Source - RNS
RNS Number : 3232K
Prosperity Russia Domestic Fund Ltd
20 September 2016





For Immediate Release                                                                      20 September 2016


 prosperity Russia Domestic Fund Limited (the "Fund")


Re: Change to the Fund


Change of Custodian


The Directors of the Fund wish to announce that, with effect from 20 September 2016, Deutsche Bank AG London have been terminated as custodian to the Fund and Pictet & Cie (Europe) S.A. (the "Custodian"), established and existing under the laws of Luxembourg and with its address at 15A avenue J.F. Kennedy, L-1855 Luxembourg, has been appointed as Custodian to the Fund, pursuant to Custody Agreement, dated 6 September 2016, between the Fund and the Custodian (the "Custody Agreement"). 


The Custodian is regulated by the Luxembourg financial services regulator (Commission de Surveillance du Secteur Financier, or CSSF).


The Custodian receives fees for its services, comprising: (i) a minimum safekeeping fee of US$25,000 (subject to VAT) calculated quarterly in arrears on the average market value of the portfolios as at the end of the preceding three months. The safekeeping fee will be calculated on the total assets and range from 0.025% to 0.065% for assets totaling USD$3 billion or less. For assets totaling above USD$3 billion, the safekeeping fee will be subject to negotiation; (ii) a flat settlement fee charged to each transaction settled by the Custodian; and (iii) brokerage fees charged for the trading of any marketable securities. The fees are in addition to reasonable out-of-pocket expenses incurred by the Custodian in the performance of its duties under the Custody Agreement, third-party brokerage commissions, stamp duties and taxes. The Fund will maintain a sufficient cash balance in the Fund's account, or accounts with the Custodian, in order to cover the Custodian's fees and expenses.


The Custodian is responsible for the custody of the Fund's cash and securities. These assets will either be held by the Custodian, banks, financial institutions or certain clearing systems (such as Clearstream and Euroclear). The Custodian (or its sub- Custodian) will be responsible for the safe keeping of certificates of registration or other similar certificates relating to those securities or other assets of the Fund.


Under the Custody Agreement, the Custodian is authorised to carry out all operations concerning the day to day administration of the assets of the Fund.


Upon receipt of a proper instruction, the Custodian is authorised to carry out the following transactions in relation to the securities:  (i) the sale of securities, (ii) the conversion of securities, (iii) exercising any right with respect to the securities, (iv) upon termination of the Custody Agreement, the transfer of securities to a succeeding Custodian, (v) debit the account of the Fund for payment of the securities and other assets purchased by the Fund, (v) arrange for income, dividends, interest and other payments to the Fund. 


The Custodian will segregate the Fund's securities and cash from any securities and/or cash it holds for its own account and will use its best efforts to segregate the Fund's securities and cash from securities and cash it holds otherwise on behalf of other clients. The Fund's securities that are held through the Custodian's sub-custodian in Russia, will be identified as being held on behalf of the Fund and segregated from any other securities that the sub-custodian in Russia may hold for their own account, for the account of other clients or the Custodian's own account.


The Fund has agreed to indemnify the Custodian and its officers and directors from all costs, liability and expenses resulting directly or indirectly from:  (i) the Custodian acting under proper instructions under the Custody Agreement, and (ii) any act or omission of agents  approved by the Fund.  The indemnity excludes costs, liability and expenses arising from the Custodian's fraud, wilful default, negligence or breach of the Custody Agreement.  


Sub-Custodians may be appointed by the Custodian, provided that the Custodian shall exercise reasonable skill, care and diligence in the selection and appointment of any such Sub-Custodian so as to ensure that the Sub-Custodian is a fit and proper person and has and maintains the expertise, competence and standing appropriate to discharge the responsibilities concerned, and shall be responsible to the Fund for the duration of the Sub-Custodian agreement for satisfying itself as to the on-going suitability of the Sub-Custodian to provide custodial services to the Fund.  The Custodian must maintain an appropriate level of supervision over the Sub-Custodian and make appropriate enquiries from time to time to confirm that the obligations of the Sub-Custodian continue to be adequately discharged.



The Custody Agreement can be terminated by either party on not less than 120 days' prior written notice.  However, if there is a breach of any provision of the Custody Agreement by either party, the other party is entitled to terminate the Custody Agreement immediately upon 30 days' prior written notice unless the breach is cured within the period.  The Custody Agreement can also be terminated by either party without notice in the event of the dissolution of either party, or if either party becomes the subject of bankruptcy proceedings, or on election of the Fund in the event of a disclosure of a conflict of interest by the Fund that adversely affects the Fund's interests.


The Custody Agreement is governed by Luxembourg law. 


The Custodian has been appointed in addition to PJSC Citibank, who is currently appointed as an additional custodian to the Fund to hold assets that are located in the Ukraine, to the extent necessary. 


Cessation of the use of Cyprus Subsidiaries


Once the transition to the new Custodian is complete, the Fund will cease to use Cyprus Subsidiaries.


For various reasons that the Manager is advised the Cyprus Subsidiaries are, on balance, no longer of benefit to the Fund, the Fund in the past made a majority of its investments through Cyprus Subsidiaries.  The Cyprus Subsidiaries have now been, or are in the process of being, liquidated.



Termination of Russian Custodian


As of 20 September 2016 Deutsche Bank Limited Liability Company has been terminated as Russian Custodian to the assets of the Fund.  There has been no entity re appointed in this role. The Custodian is expected to use a sub-custodian in Russia.


Appointment of Placement Agents to the Fund


Placement agents appointed by the Fund or the Manager may receive a placement fee, by way of an initial charge of up to 3% of the moneys subscribed for Participating Shares by investors placed by them.  There has been no entity appointed as Placement Agent to the Fund as of yet.



Enquiries to:



David Ryan

+353 1 614 8933












This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.

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