^All fees are expressed as a percentage of Principal. All fees are exclusive of GST and exclusive of any RITC.
*As the Fund is a new product, this is Gleneagle’s reasonable estimate at the time of this PDS for the current financial year and assumes: (i) no abnormal expenses are incurred; and (ii) 0.5% p.a. of Principal Threshold Management Fee has been waived to the extent of and in proportion to the amount of the Principal invested in any other fund for which Liquidity Manager is entitled to fees. It also assumes that the Fund earns 1.1% above the Intended Return.
EXAMPLE OF ANNUAL FEES AND COSTS
This table gives an example of how the fees and costs for the Fund can affect your investment over a one-year period. You should use this table to compare the Fund with other managed investment products. It is important to read the assumptions and notes below the table.
|BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000 DURING THE YEAR|
|CONTRIBUTION FEES||Nil||For every additional $5,000 you put in,you will be charged $0.|
MANAGEMENT FEES AND COSTS
|1% p.a. of Principal||And, for every $50,000 you have in the Blossom Fund you will be charged or have deducted from your investment $500 each year.|
|0||And, you will be charged or have deducted from your investment $0 in performance fees each year.|
|0.1% of Principal||And, you will be charged or have deducted from your investment $50 in transaction costs.|
COST OF THE FUND^
|1.1%||If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year,you would be charged fees and costs of up to $550 each year.|
^As the Fund is newly established, the figure reflects Gleneagle’s reasonable estimate, based on information available as at the date of this PDS and calculated on the Principal, that will apply for the current financial year (adjusted to reflect a 12-month period). Please refer to ‘additional explanation of fees and costs’ section for more information.
The Corporations Act requires that when calculating management costs in this table we must assume that the value of your investment remains at $50,000 and the Fund’s unit price does not fluctuate. Management costs actually incurred will depend on the market value of your investment and the timing of your contributions (including any reinvestment of distributions) during any 12-month period. The example assumes no abnormal expenses are incurred, 0.5% p.a. of Principal Threshold Management Fee has been waived to the extent of and in proportion to the amount of the Principal invested in any other fund for which Liquidity Manager is entitled to fees and no additional service fees are incurred by you and that fees are not individually negotiated with us. Totals may vary from the expected number due to rounding.
About management costs
Management costs comprise the additional fees or costs that investors incur by investing in the Fund, rather than investing directly in the underlying assets. These include investment management fees, BlossomApp’s threshold management fees, Fortlake’s liquidity management fees, indirect costs, audit costs, legal costs, and administration and custody fees. Management costs do not include transactional and operational costs. On any given day, the amounts payable to fee recipients is to be calculated and accrued daily, until the amount of Return above the Intended Return is exhausted, in the following order:
If the Return is not sufficient to allow for the payment of all fees and costs to the fee recipients then the fees will be waived or reduced in the order of priority as listed above.
The Liquidity Manager is entitled to a management fee of 0.5% per annum of the Principal (exclusive of GST) accrued daily, calculated on the last business day of each calendar quarter and payable quarterly in arrears. The management fee is charged for acting as Liquidity Manager of the Fund, managing its investments and overseeing the Fund’s operations. The Liquidity Manager has waived to the extent of and in proportion to the amount of the Principal invested in any other fund for which Liquidity Manager is entitled to fees.
Gleneagle has the right to appoint more than one investment manager (including the Liquidity Manager) in respect of the Fund. Where more than one investment manager is appointed, each investment manager will be appointed in respect of a portfolio. When determining the fees payable to each relevant investment manager as a management fee, the calculation of the fees will be undertaken on a portfolio basis; where the Intended Return and Return are calculated in respect of each individual portfolio.
Threshold Management Fee
The Threshold Manager is entitled to a Threshold Management Fee of:
not exceeding the amount which the Responsible Entity is entitled to pay to the Threshold Manager under the Constitution.
The Threshold Management Fee is accrued daily,calculated on the last business day of each calendar quarter and payable quarterly in arrears. The Threshold Management Fee is charged for the provision of the threshold management services to the Fund under the Threshold Management and Underwriting Deed.
The Fund does not charge a performance fee.
Indirect costs are costs incurred in managing the Fund which directly or indirectly reduce the return on a product. Gleneagle is entitled under the constitution to be reimbursed out of the Fund’s assets for the expenses incurred in the proper performance of its duties as the responsible entity of the Fund. Indirect costs include the fee charged by the Administrator and Auditor. Gleneagle will be reimbursed indirect costs of up to 0.5% per annum, of the Principal (exclusive of GST) accrued daily, calculated on the last business day of each calendar quarter and payable from the Fund quarterly in arrears. Abnormal expenses are expected to occur infrequently and may include (without limitation) costs of litigation to protect investors’ rights, costs to defend claims in relation to the Fund, investor meetings and termination and wind-up costs.
About Transactional and operational costs
Transactional and operational costs include brokerage, settlement costs, bid-offer spreads on investments and currency transactions, borrowing costs, clearing and stamp duty costs, and the costs of derivatives used for hedging purposes. When you invest in the Fund, the Liquidity Manager may incur expenses in buying and selling investments (for example, brokerage and custody costs). The Liquidity Manager may also incur costs resulting from trading certain derivative products for hedging purposes. The Liquidity Manager will also incur costs in selling investments to meet withdrawal requests. A buy-sell is an adjustment to the unit price reflecting our estimate of the transaction costs that may be incurred as a result of the purchase/sale of assets arising from the issue/withdrawal of units. This adjustment ensures that the existing investors do not pay costs associated with other investors acquiring/withdrawing units from the Fund. The buy-sell spread is typically reflected in the issue/withdrawal price. There is no buy-sell spread for the Blossom Fund.
The Liquidity Manager’s estimates of the transactional and operational costs for the Fund are:
|Total transactional and operational costs (% p.a. of Principal)||Recovery through buy-sell spread (% p.a. of Principal)||Recovery through buy-sell spread (% p.a. of Principal)||Recovery through buy-sell spread (% p.a. of Principal)|
While the Fund is a new product, and hence such costs are unable to be calculated based on the costs charged in the past 12 months, this information reflects the Liquidity Manager’s reasonable estimate of the transaction and operational costs for the Fund. We have also assumed that application monies received are fully invested. In practice, your investment balance, the Fund’s volume of trading and the number and value of applications and withdrawals processed will vary from year to year, which will impact the transactional and operational costs of the Fund.
Transactional and operational costs such as brokerage, borrowing costs, transactional taxes, and settlement costs are incurred when the Fund acquires or disposes of assets. The amount of these costs for the Fund will vary from year to year depending of the volume and value of trades undertaken for the Fund.
Transactional and operational costs for the Fund are paid out of the assets of the Fund and are not fees paid to the Liquidity Manager.
Can the fees change or be updated?
Yes,all fees can change. Reasons might include changing economic conditions and changes in regulation. However,we will give you 30 days’ written notice of any increase to fees where practicable. The Constitution for the Fund sets the maximum amount we can charge for all fees. If we wished to raise fees above the amounts allowed for in the Constitution,we would need the approval of investors.
Please refer to our website for any updates on our estimates of any fees and costs (including indirect costs and transactional and operational costs). Past performance is not an indicator of future performance and fees or costs may change in future years.
No commissions will be paid by us to financial advisers. Additional fees may be paid by you to your financial adviser if one is consulted. You should refer to the Statement of Advice they give you in which details of the fees are set out.
Can fees be different for different investors?
The law allows us to negotiate fees with “wholesale” investors or otherwise in accordance with legal requirements. The size of the investment and other relevant factors may be taken into account. We generally don’t negotiate fees. However,we may negotiate fees with very large wholesale clients only. The terms of these arrangements are at our discretion.
Government charges and taxation
Government taxes such as GST are applied to your account as appropriate. In addition to the fees and costs described in this section,standard government fees,duties and bank charges may also apply such as stamp duties. Some of these charges may include additional GST and will apply to your investments and withdrawals as appropriate. Please refer to the ‘What about Tax?’ section of the PDS.
You may invest in the Fund by downloading the App or via the Web App and creating an investor account. Within the App or via the Web App, you may complete the electronic application process to our satisfaction (including providing any identification documentation) and pay your application funds. There is no minimum investment amount.
Application requests will generally be processed daily using the unit price effective for the day. If your application request is received before 4pm Sydney time on a business day, it will be processed using the unit price effective for the end of the day. If an application request is received after this time, it is treated as having been received the following day.
Application requests are valid when the initial identification verification has been passed and cleared funds are received. Any of your payments which remain subject to being dishonoured or clawed back will be shown as “pending” and so additional units might not be issued until your payment has cleared. Although generally units will be issued following payment in cleared funds as described above, if for any reason Gleneagle holds application moneys prior to full credit for payment, Gleneagle will retain the interest (if any) earned on the application monies.
You can make additional investments at any time through your investor account in the App or via the Web App. No minimum amount applies to additional investments. Units will be issued to you in the same manner as initial application funds as stated above.
When you wish to withdraw
There is generally a minimum withdrawal amount of $0.01 and a minimum balance of nil applies to the Fund.
You can ask to withdraw all or part of your investment in the Fund at any time by making a request to withdraw a specified amount through your investor account on the App or via the Web App. This is called a redemption or withdrawal request. The Fund generally processes redemptions on a daily basis each business day. Daily redemption requests are required to be received by 4pm Sydney time on a business day for processing using the unit price effective for the day of redemption. Once we decide you can withdraw your money, redemption requests received by 4pm Sydney time on the day of redemption will be processed on the day of redemption, redemption requests received after 4pm Sydney time on the day of redemption will be processed the business day after the day of redemption. We will generally pay the funds to your account on the following business day after the day your redemption request is processed.
You will be notified of any material changes to your withdrawal rights through the Fund website where there is a material change to your withdrawal rights.
Please note that units in the Fund are not listed on any stock exchange like the ASX, so you can’t sell your units through a stockbroker.
Some detail about withdrawals and how much we pay
How much money you receive for each nit depends on the withdrawal price.
Firstly, we calculate the value of the investments of the Fund and take away the value of the liabilities as defined in the Fund’s Constitution. Secondly, we divide the result of this by the number of units we have on issue to obtain a unit mid-price.
These steps produce a per unit price.
We have a documented policy in relation to the guidelines and relevant factors taken into account when calculating unit prices. We call this our unit pricing policy. We keep records of any decisions which are outside the scope of the unit pricing policy, or inconsistent with it. A copy of the unit pricing policy and of the records are available free on request from the Responsible Entity.
We can withhold from amounts we pay you, any amount you owe us, or we owe someone else relating to you (for example, the tax office).
We generally pay all withdrawal proceeds in cash, (cleared funds, not physical money), directly to your bank account but we are permitted under the Constitution for the Fund to pay redemption proceeds in kind (i.e. in- specie asset transfer).
Payments can be delayed
In certain circumstances, such as a freeze on withdrawals or where the Fund is illiquid (as defined in the Corporations Act), you may have to wait a longer period of time before you can redeem your investment.
If the Fund is not sufficiently liquid, then you will only be permitted to withdraw if we make a withdrawal offer to all investors in accordance with the Fund’s constitution and Corporations Act.
We can delay withdrawal of your money for 21 days or such period as considered appropriate in our view in all the circumstances if:
In certain circumstances we can also delay withdrawal of your money for so long as the relevant event continues. The Constitution sets out the full range of circumstances in which we can delay withdrawal of your money and these include (among others) if:
The Responsible Entity may also gate redemptions in either of the following two scenarios:
The Responsible Entity also has the discretion to waive these ‘gating’ rights.
We can give you back your invested money
In certain circumstances we can, or may be required to, also redeem some or all of your units without you asking. These circumstances include:
Any income distributions (if available) will be made following the end of each financial year being 30 June each year or more frequently at the Responsible Entity’s discretion. Any such distributions will be paid annually and generally within 30 business days after the distribution date.
Distributions are automatically reinvested unless a Unitholder elects for the distribution to be paid out in cash. A Unitholder can change their distribution option by notifying the Administrator via the ‘update distribution preferences’ feature in the App or via the Web App, or by notifying the Responsible Entity, at least twenty (20) business days prior to the relevant distribution date. Unitholders will still have to pay tax on a distribution, even if it is reinvested.
In certain circumstances, such as where investments are sold to meet a significant redemption, Gleneagle may choose to allocate undistributed income and any net realised capital gains to withdrawing Unitholders based on a pro-rata allocation with reference to the number of units being withdrawn. This would only be utilised to ensure a fair and reasonable allocation of any undistributed income and net realised capital gains amongst all Unitholders.
Gleneagle has absolute discretion, in performing its obligation as Responsible Entity, and may accept or reject a written direction from a Unitholder. Gleneagle may also in its discretion implement a minimum initial investment and minimum holding amount requirements.
Gleneagle also reserves the right to cancel distribution reinvestments. Unitholders will be notified if this occurs.
Distribution statements will be forwarded to all Unitholders annually.
As stated above, the default option is for distributions to be reinvested. Investors can elect instead to be paid in cash (cleared funds, not physical money) by completing the ‘update distribution preferences’ feature in the App or via the Web App or by notifying the Responsible Entity, at least twenty (20) Business Days prior to the relevant distribution date.
You become legally entitled to income (called “distributions”) and withdrawal proceeds when paid. This is governed by the Fund’s Constitution and law. This PDS describes when distributions are made and important features of withdrawals.
We want to keep you informed of your savings during your investment (i.e., before you become legally entitled to distributions and withdrawal payments). You can see in the App or via the Web App the total value of your savings and your investment’s “earnings”.
This is based on how much you have invested, less any withdrawals, plus increases (or decreases) in the value based on the Fund’s earnings (as described in this PDS, including provisions for fees, charges and costs), the total number of units on issue and the number which you have.
The displayed total value of your savings (all of your net investment) is based on your number of units and the actual unit prices applicable for the same day used for applications and redemptions.
The displayed amount of your earnings (the indicative increase in value based on your net application moneys) is based on the prevailing net increase in the Fund’s earnings.
For example, if you started saving with $100, your account starts by showing your savings of $100. You are entitled to withdraw that at any time as disclosed in this PDS. You are legally entitled to the $100 payment when your withdrawal application is processed.
If the Fund value which is used for calculating unit prices has increased, then your savings will be displayed as having increased by the same rate. The increase can be displayed both as a dollar value and as an annualised rate. For example, say sometime later the Fund has increased in value per unit. In this example, your savings might be shown as $101 and your earnings will be displayed as $1.00. Depending on when this example is in during the financial year, this $1 increase may be displayed as an annualised rate (in this brief example, 3.00% (p.a.)).
It is important to be aware that you are only legally entitled to the $100 and $1 when legally paid out of the Fund (as described in this PDS). Savings and earnings displayed in the App or via the Web App are based on valuations and assumptions for the valuation (set out in the unit pricing policy, described in this PDS) before you actually withdrawal or distributions are actually made. Actual performance is not guaranteed and displayed indicative values and rates may differ from actual proceeds paid on withdrawals.
Since we price units every business day, in the ordinary course the displayed savings and earnings will generally be identical with actual unit prices and withdrawal payments.
As described in this PDS, distributions on your units will be reinvested into more units (as the default, unless you instruct us otherwise). This will increase the number of units you have, but your total savings on all of your investment will remain the same. Of course, your withdrawals and your additional investments will adjust the displayed savings.
The Fund is relatively new. As at the date of this PDS the Fund has more than 100 investors. When the Fund has 100 investors or more, the Fund will be considered to be a “disclosing entity” for the purposes of the Corporations Act. This means the Fund is subject to regular reporting and disclosure obligations under the Corporations Act which apply to a ‘disclosing entity’. Copies of any documents required to be lodged with ASIC in relation to the Fund may be obtained from, or can be inspected at, an ASIC office. Investors will have a right to obtain a copy, free of charge, in respect of the Fund, of:
Any continuous disclosure obligations we may have will be met by following ASIC’s good practice guidance via website notices rather than lodging copies of these notices with ASIC. Accordingly, should Gleneagle, as Responsible Entity of the Fund, become aware of material information that would otherwise be required to be lodged with ASIC as part of any continuous disclosure obligations, we will ensure that such material information will be made available as soon as practicable on the website www.blossomapp.com.
Your tax liability ultimately depends on your circumstances, for example, whether you are an Australian resident. So, it’s important that you seek professional advice before you invest or deal with your investment.
The discussion below assumes that the Fund will be an Attribution Managed Investment trust (AMIT) and that the investor is an Australian resident for tax purposes who holds their units in the Fund directly on capital account. Non-resident investors should seek their own independent tax advice before investing, taking into account their particular circumstances and the provisions of any relevant double taxation agreement and/or multilateral instrument/ exchange of information agreement between Australia and their country of residence for taxation purposes.
You may need to pay tax in relation to your investment in the Fund. Whilst you may pay income tax you might be able to claim some tax credits or have the benefit of some concessions.
The Fund is an Australian resident trust for Australian tax purposes. It is required to determine its tax components for each year of income. These tax components may include assessable income, exempt income, non-assessable non-exempt income, tax offsets and credits of different characters. The trustee will attribute the tax components to investors on an annual basis such that investors should be treated as having derived their share of the tax components of the Fund directly on a flow through basis. In the case where a Fund makes a loss for tax purposes, that Fund cannot distribute (or attribute) the loss to investors. However, subject to the relevant Fund meeting certain conditions the Fund may be able to take into account the losses in subsequent years.
The Fund will generally attribute any income and realised gains (the timing of recognition of income may be impacted by the Taxation of Financial Arrangements (TOFA) provisions as noted below), if any, shortly after 30 June each year. investors will be required to include in their assessable income the taxable components attributed to them by the Fund. The Fund may attribute a number of different types of income which reflect the income derived by the Fund. These components could comprise of:
If the Fund’s assets are $100 million or more it will be subject to TOFA provisions of the tax legislation which provide rules in relation to the method for calculating gains and losses from financial arrangements and the time at which these gains and losses are brought to account for tax purposes (the default recognition of gains and losses would be accruals or realisation method but there are certain elections that the Responsible Entity might make for alternative timing recognition).
An investor’s share of the assessable tax components of the Fund for a year of income forms part of the investor’s assessable income of that year.
Tax components of the Fund which are attributed to investors may include franked distributions. Subject to the application of anti-avoidance provisions at the Fund level (such as the dividend imputation holding period and related payment rules), such franked distributions generally entitle Australian resident investors to obtain a tax offset (the franking credit) that is available to offset against their income tax liability. Franked distributions and franking credits are included in a person's assessable income. If the franking credits exceed the tax payable on an investor's taxable income, the excess credits may be refundable to the investor if the investor is a resident individual or complying superannuation fund. Excess franking credits may generate tax losses if the investor is a corporate entity.
Tax components of the Fund which are attributed to investors may also include non-cash amounts, such as foreign income tax offsets (FITOs). Depending on the investor’s circumstances, they may be able to claim a tax offset for these amounts against Australian income tax payable on foreign income. An investor’s entitlement to FITOs may be limited to where the FITO does not relate to an amount included in assessable income, or where the investors do not have sufficient overall foreign source income to utilise all of the FITOs relevant to a particular year of income. The excess FITOs cannot be carried forward to a future income year.
We will send you the information you need each year in the form of an AMIT Member Annual Tax (AMMA) Statement to help you to complete your tax return. This information will advise the investor of the share of the tax components of the Fund (if any) of any foreign income/foreign income tax offsets as well as any adjustments required to be made to the investor’s cost base. This will assist the investor when preparing their income tax return.
The amount of the tax components of the Fund which the investor is required to include in their assessable income may be different to the cash distributions received by an investor in respect of their units. This is because the distributions received on the units is determined by reference to the returns received in respect of the Fund, whereas the tax components of the Fund are determined by reference to the overall tax position of the Fund. An investor may be required to make, in certain circumstances, both upward and downward adjustments to the cost or cost base of their unit holdings. This occurs where during an income year there is a difference between:
If the amount in (a) exceeds the amount in (b), the cost base of the investor’s units in the Fund should be reduced by the excess amount. This results in either an increased capital gain, or a reduced capital loss, upon the subsequent disposal of the investor's units in the Fund. Should the cost base be reduced to below zero, the amount in excess of the cost base should be a capital gain that is to be included in the investor's taxable income. Conversely, where the amounts in (a) falls short of the amounts in (b) during an income year, the cost base of the investor’s units in the Fund should be increased by the shortfall amount.
Additionally, Australian residents will generally realise a capital gain or capital loss when they redeem (or dispose of) units in the Fund.
Depending on the kind of taxpayer you are, and how long you have held your units, you may be entitled to a CGT discount which can reduce any capital gain (if any) by up to one half.
If you choose not to provide us with your tax file number (TFN) or Australian business number (ABN) and don’t have an exemption, we must withhold tax at the highest personal rate, plus the Medicare levy, before passing on any distribution to you. The law is very strict on how we can use these details. If this withholding tax applies it is noted that it is merely a collection mechanism and an investor may claim a credit in their annual income tax return in respect of the tax withheld.
Investors should seek their own tax advice to ensure the Fund is appropriate for them.
Gleneagle does not provide any tax advice.
The Constitution establishes the Fund and sets out certain rules which apply to the relationship between Gleneagle as Responsible Entity and each unitholder. Together with this PDS and the law from time to time, it governs your relationship with Gleneagle. It gives Gleneagle rights to be paid fees and expenses and be indemnified from the Fund.
It governs (amongst other things) Gleneagle’s powers (which are very broad), investor meetings and unit issue, pricing and withdrawal, as well as what happens if the Fund terminates.
The Constitution limits Gleneagle’s need to compensate you if things go wrong. Generally, Gleneagle is not liable in equity, contract, tort or otherwise to investors for any loss suffered in any way relating to the Fund.
The Constitution also contains a provision that it alone is the source of the relationship between you and Gleneagle and not any other laws (except, of course, those laws that can’t be excluded).
Gleneagle must have investor approval to make changes to the Constitution which are adverse to the rights of investors.
You can obtain a copy of the Constitution by emailing BlossomApp at firstname.lastname@example.org.
Gleneagle has established procedures for dealing with complaints. If an investor has a complaint, they can contact Gleneagle. Gleneagle will use reasonable endeavours to deal with and resolve the complaint within a reasonable time but in any case, no later than 45 days after receipt of the complaint.
If you are a direct investor and have notified Gleneagle of a complaint in writing and you are not satisfied with how the complaint has been handled, you can refer your complaint to the Australian Financial Complaints Authority (AFCA). Gleneagle is a member of AFCA (member number 11357) which is an external dispute complaints resolution scheme approved by ASIC.
Australian Financial Complaints Authority
GPO Box 3 Melbourne
Phone: 1300 56 55 62
AFCA’s services are generally only available to ‘retail clients’ (as defined in the Corporations Act).
Indirect investors may contact their IDPS operator if they wish to make a complaint or if they are unsatisfied with how a complaint has been handled. However, Gleneagle’s complaints process is also available to indirect investors.
If you are a retail investor (as defined in the Corporations Act), who invests directly in the Fund, you are entitled to a 14-day cooling-off period during which you may change your mind about your investment. During that time, you may exercise your cooling-off rights by requesting your money be returned.
The cooling-off period begins when your transaction confirmation is received by you or, if earlier, 5 business days after your units are issued. Gleneagle is allowed to (and generally does) make adjustments for market movements up or down, as well as any tax and reasonable transaction and administration costs. This may result in you receiving back less than you originally invested.
You may have capital gain/loss tax implications if you happen to receive more or less back than you originally invested.
If you wish to cancel your investment during the cooling-off period, you need to inform Gleneagle in writing of your intention to exercise this right before the end of the cooling-off period (and before exercising any rights or powers you have in respect of your investment in the Fund).
We collect personal information from you in the application and any other relevant forms to be able to process your application, administer your investment and comply with any relevant laws. If you do not provide us with your relevant personal information, we will not be able to do so.
The Threshold Management and Underwriting Deed is publicly available for inspection free of charge at our offices by contacting BlossomApp at email@example.com.
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML Act) and other applicable anti-money laundering and counter terrorism laws, regulations, rules and policies which apply to Gleneagle (AML Requirements), regulate financial services and transactions in a way that is designed to detect and prevent money laundering and terrorism financing. The AML Act is enforced by the Australian Transaction Reports and Analysis Centre (AUSTRAC). In order to comply with the AML Requirements, Gleneagle is required to, amongst other things:
Gleneagle and the Administrator reserve the right to request such information as is necessary to verify your identity and the source of the payment. In the event of delay or failure by you to produce this information, Gleneagle may refuse to accept an application and the application monies relating to such application or may suspend the payment of withdrawal proceeds if necessary, to comply with AML Requirements applicable to them. Neither Gleneagle nor their delegates shall be liable to you for any loss suffered by you as a result of the rejection or delay of any subscription or payment of withdrawal proceeds.
Each of Gleneagle and the Administrator has implemented a number of measures and controls to ensure they comply with their obligations under the AML Requirements, including carefully identifying and monitoring investors. As a result of the implementation of these measures and controls:
Gleneagle and the Administrator may from time to time require additional information from you to assist it in this process.
Each of Gleneagle and the Administrator may have certain reporting obligations under the AML Requirements and may be prevented by law from informing you that any such reporting has taken place. Where required by law, Gleneagle or the Administrator may disclose the information gathered to regulatory or law enforcement agencies, including AUSTRAC. Gleneagle and the Administrator (and each service provider to the Fund) are not liable for any loss you may suffer as a result of their compliance with the AML Requirements.
US Tax Withholding and Reporting under the Foreign Account Tax Compliance Act
The United States of America has introduced rules (known as FATCA) which are intended to prevent US persons from avoiding tax. Broadly, the rules may require the Fund to report details of all US persons and suspected US persons in the Fund to the US tax authorities, to prevent a 30% FATCA withholding tax on certain income and proceeds of the Fund. The Australian Government has entered into an agreement with the United States of America to implement the FATCA regime in Australia (Intergovernmental Agreement). Gleneagle or the Administrator may therefore request that you provide certain information in order to comply with FATCA requirements.
COMMON REPORTING STANDARD
The OECD Common Reporting Standard for Automatic Exchange of Financial Account Information (CRS) requires certain financial institutions to report information regarding certain accounts to their local tax authority and follow related due diligence procedures. The Fund is a ‘Financial Institution’ under the CRS and complies with its CRS obligations by obtaining and reporting information on relevant accounts (which may include the units in the Fund) to the Australian Tax Office (ATO).
In order for the Fund to comply with its obligations under CRS and FATCA, Gleneagle requests (and the Administrator may also request) the investors to provide certain information and certifications to Gleneagle for the Fund’s compliance with FATCA and the CRS. Gleneagle (and the Administrator) may determine whether the Fund is required to report the investors’ details to the ATO based on Gleneagle’s (and/or the Administrator’s) assessment of the relevant information received. The ATO may provide this information to the IRS (in the case of the FATCA regime) where applicable and to other jurisdictions’ tax regulators (in the case of the CRS regime) that have signed the “CRS Competent Authority Agreement”, the multilateral framework agreement that provides the mechanism to facilitate the automatic exchange of information in accordance with the CRS. The Australian Government has enacted legislation amending, among other things, the Taxation Administration Act 1953 to give effect to the CRS and to implement FATCA (in accordance with the Intergovernmental Agreement).
The Responsible Entity
The Responsible Entity is Gleneagle Asset Management Limited which is a wholly owned subsidiary of Gleneagle Securities (Aus) Pty Ltd (i.e. the Underwriter and Custodian). Gleneagle is able to offer asset management and related services to retail investors and fund managers.
The Liquidity Manager
Fortlake is the Liquidity Manager currently managing a portfolio of the Fund. Fortlake blends its talented and experienced team of individuals with a combination of global business insights and investment philosophy.
The Responsible Entity may appoint other investment managers to the Fund in its discretion. Each investment manager is responsible for managing a relevant portfolio in accordance with the relevant management agreement and is contractually required to act in the best interests of Unitholders in performing its duties under the terms of such management agreement.
The Threshold Manager
The Threshold Manager is BlossomApp Pty Limited (also referred to as BlossomApp). Gleneagle as the Responsible Entity of the Fund has signed a Threshold Management and Underwriting Deed with the Threshold Manager and the Underwriter. The deed contains general commercial terms in a standard format and provides for the termination of the Threshold Manager in a number of circumstances including insolvency, breach of an obligation, representation, warranty or undertaking under the agreement or if Gleneagle is required to terminate to comply with relevant law.
BlossomApp is responsible for seeking to facilitate the Intended Return. For further information on the Threshold Manager and how it will seek to facilitate the Intended Return, refer to the section above ‘Threshold Management and Underwriting Deed’.
The Underwriter and Custodian
The Underwriter and Custodian is Gleneagle Securities (Aust) Pty Ltd (Gleneagle Securities). Gleneagle as the Responsible Entity of the Fund has signed a Threshold Management and Underwriting Deed with the Threshold Manager and the Underwriter. The deed contains general terms in a standard format and provides for the termination of the Threshold Manager in a number of circumstances including insolvency, adverse regulatory findings and breach of duty of care.
Pursuant to the Threshold Management and Underwriting Deed, Gleneagle Securities may, in its discretion, provide funds to the Threshold Manager which may be used to fund the Intended Return on the investments in the Fund in the event that BlossomApp does not have sufficient funds. For further information on the Underwriter and these arrangements, refer to the section above ‘Threshold Management and Underwriting Deed’.
Gleneagle Securities acts as Custodian in respect of the Fund’s investments in other funds, primarily expected to be the other funds for which Liquidity Manager is their investment manager and their investment strategies are aligned with those of the Fund
The Responsible Entity has entered into an accounting service agreement (Administration Agreement) with Apex Fund Services (Australia) Pty Ltd (Administrator). Under the Administration Agreement, the Administrator agrees to perform administration services for the Fund.
The Administrator has not been involved in the preparation of any part of this PDS. They have not authorised or caused the issue of, and expressly disclaims and take no responsibility for any part of this PDS.
The Prime Broker and Custodian
J.P. Morgan Securities LLC (JPMS) and certain of its affiliates (each such affiliate, a JP Morgan Entity, and collectively, JP Morgan) may provide certain clearing (including prime brokerage), margin financing and stock lending services with respect to the Fund’s securities and cash carried on the books of a JP Morgan Entity. Such services and facilities will be provided pursuant to a series of agreements (the Customer Documents) and may include an Institutional Account Agreement with JP Morgan in compliance with the laws, rules and regulations of the United States Securities and Exchange Commission and other exchanges and dealer associations by which certain of the JP Morgan Entities are regulated (collectively, the US Rules). The Fund may also enter into principal transactions with one or more JP Morgan Entities.
Fund assets that are held by JPMS as prime broker will be carried in the name of the Fund and shall be subject to a lien to secure the Fund’s obligations to JP Morgan. To the extent permitted under US Rules, with respect to JPMS or any other JP Morgan Entity subject to the US Rules, the Fund’s assets that are not required by US Rules to be segregated may be borrowed, lent, pledged, repledged, sold, hypothecated, rehypothecated, transferred or otherwise used by such JP Morgan Entities as may hold such assets for their own purposes. Cash held with a JP Morgan Entity subject to the US Rules may be used by such JP Morgan Entity in the course of its business to the extent permitted by the US Rules.
Neither JPMS nor any other JP Morgan Entity will be liable for any loss to the Fund resulting from any act or omission in relation to the services provided under the terms of the Customer Documents unless such loss results directly from the gross negligence, bad faith or wilful misfeasance of JPMS or any other JP Morgan Entity, nor shall JPMS or any other JP Morgan Entity be liable for consequential or other types of special damages, or losses to the Fund caused by the insolvency or acts or omissions of any sub-custodian or other third party by whom or in whose control any of the Fund’s investments or cash may be held. The Fund has agreed to indemnify JPMS and the other JP Morgan Entities against any loss suffered by, and any claims made against, them to the extent set forth in the Customer Documents.
Neither JPMS nor any other JP Morgan Entity will have any involvement in the management of the Fund or any decision-making discretion relating to the Fund’s investments. Neither JPMS nor any other JP Morgan Entity has any responsibility for monitoring whether investments by any investment manager or advisor are in compliance with any internal policies, investment goals or limitations of the Fund, and neither JPMS nor any other JP Morgan Entity will be responsible for any losses suffered by the Fund.
JPMS and each other JP Morgan Entity reserve the right not to clear transactions and not to provide any of the services. JP Morgan and each other JP Morgan Entity reserve the right to terminate the arrangements in accordance with the provisions of the Customer Documents.
JPMS and the other JP Morgan Entities are service providers and are not responsible for the preparation of this document or the activities of the Fund and therefore accept no responsibility for the accuracy of any information contained in this document.
Fortlake consents and, as at the date of this PDS, has not withdrawn its consent to the statements (in the form and context in which they are included) about it in this PDS. Fortlake has not otherwise issued or caused the issue of this PDS.
BlossomApp Pty Limited consents to being named in the PDS and, as at the date of this PDS, has not withdrawn its consent to the statements (in the form and context in which they are included) about it in this PDS. BlossomApp Pty Limited has not otherwise issued or caused the issue of this PDS.
Gleneagle Securities (Aust) Pty Ltd consents to being named in the PDS and, as at the date of this PDS, has not withdrawn its consent to the statements (in the form and context in which they are included) about it. Gleneagle Securities (Aust) Pty Ltd has not otherwise issued or caused the issue of this PDS.
Apex Fund Services (Australia) Pty Ltd each consent to being named in the PDS and, as at the date of this PDS, have not withdrawn their consent to the statements (in the form and context in which they are included) about them in this PDS. Apex Fund Services (Australia) Pty Ltd has not otherwise issued or caused the issue of this PDS.
J.P. Morgan Securities LLC consents to being named in the PDS and, as at the date of this PDS, has not withdrawn its consent to the statements (in the form and context in which they are included) about it in this PDS. J.P. Morgan Securities LLC has not otherwise issued or caused the issue of this PDS
Ernst & Young consents to being named in the PDS and, as at the date of this PDS, has not withdrawn its consent to the statements (in the form and context in which they are included) about it in this PDS. Ernst & Young has not otherwise issued or caused the issue of this PDS.
 J.P. Morgan Securities LLC is custodian of certain assets that it holds on behalf of the Fund, including cash. The Responsible Entity may itself hold certain derivative positions on behalf of the Fund.
 “Principal” means any amounts paid by Unitholders of the Fund for the acquisition of units in the Fund, referable to the relevant class, which have not subsequently been redeemed and includes any amount of Return of the Fund that the Responsible Entity determines each quarter to be attributable to the relevant class of units. For the avoidance of doubt, any units acquired by way of reinvestment of distributions would be considered amounts paid by the Unitholders of the Fund for the acquisition of units. “Return” means the value of the assets of the Fund referable to a class of units in the Fund above the Principal.
 The Threshold Manager is responsible for seeking to achieve the Intended Return and where the return is below the Intended Return, either: (i) pay the amount of shortfall to the Fund so that the Fund is achieving the Intended Return; or (ii) where there are insufficient funds, request that the Underwriter pay the shortfall to it pursuant to the terms of the Intended Return Facility (as set out in Threshold Management and Underwriting Deed) so it can make the relevant payment to the Fund in respect of the shortfall. There is no guarantee that investors will receive the Intended Return.
 The Liquidity Management Fee will only be paid to the Liquidity Manager where the Fund achieves the Intended Return and has not been waived to the extent of and in proportion to the amount of the Principal invested in any other fund for which Liquidity Manager is entitled to fees.