Information for fund’s unitholders or shareholders.
Implementation of liquidity management mechanisms: Swing Pricing et Gates
UCITS managed by Montpensier Finance
As of November 6, 2023, in application of AMF instruction DOC-2011-19 governing UCITS, the following change will be made to UCITS managed by Montpensier Finance which did not already include these mechanisms in their prospectus:
- Implementation of a Swing Pricing mechanism ;
- Implementation of a Gates mechanism.
This operation does not involve any specific action on the part of the unitholders or shareholders of the UCITS concerned, and all the other characteristics of the UCITS remain unchanged.
These changes do not require the approval of the Autorité des Marchés Financiers (AMF).
Implementation of a Swing Pricing and Gates mechanism:
– FCP Aesculape SRI
– SICAV Best Business Models SRI
– SICAV Equilibre Patrimoine
– SICAV Great European Models SRI
– FCP Improving European Models SRI
– FCP M Climate Solutions
– FCP M Cloud Leaders SRI
– FCP M Sport Solutions SRI
– SICAV MFD Patrimoine
– FCP Mondial Valor
Implementation of a Swing Pricing mechanism, with a Gates mechanism being already in place:
– FCP M Prime Europe Stocks
A “swing pricing” mechanism with a trigger threshold has been introduced for all share classes of UCITS managed by Montpensier Finance that do not already have this mechanism in their prospectus. The aim of this mechanism, which is governed by a policy, is to protect the unitholders or shareholders who remain in each UCITS concerned, by ensuring that they bear as little as possible of the costs associated with subscriptions/redemptions made by other investors in this UCITS. The result is an adjusted NAV known as a “swung NAV”.
The redemption capping mechanism (hereinafter “Gates”) enables redemption requests to be temporarily spread over several net asset values, once they exceed a pre-determined level. This mechanism is a liquidity risk management tool in the exclusive interest of unitholders or shareholders.
It is designed to be implemented in exceptional market conditions, in order to cope with a significant deterioration in liquidity. Indeed, in the event of a liquidity situation that does not justify a total suspension, it may be more in the interest of unitholders or shareholders to temporarily stagger redemption requests.
The introduction of the possibility of staggering redemptions provides no information on the likelihood of this mechanism being used over the lifetime of each UCITS concerned, but is primarily intended to provide an additional tool for managing the liquidity of the UCITS concerned, in the interests of unitholders or shareholders.
Therefore, from the date mentioned in the preamble, in the event of exceptional market circumstances, the management company of your UCITS may implement the Gates mechanism in accordance with the terms and conditions set out in the prospectus, regulations or articles of association of the UCITS and described below.
2- Changes resulting from the operation
– Risk profile:
Change in risk/return profile: No
Increase in risk/return profile: No
– Increase in fees: No
– Modifications description:
Modification of prospectuses and regulations or articles of association of UCITS in order to integrate the implementation of a Swing Pricing mechanism, and a Gates mechanism, for UCITS managed by Montpensier Finance which did not already have these mechanisms in their prospectus.
Swing Pricing mechanism
This Swing Pricing mechanism, which is governed by a policy, consists in adjusting the net asset value upwards or downwards, depending on the variation in the net balance of subscriptions/redemptions, in order to protect the unitholders or shareholders who remain in the UCITS, by making them bear as little as possible the costs of rearranging the portfolio, linked to transactions carried out on the assets of the UCITS due to movements (subscriptions/redemptions) in the liabilities of this UCITS. This mechanism results in calculation of an adjusted net asset value, known as the “swung net asset value”, which will be the only net asset value of the UCITS to be communicated.
Details of how Swing Pricing works are given in each fund’s prospectus.
Gates redemption capping mechanism
In exceptional circumstances and if the interests of the unitholders or shareholders so require, the management company reserves the right not to execute all redemption orders centralized on the same net asset value.
The implementation of a “Gates” system makes it possible to spread redemption requests over several net asset values.
For a UCITS whose net asset value calculation frequency is daily, the cap on redemption may be triggered by the management company when a threshold of 5% (redemptions net of subscriptions/last calculated net asset value) of net assets is reached. In this case, the maximum duration of application of the redemption cap is 20 net asset values over 3 months.
For a UCITS whose net asset value calculation frequency is weekly, the cap on redemptions may be triggered by the management company when a threshold of 10% (redemptions net of subscriptions/last calculated net asset value) of net assets is reached. In this case, the maximum duration of application of the redemption cap is 8 net asset values over 6 months.
The trigger threshold is identical for all share classes of the UCITS concerned. The trigger threshold will be identical for all the UCITS’ share classes in the event that other share classes should be created.
When redemption requests exceed the trigger threshold, and if liquidity conditions permit, the management company may decide to honor redemption requests above the said threshold, and thus execute orders in part or in full.
Redemption requests not executed on a given net asset value will automatically be carried forward to the next centralization date.
For example, if a fund’s net redemption requests represent 10% of the fund (whereas the trigger threshold is set at 5% of net assets), the management company may decide to honor redemption requests up to 7.5% of net assets, in keeping with the principle of fair treatment (and therefore execute 75% of redemption requests instead of 50% if it strictly applied the 5% ceiling).
Redemption orders on a UCITS that are not executed and automatically carried forward cannot be revoked by the UCITS holders or shareholders concerned.
In the event of a Gates trigger, all holders or shareholders of the UCITS will be informed by any means via the management company’s website (montpensier.com).
Holders or shareholders whose orders have not been executed will be specifically informed as soon as possible.
The detailed procedures for implementing Gates are described in the prospectus of each UCITS.
3- Important information for investors
Unitholders and shareholders are reminded of the need to read the Key Information Document (KID), the Prospectus and, where applicable, the pre-contractual information document for SFDRs (PCD), available on the NAV and documents page of the www.montpensier.com website. As a general principle, unitholders or shareholders of UCITS are advised to contact their usual investment advisor on a regular basis.
The KID, Prospectus and PCD are available on the management company’s website www.montpensier.com and can be sent to you within one week on request to the head office of Montpensier Finance, 58 avenue Marceau – 75008 Paris.