market access iii kenmar liquid commodity index fund · 2015-07-27 · market access iii kenmar...

Market Access III Kenmar Liquid Commodity Index FundA diversified portfolio of commodity investment managers

For Professional Investors Only

The Market Access III Kenmar Liquid Commodity Index Fund (the “Fund”) is a sub-fund of Market Access III (the “SICAV”).

2 Market Access III Kenmar Liquid Commodity Index Fund

Overview Market Access III Kenmar Liquid Commodity Index FundThe Fund provides an exposure to the Kenmar Liquid Commodity Index (“KLCI” or the “Index”). The objective of the Index is to reflect the performance of a diversified portfolio of investment managers investing in various strategies in relation to the commodity markets in order to provide broad, diversified exposure across the commodity universe. The Index Sponsor is the Kenmar Group of companies (“Kenmar”), an experienced commodities fund of funds manager. The Index was live on the 15th November 2010.

Long-Only Index-Beating Returns with Reduced VolatilityThe Fund aims to seek capital appreciation in rising and falling commodity markets, with significantly reduced downside volatility versus typical long-only commodity indices, such as the S&P Goldman Sachs Commodity IndexTM Total Return and the Rogers International Commodities Index®.

Diversified PortfolioThe underlying investment managers may trade either broadly diversified or sector specific portfolios in the liquid commodities markets in areas including, but not limited to: energy, precious and industrial metals, agricultural and softs products.

This section is not intended to be exhaustive. It contains certain risk factors that any prospective investor should carefully consider when reading this document.Historical performance data or charts relating to the index or the Fund shown in this material are hypothetical and based on a calculation methodology using past market data. Past performance is not a guide to future performance. The simulated performance resulting from this backtesting methodology is based on several assumptions and has not been audited. No prospective investor should rely on this analysis or these assumptions to form its judgement for any future investment.In accordance with UCITS applicable regulations, the Fund will use derivative instruments in order to gain an exposure to the index. The use of futures, options, warrants, forwards, swaps, swap options or any other derivative instrument involves increased risks. By investing in OTC derivatives, there is risk that the counterparties may fail to honour their contract(s) or be subject to bankruptcy. The investment strategies of the underlying managers comprising the index are complex and involve numerous risks, including potentially high levels of volatility and the risk of losing the capital invested and receiving no income. The prospective Fund is intended only for those potential investors who understand these strategies and associated risks. Prospective investors should consult their financial, tax and legal advisors, as appropriate, in order to determine whether or not the prospective Fund would be a suitable investment for them should the Fund or the index be launched in the future. Any such future investment in the prospective Fund involves a high degree of risk and should be considered only by investors who accept twice monthly liquidity on their investments and can withstand the loss of all or a substantial part of their investment. There can be no assurance that the prospective Fund or the index will achieve its investment objectives. There is no guarantee that the prospective Fund would perform or generate a positive return. All Fund investments and strategies are subject to market risk that cannot be predicted with certainty, such as fluctuations in prices and bankruptcy or default of any issuer.

Note: Simulated past performance is not indicative of future results. There is no guarantee that the Fund will generate a future positive return. The simulated Fund performance shown does not reflect the volatility-control mechanism or correlation-related additional diversification mechanism of the Index, and incorporates Fund running costs based on an assumed Net Asset Value of €60m.

The Royal Bank of Scotland plc (RBS) is a recognised provider of low cost & efficient Index Funds based on innovative and niche underlyings. Combining RBS’ position as one of the leading providers of thematic indices with the experience of managing a large array of fund products.

Fund highlights • Access to a wide range of commodity strategies: The Fund delivers a diversified exposure to a wide range of commodity strategies and styles, from sector specific to diversified commodity managers with a well balanced blend of discretionary and systematic approaches.

• Enhanced Risk-return profile: The Fund is designed to seek capital appreciation in rising and falling commodity markets, with significantly reduced downside volatility versus typical long-only commodity indices, such as the S&P Goldman Sachs Commodity IndexTM Total Return and the Rogers International Commodities Index®.

• Low correlation to traditional asset classes: Over the period from 1 July 2006 to 31 December 2010 the Fund’s pro forma (simulated back-tested performance) exhibits a 0.01, 0.29 and a 0.19 correlation to the S&P 500® Total Return Index (USD), the HFRI Fund of Funds Composite Index (USD) and the Citigroup World Government Bond Index (USD) respectively.

• Enhanced Liquidity: Twice-monthly liquidity delivered by the UCITS III fund. Possible since the underlying assets of the Index constituents are highly liquid instruments.

• Mitigation of shocks/drawdowns: The largest monthly negative return for the S&P GSCITM Total Return Index (USD) over the period from 1 July 2006 to 31 December 2010 was -28.20% in October 2008 with the largest drawdown of -67.64%. In October 2008, the Fund’s pro forma showed a positive 3.14% return with a maximum drawdown of -6.90%.

• Experienced manager selection: Kenmar’s more than 25 years in the industry allows for access to investment managers with demonstrated track records.

• UCITS III: The Fund is a UCITS III sophisticated fund and adheres to the highly regulated and approved framework set out in the UCITS Directives. RBS launched the Fund on the 15th November 2010, under its Luxembourg domiciled SICAV Market Access III.

Market Access III Kenmar Liquid Commodity Index Fund 3

* These funds are established and operated by Kenmar. Neither RBS nor the Company provides any services to these funds and are not promoting these funds.

Kenmar, the Index sponsor, is an experienced commodities fund of funds manager

Experienced Commodities Investment Team Fund investors benefit from the experience of an investment team that has first-hand commodities trading experience. This expertise brings an additional element to the underlying manager selection, Index strategy allocation and risk management processes.

Access to Experienced Investment Managers Kenmar’s more than 25 years in the industry allows for access to investment managers with demonstrated track records.

Long History and Tested Fund ConceptKenmar’s parallel commodity funds were launched as early as March 2005, giving Kenmar’s commodity strategies one of the longer track records in this investment space, through both rising and correcting commodities markets. Kenmar’s current commodity funds include: the Kenmar Global Resource Fund, the Kenmar Global Resource Fund EXE and the Kenmar Global Resource Fund LLC*.

Why Invest in the Market Access III Kenmar Liquid Commodity Index Fund

The Fund has a dual objective – capital appreciation and reduced volatility. The goal of capital appreciation is sought through a broadly diversified global resource portfolio. Kenmar believe that a more favourable risk-adjusted return can be achieved compared to commodity indices that utilise an outright long-only strategy. The underlying manager portfolio has strict diversification limits which also take the correlation between constituents into account, and the portfolio itself is subject to a hard Value-at-Risk limit in accordance with UCITS regulations.

An additional layer of qualitative risk management (including assessing and monitoring the Index) is derived from Kenmar’s long experience in the global commodity markets over various market cycles.

Kenmar has proven success in sourcing underlying investment managers that aim to navigate market volatility by means of trading acumen and a judicious implementation of shorts as well as longs.


The Kenmar Group – A proven track recordThe Kenmar Group of companies established in 1983, has a proven track record in managing alternative investment vehicles:

• Co-founders Marc S. Goodman and Kenneth A. Shewer have over 65 years of combined experience trading physical commodities, analysing markets, evaluating managers and managing alternative investments.

• Investment professionals have extensive investment experience and several also have hands-on experience trading commodities and other financial instruments.

• Kenmar’s nine-person Investment Committee averages 27 years’ experience in their respective areas: manager research, portfolio construction, trading and risk management. Kenmar bring this collective experience, insight and perspective to the management of all of their funds.

• Global clientele include major global investment managers, government institutions, pension plans, US and international brokerage firms, global financial institutions, private banks, international insurance companies, family offices and a broad private investor base.

• Headquartered in Rye Brook, New York, with offices in Richmond, Virginia, Singapore and the UK; 47 employees (as of October 2010).

• Independent investment management firm, creating and managing funds of hedge funds focused on offering clients different opportunity sets than those obtained within traditional markets.

• Currently manages funds across various strategies and sectors; including multi-strategy, managed futures and natural resources

Source: Kenmar Group, November 2010

The Index will benefit from a Disciplined Approach to Fund of Funds Management developed by Kenmar

Macro outlook, based on economic, political and social factorsFinancial market implicationsHedge fund strategy impact

Kenmar’s long-standing network of contactsProprietary sourcing databaseStandard introduction services, databases, solicitations

Qualitative and quantitative analysisFormal and documented due diligence processComprehensive operational and risk due diligence

Top-down / bottom-up processIncorporation of macro viewDiversification of risks

Risk factor analyticsOngoing analysis of portfolio characteristicsOngoing communication with managersFormal quarterly manager reviews

Outlook on Economy, Markets, Strategies

Manager Sourcing

Manager Evaluation and Due Diligence

Portfolio Construction

Portfolio Monitoring


The Case For Global Natural Resource Investing

The Worst is Over • Policy actions across the globe have arrested a deflationary collapse.

• Commodity market moves in 2008 were exacerbated by the liquidation of positions held by financial players and panic inventory liquidations aggravated by credit problems.

• Kenmar believes that the global restocking from overdrawn levels is driving the current surge in commodity indices in 2009/2010.

• Historically low exploration and infrastructure investments in some commodities in the recent past have constrained the potential for significant commodity supply growth and may cause supply disruptions.

• The need to diversify away from massive dollar reserves is driving the push toward stockpiling commodity assets, especially by China.

• The current cyclical move may not last resulting in a modest price relapse in the coming months. But the underpinnings of the long-term secular boom have not changed; in fact, they have been strengthened.

• Population growth and wealth creation builds a compelling case for increased demand globally.

The Secular Commodity Theme ContinuesAs the chart in the margin illustrates, the CRB Spot Index surged past its 2008 high in September 2010 and climbed higher since then. Even after its 2008 decline, the CRB Index barely edged below the peak of the previous cycle.

A secular opportunity is characterised not by a trend that just keeps going up, but by its ability to bounce back rapidly from sharp reversals.

More importantly, secular bull markets exhibit a remarkable ability to withstand adversities that question the basic thesis.

The basic secular commodity theme was predicated on long-developing supply-demand imbalances, a big part of which was surging emerging economy demand.

Even before the crisis, commodity demand was increasingly being driven by emerging economy growth.

For example, at the beginning of 2008, crude oil demand had already been falling for two years in the OECD countries but this decline was being more than made up by rising demand in developing economies.

Nonetheless, the meltdown in 2008 - coming at a time when financial speculation had pushed prices way ahead of the secular trend - caused the collapse.

Yet, growth in emerging economies has picked up rapidly, and this time is no longer reliant on the US consumer but on the more sustainable foundation of domestic demand. Consequently, commodity demand is firming up as well.

Nothing reflects this better than the divergent paths of crude oil and North American natural gas, with the latter plummeting to new lows (see graph in the margin).

500

450

400

350

300

250

200

1200

1000

800

600

400

200

Source: Commodity Research Bureau, September 2010.

Note: Past performance is not indicative of future results. There is no guarantee that the Index will generate a future positive return.

Source: Bloomberg and Pertrac, September 2010.

Note: Past performance is not indicative of future results. There is no guarantee that the Index will generate a future positive return.

Jan 90 Jan 94 Jan 98 Jan 02 Jan 06 Jan 10

Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10

DJ UBS Crude Oil Subindex Total Return

DJ UBS Natural Gas Subindex Total Return

Peak of previous cycle

CRB Spot Commodity Price Index All Commodities (1967 = 100)

Divergence Between Crude Oil and Natural Gas (December 2008 = 1000)


The Long-Term OpportunityContinued Supply Shocks: Increasing global demand and depletion of easily obtainable resources have resulted in an absence of significant spare production capacity for some commodities. Historically low infrastructure and exploration investments in the last 25 years in the metals, mining and oil/gas drilling sectors have constrained the potential for significant commodity supply growth. Commodity prices are therefore highly sensitive to geopolitical uncertainty.

High Volatility is an Opportunity, If You Take the Right Approach: Many commodity sectors will experience high volatility, both as a result of historically high speculative positions but also as a result of unforeseen economic and geopolitical events shaping economic prospects and investor psychology. Managers that employ a trading-oriented, long/short approach may be generally better placed to navigate this volatility.

Low Sub-Sector Correlation: The commodity space has numerous sub-sectors which historically have been uncorrelated. Correlations shot up during the panic of 2008, but have come down since.

Long-Term Secular Commodity Bull MarketIt is not unusual for secular bull markets to have steep corrections. Kenmar believes that experienced long/short commodity managers are better able to navigate periodic market corrections.

Emerging Markets Are Likely to Drive Commodity DemandAs emerging markets develop, the demand for natural resources to support this development will likely increase (see energy consumption chart in the margin).

The Short-Term FluctuationsKenmar expects increased volatility in the near-term. Kenmar believes that experienced long/short commodity managers are better able to navigate in these markets.

• Commodities have been surging, especially after Bernanke first broached quantitative easing in late August 2010. Meanwhile, China is tightening monetary policy to fight inflation, which may lead to moderate deceleration over the next several months. These two opposing forces may cause turbulence in the months ahead.

• Longer term the structural bull trend remains in place, driven by limited supply growth and strong emerging market demand.

• The outlook, nonetheless, is not uniform for all commodities. In fact, the correlation within the commodity space has been declining in recent months.

• As the global economy gradually rebalances from advanced economies dominating the demand to emerging economies becoming more influential, the seasonal and usage patterns are changing, which may create significant volatility.

400

300

200

100

300

200

100

0

Quadrillion Btu

History Projections

Base Price of $100

Source: Energy Information Administration (EIA), International Energy Annual 2006 (June-December 2008), website: www.eia.doe.gov/iea. Projections: EIA, World Energy Projections Plus (2009).

Source: Bloomberg, September 2010.

Note: The commodities depicted above are represented by the near contract generic US future. A generic is constructed by pasting together successive ‘nth’ contract prices from the primary months.

Non-OECD

Crude Oil

Soybeans

Gold

Zinc

OECD

Copper

Natural Gas

World Marketed Energy Consumption, OECD and Non-OECD

Commodity Prices

1980 1990 2000 2010 2020 2030

Jul 06 Jul 07 Jul 08 Jul 09 Jul 10


Market Access III Kenmar Liquid Commodity Index Fund & Kenmar Liquid Commodity Index

Investment ObjectiveThe Market Access III Kenmar Liquid Commodity Index Fund seeks to generate absolute returns by delivering the performance of a diversified portfolio of investment managers investing in various strategies in relation to the commodity markets in order to provide broad, diversified exposure across the commodity markets.

The Fund is designed to seek capital appreciation in rising and falling commodity markets, with significantly reduced downside volatility versus typical long-only commodity indices, such as the S&P Goldman Sachs Commodity IndexTM Total Return and the Rogers International Commodities Index®.

• The Index seeks to offer exposure to a diversified portfolio of commodity investment managers that invest in liquid financial instruments.

• The Index’s managers have a majority of their exposure to the commodity markets by providing a broad based long and/or short exposure across various commodity markets. The Index composition is achieved through the application of a rules-based Index Construction Methodology and Rebalancing Methodology.

• Kenmar believes that a long/short strategy rather than a long-only strategy in the commodities sector can produce better risk-adjusted returns over the medium to long term.

• The Index seeks to generate returns that are comparable to the long only commodities indices but with lower volatility and lower correlation to other asset classes.

• Managers comprised in the Index are all accessed via managed accounts, which provide the Index enhanced liquidity, position and portfolio transparency and custody of the invested assets.

Potential benefits

Multi-Manager Approach: • Mitigates some risks inherent in

investing in a single manager fund. • Seeks to preserve the alpha

generation of skilled managers.

Manager Access: • Access to experienced managers

that may be closed to new investors or whose minimum investment sizes are prohibitively large. • Kenmar has relationships in the

commodities industry dating back to the 1970’s.

Professionally Researched Managers: • Manager selection and due diligence

by a dedicated and experienced team. • Ongoing due diligence to monitor

existing managers, continually seeking new opportunities.

The potential for overall investment portfolio diversification due to low correlation to traditional asset classes.

A proven success finding managers that aim to navigate market volatility by means of trading acumen and a judicious implementation of shorts as well as longs.

The Index has been designed to achieve both capital appreciation and reduced volatility. The goal of capital appreciation is sought through a broadly diversified liquid commodity portfolio through the Index constituents. It is believed that a more favourable risk-adjusted return can be achieved compared to commodity indices that utilise an outright long-only strategy. • Exposure to commodity investing. • Broad, multi-sector commodities

opportunity. • Capital appreciation over the long term. • Enhanced by managers that employ an

actively managed long/short approach.


Underlying Investment Manager DescriptionsManager Strategy Markets Traded

Manager 1 This is a longer-term, systematised strategy that looks for profit opportunities on directional moves within the commodity arena. The system has been designed to evaluate the tradeoff between the holding cost and the spot price movements of a commodity. In practice, the system wants to be long markets that are backwardated where the roll yield is positive and conversely, when commodity yields turn negative the systems sells the commodity.

Diversified Commodities(Systematic)

Manager 2 This is a fully computerised strategy that employs multiple models to identify potential opportunity in the global commodity futures arena. Specifically, two of the models rely on breakouts for signal generation while the third has been designed to act more like a proprietary trading desk where multiple trading styles may be used to capture a potential opportunity.


Manager 3 The program systematically trades the futures curve on a diversified set of tangible commodity markets. This is an intracommodity, relative value strategy where the net contract exposure in any individual market is always zero.


Manager 4 The program employs a combination of proprietary computerised mathematical strategies to invest in commodities on a worldwide basis. The proprietary models, when applied to market data, produce computer-generated trading signals on a largely automated basis.


Manager 5 This manager has a global macro trading style that can be described as discretionary where the decision-making process is largely driven by market fundamentals such as supply and demand, consensus figures and open interest. The portfolio is limited to base and precious metals, energies, grains and tropicals.

Diversified Commodities

(Discretionary)

Manager 6 The manager's discretionary global macro strategy attempts to identify commodity price moves that are predicated on a shift in the supply/demand fundamentals; the strategy eschews granular statistical modeling in favour of more qualitative interpretations of the current market conditions. Trade ideas may be structured as directional. spread or volatility.


(Discretionary)

Manager 7 The manager, who has been involved in futures trading since the mid-1970’s, employs a discretionary approach to trading currencies, equity indices, financial futures, precious metals, base metals, energy, softs and grains and oilseeds globally. Though the manager’s methodology is primarily technical, fundamental inputs are employed when warranted.


(Discretionary)

Manager 8 The manager uses a discretionary approach to identify opportunities throughout the grain and livestock markets. Trading decisions are based on market fundamentals and an extensive industry knowledge and information gained from the manager's many years trading in these sectors.

Sector Specific Commodities (Agriculturals)

(Discretionary)

Manager 9 The manager uses a discretionary approach to trade the grain and meat markets. The decision making process largely focuses on market fundamentals which are supplemented by proprietary, quantitative models. The manager seeks to participate in both short-term and longer-term strategic positions.

Sector Specific Commodities (Agriculturals)

(Discretionary)

Manager 10 The manager pursues a fundamental approach to energy commodity trading, evaluating in detail the drivers of supply and demand. Its primary focus is in the North American natural gas markets. The manager may also trade in crude oil and related oil products and North American electricity. Trading involves a mixture of flat price (directional), spread and volatility trading.

Sector Specific Commodities

(Energies)(Discretionary)

Manager 11 The manager will seek to participate in opportunities in the global sugar market; over time, other biofuels might be added to the portfolio. The approach is discretionary, yet predicated on sophisticated databases which combine fundamental, statistical and technical analyses.

Sector Specific Commodities

(Softs)(Discretionary)

Note: More information may be available on the underlying investment managers from the Index Sponsor upon execution of a non-disclosure agreement.


Index Construction MethodologyThe Index construction process is guided by a proprietary allocation methodology that is designed to identify appropriate commodity managers for inclusion in the Index through a combination of quantitative and qualitative techniques:

• Identify universe of eligible commodity managers.

• Drill down to managers that meet qualification criteria.

• Weight managers in accordance with the Proprietary Allocation Methodology and the Constituent Fund Diversification Criteria.

Target Commodity MarketsBelow are the various commodity markets to which the underlying investment managers of the Index may be exposed. The Index may or may not be allocated to all markets at all times.

Energy Environmental Grains Meats Metals Shipping Tropicals

Crude Oil Weather Corn Cattle Aluminium Freight Cocoa

Coal Emissions Cotton Hogs Copper Coffee

Gas Oil Soybean Meal Gold Lumber

Gasoline Soybean Oil Lead Orange Juice

Heating Oil Soybeans Nickel Rubber

Natural Gas Wheat Palladium Sugar

Platinum

Silver

Tin

Zinc

Proposed Index Portfolio Strategy AllocationsThe Index is currently allocated to the following strategy sectors within the underlying Index constituents:

Diversified Discretionary Commodities: Investment managers in this strategy trade a diversified basket of global commodities, such as metals, energies, softs, grains and tropicals. The investment managers’ decision-making process is largely discretionary and based on the analysis of market fundamentals.

Diversified Systematic Commodities: Investment managers in this strategy trade a diversified basket of global commodities, such as metals, energies, softs, grains and tropicals. Investment managers included in this strategy trade an approach where the decision-making process is driven by computerised models where the primary inputs may be technical and/or fundamental.

Sector Specific Discretionary Commodities: Investment managers included in this strategy trade a single commodity sector, such as agriculturals (livestock and grain), energies (oil and natural gas) or softs (coffee, cocoa, sugar). The investment manager’s decision making process is largely discretionary and based on the analysis of market fundamentals, among other factors.

Sector CompositionBelow is the pro forma initial commodity sector breakdown of the Index. Investment managers may trade either broadly diversified or sector specific portfolios in areas such as energy, precious and industrial metals, agricultural and softs products.

Index CompositionBelow are the pro forma Index allocations. Managers may trade either broadly diversified or sector specific portfolios in areas such as energy, precious and industrial metals, agricultural and softs products.

Source: RBS, 1 January 2011

Note: Allocations are subject to change on a quarterly basis.

Source: RBS, 1 January 2011.

Note: Allocations are subject to change on a quarterly basis.

Energies 40%Grains 37%Base Metals 7%

Diversified Discretionary Commodities 32%Diversified Systematic Commodities 40%Discretionary Commodities (Agriculturals) 18%Discretionary Commodities (Energies) 5%Discretionary Commodities (Softs) 5%

Precious Metals 6%Meats 3% Softs 7%


With respect to all of these strategies:

• Investment managers can be either long-biased, long/short or market neutral, and may benefit from the extensive experience of their investment professionals, proprietary research and forecasting model, and strong risk controls.

• Investment managers may tactically shift their allocations as they find opportunities in the global markets.

• Investment managers can be short or long-term traders.

• Investment managers may employ discretionary or systematic strategies, or a combination of the two. The systematic approach will often incorporate trend following and pattern recognition strategies, while the discretionary decision-making approach utilises fundamental and technical information gathered from supply/demand analysis, industry contacts, and various other market indicators related to the manager’s specific sector.

• Investment managers’ trades may be directional or relative value.

Fund StructureFund performance is delivered via a collateralised funded total return swap.

Fund GovernanceLuxembourg Domiciled Funds example.

• The Fund has robust governance involving independent servicing providers which helps ensure that the activities of the Fund are carried out for the benefit of the investors, and that checks and balances are in place, the aims of which are to provide optimal conditions for the fund investment objectives to be met.

• Fund investments are segregated and are not exposed to the liabilities of other funds within the same SICAV umbrella. They are managed by the Fund’s Investment Manager in line with the applicable investment objectives and UCITS regulations.

UCITS III compliance ensures the benefits of Credit Enhancement • The Fund enters into a Funded Swap (“Index Swap”) to receive the Index performance.

• Any credit exposure of the Fund to the Swap Counterparty is limited in accordance with UCITS III rules (maximum 10%).

• The Swap Counterparty is required to post collateral in line with UCITS requirements.

• Performance under the swap is marked to-market daily and reset regularly to zero (at least monthly).

• In practice, any counterparty exposure under the swap exceeding 5% of the Fund’s NAV will be covered by collateral on a daily marked-to-market basis.

Fund

Investment ManagerThe Royal Bank of

Scotland plc

Legal AdvisorsLinklaters

Luxembourg

AuditorsPriceWaterhouse

Coopers Luxembourg

Regulatory AuthorityCommission de Surveillance du

Secteur Financier (‘CSSF’) Luxemborg

Promoters & Joint Global Distributors

The Royal Bank of Scotland plc & The Royal Bank of

Scotland N.V.

Custodian/Transfer Agent

RBC Dexia Investor Services Bank S.A.

Management Company

RBS (Luxembourg) S.A.

Market Access IIISICAV

incorporated in Luxembourg

Swap counterparty

Funded swap

Collateral (under English law CSA)

The counterparty posts collateral which is marked to market daily

CSSF approval

Note: Long - term credit ratings for RBS plc of A+ (S&P), Aa3 (Moody’s) and AA- (Fitch)


Historical Pro Forma Analysis (USD)Fund Pro Forma Performance – Monthly Returns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year

2010 (1.02%) (1.83%) 0.88% (0.11%) (2.08%) 1.25% 0.12% (0.24%) 2.69% 2.39% (0.47) 2.73% 1.66%

2009 0.40% 0.61% (0.92%) 0.07% 2.86% (0.21%) 0.88% 1.73% (1.95%) (0.57%) 1.53% (0.53%) 3.87%

2008 3.01% 7.79% (2.03%) 1.82% 1.61% 2.52% (3.61%) (1.88%) 0.68% 3.14% 0.68% 0.75% 14.95%

2007 2.15% 3.26% (1.83%) (0.79%) 0.69% 2.20% 0.45% (0.49%) 4.99% 2.70% 1.05% 3.09% 18.68%

2006 0.64% (0.09%) 2.35% 6.61% 4.83% 0.37% 15.45%

Source: RBS, data observed from July 2006 to December 2010. December 2010 is live Fund performance. Note: Past performance and simulated past performance are not indicative of future performance. The simulated Fund performance shown does not reflect the volatility-control mechanism or correlation-related additional diversification mechanism of the Index, and incorporates Fund running costs based on an assumed Net Asset Value of €60m.

Fund Pro Forma Comparison – Analysis

Note: Past performance and simulated past performance are not indicative of future performance. The simulated Fund performance shown does not reflect the volatility-control mechanism or correlation-related additional diversification mechanism of the Index, and incorporates Fund running costs based on an assumed Net Asset Value of €60m.

Fund Pro Forma Comparison – SummaryThe Index is designed to seek capital appreciation in rising and falling commodity markets, with significantly reduced downside volatility versus typical long-only commodity indices, such as the S&P GSCITM Total Return Index and the Rogers International Commodities Index®.

Market Access III Kenmar Liquid

Commodity Index Fund

S&P GSCITM

Index

S&P 500®

Index

HFRI Fund of Funds

Composite Index

Citigroup World Government Bond Index

December 2010 2.73% 9.40% 6.53% 1.97% 1.76%

Year-to-Date 1.66% 9.03% 12.78% 5.46% 5.17%

Ann. ROR 11.95% -7.36% -0.22% 1.72% 7.24%

Ann. Std. Dev. 7.62% 28.46% 18.72% 6.86% 8.26%

% Positive Months 64.81% 55.56% 61.11% 64.81% 66.67%

Sharpe Ratio 2% 1.31 -0.33 -0.12 -0.04 0.63

Best Month 7.79% 19.67% 9.39% 3.32% 7.11%

Worst Month -3.61% -28.20%-16.94% -6.54% -5.03%

Correlation - 0.32 0.01 0.29 0.19

Source: RBS, data observed from July 2006 to December 2010. December 2010 is live Fund performance.Note: Past performance and simulated past performance are not indicative of future performance. The simulated Fund performance shown does not reflect the volatility-control mechanism or correlation-related additional diversification mechanism of the Index, and incorporates Fund running costs based on an assumed Net Asset Value of €60m.

Attractive Risk-adjusted Returns.Historically, the Fund’s pro forma performance compares well to the long only commodities indices, equities indices and Hedge Fund benchmarks.Source: RBS, July 2006 to December 2010.

Annualised Volatility

Ann

ualis

ed R

etur

n

15%

10%

5%

0%

-5%

-10%

-15%

Citigroup World Government Bond Index (USD)

S&P 500® Total Return Index (USD)

S&P GSCITM Total Return Index (USD)

Market Access III Kenmar Liquid Commodity Index Fund

HFRI Fund of Funds Composite Index (USD)

0% 5% 10% 15% 20% 25% 30%

Source: Bloomberg and RBS, December 2010. December 2010 is live Fund performance.

Note: Simulated past performance is not indicative of future results. There is no guarantee that the Index will generate a future positive return.

Fund Pro Forma Comparison180%

160%

140%

120%

100%

80%

60%

40% Dec 06 Dec 07 Dec 08 Dec 09 Dec 10

Citigroup World Government Bond IndexHFRI Fund of Funds Composite Index

S&P 500® Total Return IndexS&P GSCITM Total Return IndexMarket Access III Kenmar Liquid Commodity Index Fund

NAV


Fund Pro Forma Comparison – Calendar Year ReturnsSimulated analysis of historic pro forma of the Fund from July 2006 onwards shows that the Market Access III Kenmar Liquid Commodity Index Fund would have been profitable each year from 2006 - 2010 Including 2008, during which the S&P GSCITM Total Return Index (USD) and the S&P 500® Total Return Index (USD) demonstrated significant declines, and the HFRI Fund of Funds Composite Index (USD) demonstrated the worst annual decline in its history.

45%

30%

15%

0%

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

-50%

Source: RBS, July 2006 to December 2010.


Note: Simulated past performance is not indicative of future results. There is no guarantee that the Index will generate a future positive return. The simulated Fund performance shown does not reflect the volatility-control mechanism or correlation-related additional diversification mechanism of the Index, and incorporates Fund running costs based on an assumed Net Asset Value of €60m.

Fund Pro Forma Comparison – Calendar Year VolatilityBased on pro forma performance, volatility for the Fund has averaged 7.62% p.a. since July 2006. The highest annualised volatility recorded by the Index was 10.27% in 2008. In recent years, when the S&P GSCITM Total Return Index (USD) realised in excess of 40% volatility and the S&P 500® Total Return Index (USD) realized over 20% volatility per year (based on monthly observations), the simulated volatility of the Market Access III Kenmar Liquid Commodity Index Fund remained below 10.27% p.a. in all years.




S&P 500® Total Return Index

S&P 500® Total Return Index

S&P GSCITM Total Return Index




HFRI Fund of Funds Composite Index

HFRI Fund of Funds Composite Index

2006 2007 2008 2009 2010

2006 2007 2008 2009 2010


5%

0%

-5%

-10%

-15%

-20%

-25%

-30%

20%

15%

10%

5%

0%

-5%





Delivering Negative Correlation in Market Declines

Benefiting from Positive Trends





1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10Largest 10 increases in GSCI Index

Largest 10 decreases in GSCI Index


Fund Pro Forma Performance – Distribution of Monthly ReturnsBased on pro forma performance, 65% of all monthly returns would have been positive. In 52% of the cases the Fund has generated a return between 0% and 3% per calendar month. The average monthly return is 0.97%.

Fund Pro Forma Performance – Comparison of DrawdownsBased on pro forma performance, the worst drawdown from a previous high for the Fund was -6.90%. On average, upon the occurrence of a drawdown event, it would have taken the Fund 2.25 months to recover. This compares favourably to the recorded drawdowns of the other indices below which range from -67.7% to -8.96% across various asset classes.

30%

25%

20%

15%

10%

5%

0%

0%

-10%

-20%

-30%

-40%

-50%

-60%

-70%



< -2% -2%/-1% -1%/0% 0%/1% 1%/2% 2%/3% 3%/4% 4% <Return per Calendar Month

S&P GSCITM Total Return

Index

S&P 500® Total Return

Index

HFRI Fund of Funds Composite

Index


Market Access III Kenmar Liquid Commodity Index

Fund

Positive Returns

Negative Returns

Freq

uenc

y





Indicative Terms and ConditionsCompany Market Access III SICAV

Sub-Fund Kenmar Liquid Commodity Index Fund

Distributor The Royal Bank of Scotland plc

Launch Date 15 November 2010

Investment Manager The Royal Bank of Scotland plc

Index Sponsor Kenmar Global Investment Management LLC, acting through the Index Committee

Index Management Agent Kenmar Global Investment Management LLC

Base Currency USD

Liquidity Twice monthly

Lockup No

Minimum Investment USD 250,000

Management Fee 0.15% p.a.

Index Management Agent Fee 1.50% p.a.

Index Performance Fee 5% above High Watermark

Management Company RBS (Luxembourg) S.A.

Custodian RBC Dexia Investor Services Bank S.A.

Administrative Agent RBC Dexia Investor Services Bank S.A.

Auditor PriceWaterhouseCoopers

Legal Advisor Linklaters LLP

Listing No listing

NAV Valuation Date 15th day (or immediately following Business Day if such day is not a Business Day) and the last Business Day of each calendar month

NAV Publication Date 5 Business Days following such NAV Valuation Date

Index Calculation Agent The Royal Bank of Scotland N.V.

Business Day A day banks are open for business in New York, London & Luxembourg

Subscription/ Redemption 4 Business Days prior to such NAV Valuation Date order cut-off time (12 noon, Luxembourg)

Subscription proceeds Payment must be made and accepted 4 Business Dayscut-off time prior to such NAV Valuation Date

Redemption Price Proceeds Remitted 3 Business Days after such NAV Publication Date

Share Classes USD Institutional and EUR Hedged Institutional

ISIN Codes USD Institutional - LU0521861962 EUR Hedged Institutional - LU0521862424

Bloomberg Tickers USD Institutional - MAKIC1U LX EUR Hedged Institutional - MAKIC1E LX

To find out more about Market Access III Kenmar Liquid Commodity Index Fund,Log on to www.rbs.com/marketaccess

Market Access III or its sponsor, The Royal Bank of Scotland plc, London Branch (“RBS plc”) does not offer advice to individual investors. Past investment performance is not an indication of future performance. The value of investments can go down as well as up and you may not get back the full amount invested. Changes in foreign exchange rates may cause the value of investments to fluctuate. A significant proportion of the Market Access III Kenmar Liquid Commodity Index Fund (the “Fund”) may be invested in commodities linked to derivatives. Investments in commodity derivatives can involve greater risk than is customarily associated with more traditional markets meaning above average price movements both positive and negative can be expected. RBS plc has taken reasonable care to ensure the accuracy of this information at the time of publication but it is subject to change. This document is not for distribution in the U.S. or to U.S. persons. This document is issued by RBS plc which is established at St Andrew’s Square, Edinburgh. RBS is authorised and regulated by the Financial Services Authority. Calls may be recorded. Market Access III is regulated by the Commission de Surveillance du Secteur Financier. Investors should read the Prospectus of the product carefully before investing and inform themselves about potential legal and tax consequences, offering restrictions or exchange control requirements that may be encountered under their local country laws and regulations. The Fund is not and will not be offered or sold in the United States to or for the account of U.S. persons as defined by U.S. securities laws. Each purchaser of the Fund shares will be asked to certify that such purchaser is not a U.S. person, is not receiving the Fund shares in the United States, and is not acquiring the Fund shares for the benefit of a U.S. person. shares of the Fund are issued by Market Access III and are globally distributed by The Royal Bank of Scotland N.V. (“RBS NV”) and RBS plc. RBS plc acts in certain jurisdictions as the authorised agent of The Royal Bank of Scotland N.V. The Royal Bank of Scotland plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The daisy device logo, RBS, The Royal Bank of Scotland and Make it happen are trade marks of The Royal Bank of Scotland Group plc.Important NoticeThis material has been prepared for information purposes to support the promotion of the Fund or matters addressed herein. This summary is intended for prospective institutional investors only and their representatives, and does not constitute an offer to sell, or a solicitation of an offer to buy or sell any security, interest in a Fund, commodity or other financial instrument or to participate in any trading strategy. Offers to investors might only be made pursuant to the SICAV’s prospectus and where permitted by law. In the event that the description or terms described herein would be inconsistent with or contrary to the descriptions in or terms of any prospectus or offering document of the Fund, the latter should prevail. Neither RBS plc nor any of its affiliates assume any duty to update any information in this summary for subsequent changes of any kind. The directors of Market Access III (the “Board”) may at their discretion, refuse, or partially fulfil, any share subscription request. The Board also reserves the right not to launch a particular class of share for any reason. Risks FactorsThis section is not intended to be exhaustive. It contains certain risk factors that any prospective investor should carefully consider when reading this document. Historical performance data or charts relating to the Kenmar Liquid Commodity Index (the “Index”) or the Fund shown in this material are hypothetical and based on a calculation methodology using past market data. Past performance is not a guide to future performance. The simulated performance resulting from this backtesting methodology is based on several assumptions and has not been audited. Prospective investor should not rely on this analysis or these assumptions to form its judgement for any future investment. In accordance with UCITS applicable regulations, the Fund may use derivative instruments in order to gain an exposure to the Index. The use of futures, options, warrants, forwards, swaps, swap options or any other derivative instrument involves increased risks. By investing in OTC derivatives, there is risk that the counterparties may fail to honour their contract(s) or be subject to bankruptcy. The investment strategies of the underlying managers comprising the Index are complex and involve numerous risks, including potentially high levels of volatility and the risk of losing the capital invested and receiving no income. The Fund is intended only for those potential investors who understand these strategies and associated risks. Prospective investors should consult their financial, tax and legal advisors, as appropriate, in order to determine whether or not the Fund would be a suitable investment for them. Any such future investment in the Fund involves a high degree of risk and should be considered only by investors who accept twice monthly liquidity on their investments and can withstand the loss of all or a substantial part of their investment. There can be no assurance that the Fund or the Index will achieve its investment objectives. There is no guarantee that the Fund would perform or generate a positive return. All Fund investments and strategies are subject to market risk that cannot be predicted with certainty, such as fluctuations in price and bankruptcy or default of any issuer.Trademarks“Standard & Poor’s®”, “S&P®”, “GSCI®” and “S&P® GSCI®” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by The Royal Bank of Scotland Group plc.. The S&P® GSCI® Index is not owned, endorsed, or approved by or associated with Goldman Sachs & Co. or its affiliated companies. Market Access III Kenmar Liquid Commodity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. and Standard & Poor’s does not make any representation regarding the advisability of investing in Market Access III Kenmar Liquid Commodity Index Fund.Selling RestrictionsDenmark: The Fund has not obtained an approval for marketing in Denmark by the Danish Financial Supervisory Authority pursuant to the Danish Act on Investment Associations and Special- Purpose Associations as well as other Collective Investment Schemes etc. (Consolidated Act No. 904 of 5 July 2010) (the “Act”) and the Executive Order on Marketing Carried out by Foreign Investment Undertakings in Denmark (Executive Order No. 505 of 12 May 2010) (the “Executive Order”) issued by the Danish Financial Supervisory Authority. The shares of the Fund have not been offered or sold and may not be offered, sold or delivered, directly or indirectly, to investors in Denmark. This implies, inter alia, that the shares in the Fund may not be offered or marketed to potential investors in Denmark unless an approval from the Danish Financial Supervisory Authority in accordance with Section 16(1) of the Act has been obtained. The shares of the Fund may only be offered or marketed in Denmark in compliance with the Act and the Executive Order as well as any other provisions of Danish law applicable to the offering or marketing of investment products to investors located in Denmark.Finland: This material does not constitute an offer to the public in Finland. The shares cannot be offered or sold in Finland by means of any document to any persons other than “Professional Investors” as defined by the Finnish Mutual Funds Act (Sijoitusrahastolaki 29.1.1999/48), as amended. No action has been taken to authorize an offering of the shares to the public in Finland and the distribution of this material is not authorized by the Financial Supervision Authority in Finland. This material is strictly for private use by its holder and may not be passed on to third parties or otherwise publicly distributed. Subscriptions will not be accepted from any persons other than the person to whom this material has been delivered by the Fund or its representative. This material may not include all the information that is required to be included in a prospectus in connection with an offering to the public.Israel: This material has not been approved by the Israel Securities Authority and will only be distributed to Israeli residents in a manner that will not constitute “an offer to the public” under sections 15 and 15a of the Israel Securities Law, 5728-1968 (“the Securities Law”) or section 25 of the Joint Investment Trusts Law, 5754-1994 (“the Joint Investment Trusts Law “), as applicable. The Fund is being offered to a limited number of investors (35 investors or less during any given 12 month period) and/or those categories of investors listed in the First Addendum (“the Addendum”) to the Securities Law, (“Institutional Investors”) namely joint investment funds or mutual trust funds, provident funds, insurance companies, banking corporations (purchasing shares for themselves or for clients who are Institutional Investors), portfolio managers (purchasing shares for themselves or for clients who are Institutional Investors), investment counsellors (purchasing shares for themselves), members of the Tel-Aviv Stock Exchange (purchasing shares for themselves or for clients who are Institutional Investors), underwriters (purchasing shares for themselves), venture capital funds engaging mainly in the capital market and wholly-owned by Institutional Investors and corporations with a shareholders equity in excess of NIS 250 million, each as defined in the said Addendum, as amended from time to time; in all cases under circumstances that will fall within the private placement or other exemptions of the Joint Investment Trusts Law, the Securities Law and any applicable guidelines, pronouncements or rulings issued from time to time by the Israel Securities Authority. This material may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Any offeree who purchases shares is purchasing such shares for its own benefit and account and not with the aim or intention of distributing or offering such shares to other parties (other than, in the case of an offeree which is an Institutional Investor by virtue of it being a banking corporation, portfolio manager or member of the Tel-Aviv Stock Exchange, as defined in the Addendum, where such offeree is purchasing shares for another party which is an Institutional Investor). Nothing in this material should be considered investment advice or investment marketing as defined in the Regulation of Investment Counselling, Investment Marketing and Portfolio Management Law, 5755-1995. Investors are encouraged to seek competent investment counselling from a locally licensed investment counsel prior to making the investment. As a prerequisite to the receipt of a copy of this material a recipient shall be required by the Fund to provide confirmation that it is an institutional investor purchasing shares for its own account or, where applicable, for other institutional investors. This material does not constitute an offer to sell or solicitation of an offer to buy any securities, nor does it constitute an offer to sell to or solicitation of an offer to buy from any person or persons in any state or other jurisdiction in which such offer or solicitation would be unlawful, or in which the person making such offer or solicitation is not qualified to do so, or to a person or persons to whom it is unlawful to make such offer or solicitation.Italy: The shares may not be offered, sold or delivered and the material, or any circular, advertisement or other document or offering material relating to the shares, may not be published, distributed or made available in the Republic of Italy unless: (i) the shares have been previously registered with the Bank of Italy and, as appropriate, with the Italian Securities and Exchange Commission (Consob); and (ii) the offering, sale or delivery of the shares and publication or distribution of the prospectus or of any other document or offering material is made in accordance with relevant Italian laws and regulations.Netherlands: This material is not addressed to or intended for any individual or legal entity in the Netherlands except (a) individuals or legal entities who qualify as qualified investors (as defined by article 2 paragraph 1(e) of the Prospectus Directive (2003/71/EC), as amended or (b) other persons to whom, or in circumstances where, an exemption or exception to the offering of interests in collective investment schemes (beleggingsinstellingen) applies pursuant to the Act on Financial Supervision (Wet op het financieel toezicht), and the rules and regulations promulgated pursuant thereto, as amended. Distribution of this document does not trigger a licence requirement for the Fund in the Netherlands and consequently no supervision will be exercised over the Fund by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten).Spain: The Fund has not been registered with the Spanish Securities Market Commission as a foreign UCITS in accordance with section 15.1 of Law 35/2003 of 4 November 2003 on Collective Investment Schemes (which implements into Spanish law the provisions of Directive 85/611 EEC, as amended). Accordingly, the shares of the Fund may not be offered or sold in Spain by means of any marketing activities as defined in section 2 of Law 35/2003, as amended by Law 25/2005, of 24 November 2005.Sweden: This material has not been approved by or registered with the Swedish Financial Supervisory Authority (Finansinspektionen) pursuant to the Swedish Financial Instruments Trading Act (lagen 1991:980) om handel med finansiella instrument). Accordingly, the shares may only be offered in Sweden in circumstances that will not result in a requirement to prepare a prospectus pursuant to the Swedish Financial Instruments Trading Act. The Fund is not an Investment Fund (fondföretag)for the purpose of the Swedish Investment Funds Act (lag (2004:46) om investeringsfonder) and has therefore not been, nor will it be, approved or registered by the Swedish Financial Supervisory Authority pursuant to the Swedish Investment Funds Act. Switzerland: The Fund has not been approved by the Swiss Financial Market Supervisory Authority (FINMA) as a foreign collective investment scheme pursuant to Article 120 of the Swiss Collective Investment Schemes Act of 23 June 2006 (the “CISA”) Accordingly, the shares may not be offered to the public in or from Switzerland and neither this material nor any other offering materials relating to the shares may be made available through a public offering in or from Switzerland. The shares may only be offered and this material may only be distributed in or from Switzerland to “Qualified Investors” (as defined in the CISA and its implementing ordinance). United Kingdom: The Fund is not a recognised collective investment scheme for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (the “Act”). The promotion of the Fund and the distribution of this material in the United Kingdom is accordingly restricted by law. Whilst this material may be issued outside the United Kingdom directly by the Fund and the directors of the Fund are responsible for its contents, wherever issued, it is being issued inside and outside the United Kingdom by RBS (which is authorised and regulated by the Financial Services Authority (“FSA”)) only to and/or is directed only at persons who are professional clients or eligible counterparties for the purposes of the FSA’s Conduct of Business Sourcebook. This material is exempt from the scheme promotion restriction (in Section 238 of the Act) on the communication of invitations or inducements to participate in unrecognised collective investment schemes on the grounds that it is being issued to and/or directed at only the types of person referred to above. To the extent that this material is issued by RBS plc, the shares are only available to such persons and this material must not be relied or acted upon by any other persons. Any recipient of this material who is an authorised person may (if and to the extent it is permitted to do so by the FSA rules applicable to it) distribute it or otherwise promote the Fund in accordance with Section 238 of thec Act but not otherwise. Any recipient of this material who is not an authorised person may not distribute it to any other person.Qatar: The shares are only being offered to a limited number of investors who are willing and able to conduct an independent investigation of the risks involved in an investment in such shares. The material does not constitute an offer to the public and is for the use only of the named addressee and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee’s consideration thereof). No transaction will be concluded in your jurisdiction and any inquiries regarding the shares should be made to RBS.plc or RBS N.V.United Arab Emirates: This material, and the information contained herein, does not constitute, and is not intended to constitute, a public offer of securities in the United Arab Emirates and accordingly should not be construed as such. The shares are only being offered to a limited number of sophisticated investors in the UAE who (a) are willing and able to conduct an independent investigation of the risks involved in an investment in such shares, and (b) upon their specific request. The shares have not been approved by or licensed or registered with the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the UAE. The material is for the use of the named addressee only and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee’s consideration thereof). No transaction will be concluded in the UAE and any enquiries regarding the shares should be made to RBS plc or RBS N.V.Australia: This material is not a prospectus or product disclosure statement under the Corporations Act 2001 (Cth) (Corporations Act) and does not constitute a recommendation to acquire, an invitation to apply for, an offer to apply for or buy, an offer to arrange the issue or sale of, or an offer for issue or sale of, any securities in Australia. The Fund has not authorised nor taken any action to prepare or lodge with the Australian Securities & Investments Commission an Australian law compliant prospectus. Accordingly, this material may not be issued or distributed in Australia and the shares in the Fund may not be offered, issued, sold or distributed in Australia by the fund manager, or any other person, under this material other than by way of or pursuant to an offer or invitation that does not need disclosure to investors under Part 6D.2 or Part 7.9 of the Corporations Act or otherwise. This material does not constitute or involve a recommendation to acquire, an offer or invitation for issue or sale, an offer or invitation to arrange the issue or sale, or an issue or sale, of interests to a ‘retail client’ (as defined in section 761G of the Corporations Act and applicable regulations) in Australia. China: This material does not constitute a public offer of the Fund, whether by sale or subscription, in the People’s Republic of China (the “PRC”). The Fund is not being offered or sold directly or indirectly in the PRC to or for the benefit of, legal or natural persons of the PRC. Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the Fund or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.Hong Kong: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This Private Placement Memorandum has not been registered by the Registrar of Companies in Hong Kong. The Fund is a collective investment scheme as defined in the Securities and Futures Ordinance of Hong Kong (the “Ordinance”) but has not been authorised by the Securities and Futures Commission pursuant to the Ordinance. Accordingly, the shares may only be offered or sold in Hong Kong to persons who are “professional investors” within the meaning of the Ordinance or in circumstances which are permitted under the Companies Ordinance of Hong Kong and the Ordinance. In addition, this Private Placement Memorandum may not be issued or possessed for the purposes of issue, whether in Hong Kong or elsewhere, and the shares may not be disposed of to any person unless such person is outside Hong Kong, such person is a “professional investor” within the meaning of the Ordinance or as otherwise may be permitted by the Ordinance. Japan: The shares have not been and will not be registered pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law no. 25 of 1948, as amended) and, accordingly, none of the shares nor any interest therein may be offered or sold, directly or indirectly, in Japan or to, or for the benefit, of any Japanese person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For this purpose, a “Japanese person” means any person resident in Japan, including any corporation or other entity organised under the laws of Japan.Singapore: This material has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this material and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of shares may not be circulated or distributed, nor may shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”) or (ii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.South Korea: Neither the Fund nor RBS is making any representation with respect to the eligibility of any recipients of this material to acquire the shares therein under the laws of Korea, including but without limitation the Foreign Exchange Transaction Act and Regulations thereunder. The shares may only be offered to Qualified Professional Investors, as such term is defined under the Financial Investment Services and Capital Markets Act, and none of the shares may be offered, sold or delivered, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to applicable laws and regulations of Korea.Taiwan: The shares are being made available in the R.O.C. on a private placement basis only to banks, bills houses, trust enterprises, financial holding companies and other qualified entities or institutions (collectively, “Qualified Institutions”) and other entities and individuals meeting specific criteria (“Other Qualified Investors”) pursuant to the private placement provisions of the R.O.C. Rules Governing Offshore Funds. No other offer or sale of the shares in the R.O.C. is permitted. R.O.C. purchasers of the shares may not sell or otherwise dispose of their holdings except by redemption, transfer to a Qualified Institution or Other Qualified Investor, transfer by operation of law or other means approved by the R.O.C. Financial Supervisory Commission.

market access iii kenmar liquid commodity index fund · 2015-07-27 · market access iii kenmar...

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