Moti Lal Gold Etf

8/13/2019 Moti Lal Gold Etf

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SCHEME INFORMATION DOCUMENT

Motilal Oswal MOSt Shares Gold ETF (MOSt Gold Shares)

(An Open Ended Exchange Traded Fund)

Offer for Units having face value of `10/- per unit for cash at a premium approximately equal to the

difference between face value and allotment price during the New Fund Offer Period and at NAV based

prices during Continuous Offer

New Fund Offer Opens on MARCH 02, 2012

New Fund Offer Closes on MARCH 16, 2012

Scheme re-opens for continuous sale MARCH 26, 2012

and repurchase on or before

Name of Mutual Fund Motilal Oswal Mutual Fund

Name of Asset Management Company (AMC) Motilal Oswal Asset Management Company Limited

Name of Trustee Company Motilal Oswal Trustee Company Limited

Address Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad - (W), Mumbai - 400064.

Website www.motilaloswal.com/assetmanagement

www.mostshares.com

The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India

(Mutual Funds) Regulations 1996, (herein after referred to as SEBI (MF) Regulations) as amended till date, and filed with

SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not

been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information

Document (SID).

The SID sets forth concisely the information about the Scheme that a prospective investor ought to know before investing. Before

investing, investors should also ascertain about any further changes to this SID after the date of this Document from the Mutual

Fund / Investor Service Centres / Website / Distributors or Brokers.

The investors are advised to refer to the Statement of Additional Information (SAI) for details of Motilal Oswal Mutual

Fund, Tax and Legal issues and general information on www.motilaloswal.com/assetmanagement and

www.mostshares.com

SAI is incorporated by reference (is legally a part of the SID). For a free copy of the current SAI, please contact your

nearest Investor Service Centre or log on to our website.

The SID should be read in conjunction with the SAI and not in isolation.

This SID is dated February 14, 2012


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Scheme Information Document 2

Disclaimers:

Disclaimers of NSE

"As required, a copy of this Scheme Information Document has been submitted to National Stock Exchange of India Limited (hereinafter referred to

as NSE). NSE has given vide its letter NSE/ List/142583-U dated August 16, 2011 permission to the Mutual Fund to use the Exchange's name in this

Scheme Information document as one of the stock exchanges on which the Mutual Fund's units are proposed to be listed subject to, the Mutual

Fund fulfilling the various criteria for listing. The Exchange has scrutinized this Scheme Information Document for its limited internal purpose of

deciding on the matter of granting the aforesaid permission to the Mutual Fund. It is to be distinctly understood that the aforesaid permission given

by NSE should not in any way be deemed or construed that the Scheme Information Document has been cleared or approved by NSE; nor does it

in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Scheme Information Document; nor does

it warrant that the Mutual Fund's unit will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial

or other soundness of the Mutual Fund, its sponsors, its management or any scheme of the Mutual Fund.

Every person who desires to apply for or otherwise acquire any units of the Mutual Fund may do so pursuant to independent inquiry, investigationand analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent

to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any reason whatsoever."

Disclaimers of BSE

"Bombay Stock Exchange Ltd. ("the Exchange") has given vide its letter dated September 16, 2011 permission to Motilal Oswal Mutual Fund to use

the Exchange's name in this SID as one of the Stock Exchanges on which the Mutual Fund's Units are proposed to be listed. The Exchange has

scrutinized this SID for its limited internal purpose of deciding on the matter of granting the aforesaid permission to Motilal Oswal Mutual Fund.

The Exchange does not in any manner :-

i Warrant, certify or endorse the correctness or completeness of any of the contents of this SID; or

ii Warrant that this scheme's units will be listed or will continue to be listed on the Exchange; or

iii Take any responsibility for the financial or other soundness of this Mutual Fund, its promoters, its management or any scheme or project of this

Mutual Fund;

and it should not for any reason be deemed or construed that this SID has been cleared or approved by the Exchange. Every person who desires

to apply for or otherwise acquires any unit of Motilal Oswal MOSt Shares Gold Exchange Traded Fund of this Mutual Fund may do so pursuant to

independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be

suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be

stated herein or any other reason whatsoever."


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TABLE OF CONTENTS

Sr. No. Particulars Page No.

HIGHLIGHTS / SUMMARY OF THE SCHEME 4 - 5

I. INTRODUCTION 6 - 12

A. Risk Factors 6 - 7

B. Requirement of Minimum Investors in the Scheme 7

C. Special Considerations 7 - 9

D. Definitions 10 - 11

E. Due Diligence by the Asset Management Company 12

II. INFORMATION ABOUT THE SCHEME 13 - 17

A. Type of the Scheme 13

B. Investment Objective 13

C. Asset Allocation 13

D. Investment by the Scheme 13

E. Investment Strategy 14 - 16

F. Fundamental Attributes 16

G. Benchmark Index 16

H. Fund Manager 16

I. Investment Restrictions 16 - 17

J. Scheme Performance 17

III. UNITS AND OFFER 18 - 28

A. New Fund Offer (NFO) 18 - 21

B. Ongoing Offer Details 21 - 26

C. Periodic Disclosures 26 - 27

D. Computation of NAV 27 - 28

IV. FEES AND EXPENSES 29 - 30

A. New Fund Offer (NFO) Expenses 29

B. Annual Scheme Recurring Expenses 29

C. Load Structure 29 - 30

D. Waiver of Load 30

E. Transaction Charge 30

V. RIGHTS OF UNITHOLDERS 30

VI. PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTIONS OR INVESTIGATIONS 31 - 32

FOR WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN THE PROCESS OF BEING TAKEN BY ANY

REGULATORY AUTHORITY

List of Designated Collection Centres 33 - 35


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HIGHLIGHTS/SUMMARY OF THE SCHEME

Name of the Scheme Motilal Oswal MOSt Shares Gold ETF(MOSt Gold Shares)

Type of the Scheme An open ended Exchange Traded Fund

Investment Objective The investment objective of the Scheme is to provide return by investing in Gold Bullion.

The performance of the fund will be benchmarked to the Spot Gold Price. However, the performance

of scheme may differ from that of the underlying index due to tracking error.

There can be no assurance or guarantee that the investment objective of the Scheme would be

achieved.

Investment Pattern Instruments Investment Pattern Risk Profile

Gold Bullion 95% to 100% Medium

Government Securities, Money Market 0% to 5% Low

Instruments and cash at call

Liquidity On the Exchange

The units of the Scheme can be bought/sold on all trading days on the National Stock Exchange of

India Ltd (NSE) / Bombay Stock Exchange Ltd. (BSE) where the Scheme will be listed.

or

Directly with the Mutual FundInvestors may subscribe to and/or redeem the units of the scheme directly with the Mutual Fund

on any business day on an ongoing basis in creation unit lot of 10 units (10 gms) and multiples of

10 units (10 gms) thereof.

An investor can also sell its units of the Scheme directly to the Fund in less than creation size for

a period of 1 trading week, under either of the following circumstances:

1. Where there have been no quotes on the exchange for 3 trading days consecutively

2. When the average discount, of the volume weighted traded price to the volume weighted

indicative NAV over a period of 1 trading week is greater than 3 %, and

3. When the total bid size on the exchange(s) is less than 10 creation units over a period of 1

trading week.

In above circumstances, an investor can sell its units of the Scheme to the Fund with an exit load

of 1% of NAV of the Scheme.

The notification of the same would be displayed on our website.

Benchmark Spot Domestic Gold Price

Purity of Gold: All gold bullion held in the schemes allocated account with the custodian shall be

of fineness (or purity) of (99.5%) or higher.

Transparency/NAV Disclosure The AMC will calculate and disclose the NAV of the Scheme on all business days. The NAV of the

Scheme shall be published at least in two daily newspapers. The AMC will update the NAVs on its

website www.motilaloswal.com/assetmanagement and www.mostshares.com and also on AMFI

website www.amfiindia.com before 9.00 p.m. on every business day. If the NAV is not available

before the commencement of Business Hours on the following day due to any reason, the Mutual

Fund shall issue a press release giving reasons and explaining when the Mutual Fund would be

able to publish the NAV.

The AMC shall disclose the Portfolio of the Scheme within one month from the close of each half

year (i.e. 31st March and 30th September) either by sending a complete statement to all the

Unitholders or by publishing the same by way of advertisement in one national English daily

newspaper circulating in the whole of India and in a newspaper published in the language of the

region where the Head Office of the Mutual Fund is situated. The portfolio statement will also be

displayed on the website of the AMC and AMFI.

The AMC shall also make available the Annual Report of the Scheme within four months of the

end of the financial year. The AMC may also calculate intra-day indicative NAV (computed based

on snapshot prices of the underlying securities traded and available on NSE/BSE) and will be

updated during the market hours on its website www.motilaloswal.com/assetmanagement and

www.mostshares.com. Intra-day indicative NAV will not have any bearing on the subscription or

redemption of units directly with the Fund by the Authorised Participant / Investor.


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A. RISK FACTORS

Standard Risk Factors:

Investment in Mutual Fund units involves investment risks such as

trading volumes, settlement risk, liquidity risk, default risk including

the possible loss of principal.

As the price / value / interest rate of the securities in which the

Scheme invests fluctuates, the value of your investment in the

Scheme may go up or down depending on various factors and forces

affecting the capital market.

Past performance of the Sponsor/AMC/Mutual Fund does not

guarantee future performance of the Scheme.

The name of the Scheme does not in any manner indicate either

the quality of the Scheme or its future prospects and returns.

The Sponsor is not responsible or liable for any loss resulting from

the operation of the Scheme beyond the initial contribution of

`100,000 made by it towards setting up the Fund.

The present Scheme is not a guaranteed or assured return Scheme.

Scheme Specific Risk Factors

The Scheme is subject to the principal risks described below. Some or

all of these risks may adversely affect Schemes NAV, yield, return and/

or its ability to meet its objectives.

Risk factors associated with investing in Gold:

Market Risk:The value of the Units relates directly to the value of the

gold held by the Scheme and fluctuations in the price of gold could

adversely affect investment value of the Units. The factors that may effect

the price of gold, inter-alia, include economic and political developments,

changes in interest rates and perceived trends in bullion prices, exchangerates, inflation trends, market movements, etc.

Currency Risk: The formula for determining NAV of the Units is based

on the imported (landed) value of gold. The landed value of gold is

computed by multiplying international market price by US dollar value.

The value of gold or NAV, therefore will depend upon the conversion

value of US dollar into Indian rupee and attracts all the risks attached to

such conversion.

Counter Party Risk:The Scheme will buy or sell gold from the open

market, which may lead to counter party risks for the Scheme for trading

and settlement.

Asset Class Risk:The returns from physical Gold in which the Scheme

invests may underperform returns from the securities or other assetclasses.

Physical gold: There is a risk that part or all of the Schemes gold could

be lost, damaged or stolen. Access to the Schemes gold could also be

restricted by natural events or human actions. Any of these actions may

have adverse impact on the operations of the Scheme and consequently

on investment in Units.

Liquidity Risk:The Scheme has to sell gold only to bullion bankers/

traders who are authorized to buy gold. Though, there are adequate

numbers of players (commercial or bullion bankers) to whom the Scheme

can sell gold, the Scheme may have to resort to distress sale of gold if

there is no or low demand for gold to meet its cash needs of redemption

or expenses.

I. INTRODUCTION

Regulatory Risk: Any changes in trading regulations by the stock

exchange(s) or SEBI /RBI may affect the ability of Authorised Participant

to arbitrage resulting into wider premium/ discount to NAV. Any changes

in the regulations relating to import and export of gold or gold jewellery

(including customs duty, sales tax and any such other statutory levies)

may affect the ability of the Scheme to buy/ sell gold against the purchase

and redemption requests received.

Price Risk : The performance of the Scheme may be affected by a

general price decline in the Gold prices. The Scheme invests in the

physical Gold regardless of their investment merit. The AMC does not

attempt to take defensive positions in declining markets.

Indirect taxation:For the valuation of gold by the Scheme, indirect taxes

like customs duty, VAT, etc. would also be considered. Hence, any change

in the rates of indirect taxation would affect the valuation of the Scheme.

Operational Risks:Gold Exchange Traded Funds (GETFs) are relatively

new products and their value could decrease if unanticipated operational

or trading problems arise. Motilal Oswal Shares Gold ETF an open ended

Exchange Traded Fund, is therefore subject to operational risks.

In addition, investors should be aware that there is no assurance that

gold will maintain its long-term value in terms of purchasing power. In

the event that the price of gold declines, the value of investment in Units

is expected to decline proportionately.

Redemption Risk:Though this is an open-ended scheme, the Scheme

would ordinarily repurchase Units in Creation Unit Size. Thus Unit holding

less than Creation Unit Size can only be sold through the secondary

market on the Exchange. Further, the price received upon the redemption

of Units of the Scheme may be less than the value of the gold represented

by them.

Motilal Oswal MOSt Shares Gold ETF shall be investing substantial

portion of its assets in physical gold and tracking its performance as

close as possible to the price of gold.

Market Risk

The Schemes NAV will react to the interest rate movements. The

Investor may lose money over short or long period due to fluctuation

in Schemes NAV in response to factors such as economic and

political developments, changes in interest rates, inflation and other

monetary factors.

Market Trading Risks

1. Absence of Prior Active Market: Although the units of the

Scheme are listed on NSE/BSE, there can be no assurance

that an active secondary market will develop or be maintained.

2. Lack of Market Liquidity: Trading in the units of the Scheme on

NSE/BSE may be halted because of market conditions or for

reasons that in view of NSE/BSE or SEBI, trading in the units

of the Scheme is not advisable. In addition, trading of the units

of the Scheme is subject to trading halts caused by extraordinary

market volatility and pursuant to circuit filter rules of NSE/BSE

and SEBI. There can be no assurance that the requirements of

NSE/BSE necessary to maintain the listing of the units of the

Scheme will continue to be met or will remain unchanged.


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3. Units of the Scheme may trade at Prices Other than NAV: The

units of the Scheme may trade above or below their NAV. The

NAV of the Scheme will fluctuate with changes in the market

value of Schemes holdings. The trading prices of the units of

the Scheme will fluctuate in accordance with changes in their

NAV as well as market supply and demand for the units of the

Scheme. However, given that units of the Scheme can be

created and redeemed in Minimum Unit size directly with the

Fund, it is expected that large discounts or premiums to the

NAV of units of the Scheme will not sustain due to arbitrage

opportunity available.

4. Regulatory Risk: Any changes in trading regulations by NSE/

BSE or SEBI may affect the ability of market maker to arbitrage

resulting into wider premium/discount to NAV.

5. Right to Limit Redemptions: The Trustee, in the general interest

of the unit holders of the Scheme offered under this SID and

keeping in view of the unforeseen circumstances/unusual

market conditions, may limit the total number of Units which

can be redeemed on any Business Day.

Redemption Risk

Investors may note that even though this is an open-ended Scheme,

the Scheme would ordinarily repurchase units in minimum size,

presently 10 units of MOSt Gold Shares. Thus unit holdings less

than the minimum size can only be sold through the secondary

market on NSE/BSE.

Asset Class Risk

The returns from the types of securities in which the Scheme invests

may under perform from the various general securities markets or

different asset classes. Different types of securities tend to go

through cycles of out-performance and under-performance in

comparison with the general securities markets. Interest Rate Risk

Changes in interest rates will affect the Schemes Net Asset Value.

The prices of securities usually increase as interest rates decline

and usually decrease as interest rates r ise. The extent of fall or rise

in the prices is guided by duration, which is a function of the existing

coupon, days to maturity and increase or decrease in the level of

interest rate. The new level of interest rate is determined by the rate

at which the government raises new money and/or the price levels

at which the market is already dealing in existing securities. Prices

of long-term securities generally fluctuate more in response to

interest rate changes than short-term securities. The price risk is

low in the case of the floating rate or inflation-linked bonds. The

price risk does not exist if the investment is made under a repoagreement. Debt markets, especially in developing markets like

India, can be volatile leading to the possibility of price movements

up or down in fixed income securities and thereby to possible

movements in the NAV.

Credit Risk

Credit Risk means that the issuer of a security may default on interest

payments or even paying back the principal amount on maturity.

(i.e. the issuer may be unable to make timely principal and interest

payments on the security). Even where no default occurs, the prices

of security may go down because the credit rating of an issuer goes

down. It must be, however, noted that where the Scheme has

invested in Government securities, there is no risk to that extent.

Liquidity or Marketability Risk

This refers to the ease at which a security can be sold at or near its

true value. The primary measure of liquidity risk is the spread

between the bid price and the offer price quoted by a dealer. Liquidity

risk is characteristic of the Indian fixed income market. Trading

Volumes, settlement periods and transfer procedures may restrict

the liquidity of the investments made by the Scheme. Differentsegments of the Indian financial markets have different settlement

periods and such period may be extended significantly by unforeseen

circumstances leading to delays in receipt of proceeds from sale of

securities. As liquidity of the investments made by the Scheme could,

at times, be restricted by trading volumes and settlement periods,

the time taken by the Fund for redemption of units may be significant

in the event of an inordinately large number of redemption requests

or restructuring of the Scheme.

B. REQUIREMENT OF MINIMUM INVESTORS IN THE

SCHEME

As MOSt Gold Shares is an exchange traded fund, the provisions

of minimum number of investors and maximum holding by theinvestor is not applicable as per SEBI Circular having reference no.

SEBI/IMD/CIR NO 10/22701/03 dated December 12, 2003.

C. SPECIAL CONSIDERATIONS

Prospective investors should study this SID and SAI carefully in its

entirety and should not construe the contents hereof as advise

relating to legal, taxation, financial, investment or any other matters

and are advised to consult their legal, tax, financial and other

professional advisors to determine possible legal, tax, financial or

other considerations of subscribing to or redeeming units, before

making a decision to invest/redeem/hold units.

Neither this SID, SAI nor the units have been registered in anyjurisdiction. The distribution of this SID or SAI in certain jurisdictions

may be restricted or totally prohibited to registration requirements

and accordingly, any person who comes into possession of this SID

or SAI is required to inform themselves about and to observe any

such restrictions and/ or legal compliance requirements.

The AMC, Trustee or the Mutual Fund have not authorized any

person to issue any advertisement or to give any information or to

make any representations, either oral or written, other than that

contained in this SID or SAI or as provided by the AMC in connection

with this offering. Prospective Investors are advised not to rely upon

any information or representation not incorporated in the SID or

SAI or as provided by the AMC as having been authorized by the

Mutual Fund, the AMC or the Trustee.

The tax benefits described in this SID and SAI are as available under

the present taxation laws and are available subject to relevant

conditions. The information given is included only for general purpose

and is based on advise received by the AMC regarding the law and

practice currently in force in India as on the date of this SID and the

Unitholders should be aware that the relevant fiscal rules or their

interpretation may change. As is the case with any investment, there

can be no guarantee that the tax position or the proposed tax position

prevailing at the time of an investment in the Scheme will endure

indefinitely. In view of the individual nature of tax consequences,

each Unitholder is advised to consult his / her own professional tax

advisor.


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The Mutual Fund may disclose details of the investors account and

transactions there under to those intermediaries whose stamp

appears on the application form or who have been designated as

such by the investor. In addition, the Mutual Fund may disclose such

details to the bankers, as may be necessary for the purpose of

effecting payments to the investor. The Fund may also disclose such

details to regulatory and statutory authorities/bodies as may be

required or necessary.

Pursuant to the provisions of Prevention of Money Laundering Act,

2002 (PMLA), if after due diligence, the AMC believes that any

transaction is suspicious in nature as regards money laundering,

the AMC shall have absolute discretion to report such suspicious

transactions to FIU-IND (Financial Intelligence Unit - India) or such

other authorities as prescribed under the rules/guidelines issued

thereunder by SEBI and/or RBI and take any other actions as may

be required for the purposes of fulfilling its obligations under PMLA

and rules/guidelines issued thereunder by SEBI and/or RBI without

obtaining the prior approval of the investor/Unitholder/ any other

person.

The Custodian

The Trustee shall appoint a Custodian, who have been approved by

SEBI to act as Custodian for Mutual Funds including gold exchange

traded funds

The registration of the Custodian is still valid and effective. The custodian

shall hold the custody and possession of the securities and investment

of the Fund and will discharge all the functions as are ordinarily discharged

by a Custodian. It does not have any power or authority to sell or dispose

of or deal with the securities/investment held by it on behalf of the Fund

except as instructed by the AMC. The Trustee reserves the right to change

the custodian, if required.

In terms of proposed Custody Agreement in accordance with SEBI

Regulations, to be entered into subject to amended from time to time,

the Custodian shall, inter alia:

Provide post-trading and custodial services to the Mutual Fund;

Keep gold, securities and other instruments belonging to the Scheme

in safe custody;

Ensure smooth inflow/outflow of gold, securities and such otherinstruments as and when necessary, in the best interests of the Unit

holders;

Ensure that the benefits due to the holdings of the Mutual Fund are

recovered; and

Be responsible for loss of or damage to the gold, securities due to

negligence on its part or on the part of its approved agents.

The Custodian will charge the Mutual Fund, portfolio fee, transaction fee

and out-of-pocket expenses in accordance with the terms of the proposed

Custody Agreement and as per any modification made thereof from time

to time.

Role of the Custodian

The Custodian is responsible for safekeeping of the Schemes gold

deposited with it by an Authorised Participants in connection with the

creation of Baskets. The Custodian is responsible for allocating specific

bars of gold bullion to the scheme Allocated Account.

The Custodian will provide the AMC with regular reports detailing with

identifying the gold bars held in the scheme Allocated Account.

Custody of the Schemes Gold

Custody of the gold bullion deposited with and held by the scheme is

provided by the sub-custodian at its Vaults in Mumbai. The custodian, as

instructed by the AMC, is authorized to accept, on behalf of the AMC,

deposits of gold. On the instructions given by the AMC, the custodian

allocates gold by selecting bars of gold bullion for deposit to the schemes

allocated account.

Custodian will accept and deliver physical gold only if it is in compliance

with the LBMA good delivery norms as mutually agreed by the AMC and

custodian and the AMC has the discretion to reject the application form

and the portfolio deposit if it does not fulfill the good delivery norms.

The Good Delivery norms are as under: (a) Original Assay Certificate;

(b) Bar list from the refiner; (c) relevant shipping documents (airway bill

and customs invoice) establishing that the gold has been shipped directly

from a Good London Refiner using an accredited basis through one of

the accredited agencies; and (d) such other documents that the AMC

may require from time to time so as to adequately indicate the purity of

the Gold deposited with it.

The Custodian will ensure that all Gold deposited with it is accompanied

by the above documents and that the Gold bars indicate that the purity(fineness) is 995 or above.

On having credited the schemes account with gold deposits in the

physical form, Custodian will confirm to the AMC of vaulting of gold. Upon

realization of Cash Component, the AMC will instruct the Registrar &

Transfer Agent of the total number of units to be created against the

portfolio deposit. The creation of units will be at the NAV of the scheme

on day T (i.e. the day on which the valid application was made by

Authorized Participant).

The AMC and the proposed custodian will enter into the custody

agreements, which establish the allocated account. The gold deposited

with the scheme is held in the scheme allocated account.

Under the proposed agreement to be entered into by the AMC and

the custodian, the custodian is responsible for the safekeeping of the

gold held on behalf of the AMC. The custodian is responsible for any

loss or damage suffered by the scheme as a direct result of any

negligence, fraud or willful default in the performance of its duties.

The custodians liability is limited to the market value of the gold held

in the schemes allocated account at the time such negligence, fraud

or willful default is discovered by the custodian, provided that the

custodian promptly notifies the AMC of its discovery. In the event of a

loss caused by the failure of the custodian to exercise reasonable

care, the AMC has the right to seek recovery with respect to the loss

against the custodian in breach.


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Allocated Accounts

An allocated account is an account with a Bank or Custodian, to which

individually identified gold bars owned by the account holder are credited.

The gold bars in an allocated gold account are specific to that account

and are identified by a list which shows, for each gold bar, the refiner,

assay or fineness, serial number and fine weight. The account holder

has full ownership of the gold bars and, except as instructed by the

account holder, the Bank or Custodian may not trade, lease or lend the

bars.

Transfer of Gold

At the end of each business day gold will be transferred to the schemes

allocated account. The custodian allocates specific bars of, so that

allocated gold bars represent the amount of gold credited to the extent

such amount is represented by whole bars. The bars of gold should be

held directly by the Custodian. The custodian updates its records at the

end of each business day to identify the specific bars of gold allocated to

the scheme. The withdrawal of gold from the scheme for the purpose of

redemption will follow the same procedure in the reverse order. The AMCwill arrange to deliver physical gold through its Sub Custodian.

Description of The Custody Agreements

Reports

The custodian provides the AMC with reports for each business day, no

later than the following business day, identifying the movements of gold

in and out of the schemes allocated account.

The monthly statement contains sufficient information to identify each

bar of gold held in the scheme allocated account and the custodian or

sub-custodian having possession of such bar.

Sub-Custodians

The custodian may select Sub-custodians to perform any of its duties,

including holding gold for it. The sub-custodians selected by the

custodians will have to be informed by the custodians to the AMC. Any

additions or deletion of sub-custodians will have to be reported to the

AMC on a periodic basis.

Custodian may, with the prior written consent of AMC, entrust Gold held

in the Account to a specified sub-custodian that is eligible to act as a

custodian of Gold under applicable laws and regulations (a Sub-

Custodian) selected by Custodian with due care. The Custodian shall

remain responsible in all respects to its client for safekeeping of the gold

kept with such other person, including any associated risks. The custodian

of securities shall continue to fulfill all duties to the clients relating to the

gold so kept with the other person.

Role of Sub custodian

Safe keeping and segregation of gold bars belonging to the Scheme.

Ensuring proper receipt, safekeeping, accounting and delivery of

the gold bars from the place of collection to sub-custodians vault

as well as from sub-custodians vault to the counterparty as specified

and directed by the Custodian.

Deliver physical gold redemption proceeds at specified locations.

For physical delivery of bars, additional charges would be applicable

depending on the denominations redeemed.

Providing security for the gold bars belonging to the Scheme and

equipping the vault with security features as per best International

Standards and requirements of the Insurer.

Facilitating safe transportation of gold bars belonging to the scheme,

by providing armed security, armoured vans and taking other

precautions.

Providing all other support services and facilities to ensure safe

custody of gold bars as well as for uninterrupted operation of the

vaults.

The Insurance of the Gold bars will be the responsibility of the

Custodian.

Sub Custodian Delivery of Gold

The Investor will furnish requisite documents to sub custodian at

the specified sub-custodian locations

Sub custodian will verify requisite documents and deliver the Gold.

The investor (not applicable to APS) will have to come in person to

collect the physical gold and the sub-custodian will perform person/

documents verification of the investor before delivering the physicalgold.

The investor will have to submit a self attested copy of any two of

the following at the time of collecting physical gold :

PAN Card copy

Passport copy

Voter Id

Note:The original of the above will have to be shown to the sub-

custodian for verification at the time of collecting physical gold.

Appointment of sub-custodian

A sub-custodian after carrying out necessary due diligence of thesub-custodian in line with RBIs Outsourcing Policy and best

International Practices.

A sub-custodian may not restrict itself to operating through a single

sub-custodian but will explore availing the services of more than

one sub custodian based on the clients needs

Loss / Damage of Physical Gold and Securities

The custodian will be responsible for loss of / or damage to the physical

gold and securities due to fraud, bad faith, negligence, willful neglect,

default, or willful default on its part or on the part of its sub-custodian.

Location & Segregation of Gold

Gold held for schemes allocated account by the custodian or

subcustodians appointed by the custodians is held at the custodians

Vaults. The custodians books and records will identify every bar of gold

held in the schemes allocated account in its own vault by refiner, assay

or fineness, serial number and gross and fine weight. The AMC may

upon reasonable notice, visit the custodians premises and examine the

schemes gold held there and the custodians records concerning the

schemes allocated account. The AMCs independent auditors may also

visit the custodians premises in connection with their audit of the financial

statements of the scheme.

Insurance

The custodian will ensure adequate insurance for its bullion and custody

business. The AMC and the sponsor may subject to confidentiality

restrictions, review this insurance coverage from time to time.


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D. DEFINITIONS

In this SID, the following words and expressions shall have the meaning specified below, unless the context otherwise requires:

Applicable NAV Unless stated otherwise in this document, Applicable NAV is the Net Asset Value at the

close of a Business/Working Day on which the purchase or redemption is sought by an

investor and determined by the Fund.

Asset Management Company / AMC / Motilal Oswal Asset Management Company Limited, a Company incorporated under the

Investment Manager provisions of the Companies Act, 1956, and approved by SEBI to act as the Asset

Management Company for the Schemes of Motilal Oswal Mutual Fund.

Authorised Participant Member of the Stock Exchanges having trading terminals on which the units of the Scheme

are listed and who are appointed by the AMC to give two way quotes on the stock exchanges

and who deal in creation unit size for the purpose of purchase and sale of units directly

from the Mutual Fund.

Acceptable Gold for Creation The gold bars shall be in denominations of 10 gms, 100 gms or 1000 gms, assayed, not

have ever left the loop and must conform to the LBMA Good Delivery Standards with

minimum 99.5% finess verified by Custodian as per SEBI Mutual funds (Fourth Amendment)

Regulations 2006, No. SEBI/LAD/DOP/82534/2006. For further details refer to para on

Valuation of Gold under the section Computation of NAV.

Custodian Custodian will include any sub-custodian appointed by the custodian.

Business Day / Working Day Any day other than:(a) Saturday and Sunday

(b) a day on which capital/debt markets in Mumbai are closed or are unable to trade for

any reason

(c) a day on which the Banks in Mumbai are closed or RBI is closed

(d) a day on which both the Bombay Stock Exchange Ltd. and National Stock Exchange of

India Ltd. are closed

(e) a day which is public/Bank holiday at a collection centre/ investor service centre/official

point of acceptance where the application is received

(f) a day on which sale and repurchase of units is suspended by the Trustee/AMC

(g) a day on which normal business could not be transacted due to storms, floods, bandhs,

strikes or such other event as the AMC may specify from time to time.

However, the AMC reserves the right to declare any day as the Business / Working Day orotherwise at any or all collection centres / investor service centre / official point of acceptance.

Cash Component Cash Component is defined as cash and cash equivalent, represents the difference between

the Applicable NAV of Creation Unit Size and the market value of physical gold. This

difference will represent accrued interest, income earned by the Scheme, accrued annual

charges including management fees and residual cash in the Scheme. In addition the Cash

Component will include transaction cost as charged by the custodian/DP and other incidental

expenses, if any and will include the difference between the purchase/sale price and closing

price of Portfolio Deposit for creation/redemption of MOSt Gold Shares Units in Creation

Unit. Cash Component will also include exit load, if applicable. The Cash Component will

vary from time to time and will be decided and announced by the AMC.

Creation unit Creation Unit is a fixed number of units, which is exchanged for Portfolio Deposit which

would consist of physical Gold of defined purity and quantity and/or Cash Component.

Investment Management Agreement / IMA Investment Management Agreement dated May 21, 2009, as amended from time to time,entered into between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset

Management Company Ltd.

Load In case of subscription, the amount paid by the prospective investors on purchase of a unit

(Entry Load) in addition to the Applicable NAV and in case of redemption, the amount

deducted from the Applicable NAV on the redemption of unit (Exit Load).

Presently, entry load cannot be charged by Mutual Fund scheme.

LBMA London Bullion Market Association

LBMA Good Delivery Standards and List A list of Refineries, Assayers and rules which define good delivery

Loop A secured chain of storage and transportation established between the Refinery and

Custodian Vaults for receiving gold. This Gold has never been in the possession of any

individual or entity other than the refinery, transporter or vaulting company. Any gold which

has left the loop is not accepted for creation.


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Gilts or Government Securities Means securities created and issued by the Central Government and/or State Government

(including treasury bill) or Government Securities as defined in the Public Debt Act, 1944

as amended from time to time.

Gold Related Instrument Gold Related Instrument shall mean such instrument having gold as underlying, as may be

specified by the SEBI from time to time.

Repo Sale of Government Securities with simultaneous agreement to repurchase them at a later date.

Reverse Repo Purchase of Government Securities with simultaneous agreement to resell them at a later date.

Mutual Fund Motilal Oswal Mutual Fund, a trust set up under the provisions of Indian Trust Act, 1882

and registered with SEBI vide Registration no. MF/063/09/04.

Net Asset Value / NAV Net Asset Value per unit of the Scheme calculated in the manner described in this SID or

as may be prescribed by the SEBI Regulations from time to time.

New Fund Offer / NFO Offer for purchase of units of the Scheme during the New Fund Offer Period as describe hereinafter.

NFO Period The date on or the period during which initial subscription of units of the Scheme can be

made i.e. March 2, 2012 to March 16, 2012_ subject to extension, if any.

Portfolio Deposit These are LBMA Good Delivery standard gold bars imported by Banks authorized by RBI to

deal in Gold and other securities. The value of gold will be linked to the domestic prices of gold.

Portfolio Deposit can change from time to time.

RBI The Reserve Bank of India established under The Reserve Bank of India Act, 1934.

Redemption/Repurchase Redemption of units of the Scheme as permitted

Registrar and Transfer Agent Karvy Computershare Pvt. Ltd., registered under the SEBI (Registrar to an Issue and Share

Transfer Agents) Regulations, 1993, currently acting as registrar to the Scheme, or any

other Registrar appointed by the AMC from time to time.

Sale / Subscription Sale or allotment of units to the Unitholder upon subscription by the investor/applicant

under the Scheme.

Scheme Motilal Oswal MOSt Shares Gold ETF (MOSt Gold Shares) is an open ended Exchange

Traded Fund. Units of MOSt Gold Shares will be listed on the Stock Exchanges and will be

traded like a share.

Scheme Information Document / SID This document issued by Motilal Oswal Mutual Fund for offering units of the Scheme.

SEBI Securities and Exchange Board of India, established under Securities and Exchange Board

of India Act, 1992 as amended from time to time.

SEBI Regulations SEBI (Mutual Funds) Regulations, 1996 as amended from time to time.

Sponsor Motilal Oswal Securities Ltd.

Statement of Additional Information / SAI The document issued by Motilal Oswal Mutual Fund containing details of Motilal Oswal

Mutual Fund, its constitution and certain tax, legal and general information. SAI is legally a

part of the SID.

Tracking Error Tracking error is defined as the standard deviation of the difference between the daily

returns of the Underlying benchmark and the NAV of the Scheme at any particular point of

time, due to any cause or reason whatsoever including but not limited to expenditure incurred

by the Scheme, dividend payouts if any, all cash not invested at all times as it may keep a

portion of funds in cash to meet redemption, purchase price different from the closing price

of securities on the day of rebalance of Index, etc.

Trustee Motilal Oswal Trustee Company Ltd., a Company incorporated under the Companies Act, 1956

and approved by SEBI to act as Trustee of the Schemes of Motilal Oswal Mutual Fund.Unit The interest of Unitholder which consists of each unit representing one undivided share in

the assets of the Scheme.

Unitholder / Investor A person holding unit(s) in the Scheme of Motilal Oswal Mutual Fund offered under this SID.

Interpretation:

For all purposes of this SID, except as otherwise expressly provided or unless the context otherwise requires :

All references to the masculine shall include feminine and all reference to the singular shall include plural and vice-versa.

All references to dollars or $ refer to the Unites States Dollars and Rs refer to the Indian Rupees. A crore means ten million and a lakh

means a hundred thousand.

All references to timings relate to Indian Standard Time (IST).


12/36


E. DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY

It is confirmed that :

(i) The draft Scheme Information Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and the

guidelines and directives issued by SEBI from time to time.

(ii) All legal requirements connected with the launching of the Scheme as also the guidelines, instructions, etc., issued by the Government

and any other competent authority in this behalf, have been duly complied with.

(iii) The disclosures made in the Scheme Information Document are true, fair and adequate to enable the investors to make a well informed

decision regarding investment in the proposed Scheme.

(iv) The intermediaries named in the Scheme Information Document and Statement of Additional Information are registered with SEBI and

their registration is valid, as on date.

For Motilal Oswal Asset Management Company Limited

(Asset Management Company for Motilal Oswal Mutual Fund)

Sd/-

Place : Mumbai Trupti Vyas

Date : July 25, 2011 Compliance Officer


13/36


A. TYPE OF THE SCHEME

An open ended Exchange Traded Fund

B. INVESTMENT OBJECTIVE

The investment objective of the Scheme is to provide return byinvesting in Gold Bullion. The performance of the fund will be

benchmarked to the Spot Domestic Gold Price. However, the

performance of scheme may differ from that of the underlying index

due to tracking error.

There can be no assurance or guarantee that the investment

objective of the Scheme would be achieved.

C. ASSET ALLOCATION

The asset allocation pattern of the Scheme would be as follows:

Instruments Investment Pattern Risk Profile

Gold Bullion 95% to 100% Medium

Government Securities, 0% to 5% Low

Money Market Instruments

and cash at call

Note:

The Scheme will not make any overseas investment and investment

in derivatives. The Scheme will make investment in/purchase debt

and money market securities with maturity of upto 91 days only.

Explanation :

a. In case of securities where the principal is to be repaid in a

single payout the maturity of the securities shall mean residual

maturity. In case the principal is to be repaid in more than one

payout then the maturity of the securities shall be calculated

on the basis of weighted average maturity of security.

b. In case the maturity of the security falls on a non-business day then

settlement of securities will take place on the next business day.

The Scheme will retain the flexibility to invest in the entire range of

securities as per investment objectives of the Scheme and as per

the SEBI Regulations.

D. INVESTMENT BY THE SCHEME

The Scheme will invest in physical gold of the prescribed quality

and standard as prescribed and permitted by SEBI.

In addition to the securities stated in the table above, the Scheme

may enter into repos/reverse repos (excluding corporate debt repo)

as may be permitted by RBI. From time to time, the Scheme mayhold cash. A part of the net assets may be invested in the

Collateralised Borrowing & Lending Obligations (CBLO) or repo or

in an alternative investment as may be provided by RBI to meet the

liquidity requirements.

Change in Asset Allocation Pattern

The Scheme, out of the funds allocated shall primarily invest in Gold

bullion and shall invest in debt and money market securities, only to

the extent necessary to meet the liquidity requirements for honouring

repurchase/redemptions/ expenses. In view of the nature of the

Scheme, the asset allocation pattern as indicated above may not

change, except in line with the changes made in SEBI (MF)

Regulations, from time to time.

II. INFORMATION ABOUT THE SCHEME

Investment in money market and debt instruments

The Scheme will also invest in money market and debt instruments.

Money market and debt instruments will include:

Money Market instruments as permitted by SEBI/RBI, call money

or an alternative investments for the call money market as may be

provided by RBI to meet the liquidity requirement such as CBLO/

REPO.

Certificate of Deposit (CDs).

Commercial Paper (CPs).

Securities created and issued by the Central and State Government

and/or repos/reverse repos in such Government Securities as may

be permitted by RBI (including but not limited to coupon bearing

bonds, zero coupon bonds and treasury bills).

Securities guaranteed by the Central and State Government

(including but not limited to coupon bearing bonds, zero couponbonds and treasury bills).

Debt obligations of domestic Government agencies and statutory

bodies, which may or may not carry a Central/State Government

guarantee.

Corporate debt and securities (for both public and private sector

undertakings) including Bonds, Debentures, Notes, Strips, etc.

Obligations of banks (both public and private sectors) and

development financial institutions.

Securitised Debt Obligations. Investments in such securities will not

exceed 50% of the net assets of the Scheme or such other limits as

may be prescribed from time to time.

The non-convertible part of convertible securities.

Pass through, Pay through or other Participation Certificates

representing interest in pool of assets including receivables.

Any other domestic fixed income securities including Structured

Obligations.

Any international fixed income securities as permitted by SEBI and

RBI from time to time.

Derivative instruments like Interest Rate Swaps, Forward Rate

Agreement and such other derivative instruments as permitted by

SEBI/RBI.

Any other like instrument as may be permitted by RBI/SEBI/such

other Regulatory Authority from to time.

The securities mentioned above and such other securities, the Scheme

is permitted to invest could be listed, unlisted, privately placed, secured

or unsecured. The securities may be acquired through Initial Public

Offerings (IPOs), secondary market operations, private placements, right

offers or negotiated deals.

The investment restrictions and the limits are specified in the Schedule

VII of SEBI (Mutual Funds) Regulations, 1996 which are mentioned in

the section Investment Restrictions.


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E. INVESTMENT STRATEGY

The Scheme will invest the funds in physical gold having 99.5%

purity (fineness), with the objective to generate returns that are in

line with the performance of gold, subject to tracking errors. The

Scheme investments will be in accordance with investment objective

of the Scheme and provisions of SEBI regulations.

Risk Control

Risk is an inherent part of the investment function. Effective Risk

management is critical to fund management for achieving financial

soundness. Investment by the Scheme would be made as per the

investment objective of the Scheme and in accordance with SEBI

Regulations. AMC has adequate safeguards to manage risk in the

portfolio construction process. Risk control would involve managing

risk in order to keep in line with the investment objective of the

Scheme. The risk control process would include identifying the risk

and taking proper measures for the same. Further, AMC has

implemented the Front Office System for managing r isk. The system

has incorporated all the investment restrictions as per the SEBI

guidelines and enables identifying and measuring the risk through

various risk management tools like various portfolio analytics, risk

ratios, average duration and analyses the same and acts in a

preventive manner. The AMC will appoint at least two Authorised

Participants who would endeavour to provide liquidity of the units of

the Scheme on the exchange at all times.

Change in Investment Pattern

Subject to SEBI Regulations, the asset allocation pattern indicated

above may change from time to time, keeping in view market

conditions, market opportunities, applicable regulations and political

and economic factors. It must be clearly understood that the

percentage stated above are only indicative and not absolute. These

proportions may vary substantially depending upon the perception

of the AMC, the intention being all the times to seek to protect theinterest of the unit holders. Such changes in the investment pattern

will be for short term only.

The AMC retains the flexibility to invest across all the securities/

instruments in money market. The flexibi lity is being retained to adjust

the portfolio in response to a change in the risk-return equation for

asset classes under investment, with view to maintain risk within

manageable limits.

Investment by AMC in the Scheme

AMC may invest in the Scheme during the New Fund Offer or on an

ongoing basis in accordance with the SEBI Regulations. The AMC

shall not charge investment management fees on investment by

the AMC in the Scheme.

Investment of Subscription Money

The Mutual Fund / AMC shall commence investment out of the NFO

proceeds received in accordance with the investment objectives of

the Scheme only on or after the closure of the NFO period.

Tracking Error

Tracking error is defined as the standard deviation of the difference

between the daily returns of the Underlying benchmark and the NAV

of the Scheme at any particular point of t ime. NAV of the Scheme is

dependant on valuation of gold. Gold has to be valued based on the

formula prescribed by SEBI. NAV so computed may vary from the

price of Gold in the domestic market. Tracking Error may arise due

to the following reasons : -

1. Delay in the purchase or sale of gold due to

- Illiquidity of gold,

- Delay in realisation of sale proceeds,

- Creating a lot size to buy the required amount of gold

2. The Scheme may buy or sell the gold at different points of timeduring the trading session at the then prevailing prices which may

not correspond to its closing prices.

3. The potential for trades to fail, which may result in the Scheme not

having acquired gold at a price necessary to track the benchmark

price.

4. The holding of a cash position and accrued income prior to

distribution of income and payment of accrued expenses.

5. Disinvestments to meet redemptions, recurring expenses, dividend

payouts etc.

6. Execution of large buy / sell orders

7. Transaction cost (including taxes and insurance premium) and

recurring expenses

8. Realisation of Unit holders funds

Tracking error due to movement in prices of physical gold will impact the

performance of MOSt Gold Shares. However, the Scheme will endeavor

to keep tracking error as low as possible by :

- Use of gold related derivative instruments, as and when allowed by

SEBI (MF) Regulations

- Rebalancing of the portfolio.

- Setting off of incremental subscriptions against redemptions.

The AMC would monitor the tracking error of the Scheme on an ongoing

basis and would seek to minimize tracking error to the maximum extent

possible. Under normal market circumstances, such tracking error is not

expected to exceed by 2% p.a. However, in abnormal circumstances,

the tracking error may exceed the above limits. There can be no

assurance or guarantee that the Scheme will achieve any particular level

of tracking error relative to performance of the Underlying Benchmark.

Debt Markets in India

Debt market as the name suggests is a market where debt instruments

or bonds are traded. The most distinguishing feature of these instruments

is that the return is fixed i.e. they are as close to being as risk free as

possible, if not totally risk free. The fixed return on the bond is known as

the interest rate or the coupon rate. The Indian Debt Markets are today

one of the largest in Asia and can be divided into two categories, firstly

the government securities market or the G-Sec markets consisting of

Central Government and State Government Securities (therefore loans

being taken by the Central and State Governments), Treasury Bills, Dated

Government Securities, Coupon Bearing Bonds, Floating Rate Bonds,

Zero Coupon Bonds, State Government Debt, State Government Loans,

Coupon Bearing Bonds etc. and secondly, Non-Government Securities

which mainly consists of FI (Financial Institutions) bonds, PSU (Public

Sector Units) bonds, corporate bonds/debentures and Pass Through

Certificates (PTCs). These can be in the nature of fixed interest bearing,

floaters or deep discount bonds. The government securities segment is


15/36


the most dominant category in the debt market. Risks associated with debt

instruments are credit risk, liquidity risk and price risk/interest rate risk.

The money market segment also deals in fixed and floating rate

instruments. However, the difference between money and bond markets

is that the instruments in the bond markets have a larger time to maturity

(one year and above). The money market on the other hand deals with

instruments that have a maturity of less than one year. The Corporatebond market, though relatively less liquid, is also fast developing with an

increased participation from the banks, financial institutions, mutual funds,

insurance companies and cash rich corporates. Also there are a large

number of instruments available like, Certificates of Deposits, Commercial

Papers and medium to long dated fixed income instruments, PTCs and

derivatives. The yield curve tends to be positive sloping i.e. yield of shorter

dated securities being lower than that of longer dated ones.

The government finances its fiscal deficit through borrowing. It borrows

by issuing G-Secs that are sovereign securities and are issued by the

Reserve Bank of India (RBI) on behalf of Government of India, in lieu of

the Central Governments market borrowing programme.

The money markets in India essentially consist of call money market

(i.e. market for overnight and term money between banks and institutions),

repo transactions (temporary sale with an agreement to buy back the

securities at a future date at specified price), commercial papers (CPs,

short term unsecured promissory note, generally issued by corporates),

certificate of deposits (CDs, issued by banks) and Treasury Bills (issued

by RBI). Debt market is a predominantly institutional market, the key

money market players being banks, financial institutions, insurance

companies, mutual funds, primary dealers and corporates.

The various instruments currently available for investments are:

Instruments Current Yields Liquidity

Central/State Government securit ies 8.75% - 8.95% Very high

PSU Bonds/Corporate debentures 9.55% - 9.70% Medium - High

Commercial Papers 9.20% - 9.70% Low - Medium

Certificate of deposits 9.25% - 9.35% Medium - High

Call/Notice Money 8.55% - 8.65% Very high

Repo (RBI)/CBLO 8.40% - 8.50% Very high

The actual yields will, however, vary in line with general levels of interest

rates and debt/money market conditions prevailing from time to time.

Differentiation of Motilal Oswal MOSt Shares Gold ETF with other

existing Scheme of Motilal Oswal Mutual Fund

Motilal Oswal MOSt Shares Gold ETF is an open ended exchange

traded fund that invests at least 95% in gold bullion, while the balance in

Commercial Papers, CDs, Short Term Debentures, Pass through

Certificates and Floating Rate Notes. The following table shows the

differentiation of the Scheme with the existing Scheme of Motilal Oswal

Mutual Fund:

Name of theScheme

InvestmentObjective

AssetAllocation

ProductDifferentiation

AUM(`Crores)

(As onJanuary 31,

2012)

No. of Folios(As on

January 31,2012)

Motilal Oswal MOStShares M50 ETF(MOSt Shares M50)

The Scheme would investat least 95% in thesecurities constitutingMOSt 50 Basket and thebalance in debt and money

market instruments andcash at call.

MOSt Shares M50 is an open endedexchange traded fund which investsin securities constituting MOSt 50Basket

85.86 13165The Scheme seeksinvestment return thatcorresponds (before feesand expenses) generallyto the performance of the

MOSt 50 Basket(Underlying Basket),subject to tracking error.

Motilal Oswal MOStShares Midcap 100ETF (MOSt SharesMidcap100)

The Scheme would investat least 95% in thesecurities constituting CNXMidcap Index and thebalance in debt and moneymarket instruments andcash at call.

MOSt Shares Midcap100 is an openended Index exchange traded fundwhich invests in securities constitutingCNX Midcap Index in the sameproportion as in the Index.

78.33 10094The Scheme seeksinvestment return thatcorresponds (before feesand expenses) to theperformance of CNX MidcapIndex (Underlying Index),subject to tracking error.

Motilal Oswal MOStShares NASDAQ-100 ETF (MOStShares NASDAQ100)

The Scheme would investat least 95% in thesecurities constitutingNASDAQ-100 Index andthe balance in OverseasDebt and Money marketinstruments and cash atcall, mutual fund schemesor exchange traded fundsbased on NASDAQ-100Index.

The Scheme will invest in the securitieswhich are constituents of NASDAQ-100 Index in the same proportion as inthe Index.

49.09The Scheme seeksinvestment return thatcorresponds (before feesand expenses) generallyto the performance of theNASDAQ-100 Index,

subject to tracking error.

1545

Motilal Oswal MOSt10 Year Gilt Fund(MOSt 10 Year GiltFund)

The Scheme would investat least 90% in 10 yr Bench-mark Government Securityand the balance in OtherGovernment Securities (7to 12 years), T-Bills, CashManagement Bills, CBLO &Repo.

The Scheme will invest in 10 YearBenchmark GOI Dated Security* andCRISIL Gilt Index.* NDS OM (Negotiated Dealing SystemOrder Matching) Last traded Price

134.30The primary investmentobjective of the Scheme isto generate credit risk-freereturns by investing in aportfolio of securitiesissued by the CentralGovernment and StateGovernment.However, there can be noassurance or guaranteethat the investmentobjective of the Schemewould be achieved.

969


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F. FUNDAMENTAL ATTRIBUTES

Following are the Fundamental Attributes of the Scheme, in terms

of Regulation 18 (15A) of the SEBI (MF) Regulations :

(i) Type of a Scheme :

Open Ended Exchange Traded Fund

(ii) Investment Objective :

Investment Objective: Please refer to section Investment

Objective.

Investment pattern - Please refer to section Asset

Allocation.

(iii) Terms of Issue:

Provisions with respect to listing, repurchase, redemption, fees

and expenses are mentioned in the SID.

In accordance with Regulation 18(15A) of the SEBI (MF)

Regulations, the Trustees shall ensure that no change in the

fundamental attributes of the Scheme(s) and the Plan(s) /Option(s) thereunder or the trust or fee and expenses payable

or any other change which would modify the Scheme(s) and

the Plan(s) / Option(s) thereunder and affect the interests of

Unitholders is carried out unless:

A written communication about the proposed change is

sent to each Unitholder and an advertisement is given in

one English daily newspaper having nationwide circulation

as well as in a newspaper published in the language of

the region where the Head Office of the Mutual Fund is

situated; and

The Unitholders are given an option for a period of 30

days to exit at the prevailing Net Asset Value without any

exit load.

G. BENCHMARK INDEX

The performance of the Scheme will be benchmarked against Spot

Domestic Gold Price.

The Trustee reserves the right to change the benchmark for

evaluation of performance of the Scheme from time to time in

conformity with investment objective of the Scheme and

appropriateness of the benchmark subject to SEBI Regulations and

other prevailing guidelines, if any.

H. FUND MANAGER

Mr. Rajnish Rastogi is the Fund Manager of the Scheme and isresponsible for managing investments of the Scheme.

Mr. Rastogi, aged 40 years, is a CFA Charter holder given by the

CFA Institute, USA, a B.Tech. (Electrical Engineering) from Indian

Institute of Technology, Delhi and an M.Tech. (Management &

Systems) from Indian Institute of Technology, Delhi. He has 15

years of experience in the Financial Services Industry. Prior to

joining Motilal Oswal Asset Management Company Limited, he

was Director - Investments at HSBC Private Equity Advisors

(India) Pvt. Ltd., Mumbai. Earlier he had worked as Associate

Director at IL&FS Investment Managers Ltd. between July 2006

to April 2008 where he was responsible for making private equity

investments. He was Head Research at CRISIL Research

between Jan 2004 to July 2006 and was responsible for Industry

Research and Company Research undertaken by CRISIL.

Between May 1999 to May 2003, he had worked at Alliance

Bernstein LLP, New York, USA (NYSE AB) where he helped the

firm make investment decisions for technology, telecom and

healthcare sectors for its Strategic Value Fund and Advance Value

Hedge Fund. At Motilal Oswal Asset Management Company

Limited, he is designated as the Co-Head - Equities and is the

Fund Manager of Motilal Oswal MOSt Shares M50 ETF Motilal

Oswal MOSt Shares Midcap 100 ETF and Motilal Oswal MOSt

Shares NASDAQ-100 ETF (MOSt Shares NASDAQ 100).

I. INVESTMENT RESTRICTIONS

All the investments by the Scheme and the Fund shall always be

within the investment restrictions as specified in SEBI Regulations

as amended from time to time. Pursuant to the SEBI Regulations,

the following are some of the investment and other limitations as

presently applicable to the Scheme.

1. No term loans will be advanced by the Scheme.

2. The scheme shall invest in gold of 99.5% fineness.

3. As per Regulation 44(5)(b), the scheme may invest all its funds

in gold in accordance with its investment objectives, except to

the extent necessary to meet the liquidity requirements for

honouring repurchase or redemptions, as disclosed in the SAI.

4. Transfer of investments from one Scheme to another Scheme

in the Fund shall be allowed only if:

a. Such transfers are done at the prevailing market price for

quoted instruments on spot basis. Explanation: Spot basis

shall have same meaning as specified by Stock Exchange

for spot transaction.

b. The securities so transferred shall be in conformity with

the investment objective of the Scheme to which suchtransfer has been made.

5. The Scheme may invest in another Scheme under the same

AMC or any other Mutual Fund Without charging any fees,

provided that aggregate inter-Scheme investment made by all

the Schemes under the same management or in Schemes

under the management of any other AMC shall not exceed 5%

of the net asset value of the mutual fund.

6. Till the Regulations so require, the Fund shall buy and sell

securities on the basis of deliveries and shall in all cases of

purchases, take delivery of relative securities and in all cases

of sale, deliver the securities and shall in no case put itself in a

position whereby it has to make short sale or carry forward

transaction or engage in badla finance. Provided the MutualFund shall enter into derivatives transactions in a recognized

stock exchange, in accordance with the guidelines issued by

the SEBI.

7. Till the Regulations so require, the Fund shall get the securities

purchased transferred in the name of the Fund on account of

the Scheme, wherever investments are intended to be of a long-

term nature.

8. Pending deployment of funds of a Scheme in securities in terms

of investment objectives of the Scheme, a Mutual Fund can

invest the funds of the Scheme in short-term deposits of

scheduled commercial banks within the limits prescribed under

SEBI circular no. SEBI/IMD/CIR No.1/ 91171/07 dated April 16,


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2007 and SEBI/IMD/CIR No. 8/107311/07 dated October 26,

2007 and SEBI/IMD/CIR No.7/129592/08 dated June 23, 2008

and applicable guidelines.

9. The Fund may borrow to meet liquidity needs, for the purpose

of repurchase, redemption of units or payment of interest or

dividend to the unit holders and such borrowings shall not

exceed 20% of the net asset of the Scheme and duration ofthe borrowing shall not exceed 6 months. The Fund may borrow

from permissible entities at prevailing market rates and may

offer the assets of the Fund as collateral for such borrowing.

10. Till the time the Regulations so require, the Scheme shall not

make any investment in:

i Any unlisted security of an associate or group company of

the sponsor; or

ii Any security issued by way of private placement by an

associate or group company of the Sponsor; or

iii The listed securities of group companies of the Sponsor,

which is in excess of 25% of the net assets.

11. The Scheme shall not make any investment in any fund of funds

Scheme.

12. The Scheme will comply with any other Regulations applicable

to the investments of Mutual Funds from time to time.

All investment restrictions shall be applicable at the time of making

investments. The AMC may alter these limitations/objectives from

time to time to the extent the SEBI Regulations change so as to

permit Scheme to make its investments in the full spectrum of

permitted investments to achieve its investment objective. The

Trustees may from time to time alter these restrictions in conformity

with the SEBI Regulations.

Investment by AMC

The AMC may invest in the Scheme. The percentage of such

investment to the total net asset value may vary from time to time.

The AMC shall not charge any fees on investment by the AMC in

the units of the Scheme in accordance with sub-regulation 3 of

Regulation 24 of the Regulations and shall charge fees on such

amounts in future only if the SEBI Regulations so permit.

J. SCHEME PERFORMANCE

This Scheme is a new scheme and does not have any performance

track record.


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III. UNITS AND OFFER

This section provides details you need to know for investing in the Scheme.

A. NEW FUND OFFER (NFO)

New Fund Offer Period New Fund Offer Opens on : March 02, 2012

This is the period during which a new scheme New Fund Offer Closes on : March 16, 2012

sells its units to the investors.

The AMC reserve the right to extend the NFO period, subject to the condition

that NFO shall not be open for more than 15 days. Any such extension shall

be announced by way of notice published in one daily newspaper.

New Fund Offer Price: The units being offered will have a face value of `10/- each. Units will be

This is the price per unit that the investors have to issued at a premium equivalent to difference between allotment price and

pay to invest during the NFO. the face value of `10/-.

Minimum Amount for Application in the NFO `10,000/- and in multiples of Re.1/- thereafter.

Minimum Target amount: `10 Crore during the New Fund Offer.

This is the minimum amount required to operate the

scheme and if this is not collected during the NFO

period, then all the investors would be refunded theamount invested without any return. However, if AMC

fails to refund the amount within 5 business days,

interest as specified by SEBI (currently 15% p.a.) will

be paid to the investors from the expiry of 5 business

days from the date of closure of the subscription list.

Maximum Amount to be raised (if any) There is no upper limit on the total amount to be collected in the New Fund

This is the maximum amount which can be col lected Offer.

during the NFO period, as decided by the AMC.

Plans/Options Offered The Scheme offers only Growth Option.

Dividend Policy The Trustees may declare dividend subject to the availability of distributable

surplus calculated in accordance with SEBI (MF) Regulations. The actual

declaration of dividend and the frequency of distribution will be entirely at thediscretion of the Trustees. The dividend would be paid to the Unitholders whose

names appear in the Register of Unitholders as on the record date.

There is no assurance or guarantee to the Unitholders as to the rate of dividend

nor that the dividend would be paid regularly. If the Fund declares dividend,

the NAV will stand reduced by the amount of dividend and dividend distribution

tax (if applicable) paid. All the dividend payments shall be in accordance and

compliance with SEBI & NSE/BSE Regulations, as applicable from time to

time.

Allotment Subject to the receipt of the minimum subscription amount, allotment would

be made to all the valid applications of the Unitholders received during the

NFO Period. Allotment would be completed within 5 business days after the

closure of the NFO.

The process will be as follows

Each Creation Lot would consist of 10 units of Motilal Oswal MOSt Shares

Gold ETF, where one unit would represent 1gm of gold with 99.5% purity

(fineness). As explained earlier, the Creation Lot is made up of 2 components

i.e. Portfolio Deposit and Cash Component. The Portfolio Deposit will consist

of physical gold in a pre defined quantity and in multiples of 1 Kg, 100g and

10g with purity of 995 parts per 1000 of physical gold. The quantity and purity

(fineness) of physical gold will be defined and announced by the AMC from

time. The value of this Portfolio Deposit will change due to change in the

domestic spot price of gold during the day. The cash component would be

attributed towards the expenses of the fund.


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The example of Creation Unit is as under :

No. of units in one creation unit 10

Value of one creation unit (a) 28595

Value of gold (b) 28309

Cash component (c=a-b) 286

*The above example is based on the domestic spot price of gold as

on 06/9/2011

Value of Portfolio Deposit `28309

Value of Cash Component `286

Total Value of Creation Unit `28595

Allotment of units under the Scheme would be at the discretion of the Trustee.

The Trustees reserve the right to reject any application without assigning any

reason thereof.

An allotment advice stating the number of units allotted would be dispatched

by ordinary post to each Unitholder, not later than 5 business days after the

closure of NFO and the units will be credited to the DP account of the applicant

as per the details provided in the application form. Any excess amount, if any,

would be refunded to the Unitholder.

Refund In accordance with the Regulations, if the Scheme fails to collect the minimum

subscription amount as specified above, the Fund shall be liable to refund the

subscription amount money to the applicants.

In addition to the above, refund of subscription money to applicants whose

applications are invalid for any reason whatsoever or where the Demat details

provided in the application form does not match with the details with the

Depository records, will commence immediately after the allotment process is

completed. Full amount will be refunded within 5 business days of closure of

NFO. If the Fund refunds the application amount later than 5 business days,

interest @ 15% p.a. for delay period will be paid and charged to the AMC.Who can invest This is an indicative list and you are requested to consult your financial

This is an indicative list and you are requested to advisor. The following are eligible to subscribe to the units of the Scheme:

consult your financial advisor to ascertain whether 1. Resident adult individuals, either singly or jointly (not exceeding three)

the scheme is suitable to your risk profile. or on anyone or Survivor basis.

2. Minors through Parents/Lawful Guardian.

3. Hindu Undivided Family (HUF) through its Karta.

4. Partnership Firms in the name of any one of the partner.

5. Proprietorship in the name of the sole proprietor.

6. Companies, Body Corporate, Societies, (including registered co-operative

societies), Association of Persons, Body of Individuals, Clubs and Public

Sector Undertakings registered in India if authorized and permitted to invest

under applicable laws and regulations.

7. Banks (including co-operative Banks and Regional Rural Banks), Financial

Institutions.

8. Mutual Fund schemes registered with SEBI.

9. Non-Resident Indians (NRIs) / Persons of Indian Origin (PIOs) residing

abroad on repatriation basis and on non-repatriation basis.

10. Foreign Institutional Investors (FII) registered with SEBI on repatriation

basis (subject to RBI approval).

11. Charitable or Religious Trusts, Wakf Boards or endowments of private

trusts (subject to receipt of necessary approvals as Public securities as

required) and private trusts authorized to invest in units of Mutual Fund

schemes under their trust deeds.


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12. Army, Air Force, Navy, Para-military funds and other eligible institutions.

13. Scientific and Industrial Research Organizations.

14. Multilateral Funding Agencies or Bodies Corporate incorporated outside

India with the permission of Government of India Reserve Bank of India.

15. Overseas Financial Organizations which have entered into an arrangement

for investment in India, inter-alia with a Mutual Fund registered with SEBIand which arrangement is approved by Government of India.

16. Provident / Pension / Gratuity / Superannuation and such other retirement

and employee benefit and other similar funds as and when permitted to

invest.

17. Other Associations, Institutions, Bodies etc. authorized to invest in the

units of Mutual Fund.

18. Trustees, AMC, Sponsor or their associates may subscribe to the units of

the Scheme.

19. Such other categories of investors permitted by the Mutual Fund from time

to time, in conformity with the SEBI Regulations.

Where can you submit the filled up applications During the NFO period, the applications can be submitted at any of the branches

of the collecting bankers or Investor Service Centres of Motilal Oswal Asset

Management Company Limited or offices of stock brokers registered with NSE

and BSE. For details, please refer end of this document.

Motilal Oswal Mutual Fund shall as collecting banker for the New Fund Offer.

AMC reserves the right to appoint additional collecting bankers during the

NFO Period and change the bankers and/or any of the bankers appointed

subsequently.

As per the provisions of SEBI Circular No. SEBI/IMD/Cir No. 11/183204 dated

November 13, 2009, investors who wish to subscribe to the units may register

with trading members of National Stock Exchange of India Ltd. (NSE) and

Bombay Stock Exchange Ltd. (BSE) by submitting the application form and

required documentation as prescribed. The respective trading member would

then place orders in the NSEs and BSEs mechanism for subscription of units.

How to Apply Please refer to the SAI and Application form for the instructions.

Listing The units of the Scheme would be listed on National Stock Exchange of India

Ltd. (NSE)/ Bombay Stock Exchange Ltd. (BSE) within 5 business days of

allotment.

The AMC reserves the right to list the units of the Scheme on any other

recognized stock exchange.

Dematerialization i. The units of the Scheme are available in the Dematerialized (electronic)

mode.

ii. The applicant under the Scheme are required to have a beneficiary account

with a Depository Participant of NSDL/CDSL and are required to indicate

in the application the DPs name, DP ID Number and beneficiary account

number of the applicant with the DP.

iii. The units of the Scheme are issued/repurchased and traded compulsorily

in dematerialized form.

Applications without relevant details of their depository account are liable to

be rejected.

Special Products / facilities available during the NFO The Mutual Fund will offer ASBA facility during the NFO of the Scheme.

ASBA is an application containing authorisation given by the Investor to block

the application money in his specified bank account towards the subscription

of the units offered during the NFO of Scheme. If an Investor is applying through

ASBA facility, the application money towards the subscription of units shall be

debited from his specified bank account only if his/her application is selected

for allotment of units. Please refer to the SAI for more details.


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The policy regarding reissue of repurchased units, Units once redeemed/repurchased will not be re-issued.

including the maximum extent, the manner of reissue,

the entity (the scheme or the AMC) involved in the same.

Restrictions, if any, on the right to freely retain or As the units of the Scheme will be issued in demat form, the units will be

dispose of units being offered. transferred and transmitted in accordance with the provisions of SEBI (Depositories

and Participants) Regulations, as may be amended from time to time.

The delivery instructions for transfer of Units will have to be lodged with the

Depository Participant (DP) in the requisite form as may be required from time

to time and transfer will be effected in accordance with the rules/regulations

as may be in force governing transfer of securities in demat form.

B. ONGOING OFFER DETAILS

Ongoing Offer Period The Scheme will re-open on an ongoing basis within 10 business days after

This is the date from which the scheme will reopen for the date of closure of the NFO.

subscriptions/ redemptions after the closure of the NFO period.

Ongoing price for subscription (purchase by investors On the Exchange :

This is the price you need to pay for purchase As the Scheme would be listed on the exchange, the investor can buy units on an

ongoing basis on the National Stock Exchange of India Ltd. (NSE) and Bombay

Stock Exchange Ltd. (BSE) at the traded prices which may be close to the actual

NAV of the Scheme. The units are purchased in round lots of 1 unit.

Directly with the Mutual Fund :

The authorized participant/any investor can subscribe the units of the Scheme

directly with the Mutual Fund only in creation unit size at the applicable NAV of

the Scheme. The number of units of the Scheme that authorized participant/

investor can create is 10 units and in multiples thereafter.

Ongoing price for redemption (sale) by investors On the Exchange :

This is the price

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