Marketing Material Guidelines and Compliance FAQ
Question
Answer
39A.
39B.
39C.
Under what circumstances can a fund use and
highlight a statement / description of "regular
dividend payment / distribution" () in the
marketing materials?
For a fund that intends / aims to make regular
dividend payment / distribution but the payment
of dividend distribution is subject to the
management company's discretion, can the fund
advertise or highlight its dividend / distribution
policy as "regular dividend payment /
distribution" in the marketing materials?
What warning statement(s) is/are required to
be stated in the marketing materials with the
following statements: (i) "regular dividend
payment / distribution"; (ii) "[the fund] aim[(s)] to
pay dividend on a regular basis" or (iii) "regular
distribution share class is available" and "[the
fund] aim[(s)] to pay dividend on a regular basis"
(collectively, the "Dividend Statement(s)") ?
If a management company wishes to highlight or advertise the regular dividend payment /
distribution feature (or words to the similar effect) of a fund in its marketing materials, it can do
so only if the fund's offering document has expressly and clearly disclosed that dividends will
be made by the fund on a regular basis (e.g. on a monthly basis), without being subject to the
management company's discretion.
For a fund that offers distributing share classes for which payment of dividends is subject to
the management company's discretion ("Discretionary Distributing Share Classes"), the
management company may occasionally exercise its discretion not to make any dividend
payments due to specific reasons such as absence of net distributable income and / or
decision not to make dividends out of the fund's capital etc. Therefore, in the case where the
management company intends / aims to make regular dividend payment but wishes to
maintain discretion as to whether or not to make any dividend payment (e.g. in respect of
Discretionary Distributing Share Classes):
a. it would not be appropriate to include any statement of “regular (e.g. monthly)
dividend payment" in the fund's marketing materials. Instead, a statement of, for
example, "[the fund] aim[(s)] to pay dividend on a regular (e.g. monthly) basis” (5#[
) may be included; and
b. any statement of “regular (e.g. monthly) distribution share class is available" should
be accompanied with a statement of "[the fund] aim[(s)] to pay dividend on a regular
(e.g. [monthly]) basis” ([]) of similar prominence and close proximity.
In addition, the warning statements referred to in FAQ39C and FAQ39D (where applicable)
should be included prominently.
Presentation of benefits, returns and risks of a fund should be fair, balanced and
proportionate in the marketing materials. Benefits and returns should not be presented by the
fund disproportionately larger than the associated risks of the fund. In addition, benefits and
risks must be displayed in a clear and conspicuous manner and in close proximity. As such,
disclosure of the warning statements mentioned in this FAQ39C below ("Warning
Statement(s)") must be of similar prominence and close proximity to the Dividend
Statement(s), except where the relevant Warning Statement(s) have already been included in
a prominent manner as referred to in FAQ39D below in the same marketing materials. They
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