The Momentum AllWeather Strategies II Master Fund
a Class Fund of
Momentum AllWeather Strategies Limited
Prospectus
6th September 2005
PROSPECTUS
6th September, 2005
MOMENTUM ALLWEATHER STRATEGIES LIMITED
MANAGER
INVESTMENT MANAGER
Pioneer Alternative Investment Management (Bermuda) Limited
Pioneer Alternative Investment Management Limited
CUSTODIAN
SUB-CUSTODIAN, SUB-REGISTRAR AND SUB-ADMINISTRATOR
REGISTRAR AND ADMINISTRATOR
The Bank of Bermuda Limited
HSBC Securities Services (Luxembourg) S.A.
Management International (Bermuda) Limited
The Company is not registered in Luxembourg. The Company is not subject to Luxembourg law and its activities are not supervised in Luxembourg.
Distribution of this document is not authorised unless it is accompanied by a copy of the latest published report, if any, of the relevant Class Fund, comprising, in relation thereto, the latest audited financial statements. Such
report, this document and the supplementary prospectus relating to the relevant Class Fund together form the Prospectus for the issue of shares of such Class Fund.
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This Prospectus is issued by Momentum AllWeather Strategies Limited,
a mutual fund company incorporated under the laws of Bermuda with
limited liability on 16th July, 2004. Separate supplements to this
Prospectus will be issued for each Class of participating, non-voting
shares ("Shares") created by the Company from time to time.
The Company has been classified as a Bermuda Standard Scheme. As
such the Company is subject to supervision and regulation as provided
for in the Bermuda Monetary Authority (Collective Investment Scheme
Classification) Regulations 1998. However the Company should be
viewed as an investment suitable only for investors who can fully
evaluate and bear the risks involved. Permission under the Exchange
Control Act 1972 (and regulations made thereunder) has been received
from the Bermuda Monetary Authority (the "Authority") for the issue of
Shares by the Company.
Approvals or permissions received from the Authority do not constitute a
guarantee by the Authority as to the performance of the Company or
creditworthiness of the Company. Furthermore, in giving such approvals
or permissions, the Authority shall not be liable for the performance or
default of the Company or for the correctness of any opinions or
statements expressed.
The Shares have not been and will not be registered under the United
States Securities Act of 1933, as amended, or under the securities laws
of any of the states of the United States. The Company has not been,
and will not be, registered under the United States Investment Company
Act of 1940 (the "US Company Act"), as amended and the Shares may
not, except in a transaction which does not violate such acts, be offered,
sold or transferred directly or indirectly in the United States or in any of
its territories or possessions or areas subject to its jurisdiction to any US
person (as defined herein) other than a Permitted US Person. For the
purposes of this Prospectus, "Permitted US Person" means (i) a Tax
Exempt US Person (as defined under the section entitled "Taxation and
Exchange Control") or (ii) any other US person within the meaning of the
US Internal Revenue Code of 1986, as amended, that is approved by
the Directors. Shares in the Company are investments specified under
the Financial Services and Markets Act 2000 of the United Kingdom, as
amended (the "Act") and securities under the Public Offers of Securities
Regulations 1995 (the "Regulations"). Accordingly, the distribution of
this Prospectus and any related communications are restricted by law.
In addition, neither the Company nor the Manager is an authorised
person under the Act. Accordingly, recipients of this Prospectus will not
benefit from any of the protections afforded to clients of authorised
persons under the Act and related regulations, including the right to
claim compensation under the Financial Services Compensation
Scheme. The Company constitutes an "Unregulated Collective
Investment Scheme" for the purpose of the restriction on the promotion
of unregulated schemes by persons authorised for the purpose of the
Act ("Authorised Person") under section 238 of the Act. This Prospectus
may be communicated only to persons to whom such communication
may lawfully be made (each a "Permitted Recipient"), including (but not
limited to and subject to the Regulations) existing members of the
Company within the meaning of Article 44 of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2001, as amended (the
"Order") and "Investment Professionals" within the meaning of Article 19
of the Order, for example, Authorised Persons. In accordance with Article
19(6) of the Order, this Prospectus is to be treated for the purpose of
the Order as made only to Investment Professionals even if it is also
made to other persons to whom it may lawfully be communicated. The
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Company will not process applications for Shares received from persons
other than Permitted Recipients.
The Company’s Memorandum of Association provides, among other
things, at Clause 6, the object of the Company is to be and to carry on
the business of a mutual fund within the meaning of section 156A of
the Companies Act 1981 of Bermuda (the "Bermuda Companies Act"),
as amended. Neither the admission of the Shares to the Official List of
The Irish Stock Exchange Limited nor the approval of the Listing
Particulars pursuant to the listing requirements of The Irish Stock
Exchange Limited shall constitute a warranty or representation by The
Irish Stock Exchange Limited as to the competence of service providers
to or any other party connected with the Company, the adequacy of the
information contained in this Prospectus or the suitability of the
Company for investment purposes.
The Directors of the Company, whose names appear on Page 9, accept
responsibility for the information contained in this document. To the best
of the knowledge and belief of the Directors, (who have taken all
reasonable care to ensure that such is the case), the information
contained in this document is in accordance with the facts and does not
omit anything likely to affect the import of such information. The
Directors accept responsibility accordingly.
Nothing in this Prospectus constitutes an offer to buy, or invitation to
make an offer to sell, any interest in the Company to any person in the
UK other than: (a) to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their business for the purposes of
regulation 7(2)(a) of the Regulations; (b) where the minimum
subscription under this Prospectus for shares of the class concerned by
any investor is at least EUR 40,000 (or an equivalent amount) for the
purposes of regulation 7(2)(i) of the Regulations; or (c) in
circumstances which otherwise do not constitute an offer to the public
in the UK under the Regulations.
Neither this Prospectus nor the Shares have been registered or qualified
for offer or sale under the laws of any other jurisdiction governing the
offer or sale of mutual fund shares or other securities, and this
Prospectus shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of such Shares in any jurisdiction
in which such offer, solicitation or sale is not authorised or to any person
to whom it is unlawful to make such offer, solicitation or sale. No person
has been authorised to make any representations concerning the
Company or the Shares other than those contained in this Prospectus
and, if made, such representations may not be relied upon as having
been authorised by the Company. Prospective investors should not
construe the contents of this Prospectus as legal, tax or financial advice.
Each prospective investor should consult his own professional advisors
as to the legal, tax, financial and other matters relevant to the suitability
of an investment in the Shares for such investor. This Prospectus is
intended solely for the use of the person to whom it has been delivered
for the purpose of evaluating a possible investment by the recipient in
the Shares described herein, and it is not to be reproduced or
distributed to any other persons (other than professional advisors of the
prospective investor). Notwithstanding anything to the contrary herein,
the recipient (and each employee, representative, or other agent of such
recipient) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of (i) the Company and each
Class Fund and (ii) any transactions described herein, and all materials
of any kind (including opinions or other tax analyses) that are provided
to the recipient relating to such tax treatment and tax structure.
A copy of this document has been delivered to the Registrar of
Companies in Bermuda for filing, pursuant to the Bermuda Companies
Act. It must be distinctly understood that neither the Authority nor the
Registrar of Companies in Bermuda accepts any responsibility for the
financial soundness of any proposals herein or the correctness of any of
the statements made or opinions expressed with regard to them.
Prospective investors should also note that the Shares carry no voting
rights (see "SHARES OF THE COMPANY Meetings and Voting Rights" in
this Prospectus).
All monetary amounts set forth herein are expressed in US Dollars
except where otherwise stated.
3
DEFINITIONS
Administrator
Management International (Bermuda) Limited, a wholly owned
subsidiary of The Bank of Bermuda Limited.
Advisors
Managers or trading advisors to whom the Investment Manager may
determine to allocate assets of a Class Fund.
Affiliate
With respect to any Person, means an entity that controls, is controlled
by, or is under common control with such Person, "control" meaning for
this purpose the ownership of the majority of the voting shares or other
management interests in such entity.
"AUD"
Means Australian Dollars, the lawful currency of Australia.
Auditors
KPMG Audit, Luxembourg.
Dealing Day as provided in the Supplementary Prospectus of the
relevant Class Fund or Sub-Class Fund.
Directors
The Board of Directors of the Company including any duly authorised
committee thereof.
"Euro" and "€"
Means the single currency of participating states of the European Union.
Founders’ Share
A voting, non-participating share of par value USD1.00 issued to the
Manager.
"GBP" or "£"
Means pounds sterling, the lawful currency of the United Kingdom.
Initial Offer Period
The period of the initial offer of Shares which will be determined by the
Directors in respect of each Class and Sub-Class of Shares at their
discretion and provided in the relevant Supplementary Prospectus.
Base Currency
With respect to any Class Fund, the currency in which the assets of the
relevant Class Fund shall be valued and in which the Net Asset Value per
Share and Offer Price is determined as set by the Directors of the
Company.
Investment Manager
Pioneer Alternative Investment Management Limited.
Business Day
Any day on which banks in Bermuda, New York and Luxembourg are all
open for business.
Management Fee
Such fee as may be payable by the Company to the Manager in respect
of any Series, Sub-Class or Class Fund as set out in the relevant
Supplementary Prospectus.
Bye-Laws
The Bye-Laws of the Company, as amended from time to time.
"CHF"
Means Swiss Francs, the lawful currency of Switzerland.
Class
A class of Shares, the assets and liabilities attributable to which will be
maintained in a separate Class Fund. Each Class of Shares may be
issued as different Sub-Classes and/or Series of Shares as the Directors
may from time to time determine.
Class Fund
The separate fund established and maintained by the Company in
connection with each Class of Shares in the Company and within which
all assets and liabilities attributable to the relevant Class of Shares in
the Company shall be held.
Company
Momentum AllWeather Strategies Limited.
Custodian or Bank
The Bank of Bermuda Limited.
Dealing Day
The first Business Day of each month and or such other day or days in
addition thereto or in substitution therefore as may from time to time be
determined by the Directors either in any particular case or generally
provided that any Class Fund or Sub-Class Fund may have a different
4
"JPY"
Means Japanese Yen, the lawful currency of Japan.
Manager
Pioneer Alternative Investment Management (Bermuda) Limited.
Minimum Holding
Means the minimum holding of Shares which a Shareholder of the
Company must maintain as determined by the Directors in respect of
each Class Fund and subject to waiver by the Directors at their sole
discretion in a particular case or generally.
Minimum Redemption Notice
Such period of notice as may be specified by the Directors in respect of
the relevant Class Fund determined in accordance with the Bye-Laws
and set out in the relevant Supplementary Prospectus subject to waiver
by the Directors at their sole discretion in a particular case or generally.
Net Asset Value per Share
The Net Asset Value per Share of the relevant Series of the relevant Class
Fund determined in accordance with the Bye-Laws.
Offer Price
The price at which each Share in the Company may be purchased, being
such price as may be determined by the Directors in the case of an
initial offer or issue of a new Series, and thereafter, as calculated by
reference to the Net Asset Value per Share of the relevant Series plus the
subscription charge (if any) that may be imposed on certain Classes or
Sub-Classes of Shares, the details of which would be described in the
relevant Supplementary Prospectus.
Permitted US Person
(i) A Tax Exempt US Person (as defined under the section entitled
"Taxation and Exchange Control") or (ii) any other US person within the
meaning of the US Internal Revenue Code of 1986, as amended, that is
approved by the Directors.
Performance Fee
Such fee as may be payable by the Company to the Manager in respect
of any Series, Sub-Class or Class Fund as set out in the relevant
Supplementary Prospectus.
Person
Any individual, partnership, company, corporation, unincorporated
association, trust or other entity, association or relationship.
Pioneer Group
Includes the Manager and all Affiliates of the Manager.
Redemption Day(s)
The day or days on which Shares of a Class Fund may be redeemed in
accordance with the Company’s Bye Laws and the Supplementary
Prospectus of the relevant Class Fund.
Registrar
Management International (Bermuda) Limited.
Series
A series of Shares within a Sub-Class of a Class of Shares in the
Company. The Directors have the power at their discretion to create
further Series of Shares.
Series Fund
The separate fund established and maintained by the Company in
connection with each Series of Shares within a Sub-Class and within
which fund all assets and liabilities attributable to the relevant Series
shall be held. While each fund is considered a separate account for
purposes of calculation of the net assets and liabilities attributable to
such fund, the assets of the fund are invested with the assets of other
funds on a commingled basis and will not be segregated.
Share(s)
Up to 23,999,900 non-voting, participating common shares of par
value USD 0.01 each in the Company.
Supplementary Prospectus
The supplement to this Prospectus that may be issued by the Company
in respect of the offer of each Class and/or Sub-Class of Shares created
by the Directors from time to time.
Underlying Fund
A collective investment scheme or entity managed or advised by an
Advisor into which the Investment Manager may determine to invest the
assets (or portion thereof) of a Class Fund. The Underlying Funds into
which the Company invests may or may not be listed on The Irish Stock
Exchange Limited or other exchanges.
"US Dollars" or "US$" or "USD"
Means Dollars, the lawful currency of the United States of America.
US Person
Means, with respect to individuals, any US citizen (and certain former US
citizens) or "resident alien" within the meaning of US income tax laws as
in effect from time to time. Currently, the term "resident alien" is defined
under US income tax laws to generally include any individual who (i)
holds an Alien Registration Card (a "green card") issued by the US
Immigration and Naturalisation Service or (ii) meets a "substantial
presence" test. The "substantial presence" test is generally met with
respect to any current calendar year if (i) the individual was present in
the US on at least 31 days during such year and (ii) the sum of the
number of days on which such individual was present in the US during
the current year, 1/3 of the number of such days during the first
preceding year, and 1/6 of the number of such days during the second
preceding year, equals or exceeds 183 days. With respect to persons
other than individuals, the term "US Person" means (i) a corporation or
partnership created or organised in the United States or under the law
of the United States or any state, (ii) a trust where (a) a US court is able
to exercise primary jurisdiction over the trust and (b) one or more US
persons have the authority to control all substantial decisions of the
trust and (iii) an estate which is subject to US tax on its worldwide
income from all sources. The term "US Person" also means any
individual or entity that would be a US Person under Regulation S of the
US Securities Act of 1933, as amended (the "Securities Act").
Valuation Day
The Business Day immediately preceding each Dealing Day or such
other day or days in addition thereto or in substitution therefore as may
from time to time be determined by the Directors either in a particular
case or generally.
Shareholder(s)
A holder of Shares entered in the register of members of the Company.
Sub-Class
A sub-class of Shares within a Class of Shares in the Company. The
Directors have the power at their discretion to create further Sub-Classes
of Shares.
Sub-Class Fund
The separate fund established and maintained by the Company in
connection with each Sub-Class of Shares within a Class and within
which fund all assets and liabilities attributable to the relevant SubClass shall be held.
Sub-Administrator, Sub-Custodian or Sub-Registrar
HSBC Securities Services (Luxembourg) S.A.
5
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TABLE OF CONTENTS
SUMMARY
PAGE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
MANAGEMENT & ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
The Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
The Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
The Administrator and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
The Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Liability Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SHARES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
The Company’s Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Temporary Suspension of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Registration and Transfer of Shares and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Meetings and Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Variation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Subscription Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Management Performance and Subscription Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Fees of the Administrator and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Fees of the Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Other Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
TAXATION AND EXCHANGE CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
The Company - Bermuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
United States Tax Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
US Trade or Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
US Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Tax-Exempt US Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Reporting Requirements for US Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Estate and Gift Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
United Kingdom Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Future Changes in Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Other Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Plan Asset Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Limitation on Investments by Benefit Plan Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Representations by Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Reports to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Available Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Enquiries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Directors Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Directors Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Transactions with Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Other Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SUPPLEMENTARY PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-1
SUBSCRIPTION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-9
7
SUMMARY
The information set forth below should be read in conjunction with, and
is qualified by, the full text of this Prospectus and any Supplementary
Prospectus relating to the relevant Class Fund which should be read in
their entirety.
Although HSBC Securities Services (Luxembourg) S.A. has been
appointed to act as Sub-Administrator, Sub-Registrar and SubCustodian of the Company, the Company is not registered in
Luxembourg. The Company is not subject to Luxembourg laws and its
activities are not supervised in Luxembourg.
DIVIDENDS
THE COMPANY
Momentum AllWeather Strategies Limited is an open-ended mutual fund
company incorporated with limited liability in Bermuda on 16th July,
2004. A separate Supplementary Prospectus will be issued for each
Class of Shares created by the Company from time to time.
Although the Company is entitled to pay dividends, it is not envisaged
that it will do so. Shareholders who require a regular cash flow from their
investment may arrange for the Company to redeem sufficient of their
Shares to make a specified fixed payment to them on a half yearly or
annual basis. This facility is available only to uncertificated
Shareholders.
MANAGER
FEES AND EXPENSES
The Manager, Pioneer Alternative Investment Management (Bermuda)
Limited, is a company incorporated with limited liability in Bermuda. The
Company has appointed the Manager to, among other things, (i) provide
the Company with administrative and management services and
investment management and advice, and (ii) solicit subscriptions for the
Shares under the supervision of the Company's Directors, with power to
(i) delegate to investment advisors and investment managers, and (ii)
appoint sales agents who may receive sales commissions from the
Manager.
INVESTMENT MANAGER
The Investment Manager, Pioneer Alternative Investment Management
Limited, is a company incorporated with limited liability in Ireland. The
Manager has appointed the Investment Manager to provide the
Company with investment management and advice subject to the
control of and review by the Manager with power to delegate to other
investment managers or sub-advisors.
CUSTODIAN
The Custodian, The Bank of Bermuda Limited, is a licensed bank
incorporated in Bermuda. The Company has appointed the Custodian to
act as custodian of the assets of the Company under the supervision of
the Manager, with power to appoint sub-custodians.
ADMINISTRATOR AND REGISTRAR
The Company has appointed Management International (Bermuda)
Limited to provide it with a Secretary and to act as its Registrar and to
provide accounting services under the supervision of the Manager.
SUB-ADMINISTRATOR AND SUB-REGISTRAR
Management International (Bermuda) Limited has appointed HSBC
Securities Services (Luxembourg) S.A. to act as Sub-Administrator and
Sub-Registrar of the Company and has delegated to HSBC Securities
Services (Luxembourg) S.A. its day-to-day functions as Administrator
and Registrar.
SUB-CUSTODIAN
The Bank of Bermuda Limited has appointed HSBC Securities Services
(Luxembourg) S.A. to act as Sub-Custodian of the Company and has
delegated to HSBC Securities Services (Luxembourg) S.A. its day-to-day
functions as Custodian.
The fees and expenses payable by the Company are set out below under
"FEES AND EXPENSES" and in the Supplementary Prospectus relating to
each Class Fund.
TAX STATUS
Based on the Company's organisational structure, anticipated methods
of operation and features as described herein, the Company generally
should not be subject to US federal income tax on gains from trading in
securities and commodities. In addition, interest from US sources
earned on bank deposits, and "portfolio interest" as defined under the
US Internal Revenue Code of 1986, as amended, are not subject to
withholding for US federal income tax. However, dividend income and
certain other interest from US sources are subject to 30% withholding
tax.
At the date of this Prospectus, there is no Bermuda income, corporation,
or profits tax, withholding tax, capital tax, capital transfer tax, estate duty
or inheritance tax payable by the Company or its Shareholders, other
than Shareholders ordinarily resident in Bermuda. The Company has
obtained from the Minister of Finance of Bermuda under the Exempted
Undertakings Tax Protection Act 1966 as amended, a certificate
confirming the exemption of the Company until 28 March, 2016 from
any such taxes which may be introduced.
There can be no assurance that the US, Bermuda or UK tax laws will not
be changed adversely with respect to the Company and its Shareholders
or that the Company's income tax status will not be successfully
challenged by such authorities.
Potential Shareholders should consult their own advisors regarding tax
treatment by the jurisdiction applicable to them. Shareholders should
rely only upon advice received from their own tax advisors based upon
their own individual circumstances and the laws applicable to them.
(See "Taxation & Exchange Control")
BASE CURRENCY
The Company will report its results and transact subscriptions and
redemptions in US Dollars unless, in respect of any Class Fund or SubClass Fund, the Directors designate a different currency as the Base
Currency or reporting currency.
9
ERISA AND OTHER TAX-EXEMPT ENTITIES
Entities subject to the U.S. Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and other U.S. tax-exempt entities may
purchase Shares of each Class Fund. Trustees or administrators of such
entities are urged to carefully review the matters discussed in this
Prospectus. The Board of Directors does not intend to permit
investments by "benefit plan investors" (as defined in U.S. Department
of Labor Plan Asset Regulation, 29 CFR 2510.3-101) to equal or exceed
25% of the value of any class of Shares of any Class Fund. (See "ERISA
Considerations.")
10
DIRECTORY
INVESTMENT MANAGER
DIRECTORS OF THE COMPANY
Pioneer Alternative Investment Management Limited
Sixth Floor
1 George’s Quay Plaza
George’s Quay Dublin 2, Ireland
John Cogan (President)
Pioneer Investment Management USA, Inc.
60 State Street
Boston, MA 02109
USA
Alberto La Rocca (Vice-President)
Pioneer Alternative Investment Management Limited
Sixth Floor, 1 George’s Quay Plaza
George’s Quay
Dublin 2, Ireland
MANAGER
Pioneer Alternative Investment Management (Bermuda) Limited
Operations Address:
Mercury House
101 Front Street
Hamilton HM 12, Bermuda
CUSTODIAN
Paolo Barbieri
Pioneer Alternative Investment Management SGRpA
Galleria San Carlo, 6
20122 Milano, Italy
Fabio Tombesi
Pioneer Global Asset Management S.p.A.
Galleria San Carlo, 6
20122 Milano, Italy
Giuseppe Ciliberto
Pioneer Alternative Investment Management SGRpA
Galleria San Carlo 6
20122 Milano, Italy
David Smith
Equus Asset Management Partners
27 Queen Street
Hamilton HM 11, Bermuda
The Bank of Bermuda Limited
Bank of Bermuda Building
6 Front Street
Hamilton HM 11, Bermuda
ADMINISTRATOR AND REGISTRAR
Management International (Bermuda) Limited
Bank of Bermuda Building
6 Front Street
Hamilton HM 11, Bermuda
SUB-CUSTODIAN, SUB-REGISTRAR AND SUB-ADMINISTRATOR
HSBC Securities Services (Luxembourg) S.A.
B.P 413, 40 Avenue Monterey
L-2014 Luxembourg
LEGAL ADVISORS AS TO MATTERS OF BERMUDA LAW
John Collis
Conyers Dill & Pearman
Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
Christopher Wetherhill
"Baicliff"
1 Turtle Bay Crescent
Southampton, Bermuda
AUDITORS
Conyers Dill & Pearman
Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
SPONSORING BROKER
J & E Davy
Davy House
49 Dawson Street,
Dublin 2, Ireland
KPMG Audit S.ár.l
Réviseurs d'Entreprises
31, Allée Scheffer
L-2520, Luxembourg
SECRETARY AND REGISTERED OFFICE
Michelle Amesse
Bank of Bermuda Building
6 Front Street
Hamilton HM 11, Bermuda
11
INTRODUCTION
Momentum AllWeather Strategies Limited is an open-ended mutual fund
company incorporated as a limited liability company under the laws of
Bermuda on 16th July, 2004. A Supplementary Prospectus for each
Class Fund is available from the Registrar or Sub-Registrar.
MANAGEMENT & ADMINISTRATION
THE COMPANY
The Directors of the Company are:
JOHN COGAN is President of the Company and has been Deputy
Chairman and Director of Pioneer Global Asset Management S.p.A since
October 2000. He is Non Executive Chairman of the Board and a
Director of Pioneer Investment Management USA, Inc. and President and
Director of Pioneer Fund Distributor, Inc. From 1963 to October 2000 he
was President and Chief Executive Officer of Pioneer Group Inc. He is
Chairman of the Board of Trustees of the Pioneer Family of Mutual Funds
(since 1982), Director of Pioneer Investment Management, Inc., Director
of Pioneer’s Irish UCITS Funds, and Director of Pioneer Alternative
Investment Management Limited since 2000. He has also been a
Director of Harbor Global Company Ltd. since 2002. Mr. Cogan is
currently a member of the Board of Governors and the Executive
Committee of the Investment Company Institute and Chairman and
Director of ICI Mutual Insurance Company. Mr. Cogan is of counsel at
Wilmer, Cutler, Pickering, Hale and Dorr LLP, attorneys at law, Boston,
Massachusetts, having joined the firm in 1952. He received BA (1949)
and JD degrees (1952) from Harvard University.
ALBERTO LA ROCCA is Vice-President of the Company, Managing
Director of Pioneer Alternative Investment Management (Bermuda)
Limited, a Director of Pioneer Global Asset Management Limited S.p.A.
and Chief Executive Officer of Pioneer Alternative Investment
Management Limited. He joined Credito Italiano S.p.A. in 1991 and from
1991 to 1995 he was Assistant Portfolio Manager of the Bond Portfolio
of Credito Italiano S.p.A. From 1995 to 1997 he was Head of the Bond
Portfolio. From 1997 to 1998 he was Head of Global Proprietary Trading
in the Finance Department of Credito Italiano S.p.A. Mr. La Rocca holds
a Laurea Diploma in Management and Finance from Bocconi University,
Milan (1991) and a Certified Accountants Professional Qualification
from University of Lecce (1993).
PAOLO BARBIERI is Deputy CEO of Pioneer Alternative Investments (PAI).
In this role he is responsible for the Fund of Hedge Funds business line.
Prior to this, he was General Manager of Pioneer Alternative Investment
Management SGRpA, where he was responsible for managing the Italian
arm of PAI. Paolo has over 20 years experience in the investment
industry. Prior to joining PAI in 2003, Paolo was the founder and CEO of
Akros HFR Alternative Investments SGR S.p.A. (2000-03), responsible
for the company’s incorporation, in addition to building up the
organisational structure and starting up fund management activity. The
company was among the first players in the Italian hedge funds industry.
While with Akros Group, Paolo also held other responsibilities with other
companies of the Group: Managing Director and Board Member of
Banca Akros S.p.A. (1997-00), responsible for the Equity Division;
Managing Director and Board Member of Akros Sim S.p.A. (1994-97),
12
responsible for the Proprietary Trading Activities and the Equity and
Derivatives Sales Desk and Director of the Structured Products Desk at
Akros Mercantile S.p.A. (1992-94). Previously, Paolo also held positions
with Compagnia Privata di Finanza e Investimenti S.p.A. and Interbanca
S.p.A. Paolo holds a degree in Business and Economics (magna cum
laude) which he attained from Federico II University, Naples in 1985.
FABIO TOMBESI is Senior Vice President and acts as Chief of Staff,
Operations, for Pioneer Global Asset Management S.p.A (PGAM), sole
shareholder for Pioneer entities. He joined UniCredito Italiano S.p.A in
1981 and covered a number of positions in Milan, London, Madrid,
Tokyo and New York, before joining PGAM in 2002.
GIUSEPPE CILIBERTO has worked in the financial markets since 1983.
He graduated in Economics at Università Cattolica of Milan and he
started trading Foreign Exchange and Money Market instruments for
UniCredito Italiano. In 1993 he became Chief Manager Derivatives
Trading of the Credito Italiano Treasury Division being in charge of short
term interest rate and currency options trading. He traded in different
roles up to the end of 1999 when he left trading to become responsible
for teaching structured products and financial markets for 1 year in the
group training centre. Since the end of 2000, Giuseppe has managed as
C.I.O, the start up process of Pioneer Alternative SGRpA Milan
(UniCredito Italiano Group).
DAVID SMITH was an employee of Bank of Bermuda from 1982 until
March, 2003. Since 1997 he was an executive officer of the Bank and
in 2001 he was transferred to Hong Kong as Global Head of Sales for
Global Fund Services division. In March, 2003 he resigned from the
Bank to become a Partner of Equus Asset Management Partners which
specialises in private wealth asset management. He is a Chartered
Secretary and member of the Institute of Bankers (Bermuda). Mr. Smith
resides in Bermuda.
JOHN COLLIS is a partner at Conyers Dill & Pearman, Barristers and
Attorneys, Hamilton, Bermuda. Mr. Collis received a Bachelor of
Commerce Degree from McGill University, Canada and a Bachelor of Arts
(Jurisprudence) from Oxford University, England. He is a member of the
Bar of England and Wales and of the Bar of Bermuda. Dawn Griffiths, a
partner of Conyers Dill & Pearman, has been appointed Alternate
Director to Mr. Collis.
CHRISTOPHER WETHERHILL is the founder, and until his retirement in
1999 was the Chief Executive Officer, of The Hemisphere Group of
financial services companies. He is a director of a number of investment
companies. Mr. Wetherhill is a Chartered Accountant, a Fellow of the
Institute of Chartered Accountants in England and Wales, a member of
the Canadian and Bermudian Institutes of Chartered Accountants, a
Fellow of the Institute of Directors and a Freeman of the City of London.
Mr. Wetherhill resides in Bermuda.
No Director has:
i) any unspent convictions in relation to indictable offences; or ii) been
bankrupt or the subject of a voluntary arrangement, or has had a
receiver appointed to any asset of such Director; or iii) been a director
of any company which, while he was a director with an executive function
or within 12 months after he ceased to be a director with an executive
function, had a receiver appointed or went into compulsory liquidation,
creditors voluntary liquidation, administration or company voluntary
arrangements, or made any composition or arrangements with its
creditors generally or with any class of its creditors; or iv) been a partner
of any partnership, which while he was a partner or within 12 months
after he ceased to be a partner, went into compulsory liquidation,
administration or partnership voluntary arrangement, or had a receiver
appointed to any partnership asset; or v) had any public criticism by
statutory or regulatory authorities (including recognized professional
bodies); or vi) been disqualified by a court from acting as a director or
from acting in the management or conduct of affairs of any company.
There is no required retirement age for Directors of the Company. Certain
of the Directors (Messrs. Collis, Wetherhill and Smith) each receive an
annual fee determined by the Company in general meeting currently at
USD 5,000 per annum. The Company's Bye-Laws provide that, except for
fraud and dishonesty, every Director or Officer of the Company shall be
indemnified out of the assets of the Company against all costs, losses
and expenses which any such Director or Officer may incur or for which
he may become liable by reason of any contract entered into, or any act
or thing done by him in such capacity, or in any way in the discharge of
his duties.
THE MANAGER
Pursuant to a Management and Marketing Advice and Services
Agreement dated 20th August 2004 (the "Management Agreement") the
Company has appointed Pioneer Alternative Investment Management
(Bermuda) Limited to, among other things (i) provide it with
administrative and investment management services and investment
management and advice and (ii) solicit subscriptions for the Shares for
the Company under the supervision of the Directors of the Company in
compliance with the Bye-Laws and the applicable provisions of this
Prospectus and any supplements hereto, with power to (i) delegate to in
full or in part to other investment managers or investment advisors
including to any affiliated company and (ii) appoint sales agents who
may receive sales commissions from the Manager.
The Manager is a company incorporated with limited liability in Bermuda
and is a wholly owned subsidiary of Pioneer Global Asset Management
S.p.A. which is incorporated in Italy and is a wholly owned subsidiary of
Unicredito Italiano S.p.A., also incorporated in Italy. The Manager has a
share capital of 12,000 shares of USD 1.00 each, fully paid-up.
The Management Agreement is subject to termination by either party
upon not less than 90 days' written notice. The Management Agreement
provides that the Manager shall not be liable to the Company or its
Shareholders for any act or omission in the performance of its duties,
except through wilful default or gross negligence. The Management
Agreement also contains provisions for the indemnification of the
Manager by the Company against liabilities arising in connection with
the performance of its duties.
See "FEES AND EXPENSES" below in this Prospectus and refer to the
Supplementary Prospectus in respect of separate Class Funds for a
description of the compensation payable to the Manager pursuant to the
Management Agreement.
accordance with the investment objectives of the Company from time to
time subject to the control of and review by the Manager, with power to
delegate to other investment managers or sub-advisors. The Investment
Manager is a private company limited by shares incorporated in Ireland
on 27 January 1999 and is a wholly owned subsidiary of Pioneer Global
Asset Management S.p.A., which is itself a subsidiary of UniCredito
Italiano S.p.A. The Investment Manager is authorised in Ireland by the
Financial Regulator under section 10 of the Investment Intermediaries
Act 1995.
The Investment Management Delegation Agreement is subject to
termination by the Manager upon not less than 30 days written notice.
The Investment Management Delegation Agreement may also be
terminated by the Manager or the Investment Manager upon notice
having immediate effect in certain circumstances. The Investment
Management Delegation Agreement provides that the Investment
Manager shall not be liable to the Manager, the Company or its
Shareholders for any act or omission in the performance of its duties,
except through willful default or gross negligence. The Investment
Management Delegation Agreement also contains provisions for the
indemnification of the Investment Manager by the Manager against
liabilities (other than those resulting from gross negligence or willful
default on the part of the Investment Manager, or on the part of its
servants or agents) arising in connection with the performance of its
duties. The Manager will be responsible for the payment of any fees of
the Investment Manager out of its Management and Performance Fees.
THE ADMINISTRATOR AND REGISTRAR
Pursuant to an Administration and Registrar Agreement dated 20th
August 2004 the Company has appointed Management International
(Bermuda) Limited to provide it with a Secretary and to act as its
Registrar and Administrator under the supervision of the Manager, with
the power to appoint sub-administrators and sub-registrars. As such
Management International (Bermuda) Limited has responsibility for
maintaining a register of Shareholders of the Company, issuing and
redeeming Shares, determining the value of the net assets of each Class
Fund, and the redemption price of Shares and keeping the accounts of
the Company and each Class Fund.
The Administration and Registrar Agreement shall continue in force until
terminated either by the Company or Management International
(Bermuda) Limited giving to the other not less than 60 days notice in
writing without penalty by either party.
The Administration and Registrar Agreement provides the Administrator
shall not be liable to the Company or its Shareholders for any acts or
omissions in the course of or in connection with the services rendered
by it under the Administration and Registrar Agreement in the absence
of fraud, dishonesty, negligence or wilful default and contains provisions
for the indemnification of the Administrator by the Company, subject to
the foregoing standard of exculpation, against any and all liabilities and
expenses whatsoever arising out of its actions pursuant to the
Administration and Registrar Agreement.
THE INVESTMENT MANAGER
Pursuant to an Investment Management Delegation Agreement dated
20th August 2004 the Manager has appointed the Pioneer Alternative
Investment Management Limited, an Irish affiliate of the Manager to
provide the Company with investment management and advice in
See "FEES AND EXPENSES" below in this Prospectus for a description of
the fees payable to Management International (Bermuda) Limited
pursuant to the Administration and Registrar Agreement.
13
THE CUSTODIAN
LIABILITY STATEMENT
Pursuant to a Custodian Agreement dated 20th August 2004 the
Company has appointed The Bank of Bermuda Limited to act as
Custodian of all of the assets of the Company (subject to any broker or
intermediary accounts as explained below) under the supervision of the
Manager, with power to appoint sub-custodians. The Bank of Bermuda
Limited may, at the request of the Manager, open accounts with brokers
or other intermediaries. The Custodian will not be responsible for the
safekeeping of assets or cash deposited with such brokers or other
intermediaries. All assets held by such broker, except margin deposits,
will be segregated and unavailable to the broker or other intermediary
and its creditors in the event of insolvency. Margin deposits may not be
segregated and may become so available. Any broker or other
intermediary appointed shall be deemed not to be an agent, subcustodian or delegate of the Custodian and the Custodian shall not be
liable for the acts or omissions or, any loss directly or indirectly caused
by any such person. The Investment Manager will monitor the adequacy
of the custody arrangements entered into by the Underlying Funds in
which the assets of the Company are invested.
The Custodian will retain responsibility for the acts and omissions of the
majority of its correspondents but will not be liable for any loss directly
or indirectly arising as a result of the acts or omissions of its
correspondents in certain emerging markets. In addition, the Custodian
shall not be liable for any losses arising as a result of the liquidation,
bankruptcy or insolvency of its sub-custodians, agents or delegates in
any market. The fees of any sub-custodian, agent or delegate appointed
by the Custodian shall be paid by the Company. Any sub-custodian
appointed will be paid normal commercial rates. The Custodian shall
have no responsibility for the adequacy of custodial arrangements
entered into by the Underlying Funds in which the assets of the
Company are invested. The Custodian and Administrator will have no
decision-making discretion relating to the Company’s investments. The
Custodian and Administrator are service providers to the Company and
are not responsible for the preparation of this document and therefore
accept no responsibility for the accuracy of any information contained
in this document.
The Bank of Bermuda Limited is a licensed bank incorporated in
Bermuda. The Custodian is an ultimately wholly owned subsidiary of
HSBC Holdings plc, a public company incorporated in England. The
HSBC Group has major commercial and investment banking business in
the Asia Pacific region, Europe, the Americas, the Middle East and Africa.
The Group has over 9,500 offices in 79 countries/territories world-wide
and, as at 31 December 2004, HSBC Holdings plc had consolidated
gross assets of approximately USD 1,277 billion.
SHARES OF THE COMPANY
The Custodian Agreement shall continue in force until terminated by
either party giving to the other party not less than 90 days notice in
writing without penalty by either party. The Custodian Agreement
provides that the Custodian shall not be liable to the Company or its
Shareholders for any acts or omissions in the course of or in connection
with the services rendered by it under the Custodian Agreement in the
absence of fraud, dishonesty, negligence or wilful default and contains
provisions for the Custodian's indemnification by the Company, subject
to the foregoing standard of exculpation against any and all liabilities,
obligations, losses and expenses whatsoever arising out of its actions
pursuant to the Custodian Agreement.
See "FEES AND EXPENSES" below in this Prospectus for a description of
the fees payable to The Bank of Bermuda Limited pursuant to the
Custodian Agreement.
The Company has also appointed The Bank of Bermuda Limited as its
banker on the bank's normal banking terms for customers as regards
bank charges, interest and other matters.
Sub-custodians may be appointed by the Custodian, provided that the
Custodian shall exercise reasonable skill, care and diligence in the
selection of a suitable sub-custodian and shall be responsible to the
Company for the duration of the sub-custody agreement for satisfying
itself as to the ongoing suitability of the sub-custodians to provide
custodial services to the Company. The Custodian will also maintain an
appropriate level of supervision over the sub-custodians and will make
appropriate inquiries periodically to confirm that the obligations of the
sub-custodian continue to be competently discharged.
14
THE COMPANY'S SHARE CAPITAL
The Company has an authorised share capital of USD 240,000
comprising 23,999,900 Shares each of a par value of USD 0.01 (which
may be allocated by the Directors, in their discretion, among various
Classes, Sub-Classes and Series) and one Founders’ Share having a par
value of USD 1.00. The Shares carry no voting rights (save as described
herein). The Founders’ Share, which has been issued to the Manager,
carries the right to vote but does not participate in dividends, may not
be redeemed or repurchased and, in the event of a winding up or
dissolution of the Company or upon a distribution of capital, participate
pari passu with the Shares only in an amount equal to the par value per
Founders’ Share.
The Bye-Laws of the Company empower the Directors to create different
Classes, Sub-Classes and Series of Shares and contain certain
provisions in respect of the Class Funds, Sub-Class Funds and Series
Funds established in connection with each Class, Sub-Class and Series
of Shares. The Bye-Laws allow a Class Fund to invest its assets in other
Class Funds. The supplements to this Prospectus in respect of the
relevant Class Funds will indicate whether such Class Funds will invest
in other Class Funds. The assets of each Class Fund, Sub-Class Fund
and Series Fund will be subject to the general creditors of the Company.
Copies of the Supplementary Prospectuses for each Class Fund may be
obtained from the Registrar or Sub-Registrar.
Each separate Class or Sub-Class of Shares will represent a separate
account and will be maintained with separate accounting records. It
should be noted that while each such Class and Sub-Class Fund is
considered a separate account for purposes of calculation of the net
assets and liabilities attributable to such fund, the assets of each Class
and Sub-Class Fund are generally invested with the assets of other Class
and Sub-Class Funds on a commingled basis and may not be
segregated.The Company is one legal entity. Thus all of the assets of the
Company may be available to meet all of the liabilities of the Company,
regardless of the separate portfolio to which such assets or liabilities are
attributable. In practice, cross class or cross sub-class liability will
usually arise where any Class or Sub-Class exhausts its assets and is
unable to meet its liabilities. The Shares of each Class, Sub-Class and
Series of Shares in the Company participate in any dividends declared
by the Company in respect of that Class, Sub-Class or Series, have the
redemption rights described in the supplements to this Prospectus in
respect of each Fund and, in the event of a winding up or dissolution of
the Company or upon a distribution of capital, participate (i) pari passu
with the Founders' Share in an amount equal to the par value per Share,
(ii) in all the surplus assets of the relevant Class, Sub-Class or Series
Fund and (iii) pari passu with the Shares of any other Class in any
surplus assets of the Company which are not comprised within any of
the Class, Sub-Class or Series Funds, but subject to the general
creditors of the Company. Additional Classes, Sub-Classes and Series of
Shares in the Company may be created and issued from time to time at
the Directors' discretion.
Details of the subscription procedures are set forth in the
Supplementary Prospectus in respect of each Class Fund. The various
Classes and Sub-Classes of Shares may have different investment
objectives, different base currencies and different fees payable. In
addition, different fees may be payable as between each Series within a
Class or Sub-Class and so the Net Asset Value per Share of each Series
may differ.
DETERMINATION OF NET ASSET VALUE
The Net Asset Value per Share of each Series, Sub Class Fund and Class
Fund will be determined by the Registrar (which the Registrar has in turn
delegated to the Sub-Registrar) as of the close of business in
Luxembourg on each Valuation Day (and on such occasions as the
Directors may from time to time determine) by dividing the value of the
net assets comprised within each Series, Sub-Class or Class Fund, as
the case may be, by the number of Shares of such Series, Sub-Class or
Class, respectively, then in issue, all determined as indicated below. The
net asset value of any Class Fund which has been listed on The Irish
Stock Exchange Limited will be notified to The Irish Stock Exchange
Limited immediately upon calculation.
The net assets of each Series, Sub-Class or Class Fund will comprise the
aggregate of:
(1) investments owned or contracted to be acquired;
(2) cash in hand or on deposit, including accrued interest;
(3) cash payments outstanding on any Shares of the relevant Series,
Sub-Class or Class Fund, as the case may be;
(4) bills and demand notes and amounts receivable, including net
amounts receivable in respect of investments contracted to be
realised, relating to the relevant Series, Sub-Class or Class Fund as
the case may be;
(5) notional Shares, if any, issued to such Series, Sub-Class or Class
Fund, as the case may be;
(6) interest accrued on interest-bearing investments of each Series,
Sub–Class or Class Fund, as the case may be except that accrued
on securities which is included in the quoted price; and;
(7) other property and assets of any kind and nature including prepaid
expenses and unamortised preliminary expenses as valued and
defined from time to time by the Directors; in each case,
attributable only to the relevant Series, Sub-Class or Class, as the
case may be and from which will be deducted:
(8) investments contracted to be sold;
(9) bills and accounts payable;
(10) management, and administrative fees and expenses payable
and/or accrued;
(11) the gross acquisition consideration of investments or other
property contracted to be purchased;
(12) reserves authorised or approved by the Directors for duties and
charges or taxes or contingencies;
(13) the aggregate amount of all borrowings and interest, and
commitment fees and other charges arising in connection
therewith; and
(14) other liabilities of whatsoever nature including outstanding
payments on any Shares of the relevant series or Sub-Class, as the
case may be previously redeemed and, as from the record date in
respect thereof, any dividends declared and not paid (contingent
liabilities, if any, being valued in such manner as the Directors may
determine from time to time or in any particular case);
in each case, attributable only to the relevant Series, Sub-Class or Class
Fund, as the case may be. Where appropriate, liabilities will be deemed
to accrue on a day-to-day basis. For the purpose of calculating the
number of Shares in issue or deemed to be in issue, Shares to be
redeemed will be deemed to be in issue on the relevant Valuation Day,
and Shares for which applications have duly been made shall be
deemed to be not in issue on the relevant Valuation Day. For the purpose
of calculating the value of the net assets:
(1) the value of any cash in hand or on deposit, bills (other than United
States Treasury securities), demand notes, accounts receivable,
prepaid expenses, cash dividends and interest declared or accrued
and not yet received is deemed to be the full amount thereof
unless the Directors determine that it is not worth such full amount,
in which event the value will be such as the Directors deem to be
the reasonable value;
(2) United States Treasury Securities shall be valued at the lower of (i)
market and (ii) cost plus accrued interest;
(3) the net asset value of the shares in any subsidiary company shall
be calculated in accordance with the same principles as apply in
calculating the Net Asset Value of the Shares;
(4) where the Company has entered into a forward contract for the sale
or purchase of any currency the currency required to be delivered
by the Company shall be included in the assets of the Company at
the price payable to the Company under such contract and there
shall be included in the liabilities of the Company for the relevant
Valuation Day, the cost of purchasing, as advised to the Company
for the relevant Valuation Day, the contract quantity of that currency
on the date for performance of the contract;
(5) the value attributed to any open futures position shall be the
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amount calculated by reference to the settlement price on the
principal futures exchange on which that future is traded after
deduction of any commission or charges that would be incurred in
liquidating that future at the settlement price on the relevant date
and if any future cannot be valued by reference to the settlement
price on that day due to the operation of daily limits or other rules
of the market on which that future is traded or for any other reason,
then the value of that future shall be the value which is attributed
to it by the Directors after obtaining such professional advice as
the Directors think fit;
(6) in the case of securities all calculations shall be based upon the
mean between the lowest available dealing offered price on the
principal market for those securities and the highest available
dealing bid price on the principal market for those securities. All
such valuations shall be calculated by reference to the prices
appearing to the Directors to be the latest available on such
principal market at the end of business on the relevant Valuation
Day;
(7) investments in other collective investment schemes shall be valued
at the last price provided by or on behalf of such entity or if such
price is not available the Company may rely on an estimated price
provided by or on behalf of such entity.
PROVIDED ALWAYS that:
(i) if the Directors at their discretion consider that the prices ruling
on a market other than the principal market provide in all the
circumstances a fairer criterion of value in relation to any such
investment, they may adopt such prices;
(ii) the Directors may, at their absolute discretion, permit some
other method of valuation to be used if they consider that such
valuation better reflects the fair value;
(8) if and whenever the quoted, listed or available price of an
investment is a single price such price shall be taken as the mean
between the lowest available market dealing offered price and the
highest available market dealing bid price;
(9) if no price quotations are available as above provided, the value
thereof shall be determined from time to time in such manner as
the Directors shall determine;
(10) preliminary expenses will be amortised over a period of 60 months
or such shorter period as the Directors may determine from time to
time and included as an asset at cost less amounts written off;
(11) any value (whether of a security or cash) otherwise than in the
relevant Base Currency shall be converted into the Base Currency
at the rate which the Directors in their absolute discretion deem
appropriate to the circumstances having regard, inter alia, to any
premium or discount which they consider may be relevant and to
costs of exchange;
(12) notwithstanding the foregoing, the Directors may, after obtaining
such professional advice as they think fit, permit some other
method of valuation to be used if they consider that such valuation
better reflects the fair value of any assets;
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(13) for the purposes of valuing the assets comprised in any fund, the
Directors may rely on the opinion of any persons who appear to
them to be competent to value assets by reason of any appropriate
professional qualification or of experience of any relevant market.
It should be noted that the Directors have delegated their duties
outlined above to the Registrar (which the Registrar has in turn
delegated to the Sub-Registrar) on a day-to-day basis. In calculating the
Net Asset Value, Series Net Asset Value and Net Asset Value per Share
of any Series, Sub-Class or Class, the Administrator or Sub-Administrator
may rely upon such automatic pricing services as either of them shall
determine or, if so instructed by the Company or the Manager, may use
information provided by particular pricing services, brokers, market
makers or other intermediaries. In such circumstances, neither the
Administrator nor the Sub-Administrator, shall in the absence of fraud,
dishonesty, negligence or willful default on the part of the Administrator
or Sub-Administrator, shall be liable for any loss suffered by the
Company or any Shareholder by reason of any error in the calculation of
the Net Asset Value of the Class, Sub-Class or Series, or Net Asset Value
per Share of any Series, Sub-Class or Class resulting from any
inaccuracy in the information provided by any such pricing service,
broker, market maker or other intermediary.
TEMPORARY SUSPENSION OF NET ASSET VALUE
The Directors may suspend the determination of the Net Asset Value per
Share in respect of any Class for the whole or any part of a period:
(1) during which any stock or futures exchange or over-the-counter
market on which any significant portion of the investments of the
Class Fund or Class Funds are listed, quoted, traded or dealt in is
closed (other than the customary weekend and holiday closing) or
trading on any such stock or futures exchange or over-the-counter
market is restricted; or
(2) when circumstances exist as a result of which in the opinion of the
Directors it is not reasonably practicable for the Company to
dispose of investments comprised in a Class Fund or Class Funds
owned by it or as a result of which any such disposal would be
materially prejudicial to Shareholders; or
(3) when a breakdown occurs in any of the means normally employed
in ascertaining the value of investments or when for any other
reason the value of any of the investments or other assets of a Class
Fund or Class Funds, cannot reasonably or fairly be ascertained; or
(4) during which the Company or a Class Fund is unable to repatriate
funds required for the purpose of making payments due on
redemption of Shares or during which any transfer of funds involved
in the realisation or acquisition of investments or payments due on
redemptions of Shares cannot in the opinion of the Directors be
effected at normal rates of exchange; or
(5) if the Directors recommend the winding up of the Company or the
termination of a Class Fund.
Any suspension of redemptions and the calculation of the Net Asset
Value will be notified immediately to The Irish Stock Exchange Limited
and, where possible, all reasonable steps will be taken to bring any
period of suspension to an end as soon as possible.
No Share may be converted during a period when the determination of
the Net Asset Value per Share is suspended.
payment to the Company (by subscription or otherwise) which contains
the proceeds of criminal conduct.
REGISTRATION AND TRANSFER OF SHARES AND CERTIFICATES
The Shares of the AllWeather Strategy II USD Fund, the AllWeather
Strategy II EURO Fund, the AllWeather Strategy II GBP Fund, the
AllWeather Strategy II JPY Fund and the USD, EUR, GBP, JPY and CHF
Sub-Classes of Momentum AllWeather Strategies II Master Fund have
been admitted to the Official List of The Irish Stock Exchange Limited. At
the time of this Prospectus, no other Sub-Classes have applied for
listing. No application has been made for the listing of the Shares on
any other stock exchange.
Shares of the Company will be issued only in registered form: the
Company will not issue bearer shares. The Registrar will maintain a
current list of the registered names and addresses of the Company's
Shareholders at the registered office of the Company in Bermuda and in
addition the Sub-Registrar will maintain a list of the registered names
and addresses of the Company's Shareholders at the offices of the SubRegistrar in Luxembourg. Certificates representing Shares will be issued,
without charge, only if requested by a Shareholder. Since certificates
must be returned to the Sub-Registrar prior to the processing of
redemption requests, the Company discourages Shareholders from
requesting certificates.
In the case of a lost share certificate, it will be re-issued upon such
terms as to evidence and indemnity as the Directors may require. A
Shareholder will be required to sign a letter of indemnity with a bank,
insurance company or guarantee society, jointly signing to undertake the
responsibility of indemnification.
A maximum of four names may be entered on the register as joint
holders of any Shares. Should any joint Shareholder die, the remaining
Shareholders shall be treated as solely and fully entitled to such Shares.
Transfer of Shares will be permitted in accordance with the Bye-Laws. No
transfer of Shares may be made if (i) as a result of such transfer either
the transferor or the transferee of such Shares would hold less than the
minimum number of Shares as the Directors may from time to time
specify or (ii) such transfer would in the opinion of the Directors result
in (a) a breach of the law or requirements of any country or
governmental authority or (b) the Company incurring any liability to
taxation or suffering any other pecuniary disadvantage which the
Company might not otherwise have incurred or suffered. Violation of
applicable ownership and transfer restrictions may result in compulsory
redemption.
The Company may cause the compulsory redemption of the Shares of
any Shareholder from the Company at any time at the current Net Asset
Value thereof in certain circumstances including (without limitation) to
ensure that the Company or any Class Fund does not violate the Uniting
and Strengthening America by Providing Appropriate Tools required to
Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 or any
other anti-money laundering laws or regulations where applicable to any
service provider to the Company.
Pursuant to the law of 11 August, 1998 on money laundering, the July
7, 1989 Act on Fight against Drug Addiction and Circulars 89/57,
91/IML 94/112, professional obligations have been outlined to prevent
the use of collective investment schemes for money laundering
purposes. As a result, the identity of investors (a certified copy of the
passport or the identification card) and/or the status of financial
intermediaries (a recent copy of the business authorisation delivered by
the competent local authorities) shall be disclosed to the Company.
Such information shall be collected for compliance reasons only and
shall be covered by the duty of secrecy incumbent to the Custodian and
Registrar. Pursuant to the Bermuda Proceeds of Crime Act 1997, any
person resident in Bermuda, which includes the Custodian and the
Registrar, has a duty to report any suspicious payment or known
DIVIDEND POLICY
Although the Company is entitled to pay dividends, it is not envisaged
that it will do so and any income of any Class Fund of the Company will
instead be added to the relevant Class Fund’s investment portfolio for
the benefit of the Shareholders of the relevant Class Fund. To the extent
that a dividend may be declared, it will be paid in compliance with Irish
Stock Exchange policy and requirements. Shareholders who require a
regular cash flow from their investment may arrange for the Company to
redeem sufficient of their Shares to make a specified fixed payment to
them on a half yearly or annual basis. This facility is available only to
uncertificated Shareholders.
MEETINGS AND VOTING RIGHTS
Meetings of the Company's Shareholders will be held annually to
approve the election of auditors and to attend to such other business as
may properly be placed before a meeting. The Founders' Share generally
carries the exclusive right to vote on any matter presented to a meeting
of Shareholders. Whilst no voting rights are generally attached to Shares
in the Company (other than in respect of matters constituting a variation
of special rights – see "Variation of Rights" below), Shareholders will
receive at least 21 days’ notice of any Shareholders’ meeting.
VARIATION OF RIGHTS
The special rights attached to any Class of Shares in the Company may
be altered or abrogated with the consent in writing of holders of not less
than three quarters of the issued Shares of such Class, or with the
sanction of a resolution passed at a separate meeting of holders of the
Shares of that Class by a majority of three quarters of such holders
voting in person or by proxy. The quorum for such a meeting shall be two
persons holding or representing by proxy at least one third of the
nominal amount of the issued Shares of the Class, or at any adjourned
meeting, such holders as are present. On a poll each holder will be
entitled to one vote per Share of the Class held. Any holder present in
person or by proxy may demand a poll. For such purposes the Directors
may treat all the Classes of Shares as forming one class if they consider
that all such Classes would be affected in the same way by the
proposals under consideration but in any other case shall treat them as
separate Classes. No special rights of any Class of Shares will be
deemed varied by the creation, allotment or issue of further Shares
ranking pari passu with such Shares.
SUBSCRIPTION PROCEDURE
For details on how to subscribe for Shares in any Class Fund within the
Company, please refer to the section on "SUBSCRIPTION FOR SHARES"
in that Class Fund's Supplementary Prospectus.
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REDEMPTION PROCEDURE
FEES & EXPENSES
For details on how to redeem Shares in any Class Fund within the
Company, please refer to the section on "REDEMPTION OF SHARES" in
that Class Fund's Supplementary Prospectus.
MANAGEMENT, PERFORMANCE AND SUBSCRIPTION FEES
CONVERSION
Shares in a Series Fund may, in general, be converted on any Dealing
Day into Shares of the corresponding Series of another Class Fund.
Currently, Shareholders may convert Shares free of any subscription
charges. Shareholders who convert their Shares may be charged fiscal
and purchase charges, such charges (if any) will be set out in the
relevant Supplementary Prospectus to this Prospectus in respect of the
relevant Class Fund.
Shareholders may convert their Shares from one Series of Shares in the
Company to the corresponding Series of another Class by redeeming all
or part of their holding of Shares in exchange for the issue at the Net
Asset Value per Share in the corresponding Series of the Class Fund of
their choice subject to satisfaction of any suitability requirements in
respect of such Series or Class. Such conversion will be effected by
redemption of Shares of the original Series in accordance with the terms
and conditions applicable to such Series at the redemption price ruling
for such Shares on the relevant Dealing Day and by the application to
the Company of the proceeds of the redemption less fiscal and
purchase charges (if any) to be invested at the subscription price ruling
for the new Shares on the relevant Dealing Day. Shareholders wishing to
convert Shares may do so by means of a written request sent to the SubRegistrar stating the number of Shares to be converted and the
registration details accompanied by share certificates when appropriate.
If the converting Shareholder is a company, the notice of conversion and
share certificate (if any) should be signed by authorised signatories of
the company or executed under seal. Requests for conversion of Shares
must be received prior to the relevant Dealing Day in order to be effected
for such date and requests for conversion received after the relevant
deadline will be treated as having been received on the next Business
Day. The minimum value of any conversion out of or into a Class Fund
must be USD25,000 (or its equivalent in the relevant Base Currency).
The Directors may at their discretion waive this requirement. The
Company also reserves the right not to implement any requests for
conversion which would result in a Shareholder's residual holding in any
Class Fund out of which the conversion is being made falling below USD
10,000 or such other amount as the Directors may determine. The
Directors may delegate the exercise of their discretion with respect to
conversion to the Manager.
In no circumstances will a Shareholder who has converted his Shares in
one Class Fund into Shares in another Class Fund be given a right to
withdraw from the transaction.
Shares acquired on conversion may not be redeemed by a Shareholder
until the Redemption Day following that on which the conversion
was effected.
The Directors, in their discretion, may prohibit conversions into or out
of any particular Series or Class Fund as set out in the relevant
Supplementary Prospectus.
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For details on management, performance and subscription fees, please
refer to the section on "Fees" in the relevant Class Fund's
Supplementary Prospectus.
FEES OF THE ADMINISTRATOR AND REGISTRAR
Pursuant to the Administration and Registrar Agreement, the
Administrator is paid a fee by the Company, such fees being based on
its normal fees for the work performed by it and is entitled to
reimbursement of actual out of pocket expenses incurred in the
performance of its duties. The fees and expenses of the SubAdministrator will be met by the Administrator out of its fees.
FEES OF THE CUSTODIAN
Pursuant to the Custodian Agreement, the Custodian is paid a fee by the
Company, such fees being based on its normal fees for the work
performed by it currently equal to 0.1% per annum of the Company’s net
assets and is entitled to reimbursement of actual out of pocket
expenses incurred in the performance of its duties. The fees and
expenses of the Sub-Custodian will be met by the Custodian out of its
fees.
OTHER OPERATING EXPENSES
Each Class, Sub-Class and Series Fund will bear all other expenses
incidental to its operations and business and, with any other Class, SubClass and Series Fund, its proportional share of the expenses of the
Company (pro rata to the value of the net assets of the relevant Class,
Sub-Class and Series Funds on the preceding Valuation Day), including
(without limitation) (i) the fees of its legal advisors and Auditors (ii)
Directors' fees and expenses, (iii) the costs of maintaining the
Company's registered office in Bermuda, (iv) the costs of printing and
distributing reports and notices to Shareholders and (v) the costs of
printing and distributing this Prospectus, any supplement to this
Prospectus and any other promotional material and information
concerning the relevant Class, Sub-Class and Series Fund.
TAXATION & EXCHANGE CONTROL
INTRODUCTION
The following summary of the principal tax and exchange control
considerations applicable to the Company and its Shareholders does
not constitute legal or tax advice. Prospective investors should consult
their own professional advisors on the income and other tax
consequences of acquiring, holding or disposing of Shares in the
Company arising in the jurisdiction in which they are resident or
domiciled for tax purposes. While this summary is considered to be a
correct interpretation of existing laws in force as of the date of this
Prospectus, no assurance can be given that courts or fiscal authorities
responsible for the administration of such laws will agree with the
interpretations or that changes in such laws will not occur.
THE COMPANY - BERMUDA
At the date of this Prospectus, there is no Bermuda income, corporation
or profits tax, withholding tax, capital gains tax, capital transfer tax,
estate or stamp duty or inheritance tax payable by the Company or its
Shareholders.
The Company has obtained from the Minister of Finance under the
Exempted Undertakings Tax Protection Act 1966, as amended, a
certificate confirming that, in the event of there being enacted in
Bermuda any legislation imposing tax computed on profits or income, or
computed on any capital assets, gain or appreciation of any tax in the
nature of estate duty or inheritance tax, such tax shall not until 28
March, 2016 be applicable to the Company or to any of their operations,
or to the Shares or other obligations of the Company except insofar as
such tax applies to persons ordinarily resident in Bermuda and holding
such Shares or other obligations or any land leased or let to the
Company. The Company is liable to pay the Bermuda Government an
annual registration fee based on its authorised share capital at a rate
not exceeding BMD 27,825.
The Company has been classified as non-resident of the Bermuda
Exchange Control area by the Authority whose permission for the issue
of the Shares has been obtained. The transfer of Shares between
persons regarded as non-residents of Bermuda for exchange control
purposes and the issue and redemption of Shares to or by such persons
may be affected without specific consent under the Exchange Control
Act 1972 of Bermuda and regulations made thereunder. The Company,
by virtue of being a non-resident of Bermuda for exchange control
purposes, is free to acquire, hold and sell any foreign currency, securities
and other investments without restriction.
BASED ON THE STRUCTURE AND OPERATIONS OF THE COMPANY AND
EACH CLASS FUND, THE COMPANY AND EACH SUCH CLASS FUND
GENERALLY SHOULD NOT BE SUBJECT TO US INCOME TAX, EXCEPT AS
PROVIDED BELOW.
US TRADE OR BUSINESS
Section 864(b)(2) of the US Internal Revenue Code of 1986, as
amended (the "IRC"), provides a safe harbor (the "Safe Harbor")
applicable to a non-US corporation (other than a dealer in securities)
that engages in the US in trading securities (including contracts or
options to buy or sell securities) for its own account pursuant to which
such non-US corporation will not be deemed to be engaged in a US
trade or business. The Safe Harbor also provides that a non-US
corporation (other than a dealer in commodities) that engages in the US
in trading commodities for its own account is not deemed to be engaged
in a US trade or business if "the commodities are of a kind customarily
dealt in on an organised commodity exchange and if the transaction is
of a kind customarily consummated at such place." Pursuant to
proposed regulations, a non-US taxpayer (other than a dealer in stocks,
securities or derivatives) that effects transactions in the United States in
derivatives (including (i) derivatives based upon stocks, securities, and
certain commodities, and (ii) certain notional principal contracts based
upon an interest rate, equity, or certain commodities and currencies) for
its own account is not deemed to be engaged in a United States trade
or business. Although the proposed regulations are not final, the Service
has indicated in the preamble to the proposed regulations that for
periods prior to the effective date of the proposed regulations, taxpayers
may take any reasonable position with respect to the application of
Section 864(b)(2) of the IRC to derivatives, and that a position
consistent with the proposed regulations will be considered a
reasonable position.
UNITED STATES TAX ASPECTS
THE DISCUSSION HEREIN IS FOR INFORMATIONAL PURPOSES ONLY
AND IS A DISCUSSION PRIMARILY OF THE US TAX CONSEQUENCES TO
PROSPECTIVE SHAREHOLDERS. EACH PROSPECTIVE SHAREHOLDER
SHOULD CONSULT ITS PROFESSIONAL TAX ADVISOR WITH RESPECT TO
THE TAX ASPECTS OF AN INVESTMENT IN THE COMPANY. TAX
CONSEQUENCES MAY VARY DEPENDING UPON THE PARTICULAR STATUS
OF A PROSPECTIVE SHAREHOLDER. IN ADDITION, SPECIAL
CONSIDERATIONS (NOT DISCUSSED HEREIN) MAY APPLY TO PERSONS
WHO ARE NOT DIRECT SHAREHOLDERS IN THE COMPANY BUT WHO ARE
DEEMED TO OWN SHARES AS A RESULT OF THE APPLICATION OF
CERTAIN ATTRIBUTION RULES.
Neither the Company nor any Class Fund has sought a ruling from the
US Internal Revenue Service (the "Service") or any other US federal,
state or local agency with respect to any of the tax issues affecting the
Company or each Class Fund, nor have any obtained an opinion of
counsel with respect to any tax issues.
The following is a summary of certain potential US federal tax
consequences which may be relevant to prospective Shareholders. The
discussion contained herein is not a full description of the complex tax
rules involved and is based upon existing laws, judicial decisions and
administrative regulations, rulings and practices, all of which are subject
to change, retroactively as well as prospectively. A decision to invest in
the Company should be based upon an evaluation of the merits of the
trading program, and not upon any anticipated US tax benefits.
The Company and each Class Fund intend to conduct their businesses
in a manner so as to meet the requirements of the Safe Harbor. Thus,
the Company's and the Class Funds’ securities and commodities trading
activities, if any, should not constitute a US trade or business and,
except in the limited circumstances discussed below, the Company and
the Class Funds should not be subject to the regular US income tax on
any of their trading profits. However, if certain of the Company's or a
Class Fund’s activities were determined not to be of the type described
in the Safe Harbor, the activities of the Company or such Class Fund,
respectively, may constitute a US trade or business in which case the
Company or such Class Fund would be subject to US income and
branch profits tax on the income and gain from those activities. Even if
the Company's or a Class Fund’s securities trading activity, if any, does
not constitute a US trade or business, gains realised from the sale or
disposition of stock or securities (other than debt instruments with no
equity component) of US Real Property Holding Corporations (as
defined in Section 897 of the IRC) ("USRPHC"), including stock or
securities of certain Real Estate Investment Trusts ("REITs"), will be
generally subject to US income tax on a net basis. However, a principal
exception to this rule of taxation would apply if such USRPHC has a
class of stock which is regularly traded on an established securities
market and the Company or a Class Fund generally did not hold (and
was not deemed to hold under certain attribution rules) more than 5%
of the value of a regularly traded class of stock or securities of such
USRPHC at any time during the five year period ending on the date
ofdisposition. Moreover, if the Company or a Class Fund were deemed to
be engaged in a US trade or business as a result of owning a limited
partnership interest in a US business partnership or a similar ownership
19
interest, income and gain realised from that investment would be
subject to US income and branch profits tax.
The extent to which an investment vehicle managed by a US
independent portfolio manager ("Investment Vehicle") in which a Class
Fund invests is subject to US income and branch profits tax will depend
on the extent to which such Investment Vehicle conducts its activities
within the Safe Harbor.
US WITHHOLDING TAX
In general, under Section 881 of the IRC, a non-US corporation which
does not conduct a US trade or business is nonetheless subject to tax
at a flat rate of 30% (or lower tax treaty rate) on the gross amount of
certain US source income which is not effectively connected with a US
trade or business, generally payable through withholding. Income
subject to such a flat tax rate is of a fixed or determinable annual or
periodic nature, including dividends and certain interest income. There
is presently no applicable tax treaty between the US and Bermuda.
Certain types of income are specifically exempted from the 30% tax and
thus withholding is not required on payments of such income to a nonUS corporation. The 30% tax does not apply to US source capital gains
(whether long or short-term) or to interest paid to a non-US corporation
on its deposits with US banks. The 30% tax also does not apply to
interest which qualifies as Portfolio Interest. The term "Portfolio Interest"
generally includes interest (including original issue discount) on an
obligation in registered form which has been issued after 18 July, 1984
and with respect to which the person who would otherwise be required
to deduct and withhold the 30% tax receives the required statement that
the beneficial owner of the obligation is not a US person within the
meaning of the IRC. Under certain circumstances, interest on bearer
obligations may also be considered Portfolio Interest.
REDEMPTION OF SHARES
Gain realised by Shareholders who are not US persons within the
meaning of the IRC ("Non-US Shareholders") upon the sale, exchange
or redemption of Shares held as a capital asset should generally not be
subject to US federal income tax provided that the gain is not effectively
connected with the conduct of a trade or business in the US. However,
in the case of nonresident alien individuals, such gain will be subject to
the 30% (or lower tax treaty rate) US tax if (i) such person is present in
the US for 183 days or more during the taxable year (on a calendar year
basis unless the nonresident alien individual has previously established
a different taxable year) and (ii) such gain is derived from US sources.
Generally, the source of gain upon the sale, exchange or redemption of
Shares is determined by the place of residence of the Shareholder. For
purposes of determining the source of gain, the IRC defines residency in
a manner that may result in an individual who is otherwise a nonresident
alien with respect to the US being treated as a US resident only for
purposes of determining the source of income. Each potential individual
Shareholder who anticipates being present in the US for 183 days or
more (in any taxable year) should consult his tax advisor with respect to
the possible application of this rule.
Gain realised by a Non-US Shareholder engaged in the conduct of a US
trade or business will be subject to US federal income tax upon the sale,
exchange or redemption of Shares if such gain is effectively connected
with its US trade or business.
20
Non-US Shareholders may be required to make certain certifications to
the Company as to the beneficial ownership of the Shares and the nonUS status of such beneficial owner, in order to be exempt from US
information reporting and backup withholding on a redemption of
Shares.
TAX-EXEMPT US PERSONS
The term "Tax-Exempt US Person" means a US person within the
meaning of the IRC that is exempt from payment of US federal income
tax. Generally, a Tax-Exempt US Person is exempt from federal income
tax on certain categories of income, such as dividends, interest, capital
gains and similar income realised from securities investment or trading
activity. This type of income is exempt even if it is realised from securities
trading activity which constitutes a trade or business. This general
exemption from tax does not apply to the "unrelated business taxable
income" ("UBTI") of a Tax-Exempt US Person. Generally, except as noted
above with respect to certain categories of exempt trading activity, UBTI
includes income or gain derived from a trade or business, the conduct
of which is substantially unrelated to the exercise or performance of the
Tax-Exempt US Person's exempt purpose or function. UBTI also includes
(i) income derived by a Tax-Exempt US Person from debt-financed
property and (ii) gains derived by a Tax-Exempt US Person from the
disposition of debt-financed property.
In 1996, Congress considered whether, under certain circumstances,
income derived from the ownership of the shares of a non-US
corporation should be treated as UBTI to the extent that it would be so
treated if earned directly by the Shareholder. Subject to a narrow
exception for certain insurance company income, Congress declined to
amend the IRC to require such treatment. Accordingly, based on the
principles of that legislation, a Tax-Exempt US Person investing in a nonUS corporation such as the Company should not realise UBTI with
respect to an unleveraged investment in Shares. Tax-Exempt US Persons
are urged to consult their own tax advisors concerning the US tax
consequences of an investment in the Company.
REPORTING REQUIREMENTS FOR US PERSONS
Any US person within the meaning of the IRC owning 10% or more
(taking certain attribution rules into account) of either the total
combined voting power or total value of all classes of the shares of a
non-US corporation such as the Company will likely be required to file
an information return with the Service containing certain disclosure
concerning the filing Shareholder, other US Shareholders and the
corporation. The Company has not committed to provide all of the
information about the Company or its Shareholders needed to complete
the return. In addition, a US person within the meaning of the IRC that
transfers cash to a non-US corporation may be required to report the
transfer to the Service if (i) immediately after the transfer, such person
holds (directly, indirectly or by attribution) at least 10% of the total
voting power or total value of such corporation or (ii) the amount of cash
transferred by such person (or any related person) to such corporation
during the twelve-month period ending on the date of the transfer
exceeds USD 100,000.
Furthermore, certain US persons within the meaning of the IRC will have
to file Form 8886 ("Reportable Transaction Disclosure Statement") with
their US tax return, and submit a copy of Form 8886 with the Office of
Tax Shelter Analysis of the Service if the Company engages in certain
"reportable transactions" within the meaning of recently issued US
Treasury Regulations. Such a "reporting shareholder" includes a US
person within the meaning of the IRC if either (1) the Company is treated
as an FPHC, or (2) such US person owns 10% (by vote or value) of the
Company and makes a QEF election with respect to the Company.
Moreover, if a US person within the meaning of the IRC recognises a loss
upon a disposition of Shares, such loss could also constitute a
"reportable transaction" for such shareholder. Shareholders who are US
persons within the meaning of the IRC (including Tax-Exempt US
Persons)) are urged to consult their own tax advisors concerning these
and any other reporting requirements.
ESTATE AND GIFT TAXES
Individual holders of Shares who are neither present or former US
citizens nor US residents (as determined for US estate and gift tax
purposes) are not subject to US estate and gift taxes with respect to
their ownership of such Shares.
claims generating interest payments for the Directive to apply on
distributions (if any) and/or redemptions.
In respect of the countries which have opted for a withholding tax
system, from 1 July 2005 until 30 June 2008 the applicable withholding
tax rate would be 15% and from 1 July 2008 until 30 June 2011 the
applicable withholding tax would be 20%, rising to 35% from 1 July
2011. However, the Directive permits such countries to provide in their
implementing laws that paying agents in such countries shall not
withhold tax if (i) the beneficial owner expressly authorizes the paying
agent to report information to his national tax authority or (ii) if the
beneficial owner provides to the paying agent a tax certificate issued by
his national tax authority. For electing any of these options, see the
relevant provisions in the Subscription Agreement attached hereto.
The Company reserves the right to reject any application for Shares if the
information provided by any prospective investor does not meet the
standards required by legalisation enacted as a result of the Directive.
UNITED KINGDOM TAXATION
OTHER TAX CONSIDERATIONS
It is intended that the central management and control of the Company
will be exercised outside the United Kingdom. On this basis, the
Company will not be resident in the United Kingdom for taxation
purposes, and will not therefore be liable for United Kingdom tax on its
profits other than income which has a United Kingdom source, including
income derived from a trade carried on in the United Kingdom.
FUTURE CHANGES IN APPLICABLE LAW
The foregoing description of US, Bermuda and UK income tax
consequences of an investment in, and the operations of, the Company
and each Class Fund is based on laws and regulations which are subject
to change through legislative, judicial or administrative action. Other
legislation could be enacted that would subject the Company or a Class
Fund to income taxes or subject Shareholders to increased income
taxes.
The Company has no present plans to apply for any certifications or
registrations, or to take any other actions under the laws of any
jurisdictions which would afford relief to local investors therein from the
normal tax regime otherwise applicable to an investment in Shares of a
Class Fund. It is the responsibility of all persons interested in
subscribing for Shares to inform themselves not only of any income or
other tax consequences arising in the jurisdiction in which they are
resident or domiciled for tax purposes, but also as to any foreign
exchange or other fiscal or legal restrictions which are relevant to their
particular circumstances in connection with the acquisition, holding or
disposal of Shares. The foregoing summary does not address tax
considerations which may be applicable to certain Shareholders under
the laws of any jurisdiction including the United States, Bermuda or the
United Kingdom. Prospective Shareholders should consult their own
counsel regarding tax laws and regulations of any other jurisdiction
which may be applicable to them.
TAX CONSIDERATIONS FOR EU RESIDENT INDIVIDUALS
The Council of the European Union adopted on 3 June 2003, a Council
Directive 2003/48/EC on the taxation of savings income in the form of
interest payments (the "Directive"). Under this Directive, Member States
of the European Union ("Member States") will be required to provide tax
authorities of another Member State with details of payments of interest
or other similar income paid by a person within its jurisdiction to an
individual resident in that other Member State. Austria, Belgium and
Luxembourg have opted instead for a withholding tax system for a
transitional period in relation to such payments. Certain other countries,
including the Swiss Confederation, dependant or associated territories
in the Caribbean, the Channel Islands, Isle of Man, the Principality of
Monaco and the Principality of Lichtenstein, Principality of Andorra and
Republic of San Marino will also be introducing measures equivalent to
information reporting or withholding tax.
The Directive will apply to paying agents in EU Member States and other
territories who make certain interest payments to individuals and certain
other "residual entities" (but excluding in general terms legal persons)
resident for tax purposes in another EU Member State.
It is possible that a Class Fund may be sufficiently invested in debt
THE TAX AND OTHER MATTERS DESCRIBED IN THIS PROSPECTUS DO NOT
CONSTITUTE, AND SHOULD NOT BE CONSIDERED AS, LEGAL OR TAX
ADVICE TO PROSPECTIVE SHAREHOLDERS.
ERISA CONSIDERATIONS
THE FOLLOWING SUMMARY OF CERTAIN ASPECTS OF ERISA, IS
BASED UPON ERISA, JUDICIAL DECISIONS, DEPARTMENT OF LABOR
REGULATIONS AND RULINGS IN EXISTENCE ON THE DATE HEREOF.
THIS SUMMARY IS GENERAL IN NATURE AND DOES NOT ADDRESS
EVERY ERISA ISSUE THAT MAY BE APPLICABLE TO THE COMPANY,
EACH CLASS FUND OR A PARTICULAR INVESTOR. ACCORDINGLY,
EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH ITS OWN
COUNSEL IN ORDER TO UNDERSTAND THE ERISA ISSUES AFFECTING
THE COMPANY, THE CLASS FUNDS AND THE INVESTOR.
GENERAL
Persons who are fiduciaries with respect to a U.S. employee benefit plan
or trust within the meaning of and subject to the provisions of ERISA (an
"ERISA Plan"), an individual retirement account or a Keogh plan subject
solely to the provisions of the IRC (an "Individual Retirement Fund")
21
should consider, among other things, the matters described below
before determining whether to invest in a Class Fund.
ERISA imposes certain general and specific responsibilities on persons
who are fiduciaries with respect to an ERISA Plan, including prudence,
diversification, avoidance of prohibited transactions and compliance
with other standards. In determining whether a particular investment is
appropriate for an ERISA Plan, U.S. Department of Labor ("DOL")
regulations provide that a fiduciary of an ERISA Plan must give
appropriate consideration to, among other things, the role that the
investment plays in the ERISA Plan's portfolio, taking into consideration
whether the investment is designed reasonably to further the ERISA
Plan's purposes, the risk and return factors of the potential investment,
the portfolio's composition with regard to diversification, the liquidity
and current return of the total portfolio relative to the anticipated cash
flow needs of the ERISA Plan, the projected return of the total portfolio
relative to the ERISA Plan's funding objectives, and the limitation on the
rights of Shareholders to redeem all or any part of their Shares or to
transfer their Shares. Before investing the assets of an ERISA Plan in a
Class Fund, a fiduciary should determine whether such an investment is
consistent with its fiduciary responsibilities and the foregoing
regulations. For example, a fiduciary should consider whether an
investment in such Class Fund may be too illiquid or too speculative for
a particular ERISA Plan and whether the assets of the ERISA Plan would
be sufficiently diversified. If a fiduciary with respect to any such ERISA
Plan breaches its responsibilities with regard to selecting an investment
or an investment course of action for such ERISA Plan, the fiduciary may
be held personally liable for losses incurred by the ERISA Plan as a
result of such breach.
PLAN ASSETS REGULATIONS
The DOL has published a regulation (the "Regulation") describing when
the underlying assets of an entity in which certain benefit plan investors
("Benefit Plan Investors") invest constitute "plan assets" for purposes of
ERISA. Benefit Plan Investors include employee benefit plans as defined
in Section 3(3) of ERISA, whether or not subject to Title I of ERISA, plans
described in Section 4975(e)(1) of the IRC, government plans, church
plans, non–U.S. employee benefit plans, certain insurance company
general and separate accounts, and entities the underlying assets of
which include plan assets by reason of investment therein by Benefit
Plan Investors. The effect of the Regulation is to treat certain entities as
pooled funds for the collective investment of plan assets.
The Regulation provides that, as a general rule, when an ERISA Plan
invests assets in another entity, the ERISA Plan's assets include its
investment, but do not, solely by reason of such investment, include any
of the underlying assets of the entity. However, when an ERISA Plan
acquires an "equity interest" in an entity that is neither: (a) a "publicly
offered security;" nor (b) a security issued by an investment fund
registered under the US Company Act, then the ERISA Plan's assets
include both the equity interest and an undivided interest in each of the
underlying assets of the entity, unless it is established that:
(i) the entity is an "operating company;" or
(ii) the equity participation in the entity by Benefit Plan Investors is not
"significant."
Equity participation in an entity by Benefit Plan Investors is considered
"significant" if 25% or more of the value of any class of equity interests
in the entity is held by such Benefit Plan Investors. Equity interests held
22
by a person with discretionary authority or control with respect to the
assets of the entity and equity interests held by a person who provides
investment advice for a fee (direct or indirect) with respect to such
assets or any affiliate of any such person (other than a Benefit Plan
Investor) are not considered for purposes of determining whether equity
participation by Benefit Plan Investors is significant.
LIMITATION ON INVESTMENTS BY BENEFIT PLAN INVESTORS
It is the current intent of the Board of Directors to monitor the
investments in each Class Fund to ensure that the aggregate investment
by Benefit Plan Investors does not equal or exceed 25% of the value of
any class of the Shares in any Class Fund so that equity participation by
Benefit Plan Investors in each Class Fund will not be considered
"significant" under the Regulation and, as a result, the underlying assets
of each Class Fund will not be deemed "plan assets" for purposes of the
Regulation. Shares of a Class Fund held by the Investment Manager and
its affiliates are not considered for purposes of determining whether
equity participation by Benefit Plan Investors is significant. If the assets
of a Class Fund were regarded as "plan assets" of a Benefit Plan Investor
that is an ERISA Plan or an Individual Retirement Fund, the Investment
Manager would be a "fiduciary" (as defined in ERISA and the IRC) with
respect to each such Benefit Plan Investor, and would be subject to the
obligations and liabilities imposed on fiduciaries by ERISA. In such
circumstances, such Class Fund would be subject to various other
requirements of ERISA and the IRC. In particular, such Class Fund would
be subject to rules restricting transactions with "parties in interest" and
prohibiting transactions involving conflicts of interest on the part of
fiduciaries which might result in a violation of ERISA and the IRC unless
such Class Fund obtained appropriate exemptions from the DOL
allowing such Class Fund to conduct its operations as described herein.
As described above, under "Compulsory Redemption", the Board of
Directors of the Company reserves the right to redeem all or a part of
the Shares held by any Shareholder, subject to the aforesaid, including,
without limitation, to ensure compliance with the above percentage
limitation. The Board of Directors reserves the right, however, to waive the
25% limitation and thereafter to comply with ERISA.
REPRESENTATIONS BY PLANS
An ERISA Plan proposing to invest in a Class Fund will be required to
represent that it is, and any fiduciaries responsible for the ERISA Plan's
investments are, aware of and understand the Class Fund's investment
objective, policies and strategies, and that the decision to invest plan
assets in the Class Fund was made with appropriate consideration of
relevant investment factors with regard to the ERISA Plan and is
consistent with the duties and responsibilities imposed upon fiduciaries
with regard to their investment decisions under ERISA.
WHETHER OR NOT THE UNDERLYING ASSETS OF A CLASS FUND ARE
DEEMED PLAN ASSETS UNDER THE REGULATION, AN INVESTMENT IN
SUCH CLASS FUND BY AN ERISA PLAN IS SUBJECT TO ERISA.
ACCORDINGLY, FIDUCIARIES OF ERISA PLANS SHOULD CONSULT WITH
THEIR OWN COUNSEL AS TO THE CONSEQUENCES UNDER ERISA OF AN
INVESTMENT IN SUCH CLASS FUND.
ERISA PLANS AND INDIVIDUAL RETIREMENT FUNDS HAVING PRIOR
RELATIONSHIPS WITH THE INVESTMENT MANAGER OR ITS AFFILIATES
Certain prospective ERISA Plan and Individual Retirement Funds
investors may currently maintain relationships with the Investment
Manager or other entities which are affiliated with the Investment
Manager. Each of such entities may be deemed to be a party in interest
to and/or a fiduciary of any ERISA Plan or Individual Retirement Fund to
which any of the Investment Manager or its affiliates provides investment
management, investment advisory or other services. ERISA prohibits
ERISA Plan assets to be used for the benefit of a party in interest and
also prohibits an ERISA Plan fiduciary from using its position to cause
the ERISA Plan to make an investment from which it or certain third
parties in which such fiduciary has an interest would receive a fee or
other consideration. Similar provisions are imposed by the IRC with
respect to Individual Retirement Funds. ERISA Plan and Individual
Retirement Fund investors should consult with counsel to determine if
participation in a Class Fund is a transaction which is prohibited by
ERISA or the IRC.
The provisions of ERISA are subject to extensive and continuing
administrative and judicial interpretation and review. The discussion of
ERISA contained herein is, of necessity, general and may be affected by
future publication of regulations and rulings. Potential investors should
consult with their legal advisors regarding the consequences under
ERISA of the acquisition and ownership of Shares.
REPORTS TO SHAREHOLDERS
The Company's financial statements will be prepared in accordance with
Bermuda and Canadian GAAP. The Company will furnish annual reports
to its Shareholders containing the audited combined financial
statements of the Company made up to 31 December in each year. The
Company will also furnish to its Shareholders a semi-annual unaudited
financial statement. Monthly statements of the Net Asset Value per
Share together with monthly and quarterly commentaries relating to the
Company will be made available on the pricing page of the following
website: www.pioneeraltinvest.com. Net Asset Value quotations in
respect of each Class, Sub-Class and Series of Shares as of the most
recent Valuation Day will, at the discretion of the Directors, be published
in the International Herald Tribune, the Financial Times (other than
issues circulating in the United States) and in such other newspapers as
the Directors may from time to time determine, and also may be
obtained by contacting the Registrar or Sub-Registrar.
The interim unaudited semi-annual reports and the audited annual
financial statement for the Company will be sent to Shareholders and to
The Irish Stock Exchange Limited within four and six months,
respectively, of the end of the period to which they relate.
ADDITIONAL INFORMATION
AVAILABLE DOCUMENTS
There have been no events subsequent to the date of the latest audited
financials but before the date of this Prospectus which either provide
material additional information relating to conditions that existed at the
date of the financial statements or which cause significant changes to
assets or liabilities or which will or may have a significant effect on the
future operations of the Company.
This Prospectus is not intended to provide a complete description of the
Company's Memorandum of Association and Bye-Laws or of the
agreements with or between the Manager, the Investment Manager, the
Custodian and the Registrar summarised herein. Copies of all such
documents and other relevant documents are available for inspection at
the registered office of the Company at Bank of Bermuda Building, 6
Front Street, Hamilton HM 11, Bermuda and at the offices of the SubRegistrar at HSBC Securities Services (Luxembourg) S.A., B .P. 413, 40
Avenue Monterey, L-2014, Luxembourg from the date of this Prospectus.
The Auditors have given and have not withdrawn their written consent to
the inclusion of references to their name in the form and context in
which the same appear.
None of the Shares of the Company are under option, or agreed,
conditionally or unconditionally to be put under option.
There are no legal, arbitration or other proceedings pending or
threatened against the Company nor have there been since its
incorporation.
The following documents are available for inspection during normal
business hours at the registered office of the Company:
(i) the Memorandum of Association and Bye-Laws of the Company;
(ii) the material contracts referred to herein;
(iii) the Companies Act of Bermuda;
(iv) the auditor’s letter of consent.
ENQUIRIES
Neither the Directors, nor any connected person, the existence of which
is known to or could with reasonable diligence be ascertained by that
Director, whether or not through another party, have any interest in the
Shares of the Company, nor have they been granted any options in
respect of the Shares of the Company.
None of the Directors has any interest, direct or indirect, in any
transaction which are unusual in their nature or significant to the
business of the Company during the current or immediately preceding
financial year.
The launch and listing of the various Classes within the Company may
occur at different times and therefore at the time of the launch of given
Class(es) the pool of assets to which a given Class relates may have
commenced to trade. For further information in this regard, the most
recent interim and annual reports of the Company will be made
available to potential investors upon request.
Enquiries concerning the Company, each Class Fund and the Shares
(including information concerning redemption procedures and current
Net Asset Values) should be directed to the Secretary or to the SubRegistrar, each at the following address:
To the Secretary
The Bank of Bermuda Limited
Bank of Bermuda Building
6 Front Street
Hamilton HM 11, Bermuda
Tel: (+1 441) 299 6120
Fax: (+1 441) 299 6587
Telex: 3358 MIL BA
Attn: Michelle Amesse
23
To the Sub-Registrar
HSBC Securities Services (Luxembourg) S.A.
B.P. 413, 40 Avenue Monterey
L-2014 Luxembourg
Tel: (+352) 404 646 1
Fax: (+352) 404 676
Attn: Investor Services
DIRECTORS' INTERESTS
The right of Shareholders to remove a Director from office, and to
appoint a new Director, is exercisable solely by the holders of the
Founders' Share that is currently held by, or on behalf of, the Manager.
The interests of the Directors of the Company and their interests in
companies associated with the management, administration, promotion
and marketing of the Company and the Shares are set out below:
(a) Messrs. Cogan, La Rocca, Barbieri, Smith, Tombesi and Wetherhill
are each a director (and in the case of Messrs. Cogan, La Rocca and
Barbieri an officer) of Pioneer Alternative Investment Management
(Bermuda) Limited. Messrs. Cogan, La Rocca and Barbieri are each
a director of Pioneer Alternative Investment Management Limited.
Pioneer Alternative Investment Management (Bermuda) Limited
and Pioneer Alternative Investment Management Limited have a
common ultimate beneficial owner.
(b) Mr. Collis is a partner in the firm of Conyers Dill & Pearman, the
Company's legal advisors in Bermuda. That firm acted in connection
with the formation of the Company and has received fees for these
services. Dawn Griffiths, a partner with Conyers Dill & Pearman has
been appointed alternate Director to Mr. Collis.
(c) There are no existing or proposed service agreements between the
Company and any of the Directors.
(d) No shareholding qualification for Directors is required. The Directors
of the Company or companies of which they are officers or
employees may, however, subscribe for Shares in the Company. Their
application will rank pari passu with all other applications.
from contracting with the Company either as vendor, purchaser or
otherwise, nor shall any such contracts or any contract or
arrangement entered into by or on behalf of the Company in which
any Director is in any way interested be liable to be avoided, nor
shall any Directors so contracting or being so interested be liable to
account to the Company for any profit realised by any such contract
or arrangement by reason of such Director holding that office, or of
the fiduciary relation thereby established, but the nature of his
interest must be declared by him at the meeting of the Directors at
which the question of entering into the contract or arrangement is
first taken in consideration, or if the Director was not at the date of
that meeting interested in the proposed contract or arrangement,
then at the next meeting of the Directors held after he becomes so
interested, and in a case where the Director becomes interested in
a contract or arrangement after it is made then at the first meeting
of the Directors held after he becomes so interested.
(c) Save as provided below, a Director shall not vote in respect of any
contract or arrangement or any other proposal whatsoever in which
he has any material interest otherwise than by virtue of his interests
in Shares or debentures or other securities of or otherwise in or
through the Company unless the nature of his interest is declared
at the first opportunity at a meeting of Directors or by writing to the
Directors and no other Director objects to the interested Director
voting on such arrangement. A Director shall not be counted in the
quorum at a meeting in relation to any resolution on which he is
debarred from voting.
(d) A Director shall (in the absence of some other material interest than
is indicated below) be entitled to vote (and be counted in the
quorum) in respect of any resolution concerning any of the following
matters, namely:
(i) the giving of any security or indemnity to him in respect of
money lent or obligations incurred by him at the request of or
for the benefit of the Company or any of its subsidiaries;
(ii) the giving of any security or indemnity to a third party in respect
of a debt or obligation of the Company or any of its subsidiaries
for which he himself has assumed responsibility in whole or in
part under a guarantee or indemnity or by the giving of security;
DIRECTORS' REMUNERATION
The Bye-Laws of the Company contain provisions, inter alia, to the effect
that the remuneration of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day
to day. The Directors may also be paid all travelling, hotel and other
expenses properly incurred by them in attending and returning from
meetings of the Directors, any committee of the Directors or general
meetings of the Company or in connection with the business of the
Company.
TRANSACTIONS WITH DIRECTORS
(a) A Director may hold any other office or place of profit under the
Company (except that of Auditor) in conjunction with his office of
Director or may act in a professional capacity to the Company on
such terms as to tenure of office, remuneration and otherwise as
the Directors may determine.
(b) No Director or intending Director shall be disqualified by his office
24
(iii) any proposal concerning an offer of shares or debentures or
other securities of or by the Company or any of its subsidiaries
for subscription or purchase in which offer he is or is to be
interested as a participant in the underwriting thereof,
(iv) any proposal concerning any other company in which he is
interested, directly or indirectly and whether as an officer or
shareholder or otherwise howsoever, provided that he is not the
holder of or beneficially interested in 1 % or more of any class
of the equity share capital of such company (or of any third
company through which his interest is derived) or of the voting
rights available to members of the relevant company (any such
interest being deemed for the purpose of these provisions to be
a material interest in all circumstances).
(e) Where proposals are under consideration concerning the
appointment (including fixing or varying the terms of appointment)
of two or more Directors to offices or employments with the
Company or any company in which the Company is interested, such
proposals may be decided and considered in relation to such
Director separately and in such cases each of the Directors
concerned (if not debarred from voting under the proviso to sub
paragraph (iv) of paragraph (d) above) shall be entitled to vote (and
be counted in the quorum) in respect of each resolution except that
concerning his own appointment.
(f) If any question shall arise at any meeting as to the materiality of a
Director's interest or as to the entitlement of any Director to vote
and such question is not resolved by his voluntarily agreeing to
abstain from voting, such question shall be referred to the chairman
of the meeting and his ruling in relation to such Director shall be
final and conclusive except in a case where the nature or extent of
the interests of the Director concerned have not been fairly
disclosed.
BORROWINGS
Under the Bye-Laws of the Company, the Directors may exercise the
Company's power to borrow money. It is intended to use this power in
respect of the Company as a short term basis to provide funds to meet
redemptions.
While it is not the Company's general policy, the Company may also,
from time to time, exercise its power to borrow in order to increase its
exposure to Advisors. The Company's total borrowings will not generally
exceed 25% of the Company's net assets. Further, borrowings by any
Class Fund for the purpose of leverage will not generally exceed 25% of
the Class Fund's net assets.
RISK FACTORS
(g) The Company in a general meeting may suspend or relax these
provisions to any extent or ratify any transaction not duly authorised
by reason of a contravention of the provisions in paragraph (a) to (f)
above.
(h) Any Director may continue to be or become a president, vice
president, director, managing director, manager or other officer or
member of any other company in which the Company may be
interested, and no such Director shall be accountable for any
remuneration or other benefits received by him as a president, vicepresident, director, managing director, manager or other officer or
member of any such other company. The Directors may exercise the
voting powers conferred by the shares in any other company held or
owned by the Company or exercisable by them as Directors of such
other company, in such manner in all respects as they think fit
(including the exercise thereof in favour of any resolution appointing
themselves or any of them president, vice-president, director,
managing director, manager or other officer of such company) and
subject as set out above, any Director of the Company may vote in
favour of the exercise of such voting rights in the manner aforesaid,
notwithstanding that he may be, or be about to be, appointed a
president, vice-president, director, managing director, manager or
other officer of such other company, and as such is or may become
interested in the exercise of such voting rights in the manner
aforesaid.
OTHER CONFLICTS
The Manager, the Investment Manager and other members of the
Pioneer Group may advise or manage and intend to continue to advise
or manage and establish additional investment companies which may
compete with the Company. In addition, the Directors of the Company
may serve as Directors or other controlling persons of such other
companies.
There will be circumstances in which the Investment Manager will
consider participation by other companies or accounts it manages in
investment opportunities to which it may be allocating Company assets.
Such participation may be greater or less than the amount or
percentage of assets allocated on behalf of the Company. The
Investment Manager has agreed to act in a manner that it in good faith
considers fair and equitable in allocating investment opportunities to
the Company.
Investment in the Company is speculative and prospective purchasers
should consider the following risks before subscribing for Shares. These
risks can generally be divided into two categories. Those related to the
Company and those related to the investments.
The assets of each Class, Sub-Class and Series Fund will be subject to
the general creditors of the Company.
OTHER ACTIVITIES OF THE ADVISORS
The Company may allocate certain money to Advisors running managed
accounts. A managed account ("Managed Account") is a commingled
account held in the name of the Advisor in which the funds of all
investors using that manager are pooled. Unlike an investment in a fund,
the Company will not receive shares or any other form of title, but will
simply be entitled to a pro rata share in the contents of the account.
There will be no investment capable of being held by the Custodian on
behalf of the Company, and the Custodian will not be involved in
providing custody for the assets held in the managed account. Any loss
arising as a result of an investment in a managed account will be borne
by the Shareholders.
The Advisors may manage additional customer accounts. Orders for such
accounts similar to those of the Company may occur
contemporaneously. The performance of the Company's investments
could be adversely affected by the manner in which particular orders are
entered for all such accounts.
TRADING AND INVESTMENT RISKS IN GENERAL
All investments risk the loss of capital. Investment in the various
Underlying Funds, managed accounts, securities and other instruments
contemplated by the Company involve significant economic risk.
Although the Company's investment program is expected to provide
some protection from the risk of loss inherent in such investments, there
can be no assurance that its strategy will protect against this risk or that
the Company's investment objectives will be achieved.
The investment return and principal value of an investment will fluctuate
so that a Shareholder’s Shares, when redeemed, may be worth more or
less than their original cost.
25
BORROWING AND LEVERAGE
Borrowing creates leverage, a speculative factor. To the extent the
income derived from the assets obtained with borrowed funds exceed
the interest and other expenses that the Company will have to pay, the
Company's net income will be greater than if borrowing were not used.
Conversely, if the income from the assets obtained with the borrowed
funds is not sufficient to cover the costs of borrowing, the net income of
the Company will be less than if borrowing were not used. The Company
will borrow only when the Investment Manager believes such borrowings
will benefit the Company after taking into account considerations such
as the costs of the borrowing and the likely returns on investments made
with the borrowed monies. In addition, certain Advisors or Underlying
Funds with which the Company or any Class Fund has invested may
operate with a substantial degree of leverage and are not limited in the
extent to which they may borrow or engage in margin transactions.
MANAGED ACCOUNT ALLOCATIONS
The Company may allocate its assets to an Advisor by retaining the
Advisor to manage a Managed Account for the Company, rather than
investing in the Advisor's investment vehicle. Managed Accounts can
expose the Company to theoretically unlimited liability and it is possible,
given the leverage at which certain Advisors trade, that the Company
could lose more in a Managed Account that is managed by a particular
Advisor than the Company has allocated to such Advisor to invest. This
risk may be avoided or mitigated if the Company, instead of retaining an
Advisor to manage a separate account comprised of a designated
portion of the Company's assets, creates a separate investment vehicle
for which the Advisor will serve as general partner or manager and in
which the Company will be the sole limited partner or sole shareholder,
as the case may be. Use of such structures, however, can involve various
expenses and there is no requirement that separate investment vehicles
be used.
CONCENTRATION
Although the intention of the Manager is to achieve a minimum of
diversification, to the extent the Company's investments are
concentrated in any way, the Company may be more vulnerable to
particular economic, political, regulatory or other developments than
would a more diversified portfolio and the aggregate return of the
Company may be substantially adversely affected by the unfavourable
performance of even a single investment.
POSSIBLE EFFECT OF REDEMPTIONS
Shareholders may redeem their Shares in accordance with the Bye-Laws
of the Company. Substantial redemptions could require the Company to
liquidate investments more rapidly than otherwise desirable in order to
raise the necessary cash to fund the redemptions and to achieve a
position appropriately reflecting the smaller equity base. This could
adversely affect the value of both Shares being redeemed and of
outstanding Shares. The risk of decline in Net Asset Value of the Shares
during the period from the date of notice of redemption until the next
Redemption Day in the relevant Class Fund, as specified in that Class
Fund's Supplementary Prospectus, is borne by the Shareholders.
LIMITED LIQUIDITY OF SHARES
It is not expected that there will be any established over-the-counter
26
market for the sale of Shares or that one may develop. No Share may be
transferred directly to or for the account of any US person without the
consent of the Directors.
There will be no secondary market for Shares and consequently,
Shareholders may dispose of their Shares only by means of redemption.
LACK OF MANAGEMENT RIGHTS
Except as may be otherwise provided in the Bye-Laws of the Company,
the holders of the Company's Shares generally have no right to
participate in the management of the Company or vote at any general
meeting. The Company's Founder Share, which carries voting rights, has
been issued to the Manager.
SUBSTANTIAL FEES AND EXPENSES
The Company must make substantial profits in order to avoid depletion
of its assets from expenses. In addition, incentive fees payable to the
Advisors, Underlying Funds and the Manager may be based on both
realised and unrealised gains as of the end of the applicable period. As
a result, incentive fees could be paid on unrealised gain which may
never be realised. Further, payment of a fee based on profits may create
an incentive for the Advisors, Underlying Funds or the Manager to select
riskier or more speculative investments than would be the case in the
absence of such a fee. Finally, the Company may be obligated to pay
incentive fees based on individual Advisors' or Underlying Funds’
performance even if the Company as a whole generated no new profits
or lost money during a particular period.
MULTIPLE ADVISORS OR UNDERLYING FUNDS
The Company will invest with a number of Advisors or Underlying Funds,
each of which trades independently of the others. There can be no
assurances that the use of several different Advisors or Underlying Funds
will not result overall in losses generated by some Advisors or Underlying
Funds exceeding profits achieved by others. In addition, the Advisors or
Underlying Funds may compete with each other from time to time for the
same positions in markets. Conversely, the Company could hold at one
time opposite positions in the same security or commodity in different
accounts managed by different Advisors or Underlying Funds. Each such
position would cost the Company transactional expenses but might not
generate any recognised gain or loss. Finally, there is no assurance that
the selection of multiple Advisors or Underlying Funds will prove more
successful than would the selection of a single Advisor or Underlying
Fund. Moreover, the Company may reallocate its assets among the
Advisors or Underlying Funds, terminate one or more Advisors or
Underlying Funds or select additional Advisors or Underlying Funds at
any time. Any such reallocation could adversely affect the performance
of the Company or of any one Advisor or Underlying Fund.
LIMITED LIQUIDITY OF COMPANY INVESTMENTS
The Company, directly or indirectly, may invest in Underlying Funds or
shares of other open-ended investment schemes. There may be no liquid
secondary market for these shares and some of the companies may
limit the intervals at which the shares may be redeemed. Most of these
entities provide for redemption of interests only at specified intervals
during a year. Consequently, the Company would be unable to liquidate
those interests other than at the specified date.
PRINCIPAL TRANSACTIONS IN DERIVATIVE INSTRUMENTS
The Company, directly or indirectly through Advisors or Underlying Funds,
may trade in derivative instruments such as spot and forward contracts
on foreign currencies with banks or brokers as principals. Although the
market for instruments is not believed to be necessarily more volatile
than the market for the underlying securities or commodities interests,
there is less protection against defaults in principal trading of the same
since such derivative instruments are not guaranteed by an exchange or
clearing house.
SECURITIES TO BE PURCHASED
The Company, directly or indirectly through Advisors or Underlying Funds
may purchase low rated or unrated securities. Such securities may offer
higher returns than do higher rated securities, but generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities. In
addition, the markets for such securities may be limited. The Company
may enter into contracts with dealers as principal to purchase certain
securities. Such transactions are not subject to exchange rules. The
Company, directly or indirectly through Advisors or Underlying Funds may
also purchase securities issued by companies from many countries and
by the countries themselves. Such investments will cause the Company
to be affected by changes in the currency exchange rates and
revaluations of currencies.
SECURITIES ON MARGIN
Borrowing money to purchase securities may provide the Company
Advisors or Underlying Funds with the advantages of leverage, but
exposes it to capital risk and higher current expenses. Any gain in the
value of securities purchased with borrowed money or income earned
from these securities that exceeds interest paid on the amount borrowed
would cause the Company's Net Asset Value per Share to increase faster
than would otherwise be the case. Conversely, any decline in the value
of the securities purchased would cause the Company's Net Asset Value
per Share to decrease faster than would otherwise be the case.
OPTIONS
The Company, directly or indirectly through Advisors or Underlying Funds
may engage in the trading of commodity options including options on
physical commodities, futures contracts and on equity options. Such
trading involves risks substantially similar to those involved in trading
commodity futures contracts or margined securities, in that options are
speculative and highly leveraged. Specific market movements of the
commodities, futures contracts or securities underlying an option cannot
accurately be predicted. The purchaser of an option is subject to the risk
of losing the entire purchase price of the option. The writer of an option
is subject to the risk of loss resulting from the difference between the
premium received for the option and the price of the commodity, futures
contract or security underlying the option which the writer must
purchase or deliver upon exercise of the option.
FEES
As a result of the Company's direct fees and expenses, including the
Management Fees and Performance Fees, the compensation of the
Advisors or Underlying Funds and the indirect burden of fees and
expenses incurred through investment in such other fund vehicles, there
may be multiple layers of fees (including advisory and performance
fees) and greater expense than would be associated with direct
investment in the Company's underlying investments. The Company's
expenses may thus constitute a higher percentage of net assets than the
expenses associated with other investment entities.
INVESTMENT IN OTHER SCHEMES
The securities of Underlying Funds in which the Company may invest are
generally offered on a private placement basis and, unlike more
regulated mutual funds registered for distribution to the public, are
subject to limited regulation, disclosure and reporting requirements.
Accordingly, only a relatively small amount of public information about
Underlying Funds, their holding and performance will be available to the
Investment Manager in managing and assessing the Investments of the
Sub-Funds. For other information relating to the Underlying Funds, the
Investment Manager will be forced to rely on the Underlying Funds
themselves and their Advisors, administrators and agents. Investors
should recognize that the Investment Manager’s ability to monitor the
Advisors will be affected by the amount, timeliness and quality of
information available with respect to these Underlying Funds and their
investment operations, and that the Investment Manager may be
significantly limited in its means of independently verifying much of the
information supplied by the Underlying Funds or their agents. In
addition, the Company will use official valuations of investments held by
the Company in Underlying Funds or other collective investment
schemes, however, where such valuations are not available in other
circumstances determined by the Directors, the Company will use
estimated valuations for such investments.
CURRENCY RISKS
The Company, directly or indirectly, through the Advisors or Underlying
Funds, may invest in securities of issuers in various jurisdictions and
these, if any, may be denominated in currencies other than the Base
Currency of the relevant Class Fund or Sub-Class Fund. The value of such
investments may be affected either favourably or unfavourably by any
fluctuations in the exchange rate between foreign currencies and the
relevant Base Currency. Investing in the securities of companies (and
governments) in certain countries (such as emerging nations or
countries with less well regulated securities markets than the US or the
UK or other European Union countries) involves certain considerations
not usually associated with investing in the securities of a US company
or the US government. These considerations include, among other
things, political and economic considerations, such as greater risks of
expropriation, nationalization and general social, political and economic
instability, the small size of the securities markets in such countries and
the low volume of trading, resulting in a potential lack of liquidity and in
price volatility, fluctuations in the rate of exchange between currencies
and the costs associated with currency conversion, certain government
policies that may restrict investment opportunities, and in most cases
less effective government regulation than is the case in the US.
HEDGING
The Company may utilise options, forward contracts or other instruments
and techniques to hedge against currency fluctuations, but there can be
no assurance that such hedging transactions will be effective and such
instruments and techniques entail additional risks.
27
VALUATIONS
In determining the Net Asset Value per Share of any Class or Sub-Class,
the Directors may from time to time rely on estimates of the value of the
Company’s underlying investments. Where estimated prices are used, it
should be noted that valuations will not generally be revised if such
estimates prove to be inaccurate. In the case that any subscriptions or
redemptions are effected at prices based wholly or partly on estimates
then, to the extent that these estimates are too high, new shareholder
investment will provide a benefit to existing Shareholders; similarly, if
these estimates are too low, existing Shareholders will suffer a dilution
in the value of their Shares.
The foregoing list of factors does not purport to be complete or fully
explain the risks involved in an investment in the Company. Please refer
to the Risk Factors of the attached supplements for a description of the
risks associated with a particular Class Fund. Although HSBC Securities
Services (Luxembourg) S.A. has been appointed to act as SubAdministrator, Sub-Registrar and Sub-Custodian of the Company, the
Company is not registered in Luxembourg. The Company is not subject
to Luxembourg laws and its activities are not supervised in Luxembourg.
ANTI-MONEY LAUNDERING
Measures aimed towards the prevention of money laundering require
each applicant for Shares to document his or her identity to the
Administrator or Sub-Administrator. By way of example, an individual will
be required to produce a copy of a passport or identification card duly
certified by a public authority such as a notary public, the police or the
ambassador in the relevant investor's country of residence, together with
evidence of such individual's address such as a utility bill or bank
statement. In the case of corporate applicants this will require
production of a certified copy of the certificate of incorporation (and any
change of name), memorandum and articles of association (or
equivalent) and the names and addresses of Directors, signatories
and beneficial owners. The foregoing details are by way of example
only and the Administrator or Sub-Administrator may request such
documentation as is necessary to verify the identity of the applicant. Full
details of the anti-money laundering requirements of the Administrator
or Sub-Administrator are set forth in the subscription form.
28
SUPPLEMENTARY PROSPECTUS
6th September, 2005
THE MOMENTUM ALLWEATHER STRATEGIES II MASTER FUND
A CLASS FUND OF
MOMENTUM ALLWEATHER STRATEGIES LIMITED
A Bermuda Mutual Fund Company
Incorporated with Limited Liability
Offer for Subscription of Shares in the following Sub-Classes:
USD Sub-Class
EUR Sub-Class
GBP Sub-Class
JPY Sub-Class
AUD Sub-Class
CHF Sub-Class
MANAGER
INVESTMENT MANAGER
Pioneer Alternative Investment Management (Bermuda) Limited
Pioneer Alternative Investment Management Limited
CUSTODIAN
SUB-CUSTODIAN AND SUB-REGISTRAR
REGISTRAR AND ADMINISTRATOR
The Bank of Bermuda Limited
HSBC Securities Services (Luxembourg) S.A.
Management International (Bermuda) Limited
This Supplementary Prospectus relates to an offering by Momentum AllWeather Strategies Limited (the "Company") of Shares in The Momentum AllWeather Strategies II Master Fund, (the "Fund"),
a Class Fund of the Company. Up to 23,999,900 Shares of the Company are available for issue as Shares of the Fund and as Shares of such other Classes and Sub-Classes as may be determined
by the Directors from time to time, each Class being offered pursuant to a separate Supplementary Prospectus.
It is important to note that the information contained in this Supplementary Prospectus should be read in addition to the general information about the Company contained in the Company's
prospectus (the "Prospectus") dated 6th September 2005. The information contained herein is relevant specifically to the Fund and in no way constitutes an offer for Shares independent of the
Prospectus. Save as otherwise defined herein the capitalised terms used in this Supplementary Prospectus shall have the same meaning as in the Prospectus. The permission of the Bermuda
Monetary Authority (the "Authority") has been obtained for the issue of the Shares for public offer by the Company. Approvals or permissions received from the Authority do not constitute a
guarantee by the Authority as to the performance of the Fund or creditworthiness of the Company involved. Furthermore, in giving such approvals or permissions, the Authority shall not be liable
for the performance or default of the Fund or for the correctness of any opinions or statements expressed. A copy of the Prospectus and this Supplementary Prospectus have been delivered to
the Registrar of Companies in Bermuda for filing pursuant to the Companies Act 1981 of Bermuda. Terms not defined herein shall have the meanings ascribed to them in the Prospectus.
The Fund is not registered in Luxembourg. The Fund is not subject to Luxembourg law and its activities are not supervised in Luxembourg.
S-1
SUMMARY
The information set forth below should be read in conjunction with, and
is qualified by, the full text of this Supplementary Prospectus and the
Prospectus, both of which should be read in their entirety.
THE FUND
Shares in The Momentum AllWeather Strategies II Master Fund (the
"Fund") are available for offer in the USD, EURO, GBP, AUD, JPY and CHF
Sub-Classes. Such Sub-Classes each have a different Base Currency
corresponding to the currency reflected in the name of each Sub-Class.
Investments of the assets of each Sub-Class Fund may be made in
currencies other than the Base Currency of the relevant Sub- Class. All
Sub-Classes in the Fund have a common investment objective.
OFFERING
Shares are available for subscription pursuant to the Prospectus and
this Supplementary Prospectus on the first Business Day of each
month (each, a "Dealing Day") at the subscription price per Share. The
subscription price (subject to the subscription charge described below)
will be payable in full on application.
Investors purchasing Shares for the first time must complete the
appropriate documentation as may be required by the Company and/or
relevant placement agent. Not all Sub-Classes of Shares will be
available through each placement agent. Investors should check with
their placement agent for details. Investors purchasing Shares through
certain placement agents may have an account opened in the name of
such placement agent or of an affiliate of such placement agent
and Shares may be registered in the name of the placement agent or
its affiliate or nominee. Accordingly, any subsequent purchases,
redemptions or other instructions relating to the Shares will need to be
made through such placement agent. The only party with authority to
accept or reject a purchase, conversion or redemption request on behalf
of the Company is the Sub-Registrar.
INVESTMENT OBJECTIVE
The objective of the Fund is to achieve steady capital appreciation in all
market conditions with minimal drawdowns, low volatility and limited
correlation to the equity and bond markets. The Fund aims to achieve
absolute returns without reference to specific stock market indices.
INVESTMENT STRATEGY
The Investment Manager will select specialised managers and or trading
advisors (collectively the "Advisors") that it deems best suited to exploit
the investment strategies chosen as the means of implementing the
objective. Investments with Advisors will be made through investment in
Underlying Funds or other fund vehicles or through investment in
individually managed accounts. The Advisors or Underlying Funds may
include related persons, employees and affiliates of the Investment
Manager. The Fund may also allocate assets to other funds managed by
the Manager or Affiliates of the Manager. The Fund seeks steady
absolute returns through all market environments without reference to
any particular market or index while maintaining a particular aversion to
downside risk. The Fund achieves its consistency of return and lack of
correlation by allocating assets across event-driven strategies combined
with a diversified holding of hedged equity and trading investment
S-2
styles. Each of the Fund’s core holdings has a history of low volatility
returns; in combination the Fund’s investments aim to produce
consistent returns through economic cycles with limited market
correlation. A substantial portion of the Fund’s assets may be allocated
to event-driven strategies. Event-driven investments are characterised by
transparency and predictability of returns. An event-driven or special
situation investment may be defined as an investment opportunity where
there is a perceived differential between the value to be received from
an investment upon successful completion of an anticipated transaction
or event, and the current market price. Typically there will be a catalyst
or an event which is responsible for the realisation of this value. The core
event-driven sectors in the Fund are: distressed securities; asset-backed
lending; loan origination and merger arbitrage. The event-driven
investments are combined with diversified hedged equity and trading
strategies that aim to provide low volatility exposure to the traditional
capital markets. This part of the portfolio is biased towards strategies
whose objective is to hedge out maximum amount of market risk seeking
steady returns across market environments. The Fund also includes:
long/short equity investments and asset allocation styles which adopt
hedged exposure to the stock, bond and cash markets. This component
of the Fund aims to outperform during strong markets and to minimise
losses in declining markets. The Fund’s trading allocation seeks low
volatility returns from the global equity and commodity markets.
Distressed Securities
Distressed securities investing involves investment in the secured debt
of distressed companies. Distressed securities include the debt
obligations of companies which are, or are likely to become, subject to
US or foreign bankruptcy proceedings, as well as healthy companies
having short-term cash flow or liquidity problems. The Fund’s distressed
strategies focus on senior secured debt which is valued at a significant
discount to its real value calculated on the basis of a company’s
realisable assets. Distressed security investing produces well above
average, long-term risk-adjusted returns with low market correlation.
Distressed securities investing provides contra-cyclical portfolio balance
producing its best returns during economic recession.
Asset-Backed/Loan Origination
Loan origination is asset-backed lending where companies are financed
based on their asset and liquidation values and not on their operations
or future business prospects. These loans are generally secured by all
the company’s assets and are made when these substantially exceed
the amount of the loan. At times, a favourable investment outcome is for
the company to default thereby enabling the lender to foreclose on and
sell the collateral that had over-secured the loan. Loan origination, i.e.,
making loans to companies with cash flow difficulties, is an offshoot of
distressed debt investing, i.e., purchasing existing bank loans which
have been made to troubled companies. Practitioners of the strategy,
therefore, bring the skills to understand a company’s assets and
accurately predict its liquidation value as well as the ability to realise the
assets over-collateralising the loan in the event of a default. This strategy
generally has almost no market correlation.
Merger Arbitrage
Investments are made in the merger arbitrage sector, principally but not
exclusively in North America. Also known as risk arbitrage, the approach
is designed to profit from the successful completion of proposed
mergers, take-overs, tender offers, leveraged buy-outs, liquidations and
other corporate re-organisations. Generally, in such a transaction, the
stock of an acquisition target appreciates while the stock of the
acquiring company depreciates in value. By going long of the target
company and short of the acquirer’s stock, the strategy aims to generate
returns through the successful completion of the proposed merger. The
discount level prior to the successful completion is best described as
reflecting the uncertainties surrounding the completion of the
transaction. Although this spread is representative of numerous issues,
the state of agreement between the two parties (whether friendly or
unfriendly), the complexity of the deal, the regulatory status, the
possibility of other bids or interventions, the deal’s financing and the
likelihood of timely completion are all factors taken into account. The
discount level can therefore be viewed as ‘transaction risk’, where the
greater the uncertainty, the greater the discount will be. Merger arbitrage
Advisors seek their profits from a realisation of the price differential
between the market price of the securities purchased and the value
realised upon the merger of the two entities. Market risk and transaction
risk are often reduced through the use of option trading and short
selling.
extent. The Advisor develops its own computer programs to search for
patterns in data and develops trading strategies in an attempt to exploit
those patterns. The trading decisions are based on a combination of
these computer systems and its own trading discretion, judgement and
experience. The methodology is systematic, but not automatic or robotic.
Trading decisions require the exercise of judgment by the Advisor in the
evaluation of trading methods used, in their possible modification from
time to time, and in their implementation. The Advisor analyses and
trades approximately 150 commodities and securities markets worldwide, although not all such markets are continuously monitored. At any
given time, the Advisor typically holds positions in an average of
approximately 70 of such 150 markets.
Convertible Arbitrage
Convertible bond arbitrage typically involves the purchase of an
undervalued convertible bond or warrant while simultaneously delta
hedging through the selling of the underlying equity, with the aim of
creating a "market neutral" investment with high current income and
limited exposure to stock-market fluctuations. The favoured strategies
employ an optimal mix of domestic, international and discount
convertible arbitrage situations, where the attempt is to earn 200-300
basis points above the cost of money from the static return (free cash
flow from the position’s coupons plus short rebate minus stock
dividends - if any - and margin financing) and an extra 200-300 basis
points from their trading operations. The Fund generally favours
strategies which employ ‘bottom-up’ credit quality analysis and strictly
managed hedge ratios. Portfolio diversification is achieved through
combining different industries, securities and trading strategies. Market
risk is generally reduced through hedging the portfolio on both a
transaction and market basis, while forex risk is offset to create currency
neutral positions where necessary.
(i) No more than 20% of the value of the gross assets of the Fund may
be lent to or invested in securities of any one issuer or may be
exposed to the creditworthiness or solvency of any one
counterparty;
Equity Hedged Long And Short/Equity Split Strike Conversion
Equity Hedged Long and Short Advisors trade both long and short in the
US and international equity markets. With emphasis on capital
preservation, allocation is made to Advisors who have shown an ability
to minimise losses during negative market periods and to perform well
during strong market periods. The Advisors used carry diversified
portfolios and focus on long and short equity securities, in addition to
matched pairs and the use of other financial instruments, including
stock indices, options, bonds and cash equivalents, to increase flexibility
and reduce the risk of capital loss. A bottom-up approach is favoured
amongst these Advisors, who trade in large, medium and smaller
capitalised stocks. The split strike conversion strategy is based around
the purchase of equities, or a basket of equities (typically in the S&P
100) and then selling out of the money calls which equal the underlying
positions. The premium taken in through the selling of the calls then
funds the purchase of puts which in turn protect the portfolio on the
downside.
TRADING STRATEGY
The trading strategy employs a computerised statistical approach –
based on an extensive proprietary database of prices, volume, open
interest and various other market statistics – to the development and
monitoring of trading strategies. Market charting is used only to a timing
INVESTMENT AND BORROWING RESTRICTIONS
The following investment restrictions will be complied with by the Fund:
(ii) The Fund may not seek to take legal or management control of the
issuer of any of its underlying investments;
(iii) The Fund will adhere to the general principle of risk spreading in
respect of its investments in derivatives and money market
instruments;
(iv) No more than 20%, in aggregate, of the value of the gross assets of
the Fund may be invested in other funds whose principal investment
objectives include investing in other funds;
(v) Up to 40%, in aggregate, of the value of the gross assets of the Fund
may be invested in any other fund or allocated to any one
investment manager, provided that that other fund or investment
manager operates on the principle of risk-spreading. The Investment
Manager will endeavour to monitor the underlying investments of
these other fund(s) and investment managers to ensure that, in
aggregate, the restrictions (i) above are not breached. In the event
that the Investment Manager becomes aware that the restrictions in
(i) above are breached, the Investment Manager must take
immediate corrective action. The restrictions outlined in (i) above
shall not apply to securities which are issued or guaranteed by a
government, governmental agency or instrumentality of a member
state of the Organisation for Economic Co-operation and
Development ("OECD") or by any supranational authority of which a
member state of the European Union or OECD is a member.
These investment limits apply to any investment at the time that
investment is made, apart from (ii) which applies at all times. These
investment limits apply to any investment at the time that the
investment is made, apart from (ii) which applies at all times. The
principal investment objectives and policy of the Fund will be
adhered to for at least three years from the date of commencement
of operations except in exceptional circumstances and then only
with the consent of a majority of Shareholders. After three years, the
Fund may only change its investment objectives and policy in
accordance with the Company’s Bye-Laws and Bermuda Law.
S-3
Under the Bye-Laws of the Company, the Directors may exercise the
Company's power to borrow money. It is intended to use this power in
respect of the Company on a short term basis to provide funds to meet
redemptions. While it is not the Company's general policy, the Company
may also, from time to time, exercise its power to borrow in order to
increase its exposure to the underlying investments. The Company's total
borrowings will not generally exceed 25% of the Company's assets.
Further, borrowings by any Class Fund for the purpose of leverage will not
generally exceed 25% of the Class Fund's assets.
thereafter and their holding of the Master Series Shares confirmed. By
subscribing for Shares other than Master Series Shares, each
Shareholder will have irrevocably authorised and directed the Directors
to convert such Shares (in so far as they are not redeemed) into Master
Series Shares as set forth above.
FEES AND EXPENSES
PRELIMINARY EXPENSES
In addition, the Company at the discretion of the Directors, may arrange
a credit facility to facilitate investment in the underlying assets. The
Company's purchase of underlying assets will ordinarily occur two
Business Days prior to the calendar month end preceding the relevant
Dealing Day following receipt of subscription applications. Thus, the
Company may borrow under the credit facility to purchase shares to
anticipate investment of incoming subscriptions from investors. The
costs associated with any such borrowing will be charged to
Shareholders.
THE MOMENTUM ALLWEATHER STRATEGIES II MASTER FUND
SHARES
The Company intends to issue Shares of each Sub-Class of the Fund in
Series within each Sub-Class (each, a "Series" and unless the context
otherwise determines, the use of the term "Shares" in this
Supplementary Prospectus includes all Series of each Sub-Class of the
Fund. Master Series Shares of each Sub-Class of the Fund will be sold
at the beginning of each financial year and on the Dealing Day occurring
on or after 30 June in each year and the remaining Series will generally
be sold on a monthly basis during the interim periods ("Monthly Series
Shares"). The reason for the different Series is to equitably reflect the
differing Performance Fee attributable to each Series (because of the
different issue dates throughout the financial year). As at the first
Dealing Day in a financial year and the first Dealing Day on or after 30
June in each year (each a "Conversion Date"), where the Net Asset Value
per Share of the relevant Master Series exceeds its previous highest Net
Asset Value per Share of that Master Series, each other Monthly Series
whose Net Asset Value per Share exceeds the previous highest Net Asset
Value per Share of that Series will be converted into Master Series
Shares so that after the relevant Conversion Date all Shares will be
Master Series Shares. The Net Asset Value per Share of all Shares of any
one Series will be the same. After allocation of the Performance Fee, the
Net Asset Value per Share is calculated for each Series of Shares as at
the Valuation Day that occurs immediately prior to the relevant
Conversion Date and (a) in the event that the Net Asset Value per Share
is identical for the Monthly Series Shares, the Directors will convert the
Shares of each Monthly Series into Shares of the Master Series. The rate
at which the holding of the relevant Monthly Series Shares shall be
converted into the Master Series Shares shall be on a one-for-one basis;
or (b) in the event that the Net Asset Value per Share varies for different
Monthly Series then the Directors shall convert the Shares of each
Monthly Series into Shares of the Master Series based on a conversion
ratio equal to the ratio of the Net Asset Value per Share of the relevant
Monthly Series to the Net Asset Value per Share of the Master Series.
If the Master Series is below its high watermark as at a Conversion Date
then it will stay a separate series until the next occuring Conversion
Date.
Shareholders will be notified of the conversion as soon as practicable
S-4
The costs incurred with respect to incorporating the Company amounted
to approximately USD 77,000 and will be allocated between all Class
Funds pro rata to the value of the net assets of the relevant Class Funds
following their launch and will be, together with expenses in connection
with the preparation of the Prospectus and Supplementary Prospectus,
be amortised over the first five accounting periods (60 months) of the
Company.
All preliminary expenses incurred in connection with the creation of a
Class Fund and the expenses of the issue of Shares in the various SubClasses and/or Series, including, without limitation, professional fees
and expenses in connection with the preparation of this Prospectus and
the agreements to which the Company is party, will be paid out of the
proceeds of the offer of Shares pro-rata among the Series of each Class
Fund and will be amortised over a period of 60 months.
All preliminary expenses incurred in the formation and issue of Shares
of all other Class Funds are not expected to exceed USD 30,000 per
Class Fund.
MANAGEMENT FEE
The Company will be charged by the Manager, a Management Fee of
1.5 % per annum of the monthly Net Asset Value of the relevant Series,
respectively, before deduction of Performance Fees for such Series. The
Management Fees are payable monthly in arrears to the Manager.
The Fund may invest in other Class Funds or Sub-Class Funds of the
Company, but will not be subject to additional management fees or
performance fees as a result of such investments. It is the intention of
the Directors that in those circumstances the Fund will not be subject to
additional fees. That is, where the Fund invests in another Class Fund
(the "Investee Class") of the Company or other funds managed by the
Manager, all Management Fees charged to the Investee Class in respect
of investments attributable to the Fund will be reimbursed to the Fund.
PERFORMANCE FEE
Each Series will be charged a Performance Fee by the Manager of an
amount equal to 10% of the increase (if any) in such Series' Net Asset
Value per Share at the end of each month (before deduction of such
Performance Fee, but after deduction or accrual of all other expenses
and liabilities) above the previous highest such value at the end of any
preceding month or if such Series of Shares was not outstanding at the
end of the preceding month, above the offering price per Share of such
Series, after adjusting as necessary for subscriptions and redemptions
from the Series multiplied by the number of Shares of such Series in the
Fund (in issue or deemed to be in issue) at the end of the month in
respect of which the Performance Fee is being calculated. Any
Performance Fee due will be paid monthly. A portion of the Performance
Fee may be remitted to the placement agent. The Manager will be
responsible for the payment of any fees of the Investment Manager out
of its Performance Fee.
The Manager or Investment Manager, as the case may be, may at its
option rebate to any particular Shareholder all or a portion of the
Performance Fees charged.
SUBSCRIPTION CHARGE
All subscriptions for Shares will be subject to a charge of up to 5%
calculated as a percentage of the total amount subscribed by an
applicant for Shares. Such charge will be deducted from the applicant's
subscription payment for purposes of determining the net amount
available for investment in Shares, and will be paid to the Manager,
pursuant to the Management Agreement, for services in connection with
the solicitation of subscriptions. The Manager may remit all or a portion
of such subscription charges to placement agents.
SUBSCRIPTIONS & REDEMPTIONS
SUBSCRIPTION FOR SHARES
Shares of the Fund are available for subscription as of each Dealing Day
at the subscription price per Share of the relevant Sub-Class (subject to
any relevant subscription charge described above). Shares of each SubClass will generally be issued in a new Series as of each Dealing Day
(see above under "The Momentum AllWeather Strategies II Master Fund
Shares").
Except by special "arrangement" with the Directors of the Company and
with the consent of the Manager, the minimum subscription (inclusive of
the subscription charge) per investor is USD 25,000 (or its equivalent in
the relevant Base Currency) and subscriptions are payable only in the
relevant Base Currency relating to the Sub-Class being subscribed for.
Further subscriptions are subject to a minimum of USD 25,000 (or its
equivalent in the relevant Base Currency).
In order to ensure that applications are processed as of any Dealing Day,
applications specifying the number of Shares (or currency value thereof)
to be purchased must be received by the Sub-Registrar by 1.00pm
(Luxembourg time), at least four Business Days prior to the relevant
Dealing Day.
Applications, once submitted to the Sub-Registrar, are irrevocable. The
issuance of Shares is subject to confirmation of the prior receipt of
cleared funds credited to the Company's subscription account at the
Sub-Registrar. Subscription monies must be received and cleared in
the Company's subscription account at least four Business Days prior to
the relevant Dealing Day. The Directors of the Company reserve the right
to reject subscriptions, in whole or part, at their absolute discretion.
The Net Asset Value per Share of each Series of each Sub-Class will be
determined as of each Valuation Day and will be available on the 20th
day of each month (C.O.B Luxembourg time) or earlier if circumstances
permit.
Details of the subscription procedures are set forth under
"SUBSCRIPTION INSTRUCTIONS" at the back of this document. Investors
buying Shares through a placement agent should enquire of the agent
as to any amended/additional conditions for subscription.
REDEMPTION OF SHARES
The Directors have determined that, in respect of this Fund, a
Redemption Day shall be the last Business Day of each calendar quarter
or such other day or days as the Directors may determine in a particular
case or generally.
Shares may generally be redeemed as of any Redemption Day provided
that prior written notice has been given to the Sub-Registrar not less
than 35 days prior to the calendar quarter end. Requests received
outside this time limit will be treated as requests for redemption on the
next following Redemption Day.
The net redemption proceeds will normally be remitted within 5 days
after the publication of the Net Asset Value per Share (which as noted
above under "Subscription for Shares" will be on the 20th day (C.O.B
Luxembourg time), of each month following the end of each calendar
quarter or earlier if circumstances permit , without interest for the period
from the Redemption Day to the payment date providing that the original
redemption request has been received by mail. The redemption price of
each Share will be equal to the Net Asset Value per Share of the relevant
Series in the Fund prevailing as of the relevant Redemption Day. Net
Asset Value determinations will be based on the market value of the
Fund's assets as of each Valuation Day, after deducting all accrued
debts and liabilities attributable to the Fund, including any
contingencies for which reserves are determined to be required.
The Fund may retain a balance of up to 5% of a redeeming
Shareholder's monies until balances owing to the Company in respect
of redemptions of underlying assets are paid to the Fund. The Company
will pay interest to the redeeming Shareholder on any payment not made
within 30 days after the Redemption Day. Accrual of such interest
payment shall commence after such 30th day.
The Directors reserve the right, in their absolute discretion, to limit the
redemptions to 10% of the Net Asset Value of the Fund on any one
Redemption Day. If redemption requests in excess of this are received in
respect of any Redemption Day, the Directors may, in their absolute
discretion, reduce all requests pro-rata and any unsatisfied requests will
be carried forward to the next or subsequent Redemption Days, subject
to the same limitation. Notwithstanding the above, the Directors reserve
the right to meet all or part of redemption requests which exceed 10%
of the Net Asset Value by a redemption in specie.
As the Fund meets its investment objective primarily by investing in the
Master Fund, any decision to limit redemptions for any particular
Redemption Day will be based primarily on an analysis of the liquidity
available in the portfolio of the Master Fund.
In unusual circumstances relating to the withdrawal of underlying assets
from certain of the Fund's investments, the Fund may remit 80% of net
redemption proceeds following receipt of redemption instructions, the
balance being remitted within 90 days of the Redemption Day, excluding
the 5% referred to above.
The Minimum Holding in respect of each Sub-Class of this Fund is USD
10,000 (or its equivalent in the relevant Base Currency) waivable at the
discretion of the Directors. Where a redemption request would result in
a shareholding being reduced below a net asset value of USD 10,000
(or the relevant currency equivalent) the request will be deemed to be a
redemption for the whole of such shareholding.
S-5
Shareholders wishing to redeem Shares may do so by means of a
written request sent to the Sub-Registrar stating the number of Shares
to be redeemed and the registration details. If the Shares are held in
certificated form, the relevant share certificate(s) must accompany the
redemption request. A request for redemption, once submitted to the
Sub-Registrar, may not be withdrawn except with the consent of the SubRegistrar.
THAT ANY SUBSCRIPTIONS OR REDEMPTIONS ARE EFFECTED AT PRICES
BASED WHOLLY OR PARTLY ON ESTIMATES THEN, TO THE EXTENT THAT
THESE ESTIMATES ARE TOO HIGH, NEW SHAREHOLDER INVESTMENTS
WILL PROVIDE A BENEFIT TO EXISTING OR REDEEMING SHAREHOLDERS;
SIMILARLY, IF THESE ESTIMATES ARE TOO LOW, EXISTING OR REDEEMING
SHAREHOLDERS WILL SUFFER A DILUTION IN THE VALUE OF THEIR
SHARES.
Redemption requests may be sent by facsimile at the risk of the relevant
Shareholder. No redemption proceeds will be sent out until the original
redemption is received by the Sub-Registrar together with any other
documents required by the Sub-Registrar or the Company.
CONVERSION OF SHARES
No Shares may be redeemed during any period when the determination
of the Net Asset Value of the Shares is suspended in the circumstances
described under "Determination of Net Asset Value" of the Prospectus.
Violation of applicable ownership and transfer restrictions, described
herein, may result in compulsory redemption. The Directors may delegate
to the Manager the exercise of the various discretions granted to them
by the Prospectus, this Supplementary Prospectus or the Bye-Laws.
Shareholders redeeming Shares held through a placement agent should
enquire of the agent as to any amended/additional conditions of
redemption.
VALUATIONS
IN ACCORDANCE WITH THE DISCRETION AFFORDED THE DIRECTORS TO
SET DIFFERENT VALUATION DAYS IN A PARTICULAR CASE OR GENERALLY,
THE DIRECTORS HAVE DETERMINED THAT THERE SHALL BE TWO
VALUATION DAYS IN EACH MONTH IN RESPECT OF THE FUND. THESE
SHALL BE ON THE 22nd DAY OF EACH MONTH (OR THE IMMEDIATELY
PRECEDING BUSINESS DAY IF SUCH DAY IS NOT A BUSINESS DAY) AND
ON THE BUSINESS DAY IMMEDIATELY PRECEDING EACH DEALING DAY.
INVESTORS SHOULD NOTE THAT VALUATIONS MADE FOR THE FIRST
VALUATION DAY SHALL MADE IN ACCORDANCE WITH THE COMPANY’S
BYE-LAWS BUT, GIVEN THE VALUATION DATES ON WHICH
ADVISORS/UNDERLYING FUNDS GENERALLY CALCULATE THEIR NET
ASSET VALUES WILL NOT COINCIDE WITH THE TIMING OF THE FIRST
VALUATION DAY, VALUATIONS MADE ON THE FIRST VALUATION DAY SHALL
BE BASED ON ESTIMATES OF THE VALUE OF INVESTMENTS IN THE
UNDERLYING FUNDS HELD BY THE COMPANY. REDEMPTIONS ARE
GENERALLY EXPECTED TO OCCUR ON THE SCHEDULED DEALING DAYS
AND THE REDEMPTION PRICE WILL BE BASED ON THE PREVAILING NET
ASSET VALUE PER SHARE AS DETERMINED AS OF THE SECOND
VALUATION DAY. SUCH VALUATIONS MADE AS OF THE SECOND
VALUATION DAY IN ANY MONTH WILL MADE BY REFERENCE TO THE LAST
AVAILABLE PRICES ISSUED BY OR ON BEHALF OF THE UNDERLYING
FUNDS ALTHOUGH IT IS POSSIBLE THAT THE DIRECTORS MAY FROM TIME
TO TIME RELY ON ESTIMATED PRICES AS PROVIDED IN THE BYE-LAWS.
SUCH ESTIMATES MAY BE PROVIDED BY OR ON BEHALF OF THE
UNDERLYING FUNDS, THEIR RESPECTIVE ADMINISTRATORS, ADVISORS
OR OTHER AGENTS. THE LATEST AVAILABLE ESTIMATES WILL BE USED
BUT INVESTORS SHOULD NOTE THAT THE TIMING OF THESE ESTIMATES
MAY NOT COINCIDE WITH THE TIMING OF THE FUND’S VALUATION DAY
AND THEREFORE SUCH ESTIMATES MAY NO LONGER BE VALID AS AT THE
VALUATION DAY. THE COMPANY HAS NO ABILITY TO ASSESS THE
ACCURACY OF THE VALUATIONS OR ESTIMATES RECEIVED FROM THE
UNDERLYING FUNDS OR THEIR SERVICE PROVIDERS. WHERE ESTIMATED
PRICES ARE USED, IT SHOULD BE NOTED THAT VALUATIONS WILL NOT BE
REVISED IF SUCH ESTIMATES PROVE TO BE INACCURATE. IN THE CASE
S-6
If during a particular financial year, Shares of any Series, other than the
Master Series, have been issued, the Shares thereof held by a particular
Shareholder, subject to the conditions below, will be converted into
Shares of the Master Series at the beginning of each financial year and
on the Dealing Day occurring on or after 30 June in each year. Where the
Net Asset Value per Share of the relevant Master Series exceeds its
previous highest Net Asset Value per Share of that Master Series, each
other Monthly Series whose Net Asset Value per Share exceeds the
previous highest Net Asset Value per Share of that Series will be
converted into Master Series Shares so that after the relevant
Conversion Date all Shares will be Master Series Shares. After allocation
of the Performance Fee, the Net Asset Value per Share is calculated for
each Series of Shares as at the Valuation Day immediately preceding the
relevant Conversion Date and (a) in the event that the Net Asset Value
per Share is identical for the Monthly Series Shares, the Directors will
convert the Shares of each Monthly Series into Shares of the Master
Series. The rate at which the holding of the relevant Monthly Series
Shares shall be converted into the Master Series Shares shall be on a
one-for-one basis; or (b) in the event that the Net Asset Value per Share
varies for different Monthly Series then the Directors shall convert the
Shares of each Monthly Series into Shares of the Master Series based
on a conversion ratio equal to the ratio of the Net Asset Value per Share
of the relevant Monthly Series to the Net Asset Value per Share of the
Master Series. Shareholders will be notified of the conversion as soon
as practicable thereafter and their holding of the Master Series Shares
confirmed.
In addition, at the request of aShareholder, Shares of the Fund may be
converted into Shares of the corresponding Series of any other Class
Fund in the Company. The process for conversion is described in the
Company's Standing Prospectus under "SHARES OF THE COMPANY –
Conversion".
ADDITIONAL INFORMATION
AUDITORS' PERMISSION
The Auditors to the Company have accepted their appointment as
auditors to the Company and have given and have not withdrawn their
consent to the references to them in this Supplementary Prospectus as
having accepted appointment as auditors to the Company in the form
and context in which they are included.
MINIMUM AMOUNT
The minimum amount which, in the opinion of the Directors, must be
raised by the issue of Shares pursuant to the Prospectus and this
Supplement to provide for the matters referred to in Section 28 of the
Companies Act 1981 of Bermuda is nil.
RISK FACTORS
ALL SECURITIES INVESTMENTS RISK THE LOSS OF RETURN OF CAPITAL.
NO GUARANTEE OR REPRESENTATION IS MADE THAT THE FUND WILL
ACHIEVE ITS INVESTMENT OBJECTIVES. AN INVESTMENT IN THE FUND IS
SPECULATIVE AND INVOLVES CERTAIN RISKS THAT PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY BEFORE SUBSCRIBING.
PROSPECTIVE INVESTORS ARE REFERRED TO THE RISK FACTORS
DESCRIBED IN THE STANDING PROSPECTUS. PROSPECTIVE INVESTORS
ARE URGED TO CAREFULLY READ AND REVIEW THE PROSPECTUS FOR
SUCH FUND WHICH IS AVAILABLE FROM THE SUB-REGISTRAR.
Each Sub-Class Fund’s investments that are denominated in currencies
other than the Base Currency of that Sub-Class Fund are subject to the
risk that the value of a particular currency will change in relation to one
or more other currencies. This could result in an investment loss even
though the investment actually increased in value measured in its own
currency. Among the factors that may affect currency values are trade
balances, the level of short-term interest rates, differences in selective
values of similar assets in different currencies, long-term opportunities
for investment and capital appreciation and political developments. The
Investment Manager may try to hedge these risks by investing in
currencies, currency futures contracts, forward currency contracts,
swaps, options on the foregoing, or any combination thereof (whether
exchange traded or over-the-counter) but there can be no assurances
that such strategies will be effective. Since the over-the-counter
instruments are not guaranteed by an exchange or clearing house, a
default on the instruments would deprive the Fund of unrealised profits
or force the Fund to cover its commitments for purchase or resale, if any,
at the current market price.
There can be no assurance that the Fund will achieve its investment
objectives. An investment in the Fund should be considered speculative,
as there can be no assurance that the Investment Manager's
assessment of the short-term or long-term prospects of investment will
prove accurate. The investment return and principal value of an
investment will fluctuate so that a Shareholder's Shares, when
redeemed, may be worth more or less than their original cost.
There is limited liquidity of the Shares as it is not expected that there will
be any secondary market for the Shares and there are restrictions on
transferability.
The risk of any decline in Net Asset Value of the Shares during the period
of at least 35 days from the date of notice of redemption until the
Redemption Day is borne by the Shareholders.
The Bye-Laws of the Company provide that, as among holders of
different Series, Sub-Classes and Classes, net capital appreciation and
depreciation attributable to a Series, Sub-Class or Class of Shares will
be allocated only to the relevant Series, Sub-Class or Class. Similarly,
expenses attributable solely to such Series, Sub-Class or Class will be
allocated solely to that Series, Sub-Class or Class. However, a creditor of
the Company will not generally be bound to satisfy its claims from a
particular Series, Sub-Class or Class. Rather, such creditor may seek to
satisfy its claims from the assets of the Company as a whole. Thus, if a
creditor's claims relating to a particular Series, Sub-Class or Class
exceed the net assets attributable to such Series, Sub-Class or Class,
the remaining assets of the Company including those attributable to
other Series, Sub-Class or Classes will be subject to such claim.
All calculations based on the value of investments held by the Company
in underlying funds will be made by reference to the last available prices
issued by or on behalf of such vehicles. A number of such calculations
may be made on the basis of estimated prices. The Company has no
ability to assess the accuracy of the valuations or estimates received
from the underlying funds. The Company's Net Asset Value calculations
will not generally be revised if such estimates prove to be inaccurate
unless materially different from the actual values. In the case that any
subscriptions or redemptions are effected at prices based on estimates
then, to the extent that these estimates are too high, new shareholder
investment will provide a benefit to existing or redeeming Shareholders.
Similarly, if these estimates are too low, existing or redeeming
Shareholders will suffer a dilution in the value of their Shares.
POSSIBLE EFFECT OF REDEMPTIONS
Shareholders may redeem their Shares in accordance with the Bye-Laws
of the Company. Substantial redemptions could require the Company to
liquidate investments more rapidly than otherwise desirable in order to
raise the necessary cash to fund the redemptions and to achieve a
position appropriately reflecting the smaller equity base. This could
adversely affect the value of Shares being redeemed and of outstanding
Shares. In addition, in certain circumstances the Company may be
required to borrow to raise cash to fund redemptions and the cost of
such borrowing will be borne by remaining Shareholders.
LACK OF US REGULATION
While the Fund may be considered similar to an investment company, it
does not intend to register as such under the US Company Act in
reliance upon an exception available to privately offered investment
funds, and, accordingly, the provisions of that Act (which, among other
matters, require investment companies to have disinterested Directors,
require securities held in custody to at all times be individually
segregated from the securities of any other person or marked to clearly
identify such securities as the property of such investment company and
regulate the relationship between the adviser and the investment
company) will not be applicable.
LACK OF CFTC REGULATION
While the Class Funds in which the Fund invests may trade commodity
futures and/or commodity options contracts, the Manager is exempt
from registration with the US Commodity Futures Trading Commission
("CFTC") as a commodity pool operator ("CPO") under CFTC rule
4.13(a)(4). Therefore, unlike a registered CPO, the Manager is not
required to provide a CFTC compliant disclosure document to
prospective shareholders, nor is it required to provide shareholders with
certified annual reports that satisfy the requirements of CFTC rules
applicable to registered CPOs.
The CFTC exemption rule requires, among other things, that each
shareholder in the Fund be a Non-United States person under CFTC
rules, satisfy certain sophistication criteria, or otherwise be an eligible
investor specified in the rule. It also requires that interests in the Fund
be exempt from registration under the Securities Act of 1933 and be
offered and sold without marketing to the public in the United States.
None of the Fund's Prospectus, Supplemental Prospectus or
Supplemental Disclosure Statement for US Persons has been reviewed
or approved by the CFTC.
S-7
THE FOREGOING LIST OF RISK FACTORS DOES NOT PURPORT TO BE A
COMPLETE ENUMERATION OF THE RISKS INVOLVED IN AN INVESTMENT
IN THE FUND. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
PROFESSIONAL OR FINANCIAL ADVISORS BEFORE DECIDING TO
SUBSCRIBE FOR SHARES.
The issuance of Shares is subject to confirmation of the prior receipt of
cleared funds credited to the Company's subscription account at the
Sub-Registrar at least four Business Days prior to the relevant Dealing
Day. The Directors of the Company reserve the right to reject
subscriptions, in whole or part, in their absolute discretion.
NOTICE TO INVESTORS
In order to facilitate prompt and accurate crediting of subscription
payments, subscribers must notify the Sub-Registrar, prior to remitting
payment by telex transfer, of the details of the subscription payment,
indicating (i) the name of the subscriber, (ii) the amount of the
subscription and the Class and Sub-Class of Shares subscribed, (iii) the
subscriber's address (including a telefax number if applicable), (iv) the
name and address of the financial institution remitting the subscription
payment and (v) the value date as of which the payment is being
transferred to the Company's account.
Measures aimed towards prevention of money laundering entail the
obligation for the applicant to prove his/her identity to the Company.
Therefore, for your subscription to be considered valid and acceptable
by the Company, please attach to this Subscription Agreement a copy of
one of your identity documents (passport or identification card only)
duly certified by a public authority such as, a notary, the police, your
ambassador in your country of residence.
This obligation is absolute, unless:(a) your application is placed to the Company through one of its sales
agents located in one of the countries which have ratified the
conclusions of the report of the Financial Action Task Force (‘FATF’)
on money laundering,
or
(b) your application is sent directly to the Company and your
subscription is settled either by (i) a bank transfer originated by a
financial institution resident in one of the FATF countries, or (ii) a
cheque drawn on the applicant's personal account from a bank
resident in one of the FATF countries or a banker's draft issued by a
bank resident in one of the FATF countries. An institution or
placement agent that acts on behalf of prospective investors is
required to obtain the required written certifications and
undertakings and certify that it is acting for a customer who is
eligible to invest in the Company.
Shares will be issued in respect of accepted applications as soon as
practicable following the relevant Dealing Day. Any Shares that are
issued will be rounded down to three decimal places (any balance of
funds insufficient to acquire such fraction of a Share will be retained by,
and accrue for the benefit of, the Fund). The Company assumes no
responsibility for commissions or other charges paid directly by
subscribers, and no such payments will be creditable against the
subscription charge.
TELEFAX APPLICATION
A properly completed and signed copy of the Subscription Agreement
may be submitted to the Sub-Registrar by telefax (+352) 404 676 in
advance of submitting the original Subscription Agreement to ensure
that such subscription is received with the required notice period prior
to the relevant Dealing Day. The signed original, however, must be
submitted within one month thereafter or such longer period, as the
Directors may at their discretion permit. Applicants will be unable to
redeem Shares on request until the signed original Subscription
Agreement has been received.
SUBSCRIPTION INSTRUCTIONS
CONFIRMATIONS
SUBSCRIPTION APPLICATIONS
Applications which must be for a minimum of USD 25,000 (or its
equivalent in the relevant Base Currency) may be made only by written
application using the enclosed Subscription Agreement.
All applications should be directed to the Company at the address
shown on the Subscription Agreement. Applications will only be
accepted subject to the terms of this Supplementary Prospectus and
the Prospectus of the Company and subject to the Memorandum of
Association and Bye-Laws of the Company. Acceptance of applications
is subject to confirmation of prior receipt of cleared funds in the
Company's subscription account. The basis of allotment of the Shares
will be determined by the Directors in their absolute discretion. The
Company reserves the right to reject applications in whole or in part, in
which event subscription payments will be refunded, at the applicant's
risk, without interest. Applications are irrevocable.
SUBSCRIPTION PAYMENTS
Payment in full for the Shares subscribed should be paid by banker's
draft or cheque to the Company or by telegraphic transfer using the
account details set out in the Subscription Agreement.
S-8
Confirmation notices will be sent to subscribers showing the details of
their subscription. Confirmations of telefax applications will be deemed
provisional and will be subject to cancellation unless the Sub-Registrar
has received a satisfactorily completed original Subscription Agreement
from the subscriber on a timely basis. Applicants will be unable to
redeem Shares on request until the signed original Subscription
Agreement has been received. Shares will be issued in uncertified form
only, unless specifically requested by the subscriber.
MOMENTUM ALLWEATHER STRATEGIES LIMITED
The amount of ___to be paid by telex transfer to the relevant account:
SUBSCRIPTION AGREEMENT
(Payment should be made by swift MT103 without any transfer charge)
1. SUBSCRIPTION APPLICATION
For USD Payments:
HSBC Bank USA
New York,
USA
THE FUND IS NOT REGISTERED IN LUXEMBOURG. THE FUND IS NOT
SUBJECT TO LUXEMBOURG LAW AND ITS ACTIVITIES ARE NOT
SUPERVISED IN LUXEMBOURG.
Attention: Investor Services; Trading Department
Momentum AllWeather Strategies Limited
c/o HSBC Securities Services (Luxembourg) S.A.
B.P. 413, 40 Avenue Monterey
L-2014 Luxembourg
Fax: + 352 404 676
SWIFT address:
For further credit to:
Account:
Swift Address:
For further credit to:
Account:
Reference:
Dear Sirs,
Attention of:
The undersigned subscriber (the "Subscriber") acknowledges having
received the Prospectus dated 6th September 2005 together with the
Supplementary Prospectus dated 6th September 2005 of The
Momentum AllWeather Strategies II Master Fund (together, the
"Prospectus") offering for subscription shares (the "Shares") of
Momentum AllWeather Strategies Limited (the "Company") and hereby
subscribes for as many Shares as may be purchased for the amount(s)
indicated below on the terms of the Prospectus and subject to the
provisions of the Memorandum of Association and Bye-Laws of the
Company.
For GBP Payments:
HSBC
27/32 Poultry
London EC2P 2BX
The Subscriber further acknowledges that the Company reserves the
right to reject any application or to accept an application in part only. In
such an event, the amount paid on application or the balance thereof
(as the case may be) will be returned to the Subscriber as soon as
practicable without interest in the Base Currency of the relevant SubClass, at the Subscriber's risk and cost.
SUBSCRIPTION AMOUNTS (minimum initial subscription USD
25,000 or the equivalent in the relevant Base Currency)
SWIFT address:
S.C.
For further credit to:
Account:
Swift Address:
For further credit to:
Account:
Reference:
Attention of:
MRMDUS33
HSBC Securities Services (Luxembourg) S.A.
000-153907
BBDALULX
Momentum AllWeather Strategies Limited
001-064112-021
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
MIDLGB22
40-05-15
HSBC Securities Services (Luxembourg) S.A.
35207582
BBDALULX
Momentum AllWeather Strategies Limited
001-064112-105
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
For EUR Payments:
HSBC PLC
London,
ENGLAND
GBP Sub-Class Shares GBP _______________________________
SWIFT address:
For further credit to:
Account:
Swift Address:
For further credit to:
Account:
Reference:
JPY Sub-Class Shares JPY_________________________________
Attention of:
AUD Sub-Class Shares AUD _______________________________
For AUD Payments:
HSBC Bank Australia
1 O’Connell Street, Floor 6th
Sydney
The Momentum AllWeather Strategies II Master Fund
USD Sub-Class Shares USD _______________________________
EURO Sub-Class Shares Euro ______________________________
CHF Sub-Class Shares CHF _______________________________
From which will be deducted the subscription charge, and the balance
shall be invested in Shares.
2. PAYMENT DETAILS (complete where applicable)
Bankers draft for ________________________________enclosed.
SWIFT address:
For further credit to:
Account:
Swift Address:
For further credit to:
MIDLGB22
HSBC Securities Services (Luxembourg) S.A.
GB64MIDL40051537946879
BBDALULX
Momentum AllWeather Strategies Limited
001-064112-104
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
HKBAAU2S
HSBC Securities Services (Luxembourg) S.A.
011190659041
BBDALULX
Momentum AllWeather Strategies Limited
S-9
Account:
Reference:
Attention of:
001-064112-101
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
In the case of a body corporate:
Full title of body corporate:
___________________________________________________
For JPY Payments:
HSBC Bank Tokyo
7 F HSBC Building
11-1 Nihonbashi 3-Chome
Chuo-Ku, Tokyo, Japan
Address: ____________________________________________
___________________________________________________
___________________________________________________
SWIFT address:
For further credit to:
Account:
Swift Address:
For further credit to:
Account:
Reference:
Attention of:
HSBCJPJT
HSBC Securities Services (Luxembourg) S.A.
009-023755-026
BBDALULX
Momentum AllWeather Strategies Limited
001-064112-106
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
Tel: _______________________Fax: ______________________
In the case of individuals:
Mr/Mrs/Ms/Title: ______________________________________
Surname: ____________________________________________
First Name: __________________________________________
For CHF Payments:
Union Bank of Switzerland
45 Bahnhofstrasse
CH-8021 Zurich
SWIFT address:
For further credit to:
Account:
Swift Address:
For further credit to:
Account:
Reference:
Attention of:
UBSWCHZH80A
HSBC Securities Services (Luxembourg) S.A.
6054105L
BBDALULX
Momentum AllWeather Strategies Limited
001-064112-103
The Momentum AllWeather Strategies II Master
Fund/Subscriber’s Name
Investor Services, Trading Department
Name of Financial Institution remitting payment:
Address: ____________________________________________
___________________________________________________
___________________________________________________
Date of Birth:__________________________________________
Place of Birth: _________________________________________
Citizenship: ___________________________________________
Passport/Identity Card Nr.: ________________________________
Issuing Authority: _______________________________________
___________________________________________________
Date of Issue: _________________________________________
Address: ____________________________________________
Passport/Identity Card valid until:______________ _____________
___________________________________________________
Country of Tax Residence:_________________________________
___________________________________________________
Tax Identification Number: ________________________________
Tel: _______________________Fax: ______________________
In the case of individuals:
Mr/Mrs/Ms/Title: ______________________________________
3. DETAILS OF SUBSCRIBER(S) AND REGISTRATION OF SHARES
(Please complete in block capitals)
Shares will be registered in the name(s) of the Subscriber(s) hereunder
and share certificates (if requested) and all other correspondence will
be sent to the address given. All communications will be sent to the first
named registered holder. If there are to be joint holders, all must be
named in this section.
Surname: ____________________________________________
First Name: ___________________________________________
Address: ____________________________________________
___________________________________________________
___________________________________________________
S-10
Date of Birth:__________________________________________
Place of Birth: _________________________________________
on 12 April 2005. Please tick-off and initial the box to confirm your
instruction.
❏ The Bank is requested and authorised to disclose information as set
out opposite
Citizenship: ___________________________________________
Initials_______________________________________________
Passport/Identity Card Nr.: ________________________________
Passport/Identity Card valid until:______________ _____________
Luxembourg law also allows you to obtain gross payment of dividend
and/or redemption proceeds if you provide a tax certificate issued by
your national tax authority. In this case, we will make payment to such
bank account as disclosed in the tax certificate.
❏ Tax certificate from EU Member State tax authority attached. I confirm
that the details provided on this form are true and correct.
Country of Tax Residence:_________________________________
Signature: ____________________________________________
Tax Identification Number: ________________________________
Place: _______________________________________________
In the case of trustees:
Date: _______________________________________________
Full name of trustee: ____________________________________
4. SIGNATURES AND REPRESENTATIONS
Address: ____________________________________________
I/We (the "Subscriber") represent and agree that none of the Shares
(nor any interest therein) is being acquired or will at any time be held,
directly or indirectly, for the account or benefit of a "US Person" (as
defined in the Prospectus) contrary to any United States federal
securities laws or any securities laws of any of the states of the United
States and further agree that none of the Shares may be transferred to
any person who has failed to supply a similar representation. Permitted
US Persons interested in purchasing Shares of the Fund must contact
the Company and complete a separate Subscription Agreement.
Issuing Authority: _______________________________________
Date of Issue: _________________________________________
___________________________________________________
___________________________________________________
Tel: _______________________Fax: ______________________
EU Savings Directive - (for individuals resident in the EU or holding
an EU passport or ID)
Please enclose a photocopy of your current passport (first four pages)
or ID (recto-verso), ensuring that your picture is discernable, and that all
written details are legible.
❏ Photocopy of passport or ID is enclosed.
If your passport or ID evidences that you are a citizen of one of the EU
Member States and you declare you are permanently resident outside
the EU, please supply a tax resident certificate issued by the tax
authority of your country of residence. Without this certificate, we will be
obliged by law to consider that you are resident, for tax purposes, in the
EU Member State which issued your passport or ID.
❏ Certificate of taxation issued by non-EU country of residence is
enclosed.
By default and failing any further instruction from you as set out below,
the Sub-Registrar will be required to apply a withholding tax on the
interest distributed to you further to your investment, or received upon
redemption of your investment. Upon redemption, the tax will be
withheld on the capital gain realised based on the Net Asset Value per
Share on 1st July 2005. For the applicable withholding tax rate, see the
main part of the Prospectus. You may elect to require the Sub-Registrar
to disclose to local authorities, for further reporting to your tax authority,
details of the dividend and redemption payments you will receive, so
that the Sub-Registrar will make gross payments to you. Reporting will
include your name, surname and address, your above account
number(s) and the total amount of interest or revenue targeted by the
EU Savings Directive 2003/48/CE transposed under Luxembourg law
I/We represent and warrant that: (a) the Shares are not being
purchased with a view to resale; (b) all consents required to be obtained
and all legal requirements necessary to be complied with or observed
in order for this Agreement or the issue of the Shares to be lawful and
valid under the law of any jurisdiction to which I/We am/are subject to,
have been obtained, complied with or observed; and (c) I/We have not
relied on any representations or other information purported to be given
on behalf of the Company except as set forth in the Prospectus.
I/We acknowledge that the Administrator, Sub-Administrator and/or the
Company may require the production of documentation or information
which establishes the identity of Subscribers and/or beneficial owners
of Shares in the Company as described under "Notice to Investors" of
the Prospectus or under applicable anti-money laundering laws and
regulations. I/We agree that the form of documentation or information
required for this purpose will be determined by the Administrator, SubAdministrator or the Company in their absolute discretion and may
change from time to time.
I/We further acknowledge that such documentation or information may
be required before an application or redemption can be processed or at
any other time and that the Administrator, Sub-Administrator and/or the
Company shall be held harmless and indemnified against any loss
ensuing due to the failure to process any application or redemption,
arising from a failure by me/us to provide such documentation or
information in the form requested. I/We hereby confirm that the
Company and the Administrator and/or the Sub- Administrator are each
authorised and instructed to accept and execute any instructions in
S-11
computation interests held by any individual or entity (other than a
Benefit Plan Investor) with discretionary authority or control over the
assets of the Subscriber and of any individual or entity who provides
investment advice for a fee (direct or indirect) with respect to the
assets of the Subscriber or any affiliate of such person or entity) is
held by Benefit Plan Investors as defined above.
respect of this application and the Shares to which it relates given by
me/us by facsimile. If instructions are given by me/us by facsimile, I/we
acknowledge that the onus is on me/us to ensure that such instructions
are received in legible form, and I/we undertake to confirm them in
writing.
I/We hereby indemnify the Company, the Directors, the Administrator
and the Sub-Administrator and agree to keep each of them
indemnified, against any loss of any nature whatsoever arising to each
of them as a result of any of them acting on facsimile instructions
provided that any such loss is not caused by gross negligence or fraud
on the part of the Company, the Directors, the Administrator or the SubAdministrator. The Company, the Directors, the Administrator and the
Sub-Administrator may rely conclusively upon, and shall incur no liability
in respect of, any action taken upon any notice, consent, request,
instructions or other instrument believed, in good faith, to be genuine or
to be signed by properly authorised persons.
I/We declare that I/we am/are the beneficial owner(s). Where I/We
am/are not the beneficial owner(s), I/we undertake to inform the
Company and/or the Administrator and/or the Sub- Administrator
accordingly and provide all details of such beneficial owners as the
Company and/or the Administrator and/or the Sub-Administrator may
require. If applicable, the Subscriber has identified below its status as a
Benefit Plan Investor (as defined below) to the Fund. If the Subscriber
has identified to the Fund that it is not currently a Benefit Plan Investor,
but becomes a Benefit Plan Investor, the Subscriber shall forthwith
disclose to the Investment Manager promptly in writing such fact and
also the percentage of such Subscriber's equity interests held by Benefit
Plan Investors. For these purposes, a "Benefit Plan Investor," as defined
under the US Department of Labor Regulation Section 2510.3-101(f),
includes, but is not limited to, retirement and other employee benefit
plans subject to the US Employee Retirement Income Security Act of
1974, as amended ("ERISA") and employee benefit plans and
arrangements not subject to ERISA, such as US and non-US
governmental plans, church plans, non-US retirement, health and
welfare plans and individual retirement accounts, as well as entities
whose underlying assets include plan assets by reason of investment by
plans in such entities.
1. The Subscriber _______ (is) _______ (is not) (please initial one)
a "Benefit Plan Investor" (e.g., any non-US employee pension
benefit plan or employee welfare plan). If the Subscriber is a Benefit
Plan Investor, please respond to the following:
(a)
_____
initial
OR
Twenty-five percent or more of the value of any class of equity
interests in the Subscriber (excluding from the computation
interests held by any individual or entity (other than a Benefit Plan
Investor) with discretionary authority or control over the assets of
the Subscriber and of any individual or entity who provides
investment advice for a fee (direct or indirect) with respect to the
assets of the Subscriber or any affiliate of such person or entity) is
held by Benefit Plan Investors; and the Subscriber, ___ (is) ___ (is
not) subject to the fiduciary responsibility provisions of ERISA
and/or the prohibited transaction provisions of Section 4975 of the
Code.
(b)
_____
initial
I/We understand that redemption and dividend payment instructions
sent by telegraphic transfer to a designated bank account are sent at
my/our risk insofar as the onus to provide bank account details rests
solely on me/us. Transfer charges will be levied. In the event that I/We
request redemption of my/our shares, please remit proceeds to.
Name of Payee: ________________________________________
Name of Bank: ________________________________________
Address: _____________________________________________
____________________________________________________
____________________________________________________
City: _______________________Post Code: ________________
Country: _____________________________________________
(i) The Subscriber ___ (is) ___ (is not) (please initial one) subject
to the fiduciary responsibility provisions of ERISA and/or the
prohibited transaction provisions of Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
(ii) The Subscriber ___ (is) ____ (is not) (please initial one) subject
to any rules or regulations similar to the fiduciary responsibility
provisions of ERISA and/or the prohibited transaction
provisions of Section 4975 of the Code.
2. If the Subscriber is an entity, the Subscriber hereby certifies to either
(a) or (b) below:
(Please initial one)
If the Subscriber is a corporation, partnership, limited liability
company, trust or other entity, less than 25% of the value of each
class of equity interests in the Subscriber (excluding from the
S-12
Tel: _______________________Fax: _____________________
SWIFT/Sort Code:_______________________________________
Account No.: __________________________________________
Currency of Account: ____________________________________
The details provided on this application form in addition to any
further personal data deriving from interactions with the Company
and/or the Administrator and/or the Sub- Administrator will be
stored and used by these entities for the purpose of fulfilling this
subscription agreement and developing the client relationship. I/We
consent to details relating to my/our application and holdings being
disclosed to the Manager and its Affiliates (as defined in the
Prospectus). I/We consent to the Administrator, Sub-Registrar, its
delegates, authorised agents and associated or affiliated companies
using, disclosing, processing and transferring within or outside the
European Union my/our personal data which is revealed on this form
or is disclosed by me/us subsequently.
I/We understand the meaning of the representations and warranties
contained in this application and understand and acknowledge that the
Company, Custodian, Administrator and Sub-Administrator are relying
upon the representations and warranties given by me/us contained in
this application in determining whether to accept the subscription
tendered hereby and in meeting any applicable obligations of each of
them to relevant authorities under anti-money laundering regulations,
the EU Savings Directive and any other applicable regulations. I/We
represent and warrant that the information provided in application is
true and correct as of the date hereof and agree to notify immediately
the Sub-Administrator of any changes in such information. I/We hereby
agree to indemnify and hold harmless the Company, the Administrator,
and the Sub-Administrator and each member, Shareholder, officer,
director or employee thereof from and against any and all losses,
damages, expenses, liabilities or reasonable attorneys’ fees (including
attorneys’ fees and expenses incurred in any action in which no
judgment in my/our favour is rendered) due to or arising out of a breach
of any representation or warranty contained in or provided as part of this
application.
In the event that this subscription is accepted, I/we agree that the
representations, warranties and agreements set forth in this application
shall survive the acceptance of this subscription.
E-Mail:_______________________________________________
Name of Regulatory Authority (if applicable):
____________________________________________________
B. SUBSCRIBER IDENTIFICATION CONFIRMATION
(Agents/Financial Advisers responsible for verifying identity of
subscribers should also complete this section)
I/We confirm that I/we have established the identity of the Subscriber(s)
in his/her presence. I/We furthermore attach certified copies of the
Identity Card(s)/Passport(s) of the Subscriber(s) or other appropriate
documentation where required.
Signature of Agent/Financial Adviser: ________________________
Block Capitals:_________________________________________
Please note: further documentation may be requested regarding the
identity of Subscribers.
6. GENERAL
In the case of joint Subscribers (and there must not be more than four),
all must sign. A body corporate may execute this Subscription Agreement
either under its Common Seal or under the hand of a duly authorised
officer who should state his representative capacity. Such officer may be
required to provide evidence of his appointment and of his authority to
sign.
Signature of Subscriber 1 _________________________________
Signature of Subscriber 2 _________________________________
Name of Subscriber 1 ___________________________________
(PRINT NAME)
We direct that on the death of one of us, the Shares for which we hereby
apply will be held in the name of and to the order of the survivor(s) or
the executors of such survivor(s). (Applicable to joint subscribers only)
If you require fax confirmation of receipt of monies,
please tick this box ❏ and state:
Fax Number: __________________________________________
Name of Subscriber 2 ___________________________________
(PRINT NAME)
5. TO BE COMPLETED BY AGENTS/FINANCIAL ADVISERS
A. DETAILS OF SALES AGENTS/FINANCIAL ADVISERS
(All Agents/Financial Advisers should provide these details)
If you require a share certificate please tick this box ❏.
Please note that original share certificates will be required by the SubAdministrator in order for redemption requests to be processed. In the
case of a lost share certificate, you will be required to sign a letter of
indemnity with your bank, insurance company or guarantee society,
jointly signing to undertake the responsibility of indemnification.
Agent/Financial Adviser Name: _____________________________
Agent/Financial Adviser Address:
____________________________________________________
____________________________________________________
____________________________________________________
Telephone: ____________________________________________
Telefax : ______________________________________________
S-13
Momentum AllWeather Strategies Limited
Pioneer Alternative Investment Management (Bermuda) Limited
Mercury House
101 Front Street
Hamilton HM 12
Bermuda
Tel: +1 441 296 1019
Fax: +1 441 296 0288
Pioneer Alternative Investments
c/o Pioneer Investment Management Limited
1 George’s Quay Plaza
George’s Quay
Dublin 2
Ireland
Tel: +353 1 480 2000
Fax: +353 1 449 5000
15/09/05ww07128-00-0905