DEED, TRUSTEE, UNIT HOLDERS

1.1 Parties to a deed

The parties to a deed, and the role of each, are as follows:

UTMC

UTMC of UTS make reports to the trustee regarding the purchase, sale and management of the investments of UTS. UTMC also promote and distribute or sell units UTS either directly or through IUTA, CUTA and UTC, service the unitholders, and buy back units from those unitholders who wish to dispose of units. UTMC generally keep the accounting records of UTS since these are required to calculate unit selling and repurchase prices, and to detrmine the amount of distributions payable to unit holders. UTMC also maintain a register of unit holders in each UTS showing the units held by each unit holder.

Parties to a deed (cont.)

TRUSTEE

The trustee is responsible to unitholders for safeguarding UTS asset and ensuring that they invested in accordance with the term of the deed. The trustee supervises the operations of UTS to ensure that its objectives are followed by UTMC and that the interest of the unit holders are protected. The trustee is independent of UTMC and can remove one that fails to manage effectively and in accordance with the deed. The deed sets out the various responsibilities of the trustee. Major responsibilities includes approving and monitering all financial transactions, holding title documents of all UTS assets, and collecting all income entitlements on investments held.

Parties to a deed (cont.)

UNIT HOLDERS

Of the three parties deeds, the unitholders are the most significant since they supply the capital to be invested by UTMC on their behalf. As such, they are responsible for the fees earned by UTMC (and hence salaries and commission payments of UTC ) and the trustee.

Unitholders hold units, each unit ranking equally with all other units of that UTS. The value of a unit is determined by using a formula set out in the deed, which is based on dividing the market value of the net assets of the UTS by the number of units currently in circulation. Unitholders purchases unit in UTS by completing an application form contained within a UTS prospectus.

1.2 Deed

A deed shows the rights and obligations of UTMC, the rights and duties of the trustee, and the right of unitholders. It will also include the maximum fees payable;describe the investments in which UTS can be invested; prescribe how the value of a unit is to be determined; and determine how the price at which a unit to be sold to investor, and bought from them, by UTMC is to be calculated.

The deed will also outline the way in which changes can be made to the deed. This will sometimes require the consent of UTS unitholders who will be asked to vote on the proposed changes. The responsibilities of the auditor of UTS, appointedby the trustee under the deed, will also be set out in the document.

1.3 Prospectus

Where UTS are to be offered to the public, its is required by lawa that the potential investors receive sufficient information about UTS, its UTMC and the trustee to allow them to make an informed investment decision. This information is contained in a prospectus for the issues of units in UTS.

The prospectus must be registered with the SC and contain certain information as required by law. The information provided must be accurate and not mesleading. Those involved in the preparation of a prospectus are held accountable for its contents. There are legal remedies available to investors against those who have made misrepresentations or who have caused misleading information to be included in a prospectus. By completing and signing an application form from UTS prospectuses, investors become unitholders and a party to th deed.

1.4 Agents of UTMC and Trustee

Several other parties are involved with UTS, although they are nit parties to the deed.

A trustee may appoint a sub –custodian to hold UTS assets on its behalf (perhaps where UTS investments are listed on overseas share markets). UTMC may appoint fund managers, assets consultants, managers of real estate, and other specialist to assist it in its role.

The trustee and UTMC are responsible for the actions of any agents they appoint. The deed clearly sets out the duties of the trustee and UTMC, and these cannot be avoided.