SF (LUX) SICAV 3. Société d'investissement à capital variable 33A avenue J.F. Kennedy, L-2010 Luxembourg SALES PROSPECTUS.

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1 SF (LUX) SICAV 3 Société d'investissement à capital variable 33A avenue J.F. Kennedy, L-2010 Luxembourg SALES PROSPECTUS October 2014 Distribution of this prospectus ("Prospectus") is not authorised unless it is accompanied by a copy of the latest available annual report of SF (LUX) SICAV 3 containing the audited balance-sheet and a copy of the latest half-yearly report, if published after such annual report. The sales prospectus and the respective annual and semi-annual reports may be obtained free of charge from all paying agents and sales agencies. It is prohibited to disclose information on the Fund, which is not contained in this sales prospectus, the documents mentioned therein, the latest annual report and any subsequent semi-annual report. The English version of the Prospectus is binding. VISA 2014/ PC L'apposition du visa ne peut en aucun cas servir d'argument de publicité Luxembourg, le Commission de Surveillance du Secteur Financier

2 SF (LUX) SICAV 3 TABLE OF CONTENTS INTRODUCTION... 3 SECTION I: DESCRIPTION OF THE AVAILABLE SUBFUNDS... 5 SF (LUX) SICAV 3 UBS A&Q ALTERNATIVE SOLUTION EUR... 6 SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND DIVERSIFIED USD SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND DIVERSIFIED CHF SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND DIVERSIFIED EUR SF (LUX) SICAV 3 GLOBAL EQUITY (EXTENSION) ALPHA CHF SF (LUX) SICAV 3 GLOBAL EQUITY (EXTENSION) ALPHA EUR SF (LUX) SICAV 3 GAM CAR EUR SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND FOCUSED EUR SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND FOCUSED CHF SF (LUX) SICAV 3 KEY MULTI-MANAGER HEDGE FUND FOCUSED USD SECTION II: GENERAL PROVISIONS MANAGEMENT AND ADMINISTRATION THE FUND INVESTMENT OBJECTIVES AND POLICY INVESTMENTS IN THE SF (LUX) SICAV LIQUIDATION AND MERGING OF THE FUND AND ITS SUBFUNDS DIVIDEND POLICY SPONSOR MANAGEMENT COMPANY AND AIFM PORTFOLIO MANAGERS/ INVESTMENT ADVISORS DEPOSITARY AND MAIN PAYING AGENT ADMINISTRATIVE SERVICES TAXATION CHARGES AND EXPENSES INFORMATION AVAILABLE TO SHAREHOLDERS AND SHAREHOLDER RIGHTS CONFLICTS OF INTEREST FAIR TREATMENT OF SHAREHOLDERS APPLICABLE LAWS AND JURISDICTION INVESTMENT GUIDELINES

3 INTRODUCTION SF (LUX) SICAV 3 (the "Fund") is a company organised as a société d'investissement à capital variable ("SICAV") and is registered under Part II of the Luxembourg law of December 17, 2010 on collective investment undertakings (the "Law"). This registration pursuant to the Law does not require any Luxembourg authority to approve or disapprove either the adequacy of this Prospectus or the portfolio of securities held by the Fund. Any representation to the contrary is unauthorised and unlawful. The Fund is subject to Part II of the Law because the investment policy of one, several or all of its Subfunds (as defined below) permits the exposure to underlying assets, by way of a financial index, that are not transferable securities and/or other financial assets as referred to in Article 41(1) of the Law laying down the permissible investments for UCITS. The Fund is an alternative investment fund ("AIF") within the meaning of Directive 2011/61/EU of the European Parliament and the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (the "AIFM Directive"). The Fund has appointed UBS Third Party Management Company S.A. as its alternative investment fund manager ("AIFM") within the meaning of the AIFM Directive and the Luxembourg law of 12 July 2013 on alternative investment fund managers, as may be amended (the "Law of 2013"). In Switzerland, some of the subfunds of the Fund (the "Subfunds") will only be offered and sold in accordance with the private placement exemptions set forth by article 3 of the Swiss law on collective investment schemes ("CISA"). Further information will be provided in the sections of the affected Subfunds. Investors should note that by virtue of current statutory regulations in the United States of America, the shares in the Fund are not authorised for sale in that country. Shares in the Fund may therefore neither be offered, sold or distributed within the United States of America, nor may any shares be acquired or held by US citizens or residents in the sense of the current statutory regulations in the United States. The shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission or other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of these offering materials. Any representation to the contrary is unlawful. The Subfunds may be registered in different distribution countries. The distribution of this Prospectus may be restricted in certain jurisdictions, in particular pursuant to selling restrictions set out under the AIFM Directive and applicable local rules and restrictions. The Subfunds may be offered for sale to professional investors in certain European Economic Area Member states subject to passport notification. Potential subscribers to the Fund should inform themselves on applicable laws and regulations (i.e. as to the possible tax requirements or foreign exchange control) of the countries of their citizenship, residence or domicile, and which might be relevant to the subscription, purchase, holding, conversion and redemption of shares. Any reference to "EUR" in this prospectus refers to the official currency of the European Monetary Union. Any reference to "USD" in this prospectus refers to the official currency of the United States of America. Any reference to "CHF" in this prospectus refers to the official currency of Switzerland. Any reference to "business day" in this prospectus refers to any day upon which the banks shall be open for business in Luxembourg. This Prospectus is subject to changes concerning the addition or suppression of Subfunds as well as other modifications. Therefore it is advisable for subscribers to ask for the most recent issue of the Prospectus. 3

4 Potential subscribers should note that the structure of the Prospectus is made up of Section I which contains the provisions which are specific to each available Subfund and of Section II which contains general provisions applicable to all Subfunds and the Fund as a whole. 4

5 SECTION I: DESCRIPTION OF THE AVAILABLE SUBFUNDS List of available Subfunds SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR SF (LUX) SICAV 3 Key Multi-Manager Hedge Fund Diversified USD SF (LUX) SICAV 3 Key Multi-Manager Hedge Fund Diversified CHF SF (LUX) SICAV 3 Key Multi-Manager Hedge Fund Diversified EUR SF (LUX) SICAV 3 Global Equity (Extension) Alpha CHF SF (LUX) SICAV 3 Global Equity (Extension) Alpha EUR SF (LUX) SICAV 3 GAM CAR EUR SF (LUX) SICAV 3 Key Multi-Manager Hedge Fund Focused EUR SF (LUX) SICAV 3 Key Multi-Managed Hedge Fund Focused CHF SF (LUX) SICAV 3 Key Multi-Managed Hedge Fund Focused USD Unless otherwise indicated in the descriptions below, each Subfund of SF (LUX) SICAV 3 is subject to the general provisions as set out in Section II of this Prospectus. 5

6 SF (LUX) SICAV 3 UBS A&Q ALTERNATIVE SOLUTION EUR This specific section describes the particulars of the Subfund SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR and is part of the general sales prospectus. Therefore, all information given herein should be considered in conjunction with this general prospectus. Profile of the typical investors The Subfund is suitable for investors with a relatively long investment horizon who consider investments in this Subfund as a convenient way of participating in the performance of the UBS A&Q Alternative Solution Index (EUR) (the "Index"). The Index reflects the performance of a notional portfolio comprised primarily of hedge funds and fund of hedge funds and other alternative investments (e.g. private equity, commodity and real estate and certain financial instruments) as further described below. The performance of the Subfund is determined by the performance of the Index. If the level of the Index increases from Launch Date, then this will result in a comparable increase in the performance of the Subfund; conversely if the level of the Index decreases from Launch Date, then this will result in a comparable decrease in the performance of the Subfund. The strategy as described herein is a high risk investment which does not provide any right of repayment of capital invested and as such, should the Index Components (as defined below) not perform favourably, then investors will incur a partial or total loss of capital invested. SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR qualifies as a foreign open-ended collective investment scheme pursuant to article 119 para. 1 Swiss law on collective investment schemes ("CISA"), as amended. SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR will not be licensed for public distribution in and from Switzerland and its shares will only be offered and sold to so-called "qualified investors" in accordance with the private placement exemptions set forth by article 3 CISA. The term "qualified investors" includes, inter alia, high net-worth individuals being individuals who have provided written confirmation that they hold directly or indirectly net financial investments worth at least CHF 2,000,000. SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR has not been licensed and is not subject to the supervision by the Swiss "Financial Market Supervisory Authority" ("FINMA"). Therefore, investors in the shares of SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR do not benefit from the investor protection provided by CISA and the supervision by the FINMA. The contents of this specific section of the prospectus are strictly for private use by its recipient and shall not be copied or distributed. Investment objective The investment objective of the Subfund is to generate capital appreciation by providing investors with a return linked to the performance of the UBS A&Q Alternative Solution Index (EUR), a diversified hedge fund and alternative investments index, as further described below. Investment policy The Subfund will principally invest in equity securities issued by corporate entities domiciled in any OECD country and listed or traded on regulated markets of an OECD country (the "Investment Portfolio"), and for the purpose of meeting its investment objective the Subfund will enter into a performance swap agreement (the "Swap Agreement") negotiated at arm's length with UBS AG (London branch), with another counterparty the obligations of which under the Swap Agreement are guaranteed by UBS AG or with another first class financial institution specialised in this type of transactions (the "Swap Counterparty"). Under the terms of the Swap Agreement, the Swap Counterparty delivers to the Subfund exposure to the Index (as described below) (the "Investment Strategy") and the Subfund delivers to the Swap Counterparty a total return exposure to the Investment Portfolio. 6

7 As of 3 rd November 2010 the Swap Counterparty changed from UBS AG (London branch) to STAR Compass plc, with all obligations under the Swap Agreement being guaranteed by UBS AG (London branch) as more fully described under "Guarantee" below. STAR Compass plc is a special purpose vehicle (in the form of a public limited company) established under the laws of Ireland and in relation to this transaction, its sole purpose is to act as swap counterparty and securities lending counterparty to various Subfunds of the Fund. The Subfund may hold liquid assets on an ancillary basis. The Subfund will only utilise leverage to a limited extent by which the exposure of the Subfund will not exceed 200% of the NAV. The Subfund will enter into securities lending transactions in order to generate additional income with UBS AG, Zurich or such other counterparty in accordance with the requirements and regulations of the CSSF and of which obligations under the relevant securities lending agreement are guaranteed by UBS AG or such other counterparty specialised in this type of transactions (the "Securities Lending Counterparty"). As of 3 rd November 2010 the Securities Lending Counterparty changed from UBS AG, Zurich to STAR Compass plc with all obligations under the Securities Lending Agreement guaranteed by UBS AG, (London branch) as more fully described under "Guarantee" below. The Swap Agreement will incorporate the terms of and be governed by a master agreement based on the standard 1992 ISDA Master Agreement governed and construed in accordance with English law and published by the International Swaps and Derivatives Association, Inc. The Swap Agreement will be valued on a consistent and monthly basis by the calculation agent ("Swap Calculation Agent") being UBS AG (London branch), or such other party as accepted by the Board of Directors from time to time, in accordance with the prevailing market parameters and valuations. The valuation methodology is outlined below. The Swap Counterparty will provide a trading price at which the Subfund can increase or decrease the Swap Agreement notional amount. Such a facility will be available on each Valuation Day when requested by the Portfolio Manager. The notional amount of the Swap Agreement will be the proceeds raised at the Launch Date and, in the case of subsequent subscriptions and/or redemptions, the notional amount will be adjusted accordingly. The Swap Agreement may be terminated or otherwise cancelled in accordance with its terms. The Swap Agreement will be entered into for a 7 year term as outlined therein. Thereafter it will be extended for consecutive 7 year periods, subject to the consent of the Board of Directors of the Fund and the Swap Counterparty at the end of each period (each such expiry date also being a relevant "Maturity Date") and the end of the last such period being the final maturity date (the "Final Maturity Date"). The Swap Counterparty has the option to early terminate the swap agreement in various circumstances upon the provision of adequate notice to the Subfund; in such circumstances, the early termination date would become the Final Maturity Date. The Swap Agreement neutralises the performance of the Investment Portfolio. Consequently, any income (including dividends) and capital gains from the Investment Portfolio are delivered to the Swap Counterparty under the Swap Agreement and will not be paid to investors in the Subfund. Risk Profile: The Subfund replicates the performance of a hedge fund index. It is therefore exposed via the Swap Agreement to less liquid financial instruments, a wide range of asset classes and potentially leverage in some of the index components. A significant portion of the Subfund is exposed to less liquid instruments, whose prices could fluctuate in certain market conditions. This potential for higher volatility has determined that the Subfund be classified in a high risk category. 7

8 Interim Swap Flows: In accordance with the Swap Agreement, and for the first time on 6 th January 2009 and thereafter on the 3 rd Subfund Business Day of each quarter until the Final Maturity Date: The Swap Counterparty will pay to the Subfund an amount, which corresponds to all fees and operating charges and expenses incurred by the Subfund as referred to in the section "Fees and Expenses" below. The Subfund will pay to the Swap Counterparty the income received on the Investment Portfolio and on any ancillary liquid assets. Maturity Swap Flows: At the end of the relevant term, amounts to be paid out under the Swap Agreement are determined on the basis of the following formula: Amount payable = outstanding Notional Amount on Final Maturity Date * (ISm IPm) where: ISm = performance of the Investment Strategy in EUR (consisting of exposure to the Index) at the end of the term of the Swap Agreement in relation to the initial value when the relevant agreement commenced. IPm = performance of the Investment Portfolio in EUR at the end of the term of the Swap Agreement in relation to the initial value when the relevant agreement commenced. If the amount is positive, then the Swap Counterparty will pay the amount to the Subfund. If this amount is negative then the Subfund will pay the amount to the Swap Counterparty. Valuation of Swap Agreement and its effects on the performance of the Subfund Before each Maturity Date, except for decreases of the notional amount, no payment is made to the Subfund in relation to the performance of the Investment Strategy. The performance of the Investment Strategy is taken into account in the meantime by virtue of the Swap Agreement in the calculation of the Net Asset Value per share of the Subfund. Accordingly, the valuation of the Swap Agreement determines the performance of the Subfund. On any Valuation Day after the Launch Date but before the Maturity Date, the value of the Swap Agreement is determined as follows: Outstanding Notional Amount on the relevant Valuation Day * (ISi IPi) ISi = the estimated performance of the Investment Strategy in EUR (consisting of exposure to the Index) at close of business on that Valuation Day in relation to the initial value when the relevant agreement commenced, as determined by the Swap Calculation Agent. For the avoidance of doubt the estimated performance of the Investment Strategy will be calculated based on the latest estimated valuations of the Index Components (as defined below) multiplied by their weights provided on or before the relevant Valuation Day and adjusted by the Swap Calculation Agent to reflect expected changes to the estimated valuations as at the Valuation Day (and not on the final Index level which is calculated on a one month delayed basis as outlined below) as determined by the Swap Calculation Agent on that Valuation Day. IPi = performance of the Investment Portfolio at close of business on the relevant Valuation Day in relation to the initial value when the relevant agreement commenced. Guarantee The irrevocable and unconditional Guarantee was issued on the 3rd November 2010 by UBS AG (London branch), 1 Finsbury Avenue, London EC2M 2PP (the "Guarantor"). UBS AG (London branch) is the London branch of UBS AG, a company incorporated under the laws of Switzerland whose registered offices are at Aeschenvorstadt 1, CH-4051 Basel, Switzerland and Bahnhofstrasse 45, CH Zurich, Switzerland. 8

9 The Guarantor irrevocably and unconditionally guarantees to the Subfund the due and punctual observance and performance by STAR Compass plc under the Securities Lending Agreement and Swap Agreement and agrees to pay to the Subfund from time to time on demand any and every sum or sums of money from time to time due and payable (but unpaid) by STAR Compass plc under or pursuant to the Securities Lending Agreement or Swap Agreement. The Guarantee exclusively aims at covering the Subfund's counterparty risk on STAR Compass plc and the Subfund's risk on the failure of STAR Compass plc to perform its obligations under the Securities Lending Agreement and the Swap Agreement. The Guarantee does not guarantee any investment return under redemption or at Maturity Date. Market Making UBS AG will make a market in the shares of the Subfund for investors who wish to realise their investment outside of the normal subscription and redemption cycle (as further described below under "Secondary market"). UBS A&Q Alternative Solution Index (EUR) The UBS A&Q Alternative Solution Index (EUR) (the "Index") is a Euro-denominated index which reflects the performance of notional index components comprising (i) single and multi manager hedge funds and fund of hedge funds generally managed by members of UBS Global Asset Management's Alternative and Quantitative Investment Platform ("A&Q Platform", collectively the "Hedge Funds") and other alternative investments (e.g. private equity, commodity, real estate and certain Financial Instruments as defined below) (collectively with the Hedge Funds, the "Alternative Investments"), (ii) Financial Instruments (as described below), (iii) the Cash Position (as described below) and (iv) certain EUR/USD-Hedging Arrangements (as described below) (which together with the Alternative Investments, the Financial Instruments, the Cash Position and the EUR/USD-Hedging Arrangements shall be referred to as the "Index Components"). The level of the Index is based on the performance of the Index Components, less Index Fees and Expenses (as defined below). Index Sponsor and Index Calculation Agent: UBS Alternative and Quantitative Investments LLC, ("A&Q"), which is part of the A&Q Platform, created the Index and is responsible for its calculation, the selection, rebalancing as well as the management of the Index (the "Index Calculation Agent" and/or "Index Sponsor"). Further details on the Index are included in the Appendix below. Collateral In order to reduce the credit risk exposure of the Subfund to the Swap Counterparty and the Securities Lending Counterparty (together the "Counterparty"), the Counterparty will provide the Subfund with collateral which should at least correspond to 90% of the Net Asset Value of the Subfund on any Valuation Day. This collateral will consist of eligible assets in accordance with the requirements and regulations of the CSSF and may include units of funds of hedge funds and claims against protected custody accounts, opened with a regulated custodian, in which the collateral assets are held. Collateral received will not be reinvested or otherwise reused. Risk Considerations Investment risk no capital protection: the Subfund employs no capital protection techniques or capital guarantees. Accordingly, the full amount of an investor's subscription is at risk and may be lost. Investment risk achievement of investment objective: the investment objective of the Subfund is to generate growth in value. The return of the Subfund will be linked to the return of the estimated Index level as determined by the Swap Calculation Agent subject to certain adjustments or, at the Final Maturity Date, to the final Index level. There can be no assurance that the Index level will increase in value, and accordingly there is no assurance that the Subfund's investment objective will be attained. 9

10 Investment risk alternative investment index risk: the return of the Subfund will be linked to the return of the estimated Index level as swap underlying. Investors in the Subfund are therefore exposed to general risks inherent in alternative investments, as well as specific risks associated with the Index. Such risks include but are not limited to the following: The risk that the Index Sponsor is not effective in selecting appropriate Alternative Investments components that will generate positive returns over the long term. The risk that the Alternative Investments may suspend the calculation of their net asset values which could impact the calculation of the Index level or estimated Index level as relevant and could lead to a suspension of subscriptions and redemptions of the Subfund shares. The Index itself may employ leverage of up to 25%. Hedge funds are generally considered to be unregulated investment vehicles. They may sell securities short, use significant levels of leverage, invest in various asset classes and instrument types including derivatives and commodities, whether traded on a regulated market or over the counter, and may not be required to diversify their investments. Accordingly, investments in hedge funds are generally considered to have a greater degree of risk than investments in regulated funds. To the extent that the Alternative Investments invest in the securities markets of developing countries, the political, regulatory and economic risks inherent in investments in emerging markets' securities are significant and may differ in kind and degree from the risks presented by investments in the world's major securities markets. These may include greater price volatility, substantially less liquidity and controls on foreign investment and limitations on repatriation of invested capital. The risk that the Index or any of the Alternative Investments diverge from their stated investment objectives and take on greater than expected levels of investment risk. The risk that some or all of the investments are illiquid. Accordingly, some or all Alternative Investments may be unable to redeem from and/or sell the underlying investments in a timely manner which may affect the liquidity of the Subfund. In particular, up to 20% of the Index may be allocated to illiquid private equity or real estate investments with lock-up periods in excess of two years. The risk of incorrect or stale investment values. The Alternative Investments and their investments may include assets which are not traded on an exchange or regulated market. Accordingly, their values may be difficult to determine and may be based on models or quotes provided by the relevant manager. These values may be incorrect or stale and may not reflect fair value. Lack of operating history of managers. The Index may include Alternative Investments whose managers have no, or a very short, performance history. Such investments may involve greater risks than those with more established managers. Operational risks of the managers, including inadequate back office functions, trade processing, accounting, administration, risk management, valuation services and reporting. Reliance on key personnel in the Alternative Investments selection process. The loss of key personnel at both the Index Sponsor and the Alternative Investments could materially and negatively impact the value of the Index. Limited capacity of managers. In order to deliver positive returns, some managers close their funds to new subscriptions once their fund has reached a certain size. The Index may be unable to reference underlying funds at all times, and therefore from time to time, the Index may in part also reference cash or money market instruments. 10

11 Risk of lack of regulatory oversight. The Alternative Investments are domiciled in countries providing significant investment discretion and which are generally considered to be lightly regulated. For example, the Alternative Investments are generally not required to deposit their assets with an independent custodian bank. Instead, such assets may be deposited with brokers or other intermediaries who do not provide for segregation of client assets. The Net Asset Value of the Subfund will be affected by various levels of fees, including fees at the level of the Subfund, the Index and the Index Components. These fees may include asset-based as well as performance fees. Consequently, performance fees may be charged in periods when the Net Asset Value of the Subfund has fallen. Additionally, performance fees may be paid on unrealised gains which in fact are never realised. Foreign currency risk. The Alternative Investments are mostly denominated in USD. The Alternative Investments in turn may invest in assets denominated in various currencies. The Index is initially calculated in USD, and an adjustment is made to reflect the effect of currency hedging between USD and EUR. It is not intended that the currency hedging of the Index will be 100% effective. The level of the Index and the return to investors in the Subfund could be adversely affected not only by hedging costs and changes in exchange rates but also by local exchange control regulations and other limitations, including currency exchange limitations and political and economic developments in the relevant countries. Liquidity Risk The risk that the Fund may temporarily suspend calculation of the Net Asset Value per share of the Subfund and/or the issue and redemption of shares. Collateral Risk The Fund has made all reasonable endeavours to ensure the collateral is enforceable in accordance with the applicable laws and regulations. However, there is a risk that as a result of a change in, or amendment to, the applicable laws and regulations, the collateral may become unenforceable. Valuation risk estimated Index level: the main determinant of the monthly Net Asset Value per share of the Subfund is the level of the Index on the Valuation Day. The final Index level is published monthly by the Index Sponsor, typically within a month after the relevant Valuation Day. In order to calculate the value of the Swap Agreement on any Valuation Day (other than the Final Maturity Date) at which the Subfund can trade with the Swap Counterparty, the estimated Index level will be determined by the Swap Calculation Agent based on estimated values of the Alternative Investments provided to the Swap Counterparty by the managers or administrators of the Alternative Investments on or before the Valuation Day and may be adjusted to reflect expected changes to the estimated valuations as at the Valuation Day; where the values of any Alternative Investments are not available or, in the opinion of the Swap Calculation Agent, are otherwise unreliable or unrepresentative, the Swap Calculation Agent may estimate in good faith the value of such Alternative Investments in order to determine the estimated value of the Index on the Valuation Day. The value of the Index used in determining the Net Asset Value per share of the Subfund may differ from the final Index level for the relevant month as published by the Index Sponsor. In such circumstances, the value of the Swap Agreement and the Net Asset Value per share of the Subfund will not be revised or otherwise amended to reflect any such difference. Valuation risk final Index level: The Net Asset Value per share of the Subfund at the Final Maturity Date will be based on the final Index level as calculated by the Index Calculation Agent. In valuing the Alternative Investments, the Index Calculation Agent may need to rely on financial information provided by the managers of the Alternative Investments themselves. Independent valuation sources such as exchange listing may not be available for the Alternative Investments of the Index. The net asset value of the Alternative Investments may be finalized using estimated values provided by the managers or administrators of the Alternative Investments. In most cases, the Index Calculation Agent will have no ability to assess the accuracy of the valuations received. In certain cases, the values provided by the managers or administrators of the Alternative Investments may subsequently be amended; e.g. as a result of adjustments identified as part of the annual audit of the underlying schemes. In such circumstances, the value of the Index and the Net Asset Value per share of the 11

12 Subfund at the Final Maturity Date will not be revised or otherwise amended to reflect any such difference. Settlement of redemption amounts prior to the Final Maturity Date: redemption proceeds will generally be paid no later than 2 Subfund Business Days following the relevant Valuation Day. However, in circumstances where the Swap Counterparty has hedged itself whether with the Index components or otherwise and has not received redemption proceeds, then settlement of Subfund redemptions may be delayed for up to 30 Subfund Business Days unless otherwise decided by the Board of Directors in exceptional circumstances. Settlement of redemption amounts on the Final Maturity Date: redemption proceeds will generally be paid after one calendar month plus 5 Subfund Business Days following the Final Maturity Date. However, in circumstances where the Swap Counterparty has hedged itself whether with the Index components or otherwise and has not received redemption proceeds, then settlement of Subfund redemptions may be delayed for up to 30 Subfund Business Days unless otherwise decided by the Board of Directors in exceptional circumstances. Early Maturity: Under the terms of the Swap Agreement, the Swap Counterparty may terminate the Swap Agreement on a calendar quarter-end prior to the Maturity Date. In such circumstances, the date of the early termination would become the Final Maturity Date of the Subfund, and the Subfund would terminate unless the Subfund enters into another swap agreement with another counterparty. The Swap Counterparty must give at least 100 calendar days' notice to the Subfund prior to an early termination date. Index disruption: If the Swap Calculation Agent determines the Index has been replaced with another index, or the Index is likely to cease to be calculated by the Index Calculation Agent or maintained by the Index Sponsor, then the Swap Counterparty and the Subfund may agree to use another index, and the terms of the Swap Agreement may be amended accordingly. Alternatively, the Swap Agreement may be terminated and accordingly the Subfund would terminate as well as set out above unless the Subfund enters into another swap agreement with another counterparty. Counterparty Risk: the Subfund is exposed to the risk that the Swap Counterparty (together with the Guarantor) may default on its obligations to perform under the Swap Agreement and that the Securities Lending Counterparty (together with the Guarantor) may default on its obligations to deliver equivalent collateral. In assessing this risk, investors should recognise that the Swap Counterparty will pledge collateral to ensure that the net credit risk of the Subfund to the Swap Counterparty will not exceed 10% of the Net Asset Value of the Subfund; and the Securities Lending Counterparty will pledge collateral equivalent to the value of the securities under loan. In circumstances where UBS AG (or another single counterparty) is both the Swap Counterparty and the Securities Lending Counterparty, then the net exposure to UBS AG, or another single counterparty will be collateralised such that the net credit risk to the relevant counterparty will not exceed 10% of the overall net exposure to that counterparty. Taxation: Potential shareholders should seek information on the taxation laws and regulations in force and, where appropriate, seek advice on the subscription, purchase, possession and sale of shares at their place of residence. Further information on taxation is provided in the section "Taxation of Section II. Use of Derivatives: The Swap Agreement is a structured derivative transaction as part of the investment strategy. While the prudent use of such a derivative can be beneficial, derivatives also involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. Structured derivative transactions are complex and may involve a high degree of loss. The aim of the Swap Agreement is to deliver exposure to the Investment Strategy and as such, the use of the Swap Agreement is not speculative in nature. Alternative Investments: The Subfund may take advantage of opportunities with respect to certain other alternative instruments that are not presently contemplated for use by the Subfund or that are currently not available, but that may be developed, to the extent such opportunities are both consistent with the investment objective of the Subfund and legally permissible for the Subfund. Certain alternative instruments may be subject to various types of risks, including market risk, 12

13 liquidity risk, the risk of non-performance by the counterparty, including risks relating to the financial soundness and creditworthiness of the counterparty, legal risk and operations risk. Avoidance of conflict of interest: The units within the UBS Group who are providing services to the Subfund operate as independent entities and in order to avoid possible conflicts of interest, all transactions between these entities and the Subfund are undertaken at arm's length prices, always keeping in mind the best interest of the shareholders. In particular, the estimated level of the Index on any Valuation Day prior to the Final Maturity Date will be determined by the Swap Calculation Agent based on estimated values for the Index Components and agreed by the Index Sponsor, both of whom may be different entities or divisions within UBS AG. In the normal course of business, UBS Group and/or its directors, officers and employees may have or may have had interests in the Alternative Investments. Such activity may or may not affect the value of the Index and Subfund. Although the Index Sponsor has agreed to use its best efforts in managing the Index, the Index Sponsor and its principals, members and affiliates (collectively the "Index Sponsor Parties") are not required to devote full time or any material portion of their time to managing the Index. The Index Sponsor is the investment adviser to a number of investment funds, including funds with investment objectives similar or substantially similar to those of the Index, and the Index Sponsor Parties advise and may advise additional clients, some of which hold or may hold the same investments as are included in the Index. The Index Sponsor may in the future sponsor other indices similar to the Index. The Index Sponsor Parties may make use of the portfolio transactions of their clients' accounts to generate "soft dollars" which are used to pay for services provided to one or more Index Sponsor Parties. Furthermore, the Index Sponsor is authorised in respect of the Index to consent to "soft dollar" practices on behalf of Alternative Investments which do not conform to the foregoing restrictions, as established by the US Securities Exchange Act UBS Group may receive management fees, performance fees and other fees, if applicable, for such portion of the Index allocated to Index Components managed by any member of the UBS Group, which may constitute a significant percentage of the Index. Accordingly, in determining Index allocations, the Index Sponsor is subject to a conflict of interest because such allocation will result in higher amounts being allocated or paid to the UBS Group than if the Index was allocated exclusively to managers not affiliated with the UBS Group. The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Subfund. Prospective investors should read the prospectus and the articles of incorporation of the Fund and consult with their own advisers before deciding whether to invest in the Subfund. Investments in the SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR General Information Reference currency: EUR. This is the currency in which the Net Asset Value per share of the Subfund is calculated. The Swap Agreement is denominated in EUR. The Index is initially calculated in USD, and an adjustment is made to reflect the effect of currency hedging between USD and EUR. It is not intended that the currency hedging will be 100% effective. In addition, the Index Components, and in turn their underlying investments, may be denominated in currencies other than USD and EUR. Allocation of income: this Subfund will pursue an accumulation policy. Valuation Day: the Net Asset Value per share will be calculated on the third last bank business day (i.e. each day on which banks are open during normal business hours) of each month in London, Zurich and Luxembourg, with the exception of individual, non-statutory rest days in London, Zurich and Luxembourg. "Non-statutory rest days" are days on which several banks and financial institutions are closed in London, Zurich and Luxembourg. 13

14 Issue of shares: shares may be issued monthly by reference to the Net Asset Value per share calculated on the relevant Valuation Day. No issue will take place on days on which the Board of Directors has decided not to calculate a Net Asset Value per share as described in the section "Suspension of the net asset value calculation and of the issue, conversion and redemptions of shares" in Section II. Shares will be issued as non-certificated registered shares, unless otherwise decided by the Board of Directors. Upon request and against payment by the shareholder of all incurred expenses, share certificates may be issued in physical form. The Board of Directors reserves the right to issue share certificates in denominations of one or more shares, however fractions of shares will not be issued in certificated form. Global share certificates will not be issued. Subscription applications by the Distributor of shares of the Subfund that are registered with the Administrative Agent no later than by 9am (Central European Time) on the relevant Valuation Day will be processed on the basis of the Net Asset Value per share calculated for that Valuation Day. Subscription applications by all other parties are subject to such earlier cut off times as may be agreed between the Distributor and such other party from time to time. Redemption of shares: shares may be redeemed quarterly in March, June, September and December each year by reference to the Net Asset Value per share calculated on the last Valuation Day of the quarter subject to written notice to the Administrative Agent by no later than the 6 th last Subfund Business Day of the first month in the relevant quarter. Where an order for a redemption of shares in the Subfund has been received for a quarterly Valuation Day and the Swap Counterparty is prepared to decrease the notional of the Swap Agreement on the next Valuation Day as set out below and the Board of Directors considers that the redemption at such shorter notice does not jeopardise the interests of the remaining shareholders, then the redemption order may be processed as of this next Valuation Day. The Swap Counterparty may be prepared to decrease the notional of the Swap Agreement on a Valuation Day other than a quarterly Valuation Day. In such circumstances, shares may be redeemed on such a Valuation Day. However, where an order for a redemption of shares in the Subfund has been received for a Valuation Day other than a quarterly Valuation Day, and the Swap Counterparty is not prepared to decrease the notional amount of the Swap Agreement, the redemption order may be rejected by the Subfund. In such case, the Subfund will execute the redemption order on the next Valuation Day on which the Swap Counterparty is prepared to decrease the notional amount of the Swap Agreement, but in no case later than the second following quarterly Valuation Day. Where the Swap Counterparty may be prepared to decrease the notional of the Swap Agreement on a Valuation Day other than a quarterly Valuation Day, then redemption applications by the Distributor relating of shares of the Subfund that are registered with the Administrative Agent no later than by 9am (Central European Time) on the relevant Valuation Day will be processed on the basis of the Net Asset Value per share calculated for that Valuation Day. Redemption applications by all other parties are subject to such earlier cut off times as may be agreed between the Distributor and such other party from time to time. No redemption will take place on days on which the Board of Directors has decided not to calculate a Net Asset Value per share as described in the section "Suspension of the net asset value calculation and of the issue, conversion and redemptions of shares" in Section II. In addition, the Board of Directors is empowered to: a) Reject a subscription application at its discretion and to discretionarily decide to accept subscription requests on any other Valuation Day; b) At any time redeem shares of the Subfund held by shareholders who are not qualified to purchase or hold shares of the Subfund. Such redeemed shares are reimbursed to the shareholders and thereby cease to be valid. Subfund Business Day: days on which the TARGET system is open and normal bank business days (i.e. each day on which banks are open during normal business hours) in London, Luxembourg, New York, Zurich and the Cayman Islands, with the exception of individual, non- 14

15 statutory rest days in London, Luxembourg, New York, Zurich and the Cayman Islands. "Nonstatutory rest days" are days, on which several banks and financial institutions are closed in London, Luxembourg, New York, Zurich and the Cayman Islands. Secondary market: UBS AG (the "market-maker") will make a market in the shares of the Subfund. Shareholders may sell shares to the market-maker on each business day. The price at which shares can be traded with the market-maker may differ from the most recent Net Asset Value of the Subfund. Specific reasons for the suspension of the Net Asset Value calculation and/or issue, conversion and redemption of shares: Notwithstanding the reasons set out in Section II "Suspension of the Net Asset Value calculation and of the issue, conversion and redemption of share" the Subfund may temporarily suspend calculation of the Net Asset Value per share of the Subfund and/or the issue and redemption of shares when the Subfund cannot adjust the size of the Swap Agreement due to the inability of the Swap Counterparty to adjust its hedging positions due to restrictions on subscriptions or redemptions of the entirety of or some of the hedging positions. Subject to an extraordinary event, including without limitation, liquidation or force majeure, the Subfund will ensure that investor's shares will be redeemed within 12 months following the request for redemption but in no case later than within 36 months. UBS Group: UBS AG together with its branches and affiliates (which shall for this purpose mean any entity owned by and/or under common ownership or control of UBS AG.) Portfolio Manager: UBS Global Asset Management (UK) Ltd. The Portfolio Manager is part of UBS Global Asset Management, a business group of UBS AG. The Portfolio Manager is regulated by the UK Financial Services Authority. Distributor: UBS Investment Bank, a business group of UBS AG Launch Period: 1 September September 2008 Launch Date: 1 October 2008 Share classes The Board of Directors can issue several classes of shares for the Subfund. Currently, the following share class is offered: R-class available for all types of investors Fees and Expenses The Subfund will bear all the costs incurred in connection with the management, administration, portfolio management of the Subfund's assets and distribution of the Subfund (the "Flat Fee") which will be calculated based on the Net Asset Value of the Subfund and in total will not exceed 0.45% per annum of the Net Asset Value per share and be payable on a quarterly basis. The Depositary will receive a fee that will not exceed 0.05% per annum of the Net Asset Value per share calculated and payable on a quarterly basis. In addition, the Subfund shall bear the expenses (the "Additional Expenses") as described in Section II 12. Charges and Expenses. As described above, the Swap Counterparty pays the Subfund on a quarterly basis an amount corresponding to the aforementioned fees and costs and all additional costs incurred by the Subfund. Fees which are borne by the investor directly are the following: Issuing commission of up to 3% of the issue price per share; Redemption charge of up to 0.5% of the Net Asset Value per share to be redeemed, which may be increased up to 5% in periods of increased volatility of the Index Components or in the event that the Subfund experiences significant redemptions. 15

16 Subscriptions During the Launch Period the shares of the Subfund may be subscribed at a price calculated based on the latest estimated valuations of the Index Components multiplied by their weights provided on or before 26 September 2008 and adjusted by the Swap Calculation Agent to reflect expected changes to the estimated valuations as of 26 September 2008 as determined by the Swap Calculation Agent on that date plus any stamp duties and fees. After the Launch Period, the issue price is based on the Net Asset Value per share. Any taxes, commissions and other fees that apply to investors in the different countries in which shares may be sold will also be charged in addition to the Net Asset Value per share. Sales agencies may charge investors an issuing commission of up to 3% of the issue price per share. Example 1 sales commission applied in addition to investment amount Example where an issuing commission of 3% is applied Example where no issuing commission is applied Investment amount EUR 10,000 EUR 10,000 Net asset value per share EUR 100 EUR 100 Issuing commission 3% 0% Issue price per share EUR 103 EUR 100 Number of shares subscribed Total amount of subscription EUR 10,300 EUR 10,000 Example 2 sales commission applied to initial investment Example where an issuing commission of 3% is applied Example where no issuing commission is applied Investment amount EUR 10,000 EUR 10,000 Net asset value per share EUR 100 EUR 100 Issuing commission 3% 0% Issue price per share EUR 103 EUR 100 Number of shares issued Total subscription amount EUR 10,000 EUR 10,000 Subscriptions for shares in the Subfund are accepted by the Fund as well as by the sales agencies and paying agents, which forward them to the Fund. Subscriptions received on any Subfund Business Day prior to the time stated under "Issue of Shares" in "General Information" by the Administrative Agent will be processed on the relevant Valuation Day. To ensure punctual forwarding to the Administrative Agent, earlier cut-off times may apply for submission of applications received by sales agencies in Luxembourg or abroad. Information on this may be obtained from the sales agency concerned. The issue price of the Subfund shares is paid no later than two Subfund Business Days following the relevant Valuation Day into the account at the Depositary in favour of the Subfund. In addition, the Fund may issue fractional shares up to three decimal places. However, no certificates are issued for these fractional shares. They are credited to the shareholder via an entry in the securities custody account of his or her choice. 16

17 Fractions of shares do not confer the right to vote at general meetings, but will grant entitlement to a distribution or a proportionate distribution of the liquidation proceeds in the case where the Subfund is dissolved. In certain circumstances during the first six months after Launch Date, at the discretion of the Board of Directors, the Subfund may process subscriptions on a Subfund Business Day which is not a Valuation Day. In such cases, the assets and liabilities of the Subfund will be valued on that Subfund Business Day. Redemptions Redemption applications, accompanied by any certificates that might have been issued, are accepted by the Fund as well as at the sales agencies and paying agents, which forward them to the Fund. Applications for redemption received on any Subfund Business Day prior to the time stated under "Redemption of Shares" in "General Information" by the Administrative Agent will be processed on the relevant Valuation Day. To ensure punctual forwarding to the Administrative Agent earlier cutoff times may apply for the submission of applications received by sales agencies in Luxembourg or abroad. Information on this may be obtained from the sales agency concerned. In general, the value of redeemed Subfund shares is paid out no later than two Subfund Business Days after the relevant Valuation Day. However, in circumstances where the Swap Counterparty has hedged itself and has not received redemption proceeds for whatever reasons with respect to its hedge, then settlement of Subfund redemptions may be delayed for up to 30 Subfund Business Days unless otherwise decided by the Board of Directors in exceptional circumstances. In addition, legal provisions, such as foreign exchange controls or restrictions on capital movements, or other circumstances beyond the control of the Depositary, may make it impossible to transfer the redemption amount to the country in which the redemption application was submitted. Any taxes, commissions and other fees incurred in the countries in which Fund shares may be sold will also be charged. The price at which shares in the Subfund are redeemed, shall be calculated according to the Net Asset Value per share of the Subfund and of the relevant share class. In the event of an excessively large volume of redemption applications, the Board of Directors may decide to delay execution of the redemption applications until the corresponding assets of the Fund have been sold without unnecessary delay. Should such a measure be necessary, all redemption applications received on the same day will be calculated at the same price. In calculating the redemption price, the Subfund may on any Valuation Day when there are redemptions adjust the redemption price by deducting an amount of up to 0.5% from the Net Asset Value per share to be redeemed. However, in periods of increased volatility of the Index Components and/or in the event that the Subfund experiences significant redemptions such deduction may be increased up to 5% of the Net Asset Value per share. Example 3 redemption charge applied to redemption of shares Example where no redemption charge is applied Example where redemption charge of 0.5% is applied Example where redemption charge of 5% is applied Number of shares redeemed Net asset value per share EUR 100 EUR 100 EUR 100 Redemption charge (in %) 0% 0.5% 5.0% Redemption price per share EUR 100 EUR 99.5 EUR 95 Total redemption proceeds EUR 10,000 EUR 9,950 EUR 9,500 17

18 Conversions Conversions of shares into other Subfunds' shares of the Fund may be permitted. Past performance 20% 15% 10% 5% 0% -5% R LU % 6.7% -2.2% 3.7% 8.7% The chart shows the investment returns of the SF (LUX) SICAV 3 UBS A&Q Alternative Solution EUR R-class calculated as a percentage of the change in Net Asset Value over the previous year. In general any past performance takes account of all ongoing charges but not the entry charge/issuing commission. The past performance is not an indicator for the future performance. The share class was launched on The past performance is calculated in EUR. 18

19 APPENDIX: INDEX DESCRIPTION The Index Sponsor does not guarantee the accuracy and/or the completeness of the Index or any data included therein, and it shall have no liability for any errors, omissions, or interruptions therein. The Index Sponsor does not make any warranty, express or implied, as to results to be obtained by the Subfund, investors or any other person or entity from the use of the Index or any data included therein. The Index Sponsor does not make any express or implied warranties and expressly disclaims all warranties, of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein. Without limiting any of the foregoing, in no event shall the Index Sponsor have any liability for any lost profits or indirect, punitive, special or consequential damages, even if notified of the possibility thereof. I. Background to the Index The objective of the Index is to consistently realize risk-adjusted appreciation primarily through allocations to single and multi-manager Alternative Investments managed by the A&Q Platform. The Index Sponsor may include allocations to Alternative Investments managed by the Index Sponsor, affiliates of the Index Sponsor and from time to time unaffiliated managers. The Index Sponsor seeks to generate total returns over the long-term, irrespective of the performance of any particular sector of the global capital markets. The Index Sponsor seeks to achieve the objective of the Index by taking advantage of opportunities in the global capital markets primarily through the selection of multiple investment managers who pursue a variety of alternative investment strategies as well as allocations similar to direct investments in a wide range of financial instruments. In seeking to maintain an index composition that demonstrates a balance of strategies, markets and risks the Index Sponsor will consider to include the performance of the broadest range of securities, commodities and other instruments, including, without limitation, U.S. and non-u.s. equity and equity-related securities, bonds and other fixed-income securities, futures, forward contracts, warrants, options, swaps and other derivative instruments, currencies, U.S. government securities (collectively, "Financial Instruments") as a possible complementary Index Component. Financial Instruments included into the Index as Index Components may be listed on exchanges, traded overthe-counter and through private placements. The Index may mirror long and short positions in Financial Instruments. The Index Sponsor is not bound by any fixed criteria in allocating weights to the Index Components including Hedge Funds or to Financial Instruments, and is not limited in the types of allocations or strategies. Over time, markets may change, and the Index Sponsor will seek to capitalize on attractive opportunities, wherever they may be. Specifically, the Index Sponsor may, in its sole discretion, adjust the allocations among Hedge Funds and Financial Instruments to maintain the initial allocation among the current Hedge Funds and Financial Instruments included in the Index, or allocate weightings to new or different Hedge Funds and Financial Instruments. The Index Sponsor may also include in the Index new or different Hedge Funds or Financial Instruments. The Index Sponsor intends to include in the Index as Index Components a diverse group of Hedge Funds which utilize uncorrelated investment strategies which will allow the Index Sponsor to maintain the flexibility to adjust the composition of the Index as market opportunities change. The Index composition will be diversified in terms of investment strategies used, sector exposure taken, asset classes and markets invested in by the Hedge Funds included in the Index. The Index Sponsor may, in its reasonable discretion, change the composition of the Index or the weightings of existing Index Components (such change hereinafter referred to as "rebalancing") on any Index Rebalancing Date (as defined below under "Index Calculation") subsequent to the initial composition of the Index on 31 March 2006 as it sees fit in line with the objectives and goals of the Index. A rebalancing of the Index can be made as a result of, but not limited to one or more of the following reasons: (i) one or more of the Index Components fails to meet the criteria set forth in the guidelines by the Index Sponsor for inclusion within the Index; 19

20 (ii) (iii) a new Index Component has been identified by the Index Sponsor, which, in the opinion of the Index Sponsor, will improve the overall performance of the Index if included, either as an addition to the existing Index Components making up the Index or as a replacement for one or more of the Index Components; or the weightings of all existing Index Components are changed because, in the opinion of the Index Sponsor, the new weightings will improve the performance of the Index. On each Index Rebalancing Date on which a change in the composition of the Index is made, the Index will be adjusted by assigning new weightings to one or more of the Index Components subject to the condition that the level of the Index immediately after the change is effected must be the same as the level of the Index immediately before the change. In other words, no change in the level of the Index may occur on the Index Rebalancing Date solely as a result of changes to the composition of the Index. II. Cash Position The Index will include as an Index Component a "Cash Position" which mirrors the holding of cash, money market instruments or cash obligations. The Cash Position can also mirror the employment of leverage, in which case the Cash Position may mirror a negative cash balance and may reflect the cost of such leverage in the returns of such Cash Position. Accordingly, the Cash Position may be a negative amount at such times that borrowing exceeds cash holdings. The Index Sponsor may employ leverage up to 25% to take advantage of market opportunities. III. Financial Instruments The Index may include as an Index Component allocations similar to direct investments in Financial Instruments which pursue a wide range of strategies including without limitation, discretionary trading strategies, quantitative strategies indices and structured products. These allocations may be made to achieve both excess returns as well as form down side trends that may negatively impact the Index. These direct investments which are mirrored in the Index are expected to be noncorrelated and are expected to span a variety of asset classes including, but not limited to, swaps, commodities, options and other fixed income and credit derivative instruments. At the time the Index Sponsor makes an allocation, it does not intend to assign a weight to an Index Component in excess of 20% which pursues illiquid private equity strategies or real estate investments or to investment vehicles which are subject to a non-waivable lock-up period in excess of two years. IV. Expenses The Index is calculated net of certain fees, costs and expenses commonly to be associated with establishing and maintaining a portfolio similar to the notional portfolio mirrored by the Index, as determined by the Index Sponsor in its reasonable discretion, including, without limitation, investment, research, legal, accounting, administration, custodial and professional expenses (collectively, the "Expenses"). In addition, the Index Fees (as defined below) will be deducted when calculating the level of the Index. V. EUR/USD-Hedging Arrangements The Index will include as an Index Component the "EUR/USD-Hedging Arrangements." As it is anticipated that substantially all of the Index Components will be denominated in US-Dollars, the Index Sponsor will enter into EUR/USD-Hedging Arrangements. The level of the Index will be increased or decreased, as the case may be, by any income, loss, costs and expenses attributable to the currency conversions and any other transactions constituting the EUR/USD-Hedging Arrangements. The Index Sponsor will, pursuant to the EUR/USD-Hedging Arrangements, make a reasonable attempt to offset, but not eliminate, the Euro/US-Dollar exposure of the Index resulting from substantially all other Index Components being US-Dollar denominated. Pursuant to the EUR/USD-Hedging Arrangements, to the extent reasonably practicable, the Index Sponsor will use reasonable efforts to convert weightings to the Index Components between EUR and US-Dollars at the spot rate. In addition, to the extent reasonably practicable, non-functional currency exposure (i.e., non-eur exposure) of the Index Components is periodically hedged back to the functional currency (EUR) of the Index by means of weightings to forward currency contracts. 20