The fees, costs and expenses relating to the authorisation and incorporation and establishment of the Company, the offer of Shares, the preparation and printing of this Prospectus and the fees of the professional advisers to the Company in connection with the offer will be borne by the ACD.
Each Fund formed after this Prospectus is superseded may bear its own direct establishment costs.
The Company may pay out of the property of the Company any liabilities arising on the unitisation, amalgamation or reconstruction of the Company or of any Fund.
All fees of expenses payable by a Shareholder or our of Scheme Property are set out in this section. The Company may also pay out of the property of the Company charges and expenses incurred by the Company on an ongoing basis, which will include the following expenses:
1. the fees and expenses payable to the ACD (which will include the fees and expenses payable to the Investment Adviser, any sub-adviser and the Administrator) and to the Depositary (which will include the fees and expenses payable to any custodian);
2. fees and expenses in respect of establishing and maintaining the Register of Shareholders (and any plan sub-register) and related functions;
3. expenses incurred in acquiring and disposing of investments;
4. expenses incurred in producing, distributing and dispatching income and other payments to Shareholders;
5. fees in respect of the publication and circulation of details of the Net Asset Value and prices;
6. the fees and expenses of the auditors and tax, legal and other professional advisers of the Company;
7. the costs of convening and holding Shareholder meetings and associated documentation (including meetings of Shareholders in any particular Fund, or any particular Class within a Fund);
8. costs incurred in taking out and maintaining any insurance policy in relation to the Company and/or its Directors;
9. expenses incurred in company secretarial duties, including the cost of minute books and other documentation required to be maintained by the Company;
10. the costs of printing and distributing reports, accounts, any instrument of incorporation and any prospectuses (except the costs and expenses of distributing any simplified prospectus) and any costs incurred as a result of
periodic updates of any prospectus or instrument of incorporation and any other administrative expenses, including the costs and expenses of any key investor information document;
11. any costs incurred in modifying the Instrument of Incorporation, including costs incurred in respect of meetings of shareholders convened for the purpose, where the modification is:
(i) necessary to implement any change in the law (including changes in the Regulations), or
(ii) necessary as a direct consequence of any change in the law (including changes in the Regulations), or
(iii) expedient having regard to any fiscal enactment and which the ACD and the Depositary agree is in the interests of shareholders, or
(iv) to remove obsolete provisions from the Instrument of Incorporation;
12. taxation and duties payable by the Company;
13. interest on and charges incurred in borrowings;
14. any amount payable by the Company under any indemnity provisions contained in the Instrument of Incorporation or any agreement with any functionary of the Company;
15. fees of the FCA under the Financial Services and Markets Act and the corresponding periodic fees of any regulatory authority in a country or territory outside the United Kingdom in which Shares are or may lawfully be marketed;
16. any payments otherwise due by virtue of the COLL Sourcebook.
VAT is payable on these charges where appropriate.
The Investment Adviser or its associates may use certain goods and services, which assist the management of investments of its customers and which are paid by various brokers. These services may include, for example, research and analysis of the relative merits of individual shares or markets or the use of computer and other information facilities. In return the Investment Adviser or its associates place business with those brokers including transactions relating to the relevant Funds. The Investment Adviser or its associates have satisfied themselves that they obtain best execution on behalf of their clients and that these arrangements are to the benefit of their clients.
It is not currently proposed to seek a listing for the Shares on any stock exchange, but if a listing is sought in the future the fees connected with the listing will be payable by the Company.
The ACD will allocate expenses between capital and income for each Fund having due regard to the investment objective of the Fund and whether the nature of the cost is income related
or capital related. The treatment of any payment as capital or income will be agreed with the Depositary.
Charges payable to the ACD Annual Management Charge
In payment for carrying out its duties and responsibilities the ACD is entitled to take an annual fee out of each Fund which is calculated as a percentage of the relevant Net Asset Value of the Fund. The current initial charge for Class A shares, Class C Shares, Class I Shares and Class S Shares in respect of each Fund is set out in Appendix I.
The accrual interval for such periodic charge shall commence at the last Valuation Point on any Business Day and shall end immediately before the last Valuation Point on the next following business day and shall be paid to the ACD on or as soon as is practicable after the last Business Day in that calendar month. The final accrual interval shall end on the occurrence of one of the events specified in COLL 7.3.4R and the periodic charge shall be paid to the ACD on or as soon as is practicable after the end of such accrual interval.
The current fees for each Fund (expressed as a percentage per annum of the Net Asset Value of each Fund) are shown in Appendix I.
Expenses of the ACD
The ACD is also entitled to all reasonable, properly vouched, out of pocket expenses incurred in the performance of its duties which may include including legal and professional expenses of the ACD in relation to the proper performance of the ACD’s duties under the ACD Agreement, or related to documents amending the ACD Agreement, all postage and communication costs incurred in the proper performance of duties under the ACD Agreement and all expenses incurred in notarising documents.
Charges to Income or Capital
Expenses shall be payable out of the income earned by the Class. If a Class’s expenses in any period exceed its income the ACD may take that excess from the capital property attributable to that Class.
In the case of Allianz Gilt Yield Fund, Allianz Sterling Total Return Fund, Allianz UK Corporate Bond Fund and Allianz UK Equity Income Fund where the investment objective is either to treat the generation of income as a higher priority than capital growth, or to achieve an equal or broadly equal mix of income and capital growth, all or part of the ACD’s fee may be charged against capital instead of against income. This has been agreed with the Depositary.
This treatment of the ACD’s fee will increase the amount of taxable income available for distribution to Shareholders in these Funds, but will constrain capital growth. Such an increase in the income available for distribution will increase a Shareholder’s liability to tax on actual or deemed income distributions but, conversely, the reduction of capital growth, may mean that a Shareholder’s liability to tax on capital gains may be reduced on a disposal of Shares.
Value Added Tax is payable on charges or expenses where appropriate.
Increase in Charges
The current annual fee payable to the ACD for a Class may be increased, or a new type of remuneration introduced, in accordance with the Regulations and after the ACD has made available a revised Prospectus showing the new rate of charge and its commencement date.
Investment Adviser’s fees
The Investment Adviser’s fees and expenses (plus VAT thereon) for providing investment management and investment advisory services will be paid by the ACD out of its remuneration under the ACD Agreement.
Depositary’s Remuneration and Expenses Depositary’s Remuneration
The Depositary’s remuneration, which is payable out of the scheme assets of each Fund, is a periodic charge at such annual percentage rate of the value of the property of each Fund as is set out below, with the property of each Fund being valued and such remuneration accruing and being paid on the same basis as the ACD’s periodic charge. Currently, the ACD and the Depositary have agreed that the Depositary’s remuneration in respect of each Fund shall be calculated on a sliding scale as follows:
Band Range Fee
On the first GBP 40 million 0.03 per cent
On the next GBP 40 million 0.02 per cent
On the balance over GBP 80 million 0.01 per cent
The Depositary is also entitled to receive out of the property of each Fund remuneration for performing or arranging for the performance of the functions conferred on the Depositary by the Instrument of Incorporation or COLL Sourcebook. The Depositary’s remuneration under this paragraph shall accrue when the relevant transaction or other dealing is effected and shall be paid in arrears on the next following date on which payment of the Depositary’s periodic charge is to be made or as soon as practicable thereafter. Currently the Depositary does not receive any remuneration or service charges under this paragraph.
The current rate of the Depositary’s remuneration may only be increased, or a new type of remuneration introduced, in accordance with the rules in the COLL sourcebook and after the ACD has revised and made available the Prospectus to reflect the new rate and the date of its commencement.
Depositary’s Expenses
In addition to the remuneration referred to above, the Depositary will be entitled to receive reimbursement for expenses properly incurred by it in the discharge of its duties or exercising any of the powers conferred upon it in relation to the Company and each Scheme, subject to approval by the ACD.
The Depositary has appointed JPMorgan Chase Bank as the Custodian of the property of the Company and is entitled to receive reimbursement of the Custodian’s fees as an expense of the Company. JPMorgan Chase Bank’s remuneration for acting as Custodian is calculated at an ad valorem rate determined by the territory or country in which the Scheme Property are held. Currently, the lowest rate is 0.005 per cent and the highest rate is 0.43 per cent. In addition, the Custodian makes a transaction charge determined by the territory or country in which the transaction is effected. Currently, these transaction charges range from £10 to £70 per transaction.
The Depositary is also entitled to be reimbursed out of the property of each Fund in respect of remuneration charged by the Custodian for such services as the ACD, Depositary and the Custodian may from time to time agree, being services delegated to the Custodian by the Depositary in performing or arranging for the performance of the functions conferred on the Depositary by the Instrument of Incorporation or COLL Sourcebook. Remuneration charged under this paragraph shall accrue when the relevant transaction or other dealing is effected and shall be paid in arrears. Currently the Custodian does not receive any remuneration or service charges under this paragraph.
The current rate of the transaction and/or Custodian charges may only be increased, or a new type of charge introduced in accordance with the rules in the COLL sourcebook and after the ACD has revised and made available the Prospectus to reflect the new rate and the date of its commencement.
The following further expenses may also be paid out of the Scheme Property:
a) all charges imposed by, and any expenses of, any agents appointed by the Depositary to assist in the discharge of its duties;
b) all charges and expenses incurred in connection with the collection and distribution of income;
c) all charges and expenses incurred in relation to the preparation of the Depositary’s annual Report to shareholders;
d) all charges and expenses incurred in relation to stock lending and/or repurchase/reverse repurchase transactions.
Subject to current HM Revenue and Customs regulations, VAT at the prevailing rate may be payable in addition to the Depositary’s remuneration, the Custodian’s remuneration and the above expenses.
Charges payable to the Stock Lending Agent
The Stock Lending Agent is entitled to receive a fee out of the Scheme Property (plus VAT thereon) for its services in relation to Stock Lending. The fee is calculated as a percentage of the gross income from Stock Lending. The current fee is 20% gross of the fees generated by the stock lending and/or repurchase/reverse repurchase transactions activity.
The Stock Lending Agent’s fees and expenses are paid out of the Scheme Property and do not form part of and are not paid from the ACD’s or Depositary’s fees and expenses.
Fees of the Administrator
The Administrator will be paid by the ACD out of the fees and expenses payable to the ACD.
Fees of the Registrar
The fees of the Registrar will be paid by the ACD out of the registration fee payable to the ACD. Currently, the registrar’s fee is £15.51 plus VAT per Shareholder per annum and is subject to a maximum of £50 plus VAT per Shareholder per annum.
The Registrar’s fee is reviewed on an annual basis and may be varied by the ACD in line with inflation.
Allocation of fees and expenses between Funds
All the above fees, duties and charges (other than those borne by the ACD) will be charged to the Fund in respect of which they were incurred. Where an expense is not considered to be attributable to any one Fund, the expense will normally be allocated to all Funds pro rata to the value of the Net Asset Value of the Funds, although the ACD has discretion to allocate these fees and expenses in a manner which it considers fair to Shareholders generally.