in its books as held on behalf of custodial clients. In addition, if the Custodian or any sub-custodian goes into liquidation, administration or similar process a liquidator or similar officer may cease the delivery or release of securities held on behalf of the Fund pending an audit or securities verification process. The Manager will seek to mitigate this risk by engaging a Custodian (such as the JCSD Trustee Services) which has adequate systems in place to identify, measure, monitor and control in the custody service area. LEGAL AND TAX RISKS: The legal and tax regimes in Jamaica governing collective investment schemes may change from time to time, either by the passage of new laws or regulations or the way in which an existing law or regulation is interpreted and applied by the courts, the FSC or another regulatory agency. Changes in the prevailing regulatory regime could increase the compliance burden of a Fund and result in additional operating costs. At the present time, the tax regime governing collective investments schemes is relatively favorable. There is no guarantee that this state of affairs will continue in the future and the imposition of additional taxes would inevitably reduce the NAV of an affected Fund. A Fund may invest in foreign securities and other assets. Such investments may be affected by changes in the tax law or regulations, particularly the rate of withholding tax on dividends, interest and other payments emanating from a foreign source. COMPLIANCE RISKS: The regulatory regime governing the registration and operation of collective investment schemes is relatively new having been promulgated on December 30, 2013. It imposes upon collective Investment schemes, such as the Funds, a comprehensive reporting and regulatory monitoring system including, inter alia, annual registration of each Fund. The objective of the regulatory regime is the protection of investors. Failure of a Fund to comply with the CIS Regulations could result in sanctions which may include any of the following: a. b.
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deregistration of the Fund; suspension of registration;