Marketing Material Guidelines and Compliance FAQ
Question
Answer
the KFS or other parts of the offering document (i.e. the "Fixed Dividend Rate"). For the
purpose of this FAQ39D and FAQ39C above, a Fixed Dividend Rate also refers to such rate
of dividend that will be paid by the fund as reasonably determined by the management
company in accordance with the funds' offering documents and notified to investors from time
to time, any change of the rate of dividend will require prior notification to investors. A Fixed
Dividend Rate being highlighted / quoted in the marketing materials should be consistent with
the disclosure in the KFS or other parts of the offering document (as the case may be).
The disclosure / statement regarding the rate of dividend mentioned in this FAQ39D should
always be accompanied with the Warning Statement(s) mentioned in FAQ39C above of
similar prominence and close proximity in the marketing materials. They should not be
disclosed in fine print only, in the risk disclosure box and / or by way of footnotes in the fund's
marketing materials. Where applicable, information referred to in (b) and (c) under FAQ34 of
the FAQ on UT Code should also be disclosed in the marketing materials of the fund in a
prominent and upfront manner (e.g. in the risk disclosure box of the relevant marketing
materials). See the FAQ on the UT Code via the following link:
http://www.sfc.hk/web/EN/faqs/product-authorization/code-of-unit-trusts-and-mutual-
funds.html
39E.
If the dividend rate / yield is highlighted / quoted
in the marketing materials, does the fund need
to disclose the calculation basis thereof?
The disclosure of dividend rate / yield (other than a Fixed Dividend Rate referred to in
FAQ39C and FAQ39D above) of a fund, if any, must be accompanied by a disclosure of its
calculation basis in the marketing materials which is reasonable, fair and not misleading and
such calculation basis must be adopted by a particular fund on a consistent basis. For
example, some funds may present the fund's dividend yield as an average rate for the
previous 3, 6 or 12 months or since inception etc.
Once a management company adopts a particular calculation basis / methodology in
calculating the dividend rate / yield of a fund for marketing, it should be consistently applied to
other funds under its management. Thus, it would not be acceptable for management
company to cherry pick and to vary and adopt different calculation basis / methodologies from
time to time by selecting the most profitable and / or beneficial figures from all the available
data in presenting the dividend rate / yield. The management company should exercise its
professional judgment, having taken into account the specific circumstance of the funds,
when choosing the most appropriate calculation basis to ensure compliance.
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