Integrating Ignis Funds into the Standard Life Investments Group: our merger proposals

Transcription

1 Integrating Ignis Funds into the Standard Life Investments Group: our merger proposals 11 September 2015 This document is important and requires your immediate attention. If you are in any doubt as to any aspect of this document or the action to be taken you should consult your financial adviser.

2 In this document, unless the context requires otherwise, the terms in bold italics shall have the meaning set out in the Glossary in Appendix 7. References to we, us or our are to Standard Life Investments (Mutual Funds) Limited. Proposal to merge: Authorised Unit Trust OEIC Sub-Fund Standard Life Investments Ignis American Growth Fund into American Equity Unconstrained Fund Standard Life Investments Ignis Balanced Growth Fund into UK Equity High Alpha Fund Standard Life Investments Ignis Corporate Bond Fund into Corporate Bond Fund Standard Life Investments Ignis European Growth Fund into European Equity Growth Fund Standard Life Investments Ignis European Smaller Companies Fund into Europe ex UK Smaller Companies Fund Standard Life Investments Ignis Global Growth Fund into Global Equity Unconstrained Fund Standard Life Investments Ignis High Income Bond Fund into Higher Income Fund Standard Life Investments Ignis Managed Portfolio Fund into MyFolio Managed IV Fund Standard Life Investments Ignis Pacific Growth Fund into Asian Pacific Growth Fund Standard Life Investments Ignis Smaller Companies Fund into UK Smaller Companies Fund Standard Life Investments Ignis UK Equity Income Fund into UK Equity High Income Fund You have received this document because you are a Unitholder in one or more of the authorised unit trusts listed above (each a Trust and together the Trusts ) and we want to inform you of our proposals to merge these Trusts with the OEIC sub-funds listed above. For our proposals to take effect an Extraordinary Resolution must be passed at a Meeting of your Trust. A Notice of Meeting of Unitholders in each of the above Trusts is set out in Appendix 6. You are requested to complete every Proxy Form sent to you with this document and to send it, or them, in the enclosed pre-paid envelope as soon as possible and in any event so that it (or they) arrives not later than 48 hours before the time of the Meeting of Unitholders of your Trust. The references to your Trust throughout this document are to the Trust in which you are a Unitholder. If you are a Unitholder in more than one of the Trusts listed above then you will have received with this document a separate Proxy Form for each Trust in which you are a Unitholder. If that is the case, it is important that you read this document carefully in relation to each of those Trusts in which you are a Unitholder. This is because there are differences in the way the proposals affect each of the Trusts.

3 CONTENTS PAGE Reasons for the Merger Proposals 4 Our Merger Proposals 4 Costs 5 Other Considerations Income Mandates and Other Instructions Tax Other Consents 5 Dealing Dates 6 Other Key Dates 7 Action You Need to Take 8 Results of the Meeting of your Trust 9 Any Questions 9 Appendices 10 Appendix 1: Destination Table 11 Appendix 2: The Scheme 13 Appendix 3: Consents and Clearances 21 Appendix 4 22 o Part 1: Comparison of an authorised unit trust and an OEIC o Part 2: Comparison of your Trust and your Receiving Fund Standard Life Investments Ignis American Growth Fund Standard Life Investments Ignis Balanced Growth Fund Standard Life Investments Ignis Corporate Bond Fund Standard Life Investments Ignis European Growth Fund Standard Life Investments Ignis European Smaller Companies Fund Standard Life Investments Ignis Global Growth Fund Standard Life Investments Ignis High Income Bond Fund Standard Life Investments Ignis Managed Portfolio Fund Standard Life Investments Ignis Pacific Growth Fund Standard Life Investments Ignis Smaller Companies Fund Standard Life Investments Ignis UK Equity Income Fund o Part 3: Performance Data Appendix 5: Procedure for the Meetings 70 Appendix 6: Notices of Meetings 72 Appendix 7: Glossary 84

4 Reasons for the Merger Proposals You will be aware that Ignis Asset Management Limited was acquired by Standard Life Investment (Holdings) Limited on 1 July In July this year, we took over the operation of the Ignis Funds and since then we have been looking at the best way of more fully integrating the Ignis Funds into our range of OEICs. We have identified that there are a number of overlaps between some of the Ignis Funds and some of the funds within the Standard Life Investments Fund Range; in particular, a number of funds in the Standard Life Investments Fund Range pursue a similar investment strategy to the Trusts. We want to generate certain efficiencies in the management of our products, such as our funds, which will benefit our investors. In general, funds (such as your Trust and the Receiving Funds) have a proportion of fixed costs which the funds have to pay regardless of size. Typically, the larger the fund the greater the economies of scale. We have been advised that the single largest investor in the majority of the Ignis Funds intends, over the shorter term, to redeem its holdings in these funds. This will mean that many of the Ignis Funds would, in the absence of any re-structuring, be small in comparison to many of the existing funds within the Standard Life Investments Fund Range and we would expect that, over time, the costs of running these funds on a stand-alone basis would increase. We have identified that there should be a cost benefit over time to unitholders by combining the Trusts with the Receiving Funds. We refer to this combination of the funds as our Merger Proposals. We anticipate that in most cases the overall costs of running the Receiving Funds will be proportionately lower after the mergers; this is because in all cases other than the Standard Life Investments Ignis Corporate Bond Fund and the Standard Life Investments Ignis European Smaller Companies Fund, the Trusts will be merged into existing Receiving Funds and the mergers will enlarge the shareholder base and increase the fund assets. We also believe that the merger of your Trust with your Receiving Fund will result in more efficient portfolio management and operations over time. Also, by merging your Trust with your Receiving Fund we can reduce the overall number of funds within our range. A reduction in the number of our overall funds and being able to operate the funds in the Standard Life Investments Fund Range on the same operational platform, with a single custodian, fund administrator and accountant will, we anticipate, result in further efficiencies. Most of the funds in the Standard Life Investments Fund Range are sub-funds of OEICs. The majority of the Ignis Funds are authorised unit trusts. OEICs are in many ways similar to unit trusts. They provide essentially the same level of investor protection and the same tax benefits as unit trusts (including all the tax benefits if you invest through an ISA). However, we believe that OEICs have a more modern structure and are generally more flexible than unit trusts. A general comparison of the main features of OEICs and unit trusts is contained in Appendix 4. A more specific comparison of the Receiving Funds and the Trusts is set out in Appendix 4. It is important that you consider Appendix 4 in detail. This is because the comparison highlights some significant differences between the Receiving Funds and the Trusts. For example, there are differences in the investment objectives and policies, the income distribution dates, the types of share in issue, charges (including the level of the OCF) and for some, their use of derivatives and their investment and borrowing powers. In particular, there are material differences in the way that the Standard Life Investments Ignis High Income Bond Fund, Standard Life Investments Ignis Managed Portfolio Fund and the Standard Life Investments Ignis Smaller Companies Fund are currently managed relative to the way in which the corresponding Receiving Fund is managed. Our Merger Proposals Our proposals in relation to each Trust require the Unitholders in that Trust to pass an Extraordinary Resolution. (See Action you Need to Take below.) If, in respect of your Trust, the merger is approved the Scheme (which is a legal document that we have prepared in accordance with the FCA Rules and which sets out the terms on which the transfer of the scheme property of your Trust to 4

5 your Receiving Fund will be undertaken) will be binding on each unitholder in the relevant Trust whether or not they voted in favour of the Extraordinary Resolution or at all. The Scheme relates separately to the merger of each Trust into the corresponding Receiving Fund. On the Effective Date the scheme property of your Trust will be transferred by way of the Scheme to the relevant Receiving Fund in exchange for the issue of Shares in that Fund. The class of Share that you will receive is set out in Appendix 1, opposite the type of Unit which you hold in your Trust. The number of Shares issued to you will be equivalent in value to the value attributable to your Units. Your holding of Units in your Trust will be cancelled and will cease to have any value and instead you will hold Shares in your Receiving Fund. For more information on the Scheme, please see Appendix 2. Costs To help us to implement the Scheme, we may need to start making some changes to the assets held by your Trust prior to the Effective Date. The purpose of making these changes is to ensure, as best we can, that the assets in your Trust match those held by the corresponding Receiving Fund prior to the Effective Date. We call this rebalancing. As each Receiving Fund other than Corporate Bond Fund and Europe ex UK Smaller Companies Fund has already been launched and therefore has shareholders and assets attributable to it, we need to ensure that existing shareholders are not prejudiced by the merger. Rebalancing will help to ensure that there is no dilutive effect when the assets are transferred into your Receiving Fund, reducing the risk of prejudice to existing shareholders in that Fund. We expect the costs arising from rebalancing will, in respect of each Trust be small particularly where we have identified overlaps in the investment strategy between a Trust and its corresponding Receiving Fund. These costs have been estimated to not exceed 0.15% of the relevant Trust s net asset value with the exception of the Standard Life Investments Ignis Smaller Companies Fund where trading costs including stamp duty have been estimated at 0.55% of net asset value. The costs of any such rebalancing will be borne by the relevant Trust. The other costs associated with bringing this proposal to Unitholders attention, namely the costs in: preparing and sending this document and the covering letter; holding the Meetings (including any adjournments (if required)); transferring the assets from your Trust to your Receiving Fund; and the winding-up of the Trusts will be paid for by us. Other Considerations Income The annual and half-yearly accounting periods determine the dates on which the annual and half-yearly reports relating to your Trust are issued. The annual accounting period and the interim accounting periods normally determine the dates on which any income is distributed or allocated. However, for the purposes of the Scheme, there will be a one-off additional distribution date for your Trust immediately before the Effective Date. This has been agreed with the Trustee. If you hold Income Units in your Trust, we will, for the accounting period ending immediately before the Effective Date, make a distribution (in respect of any distributable cash) in relation to those Units within 2 months of the Effective Date. If you normally reinvest your income in further Units in your Trust, the cash distribution will be reinvested in Shares in your Receiving Fund following implementation of the Scheme. These Shares will be of the same class as those which you receive under the Scheme. This reinvestment will not be subject to an initial charge. 5

6 If you hold Accumulation Units in your Trust, any income in respect of those Units for the accounting period ending immediately before the Effective Date will be retained and reflected in the value of those Units. Such income will, therefore, become part of the property of your Trust and be transferred to your Receiving Fund. Mandates and Other Instructions If, in respect of your Trust, the merger is approved by Unitholders, mandates or other instructions (for example regular investments, withdrawals or reinvestment of income) which you have given in relation to your holdings in your Trust will automatically be applied to the Shares issued to you under the Scheme. Please note, however, that collections for direct debit payments into the Receiving Funds are taken on the 6 th of each month (or if the 6 th is not a Business Day, the nearest available Business Day). This does not apply to direct debits into the ISA managed by us. Tax Based on our understanding of the current UK legislation and the current HMR&C practice relevant to UK resident investors and on the basis of the tax clearances which have been sought from HMR&C in the UK, we do not expect that the merger will constitute a disposal of Units in your Trust for UK capital gains tax purposes. New Shares issued under the Scheme in the Receiving Fund should be deemed to have the same acquisition cost and acquisition date for the purposes of UK capital gains tax as the Units originally acquired in the relevant Trust. Details of the tax clearances that have been sought are set out in Appendix 3. It is not expected that any UK stamp duty or stamp duty reserve tax will be payable in connection with the Scheme. The implementation of the Scheme will not affect the tax treatment of any ISA which is invested in Units in any of the Trusts. We believe the above information on taxation to be correct at the time of printing this document. However tax law and practice may change. Please note that the above information does not constitute tax or legal advice. We recommend that you consult an independent professional adviser to obtain specific advice relating to your personal circumstances, especially if you are not or may not be UK resident. Other Consents The Trustee as trustee of the Trusts (Citibank International Limited) has consented to the references made to it in this document in the form and context in which they appear. The Financial Conduct Authority has been informed of the proposals contained in this document and has confirmed that implementation of these proposals will not affect the authorisation of the Companies. Details of all consents and clearances are set out in Appendix 3. Dealing Dates For all Trusts other than Standard Life Investments Ignis Smaller Companies Fund No subscriptions, redemptions or switches into or out of any Trust (other than Standard Life Investments Ignis Smaller Companies Fund) will be accepted after 11.59am on 22 October Consequently there will be no dealing in Units in your Trust on 23 October You may deal in the Shares in your Receiving Fund issued under the Scheme from 9am on 26 October Further details on the Scheme are set out in Appendix 2. For Standard Life Investments Ignis Smaller Companies Fund No subscriptions, redemptions or switches into or out of Standard Life Investments Ignis Smaller Companies Fund will be accepted after 11.59am on 26 November Consequently there will be no dealing in Units in this Trust on 27 November You may deal in the Shares in UK Smaller Companies Fund (the relevant Receiving Fund) issued under the Scheme from 9am on 30 November Further details on the Scheme are set out in Appendix 2. 6

7 Other Key Dates Qualification date for Unitholder mailing Deadline for receipt of Proxy Forms The date seven days before this document is sent out 48 hours before the time of the Meeting of Unitholders of your Trust Meeting of your Trust Standard Life Investments Ignis American Growth Fund Standard Life Investments Ignis Balanced Growth Fund Standard Life Investments Ignis Corporate Bond Fund Standard Life Investments Ignis European Growth Fund Standard Life Investments Ignis European Smaller Companies Fund 10am 8 October am 8 October 2015** 10.30am 8 October 2015** 10.45am 8 October 2015** 11am 8 October 2015** Standard Life Investments Ignis Global Growth Fund Standard Life Investments Ignis High Income Bond Fund Standard Life Investments Ignis Managed Portfolio Fund Standard Life Investments Ignis Pacific Growth Fund Standard Life Investments Ignis Smaller Companies Fund Standard Life Investments Ignis UK Equity Income Fund 11.15am 8 October 2015** 11.30am 8 October 2015** 11.45am 8 October 2015** 12 noon 8 October 2015** 12.15pm 8 October 2015** 12.30pm 8 October 2015** Last date / time for dealing in your Trust* Standard Life Investments Ignis Smaller Companies Fund All other Trusts 12 noon on 26 November noon on 22 October 2015 Suspension of dealing in your Trust Standard Life Investments Ignis Smaller Companies Fund All other Trusts 12.01pm on 26 November pm on 22 October 2015 Additional valuation point for your Trust for the purposes of the Scheme only Standard Life Investments Ignis Smaller Companies Fund All other Trusts 7.30am on 27 November am on 23 October

8 Effective Date of the Scheme for your Trust* Standard Life Investments Ignis Smaller Companies Fund All other Trusts 7.31am 27 November am 23 October 2015 First day of dealing in Shares in your Receiving Fund* Standard Life Investments Ignis Smaller Companies Fund All other Receiving Funds 9am 30 November am 26 October 2015 *(if the relevant Extraordinary Resolution is passed. These times and dates may also differ if the Manager and the Trustee agree that the Effective Date is to be other than 7.31am on 23 October 2015 (in the case of all Trusts other than Standard Life Investments Ignis Smaller Companies Fund) or 7.31am on 27 November 2015 (in the case of Standard Life Investments Ignis Smaller Companies Fund).) **(if necessary, the start of each of the Meetings will be delayed until the preceding Meeting has terminated or been adjourned.) Action You Need to Take The Scheme (insofar as applicable to your Trust) needs to be approved by an Extraordinary Resolution at a Meeting of Unitholders in your Trust. To be passed, the Extraordinary Resolution requires at least 75% of the votes cast to be in favour. It is therefore important that you exercise your right to vote. We believe that our proposals are in your interests and we urge you to vote in favour. The Meetings will be held at 1 George Street, Edinburgh EH2 2LL on 8 October The time for each Meeting is set out in the Notices of Meetings in Appendix 6. You should carefully consider the proposed merger insofar as it relates to your Trust. It is important that you also read the KIID or NURS-KII (as appropriate) for the appropriate Share class of the relevant Receiving Fund into which it is proposed that your Units will be exchanged once the Scheme becomes effective. (For details of the appropriate Share class, please see the Destination Table in Appendix 1.) The KIID or NURS-KII (as appropriate) should enable you to assess whether or not the Receiving Fund meets your investment needs and, in conjunction with this pack, allow you to decide how to vote. You will find a copy of the relevant KIID/NURS-KII at If you do not have internet access, or would prefer to receive a paper copy, you may request the relevant KIID/NURS-KII by calling us on (or +44 (0) if outwith the UK). Our telephone lines are open Monday to Friday, 9am to 5.30pm. Please do read the KIID or NURS-KII (as applicable) carefully before deciding how to vote. We strongly encourage you to either attend the Meeting of your Trust and vote in person or complete and return the enclosed Proxy Form in the pre-paid envelope provided as soon as possible. To be valid, the Proxy Form must be received no later than 48 hours before the time appointed for the Meeting of your Trust. Completion and return of the Proxy Form will not preclude you from attending the Meeting of your Trust and voting in person. If a quorum is not present within 15 minutes of the time appointed for the Meeting of your Trust, the chairman will adjourn the Meeting. The enclosed Proxy Form will remain valid for any adjourned Meeting (if required), unless expressly revoked. We will notify Unitholders of any adjournment as soon as practical by post. The procedure for each of the Meetings and list of documents relating to the merger proposals are given in Appendix 5. Should the Scheme (insofar as applicable to your Trust) be approved and you do not wish your holdings in your Trust to be converted to Shares in your Receiving Fund, you may either redeem your Units or switch your holding to another Standard Life Investments Fund free of charge until the relevant cut-off. In respect of all Trusts other than Standard Life Investments Ignis Smaller Companies Fund, the cut-off is 11.59am on 22 October 2015, meaning that we must receive your valid dealing instruction before 11.59am on 22 October If you are invested in Standard Life Investments Ignis Smaller Companies Fund, the cut-off is 11.59am on 26 November 2015, meaning that we must receive your valid dealing instruction before 8

9 11.59am on 26 November If you do switch or redeem your holding please remember you may (unless you are invested through an ISA) be liable to capital gains tax. When considering your options please remember that the value of investments and the income from them may fall as well as rise and you may get back less than you originally invested. Results of the Meeting of your Trust We will confirm whether the Scheme (insofar as applicable to your Trust) has been approved by publishing a notice on our website as soon as possible after the Meeting (or adjourned meetings (if any)) has concluded. You can also call us on (or +44 (0) if outwith the UK) from 2pm on 8 October 2015 to find out the result of the Meeting of your Trust(s). Our telephone lines are open Monday to Friday, 9am to 5.30pm. Any Questions If you have any questions or require further information, please speak with a person authorised to give financial advice. Alternatively, we are happy to answer your general questions on (or +44 (0) if outwith the UK). Our telephone lines are open Monday to Friday, 9am to 5.30pm. Please note that while we are happy to answer your general queries we cannot give you investment advice. 9

10 Appendices Appendix 1 Destination Table Appendix 2 The Scheme Appendix 3 Consents and clearances Appendix 4 Comparison of the principal features of an authorised unit trust and an OEIC Comparison of the key features of your Trust with your Receiving Fund Comparison of performance data Appendix 5 Procedure for the Meetings Display Documents Appendix 6 Notices of Meetings Appendix 7 Glossary of Terms used in this document 10

11 Appendix 1 Destination Table: we have set out below the names of the Receiving Fund into which your Trust will merge and the class of Share which you will receive under the Scheme Trust Receiving Fund Type of Unit in your Trust you hold Standard Life American Equity Class A net Investments Unconstrained income Ignis Fund (a sub-fund Class A net American of Standard Life accumulation Growth Fund Investment Class I net Company) accumulation Standard Life UK Equity High Class A net Investments Alpha Fund (a subfund income Ignis of Standard Class A net Balanced Life Investment accumulation Growth Fund Company) Class I net accumulation Standard Life Corporate Bond Class A net Investments Fund (a newly income Ignis created sub-fund of Class A net Corporate Standard Life accumulation Bond Fund Investment Class I net Company) income Class I net accumulation Standard Life European Equity Class A net Investments Growth Fund (a income Ignis sub-fund of Class A net European Standard Life accumulation Growth Fund Investment Class I net Company) accumulation Standard Life Europe ex UK Class A net Investments Smaller Companies accumulation Ignis Fund (a newly Sterling European created sub-fund of Smaller Standard Life Class I net Companies Investment accumulation Fund Company) Sterling SRRI for your Trust Type of Share in your Receiving Fund you will receive SRRI for your Receiving Fund 6 Retail Income 5 6 Retail 5 Accumulation 6 Platform 1 5 Accumulation 6 Retail Income 6 6 Retail 6 Accumulation 6 Platform 1 Accumulation 6 4 Retail Income 4 4 Retail 4 Accumulation 4 Platform 1 4 Income 4 Platform 1 4 Accumulation 6 Retail Income 6 6 Retail 6 Accumulation 6 Platform 1 6 Accumulation 6 Retail Accumulation 6 6 Platform 1 6 Accumulation 11

12 Standard Life Global Equity Class A net 6 Retail Income 6 Investments Unconstrained income Ignis Global Growth Fund Fund (a sub-fund of Standard Life Investment Company) Class A net accumulation Class I net accumulation 6 Retail Accumulation 6 Platform 1 Accumulation 6 6 Standard Life Higher Income Class A net 4 Retail Income 4 Investments Fund (a sub-fund income Ignis High Income Bond Fund of Standard Life Investment Company) Class A net accumulation Class I net 4 Retail Accumulation 4 Platform income Income Class I net 4 Platform 1 4 accumulation Accumulation Standard Life Investments MyFolio Managed IV Fund (a sub- Class A net income 5 Retail Accumulation 1 4 Ignis Managed Portfolio fund of Standard Life Investment Company III) Class A net accumulation 5 Retail Accumulation 4 Fund Standard Life Asian Pacific Class A net 6 Retail Income 6 Investments Growth Fund (a income Ignis Pacific Growth Fund sub-fund of Standard Life Investment Company) Class A net accumulation Class I net accumulation 6 Retail Accumulation 6 Platform 1 Accumulation 6 6 Standard Life UK Smaller Class A net 6 Retail Income 5 Investments Companies Fund (a income Ignis Smaller Companies Fund sub-fund of Standard Life Investment Company) Class A net accumulation Class I accumulation 6 Retail Accumulation 6 Platform 1 Accumulation 5 5 Standard Life UK Equity High Class A net 6 Retail Income 5 Investments Income Fund (a income Ignis UK Equity Income Fund sub-fund of Standard Life Investment Company) Class A net accumulation Class I net income 6 Retail Accumulation 6 Platform 1 Income 5 5 Class I net 6 Platform 1 5 accumulation Accumulation 1 PLEASE NOTE: there are no income shares available in MyFolio Managed IV Fund. The ACD does not consider that the range of MyFolio Managed Funds are suitable for those seeking income. If income is important to you, please see other funds within the MyFolio Range which have income shares and which may be more suitable for you. Details of these other funds can be found at 12

13 Appendix 2 The Scheme: this section details the scheme of arrangement for the merger of the Trusts with the Receiving Funds. 1. Interpretation and application 1.1 The words and expressions defined in the glossary in Appendix 7 of this document shall have the same meanings for the purposes of this Scheme, unless the context requires otherwise. 1.2 References to paragraphs are to paragraphs of this Scheme. 1.3 Headings are inserted for convenience only and shall not affect the construction of this Scheme. 1.4 Where the context so permits, all terms used in the Scheme in relation to a Trust or a Receiving Fund shall, unless the same are inconsistent herewith, have the meanings attributed to them in the relevant Trust Deed or the OEIC Documents of the relevant Company (as the case may be), provided that: references to the "Unitholders" or unitholders shall include Standard Life Investments (Mutual Funds) Limited (in its capacity as Manager) where it is deemed to hold Units; and references in the Scheme to Units held shall include Units deemed to be held by Standard Life Investments (Mutual Funds) Limited; and in so far as any of the provisions of the Scheme are inconsistent with the relevant Trust Deed in the context of that Trust the said provisions shall prevail and the Scheme shall have full effect accordingly in relation to that Trust. Insofar as any of the provisions of the Scheme are inconsistent with the OEIC Documents in the context of the relevant Company in the context of a relevant Receiving Fund the said provisions shall prevail and the Scheme shall have full effect accordingly in relation to that Company in relation to the relevant Receiving Fund. If there is a conflict between the Regulations and the Scheme, the Regulations shall prevail. 1.5 This Scheme relates separately and independently to the merger of each Trust into the relevant Receiving Fund. 2. Approval 2.1 Implementation of the Scheme (insofar as applicable to each Trust) is conditional on its approval and adoption by the passing of an extraordinary resolution at the Meeting of the Unitholders of that Trust which has been convened (by the Notice of Meeting to the Unitholders of that Trust) to consider and, if thought fit, to pass the Extraordinary Resolution to approve and adopt the Scheme (in respect of that Trust). 2.2 For the avoidance of any doubt, in the event that the condition in terms of paragraph 2.1 is not satisfied in respect of any Trust and the Scheme (insofar as applicable to that Trust) is therefore not implemented this shall not affect (or otherwise prejudice) in any way the operation (or implementation) of the Scheme in relation to any other of the Trusts. 2.3 In the event of the Scheme being implemented in respect of a relevant Trust it shall be binding on all unitholders of that Trust irrespective of whether or not they voted in favour of it, or at all, and the Scheme will be implemented as set out in the following paragraphs. 3. Cessation of dealings in the Trusts 3.1 To facilitate the implementation of the Scheme, the final day of dealing in Units will end at: noon on 22 October 2015 in the case of each of the Trusts other than Standard Life 13

14 Investments Ignis Smaller Companies Fund or, if the Effective Date in respect of any one of more of these Trusts is other than 7.31am on 23 October 2015, such other date as may be agreed in writing between the Manager and the Trustee; and noon on 26 November 2015 in the case of Standard Life Investments Ignis Smaller Companies Fund or, if the Effective Date is other than 7.31am on 27 November 2015, such other date as may be agreed in writing between the Manager and the Trustee. 4. Scheme of Arrangement 4.1 As at and from the Effective Date (and subject to the terms and conditions of the Scheme insofar as applicable to the relevant Trust), the scheme property of each Trust less firstly, the Retained Amount, secondly, any amount to be retained under paragraph 9.4 and thirdly, the amount of income to be distributed in accordance with paragraph 9.2 (the Transferred Property ) will be transferred as an accretion to the scheme property of the relevant Receiving Fund, subject to the provisions of this Scheme, the OEIC Documents and the Regulations. The Trustee shall in respect of each such relevant Trust cease to hold the Transferred Property of that Trust as attributable to the Trust and the Depositary shall hold the Transferred Property freed and discharged from the trusts and provisions of the relevant Trust Deed. The Trustee will make or ensure the making of any transfers or redesignations which may be necessary as a result of the Scheme. 4.2 The Retained Amount and any income arising on it, will be retained by the Trustee as part of the relevant Trust for the purpose of discharging outstanding, undischarged and contingent liabilities of that Trust, whether arising before, on or after the Effective Date (including accrued costs, charges, expenses, taxation, liabilities and fees of the Trust) in accordance with the provisions of the Scheme (insofar as applicable to that Trust), the relevant Trust Deed and the COLL Sourcebook until the date on which the relevant Trust shall have completed its winding up pursuant to paragraph 12.1, and, for the avoidance of doubt, such amount shall exclude the amount of income (if any) to be transferred, or deemed to be transferred to the distribution account of that Trust in terms of paragraph If, after the discharge of all liabilities of a Trust, there are any surplus monies (or assets) remaining, they, together with any income arising therefrom shall be transferred to the relevant Receiving Fund to be held by the Depositary as an accretion to the scheme property of that Fund (subject to the provisions of the OEIC Documents and the Regulations), but such accretion (if any) shall not take place until the date on which the relevant Trust shall have completed its winding up pursuant to paragraph 12. No further issue of Shares shall be made as a result. The Trustee shall cease to hold the Retained Amount and any amount retained under paragraph 9.4 and shall be freed and discharged from the trusts and provisions set out in the relevant Trust Deed. The Trustee shall make such transfers and re-designations as may be necessary as a result. 4.4 If the Retained Amount in respect of a relevant Trust together with the amount under paragraph 9.4 is insufficient to meet all the liabilities of that Trust then the Manager shall discharge the shortfall or (if the Trustee is liable to meet such liabilities) the Manager shall put the Trustee in funds to discharge such liabilities and shall indemnify the Trustee in respect thereof, unless the Manager shall be satisfied and agree with the Trustee that proper provision was made for meeting such liabilities of the relevant Trust as were known or could reasonably have been anticipated at the Effective Date and the amount of such undischarged liabilities is paid out of the scheme property attributable to the relevant Receiving Fund in accordance with the COLL Sourcebook. 4.5 For the purposes of the Scheme, the outstanding or unsatisfied liabilities of each Trust shall exclude any liability to stamp duty or stamp duty reserve tax or the like which arises from implementation of the Scheme (insofar as applicable to that Trust) but shall for the avoidance of doubt include provision for payment of the Manager's annual management charge and the Trustee's remuneration, in 14

15 accordance with the relevant Trust Deed. 4.6 With effect from the Effective Date, any action or other legal proceedings or step (whether by way of a claim, legal proceedings, execution of judgment, arbitration or otherwise) whether current, future, pending or otherwise in respect of which a Trust is a party (or would but for the Scheme be a party) concerning any part of the scheme property shall be continued or commenced by the corresponding Receiving Fund and that Receiving Fund shall be entitled to all claims, settlements and any other rights that would have been available to the Trust immediately prior to the Effective Date. Any settlement or award shall become an accretion to the relevant Receiving Fund. 5. Cancellation of Units 5.1 Immediately prior to the creation and issue of Shares in the relevant Receiving Fund, under this Scheme, every Unit in a Trust shall be deemed to have been cancelled and shall cease to be of value and no further Units of that Trust shall be issued. 5.2 The above paragraph shall be without prejudice to any provisions of the relevant Trust Deed relating to income received or receivable under paragraph Issue of Shares 6.1 As at and from the Effective Date, the ACD will allot and issue to each of the former unitholders (being those unitholders who were registered in the relevant Trust immediately before the Effective Date) Shares (linked to the relevant Receiving Fund), free of any initial charge, on the basis set out in paragraph 7 below. 7. Basis for the issue of Shares 7.1 Each unitholder holding Units immediately before the Effective Date in: the Standard Life Investments Ignis Corporate Bond Fund shall be issued with Shares of the relevant type in the Corporate Bond Fund; and the Standard Life Investments Ignis European Smaller Companies Fund shall be issued with Shares of the relevant type in the Europe ex UK Smaller Companies Fund and the basis for that or those issues shall be a one for one basis (rounded up if necessary to the nearest smaller denomination Share). 7.2 Each unitholder holding Units in a relevant Trust other than Standard Life Investments Ignis Corporate Bond Fund and the Standard Life Investments Ignis European Smaller Companies Fund immediately before the Effective Date shall be issued with Shares in the relevant Receiving Fund in accordance with the following formula: = D Where: A = B = C = D = The part of the Value of the relevant Trust which is attributable to a Unit of the relevant type; The number of Units of the relevant type which were held by that unitholder immediately before the Effective Date; The part of the Value of the relevant Receiving Fund which is attributable to a Share of the relevant type; and The number of Shares to be issued to that unitholder by the ACD of the relevant Company which number will (if necessary) be rounded upwards to the nearest smaller denomination Share. The ACD will pay into the relevant Receiving Fund an amount equal to the value of 15

16 any additional Shares issued as a result of this rounding. 7.3 For the purposes of paragraphs 7.1 and 7.2 relevant type means (in respect of a Trust) the type of Units (being Class A or Class I net income or net accumulation) held by the unitholder immediately before the Effective Date and (in respect of a Receiving Fund) the type of Share (being Retail or Platform 1 Income or Accumulation) specified in column 4 of the table in Appendix 1 opposite the name of the relevant Trust to be issued to that unitholder under the Scheme. 7.4 Shares will be issued pursuant to the Scheme even where such issue is for less than the value of the minimum holding of shares referred to in the prospectus of the relevant Company. 7.5 The ACD shall not, in respect of the Shares to be issued under the Scheme, be entitled to make any initial charge. 7.6 Unitholders will be treated as exchanging their Units for Shares. 7.7 All the Shares to be issued in terms of this paragraph 7 in the Corporate Bond Fund and in the Europe ex UK Smaller Companies Fund shall be the first Shares to be issued in those funds. Neither the ACD nor the Company shall agree to issue any Shares in the Corporate Bond Fund or in the Europe ex UK Smaller Companies Fund other than under the Scheme unless such other shares are agreed to be issued at a price determined by reference to the value of the scheme property of the Corporate Bond Fund or the Europe ex UK Smaller Companies Fund (as the case may be), calculated in accordance with the prospectus of the Company and as at a valuation point occurring after the Effective Date. 7.8 The transfer of the scheme property of a Trust to the relevant Receiving Fund will be full payment for the Shares issued to unitholders in that Trust pursuant to the Scheme. 7.9 As the issue of Shares in the Corporate Bond Fund and in the Europe ex UK Smaller Companies Fund under the Scheme will be the first issue of Shares, in each of those funds, no part of the consideration for such issue of Shares will be treated as income equalisation. In respect of the other Trusts, part of the consideration for the issue of Shares in the relevant Receiving Fund may be treated as income equalisation. 8. Calculation of the Value 8.1 For the purposes of paragraph 7.2 the word Value, shall mean: in the context of a Trust, the value of the scheme property referred to in paragraph 4.1 of that Trust calculated as at 7.30am on the same day as the Effective Date; and in the context of a Receiving Fund, the value of the scheme property of that Fund calculated as at 7.30am on the same day as the Effective Date such values being calculated on a mid-market basis. 8.2 The ACD and the Manager shall, prior to the Effective Date, request the administrator of the Receiving Funds to perform a price source comparison with a view to establishing acceptable price tolerances, owing to the use of different pricing sources to value the scheme property of the Trusts. These tolerances shall be captured in a Known Differences Document which will be used to validate price differences on the Effective Date. 8.3 For the purposes of the Scheme, the following items shall be deducted from the value of the scheme property of each Trust: Such provisions as may be determined by the Manager as representing the accrued costs, charges and expenses, taxation, liabilities and fees authorised by the relevant Trust Deed to be paid out of the scheme property as accrued to the Effective Date (including for the 16

17 avoidance of any doubt the Manager s periodic charge and the Trustee s fee, if any); The amount of income (if any) to be distributed to unitholders in terms of paragraph 9.2; The sums to be retained by the Trustee in terms of paragraph 9.4; and Such other amounts (not already accounted for above) as are required to be retained by the Trustee to meet the liabilities of the Trust concerned in accordance with paragraph Income allocation arrangements 9.1 There will be a one-off additional distribution date in respect of each Trust immediately prior to the Effective Date. This has been agreed with the Trustee. The Manager may, with the agreement of the Trustee, make such other alterations to the distribution dates of any Trust as they consider appropriate in the circumstances if, in respect of that Trust the Effective Date is other than 7.31am on 23 October 2015 (in the case of all Trusts other than Standard Life Investments Ignis Smaller Companies Fund) or 7.31am on 27 November 2015 (in the case of Standard Life Investments Ignis Smaller Companies Fund). 9.2 Immediately prior to the Effective Date of the Scheme (insofar as the Scheme relates to each of the Trusts in respect of which Income Units are in issue immediately before the Effective Date) there will be transferred to each of those Trusts distribution accounts (or deemed to be so transferred) such amount of income (if any) as shall be determined by the Manager to be available for allocation to the respective unitholders of those Trusts then holding Income Units in respect of the accounting period ending immediately before the Effective Date. Such amount shall be held by the Trustee on trust to be distributed in accordance with the COLL Sourcebook and the relevant Trust Deed to such unitholders in proportion to the number of Income Units held by them immediately prior to the Effective Date (or in the case of unitholders who normally have income reinvested in further Units in a Trust, to be reinvested in additional Shares of the appropriate class in the relevant Receiving Fund). 9.3 All income (if any) available for allocation to unitholders in each Trust holding Accumulation Units immediately prior to the Effective Date shall be allocated to those Accumulation Units in issue immediately prior to the Effective Date and shall thereupon become part of the property of that Trust. The interests of the holders of such Accumulation Units shall be satisfied by an increase in the number (including fractions) of undivided shares in that property represented by each such Accumulation Unit. 9.4 Except insofar as already retained under paragraph 4.2 in respect of a Trust, there shall be retained by the Trustee, out of the amount of income available for distribution and allocation in respect of the accounting period of the relevant Trust (which, in accordance with paragraph 9.1 above, shall end immediately before the Effective Date), such amounts of monies (and, if necessary, other assets) as in the opinion of the Manager (acting reasonably) are sufficient to meet any undischarged liabilities of the relevant Trust to tax upon income or profits (if any) (including tax assessed after the Effective Date and any income tax payable by reason of any distribution made in respect of such accounting period and taking into account any relief or repayment) and the Trustee shall hold such sums, together with any income arising therefrom, as part of the property of the relevant Trust and shall pay any such liabilities out of such property. 9.5 Any distributions in respect of a Trust which are unclaimed six months from the date of issue, together with any unclaimed distributions in respect of previous accounting periods of that Trust and any interest on these distributions shall be transferred to the Depositary of the relevant Company and shall be held by the Depositary in a separate designated account in accordance with the COLL Sourcebook, on the basis that such distributions which are unclaimed six years from the respective original dates of payment shall be transferred by the Depositary (or its successor as depositary) and 17

18 will become part of the capital property of the relevant Receiving Fund pursuant to this Scheme. The separate designated account shall be closed when the last distribution is claimed, or on the expiry of six years from the original payment of the distributions in respect of the accounting period ending immediately prior to the Effective Date, whichever is the earlier. 10. Notification of the Shares issued under the Scheme 10.1 Subject to the provisions of the Scheme, the ACD will despatch, to those persons who were unitholders in each Trust at the Effective Date, notifications of shareholding in respect of the number of Shares to which they are entitled under the Scheme and which at the date of despatch of such notifications, have not been transferred or sold back to the ACD. Such notifications shall be sent not later than 2 weeks after the Effective Date or (in any other case) at a date to be determined by the ACD by ordinary pre-paid post at the risk of the persons entitled to them and shall be sent to their respective addresses appearing in the register of shareholders of the relevant Company (or, in the case of joint shareholders, at the address so appearing in the register of that one of such joint shareholders whose name stands first in the register in respect of such joint shareholding) as at the Effective Date or to any other such address as may be notified in writing to the ACD before the despatch of such notifications Upon despatch of the notifications referred to above, any documentation confirming ownership of Units in the relevant Trust will cease to be valid The obligation of the Manager to deal in Units in a Trust shall continue: (subject to the deal having been received by the Manager by 11.59am on 22 October 2015) up to 12 noon on 22 October 2015 in the case of all Trusts other than Standard Life Investments Ignis Smaller Companies Fund; and (subject to the deal having been received by the Manager by 11.59am on 26 November 2015) up to 12 noon on 26 November 2015 in the case of Standard Life Investments Ignis Smaller Companies Fund Transfers or redemptions of Shares issued under the Scheme may be effected by writing to or telephoning the ACD from: am on 26 October 2015 in the case of all Trusts other than Standard Life Investments Ignis Smaller Companies Fund or, if the Effective Date in respect of any one or more of these Trusts is other than 7.31am on 23 October 2015, such other date as may be agreed in writing between the ACD and the Depositary of the relevant Company; and am on 30 November 2015 in the case of Standard Life Investments Ignis Smaller Companies Fund or, if the Effective Date is other than 7.31am on 27 November 2015, such other date as may be agreed in writing between the ACD and the Depositary of the Company. 11. Mandates and Other Instructions in respect of Shares 11.1 Mandates and other instructions to the Manager in force on the Effective Date in respect of a Trust shall continue to have effect, save that the collection date for direct investments by direct debit payments into the Receiving Funds shall be altered to the 6 day of the month (or if that day is not a Business Day, the nearest Business Day). 12. Wind up of the Trusts 12.1 If the Scheme becomes effective in respect of a Trust, the Manager will notify the FCA and, following the Effective Date, the Trustee will proceed to wind up that Trust in accordance with the 18

19 terms of the Scheme, the relevant Trust Deed and the COLL Sourcebook When such winding up has been completed (including the payment of all outstanding or unsatisfied liabilities), the Trustee shall notify the FCA in writing of that fact and the Manager or the Trustee shall formally request the FCA to revoke the authorisation order declaring the relevant Trust to be an authorised unit trust and thereupon the Manager and the Trustee will stand discharged from all their respective duties, obligations and liabilities in respect of that Trust, except those arising from a breach of duty before that time. 13. Charges and expenses 13.1 The Manager and the Trustee will continue to receive their usual fees and expenses for being manager and trustee respectively of each Trust insofar as they are attributable to a Trust out of the scheme property of that Trust until the Effective Date (and for this purpose notwithstanding any provision in the relevant Trust Deed, the last accrual period to commence in respect of the Manager s periodic charge before the Effective Date shall be deemed to end immediately before the Effective Date and such charge shall be due in respect of that accrual interval immediately before the Effective Date and payable as soon as practicable thereafter) The costs of any rebalancing of the assets in the underlying portfolio of a Trust will be borne out of the scheme property of that Trust Save from: the payments to be made under paragraph 13.1; the costs incurred under paragraph 13.2; the income to be distributed in terms of paragraph 9.2; the sums to be retained under paragraphs 4.2 and 9.4 no deduction shall be made from the value of the scheme property of a Trust or from the scheme property of a Receiving Fund for the costs and expenses of the Scheme (including the implementation of the Scheme and the holding of any Meeting of the Unitholders of a Trust). 14. Reliance on the Register 14.1 The Manager, the Trustee, the ACD and the Depositary shall each be entitled to assume that all information contained in the register of unitholders on and immediately prior to the Effective Date is correct, and to utilise the same in calculating the number of Shares to be issued and registered pursuant to the Scheme The Manager, the Trustee, the ACD and the Depositary, may each act and rely upon any certificate, opinion, evidence or information furnished to it by the other or others or its or their respective professional advisers in connection with the Scheme and shall not be liable or responsible for any resulting loss. 15. Alterations to the Scheme 15.1 Each of the Manager and the ACD (also for and on behalf of each Company) has given an undertaking to each of the Trustee and the Depositary to be bound by and implement such of the terms and conditions of the Scheme as shall become incumbent on the Manager and the ACD (as the case may be) in the event of the Scheme becoming effective Subject to such FCA approval as may be necessary, the Manager and the Trustee shall, at any time on or before the Effective Date, be authorised to make such modifications, additions or conditions to the 19

20 Scheme (both generally or insofar as the Scheme is applicable to a particular Trust) as the Manager may propose, provided always that the Manager (after notifying the Auditors) shall have determined that such modifications, additions or conditions do not materially prejudice unitholders or potential unitholders in the Trust or Trusts affected by the proposed modifications, additions or conditions and the ACD shall have agreed that such modifications, additions or conditions do not involve any material prejudice to existing or potential shareholders of the relevant Company Without prejudice to paragraph 15.2 above, if this Scheme has not become effective on or before 6 months from the date of this document, it shall lapse. 16. Proper Law 16.1 The Scheme shall, in all respects, be governed by, and be construed in accordance with, Scots law. Dated: 11 September