Redemption cap / Swing pricing
In order to strengthen the protection of holders of units or shares in Funds managed by Crédit Mutuel
Asset Management, it has been decided that a redemption cap mechanism for all funds or sub-funds of the SICAVs listed below will be introduced by 31 December 2023. This mechanism may be supplemented by swing pricing.
The mechanisms put in place for each Funds as well as the effective date are set out below.
Redemption cap mechanism
This mechanism is triggered when required in exceptional circumstances and when the interests of shareholders or the public so dictate. The Asset Management company will assess the appropriateness of its application also with regard to the consequences for liquidity management, in order to guarantee the balanced management of the Fund, market integrity and equal treatment of shareholders.
After analysis, the Asset Management company may decide to partially or fully honour redemption requests in excess of the maximum limit. Fund unit/shareholders are reminded that the threshold for triggering gates corresponds to the ratio between:
- The difference recorded, on the same processing date, between the number of units/shares of the Fund for which redemption is requested or the total amount of such redemptions, and the number of units/shares of the Fund for which subscription is requested or the total amount of such subscriptions, and
- The net assets or total number of units/shares of the Fund.
Redemption requests that are not executed will be automatically deferred and processed at the next net asset value. They will not have priority over new redemption orders placed for execution at the next net asset value. Unexecuted redemption orders that are automatically deferred may not be revoked by the Fund's unit/shareholders.
Swing pricing mechanism
This method of adjusting the fund's net asset value (NAV), known as swing pricing with a trigger threshold, is designed to protect the interests of investors in the Fund by ensuring that only incoming (or outgoing) investors bear the burden of the cost of portfolio reorganisation (transaction costs, associated taxes and the cost of liquidity) in the event of large-scale subscriptions (or redemptions).
If, on the day of processing, the total number of net subscription/redemption orders from investors for all of the Fund's unit classes exceeds the threshold for triggering swing pricing, the adjustment mechanism will be triggered. When triggered, the NAV is adjusted upwards if the change in liabilities is positive or downwards if the change in liabilities is negative, by applying an adjustment known as the swing factor.
The trigger threshold and readjustment cost parameters are determined by the Asset Management company and reviewed periodically. It also has the option of modifying the parameters of the swing pricing mechanism at any time, particularly in the event of a crisis on the financial markets. The Asset Management company does not disclose the trigger level and ensures that this information remains confidential.
The "swung" NAV is the only net asset value of the fund and the only one communicated to the Fund's unitholders.
Please refer to the Fund's rules for further details on mechanisms.
These updates do not constitute a transfer and do not require AMF approval or any specific action on your part. The aforementioned funds or sub-funds will retain all their other characteristics, in particular their risk/return profiles, their investment strategies and all their charges.
In addition, and in accordance with the regulations, Crédit Mutuel Asset Management will not disclose swing pricing parameters and has put in place procedures to restrict access to parameters and subscription/redemption flows and to identify potential conflicts of interest.
Please note that all regulatory documentation (PRIIPS KIID, prospectus, appendix and regulations) will be available on request from:
CRÉDIT MUTUEL ASSET MANAGEMENT
Direction des Services Supports
4 Rue Gaillon
PARIS 75002
and published on our website in the "Our investment solutions" section from their effective date.
We invite you to contact your usual contact person for any further information you may require.