Marketing Material Guidelines and Compliance FAQ

36. 37. Question What warning statements are mandatory for these materials? Is any warning statement in addition to those required under paragraph 23 of the Advertising Guidelines for a listing of schemes with a common special feature published in a regular publication? Can you give us some examples for specific risk warnings and explanatory notes applicable for schemes with special features? Answer SFO, that the advertisement has not been reviewed by the Commission. Additional warning statements or notes are optional. Only the basic warning statements under paragraph 23 of the Advertising Guidelines are required. Warning statements in relation to the specific risks associated with investments in schemes in the common special feature is recommended. The Commission encourages advertisement issuers to use their professional expertise to consider what the most appropriate and applicable disclosures to be included in an advertisement should be. Here are some examples for reference only: For schemes investing in financial derivative instruments for investment purposes - "Transactions in derivative instruments may be used to meet the investment objectives of the scheme and may therefore lead to higher volatility to its net asset value." For schemes investing in emerging markets - "Investors should read the offering documents for details and the risk factors, in particular those associated with investments in emerging markets." For schemes with exposure to short positions - "The scheme may take short positions and investors should note that the investment strategy and risks inherent in the scheme are not typically encountered in traditional equity long only schemes." For exchange traded funds (ETF) - "The scheme is traded on the exchange at market price, which may be different from its net asset value." A telephone number or the website where investors can obtain the offering documents of the scheme should also be disclosed. For listed close-ended funds - "The scheme is a close-ended fund and no investors may demand redemption of their shares / units. It is traded on the exchange at market price, which may be different from its net asset value. The listing of the scheme on the exchange does not guarantee a liquid market." 15

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