property funds, money market funds, hedge funds, futuresand options funds or currency funds as set out in Appendices 2, 3, 4, 7and 8 of the Code.

Non-Specialised FundsInvestment Guidelines

: The investment guidelines for Non-Specialised Funds issued by the MASas Appendix 1 of the Code for the time being in force, and as the same

may be amended from time to time by the MAS.Participating Dealer : CIMB Bank and any other person who has entered into a Participating

Dealer Agreement in form and substance acceptable to the Manager andTrustee.

Participating DealerAgreement

: The agreement entered into between the Participating Dealer, theManager and Trustee setting out, amongst others:

(i) the arrangements in respect of the creation and issue of Unitsand the redemption and cancellation of Units; and

(ii) the obligations of the Participating Dealer as a liquidity provider.

Post-Listing Phase : The period commencing on the date of Listing and continues until the

Fund is de-listed.Prospectus Guidelines for

Collective InvestmentSchemes

: Guidelines on Collective Investment Schemes Prospectus issued by theSC which came into effect in January 2008, as may be amended fromtime to time.

Redemption Amount : The sum payable for Units redeemed pursuant to a RedemptionApplication which shall be the Redemption Price multiplied by thenumber of Units redeemed.

Redemption Application : An application to redeem existing Units.

Redemption Date : In relation to Units applied for, means three Dealing Days after the TradeDate on which an Application for such Units is received/deemed receivedor such other day as may be agreed between the Manager and Trustee

(on either a general or case by case basis) and notified to theParticipating Dealer on which Units are to be redeemed/cancelled.


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DEFINITIONS (contd)

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Redemption Price : The price per Unit at which Units are redeemed from time to time andwhich shall be ascertained in accordance with the provisions set out inSection 7.6 of this Prospectus.

Redemption Unit Block : The quantity of Units which are required to be delivered to the Trustee inexchange for cash, as from time to time determined by the Manager,

upon consultation with the Trustee and notified to the ParticipatingDealer.

Register : The register of Unitholders kept and maintained by the Manager or itsappointed agent on the following basis:

(i) Units issued to the Unitholders;

(ii) Units redeemed by the Unitholders; and

(iii) records obtained from Bursa Depository annually, or on suchother dates as may be determined by the Manager.

Relevant Exchanges : The stock exchanges of the ASEAN region on which the UnderlyingIndex Securities are traded and a Relevant Exchange means any oneof them. The initial Relevant Exchanges are PT Bursa Efek Jakarta(Jakarta Stock Exchange), Bursa Malaysia Berhad, The Philippine StockExchange, Inc., The Stock Exchange of Thailand and SGX-ST.

Ringgit Malaysia or RM : The lawful currency of Malaysia.

SC : Securities Commission of Malaysia.

SF Business Day : A day (other than a Saturday or a Sunday) on which all the RelevantExchanges are open for normal trading and on which the UnderlyingIndex is compiled and published, and on which banks in Singapore areopen for general business (or such other day or days as may from timeto time be determined by the SF Manager and SF Trustee) and where aday on which any of the Relevant Exchanges or banks in Singapore isopen for only half a day such day shall not be considered a SF Business

Day.

SF Dealing Day : In relation to the Singapore Fund, each SF Business Day during thecontinuance of the Singapore Fund, and/or such other day or days as theSF Manager may from time to time determine with the approval of the SFTrustee.

SF Deed : Trust Deed constituting the Singapore Fund dated 6 September 2006between the SF Manager and the SF Trustee, as amended,supplemented or restated from time to time.

SF Manager : CIMB-Principal (S), in its capacity as the manager of the SingaporeFund.

SF NAV : The net asset value of the Singapore Fund or, as the context may

require, of a SF Unit calculated pursuant to the SF Deed.

SF Participating Dealer : Citigroup Global Markets Singapore Securities Pte Ltd, Flow TradersAsia Pte Lte, DBS Vickers Securities (Singapore) Pte Ltd or any otherdealer which has entered into an SF Participation Agreement in form andsubstance acceptable to the SF Manager and the SF Trustee.

SF Securities : Underlying Index Securities, Index Return AAPs and any securities,futures or derivative instrument held by the Singapore Fund.

SF Unit : An undivided interest in the Singapore Fund.

SF Unitholder : The person for the time being entered in the register as the holder of aSF Unit and (where the context so permits) persons jointly so entered.

SGX-ST : Singapore Exchange Securities Trading Limited or its successors.Singapore Fund : CIMB FTSE ASEAN 40, a unit trust constituted under Singapore law.


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DEFINITIONS (contd)

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Special Resolution : A resolution passed by a majority of not less than three-fourths (3/4) ofUnitholders voting at a meeting of Unitholders, provided that for thepurpose of terminating or winding-up the Fund, a special resolution ispassed by a majority in number representing at least three-fourths (3/4)of the value of Units held by Unitholders voting at the meeting.

Subscription Amount : The price payable for Units applied for pursuant to a Creation Applicationwhich shall be the Issue Price multiplied by the number of Units applied.

Target Funds : Other collective investment schemes as defined in the ETF Guidelines.

Trade Date : The Dealing Day on which the Manager receives a valid Application inaccordance with the Deed and the Participating Dealer Agreementprovided that if such Application is received after the Dealing Deadline,the next Dealing Day shall be deemed the Trade Date.

Transaction Costs : In relation to any particular transaction or dealing, means all stamp andother duties, taxes, government charges, brokerage, bank charges,transfer fees, registration fees, transaction levies and other duties andcharges whether in connection with the constitution of the Fund Assetsor the increase or decrease of the Fund Assets or the creation, issue,

transfer, cancellation or redemption of Units or the acquisition or disposalof Fund Assets or otherwise which may have become or may be payablein respect of (whether prior to, upon or after the occasion of) anytransaction or dealing.

Trustee Fee : A percentage of the NAV of the Fund that is paid to the Trustee, as setout in Section 5 of this Prospectus.

Underlying Index or FTSE/ASEAN 40 Index

: The FTSE/ASEAN 40 Index (or such other name by which the index maybe known) provided by the Index Licensor or such replacement index asmay be determined by the SF Manager.

Underlying Index Securities : The shares or interests issued by the companies that are included in theUnderlying Index from time to time or depository receipts that may be

issued against such shares or securities.Unit : An undivided interest in the Fund.

Unitholder : Any person(s) registered as holding a Unit in accordance with theprovisions of the Deed.

Valuation Point : In relation to the Fund, at the official close of trading on Bursa Securitieson each Dealing Day.

Words denoting the singular shall, include the plural and vice versa and words denoting the masculinegender shall, where applicable, include the feminine and neuter genders and vice versa. Reference topersons shall include companies and corporations.

Any reference to an enactment is a reference to that enactment as for the time being amended or re-enacted.

Any reference to a time or day shall be reference to Malaysian time or day, unless otherwise stated.


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CORPORATE DIRECTORY

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MANAGER : CIMB-Principal Asset Management Berhad (304078-K)

Registered address : 5th

Floor, Bangunan CIMBJalan SemantanDamansara Heights50490 Kuala Lumpur

Malaysia

Tel No.: (+603) 2093 0379

Business address : Level 5, Menara Milenium8 Jalan DamanlelaBukit Damansara50490 Kuala LumpurMalaysia

Tel No.: (+603) 2084 2000E-mail: [email protected]: www.cimb-principal.com.my

Board of Directors of the Manager : Dato Charon Wardini bin MokhzaniDatuk Noripah binti KamsoDato Mohd Shukri Hussin**Raja Noorma binti Raja OthmanBadlisyah bin Abdul Ghani***Peter William EnglandRex AuyeungJohn Campbell TuplingNed Alan BurmeisterBrig Gen (R) Dato Arif bin Dato Awang*Loong Chun Nee*Dato Anwar bin Aji*

Wong Joon Hian*

*Independent director** Alternate director to Dato Charon Wardini bin Mokhzani*** Alternate director to Raja Noorma binti Raja Othman

Investment Committee : Raja Noorma binti Raja OthmanJohn Campbell TuplingBadlisyah bin Abdul GhaniKim Teo Poh Jin*A.Huzaime bin Abdul Hamid*Fadl bin Mohamed*

*Independent member

Company Secretary : Datin Rossaya Mohd Nashir (LS 0007591)5th Floor, Bangunan CIMB,Jalan SemantanDamansara Heights50490 Kuala LumpurMalaysia

Tel No.: (+603) 2093 0379


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CORPORATE DIRECTORY (contd)

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INVESTMENT ADVISER : CIMB-Principal Asset Management (S) Pte Ltd

Registered/Business address : 50 Raffles PlaceSingapore Land Tower, #26-05Singapore 048623Tel No.:(+65) 6210 8488

Fax No.: (+65) 6210 8489

FUND ADMINISTRATION ANDFUND ACCOUNTING SERVICEPROVIDER(Managers Delegate)

: Deutsche Bank (Malaysia) Berhad (312552-W)

Registered address : Level 18, Menara IMC8, Jalan Sultan Ismail50250 Kuala LumpurMalaysia

Tel no.: (+603) 2053 6788

Business address : Level 18-20, Menara IMC8, Jalan Sultan Ismail50250 Kuala LumpurMalaysia

Tel no.: (+603) 2053 6788Email: [email protected]: www.db.com

TRUSTEE : Deutsche Trustees Malaysia Berhad (763590-H)

Registered/Business address : Level 20, Menara IMC

8, Jalan Sultan Ismail50250 Kuala LumpurMalaysia

Tel No.: (+603) 2053 7522Email: [email protected]

CUSTODIAN(Trustees Delegate)

: Deutsche Bank (Malaysia) Berhad (312552-W)

Registered Address : Level 18, Menara IMC8, Jalan Sultan Ismail50250 Kuala Lumpur

Malaysia

Tel no.: (+603) 2053 6788

Business Address : Level 18-20, Menara IMC8, Jalan Sultan Ismail50250 Kuala LumpurMalaysia

Tel no.: (+603) 2053 6788Email: [email protected]: www.db.com


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CORPORATE DIRECTORY (contd)

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AUDITORS OF THE MANAGERAND OF THE FUND

: PricewaterhouseCoopersChartered AccountantsLevel 10, 1 SentralJalan TraversKuala Lumpur SentralPO Box 10192

50706 Kuala LumpurMalaysia

TAX ADVISER : PricewaterhouseCoopersTaxation Services Sdn BhdLevel 10, 1 SentralJalan TraversKuala Lumpur SentralPO Box 1019250706 Kuala LumpurMalaysia

SOLICITORS : Zaid Ibrahim & Co

Level 19, Menara Milenium,Pusat Bandar Damansara,50490 Kuala LumpurMalaysia

PRINCIPAL BANKER : CIMB Bank Berhad (13491-P)

Business address : Menara Bumiputra-Commerce11 Jalan Raja Laut50350 Kuala LumpurMalaysia

ADVISER : CIMB Investment Bank Berhad (18417-M)


Floor, Bangunan CIMBJalan Semantan, Damansara Heights50490 Kuala LumpurMalaysia

PARTICIPATING DEALER : CIMB Bank Berhad (13491-P)


Floor, Bangunan CIMBJalan Semantan, Damansara Heights50490 Kuala LumpurMalaysia

INDEX LICENSOR : FTSE INTERNATIONAL LIMITED12

thFloor,

10 Upper Bank Street,Canary Wharf,London, E14 5NP.

LISTING SOUGHT : Main Market of Bursa Securities


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1. INFORMATION SUMMARY

1

This section is only a summary of salient information about the Fund. Investors shouldread and understand the whole Prospectus prior to making investment decisions.

1.1 Summary of the Fund

Item Brief Description Sections in

Prospectus

Name of Fund : CIMB FTSE ASEAN 40 Malaysia 3 andDefinitions

Category of Fund : Feeder ETF / Equity 3.1

Type of Fund : Index tracking

Investment objective : The Fund aims to provide investmentresults that, before expenses, closely

correspond to the performance of theUnderlying Index, regardless of itsperformance.

3.3

Underlying Index : The FTSE/ASEAN 40 Index or suchreplacement index as may be determinedby the SF Manager and/or the Manager.

3.9

Investment policyand strategy

: A passive strategy whereby Managerinvests substantially all the assets of theFund into the Singapore Fund.

3.4

Risk factors : The following is a list of risk factors (whichmay not be exhaustive) which you shouldcarefully consider before investing in theFund:

2

(I) General risk of investing in ETFs 2.1

(i) Returns not guaranteed

(ii) General market risk

(iii) Inflation risk

(iv) Loan financing risk(v) Risk of non-compliance

(vi) Managers risk

(II) Risk factors specific to the Fund 2.2

(i) Market risk

(ii) Passive investment

(iii) Tracking error risk

(iv) Creation and redemptionthrough Participating Dealeronly

(v) No prior trading market in theUnits


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1. INFORMATION SUMMARY (contd)

2

Item Brief Description Sections inProspectus

(vi) Minimum creation andredemption size

(vii) Units may trade at price otherthan at NAV of the Fund

(viii) Lack of operational history

(ix) Income distributions arecontingent on dividends paid bythe Singapore Fund

(x) Concentration on the SingaporeFund

(xi) Concentration on a particulargroup of stocks, industry orgroup of industries

(xii) Dependence on trading market

for the Underlying IndexSecurities

(xiii) Lack of discretion by Manager toadapt to market changes

(xiv) Trading in Units on BursaSecurities may be suspended

(xv) Trading in SF Units on the SGX-ST may be suspended

(xvi) Units may be de-listed fromBursa Securities

(xvii) Suspension of creations and

redemptions(xviii)Right of the MAS to withdraw

authorization of the SingaporeFund

(xix) Counterparty risk of theSingapore Fund

(xx) Risk relating to the Index ReturnAAPs of the Singapore Fund

(xxi) Emerging market risks

(xxii) Foreign exchange risk

(xxiii) Foreign security risk

(xxiv)Market disruption events andsettlement disruption events

(III) Risk factors related to the UnderlyingIndex

2.3

(i) Errors or inaccuracies to theUnderlying Index

(ii) Underlying Index is subject tofluctuations

(iii) Composition and weightings inthe Underlying Index maychange

(iv) Licence to use the UnderlyingIndex may be terminated


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(v) Compilation of the UnderlyingIndex

Investor profile : The Fund is designed for investors whoseek an index-based approach toinvesting in a liquid, low cost financialinstrument with performance generallysimilar to the Underlying Index. Due to itsdual attribute of being a unit trust andbeing listed and traded on the stockexchange, the Units can be used by bothmedium to long-term investors and short-term traders.

Initial approved Fundsize

: 500 million Units

Offering of the Units : Investors may only acquire Units uponListing. Investors may choose topurchase and sell Units in the secondarymarket on Bursa Securities or apply forcreation/redemption in aCreation/Redemption Unit Block or amultiple or multiples thereof, through theParticipating Dealer.

7.2

Creation/redemptionof Units

: (I) Creation of UnitsParticipating Dealer (either for theirown accounts or for the accounts oftheir clients) can only apply forcreation of new Units via the deliveryof cash in exchange for Units.

7.3 and 7.4

(II) Redemption of Units 7.3 and 7.5

Participating Dealer (either for theirown accounts or for the accounts oftheir clients) can only redeem Unitsvia the delivery of existing Units inexchange for cash.

Creation/RedemptionUnit Block

: Currently, 8.1 million Units. This quantitymay change from time to time asdetermined by the Manager, uponconsultation with the Trustee and notifiedto the Participating Dealer.

Creation/redemption of Units must be in aCreation/Redemption Unit Block or amultiple or multiples thereof.

7.2, 7.3, 7.4and 7.5

Trading of Units : Investors may trade (buy and sell) Units

on the Main Market

7.2 and 7.8


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Trading board lot size : 100 Units 7.2 and 7.8

Trading currency : Ringgit Malaysia

Financial year end ofthe Fund

: 30 June

First financial year end of the Fund is 30June 2011

Income distributionpolicy

: Annually, subject to the discretion of theManager.

3.6

Manager : CIMB-Principal Asset ManagementBerhad

8

Investment Adviser : CIMB-Principal Asset Management (S)Pte Ltd

8.9

Trustee : Deutsche Trustees Malaysia Berhad 9

Please refer to Section 3 of this Prospectus for additional information on the Fund.

Latest information on the Underlying Index and the Fund will be published on the FTSEwebsite at http://www.ftse.com/ and the Funds website at www.cimbetf.comrespectively.

1.2 Fees, charges and expenses in relation to the Fund

(i) Direct fees and charges payable by a typical investor

This table describes the charges that a typical investor may incur (based on thecharges imposed by Bursa Securities as at the Latest Practicable Date, whichmay be varied from time to time) when you buy or sell Units on Bursa Securities:

Fees and charges %/RM

Brokerage fee Maximum of 0.70% of the contract value(subject to minimum of RM40).

Clearing fee On market transactions: 0.03% (subject tomaximum of RM1,000 per contract).

Direct business transactions: 0.03% (subject tominimum of RM10 and maximum of RM1,000per contract).

Stamp duty 0.1% of the contract value (rounded up to thenearest RM), subject to a maximum of RM200.

Further information on the charges that you may incur from trading the Units onBursa Securities can be found at www.bursamalaysia.com.


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(ii) Indirect fees and charges payable by a typical investor

This table describes the fees and expenses that you may indirectly incur whenyou invest in the Fund:

Fees and expenses %

Annual Management Fee Nil

Annual Trustee Fee 0.08%(1)

, subject to a minimum of RM18,000per annum.

Note:(1)

Calculated based on the NAV of the Fund, accrued daily.

In addition, there will be other fees or expenses incurred by the Fund asdescribed in Section 5.3.4 of this Prospectus.

All of the abovementioned fees and expenses shall be deducted from the FundAssets.

The costs of establishing the Fund, the costs of preparation of this Prospectusand publishing of this Prospectus in the newspapers, and the costs of seekingand obtaining authorization from the SC as well as the listing on Bursa Securitiesand all initial legal and printing costs in respect of the Fund (the "Cost ofEstablishment of the Fund") will be borne by the Fund.

The Cost of Establishment of the Fund shall be funded by the Manager upfrontas and when they are incurred. The Manager is allowed to charge back this Costof Establishment to the Fund over the next two (2) financial years from the dateof this Prospectus, which is not anticipated to exceed RM500,000.

(iii) Fees and charges to a Participating Dealer

All Creation/Redemption Applications must be submitted to the Manager througha Participating Dealer and the creation/redemption of Units must beimplemented in accordance with the terms and conditions set out in theParticipating Dealer Agreement.

The fees and charges (excluding out-of-pocket expenses) to be paid by theParticipating Dealer to the Manager and/or Trustee (which may be charged toyou by the Participating Dealer) as set out in the Participating Dealer Agreementare as follows:

Fees and charges Description

(a) Creation Application fee Currently RM4,550 (subject to amaximum of RM5,000 to allow for foreignexchange fluctuations) payable to theManager or such amount as may bedetermined by the Manager from time totime, in consultation with the Trustee.

(b) Creation ApplicationCancellation Fee

Currently RM7,350 (subject to amaximum of RM8,000 to allow for foreignexchange fluctuations) payable to theManager or such amount as may be

determined by the Manager from time totime, in consultation with the Trustee.


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Fees and charges Description

(c) Redemption Application fee Currently RM7,350 (subject to amaximum of RM8,000 to allow for foreignexchange fluctuations) payable to theManager or such amount as may be

determined by the Manager from time totime, in consultation with the Trustee.

(d) Redemption ApplicationCancellation Fee

Currently RM7,350 (subject to amaximum of RM8,000 to allow for foreignexchange fluctuations) payable to theManager or such amount as may bedetermined by the Manager from time totime, in consultation with the Trustee.

(e) Transaction Costs The Manager may charge TransactionCosts (incurred by the Fund). This is toprevent the NAV of the Fund from beingdiluted by the high Transaction Costs.

(f) Other fees The amount (other than TransactionCosts described above) that may beincurred by the Manager and/or theTrustee from time to time in relation to theApplications submitted by theParticipating Dealer, which is charged byBursa Depository.

These fees and charges are relatively higher due to charges imposed by theSingapore Fund.

(iv) Impact of fees and charges imposed by the Singapore Fund on the cost of

investing in the Fund

There will be no Management Fee charged at the Fund level as illustratedbelow. A management fee will only be charged once at the Singapore Fundlevel. The fees of the SF Trustee, custodian, registrar, investment advisor, IndexLicensor and auditors of the Singapore Fund will be borne by the SF Managerand will not be charged to the Singapore Fund.

The maintenance fee payable by the Singapore Fund (payable to the issuer ofthe Index Return AAPs) is currently at 0.30% per annum (calculated based onthe average of net asset value of the Index Return AAPs).

Other than the management and maintenance fees above, there are otherexpenses incurred by the Singapore Fund. These fees and charges are imputedinto the calculation of the SF NAV. As such, Unitholders of the Fund are

indirectly bearing the above fees and expenses charged at the Fund level.Please refer to Section 6.2 for details of the fees, charges and expenses ofinvesting in the Singapore Fund.

investsinvests

The Singapore Fund

charges management feeof 0.65% of NAV of theSingapore Fund (subjectto a maximum of 1.00%)

No Management

Fee

Investor Fund SingaporeFund


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7

1.3 Use of proceeds

The proceeds received by the Fund pursuant to the subscription of Units shall be usedfor the purposes of investment in the SF Units and other investments described inSection 3 of this Prospectus.

1.4 Summary of the Singapore Fund

Investors attention is drawn to the fact that the Singapore Fund is not availablefor direct investment by Malaysian investors in Malaysia. The SCs approval of theFund does not imply recommendation of either the Fund or the Singapore Fundand the SC accepts no responsibility as to the accuracy of the statements made oropinions expressed in this Prospectus.

The following information is extracted from or based on information contained inthe prospectus issued by the Singapore Fund on 27 May 2009 and suchinformation has not been independently verified.

Item Brief Description Sections in

Prospectus

Name of Fund : CIMB FTSE ASEAN 40 4.1

Investment objective : The Singapore Fund aims to provideinvestment results that before expenses,closely correspond to the performance ofthe FTSE/ASEAN 40 Index, regardless ofits performance.

4.2

Underlying Index : The FTSE/ASEAN 40 Index or such

replacement index as may be determinedby the SF Manager.

3.9

Investment policyand strategy

: In managing the Singapore Fund, the SFManager may adopt either a ReplicationStrategy or a Representative SamplingStrategy. The SF Manager may swapbetween the two strategies, without priornotice to investors, in its absolutediscretion as often as it believesappropriate in order to achieve theinvestment objective of the SingaporeFund.

Using a Replication Strategy, theSingapore Fund will invest in substantiallyall the Underlying Index Securities insubstantially the same weightings (i.e.proportions) as the FTSE/ASEAN 40Index, or the Index Return AAP(s) (to theextent possible).

However, if the SF Manager believes thata Replication Strategy is not the mostefficient means to track the FTSE/ASEAN40 Index, the SF Manager may decide to

adopt a Representative SamplingStrategy instead.

4.3


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Using a Representative SamplingStrategy, the Singapore Fund will hold arepresentative sample of a portfolio of SF

Securities selected by the SF Managerusing quantitative analytical models in atechnique known as portfolio sampling.The SF Manager will seek to construct theportfolio of the Singapore Fund so that, inthe aggregate, its capitalisation, industryand fundamental investmentcharacteristics perform like those of theFTSE/ASEAN 40 Index.

Trading currency : US dollars (US$)

Financial year end ofthe Singapore Fund

: 31 December

Income Distributionpolicy

: Annually, subject to the discretion of theSF Manager.

4.6

SF Manager : CIMB-Principal Asset Management (S)Pte Ltd

10

SF InvestmentAdviser

: Barclays Global Investor North AsiaLimited

SF Trustee : DBS Trustee Limited 11

Please refer to Section 4 of this Prospectus for additional information on theSingapore Fund.

Latest information on the FTSE/ASEAN 40 Index and the Singapore Fund will bepublished on the FTSE website at http://www.ftse.com/ and the Singapore Fundswebsite at www.cimbetf.com respectively.

1.5 Fees, charges and expenses in relation to the Singapore Fund

(i) Fees and charges payable by the Singapore Fund

The fees and charges payable by the Singapore Fund are summarised asfollows:

Fees and expenses %/US$

Annual Management Fee Currently 0.65%

Maximum 1.00%

Annual Maintenance Fee (payableto the issuer of the Index Return

AAPs)

0.30% (calculated based on theaverage net asset value of the Index

Return AAPs)


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Note:

The fees of the Singapore Funds trustee, custodian, registrar, investment adviser, IndexLicensor and auditors will be borne by the SF Manager and will not be charged to theSingapore Fund.

(ii) Other costs of investing in the Singapore Fund

All the expenses incurred in connection with the convening of meetings of SFUnitholders and all other transactional costs and operating costs (relating to theadministration of the Singapore Fund) shall be paid out of the assets of theSingapore Fund.

The cost and expenses for the preparation of all prospectuses issued by theSingapore Fund and any supplementary thereto, reports and/or other statementsto SF Unitholders will be borne by the Singapore Fund.

1.6 Other Information

The Deed is dated 19 April 2010 and has been entered into between the Manager, the

Trustee and the Unitholders of the Fund.

Please refer to Section 5 for further details on the fees, charges and expensesrelated to investing in the Units. An investor should read and understand thecontents of the Prospectus and if necessary consult their professional adviser(s).

There are fees involved and investors are advised to consider them beforeinvesting in the Fund.

Unit prices and distributions payable, if any, may go down as well as up.

For information concerning certain risk factors which should be considered byprospective investors, see "RISK FACTORS" commencing on page 10.



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2. RISK FACTORS

10

2.1 General risks of investing in ETFs

Any investment carries with it an element of risk. Therefore, prior to making aninvestment, prospective investors should consider the following risk factors in addition tothe other information set out in this Prospectus.

(i) Returns not guaranteed

Investors should be aware that by investing in an exchange-traded fund, there isno guarantee of any income distribution, returns or capital appreciation.

(ii) General market risk

Any purchase of securities will involve some element of market risk. Hence anETF may be prone to changing market conditions as a result of: global, regional or national economic developments; governmental policies or political conditions; development in regulatory framework, law and legal issues;

general movements in interest rates; broad investor sentiment; and external shocks (e.g. natural disasters, war and etc.).

All these may result in uncertainties and fluctuations in the price of theunderlying securities of an ETFs investment portfolio. Such movements in theunderlying values of the securities will cause the NAV or prices of units to fall aswell as rise, and income produced by an ETF may also fluctuate.

(iii) Inflation risk

Inflation rate risk is the risk of potential loss in the purchasing power of yourinvestment due to a general increase of consumer prices. Inflation erodes thereal rate of your return, that is, the return after you take away the inflation rate.The inflation rate is commonly reported using the Consumer Price Index.Inflation is thus one of the major risks to investors over a long-term period andresults in uncertainly over the future value of investments. Thus, fixed ratesecurities are exposed to higher inflation risk than equities in a rising inflationaryenvironment. This risk can be minimised by investing in securities that canprovide positive real rate of return.

(iv) Loan financing risk

If a loan is obtained to finance the purchases of Units of the Fund, investors willneed to understand that:

borrowing increases the possibility for gains as well as losses; if the value of the investment falls below a certain level, investors may be

asked by the Financial Institution to top up the collateral or reduce theoutstanding loan amount to the required level;

the borrowing cost may vary over time depending on the fluctuations ininterest rates; and

the risks of using loan financing in light of investors investment objectives,attitude towards risk and financial circumstances should be carefullyassessed.


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2. RISK FACTORS (contd)

11

(v) Risk of non-compliance

This refers to the current prospective risk to the ETF and investors interestarising from non-conformance with laws, rules, regulations, prescribed practicesand internal policies and procedures by the Manager. This risk may also occurindirectly due to legal risk, which is risk of circumstances from the imposition

and/or amendment on the relevant regulatory frameworks, laws, rules, and otherlegal practices affecting the Fund. Non-compliance may result in a fall in value ofan ETF and may lead to suspension or de-listing of Units on Bursa Securities. Inorder to mitigate this risk, the Manager imposes stringent internal controls andensures that compliance monitoring processes are undertaken.

(vi) Managers risk

The performance of any exchange-traded fund is dependent amongst others onthe experience, knowledge, expertise and investment techniques/processadopted by the Manager and/or the SF Manager, as the case may be, and anylack of the above would have an adverse impact on the Funds performancethereby working to the detriment of Unitholders. Investors should also note that

the quality of the Funds management and/or the Singapore Fundsmanagement, as the case may be, is also affected by internal circumstanceswithin the management company such as operational and system matters.Some of these are due to human error and some are due to other factors thatmay be beyond control. Although the occurrence of such events is very unlikely,the Manager and/or the SF Manager, as the case may be, seeks to reduce thisrisk by implementing a consistent and structured investment process, systematicoperational procedures and processes along with stringent internal controls.

2.2 Risk factors specific to the Fund

(i) Market risk

The NAV of the Fund will change with changes in the market value of the SFSecurities the Singapore Fund holds. The price of SF Units and correspondinglythe price of the Units and the income from them may fluctuate. Investors may notget back their original investment. Whilst the Manager currently intends to payout income distributions of the Fund annually, there is no guarantee that theManager would make such distributions to investors. Investment in the Fundinvolves risks similar to those of inherent in any fund of equity securities tradedon an exchange, such as market fluctuations caused by factors like economicand political developments, changes in interest rates and foreign exchange. Asignificant decline in the value of the Underlying Index can therefore be expectedto result in a similar decline in the SF NAV (and consequently the NAV of theFund).

(ii) Passive investment

The Fund is not actively managed. Accordingly, the Fund may be affected by adecline in the Underlying Index. The Fund invests substantially all its assets inthe Singapore Fund, which in turn invests in the securities included in orreflecting its Underlying Index. The SF Manager does not attempt to selectstocks individually or to take defensive positions in declining markets.


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(iii) Tracking error risk

Changes in the SF NAV are unlikely to replicate the exact changes in theUnderlying Index. This is due to, among other things, the fees and expensespayable by the Singapore Fund and transaction fees and stamp duty incurred inadjusting the composition of the Singapore Funds portfolio because of changes

in the Underlying Index and dividends received, but not distributed, by theSingapore Fund. In addition, as a result of the unavailability of Underlying IndexSecurities, the transaction costs in making an adjustment outweighing theanticipated benefits of such adjustment or for certain other reasons, there maybe timing differences between changes in the Underlying Index and thecorresponding adjustment to the shares which comprise the Singapore Fundsportfolio.

During times when Underlying Index Securities are unavailable, illiquid or whenthe SF Manager determines it is in the best interests of the Singapore Fund todo so, the Singapore Fund may maintain a small cash position or invest in othersecurities until the Underlying Index Securities become available or liquid. Suchcosts, expenses, cash balances, timing differences or holdings could cause the

SF NAV (and as a result the NAV of the Fund) to be lower or higher than therelative level of the Underlying Index. Regulatory policies may also affect the SFManagers ability to achieve close correlation with the performance of theUnderlying Index. The Singapore Funds returns may therefore deviate from theUnderlying Index and thus affecting the return of the Fund.

(iv) Creation and redemption through Participating Dealer only

Investors may generally not create or redeem Units and in any event can onlycreate or redeem Units through Participating Dealer who are under no obligationto agree to do so on behalf of any investor. The Participating Dealer may, in itsabsolute discretion, refuse to accept a creation or redemption order from aninvestor and can charge such fees as it may determine. The Participating Dealer

will not be able to create or redeem Units during any period when, amongstother things, dealings on Bursa Securities are restricted or suspended,settlement or clearing of Units through the Bursa Depository is disrupted or theUnderlying Index is not compiled or published. In addition, the ParticipatingDealer will not be able to create or redeem Units if some other events occurswhich impedes the calculation of the NAV of the Fund or disposal of the Fundsportfolio SF Units cannot be effected.

As the Fund invests substantially in the Singapore Fund, the SF ParticipatingDealer may refuse to accept a creation or redemption order. Further, thewillingness of a SF Participating Dealer to redeem Units may depend upon, butis not limited to, that SF Participating Dealers ability to sell the relevant SF Unitsas well as any agreement which may be reached between the Manager and the

SF Participating Dealer.

(v) No prior trading market in the Units

Although the Units will be listed on Bursa Securities, investors should be awarethat there may not be a liquid trading market for the Units. Prior to the Listing,there has been no market for the Units. There can be no assurance that activetrading markets will develop, nor is there a certain basis for predicting the actualprice levels at, or sizes in which the Units may trade. Further, there can be noassurance that the Units will experience trading or pricing patterns similar tothose of market-traded shares which are issued by investment companies inother jurisdictions or which are based upon indices other than the UnderlyingIndex. However, the Participating Dealer which also act as market makers are

expected to create liquidity for the Units.


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(vi) Minimum creation and redemption size

Units will normally only be issued/redeemed in a Creation/Redemption UnitBlock (currently 8.1 million Units) or a multiple or multiples thereof. Investorswho do not hold Creation/Redemption Unit Blocks may only be able to subscribefor Units/realise the value of their Units on Bursa Securities.

(vii) Units may trade at prices other than at NAV of the Fund

The NAV of the Fund represents the fair price for buying or selling Units. As withany listed fund, the secondary market price of Units may sometimes trade aboveor below this NAV of the Fund. There is a risk, therefore, that Unitholders maynot be able to buy or sell at a price close to this NAV of the Fund. The deviationfrom NAV of the Fund is dependent on a number of factors, but will beaccentuated when there is a large imbalance between market supply anddemand for Units on Main Market. However, given that the Units can be createdand redeemed in Creation and Redemption Unit Blocks by Participating Dealer,as applicable, it is not anticipated that there will be large deviations from theNAV of the Fund.

(viii) Lack of operational history

The Fund has no operating history by which investors can evaluate its previousperformance. There can be no assurance that the investment objective of theFund will be met. The absolute amount of fees and expenses payable by theFund will fluctuate in relation to the NAV of the Fund. Although the amounts ofcertain ordinary expenses of the Fund can be estimated, the growth rate of theFund, and hence the NAV of the Fund, cannot be anticipated. Accordingly, noassurances can be given as to the performance of the Fund or the actual level ofits expenses. Nevertheless, key personnel of the Manager and InvestmentAdviser to the Fund have extensive experience and track record in the fundand/or asset management industry.

(ix) Income distributions are contingent on dividends paid by the SingaporeFund

The ability of the Fund to distribute income to the Unitholders dependsprincipally on the dividends declared and paid to the Fund by the SingaporeFund, which in turn is dependent on dividends declared and paid by thecompanies whose shares are held by the Singapore Fund. It also depends onthe level of fees and expenses payable by the Singapore Fund and the Fund.Dividend payment rates of the Singapore Fund and such companies are basedon numerous factors, including their current financial condition, their dividendpolicies and the general economic condition. There can be no assurance that theSingapore Fund and such companies will declare dividends or make other

distributions. In addition, changes to the composition of the Underlying Index(for example, the substitution of one constituent stock in the Underlying Indexwith another paying higher or lower dividend) will affect the level of dividendsreceived by the Singapore Fund (which will affect the Fund).

To the extent possible, the Fund may distribute all, or substantially all, of thedividends (after deduction of relevant fees, expenses and taxes) received by theFund amongst the Unitholders, pro-rated based on the number of Units held byeach Unitholder as at the entitlement date of the income distribution. The exactamount to be distributed will be at the discretion of the Manager.

(x) Concentration on the Singapore Fund

The Fund invests substantially its assets in the Singapore Fund. Any adverseimpact experienced by the Singapore Fund will accordingly affect theperformance of the Fund.


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(xi) Concentration on a particular group of stocks, industry or group ofindustries

If the Underlying Index comprises Underlying Index Securities that areconcentrated in a particular group of stocks, industry or group of industries, theSingapore Fund may be adversely affected by the performance of those stocks

and be subject to price volatility. In addition, if the Singapore Fund isconcentrated in a single stock, group of stocks, industry or group of industries, itmay be more susceptible to any single economic, market, political or regulatoryoccurrence. Any adverse impact experienced by the Singapore Fund as a resultof this will affect the performance of the Fund.

(xii) Dependence upon trading market for the Underlying Index Securities

All of the Underlying Index Securities are listed on the Relevant Exchanges. Theexistence of a liquid trading market for the Underlying Index Securities maydepend on whether there is a supply of, and demand for, such Underlying IndexSecurities. There can be no assurance that there will be active trading in any ofthe Underlying Index Securities. The price at which the Underlying Index

Securities may be purchased or sold by the Singapore Fund upon anyrebalancing activities or otherwise and the SF NAV or the Fund may beadversely affected if trading markets for the Underlying Index Securities arelimited or absent. Nevertheless, the constituent companies of the UnderlyingIndex generally have liquidity on the Relevant Exchanges.

(xiii) Lack of discretion by Manager to adapt to market changes

The Underlying Index Securities held by the Singapore Fund will reflect thedistribution of companies whose shares comprise the Underlying Index.Therefore, adverse changes in the financial condition or share price of anycompany included in the Underlying Index will be likely to adversely affect the SFNAV or the NAV of the Fund and the trading price of the SF Units or Units, as

the case may be. The SF Manager will have no discretion to remove the sharesof such company from the Singapore Fund.

(xiv) Trading in Units on Bursa Securities may be suspended

Investors will not be able to purchase or sell Units on Bursa Securities duringany period that Bursa Securities suspends trading in the Units. Bursa Securitiesmay suspend the trading of Units whenever it determines as appropriate in theinterests of a fair and orderly market to protect investors. The creation andredemption of Units will also be suspended in the event that the trading of Unitson Bursa Securities is suspended.

(xv) Trading in SF Units on the SGX-ST may be suspended

The SF Participating Dealer will not be able to purchase or sell SF Units on theSGX-ST during any period that the SGX-ST suspends trading in the SF Units.The SGX-ST may suspend the trading of SF Units whenever the SGX-STdetermines that it is appropriate in the interests of a fair and orderly market toprotect investors. The creation and redemption of SF Units will also besuspended in the event that the trading of SF Units on the SGX-ST issuspended. The SGX-ST imposes certain requirements for the continued listingof securities, including the SF Units, on the SGX-ST. It cannot be assured thatthe Singapore Fund will continue to meet the requirements necessary tomaintain the listing of SF Units on the SGX-ST or that the SGX-ST will notchange the listing requirements. The Singapore Fund may be terminated if Unitsare delisted from the SGX-ST.


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Dealings of SF Units on the SGX-ST may not necessarily be suspended in theevent that the creation and redemption of SF Units is temporarily suspended bythe SF Manager in accordance with the terms of the SF Deed. If the creation andredemption of SF Units is temporarily suspended, the trading price of the SFUnits may be adversely affected and differ from the SF NAV.

(xvi) Units may be de-listed from Bursa Securities

Bursa Securities imposes certain requirements for the continued listing ofsecurities, including the Units, on Bursa Securities. Investors cannot be assuredthat the Fund will continue to meet the requirements necessary to maintain thelisting of the Units on the Main Market or that Bursa Securities will not changethe Main Market Listing Requirements. The Fund may be terminated if its Unitsare de-listed from Bursa Securities.

(xvii) Suspension of creations and/or redemptions

Dealings of Units on Bursa Securities may not necessarily be suspended in theevent that the creation and/or redemption of Units is temporarily suspended by

the Manager in accordance with the terms of the Deed. If the creation andredemption of Units is temporarily suspended, the trading price of the Units maybe adversely affected and differ from the market value of the Funds underlyingassets.

(xviii) Right of the MAS to withdraw authorization of the Singapore Fund

The Singapore Fund (and consequently the Fund) seeks to provide investmentresults that, before expenses, closely correspond with the performance of theUnderlying Index. The Singapore Fund has been authorised as a collectiveinvestment scheme by the MAS pursuant to Section 286 of the Securities andFutures Act. The MAS however reserves the right to withdraw the authorisationof the Singapore Fund or impose such conditions as it considers appropriate if

an Underlying Index is no longer considered acceptable to the MAS. If as aresult of such withdrawal it becomes illegal, impractical or inadvisable for theFund to continue to invest in the Singapore Fund, the Fund may be terminated.

(xix) Counterparty risk of the Singapore Fund

In investing in the Index Return AAPs, the Singapore Fund will be exposed tothe credit risk of the issuers of the Index Return AAPs and will be subject to thepossibility of the insolvency, bankruptcy or default of the issuers which couldresult in substantial losses to the Singapore Fund (and consequently the Fund).The Singapore Fund (and consequently the Fund) may also bear the risk ofsettlement default of an issuer.

(xx) Risk relating to the Index Return AAPs of the Singapore Fund

Certain events relating to the Underlying Index or the shares or securitiesrelating to or constituting the Underlying Index may restrict the ability of theSingapore Fund to exercise the Index Return AAPs during certain time periods.These events include situations where the market for the Underlying IndexSecurities is illiquid or where there are regulatory restrictions that restrict theability of the issuer of the Index Return AAPs to enter into agreements to hedgethe Underlying Index Securities.

(xxi) Emerging market risk

The Singapore Fund will invest in securities listed on stocks exchanges of

ASEAN countries, a few of which are considered to be emerging markets. Thesemarkets may be subject to special risks associated with foreign investment inemerging markets including, but not limited to:


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generally less liquid and less efficient securities markets;

generally greater price volatility;

exchange rate fluctuations and exchange controls;

imposition of restrictions on the expatriation of funds or other assets;

less publicly available information about issuers;

the imposition of taxes;

higher transaction and custody costs;

settlement delays and risk of loss;

difficulties in enforcing contracts;

lesser regulation of securities markets;

smaller market capitalisation;

different accounting and disclosure standards;

governmental interference;

greater risk of market shutdown;

the risk of expropriation of assets;

higher inflation;

social, economic and political uncertainties; and

the risk of war.

(xxii) Foreign exchange risk

As the Funds or Singapore Funds assets and securities are not denominated inRinggit Malaysia, a substantial portion of the revenue and income of the Fundand the Singapore Fund may be received in currencies other than RinggitMalaysia. Accordingly, any fluctuation in the relevant exchange rates will affectthe value of the securities, the SF NAV as well as the NAV of the Fund. As theNAV of the Fund is determined on the basis of RM, investors may lose money if

the currency of the assets held by the Singapore Fund depreciates against RM.The Manager does not intend to hedge against such foreign currency exposure.

(xxiii) Foreign security risk

The Singapore Fund invests entirely within or relates to the equity markets of aregion. These markets are subject to special risks associated with foreigninvestment including market fluctuations caused by factors affected by politicaland economic development. The principal risk factors, which could decrease thevalue of your investment, are listed and described below:

less liquid and less efficient securities markets;

greater price volatility;

exchange rate fluctuations and exchange controls;


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less publicly available information about issuers;

the imposition of restrictions on the expatriation of funds or other assetsof the Singapore Fund;

higher transaction and custody costs and delays and risks of loss

attendant in settlement procedures;

difficulties in enforcing contractual obligations;

lesser levels of regulation of the securities markets;

different accounting, disclosure and reporting requirements;

more substantial government involvement in the economy;

higher rates of inflation; and

greater social, economic, and political uncertainty and the risk ofnationalisation or expropriation of assets and risk of war or terrorism.

(xxiv) Market disruption events and settlement disruption events

There may be a suspension of the determination of the NAV of the Fund,suspension of trading in Units on Bursa Securities and/or suspension in CreationApplication and/or Redemption Application if there is a market disruption eventor a settlement disruption event.

Market disruption events may include without limitation, any suspension of orlimitation imposed on trading (by reason of movements in price exceeding limitspermitted by the relevant exchange or otherwise) in the constituents of the

Underlying Index, the closure on any Market Day of the Relevant Exchangesprior to its scheduled closing time and any general moratorium declared inrespect of banking activities in the jurisdiction of the Relevant Exchanges or theFederal Territory of Kuala Lumpur.

Settlement disruption events may include without limitation, any technicaldifficulties experienced by the Manager, which are out of the control of theManager, in processing a valid Creation Application and/or RedemptionApplication and any controls restricting or prohibiting conversion or transfer, asthe case may be, of the relevant foreign exchange currency to RM or from RM tothe relevant foreign exchange currency.

2.3 Risk factors related to the Underlying Index

(i) Errors or inaccuracies in the Underlying Index

There may be inaccuracies, errors, omissions or mistakes in the compilation orcalculation of the Underlying Index, which may result in significant deviationsbetween the SF NAV and the Underlying Index and therefore the NAV of theFund and the Underlying Index. The Manager and Trustee are not responsible orinvolved in the compilation or calculation of the Underlying Index, and thuscannot be held responsible or liable for any inaccuracies, errors, omissions ormistakes in such compilation or calculation.


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(ii) The Underlying Index is subject to fluctuations

The performance of the NAV of the Fund should correspond closely with theperformance of the Underlying Index. The Underlying Index may experienceperiods of volatility in the future. If the Underlying Index experiences volatility ordeclines, the NAV of the Fund may vary or decline accordingly. Consequently,

the price of the Units may vary accordingly.

(iii) Composition of and weightings in the Underlying Index may change

The securities which comprise the Underlying Index are changed by the IndexLicensor from time to time. The price of the SF Unit and therefore the Units mayrise or fall as a result of such changes. The composition of the Underlying Indexmay also change if one of the constituent companies were to delist its securitiesor if a new eligible company were to list its securities and be added to theUnderlying Index. If this happens, the weighting or composition of the UnderlyingIndex Securities invested by the Singapore Fund would be changed asconsidered appropriate by the SF Manager in order to achieve the investmentobjective. Thus, an investment in Units will generally reflect the Underlying Index

as its constituents change from time to time, and not necessarily the way it iscomprised at the time of an investment in the Units.

(iv) Licence to use the Underlying Index may be terminated

The Manager and the SF Manager have been granted a licence by the FTSE touse the Underlying Index in connection with the operation, marketing andpromotion of the Fund and Singapore Fund (as the case may be). TheSingapore Fund (and as a result, the Fund) may be terminated if its IndexLicence Agreement with FTSE is terminated and the SF Manager is unable toidentify or agree with the FTSE or any other index provider terms for the use of asuitable replacement index that uses, in the opinion of the SF Manager, thesame or substantially similar formula for the method of calculation as the

Underlying Index.

Accordingly prospective investors should note that the ability of the SingaporeFund (and thereby, the Fund) to track the Underlying Index depends on thecontinuation in force of the index licence agreements with FTSE in respect of theIndex or a suitable replacement.

Any such replacement index of the Fund will be notified to Unitholders, and issubject to the approval of the Trustee and the SC.

(v) Compilation of the Underlying Index

No warranty, representation or guarantee is given as to the accuracy or

completeness of the Underlying Index and its computation or any informationrelated thereto. The process and the basis of computing and compiling theUnderlying Index and any of its related formulae, constituent companies andfactors may at any time be changed or altered by the Index Licensor withoutnotice.


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3. INFORMATION ON THE FUND

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3.1 An introduction to the Fund

The Fund is a collective investment scheme structured as a unit trust to be listed onBursa Securities under the ETF Guidelines and established under the Deed. The Deedis entered into between the Manager, the Trustee and the Unitholders of the Fund, and isgoverned by Malaysian laws.

The Fund will aim at investing at least 95% of all of its assets in the Singapore Fund,whose investment objective is to provide investment results that, before expenses,closely correspond to the performance of the Underlying Index, the FTSE/ASEAN 40Index.

Please see below a diagram illustrating the relationship between the Fund and theSingapore Fund:

3.2 Listing of the Fund on Bursa Securities

The application for admission to the Official List and the listing of and quotation for up to500 million Units on the Main Market will be made to Bursa Securities before the third(3

rd) Market Day from the date of this Prospectus.

The allotment of Units under this Prospectus to the Participating Dealer in respect of theinitial creation of Units shall be void if the said application is not made before the third(3

rd) Market Day or if the approval from Bursa Securities is not granted within 6 weeks

from the date of issue of this Prospectus or such longer period as may be specified bythe SC, provided that the Manager has been notified by or on behalf of Bursa Securitieswithin 6 weeks or such longer period as may be specified by the SC. Accordingly, allmonies received in respect of any Units subscribed for by the Participating Dealer will berepaid in full without interest if the said approval for Listing is not granted. If any suchmonies are not repaid within 14 days after the Fund becomes liable to repay it, theprovision of Section 243(2) of the CMSA shall apply accordingly.

InvestmentAdviser

Invests at least 95% ofits assets in SF Units

Tracks theperformance

Participating Dealer

CIMB FTSE ASEAN 40 Malaysia(the Fund)

CIMB FTSE ASEAN 40(the Singapore Fund)

CIMB-Principal AssetManagement (S) Pte. Ltd.

(SF Manager)

CIMB-Principal AssetManagement Berhad

(Manager)

Subscription/purchasemonies for Units

FTSE/ASEAN 40 Index(Underlying Index)


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3. INFORMATION ON THE FUND (contd)

20

The admission to the Official List and the official listing of and quotation for the Units onthe Main Market will commence after, amongst others, receipt of confirmation from BursaDepository that all the Units issued have been duly credited into the CDS Accounts ofand notices of allotment have been despatched to the Participating Dealer. After Listing,the Units will trade in board lots of 100.

Pursuant to Section 14(1) of the Central Depositories Act, Bursa Securities hasprescribed the Units as prescribed securities. In consequence thereof, the Unitswill be deposited directly with Bursa Depository and any dealings in the Units willbe carried out in accordance with the Central Depositories Act and the rules ofBursa Depository.

3.3 Investment objective

The investment objective of the Fund is to provide investment results that, beforeexpenses, closely correspond to the performance of the Underlying Index.

Any material amendments to be made to the investment objective of the Fundwould require prior approval of the Unitholders.

There is no guarantee or assurance of exact or identical replication at any time ofthe performance of the Underlying Index. The Underlying Index composition maychange and the units/securities may be delisted. The investment of the schememay be concentrated in securities of a single issuer or several issuers.

3.4 Investment policy and strategy

To achieve its investment objective, the Fund will aim to invest at least 95% of its assetsin the Singapore Fund.

The Singapore Fund is an exchange-traded fund listed on the SGX-ST which aims atproviding the SF Unitholders a return that closely corresponds to the performance of the

FTSE/ASEAN 40 Index. Please refer to Section 4 of this Prospectus on the SingaporeFund.

Unlike the majority of investment funds where their investment portfolio managementincludes considerable discretion and an active, ongoing selection of investments (basedon economic, financial and market analysis), the role of the Manager of the Fund isessentially passive.

3.5 Investment scope and restrictions

3.5.1 Permitted investments

The Manager is authorised to invest in the following types of assets or

instruments subject to the investment restrictions set out in Section 3.5.2 below:

(i) SF Units;

(ii) liquid assets; and

(iii) any other investments permitted by the SC from time to time.

As a general rule, the Fund will adhere to the following asset allocation:

(i) at least 95% in permitted investments, excluding liquid assets; and

(ii) not more than 5% in liquid assets.


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3.5.2 Investment restrictions

The investment restrictions imposed upon the Manager are as follows:

(i) the Funds property may consist of units/shares in other collectiveinvestment schemes (Target Fund) and such Target Fund must:

(a) be regulated by a regulatory authority;

(b) where the Target Fund is constituted in Malaysia, be approvedby the SC;

(c) where the Target Fund is constituted outside of Malaysia, beregistered/authorised/ approved by the relevant regulatoryauthority in its home jurisdiction; and

(d) operate on the principle of prudent spread of risk and itsinvestments to not diverge from the general investmentprinciples of the ETF Guidelines.

Where the Fund invests in Target Funds operated by the Manager or itsrelated corporation, the Manager must ensure that:

there is no cross-holding between the Fund and the TargetFund;

all initial charges on the Target Fund are waived; and

the management fee must only be charged once, either at theFund or the Target Fund.

(ii) The Fund may make investments in a foreign market where the

regulatory authority is a member of the International Organisation ofSecurities Commission (IOSCO).

(iii) The Fund may not borrow cash or other assets (including the borrowingof securities within the meaning of the Guidelines on SecuritiesBorrowing and Lending) in connection with its activities.

(iv) The Fund may participate in the lending of securities within the meaningof the SCs Guidelines on Securities Borrowing and Lending but subjectto the following conditions:

(a) the Manager shall have appropriate policies and practices forthe lending of securities of the Fund;

(b) the terms of the securities lending agreement, including the feesreceivable and the treatment of any dividend or interest due tothe securities on loan, shall be acceptable to the Trustee on theadvice of the Manager;

(c) the counterparty to the agreement, in terms of risks andexposure and credit standing, shall be acceptable to the Trusteeon the advice of the Manager; and

(d) the collateral for the loan shall be:

acceptable to the Trustee on the advice of the Manager;


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The Underlying Index is a theoretical calculation while the Funds portfolio is an actualholding of SF Units. The performance of the two may vary due to transaction costs,fees, expenses and taxes.

As the Fund is essentially a feeder ETF that invests substantially in the Singapore Fund,it will not itself hold a portfolio of securities in the Underlying Index. Accordingly, the

Manager will not undertake any rebalancing activities to achieve positive correlation or tominimise tracking errors. In relation to the index rebalancing carried out by the SFManager in relation to the Singapore Fund, please refer to Section 4.7 of thisProspectus.

3.9 The Underlying Index

(i) An introduction to the Underlying Index

The FTSE/ASEAN Index Series is designed to represent the performance of theASEAN region by measuring the eligible securities listed on the stock exchangesof Indonesia, Malaysia, The Philippines, Singapore and Thailand.

The FTSE/ASEAN Index Series contains two indices to meet differinginvestment needs - a benchmark index, which can be used by fund managers totrack the performance of the ASEAN markets, as well as a tradable index that issuitable for the creation of Exchange Tradable Funds (ETFs), derivatives andother structured products. The FTSE/ASEAN Index, which serves as thebenchmark index, is comprised of 148 securities as at the Latest PracticableDate and the

cimb ftse asean 40 malaysia prospectus

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