Marketing Material Guidelines and Compliance FAQ
39D.
Question
Can the fund highlight or advertise its rate of
dividend in the marketing materials?
Answer
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.
Except where the rate of dividend payment is fixed (i.e. the dividend rate is not subject to the
management company's discretion from time to time) (see Fixed Dividend Rate as defined in
FAQ39D below), the Dividend Statement(s) in the funds' marketing materials should always
be accompanied with a warning statement of similar prominence and close proximity to the
effect that "dividend amount or dividend rate is not guaranteed" (T). Please refer
to FAQ39D below for further guidance regarding the definition of Fixed Dividend Rate.
In the case where a fund may distribute dividends out of / effectively out of its capital, a
warning statement to the effect () of similar prominence and close proximity to
the Dividend Statement(s) should also be included in the marketing materials. Information
referred to in (b) and (c) under FAQ34 of the Frequently Asked Questions on the Code of Unit
Trusts and Mutual Funds ("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
Pursuant to paragraph 10 of the Advertising Guidelines, a substantiated prospective yield
may be disclosed in the fund's marketing materials. Issuers of marketing materials are
reminded that they have the responsibility to ensure any prospective yield presented can be
properly substantiated. Information concerning the rate of dividend typically in the form of an
annualized yield of a fund, if any, may be presented in its marketing materials based on, for
example, the actual historical dividend rate / payments made by the fund. For a brand new
fund which, in accordance with its distribution policy, does not guarantee or make dividend
payment at a Fixed Dividend Rate, it would generally not be acceptable for the fund to include
prospective dividend yield in its marketing materials unless paragraph 10 of the Advertising
Guidelines is complied with.
In addition to the above, the fund may highlight or advertise its rate of dividend in the
marketing materials if a fund's distribution policy is to guarantee or make dividend payment at
a fixed rate and that such relevant information regarding the rate of dividend and / or the
manner in which investors will be notified of the rate of dividend has been clearly disclosed in
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