Supplementary Investor Information Document incorporating the conditions for the Clerical Medical Individual Savings Account

Transcription

1 Supplementary Investor Information Document incorporating the conditions for the Clerical Medical Individual Savings Account This Supplementary Investor Information Document (SIID) is designed to be read alongside the relevant Key Investor Information Document(s) (KIIDs) for our OEIC funds. Together, they summarise important information about these funds and provide answers to some important questions. You should read these documents carefully to help you understand what you are buying, and keep them safe for future reference. There is a separate Key Investor Information Document (KIID) for each of our OEIC funds, and you should ensure that you read the KIID for the fund you re considering investing in.you must be a UK resident to invest in our Clerical Medical Individual Savings Account. If you become a resident of the United States you won t be able to continue to hold your investment in any of our OEIC funds. This plan is suitable for an investor who: typically is investing for growth and/or income typically can invest for at least five to ten years understands the risks and investment objective of the fund(s) chosen. Its aims The Clerical Medical ISA aims to help the value of your money grow over time and/or provide an income in a tax-efficient way. To offer a choice of funds so you can invest in those which best match your objectives. The specific objectives and investment policy for each fund are set out in the relevant KIID. Your commitment You agree to invest a minimum lump sum of 3,000. You can add to your investment from a minimum of 1,000, up to the maximum ISA investment limits. You can invest on a regular basis from 200 a month, up to the maximum ISA investment limits. You accept that your investment is a medium to long-term investment, ideally for at least five to ten years. Product risks Taking withdrawals from your investment will reduce any capital growth, or could be greater than the total growth. You should review the amount you take to ensure you do not erode your investment.

2 If you re making regular investments into the ISA for a specific purpose, such as to repay a mortgage or to pay university fees, it s important to maintain and review your payments, so that you continue to aim for your target. If you don t, you may not meet your target. The favourable tax advantages of an ISA investment might not be available in the future or the terms could change. For the Income Fund, capital growth will be reduced as the annual management charges are taken from the capital of the relevant fund rather than the income. This will increase the amount of income available. Our charges may increase. Tax rules could change. You have a right to cancel your investment within 30 days of receiving your cancellation notice. If you do cancel and you ve made a lump sum investment and the value of the investment has fallen, you ll get back less than you invested. The specific risk factors for each fund are set out in the relevant KIID. You will also find details of the risks in the full OEIC Prospectus, which is available on request, free of charge. General fund risks (a) Market Risk The investments of the Company* may go up and down in value and are subject to other risks inherent in securities. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the original amount invested in the Company. What investors get back will depend on investment performance, nothing is guaranteed. Past performance is no guarantee of future performance. There is no guarantee that the investment objective of any Fund will actually be achieved. *As defined in the What is the Clerical Medical ISA? section on page 3. (b) Performance Risk There will be a variation in performance between Funds with similar objectives due to the different assets selected. Funds will also diverge from their benchmarks depending on these selections. Funds aiming for relatively high performance can incur greater market movement than those adopting a more standard investment approach. The performance of your investment is not guaranteed. If you invest in the Fund(s) to build up a particular sum by a certain date you may not achieve the target amount if you do not maintain your contributions or the investment value does not grow sufficiently. (c) Capital Risk Where there is an initial charge/entry charge or a redemption charge/exit charge, an investor who sells their Shares after a short period may not (even in the absence of a fall in value of the relevant investments) realise the amount originally invested as the Fund will not have grown by an amount sufficient to cover the amount of initial charge/entry charge or redemption charge/exit charge deducted. Therefore, the Shares should be viewed as a medium to long term investment. (d) Cancellation of Shares If you decide to use your right to cancel a lump sum investment within the first 30 days and the value of the Shares purchased by that investment has fallen by the time we receive your instructions at our administration unit, the amount you will receive will be less than the amount you invested. 1

3 (e) Concentration of investments A Fund could be subject to significant losses if it holds a large position in a particular region that declines in value or is otherwise adversely affected. A Fund may be more vulnerable to particular geographic, economic, political, regulatory or other developments than would a more diversified investment. (f) Currency Exchange Rates Depending on an investor s currency of reference, rises and falls in the value of currency may adversely affect the value of an investment. (g) Inflation As Shares in the Funds should be viewed as medium to long term investments the impact of inflation on any growth in the Funds must be considered. The impact of inflation is to reduce the value of such growth in real terms. (h) Investor Taxation Tax regulations, concessions and accounting rules are not guaranteed and can change at any time. Their value to a Shareholder will depend on individual circumstances. (i) Deferred Redemptions In times of high redemption, to protect the interests of continuing Shareholders, the ACD (Authorised Corporate Director) may defer redemptions at a particular Valuation Point to the next Valuation Point where requested redemptions exceed a specified percentage of a fund s value. This will allow the ACD to match the sale of scheme property to the level of redemption, thereby reducing the impact of dilution in the fund. Requests for redemption in these circumstances will be treated on a pro rata basis to ensure the consistent treatment of all Shareholders. At the next such Valuation Point all deals relating to an earlier Valuation Point will be completed before those relating to the later Valuation Point are considered. (j) Suspension of Dealings in Shares Investors are reminded that in certain circumstances their right to sell Shares (which also includes switches) may be suspended. Please refer to the Full Prospectus for further details. (k) Liabilities of the Company Although each Fund so far as possible is treated as bearing the liabilities, expenses, costs and charges attributable to it, if its assets are not sufficient the ACD may reallocate assets, liabilities, expenses, costs and charges between the other Funds in a manner which is fair to the Shareholders of the Company generally. The ACD would normally expect any such reallocation to be effected on a pro rata basis having regard to the Net Asset Values of the relevant Funds. If there is any such reallocation the ACD will advise Shareholders of it in the next succeeding annual or half yearly report to Shareholders. Shareholders are not, however, liable for the debts of the Company. A Shareholder is not liable to make any further payment to the Company after he has paid the purchase price of the Shares. Risk and Reward Indicator The KIID for each Clerical Medical OEIC fund includes a Risk and Reward Indicator for the fund. The indicator is a legally required score that we must provide for each fund. The score (between 1 and 7) indicates the level of volatility a fund has experienced over the preceding 5 years. Volatility is a measure of the rise and fall in prices and income. 2

4 The following explains our interpretation of what each score means: 1: very low levels of volatility over the past 5 years 2: low levels of volatility over the past 5 years 3: low to medium levels of volatility over the past 5 years 4: medium levels of volatility over the past 5 years 5: medium to high levels of volatility over the past 5 years 6: high levels of volatility over the past 5 years 7: very high levels of volatility over the past 5 years Please note that the indicator can change on a regular basis. QUESTIONS AND ANSWERS What is the Clerical Medical ISA? The Clerical Medical ISA is a way of enjoying a tax-efficient return on your money. There is no UK income tax or capital gains tax to pay on any income and growth that we pay you. It is available as a stocks and shares ISA. It lets you invest in the shares of the Clerical Medical Open Ended Investment Company ( OEIC ), which is managed by Clerical Medical Investment Fund Managers Limited. You must be at least 18 years old and resident in the UK to invest in a Clerical Medical ISA. Crown employees (and their spouses or civil partners) who live overseas and are paid out of UK public revenue can also invest. You can t take out an ISA in joint names. What are my ISA Investment choices? You have separate ISAs for cash or stocks and shares. You can open one of each type of account in a tax year, with the same or different ISA managers. For details of the current maximum amount you can invest into ISAs per tax year, please see Subject to the overall ISA limit, there are no longer any restrictions on the amount that you can invest in either a Cash or Stocks and Shares ISA or a combination of the two. You can only have one stocks and shares ISA and one cash ISA in any tax year. We don t offer cash ISAs. How flexible is it? You can add to your investment at any time, up to the ISA investment limits, with a minimum lump sum of 1,000 or with regular investments from 200 a month. You can increase your regular investments by a minimum of 25 a month. You can invest for as long as you want but ideally for at least five to ten years. By selling shares, you can take out all or part of your investment at any time. You can take regular withdrawals. You can invest in more than one fund up to the ISA investment limits. The Government have announced that ISAs are to continue indefinitely. 3

5 You can switch your money into different funds. If you wish to switch funds, please write to us at our administration office with your instructions. (Please see How can I contact Clerical Medical?.) We currently waive the charge for switches between shares, which is normally 1% of the value of the shares switched. However this will not prevent a switching charge of 1% from being made in the future by giving you 90 days prior written notice. What might I get back? When you decide to cash in your investment you ll get back the value of the shares you have in the ISA at that time. There s no guaranteed return. What you get back will depend on: the amount invested how long it has been invested the investment performance of the fund our charges the amount of any withdrawals you have made the amount of any income distributions you ve received, if you ve invested in income shares. As long as your ISA has the required minimum balance you can take a break from your monthly payments at any time by contacting our administration unit. (Please see How can I contact Clerical Medical?.) Can I take money out? You can take out all or part of your investment at any time by selling shares. Any money you take out will reduce the value of your investment, and this could be to below the amount you originally invested. Once you have taken money out, it can t be replaced if you have already invested the maximum allowed in that tax year. The minimum withdrawal is 1,000. This does not apply to regular withdrawals (see below). The minimum amount that must remain in any chosen fund after any withdrawal is 1,000. You should notify us in writing if you wish to make any withdrawal. We ll send you a cheque within five working days of receiving your request at our administration office. All regular withdrawals will be paid direct into your bank account. If you invest in income shares in the Income Fund, any income you are due to receive will be paid directly into your bank account on a quarterly basis. It s paid on 31 January, 30 April, 31 July and 31 October to shareholders registered on 30 November, 28 February, 31 May and 31 August. Regular withdrawals You can take regular withdrawals if your investment includes lump sums to buy accumulation shares in one or more funds. You can withdraw up to a maximum of 7.5% a year of the total value of the accumulation shares in your ISA. You can choose to have your regular withdrawals paid monthly, quarterly, termly (every four months), half-yearly or annually. Payments will be made on the 15th of the month or, if that day is not a working day, the next working day. The minimum withdrawal is 240 each year. Regular withdrawals are funded by selling sufficient shares. The number of shares we sell can vary depending on share price movements. 4

6 Shares will be sold in the order in which they were bought, ie those bought first will be the first to be sold. The sale of shares will normally take place five business days prior to payment date. If you have accumulation shares in more than one fund, we ll sell shares from each fund in the same proportion as the holding of accumulation shares in that fund representative to your total holding of accumulation shares. This means that if you have a 10,000 investment in accumulation shares, and 6,000 is in one fund and 4,000 in another, your withdrawal payment will be taken 60% from the first fund and 40% from the second. The amount of your regular withdrawal is based on the chosen percentage of your initial investment in accumulation shares. The amount will be fixed until your regular withdrawal is reviewed. It will be reviewed: on each anniversary of your initial investment if you make an additional investment if you take a one-off withdrawal. We will write and tell you the new amount. We will pay regular withdrawals directly to your bank account. How much can I pay in? For details of the current maximum amount you can invest into ISAs per tax year, please see Subject to the overall ISA limit, there are no longer any restrictions on the amount that you can invest in either a Cash or Stocks and Shares ISA or a combination of the two. You can ask to transfer some or all of the money you ve saved in cash or stocks and shares ISAs in previous tax years, into your ISA. This won t affect your ISA investment allowance for this tax year. You can t invest in more than one stocks and shares ISA in the same tax year. The minimum lump sum you can invest is 3,000. At least 1,000 must be invested in each fund you select. The minimum regular investment is 200 a month. At least 100 a month must be invested in each fund you select. Regular investments can only be used to buy accumulation shares. If you don t invest the maximum allowed in your ISA in any tax year, you can t carry forward the unused allowance. Investments made in the following tax year will use that year s allowance and will prevent you opening a new stocks and shares ISA account. If you ve saved money into a cash and/or stocks and shares ISA in the current tax year, you can transfer it into a stocks and shares ISA. This must be the whole of the amount you ve saved up to the day of the transfer. You can t transfer part of it. If you re transferring a current year ISA, the money you ve transferred will be treated as though it has been invested directly into the new ISA. After the transfer you can continue saving up to the remaining balance of your ISA allowance for the current tax year. This includes any savings into a cash ISA up to the current limit that applies. You can invest by contacting your financial adviser who will send us a completed application form. 5

7 You can make lump sum investments by cheque or banker s draft. For regular investments, you must complete a direct debit instruction. If at a later date you wish to change the amount of your regular investment, please write to us at our administration office telling us the new amount. Where is my payment invested? You can choose from a range of funds. When you invest in your ISA, you buy a number of shares in the fund or funds you select for your ISA. You can invest in income or accumulation shares in the following fund: Income Fund. You can invest in accumulation shares only in the following funds: Balanced Managed Fund International Managed Fund FTSE 100 Tracker Fund. We normally value shares at 12 noon each working day. So if you ask us to put more money in or take money out for you, we ll buy or sell your shares at the prices which apply at the next valuation after we receive your instructions at our administration office. This means that any instructions to buy or sell received at our administration office before 12 noon will get that day s price, and any instructions received after 12 noon will get the price calculated on the next business day. If you invest in income shares, any distributions will be paid to you. If you invest in accumulation shares, any distributions will be automatically accumulated into the fund and will be reflected in the price of your shares. Our website gives more details about the funds available. If you re making regular investments you can redirect your payments to a different fund, by notifying us in writing. What are the fund choices? Income funds Clerical Medical Income Fund Growth funds Clerical Medical Balanced Managed Fund Clerical Medical International Managed Fund Clerical Medical FTSE 100 Tracker Fund What happens to the ISA if I die? If you die before cashing in your Clerical Medical ISA, your ISA will continue but will lose its tax-efficient status. If you die, your spouse or civil partner will be entitled to an additional ISA allowance equal to the value of your ISA Investor on the date of your death. This entitlement will be in addition to their own annual ISA allowance. Your personal representatives may ask us for information about the value of your ISA, which we ll provide. When your personal representatives have proved that they are legally entitled to the money invested, they may cash in your ISA or ask us to transfer the shares into an OEIC in another person s name. Until the shares in your ISA are sold, daily price movements will affect them as normal. The value of your ISA is treated as part of your estate so your personal representatives may need to declare it for inheritance tax purposes. Transfers of holdings on death can only be made to UK residents. 6

8 What are the charges? Our charges are: Initial charge/entry charge An initial charge/entry charge, which is a percentage of your payment, is deducted when shares are bought. (Please note the initial charge is called the entry charge in the KIID.) This charge is the maximum that might be taken out of your money before it s invested, and it covers the cost of setting up your investment. Annual management charge Annual management charge we ll take a 1% annual management charge when we calculate the daily share price of each of the funds. This is worked out as a percentage of the value of the relevant fund. For the Income Fund we take the annual management charge from the capital of the fund each month, which will restrict the growth on your investment. For the other funds, we take the charge from the income each month. Early withdrawal charge/exit charge There s currently no exit charge when you sell part or all of your investment. Ongoing charge The Ongoing Charge that covers operating expenses and the annual management charge is detailed in the relevant KIID. We charge certain fees and expenses to the property of each fund. Full details of all fees and expenses are explained in the full prospectus. Currently all fees and expenses, with the exception of those noted below, are met by us and not charged to the fund. However, we may charge these fees and expenses against the property of the fund in the future. The only fees and expenses that are currently charged to the property of each fund are those relating to: dealing costs and any other charges payable when assets of the fund are bought or sold interest on, and any other charges relating to, any borrowings taxation and any other duties payable by the OEIC. Additional charges information We can change most of the charges we make. We may do this if our costs turn out to be unexpectedly high, compared to our charges. Charges may increase if: a tax rule or law increases our costs or decreases our income from charges our staff or overhead costs are more than we expect, or our income from charges is less than we expect. We work out the value of shares in a fund using the mid-market value of the assets in that fund. However, the actual cost of buying and selling these assets may vary from the midmarket value due to dealing charges, taxes and any spread between the buying and selling prices of the assets. To counter the effects of this, and in order to protect the best interests of all our shareholders, it may be necessary for an adjustment to be made to the share price within a fund to reflect the dealing costs and is known as a dilution adjustment. A dilution adjustment isn t a charge and we won t benefit from applying it. For further details, please ask for a copy of the full OEIC prospectus (available free of charge). 7

9 How much will the advice cost? Your adviser will give you details about the cost. Can I transfer my ISA? You can transfer the cash value of your existing ISA to us. Simply complete our transfer form and we ll contact your existing plan manager(s) and arrange everything for you. Your existing manager may charge you to transfer. If you want to transfer the cash value of your Clerical Medical ISA to another manager without losing any tax relief, you ll need to contact the new manager who will then contact us to arrange the transfer. We ll then sell the shares and pay the proceeds to your new ISA manager, although we ll deduct any amounts owed to us or HM Revenue & Customs (HMRC). We don t make any extra charges for transfers in or out. Transferring your investment rather than selling your shares and investing in a new ISA allows you to keep the tax benefit relating to previous tax years. What about tax? This is only a general summary of the tax position in the United Kingdom and is based upon our understanding of current law and practice. The overall value of tax benefits you receive and the tax consequences for you of investing in the Clerical Medical ISA depend on the tax laws applicable to you and/or to the place where the capital is invested. Tax rules and rates may change in the future. If you need help working out your tax position, you should ask an appropriate professional such as an accountant. Under the current law relating to tax relief for ISAs, we ll manage your Clerical Medical ISA so that it s free from personal tax. This doesn t take into account any tax that may have been paid on any investments held within the fund or taxes paid by the fund before reaching you. You won t have to pay any UK income tax or capital gains tax on any income or growth from your ISA investment and you don t need to declare it on your UK tax return. You can t claim tax relief for any capital losses in your Clerical Medical ISA. We ll reclaim a 20% income tax credit on interest distributions for the Income Fund. We re not able to reclaim on your behalf the 10% tax credit on dividend income from your ISA even if you re a non-taxpayer. However, you won t have any further tax liability on this dividend income, irrespective of your tax status, and you don t need to declare it to HM Revenue & Customs (HMRC) while you hold your investment in an ISA. The income and gains within your ISA won t affect your entitlement to age allowances but your ISA may affect your entitlement to tax credits, state pension credit and other state and local authority benefits. The Government have announced that the favourable treatment of ISAs will continue indefinitely. We can t reclaim tax credits on any equalisation distributed as income. Equalisation is a refund of the income included in the price you pay for shares. OEIC taxation At fund level, net taxable income is chargeable to corporation tax, currently at a rate of 20%. The funds are exempt from corporation tax on capital gains. We ll provide HMRC with any information about your ISA that we are required to give them. 8

10 Can I change my mind? Yes, after we accept your application you ll receive a notice of your right to cancel. You ll then have 30 days in which you can change your mind. If you do decide to change your mind, you ll need to sign and return the cancellation notice (see How can I contact Clerical Medical? ). If you ve invested a lump sum, we ll give you your money back, less any fall in the value of your investment by the time we receive your instructions at our administration office. If you ve chosen to make regular monthly payments, we ll refund any payments you ve made. You won t receive a cancellation notice if you switch between funds. How will I know how my ISA is doing? When you make a lump sum investment or sell your investment, we will issue a contract note within two business days of receiving your instructions at our administration office. You should keep your contract note as a record of your investment as we don t issue share certificates. If you make regular investments we ll issue a contract note for your first investment only. Details of all your other investments will be shown in your half-yearly statement. We ll send you a statement every six months to keep you up to date with the value of your investment. We ll also send you a free copy of the latest report and accounts every six months. You can check our share prices on our website: Or you can contact our customer service desk on For an up-to-date valuation, or a free copy of the full prospectus (which gives details of the latest estimated Distribution Yield) and the half-yearly report and accounts, you can telephone our customer helpline on: Lines are open Monday to Friday 9am to 5.30pm. How can I contact Clerical Medical? Your financial adviser will normally be your first point of contact. We won t be able to give you financial advice. If you wish to make an additional investment, set up a regular withdrawal or cash in all or part of your investment, please contact your financial adviser. If you have any questions at any time you can contact us by: Telephoning our customer help line , Monday to Friday 9am to 5.30pm. We may record phone conversations to offer you additional security, resolve complaints and improve our service standards. Conversations may also be monitored for staff training purposes. Writing to us at our administration office: Clerical Medical, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG, United Kingdom. 9

11 OTHER INFORMATION Client categorisation We classify you as a retail client under Financial Conduct Authority rules. This means you ll receive the highest level of regulatory protection available for complaints and you ll receive information in a straightforward way. Most retail clients are also eligible to claim under the Financial Services Compensation Scheme (see the section headed Financial Services Compensation Scheme on page 12). How to complain If you wish to complain about any aspect of the service you have received, you should contact our administration office at: Clerical Medical, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG. If your complaint is not dealt with to your satisfaction you can complain to the Financial Ombudsman Service at Exchange Tower, London E14 9SR. Telephone: Making a complaint won t affect your right to take legal action. A copy of our complaints procedure is available on request. Conflicts of interest policy 1.1 In accordance with the Financial Services regulations, Clerical Medical, which is a member of the Lloyds Banking Group, has established and implemented a Conflicts Policy. The Conflicts Policy sets out how we must seek to identify and manage all material conflicts of interest. Such conflicts of interest can occur in our day to day business activities, for example, where one of our clients could make a gain at the direct expense of another client, or we might be faced with an opportunity to make a gain but this would be to the direct disadvantage of one or more of our clients. 1.2 Depending on the exact nature of the conflict of interest involved, we may take certain actions in accordance with the Conflicts Policy to lessen the potential impact of the conflict. Such actions may include putting in place controls between the opposing sides of the conflict, which may control or prevent the exchange of information, and / or involve the appropriate management of staff activities and segregation of duties. In instances where such controls would not be enough to eliminate the potential material risk of damage to clients from specific conflicts, we ll disclose the general nature and / or source of those conflicts of interest to you before we take on the relevant business. 1.3 The Conflicts Policy may be revised and updated from time to time. If you d like more information on the Conflicts Policy, or on any specific conflict of interest that you think might affect you, please contact us. Terms and conditions This SIID gives a summary of the ISA. You ll find full details of the ISA in the ISA conditions, which are evidence of the contract between you and us. You can find full details of the Clerical Medical Open Ended Investment Company in the full prospectus (available free of charge). You can get a copy of the full prospectus by writing to our administration office at: Clerical Medical, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG. The ISA conditions are at the back of this document. We can change the ISA conditions but we ll tell you about them in writing before we do so. Please see the ISA conditions for more information. 10

12 Investor Cash balances Any investor cash balances (which is money held on behalf of an investor) shall be deposited with companies within the Lloyds Banking Group or with such other bank or building society as we may nominate from time to time. The cash will be held in a segregated account, separate from any account used to hold money belonging to us in our own right. We will not, however, be responsible for any acts or omissions of the bank or building society. If the bank or building society becomes insolvent, we will have a claim on behalf of our clients against the bank or building society. If the bank or building society cannot pay all of its creditors, any shortfall may have to be shared pro rata between them. However, you may be entitled to compensation under the Financial Services Compensation Scheme, details of which are available on request. Interest will not be paid on any cash held in client money accounts (an account where investors money may be held). Law It s agreed that the Clerical Medical ISA is governed by the laws of England and Wales. It s agreed that any dispute will be dealt with by the English courts. The terms and conditions for the Clerical Medical Individual Savings Account and any further communications will be supplied in English. ISA Manager The Clerical Medical ISA is managed by: Clerical Medical Investment Fund Managers Limited, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG. The Head Office is: Clerical Medical Investment Fund Managers Limited, 1 Lovell Park Road Leeds LS1 1NS United Kingdom Client money and asset rules In some circumstances, depending on the nature of your transaction with us, we will make use of the Delivery versus Payment exemption within the Financial Conduct Authority s client money and asset (CASS) rules. This means that when you pay money into, or withdraw money from, your investment there could be a period of time (up to the end of the business day after the date we have received the money) where your money is not protected under the CASS rules. In such cases, if we were to become insolvent during that period, there is a risk that you may not receive your money back. Authorised Corporate Director (ACD) The ACD of the Clerical Medical Open Ended Investment Company is Clerical Medical Investment Fund Managers Limited, Trinity Road, Halifax, West Yorkshire HX1 2RG, who are authorised and regulated by the Financial Conduct Authority. Its head office is: Clerical Medical Investment Fund Managers Limited, 1 Lovell Park Road Leeds LS1 1NS, United Kingdom Depositary The Depositary of the Clerical Medical Open Ended Investment Company is National Westminster Bank plc, whose registered office is at 135 Bishopsgate, London EC2M 3UR. Please see the plan conditions and full prospectus (available free of charge) for more details about the Clerical Medical Open Ended Investment Company. 11

13 Investment adviser The Investment Adviser is Aberdeen Asset Investment Limited. Authorised and regulated by the Financial Conduct Authority in the United Kingdom. Member of the Aberdeen Asset Management group of companies. Registered in England and Wales No Registered Office: Bow Bells House, 1 Bread Street, London EC4M 9HH. The Clerical Medical Open Ended Investment Company was incorporated in the United Kingdom on 11 February Auditors The Auditors of the Clerical Medical Open Ended Investment Company are: PricewaterhouseCoopers LLP Level 4, Atria One, 144 Morrison Street, Edinburgh, EH3 8EX. Clerical Medical Investment Fund Managers Limited is authorised to promote the Clerical Medical OEIC and is authorised by the Financial Conduct Authority. The address of the Financial Conduct Authority is: The Consumer Contact Centre The Financial Conduct Authority 25 The North Colonnade Canary Wharf London E14 5HS Financial Services Compensation Scheme (FSCS) OEIC funds are not directly covered by the Financial Services Compensation Scheme (FSCS), however Clerical Medical Investment Fund Managers Limited (CMIFML) is covered as the Authorised Corporate Director (ACD). The FSCS will not cover financial loss in the course of normal OEIC investment business if CMIFML is still solvent, including losses due to counterparty failure. However an investor may be entitled to compensation from the FSCS if CMIFML cannot meet its obligations (for example, if CMIFML were to become insolvent or unable to meet the claims against it resulting in you suffering a financial loss). A customer s entitlement to a claim depends on the type of business and the circumstances of the claim. Customers would be potentially covered by the FSCS for 100% of their claim up to a maximum of 50,000. If a customer holds more than one investment with CMIFML, this limit applies to the total value of all claims the customer has against the firm. Further information about compensation is available from the FSCS at: 10th Floor, Beaufort House, 15 St. Botolph Street, London EC3A 7QU. Telephone: or Website: 12

14 Please note: FTSE, FT-SE and Footsie are trade marks jointly owned by the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited under licence. The FTSE 100 Index is calculated by FTSE International Limited. FTSE International Limited doesn t sponsor, endorse or promote this product and isn t in any way connected to it and doesn t accept any liability in relation to its issue, operation and trading. All copyright in the index values and constituent list vests in FTSE International Limited. Clerical Medical Investment Fund Managers Limited has obtained full licence from FTSE International Limited to use such copyright in the creation of this product. Equalisation We operate equalisation of the income on all our OEIC funds. This means that when you buy shares in the fund (either through a new investment or the transfer/switch of an existing investment), you ll receive Group 2 shares. The first distribution or accumulation on Group 2 shares will include an amount that is treated as a return of your capital, known as equalisation. This equalisation element isn t subject to income tax and won t have a tax credit. Except for the Income Fund, the amount distributed or accumulated on Group 2 shares will be the same as the amount for Group 1 shares. If you invest in the Income Fund, no income tax credit is available on this equalisation element and consequently the amount payable or accumulated will be less than that payable or accumulated on Group 1 shares. Your investment will automatically be changed to Group 1 shares after you become entitled to your first distribution or accumulation. There s no difference in the share price between Group 1 and Group 2 shares. 13 All of our OEIC funds have the ability to invest in financial derivative instruments for the purpose of efficient portfolio management of the funds. Derivatives (contracts which have a value linked to the price of another asset) may be used for transactions in respect of efficient portfolio management. This means they can be used, for example, to help reduce risk (including hedging to help manage the effect of fluctuations in currency exchange rates), to help reduce cost, or to help generate extra capital or income for a fund. Information on their use for a fund can be found in the fund s KIID. Further details can be found in the prospectus. All information and limits in this SIID are correct at the time of publication but may change in the future. Clerical Medical Investment Fund Managers Limited is entered on the Financial Services Register and its register number is Specific fund information The Investment and Objectives Policy and specific risk factors for the funds covered by this SIID are specified in the relevant KIID for the fund you are considering investing in. Here you will also find details of the fund s Ongoing Charges. Please note the fund risks can also be found in the full prospectus.

15 Clerical Medical Individual Savings Account Conditions Contents 1. How do these conditions work? 2. Who manages the Clerical Medical ISA? 3. What do words and phrases in bold type mean? 4. How much can I invest? 5. How do I apply for a Clerical Medical ISA? When will my ISA start? 6. What rights do I have to cancel? 7. What are shares and how do they work? 8. How do I invest in a Clerical Medical ISA? 9. Can I switch shares? 10. Who owns the shares and cash in my Clerical Medical ISA? 11. How are share prices worked out? 12. How do I withdraw cash from my Clerical Medical ISA? 13. What rules apply to instructions? 14. What are the charges under my Clerical Medical ISA? 15. How does taxation affect my Clerical Medical ISA? 16. How will you carry out your duties? 17. When can these conditions change? 18. How can my Clerical Medical ISA end? How can it be transferred? 19. What happens if my Clerical Medical ISA is made void? 20. What happens if I die? 21. How can we contact each other? What information can you give and receive about my Clerical Medical ISA? 22. What information do I receive? 23. What are the funds? 24. What conditions apply to prevent money laundering? 25. How do I complain? 26. Which country s laws apply? 14

16 1. How do these conditions work? These conditions, together with this Supplementary Investor Information Document, explain the relationship between you and us. You should read these conditions carefully, together with the KIID, to understand how they work and your and our rights and duties under them. 2. Who manages the Clerical Medical ISA? Clerical Medical Investment Fund Managers Limited manages your Clerical Medical ISA. When we use the words we, our or us in these conditions, we mean Clerical Medical Investment Fund Managers Limited. We are approved as an ISA manager by Her Majesty s Revenue & Customs ( the Revenue ) and authorised and regulated by the FCA. We will manage your Clerical Medical ISA in line with the ISA Regulations and these conditions. 3. What do words and phrases in bold type mean? 3.1 In these conditions, we have put the following words and phrases in bold type because they have a special meaning. The Act is the Financial Services and Markets Act 2000 as amended, substituted or replaced from time to time; Our current administration address is Clerical Medical Investment Fund Managers Limited, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG. We may change it from time to time; The agreement is the agreement between you and us which is made up of the application form, these conditions and the SIID, all of which may be varied from time to time in line with the provisions set out; The application form is the application form or transfer application form you filled in when you applied to invest in your Clerical Medical ISA; The COLL Sourcebook is the FCA s new Collective Investment Schemes Sourcebook as amended or replaced; Your Clerical Medical ISA is the stocks and shares individual savings account described by these conditions; The Clerical Medical OEIC is an open-ended investment company operated by us; A contract note is a written record of a deal; The FCA is the Financial Conduct Authority, an independent organisation that regulates us, whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS. The funds are the funds of the Clerical Medical OEIC which are set out in condition 23; Key Investor Information Document (KIID): there is a separate KIID for each of our OEIC funds. This contains information that will help you understand the nature and the risks of investing in the fund. This is intended to enable you to make an informed decision about making an investment. Lloyds Banking Group is the corporate group of which we are a member. More information on the Lloyds Banking Group can be found at The ISA Regulations are the Individual Savings Account Regulations 1998 as amended, substituted or replaced from time to time; 15

17 Your nominated account is the bank or building society account, details of which have been provided by you on your application form; The prospectus of the Clerical Medical OEIC is the full prospectus setting out the rules that apply to the Clerical Medical OEIC, its funds and shares. Those rules are modified by these conditions; A share is a share in a fund in the Clerical Medical OEIC held in your Clerical Medical ISA; The share price is the price at which shares are bought and sold for a Clerical Medical ISA; Supplementary Investor Information Document (SIID): information in respect of the fund and the Clerical Medical ISA which, in general terms, is intended to enable you to make an informed decision about making an investment; A tax year runs from 6 April of one year to 5 April of the next; US Resident: for purposes of US Frank-Dodd Act, any person resident in the United States, including Crown Agents and their spouse or civil partner, not using a UK Diplomatic Address; A working day is any day from Monday to Friday (excluding English public holidays) or any other day on which we choose to carry out a valuation of the relevant fund; and The valuation point is the point at which shares in the funds of the Clerical Medical OEIC are valued, this point being midday on each working day In the agreement unless the context requires otherwise words and phrases defined in the Act shall have the same respective meanings in this agreement; words and phrases not defined in the Act but defined in the COLL Sourcebook or any other rules made by the FCA shall have the meanings assigned to them by the relevant rules; words and phrases defined in the ISA Regulations shall have the meanings assigned to them by the ISA Regulations; words and phrases defined in the prospectus shall have the meanings assigned to them by the prospectus. 4. How much can I invest? 4.1 In any tax year you can invest up to the annual ISA investment allowance in your Clerical Medical ISA less any amount you save in a cash ISA in the same tax year. Both the annual ISA investment allowance and the maximum amount allowed in a cash ISA each tax year may change in the future.the investment limits that apply may change in the future. 4.2 To invest in a Clerical Medical ISA, you must be: aged 18 or over; resident in the UK for tax purposes or, if not so resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings & Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the, or married to, or in a civil partnership with, a person who performs such duties; and investing your own money. 16

18 Please note: If you become a US Resident you will not be able to continue to hold your investment in any of our OEIC funds. 4.3 If we give you at least 30 days notice, we can refuse to accept further investments from you. 4.4 If you do not make a lump sum investment in a tax year, you will have to make a new declaration before you can make a lump sum investment in any future tax year. If you are making monthly investments, you will not need to make a new declaration each tax year. If you stop making monthly investments, we will not ask you to make a new declaration to restart them in the same or the next tax year. You will have to make a new declaration to restart them in any other future tax year. 5. How do I apply for a Clerical Medical ISA? When will my ISA start? 5.1 An application to open a Clerical Medical ISA must be made on an application form. Subject to the ISA Regulations, COLL Sourcebook and any other regulations made by the FCA, we will manage your Clerical Medical ISA in line with this agreement and your instructions in your application form. 5.2 By completing an application form to open a Clerical Medical ISA and returning it to us, you are making an offer to enter into a Clerical Medical ISA. 5.3 Your Clerical Medical ISA will start when we accept your application form and your Clerical Medical ISA is opened. If you make an initial lump sum investment this will normally be by the close of business on the working day on which we have received both your completed application form and lump sum investment at our administration address. If you do not make an initial lump sum investment your Clerical Medical ISA will be opened once we have received both your completed application form and your first direct debit payment has been collected. 5.4 We may reject any application. 5.5 An application to open a Clerical Medical ISA for any tax year must be received by us at our administration address on or before the last working day in that tax year. 5.6 You warrant that all information in the application form completed by you and all other information supplied from time to time by you (or on your behalf) to us is correct when supplied. You will tell us as soon as reasonably practicable about (a) details of any changes in the information on your application form, or any changes in any other information supplied to us and (b) all information reasonably requested by us. 6. What rights do I have to cancel? 6.1 If, when your Clerical Medical ISA is set up, you have the right to cancel it, we will send you a cancellation notice. The cancellation notice will tell you about your right to cancel your Clerical Medical ISA. If your Clerical Medical ISA is set up by distance contract, we are not required to send you a cancellation notice but we have decided to do this voluntarily. 6.2 You can cancel your Clerical Medical ISA by filling in and returning the cancellation notice within 30 days of receiving it. 6.3 If you cancel your Clerical Medical ISA after making a lump sum investment and the value of your investment falls during the 30 day cancellation period, you will not get back the full amount you invested. 6.4 You can also cancel your application for a Clerical Medical ISA at any time before your first investment. 17

19 7. What are shares and how do they work? 7.1 A share is a share in the property of a fund. 7.2 Income and accumulation shares are available in the Clerical Medical Income Fund. Accumulation shares only are available in the Clerical Medical FTSE 100 Tracker Fund, the Clerical Medical Balanced Managed Fund and the Clerical Medical International Managed Fund. 7.3 Unless we agree otherwise, income fro m any income shares in your Clerical Medical ISA will be paid to you. We will pay you an amount equal to the net income from income shares. We will also pay you an amount equal to any income tax deducted that you are entitled to receive even if we have not received it from the Revenue at that time. When we receive any income tax, we will keep it to repay us for the amount we will have already paid you. Unless we agree otherwise, we will pay income on or before the relevant distribution dates by direct credit to your nominated account. You must ensure that your nominated account continues to be able to receive payments. If your nominated account ceases to be able to receive payments, you must nominate another account through which you can receive payments. We will not pay you any interest on money that we hold before you receive it as income. Any investor cash balances (which is money held on behalf of an investor) shall be deposited with a member of the Lloyds Banking Group or with such other bank or building society as we may nominate from time to time. Interest will not be paid on any cash held in client money accounts (an account where investors money may be held). 7.4 We may agree that income from any income shares in your Clerical Medical ISA is automatically reinvested to buy more shares for your ISA. We will use the net income from those shares to buy more shares of the same type. We will buy the shares no later than the relevant distribution date. We will not pay you any interest on money that we hold before we reinvest it. We will use any income tax deducted that we receive for you to buy more shares of the same type. We will buy them at the share price no later than that at the first valuation point after we receive the income tax. Where you have switched shares in your Clerical Medical ISA prior to a distribution date but after the accounting date for that distribution, we will pay any income to you. 7.5 Income from accumulation shares is reinvested back into the relevant fund. The price of accumulation shares increases to reflect this reinvestment. If we can claim a repayment of income tax deducted from the Revenue for accumulation shares, we will do so and we will use any income tax to buy more shares of the same type. We will buy them at the share price no later than that at the first valuation point after we receive the income tax. 7.6 We will manage the Clerical Medical OEIC so that the shares will be qualifying investments under the ISA Regulations. 8 How do I invest in the Clerical Medical ISA? 8.1 You can make lump sum investments to buy income or accumulation shares by cheque or bankers draft. We will use your initial lump sum investment to buy shares at the share price at the first valuation point after we open your Clerical Medical ISA (see also condition 5.1). Subsequent lump sum investments will be invested at the share price at the next valuation point following their receipt at our administration address. We will send you a contract note within one working day of the deal. 18

20 8.2 You can make monthly investments only by direct debit from your nominated account. Unless we agree otherwise, monthly investments can only be used to buy accumulation shares. We will arrange to collect each monthly investment on the 1st or 15th of each month (or, if that day is not a working day, the first working day after that date) as indicated by you on your application form. We will invest each monthly investment at the share price at the valuation point on the day your direct debit is collected. 8.3 Initial lump sum investments in all funds must be at least 3,000 aggregated across all such funds. A minimum of 1,000 must be invested in any such fund. Unless we agree otherwise, additional lump sum investments into such funds must be at least 1,000. We may also accept a smaller amount on no more than one occasion in each tax year to allow you to invest the maximum permitted in a tax year. We may change these minimum limits in line with condition Unless we agree otherwise, you must invest at least 200 a month aggregated across all funds to buy shares by direct debit. A minimum of 100 a month must be invested in any fund. Monthly investments may be increased or decreased by a minimum of 25 a month subject to the minimum monthly investment and the annual ISA investment allowance. In order to increase or decrease monthly investments, you must tell us in writing of your new investment amount, at least 28 days in advance of the first proposed collection date for the new investment amount. We may change these minimum limits in line with condition If we receive an investment from you that would result in the overall annual ISA investment allowance for your Clerical Medical ISA being exceeded, the whole amount of this investment will be returned to you. 8.6 If we receive an investment from you after the date on which you cease to be eligible to make investments to your Clerical Medical ISA under the ISA Regulations, the whole amount of this investment will be returned to you. 8.7 You can request to transfer the cash value of ISA investments from another stocks and shares ISA into your Clerical Medical ISA. We will invest the cash transfer in your Clerical Medical ISA following the procedure for lump sum investments described above. 8.8 You can request to transfer some or all of the amounts saved in previous tax years from cash ISAs into your Clerical Medical ISA. This will not affect your annual ISA investment allowance for the current tax year. We will invest the cash transfer in your Clerical Medical ISA following the procedure for lump sum investments described above. 8.9 You can request to transfer the amount saved in the current tax year from a cash ISA into your Clerical Medical ISA. Such a transfer must be the whole amount saved in the tax year in the cash ISA up to the day of the transfer. Once the transfer is completed, the amount will be treated as if it had been invested directly into your Clerical Medical ISA in that tax year. You will then still be able to invest up to the full remaining balance of your annual ISA investment allowance in ISAs in that tax year, including up to the maximum amount allowed in a cash ISA. We will invest the cash transfer in your Clerical Medical ISA following the procedure for lump sum investments described above You can stop and restart your investments to your Clerical Medical ISA at any time. If you make regular investments by direct debit, you must give us 28 days written notice if you want to cancel your direct debit. 19