BEA (MPF) Value SchemeExplanatory Memorandum

Mandatory Provident Fund

BEA (MPF) VALUE SCHEME

EXPLANATORY MEMORANDUM

BEA (MPF) Hotline : 2211 1777Fax : 3608 6003Web site address : http://www.hkbea.com

December, 2016

IMPORTANT:

• TheMaster Trust offers different Constituent Funds (i) investing in one ormoreApprovedPooled InvestmentFundsorApproved Index-TrackingFundswhichinvestinequitiesorbonds;or(ii)makingdirectinvestments,eachwithdifferentriskprofile.

• BEAMPF Conservative Fund does not provide any guarantee of therepaymentofcapital.

• Youshouldconsideryourownrisktolerancelevelandfinancialcircumstancesbeforemaking investment choices.When, in your selection of ConstituentFunds, you are in doubt as to whether a certain Constituent Fund issuitable for you (includingwhether it is consistentwith your investmentobjectives),youshouldseekfinancialand/orprofessionaladviceandchoosethe Constituent Fund(s)most suitable for you taking into account yourcircumstances.

IMPORTANT INFORMATION

The Sponsor accepts responsibil ity for the information contained in this ExplanatoryMemorandum as being accurate at the date of publication. However, neither the delivery ofthisExplanatoryMemorandumnortheofferoforagreementtoparticipateintheMasterTrustshallunderanycircumstancesconstitutearepresentationthattheinformationcontainedinthisExplanatoryMemorandum is correct as of any time subsequent to such date. This ExplanatoryMemorandummay from time to time be updated. Intending participants in theMaster Trustshould ask the Sponsor if any supplements to this ExplanatoryMemorandumor any laterExplanatoryMemorandumhavebeenissued.

TheMasterTrusthasbeenauthorisedbytheSecuritiesandFuturesCommissionandapprovedbytheMandatoryProvidentFundSchemesAuthorityinHongKong.Ingrantingsuchauthorisationand approval, neither the Securities and Futures Commission nor theMandatory ProvidentFundSchemesAuthoritytakesanyresponsibilityforthefinancialsoundnessoftheMasterTrustor for the accuracy of any of the statementsmade or opinions expressed in this ExplanatoryMemorandum. Such authorisation and approval does not imply official recommendation oftheMaster Trust by the Securities and Futures Commission or theMandatory Provident FundSchemesAuthority.

No action has been taken to permit an offering of participation in theMaster Trust or thedistributionofthisExplanatoryMemoranduminanyjurisdictionwhereactionwouldberequiredforsuchpurposeotherthanHongKong.Accordingly,thisExplanatoryMemorandummaynotbeusedinanyjurisdictionwhereitsdistributionisnotauthorised.

TABLE OF CONTENTS

Heading Page Number

DIRECTORY OF PARTIES ............................................................................................... 1

DEFINITIONS ................................................................................................................ 2

ABOUT BEA (MPF) VALUE SCHEME ............................................................................. 4

How to Join ..................................................................................................................................4

ContributionsandBenefits ..........................................................................................................4

ContributionsandBenefitsofSpecialVoluntaryContribution

AccountMembers .....................................................................................................................4

InvestmentofContributions ........................................................................................................5

CONSTITUENT FUNDS .................................................................................................. 6

InvestmentObjectivesandPolicies ..............................................................................................7

General .......................................................................................................................................15

Risk Factors ................................................................................................................................15

InvestmentandBorrowingRestrictions .....................................................................................21

Establishment,Termination,MergerandDivisionofConstituentFunds ..................................22

MANAGEMENT AND ADMINISTRATION .................................................................... 23

Sponsor ......................................................................................................................................23

InvestmentManager ..................................................................................................................23

Trustee........................................................................................................................................23

CONTRIBUTIONS ........................................................................................................ 24

MandatoryContributions ..........................................................................................................24

ContractualVoluntaryContributions .........................................................................................24

PaymentofContributionsGenerally .........................................................................................25

InvestmentofContributionsinConstituentFunds ....................................................................26

MandatestoInvestContributions .............................................................................................26

InstructionstoChangeInvestment ............................................................................................27

BENEFITS .................................................................................................................... 28

EntitlementtoBenefits ..............................................................................................................28

RealisationofUnits ....................................................................................................................28

PaymentofBenefits ...................................................................................................................29

TRANSFERS TO AND FROM OTHER SCHEMES ........................................................... 31

TransferstoOtherSchemesorotheraccount(s)withintheMasterTrust .................................31

TransfersfromOtherSchemes ...................................................................................................32

CALCULATION OF NET ASSET VALUE AND ISSUE AND REALISATION PRICES ........... 33

CalculationofNetAssetValue ..................................................................................................33

CalculationofIssueandRealisationPrices ................................................................................33

PublicationofPrices ...................................................................................................................34

SuspensionofCalculationofNetAssetValue ...........................................................................34

CHARGES AND EXPENSES .......................................................................................... 35

Sponsor's Fees ............................................................................................................................35

TrusteeandInvestmentManagementFees ...............................................................................35

No SwitchingFee .......................................................................................................................36

ChangeinMandateFee .............................................................................................................36

OtherChargesandExpenses ......................................................................................................36

CashRebatesandSoftCommissions ..........................................................................................36

Fee Table ....................................................................................................................................37

TAXATION .................................................................................................................. 44

ForEmployers .............................................................................................................................44

ForEmployees ............................................................................................................................44

ForSelf-EmployedPersons .........................................................................................................44

FortheMasterTrust ...................................................................................................................44

GENERAL INFORMATION ........................................................................................... 45

Accounts,ReportsandStatements ............................................................................................45

TrustDeed ..................................................................................................................................45

ModificationofTrustDeedandParticipationAgreements .......................................................45

Termination,MergerorDivisionofMasterTrust ......................................................................45

MaterialContract .......................................................................................................................46

DocumentsAvailable .................................................................................................................46

APPENDIX .................................................................................................................. 47

Important – If you are in doubt about the meaning or effect of the contents of this

document, you should seek independent professional advice.

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DIRECTORY OF PARTIES

SponsorTheBankofEastAsia,Limited10DesVoeuxRoadCentral

HongKong

Trustee, Custodian and AdministratorBankofEastAsia(Trustees)Limited

32nd Floor, BEA Tower,MillenniumCity5,

418KwunTongRoad,KwunTong,Kowloon,

HongKong

Investment ManagerBEAUnionInvestmentManagementLimited

5thFloor,10DesVoeuxRoadCentralHongKong

Legal AdvisersDeacons

5thFloor,AlexandraHouse18ChaterRoad

Central,HongKong

AuditorsKPMG

8thFloor,Prince'sBuilding10ChaterRoad,Central

HongKong

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DEFINITIONS

“Approved Index-Tracking Fund”

an index-tracking collective investment scheme, as defined insection1(1)ofSchedule1totheGeneralRegulation,approvedby theAuthority for thepurposesof section6AofSchedule1totheGeneralRegulation

“Approved Pooled Investment Fund”

has themeaning given to it by section 6 of the GeneralRegulation

“Authority” theMandatory Provident Fund SchemesAuthority of HongKong

“Business Day” a day (other than Saturday) onwhich banks in Hong Kongare open for normal banking business provided thatwhere,asa resultofaNumber8TyphoonSignalorhigherorablackrainstormwarning or other similar event, the period duringwhich banks in Hong Kong are open for normal bankingbusinessonanydayisreduced,suchdayshallnotbeaBusinessDayunlesstheTrusteeotherwisedetermines

“Commission” theSecuritiesandFuturesCommissionofHongKong

“Constituent Fund” aseparatepoolofassetsoftheMasterTrust,whichisinvestedand administered separately from other assets of theMasterTrust

“General Regulation” theMandatoryProvidentFundSchemes(General)Regulation

“HKD” and “HK dollars” thecurrencyofHongKong

“Hong Kong” theHong Kong Special Administrative Region of the People’sRepublicofChina

“Investment Manager” BEAUnion InvestmentManagement Limited in its capacity asinvestmentmanager of theMaster Trust and the ConstituentFunds

“Master Trust” BEA(MPF)ValueScheme

“maximum level of relevant income”

hasthesamemeaningasintheMPFOrdinance

“Member” amember of theMaster Trust being, (a) a self-employedpersonwhoparticipatesintheMasterTrustor(b)anemployeeof a participating employerwho applies for and is grantedmembershipoftheMasterTrustor(c)anyothereligiblepersonwho participates in theMaster Trust (including a SpecialVoluntaryContributionAccountMember)

“minimum level of relevant income”

hasthesamemeaningasintheMPFOrdinance

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“MPF Ordinance” theMandatory Provident Fund SchemesOrdinance of HongKong

“personal account” hasthesamemeaningasintheGeneralRegulation

“relevant income” hasthesamemeaningasintheMPFOrdinance

“Special Voluntary Contribution Account Member”

aMemberwho has entered into a ParticipationAgreementwiththeTrusteetoparticipate intheMasterTrustasaSpecialVoluntaryContributionAccountMember

“Sponsor” or “Bank” TheBankofEastAsia,Limited

“Trustee” BankofEastAsia(Trustees)LimitedinitscapacityastrusteeoftheMasterTrust

“Trust Deed” the trust deed dated as of 17th August, 2012 establishing theMasterTrust,asamended

“Unit” 1 undivided share in the Constituent Fund to which theclass of Units relates. A fraction of a Unit shall represent thecorresponding fraction of an undivided share in the relevantConstituentFund

“USD” or “US dollars” thecurrencyoftheUnitedStatesofAmerica

“Valuation Date” everyBusinessDayorsuchotherdayordaysastheTrusteemaydeterminefromtimetotimeeithergenerallyorinrelationtoaparticularConstituentFund

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ABOUT BEA (MPF) VALUE SCHEME

BEA (MPF)Value Scheme is amaster trust establishedbya trustdeeddatedasof17thAugust,2012betweenTheBankofEastAsia,LimitedassponsorandBankofEastAsia(Trustees)Limitedastrustee.ItisestablishedunderandgovernedbythelawsofHongKong.

How to Join

The following persons are eligible to join theMaster Trust by executing a ParticipationAgreement:

• anyemployer;

• anyself-employedperson;

• anyemployeewhowishestotransfertotheMasterTrust,hisaccruedbenefitsattributableto(i)themandatorycontributionsmadebyhiminrespectofhiscurrentemployment;or(ii)themandatory contributionspaidbyor in respectof suchemployee thatareattributabletohisformeremploymentsorformerself-employments;or(iii)alloranyoneormoreofhispersonalaccountswithanotherregisteredscheme;or

• anyeligibleperson,includinganypersonwhowishestojointheMasterTrustasapersonalaccount holder or onewhowishes tomake special voluntary contributions to theMasterTrust,asaSpecialVoluntaryContributionAccountMember.

A sample ParticipationAgreementmay be obtained from the Sponsor or the Trustee. Thecompleted ParticipationAgreementmust be returned to the Trustee in themanner as set outin the ParticipationAgreement, togetherwith such information and documents asmay bereasonably required or requested by the Trustee. Under the ParticipationAgreement, eachpersonthatjoinstheMasterTrustagreestobeboundbythetermsoftheTrustDeed.

Contributions and Benefits

All participating employers,Memberswho are employees of such participating employers andMemberswho are self-employed personsmustmakemandatory contributions to theMasterTrustinaccordancewiththeMPFOrdinance.Theycanalsochoosetomakeadditionalvoluntarycontributions,eitheronaregularbasisorfromtimetotime.TheTrusteewillapplycontributionsmadebyoronbehalfofaMembertoacquireUnitsintheConstituentFundsfortheaccountofsuchMember.Forfurtherdetails,refertothe"Contributions"sectiononpage24.

The benefits payable to aMember on retirement or in other allowable circumstances aredependentonthecontributionspaidduringtheMember'speriodofmembershipoftheMasterTrust and the investment return on those contributions during the period. For further details,refertothe"Benefits"sectiononpage28.

Contributions and Benefits of Special Voluntary Contribution Account Members

Anyeligibleperson can choose to join theMasterTrustandmakevoluntary contributions (forthe purposes hereof to be referred to as ”special voluntary contributions”), bymaking eithermonthlypaymentsorlumpsumpaymentsfromtimetotime.SuchapersonisaSpecialVoluntaryContributionAccountMember.

Currently, the Trusteewill only accept a personwho falls under any one of the followingcategoriestojoinasaSpecialVoluntaryContributionAccountMember:-

• anemployee;

• aself-employedperson;or

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• amemberoraformermemberofaregisteredscheme(asdefinedintheMPFOrdinance)oranORSOexemptedschemeoranORSOregisteredscheme(eachasdefinedintheGeneralRegulation).

TheTrusteewillapplyspecialvoluntarycontributionsmadebyaSpecialVoluntaryContributionAccountMember to acquireUnits in the Constituent Funds selected by such Special VoluntaryContributionAccountMember.

ThebenefitspayabletoaSpecialVoluntaryContributionAccountMemberaredependentontheamountofspecialvoluntarycontributionsmadebytheSpecialVoluntaryContributionAccountMemberduring theperiodwhilst he is a SpecialVoluntaryContributionAccountMember andthe investmentreturnonthosespecialvoluntarycontributionsduringsuchperiod.Pleaserefertothesectionheaded"ChargesandExpenses"forthefees,chargesandexpensespayablebyaSpecialVoluntaryContributionAccountMember.

Special Voluntary Contribution AccountMembersmay elect tomake special voluntarycontributionstotheMasterTrustongivingnotlessthan1month'snotice(orsuchshorterperiodofnoticeastheTrusteemayinitsdiscretionagreetoaccept)inaformspecifiedbytheTrustee.Such contributions are treated as voluntary contributions for thepurposeof theMaster Trust.Payments of special voluntary contributions into theMaster Trust are subject to the followingrequirements, unlessotherwiseprovided in theParticipationAgreementand/or supplement totheParticipationAgreement:

• Minimumcontributionformonthlycontribution:HKD100;and

• Minimumcontributionforlumpsumcontribution:HKD500.

The Trusteemay revise the aboveminimum special voluntary contribution on giving not lessthan1month'spriorwrittennoticetoMembers(orsuchotherperiodofnoticeastheAuthorityortheCommissionmayrequire).

A Special Voluntary ContributionAccountMember is entitled to redeemUnits (all or part)attributabletohisspecialvoluntarycontributionsatanytime.AnyrequestbyaSpecialVoluntaryContributionAccountMembertoredeempartoftheUnitsattributabletohisspecialvoluntarycontributionsissubjecttoaminimumredemptionamountofHKD5,000,unlessotherwiseagreedbetween the relevant Special Voluntary ContributionAccountMember and the Trustee and assetoutintheParticipationAgreementand/orsupplementtotheParticipationAgreementoftherelevantSpecialVoluntaryContributionAccountMember.

Fortheavoidanceofdoubt,aSpecialVoluntaryContributionAccountMemberisnotrequiredtomakemandatorycontributionstotheMasterTrust.

Investment of Contributions

Contributionsare invested in1ormoreoftheConstituentFundsestablishedundertheMasterTrust,inaccordancewithinstructionsgivenfromtimetotimebyMembers.

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CONSTITUENT FUNDS

Under the Trust Deed, the Trustee is required to establish andmaintain separate ConstituentFunds inwhich contributionsmay be invested. The Constituent Funds are notional fundsestablishedwithintheMasterTrustandareonlyavailableforinvestmentbyMembers.

TheMasterTrustcurrentlyoffers10ConstituentFundsforinvestment,listedbelow:

NameofConstituentFund FundType InvestmentStructure

BEAGrowthFund MixedAssets Fund – Global–Maximum90%inequity

Investmentin2ormoreApprovedPooledInvestmentFunds

BEABalancedFund MixedAssets Fund – Global–Maximum60%inequity

Investmentin2ormoreApprovedPooledInvestmentFunds

BEAStableFund MixedAssets Fund – Global–Maximum40%inequity

Investmentin2ormoreApprovedPooledInvestmentFunds

BEAGlobalEquityFund EquityFund–Global Investment in a single ApprovedPooledInvestmentFund

BEAAsianEquityFund EquityFund–Asiaex-Japan Investmentin2ormoreApprovedPooledInvestmentFunds

BEAGreaterChinaEquityFund

EquityFund–GreaterChina Investment in a single ApprovedPooledInvestmentFund

BEAGreaterChinaTrackerFund

EquityFund–GreaterChina Investment in a single ApprovedIndex-TrackingFund

BEAHongKongTrackerFund

EquityFund–HongKong Investment in a single ApprovedIndex-TrackingFund

BEAGlobalBondFund BondFund–Global Investment in a single ApprovedPooledInvestmentFund

BEAMPFConservativeFund

MoneyMarket Fund–HongKong

DirectinvestmentinaportfolioofHK dollar deposits andHK dollardenominateddebtinstruments

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Investment Objectives and Policies

EachConstituentFundhasaseparateanddistinctinvestmentobjectiveandpolicy,asdescribedbelow.

Investors should note that the statements of expected return for each of the Constituent Funds set out below represent the Investment Manager's expectations based on the Investment Manager's past experience. However, there is no guarantee that such returns will be achieved. In addition, the return of a Constituent Fund over the short term may be greater than or less than the return of a Constituent Fund over the long term, due to market fluctuations and other factors. The "Risk and Return Profile" below is provided for reference only and investors should take into account your own risk tolerance level and financial circumstances before making investment choices. If you are in doubt as to whether a certain Constituent Fund is suitable for you (including whether it is consistent with your investment objectives), you should seek financial and/or professional advice.

BEA Growth Fund

Investment Objective: Toachieve longtermcapitalappreciationwithinacontrolledrisk-returnframework through investingmainly in global equitieswith some exposure in global debtsecurities/moneymarketinstruments.

Investment Policy: TheBEAGrowthFundwillinvestprimarilyinglobalequityandbondmarkets.TheBEAGrowthFundwillinvestinarangeofApprovedPooledInvestmentFundsmanagedbytheInvestmentManagertoobtainexposuretosuchmarkets(suchApprovedPooledInvestmentFunds selected by the InvestmentManager having regard to the investment objective andinvestment policy of the BEAGrowth Fund). The underlying assets of the BEAGrowth Fundare expected normally to be invested 60% to 90% in equities and 10% to 40% in cash, debtsecuritiesand/ormoneymarketinstruments.

TheInvestmentManagerwillinvesttheassetsoftheBEAGrowthFundonlyinApprovedPooledInvestmentFundswhichdonotenterintofinancialfuturesandoptionscontractsotherthanforhedging purposes. TheApproved Pooled Investment Fundsmay, however, engage in securitieslending.

The BEAGrowth Fundwill enter into financial futures and options contracts for hedgingpurposesonly.TheBEAGrowthFundwillnotengageinsecuritieslending.

Risk and Return Profile: TheBEAGrowthFundissuitableforinvestorswhoarewillingtoassumeahigher levelof risk toachievepotentiallyhigher long-termreturns.The InvestmentManagerexpects the return of the BEAGrowth Fund over the long term to reflectmovements in theglobalequitymarkets.

BEA Balanced Fund

Investment Objective: To achieve a stable rate of returnwith an opportunity for capitalappreciationthroughabalancedweightingofinvestmentsinglobalequitiesanddebtsecurities.

Investment Policy: The BEA Balanced Fundwill invest primarily in global equity and bondmarkets. The BEA Balanced Fundwill invest in a range of Approved Pooled Investment FundsmanagedbytheInvestmentManagertoobtainexposuretosuchmarkets(suchApprovedPooledInvestmentFundsselectedbytheInvestmentManagerhavingregardtotheinvestmentobjectiveand investment policy of the BEA Balanced Fund).The underlying assets of the BEA BalancedFund are expected normally to be invested 40% to 60% in equities and 40% to 60% in cash,debtsecuritiesand/ormoneymarketinstruments.

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The InvestmentManagerwill invest the assets of the BEA Balanced Fund only in ApprovedPooled InvestmentFundswhichdonotenter intofinancial futuresandoptionscontractsotherthan for hedging purposes. TheApproved Pooled Investment Fundsmay, however, engage insecuritieslending.

The BEA Balanced Fundwill enter into financial futures and options contracts for hedgingpurposesonly.TheBEABalancedFundwillnotengageinsecuritieslending.

Risk and Return Profile: The BEA Balanced Fund is suitable for investorswho arewilling toassume somedegreeof risk. The InvestmentManager expects the returnof theBEABalancedFundoverthelongtermtoreflectarateofreturnbetweenthereturnsoftheBEAGrowthFund(reflectingmovementsoftheglobalequitymarkets)andtheBEAStableFund(areturnexpectedtoexceedtheHongKonginflationrate).

BEA Stable Fund

Investment Objective: Tominimise short-term capital riskwithmodest capital growth overthe long term through a higherweighting of investments in global debt securities to providesteady income and lower exposure to global equities to providemodest potential for capitalappreciation.

Investment Policy: The BEA Stable Fundwill invest primarily in the global equity and bondmarkets. The BEA Stable Fundwill invest in a range of Approved Pooled Investment FundsmanagedbytheInvestmentManagertoobtainexposuretosuchmarkets(suchApprovedPooledInvestmentFundsselectedbytheInvestmentManagerhavingregardtotheinvestmentobjectiveand investment policy of the BEA Stable Fund).The underlying assets of the BEA Stable Fundare expected normally to be invested 10% to 40% in equities and 60% to 90% in cash, debtsecuritiesand/ormoneymarketinstruments.

TheInvestmentManagerwill investtheassetsoftheBEAStableFundonlyinApprovedPooledInvestmentFundswhichdonotenterintofinancialfuturesandoptionscontractsotherthanforhedging purposes. TheApproved Pooled Investment Fundsmay, however, engage in securitieslending.

TheBEAStableFundwillenterintofinancialfuturesandoptionscontractsforhedgingpurposesonly.TheBEAStableFundwillnotengageinsecuritieslending.

Risk and Return Profile: TheBEAStableFundissuitablefor investorswhowantastablereturnwith reduced risk through diversification. The InvestmentManager expects the return of theBEAStableFundoverthelongtermtoexceedtheHongKonginflationrate.

BEA Global Equity Fund

Investment Objective: Toprovideinvestorswithlongtermcapitalgrowththroughinvestinginadiversifiedglobalportfolio.

Investment Policy: TheBEAGlobalEquityFundwill investdirectly ina singleApprovedPooledInvestmentFund,namelytheBEAUnionInvestmentGlobalEquityFund(asub-fundoftheBEAUnion InvestmentCapitalGrowthFund), toobtainexposure to theglobal equitymarkets. TheApproved Pooled Investment Fund's portfoliowill primarily consist of global equity securities,including but not limited to common stocks, preferred stocks, AmericanDepositary Receipts("ADRs"), Global Depositary Receipts ("GDRs"), International Depositary Receipts ("IDRs"),approvedExchangeTradedFunds("ETFs"),warrants,ordebtsecuritiesconvertibleintocommonor preferred stocks, or ADRs, GDRs or IDRs, to the extent permitted under Schedule 1 of theGeneralRegulation.

InmanagingtheassetallocationoftheApprovedPooledInvestmentFund'sportfolio,themanageroftheApprovedPooledInvestmentFundwillfromtimetotimemakereferencetothegeographic

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allocation by one ormore global stockmarket indices. As an indication, the geographicallocationoftheApprovedPooledInvestmentFundisexpectedtobe:

UnitedStates – 0%-65%Europe – 0%-40%Others – 0%-50%

Pleasenotethattheabovefiguresareforindicativepurposesonly.TheactualallocationoftheApproved Pooled Investment Fund's portfolio between countries and regionsmay vary fromtime to time andmay be different from that as shown above according to the perception oftheApproved Pooled Investment Fund'smanager of prevailing and anticipated globalmarketconditions andwill be decided on the basis of themacro-economic analysis of theApprovedPooled Investment Fund'smanager of the globalmarkets and economic growth, inflation andinterest rate trends.

Normally not less than 70%of theApproved Pooled Investment Fund's assetswill be investedin equities. Any remaining assetsmay be held inmoneymarket instruments, cash or cashequivalents. In times of extreme volatility of themarkets or during severe adversemarketconditions, theApproved Pooled Investment Fundmay hold a substantial portion of its assetsinmoneymarketinstruments,cashorcashequivalentstosafeguardtheinvestmentportfoliooftheApprovedPooledInvestmentFund.

SubjecttotherestrictionsimposedbytheMPFOrdinance,theApprovedPooledInvestmentFundmayenter into financial futures,optionsand currency forward contracts forhedgingpurposestoreduceriskandprotectassetvalue,consistentwiththeinvestmentobjectiveoftheApprovedPooledInvestmentFund.Upto10%oftheassetsoftheApprovedPooledInvestmentFundmaybe invested in other securities (as permitted under Schedule 1 to theGeneral Regulation).TheApprovedPooledInvestmentFundmayengageinsecuritieslending.

TheBEAGlobalEquityFundmayholdcashandbankdepositsforancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

TheBEAGlobalEquityFundwillnotenter into financial futuresandoptions contracts foranypurposesandwillnotengageinsecuritieslending.

The InvestmentManager, BEAUnion InvestmentManagement Limited, is also themanager oftheApprovedPooledInvestmentFund.

Risk and Return Profile: TheBEAGlobalEquityFundissuitableforinvestorswhoarewillingtoassume a higher level of risk to achieve potentially higher long-term returns. The InvestmentManager expects the return of the BEAGlobal Equity Fund over the long term to reflectmovementsintheglobalequitymarkets.

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BEA Asian Equity Fund

Investment Objective: Toachieve longtermcapitalappreciationwithinacontrolledrisk-returnframeworkthroughinvestingmainlyinAsianex-Japanequities.

Investment Policy: The BEAAsian Equity Fundwill invest primarily in Asian ex-Japan equitymarkets.TheBEAAsianEquityFundwillinvestinarangeofApprovedPooledInvestmentFundsmanagedbytheInvestmentManagertoobtainexposuretosuchAsianex-Japanequitymarkets(suchApprovedPooledInvestmentFundsselectedbytheInvestmentManagerhavingregardtothe investmentobjectiveand investmentpolicyof theBEAAsianEquity Fund).Theunderlyingassets of the BEAAsian Equity Fund are expected normally to be invested 70% to 100% inequitiesofcompanieslistedintheAsianequitymarkets(includingbutnotlimitedtoSingapore,Malaysia,Korea,Taiwan,Thailand, Indonesia, thePhilippines, India,ChinaandHongKongbutexcluding Japan). The underlying assets of the BEAAsian Equity Fundmay be invested 0% to30%incash,debtsecuritiesand/ormoneymarketinstrumentsforcashmanagementpurpose.

The InvestmentManagerwill invest theassetsof theBEAAsianEquity Fundonly inApprovedPooled InvestmentFundswhichdonotenter intofinancial futuresandoptionscontractsotherthan for hedging purposes. TheApproved Pooled Investment Fundsmay, however, engage insecuritieslending.

TheBEAAsianEquityFundmayholdcashandbankdepositsforancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

TheBEAAsian Equity Fundwill enter into financial futures andoptions contracts for hedgingpurposesonly.TheBEAAsianEquityFundwillnotengageinsecuritieslending.

Risk and Return Profile: TheBEAAsianEquityFund is suitable for investorswhoarewilling toassume a higher level of risk to achieve potentially higher long-term returns. The InvestmentManager expects the return of the BEAAsian Equity Fund over the long term to reflectmovementsintheAsianex-Japanequitymarkets.

BEA Greater China Equity Fund

Investment Objective: Toprovide investorswith long-termcapitalgrowththroughexposure totheGreaterChinaequitymarkets.

Investment Policy: TheBEAGreaterChinaEquityFundwill investdirectly ina singleApprovedPooledInvestmentFund,namelytheBEAUnionInvestmentGreaterChinaGrowthFund(asub-fund of the BEAUnion Investment Capital Growth Fund), to obtain exposure to theGreaterChina equitymarkets. The Approved Pooled Investment Fundwill invest in a diversifiedportfolioprimarilyconsistingofsecuritiesthatareeither(a)listedinGreaterChinaor(b)issuedby companies that are incorporated in Greater China or companieswhich have significantoperations in or derive a significant portion of revenue or profits fromGreater China,whichincludesthePeople’sRepublicofChina(PRC),HongKong,MacauandTaiwan.

Normally not less than 70%of the assets of theApproved Pooled Investment Fundwill beinvesteddirectly inequities.Upto10%of theassetsof theApprovedPooled InvestmentFundmaybe invested inothersecurities (aspermittedunderSchedule1totheGeneralRegulation),includingothercollectiveinvestmentschemes,ChinaA-sharesandChinaB-shares.Anyremainingassetsmaybeheld in cashor cashequivalents. In timesof extremevolatilityof themarketsorduring severe adversemarket conditions, theApproved Pooled Investment Fundmay hold asubstantialportionofitsassetsincashorcashequivalents,orinvestinshort-termmoneymarketinstrumentstosafeguardtheinvestmentportfoliooftheApprovedPooledInvestmentFund.

TheApproved Pooled Investment Fundmay enter intofinancial futures andoptions contracts forhedgingpurposestoreduceriskandprotectorenhanceassetvalue,consistentwiththeinvestment

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objectiveoftheApprovedPooledInvestmentFund.TheApprovedPooledInvestmentFundmayengageinsecuritieslending.

TheBEAGreaterChinaEquityFundmayholdcashandbankdepositsforancillarypurposes,suchas formeeting redemption requests or defraying operating expenses. The BEAGreater ChinaEquityFundwillnotenterintofinancialfuturesandoptionscontractsforanypurposesandwillnotengageinsecuritieslending.

The InvestmentManager, BEAUnion InvestmentManagement Limited, is also themanager oftheApprovedPooledInvestmentFund.

Risk and Return Profile: The BEAGreater China Equity Fund is suitable for investorswho arewilling to assume a higher level of risk to achieve potentially higher long-term returns. TheInvestmentManager expects the return of the BEAGreater China Equity Fund over the longtermtoreflectmovementsintheGreaterChinaequitymarkets.

BEA Greater China Tracker Fund

Investment Objective: To provide investment returns, before fees and expenses, that closelycorrespondtotheperformanceoftheFTSE®GreaterChinaHKDIndex.

Investment Policy: TheBEAGreaterChinaTrackerFundwill investdirectlyinasingleApprovedIndex-Tracking Fund, namely the SPDR® FTSE®Greater China ETF (a sub-fund of the SPDR®ETFs). TheApproved Index-Tracking Fund aims to provide investment returns, before fees andexpenses, that closely correspond to the performance of the FTSE®Greater ChinaHKD Index.TheFTSE®GreaterChinaHKDIndexcomprisesofstockslistedinHongKong,Taiwan,Shanghai(Bshares),Shenzhen(Bshares)andSingapore,wheretheSingaporelistedstocksareclassifiedasHongKongnationalityinaccordancewithFTSEnationalityrules.

TheApproved-Index Tracking Fundmay use futures contracts listed on futures exchanges inHongKong,TaiwanandSingapore. Inaddition,theApproved-IndexTrackingFundmayreceiveotherderivatives, such aswarrants or options, as a result of corporate action fromunderlyinginvestments.TheApproved-IndexTrackingFundwillnotengageinsecuritieslending.

The BEAGreater China Tracker Fundmay hold cash and bank deposits for ancillary purposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

TheBEAGreaterChinaTrackerFundwillnotenter intofinancial futuresandoptionscontractsandwillnotengageinsecuritieslending.

WhilsttheinvestmentobjectiveoftheBEAGreaterChinaTrackerFundandtheApprovedIndex-TrackingFundistotracktheFTSE®GreaterChinaHKDIndex,therecanbenoassurancethattheperformanceoftheBEAGreaterChinaTrackerFundandtheApprovedIndex-TrackingFundwillatanytimebeidenticaltothatoftheFTSE®GreaterChinaHKDIndex.FurtherinformationontheFTSE®GreaterChinaHKDIndexcanbefoundintheAppendixannexedtothisExplanatoryMemorandum.

None of State Street Global Advisors Asia Limited (themanager of the SPDR® FTSE®GreaterChinaETF) andState StreetTrust (HK) Limited (the trusteeof the SPDR®FTSE®GreaterChinaETF)are related to theMasterTrustor theBEAGreaterChinaTrackerFundandnoneof theseentitieswill have any liability in connectionwith theMaster Trust or the BEAGreater ChinaTrackerFund.

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Tracking of the FTSE® Greater China HKD Index:

SPDR®FTSE®GreaterChinaETFlevel

Themanagerof the SPDR®FTSE®GreaterChinaETF reviews the securitiesheld in the SPDR®FTSE®GreaterChinaETF'sportfoliooneachbusinessday,checkingthosesecuritiesagainstthesecuritiesconstitutingtheFTSE®GreaterChinaHKDIndexandcomparingtheweightingofeachsecurityintheSPDR®FTSE®GreaterChinaETF'sportfoliototheweightingofthecorrespondingconstituentsecurityintheFTSE®GreaterChinaHKDIndex.

Members should be aware that whilst the BEA Greater China Tracker Fund through itsinvestment in the SPDR® FTSE®Greater China ETF (which, in turn, invests all, or substantiallyall,ofitsassetsintheconstituentsecuritiesoftheFTSE®GreaterChinaHKDIndexinthesame,orsubstantiallythesameweightingsastheyappeartherein)aimstoprovideinvestmentreturnsthatcloselycorrespondtotheperformanceof theFTSE®GreaterChinaHKDIndex, there isnoguaranteeorassuranceofexactor identical replicationatany timeof theperformanceof theFTSE®Greater ChinaHKD Index. If there is any deviation between the SPDR® FTSE®GreaterChinaETF'sportfolioandthecompositionandweightingoftheFTSE®GreaterChinaHKDIndexwhich is considered by themanager of the SPDR® FTSE®Greater China ETF to be significanttakingintoaccounttheinvestmentobjective,themanagerwilladjusttheSPDR®FTSE®GreaterChinaETF'sportfoliowhenitconsidersappropriateassoonasitisreasonablypracticable,afterconsideringtransactioncostsandtheimpact,ifany,onthemarket.

However, itwill not always be efficient to replicate or attempt to replicate identically theconstituent securities of the FTSE®Greater ChinaHKD Index if, for example, transaction costsincurredbytheSPDR®FTSE®GreaterChinaETFinperforminganynecessaryadjustmentswouldoutweightheanticipatedreductionintrackingerrorthatwouldresultfromthefailuretoreflectminorchangesintheFTSE®GreaterChinaHKDIndex.Therefore,minormisweightingsarelikelytooccur. Further, themanagerof the SPDR® FTSE®Greater China ETFmaybe restricted fromeffectingcertainadjustmentsormayberequiredtoperformcertainadjustmentsbyapplicablelawsandregulations.

BEAGreaterChinaTrackerFundlevel

DuetothedelayinactuallysubscribingforunitsintheSPDR®FTSE®GreaterChinaETFarisingfromthetimerequiredtoprocessinstructionstoinvestintheBEAGreaterChinaTrackerFundintheinitialperiod,thetrackingerrorandtheperformanceoftheBEAGreaterChinaTrackerFundmayrespectivelybebiggerandpoorer immediatelyafter launchalthoughsuchaphenomenonwoulddiminishovertimeasthefundsizeoftheBEAGreaterChinaTrackerFundgrows.Otherthantheabove,duetothefactthattheBEAGreaterChinaTrackerFundwillhold idlecashtomeet redemption / switching requests and the calculation of performance of the BEAGreaterChinaTrackerFund isonanafter-feebasis, trackingerror resultedfromsuchcashholdingandfeedeductionfromtheBEAGreaterChinaTrackerFundwouldbeunavoidable.

Risk and Return Profile: The BEAGreater China Tracker Fund is suitable for investorswho arewilling toassumeahigher levelof risk toachievepotentiallyhigher returnsover the short tomedium term. The InvestmentManager expects the return of the BEAGreater China TrackerFundtoreflectmovementsintheGreaterChinaequitymarketsovertheshorttomediumterm.Please refer to the risk factor"Risk in relationto Investments in Index-TrackingFunds" for theparticularrisksinvolvedininvestinginanindex-trackingfund.

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BEA Hong Kong Tracker Fund

Investment Objective: ToprovideinvestmentresultsthatcloselycorrespondtotheperformanceoftheHangSengIndex.

Investment Policy: The BEAHong Kong Tracker Fundwill invest directly in a single ApprovedIndex-TrackingFund,namelytheTrackerFundofHongKong.TheApprovedIndex-TrackingFundaimstoprovideinvestmentresultsthatcloselycorrespondtotheperformanceoftheHangSengIndex.

TheApproved-IndexTrackingFundmayusefuturescontractsandoptionsforhedgingpurposesor to achieve its investment objective. TheApproved-Index Tracking Fundwill not engage insecuritieslending.

TheBEAHongKongTrackerFundmayholdcashandbankdepositsforancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

TheBEAHongKongTrackerFundwillnotenterintofinancialfuturesandoptionscontractsandwillnotengageinsecuritieslending.

Whilst the investmentobjectiveof theBEAHongKongTracker Fundand theApproved Index-TrackingFundistotracktheHangSengIndex,therecanbenoassurancethattheperformanceoftheBEAHongKongTrackerFundandtheApprovedIndex-TrackingFundwillatanytimebeidentical to thatof theHangSeng Index. Further informationon theHangSeng Index canbefoundintheAppendixannexedtothisExplanatoryMemorandum.

None of State Street Global Advisors Asia Limited (themanager of the Tracker Fund of HongKong),StateStreetBankandTrustCompany(thetrusteeoftheTrackerFundofHongKong),ortheHongKongGovernmentarerelatedtotheMasterTrustortheBEAHongKongTrackerFundandnoneoftheseentitieswillhaveanyliabilityinconnectionwiththeMasterTrustortheBEAHongKongTrackerFund.

Tracking of the Hang Seng Index:

TrackerFundofHongKonglevel

ThemanageroftheTrackerFundofHongKongreviewsthestocksheld intheTrackerFundofHongKong'sportfoliooneachbusinessday,checkingthosestocksagainsttheconstituentstocksoftheHangSengIndexandcomparingtheweightingofeachstockintheTrackerFundofHongKong's portfolio to theweighting of the corresponding constituent stock in theHang SengIndex.

MembersshouldbeawarethatwhilsttheBEAHongKongTrackerFundthroughits investmentintheTrackerFundofHongKong(which,inturn,investsall,orsubstantiallyall,ofitsassetsinthesharesofconstituentcompaniesoftheHangSengIndexinsubstantiallysimilarcompositionandweightingastheyappeartherein)aimstoachieveareturnwhichfollowsthetrendoftheHangSengIndex,thereisnoguaranteeorassuranceofexactoridenticalreplicationatanytimeoftheperformanceoftheHangSengIndex.

In the event that there is any deviation between the Tracker Fund of Hong Kong's portfolioand the composition andweighting of theHang Seng Index thereby giving rise to a trackingerrorwhich is consideredby themanagerof theTracker FundofHongKong tobe significanttaking into account the investment objective, themanagerwould effect adjustments ofthe Tracker Fund of Hong Kong's portfoliowhich it considers appropriate as soon as it isreasonably practicable, after considering transaction costs and the impact, if any, on themarket.However, itwillnotalwaysbeefficient to replicateorattempt to replicate identicallythe share composition of the Hang Seng Index. For example, if the transaction costs tobe incurred by the Tracker Fund of Hong Kong in performing adjustments of the naturejustmentionedwould outweigh the anticipated reduction those adjustments could bringabout in the tracking error in question, those adjustmentsmay not bemade.Minormis-

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weightings are, accordingly, likely to occur. It should also be noted that themanager of theTrackerFundofHongKongmayberestrictedfromeffectingcertainadjustmentsorrequiredtoperformcertainadjustmentsbyapplicablelawsandregulations.

BEAHongKongTrackerFundlevel

Due to the delay in actually subscribing for shares in the Tracker Fund of Hong Kong arisingfromthetimerequiredtoprocess instructionsto invest intheBEAHongKongTrackerFund inthe initialperiod, thetrackingerrorandtheperformanceoftheBEAHongKongTrackerFundmayrespectivelybebiggerandpoorer immediatelyafter launchalthoughsuchaphenomenonwould diminish over time as the fund size of the BEAHong Kong Tracker Fund grows.Otherthan the above, due to the fact that the BEAHong Kong Tracker Fundwill hold idle cash tomeetredemption/switchingrequestsandthecalculationofperformanceoftheBEAHongKongTracker Fund is on an after-fee basis, tracking error resulted from such cash holding and feedeductionfromtheBEAHongKongTrackerFundwouldbeunavoidable.

Risk and Return Profile: The BEAHong Kong Tracker Fund is suitable for investorswho arewilling to assume a higher level of risk to achieve potentially higher returns over the shorttomedium term. The InvestmentManager expects the return of the BEAHong Kong TrackerFund to reflectmovements in theHong Kong equitymarket over the short tomedium term.Please refer to the risk factor"Risk in relationto Investments in Index-TrackingFunds" for theparticularrisksinvolvedininvestinginanindex-trackingfund.

BEA Global Bond Fund

Investment Objective: To provide investorswith total investment return over themedium tolongtermthroughinvestingintoadiversifiedrangeofglobalbonds.

Investment Policy: The BEAGlobal Bond Fundwill invest directly in a singleApproved PooledInvestment Fund,namely theBEAUnion InvestmentGlobalBondFund (a sub-fundof theBEAUnion Investment Capital Growth Fund), to obtain exposure to the global bondmarkets. TheApprovedPooledInvestmentFundwillinvestinadiversifiedrangeofglobalbondsdenominatedin variousmajor currencies (including but not limited to, US dollars, Euro, Pounds Sterling,JapaneseYenandHongKongdollars).

TheApprovedPooledInvestmentFund'sassetswillnormallybeinvestedbetween20%to100%inshorttolongtermgovernmentbondsand0%to80%inshorttolongtermcorporatebonds.Such investmentswill bemademainly in theUnited States, Europe andAsia, butmay includeother markets.

TheApproved Pooled Investment Fundmay enter into financial futures contracts for hedgingpurposes to reduce risk and enhance asset value, consistentwith the investment objective oftheApproved Pooled Investment Fund. TheApproved Pooled Investment Fundmay engage insecuritieslending.

TheBEAGlobalBondFundmayholdcashandbankdepositsforancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

The BEAGlobal Bond Fundwill not enter into financial futures and options contracts for anypurposesandwillnotengageinsecuritieslending.

The InvestmentManager, BEAUnion InvestmentManagement Limited, is also themanager oftheApprovedPooledInvestmentFund.

Risk and Return Profile: TheBEAGlobal Bond Fund is suitable for investorswhoarewilling toassumealowerlevelofrisktoachievepotentiallystablereturnoverthemediumtolongterm.The

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InvestmentManager expects the return of the BEAGlobal Bond Fund over the long term toreflectmovementsintheglobalbondmarkets.

BEA MPF Conservative Fund

Investment Objective: To achieve aminimum rate of returnwhilemaintaining stability of theprincipalamountinvested.

Investment Policy: TheBEAMPFConservativeFundwill solely invest inHKdollardenominatedinstruments,namely, short termdepositsanddebt securities issuedbybanks, corporationsandgovernments and such instrumentswill satisfy the requirements set out in section 37 of theGeneralRegulation.

TheBEAMPFConservative Fundwill notenter into financial futuresandoptions contracts foranypurposesandwillnotengageinsecuritieslending.

Risk and Return Profile: TheBEAMPFConservativeFund isdesigned for conservative investorswith very low capital risk. The InvestmentManager expects the return of the BEAMPFConservativeFundoverthe longtermtobe in linewiththe interestratepayablefromtimetotimebymajorbanksinHongKongonHKdollarsavingsaccounts.

General

Unlessotherwiseagreedwith theCommissionand theAuthority, theTrusteewillgivenot lessthan 1month'swritten notice of any change in the investment objectives and policies of aConstituentFundtoMembersandtoparticipatingemployers.

Each of the Constituent Funds is unitised and denominated in HK dollars. The BEAMPFConservativeFundwillmaintainaneffectivecurrencyexposuretoHKdollarsof100%.TheotherConstituent Fundswillmaintain an effective currency exposure to HK dollars of not less than30%.

Risk Factors

Investment in the Constituent Funds involves risks. The Constituent Funds are not guaranteedandaccordinglyare subject tomarket fluctuationsandto the risks inherent inall investments.ThepriceofUnitsofanyConstituentFundandthe incomefromthemmaygodownaswellasup.

InvestmentintheBEAMPFConservativeFundisnotequivalenttoplacingfundsondepositwitha bankor deposit-taking company.AMember's rights to benefits in respect of anyUnits heldfortheaccountoftheMemberintheBEAMPFConservativeFundarelimitedtotherealisationpriceofsuchUnitsattherelevanttime,whichmaybemoreorlessthanthepriceatwhichsuchUnitswereissued.TheBEAMPFConservativeFundisnotsubjecttothesupervisionoftheHongKongMonetaryAuthority.

China market risk

AConstituent Fundor its underlyingApproved Pooled Investment Fund(s) orApproved Index-TrackingFund(s)mayinvestinsecuritiesofcompaniesthataredomiciledorconductasignificantportionoftheirbusinessactivitiesin,orderiveorareexpectedtoderiveasignificantportionoftheirrevenuesfromChina.TotheextentthatsuchConstituentFundoritsunderlyingApprovedPooledInvestmentFund(s)orApprovedIndex-TrackingFund(s)hasexposuretosuchcompanies,the value of the assets of a Constituent Fund or its underlyingApproved Pooled InvestmentFund(s) or Approved Index-Tracking Fund(s) invested in Chinamay be affected by political,legal,economicandfiscaluncertaintieswithinChina.Existinglawsandregulationsmaynotbeconsistentlyapplied.

Since1978,theChinesegovernmenthasimplementedeconomicreformmeasureswhichemphasisedecentralisationandtheutilisationofmarketforcesinthedevelopmentoftheChineseeconomy.

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Such reforms have resulted in significant economic growth and social progress.Many of thereformsareunprecedentedorexperimentalandareexpected tobe refinedor changed.Otherpolitical, economic and social factors could also lead to further readjustments to the reformmeasures.Theoperationsand financial resultsof thecompanies thataConstituentFundor itsunderlyingApproved Pooled Investment Fund(s) or Approved Index-Tracking Fund(s) investsin could be adversely affected by adjustments in Chinese state plans, political, economic andsocial conditions, changes in the policies of the Chinese government such as changes in lawsand regulations (or the interpretation thereof),measureswhichmay be introduced to controlinflation, changes in the rate ormethod of taxation, imposition of additional restrictions oncurrency conversion and the imposition of additional import restrictions. Thismay adverselyaffecttheperformanceoftherelevantConstituentFund.

The transformation from a centrally planned, socialist economy to amoremarket-orientedeconomy has resulted inmany economic and social disruptions and distortions.Moreover,there canbeno assurance that the economic andpolitical initiatives necessary to achieve andsustain such a transformationwill continue or, if such initiatives continue and are sustained,that theywill be successful. In the past the Chinese government has applied nationalization,expropriation, confiscatory levels of taxation and currency blockage. Any changes in thesepolicies and regulationsmay adversely impact on the companies or securities inwhich therelevant Constituent Fund or its underlyingApproved Pooled Investment Fund(s) or ApprovedIndex-TrackingFund(s)investsin.

Accounting, auditing and financial reporting standards in Chinamay not be equivalent tostandards applicable in Hong Kong or in other developed countries. As a result, the lowerlevels of disclosure and transparency of certainmaterial informationmay impact on thevalue of investmentsmade by the relevant Constituent Fund or its underlyingApprovedPooled Investment Fund(s) orApproved Index-Tracking Fund(s). This, if combinedwith aweakregulatory environment, could result in lower standards of corporate governance and lessprotection ofminority shareholder rights of the companies inwhich the relevant ConstituentFundoritsunderlyingApprovedPooledInvestmentFund(s)orApprovedIndex-TrackingFund(s)invest.

Concentration risk

Some of the Constituent Funds or their underlyingApproved Pooled Investment Funds orApproved Index-TrackingFundsmay investonly inaspecificcountryorregion.Theirportfoliosmaynotbewelldiversifiedintermsofthenumberofholdings.Investorsshouldbeawarethatsuch Constituent Funds or their underlyingApproved Pooled Investment Funds or ApprovedIndex-TrackingFundsarelikelytobemorevolatilethanabroad-basedfund,suchasaglobalorregionalequityfund,astheyaremoresusceptibletofluctuationsinvalueresultingfromlimitednumberofholdingsoradverseconditionsintheirrespectivecountries.

Credit risk

ThevalueofaConstituentFundmaybeaffectedifanyofthefinancial institutionswithwhichthe cash of the Constituent Fund is invested or deposited, or a counterparty of a ConstituentFund or its Approved Pooled Investment Fund(s) or Approved Index-Tracking Fund(s), suffersinsolvencyorother financialdifficulties. This risk isminimised to theextent that theexposuretoanyoneinstitutionisgenerally limitedtothemaximumlevelof10percentofthetotalnetasset value of a Constituent Fund as investment permitted under Schedule 1 to theGeneralRegulation.

Currency risk

Some of the Constituent Funds or their underlyingApproved Pooled Investment Fund(s) orApproved Index-Tracking Fund(s)may invest inwhole or in part in assets quoted in othercurrencies.Theperformanceofthemmaythereforebeaffectedbymovementsintheexchangeratebetweenthecurrenciesinwhichtheassetsareheldandtheirrespectivebasecurrencies.

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Interest rates risk

Interest ratesmay be subject to fluctuation. High yield bonds are particularly susceptible tointerestratechangesandmayexperiencesignificantpricevolatility.Anyfluctuationin interestratesmayhaveadirecteffectontheincomereceivedbytheinvestors.

Credit rating downgrading risk

The credit ratingsof fixed income securitiesby credit ratingagenciesareagenerallyacceptedbarometer of credit risk. They are, however, subject to certain limitations. For example, therating of an issuer is heavilyweighted by past developments and does not necessarily reflectprobablefutureconditions.Thereisoftenatimelaginupdatingthecreditratings inresponsetorecentcreditevents.

Investmentgradesecuritiesmaybesubjecttotheriskofbeingdowngradedtobelowinvestmentgrade securities. In the event of downgrading in the credit ratings of a security or an issuerrelating toa security, thevalueof the relevantdebt securitymaydecline rapidlyand thus thevalue of a Constituent Fund or its underlyingApproved Pooled Investment Fund(s)may beadverselyaffected.TheInvestmentManagerand/orthemanager(s)oftheunderlyingApprovedPooledInvestmentFund(s)mayberequiredtodisposeofthesecuritiesbeingdowngradedatanundesirablepriceinordertomeettherequirementsunderSchedule1totheGeneralRegulationand/or the investment objectives of the relevant Constituent Fund(s) or Approved PooledInvestmentFund(s),whichmayreducethevalueoftherelevantConstituentFund.

Emerging market risk

Some of the countries in which a Constituent Fund or its underlying Approved PooledInvestmentFund(s)orApprovedIndex-TrackingFund(s)investsinmaybeconsideredasemergingmarkets.Asemergingmarkets tend tobemorevolatile thandevelopedmarkets, anyholdingsin emergingmarkets are exposed to higher levels ofmarket risk. The securitiesmarkets ofsomeoftheemergingcountriesarenotyetfullydevelopedwhichmay, insomecircumstances,lead to a potential lack of liquidity.Accounting, auditing and financial reporting standards insomeof the emergingmarketsmay be less vigorous than international standards.As a result,certainmaterialdisclosuresmaynotbemadebysomecompanies.Inmanycases,governmentsofemergingmarketsretainahighdegreeofdirectcontrolovertheeconomyandmaytakeactionshaving suddenandwidespreadeffects suchas suspensionof tradeandmoratoriumwhichmayaffectvaluationofassets.InvestmentsinproductsofemergingmarketmayalsobecomeilliquidwhichmayconstraintheInvestmentManager'sabilitytorealisesomeoralloftheportfolioandthusaffecttherepatriationofcapital.

Risk in relation to futures and options contracts

Some of the Constituent Fundsmay enter into futures and options contracts for hedgingpurposes.Thevalueor returnof thesetypesof instruments isbasedontheperformanceofanunderlyingasset.These instrumentsmaybevolatileand involvevarious risks, includingmarketrisk,theriskoflackofcorrelationorleverageeffect,liquidityrisk,theriskofnon-performancebythecounterparty.

Market / liquidity risk

Weak financial and credit conditionsmay have a negative impact on the equitiesmarketsresulting in increasedvolatility. InvestorsshouldnotethataConstituentFundor itsunderlyingApprovedPooledInvestmentFund(s)orApprovedIndex-TrackingFund(s)thatinvestsinequitieswillbesubjecttomarket/liquidityrisk.Investmentexpectationsmaythereforefailtoberealisedin such instances. This risk isminimised to the extent that investment in equities and othersecuritiesissubjecttothediversificationrequirementsofSchedule1totheGeneralRegulation,underwhich the investment of a Constituent Fund is limited to 10 per cent of shares of aparticularclassissuedbyanyissuerandanyinvestmentrepresentingnotmorethan10percentoftotalnetassetvalueofsuchConstituentFundissuedbyanyoneissuer.

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Change of laws / regulations, political and economic conditions

TheperformanceoftheConstituentFundoritsunderlyingApprovedPooledInvestmentFund(s)orApprovedIndex-TrackingFund(s)anditsabilitytopayredemptionproceedsmaybeaffectedby changes in economic conditions and uncertainties such as change in political conditionsincluding strikes and curfew and government policies, the imposition of restrictions on thetransferofcapitalandchangesinlawsorregulatoryrequirements.

Risk in relation to investments in index-tracking funds

Investors should note that a Constituent Fund that invests in Approved Index-Tracking Fundswouldbesubjecttothefollowingrisks:

(i) market risk of the sector or market tracked by the relevant index

Each of such Constituent Funds tracks an underlying index by investing in anApprovedIndex-Tracking Fund. As a result, such Constituent Funds are subject to the fluctuationsand adverse conditions in the sector ormarketwhich the relevant index seeks to track.The InvestmentManager does not have discretion to take defensive positionswhere themarket(s) represented by the relevant index decline. Hence, any fall in the underlyingindexwill result in corresponding fall in the value of theApproved Index-Tracking Fundand hence the Constituent Fund. Furthermore, since an underlying indexmay focus on aparticular geographical region or industry, investments of anApproved Index-TrackingFundmay be concentrated in the securities of a single issuer or several issuerswhen theApproved Index-Tracking Fund endeavours tomatch as closely as practicable its holdingsofconstituentstocksoftheindex.Therefore,theConstituentFundsmaybesubjecttotheadditionalrisksofconcentrationinthesemarketsorregions.

Further, there is no guarantee that the information used in connection with thecomputationof the relevant index is free from inaccuracies,omissions,mistakes,errorsorincompleteness.Theunderlyingindexmaynotbeabletoachieveits intendedobjectiveintrackingtheperformanceofaparticulargeographicalregionorindustry.

AnApproved-Index Tracking Fundmay invest in financial derivatives instruments to gainexposure to the constituent stocks of the underlying index. As such, theApproved-IndexTrackingFundwillbesubjecttoinsolvencyordefaultriskoftheissuersorcounterpartiesoftheseinstruments.AnydefaultorfailuretoperformitsobligationsbysuchissuersmayleadtosubstantiallosstotheApproved-IndexTrackingFund,whichmayinturnaffectthevalueoftherelevantConstituentFund.

(ii) failure to fully replicate the performance of the index

While theApproved Index-Tracking Fund inwhich a Constituent Fund investswill seekto track theperformanceof theunderlying index, changes in thenet asset valueof suchConstituent Fundmay not replicate exactly changes in the relevant index. This is dueto, among other factors, the fees and expenses payable by the Constituent Fund andtransaction fees and stamp duty incurred in adjusting the composition of the investmentportfolio according to changes in the relevant index, and dividends received, but notdistributed,bytherelevantApprovedIndex-TrackingFund.

In addition, as a result of the unavailability of constituent stocks of an underlying index,thetransactioncostsinmakinganadjustmentoutweighingtheanticipatedbenefitsofsuchadjustmentorforcertainotherreasons,theremaybetimingdifferencesbetweenchangesintheunderlyingindexandthecorrespondingadjustmenttotheshareswhichcomprisetheApprovedIndex-TrackingFund'sportfolio.

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Duringtimeswhentheconstituentstocksofanunderlying indexareunavailableorwhenthe investmentmanagerof theApproved Index-TrackingFunddetermines it is in thebestinterestoftheApprovedIndex-TrackingFundtodoso,theApprovedIndex-TrackingFundmaymaintainacashpositionorinvestinothercontractsorinvestmentsaspermittedbytheapplicable laws and regulations until the constituent stocks becomeavailable. Such costs,expenses, cash balances or timing differences could cause theApproved Index-TrackingFund'snetassetvalue tobe lowerorhigher than the relative levelof the index it tracks.ThemagnitudeoftrackingerrorofanApprovedIndex-TrackingFundwoulddependonthecashflow, sizeof theportfolioand theextentofuseof financial instrumentsandmaybehigherorlowerthanotherindextrackingfunds.

(iii) the index composition may change over time which may affect performance

TheindexcompositionmaychangefromtimetotimeandtheInvestmentManagerhasnocontrolover the selectionof theconstituent stocks comprisingof the index.Generally,anunderlyingApproved Index-Tracking Fund's holding of constituent stockmay not exceedthe constituent stock'sweighting in the relevant index, exceptwhere theweighting isexceededasaresultofchangesinthecompositionoftherelevantindexwheretheexcessisonlytransitionalandtemporaryinnature,wheresuchexcessisduetopurchaseofboardlots orwhere such excess is due to the implementation of a documented sampling oroptimizationtechniquethepurposeofwhichisfortheunderlyingApprovedIndex-TrackingFundtoachieveitsobjectiveoftrackingtherelevantindex.

(iv) an Approved Index-Tracking Fund may be traded at a market price, which may be different from its net asset value and may fluctuate

Themarket price of the units in anApproved Index-Tracking Fundmay sometimes tradeaboveorbelowitsnetassetvalue.Thereisarisk,therefore,thattherelevantConstituentFundmaynotbeabletobuyorsellatapriceclosetothenetassetvalueoftheApprovedIndex-Tracking Fund. The deviation from net asset value is dependent on a number offactors, butwill be accentuatedwhen there is a large imbalance betweenmarket supplyand demand for the constituent stocks of the index. The "bid/ask" spread (being thedifferencebetweenthepricesbeingbidbypotentialpurchasersandthepricesbeingaskedbypotentialsellers)isanothersourceofdeviationfromnetassetvalue.Thebid/askspreadcanwidenduringperiodsofmarketvolatilityormarketuncertainty,therebyincreasingthedeviationfromnetassetvalue.

(v) an Approved Index-Tracking Fund or an underlying index may be terminated

Any license granted to the service provider of the underlyingApproved Index-TrackingFundfortheuseof,andreferenceto,therespectiveunderlyingindex,maybeterminated,ortheunderlyingindexmayceasetobeoperatedoravailable.Asaresult,theunderlyingApproved Index-Tracking Fundmay be terminated. In such circumstances, the InvestmentManagermay, subject to theprior approval of theAuthority and theCommission, seek areplacementoftheApprovedIndex-TrackingFund.TherelevantConstituentFundmayalsobeterminatedifnosuitablereplacementunderlyingfundisfound.

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Early termination risk

The Trusteemaywith the consent of the Sponsor terminate a Constituent Fundongivingnotless than1month'swrittennotice toMembersandeachparticipatingemployer (or suchotherperiodofnoticeastheAuthorityortheCommissionmayrequire).

IfaConstituentFund is terminated,contributionswill ceasetobe invested in suchConstituentFund and amounts invested in such Constituent Fundmust be switched (free of charge) intoanother Constituent Fund chosen by the relevantMember.Members should note that suchamount to be switched from the terminating Constituent Fundmay be less than the amountcontributedbythem.

Further,theMasterTrustmaybewoundupbythecourtinaccordancewiththeMPFOrdinanceon application by theAuthority to the court. The Trustee shall give not less than 1monthswrittennotice(orsuchotherperiodastheAuthorityortheCommissionmayagreeorrequire)toparticipatingemployersandMembersoftheterminationoftheMasterTrustandarrangementswill bemade for the transfer ofMembers' accrued benefits in theMaster Trust to anotherregisteredscheme.Membersshouldnotethattheaccruedbenefitstobetransferredtoanotherregisteredschememaybelessthantheamountcontributedbythem.

Forfurtherdetails,pleaserefertothesectionsheaded"Establishment,Termination,MergerandDivisionofConstituentFunds"and"Termination,MergerorDivisionofMasterTrust"below.

Risk of investment in Europe

CertainConstituent Fundsor their underlyingApprovedPooled Investment Fund(s)may investin global equity securitieswhichmay include a substantial investment in European securities.The current economic and financial difficulties in Europemay continue to getworse andmayspreadwithinandoutsideEurope.ItispossiblethatmeasurestakenbythegovernmentsoftheEuropeancountries, centralbanksandotherauthorities toaddress theeconomicand financialproblems,suchasausteritymeasuresandreforms,maynotworkandsuchfailuremayresult inadverseconsequences.TheimpactofanyadverseeconomicorfinancialeventsinEuropemaybesignificantandmayadverselyaffectthevalueoftherelevantConstituentFunds' investment inEuropeansecurities. Inaddition,theConstituentFunds' investments inEuropeansecuritiesmaybesubjecttoincreasedrisksofvolatility,liquidity,creditandcurrencyfluctuationsasaresultofconcernsoverthefiscalconditionsandsovereigncreditrisksthatmaybefacedbyoneormoreEuropeancountries.

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Investment and Borrowing Restrictions

Investment Restrictions

General investment restrictions for Constituent Funds

Each Constituent Fund is subject to the investment and borrowing restrictions in theMPFOrdinance (as set out in Schedule 1 of General Regulation), theMPFGuidelines, and theAuthority'sCodeonMPFInvestmentFunds.

For the BEA MPF Conservative Fund

The BEAMPF Conservative Fund is subject to the investment restrictions applicable to capitalpreservationfundsintheMPFOrdinance(assetoutinsection37andSchedule1oftheGeneralRegulation).

For the BEA Global Equity Fund, BEA Greater China Equity Fund and BEA Global Bond Fund

Each of these Constituent Funds is a feeder fundwhich invests in a single Approved PooledInvestmentFund(referredto inthesectionheaded"InvestmentObjectivesandPolicies").EachunderlyingApprovedPooled InvestmentFundhasbeenapprovedbytheAuthoritypursuanttotheMPFOrdinanceand is subjecttothe investmentrestrictionsapplicabletoApprovedPooledInvestment Funds pursuant to theMPFOrdinance (as set out in Schedule 1 of theGeneralRegulation),theMPFGuidelinesandtheAuthority'sCodeonMPFInvestmentFunds.

TheseConstituentFundswillnotenterintofinancialfuturesandoptionscontracts.

For the BEA Greater China Tracker Fund and BEA Hong Kong Tracker Fund

Each of these Constituent Funds is a feeder fundwhich invests in a single Approved Index-Tracking Fund (referred to in the section headed "InvestmentObjectives and Policies"). EachunderlyingApprovedIndex-TrackingFundhasbeenapprovedbytheAuthoritypursuanttotheMPFOrdinance(assetoutinSchedule1oftheGeneralRegulation),theMPFGuidelinesandtheAuthority'sCodeonMPFInvestmentFunds.

TheConstituentFundswillnotenterintofinancialfuturesandoptioncontracts.

For the BEA Growth Fund, BEA Balanced Fund, BEA Stable Fund and BEA Asian Equity Fund

These Constituent Funds are "funds of funds" and are subject to the following investmentrestrictions:

(1) therelevantConstituentFundmayonlyinvestinApprovedPooledInvestmentFunds;

(2) the relevantConstituentFundmust invest innot less than2ApprovedPooled InvestmentFunds;

(3) noinvestmentmaybemadefortheaccountoftherelevantConstituentFundifasaresultthe value of that Constituent Fund's holding of interests in any oneApproved PooledInvestmentFundwouldexceed90%ofthenetassetvalueofthatConstituentFund;

(4) the InvestmentManagermayenter intocurrency forwardcontracts, futures contractsandoptions contracts for the account of the relevant Constituent Fund for hedging purposesonly.

EachoftheApprovedPooledInvestmentFundsthattheConstituentFundsinvestinissubjecttothe investment andborrowing restrictions applicable toApprovedPooled Investment Funds intheMPFOrdinance(assetoutinSchedule1ofGeneralRegulation),theMPFGuidelines,andtheAuthority'sCodeonMPFInvestmentFunds.

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Repurchase Agreements

TheInvestmentManagercurrentlydoesnot intendtoenter intoanyrepurchaseagreements inrespectofeachConstituentFund.

Borrowing Restrictions

TheTrusteemayborrowfortheaccountofeachConstituentFundforliquiditypurposestomeetbenefitpaymentsandforother limitedpurposesas setout in theMPFOrdinance, theGeneralRegulation,theMPFGuidelines,andtheAuthority'sCodeonMPFInvestmentFunds.TheassetsoftherelevantConstituentFundmaybechargedorpledgedassecurityforanysuchborrowings.

General

TheInvestmentManagerisnotimmediatelyrequiredtosellapplicableinvestmentsifanyoftheinvestmentrestrictionsareexceededasaresultofchangesinthevalueofaConstituentFund'sinvestments, reconstructions or amalgamations, payments out of the assets of the ConstituentFund or realisations of Units but for so long as such limits are exceededwill not acquire anyfurther investments subject to the relevant restriction andwill as a priority objective take allreasonable steps to restore theposition so that the limitsareno longerexceeded,atall timeshavingregardtotheinterestsofMembers.

Establishment, Termination, Merger and Division of Constituent Funds

The Trusteemaywith the consent of the Sponsor establish new Constituent Funds in future.TheTrusteewillnotifyparticipatingemployersandMemberswhereanewConstituentFund isestablished.

The Trusteemaywith the consent of the Sponsor terminate a Constituent Fundongivingnotless than1month'swrittennotice toMembersandeachparticipatingemployer (or suchotherperiodofnoticeastheAuthorityortheCommissionmayrequire).

AConstituentFundwhichisafeederfundshallterminateontheterminationoftheApprovedPooled Investment Fundor theApproved Index-Tracking Fund inwhich suchConstituent FundinvestsunlesstheTrusteewiththeconsentoftheSponsorand(ifrequired)theapprovaloftheAuthorityand theCommission shalldetermine that suchConstituentFund shall invest in someotherApprovedPooledInvestmentFundorApprovedIndex-TrackingFund.

IfaConstituentFund is terminated,contributionswill ceasetobe invested in suchConstituentFund and amounts invested in such Constituent Fundmust be switched (free of charge) intoanotherConstituentFundchosenbytherelevantMember.IftherelevantMemberfailstomakeachoicewhenrequestedtodoso,theMember'sUnitsintheterminatingConstituentFundwillbeswitched intoanotherConstituentFundasmaybechosenbytheTrusteefromtimetotimeand as stipulated in the termination notice toMembers (currently the BEA Stable Fund) (the"Default Constituent Fund") and future contributions by or on behalf of theMemberwhichwouldotherwisebeinvestedintheterminatingConstituentFundwillbeinvestedintheDefaultConstituentFund.

Subject to the prior approval of theAuthority and the Commission, the Trusteemaywiththe prior approval of the Sponsor at any time and from time to timemerge or subdivide anyConstituent Funds by giving not less than 1month'swritten notice (or such other periodof notice as theAuthority and the Commissionmay agree or require) to each participatingemployerandeachMember.

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MANAGEMENT AND ADMINISTRATION

Sponsor

TheSponsorisTheBankofEastAsia,Limited(the"Bank").

Incorporated in Hong Kong in 1918, the Bank is dedicated to providing comprehensive retailbanking, commercial banking,wealthmanagement, and investment services to its customersinHongKongandothermajormarketsaroundtheworld.TheBankisthelargestindependentlocalbankinHongKong,withtotalconsolidatedassetsofHKD611.4billion(USD78.7billion)asof31stDecember,2011.TheBankislistedonTheStockExchangeofHongKongandisoneoftheconstituentstocksoftheHangSengIndex.

Where contributions to theMaster Trust and other amounts are held in an interest bearingaccountwiththeBankasdescribedinthisExplanatoryMemorandum,theBankwillpayinterestonsuchamountsataratenolowerthantheprevailingcommercialratefordepositsofasimilarsizeandduration.

Investment Manager

BEAUnion InvestmentManagement Limited is the InvestmentManager of theMaster Trust.Incorporated in Hong Kong on 12 th April, 1988 and previously known as East Asia AssetManagementCompanyLimited,theInvestmentManagerisjointlyownedbytheBankandUnionAssetManagementHoldingAG.

TheInvestmentManagerhasbeenappointedtomanagetheassetsoftheConstituentFunds.

Trustee

BankofEastAsia (Trustees)Limitedwas incorporated inHongKong in1975and is the trusteeof theMaster Trust. The Trustee is registered as a trust company inHongKong and has beenapprovedbytheAuthorityasanapprovedtrusteeforMPFpurposes1.TheTrusteeisalsoawhollyownedsubsidiaryoftheBank.

UndertheTrustDeed,theTrusteeisresponsiblefortheadministrationoftheMasterTrustandthesafekeepingoftheassetsoftheMasterTrust.TheTrusteewillactascustodianoftheassetsoftheMasterTrust.

1SuchapprovaldoesnotimplyrecommendationbytheAuthority

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CONTRIBUTIONS

Mandatory Contributions

A participating employermustmakemandatory contributions to theMaster Trust in respectof eachMember employed by it and, except as provided below,must deductmandatorycontributions from the relevant income of eachMember employed by it and pay thosemandatorycontributionstotheMasterTrust.

CalculationofMandatoryContributions

The amount of the employer's mandatory contributions and theMember's mandatorycontributionsisasfollows:-

Employer’smandatorycontributions

– 5% (or any other percentage as may be prescribed by theMPFOrdinance) of relevant income (provided thatmandatorycontributionsarenotrequiredonrelevantincomeinexcessofthestatutorymaximumlevelofrelevantincome)

Member'smandatorycontributions

– ifmonthly relevant income is less than the statutoryminimumlevel of relevant income, nil ; otherwise, 5% (or any otherpercentage asmay be prescribed by theMPF Ordinance) ofrelevant income (provided thatmandatory contributions arenotrequiredon relevant income inexcessof the statutorymaximumlevelofrelevantincome)

Note: Member'smandatorycontributionsarenotrequired inrespectof (1)wheretheMemberis paidmonthly ormore frequently, anywageperiod that commences onor before theMember's 30thdayofemployment;and(2)wheretheMemberispaidlessfrequentlythanmonthly, the period from commencement of theMember's employment to the last dayin the calendar month in which the Member's 30th day of employment falls. Employer'smandatorycontributionsarerequiredinrespectoftheseperiods.

Memberswho are self-employedmust also paymandatory contributions to theMaster Trustunless their relevant income is less than the statutoryminimum level of relevant income. Theamountofsuchmandatorycontributionsis5%(oranyotherpercentageasmaybeprescribedbytheMPFOrdinance) of theMember's relevant income (provided thatmandatory contributionsare not required on relevant income in excess of the statutorymaximum level of relevantincome).

Memberswho are interested in knowing the current statutoryminimum andmaximum levelof relevant incomemaycall theBEA(MPF)Hotlineat22111777, requestviaelectronicmail toBEAMPF@hkbea.comorvisitthefollowingwebsite:http://www.hkbea.com.

PaymentofMandatoryContributions

Mandatory contributionsmustbepaid to theTrusteewithin such timesasare requiredby theMPF Ordinance.

Contractual Voluntary Contributions

Participatingemployers,Memberswhoareemployeesof suchparticipatingemployersandMemberswhoare self-employedpersonsmayelect tomakecontributions to theMasterTrust inaddition tomandatorycontributions (where relevant)ongiving suchpriornoticeas theTrusteemay require inaformspecifiedbytheTrusteeandbyenteringintoaParticipationAgreement(ifnonehasbeenenteredinto). Suchadditional contributionsare treatedasvoluntary contributions for thepurposesof theMasterTrust (shallbe referred toas"contractual voluntary contributions" for thepurposeshereof).

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UnlessotherwiseagreedwiththeTrustee,contractualvoluntarycontributions inrespectoftherelevantemployerand/orMembersshouldbepaidatthesametimeandinthesamemannerasmandatorycontributions.

Unless otherwise stated in the relevant ParticipationAgreement and/or supplement to theParticipationAgreement,contractualvoluntarycontributionsmadebyanemployerinrespectofaMembervestinthatMember:

(a) onretirementonoraftertheMember's60thbirthday;

(b) onthetotalincapacityoftheMember;

(c) ontheMember'sdeath;

(d) except on dismissal for cause as described below, otherwise by reference to the periodof theMember's employmentwith the relevant employer (andwith any other employernominatedbytherelevantemployer)("Service")inaccordancewiththefollowingtable:

YearsofService VestedPercentage

less than 3 Nil3ormorebutlessthan4 30%4ormorebutlessthan5 40%5ormorebutlessthan6 50%6ormorebutlessthan7 60%7ormorebutlessthan8 70%8ormorebutlessthan9 80%9ormorebutlessthan10 90%10 or more 100%

IfaMemberisdismissedfromemploymentonanyofthefollowinggrounds:

(i) wilfullydisobeyingalawfulandreasonableorder;

(ii) misconduct, such conduct being inconsistentwith the due and faithful discharge of theMember'sduties;

(iii) beingguiltyoffraudordishonesty;

(iv) beinghabituallyneglectfulintheMember'sduties;or

(v) uponanyothergroundonwhich theMember's employerwouldbeentitled to terminatetheMember'scontractofemploymentwithoutnoticeatcommonlaw,

and the Trustee is satisfied that dismissalwasmade upon any of the above grounds then allcontractualvoluntarycontributionsmadebytheMember'semployerinrespectofthatMemberareforfeited.

ForfurtherdetailsofspecialvoluntarycontributionsbySpecialVoluntaryContributionAccountMembers, please refer to the sectionheaded"Contributions andBenefits of SpecialVoluntaryContributionAccountMembers"above.

Payment of Contributions Generally

ContributionstotheMasterTrustshouldonlybepaidtotheTrustee.

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Investment of Contributions in Constituent Funds

TheTrusteewillapplycontributionsmadebyoronbehalfofaMembertoacquireUnits intheConstituentFundsinaccordancewiththeinstructionsoftheMember.DealingsforaConstituentFundwillbeavailableoneveryValuationDate.WheretheTrusteereceivesthecorrectamountof contributions in cleared funds and a duly completed remittance statement, the Trusteewill apply the contributions received to acquire Units on a ValuationDatewithin 20 BusinessDaysof receipt.AValuationDate is eachBusinessDay.Pending theacquisitionofUnits in theConstituent Funds, theTrusteewill hold contributions in an interestbearingaccountwithTheBankofEastAsia,Limited.InterestearnedwillbeusedbytheTrusteetomeetgeneraloperatingexpensesoftheMasterTrust.

Issue price of Units: The issuepriceofUnitsofaConstituentFundonaValuationDatewillbecalculatedbyreferencetothenetassetvalueperUnitofthatConstituentFundasatthecloseofbusinessonthatValuationDate(forfurtherdetails,see"CalculationofIssueandRealisationPrices"onpage33below).

Offer spread: Although the Sponsor has the power to levy an offer spread of up to 5%ofthe issue price per Unit issued, the Sponsor does not currently intend to levy such charge.The Sponsorwill give not less than 3months'written notice toMembers of any change insuch intention. No offer spreadwill be levied on the issue of Units relating to the BEAMPFConservative Fund. In any event, in respect of a transfer of accrued benefits (i) from anotherregisteredschemeintotheMasterTrust;(ii)fromanaccountwithintheMasterTrusttoanotheraccountwithin theMaster Trust; (iii) in the same accountwithin theMaster Trust, from aConstituentFundtoanotherConstituentFund,nooffer spreadshallbechargedotherthananamountrepresentingthenecessarytransactioncoststhatareincurred,orreasonablylikelytobeincurred,insellingorpurchasinginvestmentsinordertogiveeffecttothetransfer.

General: Fractionsofnot less than1/1,000of aUnitwill be issued.Contributions representingsmaller fractions of a Unitwill be retained by the relevant Constituent Fund. NoUnits ofa Constituent Fundwill be issuedwhere the determination of the net asset value of thatConstituent Fund is suspended (for furtherdetails see "SuspensionofCalculationofNetAssetValue"onpage34below).

Mandates to Invest Contributions

On becoming amember of theMaster Trust, aMembermust give an instruction in a formspecifiedbytheTrustee(a"Mandate")settingouthowcontributionsmadebyandonbehalfoftheMemberaretobeinvestedintheConstituentFunds.Fortheavoidanceofdoubt,aSpecialVoluntaryContributionAccountMemberwho is also anemployeeMemberor a self-employedMembermay give aMandate in respect of the special voluntary contributions, which isdifferentfromtheMandateinrespectofthemandatorycontributionsorcontractualvoluntarycontributions. If aMemberelects to invest in aparticularConstituent Fund thennot less than10%of theMember's total contributionsmust be invested in that Constituent Fund. In theabsenceofaMandate,theTrusteewillinvesttherelevantcontributionsintheBEAStableFund.

AMember can change theMember'sMandate by giving a newMandate to the Trustee. ThenewMandatewillapplywitheffectnolaterthanthelatestof:(i)theValuationDatefallingonor immediatelyafter theeffectivedate specified in theMandate (if any), (ii) aValuationDatewithin7BusinessDaysafterreceiptofthenewMandatebytheTrustee,or(iii)aValuationDatewithin7BusinessDaysafterreceiptbytheTrusteeofanyfeepayableforchangingtheMandate.ThenewMandatewillonlyapply to investmentofcontributions receivedby theTrusteeonoraftertheValuationDateonwhichthenewMandatetakeseffect.

MembersmaygiveanunlimitednumberofinstructionstochangeMandatesfreeofcharge.

Forms forMandatesandchangesofMandatesareavailable fromtheTrusteeand theSponsor.Mandatesmay be given to the Trustee bywritten notice or other authenticatedmeans of

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communication. However, the Trusteewill not be responsible to anyMember for any lossresultingfromthenon-receiptofaMandateoranyamendmenttoaMandatepriortoreceiptbytheTrustee.

Instructions to Change Investment

Membershavetheright (subjecttoanysuspension inthedeterminationofthenetassetvalueof any relevant Constituent Fund) to switch all or (subject as provided below) part of theUnits relating to a Constituent Fund credited to their account intoUnits relating to anotherConstituentFundorConstituentFundsbygivinganinstructioninaformspecifiedbytheTrustee(a"Switching Instruction").

MembersmaygiveanunlimitednumberofSwitchingInstructionsfreeofcharge.

Forms for Switching Instructions are available from the Trustee and the Sponsor. SwitchingInstructionsmay be given to the Trustee bywritten notice or other authenticatedmeans ofcommunication. However, the Trusteewill not be responsible to anyMember for any lossresulting from the non-receipt of a Switching Instruction or any amendment to a SwitchingInstructionpriortoreceiptbytheTrustee.

InrespectofaSwitchingInstructionUnitsrelatingtoaConstituentFund(the"Existing Units")willberealisedonaValuationDatewithin7BusinessDaysofreceiptoftheSwitchingInstructionbytheTrusteeor, if later,theValuationDatefallingonor immediatelyaftertheeffectivedatespecified in the Switching Instruction (if any) or the ValuationDate falling on or immediatelyafter the day onwhich the Trustee receives any fee payable in respect of the SwitchingInstruction. ThedayonwhichUnits relating to theConstituent Fund intowhichpart or all ofthe holding are to be switched (the "New Units")will be issued shall be on aValuationDatefallingnolaterthan5BusinessDaysaftertheValuationDateonwhichtheExistingUnitswererealised.TheExistingUnitswillberealisedandtheNewUnitswillbeissuedatratesdeterminedbyreferencetotheirrespectiveUnitpricesontherelevantValuationDates.PendinginvestmentintheConstituentFundrelatingtotheNewUnits,theTrusteewillholdtherealisationproceedsoftheExistingUnitsinaninterestbearingaccountwithTheBankofEastAsia,Limited.InterestearnedwillbecreditedtotheConstituentFundrelatingtotheExistingUnits.

Currently, no offer spread or bid spreadwill be charged for implementing a SwitchingInstruction. Under the Trust Deed no feesmay be charged, and no financial penaltiesmaybe imposed on anyMember in relation to any Switching Instruction other than an amountrepresentingthenecessarytransactioncoststhatareincurred,orreasonablylikelytobeincurredby the Trustee in selling or purchasing investments in order to give effect to the SwitchingInstruction and are payable to a party other than the Trustee. Any such necessary transactioncosts imposed and received shall be used to reimburse the relevant Constituent Fund. Pleaserefertothesectionheaded"No Switching Fee"belowforfurtherdetails.

Anyfractionsmallerthan1/1,000ofaNewUnitarisingastheresultofaswitchwillbeignoredandmoneys representingany suchfractionwillbe retainedaspartof theConstituentFundtowhich the New Units relate.

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BENEFITS

Entitlement to Benefits

AMemberwillbecomeentitledtobenefitsinrespectofmandatorycontributionstotheMasterTrust in thecircumstancessetout in theMPFOrdinance.Currently, thesecircumstances includewhere theMember (i) reaches the age of 65, (ii) permanently ceases employment or self–employmentafterreachingtheageof60orceasesemploymentorself–employmentasaresultoftotalincapacity,(iii)hasaterminalillness,(iv)permanentlydepartsfromHongKong,(v)diesor(vi)hastherighttoclaimasmallbalancepursuanttotheMPFOrdinance.

AMemberwillbecomeentitledtobenefits inrespectofcontractualvoluntarycontributionstotheMaster Trust in the circumstances set out in the TrustDeed and the relevant ParticipationAgreement and/or Supplement to the Participation Agreement, subject to such vestingconditionsasdescribedabove in the“ContractualVoluntaryContributions” section.Unless theParticipationAgreement and/or Supplement to the ParticipationAgreement states otherwise,aMemberwill become entitled to benefits in respect of contractual voluntary contributionsin the same circumstancesas thosenoted in theprecedingparagraph in respectofmandatorycontributions, subject to, in the case of aMemberwho is an employee of a participatingemployer,thecessationofemploymentoftherelevantMember.

Subject as provided in the ParticipationAgreement and/or supplement to the ParticipationAgreement, aMemberwho is a self-employedperson is entitled to request theTrustee topaytheMember all (but not part only) of the amounts attributable to theMember's contractualvoluntarycontributionsatanytime.

Subject as provided in the ParticipationAgreement and/or supplement to the ParticipationAgreement, a Special Voluntary ContributionAccountMember is entitled to request theTrusteetopaytheMemberallorpartonlyoftheamountsattributabletotheMember'sspecialvoluntary contributionsatany time.Unlessotherwiseprovided in theParticipationAgreementand/or supplement to the ParticipationAgreement, each request forwithdrawal of only partof the amounts attributable to a Special Voluntary ContributionAccountMember's specialvoluntary contributions is subject to aminimumwithdrawal amount ofHKD5,000. There is nolimitonthenumberofwithdrawalsofspecialvoluntarycontributionsthatcanbemadeinanyonecalendaryear.

Where aMember who is an employee of a participating employer hasmade voluntarycontributionsinadditiontothoserequiredbythetermsoftherelevantParticipationAgreementand/or supplement to the ParticipationAgreement ("Additional Voluntary Contributions"),theMember is entitled to request the Trustee to pay theMember amounts attributable totheMember's Additional Voluntary Contributions at any time subject to the following, unlessthe Trustee agrees otherwise: (1) the requestmust be in a form specified by the Trustee, (2)the requestmust relate to all amounts attributable to theMember's Additional VoluntaryContributions;and (3)notmore than2 requestsmaybemade inanyonefinancialyearof theMasterTrust(theperiodfrom1stAprilinayearto31stMarchinthefollowingyear).

Unclaimed benefitswill continue to be held and invested in theMaster Trust, subject to theprovisionsoftheMPFOrdinance.

Realisation of Units

WhereaMemberbecomes entitled tobenefits anda claim is submitted for suchbenefits, theTrusteewill realise theUnits credited to the account of theMember tomeet such claim forbenefits.

UnitsrealisedonaValuationDatewillberealisedatapricecalculatedbyreferencetothenetassetvalueperUnitoftherelevantConstituentFundasatthecloseofbusinessonthatValuationDate(forfurtherdetails,see"Calculationof IssueandRealisationPrices"onpage33below).Althoughthe

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Sponsorhasthepowerto levyabidspreadofupto0.5%oftherealisationpriceofeachUnitrealised,theSponsordoesnotpresentlyintendtolevysuchcharge.NobidspreadwillbeleviedontherealisationofUnits relatingtotheBEAMPFConservativeFund. Inanyevent, inrespectofatransferofaccruedbenefits(i)fromtheMasterTrusttoanotherregisteredscheme;(ii)fromanaccountwithintheMasterTrusttoanotheraccountwithintheMasterTrust;(iii)inthesameaccountwithin theMasterTrust, fromaConstituentFundtoanotherConstituentFund,and inrespectofpaymentofaccruedbenefits,totheextentrequiredbytheGeneralRegulation,nobidspreadshallbechargedotherthananamountrepresentingthenecessarytransactioncoststhatareincurred,orreasonablylikelytobeincurred,insellingorpurchasinginvestmentsinordertogiveeffecttosuchtransferorpayment.

Realisation of Unitswill be suspended and payment of benefitswill be delayedwhere thedeterminationofthenetassetvalueoftherelevantConstituentFundissuspended(forfurtherdetailssee"SuspensionofCalculationofNetAssetValue"onpage34below).

Inaddition,withaviewtoprotectingthe interestsofMembers, theTrustee isentitledto limitthenumberofUnitsrelatingtoanyConstituentFundrealisedonanyValuationDateto10%ofthetotalnumberofUnitsrelatingtothatConstituentFundinissue(disregardinganyUnitsthataretobe issuedonsuchValuationDate). In thisevent, the limitationwillapplyproratatoallMembersinrespectofwhomUnitsrelatingtothatConstituentFundaretoberealisedonthatValuationDate so that theproportionof suchUnits realised in respectof eachMember is thesame.Unitsnotrealised(butwhichwouldotherwisehavebeenrealised)willbecarriedforwardforrealisation,subjecttothesamelimitation,onthenextValuationDate.Ifrealisationsaresocarriedforward,theTrusteewillinformtheMembersconcerned.

Payment of Benefits

Lumpsumpayment

Subject as noted below, lump sum benefits (including amounts attributable to voluntarycontributions)willbepaidassoonasreasonablypracticableandinanyeventnotlaterthan(i)30daysafterthedateonwhichtheclaimislodgedor(ii)30daysafterthecontributiondayinrespectofthelastcontributionperiodthatendsbeforetheclaimislodged,whicheverislater.

Withdrawalbyinstalments

AMember (“Eligible Member”)who becomes entitled to benefits in respect ofmandatorycontributions and,where applicable, contractual voluntary contributions upon reaching theage of 65 or permanently ceasing employment or self–employment after reaching the age of60,mayelecttohavehisbenefitsderivedfrommandatorycontributionsand,whereapplicable,contractual voluntary contributions (together “Eligible Benefits”) paid in a lump sum or byinstalments (i.e.partialwithdrawal).Suchelection isnotavailable inothercircumstanceswhenaMember becomes entitled to benefits in respect ofmandatory and/or contractual voluntarycontributionsandthebenefitswillbepaidinalumpsumonly.

IfanEligibleMemberelectstohavehisEligibleBenefitspaidbyinstalments,foreachinstalment,heisrequiredtogiveinstructionstotheTrusteebysubmittingaseparateclaimform(availablefromtheTrusteeandtheSponsor)specifyingtheamountofwithdrawal.

Suchwithdrawal instructionswillapply tobenefitsboth in respectofmandatory contributionsand,whereapplicable,contractualvoluntarycontributions,onapro-ratabasis.ForexampleifanEligibleMemberisentitledtoaccruedbenefitsofHK$80,000whicharederivedfrommandatorycontributions (“Mandatory Benefits”) andHK$20,000which are derived from contractualvoluntary contributions (“Voluntary Benefits”), and the EligibleMemberwishes towithdrawHK$5,000,thenHK$4,000willbewithdrawnfromtheMandatoryBenefits,andHK$1,000willbewithdrawnfromtheVoluntaryBenefits,inproportiontothebenefitsattributabletomandatorycontributionsandcontractualvoluntarycontributions,respectively.

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Unless otherwise agreed between the Trustee and the EligibleMember, and subject as notedbelow,theTrusteewillpayeachwithdrawaltosuchEligibleMembernolaterthan30daysafterthedateonwhichtheEligibleMemberinstructstheTrusteetopaythatwithdrawal. In respect ofwithdrawal by instalments, the first 4 instalments (or such further number ofinstalmentsasdeterminedby theTrustee) inany calendaryear (theperiod from1st January to31stDecemberinayear)willbepaidfreeofcharge(otherthananynecessarytransactioncostspermittedundertheGeneralRegulation).Thereafter,eachadditionalwithdrawalbyinstalmentinthesamecalendaryear is subjecttoafeeofHK$100,whichshallbepaidtoabankaccountdesignated by the Trustee as specified in the claim form. Please note that bank chargesmayapply toMembers’ banking accounts ifMembers choose to be paid thewithdrawal amountdirectlytotheirbankaccount.

Tomeeteachwithdrawal request, theEligibleBenefits inallof theConstituent FundsheldbytheEligibleMemberwillberealised,sofaraspracticable,onapro-ratabasis.

Members should note that in the case ofwithdrawal of benefits by instalments, any balanceremaininginaMember’saccountwillcontinuetobeinvestedintherelevantConstituentFund(s)andthereforesubjecttoinvestmentrisks.

Other points to note

Benefitswill be paid in HK dollars to the relevant recipient at the recipient’s risk by chequeunlessotherwiseagreedbetweentheTrusteeandtherelevantrecipient.

Saveasdisclosedabove,nofeesorfinancialpenaltiesshallbechargedorimposedforpaymentofbenefits(inalumpsumorbyinstalmentsforthefirst4instalmentsinacalendaryear)otherthan an amount representing the necessary transaction costs that are incurred, or reasonablylikelytobeincurred,bytheTrusteeinsellingorpurchasinginvestments inordertogiveeffectto thepayment andarepayable to apartyother than the Trustee. Suchnecessary transactioncostswould include, but are not limited to, items such as brokerage commissions, fiscalcharges and levies, government charges, bank charges, exchange fees, costs and commissions,registration fees and charges, collection fees and expenses, etc. Any amount of such fees andchargesimposedandreceivedmustbeusedtoreimbursetherelevantConstituentFund.

Paymentmay be delayed in certain circumstances pursuant to theMPFOrdinance, includingwhere theMaster Trust is being audited or investigated at the instigation of theAuthority.Pending thepaymentofbenefits, theTrusteewill hold the realisationproceedsofUnits in aninterest bearing accountwith The Bank of East Asia, Limited. Interest earnedwill be creditedto the Constituent Fund(s) inwhich such amountswere invested immediately prior to therealisationofUnits.

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TRANSFERS TO AND FROM OTHER SCHEMES

Transfers to Other Schemes or other account(s) within the Master Trust

A participating employermay elect by notice inwriting to the trustee of another scheme totransfer amounts held to the credit ofMembers employed by the relevant employer undertheMaster Trust and that relate to theMembers' employmentwith the employer to thatother scheme inwhich the employerwill participateon themerger, divisionorwindingupoftheMaster Trust in accordancewith theMPFOrdinance orwhere the employer gives notice,personallyor through the trusteeof another scheme,of its intention to ceaseparticipation intheMasterTrustinrespectofsuchMembers.

Where aMemberwho is an employee of a participating employer ceases to be so employed,theMembermay elect by notice inwriting to the Trustee or the trustee of the new scheme,as thecasemaybe, tohaveamountsheldtothecreditof theMemberundertheMasterTrusttransferredto(a)anotheraccountintheMasterTrustor(b)anaccountinanothermastertrustscheme nominated by theMember or (c) an existing account of theMember in an industryscheme or (d) a contribution account in a registered scheme inwhich theMember's newemployerisparticipatinginrelationtothatMember.Inaddition:

(a) aMemberwhoisanemployeemayatanytimeelecttohave-

(i) alltheamountsheldtothecreditoftherelevantMemberundertheMasterTrustattributableto the relevantMember'smandatory contributions in respectof the relevantMember'scurrentemployment,transferredto(a)apersonalaccountintheMasterTrustnominatedbytherelevantMemberbynoticeinwritingtotheTrustee;or(b)apersonalaccountinanotherregisteredschemewhich isamastertrustschemeoran industryschemenominatedbytherelevantMemberbynoticeinwritingtothetrusteeofthenewscheme;and

(ii) all the amounts held to the credit of the relevantMemberunder theMaster Trustattributabletoallmandatorycontributionspaidbyor inrespectoftherelevantMemberthat are attributable to theMember's former employmentsor former self-employments,transferredto(a)apersonalaccountorcontributionaccountintheMasterTrustnominatedbytherelevantMemberbynoticeinwritingtotheTrustee;or(b)acontributionaccountwithinanotherregisteredschemeorapersonalaccountwithinanotherregisteredschemewhich is amaster trust schemeoran industry scheme, ineach caseasnominatedby therelevantMemberbynoticeinwritingtothetrusteeofthenewscheme.

Anelectiontotransferunderparagraph(i)abovemayonlybemadeonceineverycalendaryear.

(b) aMemberwhohas accruedbenefits held inoneormore thanonepersonal account in theMasterTrustmayatanytimeelecttohavealltheamountsheldinoneormoreofthepersonalaccountsoftherelevantMember,transferredto(a)apersonalaccountorcontributionaccountin theMaster Trust nominatedby the relevantMemberbynotice inwriting to the Trustee;or (b)a contributionaccountwithinanother registered schemeorapersonalaccountwithinanotherregisteredschemewhichisamastertrustschemeoranindustryscheme,ineachcaseasnominatedbytherelevantMemberbynoticeinwritingtothetrusteeofthenewscheme.

AMemberwho is a self-employed personmay at any time elect by notice inwriting to thetrusteeofthenewschemetohaveamountsheldtothecreditoftheMemberundertheMasterTrust transferred to (a) an account in anothermaster trust schemenominatedby theMemberor(b)anexistingaccountoftheMemberinanindustryschemeor(c)anaccountinanindustryscheme towhich theMember is eligible to belong or (d)where theMember subsequentlybecomes employed, a contribution account in the scheme inwhich theMember's employer isparticipatinginrelationtotheMember.

No fees shall be chargedandno financial penalties shall be imposed for transferring accruedbenefits(i)fromaregisteredschemetoanotherregisteredscheme;(ii)fromanaccountwithintheMasterTrusttoanotheraccountwithintheMasterTrust;(iii)inthesameaccountwithintheMasterTrust,fromaConstituentFundtoanotherConstituentFund,otherthananamountrepresentingthe

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necessarytransactioncoststhatareincurred,orreasonablylikelytobeincurred,bytheTrusteein sellingorpurchasing investments inorder togive effect to the transfer andarepayable toa party other than the Trustee. Such necessary transaction costswould include, but are notlimitedtobrokeragecommissions,fiscalchargesandlevies,governmentcharges,bankcharges,exchange fees, costs and commissions, registration fees and charges, collection fees andexpenses.AnyamountofsuchnecessarytransactioncostsimposedandreceivedshallbeusedtoreimbursetherelevantConstituentFund.

The redemption price of the Approved Pooled Investment Fund(s) inwhich the relevantConstituent Fund(s) investmay be adjusted to take account of realisation expenses including(butnotlimitedto)brokerage;stampduty;transactionfees,anybid/offerspreadofunderlyinginvestment; registration and transfer fees; bank charges; conversion charges; and any othertransaction costs. In the normal course, such adjustment is not expected to exceed 1%of theredemption price.

AnelectiontotransfermustbemadeintheformspecifiedbytheAuthorityandavailablefromscheme trustees. The Trustee on receipt fromanother trustee of notificationof an election totransfer(fortransfertootherschemes)andreceiptofnotificationofanelectiontotransfer(fortransferwithintheMasterTrust)willeffectatransferwithin30daysofsuchnotificationorifanelectionismadebyaMemberwhoisanemployeeofaparticipatingemployerwhoceasestobesoemployed,within30daysafter the last contributionday in respectof theemployment thathasceased,whicheveristhelater.TransfersmaybedelayedwherevaluationoftheConstituentFunds are suspended (see "Suspension of Calculation of Net Asset Value" on page 33) and incertaincircumstancesspecifiedpursuanttotheMPFOrdinance,includinginrespectofatransfermade under section 150 or section 150A of theGeneral Regulation there are contributionsor contribution surcharges or bothwhich are outstanding at the time of notification of suchtransfer. Pending the transfer of benefits, the Trusteewill hold the realisation proceeds ofUnitsinaninterestbearingaccountwithTheBankofEastAsia,Limited.Interestearnedwillbecredited to theConstituentFund(s) inwhich suchamountswere invested immediatelyprior totherealisationofUnits.

Transfers from Other Schemes

The Trustee has power to accept transfers from other schemes into theMaster Trust. Inparticular:

(a) aMemberwhoisanemployeemembermaytransferallofhis (i)accruedbenefitsderivedfrommandatory contributionsmade by him in respect of his current employment;(ii) accrued benefits derived frommandatory contributions attributable to his formeremploymentsorformerself-employmentor(iii)accruedbenefitsinhispersonalaccount(s)within another registered scheme into a personal account (for all of the above cases) ora contribution account (for (ii) and (iii) above) of theMemberwithin theMaster Trust inaccordancewiththeGeneralRegulation;

(b) any other eligible personsmay transfer all of his accrued benefits held in his personalaccount(s)within another registered scheme into a personal account or a contributionaccountwithintheMasterTrustinaccordancewiththeGeneralRegulation.

TheTrusteewillapplyamountsreceivedfromotherschemestoacquireUnitsintheConstituentFundsinaccordancewiththeinstructionsoftheMemberonaValuationDate,within20BusinessDaysofreceiptofsuchamountsinclearedfunds,togetherwithallrelevantdocumentationfromtheMemberandthetrusteeoftheotherscheme.Currently,noofferspreadwillbeleviedontheissueof suchUnits. Pending theacquisitionofUnits in theConstituent Funds, theTrusteewillholdsuchamounts inan interestbearingaccountwithTheBankofEastAsia,Limited. InterestearnedwillbeusedbytheTrusteetomeetgeneraloperatingexpensesoftheMasterTrust.

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CALCULATION OF NET ASSET VALUE AND ISSUE AND REALISATION PRICES

Calculation of Net Asset Value

The Trusteewill value each Constituent Fund and calculate the issue and realisation prices ofUnitsinaccordancewiththeTrustDeedasatthecloseofbusinessinthelastrelevantmarkettocloseoneachValuationDate.TheTrustDeedprovides(interalia)that:

(i) the value of any interest in a collective investment scheme (which, for the avoidanceof doubt, does not include interests in listedApproved Index-Tracking Funds) shall becalculated by reference to the price of such interest quoted at the relevant time by themanageroftherelevantcollectiveinvestmentscheme(orifmorethanonepriceisquoted,thebidprice);

(ii) the value of any investment not included in paragraph (i) abovewhich is listed, quotedordealt inonanapproved stockexchangeor approved futures exchange (which, for theavoidance of doubt, includes investments in Approved Index-Tracking Funds) shall becalculatedbyreferencetothelasttradedpriceofsuchinvestment;

(iii) the value of cash, deposits and similar investments not included in paragraphs (i) or (ii)aboveshallbecalculatedbyreferencetotheir facevalue (togetherwithaccrued interest)unless, in theopinionof theTrustee,anyadjustment shouldbemade to reflect thevaluethereof;

(iv) thevalueofanyotherinvestment(orinthecaseofanyinvestmentincludedinparagraphs(i),(ii)or(iii)abovetheprevailingpriceofwhichisnotconsideredtobefairbytheTrustee)shall be determined by any person (including the Sponsor) approved by the Trustee asqualifiedtovaluetherelevantinvestment;

(v) notwithstanding the foregoing, the Trusteemaymake such adjustments as it thinksappropriate to take account of any other assets or liabilities attributable to the relevantConstituentFundnototherwisereflectedinavaluationortoprovideafairerattributionofassetsandliabilitiesasbetweentheConstituentFunds;and

(vi) amountsexpressedincurrenciesotherthanHKdollarsshallbeconvertedintoHKdollarsatsuchprevailingratesofexchangeastheTrusteeshallconsiderappropriate.

Calculation of Issue and Realisation Prices

TheissuepriceofaUnitinaConstituentFundonaValuationDateisthenetassetvalueperUnitof suchclass roundedto4decimalplaces (with fractionsofHKD0.00005roundedup)providedthat the Trusteemay add an allowance (for the benefit of the relevant Constituent Fund) forfiscalandpurchasechargeswhichmightbepayable tobuy investments for theaccountof therelevantConstituentFund.

TherealisationpriceofaUnit inaConstituentFundonaValuationDate isthenetassetvalueperUnitof such class rounded to4decimalplaces (with fractionsofHKD0.00005 roundedup)providedthattheTrusteemaydeductanallowance(forthebenefitoftherelevantConstituentFund)forfiscalandsalechargeswhichmightbepayabletosell investmentsfortheaccountoftherelevantConstituentFund.

The net asset value per Unit in a Constituent Fund is calculated by valuing the assets of thatConstituent Fund, deducting the liabilities attributable to the relevant Constituent Fund anddividingtheresultantsumbythenumberofUnitsoftherelevantclassinissue.

Subject to theprior approvalof theAuthority and theCommission,not less than1month'spriorwrittennotice(orsuchotherperiodofnoticeastheAuthorityortheCommissionmayrequire)willbe

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giventoMembersinrespectofanychangestothevaluationorcalculationmethodsasdescribedabove.

Publication of Prices

TheissueandrealisationpricesperUnitofeachConstituentFundwillbepublisheddailyintheSouthChinaMorningPostandHongKongEconomicTimes.

Suspension of Calculation of Net Asset Value

UnlessotherwiseprohibitedbytheMPFOrdinance,theTrusteemaydeclareasuspensionofthedeterminationofthenetassetvalueofanyConstituentFund:

(a) during any periodwhen any stock exchange or othermarket onwhich any of theinvestmentsforthetimebeingheldfortheaccountofsuchConstituentFundarequotedisclosedotherwisethanforordinaryholidays;or

(b) during any periodwhen any dealings on any such stock exchange or othermarket arerestrictedorsuspended;or

(c) duringtheexistenceofanystateofaffairsasaresultofwhichdisposalofinvestmentsforthetimebeingcomprisedinsuchConstituentFundcannotintheopinionoftheTrusteebeeffectednormally;or

(d) duringanybreakdowninthemeansofcommunicationnormallyemployedindeterminingthe value of such Constituent Fund or part thereof or the issue price or realisation priceofUnits relating to suchConstituentFundorwhenforanyother reason thevalueofanyinvestment for the time being comprised in such Constituent Fund and representing asignificantpartofthevaluethereofcannotbepromptlyandaccuratelyascertained;or

(e) during any periodwhen the realisation of any investments for the time being comprisedin such Constituent Fund or the transfer of funds involved in such realisation cannotin the opinion of the Trustee be effected at normal prices or normal rates of exchangerespectively;or

(f) duringany suspensionofpaymentofbenefits fromtheMasterTrustpursuant to theMPFOrdinance.

Whenever the Trustee declares such a suspension it shall, as soon asmay be practicable afterany suchdeclaration andat least once amonthduring theperiodof such suspension, publisha notice in the South ChinaMorning Post andHong Kong Economic Times stating that suchdeclaration has been made.

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CHARGES AND EXPENSES

Sponsor’s Fees

TheSponsor isentitled to receivea fee for theConstituentFunds setoutat the rate specifiedbelow:

Constituent Fund Rate (p.a. of net asset value)

BEAGrowthFund 0.90%

BEABalancedFund 0.90%

BEAStableFund 0.90%

BEAGlobalEquityFund 0.90%

BEAAsianEquityFund 0.90%

BEAGreaterChinaEquityFund 0.90%

BEAGreaterChinaTrackerFund 0.60%

BEAHongKongTrackerFund 0.60%

BEAGlobalBondFund 0.90%

BEAMPFConservativeFund 0.79%

The Sponsor's fee is calculated and accrues on eachValuationDate and is payablemonthly inarrears. The Sponsor's fee is inclusive of the fees payable to the Trustee and the InvestmentManagerand theSponsorwillpay the feesof theTrusteeand the InvestmentManageroutofits own fee. The fees payable to the Trustee are inclusive of administration and custody feespayabletotheTrusteeinitscapacityastheAdministratorandCustodian(but,exclusiveoffeespayabletosub-custodianswhichwillbepaidfromtheassetsoftheMasterTrust).

Fees, charges and expenseswill only be payable out of the BEAMPF Conservative Fund tothe extent permitted by theMPFOrdinance. The Sponsorwill bear any charges or expensesattributable to theBEAMPFConservative Fundwhich arenotpermitted tobepayableoutoftheBEAMPFConservativeFund.FeesandchargesofanMPFconservativefundcanbedeductedfromeither (i) theassetsof such fundor (ii)member's accountbywayofunitdeduction. TheBEAMPFConservativeFundusesmethod(ii)and,therefore,unitprices,netassetvalueandfundperformancequoted (except for the fundperformance figuresquoted ina fundfact sheet)donotreflecttheimpactoffeesandcharges.

TheSponsormay increasetherateof feepayable in respectofanyConstituentFund(uptoortowardsamaximumrateof3%p.a.of thenetasset valueof theConstituentFund)ongivingnot less than 3 months' written notice to Members.

The Sponsordoes not currently intend to levy anoffer spreador a bid spreadon the issueorrealisationofUnits,althoughithasthepowerto levy (a)anofferspreadonthe issueofUnitsineachConstituentFund(otherthantheBEAMPFConservativeFund)ofupto5%oftheissueprice of suchUnits and (b) a bid spread on the realisation of Units in each Constituent Fund(otherthantheBEAMPFConservativeFund)ofupto0.5%oftherealisationpriceofsuchUnits.TheSponsorwillgivenotlessthan3months'writtennoticetoMembersofanychangeinsuchintention.

TheSponsormayshareanyfeesitreceiveswithdistributorsoragentsprocuringsubscriptionstotheMasterTrust.

Trustee and Investment Management Fees

The Trustee and the InvestmentManagerdonot currently charge any fees to theMaster Trust,although the Trustee is entitled to charge a feeof up to 3%p.a. of thenet asset valueof eachConstituent Fundongivingnot less than 3months'writtennotice toMembers. It is thepresentintentionoftheSponsorthatthetotalSponsor'sfees(inclusiveoftheTrustee'sfees(ifany)andthe

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InvestmentManager'sfees(ifany))chargedtoeachConstituentFundwillnotexceed0.90%p.a.ofthenetassetvalueoftheConstituentFund.

WhereaConstituentFund invests ina fundmanagedby the InvestmentManageroranyof itsassociatesnoofferspreadwillbepayablebytheConstituentFundinrespectofsuchinvestment. TheInvestmentManageranditsassociates(asdefinedinSchedule8oftheMPFOrdinance)maywith the consent of the Trustee dealwith any Constituent Fund, both as principal and agent,and, subject as provided below under "Cash Rebates and Soft Commissions",may retain anybenefitwhichtheyreceiveasaresult.

No Switching Fee

Nofeesmaybecharged,andnofinancialpenaltiesmaybeimposedonanyMemberinrelationtoanySwitchingInstructionotherthananamountrepresentingthenecessarytransactioncoststhat are incurred, or reasonably likely to be incurred by the Trustee in selling or purchasinginvestments in order to give effect to the Switching Instruction and are payable to a partyother than the Trustee. Such necessary transaction costsmay include, but are not limited to,items such as brokerage commissions, fiscal charges and levies, government charges, bankcharges,exchangefees,costsandcommissions,registrationfeesandcharges,collectionfeesandexpenses,etc.Furthermore,any suchnecessary transactioncosts imposedandreceived shallbeusedtoreimbursetherelevantConstituentFund.

Change in Mandate Fee

Currently,nofeewillbechargedforimplementingachangeinMandate.UndertheTrustDeed,theTrusteemayelecttochargeachangeinmandatefeeofuptoHKD200.TheTrusteewillgive3months'writtennoticetoMembersofanyelectiontochargesuchchangeinmandatefee.

Other Charges and Expenses

SubjectasprovidedaboveinrelationtotheBEAMPFConservativeFund,eachConstituentFundwill bear the costs set out in the Trust Deedwhich are directly attributable to it.Where suchcostsarenotdirectlyattributable toaConstituent Fund,eachConstituent Fundwillbear suchcostsinproportiontoitsrespectivenetassetvalueorinsuchothermannerastheTrusteeshallconsider fair. Such costs includebut arenot limited to the costs of investing and realising theinvestmentsof theConstituentFunds, the feesandexpensesof sub-custodiansof theassetsoftheMasterTrust,thefeesandexpensesoftheauditors,valuationcosts,legalfees,thestatutorycompensation fund levy (if any), premiums payable in respect of the Trustee's indemnityinsurance,thecosts incurredinconnectionwithanyregulatoryapprovalandthecosts incurredinthepreparationandprintingofanyexplanatorymemorandum,reportsandstatements.

No advertising or promotional expenseswill be charged to theMaster Trust or theApprovedPooledInvestmentFundsinwhichtheMasterTrustinvests.

Cash Rebates and Soft Commissions

Neither the InvestmentManager nor any of its connected personsmay retain cash or otherrebatesfromabrokerordealerinconsiderationofdirectingtransactionstothem.

The Investment Manager and any of its connected or associated persons may effecttransactions by or through the agency of another person with whom the InvestmentManager or any of its connected persons have an arrangement underwhich that partywil l from time to t ime provide to or procure for the Investment Manager or any ofits connected persons, goods, services or other benefits, such as research and advisoryservices, computer hardware associatedwith specialised software or research services andperformancemeasures etc., the nature ofwhich is such that their provision can reasonablybe expected to benefit theMaster Trust as awhole andmay contribute to an improvement

37

intheMasterTrust'sperformanceandthatofthe InvestmentManageroranyof itsconnectedpersons inprovidingservices to theMasterTrustandforwhichnodirectpayment ismadebutinstead the InvestmentManager or any of its connected persons undertake to place businesswith that party. For the avoidance of doubt such goods and services do not include travel,accommodation, entertainment, general administrative goods and services, general officeequipmentorpremises,membership fees,employee salariesordirectmoneypayments.DetailsofsoftcommissionarrangementswillbedisclosedintheMasterTrust'saccounts.

Fee Table

The following tabledescribes the fees, chargesandexpenses thatparticipatingemployersandMembersmay pay upon and after joining theMaster Trust. Important explanatory notes anddefinitionsaresetoutatthebottomofthetable.

(A) JOINING FEE & ANNUAL FEE

Type of fees Current amount (HKD) Payable by

Joiningfee1 Nil N/A

Annualfee2 Nil N/A

(B) FEES AND CHARGES PAYABLE ARISING FROM TRANSACTIONS IN INDIVIDUAL MEMBER’S ACCOUNT

Type of fees & charges

Name of Constituent Fund Current level Payable by

Contributioncharge3

BEAGrowthFund Nil N/ABEABalancedFund Nil N/ABEAStableFund Nil N/ABEAGlobalEquityFund Nil N/ABEAAsianEquityFund Nil N/ABEAGreaterChinaEquityFund Nil N/ABEAGreaterChinaTrackerFund Nil N/ABEAHongKongTrackerFund Nil N/ABEAGlobalBondFund Nil N/ABEAMPFConservativeFund N/A

Offerspread4 BEAGrowthFund CurrentlyWaived N/ABEABalancedFund CurrentlyWaived N/ABEAStableFund CurrentlyWaived N/ABEAGlobalEquityFund CurrentlyWaived N/ABEAAsianEquityFund CurrentlyWaived N/ABEAGreaterChinaEquityFund CurrentlyWaived N/ABEAGreaterChinaTrackerFund CurrentlyWaived N/ABEAHongKongTrackerFund CurrentlyWaived N/ABEAGlobalBondFund CurrentlyWaived N/ABEAMPFConservativeFund N/A

Bid spread5 BEAGrowthFund CurrentlyWaived N/ABEABalancedFund CurrentlyWaived N/ABEAStableFund CurrentlyWaived N/ABEAGlobalEquityFund CurrentlyWaived N/ABEAAsianEquityFund CurrentlyWaived N/ABEAGreaterChinaEquityFund CurrentlyWaived N/ABEAGreaterChinaTrackerFund CurrentlyWaived N/A

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(B) FEES AND CHARGES PAYABLE ARISING FROM TRANSACTIONS IN INDIVIDUAL MEMBER’S ACCOUNT

Type of fees & charges

Name of Constituent Fund Current level Payable by

Bid spread5 BEAHongKongTrackerFund CurrentlyWaived N/ABEAGlobalBondFund CurrentlyWaived N/ABEAMPFConservativeFund N/A

Withdrawal charge6

BEAGrowthFund Nil N/ABEABalancedFund Nil N/ABEAStableFund Nil N/ABEAGlobalEquityFund Nil N/ABEAAsianEquityFund Nil N/ABEAGreaterChinaEquityFund Nil N/ABEAGreaterChinaTrackerFund Nil N/ABEAHongKongTrackerFund Nil N/ABEAGlobalBondFund Nil N/ABEAMPFConservativeFund N/A

(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDSType of charges & expenses

Name of Constituent Fund Current level Deducted from

Managementfees7

BEAGrowthFund 0.90%p.a.ofnetassetvalue(“NAV”)

RelevantConstituentFund

assets

BEABalancedFund 0.90%p.a.ofNAVBEAStableFund 0.90%p.a.ofNAVBEAGlobalEquityFund 0.90%p.a.ofNAVBEAAsianEquityFund 0.90%p.a.ofNAVBEAGreaterChinaEquityFund 0.90%p.a.ofNAVBEAGreaterChinaTrackerFund 0.60%p.a.ofNAVBEAHongKongTrackerFund 0.60%p.a.ofNAVBEAGlobalBondFund 0.90%p.a.ofNAVBEAMPFConservativeFund 0.79%p.a.ofNAV RelevantMember’s

accountbyUnitdeduction

Other expenses

The Constituent Fundswill bear the operating expensesof theMaster Trust (e.g. compensation fund levy (if any),indemnity insurance, auditor’s fees and legal charges)in proportion to their respective net asset values or insuch othermanner as the Trustee shall consider fair. Suchexpenses are summarised in point (v) of the ExplanatoryNotes.

The establishment costs and payments incurred in theestablishmentoftheMasterTrustandtheabovementionedinitialConstituentFundsareestimatedtobeHKD1,372,500andwill bebornebyeachof the initial Constituent FundsoftheMasterTrustasfollows:-

• BEAGrowthFund–HKD133,250• BEABalancedFund–HKD133,250• BEAStableFund–HKD133,250• BEAGlobalEquityFund–HKD133,250• BEAAsianEquityFund–HKD133,250

RelevantConstituentFund

assets

(Other expenses ofBEAMPF

ConservativeFundaredeductedfromrelevantMember’saccountbyUnitdeduction.)

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(D) FEES AND CHARGES PAYABLE OUT OF THE UNDERLYING FUNDSType of fees & charges

Name of Constituent Fund Current level Deducted from

Managementfees7

BEAGrowthFund N/A

Relevantunderlyingfund

assets

BEABalancedFund N/ABEAStableFund N/ABEAGlobalEquityFund N/ABEAAsianEquityFund N/ABEAGreaterChinaEquityFund N/ABEAGreaterChinaTrackerFund 0.31%p.a.ofNAVBEAHongKongTrackerFund Upto0.10%p.a.of

NAVBEAGlobalBondFund N/ABEAMPFConservativeFund N/A

Other expenses

Each underlying fundmay bear its costs and operatingexpenses (e.g. establishment costof theunderlying fund,indemnity insurance, auditor’s feesand legal charges). Suchexpensesaresummarisedinpoint(vi)oftheExplanatoryNotes.

Relevantunderlyingfund

assets

(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICESCopying Services for Member Charges (HKD) Payable By Receivable ByCopyof”TrustDeed” $500

(percopy)

Member Trustee

Copyof“ParticipationAgreement”(ForSelf-employedPersonandPersonalAccountHolderOnly)Re-issuanceof“NoticeofParticipation”(ForSelf-employedPersonandPersonalAccountHolderOnly)

$50(percopy)

Copyof“Member–MembershipApplicationForm”Re-issuanceof“NoticeofParticipation”/“EnrolmentConfirmation”

$50(percopy)

(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDSType of charges & expenses

Name of Constituent Fund Current level Deducted from

Other expenses

• BEAGreaterChinaEquityFund–HKD133,250• BEAGreaterChinaTrackerFund–HKD133,250• BEAHongKongTrackerFund–HKD173,250• BEAGlobalBondFund–HKD133,250• BEAMPFConservativeFund–HKD133,250

Such establishment costs and paymentswill be borne bythese Constituent Funds and amortised over a period of5 years, commencing from the first anniversary of theformationoftherespectiveConstituentFund.

RelevantConstituentFund

assets

(Other expenses ofBEAMPF

ConservativeFundaredeductedfromrelevantMember’saccountbyUnitdeduction.)

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(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICESCopying Services for Member Charges (HKD) Payable By Receivable ByCopyofthelatest“SpecimenSignature”“Member–Declaration/StatementofAccounts(Self-employedPerson)”Form“Member–ChangeofDetails”Form“Member–Addition/ChangeofAdditionalVoluntaryContribution”Form“Member–ChangeofMandatetoInvestContributions/FundSwitchingInstruction”Form“Member–Claim/ElectionFormforTransferofAccruedBenefits”

$50(percopy)

Member Trustee

Copyofthelatest“BenefitPaymentStatement”“UnitTransferStatement”“AnnualBenefitStatement”

$50(percopy)

Copyof“QuarterlyBenefitStatement”inthelatestschemeyear

$50(perquarterly)

CopyofMPFContribution“Pay-inSlip”(ForSelf-employedPersonOnly)

$50(pereachPay-inSlip)

Copyof“ContributionReceipt”(ForSelf-employedPersonOnly)

$50(per each

contributionperiod)DetailsofMemberContribution $50

(per eachfinancialyear)

TotalamountofMPFAccruedBenefits $50(percopy)

Copyofotherform $50(percopy)

Copying Services for Employer Charges (HKD) Payable By Receivable ByCopyof”TrustDeed” $500

(percopy)

Employer Trustee

Copyof”ParticipationAgreement”Re-issuanceof”NoticeofAcceptance”

$50(percopy)

Copyofthelatest“SpecimenSignature”“ParticipatingEmployer’sRequestforFundTransferForm”“Employer–SupplementofEmployerVoluntaryContribution(RelevantEmployee)”

$50(percopy)

Copyofthelatest“Employer–ChangeofDetails”Form“Employer–NoticeofTermination(RelevantEmployee)”(pereachmember)

$50(percopy)

Copyof“Employer–RemittanceStatement”(ForRelevantEmployeeContribution)“ContributionReceipt”(ForRelevantEmployeeContribution)

$50(per each

contributionperiod)

Copyofthelatest“AnniversaryReport” $50(percopy)

CopyofMPFContribution“Pay-inSlip” $50(pereachPay-inSlip)

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Copying Services for Employer Charges (HKD) Payable By Receivable ByCopyof“MemberPayRecord” $50

(per each member ineachcontribution

period)Employer TrusteeDetailsofMemberContribution $50

(per each member in eachfinancialyear)

Copyofotherform $50(percopy)

Payment of benefits from mandatory or contractual voluntary contributions (as the case may be) by withdrawal by instalments, if applicable

Charges (HKD) Payable By Receivable By

First4instalments(orsuchfurthernumberofinstalmentsasdeterminedbytheTrustee)inanycalendaryear(theperiodfrom1st Januaryto31stDecemberinayear)

Freeofcharge(otherthananynecessarytransaction costs payabletoaparty

other than the TrusteeaspermittedundertheGeneral

Regulation)Member Trustee

Eachadditionalinstalmentsafterthefirst4instalments(orsuchfurthernumberoffreeinstalmentsasdeterminedbytheTrustee)inthesamecalendaryear(theperiodfrom1st Januaryto31stDecemberinayear)

$100perinstalments(inadditiontoanynecessarytransactioncostspayabletoapartyotherthantheTrusteeaspermittedundertheGeneral

Regulation)

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DEFINITIONS

Thefollowingarethedefinitionsofthedifferenttypesoffeesandcharges.

1. "Joining fee"means the one-off fee charged by the trustee/sponsor of a scheme andpayablebytheemployersand/ormembersuponjoiningthescheme.

2. "Annual fee"meansthefeechargedbythetrustee/sponsorofaschemeonanannualbasisandpayablebytheemployersand/ormembersofthescheme.

3. "Contribution charge"means the fee chargedby the trustee/sponsorofa schemeagainstany contributions paid to the scheme. This fee is usually charged as a percentage ofcontributionsandwill bededucted from the contributions. This chargedoesnotapply totheBEAMPFConservativeFund.

4. "Offer spread"ischargedbythetrustee/sponsoruponsubscriptionofunitsofaconstituentfundbyaschememember.OfferspreaddoesnotapplytotheBEAMPFConservativeFund.Offerspreadforatransferofbenefitscanonlyincludenecessarytransactioncostsincurredor reasonably likely to be incurred in selling or purchasing investments in order to giveeffecttothetransferandarepayabletoapartyotherthanthetrustee.

5. "Bid spread" is chargedby the trustee/sponsoruponredemptionofunitsofa constituentfundbya schememember.Bid spreaddoesnotapply to theBEAMPFConservativeFund.Bidspreadforatransferofbenefits,orwithdrawalofbenefits ina lumpsum,orthefirst4 instalments (or such other number of instalments asmay be prescribed by theGeneralRegulation) ofwithdrawal of benefits in a calendar year can only include necessarytransaction costs incurred or reasonably likely to be incurred in selling or purchasinginvestmentsinordertogiveeffecttothetransferorwithdrawalandarepayabletoapartyotherthanthetrustee.

6. "Withdrawal charge"means the fee charged by the trustee/sponsor of a scheme uponwithdrawalofaccruedbenefitsfromthescheme.Thisfeeisusuallychargedasapercentageofthewithdrawalamountandwillbedeductedfromthewithdrawalamount.ThischargedoesnotapplytotheBEAMPFConservativeFund.Awithdrawalchargeforwithdrawalofbenefits ina lumpsum,or the first4 instalments (or suchothernumberof instalmentsasmaybeprescribedbytheGeneralRegulation)ofwithdrawalofbenefitsinacalendaryearcanonly includenecessarytransactioncosts incurredorreasonably likelytobe incurred insellingorpurchasinginvestmentsinordertogiveeffecttothetransferorwithdrawalandarepayabletoapartyotherthanthetrustee.

7. "Management fees" includefeespaidto thetrustee,custodian,administrator, investmentmanager (including feesbasedon fundperformance, if any)and sponsorofa scheme forproviding their services to the relevant fund.Theyareusually chargedasapercentageofthenetassetvalueofafund.Sponsor'sfeesasdescribedinthisExplanatoryMemorandumcorrespondtoManagementfeesofconstituentfundsintheFeeTable.

EXPLANATORY NOTES

i. In respect of any increase in fees and charges from the current level as stated, at least 3months priorwritten noticemust be given to allMembers and participating employers.Impositionofanyadditional feesandchargeswillbe subject to thepriorapprovalof theAuthority and the Commission and at least 3month's priorwritten notice (or such otherperiod of notice as theAuthority or the Commissionmay require)will be given to allMembersandparticipatingemployers.

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ii. TheBEAGrowthFund,BEABalancedFund,BEAStableFund,BEAGlobalEquityFund,BEAAsian Equity Fund, BEAGreater China Equity Fund, BEAGreater China Tracker Fund, BEAHongKongTrackerFundandBEAGlobalBondFundwill, indirectly,bearthefees,chargesandexpensesoftheunderlyingfundinwhichtheyinvest.WhereaConstituentFundinvestsinanunderlyingfundmanagedbytheInvestmentManagerandwheretheTrusteeactsastrustee,nofeeforinvestmentmanagerortrusteewillbechargedonsuchunderlyingfund.

iii. The rateof theManagement feesmaybe increasedup toor towardsamaximumrateof3%p.a.ofthenetassetvalueofeachConstituentFundongivingnot lessthan3months'writtennoticetoaffectedMembers.

iv. It is the present intention of the Sponsor that theManagement fees charged to eachConstituentFundwillnotexceed0.90%p.a.ofthenetassetvalueoftheConstituentFund.

v. A Constituent Fundwill bear its operating expenses and the operating expenses of theMasterTrust,intheproportionwhichitsnetassetvaluebearstothenetassetvaluesoftheotherConstituentFunds,ifsuchexpensesarenotdirectlyattributabletoaConstituentFund(providedthatsuchoperatingexpenseswillonlybepaidoutoftheBEAMPFConservativeFund to the extent permitted by theMPFOrdinance). Such expenses include but are notlimitedtothecostsofinvestingandrealisingtheinvestmentsoftheConstituentFunds,thefeesandexpensesofsub-custodiansoftheassetsoftheMasterTrust,thefeesandexpensesof the auditors, valuation costs, legal fees, the statutory compensation fund levy (if any),premiums payable in respect of the Trustee's indemnity insurance, the costs incurred inconnectionwithanyregulatoryapproval,thecostsincurredinthepreparationandprintingofanyexplanatorymemorandum,reportsandstatementsandlicensefee(ifany)(applicabletotheConstituentFundsthatinvestinasingleApprovedIndex-TrackingFund).

vi. Each underlying fundmay bear its costs and operating expenseswhichmay includebut not limited to the fees and expenses of the custodians, sub-custodians, registrar,auditors, valuation costs, legal fees, the costs incurred in connectionwith any listing orregulatoryapproval,thecosts incurredinthepreparationandprintingofanyexplanatorymemorandum and the license fee (if any) (applicable to the underlyingApproved Index-TrackingFundsinwhichtheConstituentFundsinvest).

vii. The Fee Table does not take into account any fee rebate thatmay be offered to someemployers/MembersoftheMasterTrust.

A document that illustrates the on-going costs on contributions to the Constituent Funds intheMaster Trust (except for the BEAMPF Conservative Fund)will be distributedwith thisExplanatoryMemorandum from 30th September, 2014 onwards and an illustrative example forthe BEAMPF Conservative Fund is currently available for distributionwith this ExplanatoryMemorandum. Beforemaking any investment decisions concerning investments in theMasterTrust, you should ensure that you have the latest version of these documents. Copies can beobtainedfromtheofficesoftheTrustee.

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TAXATION

The following statements regarding taxation are based on advice received by the SponsorregardingthelawandpracticeinforceinHongKongatthedateofthisdocument.

Employers and prospectiveMembers should appreciate that as a result of changing law orpractice,thetaxationconsequencesofparticipatingintheMasterTrustmaybeotherwisethanas stated below. This summary is not intended to be comprehensive and should not be relieduponasasubstitutefordetailedandspecificadvice.EmployersandprospectiveMembersshouldseekprofessionaladviceregardingtheirparticulartaxcircumstances.

For Employers

Initial and special lump sum contributions are allowable for profits tax purposes in 5 equalinstalmentsover5years.

Annual contributionsmade by the employer in respect of an employee of up to 15%of thetotalemolumentsofsuchemployeeareallowableasadeductionforprofitstaxpurposes.Excesscontributionsarenotdeductible.

Refunds of voluntary contributions to the employerwill be treated as taxable receipts in thehandsoftheemployerforprofitstaxpurposes.

For Employees

Benefitsonretirementorearlierinthecaseofincapacity,terminalillnessordeatharegenerallynot subject to salaries tax in the hands of the employee. For tax purposes, “retirement” isdefinedasmeaning:-

– retirementfromtheserviceoftheemployerataspecifiedageofnotlessthan45years;

− retirementafteraperiodofservicewiththeemployerofnotlessthan10years;or

− attainmentofaspecifiedageofretirementor60years,whichever is later (whetherornottheemployeehasinfactretiredfromhisemploymentatsuchage).

Ifanemployeeleavesserviceotherwisethanonretirement,deathorincapacity,aproportionofthe employee's accrued benefit paid deriving from employer's voluntary contributionsmay besubjecttosalariestax.

Salariestaxisnotpayableontheportionofanypaymentthatrepresentseithertheemployee'scontributionsortheinvestmentearningsoftheMasterTrust.

The employer's contributions are not taxable on the employee. For salaries tax purposes, adeduction from salary is allowed for the amount of the employee'smandatory contributionsto theMaster Trust. However, employees' voluntary contributions to theMaster Trust are notdeductibleforsalariestaxpurposes.

For Self-Employed Persons

Self-employedpersonswillbeeligiblefordeductioninrespectoftheamountoftheirmandatorycontributionstotheMasterTrustfromtheirassessableprofits.

Profitstaxisnotpayableontheportionofanypaymentthatrepresentseithertheself-employedperson'scontributionsortheinvestmentearningsoftheMasterTrust.

For the Master Trust

TheMaster Trust is not expected to be subject to Hong Kong tax in respect of any of itsauthorisedactivities.

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GENERAL INFORMATION

Accounts, Reports and Statements

TheMasterTrust'sfinancialyearendis31stMarchineachyear.

As soonaspracticableaftereach financial year, theTrusteewillpreparea consolidated reportconsistingof(i)theauditedaccountsoftheMasterTrustpreparedinaccordancewithapplicableaccounting guidelines, (ii) the Trustee's report on theMaster Trust for the relevant financialyear and (iii) the InvestmentManager's investment report for the relevant financial year. Thisconsolidated reportwillbeopen for inspectionbyMembers freeof chargeatany timeduringnormal business hours on any day (excluding Saturdays, Sundays and public holidays) at theoffices of the Trustee.Membersmay request the Trustee to provide themwith copies of theconsolidatedreportsfortheMasterTrustforanyofthepreceding7financialyears.

TheTrusteewillsendeachMemberanannualbenefitstatementwithin3monthsoftheendofeachfinancialyear.TheannualbenefitstatementwillincludedetailsofthecontributionstotheMasterTrustinrespectoftheMemberduringtheyear,theUnitscreditedtotheaccountoftheMember ineachConstituentFundandthevalueof theaccruedbenefitsof theMemberundertheMasterTrustasatthestartandendoftherelevantfinancialyear.

Trust Deed

TheMasterTrustwasestablishedunderHongKonglawbyatrustdeeddatedasof17thAugust,2012madebetweentheSponsorandtheTrustee.AllMembersandparticipatingemployersareentitledtothebenefitof,areboundbyandaredeemedtohavenoticeoftheprovisionsoftheTrustDeed.

The Trust Deed contains provisions for the indemnification of the Trustee and the Sponsorand their relief from liability in certain circumstances.Members, participating employers andintending applicants are advised to consult the Trust Deed for further details on the relevantprovisions.

Modification of Trust Deed and Participation Agreements

TheTrusteeandtheSponsormayagreetomodifytheTrustDeedbysupplementaldeed,eithergenerallysoastoapplytoallMembersandparticipatingemployersorsoastoapplyspecificallyto a particularMember orMembers or a particular employer or employers andMembersemployedbysuchemployeroremployers.

AnymodificationstotheTrustDeedwillbesubmittedtotheAuthorityandtheCommissionforpriorapprovalandwillbenotifiedtoMembers.

TheTrustee,theSponsorandtherelevantemployer(orMemberinthecaseofaself-employedperson or other eligible person)may agree tomodify the ParticipationAgreement and/orsupplement to the ParticipationAgreement applicable to that employer (or self-employedpersonorothereligibleperson).

Termination, Merger or Division of Master Trust

TheMaster Trustmay bewound up by the court in accordancewith theMPFOrdinance onapplicationmadeby theAuthority to thecourt.TheTrustee shallgivenot less than3months'priorwritten notice (or such other period as theAuthority or the Commissionmay agree orrequire)toparticipatingemployersandMembersoftheterminationoftheMasterTrust.

SubjecttothepriorapprovaloftheAuthorityandtheCommission,theMasterTrustmaybemergedwithoneormoreotherschemesorsub-dividedintotwoormoreotherschemesinaccordancewiththeMPFOrdinance. The Trusteewill giveMembers andparticipating employers not less than 3

46

months' priorwritten notice of anymerger or sub-division of theMaster Trust (or such otherperiodofnoticeastheAuthorityortheCommissionmayrequire).

Material Contract

TheTrusteehasentered intothefollowingcontractwhich isormaybematerial to theMasterTrust:

• investmentmanagementagreementdatedasof21stAugust,2012,asamended,pursuanttowhichtheInvestmentManagerwasappointedasinvestmentmanageroftheMasterTrust,tomanagetheassetsoftheConstituentFunds.

Documents Available

Copies of the Trust Deed, any supplemental deeds, the investmentmanagement agreementreferredtoaboveandanyamendmentsthereto,thelatestExplanatoryMemorandum(togetherwithanyaddendum)andthelatestconsolidatedreportfortheMasterTrust(ifany)areavailablefor inspection freeof charge at any timeduringnormal business hours on anyday (excludingSaturdays, Sundaysandpublicholidays)at theofficesof theTrustee.Copiesof theTrustDeedand the contracts referred to above can be purchased from the Trustee on payment of areasonablefee.

Further, a copy of the latest ExplanatoryMemorandum (togetherwith any addendum) can beobtained freeof charge fromanyBEABranchor theMPFAdministrationCentre,orby callingtheBEA(MPF)Hotlineon22111777oremailingtoBEAMPF@hkbea.com,orbydownloadingacopyfromwww.hkbea.com.

47

APPENDIX

FURTHER INFORMATION ON THE INDICES

FTSE®GreaterChinaHKDIndex

TheFTSE®GreaterChinaHKDIndexistheHongKongdollarversionoftheFTSE®GreaterChinaIndex and is derived from the FTSE®All-World Index Series. The FTSE®All-World Index Seriesaggregatesapproximately2,800largeandmidcapstocks,covering90to95%oftheinvestablemarket capitalisation.

The FTSE®Greater ChinaHKD Index covers theGreater China Region and comprises of stockslisted in Hong Kong, Taiwan, Shanghai (B shares), Shenzhen (B shares) and Singapore,wherethe Singapore listed stocks are classified as Hong Kong nationality in accordancewith FTSEnationality rules. It does not have anyA share constituent stocks. As at 30th June, 2012, theFTSE®GreaterChinaHKDIndexcomprises370 largeandmidcapstocks,beingprimarilystockslisted inHongKongandTaiwanandhadanetmarket capitalizationof approximatelyHKD11trillion.

FTSEInternationalLimited("FTSE")istheIndexProvideroftheFTSE®GreaterChinaHKDIndex.TheInvestmentManageranditsconnectedpersonsareindependentofFTSE.

As at 30th June, 2012, the10 largest constituent stocksof the FTSE®GreaterChinaHKD Indexweresetoutbelowandtheyrepresentapproximately28.71%ofthenetmarketcapitalization,basedontotalsharesinissueoftheFTSE®GreaterChinaHKDIndex:

Code-Country Stock Name Weighting

2330-TW TaiwanSemiconductorManufacturingCo.Ltd. 4.84%

941-HK ChinaMobileLtd. 4.54%

939-HK ChinaConstructionBankCorporation 3.40%

1299-HK AIAGroupLtd. 2.84%

1398-HK IndustrialandCommercialBankofChinaLtd. 2.49%

883-HK CNOOCLtd. 2.45%

2317-TW HonHaiPrecisionIndustryCo.Ltd. 2.20%

3988-HK BankofChinaLtd. 2.19%

13-HK HutchisonWhampoaLtd. 1.89%

857-HK PetroChinaCo.Ltd. 1.87%

The index rulesand further information in relation to theFTSE®GreaterChinaHKD IndexareavailableontheFTSEwebsite,www.ftse.com/allworld.

FTSEcarriesouttheannualreviewoftheFTSE®GreaterChinaHKDIndexinMarcheachyear.

In the event that the FTSE®Greater ChinaHKD Index is terminated, ceases to operate or isnot available, the InvestmentManagermay subject to the approval of theAuthority and theCommission,seekareplacementoftheFTSE®GreaterChinaHKDIndexwithanotherindexthatthe InvestmentManager deems appropriate as suitable benchmark representing stocks of theGreaterChinaRegion. Ifnosuitable index is found, subject totheapprovalof theCommissionand theAuthority, the BEAGreater China Tracker Fundmay be terminated. Unless otherwiseagreedwiththeCommissionandtheAuthority,theTrusteewillgivenotlessthanonemonth'snoticeofanychangeintheunderlyingindex.

DisclaimerofFTSEInternationalLimited

TheBEAGreaterChinaTrackerFundisnotinanywaysponsored,endorsed,soldorpromotedbyFTSE International Limited ("FTSE") or the London Stock ExchangeGroup companies ("LSEG")

48

(together the "Licensor Parties") andnoneof the Licensor Partiesmakeany claim,prediction,warrantyor representationwhatsoever,expresslyor impliedly, eitheras to (i) the results tobeobtained from the use of the FTSE®Greater ChinaHKD Index (the "Index") (uponwhich theBEAGreaterChinaTrackerFund isbased), (ii) the figureatwhich the Index is said to standatany particular time on any particular day or otherwise, or (iii) the suitability of the Index forthe purpose towhich it is being put in connectionwith the BEAGreater China Tracker Fund.NoneoftheLicensorPartieshaveprovidedorwillprovideanyfinancialorinvestmentadviceorrecommendationinrelationtotheIndextotheTrusteeortoitsclients.TheIndexiscalculatedby FTSEor its agent.Noneof the LicensorParties shallbe (a) liable (whether innegligenceorotherwise) to any person for any error in the Index or (b) under any obligation to advise anypersonofanyerrortherein.

Allrights inthe Indexvest inFTSE."FTSE®"isatrademarkofLSEGandisusedbyFTSEunderlicence.

HangSengIndex

TheHangSengIndexisoneoftheearlieststockmarketindexesinHongKong,whichmeasuresthe performance of largest andmost liquid companies listed on theMain Board of the StockExchange of Hong Kong Limited ("SEHK"). Constituent stocks of theHang Seng Index areselectedbyarigorousprocessofdetailedanalysis.OnlycompanieswithaprimarylistingontheMain Board of the SEHK are eligible potential constituents.Mainland China enterprises thathaveHshare listing inHongKongwillbeeligible for inclusion in theHangSeng Index if theymeet certain conditions.

The constituent stocks are grouped under finance, utilities, properties, and commerce andindustrysub-indexes.TheHangSengIndexisreviewedquarterly.

TheHangSeng Indexcurrentlycomprises49constituentstockswhicharerepresentativeoftheHongKongstockmarket.Theaggregatemarketvalueofthesestocksaccountsforabout62.40percentofthetotalmarketcapitalisationofallstockslistedontheMainBoardofSEHK.

As at 30th June,2012, the respectiveweightingsof the top10 largest constituent stocksof theHangSengIndexare:

Code Stock Name Weighting5 HSBCHoldingsplc 15.99%941 ChinaMobileLtd. 8.55%939 ChinaConstructionBankCorporation 7.46%1398 IndustrialandCommercialBankofChinaLtd. 4.68%883 CNOOCLtd. 4.61%1299 AIAGroupLtd. 4.54%700 TencentHoldingsLtd. 4.18%857 PetroChinaCo.Ltd. 3.52%3988 BankofChinaLtd. 3.50%2628 ChinaLifeInsuranceCo.Ltd. 2.49%

Real-timeupdateoftheHangSengIndexcanbeobtainedthroughThomsonReuters,BloombergandthewebsiteofHangSengIndexesCompanyLimitedatwww.hsi.com.hk .TheindexrulesandfurtherinformationinrelationtotheHangSengIndexareavailableat www.hsi.com.hk.Asforother important news of theHang Seng Index, Hang Seng Indexes Company Limitedwill alsomakeannouncementsthroughpressreleasesandatwww.hsi.com.hk.

HangSengIndexesCompanyLimitedistheIndexProvideroftheHangSengIndex.TheInvestmentManageranditsconnectedpersonsareindependentofHangSengIndexesCompanyLimited.

In theevent that theHangSeng Index is terminated,ceases tooperateor isnotavailable, theInvestmentManagermaysubject to theapprovalof theAuthorityandtheCommission, seekareplacementof theHangSeng Indexwithanother index that itdeemsappropriateas suitable

49

benchmarkrepresentingtheoverallperformanceoftheHongKongstockmarket.Ifnosuitableindex is found, subject to the approval of the Commission and theAuthority, the BEAHongKongTracker Fundmaybe terminated.Unless otherwise agreedwith theCommissionand theAuthority,theTrusteewillgivenotlessthanonemonth'snoticeofanychangeintheunderlyingindex.

DisclaimerofHangSengIndexesCompanyLimitedandHangSengDataServicesLimited

TheHangSeng Index (the"Index") ispublishedandcompiledbyHangSeng IndexesCompanyLimitedpursuant to a licence fromHang SengData Services Limited. Themark(s) andname(s)Hang Seng Index are proprietary to Hang SengData Services Limited. Hang Seng IndexesCompany Limited and Hang Seng Data Services Limited have agreed to the use of, andreferenceto,theIndexbytheTrusteeinconnectionwiththeMasterTrust,BUT NEITHER HANG SENG INDEXES COMPANY LIMITED NOR HANG SENG DATA SERVICES LIMITED WARRANTS OR REPRESENTS OR GUARANTEES TO ANY BROKER OR HOLDER OF THE MASTER TRUST OR ANY OTHER PERSON (i) THE ACCURACY OR COMPLETENESS OF THE INDEX AND ITS COMPUTATION OR ANY INFORMATION RELATED THERETO; OR (ii) THE FITNESS OR SUITABILITY FOR ANY PURPOSE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT; OR (iii) THE RESULTS WHICH MAY BE OBTAINED BY ANY PERSON FROM THE USE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT FOR ANY PURPOSE, AND NO WARRANTY OR REPRESENTATION OR GUARANTEE OF ANY KIND WHATSOEVER RELATING TO THE INDEX IS GIVEN OR MAY BE IMPLIED. The process and basis of computation and compilation of the Index and any of therelated formula or formulae, constituent stocks and factorsmay at any time be changed oraltered byHang Seng Indexes Company Limitedwithout notice. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO RESPONSIBILITY OR LIABILITY IS ACCEPTED BY HANG SENG INDEXES COMPANY LIMITED OR HANG SENG DATA SERVICES LIMITED (i) IN RESPECT OF THE USE OF AND/ OR REFERENCE TO THE INDEX BY THE TRUSTEE IN CONNECTION WITH THE MASTER TRUST; OR (ii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES OR ERRORS OF HANG SENG INDEXES COMPANY LIMITED IN THE COMPUTATION OF THE INDEX; OR (iii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES, ERRORS OR INCOMPLETENESS OF ANY INFORMATION USED IN CONNECTION WITH THE COMPUTATION OF THE INDEX WHICH IS SUPPLIED BY ANY OTHER PERSON; OR (iv) FOR ANY ECONOMIC OR OTHER LOSS WHICH MAY BE DIRECTLY OR INDIRECTLY SUSTAINED BY ANY BROKER OR HOLDER OF THE MASTER TRUST OR ANY OTHER PERSON DEALING WITH THE MASTER TRUST AS A RESULT OF ANY OF THE AFORESAID, AND NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS MAY BE BROUGHT AGAINST HANG SENG INDEXES COMPANY LIMITED AND/ OR HANG SENG DATA SERVICES LIMITED in connectionwith theMaster Trust in anymannerwhatsoever by any broker, holder or other person dealingwith theMaster Trust. Any broker,holderorotherpersondealingwiththeMasterTrustdoessothereforeinfullknowledgeofthisdisclaimer and can place no reliancewhatsoever onHang Seng Indexes Company Limited andHangSengDataServicesLimited.Fortheavoidanceofdoubt,thisdisclaimerdoesnotcreateanycontractual or quasi-contractual relationship between any broker, holder or other person andHangSeng IndexesCompanyLimitedand/orHangSengDataServicesLimitedandmustnotbeconstruedtohavecreatedsuchrelationship.

Members invest ing in the BEA Hong Kong Tracker Fund wi l l be regarded as havingacknowledged,understoodandacceptedthedisclaimeraboveandwillbeboundbyit.TheleveloftheHangSengIndexatanytimeforthepurposesoftheBEAHongKongTrackerFundwillbethelevelascalculatedbyHangSengIndexesCompanyLimitedinitssolediscretion.

BEA (MPF) VALUE SCHEME

FIRST ADDENDUM TOTHE EXPLANATORY MEMORANDUM DATED DECEMBER, 2016

This First Addendum should be read in conjunction with and forms part of the Explanatory Memorandum for the BEA (MPF) Value Scheme (the “Master Trust”) dated December, 2016. All capitalised terms herein contained shall have the same meaning in this First Addendum as in the Explanatory Memorandum, unless otherwise stated. The Sponsor and the Trustee accept responsibility for the information contained in this First Addendum as being accurate as at the date of publication.

You may visit our website http://www.hkbea.com for the Explanatory Memorandum of the Master Trust or obtain a copy of the Explanatory Memorandum at the offices of the Trustee at 32nd Floor, BEA Tower, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong.

With effect from 1st April, 2017 (being the commencement date of the MPF default investment strategy), the Explanatory Memorandum shall be amended as follows:

MPF DEFAULT INVESTMENT STRATEGY

1. The “Important” section shall be amended by adding the following bullet points after the third bullet point:

“• You should consider your own risk tolerance level and financial circumstances before investing in the DIS. You should note that the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund may not be suitable for you, and there may be a risk mismatch between the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund and your risk profile (the resulting portfolio risk may be greater than your risk preference). You should seek financial and/or professional advice if you are in doubt as to whether the DIS is suitable for you, and make the investment decision most suitable for you taking into account your circumstances.

• You should note that the implementation of the DIS may have an impact on your MPF investments and benefits. You should consult with the Trustee if you have doubts on how you are being affected.”

2. Page 2 - The following new definitions shall be added to the section headed “DEFINITIONS” in the appropriate alphabetical order:

““Higher Risk Assets” has the meaning given to it in the MPF Ordinance”

““Lower Risk Assets” means those assets not being Higher Risk Assets, including without limitation global bonds and money market instruments”

““Reference Portfolio” means, in respect of each of the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund, the MPF industry developed reference portfolio adopted for the purpose of DIS to provide a common reference point for the performance and asset allocation of the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund (as the case may be).”

““Specific Investment Instruction” means:

(I) subject to (II) below, an instruction for investment allocations which meets the following requirements:

– each investment allocation is in a multiple of 10%; and

– the aggregate (or in the case of any switching instruction, the switch-in total) of which is 100%; or

(II) where the instruction is to invest in DIS, an instruction to invest 100% of: (A) existing accrued benefits and/or (B) future contributions and accrued benefits transferred from another scheme in the DIS; or

(III) any confirmation (whether through hard copy submission, cyberbanking, mobile apps or IVRS (interactive voice recording system)) by a Member with regard to any investment arrangements of the existing accrued benefits and/or future contributions and accrued benefits transferred from another scheme.

Any investment mandate, change of investment mandate or switching instruction must meet the requirements for a “Specific Investment Instruction”.”

3. Page 27 - The following paragraphs shall be inserted after the sub-section headed “Instructions to Change Investment” under the section headed “CONTRIBUTIONS”:-

“MPF Default Investment Strategy (“DIS”)

DIS is a ready-made investment arrangement mainly designed for those MPF scheme members who are not interested or do not wish to make an investment choice, and is also available as an investment choice itself for Members who find it suitable for their own circumstances. For those Members who do not make an investment choice, their contributions and accrued benefits transferred from another scheme will be invested in accordance with the DIS. The DIS is required by law to be offered in every MPF scheme and is designed to be substantially similar in all MPF schemes.

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Asset Allocation

The DIS aims to balance the long term effects of risk and return through investing in two Constituent Funds, namely BEA Core Accumulation Fund and BEA Age 65 Plus Fund, according to the pre-set allocation percentages at different ages. The BEA Core Accumulation Fund will invest around 60% in Higher Risk Assets (Higher Risk Assets generally mean equities or similar investments) and 40% in Lower Risk Assets (Lower Risk Assets generally mean bonds or similar investments) of its net asset value whereas the BEA Age 65 Plus Fund will invest around 20% in Higher Risk Assets and 80% in Lower Risk Assets. Both Constituent Funds adopt globally diversified investment principles and use different classes of assets, including global equities, fixed income, money market and cash, and other types of assets allowed under the MPF legislation.

De-risking of the DIS

Accrued benefits invested through the DIS will be invested in a way that adjusts risk depending on a Member’s age. The DIS will manage investment risk exposure by automatically reducing the exposure to Higher Risk Assets and correspondingly increasing the exposure to Lower Risk Assets as the Member gets older. Such de-risking is to be achieved by way of reducing the holding in BEA Core Accumulation Fund and increasing the holding in BEA Age 65 Plus Fund throughout the prescribed time span as detailed below. Diagram 1 below shows the target proportion of investment in riskier assets over time. The asset allocation stays the same up until 50 years of age, then reduces steadily until age 64, after which it stays steady again.

Diagram 1: Asset Allocation between Constituent Funds in the DIS

Note: The exact proportion of the portfolio in Higher Risk Assets /Lower Risk Assets at any point in time may deviate from the target glide path due to market fluctuations.

The above de-risking is to be achieved by annual adjustments of asset allocation gradually from BEA Core Accumulation Fund to BEA Age 65 Plus Fund under the DIS. Save for the circumstances set out in this section “De-risking of the DIS”, switching of the existing accrued benefits among BEA Core Accumulation Fund and BEA Age 65 Plus Fund will be automatically carried out each year on a Member’s birthday and according to the allocation percentages as shown in the DIS De-risking Table as shown in Diagram 2 below. If the Member’s birthday is not on a Business Day, then the investments will be moved on the next available Business Day. Alternatively, if the Member’s birthday falls on the 29th of February and in the year which is not a leap year, then the investments will be moved on 1st

of March or the next available Business Day. If there is any exceptional circumstance, e.g. market closure or suspension of dealing, on the Member’s birthday which makes it impossible for the investments to be moved on that day, the investments will be moved on the next available Business Day.

If the relevant Member notifies the Trustee of his / her updated birthday, then the Trustee will, as soon as practicable, and in any case within 2 weeks, after being so notified, adjust the allocation between the BEA Core Accumulation Fund and BEA Age 65 Plus Fund according to his / her updated birthday, and effect the de-risking in the future years according to the DIS de-risking table in Diagram 2 below and his / her updated birthday. When one or more of the specified instructions (including but not limited to subscription, redemption, switching or withdrawal instructions) are being received prior to or on the annual date of de-risking for a relevant Member and being processed on that date, the annual de-risking may be deferred and will only take place after completion of these specified instructions. The smallest amount of Units of each of the BEA Age 65 Plus Fund and/or the BEA Core Accumulation Fund that can be issued in the annual de-risking under the DIS shall be a fraction of not less than one-thousandth of a Unit.

Please refer to the section headed “Contributions” for details regarding the handling procedures for subscription, redemption and switching respectively.

Members should be aware that the above de-risking will not apply where the Member chooses BEA Core Accumulation Fund and BEA Age 65 Plus Fund as individual fund choices (rather than as part of the DIS).

In summary, under the DIS:

– when a Member is below the age of 50, all existing accrued benefits and all contributions and accrued benefits transferred from another scheme will be invested in the BEA Core Accumulation Fund;

Lower risk assets (mainly global bonds)

Higher risk assets (mainly global equities)

Perc

enta

ge o

f to

tal a

sset

s

BEA Core Accumulation Fund BEA Age 65 Plus Fund

Under 50 50 - 64 65+ Age

40%

60%

20%

80%

2

– when a Member is between the ages of 50 and 64, all existing accrued benefits and all contributions and accrued benefits transferred from another scheme will be invested according to the allocation percentages between BEA Core Accumulation Fund and BEA Age 65 Plus Fund as shown in the DIS De-risking Table below. The de-risking on the existing accrued benefits will be automatically carried out as described above;

– when a Member reaches the age of 64, all existing accrued benefits and all contributions and accrued benefits transferred from another scheme will be invested in BEA Age 65 Plus Fund;

– if the relevant Member has reached 60 years of age before 1st April, 2017, unless the Member has given a Specific Investment Instruction, the Member’s accrued benefits (including new contributions and accrued benefits transferred from another scheme) will be invested in the same manner as at 31st March, 2017;

– For a deceased Member, de-risking will cease once the Trustee has received proof of the death of the Member to the Trustee’s satisfaction. If de-risking has already been taken place between the death of the Member and the time at which the Trustee received the satisfactory proof of such death, such de-risking will not be undone, although no further de-risking will take place in respect of the deceased Member.

If the Trustee does not have the full date of birth of the relevant Member:

– If only the year and month of birth is available, the annual de-risking will use the last calendar day of the birth month, or if it is not a Business Day, the next available Business Day;

– If only the year of birth is available, the annual de-risking will use the last calendar day of the year, or if it is not a Business Day, the next available Business Day;

– If no information at all on the date of birth, Member’s accrued benefits will be fully invested in BEA Age 65 Plus Fund with no de-risking applied.

Diagram 2: DIS De-risking Table

Age BEA Core Accumulation Fund BEA Age 65 Plus Fund

Below 50 100.0% 0.0%

50 93.3% 6.7%

51 86.7% 13.3%

52 80.0% 20.0%

53 73.3% 26.7%

54 66.7% 33.3%

55 60.0% 40.0%

56 53.3% 46.7%

57 46.7% 53.3%

58 40.0% 60.0%

59 33.3% 66.7%

60 26.7% 73.3%

61 20.0% 80.0%

62 13.3% 86.7%

63 6.7% 93.3%

64 and above 0.0% 100.0%

Note: The above allocation between BEA Core Accumulation Fund and BEA Age 65 Plus Fund is made at the point of annual de-risking and the proportion of BEA Core Accumulation Fund and BEA Age 65 Plus Fund in the DIS portfolio may vary during the year due to market fluctuations.

The investment allocation of each relevant Member between BEA Core Accumulation Fund and BEA Age 65 Plus Fund will be rounded off to one decimal place.

The Trustee will, to the extent practicable, issue a notice to the relevant Member at least 60 days prior to his/her 50th birthday informing him/her of the commencement of the de-risking process. Also, a confirmation statement will be sent to the relevant Member no later than 5 Business Days after the de-risking process has been completed.

Please refer to the section “Investment Objectives and Policies” for the investment policies and objectives and the other pages of this section “MPF Default Investment Strategy” for the specific operational arrangements of the Constituent Funds which are under the DIS.

Switching in and out of the DIS

Members can switch into or out of the DIS at any time, subject to the rules of the Master Trust. Members should, however, bear in mind that the DIS has been designed as a long-term investment arrangement. Where the relevant Member’s existing investment is under the DIS, he/she may only switch out of the DIS if he/she elects to have both the accrued benefits and new contributions and accrued

3

benefits transferred from another scheme under all sub-accounts invested outside of the DIS. Conversely, where the relevant Member wishes to transfer into the DIS, he/she can elect to have either (i) the accrued benefits, or (ii) new contributions and accrued benefits transferred from another scheme invested in the DIS. If a Member only elects to switch the existing accrued benefits outside of the DIS without providing a new Specific Investment Instruction, new contributions and accrued benefits transferred from another scheme will still be invested in the DIS. Also, Members may change their investment mandate to invest in the DIS at any time.

Circumstances for Accrued Benefits to be Invested in the DIS

(i) New accounts set up on or after 1st April, 2017:

(a) When a Member (including a Member who is a Special Voluntary Contribution Account Member) joins the Master Trust or sets up a new account in the Master Trust, they have the opportunity to give a Specific Investment Instruction for their future contributions and accrued benefits transferred from another scheme. They may choose to invest their future contributions and accrued benefits transferred from another scheme into:

(I) the DIS; or

(II) one or more Constituent Funds of their own choice from the list under the section headed “Constituent Funds” above (including the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund) and according to their assigned allocation percentage(s) to relevant fund(s) of their choice;

(b) Upon enrolment, a Member who is an employee member may give a Specific Investment Instruction for employer’s mandatory and voluntary contributions and a different Specific Investment Instruction for employee’s mandatory and voluntary contributions. Subsequent to enrolment, such a Member may however give different Specific Investment Instructions to different types of contributions; to illustrate, a Specific Investment Instruction may be given to a Member’s employer’s mandatory contributions and a different Specific Investment Instruction may be given to the Member’s employer’s voluntary contributions;

(c) Members should note that, if investments/benefits in BEA Core Accumulation Fund or BEA Age 65 Plus Fund are made under the Member’s Specific Investment Instructions for investment in such fund (as a standalone fund choice rather than as part of the DIS offered as a choice) (“standalone investments”), those investments/benefits will not be subject to the de-risking process. If a Member’s accrued benefits are invested in any combination of (i) BEA Core Accumulation Fund and/or BEA Age 65 Plus Fund as standalone investments and (ii) the DIS (no matter by default or by a Specific Investment Instruction), accrued benefits invested under (i) will not be subject to the de-risking mechanism whereas for accrued benefits under (ii) will be subject to the de-risking process. In this connection, Members should pay attention to the different on-going administration arrangements applicable to accrued benefits invested in (i) and (ii). In particular, Members will, when giving a fund switching instruction, be required to specify to which part of the benefits (namely, under (i) or (ii)) the instruction relates;

(d) If a Member opts for (a)(II) above, the investment instruction must meet the requirements for a Specific Investment Instruction. The following table sets out the different investment instructions and the consequences of each investment instruction given upon enrolment being invalid:

Investment instruction Consequences

A. The total investment allocation is less than 100%.The remaining percentage of contributions and accrued benefits transferred from another scheme will be invested into DIS.

B. The total exceeds 100%.

The entire contributions and accrued benefits transferred from another scheme will be invested into DIS.

C. The investment allocation is not in a multiple of 10%.

D. The investment instruction is not legible and the Trustee is unable to process.

E. No investment allocation is given.

(e) If Members do not give Specific Investment Instructions, their future contributions and accrued benefits transferred from another scheme will be automatically invested in the DIS;

(f) Where a Member has multiple capacities under the same Master Trust (e.g. a Member being an employee member and a personal account holder), the investment arrangement applies to the accounts of the Member in each capacity individually. In other words, if a Member is an employee member and a personal account holder and wishes to switch his accrued benefits and contributions under the accounts related to his/her employee member status into DIS, such switching will only impact the accounts related to his/her employee member status and not the accounts related to his/her personal account holder status.

(ii) Existing accounts set up before 1st April, 2017:

There are special rules to be applied for accounts which exist or are set up before 1st April, 2017 (“Pre-existing Accounts”) and these rules only apply to Members who are under or becoming 60 years of age on 1st April, 2017:

(a) For a Member’s Pre-existing Account with all accrued benefits being invested according to the original default investment arrangement which was generally resulted from no investment instruction being given on the existing accrued benefits (such Member being a “DIA Member”):

If, as of 1st April, 2017, the accrued benefits in a Member’s Pre-existing Account are only invested in the original default investment arrangement of the Master Trust (i.e. BEA Stable Fund), special rules and arrangements will be applied, in due course, to determine whether the accrued benefits in such account will be transferred to the DIS and whether the future

4

contributions and accrued benefits transferred from another scheme for such account will be invested in DIS. If a Member’s Pre-existing Account is the one described above, a notice called the DIS Re-investment Notice (the “DRN”) may be sent to the DIA Member within 6 months from 1st April, 2017 explaining the impact on such account and giving the DIA Member an opportunity to give a specified investment instruction to the Trustee before the accrued benefits, future contributions and accrued benefits transferred from another scheme are invested into the DIS. If the Trustee is not aware of any contact details of the Member that enable the Trustee to give the DRN, the Trustee will proceed to locate the Member in the manner, and within the time limit, specified in the guidelines issued by the Authority. Members should note that the risk inherent in the arrangement, in particular, the risk of the original default investment arrangement under “Risk Factors” may be different from that of the DIS. They will also be subject to market risks during the redemption and reinvestment process. The following table summarises the risk levels of each of the original default investment arrangement, the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund:

Name of the constituent fund Risk level

BEA Stable Fund Low to medium

BEA Core Accumulation Fund Medium to high

BEA Age 65 Plus Fund Low to medium

For details of the arrangement, Members should refer to the DRN.

(b) For a Member’s Pre-existing Account with part of the accrued benefits in the original default investment arrangement:

For a Member’s Pre-existing Account which accrued benefits are partly invested in the original default investment arrangement immediately before 1st April, 2017 (as a result of no valid investment instruction being given in respect of that part of the accrued benefits), unless the Trustee has received any Specific Investment Instructions, accrued benefits of a Member (including future contributions and accrued benefits transferred from another scheme) will be invested in the same manner as immediately before 1st April, 2017;

(c) For a Member’s Pre-existing Account which, as at 31st March, 2017, has all of the accrued benefits in it invested in Constituent Funds other than the original default investment arrangement for whatever reasons (e.g. as a result of switching instructions or accrued benefits from another account within the Master Trust being transferred to the Pre-existing Account) and no investment mandate has ever been given for the Pre-existing Account in respect of new contributions and accrued benefits transferred from another scheme, unless the Trustee has received any Specific Investment Instructions, the Member’s accrued benefits will be invested in the same manner as they were invested immediately before 1st April, 2017, while the new contributions and accrued benefits transferred from another scheme paid to the Member’s Pre-existing Account on or after 1st April, 2017 will be invested in the DIS.

(iii) Treatment of benefits transferred from a contribution account to a personal account:

Where a Member ceases employment with a participating employer and:

(a) in the absence of his/her election to transfer such benefits as described in the sub-section headed “Transfers to Other Schemes or other account(s) within the Master Trust”, and his/her accrued benefits in respect of such employment are automatically transferred to a personal account under the Master Trust upon the expiry of the three months’ period after the Trustee has been notified of the termination of his/her employment; or

(b) the Member has given instruction to transfer the accrued benefits from such employment to a personal account and his/her accrued benefits are therefore transferred to the personal account,

the accrued benefits transferred from the Member’s contribution account to the Member’s personal account will be invested in the same manner immediately before the transfer, and, unless the Trustee receives a Specific Investment Instruction from the Member with regard to the Member’s personal account, any future contributions and accrued benefits from another scheme may be invested in the DIS.

Fees and Out-of-Pocket Expenses of the DIS

In accordance with section 34DD(4) and Schedule 11 of the MPF Ordinance, the aggregate of the payments for services specified in section 34DD(2) of the MPF Ordinance of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund must not, in a single day, exceed a daily rate (being 0.75% per annum of the net asset value of each of these two Constituent Funds divided by the number of days in the year).

The above aggregate payments for services (i.e. “management fees” as defined in 7A of the sub-section “DEFINITIONS” under the section headed “Fee Table”) include, but are not limited to, the fees paid or payable for the services provided by the Trustee, the Administrator, the Sponsor and/or the Investment Manager of the Master Trust and the underlying investment funds of each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund, and any of the delegates from these parties and such fees are calculated as a percentage of the net asset value of each of the Constituent Funds and its underlying investment fund(s), but does not include any out-of-pocket expenses incurred by each Constituent Fund and its underlying investment fund(s).

In addition, in accordance with section 34DD(4) and Schedule 11 to the MPF Ordinance, the total amount of all payments that are charged to or imposed on each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund or Members who invest in each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund, for out-of-pocket expenses incurred by the Trustee on a recurrent basis in the

5

discharge of the Trustee’s duties to provide services in relation to each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund, shall not in a single year exceed 0.2% of the net asset value of each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund. For this purpose, out-of-pocket expenses include, for example, annual audit expenses, printing or postage expenses relating to recurrent activities (such as issuing annual benefit statements), recurrent legal and professional expenses, safe custody charges which are customarily not calculated as a percentage of the net asset value and transaction costs incurred by each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund in connection with recurrent acquisition of investments for each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund (including, for example, costs incurred in acquiring underlying funds) and annual statutory expenses (such as compensation fund levy where relevant) of each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund.

Members should note that out-of-pocket expenses that are not incurred on a recurrent basis may still be charged to or imposed on the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund. Such fees are not subject to the statutory caps mentioned in the preceding paragraphs.

For further details, please refer to the fee table “(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDS” under the section “Fee Table” of this Explanatory Memorandum.

Information on Performance of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund

The fund performance (including the definition and actual figures of the fund expense ratio) and Reference Portfolios of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund will be published in the fund fact sheets (and one of which will be attached to annual benefit statement). Members can visit http://www.hkbea.com or call the customer service hotline for information. Members may also obtain the fund performance information at the website of the Authority (www.mpfa.org.hk).

The Reference Portfolio is adopted for the purpose of DIS. The fund performance will be reported against the Reference Portfolio published by the Hong Kong Investment Funds Association. Please visit www.hkifa.org.hk for further information regarding the performance of the Reference Portfolio.

The fund performance is calculated in Hong Kong dollar on NAV-to-NAV basis. Past performance is not indicative of future performance. There is no assurance that investment returns and members’ accrued benefits may not suffer significant loss. Members should regularly review the performance of the fund and consider whether the investments still suit their personal needs and circumstances.”

RISK FACTORS ASSOCIATED WITH THE DIS

4. Page 20 - The following paragraphs shall be inserted after the sub-section headed “Early termination risk” under the section headed “Risk Factors”:-

“Principal risks of investing in DIS

Members should note that there are a number of attributes of the design of the DIS strategy as set out below, which affect the types of risks associated with the DIS.

Limitations on the strategy

(i) Age as the sole factor in determining the asset allocation under the DIS

As set out in more detail in “MPF Default Investment Strategy”, Members should note that the DIS adopts pre-determined asset allocation and automatically adjusts asset allocation based only upon a Member’s age. The DIS does not take into account factors other than age, such as market and economic conditions nor Member’s personal circumstances including investment objectives, financial needs, risk tolerance or likely retirement date. Members who want their MPF portfolio to reflect their own personal circumstances can make their own selection of funds from the range available in the Master Trust.

(ii) Pre-set asset allocation

Members should note that the BEA Core Accumulation Fund and BEA Age 65 Plus Fund have to follow the prescribed allocation between Higher Risk Assets and Lower Risk Assets at all times subject to a tolerance level of + or - 5%. The prescribed exposure between Higher Risk Assets and Lower Risk Assets of BEA Core Accumulation Fund and BEA Age 65 Plus Fund will limit the ability of the Investment Manager of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund to adjust asset allocations in response to sudden market fluctuations; for example through the adoption of either a more defensive asset allocation approach (being an approach which seeks to reduce Higher Risk Assets exposure), or alternatively a more aggressive asset allocation approach (being an approach which seeks to increase Higher Risk Assets exposure) even if, for some reason, the Investment Manager thought it appropriate to do so.

(iii) Annual de-risking between the BEA Core Accumulation Fund and BEA Age 65 Plus Fund

Members should note that de-risking for each relevant Member will generally be carried out on a Member’s birthday, regardless of the prevailing market conditions. While the de-risking process aims at managing risks of the investments through reducing exposure to Higher Risk Assets, it may preclude the DIS from fully capturing the upside in rising equity markets during the de-risking process and therefore would underperform as compared with funds not adopting the de-risking process under the same market conditions.

It is possible that the de-risking process is done at a time which may result in Members reducing exposure to an asset class which outperforms and increasing exposure to an asset class which underperforms. The asset allocation changes gradually over a 15-year

6

time period. Members should be aware that the de-risking operates automatically regardless of the wish of a Member to adopt a strategy which might catch market upside or avoid market downside.

Also, the de-risking process cannot insulate Members from “systemic risk”, such as broad-based recessions and other economic crises, which will affect the prices of most asset classes at the same time.

(iv) Potential rebalancing within each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund

In order to maintain the prescribed allocation between the Higher Risk Assets and Lower Risk Assets within each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund, the investments of each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund may have to be continuously rebalanced. For example, when the Higher Risk Assets perform poorly, the BEA Core Accumulation Fund’s or BEA Age 65 Plus Fund’s asset allocation may fall outside the respective prescribed limit. In this case, each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund will have to liquidate some of the better performing Lower Risk Assets in order to invest more in the Higher Risk Assets, even if the Investment Manager is of the view that the Higher Risk Assets might continue to perform poorly.

(v) Additional transaction costs

Due to (a) the potential rebalancing of Higher Risk Assets and Lower Risk Assets in the process of maintaining the prescribed allocation within each of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund and (b) the annual reallocation of accrued benefits for Members under the de-risking process, the DIS may incur greater transaction costs than a fund/strategy with more static allocation.

General investment risk related to DIS

Although DIS is a statutory arrangement, it does not guarantee capital repayment nor positive investment returns (in particular for those Members with only a short investment horizon before retirement). The two designated Constituent Funds for DIS are mixed asset funds investing in a mix of equities and bonds. Members should note that the DIS which invests in these Constituent Funds is subject to the general investment risks that apply to mixed asset funds. For general key risks relating to investment funds, please refer to the section headed “Risk Factors”.

Risk on early withdrawal and switching

Since the DIS has been developed having regard to the long-term balance between risks and likely returns, and assumes retirement at the age of 65, any cessation of the strategy (for example through early withdrawal of accrued benefits or switching into other funds) will affect that balance.

Impact on Members keeping benefits in the DIS beyond the age of 64

Members should note that the de-risking process will discontinue upon reaching the age of 64. Members should be aware that all accrued benefits (including accrued benefits transferred from another scheme)/on-going contributions, if any, will be invested in the BEA Age 65 Plus Fund which holds around 20% of its assets in Higher Risk Assets which may not be suitable for all Members beyond the age of 64.”

BEA CORE ACCUMULATION FUND AND BEA AGE 65 PLUS FUND

5. Page 6 - The second paragraph under the section headed “CONSTITUENT FUNDS” shall be deleted in its entirety and replaced by the following:

“The Master Trust currently offers 12 Constituent Funds for investment, listed below:-

Name of Constituent Fund Fund Type Investment Structure

BEA Growth Fund Mixed Assets Fund – Global – Maximum 90% in equity

Investment in 2 or more Approved Pooled Investment Funds

BEA Balanced Fund Mixed Assets Fund – Global – Maximum 60% in equity

Investment in 2 or more Approved Pooled Investment Funds

BEA Stable Fund Mixed Assets Fund – Global – Maximum 40% in equity

Investment in 2 or more Approved Pooled Investment Funds

BEA Global Equity Fund Equity Fund – Global Investment in a single Approved Pooled Investment Fund

BEA Asian Equity Fund Equity Fund – Asia ex-Japan Investment in 2 or more Approved Pooled Investment Funds

BEA Greater China Equity Fund Equity Fund – Greater China Investment in a single Approved Pooled Investment Fund

BEA Greater China Tracker Fund Equity Fund – Greater China Investment in a single Approved Index-Tracking Fund

BEA Hong Kong Tracker Fund Equity Fund – Hong Kong Investment in a single Approved Index-Tracking Fund

BEA Global Bond Fund Bond Fund – Global Investment in a single Approved Pooled Investment Fund

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6. Page 15 - The following paragraphs shall be inserted after the sub-section headed “BEA MPF Conservative Fund” under the section headed “CONSTITUENT FUNDS”:-

“BEA Core Accumulation Fund

Investment Objective: To provide capital growth to Members by investing in a globally diversified manner.

Investment Strategy: The BEA Core Accumulation Fund adopts an active investment strategy. With this strategy, the investment manager of the BEA Union Investment Core Accumulation Fund may allocate the assets among the two underlying approved pooled investment fund(s) at its discretion, subject to the restrictions set out in the sub-paragraph “Asset Allocation” below.

Investment Policy: The BEA Core Accumulation Fund will invest in an Approved Pooled Investment Fund, BEA Union Investment Core Accumulation Fund under the BEA Union Investment Capital Growth Fund, which in turn invests in two Approved Pooled Investment Funds as allowed under the General Regulation. The investment manager of the BEA Union Investment Core Accumulation Fund will from time to time rebalance the allocation between the two Approved Pooled Investment Funds, such that so far as practicable the asset allocation of the BEA Union Investment Core Accumulation Fund will be as set out in the sub-paragraph “Asset Allocation” below. Please refer to the following product structural chart illustrating the fund structure of the BEA Core Accumulation Fund:

Asset Allocation: Subject to the discretion of the investment manager of the BEA Union Investment Core Accumulation Fund and through an active asset allocation strategy investing in the two Approved Pooled Investment Funds (which in turn adopt relevant active strategy in selecting particular global equities or global bonds), the BEA Core Accumulation Fund will hold around 60% of its net asset value in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). The asset allocation to Higher Risk Assets may vary between 55% and 65% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.

Financial futures, options contracts and securities lending: The BEA Core Accumulation Fund will not enter into currency forward contracts, financial futures and options contracts for any purposes. However, the BEA Union Investment Core Accumulation Fund may enter into currency forward contracts, financial futures and options contracts for hedging purposes to reduce risk and protect asset value, consistent with the investment objective of the BEA Union Investment Core Accumulation Fund.

The BEA Union Investment Core Accumulation Fund will not invest in any structured deposits or products, and will not enter into any securities lending, repurchase transactions or other similar transactions.

Hong Kong dollar currency exposure: Through the BEA Core Accumulation Fund’s investment in the BEA Union Investment Core Accumulation Fund, at least 30% of the assets of the BEA Core Accumulation Fund will be held in Hong Kong dollar currency investments as measured by effective currency exposure (determined in accordance with Schedule 1 of the General Regulation).

Risk and Return Profile: Investors should regard BEA Core Accumulation Fund as a medium to high risk investment. The Sponsor and the Trustee, with the opinion from the Investment Manager determines the risk profile of the BEA Core Accumulation Fund, which is for your reference only. The risk profile is based on relative exposure to equities/bonds and will be reviewed semi-annually. The Investment Manager expects the return of the BEA Core Accumulation Fund over the long term to reflect movements between the global equity market and global bond market, with an emphasis on the asset allocation applicable to the BEA Core Accumulation Fund, targeting to outperform the Reference Portfolio (as defined in Section 6.5A “MPF Default Investment Strategy”).

Name of Constituent Fund Fund Type Investment Structure

BEA MPF Conservative Fund Money Market Fund – Hong Kong Direct investment in a portfolio of HK dollar deposits and HK dollar denominated debt instruments

BEA Core Accumulation Fund Mixed Assets Fund – Global Investment in a single Approved Pooled Investment Fund

BEA Age 65 Plus Fund Mixed Assets Fund – Global Investment in a single Approved Pooled Investment Fund

Constituent fund level

Feeder fund

BEA Union Investment Core

Accumulation Fund

BEA Core Accumulation Fund

Underlying Investment Fund Level

BEA Union Investment Capital Growth Fund

APIF1 Level

APIF2 Level

Investment manager: BEA Union Investment Management Limited

Approved PooledInvestment Fund

Approved PooledInvestment Fund

Investment manager: BEA Union Investment Management Limited

Investment manager: BEA Union Investment Management Limited

8

BEA Age 65 Plus Fund

Investment Objective: To provide stable growth to scheme members by investing in a globally diversified manner.

Investment Strategy: The BEA Age 65 Plus Fund adopts an active investment strategy. With this strategy, the investment manager of the BEA Union Investment Age 65 Plus Fund may allocate the assets among the two underlying approved pooled investment fund(s) at its discretion, subject to the restrictions set out in the sub-paragraph “Asset Allocation” below.

Investment Policy: The BEA Age 65 Plus Fund will invest in an Approved Pooled Investment Fund, BEA Union Investment Age 65 Plus Fund under the BEA Union Investment Capital Growth Fund, which in turn invests in two Approved Pooled Investment Funds as allowed under the General Regulation. The investment manager of the BEA Union Investment Age 65 Plus Fund will from time to time rebalance the allocation between the two Approved Pooled Investment Funds, such that so far as practicable the asset allocation of the BEA Union Investment Age 65 Plus Fund will be as set out in the sub-paragraph “Asset Allocation” below. Please refer to the following product structural chart illustrating the fund structure of the BEA Age 65 Plus Fund:

Asset Allocation: Subject to the discretion of the investment manager of the BEA Union Investment Age 65 Plus Fund and through an active asset allocation strategy investing in the two Approved Pooled Investment Funds (which in turn adopt relevant active investment strategy in selecting particular global equities or global bonds), the BEA Age 65 Plus Fund will hold around 20% of its net asset value in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). The asset allocation to Higher Risk Assets may vary between 15% and 25% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.

Financial futures, options contracts and securities lending: The BEA Age 65 Plus Fund will not enter into currency forward contracts, financial futures and options contracts for any purposes. However, the BEA Union Investment Age 65 Plus Fund may enter into currency forward contracts, financial futures and options contracts for hedging purposes to reduce risk and protect asset value, consistent with the investment objective of the BEA Union Investment Age 65 Plus Fund.

The BEA Union Investment Age 65 Plus Fund will not invest in any structured deposits or products, and will not enter into any securities lending, repurchase transactions or other similar transactions.

Hong Kong dollar currency exposure: Through the BEA Age 65 Plus Fund’s investment in the BEA Union Investment Age 65 Plus Fund, at least 30% of the assets of the BEA Age 65 Plus Fund will be held in Hong Kong dollar currency investments as measured by effective currency exposure (determined in accordance with Schedule 1 of the General Regulation).

Risk and Return Profile: Due to its investments mainly in Lower Risk Assets (such as global bonds and money market instruments), investors should regard BEA Age 65 Plus Fund as a low to medium risk investment. The Sponsor and the Trustee, with the opinion from the Investment Manager determines the risk profile of the BEA Age 65 Plus Fund, which is for your reference only. The risk profile is based on relative exposure to equities/bonds and will be reviewed semi-annually. The Investment Manager expects the return of the BEA Age 65 Plus Fund over the long term to reflect movements between the global equity market and global bond market, with an emphasis on the asset allocation applicable to the BEA Age 65 Plus Fund, targeting to outperform the Reference Portfolio (as defined in Section 6.5A “MPF Default Investment Strategy”).”

Constituent fund level

Feeder fund

BEA Union Investment Age 65 Plus Fund

BEA Age 65 Plus Fund

Underlying Investment Fund Level

BEA Union Investment Capital Growth Fund

APIF1 Level

APIF2 Level

Investment manager: BEA Union Investment Management Limited

Approved PooledInvestment Fund

Approved PooledInvestment Fund

Investment manager: BEA Union Investment Management Limited

Investment manager: BEA Union Investment Management Limited

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FEES AND CHARGES OF THE BEA CORE ACCUMULATION FUND AND THE BEA AGE 65 PLUS FUND

7. Page 29 - The sub-subsection entitled “Withdrawal by instalments” under the subsection “Payment of Benefits” under the section headed “BENEFITS” shall be amended by adding the following wording at the end of the second sentence of the fifth paragraph under that sub-subsection:

“, provided that no such charge shall be charged to or imposed on a Member who has all or part of the accrued benefits invested in the BEA Core Accumulation Fund and/or BEA Age 65 Plus Fund as at the time when the Trustee receives the valid withdrawal request from the Member”

8. Page 35 - The subsection entitled “Sponsor’s Fees” under the section headed “CHARGES AND EXPENSES” shall be amended as follows:-

(a) The following new rows shall be added at the end of the table under the first paragraph:-

“BEA Core Accumulation Fund 0.295%

BEA Age 65 Plus Fund 0.295%”

(b) The fourth paragraph shall be replaced in its entirety with the following:-

“The Sponsor may increase the rate of fee payable in respect of any Constituent Fund (other than BEA Core Accumulation Fund and BEA Age 65 Plus Fund) (up to or towards a maximum rate of 3% p.a.) on giving not less than 3 months’ notice to affected Members.”

(c) The fifth paragraph shall be replaced in its entirety with the following:-

“The Sponsor does not currently intend to levy an offer spread or a bid spread on the issue or realisation of Units, although it has the power to levy (a) an offer spread on the issue of Units in each Constituent Fund (other than the BEA MPF Conservative Fund, BEA Core Accumulation Fund and BEA Age 65 Plus Fund) of up to 5% of the issue price of such Units and (b) a bid spread on the realisation of Units in each Constituent Fund (other than the BEA MPF Conservative Fund, BEA Core Accumulation Fund and BEA Age 65 Plus Fund) of up to 0.5% of the realisation price of such Units. The Sponsor will give not less than 3 months’ notice to Members of any change in such intention.”

9. Page 35 - The following shall be inserted after the subsection entitled “Sponsor’s Fees” under the section headed “CHARGES AND EXPENSES”:-

“Management Fees

In return for the Sponsor providing services related to product support, disseminating MPF marketing materials and product development activities, the Sponsor is entitled to receive a management fee of 0.75% (inclusive of the fees and charges payable at both the Constituent Fund level and underlying fund level) p.a. of the net asset value for the BEA Core Accumulation Fund and BEA Age 65 Plus Fund. The fee covers any other costs in relation to the abovementioned services. This fee is calculated and accrued on each Valuation Date and are payable monthly in arrears. The fee is inclusive of the fees payable to the Trustee and the Investment Manager and the Sponsor will pay the fees of the Trustee and the Investment Manager out of its own fee. The fees payable to the Trustee are inclusive of administration fees payable to the Trustee in its capacity as the Administrator. The fee breakdown of the management fees in respect of the BEA Core Accumulation Fund and BEA Age 65 Plus Fund is as follows:

Fees payable to: Current level (p.a.)

Sponsor 0.295%

Trustee and Administrator 0.295%

Investment Manager 0.16%”

10. Page 35 - The first paragraph under the sub-section entitled “Trustee and Investment Management Fees” under the section headed “CHARGES AND EXPENSES” shall be replaced in its entirety with the following:-

“The Sponsor will pay the fees of the Trustee and the Investment Manager out of its own fee. The Trustee and the Investment Manager do not currently charge any fees to the Master Trust, although the Trustee is entitled to charge a fee of up to 3% p.a. of the net asset value of each Constituent Fund (other than the BEA Core Accumulation Fund and BEA Age 65 Plus Fund) on giving not less than 3 months’ notice to affected Members. It is the present intention of the Sponsor that the total of the Sponsor’s fees, the Trustee’s fees (if any) and the Investment Manager’s fees (if any) charged to each Constituent Fund (except BEA Core Accumulation Fund and BEA Age 65 Plus Fund) will not exceed 0.90% p.a. of the net asset value of the Constituent Fund.”

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(B) FEES AND CHARGES PAYABLE ARISING FROM TRANSACTIONS IN INDIVIDUAL MEMBER’S ACCOUNT

Type of fees & charges Name of Constituent Fund Current level Payable by

Contribution charge3

BEA Growth Fund Nil N/A

BEA Balanced Fund Nil N/A

BEA Stable Fund Nil N/A

BEA Global Equity Fund Nil N/A

BEA Asian Equity Fund Nil N/A

BEA Greater China Equity Fund Nil N/A

BEA Greater China Tracker Fund Nil N/A

BEA Hong Kong Tracker Fund Nil N/A

BEA Global Bond Fund Nil N/A

BEA MPF Conservative Fund N/A

BEA Core Accumulation Fund Nil N/A

BEA Age 65 Plus Fund Nil N/A

Offer spread4

BEA Growth Fund Currently Waived N/A

BEA Balanced Fund Currently Waived N/A

BEA Stable Fund Currently Waived N/A

BEA Global Equity Fund Currently Waived N/A

BEA Asian Equity Fund Currently Waived N/A

BEA Greater China Equity Fund Currently Waived N/A

BEA Greater China Tracker Fund Currently Waived N/A

BEA Hong Kong Tracker Fund Currently Waived N/A

BEA Global Bond Fund Currently Waived N/A

BEA MPF Conservative Fund N/A

BEA Core Accumulation Fund Currently Waived N/A

BEA Age 65 Plus Fund Currently Waived N/A

Bid spread5

BEA Growth Fund Currently Waived N/A

BEA Balanced Fund Currently Waived N/A

BEA Stable Fund Currently Waived N/A

BEA Global Equity Fund Currently Waived N/A

BEA Asian Equity Fund Currently Waived N/A

BEA Greater China Equity Fund Currently Waived N/A

BEA Greater China Tracker Fund Currently Waived N/A

BEA Hong Kong Tracker Fund Currently Waived N/A

BEA Global Bond Fund Currently Waived N/A

BEA MPF Conservative Fund N/A

BEA Core Accumulation Fund Currently Waived N/A

BEA Age 65 Plus Fund Currently Waived N/A

Withdrawal charge6

BEA Growth Fund Nil N/A

BEA Balanced Fund Nil N/A

BEA Stable Fund Nil N/A

BEA Global Equity Fund Nil N/A

BEA Asian Equity Fund Nil N/A

BEA Greater China Equity Fund Nil N/A

BEA Greater China Tracker Fund Nil N/A

BEA Hong Kong Tracker Fund Nil N/A

BEA Global Bond Fund Nil N/A

BEA MPF Conservative Fund N/A

BEA Core Accumulation Fund Nil N/A

BEA Age 65 Plus Fund Nil N/A

11. Fee Table

(a) Page 37 - The fee table headed “(B) FEES AND CHARGES PAYABLE ARISING FROM TRANSACTIONS IN INDIVIDUAL MEMBER’S ACCOUNT” under the section headed “Fee Table” shall be deleted in its entirety and replaced by the following:-

11

(b) Page 38 - The table headed “(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDS” under the section headed “Fee Table” shall be replaced in its entirety with the following:-

(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDSType of charges & expenses

Name of Constituent Fund Current level Deducted from

Management fees7, 7ABEA Growth Fund

0.90% p.a. of net asset value (“NAV”)

Relevant Constituent Fund assets

BEA Balanced Fund 0.90% p.a. of NAVBEA Stable Fund 0.90% p.a. of NAVBEA Global Equity Fund 0.90% p.a. of NAVBEA Asian Equity Fund 0.90% p.a. of NAVBEA Greater China Equity Fund 0.90% p.a. of NAVBEA Greater China Tracker Fund

0.60% p.a. of NAV

BEA Hong Kong Tracker Fund 0.60% p.a. of NAVBEA Global Bond Fund 0.90% p.a. of NAVBEA Core Accumulation Fund 0.75% p.a. of NAVBEA Age 65 Plus Fund 0.75% p.a. of NAV

BEA MPF Conservative Fund 0.79% p.a. of NAVRelevant Member’s account by Unit deduction

Other expenses The Constituent Funds will bear the operating expenses of the Master Trust (e.g. compensation fund levy (if any), indemnity insurance, auditor’s fees and legal charges) in proportion to their respective net asset values or in such other manner as the Trustee shall consider fair. Such expenses are summarized in point (v) of the Explanatory Notes.

Certain recurrent expenses relating to the BEA Core Accumulation Fund and the BEA Age 65 Plus Fund are subject to a statutory annual limit of 0.20% of the net asset value of each of those Constituent Funds and will not be charged to or imposed on the Constituent Fund in excess of that amount. Please refer to the sub-section "Fees and out-of-pocket expenses of the DIS" under Section 6.5A "MPF Default Investment Strategy" for details.

The establishment costs and payments incurred in the establishment of the Master Trust and the abovementioned initial Constituent Funds are estimated to be HKD1,372,500 and will be borne by each of the initial Constituent Funds of the Master Trust as follows:-

• BEA Growth Fund – HKD133,250

• BEA Balanced Fund – HKD133,250

• BEA Stable Fund – HKD133,250

• BEA Global Equity Fund – HKD133,250

• BEA Asian Equity Fund – HKD133,250

• BEA Greater China Equity Fund – HKD133,250

• BEA Greater China Tracker Fund – HKD133,250

• BEA Hong Kong Tracker Fund – HKD173,250

• BEA Global Bond Fund – HKD133,250

• BEA MPF Conservative Fund – HKD133,250

Such establishment costs and payments will be borne by these Constituent Funds and amortised over a period of 5 years, commencing from the first anniversary of the formation of the respective Constituent Fund.

The establishment costs and payments incurred in the establishment of each of the following Constituent Funds are estimated as follows:

• BEA Core Accumulation Fund - HKD73,500

• BEA Age 65 Plus Fund - HKD73,500

Such establishment costs and payments will be borne by these Constituent Funds and amortised over a period of 5 years, commencing from the first anniversary of the formation of the respective Constituent Fund.

Relevant Constituent Fund assets

(Other expenses of BEA MPF Conservative Fund are deducted from relevant Member’s account by Unit deduction.)

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(c) Page 39 - The fee table headed “(D) FEES AND CHARGES PAYABLE OUT OF THE UNDERLYING FUNDS” under the section headed “Fee Table” shall be replaced in its entirety with the following:-

(d) Page 39 - The Fee Table headed “(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICES” shall be amended by adding the following words at the end of the second column of the second row under the item headed “Payment of benefits from mandatory or voluntary contributions (as the case may be) by withdrawal by instalments, if applicable”:

“Note: Such charge is not applicable to a Member who has all or part of the accrued benefits invested in the BEA Core Accumulation Fund and/or BEA Age 65 Plus Fund as at the time when the Trustee receives the valid withdrawal request from the Member.”

(e) Page 42 - The following new definition 7A shall be added immediately after the definition of “Management fees” in the sub-section “DEFINITIONS” under the section headed “Fee Table”:-

“7A. “Management fees” in respect of each of BEA Core Accumulation Fund and BEA Age 65 Plus Fund, mean the fees paid to the Trustee, the Administrator, the Investment Manager (including fees based on fund performance, if any) and the Sponsor of the Master Trust and any of their delegates can only (subject to certain exceptions in the MPF Ordinance) be charged as a percentage of the net asset value of the fund. These management fees are also subject to a statutory daily limit equivalent to 0.75% per annum of the net asset value of the constituent fund which applies across both the constituent fund and underlying funds. Out of the 0.75%, 0.16% is for the fees payable to the Investment Manager, 0.295% is for the fees payable to the Sponsor, and 0.295% is for the fees payable to the Trustee and the Administrator. Services to be provided for the charging of payment of services by the Sponsor are related to product support, dissemination of MPF marketing materials and product development activities.”

(f) Page 43 - Paragraph ii. in the “EXPLANATORY NOTES” under the section headed “Fee Table” shall be deleted in its entirety and replaced with the following:

“The BEA Growth Fund, BEA Balanced Fund, BEA Stable Fund, BEA Global Equity Fund, BEA Asian Equity Fund, BEA Greater China Equity Fund, BEA Greater China Tracker Fund, BEA Hong Kong Tracker Fund, BEA Global Bond Fund, BEA Core Accumulation Fund and BEA Age 65 Plus Fund will, indirectly, bear the fees, charges and expenses of the underlying fund in which they invest. Where a Constituent Fund invests in an underlying fund managed by the Investment Manager and where the Trustee acts as trustee, no fee for investment manager or trustee will be charged on such underlying fund.”

(g) Page 43 - Paragraph vi. in the “EXPLANATORY NOTES” under the section headed “Fee Table” shall be deleted in its entirety and replaced with the following:-

“Each underlying fund may bear its costs and operating expenses to the extent permitted by the MPF Ordinance which may include but not limited to the fees and expenses (calculated not by reference to net asset value of the underlying fund) of custodians, sub-custodians, auditors, legal fees, the costs incurred in connection with any listing or regulatory approval, the costs incurred in the preparation and printing of any explanatory memorandum and the license fee (if any) (applicable to the underlying Approved Index-Tracking Funds in which the constituent funds invest).”

(D) FEES AND CHARGES PAYABLE OUT OF THE UNDERLYING FUNDS

Type of fees & changes Name of Constituent Fund Current level Deducted from

Management fees7,7A BEA Growth Fund N/A

Relevant underlying fund assets

BEA Balanced Fund N/A

BEA Stable Fund N/A

BEA Global Equity Fund N/A

BEA Asian Equity Fund N/A

BEA Greater China Equity Fund N/A

BEA Greater China Tracker Fund 0.31% p.a. of NAV

BEA Hong Kong Tracker Fund Up to 0.10% p.a. of NAV

BEA Global Bond Fund N/A

BEA MPF Conservative Fund N/A

BEA Core Accumulation Fund N/A

BEA Age 65 Plus Fund N/A

Other expenses

Each underlying fund may bear its costs and operating expenses (e.g. establishment cost of the underlying fund, indemnity insurance, auditor’s fees and legal charges). Such expenses are summarized in point (vi) of the Explanatory Notes.

Relevant underlying fund assets

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(h) Page 43 - The following paragraph shall be inserted after paragraph vii. in the “EXPLANATORY NOTES” under the section headed “Fee Table”:-

“viii. The rate of the management fees for BEA Core Accumulation Fund and BEA Age 65 Plus Fund will not exceed the statutory requirement for DIS.”

The Bank of East Asia, Limited and Bank of East Asia (Trustees) Limited12th December, 2016

14

BEA (MPF) VALUE SCHEME

SECOND ADDENDUM TOTHE EXPLANATORY MEMORANDUM DATED DECEMBER, 2016

This Second Addendum should be read in conjunction with and forms part of the Explanatory Memorandum for the BEA (MPF) Value Scheme (the “Master Trust”) dated December, 2016, as amended by a First Addendum dated 12th December, 2016 (collectively referred to as the “Explanatory Memorandum”). All capitalised terms herein contained shall have the same meaning in this Second Addendum as in the Explanatory Memorandum, unless otherwise stated. The Sponsor and the Trustee accept responsibility for the information contained in this Second Addendum as being accurate as at the date of publication.

With effect from 1st April, 2017 (being the commencement date of the MPF default investment strategy), the Explanatory Memorandum shall be amended as follows:

1. The “TABLE OF CONTENTS” shall be amended by inserting the words “MPF Default Investment Strategy (“DIS”)” immediately below the sub-section headed “INSTRUCTIONS TO CHANGE INVESTMENT” under the section headed “CONTRIBUTIONS”.

2. Risk Factors

(a) Page 15 - The following paragraphs shall be inserted after the sub-section headed “China market risk” under the section headed “Risk Factors”:-

“Equity investment risk and volatility risk

A Constituent Fund or its underlying fund(s) may invest directly or indirectly in equities and are thus, subject to the risks generally associated with equity investment, namely, the market value of the stocks may go down as well as up. Factors affecting the stock values are numerous, including but not limited to changes in investment sentiment, political environment, economic environment, issuer-specific factors such as issuers’ financial soundness and issuers’ financial statements as well as the business and social conditions in local and global marketplace.

Securities exchanges typically have the right to suspend or limit trading in any security traded on the relevant exchange; a suspension will render it impossible to liquidate positions and can thereby expose the Constituent Funds or its underlying fund(s) to losses.

The fundamental risk associated with any equity portfolio is the risk that the value of the investments it holds might unexpectedly and sharply decrease in value. Where equity markets are extremely volatile, the net asset value of a Constituent Fund and/or its underlying fund(s) may fluctuate substantially and Members may suffer substantial loss.”

(b) Page 16 - The sub-section headed “Credit risk” under the section headed “Risk Factors” shall be renamed “Credit risk and credit rating risk”, and the following paragraphs shall be inserted at the end of the sub-section:-

“A Constituent Fund or its underlying fund(s) may invest directly or indirectly in bonds, fixed interest securities or other debt securities and thus, subject to credit risk (i.e. the risk that an issuer of securities will be unable to pay principal and interest when due, or that the value of a security will fall because the market believes that the issuer is less able to pay). If the issuer defaults, the performance of a Constituent Fund or its underlying fund(s) can be adversely affected as the Constituent Fund or its underlying fund(s) may be unable to recover any amount due from the issuer.

This is broadly gauged by the credit ratings of the securities in which a Constituent Fund or its underlying fund(s) invest. Credit ratings may however not always be an accurate or reliable measure of the creditworthiness of the debt securities being invested in. Where such credit ratings prove inaccurate or unreliable, losses may be incurred by the Constituent Fund or its underlying fund(s).

Further, the credit rating of the debt security directly or indirectly held by a Constituent Fund or its underlying fund(s) may be downgraded. This usually leads to drops in the price of the debt security which may surpass those caused by general market fluctuations. A lowering of the credit rating of a debt security may also adversely affect the debt security’s liquidity, making it more difficult to sell.”

(c) Page 16 - The first paragraph under the sub-section headed “Currency risk” under the section headed “Risk Factors” shall be deleted in its entirety and replaced by the following:-

“A Constituent Fund or its underlying fund(s) that invests in securities denominated in currencies other than the Constituent Fund’s base currency (i.e. Hong Kong dollars) may be exposed to currency exchange risk. Fluctuations in exchange rates between these currencies and the base currency may cause the value of such securities in terms of the base currency to diminish or increase. If the currency in which a Constituent Fund’s or its underlying fund(s) portfolio security is denominated depreciates against the base currency of the Constituent Fund’s or its underlying fund(s), the value of the security in terms of the base currency will decrease and the net asset value of the Constituent Fund or its underlying fund(s) will be affected unfavourably.”

1

(d) Page 17 - The paragraph under the sub-section headed “Interest rates risk” under the section headed “Risk Factors” shall be deleted in its entirety and replaced by the following:-

“The prices of fixed income securities tend to vary inversely with market interest rates. The value of such securities is likely to decline in times of rising interest rates. Conversely, when rates fall, the value of these investments is likely to rise. The longer the time to maturity the greater such variations. To the extent a Constituent Fund or its underlying fund(s) hold long-term debt securities, its respective net asset value will be subject to a greater degree of fluctuation than if it held debt securities of a shorter duration.”

(e) Page 17 - The following paragraphs shall be inserted after the sub-section headed “Emerging market risk” under the section headed “Risk Factors”:-

“Further, all markets are subject to volatility based on prevailing economic conditions. Securities in “emerging” or “developing” markets may involve a higher degree of risk due to the small current size of the markets for securities of “emerging” or “developing” market issuers and the currently low or non-existent volume of trading, which could result in price volatility. Certain economic and political events in “emerging” or “developing” economies, including changes in foreign exchange policies and current account positions, could also cause greater volatility in exchange rates.

Market practices in certain emerging markets in relation to the settlement of securities transactions and custody of assets may increase the risk of settlement default. The clearing, settlement and registration systems available to effect trades on emerging markets may be significantly less developed than those in more mature world markets which can result in delays and other material difficulties in settling trades and in registering transfers of securities. Such delays could result in substantial losses for a Constituent Fund or its underlying fund(s) if investment opportunities are missed or if they are unable to acquire or dispose of securities as a result. Therefore, problems of settlement in these markets may affect the value of a Constituent Fund or its underlying fund(s).”

(f) Page 17 - The following paragraphs shall be inserted after the sub-section headed “Market / liquidity risk” under the section headed “Risk Factors”:-

“Hedging risk

The Investment Manager may acquire financial futures contracts and financial option contracts for hedging purposes. The Investment Manager is permitted, but not obliged, to use hedging techniques to attempt to offset currency and market risks. There is no guarantee that hedging techniques will achieve their desired result. If the techniques and instruments employed by the Investment Manager are incorrect, or the counterparty for such instruments default, the relevant Constituent Fund or its underlying fund(s) may suffer a substantial loss.

Counterparty risk

Counterparty risk involves the risk that a counterparty or third party will not fulfil its obligations to a Constituent Fund or its underlying fund(s). A Constituent Fund may be exposed to the risk of a counterparty through investments such as bonds, deposits, financial futures and options. To the extent that a counterparty defaults on its obligations and a Constituent Fund or its underlying fund(s) is delayed in exercising or prevented from exercising their respective rights with respect to the investment in their respective portfolio, the net asset value of a Constituent Fund or its underlying fund(s) may be adversely affected due to a decline in the value of the security, loss of income and incurring costs associated with their respective rights attached to the security.

Eurozone risk

The performance of a Constituent Fund or its underlying fund(s) that invest(s) in Europe will be affected by the economic, political, regulatory, geopolitical, market, currency or other conditions in the region. In particular, for the exit of EU members from the Eurozone such as Brexit and the ongoing concerns on the sovereign debt risk of certain countries within the Eurozone, the investments in the region may be subject to higher volatility, liquidity, currency and default risks. Any adverse event, such as credit downgrade of a sovereign, may have a negative impact on the value of the Constituent Fund or its underlying fund(s).

Political, economic and social risk

The performance of a constituent fund or its underlying fund(s) and its ability to pay redemption proceeds may be affected by changes in economic conditions and uncertainties such as change in political conditions including strikes and curfew and government policies, the terrorist activities causing the suspension of stock exchange such as 911 attack, the imposition of restrictions on the transfer of capital and changes in laws or regulatory requirements. For example, in respect of the investments in securities issued or guaranteed by governments, in adverse situation, the sovereign issuers may not be able or willing to repay the principal and/or interest when due or may request the constituent fund or its underlying fund(s) to participate in restructuring such debts. The constituent fund or its underlying fund(s) may suffer significant losses when there is a default of sovereign debt issuers.”

(g) Page 20 - The following paragraph shall be inserted immediately before the sub-section headed “Principal risks of investing in DIS” (introduced by the First Addendum of the Explanatory Memorandum) under the section headed “Risk Factors”:-

“Valuation and accounting risk

A Constituent Fund or its underlying fund(s) intends to adopt Hong Kong Financial Reporting Standard (“HKFRS”) in drawing up its annual accounts. However, members should note that a Constituent Fund or its underlying fund(s) intends to amortise the preliminary expenses and costs of the Constituent Fund or its underlying fund(s) over the first 5 financial years of the fund

2

commencing on the close of the initial offer period or over such other period as the Trustee shall consider fair. This policy of amortisation is not in accordance with HKFRS and may accordingly result in either a different net asset value being reflected in the annual audited accounts or the auditors qualifying the Constituent Fund’s accounts. However, the Trustee believes that the policy of capitalizing and amortising preliminary costs is fairer and more equitable to the initial members.

Valuation of the Constituent Fund’s or its underlying fund(s)’ investment may involve uncertainties and judgmental determinations. For example, securities held by the Constituent Fund or its underlying fund(s) may subsequently become illiquid due to events relating to the issuer of the securities, market and economic conditions and regulatory sanctions. The market value of such securities may become more difficult or impossible to ascertain. Under this circumstance, the Investment Manager may in consultation with the Trustee apply valuation methods to ascertain the fair value of such securities in accordance with the Trust Deed. If such valuation turns out to be incorrect, this may affect the net asset value calculation of the Constituent Fund or its underlying fund(s).”

3. Establishment, Termination, Merger and Division of Constituent Funds

(a) Page 22 - The second paragraph under the section headed “Establishment, Termination, Merger and Division of Constituent Funds” shall be deleted in its entirety without replacement.

(b) Page 22 - The fourth paragraph under the section headed “Establishment, Termination, Merger and Division of Constituent Funds” shall be deleted in its entirety and replaced by the following:-

“The Trustee may with the consent of the Sponsor terminate a Constituent Fund on giving not less than 1 month’s notice to Members and each participating employer (or such other period of notice as the Authority or the Commission may require). If a Constituent Fund is terminated, contributions will cease to be invested in such Constituent Fund and amounts invested in such Constituent Fund must be switched (free of charge) into another Constituent Fund chosen by the relevant Member. If the relevant Member fails to make a choice when requested to do so, the Member’s Units in the terminating Constituent Fund will be switched into DIS and future contributions by or on behalf of the Member which would otherwise be invested in the terminating Constituent Fund will be invested in DIS.”

4. MPF Default Investment Strategy

Page 26 - The first and second paragraphs under the sub-section headed “Mandates to Invest Contributions” under the section headed “Contributions” shall be deleted in its entirety and replaced by the following:-

“On becoming a member of the Master Trust, a Member will be given an opportunity to give an instruction in a form specified by the Trustee (a “Mandate”) setting out how contributions made by and on behalf of the Member are to be invested in the Constituent Funds. If a Member elects to invest in a particular Constituent Fund, then the Member’s total contributions must be invested in that Constituent Fund in a multiple of 10%. In the absence of a Mandate, the Trustee will invest the relevant contributions in DIS. Upon enrolment, a Member may give a specific investment instruction for employer’s mandatory and voluntary contributions and a different specific investment instruction for employee’s mandatory and voluntary contributions.

A Member can change the Member’s Mandate by giving a new Mandate to the Trustee. The Member’s Mandate applies to future contributions and not accrued benefits. A Member may give different Mandates to different types of contributions; to illustrate, a specific investment instruction may be given to a Member’s employer’s mandatory contributions and a different specific investment instruction may be given to the Member’s employer’s voluntary contributions. The new Mandate will apply with effect no later than the latest of: the Valuation Date falling on or immediately after the effective date specified in the Mandate (if any), a Valuation Date within 7 Business Days after receipt of the new Mandate by the Trustee, or receipt by the Trustee of any fee payable for changing the Mandate. The new Mandate will only apply to investment of contributions received by the Trustee on or after the Valuation Date on which the new Mandate takes effect. If any change of Mandate given after enrolment does not meet the requirements for a Specific Investment Instruction, then such change of Mandate will be rejected and the existing investment allocation (in respect of future contributions and accrued benefits transferred from another scheme) will remain unchanged.”

5. Switching instructions

Page 27 - The first paragraph under the sub-section headed “Instructions to Change Investment” under the section headed “Contributions” shall be deleted in its entirety and replaced by the following:-

“Members have the right (subject to any suspension in the determination of the net asset value of any relevant Constituent Fund) to switch all or (subject as provided below) part of the Units relating to a Constituent Fund credited to their account into Units relating to another Constituent Fund or Constituent Funds by giving an instruction in a form specified by the Trustee (a “Switching Instruction”). A Member may give different Switching Instructions to different types of accrued benefits; to illustrate, a Switching Instruction in respect of the accrued benefits attributable to a Member’s mandatory contributions can be different from a Switching Instruction given in respect of the accrued benefits attributable to the Member’s voluntary contributions. Any Switching Instruction only applies to accrued benefits already in the relevant Member’s account and not future contributions. If any Switching Instruction given after enrolment does not meet the requirements for a Specific Investment Instruction, then such Switching Instruction will be rejected, and the existing investment (in respect of the existing accrued benefits) will remain unchanged.”

The Bank of East Asia, Limited and Bank of East Asia (Trustees) Limited12th December, 2016

3

This Third Addendum should be read in conjunction with and forms part of the Explanatory Memorandum for the BEA (MPF) Value Scheme (the "Value Scheme") dated December, 2016, as amended by the First Addendum and Second Addendum both dated 12th December, 2016 (collectively referred to as the "Explanatory Memorandum"). All capitalised terms herein contained shall have the same meaning in this Third Addendum as in the Explanatory Memorandum, unless otherwise stated. The Sponsor and the Trustee accept responsibility for the information contained in this Third Addendum as being accurate as at the date of publication.

The Explanatory Memorandum shall be amended as follows:

Changes to take effect from 31st January, 2018

1. Directory of Parties

Page 1 - The paragraph under the heading "Legal Advisers" under the section headed "DIRECTORY OF PARTIES" shall be deleted in its entirety and replaced by the following:

"Baker & McKenzie 14/F., Hutchison House 10 Harcourt Road Central, Hong Kong"

2. Sponsor's Asset Size

Page 23 - The second paragraph under the sub-section headed "Sponsor" under the section headed "MANAGEMENT AND ADMINISTRATION" shall be deleted in its entirety and replaced by the following:

"Incorporated in Hong Kong in 1918, the Bank is dedicated to providing comprehensive retail banking, commercial banking, wealth management, and investment services to its customers in Hong Kong and other major markets around the world. The Bank is the largest independent local bank in Hong Kong, with total consolidated assets of HK$788.5 billion (US$101.0 billion) as of 30th June, 2017. The Bank is listed on the Stock Exchange of Hong Kong and is one of the constituent stocks of the Hang Seng Index."

3. Cut-Off Time for Instructions to Change Investment

Page 27 - The following paragraph shall be inserted after the third paragraph under sub-section headed "Instructions to Change Investment" under the section headed "CONTRIBUTIONS".

"The Cut-off time for Switching Instruction is 4 p.m. on Business Day."

4. Charges for Withdrawal by Instalment

a) Page 30 - The fifth paragraph under the sub-subsection headed "Withdrawal by instalments" under sub-section headed "Payment of Benefits" under the section headed "BENEFITS" shall be deleted in its entirety and replaced by the following:

"In respect of withdrawal by instalments, the first 12 instalments (or such further number of instalments as determined by the Trustee) in any calendar year (the period from 1st January to 31st December in a year) will be paid free of charge (other than any necessary transaction costs permitted under the General Regulation). Thereafter, each additional withdrawal by instalment in the same calendar year is subject to a fee of HK$100, which shall be paid to a bank account designated by the Trustee as specified in the claim form. Please note that bank charges may apply to Members' banking accounts if Members choose to be paid the withdrawal amount directly to their bank account."

b) Page 30 - The second paragraph under the sub-subsection headed "Other points to note" under sub-section headed "Payment of Benefits" under the section headed "BENEFITS" shall be deleted in its entirety and replaced by the following:

"Save as disclosed above, no fees or financial penalties shall be charged or imposed for payment of benefits (in a lump sum or by instalments for the first 12 instalments in a calendar year) other than an amount representing the necessary transaction costs that are incurred, or reasonably likely to be incurred, by the Trustee in selling or purchasing investments in order to give effect to the payment and are payable to a party other than the Trustee. Such necessary transaction costs would include, but are not limited

BEA (MPF) VALUE SCHEME

THIRD ADDENDUM TOTHE EXPLANATORY MEMORANDUM DATED DECEMBER, 2016

1

to, items such as brokerage commissions, fiscal charges and levies, government charges, bank charges, exchange fees, costs and commissions, registration fees and charges, collection fees and expenses, etc. Any amount of such fees and charges imposed and received must be used to reimburse the relevant Constituent Fund."

c) Page 41 - The phrase "first 4 instalments" whenever it appears in the fee table headed "(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICES" shall be deleted in its entirety and replaced by the words "first 12 instalments".

d) Page 42 - The phrase "first 4 instalments (or such other number of instalments as may be prescribed by the General Regulation)" appearing in the definition of "Bid spread" in the sub-section "DEFINITIONS" under the section headed "Fee Table" shall be deleted in its entirety and replaced by the words "first 12 instalments".

e) Page 42 - The phrase "first 4 instalments (or such other number of instalments as may be prescribed by the General Regulation)" appearing in the definition of "Withdrawal charge" in the sub-section "DEFINITIONS" under the section headed "Fee Table" shall be deleted in its entirety and replaced by the words "first 12 instalments".

5. FTSE® Greater China HKD Index

Page 47 - The first to sixth paragraphs under sub-section "FTSE® Greater China HKD Index" under "APPENDIX FURTHER INFORMATION ON THE INDICES" shall be replaced in their entirety with the following paragraphs:

"The FTSE® Greater China HKD Index is the Hong Kong dollar version of the FTSE® Greater China Index and is derived from the FTSE® All-World Index Series. The FTSE® All-World Index Series aggregates approximately 3,089 large and mid cap stocks, covering 90 to 95% of the investable market capitalisation.

The FTSE® Greater China HKD Index covers the Greater China Region and comprises of stocks listed in Hong Kong, Taiwan, Shanghai (B shares), Shenzhen (B shares) and Singapore, where the Singapore listed stocks are classified as Hong Kong nationality in accordance with FTSE nationality rules. It does not have any A share constituent stocks. As at 31st July, 2017, the FTSE® Greater China HKD Index comprises 418 large and mid cap stocks, being primarily stocks listed in Hong Kong and Taiwan and had a net market capitalisation of approximately HKD17.1 trillion.

FTSE International Limited ("FTSE") is the Index Provider of the FTSE® Greater China HKD Index. The Investment Manager and its connected persons are independent of FTSE.

As at 31st July, 2017, the 10 largest constituent stocks of the FTSE® Greater China HKD Index were set out below and they represent approximately 38.07% of the net market capitalisation, based on total shares in issue of the FTSE® Greater China HKD Index:

Code-Country Stock Name Weighting

700-HK Tencent Holdings Ltd. 9.75%

2330-TW Taiwan Semiconductor Manufacturing 7.77%

1299-HK AIA Group Ltd. 4.34%

939-HK China Construction Bank Corporation 3.39%

2317-TW Hon Hai Precision Industry 2.65%

941-HK China Mobile Ltd. 2.58%

1398-HK Industrial and Commercial Bank of China Ltd. 2.50%

3988-HK Bank of China Ltd. 1.71%

1-HK CK Hutchison Holdings Ltd. 1.69%

2318-HK Ping An Insurance (Group) Co. of China Ltd. 1.69%

The index rules and further information in relation to the FTSE® Greater China HKD Index are available on the FTSE website, www.ftserussell.com.

FTSE carries out the semi-annually review of the FTSE® Greater China HKD Index in March and September each year."

6. Hang Seng Index

Page 48 - The third and fourth paragraphs under sub-section "Hang Seng Index" under "APPENDIX FURTHER INFORMATION ON THE INDICES" shall be replaced in their entirety with the following paragraphs:

2

3

"The Hang Seng Index currently comprises 50 constituent stocks which are representative of the Hong Kong stock market. The aggregate market value of these stocks accounts for about 56.54 per cent of the total market capitalisation of all stocks listed on the Main Board of SEHK. As at 29th September, 2017, the respective weightings of the top 10 largest constituent stocks of the Hang Seng Index are:

Stock Code Stock Name Weighting

700 Tencent Holdings Ltd. - Other HK-listed Mainland Co. 10.59%

5 HSBC Holdings plc - HK Ordinary 10.31%

939 China Construction Bank Corporation - H Share 8.05%

1299 AIA Group Ltd. - HK Ordinary 7.99%

941 China Mobile Ltd. - Red Chip 5.58%

1398 Industrial and Commercial Bank of China Ltd. - H Share 4.92%

2318 Ping An Insurance (Group) Co. of China Ltd. - H Share 3.59%

3988 Bank of China Ltd. - H Share 3.51%

1 CK Hutchison Holdings Ltd. - HK Ordinary 3.10%

388 Hong Kong Exchanges and Clearing Ltd. - HK Ordinary 2.82%

Real-time update of the Hang Seng Index can be obtained through the SEHK Teletext System, Thomson Reuters, Bloomberg and the website of HSIL at www.hsi.com.hk. The index rules and further information in relation to the Hang Seng Index are available at www.hsi.com.hk. As for other important news of the Hang Seng Index, HSIL will also make announcements through press releases and at www.hsi.com.hk."

The Bank of East Asia, Limited and Bank of East Asia (Trustees) Limited31st January, 2018

ILLUSTRATIVE EXAMPLE FORBEA MPF CONSERVATIVE FUND OF THE

BEA (MPF) VALUE SCHEME

Date: 25th October, 2012

PURPOSE OF THE EXAMPLEThis example is intended to help you compare the total amounts of annual fees and charges payable under this Scheme with those under other registered schemes.

THIS EXAMPLE ASSUMES THAT:

Your MPF Account Activities(a) your monthly relevant income is HK$8,000(b) you have put all your accrued benefits into the BEA MPF Conservative Fund; you

have not switched your accrued benefits to other constituent funds during the fi nancial period

(c) you have not transferred any accrued benefi ts into or out of this Scheme during the fi nancial period

Your Company Profi le(d) 5 employees (including yourself) of your employer participate in this Scheme(e) the monthly relevant income of each employee is HK$8,000(f) no voluntary contribution is made(g) each of the other 4 employees has the same MPF account activities as yours

Investment Return and Savings Rate(h) the monthly rate of investment return is 0.5% on total assets(i) the prescribed savings rate is 3.25% per annum throughout the fi nancial period.

Based on these assumptions, the total amounts of annual fees you need to pay under this Value Scheme in one fi nancial period would be HK$35

Warnings: This is just an illustrative example. The actual amounts of fees you need to pay may be higher or lower, depending on your choice of investments and activities taken during the fi nancial period.

Fee Deduction Mechanism:Fees and charges of MPF Conservative Fund can be deducted from either (i) the assets of the fund or (ii) members’ account by way of unit deduction. BEA MPF Conservative Fund uses method (ii) and, therefore, unit prices, net asset value and fund performance quoted (except for the fund performance figures quoted in a fund fact sheet) do not refl ect the impact of fees and charges.

TR 167 (10/2012)

BEA TR167 120920-4.indd 1BEA TR167 120920-4.indd 1 2012-10-10 10:11:14a2012-10-10 10:11:14a

TR 203 (09/2017)

On-Going Cost Illustrations For BEA (MPF) Value Scheme

Issue Date : 29th September, 2017About This IllustrationThis is an illustration of the total effect of fees, expenses and charges on each HK$1,000 contributed in the funds named below. The fees, expenses and charges of a fund are one of the factors that you should consider in making investment decisions across funds. You should however also consider other important information such as the risks of the fund, the nature of the fund, the attributes of relevant parties, the range and quality of services being offered and, most importantly, your own personal circumstances and expectations. The information about fees, expenses and charges set out in this table is intended to help you compare the cost of investing in one constituent fund with the cost of investing in other constituent funds.

The Illustration has been prepared based on some assumptions that are the same for all funds. The Illustration assumes the following:

(a) a gross contribution of HK$1,000 is made in the respective constituent fund now and, being eligible to do so, you withdraw all of your accrued benefits arising from this contribution at the end of each time period indicated;

(b) for the purpose of this illustration only, the contribution has a 5% gross return each year [It is important that you note that the assumed rate of return used in this document is for illustrative and comparative purposes only. The return is neither guaranteed nor based on past performance. The actual return may be different.]; and

(c) the expenses of the funds (expressed as a percentage called the ‘fund expense ratio’ below) remain the same for each fund for all the periods shown in this illustration.

Based on the above assumptions, your costs on each HK$1,000 contributed are illustrated in the following table. Please note that the actual costs will depend on various factors and may be different from the numbers shown below.

Name of constituent fundFund expense ratio for financial period ended March 2017

Cost on each HK$1,000 contributed

After 1 year(HK$)

After 3 years(HK$)

After 5 years(HK$)

BEA Growth Fund 0.98% 10 32 56

BEA Balanced Fund 0.96% 10 31 55

BEA Stable Fund 0.94% 10 31 53

BEA Global Equity Fund 1.01% 11 33 57

BEA Asian Equity Fund 0.98% 10 32 56

BEA Greater China Equity Fund 1.00% 11 33 57

BEA Greater China Tracker Fund 1.07% 11 35 61

BEA Hong Kong Tracker Fund 0.71% 7 23 41

BEA Global Bond Fund 0.92% 10 30 52

Note:1. The example does not take into account any fee rebates that may be offered to certain members of the

scheme.2. No figures are available for the following new constituent funds, which were launched after the end of the

scheme’s relevant financial period (i.e. after 31st March, 2017): i) BEA Core Accumulation Fund ii) BEA Age 65 Plus Fund