June 2017 Sec Executed Rules Regulations

NEW RULES AND AMENDMENTS TO THE RULES AND REGULATIONS OF THE COMMISSION

PREAMBLE

A. NEW RULES

1. Rules on Return of Unclaimed Dividends to Paying Companies.
2. Inclusion of Independent National Electoral Commission (INEC) voter's registration card as a valid means of identification of individual clients in the Capital Market.
3. Three-tiered Know-Your-Customer (KYC) Framework for Capital Market Operators.
4. Fund/Portfolio Management Operations Rules

B. MAJOR AMENDMENTS

1. Amendment to the National Investor Protection Fund (NIPF) Rules
2. Amendment to Rule 508- Rules on Real Estate Investment Schemes
3. Amendment to Rules on Infrastructure Funds

C. SUNDRY AMENDMENTS

1. Rule 19- Sponsored Individuals/Compliance Officers
2. Rule 22 (4)- Minimum Paid-up Capital-Definition of Core/Non-Core Operators
3. Rule 22 (5)- Minimum Paid-up Capital
4. Rule 42 (1) & (2)- Half-yearly Returns
5. Rule 182 (5)- Registration requirements
6. Rule 279 (2) (d) (viii)- Registrable Securities
7. Rule 279 (2) (p)- Registrable Securities
8. Rule 279 (2) (r)-Registrable Securities
9. Rule 279 (3) (3) (i)- Registrable Securities
10. Rule 279 (8)- Registrable Securities Offers) GE
11. Rule 300- Pre-offer waiting period (Fixed Price Offers)
12. Rule 305- Proceeds of Issue
13. Rule 312 (6) (i)- Undersubscription ON, NIGERIA
14. Rule 314- Cost of Issue
15. Rule 315 (4)- Underwriting of Public Issues
16. Rule 315 (4) (d)- Underwriting of Public Issues
17. Rule 315 (7)- Underwriting of Public Issues
18. Rule 316 (1)- Amount to be Underwritten
19. Rule 323 (22)- Conditions for Approval of Offer
20. Rule 340 (2) (e)- Conditions for Approval of Offer
21. Rule 420 (1)- Depository Receipts by Nigerian Entities
22. Rule 421- Definition of Acquisition (Mergers)
23. Rule 566- Conditions to be satisfied by the Issuer
24. Rule 567 (f)- Registration Requirement for Corporate Bonds 1
25. Schedule 1 Part D (3)- SEC Fees on Market Deals

D. Creation of New Form SEC 2D for Fit and Proper Persons (Sponsored Individuals, Directors/Partners) for Registration in the Capital Market.

E. DELETION

1. Rule 312 (4)- Undersubscription
2. Rule 340 (2) (h) – Conditions for Approval of Offer

The details of the new rules and amendments are as follows:

A. NEW RULES (1) Rules On return of Unclaimed Dividends to Paying Companies

Title "Return of Dividends Unclaimed"

(1) At least 90% of all unclaimed dividends in the custody of the Registrars shall be returned to the paying company not later than fifteen (15) months after the date of approval of dividends at a general meeting (for final dividends) or a board meeting (for interim dividends) and evidence of remittance forwarded to the Commission (SEC) by the close of the next business day.The Registrars shall hold the balance of 10% as an agent of the company.

(2) Where unclaimed dividends are returned to the company, the company may invest the unclaimed dividend for its own benefit in an income investment outside the company and no interest shall accrue on the dividends against the company.

(3) Unclaimed dividend shall not be used by the company for its own business except in accordance with the provisions of CAMA.

(4) All accrued interests from the failure of Registrars to remit the unclaimed dividends within the time limit prescribed in these Rules and Regulations shall be remitted along with the unclaimed dividend to the paying company, and the accrued interest shall be calculated at a rate not below MPR rate.

(5) The responsibility of paying dividends to a shareholder after the dividends have been returned to the company shall lie with the Registrar.

(6) Failure by the paying companies to comply with the above provisions shall attract a penalty of N1 million and an additional sum of N10, 000 for every day such contravention persists. 2 (7) Failure by the Registrars to comply with the above provision will attract a penalty of N1 million and an additional sum of N20, 000 for every day such contravention persists.

(2) Rule 44 (4)- Inclusion of Independent National Electoral Commission (INEC) Voter's Registration Card as a Valid Means of Identification of Individual Clients in the Capital Market

“Suitable documentary evidence for Nigerian resident private individuals are- a) personal identity documents i) current International Passport, ii) Residence Permit issued by the Immigration authorities, iii) current Driver's License issued by the Federal Road Safety Commission (FRSC), iv) Inland Revenue Tax Clearance Certificate, v) birth Certificate or Sworn Declaration of Age, vi) National Identity Card, and vii) Permanent Voter's Registration card issued by the Independent National Electoral Commission (INEC)”

(3) Three-tiered Know-Your-Customer (KYC) Framework for Capital Market Operators

A- General Requirements

1. The three-tiered Know-Your-Customer (KYC) Framework is to be adopted by all Capital Market Operators for the purposes of financial inclusion. A Capital Market Operator shall: a. Apply simplified Know-Your- Customer (KYC) requirements as provided in this framework. TIES XCHANGE b. Record the reasons for doing so along with the account opening documents and render returns to the Securities & Exchange Commission on a quarterly basis. c. Maintain records of all domestic and cross border transactions including occasional transactions. d. Put in place additional monitoring for accounts opened under the three-tiered Know-Your-Customer (KYC) Framework to ensure that such accounts are not misused. e. Report all Suspicious Transactions (STRs) relating to these categories of clients to the Nigerian Financial Intelligence Unit/Centre (NFIU/NFIC) as required by the Money Laundering and Terrorism Financing Laws and Regulations. 3
2. Capital Market Operators may use agents or third parties in opening account(s) for financially excluded clients. However, all requirements relating to reliance on intermediaries and the use of third parties as stated in Regulation 18 of SEC AML/CFT Regulations, 2013, shall apply.
3. The thresholds contained in these Rules may be reviewed from time to time.
4. The Market Operator shall migrate accounts to the next level once they exceed the stated maximum cumulative balance for each level.
5. “Financially excluded clients” means underserved persons or groups including low income, rural sectors and undocumented persons or groups in Nigeria.

B. Level 1-Low-Risk Account

1. The features of Low-Risk Accounts include the following: i. The account is subject to close monitoring by financial institutions; V. ii. Can be opened through agents; iii. No minimum investment amount required for the opening of these accounts; iv. May be linked to a mobile phone; Investments can be made by account holder and third parties while redemption payments are restricted to account holder only. Should apply to Nigerian citizens or residents; vi. vii. Only one account per person with any Capital Market Operator. viii. No transfer of funds to other accounts; and ix. No foreign remittance can be credited to these accounts.

2. Limitation/threshold The account shall be:S AND EXCHANGE i. Limited to a maximum single deposit amount of ₩20,000.00 and maximum cumulative balance of ₩200,000.00 at any point in time; and Limited to a maximum daily redemption limit of ₩30,000.00. ii.

3. Customer Identification Requirements : i. Basic customer information required to be provided include name, passport-sized photograph, place of birth, nationality, gender, home location/address and telephone number. 4 ii. These requirements may be sent electronically or submitted onsite to the Capital Market Operator, its branches or agent's office. iii. No documentary evidence of identity is required.

C. Level 2 - Medium-Risk Accounts

1. The features of Medium-Risk Accounts include the following: i. The account may be opened face to face at the Capital Market Operator's office or any of its representative's or agent's offices; ii. Basic customer identification information is subject to verification and monitoring by the capital market operator. iii. These accounts may be operated by phone or at the Capital Market Operator's customer web site/portal; iv. Accounts may be linked to a mobile phone; and V. No minimum investment amount is required for opening these accounts.

2. Limitation/threshold i. Limited to a maximum single deposit of ₩40,000.00 and a maximum cumulative balance of ₩400,000.00 at any point in time; ii. This account is limited to a maximum daily redemption limit of ₩50,000.00. iii. Where verification of client's identification documents is not complete the client shall not be allowed to operate the account. EXCHANGE

3. Customer Identification Requirements : NIGERIA i. Basic customer information required to be provided include passport-sized photograph, name, place and date of birth, nationality, gender, home address, telephone number, reference by suitable referees (in addition to the definition/categorisation in the AML/CFT Rules, including village Heads, Trade Groups, Supervisors, Employers and additionally as defined in the SEC AML/CFT Regulations). 5 ii. These requirements may be sent electronically or submitted onsite in the Capital Market Operator's office, its branch or agent's office.

D. Level 3 - High-Risk Accounts

1. The features of High-Risk Accounts include the following: i. Capital Market Operators are required to obtain, verify and maintain copies of all the required documents for opening of accounts. ii. High-Risk Accounts are to be opened at the Capital Market Operator's office or branch of its agent's office face to face by the prospective customer. iii. A minimum investment amount may be required for the opening of High-Risk Accounts.

2. Limitation/threshold – There is no maximum limit on single deposits and cumulative balance.

3. Customer Identification Requirements: i. Customers are required to comply with the Know-Your- Customer (KYC) requirements contained in the Securities and Exchange Commission. ii. Customer identification obtained is to be verified against similar information contained in relevant data base. (4) RULES ON FUND/PORTFOLIO MANAGEMENT OPERATIONS Definitions: COMM HANGE RIA

1. Within the context of this part of the Rules the following terms shall have the following meaning:

a) Discretionary Fund/Portfolio Management means the exercise of any degree of discretion and independence in investment and management of securities, portfolio of securities, pooled funds on behalf of a client, or a group of clients by a Fund/Portfolio Manager in accordance with investment objectives expressed in an agreement. 6 b) Non Discretionary Fund/Portfolio Management means the investment in and the management of securities, portfolio of securities on behalf of a client or a group of clients in accordance with the direction of the client or group of clients without any exercise of discretion by the Fund/Portfolio Manager under an expressed agreement.

c) Retail Investor means an individual not otherwise classified as 'High Net worth Investor (HNI) or as 'Qualified Institutional Investor (QII) who invests with a registered Capital Market Operator and: i. has on aggregate (inclusive of tangible and intangible assets) a net worth not exceeding 100 million Naira, ii. does not possess the requisite knowledge, expertise/skill experience and sophistication for investment management; iii. has low to moderate risk tolerance threshold; iv. undertakes the investment for his or her own beneficial account, or on behalf of a minor as parent or guardian.

d) High Net worth Investor means an individual whose aggregate net worth of investment assets exceeds 100 million Naira, in addition to: i possession of evident capacity, expertise and sophistication to undertake high risk investment activities; or

2 General Business Ethics And Conduct

i. ensure that the execution of client's transaction orders are effected within twenty four (24) hours at the best available terms at every point in time in any given market situation.

ii. put in place, written Board approved guidelines in its operations manual outlining all identifiable areas of conflict of interest and stipulating actions to be taken to prevent occurrence thereof arising when allocating and executing transactions in the same securities for clients' portfolio on one hand, and firm's proprietary trade, beneficial transactions for firm's directors, employees or related persons on the other hand

iii. not undertake a short sale of any securities in a client's portfolio or unauthorized use of securities from clients' portfolios. 7 3. (1) (a) Contents of formal written Client Service Agreement

The Fund/Portfolio Manager (FPM) shall ensure the existence of a formal written Client Service Agreement (CSA) with each client or group of clients before the provision of any services in management of Client's assets, or portfolio of securities clearly setting out the following: i. Management terms and conditions, fees, charges payable by the Client; and scope of services to be provided by the Fund / Portfolio Manager with regards to the investment management service; ii. investment policy from which the management terms and conditions are derived and which identifies clearly: a. Investment objective of the Client(s); b. Performance benchmark derived from the Client(s) investment objective as provided in (a) c. risk profile of client(s); d. limitations, restrictions, etc with regards to class of assets, sector, industry within permissible assets listed in 3.2 e. implementation on the basis of (a), (b) and (c); with a section of the agreement signed by the Client(s) that he/she understands the risk(s) associated with the investments and consents to it(them); iii. Description of product(s) developed and managed by the Fund/Portfolio manager and offered to the Clients. iv. Basis and method for valuation of portfolio in reports or account statements distributed to client(s). v. Liability clause in respect of default by the Fund / Portfolio Manager.

“To the fullest extent permitted by the law, and notwithstanding any other provision of this Agreement, the Fund/Portfolio Manager is prohibited from disclaiming responsibility for losses of investments due to breach of the terms of this agreement, fraud, bad faith, gross negligence or willful default arising from its acts or omission or those of its agents appointed by it in the course of performing its services to the Client. 8 The Client shall indemnify and save harmless the Fund/Portfolio Manager from and against any and all claims, liabilities, damages, losses, costs and expenses, that are incurred by the Fund/Portfolio Manager in the course of carrying out its responsibilities hereunder, provided that it shall be entitled to indemnification hereunder only if it acted in good faith and in a manner reasonably believed to be in the best interests of the Client." b) Provision of Investment Performance Report:

The Fund/Portfolio Manager shall provide to the client(s) periodic (monthly, quarterly or bi annual) report (as agreed with the client) on the performance of its investment portfolio which shall state: i. the nominal and inflation adjusted rate of return. ii. the measuring and reporting of performance based on established and mutually agreed benchmark reflecting investment objective of the client. iii. The expenses and costs incurred. c) Contents of Marketing Materials /Client prospecting document

The marketing materials /Client prospecting document shall state among other information, the following: i. Asset class and types of securities comprised in the portfolio. ii. Risks associated with investment of the assets, securities of the portfolio and management by the firm of such risks; iii. Class of investors for which investment product is targeted categorized on a basis determined by the Fund/Portfolio Manager such as age, risk tolerance, investment objective etc.

3.2 Investment of Retail Investors Funds i. Funds received from Retail Investors/Clients and managed under a discretionary Fund/Portfolio management mandate whether on individual portfolio basis or as a pooled Fund shall only be invested in any or combination of the under listed permissible assets and securities:

Quoted equity stocks listed on a registered Stock Exchange in Nigeria; 9 3.3 4 ii. Registered stock index issued by a registered Exchange in Nigeria which is actively traded; iii. Unquoted equity stocks admitted and actively traded Over the Counter; iv. Government Securities: Treasury bills, (national, supra-national and sub- national) bonds v. Marketable Debt Instruments: Corporate Debts assigned investment grade rating by SEC registered rating agency and actively traded for thirty (30) days on a SEC registered secondary market; vi. Units of registered Collective Investment Schemes; vii. Fixed/Term deposit investment; viii. Non interest/Shariah compliant instruments or securities as provided for under the Rules and Regulations of the Commission. ix. Any other class of assets or securities as approved by the Commission from time to time. Investment of High Net Worth/Qualified Institutional Investor Funds (HNI/QII)

Investment of HNI/QII Clients funds under discretionary Fund/Portfolio management mandate shall be in assets and securities determined by the exercise of discretion of the FPM in line with the clients stated investment objective and defined risk tolerance level, evidenced by a mutually agreed/signed mandate from the client transmitted to the FPM physically or electronically. Non Discretionary Management Service i. the terms of service and relationship between both parties; ii. roles and responsibilities of each party during the tenure of the agreement; iii. fees, charges and commissions payable by the investor iv. the time lines for execution of transaction orders V. Requirement for best execution. 10 B. MAJOR AMENDMENTS

1. NATIONAL INVESTOR PROTECTION FUND RULES

PART 1- ESTABLISHMENT OF THE NATIONAL INVESTOR PROTECTION FUND

PART 2 Rule 2 (d)- ESTABLISHMENT

Have a Board of Directors which shall be responsible for the administration of the Fund.

PART 3- APPLICABILITY a) These Rules shall not apply to Capital Market operators who are dealing members of Securities Exchanges, Capital Trade Points and trading facilities.” b) These Rules do not apply to transactions not regulated by the Commission.

PART 4 Rule 4 (iii)- BOARD

The Board shall consist of:-

Three other members who shall be representatives of Capital Market Trade Groups/Associations to be appointed by the Commission from time to time, provided that no representative of a Trade Group/Association shall be on the Board for more than four years.

PART 5 - MANAGEMENT OF THE FUND EXCHANGE (9) The Fund shall be managed by the Board or Fund Manager as may be appointed by the Board.”

(13) The Board shall be responsible for the general management of the Fund.

PART 6 Rule 13- FUNDING

Assets, properties or cash realized from liquidated operators to the tune of the amount paid out of the Fund to investors as compensation. 11 PART 7 Rule 15- ELIGIBILITY

The Board shall establish a framework for determining beneficiaries of the Fund.

PART 7 Rule 16: ELIGIBITY

Beneficiaries of the Fund shall be investors who suffer pecuniary loss arising from: (a) The insolvency and bankruptcy of a Capital Market Operator; and (b) Defalcation committed by a Capital Market Operator or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the Capital Market Operator in the course of its business for which it was registered by the Commission as a capital market operator.

“Provided, however that subject to the approval of the Board, an investor who is charged, indicted or otherwise suspected of having conspired or participated in the wrongful act of the Capital Market Operator shall not immediately benefit from the Fund until the determination as to culpability is made by a competent court or tribunal".

PART 7 Rule 17- ELIGIBILITY

These Rules do not apply to transactions not regulated by the Commission and parties to such transactions shall not benefit from the Fund.

PART 7 Rule 18- ELIGIBILITY EXCHANGE Persons who bring claims as beneficiaries to the Fund shall be required to tender to a designated officer of the Fund, evidence of claims against the Capital Market Operator. Such claims shall be verified by the Fund.

PART 9 Rule 22 (i)- COMPENSATION

An application shall:- Be brought within twelve (12) months after the announcement by the Fund or the Regulator of the insolvency or bankruptcy of the Operator. 12 PART 9 Rule 22 (ii)- COMPENSATION

Be brought in writing to the Fund or Commission as prescribed under these Rules.

PART 9 Rule 22 (v)- COMPENSATION

Be accompanied by evidence of investments with the Capital Market Operator, and contain other relevant materials and facts to prove the claims of the applicant.

PART 11 Rule 30 (b)- ADJUSTED PAYMENTS

Rule 30(b) “The Board may determine to reduce the compensation which would otherwise be payable to an investor in circumstances where it is satisfied that the investor is partly to blame for the loss which he has suffered."

PART 11 Rule 30 (c): ADJUSTED PAYMENTS

Rule 30 (c) "The Board may also determine to make a payment on account or to pay a lesser sum where the investor has any prospect of recovery in respect of the claim from any third party or through an application for compensation to any other person or authority."

PART 13 Rule 34- ANNUAL REPORT

The Board shall not later than ninety (90) days after the end of its financial year,_submit an Annual report to the Board of the Commission.

PART 13 Rule 35- ANNUAL REPORT SECURITIES AND EXCHANGE (d) The Auditors of the Fund shall be appointed by the Board of the Fund. COMMISS PART 13 Rule 36- QUARTERLY REPORT NIGERIA

The Board shall also make quarterly reports to the Board of the Commission 30 days after the end of each quarter, giving details of the exercise of its powers and functions.

PART 13 Rule 37: QUARTERLY REPORT

The Board shall notify the Board of the Commission in writing of significant events occurring in the process of administering the Fund. 13 2. REAL ESTATE INVESTMENT SCHEMES

508. Definitions of Real Estate & Real Estate Related Assets

Borrowing: means consolidated third party borrowings of a REIS as may be permitted by the SEC.

Development: Includes all land and real estate assets under construction or development, renovation or enhancement provided such assets are not currently income generating.

Distributions: means a sum of money paid regularly (typically, annually) by the REIS or REIS SPV to holders, out of its profits (or relevant reserves) as dividends on equity capital and interest on shareholders' loans.

Dividend Income: means income derived from owning interests in real estate assets or REIS SPV and distributed to holders as return on equity capital.

Property Manager: A property manager is a person registered with the SEC and operates a real estate property for a fee often on behalf of the owner (or landlord). The property manager will commonly assist with services which include: meeting an owner's investment objectives, maintaining detailed tenancy records, ensuring lease terms are complied with, including rent and operating expenses collection, service charges annual rendering, tenant liaison on a day-to-day basis, meeting statutory obligations, maintaining a proper building condition and operating property on a sustainable basis'.

A Property Manager handles the day to day maintenance and operations of the properties in the REIS. The Real Estate Property Manager shall be appointed by and report to the Fund Manager. COMMISSION, NIGERIA Real Estate: in these rules real estate means income generating property consisting of land, buildings. It also includes special purpose vehicle (SPV) holding such income generating lands and buildings.

Real Estate Assets: means developed, operational and income generating properties owned by the REIS, in Nigeria, whether directly or through a REIS SPV.

Real Estate Investment Scheme (REIS): means a company, a trust or other such corporate structures that may be approved and regulated by 14 the Commission, which is primarily engaged in, and invests in income generating real estate assets or real estate related assets. A Real Estate Investment Scheme may be listed on a recognized securities exchange.

Real Estate Related Assets: Includes development, real estate assets held outside Nigeria, but within Africa, and other real estate investments owned by a REIS (including legal interests of a REIS Holdco in any REIS SPV, which falls below 75%).

Also includes but is not limited to shares of real estate companies and higher rated real estate investment schemes.

REIS Holding Company (“REIS Holdco”): is an entity set up either as a company or a trust-that holds income generating real estate assets directly or legal interest in a REIS SPV

REIS Special Purpose Vehicle (“REIS SPV”): is one primarily engaged in operating, holding or developing real estate assets where the REIS Holdco owns a minimum of 75% legal interest and exercises effective control over the affairs of the REIS SPV. Not less than 90% of the REIS SPV's assets must be held directly in real estate (including real estate assets and development) and the REIS SPV must not invest in other special purpose vehicles. Such REIS SPV can be constituted as a company (i.e. a REICO) or trust (i.e. a REIT).

Rental Income: means income derived from the lease of the properties owned by the REIS or REIS SPV.

Shareholders' loan: is a loan or debt-like form of financing provided by REIS shareholders/unit holders, which is usually the most junior debt in the entity / REIS' debt portfolio, and different from third party debt. Where shareholder loans exist in the capital structure of the REIS, then the ownership of the shareholder loan will be on a pro-rata basis with the ownership of the ordinary equity of the REIS for all shareholders/unit holders.

Valuation: means an opinion or estimate regarding the value of a particular property, as of a specific date, given by a SEC registered valuer. 15 Valuation Standards: means the best property valuation standards, as set and determined by the recognized Valuation Standards Council / Association / Organization

Rule 510- Constitution and Distribution For Real Estate Investment Schemes

1. A Real Estate Investment Scheme (REIS) is one which meets all the requirements and may be constituted as a:- a) company ("REICO"); or b) trust. (“REIT") or Such other corporate structures as may be approved and regulated by the Commission

2. Revenue: A minimum of 90% of a REIS' revenue (excluding capital gains) shall be derived from rental income or dividend income;

3. Distribution: a) An authorized Real Estate Investment Scheme shall effect the annual distribution of not less than 75% of its rental income or dividend income. b) A REIS must make a distribution, at least, annually otherwise, it shall cease to be registered as a REIS by the Commission.

Rule 515- Contents of a Prospectus

Every prospectus shall contain the information required by the Act and shall, in addition, state the following information: information:

1. The front cover shall state the name and RC number of the issuer/promoter, registration number, amount of units being offered, the price and amount payable in full on application; provided that the initial public offer shall not be less than #1 billion and subsequent offers not less than #500 million;

2. The following statements shall appear in bold character on the cover page;

You are advised to read and understand the contents of the prospectus. Before subscribing, please consult your Stockbroker, Solicitor, Banker or an Independent Investment Adviser registered by the Securities and Exchange Commission;

3. a reasonably detailed table of contents in the forepart of the prospectus showing the 16 subject matter of the various sections or subsections of the prospectus and page number on which each such section or subsection begins;

4. application forms

5. preliminary charges.

6. The following statement shall be written boldly in the summary page:

"Investors are advised to seek information on the fees and charges before investing in the Scheme";

7. the prospectus shall contain a key data section with the following cautionary statements stated in bold characters:- a) that the rental yield on real estate held by the Scheme is not equivalent to the yield of the units; and b) that the value of the real estate may fluctuate;

8. names and addresses of the directors;

9. names and profile of the investment committee members specifying the independent members;

10.corporate directory(i.e. address, contact numbers, email and website address) of Issuer, Valuer(s), Issuing House, Registrar, Solicitor to the Offer, Reporting Accountant, Property Manager, Insurance Company, Rating Agency, Auditors and Underwriter (where applicable)and other professional parties to the Offer;

11.the offer, stating the requirements of rule 514, the times of opening and closing the offer;

12. offer price;

13. The prospectus shall include a section on the REICO to provide prospective unit holders with detailed information on the scheme for the purpose of making an informed assessment of the scheme. The following information about the scheme shall be disclosed:- of the scheme, the following information ab a) history and prospects of the scheme; b) objective of the scheme, strategy for achieving the stated objective (inclusive of but not limited to the acquisition plan, disposal plan, sector focus, geographical focus, segment composition structure, value-add strategy)and a statement that material changes to the investment objective would require unit holders approval;

c) investment policy and constraints of the scheme; d) dividends, distribution or reinvestment options; e) redemption policies; f) tax and legal considerations; 17 g) the schemes' specific peculiar risks. The strategy for managing those risks shall also be disclosed; h) full details of and description of the real estate held by the company and/or type of real estate to be acquired. The description of an existing property shall spell out the type (residential/commercial/ industrial) location, age, existing use and, gross built-up area (GBA), net lettable area (NLA), rental yield, cash flow forecast; i) where an asset is held under an SPV, a detailed profile of the SPV, i.e. history, ownership structure, debt profile and 3-5 years historical and projected financial statements of the SPV should be disclosed in the Prospectus where applicable; j) brief particulars of the current tenancies and full rental roll indicating major tenants ( occupying 10% and more of the lettable space), tenancy period, area occupied, rental rates, escalations etc. k) for the property, property history, current and historical occupancy rates, average current and historical rental rates, average current and historical escalation rates, outgoings, net income and assessment of future income and major capital expenditure likely to be incurred in the immediate future (i.e. capital forecast, revenue forecast); leverage levels, l) information about the company management team and property manager, experience in real estate development, asset management, property management, total assets under management, number of years in the real estate value chain and staff strength; m) the inclusion of a photograph of any property in the prospectus will be permitted on the condition that the photograph is not more than six (6) months old as at the date of the prospectus and the depicted real estate is wholly- owned and confirmed by the Commission to be wholly acquired; n) the inclusion of three(3) dimensional pictures will be permitted for proposed developments where such building plans have been approved by the relevant authorities; o) details on the valuation of real estate(s) held by the company shall be disclosed, indicating date of last valuation, value of the estates and the basis of valuation, revaluation surplus/deficit, net book value and any other relevant information; p) statement as to consents of professionals to the offer; q) duration of the scheme and conditions relating to its termination and modification r) information concerning the relationship between the management company and/or any of its associated/related companies with the vendors of real estate purchased or to be purchased and any conflict of interest arising thereof shall 18 be disclosed;

Rule 520- Minimum Level of Subscription (1) The public issue of a REICO shall be cleared for allotment by the Commission only if it is subscribed by at least 50% apart from the percentage underwritten, subject to the assets and portfolio composition remaining consistent