Creation Procedure

T+0 Creation Orders

When an investor places a creation order with a broker, the broker will check the investor’s account for the existence of the requisite portfolio stocks and cash component. If the assets in the account are as specified in the current PCF, then the broker will pass the order to an Authorized Participant through the Takasbank terminal. Upon the Authorized Participant’s approval, Takasbank will check the investor’s account electronically and, if the portfolio and the cash component at the account match the PCF, Takasbank will transfer these assets to a restricted account from which they cannot be removed other than in connection with the creation order. The order will then be forwarded to the Fund’s Board for approval. The Fund’s Board will reply within 30 minutes. If the order is approved, Takasbank will transfer the assets into the Fund’s account and transfer the Fund shares into the investor’s account electronically.

If an investor places a creation order with an Authorized Participant, the Authorized Participant will check the investor’s account for the existence of the requisite portfolio of stocks and the cash component. If the assets in the account are as specified in the current PCF, then the authorized Participant will forward the order to Takasbank. Upon the Authorized Participant’s approval, Takasbank will check the investor’s account electronically and, if the portfolio of stocks and the cash component in the account matches the PCF, then Takasbank will transfer the assets to a restricted account from which they cannot be removed other than in connection with the creation order. The order will then be forwarded to the Fund’s Board for approval. The Fund’s Board will reply within 30 minutes. If the order is approved, then Takasbank will transfer the assets into the Fund’s account and transfer the Fund shares into the investor’s account electronically.

An investor may deliver any missing portfolio stocks through a wire transfer. However, those portfolio stocks must exist in the investor’s account before the order is given to Takasbank.

T+2 Creation Orders

  • If the requisite portfolio stocks are not in an investor’s account, the investor may buy missing portfolio stocks needed for a creation order on the BIST . 

    • Investors will effect transactions through their own accounts with an Authorized Participant. If an investor does not have an account with an Authorized Participant, he shall use the broker’s account at the Authorized Participant.

      • If an investor decides to make a partial purchase he must wire any missing portfolio stocks into the account at the Authorized Participant.

        • Before an investor places a creation order, the Authorized Participant will inform the investor of the PCF. The investor will make any necessary transactions on the BIST and create his own portfolio matching the current PCF.

          • The Authorized Participant checks whether the investor’s portfolio matches the PCF, if not, the Authorized Participant will inform the investor of the missing components. 

            • The Authorized Participant will check the investor’s account and make sure that all transactions needed for the creation order have been effected and will place the necessary restrictions on the assets to be used for creation.

              • The Authorized Participant will then notify Takasbank within the time frame defined in the Fund’s prospectus. Takasbank will check whether the Fund has sufficient shares for creation. If there are enough shares, the order will be forwarded to the Fund’s Board for approval. The Fund’s Board will reply within 30 minutes. If the order is approved the transaction is registered and reflected into the Fund’s accounts as a T+2 creation order.

                • Approval of the order will be sent to the Authorized Participant and the creation order will be finalized.

                  • The finalized order will be filled when the portfolio of stocks and the cash component are transferred into the Fund’s account and the Fund shares are transferred into the investor’s account on the settlement date of the stocks acquired on the BIST .

                    • If the creation order fails, the Authorized Participant will act as the responsible party as defined in the Authorized Participant Agreement. If the creation order fails on T+2, the Fund Board may sell fund shares on the BIST and complete the missing shares on T+3 needed for creation, or the Fund Board may redeem fund shares on T+0. Due to the creation order failure, the Authorized Participant will be required to pay a penalty fee to the Fund. However if the shares are not delivered to the fund due to a failure in the settlement system, the fund may not require a penalty fee. The Fund Board may ask for a Letter of Credit from the Authorized Participant.

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