CFM Bank House 1 Index

SRI Operating Memorandum

Custodian & Broker The Strategy Manager has appointed Capital

International Limited (“CIL”) of Capital House,

Circular Road, Douglas, Isle of Man, IM1 1AG as

lead custodian and broker to the Strategy.

CIL provides international dealing, custody,

investment management and portfolio

administration services. At the time of publication,

CIL administered over $4 billion of assets. CIL is a

member of the London Stock Exchange and is

licensed by the FSC. CIL is a member of the

Capital International Group.

CIL may from time to time also elect to use one or

more sub-custodians to hold strategy assets.

Participation Units Participation in the Strategy will be sub-divided

into standard participation units with a nominal

value of £1 each. The Strategy Manager may

issue additional units or cancel units as necessary

to facilitate contributions to or withdrawals from

the Strategy.

Valuation The Strategy will be valued on a mark to market

basis quarterly on the last calendar day of each

month. The Strategy Manager may at its absolute

discretion determine additional valuation dates on

an ad-hoc basis.

The Strategy’s value will be determined by

deducting the total liabilities from the total assets of

the Strategy. The value of the assets and liabilities

of the Strategy will be determined in accordance

with CFML’s standard strategy valuation policy,

which is available on request and may be

published from time to time on CFML’s website.

Unit Pricing The net asset value per unit will be calculated by

dividing the net asset value of the Strategy by the

total number of units participating in the Strategy.

The Directors reserve the right to adjust the unit

price on any valuation date to reflect the

approximate true cost or value per unit

associated with any investment or redemption

from the strategy.

Introduction The CFM Bank House 1 Index (the “Index”) was

formed by Capital Financial Markets Limited

(“CFML”) in September 2011.

Operating Memorandum This Operating Memorandum details the basis by

which the Index will be managed and how the

index levels are calculated.

Reference Strategy The Index is based on the performance of an

underlying reference strategy called the CFM Bank

House 1 Strategy (the “Strategy”) and the rest of

this document details how this Strategy operates.

Strategy Manager The Strategy is managed by Capital Financial

Markets Limited (“CFML” or the “Strategy

Manager”) of Capital House, Circular Road,

Douglas, Isle of Man, IM1 1AG.

CFML is a specialist provider and issuer of

contracts for difference and spread bet contracts.

CFML is licensed by the Isle of Man Financial

Supervision Commission (“FSC”).

CFML is a wholly owned subsidiary of Capital

International Limited (“CIL”).

CFML is a member of the Capital International

Group.

Investment Adviser The Strategy Manager has appointed Bank House

Investment Management Limited (“Bank House”)

of 2 Tavistock House, 5 Rodney Road,

Cheltenham, GL50 1HX as the strategy investment

adviser.

Bank House is regulated by the UK Financial

Services Authority (“FSA”).

CFM Bank House 1 Index SRI Operating Memorandum

www.capital-iom.com

Publication of Unit Pricing

The unit price of the strategy will be available on

request from CFML. The unit price may also be

published on CFML’s website. CFML will

additionally endeavour to maintain pricing of the

strategy on Bloomberg.

Contributions & Withdrawals The Strategy is a private strategy operated by

CFML. From time to time CFML may choose to

contribute additional monies to or withdraw monies

from the Strategy at its absolute discretion.

Contribution and withdrawals may only be made

on a valuation date. The amount of the

contribution or withdrawal (after deduction of any

charges) divided by the unit price on that valuation

date will determine the number of units invested

or disinvested.

The Strategy is subject to certain restrictions and

minimum notice periods with respect to

withdrawals.

Investment Objective To maximise returns and manage volatility via

investment in a wide range of asset classes.

Base Currency Sterling

Management Approach The strategy is managed by the Strategy Manager

following the investment advice and

recommendations made by the Investment

Adviser.

Investment Strategy The investment strategy is to maintain exposure to a

focused number of collective investment schemes,

equities and other securities and take advantage of

other opportunistic investment strategies.

Leverage & Borrowing Powers The Strategy will not utilise leverage or borrow

against the assets of the strategy.

Restrictions The Strategy may only maintain exposure to

securities approved by the Investment Adviser.

Risk From time to time to the investment strategy may

well have a focused nature, and consequently there

may be times when there are higher levels of

volatility and risk when compared to more traditional

diversified investment strategies.

Fees, Charges and Expenses An initial Set-Up Fee of 1% will be deducted at

outset.

An Investment Administration Fee of 0.7%per

annum will be calculated and deducted quarterly.

The Set-Up Fee and the Investment Administration

Fees are inclusive of commission payable to the

Investment Manager and all custody and

administration charges.

The Investment Adviser will be entitled to an

investment advice fee, which will be deducted and

paid directly from the assets of the Strategy. For

further details prospective investors should contact

the Strategy Manager or the Investment Adviser.

Financial Advisers may be paid initial and ongoing

commission and these amounts will be levied in

addition to the Set-Up Fee and the Investment

Administration Fee. For further details prospective

investors should contact their financial advisers.

All dealing and clearing costs, miscellaneous and

legal costs will passed onto the strategy.

Capital Financial Markets Limited Capital House Circular Road Douglas Isle of Man IM1 1AG

www.capital-iom.com

T : +44 (0) 1624 654200 E: info@capital-iom.com

Contact Details

Capital International Limited and Capital Financial Markets Limited are members of the Capital International Group

Capital International is a member of the London Stock Exchange and is licensed by the Isle of Man Financial Supervision Commission Capital Financial Markets Limited is licensed by the Isle of Man Financial Supervision Commission

Registered Address: Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG

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