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Municipal Bonds include","page_number":17,"box":{"x":69,"y":60,"width":837,"height":11}},{"id":"c2fabb30-7edb-41a5-8cd7-7131793daa29","block_type":"box","text":"general obligation bonds, revenue or special obligation bonds, private activity bonds, variable rate demand notes, and","page_number":17,"box":{"x":68,"y":75,"width":839,"height":11}},{"id":"60c8801b-4ebc-4b39-9cc9-be06391c35f5","block_type":"box","text":"short-term tax-exempt municipal obligations such as tax anticipation notes.","page_number":17,"box":{"x":69,"y":90,"width":535,"height":11}},{"id":"5e881ae1-1379-41a9-8da2-75da9f2e9977","block_type":"box","text":"Under normal circumstances, each of the California Fund, the New Jersey Fund and the Pennsylvania Fund","page_number":17,"box":{"x":102,"y":113,"width":756,"height":11}},{"id":"90bb9f0b-80d5-453c-9fad-bac8315f49a2","block_type":"box","text":"invests at least 80% of its net assets in California Municipal Bonds, New Jersey Municipal Bonds and Pennsylvania","page_number":17,"box":{"x":70,"y":128,"width":819,"height":11}},{"id":"4bc1fbd6-aa95-4336-a50a-e59113db428a","block_type":"box","text":"Municipal Bonds, respectively. For this purpose, net assets include any borrowings for investment purposes. This is a","page_number":17,"box":{"x":70,"y":143,"width":836,"height":11}},{"id":"46304c92-bf19-4f3b-9032-b4a782bedd6d","block_type":"box","text":"fundamental policy of each Fund and cannot be changed without a vote of the majority of the outstanding shares of","page_number":17,"box":{"x":68,"y":158,"width":823,"height":11}},{"id":"df1c178d-5841-4040-a4a5-1b05945c95f1","block_type":"box","text":"the Fund as defined under the Investment Company Act. The California Fund is classified as a diversified open-end","page_number":17,"box":{"x":68,"y":173,"width":816,"height":11}},{"id":"890bd075-d56c-4485-8c36-fc5170cfe228","block_type":"box","text":"management investment company under the Investment Company Act. Each of the New Jersey Fund and the","page_number":17,"box":{"x":69,"y":188,"width":771,"height":12}},{"id":"a572a7d5-388f-48af-8fa2-51d4ee5275f1","block_type":"box","text":"Pennsylvania Fund is classified as a non-diversified open-end management investment company under the Investment","page_number":17,"box":{"x":69,"y":203,"width":840,"height":12}},{"id":"a62ce18e-2866-49f0-8824-dc36920de1ec","block_type":"box","text":"Company Act. There can be no assurance that the investment objective of any Fund will be achieved.","page_number":17,"box":{"x":69,"y":218,"width":716,"height":12}},{"id":"65c8eea0-fba7-4695-b70c-fd4b4a40c318","block_type":"box","text":"For temporary periods or to provide liquidity, each Fund has the authority to invest as much as 35% of its assets","page_number":17,"box":{"x":102,"y":241,"width":800,"height":11}},{"id":"a2459fcb-7446-49c5-ae8a-565eaf7f4a74","block_type":"box","text":"in tax-exempt or taxable money market obligations with remaining maturities not in excess of one year from the date","page_number":17,"box":{"x":70,"y":256,"width":827,"height":12}},{"id":"fd16838c-3832-4c87-b81c-75e1a9cf4324","block_type":"box","text":"of purchase (“Temporary Investments”), except that taxable Temporary Investments generally will not exceed 20% of","page_number":17,"box":{"x":69,"y":271,"width":830,"height":12}},{"id":"8ad7ae99-003b-45a9-8018-dfb01a9e2f51","block_type":"box","text":"any Fund’s assets. In addition, each Fund reserves the right to temporarily invest a greater portion of its assets in","page_number":17,"box":{"x":69,"y":286,"width":814,"height":12}},{"id":"b29f0e2e-3f14-4c82-96ce-7df387b81856","block_type":"box","text":"Temporary Investments for defensive purposes, when, in the judgment of BlackRock, each Fund’s investment adviser,","page_number":17,"box":{"x":68,"y":302,"width":839,"height":11}},{"id":"0583df2a-458e-4314-b363-476ef084a2be","block_type":"box","text":"market conditions warrant such action. Temporary Investments consist of U.S. Government securities, U.S.","page_number":17,"box":{"x":69,"y":317,"width":763,"height":11}},{"id":"4ece6a30-5c0d-43ad-be13-071dc070394f","block_type":"box","text":"Government Agency securities, domestic bank certificates of deposit and bankers’ acceptances, short-term corporate","page_number":17,"box":{"x":69,"y":332,"width":839,"height":11}},{"id":"34601314-0d31-4143-a1c6-54dd9d60e856","block_type":"box","text":"debt securities such as commercial paper and repurchase agreements. A Fund may realize capital gains that will","page_number":17,"box":{"x":69,"y":347,"width":802,"height":11}},{"id":"07bee4c8-1ec4-4489-b702-494eb5b907ef","block_type":"box","text":"constitute taxable income.","page_number":17,"box":{"x":69,"y":362,"width":187,"height":9}},{"id":"58b48622-05fa-4ba7-9ed0-8fd27a7f9e6e","block_type":"box","text":"Each Fund may invest in certain tax-exempt securities that are classified as “private activity bonds,” which may","page_number":17,"box":{"x":102,"y":385,"width":792,"height":11}},{"id":"c417133d-c41e-4864-a3ad-d1efca1d0688","block_type":"box","text":"subject certain investors to a Federal and possibly state alternative minimum tax.","page_number":17,"box":{"x":69,"y":400,"width":581,"height":11}},{"id":"731ae24b-39cc-4e41-8096-38de290cf9b2","block_type":"box","text":"Certain instruments in which a Fund may invest may be characterized as derivative instruments. The California","page_number":17,"box":{"x":102,"y":423,"width":787,"height":11}},{"id":"5fd4bdf6-c9a0-48f6-9599-a67758fb661d","block_type":"box","text":"Fund is authorized to engage in transactions in certain derivatives, such as interest rate futures contracts, financial","page_number":17,"box":{"x":70,"y":438,"width":822,"height":11}},{"id":"7d0fb3e1-a4bd-4096-91ed-27a016bd61f5","block_type":"box","text":"futures contracts and options thereon, for hedging purposes or to seek to enhance returns. The California Fund may","page_number":17,"box":{"x":68,"y":453,"width":829,"height":11}},{"id":"0f3673bd-9ebf-4f85-9b73-2136a984ff0e","block_type":"box","text":"seek to actively manage interest rate risk through hedging strategies, and may seek to generate yield through","page_number":17,"box":{"x":69,"y":468,"width":780,"height":11}},{"id":"be2c88a6-093f-44bf-be3d-137b03c2a40f","block_type":"box","text":"liquidity, structure, credit, interest rate and duration strategies. The New Jersey Fund and the Pennsylvania Fund are","page_number":17,"box":{"x":70,"y":483,"width":825,"height":11}},{"id":"48e16e7a-b5be-4232-8ba8-e20121a15429","block_type":"box","text":"authorized to engage in transactions in financial futures contracts and options thereon only for hedging purposes.","page_number":17,"box":{"x":69,"y":498,"width":809,"height":11}},{"id":"fc39b7b3-fefa-4fc4-b5fb-e7f6a03417b8","block_type":"box","text":"Each Fund is also authorized to invest in swap agreements, including credit default swap agreements, both for","page_number":17,"box":{"x":70,"y":513,"width":786,"height":12}},{"id":"289ebfea-0233-4b16-9b0c-f027a893676a","block_type":"box","text":"hedging purposes and to seek to enhance income. The Funds may also invest in indexed and inverse floating rate","page_number":17,"box":{"x":69,"y":528,"width":810,"height":12}},{"id":"ca3efc1b-3f0d-4b20-8053-5c72ff17842f","block_type":"box","text":"obligations, as well as variable rate demand obligations (“VRDOs”) and VRDOs in the form of participation interests","page_number":17,"box":{"x":69,"y":543,"width":824,"height":12}},{"id":"3068d913-bea1-4437-adf4-9c0009fbae5e","block_type":"box","text":"in variable rate tax-exempt obligations held by a financial institution (“Participating VRDOs”). The Funds’ hedging","page_number":17,"box":{"x":70,"y":559,"width":800,"height":11}},{"id":"f5f8f7dc-0d5c-429a-a29c-3c7f2c621edc","block_type":"box","text":"strategies are not fundamental policies and may be modified by the Trustees of the Trusts without the approval of","page_number":17,"box":{"x":69,"y":574,"width":812,"height":11}},{"id":"ec588e52-a97f-4ded-a5c8-832198301bc8","block_type":"box","text":"shareholders.","page_number":17,"box":{"x":69,"y":589,"width":96,"height":9}},{"id":"1fbe9e11-7b35-4cf8-8595-e2e4ac89a36a","block_type":"box","text":"Certain Municipal Bonds may be entitled to the benefits of letters of credit or similar credit enhancements","page_number":17,"box":{"x":102,"y":612,"width":756,"height":11}},{"id":"5d516c5a-be0c-45e7-b3cd-d52b89dbba78","block_type":"box","text":"issued by financial institutions. In such instances, the Manager will take into account in assessing the quality of such","page_number":17,"box":{"x":70,"y":627,"width":836,"height":11}},{"id":"d6dcc11b-c349-4f0d-bb7d-de3690e817b1","block_type":"box","text":"bonds not only the creditworthiness of the issuer of such bonds but also the creditworthiness of the financial","page_number":17,"box":{"x":69,"y":642,"width":780,"height":11}},{"id":"d9e2606a-5fc2-4f93-8b84-f84df4e559d4","block_type":"box","text":"institution that provides the credit enhancement.","page_number":17,"box":{"x":70,"y":657,"width":345,"height":11}},{"id":"e470c8dd-9636-452e-b22b-9a1fd78e31d9","block_type":"box","text":"The New Jersey Fund and the Pennsylvania Fund ordinarily do not intend to realize investment income that is not","page_number":17,"box":{"x":101,"y":680,"width":802,"height":11}},{"id":"e9931720-cffd-40fb-9be3-d657ed76162e","block_type":"box","text":"excludable from gross income for Federal income tax purposes and exempt from New Jersey personal income taxes","page_number":17,"box":{"x":69,"y":695,"width":824,"height":11}},{"id":"30db3617-50eb-4897-b10d-70abf6e0f9e6","block_type":"box","text":"or Pennsylvania personal income taxes, as applicable. The California Fund, and to the extent that suitable New Jersey","page_number":17,"box":{"x":69,"y":710,"width":839,"height":11}},{"id":"ed0addfc-360c-44cd-bc3e-3627c942f8dc","block_type":"box","text":"Municipal Bonds or Pennsylvania Municipal Bonds are not available for investment, the New Jersey Fund and the","page_number":17,"box":{"x":70,"y":725,"width":801,"height":11}},{"id":"a201825d-1cab-42e4-ae05-81a9e0009f90","block_type":"box","text":"Pennsylvania Fund, respectively, may purchase Municipal Bonds issued by other states, their agencies and","page_number":17,"box":{"x":69,"y":740,"width":761,"height":11}},{"id":"5680613a-4874-4f75-93a6-e392d7678c87","block_type":"box","text":"instrumentalities, the interest income on which is, in the opinion of bond counsel to the issuer, excludable from gross","page_number":17,"box":{"x":70,"y":755,"width":839,"height":11}},{"id":"88c4a7dc-2246-4470-b0c4-f08118630dbb","block_type":"box","text":"income for Federal income tax purposes, but not exempt from California personal income taxes, New Jersey personal","page_number":17,"box":{"x":70,"y":770,"width":833,"height":11}},{"id":"eaadb5ae-0ce0-48ff-a2ab-ff686c137e4b","block_type":"box","text":"income taxes or Pennsylvania personal income taxes, as applicable. Each Fund also may invest in securities not","page_number":17,"box":{"x":70,"y":786,"width":799,"height":11}},{"id":"a2caf81c-730d-40eb-a582-202ff887895a","block_type":"box","text":"issued by or on behalf of a state or territory or by an agency or instrumentality thereof that are believed to pay","page_number":17,"box":{"x":70,"y":801,"width":785,"height":11}},{"id":"4a265ff5-058e-4f50-958b-a969383a64d9","block_type":"box","text":"interest that is excludable from gross income for Federal income tax purposes and/or exempt from California","page_number":17,"box":{"x":70,"y":816,"width":776,"height":11}},{"id":"3b1a7892-5a7a-4904-a5d5-d705ca365e48","block_type":"box","text":"personal income taxes, New Jersey personal income taxes or Pennsylvania personal income taxes, as applicable","page_number":17,"box":{"x":70,"y":831,"width":802,"height":11}},{"id":"00238508-f572-4deb-974a-dd453bcaa702","block_type":"box","text":"(“Non-Municipal Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":17,"box":{"x":69,"y":846,"width":836,"height":11}},{"id":"2b59e319-a2e0-4eb0-b8ae-18305b299b75","block_type":"box","text":"instruments evidencing an interest in one or more long-term municipal securities. Non-Municipal Tax-Exempt","page_number":17,"box":{"x":70,"y":861,"width":767,"height":11}},{"id":"2d7aa813-dde9-4b3f-a0dc-33d7d9d53c38","block_type":"box","text":"Securities also may include securities issued by other investment companies that invest in California Municipal","page_number":17,"box":{"x":69,"y":876,"width":792,"height":11}},{"id":"14e61826-38f5-4ba9-8615-6a0a674b8474","block_type":"box","text":"Bonds, New Jersey Municipal Bonds or Pennsylvania Municipal Bonds, as applicable, or Municipal Bonds, to the","page_number":17,"box":{"x":70,"y":891,"width":797,"height":11}},{"id":"a51d4b49-8434-4a20-a898-f62a21c51430","block_type":"box","text":"extent such investments are permitted by the Investment Company Act. Certain Non-Municipal Tax-Exempt Securities","page_number":17,"box":{"x":69,"y":906,"width":831,"height":12}},{"id":"94dc79a6-2314-4c60-a8ce-ff5a29137196","block_type":"box","text":"I-6","page_number":17,"box":{"x":481,"y":943,"width":17,"height":9}},{"id":"c458103e-1948-498b-b984-464bc0d6a7d2","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":17,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1763da4a-060b-4821-af7d-126b6c869fb1","block_type":"box","text":"may be characterized as derivative instruments. For purposes of the Funds’ investment objectives and policies, Non","page_number":18,"box":{"x":69,"y":45,"width":830,"height":11}},{"id":"1f7d098d-3b7f-4631-8118-cc67fed4e090","block_type":"box","text":"Municipal Tax-Exempt Securities that pay interest that is excludable from gross income for Federal income tax","page_number":18,"box":{"x":70,"y":60,"width":780,"height":11}},{"id":"21efbdc6-e124-4962-9d77-93fa6306056b","block_type":"box","text":"purposes will be considered “Municipal Bonds,” Non-Municipal Tax-Exempt Securities that pay interest that is","page_number":18,"box":{"x":70,"y":75,"width":776,"height":11}},{"id":"59d1aa11-47fe-4be3-9f91-7ea08bfc571b","block_type":"box","text":"excludable from gross income for Federal income tax purposes and exempt from California personal income taxes will","page_number":18,"box":{"x":69,"y":90,"width":838,"height":11}},{"id":"fe56949d-66bd-4719-8d39-55e72715d050","block_type":"box","text":"be considered “California Municipal Bonds,” Non-Municipal Tax-Exempt Securities that pay interest that is excludable","page_number":18,"box":{"x":69,"y":105,"width":832,"height":11}},{"id":"ce284a29-4f55-42f8-882c-6ec46f48b68e","block_type":"box","text":"from gross income for Federal income tax purposes and exempt from New Jersey personal income taxes will be","page_number":18,"box":{"x":68,"y":120,"width":794,"height":12}},{"id":"2b266a50-a484-4bdd-8bf9-2de3fbda5ae8","block_type":"box","text":"considered “New Jersey Municipal Bonds” and Non-Municipal Tax-Exempt Securities that pay interest that is","page_number":18,"box":{"x":69,"y":135,"width":768,"height":11}},{"id":"ca9cdd36-7743-4c08-bd5d-d4d4e7449e3e","block_type":"box","text":"excludable from gross income for Federal income tax purposes and exempt from Pennsylvania personal income taxes","page_number":18,"box":{"x":69,"y":150,"width":836,"height":12}},{"id":"658fec08-6cd7-48b4-8679-13a58e02c09d","block_type":"box","text":"will be considered “Pennsylvania Municipal Bonds.” Federal tax legislation has limited the types and volume of bonds","page_number":18,"box":{"x":68,"y":166,"width":837,"height":11}},{"id":"4225cfe6-ef11-493d-a90d-7f567c6a7a47","block_type":"box","text":"the interest on which qualifies for a Federal income tax exemption. As a result, this legislation and legislation that","page_number":18,"box":{"x":68,"y":181,"width":813,"height":11}},{"id":"a5b387ba-d613-433a-ae02-e4d81d637220","block_type":"box","text":"may be enacted in the future may affect the availability of Municipal Bonds for investment by the Funds.","page_number":18,"box":{"x":69,"y":196,"width":740,"height":11}},{"id":"82618278-0bf9-4d2a-abc6-066e1b841bb8","block_type":"box","text":"Investment Policies of the Funds","page_number":18,"box":{"x":70,"y":226,"width":231,"height":9}},{"id":"4a8ac66e-498d-4fbd-8050-022b665212ee","block_type":"box","text":"Each Fund pursues its investment objective through the separate investment policies described below. These","page_number":18,"box":{"x":102,"y":249,"width":777,"height":11}},{"id":"7e2551cc-e117-406e-844d-3714c9bac91b","block_type":"box","text":"policies differ with respect to the maturity and quality of portfolio securities in which a Fund may invest, and these","page_number":18,"box":{"x":70,"y":264,"width":813,"height":11}},{"id":"6a5a21ea-5951-4eaa-98c0-d587bd94bfac","block_type":"box","text":"policies can be expected to affect the yield on each Fund and the degree of market, financial, credit and interest rate","page_number":18,"box":{"x":70,"y":279,"width":834,"height":11}},{"id":"9c4d2558-0ac3-40c0-975f-c21adc5d7c8f","block_type":"box","text":"risk to which the Fund is subject. Generally, Municipal Bonds with longer maturities tend to produce higher yields and","page_number":18,"box":{"x":69,"y":294,"width":833,"height":11}},{"id":"24b45333-ad52-4b76-b8d5-65c5beaaf087","block_type":"box","text":"are subject to greater market fluctuations as a result of changes in interest rates (“interest rate risk”) than are","page_number":18,"box":{"x":69,"y":309,"width":791,"height":11}},{"id":"1ae1afe8-6ab5-46f0-9ba3-71d587b33d2d","block_type":"box","text":"Municipal Bonds with shorter maturities. In addition, lower rated Municipal Bonds generally will provide a higher yield","page_number":18,"box":{"x":70,"y":325,"width":831,"height":11}},{"id":"30e0036d-19a0-4dcf-9706-80dc319e2983","block_type":"box","text":"than higher rated Municipal Bonds of similar maturity but are also generally subject to greater market risk and to a","page_number":18,"box":{"x":68,"y":339,"width":816,"height":12}},{"id":"0bf7be6c-9fb0-4df3-adf4-1db7ed461929","block_type":"box","text":"greater degree of risk with respect to the ability of the issuer to meet its principal and interest obligations (“credit","page_number":18,"box":{"x":68,"y":355,"width":811,"height":11}},{"id":"7c33e182-7ceb-479a-a601-5379ec8656ef","block_type":"box","text":"risk”). A Fund’s net asset value may fall when interest rates rise and rise when interest rates fall. Because of its","page_number":18,"box":{"x":69,"y":370,"width":802,"height":11}},{"id":"39a1d29e-c7e7-45d8-a682-048a5ae101e2","block_type":"box","text":"emphasis on investments in Municipal Bonds, each Fund should be considered as a means of diversifying an","page_number":18,"box":{"x":69,"y":385,"width":778,"height":11}},{"id":"0203e3a0-a59f-4cf3-b60b-e9aba9340797","block_type":"box","text":"investment portfolio and not in itself a balanced investment plan.","page_number":18,"box":{"x":70,"y":400,"width":464,"height":11}},{"id":"06942995-a24a-4ff2-898b-40e398882ec2","block_type":"box","text":"In implementing each Fund’s investment strategy, from time to time, BlackRock, each Fund’s investment","page_number":18,"box":{"x":102,"y":423,"width":745,"height":11}},{"id":"74bce38e-e544-42a5-8de6-461064e1b4cb","block_type":"box","text":"manager, may consider and employ techniques and strategies designed to minimize and defer the U.S. federal","page_number":18,"box":{"x":69,"y":438,"width":787,"height":11}},{"id":"704d72fa-c886-4db0-bd69-7e80babc1f93","block_type":"box","text":"income taxes which may be incurred by shareholders in connection with their investment in such Fund.","page_number":18,"box":{"x":70,"y":453,"width":729,"height":11}},{"id":"1c12f692-d8c4-403c-83da-3546db4e1843","block_type":"box","text":"California Fund","page_number":18,"box":{"x":70,"y":483,"width":106,"height":9}},{"id":"5d373e27-760c-4655-8bdf-56e2f5978ec2","block_type":"box","text":"Under normal circumstances, the Fund will invest at least 80% of its assets in California Municipal Bonds. At","page_number":18,"box":{"x":102,"y":506,"width":776,"height":11}},{"id":"f180ae43-61be-458f-b744-ec6318476be3","block_type":"box","text":"least 50% of the Fund’s assets will be invested in investment grade securities. Investment grade securities are those","page_number":18,"box":{"x":70,"y":521,"width":836,"height":11}},{"id":"a8447c3e-25b9-4c34-b542-c91f56208a93","block_type":"box","text":"rated at the date of purchase in the four highest rating categories of S&P Global Ratings (“S&P”) (AAA, AA, A and","page_number":18,"box":{"x":69,"y":536,"width":804,"height":11}},{"id":"6aca4a51-1215-44cd-a405-3cd65ca5ac71","block_type":"box","text":"BBB), Fitch Ratings (“Fitch”) (AAA, AA, A and BBB) or Moody’s Investors Service, Inc. (“Moody’s”) (Aaa, Aa, A and","page_number":18,"box":{"x":70,"y":551,"width":805,"height":11}},{"id":"5d62e29b-8ba6-4ca8-942e-8abfd93e79f8","block_type":"box","text":"Baa) in the case of long-term debt, rated MIG 1 through MIG 3 by Moody’s, rated F-1+ through F-3 by Fitch, or rated","page_number":18,"box":{"x":70,"y":566,"width":819,"height":11}},{"id":"988e2641-2add-40cf-b083-320ac68dd672","block_type":"box","text":"SP-1 through SP-2 by S&P in the case of short-term notes, and rated P-1 or P-2 in the case of Moody’s, rated F-1+","page_number":18,"box":{"x":69,"y":581,"width":812,"height":12}},{"id":"adc34c73-0804-4b6d-a154-44105885ab64","block_type":"box","text":"through F-3 by Fitch or A-1 through A-3 by S&P in the case of tax-exempt commercial paper. If unrated, such securities","page_number":18,"box":{"x":68,"y":596,"width":839,"height":12}},{"id":"9360ba31-6752-4dfb-a217-51b465a2fd53","block_type":"box","text":"will possess creditworthiness comparable, in the opinion of the Manager, to other obligations in which the Fund may","page_number":18,"box":{"x":68,"y":612,"width":830,"height":11}},{"id":"210c40d3-be69-4b46-a0c8-3908c0dea8c8","block_type":"box","text":"invest. Securities rated in the lowest investment grade category may be considered to have speculative","page_number":18,"box":{"x":70,"y":627,"width":736,"height":11}},{"id":"72495575-ba59-40e7-b820-0640354deeab","block_type":"box","text":"characteristics. The Fund may invest up to 50% of its assets in non-investment grade bonds that are rated below Baa","page_number":18,"box":{"x":69,"y":642,"width":836,"height":11}},{"id":"f1fab00c-bd56-4e9f-9b82-73fa29d831b6","block_type":"box","text":"by Moody’s or below BBB by S&P or Fitch or that, in the Manager’s judgment, possess similar credit characteristics.","page_number":18,"box":{"x":69,"y":657,"width":826,"height":11}},{"id":"f4fdffe7-9a50-4a61-9fbb-c714819e8bce","block_type":"box","text":"Such securities, sometimes referred to as “high yield” or “junk” bonds, are predominantly speculative with respect to","page_number":18,"box":{"x":69,"y":672,"width":838,"height":11}},{"id":"cf46491c-a8de-4d11-99d2-b9f62d1216d2","block_type":"box","text":"the capacity to pay interest and repay principal in accordance with the terms of the security and generally involve a","page_number":18,"box":{"x":68,"y":687,"width":818,"height":11}},{"id":"6659dc62-16ba-413d-b134-a3b2f03cf5db","block_type":"box","text":"greater volatility of price than securities in higher rating categories. The Fund may invest in bonds of any maturity. The","page_number":18,"box":{"x":68,"y":702,"width":838,"height":12}},{"id":"c85f2526-fb42-438d-a2ab-d32c77271b10","block_type":"box","text":"Fund’s average weighted duration may vary significantly from time to time depending on the views of Fund","page_number":18,"box":{"x":70,"y":717,"width":753,"height":12}},{"id":"a5d6d616-5dc9-4b72-b337-932d67ba76bc","block_type":"box","text":"management.","page_number":18,"box":{"x":69,"y":733,"width":96,"height":11}},{"id":"79b2ada3-eedc-49cc-a61b-86a9a20d3dd5","block_type":"box","text":"New Jersey Fund","page_number":18,"box":{"x":70,"y":763,"width":118,"height":11}},{"id":"5d7a4ba3-1af7-4180-a879-b507ee5d9b57","block_type":"box","text":"Under normal circumstances, the Fund will invest at least 80% of its assets in New Jersey Municipal Bonds. At","page_number":18,"box":{"x":102,"y":785,"width":789,"height":12}},{"id":"23ef3fca-9810-4547-81ee-a2b204cb164d","block_type":"box","text":"least 80% of the Fund’s assets will be invested in investment grade Municipal Bonds. Investment grade Municipal","page_number":18,"box":{"x":70,"y":801,"width":810,"height":11}},{"id":"26b6276f-49c9-46f6-bc46-0615b385e9f4","block_type":"box","text":"Bonds are those rated at the date of purchase in the four highest rating categories of S&P (AAA, AA, A and BBB),","page_number":18,"box":{"x":70,"y":816,"width":802,"height":11}},{"id":"536e28d9-865f-4c14-a1f4-ec9bfbe99371","block_type":"box","text":"Fitch (AAA, AA, A and BBB) or Moody’s (Aaa, Aa, A and Baa) in the case of long-term debt, rated MIG 1 through MIG 3","page_number":18,"box":{"x":70,"y":831,"width":834,"height":11}},{"id":"2352f847-8945-4696-9944-25676a29e8d9","block_type":"box","text":"by Moody’s, rated F-1+ through F-3 by Fitch, or rated SP-1 through SP-2 by S&P in the case of short-term notes, and","page_number":18,"box":{"x":69,"y":846,"width":824,"height":11}},{"id":"f77a9c89-52bd-4c1b-840a-b354711620f1","block_type":"box","text":"rated P-1 or P-2 in the case of Moody’s, rated F-1+ through F-3 by Fitch or A-1 through A-3 by S&P in the case of tax","page_number":18,"box":{"x":69,"y":861,"width":825,"height":11}},{"id":"ee6d9495-802f-4353-9802-9604360d2c54","block_type":"box","text":"exempt commercial paper. If unrated, such securities will possess creditworthiness comparable, in the opinion of the","page_number":18,"box":{"x":69,"y":876,"width":836,"height":11}},{"id":"7f755f31-46b2-4481-986a-76b313ac3a92","block_type":"box","text":"Manager, to other obligations in which the Fund may invest. Securities rated in the lowest investment grade category","page_number":18,"box":{"x":70,"y":891,"width":831,"height":12}},{"id":"33c57c3b-d654-41c7-9efb-0a7b84c691b3","block_type":"box","text":"may be considered to have speculative characteristics. The Fund may invest up to 20% of its assets in Municipal","page_number":18,"box":{"x":69,"y":906,"width":803,"height":12}},{"id":"f9fc63f5-d07a-4521-bcf6-3ad844417d49","block_type":"box","text":"I-7","page_number":18,"box":{"x":481,"y":943,"width":16,"height":9}},{"id":"9c2c0b83-7aa1-4008-97fb-98fa68ce8ef8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":18,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"fc52ca7b-e5fd-46b7-9f5d-3e977471b341","block_type":"box","text":"Bonds that are rated below Baa by Moody’s or below BBB by S&P or Fitch or that, in the Manager’s judgment,","page_number":19,"box":{"x":70,"y":45,"width":779,"height":11}},{"id":"7166bace-6324-4ef9-b108-83aa44faae18","block_type":"box","text":"possess similar credit characteristics. Such securities, sometimes referred to as “high yield” or “junk” bonds, are","page_number":19,"box":{"x":70,"y":60,"width":812,"height":11}},{"id":"c8b6065c-5cfd-4956-ade8-4198d421afeb","block_type":"box","text":"predominantly speculative with respect to the capacity to pay interest and repay principal in accordance with the","page_number":19,"box":{"x":70,"y":75,"width":798,"height":11}},{"id":"73f20ada-fc17-4baf-b895-29b07f30b05c","block_type":"box","text":"terms of the security and generally involve a greater volatility of price than securities in higher rating categories. The","page_number":19,"box":{"x":68,"y":90,"width":827,"height":11}},{"id":"a85ba891-9d88-427b-b810-deeade35960b","block_type":"box","text":"Fund does not intend to purchase debt securities that are in default or that the Manager believes will be in default.","page_number":19,"box":{"x":70,"y":105,"width":817,"height":11}},{"id":"e23a48c9-197b-4383-8366-acd12ed14294","block_type":"box","text":"Under normal circumstances, it is generally anticipated that the Fund’s weighted average maturity will be in excess of","page_number":19,"box":{"x":70,"y":120,"width":837,"height":12}},{"id":"9159c4c5-f176-44e0-8fae-85bbad13dcbc","block_type":"box","text":"ten years.","page_number":19,"box":{"x":68,"y":136,"width":70,"height":10}},{"id":"a65b25a9-55f9-4fa2-8b1f-b4240b3c099c","block_type":"box","text":"Pennsylvania Fund","page_number":19,"box":{"x":69,"y":166,"width":132,"height":11}},{"id":"f86329ee-1189-4553-9add-22c180af3226","block_type":"box","text":"Under normal circumstances, the Fund will invest at least 80% of its assets in Pennsylvania Municipal Bonds. At","page_number":19,"box":{"x":102,"y":188,"width":801,"height":11}},{"id":"a4a5a25f-7870-4e43-bc15-03a21a3bfcdb","block_type":"box","text":"least 80% of the Fund’s assets will be invested in investment grade Municipal Bonds. Investment grade Municipal","page_number":19,"box":{"x":70,"y":203,"width":810,"height":12}},{"id":"5b67b873-478e-4c89-b353-71df78fcb5c4","block_type":"box","text":"Bonds are those rated at the date of purchase in the four highest rating categories of S&P (AAA, AA, A and BBB),","page_number":19,"box":{"x":70,"y":218,"width":802,"height":12}},{"id":"c4a07277-db23-400c-84e2-a6d389574061","block_type":"box","text":"Fitch (AAA, AA, A and BBB) or Moody’s Investors (Aaa, Aa, A and Baa) in the case of long-term debt, rated MIG 1","page_number":19,"box":{"x":70,"y":234,"width":798,"height":11}},{"id":"a4cc4cf4-76d2-4d6a-9c2c-3fe1d95fa1f0","block_type":"box","text":"through MIG 3 by Moody’s, rated F-1+ through F-3 by Fitch, or rated SP-1 through SP-2 by S&P in the case of short","page_number":19,"box":{"x":68,"y":249,"width":818,"height":11}},{"id":"7fce4a22-8d6f-49b1-a2ce-8a1abf6ff31f","block_type":"box","text":"term notes, and rated P-1 or P-2 in the case of Moody’s, rated F-1+ through F-3 by Fitch or A-1 through A-3 by S&P in","page_number":19,"box":{"x":68,"y":264,"width":829,"height":11}},{"id":"871b5ad6-02c6-4921-8e7d-f7e47205f642","block_type":"box","text":"the case of tax-exempt commercial paper. If unrated, such securities will possess creditworthiness comparable, in","page_number":19,"box":{"x":68,"y":279,"width":816,"height":11}},{"id":"2242f16d-7425-42fd-b8cf-8c17c2b0514d","block_type":"box","text":"the opinion of the Manager, to other obligations in which the Fund may invest. Securities rated in the lowest","page_number":19,"box":{"x":68,"y":294,"width":770,"height":11}},{"id":"2ecfe652-537e-44ca-9ad8-660ae748602b","block_type":"box","text":"investment grade category may be considered to have speculative characteristics. The Fund may invest up to 20% of","page_number":19,"box":{"x":70,"y":309,"width":832,"height":11}},{"id":"e955480b-7776-4a9f-a537-8076dbec02cc","block_type":"box","text":"its assets in Municipal Bonds that are rated below Baa by Moody’s or below BBB by S&P or Fitch or that, in the","page_number":19,"box":{"x":70,"y":324,"width":791,"height":11}},{"id":"0eb86f37-f04d-46ac-a25f-45a1a24e0e4b","block_type":"box","text":"Manager’s judgment, possess similar credit characteristics. Such securities, sometimes referred to as “high yield” or","page_number":19,"box":{"x":70,"y":339,"width":838,"height":12}},{"id":"b58c3396-43f2-4dfd-aabc-12fb01fd79a9","block_type":"box","text":"“junk” bonds, are predominantly speculative with respect to the capacity to pay interest and repay principal in","page_number":19,"box":{"x":70,"y":355,"width":780,"height":11}},{"id":"c4dcec3b-4b9a-4187-9480-5ac3daca7439","block_type":"box","text":"accordance with the terms of the security and generally involve a greater volatility of price than securities in higher","page_number":19,"box":{"x":69,"y":370,"width":815,"height":11}},{"id":"ee63e6da-0f7a-4fa1-ae27-0fe2b3da8ec0","block_type":"box","text":"rating categories. The Fund does not intend to purchase debt securities that are in default or that the Manager","page_number":19,"box":{"x":69,"y":385,"width":789,"height":11}},{"id":"dd04c9f8-fe84-4c07-a637-3e58fc8abce3","block_type":"box","text":"believes will be in default. Under normal circumstances, it is generally anticipated that the Fund’s weighted average","page_number":19,"box":{"x":69,"y":400,"width":824,"height":11}},{"id":"925db5cb-2960-41f2-8c95-0095a334d07d","block_type":"box","text":"maturity will be in excess of ten years.","page_number":19,"box":{"x":69,"y":415,"width":271,"height":11}},{"id":"e37df32f-3fad-4194-abf3-4c6c5c49dabe","block_type":"box","text":"Regulation Regarding Derivatives.","page_number":19,"box":{"x":102,"y":438,"width":246,"height":11}},{"id":"2465c612-32aa-494d-adb0-2526af984dbb","block_type":"box","text":"The Commodity Futures Trading Commission (“CFTC”) subjects advisers to","page_number":19,"box":{"x":355,"y":438,"width":530,"height":11}},{"id":"7e6cc021-aee8-453e-b921-9af7e12fd05f","block_type":"box","text":"registered investment companies to regulation by the CFTC if the funds that are advised by the investment adviser","page_number":19,"box":{"x":69,"y":453,"width":815,"height":11}},{"id":"ae4d94ee-b0af-4c7f-a571-58a5be76f497","block_type":"box","text":"either (i) invest, directly or indirectly, more than a prescribed level of its liquidation value in CFTC-regulated futures,","page_number":19,"box":{"x":69,"y":468,"width":816,"height":11}},{"id":"396acd11-262e-4b38-abbb-0fae0308936e","block_type":"box","text":"options and swaps (“CFTC Derivatives”), or (ii) market themselves as providing investment exposure to such","page_number":19,"box":{"x":69,"y":483,"width":771,"height":11}},{"id":"92e7ad23-d7c1-4411-a66a-360da22699e9","block_type":"box","text":"instruments. To the extent the Funds use CFTC Derivatives, they intend to do so below such prescribed levels and will","page_number":19,"box":{"x":70,"y":498,"width":837,"height":11}},{"id":"c2049730-c0a7-4908-a87b-860f771dac64","block_type":"box","text":"not market themselves as a “commodity pool” or a vehicle for trading such instruments. Accordingly, BlackRock has","page_number":19,"box":{"x":69,"y":513,"width":827,"height":12}},{"id":"5ab3a481-e6b5-4c73-8863-33ce01b9c798","block_type":"box","text":"claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act","page_number":19,"box":{"x":69,"y":528,"width":822,"height":12}},{"id":"59de619e-a3cd-45e4-ba61-92bfa47e7464","block_type":"box","text":"(“CEA”) pursuant to Rule 4.5 under the CEA. BlackRock is not, therefore, subject to registration or regulation as a","page_number":19,"box":{"x":69,"y":543,"width":810,"height":12}},{"id":"694abf48-0b45-46da-b1f7-51ae66e565d3","block_type":"box","text":"“commodity pool operator” under the CEA in respect of such Funds.","page_number":19,"box":{"x":70,"y":559,"width":481,"height":11}},{"id":"edda3ba4-f55e-4513-a70f-174b145e3d86","block_type":"box","text":"II. Investment Restrictions","page_number":19,"box":{"x":69,"y":589,"width":194,"height":9}},{"id":"d83b2a8a-17ed-4886-9e48-46e3d82cdc9e","block_type":"box","text":"The Trusts, on behalf of the Funds, have adopted restrictions and policies relating to the Funds’ assets and their","page_number":19,"box":{"x":101,"y":612,"width":805,"height":11}},{"id":"e5e34419-5ea3-4e26-8d97-5aa228a91696","block_type":"box","text":"activities. Certain of the restrictions are fundamental policies of the Funds and may not be changed without the","page_number":19,"box":{"x":69,"y":627,"width":795,"height":11}},{"id":"708175fc-f2ed-4f80-ae68-28e3e959fd95","block_type":"box","text":"approval of the holders of a majority of a Fund’s outstanding voting securities (which for this purpose and under the","page_number":19,"box":{"x":69,"y":642,"width":823,"height":11}},{"id":"b1112e75-c2e3-4106-b520-87a29cdb844f","block_type":"box","text":"Investment Company Act, means the lesser of (i) 67% of the shares represented at a meeting at which more than","page_number":19,"box":{"x":70,"y":657,"width":808,"height":11}},{"id":"482db9a1-70be-41a8-a0cf-b26c5feb37e6","block_type":"box","text":"50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares). The Trusts, on","page_number":19,"box":{"x":69,"y":672,"width":798,"height":11}},{"id":"609e5d24-3d11-4c53-98d8-4a44e2290c9a","block_type":"box","text":"behalf of the Funds, have also adopted certain non-fundamental investment restrictions, which may be changed by","page_number":19,"box":{"x":69,"y":687,"width":817,"height":11}},{"id":"cbfb2c1f-4827-4ce1-87fa-11446bea71d3","block_type":"box","text":"the Boards of Trustees without shareholder approval.","page_number":19,"box":{"x":68,"y":702,"width":379,"height":11}},{"id":"354667a5-856a-45f7-ac77-696f0e79a859","block_type":"box","text":"Set forth below are the Funds’ fundamental and non-fundamental investment restrictions. Unless otherwise","page_number":19,"box":{"x":102,"y":725,"width":767,"height":9}},{"id":"fc524198-3b8c-4dc0-b07e-52a2fa573f67","block_type":"box","text":"provided, all references below to the assets of a Fund are in terms of current market value.","page_number":19,"box":{"x":70,"y":740,"width":650,"height":11}},{"id":"fc624a68-484e-41ba-8694-5553e8c26c81","block_type":"box","text":"Under the Trusts’ fundamental investment restrictions, each Fund may not:","page_number":19,"box":{"x":102,"y":763,"width":533,"height":11}},{"id":"94c59b38-efdc-428c-9414-f155a777398d","block_type":"box","text":"(1) Invest more than 25% of its assets, taken at market value, in the securities of issuers in any particular","page_number":19,"box":{"x":102,"y":785,"width":759,"height":12}},{"id":"4e80b025-b9c3-4218-b774-536f61a038fe","block_type":"box","text":"industry (excluding the U.S. Government and its agencies and instrumentalities). For purposes of this restriction,","page_number":19,"box":{"x":70,"y":801,"width":802,"height":11}},{"id":"ba64d20c-1d02-4ced-9dd1-6b4111c4326b","block_type":"box","text":"states, municipalities and their political subdivisions are not considered part of any industry.","page_number":19,"box":{"x":69,"y":816,"width":660,"height":11}},{"id":"52e67f06-6442-42d5-a642-3f2bee3696ec","block_type":"box","text":"(2) Make investments for the purpose of exercising control or management.","page_number":19,"box":{"x":102,"y":838,"width":537,"height":12}},{"id":"7c3711a1-8d40-48b1-8b20-9bed7e487a98","block_type":"box","text":"(3) Purchase or sell real estate, except that, to the extent permitted by applicable law, the Fund may invest in","page_number":19,"box":{"x":102,"y":861,"width":778,"height":11}},{"id":"7baf6d3b-a436-4787-86ff-ef59abeff747","block_type":"box","text":"securities directly or indirectly secured by real estate or interests therein or issued by companies which invest in real","page_number":19,"box":{"x":69,"y":876,"width":832,"height":11}},{"id":"dfa92505-1fcd-44bc-a4fc-36da250c4dda","block_type":"box","text":"estate or interests therein.","page_number":19,"box":{"x":69,"y":891,"width":190,"height":9}},{"id":"ccbdf1e8-573e-4820-8894-e7324f3f8529","block_type":"box","text":"I-8","page_number":19,"box":{"x":481,"y":943,"width":17,"height":9}},{"id":"a0e738e3-eb30-4f7f-a066-3e7bb30d359b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":19,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"404d55b9-c48a-47bb-a1aa-892b135d72d6","block_type":"box","text":"(4) Make loans to other persons, except that the acquisition of bonds, debentures or other corporate debt","page_number":20,"box":{"x":102,"y":45,"width":755,"height":11}},{"id":"803ba65e-7668-40dd-9945-f9069a3539c2","block_type":"box","text":"securities and investment in government obligations, commercial paper, pass-through instruments, certificates of","page_number":20,"box":{"x":69,"y":60,"width":810,"height":11}},{"id":"6ab4d60a-21f5-4038-a5d0-a385c5949697","block_type":"box","text":"deposit, bankers’ acceptances, repurchase agreements or any similar instruments shall not be deemed to be the","page_number":20,"box":{"x":69,"y":75,"width":809,"height":11}},{"id":"5fb7254f-f22b-4369-b0b1-d57ff348c4df","block_type":"box","text":"making of a loan, and except further that the Fund may lend its portfolio securities, provided that the lending of","page_number":20,"box":{"x":69,"y":90,"width":795,"height":11}},{"id":"c6d2ade3-e6f9-43ce-a876-19071f00fa01","block_type":"box","text":"portfolio securities may be made only in accordance with applicable law and the guidelines set forth in the Fund’s","page_number":20,"box":{"x":70,"y":105,"width":810,"height":11}},{"id":"6017689b-c712-4650-8633-df589ad291d1","block_type":"box","text":"Prospectus and Statement of Additional Information, as they may be amended from time to time.","page_number":20,"box":{"x":69,"y":120,"width":691,"height":11}},{"id":"c400a75a-f3c7-4048-b457-473413b6069c","block_type":"box","text":"(5) Issue senior securities to the extent such issuance would violate applicable law.","page_number":20,"box":{"x":102,"y":143,"width":594,"height":11}},{"id":"79d83a48-21e6-4c08-b66a-965efee6c753","block_type":"box","text":"(6) Borrow money, except that (i) the Fund may borrow from banks (as defined in the Investment Company Act) in","page_number":20,"box":{"x":102,"y":166,"width":804,"height":11}},{"id":"93a719be-f575-45cc-979a-f9f8b0ec3a8b","block_type":"box","text":"amounts up to 33","page_number":20,"box":{"x":69,"y":181,"width":127,"height":11}},{"id":"6fe845e1-7190-49ed-a16e-b0ec206a2f43","block_type":"box","text":"1⁄","page_number":20,"box":{"x":197,"y":181,"width":6,"height":5}},{"id":"13c53547-9353-417f-9183-9ef742948e06","block_type":"box","text":"1⁄3","page_number":20,"box":{"x":201,"y":181,"width":8,"height":9}},{"id":"02207c61-1c44-48cf-a290-57ca14c4065a","block_type":"box","text":"⁄3","page_number":20,"box":{"x":206,"y":184,"width":6,"height":6}},{"id":"aeea66f8-5372-40f2-b27a-f2afe8627e79","block_type":"box","text":"% of its total assets (including the amount borrowed), (ii) the Fund may, to the extent permitted","page_number":20,"box":{"x":213,"y":181,"width":677,"height":11}},{"id":"bc347930-2ac8-48bc-82a4-dcc9e0fb089e","block_type":"box","text":"by applicable law, borrow up to an additional 5% of its total assets for temporary purposes, (iii) the Fund may obtain","page_number":20,"box":{"x":69,"y":196,"width":826,"height":11}},{"id":"299d8945-9666-4e7a-a261-8e2a71816d2b","block_type":"box","text":"such short-term credit as may be necessary for the clearance of purchases and sales of portfolio securities and","page_number":20,"box":{"x":69,"y":211,"width":800,"height":11}},{"id":"24b9dd9e-2e97-4ac2-8204-fb076c3b7d9b","block_type":"box","text":"(iv) the Fund may purchase securities on margin to the extent permitted by applicable law. The Fund may not pledge","page_number":20,"box":{"x":69,"y":226,"width":824,"height":11}},{"id":"cf6e08e4-ce85-480e-99ae-773df7da3ae8","block_type":"box","text":"its assets other than to secure such borrowings or, to the extent permitted by the Fund’s investment policies as set","page_number":20,"box":{"x":70,"y":241,"width":826,"height":11}},{"id":"ce7bc335-96c4-4d99-801f-10052ae4bf84","block_type":"box","text":"forth in its Prospectus and Statement of Additional Information, as they may be amended from time to time, in","page_number":20,"box":{"x":68,"y":256,"width":789,"height":11}},{"id":"51309a07-230a-44ca-864e-a4e0c51dd0ea","block_type":"box","text":"connection with hedging transactions, short sales, when-issued and forward commitment transactions and similar","page_number":20,"box":{"x":69,"y":271,"width":814,"height":12}},{"id":"c4f2f53c-aa24-446c-850d-16e9973ac9a9","block_type":"box","text":"investment strategies.","page_number":20,"box":{"x":70,"y":287,"width":156,"height":11}},{"id":"ca5acd6b-24a9-4859-b2f9-635fa1eede81","block_type":"box","text":"(7) Underwrite securities of other issuers, except insofar as the Fund technically may be deemed an underwriter","page_number":20,"box":{"x":102,"y":309,"width":798,"height":11}},{"id":"ac5dee78-8982-4899-9c7a-abb94de7d486","block_type":"box","text":"under the Securities Act of 1933, as amended (“Securities Act”), in selling portfolio securities.","page_number":20,"box":{"x":69,"y":324,"width":675,"height":12}},{"id":"51a2a3c9-964c-4b93-9cc9-81cda3728e2f","block_type":"box","text":"(8) Purchase or sell commodities or contracts on commodities, except to the extent that the Fund may do so in","page_number":20,"box":{"x":102,"y":347,"width":790,"height":11}},{"id":"0276db69-5201-4965-a4ee-5bd7d8422f39","block_type":"box","text":"accordance with applicable law and the Fund’s Prospectus and Statement of Additional Information, as they may be","page_number":20,"box":{"x":69,"y":362,"width":824,"height":11}},{"id":"cf135721-3183-4a59-aaaf-bd49fd0512b4","block_type":"box","text":"amended from time to time, and without registering as a commodity pool operator under the Commodity Exchange","page_number":20,"box":{"x":69,"y":377,"width":813,"height":12}},{"id":"c88b37f2-4158-49a6-a25f-9271fe910c1e","block_type":"box","text":"Act.","page_number":20,"box":{"x":68,"y":393,"width":26,"height":8}},{"id":"e3fa4519-7e6c-4d64-a6f7-8c7572b4be83","block_type":"box","text":"As an additional fundamental restriction, the California Fund may not make any investment inconsistent with its","page_number":20,"box":{"x":101,"y":415,"width":795,"height":11}},{"id":"d34f3c50-0c15-4f12-9463-85d99d3179ed","block_type":"box","text":"classification as a diversified investment company under the Investment Company Act.","page_number":20,"box":{"x":69,"y":430,"width":616,"height":11}},{"id":"5c19cb3d-224a-476d-8e8e-eca81d268ef4","block_type":"box","text":"Under the Trusts’ non-fundamental investment restrictions, each Fund may not:","page_number":20,"box":{"x":102,"y":453,"width":563,"height":11}},{"id":"d7f43597-a7ff-4faf-9523-3d381b587f42","block_type":"box","text":"(a) Purchase securities of other investment companies, except to the extent permitted by the Investment","page_number":20,"box":{"x":102,"y":475,"width":747,"height":12}},{"id":"7b47f131-0707-4ea7-9149-2f61968891e2","block_type":"box","text":"Company Act. As a matter of policy, however, the Fund will not purchase shares of any registered open-end","page_number":20,"box":{"x":69,"y":491,"width":759,"height":11}},{"id":"c004c443-7137-4814-ad4a-90c70dc78c11","block_type":"box","text":"investment company or registered unit investment trust, in reliance on Section 12(d)(1)(F) or (G) (the “fund of funds”","page_number":20,"box":{"x":70,"y":506,"width":829,"height":11}},{"id":"992b5ab1-c192-4789-87c5-45bd1d28016a","block_type":"box","text":"provisions) of the Investment Company Act, at any time the Fund has knowledge that its shares are purchased by","page_number":20,"box":{"x":70,"y":521,"width":808,"height":11}},{"id":"f37e0778-4294-491b-996d-bb320a6c929a","block_type":"box","text":"another investment company investor in reliance on the provisions of subparagraph (G) of Section 12(d)(1).","page_number":20,"box":{"x":69,"y":536,"width":763,"height":11}},{"id":"45d8bdc5-1ccb-4e39-8ef9-4c05e5a71171","block_type":"box","text":"(b) Make short sales of securities or maintain a short position, except to the extent permitted by the Fund’s","page_number":20,"box":{"x":102,"y":559,"width":770,"height":11}},{"id":"d8d36514-c604-4dee-b885-a81fce6efff1","block_type":"box","text":"Prospectus and Statement of Additional Information, as amended from time to time, and applicable law.","page_number":20,"box":{"x":69,"y":574,"width":741,"height":11}},{"id":"5e9f41bd-b35d-43b6-bae7-d8838ae91cec","block_type":"box","text":"Notations Regarding the Funds’ Fundamental Investment Restrictions","page_number":20,"box":{"x":102,"y":597,"width":510,"height":11}},{"id":"552098c7-b7c6-45fe-802d-d81fe0e9cf6c","block_type":"box","text":"The following notations are not","page_number":20,"box":{"x":612,"y":596,"width":220,"height":12}},{"id":"8f8cde87-6bb9-4513-8d2f-6845742ac535","block_type":"box","text":"considered to be part of the Funds’ fundamental investment restrictions and are subject to change without","page_number":20,"box":{"x":69,"y":612,"width":762,"height":11}},{"id":"5099ef0e-8801-4da3-9860-2d1d98bbd8e1","block_type":"box","text":"shareholder approval.","page_number":20,"box":{"x":69,"y":627,"width":153,"height":11}},{"id":"ba7759aa-cd40-4006-9fc0-4ace0254c5df","block_type":"box","text":"For purposes of applying the fundamental policy relating to concentration set forth in (1) above, municipal","page_number":20,"box":{"x":102,"y":649,"width":751,"height":12}},{"id":"a79b2f4c-e7cb-418b-8db4-60c3b54c9465","block_type":"box","text":"securities issued to finance a specific project, such as industrial development bonds and private activity bonds, are","page_number":20,"box":{"x":69,"y":664,"width":823,"height":12}},{"id":"0c4af91c-fc28-4df2-9d35-c150d3f1a18d","block_type":"box","text":"not excluded from a Fund’s 25% industry concentration limit, as they are considered to be in the industry of the","page_number":20,"box":{"x":69,"y":680,"width":797,"height":11}},{"id":"2eae940a-57b2-4652-8401-7d2ca8506942","block_type":"box","text":"relevant project. There also will be no limit on investment in issuers domiciled in a single jurisdiction or country.","page_number":20,"box":{"x":69,"y":695,"width":795,"height":11}},{"id":"86b2230a-37c4-413e-a609-e0a47bf6e589","block_type":"box","text":"Finance companies will be considered to be in the industries of their parents if their activities are primarily related to","page_number":20,"box":{"x":70,"y":710,"width":830,"height":11}},{"id":"7f2edd39-f55f-461a-a0d0-e80bf95d6292","block_type":"box","text":"financing the activities of the parents. Each foreign government will be considered to be a member of a separate","page_number":20,"box":{"x":68,"y":725,"width":803,"height":11}},{"id":"414b8c4c-6f55-414c-ad55-7d28e6985a51","block_type":"box","text":"industry. With respect to each Fund’s industry classifications, a Fund currently utilizes any one or more of the","page_number":20,"box":{"x":70,"y":740,"width":779,"height":11}},{"id":"1d541f47-ac6f-4a6e-a260-20aca7088b57","block_type":"box","text":"industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as","page_number":20,"box":{"x":70,"y":755,"width":836,"height":11}},{"id":"4d7b1ed9-1585-4554-a4ea-6d289642aa6e","block_type":"box","text":"defined by Fund management. The policy also will be interpreted to give broad authority to each Fund as to how to","page_number":20,"box":{"x":69,"y":770,"width":811,"height":12}},{"id":"cbdb272e-d547-4d49-b738-81c597642350","block_type":"box","text":"classify issuers within or among industries.","page_number":20,"box":{"x":69,"y":785,"width":306,"height":12}},{"id":"de897958-e71e-418b-93bd-45fba90af5a3","block_type":"box","text":"With respect to the fundamental policy relating to borrowing set forth in (6) above, the policy does not restrict","page_number":20,"box":{"x":101,"y":808,"width":782,"height":11}},{"id":"bc24862b-747f-4153-b9e4-7344bae759a0","block_type":"box","text":"each Fund from obtaining leverage through tender option bond trust transactions, provided that the Fund either","page_number":20,"box":{"x":69,"y":823,"width":791,"height":12}},{"id":"9421587e-b2e1-4ad6-96fa-345db8ab031f","block_type":"box","text":"(i) complies with the 300% asset coverage ratio with respect to such transactions and any other borrowings in the","page_number":20,"box":{"x":69,"y":838,"width":811,"height":12}},{"id":"80066244-6928-462a-9120-b9c3b7c7d6ee","block_type":"box","text":"aggregate, or (ii) treats such transactions as Derivatives Transactions under Rule 18f-4. See “Investment Risks and","page_number":20,"box":{"x":69,"y":853,"width":823,"height":12}},{"id":"208f4c43-3220-49f6-97e1-87161a2eb6b2","block_type":"box","text":"Considerations -- Derivatives -- Regulation of Derivatives -- Rule 18f-4 under the Investment Company Act” below.","page_number":20,"box":{"x":69,"y":869,"width":797,"height":11}},{"id":"40ff0952-69f5-4f6e-a33c-3e212f3741e3","block_type":"box","text":"I-9","page_number":20,"box":{"x":481,"y":943,"width":17,"height":9}},{"id":"3aa30e80-6e7a-4ea5-9136-070c097a4c55","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":20,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a1f8dc77-92b5-465c-b816-97beea4015e7","block_type":"box","text":"With respect to the fundamental policy relating to underwriting set forth in (7) above, the Investment Company","page_number":21,"box":{"x":101,"y":45,"width":788,"height":11}},{"id":"87c3e642-cb99-4463-895a-05bb768b8204","block_type":"box","text":"Act does not prohibit a Fund from engaging in the underwriting business or from underwriting the securities of other","page_number":21,"box":{"x":68,"y":60,"width":826,"height":11}},{"id":"cdb11d61-a6b3-4619-bc3d-37bc049b170d","block_type":"box","text":"issuers; in fact, in the case of diversified funds, the Investment Company Act permits each Fund to have underwriting","page_number":21,"box":{"x":70,"y":75,"width":836,"height":11}},{"id":"deaa0226-f7bc-4ee7-983a-9dd6f175e86d","block_type":"box","text":"commitments of up to 25% of its assets under certain circumstances. Those circumstances currently are that the","page_number":21,"box":{"x":69,"y":90,"width":811,"height":11}},{"id":"b4169c5e-85ec-427a-a6e1-ebb1813c2f91","block_type":"box","text":"amount of a Fund’s underwriting commitments, when added to the value of the Fund’s investments in issuers where","page_number":21,"box":{"x":69,"y":105,"width":830,"height":11}},{"id":"1ffe595e-b3b0-4fe9-b264-8f723a3114c7","block_type":"box","text":"the Fund owns more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A","page_number":21,"box":{"x":68,"y":120,"width":820,"height":12}},{"id":"ba60fae5-fd43-4d3b-a8e5-9b79a184060e","block_type":"box","text":"fund engaging in transactions involving the acquisition or disposition of portfolio securities may be considered to be","page_number":21,"box":{"x":68,"y":135,"width":826,"height":12}},{"id":"39e3c502-d489-4d8c-b794-57dd98652d2b","block_type":"box","text":"an underwriter under the Securities Act. Although it is not believed that the application of the Securities Act","page_number":21,"box":{"x":69,"y":150,"width":766,"height":12}},{"id":"46d04c44-9731-4213-98ea-e1214ae5f56e","block_type":"box","text":"provisions described above would cause a Fund to be engaged in the business of underwriting, the policy in (7) above","page_number":21,"box":{"x":70,"y":166,"width":838,"height":11}},{"id":"1754e5de-51c2-4aae-96d9-4498a3aa7513","block_type":"box","text":"will be interpreted not to prevent a Fund from engaging in transactions involving the acquisition or disposition of","page_number":21,"box":{"x":68,"y":181,"width":798,"height":11}},{"id":"010b34d3-01b0-4a98-9825-545364457d29","block_type":"box","text":"portfolio securities, regardless of whether the Fund may be considered to be an underwriter under the Securities Act","page_number":21,"box":{"x":70,"y":196,"width":830,"height":11}},{"id":"865db17b-af48-4d94-8135-3369e0badd68","block_type":"box","text":"or is otherwise engaged in the underwriting business to the extent permitted by applicable law.","page_number":21,"box":{"x":69,"y":211,"width":676,"height":11}},{"id":"6a5e6c9a-a485-4f4d-b5ab-8b6db9f341b1","block_type":"box","text":"Unless otherwise indicated or with respect to policies adopted pursuant to Rule 35d-1 under the Investment","page_number":21,"box":{"x":102,"y":234,"width":771,"height":11}},{"id":"9df07a28-bbc6-4248-b908-37dc4d883503","block_type":"box","text":"Company Act, all limitations under each Fund’s fundamental or non-fundamental investment restrictions apply only at","page_number":21,"box":{"x":69,"y":249,"width":834,"height":11}},{"id":"e6cf305e-ae15-4ee3-9a42-c821b52565df","block_type":"box","text":"the time that a transaction is undertaken. Any change in the percentage of a Fund’s assets invested in certain","page_number":21,"box":{"x":68,"y":264,"width":789,"height":11}},{"id":"3d588f4d-9cbc-4c01-b9b1-a3e0859cde03","block_type":"box","text":"securities or other instruments resulting from market fluctuations or other changes in a Fund’s total assets will not","page_number":21,"box":{"x":69,"y":279,"width":821,"height":11}},{"id":"48f64c04-9f5b-466f-9e77-0b9c1bb1dfbf","block_type":"box","text":"require the Fund to dispose of an investment until BlackRock determines that it is practicable to sell or close out the","page_number":21,"box":{"x":69,"y":294,"width":833,"height":11}},{"id":"b0ff9667-c9b2-45ae-8762-faa574ee5829","block_type":"box","text":"investment without undue market or tax consequences.","page_number":21,"box":{"x":70,"y":309,"width":393,"height":11}},{"id":"98b4251d-c3d0-4778-93fd-324cc2d45da8","block_type":"box","text":"Except with respect to restriction (6), if a percentage restriction on the investment or use of assets set forth","page_number":21,"box":{"x":102,"y":332,"width":772,"height":11}},{"id":"6837b455-9340-4900-a92b-0e8216946478","block_type":"box","text":"above is adhered to at the time a transaction is effected, later changes in percentages resulting from changing","page_number":21,"box":{"x":69,"y":347,"width":792,"height":11}},{"id":"1d719bbb-22e0-4de8-b72a-a1cc59b2467c","block_type":"box","text":"values will not be considered a violation.","page_number":21,"box":{"x":68,"y":362,"width":289,"height":9}},{"id":"6d443c3d-eb86-4850-9049-6f49c9378376","block_type":"box","text":"III. Information on Trustees and Officers","page_number":21,"box":{"x":69,"y":392,"width":290,"height":9}},{"id":"d38d8f3f-10cf-458f-8d8e-4478913159a4","block_type":"box","text":"The Board consists of ten individuals (each a “Trustee”), eight of whom are not “interested persons” of the","page_number":21,"box":{"x":101,"y":415,"width":765,"height":11}},{"id":"880b7462-2585-45c2-9637-5fb10287fec5","block_type":"box","text":"Trusts as defined in the Investment Company Act (the “Independent Trustees”). The registered investment","page_number":21,"box":{"x":68,"y":430,"width":760,"height":11}},{"id":"d880e1e1-4446-4c9e-bc1e-5dd7fe58b869","block_type":"box","text":"companies advised by the Manager or its affiliates (the “BlackRock-advised Funds”) are organized into the BlackRock","page_number":21,"box":{"x":69,"y":445,"width":837,"height":12}},{"id":"00f00807-4790-452a-8e34-35883dcdf1a2","block_type":"box","text":"Multi-Asset Complex, the BlackRock Fixed-Income Complex, and the iShares Complex (each, a “BlackRock Fund","page_number":21,"box":{"x":70,"y":460,"width":793,"height":11}},{"id":"f5dbd364-7f4e-4389-8f8a-3157177b8d01","block_type":"box","text":"Complex”). The Funds are included in the BlackRock Fund Complex referred to as the BlackRock Fixed-Income","page_number":21,"box":{"x":69,"y":475,"width":782,"height":12}},{"id":"eab4b6c5-556b-4bf3-a2c2-687cbe609f72","block_type":"box","text":"Complex. The Trustees also oversee as board members the operations of the other open-end and closed-end","page_number":21,"box":{"x":69,"y":491,"width":776,"height":11}},{"id":"742fe57d-2e9d-41af-988d-9f88332023a6","block_type":"box","text":"registered investment companies included in the BlackRock Fixed-Income Complex.","page_number":21,"box":{"x":69,"y":506,"width":592,"height":11}},{"id":"1646b886-771a-4f2d-9576-f499b33bb309","block_type":"box","text":"The Board has overall responsibility for the oversight of the Trusts and the Funds. The Chair of the Board and the","page_number":21,"box":{"x":101,"y":528,"width":806,"height":12}},{"id":"569371c8-e4f7-475a-af74-b4f7d6f227f6","block_type":"box","text":"Chief Executive Officer are different people. Not only is the Chair of the Board an Independent Trustee, but also the","page_number":21,"box":{"x":69,"y":543,"width":823,"height":12}},{"id":"f26dee05-0c6b-4b69-824e-40aa5b4d464a","block_type":"box","text":"Chair of each Board committee (each, a “Committee”) is an Independent Trustee. The Board has seven standing","page_number":21,"box":{"x":69,"y":559,"width":804,"height":11}},{"id":"d19f553f-ba15-4363-bb99-9045d0e67e67","block_type":"box","text":"Committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a","page_number":21,"box":{"x":69,"y":574,"width":750,"height":11}},{"id":"fda15f4c-308e-4cf6-9fe8-98874bfa046a","block_type":"box","text":"Performance Oversight Committee, a Securities Lending Committee, an Executive Committee and a Private Assets","page_number":21,"box":{"x":69,"y":589,"width":815,"height":11}},{"id":"e6b16e73-75c4-498e-a1ab-5abfbc914476","block_type":"box","text":"Committee. The role of the Chair of the Board is to preside over all meetings of the Board and to act as a liaison with","page_number":21,"box":{"x":69,"y":604,"width":837,"height":11}},{"id":"cc9c8bbd-d738-446f-83c3-c8bd8a3f8a84","block_type":"box","text":"service providers, officers, attorneys, and other Trustees between meetings. The Chair of each Committee performs","page_number":21,"box":{"x":69,"y":619,"width":829,"height":11}},{"id":"f2450b27-4689-43fb-ba1b-e02ba920d39f","block_type":"box","text":"a similar role with respect to the Committee. The Chair of the Board or a Committee may also perform such other","page_number":21,"box":{"x":69,"y":634,"width":810,"height":11}},{"id":"6f8f008d-4e9b-4304-b863-bae8ce4bc3cb","block_type":"box","text":"functions as may be delegated by the Board or the Committee from time to time. The Independent Trustees meet","page_number":21,"box":{"x":68,"y":649,"width":809,"height":12}},{"id":"2b1391db-60b4-47e0-9eb4-d8ea2f077adf","block_type":"box","text":"regularly outside the presence of Fund management, in executive sessions or with other service providers to the","page_number":21,"box":{"x":69,"y":664,"width":801,"height":12}},{"id":"7a0c8587-d52f-422d-8f4b-299021aded93","block_type":"box","text":"Funds. The Board has regular meetings five times a year, including a meeting to consider the approval of the Funds’","page_number":21,"box":{"x":70,"y":680,"width":824,"height":11}},{"id":"e8766cf1-6514-49af-8bea-1ad92dcc3588","block_type":"box","text":"investment management agreement, and, if necessary, may hold special meetings before its next regular meeting.","page_number":21,"box":{"x":70,"y":695,"width":815,"height":11}},{"id":"e0081b5a-5705-48c0-ad7c-e7d85aeb4e75","block_type":"box","text":"The Audit Committee, the Governance and Nominating Committee, the Compliance Committee, the Performance","page_number":21,"box":{"x":68,"y":710,"width":802,"height":11}},{"id":"48dcfe28-dcbc-460d-8ec4-454ec6af9ddb","block_type":"box","text":"Oversight Committee, the Securities Lending Committee, and the Private Assets Committee each meets regularly and","page_number":21,"box":{"x":69,"y":725,"width":836,"height":11}},{"id":"c3d7a876-3c3e-41e8-9b8f-e94753f695b3","block_type":"box","text":"the Executive Committee meets on an ad hoc basis to conduct the oversight functions delegated to that Committee","page_number":21,"box":{"x":68,"y":740,"width":824,"height":11}},{"id":"b40670e9-1f31-4352-9bd4-d83cc4e4fbfa","block_type":"box","text":"by the Board and reports its findings to the Board. The Board and each standing Committee conduct annual","page_number":21,"box":{"x":69,"y":755,"width":768,"height":11}},{"id":"f0b6388b-84c8-49da-9c0d-3e19cd3f7e6d","block_type":"box","text":"assessments of their oversight function and structure. The Board has determined that the Board’s leadership","page_number":21,"box":{"x":69,"y":770,"width":782,"height":12}},{"id":"517897a0-0950-4fe7-9b3d-2d6ac3f099de","block_type":"box","text":"structure is appropriate because it allows the Board to exercise independent judgment over management and to","page_number":21,"box":{"x":69,"y":786,"width":800,"height":11}},{"id":"01d92f67-0173-4791-9e15-e2b989875b55","block_type":"box","text":"allocate areas of responsibility among Committees and the Board to enhance oversight.","page_number":21,"box":{"x":69,"y":801,"width":625,"height":11}},{"id":"589476c5-697d-4d0f-a196-f96d0a924c5d","block_type":"box","text":"The Board decided to separate the roles of Chief Executive Officer from the Chair because it believes that having","page_number":21,"box":{"x":101,"y":823,"width":805,"height":12}},{"id":"9d4a1670-58c2-4e9e-81f8-1c0249f52448","block_type":"box","text":"an independent Chair:","page_number":21,"box":{"x":69,"y":838,"width":155,"height":11}},{"id":"896a0c14-92a5-4029-a2fe-8f7d8e8056a9","block_type":"box","text":"•","page_number":21,"box":{"x":102,"y":861,"width":6,"height":5}},{"id":"02a9ea33-1474-4507-b431-7fae30152db4","block_type":"box","text":"increases the independent oversight of the Funds and enhances the Board’s objective evaluation of the","page_number":21,"box":{"x":135,"y":858,"width":737,"height":12}},{"id":"218461c3-d47a-4a60-a6b6-b212911b6141","block_type":"box","text":"Chief Executive Officer;","page_number":21,"box":{"x":134,"y":874,"width":164,"height":10}},{"id":"80ed2253-5c22-456b-8d24-6f9919c675d6","block_type":"box","text":"•","page_number":21,"box":{"x":102,"y":897,"width":6,"height":4}},{"id":"310f71cf-a101-4b95-afc4-255b90356303","block_type":"box","text":"allows the Chief Executive Officer to focus on the Funds’ operations instead of Board administration;","page_number":21,"box":{"x":134,"y":894,"width":717,"height":11}},{"id":"ca24d35c-d99c-4967-815d-8d20ca7714c1","block_type":"box","text":"I-10","page_number":21,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"165ab8c6-7557-42a7-8bd9-688b21f0b45d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":21,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"aa4b7556-a029-45f0-82b9-c72080ba5c15","block_type":"box","text":"•","page_number":22,"box":{"x":102,"y":48,"width":6,"height":4}},{"id":"52517ff3-1d1f-4e8c-986b-c0a2516a2252","block_type":"box","text":"provides greater opportunities for direct and independent communication between shareholders and the","page_number":22,"box":{"x":135,"y":45,"width":742,"height":11}},{"id":"0d9689e3-dfb1-4eb2-b3a6-d464bd6f39d8","block_type":"box","text":"Board; and","page_number":22,"box":{"x":135,"y":60,"width":76,"height":10}},{"id":"0c8e686e-e6d9-4db4-a159-573e3265128a","block_type":"box","text":"•","page_number":22,"box":{"x":102,"y":83,"width":6,"height":4}},{"id":"f66afb97-db1c-44eb-8abb-4ef138153b53","block_type":"box","text":"provides an independent spokesman for the Funds.","page_number":22,"box":{"x":135,"y":80,"width":364,"height":11}},{"id":"0ac9ca83-f01c-491a-a46a-8257f5f10dc9","block_type":"box","text":"The Board has engaged the Manager to manage the Funds on a day-to-day basis. The Board is responsible for","page_number":22,"box":{"x":101,"y":103,"width":785,"height":11}},{"id":"69aea0cd-dab9-4a74-a918-e1918ea9116d","block_type":"box","text":"overseeing the Manager, other service providers, the operations of the Funds and associated risks in accordance","page_number":22,"box":{"x":69,"y":118,"width":807,"height":11}},{"id":"86729f73-4944-4e1e-9893-1cce695f876f","block_type":"box","text":"with the provisions of the Investment Company Act, state law, other applicable laws, the Funds’ charters, and the","page_number":22,"box":{"x":68,"y":133,"width":809,"height":11}},{"id":"ee568e00-4d1b-4a24-bafa-6561125bbc3f","block_type":"box","text":"Funds’ investment objectives and strategies. The Board reviews, on an ongoing basis, each Fund’s performance,","page_number":22,"box":{"x":70,"y":148,"width":803,"height":11}},{"id":"59b75fc6-4e1c-47f4-aa62-6196b61c5bdf","block_type":"box","text":"operations, and investment strategies and techniques. The Board also conducts reviews of the Manager and its role","page_number":22,"box":{"x":69,"y":163,"width":828,"height":11}},{"id":"be5b0f57-6683-40d4-a239-711ef7f6995e","block_type":"box","text":"in running the operations of the Funds.","page_number":22,"box":{"x":70,"y":178,"width":275,"height":11}},{"id":"1aac6a88-d00a-4281-9bb5-3fe2053721b0","block_type":"box","text":"Day-to-day risk management with respect to the Funds is the responsibility of the Manager, sub-advisers or other","page_number":22,"box":{"x":102,"y":201,"width":802,"height":11}},{"id":"81a48fc3-0ac6-42e2-8434-51753cca58d9","block_type":"box","text":"service providers (depending on the nature of the risk), subject to the supervision of the Manager. The Funds are","page_number":22,"box":{"x":69,"y":216,"width":806,"height":11}},{"id":"fc0314de-9f02-4753-b9a4-bc2d33208046","block_type":"box","text":"subject to a number of risks, including investment, compliance, operational and valuation risks, among others. While","page_number":22,"box":{"x":69,"y":231,"width":832,"height":11}},{"id":"cf426788-ea02-4cd1-8680-237eb21f0b28","block_type":"box","text":"there are a number of risk management functions performed by the Manager, sub-advisers or other service providers,","page_number":22,"box":{"x":68,"y":246,"width":839,"height":11}},{"id":"17c9b48d-4e15-4393-af2c-709088696659","block_type":"box","text":"as applicable, it is not possible to eliminate all of the risks applicable to the Funds. Risk oversight is part of the","page_number":22,"box":{"x":69,"y":261,"width":798,"height":12}},{"id":"8404b188-b429-430b-a806-f9a2a261d562","block_type":"box","text":"Board’s general oversight of the Funds and is addressed as part of various Board and Committee activities. The","page_number":22,"box":{"x":70,"y":276,"width":798,"height":12}},{"id":"944180d9-b1d1-4c39-9d87-e347cb846505","block_type":"box","text":"Board, directly or through Committees, also reviews reports from, among others, management, the independent","page_number":22,"box":{"x":70,"y":292,"width":799,"height":11}},{"id":"0abb4e8f-b6f3-446a-a27b-bcbb16fa38b2","block_type":"box","text":"registered public accounting firm for the Funds, the Manager, sub-advisers and internal auditors for the Manager or","page_number":22,"box":{"x":69,"y":307,"width":820,"height":11}},{"id":"cc22f8ca-f66b-45c7-9362-c18653c09ece","block_type":"box","text":"its affiliates, as appropriate, regarding risks faced by the Funds and management’s or the service provider’s risk","page_number":22,"box":{"x":70,"y":322,"width":804,"height":11}},{"id":"62b34974-4895-45d8-99c9-b149a0c37208","block_type":"box","text":"functions. The Committee system facilitates the timely and efficient consideration of matters by the Trustees and","page_number":22,"box":{"x":68,"y":337,"width":809,"height":11}},{"id":"d32090ec-913d-4102-ad09-bd1d1cacd536","block_type":"box","text":"facilitates effective oversight of compliance with legal and regulatory requirements and of each Fund’s activities and","page_number":22,"box":{"x":68,"y":352,"width":829,"height":11}},{"id":"54e7bce1-51f4-4411-9663-4e2e2f6b8029","block_type":"box","text":"associated risks. The Board has approved the appointment of a Chief Compliance Officer (“CCO”), who oversees the","page_number":22,"box":{"x":69,"y":367,"width":831,"height":11}},{"id":"94dd5a71-e50c-47c6-b25c-1ab4eee96b94","block_type":"box","text":"implementation and testing of the Funds’ compliance program and reports regularly to the Board regarding","page_number":22,"box":{"x":70,"y":382,"width":760,"height":12}},{"id":"6678ba64-ff0a-4d1f-88ed-35f4fea7b846","block_type":"box","text":"compliance matters for the Funds and their service providers. The Independent Trustees have engaged independent","page_number":22,"box":{"x":69,"y":397,"width":827,"height":12}},{"id":"43d8c277-e613-4bad-ad7d-5f44adc9f15d","block_type":"box","text":"legal counsel to assist them in performing their oversight responsibilities.","page_number":22,"box":{"x":70,"y":412,"width":524,"height":12}},{"id":"b30a07f4-622f-42fd-b22b-b934096915f7","block_type":"box","text":"Audit Committee.","page_number":22,"box":{"x":101,"y":435,"width":122,"height":9}},{"id":"a5dcafae-df37-49d8-8888-7866c9df0576","block_type":"box","text":"The Board has a standing Audit Committee composed of Lorenzo A. Flores (Chair), J. Phillip","page_number":22,"box":{"x":229,"y":435,"width":651,"height":11}},{"id":"b5c272a9-b458-48c8-b850-a5f2f1f6b01d","block_type":"box","text":"Holloman, Francis C. Mahoney and Arthur P. Steinmetz, all of whom are Independent Trustees. The principal","page_number":22,"box":{"x":70,"y":450,"width":767,"height":11}},{"id":"616d5f9f-fa66-460e-bb98-a06840337464","block_type":"box","text":"responsibilities of the Audit Committee are to assist the Board in fulfilling its oversight responsibilities relating to the","page_number":22,"box":{"x":69,"y":465,"width":834,"height":12}},{"id":"cb99c51d-266b-4fc0-a187-51c7900cc0b0","block_type":"box","text":"accounting and financial reporting policies and practices of the Funds. The Audit Committee’s responsibilities","page_number":22,"box":{"x":69,"y":481,"width":781,"height":11}},{"id":"71a1d159-e05b-45ab-b7f6-dea4c4b29b65","block_type":"box","text":"include, without limitation: (i) approving, and recommending to the full Board for approval, the selection, retention,","page_number":22,"box":{"x":70,"y":496,"width":813,"height":11}},{"id":"c995d3d2-32be-43ad-a6bd-f5dab738aff1","block_type":"box","text":"termination and compensation of the Funds’ independent registered public accounting firm (the “Independent","page_number":22,"box":{"x":68,"y":511,"width":782,"height":11}},{"id":"fcbb838f-c88d-4861-a45b-fb8eac37e559","block_type":"box","text":"Registered Public Accounting Firm”) and evaluating the independence and objectivity of the Independent Registered","page_number":22,"box":{"x":70,"y":526,"width":820,"height":11}},{"id":"ab71f991-c550-4e7e-a10d-7b6ebf46bef5","block_type":"box","text":"Public Accounting Firm; (ii) approving all audit engagement terms and fees for the Funds; (iii) reviewing the conduct","page_number":22,"box":{"x":69,"y":541,"width":818,"height":11}},{"id":"4bb06fc3-66e7-405a-8e84-d49e339a6ab9","block_type":"box","text":"and results of each audit; (iv) reviewing any issues raised by the Funds’ Independent Registered Public Accounting","page_number":22,"box":{"x":69,"y":556,"width":814,"height":11}},{"id":"1eb3addd-0376-4131-bddb-6d854de14b0a","block_type":"box","text":"Firm or management regarding the accounting or financial reporting policies and practices of the Funds, their internal","page_number":22,"box":{"x":70,"y":571,"width":833,"height":12}},{"id":"0618c25f-ced0-482d-a619-35d93d07f90b","block_type":"box","text":"controls, and, as appropriate, the internal controls of certain service providers and management’s response to any","page_number":22,"box":{"x":69,"y":586,"width":822,"height":12}},{"id":"8588c495-343a-4e21-9e2f-f5ac2e7c7b8c","block_type":"box","text":"such issues; (v) reviewing and discussing the Funds’ audited and unaudited financial statements and disclosure in","page_number":22,"box":{"x":69,"y":601,"width":816,"height":12}},{"id":"5d48c5b5-2d0c-443f-bd3a-c84c47c6fd51","block_type":"box","text":"the Funds’ shareholder reports relating to the Funds’ performance; (vi) assisting the Board’s responsibilities with","page_number":22,"box":{"x":68,"y":617,"width":809,"height":11}},{"id":"4283f8aa-7369-41d6-97d2-e3a8d9b89a6b","block_type":"box","text":"respect to the internal controls of the Funds and their service providers with respect to accounting and financial","page_number":22,"box":{"x":69,"y":632,"width":796,"height":11}},{"id":"69319d77-c49e-4b4a-8a77-40dd934fc5cc","block_type":"box","text":"matters; and (vii) resolving any disagreements between the Funds’ management and the Funds’ Independent","page_number":22,"box":{"x":69,"y":647,"width":777,"height":11}},{"id":"fe89f14a-4e52-4668-a1a9-d016bd8a6d8c","block_type":"box","text":"Registered Public Accounting Firm regarding financial reporting. The Board has adopted a written charter for the","page_number":22,"box":{"x":70,"y":662,"width":795,"height":11}},{"id":"7dad9e3d-e83b-44df-9976-2a6565ef6772","block_type":"box","text":"Board’s Audit Committee. During the fiscal year ended May 31, 2026, the Audit Committee met three times.","page_number":22,"box":{"x":70,"y":677,"width":772,"height":11}},{"id":"d12af0ba-5e9d-4700-a44b-1176a260b052","block_type":"box","text":"Governance and Nominating Committee.","page_number":22,"box":{"x":102,"y":700,"width":286,"height":11}},{"id":"1dd7996c-9fac-4eca-8a39-4d3726007081","block_type":"box","text":"The Board has a standing Governance and Nominating Committee","page_number":22,"box":{"x":394,"y":700,"width":471,"height":11}},{"id":"2a63bf26-88f4-4c45-82cb-420b878e5a08","block_type":"box","text":"composed of W. Carl Kester (Chair), Cynthia L. Egan, J. Phillip Holloman and R. Glenn Hubbard, all of whom are","page_number":22,"box":{"x":69,"y":715,"width":791,"height":11}},{"id":"d63a9fbc-e662-4567-be50-8234d56b18ac","block_type":"box","text":"Independent Trustees. The principal responsibilities of the Governance and Nominating Committee are: (i) identifying","page_number":22,"box":{"x":70,"y":730,"width":830,"height":11}},{"id":"9f924b7a-25c4-4793-9ff3-f82264b6a440","block_type":"box","text":"individuals qualified to serve as Independent Trustees and recommending Board nominees that are not “interested","page_number":22,"box":{"x":70,"y":745,"width":820,"height":11}},{"id":"65160a55-c4be-442c-9f7a-c7f9b4609eb0","block_type":"box","text":"persons” of the Funds (as defined in the Investment Company Act) for election by shareholders or appointment by the","page_number":22,"box":{"x":70,"y":760,"width":837,"height":11}},{"id":"2b34ffb8-3d31-4eca-a38e-454c1899a3c0","block_type":"box","text":"Board; (ii) advising the Board with respect to Board composition, procedures and Committees of the Board (other","page_number":22,"box":{"x":70,"y":775,"width":806,"height":12}},{"id":"10e32416-1117-4bcb-ad8d-ff903cf4e3e4","block_type":"box","text":"than the Audit Committee); (iii) overseeing periodic self-assessments of the Board and Committees of the Board","page_number":22,"box":{"x":68,"y":790,"width":800,"height":12}},{"id":"9cbdde4e-0134-465c-866b-8fd8e591497b","block_type":"box","text":"(other than the Audit Committee); (iv) reviewing and making recommendations in respect to Independent Trustee","page_number":22,"box":{"x":69,"y":806,"width":801,"height":11}},{"id":"88dd63b1-8090-496b-aa2a-675fc8f60d8f","block_type":"box","text":"compensation; (v) monitoring corporate governance matters and making recommendations in respect thereof to the","page_number":22,"box":{"x":69,"y":821,"width":823,"height":11}},{"id":"058d4cef-f64a-4062-87d7-2deb0791e4b2","block_type":"box","text":"Board; (vi) acting as the administrative committee with respect to Board policies and procedures, committee policies","page_number":22,"box":{"x":70,"y":836,"width":831,"height":11}},{"id":"e43cbf98-fc9b-45da-8b38-10c25a15512d","block_type":"box","text":"and procedures (other than the Audit Committee) and codes of ethics as they relate to the Independent Trustees;","page_number":22,"box":{"x":69,"y":851,"width":808,"height":11}},{"id":"0d53624a-5c72-41bb-bcc6-294fe81b1e99","block_type":"box","text":"and (vii) reviewing and making recommendations to the Board in respect of Fund share ownership by the Independent","page_number":22,"box":{"x":69,"y":866,"width":838,"height":11}},{"id":"ebb33c9e-60ba-4e27-a362-58e89d5b8a1a","block_type":"box","text":"Trustees. The Board has adopted a written charter for the Board’s Governance and Nominating Committee. During","page_number":22,"box":{"x":68,"y":881,"width":817,"height":11}},{"id":"5de77f2a-5da1-4479-95db-2a0b4711d72f","block_type":"box","text":"the fiscal year ended May 31, 2026, the Governance and Nominating Committee met four times.","page_number":22,"box":{"x":68,"y":896,"width":690,"height":12}},{"id":"8f66162f-5e98-498f-a5ad-844287b28872","block_type":"box","text":"I-11","page_number":22,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"792689f4-a406-4170-97ab-62d5ee55eca5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":22,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"dd303d0b-2605-4599-8ccf-3e77cbcee489","block_type":"box","text":"The Governance and Nominating Committee of the Board seeks to identify individuals to serve on the Board who","page_number":23,"box":{"x":101,"y":45,"width":803,"height":11}},{"id":"b42daeac-d8da-4811-8ef7-486d99be0d41","block_type":"box","text":"have a diverse range of viewpoints, qualifications, experiences, backgrounds and skill sets so that the Board will be","page_number":23,"box":{"x":69,"y":60,"width":825,"height":11}},{"id":"c41bdfc6-957b-4ffc-a2f1-610857306144","block_type":"box","text":"better suited to fulfill its responsibility of overseeing the Funds’ activities. In so doing, the Governance and","page_number":23,"box":{"x":69,"y":75,"width":759,"height":11}},{"id":"32beb7a1-b328-4e03-9899-6a8cf64e18c5","block_type":"box","text":"Nominating Committee reviews the size of the Board, the ages of the current Trustees and their tenure on the Board,","page_number":23,"box":{"x":70,"y":90,"width":833,"height":11}},{"id":"fc00e89e-17c4-4f76-8262-4898314fa583","block_type":"box","text":"and the skills, background and experiences of the Trustees in light of the issues facing the Funds in determining","page_number":23,"box":{"x":69,"y":105,"width":802,"height":11}},{"id":"85d28620-51d1-4ec5-ba20-1559ca7186fe","block_type":"box","text":"whether one or more new trustees should be added to the Board. The Board as a group strives to achieve diversity in","page_number":23,"box":{"x":68,"y":120,"width":836,"height":12}},{"id":"fe853c79-c8aa-419e-841a-df313ea34c04","block_type":"box","text":"terms of gender, race and geographic location. The Governance and Nominating Committee believes that the","page_number":23,"box":{"x":68,"y":135,"width":775,"height":12}},{"id":"2fbe57b4-392c-489d-b3d2-1b21c5a33417","block_type":"box","text":"Trustees as a group possess the array of skills, experiences and backgrounds necessary to guide the Funds. The","page_number":23,"box":{"x":68,"y":150,"width":810,"height":12}},{"id":"9282b7b1-d400-4745-8e1c-42e9ac17014e","block_type":"box","text":"Trustees’ biographies included herein highlight the diversity and breadth of skills, qualifications and expertise that","page_number":23,"box":{"x":68,"y":166,"width":815,"height":11}},{"id":"7c77c71d-8a08-47af-aba3-df887bac6d69","block_type":"box","text":"the Trustees bring to the Funds.","page_number":23,"box":{"x":68,"y":181,"width":227,"height":11}},{"id":"3d91cfc6-7b7a-4b27-b6a6-082186139d5a","block_type":"box","text":"The Governance and Nominating Committee may consider nominations for Trustees made by the Funds’","page_number":23,"box":{"x":101,"y":203,"width":740,"height":12}},{"id":"606a62a9-e4ca-4f6c-aff1-141c1ab2d497","block_type":"box","text":"shareholders as it deems appropriate. Under the Trusts’s Bylaws, shareholders must follow certain procedures to","page_number":23,"box":{"x":69,"y":218,"width":812,"height":12}},{"id":"e5ea6e98-d091-41d8-8cd5-6ba5f3285326","block_type":"box","text":"nominate a person for election as a Trustee at a shareholder meeting at which Trustees are to be elected. Under","page_number":23,"box":{"x":69,"y":234,"width":805,"height":11}},{"id":"b41563de-a2ac-4e96-aa04-ad42f123d8b6","block_type":"box","text":"these advance notice procedures, shareholders must submit the proposed nominee by delivering a notice to the","page_number":23,"box":{"x":68,"y":249,"width":801,"height":11}},{"id":"b78274b1-720b-498f-a7b1-47cd543fb741","block_type":"box","text":"Secretary of the Funds at its principal executive offices no later than the close of business on the fifth (5th) day","page_number":23,"box":{"x":69,"y":264,"width":798,"height":11}},{"id":"63aabf1f-6e28-49d8-a7b4-94b38dc907a2","block_type":"box","text":"following the day on which notice of the date of the meeting was mailed or public disclosure of the date of the","page_number":23,"box":{"x":68,"y":279,"width":784,"height":11}},{"id":"135ad616-fafb-4550-879d-2c333598cfc3","block_type":"box","text":"meeting was made, whichever first occurs.","page_number":23,"box":{"x":69,"y":294,"width":302,"height":11}},{"id":"c0e0fb4a-509a-47ec-a24c-01dddb3adad4","block_type":"box","text":"The Trusts’s Bylaws provide that notice of a proposed nomination must include certain information about the","page_number":23,"box":{"x":101,"y":317,"width":778,"height":11}},{"id":"6b5aaec2-b3dd-4cb6-9eb1-faa377636f00","block_type":"box","text":"shareholder and the nominee, as well as certain other information, including a written consent of the proposed","page_number":23,"box":{"x":69,"y":332,"width":791,"height":11}},{"id":"829ee3d7-485b-47d5-be9d-55a327b68239","block_type":"box","text":"nominee to serve if elected. Reference is made to the Trusts’s Bylaws for more details.","page_number":23,"box":{"x":69,"y":347,"width":623,"height":11}},{"id":"28316b61-5521-4a9e-93e3-3d961eebf1ef","block_type":"box","text":"Compliance Committee.","page_number":23,"box":{"x":102,"y":370,"width":168,"height":11}},{"id":"de985d1e-af10-49ab-89d5-31d52725c943","block_type":"box","text":"The Board has a Compliance Committee composed of Cynthia L. Egan (Chair), Stayce D.","page_number":23,"box":{"x":276,"y":370,"width":628,"height":11}},{"id":"8c348b38-c3ab-4117-ba0c-59ae2291c69f","block_type":"box","text":"Harris, R. Glenn Hubbard, W. Carl Kester and Francis C. Mahoney, all of whom are Independent Trustees. The","page_number":23,"box":{"x":70,"y":385,"width":778,"height":11}},{"id":"97017439-58ca-47dd-ad4c-840f3c54945a","block_type":"box","text":"Compliance Committee’s purpose is to assist the Board in fulfilling its responsibility with respect to the oversight of","page_number":23,"box":{"x":69,"y":400,"width":826,"height":11}},{"id":"2d7e8f29-b60d-4274-9052-15e03af60306","block_type":"box","text":"regulatory and fiduciary compliance matters involving each Fund, the fund-related activities of BlackRock, and any","page_number":23,"box":{"x":69,"y":415,"width":810,"height":11}},{"id":"e511abc9-44d9-4734-b781-0b79be6bd5fa","block_type":"box","text":"sub-advisor and each Fund’s other third party service providers. The Compliance Committee’s responsibilities","page_number":23,"box":{"x":69,"y":430,"width":782,"height":11}},{"id":"4b604cc8-252a-41c7-bc09-a59d49c01f9d","block_type":"box","text":"include, without limitation: (i) overseeing the compliance policies and procedures of each Fund and its service","page_number":23,"box":{"x":70,"y":445,"width":782,"height":12}},{"id":"1c541c58-2703-4c13-a6c0-8ba903f904fa","block_type":"box","text":"providers and recommending changes or additions to such policies and procedures; (ii) reviewing information on and,","page_number":23,"box":{"x":70,"y":460,"width":833,"height":12}},{"id":"a3d28ef8-6f7b-4c9c-97ad-601523780804","block_type":"box","text":"where appropriate, recommending policies concerning each Fund’s compliance with applicable law; (iii) reviewing","page_number":23,"box":{"x":68,"y":476,"width":804,"height":11}},{"id":"16450088-3201-4e12-8553-d2b092cab189","block_type":"box","text":"information on any significant correspondence with or other actions by regulators or governmental agencies with","page_number":23,"box":{"x":70,"y":491,"width":797,"height":11}},{"id":"4ba58e89-dc75-4354-9417-ced6ada8d19b","block_type":"box","text":"respect to the Funds and any employee complaints or published reports that raise concerns regarding compliance","page_number":23,"box":{"x":69,"y":506,"width":813,"height":11}},{"id":"ceccf345-6e39-4324-b64d-8b52eadd72fd","block_type":"box","text":"matters; and (iv) reviewing reports from, overseeing the annual performance review of, and making certain","page_number":23,"box":{"x":69,"y":521,"width":760,"height":11}},{"id":"6753e02d-c90d-4c50-91a5-07e3c2f04579","block_type":"box","text":"recommendations in respect of, each Fund’s CCO, including, without limitation, determining the amount and structure","page_number":23,"box":{"x":69,"y":536,"width":839,"height":11}},{"id":"87a30c48-7090-40be-bba9-962a8abdca53","block_type":"box","text":"of the CCO’s compensation. The Board has adopted a written charter for the Board’s Compliance Committee. During","page_number":23,"box":{"x":69,"y":551,"width":832,"height":11}},{"id":"dfc2afc1-6a52-40d5-bd40-f32a58a36ee6","block_type":"box","text":"the fiscal year ended May 31, 2026, the Compliance Committee met three times.","page_number":23,"box":{"x":68,"y":566,"width":582,"height":11}},{"id":"57256d5b-2585-423e-a3ae-67e272fff6c7","block_type":"box","text":"Per formance Oversight Committee.","page_number":23,"box":{"x":102,"y":589,"width":248,"height":11}},{"id":"3aabdfac-9bea-4f5d-ba48-52ed3e82d541","block_type":"box","text":"The Board has a Performance Oversight Committee composed of Arthur P.","page_number":23,"box":{"x":356,"y":589,"width":530,"height":11}},{"id":"44de1677-7805-404a-ba31-a25c0d8596dc","block_type":"box","text":"Steinmetz (Chair), Cynthia L. Egan, Lorenzo A. Flores, Stayce D. Harris, J. Phillip Holloman, R. Glenn Hubbard and W.","page_number":23,"box":{"x":69,"y":604,"width":828,"height":11}},{"id":"131969df-963e-4f47-9b57-0259f988d1de","block_type":"box","text":"Carl Kester, all of whom are Independent Trustees. The Performance Oversight Committee’s purpose is to assist the","page_number":23,"box":{"x":69,"y":619,"width":832,"height":11}},{"id":"b4c8382b-142d-4274-9a3b-e0625a7ad141","block_type":"box","text":"Board in fulfilling its responsibility to oversee the Funds’ investment performance relative to the Funds’ investment","page_number":23,"box":{"x":70,"y":634,"width":819,"height":12}},{"id":"ac0fc4f1-6f5d-4646-bc15-60c9fa9b9ecb","block_type":"box","text":"objective, policies and practices. The Performance Oversight Committee’s responsibilities include, without limitation:","page_number":23,"box":{"x":69,"y":649,"width":832,"height":12}},{"id":"91fbf538-f8dd-4122-be7f-12b2a1c1bb81","block_type":"box","text":"(i) reviewing the Funds’ investment objective, policies and practices; (ii) recommending to the Board any required","page_number":23,"box":{"x":69,"y":665,"width":803,"height":11}},{"id":"92a73fd2-6aaf-4ded-b833-c9e439e539b5","block_type":"box","text":"action in respect of changes in fundamental and non-fundamental investment restrictions; (iii) reviewing information","page_number":23,"box":{"x":69,"y":680,"width":824,"height":11}},{"id":"d2ab237d-b200-4bff-934d-d268dbd46230","block_type":"box","text":"on appropriate benchmarks and competitive universes; (iv) reviewing the Funds’ investment performance relative to","page_number":23,"box":{"x":69,"y":695,"width":823,"height":11}},{"id":"cf62acca-a43e-405e-a82a-eee97b3d5744","block_type":"box","text":"such benchmarks; (v) reviewing information on unusual or exceptional investment matters; (vi) reviewing whether the","page_number":23,"box":{"x":69,"y":710,"width":830,"height":11}},{"id":"48fea238-85d7-48a6-8f13-f5e870d134d8","block_type":"box","text":"Funds has complied with its investment policies and restrictions; and (vii) overseeing policies, procedures and","page_number":23,"box":{"x":70,"y":725,"width":783,"height":11}},{"id":"ffdf4fe4-eba7-4679-8201-b96b52ffede4","block_type":"box","text":"controls regarding valuation of the Funds’ investments. The Board has adopted a written charter for the Board’s","page_number":23,"box":{"x":69,"y":740,"width":798,"height":11}},{"id":"df85accc-c349-4ca6-8184-a2da24332cd4","block_type":"box","text":"Performance Oversight Committee. During the fiscal year ended May 31, 2026, the Performance Oversight","page_number":23,"box":{"x":69,"y":755,"width":762,"height":11}},{"id":"ca45445a-5e33-417b-bf65-b4906ef43ae3","block_type":"box","text":"Committee met four times.","page_number":23,"box":{"x":69,"y":770,"width":190,"height":9}},{"id":"8ce52e43-fdc2-4ff8-8e69-0fd39b740884","block_type":"box","text":"Securities Lending Committee.","page_number":23,"box":{"x":102,"y":793,"width":217,"height":11}},{"id":"d4b30f4c-87f1-4f35-bebb-9201426847c1","block_type":"box","text":"The Board has a Securities Lending Committee composed of Arthur P. Steinmetz","page_number":23,"box":{"x":325,"y":793,"width":575,"height":11}},{"id":"7778c286-87af-4b2b-bbde-845f306e310f","block_type":"box","text":"(Chair), Cynthia L. Egan and W. Carl Kester, all of whom are Independent Trustees. The principal responsibilities of","page_number":23,"box":{"x":69,"y":808,"width":816,"height":11}},{"id":"ac40f0f7-7dad-4189-9036-505d7cf11e2f","block_type":"box","text":"the Securities Lending Committee include, without limitation: (i) supporting, overseeing and organizing on behalf of","page_number":23,"box":{"x":68,"y":823,"width":820,"height":12}},{"id":"e487158e-611e-465c-a3c9-1e69e27f9389","block_type":"box","text":"the Board the process for oversight of the Fund’s securities lending activities; and (ii) providing a recommendation to","page_number":23,"box":{"x":68,"y":838,"width":834,"height":12}},{"id":"bf5b0a91-b011-43f9-8abb-ff0c918a926b","block_type":"box","text":"the Board regarding the annual approval of the Fund’s Securities Lending Guidelines and the Fund’s agreement with","page_number":23,"box":{"x":68,"y":853,"width":827,"height":12}},{"id":"0cac7161-5ad9-433b-a7d1-12b9d353e979","block_type":"box","text":"the lending agent. The Board has adopted a written charter for the Board’s Securities Lending Committee. During the","page_number":23,"box":{"x":68,"y":869,"width":836,"height":11}},{"id":"25a71bf1-d70a-473e-9225-4339988dbd15","block_type":"box","text":"fiscal year ended May 31, 2026, the Securities Lending Committee met twice.","page_number":23,"box":{"x":68,"y":884,"width":557,"height":11}},{"id":"8707026c-3b51-44a4-9b21-bcd0c7eb42fb","block_type":"box","text":"I-12","page_number":23,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"d465f637-4dec-4351-8764-9f652b98763f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":23,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"5a47d158-c811-416d-8890-f52eedc48195","block_type":"box","text":"Executive Committee.","page_number":24,"box":{"x":102,"y":45,"width":152,"height":9}},{"id":"33b3d82a-c5fa-43a9-a344-adab6fd7b2c8","block_type":"box","text":"The Board has an Executive Committee composed of R. Glenn Hubbard (Chair) and W. Carl","page_number":24,"box":{"x":260,"y":45,"width":645,"height":11}},{"id":"22a01d29-02fd-4a30-8da2-049d00c64d0c","block_type":"box","text":"Kester, both of whom are Independent Trustees, and John M. Perlowski, who serves as an interested Trustee. The","page_number":24,"box":{"x":70,"y":60,"width":815,"height":11}},{"id":"a75a1ea9-6a5a-4bc1-a413-a81a00204b90","block_type":"box","text":"principal responsibilities of the Executive Committee include, without limitation: (i) acting on routine matters between","page_number":24,"box":{"x":70,"y":75,"width":832,"height":11}},{"id":"86fc04e4-569b-41dd-a821-6f7f530103c0","block_type":"box","text":"meetings of the Board; (ii) acting on such matters as may require urgent action between meetings of the Board; and","page_number":24,"box":{"x":69,"y":90,"width":828,"height":11}},{"id":"efbe7b8c-5b78-4196-81c9-2d97d6454191","block_type":"box","text":"(iii) exercising such other authority as may from time to time be delegated to the Executive Committee by the Board.","page_number":24,"box":{"x":69,"y":105,"width":826,"height":11}},{"id":"ff3d1f0f-fe60-4039-bed5-747f6559a0f8","block_type":"box","text":"The Board has adopted a written charter for the Board’s Executive Committee. During the fiscal year ended","page_number":24,"box":{"x":68,"y":120,"width":764,"height":12}},{"id":"f0b5eda6-24cb-47d6-9b85-adbc7b91bf9a","block_type":"box","text":"May 31, 2026, the Executive Committee did not meet.","page_number":24,"box":{"x":70,"y":135,"width":386,"height":11}},{"id":"6ca00a5e-ea19-4411-8fed-ae802641bb03","block_type":"box","text":"Private Assets Committee","page_number":24,"box":{"x":102,"y":158,"width":184,"height":9}},{"id":"35d5e990-ff95-4b63-b00c-bb55023fa63b","block_type":"box","text":". The Board has a Private Assets Committee composed of W. Carl Kester (Chair),","page_number":24,"box":{"x":287,"y":158,"width":573,"height":11}},{"id":"204403ba-fa69-4264-be24-e1e0f03451ec","block_type":"box","text":"Cynthia L. Egan and Arthur P. Steinmetz, all of whom are Independent Trustees. The principal responsibilities of the","page_number":24,"box":{"x":69,"y":173,"width":822,"height":11}},{"id":"6bfc96f9-a498-4792-9e74-03db61da5669","block_type":"box","text":"Private Assets Committee include, without limitation: (i) monitoring, on behalf of the Board, through reviews of","page_number":24,"box":{"x":69,"y":188,"width":785,"height":12}},{"id":"09168a95-c590-4d74-85d2-e7d4fb744004","block_type":"box","text":"periodic reports from BlackRock, certain categories or types of private assets held by the Fund that have been","page_number":24,"box":{"x":70,"y":203,"width":786,"height":12}},{"id":"824fdc3a-e094-4fee-a246-f9b48b3c897a","block_type":"box","text":"identified by the Committee (“subject private assets”); (ii) assisting the Board and its other Committees to oversee","page_number":24,"box":{"x":70,"y":218,"width":819,"height":12}},{"id":"ae670628-3308-4b4c-ad33-142b4144d475","block_type":"box","text":"the actions of the Fund’s valuation designee and liquidity risk manager in respect of the valuation and liquidity,","page_number":24,"box":{"x":68,"y":234,"width":789,"height":11}},{"id":"17397d40-90e3-40fa-bd48-eb3177341bc3","block_type":"box","text":"respectively, of subject private assets held by the Fund; (iii) engaging with BlackRock on the oversight of subject","page_number":24,"box":{"x":69,"y":249,"width":797,"height":11}},{"id":"bdabcc9f-0e80-4cc7-8894-5cbf8c085212","block_type":"box","text":"private assets; (iv) reviewing and making recommendations to the Board and/or its Committees regarding the","page_number":24,"box":{"x":70,"y":264,"width":780,"height":11}},{"id":"cfbcc2fd-a497-4495-9bfe-6769220da962","block_type":"box","text":"Board’s oversight of subject private assets; and (v) addressing such other matters relating to subject private assets","page_number":24,"box":{"x":70,"y":279,"width":824,"height":11}},{"id":"df08ba6f-c7e3-442f-aa11-a1e1f7d02e47","block_type":"box","text":"held by the Fund as the Committee deems appropriate, including assisting the Board’s consideration of subject","page_number":24,"box":{"x":69,"y":294,"width":795,"height":11}},{"id":"960cea16-2472-4adf-b23f-e51cf80258b5","block_type":"box","text":"private assets in conjunction with the annual consideration of the Fund’s investment advisory agreement. The Board","page_number":24,"box":{"x":70,"y":309,"width":827,"height":11}},{"id":"a6722747-e305-4b4c-bfd6-5c2b8848bce8","block_type":"box","text":"has adopted a written charter for the Board’s Private Assets Committee. As the Private Assets Committee was","page_number":24,"box":{"x":69,"y":324,"width":788,"height":11}},{"id":"33106e59-e5a1-493c-8ca0-25f7f001ef1d","block_type":"box","text":"established in July 2026, during the fiscal year ended May 31, 2026, the Private Assets Committee did not meet.","page_number":24,"box":{"x":69,"y":339,"width":810,"height":12}},{"id":"83285dde-0c75-4de0-92fe-4511c257e33e","block_type":"box","text":"The Independent Trustees have adopted a statement of policy that describes the experiences, qualifications,","page_number":24,"box":{"x":101,"y":362,"width":775,"height":11}},{"id":"fcd7fd25-948c-4ec4-a52f-0b2347f3a6f1","block_type":"box","text":"skills and attributes that are necessary and desirable for potential Independent Trustee candidates (the “Statement","page_number":24,"box":{"x":69,"y":377,"width":827,"height":11}},{"id":"43ecaf1a-5e0c-4667-ac92-63d440e346a7","block_type":"box","text":"of Policy”). The Board believes that each Independent Trustee satisfied, at the time he or she was initially elected or","page_number":24,"box":{"x":69,"y":392,"width":830,"height":12}},{"id":"6b2c488b-c538-4c8a-859f-96f47edd680c","block_type":"box","text":"appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy as well as the","page_number":24,"box":{"x":69,"y":407,"width":828,"height":12}},{"id":"e0a08f04-981a-4a80-8920-87788e831ac2","block_type":"box","text":"standards set forth in each Fund’s Bylaws. Furthermore, in determining that a particular Trustee was and continues","page_number":24,"box":{"x":69,"y":423,"width":826,"height":11}},{"id":"70aed2c3-28e6-4284-a185-16e857603041","block_type":"box","text":"to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was","page_number":24,"box":{"x":68,"y":438,"width":825,"height":11}},{"id":"14fd5d98-3892-4e73-92b4-a51716d9c9d5","block_type":"box","text":"controlling. The Board believes that, collectively, the Trustees have balanced and diverse experiences, skills,","page_number":24,"box":{"x":69,"y":453,"width":773,"height":11}},{"id":"9b06cbc5-4e8c-4758-880b-e11d8c56e345","block_type":"box","text":"attributes and qualifications, which allow the Board to operate effectively in governing the Funds and protecting the","page_number":24,"box":{"x":69,"y":468,"width":820,"height":11}},{"id":"a3dafaa0-8f5d-433c-8e56-b90e11229961","block_type":"box","text":"interests of shareholders. Among the attributes common to all Trustees is their ability to review critically, evaluate,","page_number":24,"box":{"x":70,"y":483,"width":814,"height":11}},{"id":"1d24a9a4-d365-4c1b-82d4-fdf109c9372f","block_type":"box","text":"question and discuss information provided to them, to interact effectively with the Manager, sub-advisers, other","page_number":24,"box":{"x":69,"y":498,"width":796,"height":11}},{"id":"8b2cc2f5-2ac0-4cae-b9f8-12658998f864","block_type":"box","text":"service providers, counsel and independent auditors, and to exercise effective business judgment in the","page_number":24,"box":{"x":69,"y":513,"width":744,"height":12}},{"id":"8b6c67c8-3758-4257-921c-3fd448a67ec8","block_type":"box","text":"performance of their duties as Trustees. Each Trustee’s ability to perform his or her duties effectively is evidenced by","page_number":24,"box":{"x":70,"y":528,"width":840,"height":12}},{"id":"c16e9009-8878-4897-adfa-694214cd7877","block_type":"box","text":"his or her educational background or professional training; business, consulting, public service or academic","page_number":24,"box":{"x":69,"y":543,"width":768,"height":12}},{"id":"13faecd5-66aa-42a0-b2ea-4d00bc15b468","block_type":"box","text":"positions; experience from service as a board member of the Trusts or the other funds in the BlackRock Fund","page_number":24,"box":{"x":70,"y":559,"width":779,"height":11}},{"id":"39419315-9569-46aa-88ad-1c85381536f0","block_type":"box","text":"Complexes (and any predecessor funds), other investment funds, public companies, or not-for-profit entities or other","page_number":24,"box":{"x":69,"y":574,"width":828,"height":11}},{"id":"254374dd-279e-443c-a640-9cfeffbc3b7a","block_type":"box","text":"organizations; ongoing commitment and participation in Board and Committee meetings, as well as his or her","page_number":24,"box":{"x":69,"y":589,"width":782,"height":11}},{"id":"59d4691f-13d2-4d9d-858a-a15e992743ad","block_type":"box","text":"leadership of standing and other committees throughout the years; or other relevant life experiences.","page_number":24,"box":{"x":70,"y":604,"width":719,"height":11}},{"id":"7347a2b7-927b-458b-a9d5-f791d4655616","block_type":"box","text":"The table below discusses some of the experiences, qualifications and skills of each Trustee that support the","page_number":24,"box":{"x":101,"y":627,"width":784,"height":11}},{"id":"a83543dc-2805-4eee-a172-450d32332ba8","block_type":"box","text":"conclusion that he or she should serve on the Board.","page_number":24,"box":{"x":69,"y":642,"width":378,"height":9}},{"id":"f0170f0b-cfb3-4979-82e9-4097290a42a9","block_type":"box","text":"I-13","page_number":24,"box":{"x":476,"y":943,"width":26,"height":9}},{"id":"49c23f4b-67ce-4c80-a70f-c5eddf58d028","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":24,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"18b32729-3e7d-4451-aaf6-f318e0c159e3","block_type":"box","text":"The table below discusses some of the experiences, qualifications and skills of each of the Trustees that","page_number":25,"box":{"x":101,"y":45,"width":751,"height":11}},{"id":"109485e4-653f-4c7a-b236-db799e7090eb","block_type":"box","text":"support the conclusion that each board member should serve (or continue to serve) on the Board.","page_number":25,"box":{"x":69,"y":60,"width":701,"height":11}},{"id":"859c76cd-d830-417f-9af2-e36223ebc526","block_type":"box","text":"Trustees Experience, Qualifications and Skills","page_number":25,"box":{"x":68,"y":88,"width":409,"height":9}},{"id":"6051d6ce-9eb7-41b0-813a-f4c0033fbf09","block_type":"box","text":"Independent Trustees","page_number":25,"box":{"x":70,"y":105,"width":154,"height":10}},{"id":"576408c1-70f9-4ec9-adec-66f315a73a9f","block_type":"box","text":"R. Glenn Hubbard R. Glenn Hubbard has served in numerous roles in the field of economics, including as","page_number":25,"box":{"x":70,"y":120,"width":814,"height":11}},{"id":"cf99843f-52f6-4308-be45-01414ea6fbaf","block_type":"box","text":"the Chairman of the U.S. Council of Economic Advisers of the President of the United","page_number":25,"box":{"x":264,"y":135,"width":606,"height":9}},{"id":"2730729c-4a2d-468a-9e76-0f6f0af27279","block_type":"box","text":"States. Dr. Hubbard has served as the Dean of Columbia Business School, as a member","page_number":25,"box":{"x":265,"y":150,"width":635,"height":10}},{"id":"b3d95c4c-8013-4e87-9940-3fe389fde1ee","block_type":"box","text":"of the Columbia Faculty and as a Visiting Professor at the John F. Kennedy School of","page_number":25,"box":{"x":265,"y":165,"width":602,"height":11}},{"id":"c7dcebee-e912-4330-833e-ad0fa1b2cec7","block_type":"box","text":"Government at Harvard University, the Harvard Business School and the University of","page_number":25,"box":{"x":265,"y":180,"width":608,"height":11}},{"id":"89ae8229-dfe5-4bd1-acbe-9e30c9b2484b","block_type":"box","text":"Chicago. Dr. Hubbard’s experience as an adviser to the President of the United States","page_number":25,"box":{"x":265,"y":195,"width":613,"height":11}},{"id":"20625e0b-be52-4527-a1b6-7d951459a267","block_type":"box","text":"adds a dimension of balance to the Funds’ governance and provides perspective on","page_number":25,"box":{"x":265,"y":210,"width":595,"height":12}},{"id":"26e2be76-4027-4eb2-b0bf-0774eb55f11a","block_type":"box","text":"economic issues. Dr. Hubbard’s service on the boards of ADP and Metropolitan Life","page_number":25,"box":{"x":265,"y":225,"width":597,"height":11}},{"id":"a1a7bb36-7177-4917-ad62-caad8aff425e","block_type":"box","text":"Insurance Company provides the Board with the benefit of his experience with the","page_number":25,"box":{"x":265,"y":241,"width":581,"height":11}},{"id":"ae8e002b-c7ac-478b-8c27-aec6aafb3d2d","block_type":"box","text":"management practices of other financial companies. Dr. Hubbard’s long-standing service","page_number":25,"box":{"x":265,"y":256,"width":632,"height":11}},{"id":"5a7556b1-0ffe-4edf-9dcc-5a837f690437","block_type":"box","text":"on the boards of directors/trustees of the closed-end funds in the BlackRock Fixed","page_number":25,"box":{"x":265,"y":271,"width":594,"height":11}},{"id":"ff64a7c9-d428-42f6-8869-e212209ba682","block_type":"box","text":"Income Complex also provides him with a specific understanding of the Funds, their","page_number":25,"box":{"x":265,"y":286,"width":596,"height":11}},{"id":"8e217173-d177-4337-b23e-9ee5f6ef873a","block_type":"box","text":"operations, and the business and regulatory issues facing the Funds. Dr. Hubbard’s","page_number":25,"box":{"x":265,"y":301,"width":598,"height":11}},{"id":"04f73b04-e7c4-4e10-91ae-1db5583e3834","block_type":"box","text":"independence from the Funds and the Manager enhances his service as Chair of the","page_number":25,"box":{"x":265,"y":316,"width":604,"height":11}},{"id":"4c39ae32-7594-436a-85e9-d729c312b364","block_type":"box","text":"Board, Chair of the Executive Committee and a member of the Governance and","page_number":25,"box":{"x":265,"y":331,"width":562,"height":11}},{"id":"9d6e1987-4899-428b-b5de-cefb0a8170a0","block_type":"box","text":"Nominating Committee, the Compliance Committee and the Performance Oversight","page_number":25,"box":{"x":265,"y":346,"width":592,"height":12}},{"id":"93ea7976-60f6-4633-b48a-d1390f021931","block_type":"box","text":"Committee.","page_number":25,"box":{"x":265,"y":362,"width":80,"height":8}},{"id":"96685be5-3f85-4c36-8657-53aeeeff493a","block_type":"box","text":"W. Carl Kester The Board benefits from W. Carl Kester’s experiences as a professor and author in","page_number":25,"box":{"x":68,"y":384,"width":786,"height":11}},{"id":"1ff2f359-dbfe-4b8e-b0fe-dc8137e7bd86","block_type":"box","text":"finance, and his experience as the George Fisher Baker Jr. Professor of Business","page_number":25,"box":{"x":264,"y":399,"width":578,"height":12}},{"id":"79a938e9-9fa3-4b60-8bc7-8064eb9e76fb","block_type":"box","text":"Administration at Harvard Business School and as Deputy Dean of Academic Affairs at","page_number":25,"box":{"x":264,"y":414,"width":618,"height":12}},{"id":"c509414d-7b57-479f-8897-e18da1648d95","block_type":"box","text":"Harvard Business School from 2006 through 2010 adds to the Board a wealth of","page_number":25,"box":{"x":265,"y":429,"width":581,"height":12}},{"id":"e2c04a0a-82bf-4af2-92cc-194fbd48dc3b","block_type":"box","text":"expertise in corporate finance and corporate governance. Dr. Kester has authored and","page_number":25,"box":{"x":265,"y":445,"width":613,"height":11}},{"id":"3eec9fe7-fec7-404d-86b4-a963dfa154dd","block_type":"box","text":"edited numerous books and research papers on both subject matters, including co-editing","page_number":25,"box":{"x":265,"y":460,"width":641,"height":11}},{"id":"3826b996-5906-40eb-bdaf-28114fd41537","block_type":"box","text":"a leading volume of finance case studies used worldwide. Dr. Kester’s long-standing","page_number":25,"box":{"x":265,"y":475,"width":599,"height":11}},{"id":"c516eb79-1daf-4f8c-bb52-0d1d7e71cbd9","block_type":"box","text":"service on the boards of directors/trustees of the closed-end funds in the BlackRock","page_number":25,"box":{"x":265,"y":490,"width":605,"height":11}},{"id":"cca2c546-e045-4bd9-a083-d603f85d8ac2","block_type":"box","text":"Fixed-Income Complex also provides him with a specific understanding of the Funds, their","page_number":25,"box":{"x":265,"y":505,"width":636,"height":11}},{"id":"92ea563a-8e67-40e7-8b63-308d9aff3669","block_type":"box","text":"operations, and the business and regulatory issues facing the Funds. Dr. Kester’s","page_number":25,"box":{"x":265,"y":520,"width":584,"height":12}},{"id":"94cee9d3-61d0-4020-b624-d6e7988e2917","block_type":"box","text":"independence from the Funds and the Manager enhances his service as Vice Chair of the","page_number":25,"box":{"x":265,"y":535,"width":638,"height":12}},{"id":"7125803d-582f-4800-b05b-69675b350113","block_type":"box","text":"Board, Chair of the Governance and Nominating Committee, Chair of the Private Assets","page_number":25,"box":{"x":265,"y":550,"width":621,"height":12}},{"id":"fb10c238-b9cd-4e92-8ab6-e6937e99fc1c","block_type":"box","text":"Committee and a member of the Executive Committee, the Compliance Committee, the","page_number":25,"box":{"x":265,"y":566,"width":620,"height":11}},{"id":"6d41b22f-1ae2-4973-87b6-62802c474d28","block_type":"box","text":"Performance Oversight Committee and the Securities Lending Committee.","page_number":25,"box":{"x":265,"y":581,"width":526,"height":11}},{"id":"27b7778e-ffd1-4966-9b44-90688cf1848b","block_type":"box","text":"Cynthia L. Egan Cynthia L. Egan brings to the Board a broad and diverse knowledge of investment","page_number":25,"box":{"x":69,"y":603,"width":775,"height":12}},{"id":"a9faa856-32ae-4fd4-9818-e9e19e92fadc","block_type":"box","text":"companies and the retirement industry as a result of her many years of experience as","page_number":25,"box":{"x":264,"y":618,"width":613,"height":12}},{"id":"f0708ce1-f470-4950-ae1f-028e5beaab5e","block_type":"box","text":"President, Retirement Plan Services, for T. Rowe Price Group, Inc. and her various senior","page_number":25,"box":{"x":265,"y":634,"width":633,"height":11}},{"id":"b7eba50d-9618-4365-a1a9-9d0b9e9c1bbe","block_type":"box","text":"operating officer positions at Fidelity Investments, including her service as Executive Vice","page_number":25,"box":{"x":265,"y":649,"width":636,"height":11}},{"id":"67e734d4-1c0c-4620-866c-6c96794a12af","block_type":"box","text":"President of FMR Co., President of Fidelity Institutional Services Company and President","page_number":25,"box":{"x":265,"y":664,"width":629,"height":11}},{"id":"67ab7955-d2c6-4255-b401-65782107e323","block_type":"box","text":"of the Fidelity Charitable Gift Fund. Ms. Egan has also served as an advisor to the U.S.","page_number":25,"box":{"x":265,"y":679,"width":617,"height":11}},{"id":"6ae22b3a-639b-40f4-a0a3-4bb77bd1c96f","block_type":"box","text":"Department of Treasury as an expert in domestic retirement security. Ms. Egan began her","page_number":25,"box":{"x":265,"y":694,"width":642,"height":11}},{"id":"4299569e-091e-424a-ad2c-4b1f7a3bf945","block_type":"box","text":"professional career at the Board of Governors of the Federal Reserve and the Federal","page_number":25,"box":{"x":265,"y":709,"width":608,"height":11}},{"id":"52b73a12-82f1-4d59-934c-f2cca71d088f","block_type":"box","text":"Reserve Bank of New York. Ms. Egan is also a director of UNUM Corporation, a publicly","page_number":25,"box":{"x":265,"y":724,"width":620,"height":12}},{"id":"83372574-6f16-4e35-8a58-e82913e3069f","block_type":"box","text":"traded insurance company providing personal risk reinsurance, and a director and Chair of","page_number":25,"box":{"x":264,"y":739,"width":643,"height":12}},{"id":"e75f6ec2-7e58-4141-b86e-08463ed2b237","block_type":"box","text":"the Board of The Hanover Group, a public property casualty insurance company. Ms. Egan","page_number":25,"box":{"x":264,"y":755,"width":640,"height":11}},{"id":"fa47da6e-6497-40f2-a885-265876103e28","block_type":"box","text":"is also the lead independent director and non-executive Vice Chair of the Board of","page_number":25,"box":{"x":265,"y":770,"width":583,"height":11}},{"id":"a4a63642-a416-40cb-ab98-8d2d9a368dca","block_type":"box","text":"Huntsman Corporation, a publicly traded manufacturer and marketer of chemical products.","page_number":25,"box":{"x":265,"y":785,"width":643,"height":11}},{"id":"5b47b95e-c026-41de-8c04-04bcdb44de03","block_type":"box","text":"Ms. Egan’s independence from the Funds and the Manager enhances her service as Chair","page_number":25,"box":{"x":265,"y":800,"width":644,"height":11}},{"id":"79585693-b6f4-45f3-86fc-d77bffa99089","block_type":"box","text":"of the Compliance Committee and a member of the Governance and Nominating","page_number":25,"box":{"x":265,"y":815,"width":571,"height":11}},{"id":"68320c89-3893-49ca-b0b5-9681ae8db939","block_type":"box","text":"Committee, the Performance Oversight Committee, the Securities Lending Committee and","page_number":25,"box":{"x":265,"y":830,"width":641,"height":11}},{"id":"f1c3b66f-34e1-4769-849e-0ad2601fbb0e","block_type":"box","text":"the Private Assets Committee.","page_number":25,"box":{"x":264,"y":845,"width":215,"height":9}},{"id":"ee30ef6a-5bec-42aa-8bf1-f651f53e2c9e","block_type":"box","text":"I-14","page_number":25,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"494cda2e-5dce-4293-a939-9409649fde5d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":25,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"40bbdcc3-3446-44f9-9270-47f9e1f2115f","block_type":"box","text":"Trustees Experience, Qualifications and Skills","page_number":26,"box":{"x":68,"y":49,"width":409,"height":9}},{"id":"0f975511-4526-4697-af34-4d516b74d7ed","block_type":"box","text":"Lorenzo A. Flores The Board benefits from Lorenzo A. Flores’s many years of business, leadership and","page_number":26,"box":{"x":70,"y":65,"width":796,"height":12}},{"id":"1f6a412c-c5e4-44b5-928b-4390f63bc21a","block_type":"box","text":"financial experience in his roles at various public and private companies. In particular,","page_number":26,"box":{"x":264,"y":81,"width":612,"height":11}},{"id":"e7af15e8-c716-4947-a59a-18c2dcbbd9c6","block_type":"box","text":"Mr. Flores’s service as Chief Financial Officer of Lattice Semiconductor Corporation, a","page_number":26,"box":{"x":265,"y":96,"width":611,"height":11}},{"id":"4989e9a4-4050-414f-8111-fe75768d8085","block_type":"box","text":"semiconductor company that designs, develops, and markets programmable logic","page_number":26,"box":{"x":265,"y":111,"width":582,"height":11}},{"id":"1d03d775-e045-4073-88bb-dfd9481fddce","block_type":"box","text":"products and related software, Chief Financial Officer of Intel Foundry, a semiconductor","page_number":26,"box":{"x":265,"y":126,"width":622,"height":11}},{"id":"04f1a460-52b2-42eb-8cce-f775ad77f132","block_type":"box","text":"manufacturing unit of Intel Corporation, Chief Financial Officer and Corporate Controller of","page_number":26,"box":{"x":265,"y":141,"width":639,"height":11}},{"id":"9aee6a07-c0b3-4896-b758-52b0438fb65c","block_type":"box","text":"Xilinx, Inc., a technology and semiconductor company that supplies programmable logic","page_number":26,"box":{"x":264,"y":156,"width":622,"height":11}},{"id":"54713113-ccfb-42e8-bc0e-e47188676f67","block_type":"box","text":"devices, and Vice Chairman of Kioxia, Inc., a manufacturer and supplier of flash memory","page_number":26,"box":{"x":265,"y":171,"width":631,"height":11}},{"id":"75d07019-cab7-4b90-8e1b-c7242c9c9580","block_type":"box","text":"and solid state drives, and his long experience in the technology industry allow him to","page_number":26,"box":{"x":265,"y":187,"width":610,"height":11}},{"id":"00184a4f-1bb6-455b-8e8d-f4b4effa18c0","block_type":"box","text":"provide insight into financial, business and technology trends. Mr. Flores’s knowledge of","page_number":26,"box":{"x":265,"y":201,"width":629,"height":12}},{"id":"28d7ba4d-e84f-47a8-9ad8-8dd0804b6edf","block_type":"box","text":"financial and accounting matters qualifies him to serve as Chair of the Audit Committee.","page_number":26,"box":{"x":264,"y":217,"width":630,"height":11}},{"id":"c17f28d8-2ea9-4c68-a26a-af95ddc83175","block_type":"box","text":"Mr. Flores’s independence from the Funds and the Manager enhances his service as a","page_number":26,"box":{"x":265,"y":232,"width":618,"height":11}},{"id":"59acf851-b2c4-45f1-8d65-2066aa88b3a7","block_type":"box","text":"member of the Performance Oversight Committee. Mr. Flores has been determined by the","page_number":26,"box":{"x":265,"y":247,"width":639,"height":11}},{"id":"8147f18d-2477-49e7-98f6-6904bbeacab2","block_type":"box","text":"Audit Committee to be an audit committee financial expert, as such term is defined in the","page_number":26,"box":{"x":264,"y":262,"width":641,"height":11}},{"id":"5e600725-87f7-4b15-8549-660d236e67e6","block_type":"box","text":"applicable Commission rules.","page_number":26,"box":{"x":265,"y":277,"width":208,"height":11}},{"id":"a54ebb3a-32dd-4cbd-8aaf-b6a7d235e0cf","block_type":"box","text":"Stayce D. Harris The Board benefits from Stayce D. Harris’s leadership and governance experience gained","page_number":26,"box":{"x":69,"y":300,"width":832,"height":11}},{"id":"51e3465e-23ea-4a0b-8765-b8585320c4ed","block_type":"box","text":"during her extensive military career, including as a three-star Lieutenant General of the","page_number":26,"box":{"x":265,"y":315,"width":617,"height":11}},{"id":"79f880c1-dcda-4a1c-9a60-e6695f9829d6","block_type":"box","text":"United States Air Force. In her most recent role, Ms. Harris reported to the Secretary and","page_number":26,"box":{"x":265,"y":330,"width":637,"height":11}},{"id":"bc2904f7-19bf-4f36-9470-40352b3f6af8","block_type":"box","text":"Chief of Staff of the Air Force on matters concerning Air Force effectiveness, efficiency","page_number":26,"box":{"x":265,"y":345,"width":617,"height":11}},{"id":"29322ee2-630b-4d66-b4a9-ced542dbe32c","block_type":"box","text":"and the military discipline of active duty, Air Force Reserve and Air National Guard forces.","page_number":26,"box":{"x":265,"y":360,"width":635,"height":11}},{"id":"499b2a3d-d6b4-4610-bf0d-57b03afdc08a","block_type":"box","text":"Ms. Harris’s experience on governance matters includes oversight of inspection policy and","page_number":26,"box":{"x":265,"y":375,"width":643,"height":12}},{"id":"9a6b0f2d-fcbc-4df9-b3bb-952e35dfeaab","block_type":"box","text":"the inspection and evaluation system for all Air Force nuclear and conventional forces;","page_number":26,"box":{"x":264,"y":390,"width":614,"height":12}},{"id":"46027bbe-7ca7-40c8-9859-aff72763ec14","block_type":"box","text":"oversight of Air Force counterintelligence operations and service on the Air Force","page_number":26,"box":{"x":265,"y":406,"width":573,"height":11}},{"id":"b1601c93-280f-4d39-9621-eddf4485610a","block_type":"box","text":"Intelligence Oversight Panel; investigation of fraud, waste and abuse; and oversight of","page_number":26,"box":{"x":265,"y":421,"width":612,"height":11}},{"id":"fe0acc86-1a40-4b8f-bec2-9a496b89776d","block_type":"box","text":"criminal investigations and complaints resolution programs. Ms. Harris is also a director","page_number":26,"box":{"x":264,"y":436,"width":630,"height":11}},{"id":"a3ca2f72-a8ce-4d50-aa87-219c55414d5d","block_type":"box","text":"of The Boeing Company. Ms. Harris’s independence from the Funds and the Manager","page_number":26,"box":{"x":265,"y":451,"width":607,"height":11}},{"id":"1e1f737e-013e-409f-8de6-446382b6212d","block_type":"box","text":"enhances her service as a member of the Compliance Committee and the Performance","page_number":26,"box":{"x":265,"y":466,"width":623,"height":11}},{"id":"daf4f6c7-782f-4199-bdc4-e2f416e81bd0","block_type":"box","text":"Oversight Committee.","page_number":26,"box":{"x":265,"y":481,"width":151,"height":11}},{"id":"305108e3-25ae-47c8-8264-77aa69394dd0","block_type":"box","text":"J. Phillip Holloman The Board benefits from J. 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Amounts shown may include shares as to which a Trustee has indirect","page_number":31,"box":{"x":69,"y":98,"width":774,"height":11}},{"id":"9c99ef73-fa73-43b3-a1b7-6fcfbdbce850","block_type":"box","text":"beneficial ownership, such as through participation in certain family accounts, 529 college savings plan interests, or","page_number":31,"box":{"x":69,"y":113,"width":833,"height":11}},{"id":"c5c5e9a8-e44b-4040-b974-528f417211d4","block_type":"box","text":"similar arrangements where the Trustee has beneficial economic interest but not a direct ownership interest.","page_number":31,"box":{"x":69,"y":128,"width":776,"height":11}},{"id":"04daaf8c-85ad-424d-8135-b72a259217d0","block_type":"box","text":"Name of Trustee","page_number":31,"box":{"x":69,"y":176,"width":95,"height":7}},{"id":"d2569222-d603-4bb7-8eb9-b10fa8dcc3ba","block_type":"box","text":"Dollar","page_number":31,"box":{"x":423,"y":156,"width":34,"height":7}},{"id":"f55f47eb-dc30-4fd6-b32e-940a8854c744","block_type":"box","text":"Range in the","page_number":31,"box":{"x":403,"y":166,"width":73,"height":9}},{"id":"087f9363-5217-42cd-a2f5-cfc271098081","block_type":"box","text":"California Fund","page_number":31,"box":{"x":396,"y":176,"width":87,"height":7}},{"id":"b65c1489-ae0d-4df7-be06-0f229b804f51","block_type":"box","text":"Dollar","page_number":31,"box":{"x":567,"y":156,"width":33,"height":7}},{"id":"fa28eaec-dd58-4adb-8c33-c279bde5254a","block_type":"box","text":"Range in the","page_number":31,"box":{"x":547,"y":166,"width":73,"height":9}},{"id":"e67d7c02-0d63-4cc6-aaea-540a894bebde","block_type":"box","text":"New Jersey Fund","page_number":31,"box":{"x":535,"y":176,"width":97,"height":9}},{"id":"35b035e5-c26d-4fef-88e9-03ba8a97cc73","block_type":"box","text":"Dollar","page_number":31,"box":{"x":699,"y":156,"width":33,"height":7}},{"id":"a62932b7-a745-4049-a395-f1a2abce0964","block_type":"box","text":"Range in the","page_number":31,"box":{"x":679,"y":166,"width":73,"height":9}},{"id":"cc0d441b-79e5-4339-a75f-25511b40d813","block_type":"box","text":"Pennsylvania Fund","page_number":31,"box":{"x":662,"y":176,"width":107,"height":9}},{"id":"1163b53d-6f96-4a2c-b173-ce31a55e9adf","block_type":"box","text":"Aggregate Dollar","page_number":31,"box":{"x":805,"y":156,"width":99,"height":9}},{"id":"673205b1-c0c0-4d8c-90af-59ef08b94433","block_type":"box","text":"Range in","page_number":31,"box":{"x":829,"y":166,"width":50,"height":9}},{"id":"3d4ab475-9d88-43bf-b19e-680f00dc380f","block_type":"box","text":"Supervised Funds*","page_number":31,"box":{"x":799,"y":176,"width":109,"height":9}},{"id":"ce0bb9d2-5301-45a4-bf01-59c9c2aa7c50","block_type":"box","text":"Independent Trustees","page_number":31,"box":{"x":70,"y":194,"width":154,"height":11}},{"id":"5a96b7f6-dc74-4788-a5b9-9051f4eabf7f","block_type":"box","text":"Cynthia L. Egan","page_number":31,"box":{"x":79,"y":209,"width":108,"height":11}},{"id":"1870c168-e9b4-49f2-8913-0250c9676a2e","block_type":"box","text":". . . . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":195,"y":209,"width":263,"height":9}},{"id":"8e74ff85-46a9-43eb-ac81-6495cc3fde96","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":208,"width":343,"height":12}},{"id":"ff05a9c3-fd22-4809-ba74-0612fd9778cc","block_type":"box","text":"Lorenzo A. Flores. . . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":79,"y":224,"width":379,"height":9}},{"id":"2db26679-17ec-4663-809d-3d97197493e0","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":224,"width":343,"height":11}},{"id":"711c45fd-12a1-4c1b-91f4-acf031568590","block_type":"box","text":"Stayce D. Harris . . . . . . . . . . . . . . . . . .","page_number":31,"box":{"x":79,"y":239,"width":265,"height":11}},{"id":"fdcf0da2-30bb-4379-b160-b3c7defa8a4e","block_type":"box","text":"$10,001-$50,000 None None Over $100,000","page_number":31,"box":{"x":375,"y":239,"width":534,"height":11}},{"id":"0415ff77-8ebb-4066-9dd5-8b7219c19c16","block_type":"box","text":"J. Phillip Holloman. . .","page_number":31,"box":{"x":78,"y":255,"width":151,"height":10}},{"id":"2858732d-c810-4e96-b76f-04877ee4d1e0","block_type":"box","text":". . . . . . . . . . . . . . None","page_number":31,"box":{"x":236,"y":255,"width":222,"height":8}},{"id":"6f6cd647-bba4-43da-8b26-c57649d771d7","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":254,"width":343,"height":11}},{"id":"54d224d7-8fab-4b9e-9297-c6adf2a1c6be","block_type":"box","text":"R. Glenn Hubbard . . .","page_number":31,"box":{"x":79,"y":270,"width":150,"height":9}},{"id":"6e8eef1c-fd84-4f49-afd0-9fb32295504d","block_type":"box","text":". . . . . . . . . . . . . . None","page_number":31,"box":{"x":236,"y":270,"width":222,"height":9}},{"id":"aa553913-eb2f-4acc-9fdc-acca5458ce55","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":269,"width":343,"height":11}},{"id":"a6a9fefa-85ef-4d9e-a7c2-c51adceac26a","block_type":"box","text":"W. Carl Kester","page_number":31,"box":{"x":78,"y":285,"width":102,"height":9}},{"id":"04301d49-4695-4aec-8d19-b05515d34b9e","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":187,"y":285,"width":271,"height":9}},{"id":"016e7e37-3b94-4dcd-8ca9-fb72f2fa7efa","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":284,"width":343,"height":11}},{"id":"00daf435-4518-464f-84d1-4378f39ccc89","block_type":"box","text":"Francis C. Mahoney**","page_number":31,"box":{"x":79,"y":300,"width":157,"height":11}},{"id":"617c3420-67aa-43a6-ae35-94865156ac9d","block_type":"box","text":". . . . . . . . . . . . . None","page_number":31,"box":{"x":244,"y":300,"width":214,"height":9}},{"id":"12f2261d-1c77-4f79-a24c-f6a03eb9028e","block_type":"box","text":"None None None","page_number":31,"box":{"x":566,"y":300,"width":306,"height":9}},{"id":"e99bdb22-c7b0-4e5b-834e-44443a16dbea","block_type":"box","text":"Arthur P. Steinmetz . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":78,"y":315,"width":380,"height":9}},{"id":"c52458bc-4508-453c-ae24-a86dcbe79b2d","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":314,"width":343,"height":11}},{"id":"80468558-7b4c-4636-8daa-e976ecf01146","block_type":"box","text":"Interested Trustees","page_number":31,"box":{"x":70,"y":345,"width":138,"height":9}},{"id":"b0d21370-33b6-4583-ab32-14afd9c95374","block_type":"box","text":"Robert Fairbairn","page_number":31,"box":{"x":79,"y":360,"width":113,"height":9}},{"id":"b2b76f5b-6fd8-4d16-98cb-34404992eb39","block_type":"box","text":". . . . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":195,"y":360,"width":263,"height":9}},{"id":"f58b06f4-2f05-48ec-8046-06a53957359d","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":360,"width":343,"height":11}},{"id":"59cffecd-de11-4d2e-9283-ba2b5da036bb","block_type":"box","text":"John M. Perlowski","page_number":31,"box":{"x":78,"y":376,"width":127,"height":8}},{"id":"c29c2bb5-9546-4752-98a8-178328c448a7","block_type":"box","text":". . . . . . . . . . . . . . . . . None","page_number":31,"box":{"x":211,"y":376,"width":247,"height":8}},{"id":"b8534438-f10b-4fb0-a727-94925a1d374d","block_type":"box","text":"None None Over $100,000","page_number":31,"box":{"x":566,"y":375,"width":343,"height":11}},{"id":"04659df6-ede2-4896-8cd0-3fee5551f3a9","block_type":"box","text":"* Includes share equivalents owned under the deferred compensation plan in the Supervised Funds by certain Independent Trustees who have","page_number":31,"box":{"x":70,"y":400,"width":827,"height":9}},{"id":"1b26f8c8-4442-4e00-80e2-c12b24fa2bdb","block_type":"box","text":"participated in the deferred compensation plan of the Supervised Funds.","page_number":31,"box":{"x":94,"y":410,"width":414,"height":9}},{"id":"f04c43eb-2893-48d3-a36b-9f12cf9e3b63","block_type":"box","text":"** Information is provided as of September 8, 2026, the date Mr. Mahoney was appointed as a Trustee of the Funds.","page_number":31,"box":{"x":70,"y":422,"width":676,"height":9}},{"id":"404f4d53-ff01-4ab5-bc77-7045b28c4f51","block_type":"box","text":"As of September 3, 2026, the Trustees and officers of the Trusts as a group directly or indirectly beneficially","page_number":31,"box":{"x":101,"y":443,"width":775,"height":12}},{"id":"7702682e-d49a-4168-a7bd-ede3eb3158a3","block_type":"box","text":"owned an aggregate of less than 1% of any class of the outstanding shares of the Funds. As of December 31, 2025","page_number":31,"box":{"x":69,"y":458,"width":827,"height":12}},{"id":"4341f7ac-0ea9-4f24-9628-5165cf031269","block_type":"box","text":"(and, with respect to Mr. Mahoney, as of September 8, 2026), none of the Independent Trustees of the Trusts or","page_number":31,"box":{"x":69,"y":474,"width":805,"height":11}},{"id":"b3f2d8df-627b-4311-b99c-c9d4a6465a9d","block_type":"box","text":"their immediate family members owned beneficially or of record any securities of the Funds’ investment adviser,","page_number":31,"box":{"x":68,"y":489,"width":798,"height":11}},{"id":"d39c9576-4357-424f-b126-05450d1d0440","block_type":"box","text":"principal underwriter, or any person directly or indirectly controlling, controlled by, or under common control with such","page_number":31,"box":{"x":70,"y":504,"width":831,"height":11}},{"id":"2db9e1b1-6533-4dfd-91e2-6c116ef785d2","block_type":"box","text":"entities.","page_number":31,"box":{"x":69,"y":519,"width":56,"height":9}},{"id":"27b1a393-9b43-4d40-9501-abf401a53399","block_type":"box","text":"Compensation of Trustees","page_number":31,"box":{"x":69,"y":549,"width":190,"height":11}},{"id":"26e7c9db-ef67-4f5d-8a4b-691a38898f51","block_type":"box","text":"Each Independent Trustee is paid an annual retainer of $370,000 per year for his or her services as a Board","page_number":31,"box":{"x":102,"y":571,"width":775,"height":12}},{"id":"ac6407fc-2bb6-457d-bb1f-3869df7ff810","block_type":"box","text":"member of the BlackRock-advised Funds, including the Funds, together with out-of-pocket expenses in accordance","page_number":31,"box":{"x":69,"y":587,"width":812,"height":11}},{"id":"16eb8e0c-c0d9-49e4-95de-79b3d8133c46","block_type":"box","text":"with a Board policy on travel and other business expenses relating to attendance at meetings. In addition, the Chair","page_number":31,"box":{"x":68,"y":602,"width":827,"height":11}},{"id":"bf71191d-aa62-4505-9ce3-cf4243158814","block_type":"box","text":"of the Board and the Vice Chair of the Board are paid an additional annual retainer of $140,000 and $84,000,","page_number":31,"box":{"x":69,"y":617,"width":789,"height":11}},{"id":"51adecdc-58c3-4139-ab4e-6ac940781e7a","block_type":"box","text":"respectively. The Chairs of the Audit Committee, Private Assets Committee, Performance Oversight Committee,","page_number":31,"box":{"x":69,"y":632,"width":790,"height":12}},{"id":"91e860f7-f54c-4fc6-aad6-70f434af595c","block_type":"box","text":"Compliance Committee, Governance and Nominating Committee, and Securities Lending Committee are paid an","page_number":31,"box":{"x":69,"y":648,"width":798,"height":11}},{"id":"06ca6e1f-ceb3-4100-b62d-a41a20917db1","block_type":"box","text":"additional annual retainer of $55,000, $55,000, $42,500, $50,000, $42,500 and $5,000, respectively, in addition","page_number":31,"box":{"x":69,"y":662,"width":828,"height":12}},{"id":"16bf348e-23f9-44fb-b439-44163fe99e62","block_type":"box","text":"to the retainers that they each receive as a member of such committee. Each member (including the Chair) of the","page_number":31,"box":{"x":68,"y":678,"width":810,"height":11}},{"id":"8aad4413-cac0-4472-805a-9ac7eec36441","block_type":"box","text":"Audit Committee, Private Assets Committee, Compliance Committee, Governance and Nominating Committee, and","page_number":31,"box":{"x":68,"y":693,"width":816,"height":11}},{"id":"c7bd42d1-ac28-433a-bca9-90effe5a1abe","block_type":"box","text":"Securities Lending Committee are paid an additional annual retainer of $30,000, $30,000, $25,000, $25,000 and","page_number":31,"box":{"x":69,"y":707,"width":824,"height":12}},{"id":"6e27cae0-4bf9-4777-840b-3a70414fdb4b","block_type":"box","text":"$15,000, respectively, for his or her service on such committee. An Independent Trustee may receive additional","page_number":31,"box":{"x":69,"y":722,"width":798,"height":12}},{"id":"0293a273-c48c-4f75-b6d9-5c6b0ca69954","block_type":"box","text":"compensation for his or her service as a member or Chair, as applicable, of one or more ad hoc committees of the","page_number":31,"box":{"x":69,"y":738,"width":818,"height":11}},{"id":"92155895-a5d4-4a72-8a32-53fb8d3373ce","block_type":"box","text":"Board. The Fund will pay a pro rata portion quarterly (based on relative net assets) of the foregoing Trustee fees paid","page_number":31,"box":{"x":70,"y":753,"width":834,"height":12}},{"id":"4ae2caf6-e6a9-4811-9d7f-a49b8d367c95","block_type":"box","text":"by the funds in the BlackRock Fixed-Income Complex.","page_number":31,"box":{"x":69,"y":768,"width":377,"height":12}},{"id":"bc76c7bf-b77d-4827-a31f-a8ebab1c9fa3","block_type":"box","text":"The Independent Trustees have agreed that a maximum of 50% of each Independent Trustee’s total","page_number":31,"box":{"x":101,"y":791,"width":711,"height":11}},{"id":"5a55c9a5-5dec-47a8-a95c-1dffb159821f","block_type":"box","text":"compensation paid by funds in the BlackRock Fixed-Income Complex may be deferred pursuant to the BlackRock","page_number":31,"box":{"x":69,"y":806,"width":801,"height":11}},{"id":"eeec5ee4-9479-436c-a66d-0b608ad75fdf","block_type":"box","text":"Fixed-Income Complex’s deferred compensation plan. Under the deferred compensation plan, deferred amounts earn","page_number":31,"box":{"x":70,"y":821,"width":833,"height":11}},{"id":"5da5d834-f55e-4818-b6ba-0f21f40b1eb4","block_type":"box","text":"a return for the Independent Trustees as though equivalent dollar amounts had been invested in shares of certain","page_number":31,"box":{"x":69,"y":836,"width":813,"height":12}},{"id":"b69952fa-9868-4b3d-9dda-c69bff438cea","block_type":"box","text":"funds in the BlackRock Fixed-Income Complex selected by the Independent Trustees. This has approximately the","page_number":31,"box":{"x":68,"y":852,"width":802,"height":11}},{"id":"2e71923f-9345-4131-8537-cab046429135","block_type":"box","text":"same economic effect for the Independent Trustees as if they had invested the deferred amounts in such funds in","page_number":31,"box":{"x":69,"y":867,"width":814,"height":11}},{"id":"51f9f89f-b668-4ee5-a1b7-56019f4e4189","block_type":"box","text":"the BlackRock Fixed-Income Complex. The deferred compensation plan is not funded and obligations thereunder","page_number":31,"box":{"x":68,"y":882,"width":800,"height":11}},{"id":"0d3d50eb-19f0-45ac-a281-8213a3eee89c","block_type":"box","text":"represent general unsecured claims against the general assets of a fund and are recorded as a liability for","page_number":31,"box":{"x":69,"y":897,"width":760,"height":11}},{"id":"74b9871a-a921-489a-a828-ffe6e0194ff3","block_type":"box","text":"accounting purposes.","page_number":31,"box":{"x":69,"y":912,"width":151,"height":11}},{"id":"528b1b4f-6f26-4d10-a6b4-538b7d189db6","block_type":"box","text":"I-20","page_number":31,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"347d2c35-5c25-41be-b79a-6563190c4b77","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":31,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8a224fa0-00e6-47b7-90cb-428145daf20d","block_type":"box","text":"The following table sets forth the compensation paid to the Trustees by the Trusts, on behalf of the Funds for","page_number":32,"box":{"x":101,"y":45,"width":781,"height":11}},{"id":"865cbbce-0e9a-4018-8d37-2b76c122d432","block_type":"box","text":"the fiscal year ended May 31, 2026, and the aggregate compensation paid to them by all BlackRock-advised Funds","page_number":32,"box":{"x":68,"y":60,"width":822,"height":11}},{"id":"81be6117-9d10-4402-8475-4cf15dcdbb1f","block_type":"box","text":"for the calendar year ended December 31, 2025.","page_number":32,"box":{"x":68,"y":75,"width":350,"height":11}},{"id":"70c53d35-cc3b-4071-82ba-95b13e57a9f9","block_type":"box","text":"Name","page_number":32,"box":{"x":69,"y":144,"width":32,"height":7}},{"id":"023e495c-c8f4-41e1-b58a-27d5e29deeaf","block_type":"box","text":"1","page_number":32,"box":{"x":102,"y":144,"width":4,"height":3}},{"id":"dad9a434-ee2d-47f8-b38c-3c13831d138e","block_type":"box","text":"Aggregate","page_number":32,"box":{"x":295,"y":113,"width":61,"height":9}},{"id":"c1e509ce-1c18-4173-8e00-1b8e05ed7f79","block_type":"box","text":"Compensation","page_number":32,"box":{"x":285,"y":123,"width":82,"height":9}},{"id":"988e4a39-1d55-4927-bc96-655ac988d64e","block_type":"box","text":"from the","page_number":32,"box":{"x":301,"y":133,"width":49,"height":8}},{"id":"15ebfe17-1af3-463e-b9cb-7314ea038f9c","block_type":"box","text":"California Fund","page_number":32,"box":{"x":283,"y":143,"width":86,"height":8}},{"id":"d7d9967c-c98d-46a9-bae4-f22030de04c4","block_type":"box","text":"Aggregate","page_number":32,"box":{"x":417,"y":113,"width":61,"height":9}},{"id":"abc80678-f32b-4a3c-8abb-d72e912e8852","block_type":"box","text":"Compensation","page_number":32,"box":{"x":406,"y":123,"width":83,"height":9}},{"id":"1dd22ef2-c18f-4573-84b1-4dbbd41e411c","block_type":"box","text":"from the","page_number":32,"box":{"x":423,"y":133,"width":49,"height":8}},{"id":"69707294-a54c-4d45-9e7d-7fe743793c30","block_type":"box","text":"New Jersey Fund","page_number":32,"box":{"x":400,"y":144,"width":96,"height":8}},{"id":"643ed5ec-bff6-4346-8710-d70d8c58f379","block_type":"box","text":"Aggregate","page_number":32,"box":{"x":550,"y":113,"width":60,"height":9}},{"id":"7d0956be-ef36-4f19-874b-859e3302d0a5","block_type":"box","text":"Compensation","page_number":32,"box":{"x":539,"y":123,"width":82,"height":9}},{"id":"cec4b0f8-47ad-4c75-b951-78a65d82c7cf","block_type":"box","text":"from the","page_number":32,"box":{"x":556,"y":133,"width":48,"height":8}},{"id":"8fe34ea8-fb98-4e79-9032-331efc999fba","block_type":"box","text":"Pennsylvania Fund","page_number":32,"box":{"x":527,"y":144,"width":107,"height":8}},{"id":"e9cc0a56-f314-4d07-bcd4-3670ced23f5a","block_type":"box","text":"Estimated Annual","page_number":32,"box":{"x":664,"y":123,"width":102,"height":7}},{"id":"a8891187-0c3b-48c8-8a49-ffbf2464e625","block_type":"box","text":"Benefits Upon","page_number":32,"box":{"x":675,"y":133,"width":81,"height":9}},{"id":"57ea1206-b3ed-4a78-a531-6d658772cd39","block_type":"box","text":"Retirement","page_number":32,"box":{"x":683,"y":144,"width":64,"height":7}},{"id":"6710cfdc-534b-4b57-80f5-141df98c196b","block_type":"box","text":"Aggregate","page_number":32,"box":{"x":822,"y":103,"width":61,"height":9}},{"id":"330137e9-21d8-4027-91b4-c0f10e0612b0","block_type":"box","text":"Compensation from","page_number":32,"box":{"x":796,"y":113,"width":113,"height":9}},{"id":"fb8d0766-2a93-49ce-b3fd-aa320a341dbb","block_type":"box","text":"the Funds and","page_number":32,"box":{"x":811,"y":123,"width":82,"height":7}},{"id":"b62de8df-0b4b-4ea1-99ca-df0cfd0ad9bd","block_type":"box","text":"Other BlackRock","page_number":32,"box":{"x":802,"y":133,"width":102,"height":8}},{"id":"f3e62a4a-5af0-4315-bb8f-a29efdd4192b","block_type":"box","text":"Supervised Funds","page_number":32,"box":{"x":797,"y":144,"width":102,"height":8}},{"id":"5da26a05-5f66-4bf4-9c1d-4119bcb73b27","block_type":"box","text":"2,3","page_number":32,"box":{"x":899,"y":144,"width":10,"height":4}},{"id":"bb557ae5-5928-4148-996a-b127ae67d140","block_type":"box","text":"Independent Trustees","page_number":32,"box":{"x":70,"y":161,"width":154,"height":11}},{"id":"3dd68100-cc60-4b53-a174-192ef7033937","block_type":"box","text":"Cynthia L. Egan","page_number":32,"box":{"x":79,"y":176,"width":108,"height":12}},{"id":"e12b9286-d4c4-4452-adea-3d787c45dc9e","block_type":"box","text":". . . . . . . . $3,596","page_number":32,"box":{"x":192,"y":176,"width":160,"height":11}},{"id":"6e95d54b-aa51-43ab-a9bb-b9f7fde9f67a","block_type":"box","text":"$608 $651 None $580,000","page_number":32,"box":{"x":429,"y":176,"width":460,"height":11}},{"id":"2da04c14-6b31-46f8-ac44-792ffb7c2602","block_type":"box","text":"Lorenzo A. Flores","page_number":32,"box":{"x":79,"y":192,"width":121,"height":8}},{"id":"8012857f-9501-414f-a0ea-1d8f6e7b97ae","block_type":"box","text":"4","page_number":32,"box":{"x":201,"y":192,"width":4,"height":4}},{"id":"e104016c-68bb-4f30-a5d4-705280057603","block_type":"box","text":". . . . . . $2,993","page_number":32,"box":{"x":209,"y":191,"width":143,"height":11}},{"id":"6b78c30c-cd73-4cce-84eb-411320697daa","block_type":"box","text":"$535 $569 None $400,000","page_number":32,"box":{"x":429,"y":191,"width":460,"height":11}},{"id":"cafac743-1e5b-4524-8f22-e08781a8c2ae","block_type":"box","text":"Stayce D. Harris . . . . . . . $2,936","page_number":32,"box":{"x":79,"y":206,"width":273,"height":12}},{"id":"e2d41ebe-8fdf-4c36-912f-5894c2341ab3","block_type":"box","text":"$528 $562 None $395,000","page_number":32,"box":{"x":429,"y":206,"width":460,"height":11}},{"id":"1901111e-e84a-4ef7-92d6-12b8768e233d","block_type":"box","text":"J. Phillip Holloman","page_number":32,"box":{"x":78,"y":222,"width":130,"height":11}},{"id":"f871b816-60a1-4b7d-beba-ea7e6ef2cb03","block_type":"box","text":". . . . . $3,155","page_number":32,"box":{"x":217,"y":221,"width":135,"height":11}},{"id":"c5c39927-d4c8-424a-9516-292779caa0be","block_type":"box","text":"$555 $592 None $425,000","page_number":32,"box":{"x":429,"y":221,"width":460,"height":11}},{"id":"78113b7f-a84b-4ed7-9d3e-7d5660dfd29e","block_type":"box","text":"R. Glenn Hubbard","page_number":32,"box":{"x":79,"y":237,"width":124,"height":9}},{"id":"7c4c265c-0f16-49f7-afc4-087520f6d347","block_type":"box","text":". . . . . . $4,086","page_number":32,"box":{"x":209,"y":236,"width":143,"height":11}},{"id":"6ab2ce15-41f0-404e-8fcb-80292d924b4b","block_type":"box","text":"$669 $717 None $560,000","page_number":32,"box":{"x":429,"y":236,"width":460,"height":11}},{"id":"f637eced-f5e3-4d8d-aa6c-715de68d019d","block_type":"box","text":"W. Carl Kester","page_number":32,"box":{"x":78,"y":252,"width":102,"height":9}},{"id":"b2559ded-d551-421f-a008-3b68273467fc","block_type":"box","text":". . . . . . . . . $4,147","page_number":32,"box":{"x":184,"y":251,"width":168,"height":11}},{"id":"5ca8b8f4-de2a-4924-9216-fa5ff7ddd6d7","block_type":"box","text":"$676 $726 None $671,500","page_number":32,"box":{"x":429,"y":251,"width":460,"height":11}},{"id":"ee8876d1-12c7-4a94-b5ce-9b4542b8f3ec","block_type":"box","text":"Catherine A. Lynch","page_number":32,"box":{"x":79,"y":267,"width":131,"height":11}},{"id":"e0ca39e1-b62d-4a02-b9dd-9135ffa1b0a6","block_type":"box","text":"5","page_number":32,"box":{"x":211,"y":267,"width":5,"height":5}},{"id":"c1c07be2-6635-4d88-9f27-eb5f42b9dcea","block_type":"box","text":". . . . $3,104 $513 $558 None $610,000","page_number":32,"box":{"x":225,"y":266,"width":664,"height":11}},{"id":"9d46e060-f291-4d64-bf99-25b8dbc18015","block_type":"box","text":"Francis C. Mahoney","page_number":32,"box":{"x":79,"y":282,"width":139,"height":11}},{"id":"727f2f7c-fe31-4d63-b9b9-4b9f32346290","block_type":"box","text":"6","page_number":32,"box":{"x":218,"y":283,"width":4,"height":4}},{"id":"214c1cd2-7599-407e-9a1f-bae13dc2bd70","block_type":"box","text":". . . . N/A N/A N/A None None","page_number":32,"box":{"x":225,"y":282,"width":646,"height":11}},{"id":"77a447ab-7e19-48d3-a3ee-5f5db228872a","block_type":"box","text":"Arthur P. Steinmetz","page_number":32,"box":{"x":78,"y":297,"width":137,"height":9}},{"id":"cd7bc2d3-8ebd-4a66-99a5-0c79edbda820","block_type":"box","text":"7","page_number":32,"box":{"x":216,"y":298,"width":3,"height":4}},{"id":"c8f9bee3-8e25-49e5-a180-0838b5d95527","block_type":"box","text":". . . . $3,332","page_number":32,"box":{"x":225,"y":297,"width":127,"height":11}},{"id":"2369a73b-2684-4d3d-9447-1fd8adff9f02","block_type":"box","text":"$576 $616 None $537,500","page_number":32,"box":{"x":429,"y":297,"width":460,"height":11}},{"id":"e7507491-1d8a-4916-a726-db0fc9b08764","block_type":"box","text":"Interested Trustees","page_number":32,"box":{"x":70,"y":313,"width":138,"height":8}},{"id":"96ca56b0-968c-4c06-9a9b-54e342934584","block_type":"box","text":"Robert Fairbairn","page_number":32,"box":{"x":79,"y":328,"width":113,"height":8}},{"id":"3eafdefa-d889-4c0e-a411-134ac1910c3f","block_type":"box","text":". . . . . . . None None","page_number":32,"box":{"x":201,"y":328,"width":265,"height":8}},{"id":"efa543cc-7472-4f2a-ab82-f6e370da6d36","block_type":"box","text":"None None None","page_number":32,"box":{"x":563,"y":328,"width":308,"height":8}},{"id":"f230f1bd-e162-4eff-9c7d-ddd1e9d10c8c","block_type":"box","text":"John M. Perlowski","page_number":32,"box":{"x":78,"y":343,"width":127,"height":9}},{"id":"8150b3d4-22dc-4d2f-9d0f-8e5379fc7cfe","block_type":"box","text":". . . . . . None None","page_number":32,"box":{"x":209,"y":343,"width":257,"height":9}},{"id":"c5274e94-7a98-4d0a-a510-4a5ad07da08b","block_type":"box","text":"None None None","page_number":32,"box":{"x":563,"y":343,"width":308,"height":9}},{"id":"8e8e8bce-f919-4cc2-b88c-3746dba95c7b","block_type":"box","text":"1","page_number":32,"box":{"x":69,"y":367,"width":3,"height":4}},{"id":"4c295954-0080-4859-b950-82a0ca3d62a4","block_type":"box","text":"For the number of BlackRock-advised Funds from which each Trustee receives compensation see the Biographical Information Chart beginning","page_number":32,"box":{"x":94,"y":367,"width":811,"height":9}},{"id":"226b0b03-fdc3-4ed0-babc-d44418ce641a","block_type":"box","text":"on page l-23.","page_number":32,"box":{"x":93,"y":377,"width":74,"height":9}},{"id":"09b99cb5-9f28-42d2-b0dd-f1820e884859","block_type":"box","text":"2","page_number":32,"box":{"x":69,"y":390,"width":3,"height":3}},{"id":"e658a8b3-d373-4714-a3bb-fce61f4a9835","block_type":"box","text":"For the Independent Trustees, this amount represents the aggregate compensation earned from the funds in the BlackRock Fixed-Income","page_number":32,"box":{"x":94,"y":390,"width":782,"height":9}},{"id":"4748f473-2664-401e-ad87-8127ffe5baba","block_type":"box","text":"Complex during the calendar year ended December 31, 2025. Of this amount, Mr. Flores, Ms. Harris, Mr. Holloman, Dr. Hubbard, Dr. Kester,","page_number":32,"box":{"x":93,"y":400,"width":801,"height":9}},{"id":"5b965436-af5f-4653-add9-adfe6726f201","block_type":"box","text":"Ms. Lynch and Mr. Steinmetz deferred $200,000, $197,500, $212,500, $280,000, $546,859, $603,900 and $268,750, respectively,","page_number":32,"box":{"x":94,"y":409,"width":776,"height":10}},{"id":"18b1c7b9-b35b-4a9f-887d-bbc24baa4d92","block_type":"box","text":"pursuant to the BlackRock Fixed-Income Complex’s deferred compensation plan.","page_number":32,"box":{"x":94,"y":420,"width":457,"height":9}},{"id":"b268b627-3bc2-4c9f-8237-cc87cc40a34e","block_type":"box","text":"3","page_number":32,"box":{"x":69,"y":433,"width":3,"height":3}},{"id":"9f95a740-4834-4dda-80fc-8bc2b95a23f4","block_type":"box","text":"Total amount of deferred compensation payable by the BlackRock Fixed-Income Complex to Mr. Flores, Ms. Harris, Mr. Holloman, Dr. Hubbard,","page_number":32,"box":{"x":93,"y":433,"width":810,"height":8}},{"id":"cfbd5a6c-975e-4fb3-9b4e-5aa47e651e3f","block_type":"box","text":"Dr. Kester, Ms. Lynch and Mr. Steinmetz is $1,055,218, $1,032,387, $1,101,752, $5,907,215, $2,544,830, $720,927 and $603,379,","page_number":32,"box":{"x":94,"y":442,"width":787,"height":10}},{"id":"29d43137-1419-4833-af96-37f2dd82c328","block_type":"box","text":"respectively, as of December 31, 2025. Ms. Egan did not participate in the deferred compensation plan as of December 31, 2025.","page_number":32,"box":{"x":94,"y":453,"width":748,"height":9}},{"id":"96203335-ee97-4d16-8376-fe0976ac54c8","block_type":"box","text":"4","page_number":32,"box":{"x":68,"y":465,"width":4,"height":4}},{"id":"c641bfcc-bf76-4e98-ad45-5e91d0e3e20c","block_type":"box","text":"Mr. Flores became Chair of the Audit Committee effective as of March 9, 2026.","page_number":32,"box":{"x":94,"y":465,"width":452,"height":9}},{"id":"ce8c7a4a-1962-4447-a2cc-441cc1abf81a","block_type":"box","text":"5","page_number":32,"box":{"x":69,"y":478,"width":3,"height":4}},{"id":"4322dc2b-85be-44ee-abdc-fea6cd9ea0cd","block_type":"box","text":"Ms. Lynch resigned as a Trustee of the Funds effective as of March 9, 2026.","page_number":32,"box":{"x":94,"y":478,"width":439,"height":9}},{"id":"8d7f3655-e565-4a5e-bc16-60cc7460db33","block_type":"box","text":"6","page_number":32,"box":{"x":69,"y":491,"width":3,"height":3}},{"id":"20f15560-ea3d-4607-8e5a-9f6daff502a1","block_type":"box","text":"Mr. Mahoney was appointed as a Trustee of the Funds effective September 8, 2026.","page_number":32,"box":{"x":94,"y":490,"width":482,"height":9}},{"id":"6c69fb88-1373-4aeb-b8f0-e1fd7c4db4ae","block_type":"box","text":"7","page_number":32,"box":{"x":69,"y":503,"width":3,"height":4}},{"id":"c3c84163-6e1c-488c-93d1-c1b9c297232a","block_type":"box","text":"Mr. Steinmetz became Chair of the Securities Lending Committee effective as of May 20, 2026.","page_number":32,"box":{"x":94,"y":503,"width":546,"height":9}},{"id":"1dc5d4d0-e39f-4aa4-b0dc-9deb7d96c99e","block_type":"box","text":"IV. Management, Advisory and Other Service Arrangements","page_number":32,"box":{"x":69,"y":532,"width":432,"height":11}},{"id":"a02dbbc2-cfac-4418-9752-dd0a24f46510","block_type":"box","text":"Management Agreement","page_number":32,"box":{"x":69,"y":562,"width":180,"height":11}},{"id":"9651c266-6b59-4ebb-8a05-f300f43bccf2","block_type":"box","text":"The Trusts, on behalf of the Funds, have entered into investment management agreements with the Manager","page_number":32,"box":{"x":101,"y":584,"width":779,"height":12}},{"id":"75b2a187-f2bf-4ce5-85e4-2f60769a84df","block_type":"box","text":"(the “Management Agreements”), pursuant to which the Manager receives for its services to each Fund a fee based","page_number":32,"box":{"x":69,"y":600,"width":827,"height":11}},{"id":"2f46048f-36b7-4c0e-bc04-dc9cc39b4e78","block_type":"box","text":"on each Fund’s average daily net assets.","page_number":32,"box":{"x":69,"y":615,"width":291,"height":11}},{"id":"5d561fc0-a9bc-4e46-b377-68dc6a26b7d5","block_type":"box","text":"The Manager has contractually agreed to waive the management fee with respect to any portion of each Fund’s","page_number":32,"box":{"x":101,"y":637,"width":794,"height":12}},{"id":"1b933c15-7c02-42fb-af3e-703c160242e9","block_type":"box","text":"assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange","page_number":32,"box":{"x":69,"y":652,"width":799,"height":12}},{"id":"8e1e1006-bf31-469f-98bd-81c4ac68e6b0","block_type":"box","text":"traded funds managed by the Manager or its affiliates that have a contractual management fee, through","page_number":32,"box":{"x":68,"y":668,"width":742,"height":11}},{"id":"a5b49d35-7908-47ab-9256-ba8293436c7b","block_type":"box","text":"June 30, 2028. BlackRock has contractually agreed to waive its management fees by the amount of investment","page_number":32,"box":{"x":69,"y":683,"width":797,"height":11}},{"id":"c0496f72-6e62-403b-8ad4-b964c0f11388","block_type":"box","text":"advisory fees each Fund pays to BlackRock indirectly through its investment in money market funds managed by","page_number":32,"box":{"x":69,"y":698,"width":801,"height":11}},{"id":"35cbd7ef-a046-455a-8467-52063bb6c63a","block_type":"box","text":"BlackRock or its affiliates, through June 30, 2028. 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In most cases, these benchmarks are the same as the benchmark or benchmarks against","page_number":35,"box":{"x":70,"y":302,"width":830,"height":11}},{"id":"4c4cd413-558f-40e6-89b9-cfc091ecf83b","block_type":"box","text":"which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among","page_number":35,"box":{"x":68,"y":317,"width":809,"height":11}},{"id":"01c07bf7-ed8d-4422-a61c-905382b54e68","block_type":"box","text":"other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio","page_number":35,"box":{"x":69,"y":332,"width":819,"height":11}},{"id":"9e416de1-0729-4061-bc9e-3c17ae17441c","block_type":"box","text":"manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio","page_number":35,"box":{"x":69,"y":347,"width":805,"height":11}},{"id":"cdfcec55-5d80-4142-9899-1b8a0f17488e","block_type":"box","text":"manager relative to the various benchmarks. Performance of fixed-income funds is measured on a pre-tax and/or","page_number":35,"box":{"x":69,"y":362,"width":807,"height":11}},{"id":"05f4cbb3-daae-41ef-9e58-ca3eabf34387","block_type":"box","text":"after-tax basis over various time periods including 1-, 3- and 5-year periods, as applicable. 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Portfolio","page_number":35,"box":{"x":102,"y":831,"width":760,"height":12}},{"id":"cc946969-5b06-4f17-b3e7-8bae19511fe5","block_type":"box","text":"managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock","page_number":35,"box":{"x":69,"y":846,"width":795,"height":12}},{"id":"abba35ce-6006-4daf-b2ae-4a327f013b5e","block_type":"box","text":"awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive","page_number":35,"box":{"x":69,"y":862,"width":805,"height":11}},{"id":"763fec17-89ae-42b9-8d45-66ffd0675853","block_type":"box","text":"compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a","page_number":35,"box":{"x":69,"y":877,"width":822,"height":11}},{"id":"3545b394-f5fb-41e4-897b-767ab63ab7b8","block_type":"box","text":"given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. In some","page_number":35,"box":{"x":68,"y":892,"width":839,"height":11}},{"id":"8af5426a-e166-4bfa-a1c2-d11f40693621","block_type":"box","text":"cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term","page_number":35,"box":{"x":69,"y":907,"width":802,"height":11}},{"id":"13534705-241a-4091-bb89-c2094048bed2","block_type":"box","text":"I-24","page_number":35,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"3324f556-8222-47df-923e-dfa4750c5792","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":35,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"58b57f45-ffe2-4da4-885c-0f183d71246f","block_type":"box","text":"incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred","page_number":36,"box":{"x":70,"y":45,"width":820,"height":11}},{"id":"e76fc0ec-b278-4168-b8ae-686a5e7f56c7","block_type":"box","text":"BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest","page_number":36,"box":{"x":70,"y":60,"width":801,"height":11}},{"id":"be3f0bda-c7d5-427c-9a30-fe1018d86fdb","block_type":"box","text":"pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio","page_number":36,"box":{"x":70,"y":75,"width":831,"height":11}},{"id":"c75cdda4-ba38-4117-898d-53d0390a8dad","block_type":"box","text":"managers of these Funds have deferred BlackRock, Inc. stock awards.","page_number":36,"box":{"x":69,"y":90,"width":501,"height":11}},{"id":"9c542c83-16b6-43e8-8b1d-ce40d14b810b","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the","page_number":36,"box":{"x":102,"y":113,"width":785,"height":11}},{"id":"390682b5-e2be-4453-96d6-f0aee42582f3","block_type":"box","text":"form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage,","page_number":36,"box":{"x":68,"y":128,"width":836,"height":11}},{"id":"bc17259e-2bea-4d4a-860b-cc7a02fa0f42","block_type":"box","text":"which provides direct alignment of portfolio manager discretionary incentive compensation with investment product","page_number":36,"box":{"x":68,"y":143,"width":821,"height":11}},{"id":"4f510e38-54a3-4ea6-93ac-45d8e26e6e05","block_type":"box","text":"results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only","page_number":36,"box":{"x":69,"y":158,"width":829,"height":11}},{"id":"3c547f0b-4a9d-4393-8e05-52bed007eb2a","block_type":"box","text":"portfolio managers who manage specified products and whose total compensation is above a specified threshold are","page_number":36,"box":{"x":70,"y":173,"width":835,"height":11}},{"id":"201b6d28-7981-4dd6-bf0f-932f2efa9ad7","block_type":"box","text":"eligible to participate in the deferred cash award program.","page_number":36,"box":{"x":69,"y":188,"width":414,"height":12}},{"id":"6801689c-eef3-4347-a6bb-0ffa579f02ef","block_type":"box","text":"Other Compensation Benefits.","page_number":36,"box":{"x":101,"y":211,"width":218,"height":11}},{"id":"8d6b4ba3-3f1d-4ed7-9fdd-ff8b9b8f5021","block_type":"box","text":"In addition to base salary and discretionary incentive compensation, portfolio","page_number":36,"box":{"x":327,"y":211,"width":552,"height":11}},{"id":"b37037b7-30ba-4367-9dfe-4e07899c4ae8","block_type":"box","text":"managers may be eligible to receive or participate in one or more of the following:","page_number":36,"box":{"x":69,"y":226,"width":582,"height":11}},{"id":"ac3243de-00a7-4d0f-a2cf-34391dbdda56","block_type":"box","text":"Incentive Savings Plans","page_number":36,"box":{"x":102,"y":249,"width":167,"height":11}},{"id":"c2c301b0-ebf6-40ce-b6c2-093838f9d139","block_type":"box","text":"— BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock","page_number":36,"box":{"x":274,"y":249,"width":614,"height":11}},{"id":"569729a9-747d-4d51-9a25-b35d7d25d307","block_type":"box","text":"employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the","page_number":36,"box":{"x":69,"y":264,"width":831,"height":11}},{"id":"a1e5c0d6-9b21-4900-b8a4-d55e5e6b54eb","block_type":"box","text":"BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a","page_number":36,"box":{"x":70,"y":279,"width":785,"height":11}},{"id":"4b6c5dd1-c833-40a3-b152-20b53c15e82f","block_type":"box","text":"company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a","page_number":36,"box":{"x":69,"y":293,"width":830,"height":12}},{"id":"93a83629-58ea-4cc2-963b-e11ed07075ca","block_type":"box","text":"company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit","page_number":36,"box":{"x":69,"y":309,"width":799,"height":11}},{"id":"bda95849-5d96-4cb7-bdcd-612e47064dce","block_type":"box","text":"($360,000 for 2026). The RSP offers a range of investment options, including registered investment companies and","page_number":36,"box":{"x":69,"y":324,"width":831,"height":12}},{"id":"8e41f3df-ffdd-4258-a7da-7541b0f8d11c","block_type":"box","text":"collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by","page_number":36,"box":{"x":69,"y":339,"width":798,"height":12}},{"id":"1b6d9476-5275-4e44-aadd-3203b323b8cc","block_type":"box","text":"participants for their own contributions or, absent participant investment direction, are invested into a target date","page_number":36,"box":{"x":70,"y":355,"width":809,"height":11}},{"id":"a403b136-50db-4d66-b007-15ca28b36d7c","block_type":"box","text":"fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for","page_number":36,"box":{"x":68,"y":370,"width":793,"height":11}},{"id":"68e7af65-4e6d-469c-8ec3-72f6a70d318f","block_type":"box","text":"investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date.","page_number":36,"box":{"x":70,"y":385,"width":832,"height":11}},{"id":"deeac0d7-45f3-4942-b2ce-7f92c7b5a8c2","block_type":"box","text":"Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of","page_number":36,"box":{"x":68,"y":400,"width":805,"height":11}},{"id":"85ebf97f-30cb-4682-b357-c8026f849663","block_type":"box","text":"$25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to","page_number":36,"box":{"x":69,"y":414,"width":808,"height":12}},{"id":"756ac151-f31d-438e-8087-1f268d101428","block_type":"box","text":"participate in these plans.","page_number":36,"box":{"x":70,"y":430,"width":185,"height":11}},{"id":"754d8e4a-7646-4b82-abf4-cf2feb172fe2","block_type":"box","text":"Por tfolio Manager Beneficial Holdings","page_number":36,"box":{"x":69,"y":460,"width":268,"height":12}},{"id":"5490dd1e-166f-4d0d-82e8-0f55c0b935b0","block_type":"box","text":"As of , the Fund’s most recently completed fiscal year end, the dollar range of securities beneficially owned by","page_number":36,"box":{"x":101,"y":483,"width":785,"height":11}},{"id":"f8bd0090-63a6-4726-ac75-0e7789c164a8","block_type":"box","text":"the portfolio managers in the Fund is shown below:","page_number":36,"box":{"x":68,"y":498,"width":365,"height":11}},{"id":"711d4e98-feea-495c-b91b-39fbe1f583b3","block_type":"box","text":"Portfolio Manager","page_number":36,"box":{"x":69,"y":537,"width":105,"height":8}},{"id":"de36b4cf-c187-4b3c-b3e2-d5f871d76eb8","block_type":"box","text":"Fund Managed","page_number":36,"box":{"x":599,"y":537,"width":85,"height":8}},{"id":"edf66d13-4ac6-48d7-84e1-c8e4f85b88ff","block_type":"box","text":"Dollar Range of Equity","page_number":36,"box":{"x":759,"y":526,"width":129,"height":9}},{"id":"06572012-542e-4898-a807-513328fcc820","block_type":"box","text":"Securities Beneficially Owned","page_number":36,"box":{"x":736,"y":537,"width":173,"height":8}},{"id":"b1dca4eb-104e-4d50-8eca-d8b7b88202fc","block_type":"box","text":"Phillip Soccio, CFA","page_number":36,"box":{"x":69,"y":554,"width":130,"height":11}},{"id":"9fa7a1a2-0bed-4dfc-b839-65b223bdde81","block_type":"box","text":"..........................................","page_number":36,"box":{"x":209,"y":562,"width":336,"height":1}},{"id":"1b7859d0-943e-4d01-91eb-fa04563ded67","block_type":"box","text":"Pennsylvania Fund $1 - $10,000","page_number":36,"box":{"x":576,"y":554,"width":294,"height":11}},{"id":"fd8b6563-6f50-4f1b-9b81-9ff5cf2f5eda","block_type":"box","text":"New Jersey Fund None","page_number":36,"box":{"x":583,"y":570,"width":258,"height":11}},{"id":"c4ec5441-fae2-47fd-85bf-02a1bbf6890c","block_type":"box","text":"Christian Romaglino, CFA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Jersey Fund","page_number":36,"box":{"x":69,"y":585,"width":631,"height":11}},{"id":"59f4dc41-189f-4f64-bd32-b30020ae31fa","block_type":"box","text":"Pennsylvania Fund","page_number":36,"box":{"x":576,"y":599,"width":130,"height":11}},{"id":"79752b2b-bf8e-4cea-8a4b-9c90d3a71171","block_type":"box","text":"None","page_number":36,"box":{"x":806,"y":585,"width":35,"height":8}},{"id":"15737b96-c14d-415f-b39f-4dec9de76fa9","block_type":"box","text":"None","page_number":36,"box":{"x":806,"y":599,"width":35,"height":9}},{"id":"3cf4983f-ceba-48f4-8239-409d2b2767a4","block_type":"box","text":"Kristi Manidis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Jersey Fund","page_number":36,"box":{"x":70,"y":614,"width":630,"height":11}},{"id":"5b6b8c7c-a5d8-43cd-8394-656379814aa1","block_type":"box","text":"Pennsylvania Fund","page_number":36,"box":{"x":576,"y":629,"width":130,"height":11}},{"id":"7efb9de9-1f50-4a2e-95f8-9e86200d5f14","block_type":"box","text":"$1 - $10,000","page_number":36,"box":{"x":776,"y":613,"width":94,"height":12}},{"id":"48ada167-4edb-4356-af7e-fb15410a3e5c","block_type":"box","text":"$1 - $10,000","page_number":36,"box":{"x":776,"y":628,"width":94,"height":11}},{"id":"f5bf958e-d20b-4867-af1c-96de7ce67946","block_type":"box","text":"Patrick Haskell","page_number":36,"box":{"x":69,"y":644,"width":104,"height":9}},{"id":"a5758542-a7f3-4e6e-a33e-6bc53e2e37bf","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . California","page_number":36,"box":{"x":176,"y":644,"width":479,"height":9}},{"id":"3846ec7b-d3cc-4115-a36c-8079598e43ff","block_type":"box","text":"Fund None","page_number":36,"box":{"x":662,"y":644,"width":179,"height":9}},{"id":"b1933c9c-8f81-4003-ae45-bf6410ff3a79","block_type":"box","text":"Sean Carney","page_number":36,"box":{"x":69,"y":659,"width":90,"height":11}},{"id":"477bd099-e54c-41f4-b3fa-81531199afa2","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . California","page_number":36,"box":{"x":168,"y":659,"width":487,"height":9}},{"id":"7c143dc0-d56e-49d4-8290-bea9d5658e27","block_type":"box","text":"Fund None","page_number":36,"box":{"x":662,"y":659,"width":179,"height":9}},{"id":"7de2f767-c43c-4aab-81d7-a84c3f0b38dd","block_type":"box","text":"Michael Kalinoski, CFA. . . .","page_number":36,"box":{"x":70,"y":674,"width":189,"height":10}},{"id":"db41852b-1e99-4968-af0e-6ba033fb7276","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . California","page_number":36,"box":{"x":266,"y":674,"width":389,"height":9}},{"id":"d51da995-93e8-49c3-817d-89c5ff480897","block_type":"box","text":"Fund $1 - $10,000","page_number":36,"box":{"x":662,"y":673,"width":208,"height":11}},{"id":"fdaa7e35-debd-4da5-99ec-d2ae911b9ee2","block_type":"box","text":"Kevin Maloney, CFA. . .","page_number":36,"box":{"x":70,"y":689,"width":157,"height":11}},{"id":"78509778-8a64-4882-9466-cc6a88a4e6cd","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . California","page_number":36,"box":{"x":233,"y":689,"width":422,"height":9}},{"id":"92e51ceb-d987-43b7-9538-0958d4c10aba","block_type":"box","text":"Fund None","page_number":36,"box":{"x":662,"y":689,"width":179,"height":9}},{"id":"3b06aaba-5fd3-42a9-a2d2-1e1f6ebca7af","block_type":"box","text":"Ryan McDonald, CFA","page_number":36,"box":{"x":70,"y":704,"width":146,"height":11}},{"id":"6f480d16-18b6-4dac-b89c-a98342c4a212","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . California","page_number":36,"box":{"x":225,"y":704,"width":430,"height":9}},{"id":"fa0517e7-c762-4b92-b29a-46500f6f59fe","block_type":"box","text":"Fund $1 - $10,000","page_number":36,"box":{"x":662,"y":704,"width":208,"height":11}},{"id":"d4a018c2-7884-4848-ad45-f8517f8577c2","block_type":"box","text":"Por tfolio Manager Potential Material Conflicts of Interest","page_number":36,"box":{"x":69,"y":751,"width":403,"height":11}},{"id":"c2a55c6c-a2c8-4507-8b96-032e64f4b502","block_type":"box","text":"BlackRock has built a professional working environment, firm-wide compliance culture and compliance","page_number":36,"box":{"x":102,"y":773,"width":727,"height":12}},{"id":"40829adf-e066-4670-a0cc-3533f1c9e255","block_type":"box","text":"procedures and systems designed to protect against potential incentives that may favor one account over another.","page_number":36,"box":{"x":70,"y":789,"width":814,"height":11}},{"id":"bfc4163a-c512-4f1f-9efe-da5fc97b6748","block_type":"box","text":"BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of","page_number":36,"box":{"x":70,"y":804,"width":837,"height":11}},{"id":"02fc0585-c2e6-46ba-87f8-7922c9c945ae","block_type":"box","text":"portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to","page_number":36,"box":{"x":70,"y":819,"width":810,"height":11}},{"id":"5c863ba5-8313-4526-8906-a8f05a14d5a8","block_type":"box","text":"ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment","page_number":36,"box":{"x":69,"y":834,"width":782,"height":11}},{"id":"a0ae5f43-397f-40f0-8380-0f8f622ad5c5","block_type":"box","text":"management and advisory services to numerous clients in addition to the Funds, and BlackRock may, consistent with","page_number":36,"box":{"x":69,"y":849,"width":838,"height":11}},{"id":"3a3391a4-852a-485b-a0e1-f1c4983fc7e0","block_type":"box","text":"applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge","page_number":36,"box":{"x":69,"y":864,"width":828,"height":11}},{"id":"501a9ed0-6703-4967-8537-3a97d7f05dc7","block_type":"box","text":"funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest","page_number":36,"box":{"x":68,"y":879,"width":834,"height":12}},{"id":"ce1109d9-b5a6-4cc7-adec-f802fe1ec2c0","block_type":"box","text":"in the receipt of such fees), which may be the same as or different from those made to the Funds. In addition,","page_number":36,"box":{"x":70,"y":894,"width":785,"height":12}},{"id":"7ee74d94-41d2-4912-9438-7d2ac81b7de3","block_type":"box","text":"BlackRock, its affiliates and significant shareholders and any officer, director, shareholder or employee may or may","page_number":36,"box":{"x":70,"y":909,"width":821,"height":12}},{"id":"61f35eab-1f30-408d-b64b-fce363163bbe","block_type":"box","text":"I-25","page_number":36,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"d7edaafb-8fce-4473-bd87-7ed828a11be0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":36,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"6985c72c-945a-4b2a-b18a-b7f6056f3fbb","block_type":"box","text":"not have an interest in the securities whose purchase and sale BlackRock recommends to the Funds. BlackRock, or","page_number":37,"box":{"x":69,"y":45,"width":827,"height":11}},{"id":"6a2c2f2c-5648-495b-9e91-16d235cdf68c","block_type":"box","text":"any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their","page_number":37,"box":{"x":69,"y":60,"width":832,"height":11}},{"id":"410d4565-f791-470b-99d2-b4e31fa3d07b","block_type":"box","text":"families may take different actions than those recommended to the Funds by BlackRock with respect to the same","page_number":37,"box":{"x":68,"y":75,"width":812,"height":11}},{"id":"c32f2376-f7f6-4303-bd78-a8b606a8b57b","block_type":"box","text":"securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of","page_number":37,"box":{"x":69,"y":90,"width":760,"height":11}},{"id":"891e0a8d-bbde-4a71-9be4-dfe2e1ef3fe7","block_type":"box","text":"companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees","page_number":37,"box":{"x":69,"y":105,"width":834,"height":11}},{"id":"5cfdec38-63d9-48d8-a0ca-cd447fe05d52","block_type":"box","text":"are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the","page_number":37,"box":{"x":69,"y":120,"width":836,"height":12}},{"id":"0d7400b2-6ce9-4c9b-bfa9-2a518ab6b663","block_type":"box","text":"officers, directors and employees of any of them has any substantial economic interest or possesses material non","page_number":37,"box":{"x":69,"y":135,"width":822,"height":11}},{"id":"5c15439e-1e77-4ae9-b52d-2e8ccad0b72a","block_type":"box","text":"public information. Certain portfolio managers also may manage accounts whose investment strategies may at times","page_number":37,"box":{"x":70,"y":150,"width":835,"height":12}},{"id":"d04df61a-4bba-4784-849d-b96fde7e5c1e","block_type":"box","text":"be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing","page_number":37,"box":{"x":69,"y":166,"width":803,"height":11}},{"id":"8fd15182-8e55-4ed4-b0fd-618cedf8a267","block_type":"box","text":"hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts,","page_number":37,"box":{"x":69,"y":181,"width":811,"height":11}},{"id":"76c31aad-0d48-442a-bd21-4fa5f5a31b15","block_type":"box","text":"subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees","page_number":37,"box":{"x":69,"y":196,"width":839,"height":11}},{"id":"11d47e1e-dda7-4bc4-b471-2171ee282774","block_type":"box","text":"earned on such accounts. Currently, the portfolio managers of these Funds are not entitled to receive a portion of","page_number":37,"box":{"x":69,"y":211,"width":813,"height":11}},{"id":"e37a597d-1bcc-4d70-a6d3-df7ee68159a4","block_type":"box","text":"incentive fees of other accounts.","page_number":37,"box":{"x":70,"y":226,"width":231,"height":9}},{"id":"f48ab804-b953-4e46-ab3f-26b737584ce4","block_type":"box","text":"As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock","page_number":37,"box":{"x":101,"y":249,"width":788,"height":11}},{"id":"c8ae0a95-0494-42b4-a366-f082552c7bde","block_type":"box","text":"purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its","page_number":37,"box":{"x":70,"y":264,"width":839,"height":11}},{"id":"601f1ecd-3c49-4356-8d96-e941beeaa9ff","block_type":"box","text":"fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts,","page_number":37,"box":{"x":68,"y":279,"width":823,"height":11}},{"id":"262139a1-40b6-40f5-bb8a-831205c4a0d0","block_type":"box","text":"with no account receiving preferential treatment. To this end, BlackRock has adopted policies that are intended to","page_number":37,"box":{"x":68,"y":294,"width":812,"height":11}},{"id":"c2cce07b-7e12-4fcf-985e-bbc415d79f68","block_type":"box","text":"ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate","page_number":37,"box":{"x":69,"y":309,"width":777,"height":11}},{"id":"7eca786c-867d-428d-9bbd-df2ad21e5dda","block_type":"box","text":"investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.","page_number":37,"box":{"x":70,"y":325,"width":826,"height":10}},{"id":"f0bdcfb0-ef8a-4527-98a6-22b039290286","block_type":"box","text":"Custodian","page_number":37,"box":{"x":69,"y":355,"width":72,"height":9}},{"id":"565f7cd8-ca24-424e-9d40-4a1a765e21f8","block_type":"box","text":"State Street Bank and Trust Company (“State Street”) has been retained to act as custodian for each Fund and","page_number":37,"box":{"x":102,"y":377,"width":794,"height":11}},{"id":"1606c771-ac78-414c-b2a4-e3279ddd0bac","block_type":"box","text":"is located at One Congress Street, Suite 1, Boston, Massachusetts 02114-2016. The custodian, among other","page_number":37,"box":{"x":70,"y":392,"width":787,"height":12}},{"id":"40bd9052-c633-41b7-9445-aa7076044634","block_type":"box","text":"things, maintains a custody account or accounts in the name of each Fund, receives and delivers all assets for each","page_number":37,"box":{"x":68,"y":407,"width":830,"height":12}},{"id":"7731d66c-d51e-41b6-9d19-321fa880d1c4","block_type":"box","text":"Fund upon purchase and upon sale or maturity, and collects and receives all income and other payments and","page_number":37,"box":{"x":70,"y":423,"width":776,"height":11}},{"id":"4233952f-e79c-4d2c-8fa1-b2b446535373","block_type":"box","text":"distributions on account of the assets of each Fund.","page_number":37,"box":{"x":69,"y":438,"width":371,"height":9}},{"id":"54fa23ce-b656-40d6-bd1e-12826143558b","block_type":"box","text":"Accounting Services","page_number":37,"box":{"x":68,"y":468,"width":150,"height":11}},{"id":"ab9fc784-82f4-4cd4-a52c-e4004ad3a635","block_type":"box","text":"State Street serves as the accounting services provider for the Funds. State Street maintains the books of","page_number":37,"box":{"x":102,"y":491,"width":763,"height":11}},{"id":"d12eae02-5e39-4b7f-9315-fef728dcc0d6","block_type":"box","text":"account and other financial records; records general ledger entries; calculates daily net income; reconciles activity to","page_number":37,"box":{"x":69,"y":506,"width":833,"height":11}},{"id":"0b775293-b695-4e1d-817a-0f041e161815","block_type":"box","text":"the trial balance; calculates and publishes daily net asset value; prepares account balances; and provides such other","page_number":37,"box":{"x":68,"y":521,"width":840,"height":11}},{"id":"5bd39b41-b975-497f-900a-bc835b15ff99","block_type":"box","text":"accounting services as may be required. 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Each Fund reimburses the Manager for its","page_number":38,"box":{"x":70,"y":253,"width":811,"height":11}},{"id":"77412a39-c8eb-420d-9746-e7df493ca5a8","block_type":"box","text":"costs in maintaining the service center, which costs include, among other things, employee salaries, leasehold","page_number":38,"box":{"x":69,"y":268,"width":790,"height":12}},{"id":"12f2fb63-0ec3-4154-ba26-dbc7c10683a7","block_type":"box","text":"expenses, and other out-of-pocket expenses which are a component of the transfer agency fees in each Fund’s","page_number":38,"box":{"x":69,"y":283,"width":790,"height":12}},{"id":"4b61caee-a074-40c9-b1b2-33f7b7ba9460","block_type":"box","text":"annual report.","page_number":38,"box":{"x":69,"y":299,"width":99,"height":10}},{"id":"d9d4543b-8373-48ac-aee1-2dc7a49a4f9a","block_type":"box","text":"The following table sets forth the fees paid by the Funds to the Manager pursuant to the Shareholders’","page_number":38,"box":{"x":101,"y":321,"width":734,"height":11}},{"id":"d46cd9e1-5753-442c-9d4d-f6e8f6b6bea6","block_type":"box","text":"Administrative Services Agreement for the periods indicated:","page_number":38,"box":{"x":68,"y":336,"width":432,"height":12}},{"id":"dcce0f86-36f8-4ef3-9af3-9f2ec69e9c30","block_type":"box","text":"California Fund","page_number":38,"box":{"x":70,"y":366,"width":106,"height":10}},{"id":"599489fa-c59c-4a18-a9e1-5e887f0ff05b","block_type":"box","text":"Fees Paid to","page_number":38,"box":{"x":715,"y":395,"width":71,"height":7}},{"id":"b48885f8-70a2-4957-b283-fb56500134de","block_type":"box","text":"the Manager","page_number":38,"box":{"x":711,"y":405,"width":74,"height":9}},{"id":"880b84b6-f381-4c03-b3e0-6d3ff3f133d6","block_type":"box","text":"1","page_number":38,"box":{"x":786,"y":405,"width":3,"height":3}},{"id":"f5aaac99-a612-42b8-b7bc-795f4f4eb917","block_type":"box","text":"Fees Waived 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$2,563","page_number":38,"box":{"x":304,"y":540,"width":586,"height":11}},{"id":"304630c5-6d25-4ba2-b631-dd425e5689dd","block_type":"box","text":"Fiscal Year Ended May 31, 2025","page_number":38,"box":{"x":70,"y":556,"width":230,"height":11}},{"id":"a40247c7-17d3-4a05-91dc-37e8606abc22","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,332 $2,422","page_number":38,"box":{"x":304,"y":555,"width":586,"height":11}},{"id":"90b9b922-01ef-4849-953b-77a2bf3bbb99","block_type":"box","text":"Fiscal Year Ended May 31, 2024","page_number":38,"box":{"x":70,"y":571,"width":230,"height":11}},{"id":"a9d1f90a-c7ca-4f53-baa0-42575d2db07a","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,248 $2,206","page_number":38,"box":{"x":304,"y":570,"width":586,"height":11}},{"id":"9f2fc822-510c-48ca-9c7c-8dad7a445b24","block_type":"box","text":"Pennsylvania 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Though not subject to a sales charge, certain share classes may be subject to","page_number":41,"box":{"x":69,"y":257,"width":833,"height":11}},{"id":"c76d1b13-bc80-4160-a7c2-1e8bc9be43c1","block_type":"box","text":"a CDSC on redemption. For more information on the purchasing and valuation of shares, please see “Purchase of","page_number":41,"box":{"x":69,"y":272,"width":813,"height":11}},{"id":"5f73e1da-0c72-4e76-847c-9ffde3179ff4","block_type":"box","text":"Shares” and “Pricing of Shares” in Part II of this SAI.","page_number":41,"box":{"x":69,"y":287,"width":377,"height":11}},{"id":"10ed3dc7-4ca6-443e-a172-d9a9f9ded62f","block_type":"box","text":"Investor A1 Shares","page_number":41,"box":{"x":684,"y":315,"width":110,"height":8}},{"id":"b430fd09-b1f2-4fac-b871-b08bc9c2f387","block_type":"box","text":"California Fund","page_number":41,"box":{"x":573,"y":344,"width":86,"height":7}},{"id":"d0450ffd-6c6f-43c0-aff1-82180914eddb","block_type":"box","text":"New Jersey","page_number":41,"box":{"x":711,"y":334,"width":65,"height":9}},{"id":"079de328-ce64-4765-983b-6f2b515b3c04","block_type":"box","text":"Fund","page_number":41,"box":{"x":730,"y":344,"width":27,"height":7}},{"id":"834b48c2-b5b1-40ff-b06a-7e31f3e84071","block_type":"box","text":"Pennsylvania","page_number":41,"box":{"x":828,"y":334,"width":75,"height":9}},{"id":"57344307-f921-4ae4-9474-3f8f08f9e803","block_type":"box","text":"Fund","page_number":41,"box":{"x":852,"y":344,"width":27,"height":7}},{"id":"0a0a4282-7677-4b0b-873f-a0beb6a44f92","block_type":"box","text":"Net Assets . . .","page_number":41,"box":{"x":70,"y":362,"width":100,"height":8}},{"id":"c8965ac8-1c81-4a2f-a06f-451957343314","block_type":"box","text":".............................................","page_number":41,"box":{"x":176,"y":369,"width":360,"height":1}},{"id":"eae299d0-a5e8-4077-8d98-be111624b5a9","block_type":"box","text":"$58,315,948 $10,326,348 $4,107,714","page_number":41,"box":{"x":568,"y":361,"width":341,"height":11}},{"id":"a90a3f39-6342-4d91-99f2-801cfa8bc3d4","block_type":"box","text":"Number of Shares Outstanding . . . . . . . . . . . .","page_number":41,"box":{"x":70,"y":377,"width":320,"height":11}},{"id":"07cd27c7-4bc8-4ef6-9cd4-213f4e4aa85c","block_type":"box","text":". . . . . . . . . . . . . . . . . . 4,","page_number":41,"box":{"x":396,"y":377,"width":204,"height":10}},{"id":"2f1b7f64-cafa-4508-9c5c-7ae5fb9d843a","block_type":"box","text":"895,495 1,006,174 416,447","page_number":41,"box":{"x":602,"y":377,"width":306,"height":10}},{"id":"e4987bc0-9eb6-47d3-b0f5-93f808292d5f","block_type":"box","text":"Net Asset Value Per Share (net assets divided by","page_number":41,"box":{"x":70,"y":392,"width":347,"height":11}},{"id":"b05b8ae7-9cec-498a-a50c-2b6ff79cc71a","block_type":"box","text":"number of shares outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.91 $10.26 $9.86","page_number":41,"box":{"x":79,"y":406,"width":830,"height":11}},{"id":"62f28665-6484-4706-bf17-3ef5c29d1a61","block_type":"box","text":"Sales Charge Per Share (4.00% of offering price; 4.17% of net","page_number":41,"box":{"x":69,"y":421,"width":444,"height":12}},{"id":"4cc25cca-47b5-4c05-a6ed-dc74d63be439","block_type":"box","text":"asset value per share). .","page_number":41,"box":{"x":79,"y":436,"width":172,"height":11}},{"id":"c799e3d7-64f3-4c8b-89a3-0a5bfe98defb","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.50 $0.43 $0.41","page_number":41,"box":{"x":257,"y":435,"width":652,"height":11}},{"id":"36262cc7-495e-4b95-ac9a-076de370045b","block_type":"box","text":"Offering Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .","page_number":41,"box":{"x":69,"y":455,"width":467,"height":12}},{"id":"9d54ccfa-6c2f-43d2-a234-cad7c3e781dc","block_type":"box","text":"$12.41 $10.69 $10.27","page_number":41,"box":{"x":612,"y":455,"width":296,"height":10}},{"id":"29096899-a228-476d-bf9e-0eee8d43ebe8","block_type":"box","text":"VII. 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To the extent that a Fund engages in securities","page_number":42,"box":{"x":69,"y":253,"width":799,"height":11}},{"id":"eb3b2c21-3bb5-40d4-b4a0-ac3b6c06be4d","block_type":"box","text":"lending, BlackRock Investment Management, LLC (“BIM”) acts as securities lending agent for the Fund, subject to the","page_number":42,"box":{"x":70,"y":268,"width":838,"height":12}},{"id":"b222fd86-baf7-4daf-b506-d1229163cfa3","block_type":"box","text":"overall supervision of the Manager, pursuant to a written agreement (the “Securities Lending Agency Agreement”).","page_number":42,"box":{"x":69,"y":283,"width":813,"height":12}},{"id":"e4b15e62-8853-4d76-a68b-6241038d9a93","block_type":"box","text":"BIM administers the lending program in accordance with guidelines approved by each Board.","page_number":42,"box":{"x":70,"y":299,"width":657,"height":11}},{"id":"6f8ecc06-cf26-4318-99df-6018c88044fd","block_type":"box","text":"To the extent the Funds engage in securities lending, the Funds retain a portion of the securities lending income","page_number":42,"box":{"x":101,"y":321,"width":800,"height":11}},{"id":"a29df8e8-ea57-464a-a00c-a2a8f14baf4c","block_type":"box","text":"and remit the remaining portion to BIM as compensation for its services as securities lending agent. Securities","page_number":42,"box":{"x":69,"y":336,"width":794,"height":12}},{"id":"8f207648-c7dd-48fd-b138-67269bf5b9b5","block_type":"box","text":"lending income is generally equal to the total of income earned from the reinvestment of cash collateral (and","page_number":42,"box":{"x":70,"y":351,"width":774,"height":12}},{"id":"e3febf68-0cef-454a-89a0-68446d5b2cb5","block_type":"box","text":"excludes collateral investment fees as defined below), and any fees or other payments to and from borrowers of","page_number":42,"box":{"x":69,"y":366,"width":801,"height":12}},{"id":"d739da8b-b46d-4840-8f09-ee70ad6332e6","block_type":"box","text":"securities. As securities lending agent, BIM bears all operational costs directly related to securities lending. Each","page_number":42,"box":{"x":69,"y":382,"width":807,"height":11}},{"id":"6a98d830-d0b7-46f5-af63-80d119692938","block_type":"box","text":"Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a","page_number":42,"box":{"x":70,"y":397,"width":821,"height":11}},{"id":"d8351d03-ce2c-43b9-860d-812e3ef0b145","block_type":"box","text":"money market fund managed by BlackRock (the “collateral investment fees”); however, the securities lending agent","page_number":42,"box":{"x":69,"y":412,"width":823,"height":11}},{"id":"5cc1a1d4-d2ab-4c68-a645-64f459289360","block_type":"box","text":"has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral","page_number":42,"box":{"x":69,"y":427,"width":809,"height":11}},{"id":"47adb820-64f6-454f-ab33-f8500f2386b4","block_type":"box","text":"investment fees a Fund bears to an annual rate of 0.04%. Such money market fund shares will not be subject to a","page_number":42,"box":{"x":70,"y":442,"width":814,"height":11}},{"id":"9a08912c-ba87-4df9-8065-246c52cac200","block_type":"box","text":"sales load, distribution fee or service fee. To the extent that a Fund invests cash collateral in a non-government","page_number":42,"box":{"x":69,"y":457,"width":795,"height":12}},{"id":"03c72e1c-1cb0-4c39-9f9c-0feb3a372301","block_type":"box","text":"money market fund, the Fund may be subject to a discretionary liquidity fee of up to 2% on all redemptions.","page_number":42,"box":{"x":69,"y":472,"width":765,"height":12}},{"id":"bced22ee-4468-46a0-9051-e48eca239786","block_type":"box","text":"Discretionary liquidity fees may be imposed or terminated at any time at the discretion of the board of directors of","page_number":42,"box":{"x":70,"y":487,"width":814,"height":12}},{"id":"d2cc30c1-94ee-4993-806f-df29921e7934","block_type":"box","text":"the money market fund, or its delegate, if it is determined that such fee would be, or would not be, respectively, in","page_number":42,"box":{"x":68,"y":503,"width":815,"height":11}},{"id":"bedae1e2-65df-4b79-88a0-55c9e284215b","block_type":"box","text":"the best interest of the money market fund. Additionally, a Fund will be subject to a mandatory liquidity fee if the","page_number":42,"box":{"x":68,"y":518,"width":802,"height":11}},{"id":"8048b98c-8427-49c7-90ed-0834628cba70","block_type":"box","text":"money market fund’s total net redemptions on a single day exceed 5% of the money market fund’s net assets,","page_number":42,"box":{"x":69,"y":533,"width":788,"height":11}},{"id":"4c1ed398-b78c-468c-8bd0-7591d53503d4","block_type":"box","text":"unless the liquidity costs are de minimis (i.e., less than one basis point (0.01%)). The money market fund will","page_number":42,"box":{"x":69,"y":548,"width":780,"height":11}},{"id":"cdf46355-961c-4cb4-8a2e-2d292c3f60de","block_type":"box","text":"determine the size of the mandatory liquidity fee by making a good faith estimate of certain costs the money market","page_number":42,"box":{"x":69,"y":563,"width":830,"height":11}},{"id":"501bea7d-508a-4d25-a7de-e21fec46608b","block_type":"box","text":"fund would incur if it were to sell a pro rata amount of each security in the portfolio to satisfy the amount of net","page_number":42,"box":{"x":68,"y":578,"width":796,"height":11}},{"id":"db60f3fa-8e68-4f49-96a1-6f257079cf27","block_type":"box","text":"redemptions on that day. There is no limit to the size of a mandatory liquidity fee. If the money market fund cannot","page_number":42,"box":{"x":69,"y":593,"width":818,"height":11}},{"id":"ec294766-f636-4a57-b969-692c24d2c1ec","block_type":"box","text":"estimate the costs of selling a pro rata amount of each portfolio security in good faith and supported by data, it is","page_number":42,"box":{"x":69,"y":608,"width":814,"height":12}},{"id":"83c19548-adaa-41e0-abb4-f9f23fd14049","block_type":"box","text":"required to apply a default liquidity fee of 1% on the value of shares redeemed on that day. The imposition of any","page_number":42,"box":{"x":69,"y":623,"width":806,"height":12}},{"id":"136fca8a-a753-4915-9e29-09787505e768","block_type":"box","text":"such discretionary or mandatory liquidity fee would reduce the Fund’s returns on securities lending.","page_number":42,"box":{"x":69,"y":639,"width":709,"height":11}},{"id":"37e0dae2-8dd3-4b15-ad99-869d4e3207e9","block_type":"box","text":"Under the securities lending program, each Fund is categorized into one of several specific asset classes. The","page_number":42,"box":{"x":102,"y":661,"width":785,"height":12}},{"id":"6b52b5a3-d0ae-422f-bb12-1d7a563fc263","block_type":"box","text":"determination of the Fund’s asset class category (fixed income, domestic equity, international equity, or fund of","page_number":42,"box":{"x":69,"y":676,"width":796,"height":12}},{"id":"9853c363-f0e5-428c-9e9a-a1812c746375","block_type":"box","text":"funds), each of which may be subject to a different fee arrangement, is based on a methodology agreed to by the","page_number":42,"box":{"x":68,"y":692,"width":809,"height":11}},{"id":"65810ede-17e1-4524-9623-5b56b341d19e","block_type":"box","text":"Trust and BIM.","page_number":42,"box":{"x":68,"y":707,"width":103,"height":9}},{"id":"2b5554fd-bb4a-46da-9ef7-68f9d6dd85d6","block_type":"box","text":"Pursuant to the current securities lending agreement: (i) if the Funds were to engage in securities lending, the","page_number":42,"box":{"x":102,"y":729,"width":782,"height":12}},{"id":"4ff1b0e5-f167-4093-92eb-da0debcc2dba","block_type":"box","text":"Funds retain 82% of securities lending income (which excludes collateral investment fees), and (ii) this amount can","page_number":42,"box":{"x":70,"y":744,"width":818,"height":12}},{"id":"95c7e487-8e8a-487d-975f-ee88cf30ef52","block_type":"box","text":"never be less than 70% of the sum of securities lending income plus collateral investment fees.","page_number":42,"box":{"x":69,"y":760,"width":683,"height":11}},{"id":"4e0135be-eb1d-4a66-980a-5e595b894ff2","block_type":"box","text":"In addition, commencing the business day following the date that the aggregate securities lending income","page_number":42,"box":{"x":102,"y":782,"width":753,"height":12}},{"id":"07525d41-ccbe-401a-9bf2-d072b80731ab","block_type":"box","text":"earned across the BlackRock Fixed-Income Complex in a calendar year exceeds specified thresholds, each Fund,","page_number":42,"box":{"x":69,"y":797,"width":802,"height":12}},{"id":"3713ca1d-c144-4264-95c2-2ee7bae02f48","block_type":"box","text":"pursuant to the current securities lending agreement, will receive for the remainder of that calendar year securities","page_number":42,"box":{"x":70,"y":812,"width":817,"height":12}},{"id":"705bf9b3-2e18-4cf0-82f6-906762e07147","block_type":"box","text":"lending income as follows: (i) if the Funds were to engage in securities lending, 85% of securities lending income","page_number":42,"box":{"x":70,"y":828,"width":803,"height":11}},{"id":"aa765631-65df-4d6e-9480-9e8d4e7cf1fb","block_type":"box","text":"(which excludes collateral investment fees); and (ii) this amount can never be less than 70% of the sum of securities","page_number":42,"box":{"x":69,"y":843,"width":832,"height":11}},{"id":"6af90029-c55e-4bb6-8aa6-7d446a848bd8","block_type":"box","text":"lending income plus collateral investment fees.","page_number":42,"box":{"x":70,"y":858,"width":334,"height":11}},{"id":"2e2f6940-1232-4292-ac90-b5b6a17d2040","block_type":"box","text":"Each Fund had no income and fees/compensation related to its securities lending activities during its most","page_number":42,"box":{"x":102,"y":881,"width":765,"height":11}},{"id":"3531cf74-b1fb-4921-900d-3b799a06718f","block_type":"box","text":"recent fiscal year ended May 31, 2026.","page_number":42,"box":{"x":69,"y":896,"width":281,"height":11}},{"id":"a8e2daff-8a25-42b1-81bb-2ab9db764146","block_type":"box","text":"I-31","page_number":42,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"4349100c-700f-4faa-b31d-22c5b031b4ed","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":42,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b87e4ac6-3e95-48a5-aed4-4d188324776f","block_type":"box","text":"VIII. Additional Information","page_number":43,"box":{"x":68,"y":45,"width":195,"height":9}},{"id":"89c361e4-7313-4515-ab7d-150114504daf","block_type":"box","text":"Counsel.","page_number":43,"box":{"x":101,"y":67,"width":62,"height":9}},{"id":"65e8631f-b82b-416c-9f1b-dd7414257cdb","block_type":"box","text":"Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019 serves as each Fund’s","page_number":43,"box":{"x":169,"y":67,"width":723,"height":12}},{"id":"2e8c8bd7-b946-41d3-a434-9306439cf812","block_type":"box","text":"counsel.","page_number":43,"box":{"x":69,"y":83,"width":58,"height":8}},{"id":"17fa70f1-29a8-4aa9-86e4-3daf92d81ece","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":43,"box":{"x":102,"y":105,"width":352,"height":11}},{"id":"fce30833-f8e5-40d8-8ea8-253933833dc5","block_type":"box","text":"Deloitte & Touche LLP, with offices located at 115 Federal","page_number":43,"box":{"x":461,"y":105,"width":412,"height":11}},{"id":"26d41d40-2736-454d-8721-8c28975661df","block_type":"box","text":"Street, Boston, Massachusetts 02110, serves as the Funds’ independent registered public accounting firm.","page_number":43,"box":{"x":69,"y":120,"width":772,"height":12}},{"id":"8bd0cabf-04e3-4510-8c43-c1504328c817","block_type":"box","text":"Description of Shares","page_number":43,"box":{"x":70,"y":150,"width":153,"height":11}},{"id":"79541d1d-3a21-4331-a5c3-b0f94b59105a","block_type":"box","text":"The California Trust is a business trust organized on March 20, 1985 under the laws of Massachusetts. The","page_number":43,"box":{"x":101,"y":173,"width":774,"height":11}},{"id":"7599061d-e440-4efb-b933-d92fa1069e47","block_type":"box","text":"California Trust is an open-end management investment company currently comprised of one series (“Series”), the","page_number":43,"box":{"x":69,"y":188,"width":817,"height":12}},{"id":"d5e9b563-18b6-4d4c-8847-2f561cbe14a7","block_type":"box","text":"California Fund, which is a separate portfolio offering shares to a selected group of purchasers. The Trustees are","page_number":43,"box":{"x":69,"y":203,"width":808,"height":12}},{"id":"ea781a2e-1b00-4979-af3b-42fe93c98bfa","block_type":"box","text":"authorized to create an unlimited number of Series and, with respect to each Series, to issue an unlimited number of","page_number":43,"box":{"x":69,"y":218,"width":836,"height":11}},{"id":"1f3ba27e-664a-4272-9f9e-dd67fbbdd609","block_type":"box","text":"full and fractional shares of beneficial interest, par value $.10 per share, of different classes and to divide or","page_number":43,"box":{"x":68,"y":233,"width":781,"height":12}},{"id":"e992050c-eecd-4de4-a341-b4a4d3847b61","block_type":"box","text":"combine the shares into a greater or lesser number of shares without thereby changing the proportionate beneficial","page_number":43,"box":{"x":69,"y":249,"width":824,"height":11}},{"id":"43cdc5bc-3778-4dab-9459-5a0c38cbfb78","block_type":"box","text":"interests in the Series. Shareholder approval is not necessary for the authorization of additional Series or classes of","page_number":43,"box":{"x":70,"y":264,"width":831,"height":11}},{"id":"11838610-822a-4965-a0d3-3d86344d96b9","block_type":"box","text":"a Series of the Trust. Effective September 29, 2006, the California Trust changed its name to BlackRock California","page_number":43,"box":{"x":69,"y":279,"width":820,"height":11}},{"id":"61415780-32b3-4acb-bc5b-04fc8414b111","block_type":"box","text":"Municipal Series Trust and the California Fund changed its name to BlackRock California Insured Municipal Bond","page_number":43,"box":{"x":70,"y":294,"width":801,"height":11}},{"id":"ab825b1e-bf4b-4b98-b073-38eae3c651dd","block_type":"box","text":"Fund. 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Jones and Co. 12555 Manchester Road","page_number":47,"box":{"x":70,"y":256,"width":562,"height":9}},{"id":"c813b900-b7b6-44f0-8317-873168950b0d","block_type":"box","text":"St. Louis, MO 63131-3710","page_number":47,"box":{"x":447,"y":271,"width":192,"height":10}},{"id":"ed7138c8-db03-41d7-a90b-21c2e5f89feb","block_type":"box","text":"98.41% Class K Shares","page_number":47,"box":{"x":684,"y":256,"width":210,"height":9}},{"id":"7c808be1-6d45-4572-8cd7-b8c4ec0aee45","block_type":"box","text":"State Tax Issues","page_number":47,"box":{"x":68,"y":302,"width":122,"height":9}},{"id":"745785d1-b76a-4cf2-916d-cbdf6d0b05b9","block_type":"box","text":"California","page_number":47,"box":{"x":70,"y":325,"width":66,"height":9}},{"id":"7a16c6bb-077c-43e7-81cd-caadccb3079e","block_type":"box","text":"So long as, at the close of each quarter of the California Fund’s taxable year, at least 50% of the value of the","page_number":47,"box":{"x":102,"y":348,"width":779,"height":11}},{"id":"de02fddb-51db-4ad7-91e8-007db0cb6cd2","block_type":"box","text":"California Fund’s total assets consists of California municipal securities or certain United States, Puerto Rico, Virgin","page_number":47,"box":{"x":69,"y":363,"width":830,"height":11}},{"id":"461d939e-73e0-40f0-a719-d948269cc33f","block_type":"box","text":"Islands or Guam government obligations the interest on which is exempt from California personal income taxation","page_number":47,"box":{"x":70,"y":378,"width":809,"height":11}},{"id":"1b77edc2-6188-4da6-88fd-89a923c4bb4b","block_type":"box","text":"(collectively “CA-Exempt Obligations”), the California Fund may pay to its shareholders exempt-interest dividends,","page_number":47,"box":{"x":69,"y":393,"width":804,"height":11}},{"id":"c3ffa586-e849-499f-b63c-79eb7658d79e","block_type":"box","text":"which are dividends or parts thereof (other than capital gain dividends) that are paid by the California Fund and","page_number":47,"box":{"x":68,"y":408,"width":791,"height":11}},{"id":"79867a94-5f65-4cc0-badb-6ff5fcd5a5ab","block_type":"box","text":"reported by the California Fund as exempt-interest dividends in a written statement furnished to shareholders, and","page_number":47,"box":{"x":69,"y":423,"width":816,"height":11}},{"id":"2531e994-c539-4df2-a470-c7ca3cb37d82","block_type":"box","text":"such exempt-interest dividends will be treated as an item of interest excludable from the income of California","page_number":47,"box":{"x":69,"y":438,"width":778,"height":11}},{"id":"e014a75a-3562-4ec4-bda5-5508fd79a852","block_type":"box","text":"resident individuals for purposes of the California personal income tax. The California Revenue and Taxation Code","page_number":47,"box":{"x":69,"y":453,"width":810,"height":11}},{"id":"27af6f91-4d2d-48e3-805d-1c0469390eea","block_type":"box","text":"provides special rules with respect to the treatment of differences between the amount of California-exempt interest","page_number":47,"box":{"x":70,"y":469,"width":829,"height":11}},{"id":"954f9459-64a4-4ce6-9d0a-41014f3e7522","block_type":"box","text":"earned by the California Fund, net of amounts that, if the California Fund were treated as an individual, would be","page_number":47,"box":{"x":69,"y":484,"width":802,"height":11}},{"id":"9d590055-37f1-4337-be58-fbb0bdd659d9","block_type":"box","text":"disallowed as deductions under Section 17280 of the California Revenue and Taxation Code (relating to expenses","page_number":47,"box":{"x":69,"y":499,"width":812,"height":11}},{"id":"f58b43e3-2540-466f-a4c5-99fa432b08ad","block_type":"box","text":"allocable to, or incurred or continued to purchase or carry, tax-exempt obligations) or Section 171(a)(2) of the Internal","page_number":47,"box":{"x":69,"y":514,"width":838,"height":11}},{"id":"d6b7d4a5-4d4e-4f6e-9b8f-6643997cf32f","block_type":"box","text":"Revenue Code (relating to bond premium); and shareholders should consult their tax advisors with the respect to the","page_number":47,"box":{"x":70,"y":529,"width":832,"height":11}},{"id":"9bdc398f-a1ce-45ba-a216-791b614df3a7","block_type":"box","text":"applicability of these rules. Dividends designated as attributable to CA-Exempt Obligations that are paid to a","page_number":47,"box":{"x":69,"y":544,"width":770,"height":11}},{"id":"442eaf78-7c0f-4021-8719-cdbfb196a8c4","block_type":"box","text":"corporate shareholder subject to the California corporate franchise tax will be taxable as ordinary income for","page_number":47,"box":{"x":69,"y":559,"width":772,"height":11}},{"id":"aeb70909-760e-48cf-ba7a-757a5b86d517","block_type":"box","text":"purposes of such tax. On the other hand, dividends designated as attributable to CA-Exempt Obligations that are paid","page_number":47,"box":{"x":70,"y":574,"width":835,"height":12}},{"id":"9ec1b461-b92d-4d56-ac5f-45f217330fe5","block_type":"box","text":"to a corporate shareholder subject to the California corporate income tax should not be taxable as ordinary income","page_number":47,"box":{"x":68,"y":589,"width":820,"height":12}},{"id":"1f4853a0-77db-499f-b417-b8bb1069cb7e","block_type":"box","text":"but should be treated in the same manner as such dividends are treated for purposes of the California personal","page_number":47,"box":{"x":69,"y":605,"width":798,"height":11}},{"id":"c3115de4-cd4d-4f86-89dd-8d9b6441eaf3","block_type":"box","text":"income tax, described above. Distributions to shareholders attributable to interest on obligations issued by states","page_number":47,"box":{"x":70,"y":620,"width":811,"height":11}},{"id":"1df4d55e-2b36-4495-9cd8-865bb7787562","block_type":"box","text":"and municipalities other than California and its political subdivisions, as well as distributions attributable to market","page_number":47,"box":{"x":69,"y":635,"width":821,"height":11}},{"id":"c6189613-8a6e-4e10-b1b8-ac8cda7474a8","block_type":"box","text":"discount or short-term or long-term capital gains, are generally subject to California personal income tax, corporate","page_number":47,"box":{"x":69,"y":650,"width":818,"height":11}},{"id":"f327e5d9-fb4a-4336-b96f-dda0e92804bb","block_type":"box","text":"income tax and corporate franchise tax even though all or a portion of such dividends may be exempt from federal","page_number":47,"box":{"x":70,"y":665,"width":812,"height":11}},{"id":"3bd8eb5c-f89c-4370-94c5-07da1089f9d9","block_type":"box","text":"income tax. Interest on indebtedness incurred or continued by a shareholder of the California Fund to purchase or","page_number":47,"box":{"x":70,"y":680,"width":811,"height":11}},{"id":"39308abf-8aff-4a69-be85-390a48204dde","block_type":"box","text":"carry shares of the California Fund generally will not be deductible for California personal or corporate income tax","page_number":47,"box":{"x":69,"y":695,"width":808,"height":12}},{"id":"1469db9d-ce04-42e8-b456-15afa12c1c23","block_type":"box","text":"purposes. It should be noted that California law deviates from the provisions of Subchapter M of Chapter 1 of","page_number":47,"box":{"x":70,"y":710,"width":781,"height":11}},{"id":"632a5209-7026-4bad-9b20-15539719c9ab","block_type":"box","text":"Subtitle A of the Internal Revenue Code, relating to regulated investment companies, in certain potentially material","page_number":47,"box":{"x":69,"y":726,"width":817,"height":11}},{"id":"c9accc17-a9bc-4a9d-af28-e9662fa84c52","block_type":"box","text":"respects.","page_number":47,"box":{"x":69,"y":741,"width":65,"height":11}},{"id":"774e8694-62ee-4d1e-a825-96fb2050f847","block_type":"box","text":"New Jersey","page_number":47,"box":{"x":70,"y":771,"width":80,"height":11}},{"id":"33fb55f7-282a-43ed-bdc0-ff73a3441028","block_type":"box","text":"If the New Jersey Fund qualifies as a “Qualified Investment Fund,” the portion of its distributions that are derived","page_number":47,"box":{"x":102,"y":794,"width":805,"height":11}},{"id":"ddeb49d9-9d6b-4162-9a6c-1fae506d26d7","block_type":"box","text":"from interest or gains on New Jersey Municipal Bonds and other obligations that are exempt from New Jersey state or","page_number":47,"box":{"x":68,"y":809,"width":841,"height":11}},{"id":"fd4e2d1c-852e-4333-be8e-4878cdad0168","block_type":"box","text":"local taxation under New Jersey law or Federal law will be exempt from New Jersey Gross Income Tax, which is New","page_number":47,"box":{"x":70,"y":824,"width":818,"height":11}},{"id":"2d7d3d6c-4706-4fe9-bb37-1bb6e774f60d","block_type":"box","text":"Jersey’s personal income tax. In order to be a Qualified Investment Fund and pass through tax-exempt interest for","page_number":47,"box":{"x":69,"y":839,"width":812,"height":11}},{"id":"ff04adc3-daaf-42db-8af5-d260fc927966","block_type":"box","text":"New Jersey personal income tax purposes, New Jersey statutes require the New Jersey Fund, among other","page_number":47,"box":{"x":70,"y":854,"width":758,"height":11}},{"id":"86740631-5ab9-4019-b11e-1853bc34e243","block_type":"box","text":"requirements, to maintain not less than 80% of the aggregate principal amount of its investments in New Jersey","page_number":47,"box":{"x":69,"y":869,"width":800,"height":11}},{"id":"713a758d-6da3-4a1e-b0d2-630a6e0e48d4","block_type":"box","text":"Municipal Bonds and any other obligations that are statutorily free from State or local taxation under any other act of","page_number":47,"box":{"x":70,"y":884,"width":831,"height":12}},{"id":"caee22fc-5fd1-4d59-9497-a9d8ac86f29e","block_type":"box","text":"New Jersey State or local law or under the laws of the United States at the close of each quarter of the tax year (the","page_number":47,"box":{"x":70,"y":899,"width":827,"height":12}},{"id":"369d25c1-bf29-4a81-8b7b-b5c811cf3ef4","block_type":"box","text":"I-36","page_number":47,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"72063957-828f-4c53-bdc2-a2157dc1fcee","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":47,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c5ce8ae7-88ae-41ce-a5bc-ae8710fc3356","block_type":"box","text":"“80% Test”). For purposes of calculating whether the 80% Test is satisfied, cash and cash items (including","page_number":48,"box":{"x":70,"y":45,"width":759,"height":11}},{"id":"3b090eeb-5a4f-4f2d-b50e-9f86fd76d219","block_type":"box","text":"receivables), financial options, futures, forward contracts and similar financial instruments relating to interest-bearing","page_number":48,"box":{"x":69,"y":60,"width":839,"height":11}},{"id":"204c3eac-fcbd-4079-9a18-c451448f2b05","block_type":"box","text":"obligations, obligations issued at a discount or bond indexes related thereto to the extent such instruments are","page_number":48,"box":{"x":69,"y":75,"width":796,"height":11}},{"id":"7b383f04-37c2-4605-80c6-d3d14431417b","block_type":"box","text":"authorized by Section 851(b) of the Internal Revenue Code are excluded from the principal amount of the New Jersey","page_number":48,"box":{"x":69,"y":90,"width":834,"height":11}},{"id":"eaeb68be-f88f-40fc-a504-b7b8c83c5e26","block_type":"box","text":"Fund’s investments. The New Jersey Fund intends to comply with this requirement so as to enable it to pass through","page_number":48,"box":{"x":70,"y":105,"width":831,"height":11}},{"id":"f43e1874-0a80-4e09-b85c-9ca881af988b","block_type":"box","text":"interest exempt from New Jersey Gross Income Tax. In the event the New Jersey Fund does not so comply,","page_number":48,"box":{"x":70,"y":120,"width":756,"height":11}},{"id":"287c6d78-b07a-4cc0-b992-259d037e6fb9","block_type":"box","text":"distributions by the New Jersey Fund may be taxable to shareholders for New Jersey personal income tax purposes.","page_number":48,"box":{"x":69,"y":135,"width":822,"height":11}},{"id":"e709c8f0-d768-456e-aba9-9483ad6ec9b6","block_type":"box","text":"However, a 1997 New Jersey Tax Court decision held that regardless of whether the New Jersey Fund meets the 80%","page_number":48,"box":{"x":70,"y":150,"width":834,"height":12}},{"id":"26818813-d474-4601-a9b4-60dc4871374a","block_type":"box","text":"Test, all distributions paid by mutual funds to the extent attributable to interest earned on Federal obligations will be","page_number":48,"box":{"x":68,"y":166,"width":830,"height":11}},{"id":"68e998f5-8c0e-4713-aef2-0fd203ba24ee","block_type":"box","text":"exempt from New Jersey personal income tax. Interest on indebtedness incurred or continued to purchase or carry","page_number":48,"box":{"x":69,"y":181,"width":817,"height":11}},{"id":"3ca5ec23-3ac5-4739-bb57-2f97822d1714","block_type":"box","text":"New Jersey Fund shares is not deductible for New Jersey personal income tax purposes.","page_number":48,"box":{"x":70,"y":196,"width":627,"height":11}},{"id":"b8c70076-384a-4e13-9b44-c2d0dcf700c3","block_type":"box","text":"Federally exempt interest dividends and gains paid to a corporate shareholder will be subject to the New Jersey","page_number":48,"box":{"x":102,"y":219,"width":793,"height":11}},{"id":"b2e77e7f-cde8-42fd-8fbd-ceb170c05c92","block_type":"box","text":"corporation business (franchise) tax and may also be subject to state taxes in states other than New Jersey.","page_number":48,"box":{"x":69,"y":234,"width":771,"height":11}},{"id":"a2b6d1d8-c1c2-408e-a7ce-7061d2a942ef","block_type":"box","text":"Accordingly, investors in the New Jersey Fund, including, in particular, corporate investors, should consult their tax","page_number":48,"box":{"x":68,"y":249,"width":814,"height":11}},{"id":"31048303-d331-4040-81d3-bb163a09437e","block_type":"box","text":"advisers with respect to the application of such taxes to an investment in the New Jersey Fund, to the receipt of New","page_number":48,"box":{"x":69,"y":264,"width":834,"height":11}},{"id":"b445648e-c49c-4814-9e5f-57cace553d94","block_type":"box","text":"Jersey Fund dividends and as to their New Jersey tax situation in general.","page_number":48,"box":{"x":69,"y":279,"width":521,"height":11}},{"id":"57f35dd8-e6f6-4651-8d78-ab9ec28193c0","block_type":"box","text":"Under present New Jersey law, a registered investment company (“RIC”), such as the New Jersey Fund, will pay a","page_number":48,"box":{"x":102,"y":302,"width":805,"height":11}},{"id":"fc8f86af-48a2-4c84-a741-7c34ea6d453e","block_type":"box","text":"small minimum tax. But it may be subject to a more significant New Jersey corporate or franchise tax for any year in","page_number":48,"box":{"x":69,"y":317,"width":823,"height":11}},{"id":"d18abd96-c37c-4060-ac35-45da667393c6","block_type":"box","text":"which it does not qualify as a RIC. The New Jersey Fund may be subject to the New Jersey corporation business","page_number":48,"box":{"x":68,"y":332,"width":795,"height":11}},{"id":"8f73bb50-ba71-4256-a7c0-a2bfdce252ed","block_type":"box","text":"(franchise) tax for any taxable year in which it does not qualify as a RIC.","page_number":48,"box":{"x":69,"y":347,"width":508,"height":11}},{"id":"aef5fa8a-15dc-481f-a49e-6c7e14dc9022","block_type":"box","text":"Pennsylvania","page_number":48,"box":{"x":69,"y":377,"width":92,"height":11}},{"id":"c4afb644-9197-400a-bd73-dd1570a6a159","block_type":"box","text":"Distributions by the Pennsylvania Fund that are derived from interest on Pennsylvania Municipal Bonds or from","page_number":48,"box":{"x":102,"y":400,"width":786,"height":11}},{"id":"e2cec733-9154-4f51-8f9a-a7a8ed59f950","block_type":"box","text":"direct obligations of the United States are exempt from Pennsylvania state personal income taxes. However,","page_number":48,"box":{"x":69,"y":415,"width":771,"height":11}},{"id":"21874a6d-a537-4963-b80d-7cf947dc2bc7","block_type":"box","text":"distributions attributable to capital gains derived by the Pennsylvania Fund as well as distributions derived from","page_number":48,"box":{"x":69,"y":430,"width":792,"height":11}},{"id":"e9d5f41c-08af-4c8f-93fb-ac6ba2776015","block_type":"box","text":"investments other than Pennsylvania Municipal Bonds (or from direct obligations of the United States) will be taxable","page_number":48,"box":{"x":70,"y":445,"width":831,"height":12}},{"id":"a8f01a8a-dd7d-40a4-b6dd-9c71d5e7c070","block_type":"box","text":"for Pennsylvania personal income tax purposes. Distributions derived from interest on obligations that are merely","page_number":48,"box":{"x":68,"y":460,"width":808,"height":12}},{"id":"95f6b25e-9faf-4006-9ab2-937958132007","block_type":"box","text":"backed or guaranteed by the U.S. Government (e.g., GNMAs, FNMAs), or on repurchase agreements collateralized by","page_number":48,"box":{"x":69,"y":476,"width":832,"height":11}},{"id":"8ffbd89e-0727-4f72-baf1-d21a3fbcdfa8","block_type":"box","text":"U.S. Government securities, are not exempt from the Pennsylvania personal income tax.","page_number":48,"box":{"x":70,"y":491,"width":626,"height":11}},{"id":"8ca4bd13-ddee-4b6d-9220-5e82d3f3da43","block_type":"box","text":"In the case of residents of the City of Philadelphia, distributions by the Pennsylvania Fund that are derived from","page_number":48,"box":{"x":102,"y":513,"width":792,"height":11}},{"id":"b7baaf9f-50ce-425f-a090-67636fce9970","block_type":"box","text":"interest on Pennsylvania Municipal Bonds (or from direct obligations of the United States), and distributions that are","page_number":48,"box":{"x":70,"y":528,"width":827,"height":12}},{"id":"eb55bf6e-beea-49b6-88d5-2353cefc4490","block_type":"box","text":"designated as capital gain dividends for federal income tax purposes, also will be exempt from the Philadelphia","page_number":48,"box":{"x":69,"y":543,"width":793,"height":12}},{"id":"8f011cf1-fdde-4bea-bf82-1823605d8f69","block_type":"box","text":"School District investment net income tax.","page_number":48,"box":{"x":69,"y":559,"width":300,"height":9}},{"id":"14279ff8-daaf-4582-bce2-3bd6e653254c","block_type":"box","text":"Other Pennsylvania counties, cities and townships generally do not tax individuals on unearned income.","page_number":48,"box":{"x":102,"y":581,"width":736,"height":12}},{"id":"2dfe9c61-8248-4c0e-a310-07c641795d73","block_type":"box","text":"To the extent exempt-interest dividends attributable to Pennsylvania Municipal Bonds are excluded from taxable","page_number":48,"box":{"x":101,"y":604,"width":794,"height":11}},{"id":"fc72c1c7-8420-4ee9-941b-256a17f33382","block_type":"box","text":"income for federal corporate income tax purposes (determined before net operating loss carryovers and special","page_number":48,"box":{"x":70,"y":619,"width":793,"height":11}},{"id":"ef4147a0-c3aa-4b6f-9fb6-b2f5ad7e35da","block_type":"box","text":"deductions), they will not be subject to the Pennsylvania corporate net income tax. Distributions from the","page_number":48,"box":{"x":69,"y":634,"width":747,"height":11}},{"id":"058eed99-39b5-4731-baf2-ae1857f07126","block_type":"box","text":"Pennsylvania Fund derived from interest on direct obligations of the United States also are exempt from the","page_number":48,"box":{"x":69,"y":649,"width":767,"height":12}},{"id":"f9e8e13b-1d0b-46da-85b2-1f300c63883f","block_type":"box","text":"Pennsylvania corporate net income tax. Distributions by the Pennsylvania Fund that are attributable to other sources","page_number":48,"box":{"x":69,"y":665,"width":828,"height":11}},{"id":"1149d9b4-80d0-49cf-907a-2227e73f2936","block_type":"box","text":"(including indirect obligations of the United States such as GNMAs, FNMAs) generally are not exempt and are subject","page_number":48,"box":{"x":69,"y":680,"width":835,"height":11}},{"id":"16b5886e-41cd-44af-92b0-0bd5951c64fd","block_type":"box","text":"to the corporate net income tax.","page_number":48,"box":{"x":68,"y":695,"width":228,"height":11}},{"id":"f6120c0c-1dcb-4601-92ae-6f902a372ffc","block_type":"box","text":"If you are subject to income tax in a state other than Pennsylvania, the dividends derived from Pennsylvania","page_number":48,"box":{"x":102,"y":717,"width":767,"height":12}},{"id":"c9c69061-142d-4984-82ef-dae006b53cfc","block_type":"box","text":"Municipal Bonds generally will not be exempt from income tax in that state.","page_number":48,"box":{"x":70,"y":732,"width":534,"height":12}},{"id":"429aa680-8858-4242-bdf4-24bc67cad15e","block_type":"box","text":"This discussion does not address the extent, if any, to which shares of the Pennsylvania Fund, or interest and","page_number":48,"box":{"x":101,"y":755,"width":783,"height":11}},{"id":"94939b36-51d0-417d-ae83-9e32ae63d5e4","block_type":"box","text":"gain thereon, is subject to, or included in the measure of, the special taxes imposed by the Commonwealth of","page_number":48,"box":{"x":68,"y":770,"width":786,"height":12}},{"id":"0af34d9d-bf82-43fc-b465-758ba1104ebd","block_type":"box","text":"Pennsylvania on banks and other financial institutions or with respect to any privilege, excise, franchise or other tax","page_number":48,"box":{"x":69,"y":785,"width":823,"height":12}},{"id":"96755259-a97c-4c98-8480-1025a5a1a2e6","block_type":"box","text":"imposed on business entities not discussed above. For the complete provisions, reference should be made to the","page_number":48,"box":{"x":70,"y":801,"width":812,"height":11}},{"id":"3d678bdd-74ca-4909-b5b2-a343b57c617c","block_type":"box","text":"applicable state laws. The state laws described above are subject to change by legislative, judicial, or administrative","page_number":48,"box":{"x":69,"y":816,"width":829,"height":11}},{"id":"9a395d57-60b6-45f7-a2d2-74fd51fd1b6e","block_type":"box","text":"action either prospectively or retroactively. Shareholders of the Fund should consult their tax advisers about other","page_number":48,"box":{"x":69,"y":831,"width":809,"height":11}},{"id":"17f875d6-00af-4d51-a38c-fc9bdcdb3885","block_type":"box","text":"state and local tax consequences of their investment in the Fund.","page_number":48,"box":{"x":69,"y":846,"width":466,"height":11}},{"id":"a45ddd8c-72cf-49f4-be23-c61520db3fd9","block_type":"box","text":"I-37","page_number":48,"box":{"x":476,"y":943,"width":26,"height":9}},{"id":"7f95fa62-1485-471a-98cd-1e436f8d7559","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":48,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"cbe4f7d7-fa7f-45d9-b080-7032f4b8df9e","block_type":"box","text":"IX. Financial Statements","page_number":49,"box":{"x":69,"y":45,"width":179,"height":9}},{"id":"fb76b88f-231a-40e5-ad6a-72a1ce493514","block_type":"box","text":"The audited financial statements, financial highlights and notes thereto in the Annual Financial Statements And","page_number":49,"box":{"x":101,"y":67,"width":793,"height":12}},{"id":"c7748089-2333-433c-8921-692935b5ded4","block_type":"box","text":"Additional Information of the California Trust for the fiscal year ended May 31, 2026, and the Annual Financial","page_number":49,"box":{"x":68,"y":82,"width":784,"height":12}},{"id":"f53c72fb-8b08-42b6-9a80-2946a824dfba","block_type":"box","text":"Statements And Additional Information of the Multi-State Trust for the fiscal year ended May 31, 2026, as filed with","page_number":49,"box":{"x":69,"y":98,"width":824,"height":11}},{"id":"bbfd2255-e59e-4555-b477-6c46f2c9fbfc","block_type":"box","text":"the SEC on Form N-CSR (the “2026 Annual Financial Statements“), are incorporated in this SAI by reference. No","page_number":49,"box":{"x":68,"y":113,"width":801,"height":11}},{"id":"ec62c7b9-0aa3-466d-ac60-1a74d72e8ad6","block_type":"box","text":"other parts of the 2026 Annual Financial Statements are incorporated by reference herein. The 2026 Financial","page_number":49,"box":{"x":69,"y":128,"width":788,"height":11}},{"id":"b39e0caf-7f64-46c3-a650-1cfd8727b454","block_type":"box","text":"Statements have been audited by Deloitte & Touche LLP. The report of Deloitte & Touche LLP is incorporated herein","page_number":49,"box":{"x":69,"y":143,"width":823,"height":11}},{"id":"7354039f-0e9a-4e6c-9c53-64175ee4a72d","block_type":"box","text":"by reference. Such 2026 Annual Financial Statements have been incorporated herein in reliance upon the report of","page_number":49,"box":{"x":69,"y":158,"width":821,"height":11}},{"id":"4e2fb845-98b3-49c6-a603-274c4bf21822","block_type":"box","text":"such firm given their authority as experts in accounting and auditing. Additional copies of each Fund’s annual and","page_number":49,"box":{"x":69,"y":173,"width":809,"height":11}},{"id":"2da48dee-59fa-45a3-93e2-4cb683d01b24","block_type":"box","text":"semi-annual reports to shareholders and each Fund’s Annual and Semi-Annual Financial Statements and Additional","page_number":49,"box":{"x":69,"y":188,"width":820,"height":11}},{"id":"9b21f98b-8c31-4c77-bba3-3c0147fc1a77","block_type":"box","text":"Information may be obtained at no charge by telephoning the Distributor at the telephone number appearing on the","page_number":49,"box":{"x":70,"y":203,"width":818,"height":12}},{"id":"da8333dc-f5d0-4dac-b53b-274edf5a8cbc","block_type":"box","text":"front page of this SAI.","page_number":49,"box":{"x":68,"y":218,"width":155,"height":12}},{"id":"39e0f69c-1467-4095-9581-54f6a841f588","block_type":"box","text":"I-38","page_number":49,"box":{"x":476,"y":943,"width":27,"height":9}},{"id":"bce9d9c1-3846-402a-968b-7f0b273cbf4b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":49,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a124eba9-46b7-4c09-af09-3966300063e3","block_type":"box","text":"PART II","page_number":50,"box":{"x":463,"y":45,"width":52,"height":9}},{"id":"1733441a-e137-4ba6-a769-0e255bbf3e63","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be referred to as","page_number":50,"box":{"x":101,"y":67,"width":799,"height":12}},{"id":"069b93e6-baae-433d-b03c-5b5ffd916890","block_type":"box","text":"a “Fund” or collectively with others as the “Funds.” Certain Funds may also be referred to as “Municipal Funds” if","page_number":50,"box":{"x":69,"y":82,"width":813,"height":12}},{"id":"ffa623c9-1bfb-4776-a3b8-a146e4ebc1b1","block_type":"box","text":"they invest certain of their assets in municipal investments described below.","page_number":50,"box":{"x":68,"y":98,"width":546,"height":11}},{"id":"ebde20a8-0b06-4340-be85-ce3c94545bcd","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a Delaware","page_number":50,"box":{"x":102,"y":120,"width":745,"height":12}},{"id":"89680f2f-0319-42f7-8cff-f0a81459a50d","block_type":"box","text":"statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation, shares of common","page_number":50,"box":{"x":69,"y":135,"width":805,"height":11}},{"id":"d0986b2e-d487-4c8b-bd84-20b372d48610","block_type":"box","text":"stock and shares of beneficial interest are referred to herein as “shares” or “Common Stock,” holders of shares of","page_number":50,"box":{"x":69,"y":150,"width":824,"height":11}},{"id":"7d4d26d2-4025-4d51-a406-4da8cf9ee950","block_type":"box","text":"Common Stock are referred to as “shareholders,” the trustees or directors of each Fund are referred to as","page_number":50,"box":{"x":69,"y":166,"width":761,"height":10}},{"id":"f4373a6c-fba6-4644-9538-dba29ed287b8","block_type":"box","text":"“Directors,” the boards of trustees/directors of each Fund are referred to as the “Board of Directors” or the “Board,”","page_number":50,"box":{"x":70,"y":181,"width":835,"height":11}},{"id":"42a96319-37d6-4ba2-8ac3-d6f02977d882","block_type":"box","text":"BlackRock Advisors, LLC, BlackRock Fund Advisors or their respective affiliates is the investment adviser or manager","page_number":50,"box":{"x":70,"y":196,"width":832,"height":11}},{"id":"8c8c416b-572e-4663-b803-1d1cd6018bef","block_type":"box","text":"of each Fund and is referred to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or","page_number":50,"box":{"x":69,"y":211,"width":826,"height":11}},{"id":"90e54ab1-4135-4694-82d0-1f57ae946df6","block_type":"box","text":"management agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":50,"box":{"x":69,"y":226,"width":786,"height":11}},{"id":"1a8d9a0e-deca-43f8-a1f8-eebb8fee482f","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as its “charter.”","page_number":50,"box":{"x":68,"y":241,"width":834,"height":11}},{"id":"ed58916e-c20e-4bd2-8eb7-a26ba2165eb4","block_type":"box","text":"The Investment Company Act of 1940, as amended, is referred to herein as the “Investment Company Act.” The","page_number":50,"box":{"x":68,"y":256,"width":801,"height":11}},{"id":"6696ef88-17cd-4cc0-a63b-307f56cee56f","block_type":"box","text":"Securities Act of 1933, as amended, is referred to herein as the “Securities Act.” The Securities and Exchange","page_number":50,"box":{"x":69,"y":271,"width":793,"height":12}},{"id":"88811514-a79a-4903-a9bf-a2c2b9269613","block_type":"box","text":"Commission is referred to herein as the “Commission” or the “SEC.”","page_number":50,"box":{"x":69,"y":286,"width":492,"height":10}},{"id":"1f20b04a-42a2-4af5-9a94-17664032fdc3","block_type":"box","text":"Certain Funds are “feeder” funds (each, a “Feeder Fund”) that invest all or a portion of their assets in a","page_number":50,"box":{"x":102,"y":309,"width":741,"height":11}},{"id":"1b6a42b7-862f-47cb-92e2-458651b859ee","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each, a “Master","page_number":50,"box":{"x":69,"y":324,"width":824,"height":12}},{"id":"27309cc5-6341-4371-acd6-f48c08ae48eb","block_type":"box","text":"LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All investments are generally","page_number":50,"box":{"x":70,"y":339,"width":814,"height":12}},{"id":"981ade30-0cbf-47e8-a9e3-3beea9271867","block_type":"box","text":"made at the level of the Master Portfolio. This structure is sometimes called a “master/feeder” structure. A Feeder","page_number":50,"box":{"x":69,"y":355,"width":825,"height":11}},{"id":"a213fc1d-41a3-48ea-a089-dc5279d51945","block_type":"box","text":"Fund’s investment results will correspond directly to the investment results of the underlying Master Portfolio in","page_number":50,"box":{"x":70,"y":370,"width":795,"height":11}},{"id":"7f0965eb-efac-43da-92c0-4b88efa0c5da","block_type":"box","text":"which it invests. For simplicity, this SAI uses the term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":50,"box":{"x":68,"y":385,"width":830,"height":11}},{"id":"27bd70a1-e534-4bc8-b6f5-9a0444af6dda","block_type":"box","text":"In addition to containing information about the Funds, Part II of this SAI contains general information about all","page_number":50,"box":{"x":102,"y":407,"width":783,"height":12}},{"id":"401ea56d-5891-4082-a21f-7355dae8a2cd","block_type":"box","text":"funds in the BlackRock-advised fund complex. Certain information contained herein may not be relevant to a","page_number":50,"box":{"x":68,"y":423,"width":772,"height":11}},{"id":"cb402f8b-c68c-47f0-8532-d358f50c5fc4","block_type":"box","text":"particular Fund.","page_number":50,"box":{"x":70,"y":438,"width":109,"height":11}},{"id":"a4075247-bf13-41b8-893c-d93671cfc440","block_type":"box","text":"INVESTMENT RISKS AND CONSIDERATIONS","page_number":50,"box":{"x":314,"y":467,"width":351,"height":10}},{"id":"1c1ea445-bd17-4f94-b506-20ddcaea1e65","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one or more","page_number":50,"box":{"x":102,"y":490,"width":805,"height":11}},{"id":"41c17352-0802-49e5-b5d6-4b99992b55e5","block_type":"box","text":"of the Funds may use, and the risks and considerations associated with those investments and investment","page_number":50,"box":{"x":69,"y":505,"width":765,"height":11}},{"id":"e28797f7-a77c-4230-8a6a-00f27c970a5a","block_type":"box","text":"strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the “Investment Objective and Policies,”","page_number":50,"box":{"x":69,"y":520,"width":811,"height":12}},{"id":"ca227e26-58eb-4880-b3ce-e1d8072d2c83","block_type":"box","text":"“Investment Objectives and Policies” or “Investment Strategies and Risks of the Fund” section, as applicable, of Part","page_number":50,"box":{"x":70,"y":535,"width":837,"height":12}},{"id":"7888afea-1e61-41cb-8b91-49b97d61ca74","block_type":"box","text":"I of this SAI for further information on each Fund’s investment policies and risks. Information contained in this","page_number":50,"box":{"x":70,"y":550,"width":785,"height":11}},{"id":"7fc13e24-8f30-4957-8402-88e1b9fe79ed","block_type":"box","text":"section about the risks and considerations associated with a Fund’s investments and/or investment strategies","page_number":50,"box":{"x":69,"y":566,"width":791,"height":11}},{"id":"e1975d6d-499e-4317-bfde-b7c75a812c43","block_type":"box","text":"applies only to those Funds specifically identified in Part I of this SAI as making each type of investment or using","page_number":50,"box":{"x":69,"y":581,"width":805,"height":11}},{"id":"c978f05a-822e-41b0-bee4-c52920fe465f","block_type":"box","text":"each investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does not form","page_number":50,"box":{"x":69,"y":596,"width":835,"height":11}},{"id":"2f6fb4cf-4344-42c5-8e14-5d471c9bc9fb","block_type":"box","text":"a part of that Covered Fund’s SAI and should not be relied on by investors in that Covered Fund. Only information that","page_number":50,"box":{"x":69,"y":611,"width":840,"height":11}},{"id":"aaa76633-40b9-4e29-a1c1-96f6b2f922d8","block_type":"box","text":"is clearly identified as applicable to a Covered Fund is considered to form a part of that Covered Fund’s SAI.","page_number":50,"box":{"x":70,"y":626,"width":770,"height":11}},{"id":"13c4c925-e734-48b3-929e-f915e42db1b1","block_type":"box","text":"Asset-Backed Securities.","page_number":50,"box":{"x":101,"y":649,"width":183,"height":9}},{"id":"b66547a0-f227-4c88-ac10-a7222e00d20d","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans, installment sale","page_number":50,"box":{"x":290,"y":649,"width":607,"height":11}},{"id":"7c14c310-00f6-4aa7-a5c5-0324ff8f7218","block_type":"box","text":"contracts, credit card receivables or other assets. Asset-backed securities are “pass-through” securities, meaning","page_number":50,"box":{"x":69,"y":664,"width":814,"height":11}},{"id":"040e223e-f7a1-4125-a2d9-49149343f25c","block_type":"box","text":"that principal and interest payments — net of expenses — made by the borrower on the underlying assets (such as","page_number":50,"box":{"x":68,"y":679,"width":825,"height":11}},{"id":"95cd7bac-98f7-4ecc-a46b-03b47d3f9bc8","block_type":"box","text":"credit card receivables) are passed through to a Fund. The value of asset-backed securities, like that of traditional","page_number":50,"box":{"x":69,"y":694,"width":813,"height":11}},{"id":"34c31bfc-771d-4417-93c3-c23c27ed5af6","block_type":"box","text":"fixed-income securities, typically increases when interest rates fall and decreases when interest rates rise. However,","page_number":50,"box":{"x":68,"y":709,"width":830,"height":11}},{"id":"7b0619b1-245a-4568-9ef8-053256c2d98c","block_type":"box","text":"asset-backed securities differ from traditional fixed-income securities because of their potential for prepayment. The","page_number":50,"box":{"x":69,"y":724,"width":827,"height":11}},{"id":"10de91c3-f49e-4c82-82d0-49578c95e058","block_type":"box","text":"price paid by a Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and","page_number":50,"box":{"x":70,"y":739,"width":813,"height":12}},{"id":"e6854b21-5e70-429a-8ec3-f08965750b02","block_type":"box","text":"the average life of the securities are based on a number of factors, including the anticipated rate of prepayment of","page_number":50,"box":{"x":68,"y":755,"width":818,"height":11}},{"id":"5e140ab7-42d8-4e9d-a2fa-a7beab0b7720","block_type":"box","text":"the underlying assets. In a period of declining interest rates, borrowers may prepay the underlying assets more","page_number":50,"box":{"x":68,"y":770,"width":792,"height":11}},{"id":"ad385630-8c6f-457c-8505-c5a5fa4eec4a","block_type":"box","text":"quickly than anticipated, thereby reducing the yield to maturity and the average life of the asset-backed securities.","page_number":50,"box":{"x":69,"y":785,"width":811,"height":11}},{"id":"42b8570f-c8ec-438a-967b-26487404b0a8","block_type":"box","text":"Moreover, when a Fund reinvests the proceeds of a prepayment in these circumstances, it will likely receive a rate of","page_number":50,"box":{"x":70,"y":800,"width":832,"height":11}},{"id":"9bc2752a-fd8e-4482-ab7f-7746dd746a81","block_type":"box","text":"interest that is lower than the rate on the security that was prepaid. To the extent that a Fund purchases asset","page_number":50,"box":{"x":70,"y":815,"width":792,"height":11}},{"id":"fc931850-3e28-4e74-aeef-acfd56fceb87","block_type":"box","text":"backed securities at a premium, prepayments may result in a loss to the extent of the premium paid. If a Fund buys","page_number":50,"box":{"x":69,"y":830,"width":825,"height":11}},{"id":"3eff96e6-ce68-422f-9d27-55a4f4410f82","block_type":"box","text":"such securities at a discount, both scheduled payments and unscheduled prepayments will increase current and total","page_number":50,"box":{"x":69,"y":846,"width":838,"height":10}},{"id":"411017a0-151a-4cf9-863d-1e9b98be28f2","block_type":"box","text":"returns and unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":50,"box":{"x":69,"y":860,"width":793,"height":12}},{"id":"133180cd-f8bd-4e2e-b524-d5834a27ffe4","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the underlying","page_number":50,"box":{"x":69,"y":875,"width":819,"height":12}},{"id":"a426af86-0bff-49d2-99a6-f855a2d40a48","block_type":"box","text":"assets may occur at a slower than expected rate, creating maturity extension risk. This particular risk may effectively","page_number":50,"box":{"x":69,"y":891,"width":834,"height":11}},{"id":"c3b22c4d-551a-48b2-a6b8-8371d0ab60b5","block_type":"box","text":"change a security that was considered short- or intermediate-term at the time of purchase into a longer term security.","page_number":50,"box":{"x":69,"y":906,"width":837,"height":11}},{"id":"d3816950-5f0b-47c8-b86a-aa28987edd77","block_type":"box","text":"II-1","page_number":50,"box":{"x":478,"y":943,"width":23,"height":9}},{"id":"35fbd276-2575-415a-8a3b-0094cbb4097c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":50,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"67a2968e-ccf2-49f9-923e-da661f6e73ed","block_type":"box","text":"Since the value of longer-term securities generally fluctuates more widely in response to changes in interest rates","page_number":51,"box":{"x":69,"y":45,"width":810,"height":11}},{"id":"c0d0128c-29f4-4ecb-9fa2-43315416530a","block_type":"box","text":"than does the value of shorter-term securities, maturity extension risk could increase the volatility of the Fund. When","page_number":51,"box":{"x":68,"y":60,"width":833,"height":11}},{"id":"906e0e2f-55d4-4c37-9440-593432eb3362","block_type":"box","text":"interest rates decline, the value of an asset-backed security with prepayment features may not increase as much as","page_number":51,"box":{"x":70,"y":75,"width":827,"height":11}},{"id":"99704e48-2104-4108-9405-069d280af4b3","block_type":"box","text":"that of other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate or","page_number":51,"box":{"x":68,"y":90,"width":805,"height":11}},{"id":"211b41c8-1a8a-4ecf-912e-63b321ec7ad0","block_type":"box","text":"retard prepayments and thus affect maturities.","page_number":51,"box":{"x":69,"y":105,"width":333,"height":11}},{"id":"f5b87b59-0d16-40a4-8426-79434a819db4","block_type":"box","text":"Asset-Based Securities.","page_number":51,"box":{"x":101,"y":128,"width":173,"height":9}},{"id":"9ca912a6-3b00-41e5-a6ca-553d21aa40fe","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the principal","page_number":51,"box":{"x":281,"y":128,"width":582,"height":11}},{"id":"e242343d-40bb-46fd-b322-d93763ceded6","block_type":"box","text":"amount, redemption terms or conversion terms of which are related to the market price of some natural resource","page_number":51,"box":{"x":69,"y":143,"width":808,"height":11}},{"id":"a4cbe1c7-7e18-4fb1-8906-9043d7f3197a","block_type":"box","text":"asset such as gold bullion. These securities are referred to as “asset-based securities.” A Fund will purchase only","page_number":51,"box":{"x":69,"y":158,"width":815,"height":11}},{"id":"68be2afa-b510-4f07-90ff-f8f612bbc1b4","block_type":"box","text":"asset-based securities that are rated, or are issued by issuers that have outstanding debt obligations rated,","page_number":51,"box":{"x":69,"y":173,"width":769,"height":11}},{"id":"5edd13b2-84ad-44d6-96f8-93a5216b3c59","block_type":"box","text":"investment grade (for example, AAA, AA, A or BBB by S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by","page_number":51,"box":{"x":70,"y":188,"width":833,"height":12}},{"id":"c8fbdcb7-390e-46f5-9e14-1bd432b2e5ba","block_type":"box","text":"Moody’s Investors Service, Inc. (“Moody’s”) or commercial paper rated A-1 by S&P or Prime-1 by Moody’s) or by","page_number":51,"box":{"x":70,"y":203,"width":795,"height":12}},{"id":"f5c4f062-0fa4-4fc1-b7f4-5732fad5ea72","block_type":"box","text":"issuers that the Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":51,"box":{"x":70,"y":218,"width":824,"height":12}},{"id":"49ea5bff-1e7a-4ee0-a23d-72d461ed64ff","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and may be more","page_number":51,"box":{"x":69,"y":234,"width":832,"height":11}},{"id":"7947fae2-1a05-47b8-a561-b39373a7381f","block_type":"box","text":"likely to be downgraded than securities rated in the three highest rating categories. If an asset-based security is","page_number":51,"box":{"x":70,"y":249,"width":797,"height":11}},{"id":"a53a07a3-f9a2-449c-bd7e-f877aab9673e","block_type":"box","text":"backed by a bank letter of credit or other similar facility, the Manager may take such backing into account in","page_number":51,"box":{"x":69,"y":264,"width":768,"height":11}},{"id":"ae395b26-545d-4e97-bfed-e2f9e8175fef","block_type":"box","text":"determining the creditworthiness of the issuer. While the market prices for an asset-based security and the related","page_number":51,"box":{"x":69,"y":279,"width":819,"height":11}},{"id":"7c891e0e-be07-4fe0-a334-53bf028be62e","block_type":"box","text":"natural resource asset generally are expected to move in the same direction, there may not be perfect correlation in","page_number":51,"box":{"x":69,"y":294,"width":829,"height":11}},{"id":"a43a010f-aab6-4fc9-8ab1-0a89ea81fae7","block_type":"box","text":"the two price movements. Asset-based securities may not be secured by a security interest in or claim on the","page_number":51,"box":{"x":68,"y":309,"width":780,"height":11}},{"id":"a29a2d46-efa7-4944-ba40-8cccd6b40666","block_type":"box","text":"underlying natural resource asset. The asset-based securities in which a Fund may invest may bear interest or pay","page_number":51,"box":{"x":69,"y":325,"width":815,"height":11}},{"id":"22c8c51d-e371-4d5d-819e-361d02e6ffb6","block_type":"box","text":"preferred dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be payable","page_number":51,"box":{"x":70,"y":339,"width":837,"height":12}},{"id":"f416ccec-1f36-424d-b04e-908471a628d5","block_type":"box","text":"at maturity in cash at the stated principal amount or, at the option of the holder, directly in a stated amount of the","page_number":51,"box":{"x":69,"y":355,"width":812,"height":11}},{"id":"07530385-825f-47a4-8d2d-a5a3241c9af1","block_type":"box","text":"asset to which it is related. In such instance, because no Fund presently intends to invest directly in natural resource","page_number":51,"box":{"x":69,"y":370,"width":836,"height":11}},{"id":"0d772314-266b-477d-bbc8-44b7b98eef21","block_type":"box","text":"assets, a Fund would sell the asset-based security in the secondary market, to the extent one exists, prior to","page_number":51,"box":{"x":69,"y":385,"width":778,"height":11}},{"id":"9eedf9b0-7b6d-4e0b-8fa4-089cc535d7f3","block_type":"box","text":"maturity if the value of the stated amount of the asset exceeds the stated principal amount and thereby realize the","page_number":51,"box":{"x":69,"y":400,"width":819,"height":11}},{"id":"015c5b29-1d67-4d0d-bced-adc75021273a","block_type":"box","text":"appreciation in the underlying asset.","page_number":51,"box":{"x":69,"y":415,"width":258,"height":11}},{"id":"02d421b0-0d54-4595-a73f-e5365ed2578d","block_type":"box","text":"Precious Metal-Related Securities.","page_number":51,"box":{"x":102,"y":438,"width":243,"height":9}},{"id":"d74ec983-bf52-4d18-beff-2caeea7c27a9","block_type":"box","text":"A Fund may invest in the equity and other securities of companies that","page_number":51,"box":{"x":351,"y":438,"width":503,"height":11}},{"id":"3ef58a6c-1d41-4abd-b4c8-097dca79bb7f","block_type":"box","text":"explore for, extract, process or deal in precious metals (","page_number":51,"box":{"x":69,"y":453,"width":398,"height":11}},{"id":"5c6e91dc-8a13-41ff-ad76-1652be1c062c","block_type":"box","text":"e.g.","page_number":51,"box":{"x":469,"y":454,"width":25,"height":10}},{"id":"149fb2bc-d216-4ac2-a31f-4abda438383c","block_type":"box","text":", gold, silver and platinum), and in asset-based securities","page_number":51,"box":{"x":497,"y":453,"width":407,"height":11}},{"id":"0c2c6ef4-2737-4319-86b0-a06d591d686e","block_type":"box","text":"indexed to the value of such metals. Such securities may be purchased when they are believed to be attractively","page_number":51,"box":{"x":70,"y":468,"width":801,"height":11}},{"id":"5e5d9807-a59c-42ba-bf87-696c305dc103","block_type":"box","text":"priced in relation to the value of a company’s precious metal-related assets or when the values of precious metals","page_number":51,"box":{"x":70,"y":483,"width":815,"height":11}},{"id":"672e0832-8c8d-44e7-82dc-9a5eb5a306cd","block_type":"box","text":"are expected to benefit from inflationary pressure or other economic, political or financial uncertainty or instability.","page_number":51,"box":{"x":69,"y":498,"width":815,"height":11}},{"id":"964f07f0-89b7-4403-a7b5-88a9e8d7ba4d","block_type":"box","text":"Based on historical experience, during periods of economic or financial instability the securities of companies","page_number":51,"box":{"x":70,"y":513,"width":779,"height":12}},{"id":"b22336bd-a052-42bd-ad16-89521624478f","block_type":"box","text":"involved in precious metals may be subject to extreme price fluctuations, reflecting the high volatility of precious","page_number":51,"box":{"x":70,"y":528,"width":799,"height":12}},{"id":"c3ae7d4c-c60e-417f-94a1-de17101c5456","block_type":"box","text":"metal prices during such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":51,"box":{"x":69,"y":543,"width":838,"height":12}},{"id":"d98b74c9-81e8-4b1a-9689-3ef766c3f075","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such companies. The","page_number":51,"box":{"x":70,"y":559,"width":838,"height":11}},{"id":"784cdf67-4402-49d3-a057-61125ff7b48c","block_type":"box","text":"major producers of gold include the Republic of South Africa, Russia, Canada, the United States, Brazil and Australia.","page_number":51,"box":{"x":69,"y":574,"width":835,"height":11}},{"id":"f3ed2813-fd89-4729-8f81-2e787de45dc3","block_type":"box","text":"Sales of gold by Russia are largely unpredictable and often relate to political and economic considerations rather","page_number":51,"box":{"x":69,"y":589,"width":806,"height":11}},{"id":"78e2cbf6-0951-40aa-a339-5418f311c58c","block_type":"box","text":"than to market forces. Economic, financial, social and political factors within South Africa may significantly affect","page_number":51,"box":{"x":68,"y":604,"width":805,"height":11}},{"id":"904d0fed-f440-410f-8e9b-66367c4e6202","block_type":"box","text":"South African gold production.","page_number":51,"box":{"x":69,"y":619,"width":213,"height":11}},{"id":"a674bc0e-31e6-4c48-a6d2-830b5eadb7fa","block_type":"box","text":"Borrowing and Leverage.","page_number":51,"box":{"x":102,"y":642,"width":179,"height":11}},{"id":"948b32b9-ecfa-4c65-8970-39e24e8959c6","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or emergency","page_number":51,"box":{"x":288,"y":642,"width":563,"height":11}},{"id":"c30a6fc9-fedf-41d7-af07-bb07111ff0dc","block_type":"box","text":"purposes, including to meet redemptions or to settle securities transactions. Certain Funds will not purchase","page_number":51,"box":{"x":70,"y":657,"width":777,"height":11}},{"id":"759e552b-528a-488b-9be9-dbc09a88e5d3","block_type":"box","text":"securities at any time when borrowings exceed 5% of their total assets, except (a) to honor prior commitments or","page_number":51,"box":{"x":69,"y":672,"width":806,"height":11}},{"id":"8fbddb48-3516-4d0f-a438-68148de35a53","block_type":"box","text":"(b) to exercise subscription rights when outstanding borrowings have been obtained exclusively for settlements of","page_number":51,"box":{"x":69,"y":687,"width":810,"height":11}},{"id":"426bacca-54c5-4b1b-abd9-a910773e69ed","block_type":"box","text":"other securities transactions.","page_number":51,"box":{"x":69,"y":703,"width":207,"height":8}},{"id":"49f35a63-247a-4a55-8a6b-763aac56d0df","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s Prospectus.","page_number":51,"box":{"x":102,"y":725,"width":806,"height":11}},{"id":"754613c4-dd80-4c0a-aa67-4878b224789d","block_type":"box","text":"The purchase of securities while borrowings are outstanding will have the effect of leveraging the Fund. Such","page_number":51,"box":{"x":68,"y":740,"width":776,"height":11}},{"id":"f32ce7b4-44f2-4d9c-9525-0a7231ecd017","block_type":"box","text":"leveraging increases the Fund’s exposure to capital risk, and borrowed funds are subject to interest costs that will","page_number":51,"box":{"x":70,"y":755,"width":813,"height":11}},{"id":"f99c8c5b-9bb0-474c-984d-feee6e4042fd","block_type":"box","text":"reduce net income. The use of leverage by a Fund creates an opportunity for greater total return, but, at the same","page_number":51,"box":{"x":69,"y":770,"width":813,"height":12}},{"id":"eb7c187e-4707-445d-81fe-03a6a678a407","block_type":"box","text":"time, creates special risks. For example, leveraging may exaggerate changes in the net asset value (“NAV”) of Fund","page_number":51,"box":{"x":68,"y":785,"width":823,"height":12}},{"id":"1bab498e-d7bd-4994-b49c-c937203f879c","block_type":"box","text":"shares and in the yield on the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s","page_number":51,"box":{"x":69,"y":801,"width":806,"height":11}},{"id":"2e08f85c-f618-4fdb-81fe-85dd84672e84","block_type":"box","text":"assets may change in value during the time the borrowings are outstanding. Borrowings will create interest expenses","page_number":51,"box":{"x":69,"y":816,"width":835,"height":11}},{"id":"d8ae3303-3f0a-4e71-b24f-f6b451bb22e6","block_type":"box","text":"for the Fund that can exceed the income from the assets purchased with the borrowings. To the extent the income or","page_number":51,"box":{"x":68,"y":831,"width":835,"height":11}},{"id":"860094ca-56b6-4170-9640-9588dec58b5e","block_type":"box","text":"capital appreciation derived from securities purchased with borrowed funds exceeds the interest the Fund will have to","page_number":51,"box":{"x":69,"y":846,"width":838,"height":11}},{"id":"f17e8186-562e-46eb-8b62-b228d5f31cc2","block_type":"box","text":"pay on the borrowings, the Fund’s return will be greater than if leverage had not been used. Conversely, if the income","page_number":51,"box":{"x":70,"y":861,"width":835,"height":11}},{"id":"92091587-2826-4406-bada-f70075ee572f","block_type":"box","text":"or capital appreciation from the securities purchased with such borrowed funds is not sufficient to cover the cost of","page_number":51,"box":{"x":69,"y":876,"width":825,"height":11}},{"id":"770cdccc-6d32-4ef4-97a4-81215d459c8e","block_type":"box","text":"borrowing, the return to the Fund will be less than if leverage had not been used and, therefore, the amount available","page_number":51,"box":{"x":69,"y":891,"width":837,"height":12}},{"id":"722ce03b-a644-4841-926d-b465e8b2783b","block_type":"box","text":"for distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best judgment","page_number":51,"box":{"x":68,"y":906,"width":805,"height":12}},{"id":"59dd8b43-8891-4eb7-a0f0-9467fe018600","block_type":"box","text":"II-2","page_number":51,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"61550ce3-e302-451e-8132-237431f1a6d8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":51,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a205c23b-7842-457b-8979-3a3eee7a0afa","block_type":"box","text":"nevertheless may determine to maintain the Fund’s leveraged position if it expects that the benefits to the Fund’s","page_number":52,"box":{"x":69,"y":45,"width":813,"height":11}},{"id":"b3177e86-63d6-4c20-bea1-741f80ed8ce3","block_type":"box","text":"shareholders of maintaining the leveraged position will outweigh the current reduced return.","page_number":52,"box":{"x":69,"y":60,"width":653,"height":11}},{"id":"11f6526c-a67f-48e0-8977-cfe708947515","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit agreements","page_number":52,"box":{"x":102,"y":82,"width":780,"height":12}},{"id":"8524c494-ec21-4b31-9da8-e4348dadba65","block_type":"box","text":"relating to asset coverage, portfolio composition requirements and other matters. It is not anticipated that","page_number":52,"box":{"x":69,"y":98,"width":759,"height":11}},{"id":"11e27238-c829-425b-b3a8-282bc2094ef0","block_type":"box","text":"observance of such covenants would impede the Manager from managing a Fund’s portfolio in accordance with the","page_number":52,"box":{"x":69,"y":113,"width":822,"height":11}},{"id":"78e3e77d-05e8-4034-a7ef-204c98ac2fc0","block_type":"box","text":"Fund’s investment objectives and policies. However, a breach of any such covenants not cured within the specified","page_number":52,"box":{"x":70,"y":128,"width":816,"height":11}},{"id":"24a5f44c-6d9c-487d-809e-429144d8afad","block_type":"box","text":"cure period may result in acceleration of outstanding indebtedness and require the Fund to dispose of portfolio","page_number":52,"box":{"x":69,"y":143,"width":792,"height":11}},{"id":"e5edbab3-0be9-4203-8e6e-0d40319d6824","block_type":"box","text":"investments at a time when it may be disadvantageous to do so.","page_number":52,"box":{"x":70,"y":158,"width":459,"height":11}},{"id":"f7f8aa49-f469-4385-8486-32a9938b5e84","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such borrowings are","page_number":52,"box":{"x":102,"y":181,"width":786,"height":11}},{"id":"b8ca7411-df4c-498d-adb9-31e955d4aaf8","block_type":"box","text":"no less favorable than those available from comparable sources of funds in the marketplace.","page_number":52,"box":{"x":69,"y":196,"width":663,"height":11}},{"id":"28541948-5d7b-4edf-a607-720e76ec87ab","block_type":"box","text":"Cash Management.","page_number":52,"box":{"x":102,"y":219,"width":140,"height":11}},{"id":"47477144-fb73-4750-9aed-42187f4da9cd","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide liquidity","page_number":52,"box":{"x":249,"y":218,"width":603,"height":12}},{"id":"690e4d4e-c6a6-4c27-9c5c-5f144a7b6d42","block_type":"box","text":"necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if considered appropriate","page_number":52,"box":{"x":69,"y":234,"width":828,"height":11}},{"id":"ebc70f1d-738f-402e-bcdc-03fddecd390e","block_type":"box","text":"in the opinion of the Manager, a portion of a Fund’s assets may be invested in certain types of instruments with","page_number":52,"box":{"x":70,"y":249,"width":799,"height":11}},{"id":"1bd6b320-94eb-43c2-b2cf-373566e570c9","block_type":"box","text":"remaining maturities of 397 days or less for liquidity purposes. Such instruments would consist of: (i) obligations of","page_number":52,"box":{"x":69,"y":264,"width":826,"height":11}},{"id":"a86f56f8-28ff-4945-9047-2a77e4a01a97","block_type":"box","text":"the U.S. Government, its agencies, instrumentalities, authorities or political subdivisions (“U.S. Government","page_number":52,"box":{"x":68,"y":279,"width":772,"height":11}},{"id":"576a25ea-6a65-4a27-ad79-862eca32238b","block_type":"box","text":"Securities”); (ii) other fixed-income securities rated Aa or higher by Moody’s or AA or higher by S&P or, if unrated, of","page_number":52,"box":{"x":69,"y":294,"width":823,"height":11}},{"id":"3c323cff-662d-42ba-95e7-b10424b5129b","block_type":"box","text":"comparable quality in the opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable","page_number":52,"box":{"x":69,"y":309,"width":816,"height":11}},{"id":"c9b02c92-4cf5-4562-a1ad-5ac0f4fdc878","block_type":"box","text":"certificates of deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":52,"box":{"x":69,"y":324,"width":804,"height":12}},{"id":"d749cc50-8424-4928-bdc3-72f94826e5fd","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the issuer’s parent must","page_number":52,"box":{"x":70,"y":340,"width":839,"height":11}},{"id":"408a1e3f-14ca-4b91-ada8-05191cf536b2","block_type":"box","text":"have outstanding debt rated Aa or higher by Moody’s or AA or higher by S&P or outstanding commercial paper, bank","page_number":52,"box":{"x":69,"y":355,"width":824,"height":11}},{"id":"bf0c00a3-448c-44a2-9bbb-e6c29fd3ac84","block_type":"box","text":"obligations or other short-term obligations rated Prime-1 by Moody’s or A-1 by S&P; or, if no such ratings are","page_number":52,"box":{"x":69,"y":370,"width":771,"height":11}},{"id":"cd8b030c-b39e-4a91-ade1-4cced2be4690","block_type":"box","text":"available, the instrument must be of comparable quality in the opinion of the Manager. For more information on","page_number":52,"box":{"x":69,"y":385,"width":793,"height":11}},{"id":"cf8beabf-fa15-41df-b55e-ff2e15eaf6f6","block_type":"box","text":"money market instruments, see “Money Market Securities” below.","page_number":52,"box":{"x":69,"y":400,"width":472,"height":11}},{"id":"1b7f7ba4-33ab-49ec-a256-b6c32b92a46b","block_type":"box","text":"Collateralized Debt Obligations.","page_number":52,"box":{"x":102,"y":423,"width":229,"height":11}},{"id":"dbce1094-6de1-4cce-a8c2-367af9c63cd2","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations (“CDOs”), which","page_number":52,"box":{"x":337,"y":423,"width":534,"height":11}},{"id":"4e7db248-d869-4544-94d9-21c9eb05cfb6","block_type":"box","text":"include collateralized bond obligations (“CBOs”), collateralized loan obligations (“CLOs”) and other similarly","page_number":52,"box":{"x":70,"y":438,"width":764,"height":11}},{"id":"db785a0f-f595-43cb-b5fa-a37a27b7fbeb","block_type":"box","text":"structured securities. CDOs are types of asset-backed securities. A CBO is ordinarily issued by a trust or other","page_number":52,"box":{"x":69,"y":453,"width":787,"height":11}},{"id":"5752c9b5-68aa-4e13-8a73-fb977bacde38","block_type":"box","text":"special purpose entity (“SPE”) and is typically backed by a diversified pool of fixed-income securities (which may","page_number":52,"box":{"x":69,"y":468,"width":797,"height":11}},{"id":"322b24c2-0859-42a9-b403-085034ad3855","block_type":"box","text":"include high risk, below investment grade securities) held by such issuer. A CLO is ordinarily issued by a trust or","page_number":52,"box":{"x":70,"y":483,"width":798,"height":11}},{"id":"d62700fe-d148-44c5-adb7-875b7595cbdc","block_type":"box","text":"other SPE and is typically collateralized by a pool of loans, which may include, among others, domestic and non-U.S.","page_number":52,"box":{"x":69,"y":498,"width":827,"height":11}},{"id":"f17228e4-4d2d-48ea-95e2-ac00386707f4","block_type":"box","text":"senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated","page_number":52,"box":{"x":69,"y":514,"width":814,"height":11}},{"id":"882b30ec-7a8d-4ed8-8e17-0a6bd95267e2","block_type":"box","text":"below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO organized outside of","page_number":52,"box":{"x":69,"y":528,"width":828,"height":12}},{"id":"a1baf889-8e8f-4e1b-ae48-345d21848689","block_type":"box","text":"the United States may not be deemed to be foreign securities if the CLO is collateralized by a pool of loans, a","page_number":52,"box":{"x":68,"y":543,"width":782,"height":12}},{"id":"6a413a0d-5ff8-4272-9356-d1c090a2fd15","block_type":"box","text":"substantial portion of which are U.S. loans. Although certain CDOs may benefit from credit enhancement in the form","page_number":52,"box":{"x":69,"y":559,"width":830,"height":11}},{"id":"5164bad5-72f4-43e4-92f6-ef6a252776dc","block_type":"box","text":"of a senior-subordinate structure, over-collateralization or bond insurance, such enhancement may not always be","page_number":52,"box":{"x":69,"y":574,"width":803,"height":11}},{"id":"40b854c6-ad7d-4843-a2b4-fbb4020f4adc","block_type":"box","text":"present, and may fail to protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may","page_number":52,"box":{"x":70,"y":589,"width":827,"height":11}},{"id":"61ad0690-295a-41b7-a737-1d907b38c34c","block_type":"box","text":"use derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly, which","page_number":52,"box":{"x":69,"y":604,"width":807,"height":11}},{"id":"5a159b92-9bb8-41f8-809b-96810db2cc6e","block_type":"box","text":"entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge management fees and","page_number":52,"box":{"x":69,"y":619,"width":826,"height":11}},{"id":"c0dedfad-bd9b-434e-9735-593004c8e1d1","block_type":"box","text":"administrative expenses, which are in addition to those of a Fund.","page_number":52,"box":{"x":69,"y":634,"width":469,"height":11}},{"id":"7fad2e66-07fe-4c99-845b-298fe385accb","block_type":"box","text":"For both CBOs and CLOs, the cash flows from the SPE are split into two or more portions, called tranches,","page_number":52,"box":{"x":102,"y":657,"width":758,"height":11}},{"id":"75c9a88d-e45a-4e3d-b58d-71a1bb86651a","block_type":"box","text":"varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss from defaults from the","page_number":52,"box":{"x":68,"y":672,"width":836,"height":11}},{"id":"25fc636d-6924-4f24-89a5-6640184bbb95","block_type":"box","text":"bonds or loans in the SPE and serves to protect the other, more senior tranches from default (though such protection","page_number":52,"box":{"x":69,"y":687,"width":838,"height":11}},{"id":"1f855c94-862d-41c4-af7e-55e5ae150b30","block_type":"box","text":"is not complete). Since it is partially protected from defaults, a senior tranche from a CBO or CLO typically has higher","page_number":52,"box":{"x":70,"y":702,"width":835,"height":12}},{"id":"88df655d-c58c-4060-9e9f-332f02c3e668","block_type":"box","text":"ratings and lower yields than its underlying securities, and may be rated investment grade. Despite the protection","page_number":52,"box":{"x":69,"y":718,"width":808,"height":11}},{"id":"bf393509-b5a0-4084-bfa6-f2a14c87ffea","block_type":"box","text":"from the equity tranche, CBO or CLO tranches can experience substantial losses due to actual defaults, downgrades","page_number":52,"box":{"x":68,"y":732,"width":830,"height":12}},{"id":"49875602-2727-48e8-afbc-f96b8766abb2","block_type":"box","text":"of the underlying collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage","page_number":52,"box":{"x":69,"y":748,"width":806,"height":11}},{"id":"c5f7b89d-9191-45bc-a636-a1ef69c56a68","block_type":"box","text":"tests, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market","page_number":52,"box":{"x":68,"y":763,"width":809,"height":11}},{"id":"23baf4b0-fd2f-49cf-ae28-020bc8e17fe1","block_type":"box","text":"anticipation of defaults as well as investor aversion to CBO or CLO securities as a class. Interest on certain tranches","page_number":52,"box":{"x":69,"y":778,"width":835,"height":11}},{"id":"2208592a-e661-43c5-aabb-b025a4cdd967","block_type":"box","text":"of a CDO may be paid in kind or deferred and capitalized (paid in the form of obligations of the same type rather than","page_number":52,"box":{"x":69,"y":793,"width":835,"height":11}},{"id":"5aa38f38-0c08-463f-9d6a-ebd86af5c41c","block_type":"box","text":"cash), which involves continued exposure to default risk with respect to such payments.","page_number":52,"box":{"x":69,"y":808,"width":625,"height":11}},{"id":"cd83ddc2-46d8-46b4-8d64-42fe20124092","block_type":"box","text":"The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the","page_number":52,"box":{"x":101,"y":831,"width":789,"height":11}},{"id":"01344320-98a3-4197-b869-545cfe211b57","block_type":"box","text":"CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus are not","page_number":52,"box":{"x":69,"y":846,"width":830,"height":11}},{"id":"205ea08f-ad92-4728-94f3-86f78f5ec98a","block_type":"box","text":"registered under the securities laws. However, an active dealer market may exist for CDOs, allowing a CDO to qualify","page_number":52,"box":{"x":69,"y":861,"width":830,"height":11}},{"id":"fee2317f-d22b-4708-b0de-3a1b1cdd961b","block_type":"box","text":"for Rule 144A transactions. In addition to the normal risks associated with fixed-income securities and asset-backed","page_number":52,"box":{"x":68,"y":876,"width":831,"height":9}},{"id":"73687126-f8a1-44aa-becc-60a98bea2faa","block_type":"box","text":"securities generally discussed elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the","page_number":52,"box":{"x":69,"y":891,"width":824,"height":12}},{"id":"eede8845-4a7d-496a-87d4-862d52dd332f","block_type":"box","text":"possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":52,"box":{"x":70,"y":906,"width":838,"height":12}},{"id":"66ebf0ce-217c-4bb9-9862-51f329e20688","block_type":"box","text":"II-3","page_number":52,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"373951de-de93-43db-88fb-f7ed7055d810","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":52,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7e27b177-0254-49e1-82cf-fac8217c5a24","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally recognized statistical","page_number":53,"box":{"x":69,"y":45,"width":832,"height":11}},{"id":"d333ac2e-787d-4636-9027-e2d3c549fe04","block_type":"box","text":"rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that are subordinate to other tranches;","page_number":53,"box":{"x":69,"y":60,"width":807,"height":11}},{"id":"9861ca53-ea94-4cf4-a20e-81c7db785fb7","block_type":"box","text":"(iv) the structure and complexity of the transaction and the legal documents could lead to disputes among investors","page_number":53,"box":{"x":69,"y":75,"width":826,"height":11}},{"id":"1c7d79e9-28d9-4e72-b107-614c257aac5d","block_type":"box","text":"regarding the characterization of proceeds; (v) the investment return achieved by the Fund could be significantly","page_number":53,"box":{"x":69,"y":90,"width":795,"height":11}},{"id":"1a19e832-e46d-40cb-9d8f-f3eee3ad881c","block_type":"box","text":"different than those predicted by financial models; (vi) the lack of a readily available secondary market for CDOs;","page_number":53,"box":{"x":69,"y":105,"width":804,"height":11}},{"id":"fbfbf7a1-2f23-4951-922f-354c15eb0e83","block_type":"box","text":"(vii) the risk of forced “fire sale” liquidation due to technical defaults such as coverage test failures; and (viii) the","page_number":53,"box":{"x":69,"y":120,"width":805,"height":12}},{"id":"a72aa37e-4569-4458-83fb-cd66564bb56b","block_type":"box","text":"CDO’s manager may perform poorly.","page_number":53,"box":{"x":69,"y":135,"width":257,"height":12}},{"id":"63c6dd11-b8e0-48ec-abc3-4d5355aef45d","block_type":"box","text":"Commercial Paper.","page_number":53,"box":{"x":102,"y":158,"width":136,"height":11}},{"id":"360d42b1-68f6-487d-83f8-e2508078fc1a","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable by each","page_number":53,"box":{"x":244,"y":158,"width":626,"height":11}},{"id":"a39612b8-ed0e-4d19-a3ee-a74a79b66a5f","block_type":"box","text":"Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance on the “private","page_number":53,"box":{"x":70,"y":173,"width":781,"height":11}},{"id":"73f0cc02-32d2-44e2-8ade-79c31ab07f5d","block_type":"box","text":"placement” exemption from registration afforded by Section 4(a)(2) of the Securities Act. Section 4(a)(2) paper is","page_number":53,"box":{"x":70,"y":188,"width":806,"height":12}},{"id":"44f0b77a-0176-4079-b0f9-177fb0363fdb","block_type":"box","text":"restricted as to disposition under the Federal securities laws, and is frequently sold (and resold) to institutional","page_number":53,"box":{"x":69,"y":203,"width":792,"height":12}},{"id":"6a108201-a4b7-46fd-b01c-6403be3ae4df","block_type":"box","text":"investors such as the Fund through or with the assistance of investment dealers who make a market in the Section","page_number":53,"box":{"x":70,"y":218,"width":820,"height":12}},{"id":"13653f14-9732-40c1-92d7-0dedfbf892ba","block_type":"box","text":"4(a)(2) paper, thereby providing liquidity. Certain transactions in Section 4(a)(2) paper may qualify for the registration","page_number":53,"box":{"x":69,"y":234,"width":831,"height":11}},{"id":"a66c3402-1fe7-4204-918f-d60a9be4d4ba","block_type":"box","text":"exemption provided in Rule 144A under the Securities Act. Most Funds can purchase commercial paper rated (at the","page_number":53,"box":{"x":69,"y":249,"width":831,"height":11}},{"id":"e18ca449-4499-4d84-97ef-8f66c931f3c2","block_type":"box","text":"time of purchase) “A-1” by S&P or “Prime-1” by Moody’s or when deemed advisable by a Fund’s Manager or sub","page_number":53,"box":{"x":68,"y":264,"width":805,"height":11}},{"id":"7d901af6-3e4c-4b70-a4bc-ac2d2dd5f346","block_type":"box","text":"adviser, “high quality” issues rated “A-2”, “Prime-2” or “F-2” by S&P, Moody’s or Fitch, respectively.","page_number":53,"box":{"x":69,"y":279,"width":707,"height":11}},{"id":"3e8c0c8c-708f-4bc8-9e8f-81f1ca3ebedb","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all fixed income","page_number":53,"box":{"x":102,"y":302,"width":801,"height":11}},{"id":"b3426d33-aa19-4bb9-972a-b535ad3f1841","block_type":"box","text":"securities, commercial paper prices are susceptible to fluctuations in interest rates. If interest rates rise, commercial","page_number":53,"box":{"x":69,"y":317,"width":836,"height":11}},{"id":"eb398eaf-ab2b-46f2-84e3-d9ff0ab203ab","block_type":"box","text":"paper prices will decline and vice versa. However, the short-term nature of a commercial paper investment generally","page_number":53,"box":{"x":70,"y":332,"width":826,"height":11}},{"id":"7bd1e358-66c3-4037-8e42-0669b09c866f","block_type":"box","text":"makes it less susceptible to volatility than many other fixed income securities because interest rate risk typically","page_number":53,"box":{"x":69,"y":347,"width":803,"height":11}},{"id":"3f94009f-24ab-45df-9620-db82e3f1dd89","block_type":"box","text":"increases as maturity lengths increase. Commercial paper tends to yield smaller returns than longer-term corporate","page_number":53,"box":{"x":70,"y":362,"width":822,"height":11}},{"id":"22c9eed0-412b-405a-ba1f-4e769ad7c27a","block_type":"box","text":"debt because securities with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":53,"box":{"x":69,"y":377,"width":835,"height":12}},{"id":"8d0406b1-2450-411a-906d-92df89e7af59","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":53,"box":{"x":102,"y":400,"width":483,"height":11}},{"id":"0ea7461e-c747-4a4d-872e-17f10b4636fd","block_type":"box","text":"Certain Funds seek to gain exposure to the","page_number":53,"box":{"x":591,"y":400,"width":308,"height":11}},{"id":"9a3a56b0-0e54-46a3-8bd0-bdaacb0fe37f","block_type":"box","text":"commodities markets primarily through investments in hybrid instruments. Hybrid instruments are either equity or","page_number":53,"box":{"x":69,"y":415,"width":809,"height":11}},{"id":"89e5df40-bfd9-40eb-8766-9b4013664b18","block_type":"box","text":"debt derivative securities with one or more commodity-dependent components that have payment features similar to","page_number":53,"box":{"x":69,"y":430,"width":828,"height":11}},{"id":"a0292d6c-2ba0-400d-a216-5a91aee4dba8","block_type":"box","text":"a commodity futures contract, a commodity option contract, or a combination of both. Therefore, these instruments","page_number":53,"box":{"x":69,"y":445,"width":822,"height":11}},{"id":"0f265b17-884c-44e9-9d73-a70100b54877","block_type":"box","text":"are “commodity-linked.” They are considered “hybrid” instruments because they have both commodity-like and","page_number":53,"box":{"x":69,"y":461,"width":787,"height":11}},{"id":"9b796b88-d0fd-484e-8047-5677c40053bc","block_type":"box","text":"security-like characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":53,"box":{"x":69,"y":475,"width":801,"height":12}},{"id":"64d0b51e-6f09-4e26-82ba-f2092c524b1f","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable economic","page_number":53,"box":{"x":69,"y":491,"width":800,"height":11}},{"id":"b01df00e-1568-44eb-84b9-c02a2fd9531e","block_type":"box","text":"variable.","page_number":53,"box":{"x":68,"y":506,"width":59,"height":9}},{"id":"cc565582-437f-4927-a004-588d7d937727","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than investments in","page_number":53,"box":{"x":101,"y":528,"width":763,"height":12}},{"id":"4466c100-c1de-4724-a615-a1ee06d83c52","block_type":"box","text":"traditional equity and debt securities when the value of those traditional securities is declining due to adverse","page_number":53,"box":{"x":68,"y":543,"width":783,"height":12}},{"id":"cac9c488-c035-4ca2-ad56-39439ef17951","block_type":"box","text":"economic conditions. As an example, during periods of rising inflation, debt securities have historically tended to","page_number":53,"box":{"x":69,"y":559,"width":802,"height":11}},{"id":"37447e2b-5a5f-485e-bd1c-9a676934ebc8","block_type":"box","text":"decline in value due to the general increase in prevailing interest rates. Conversely, during those same periods of","page_number":53,"box":{"x":69,"y":574,"width":808,"height":11}},{"id":"12880452-558d-45dd-b6dc-d515095c5f4e","block_type":"box","text":"rising inflation, the prices of certain commodities, such as oil and metals, have historically tended to increase. Of","page_number":53,"box":{"x":69,"y":589,"width":811,"height":11}},{"id":"83abad8d-8279-4647-bb33-7ad37936cbf3","block_type":"box","text":"course, there cannot be any guarantee that these investments will perform in that manner in the future, and at","page_number":53,"box":{"x":69,"y":604,"width":791,"height":11}},{"id":"58e2c60b-cae5-450e-b735-6c2ffaf663b2","block_type":"box","text":"certain times the price movements of commodity-linked instruments have been parallel to those of debt and equity","page_number":53,"box":{"x":69,"y":619,"width":819,"height":11}},{"id":"1da37234-f44e-4788-b485-1db9e802d4ed","block_type":"box","text":"securities. Commodities have historically tended to increase and decrease in value during different parts of the","page_number":53,"box":{"x":69,"y":634,"width":795,"height":12}},{"id":"99ca711a-885d-4e86-8a8d-4a51bb692937","block_type":"box","text":"business cycle than financial assets. Nevertheless, at various times, commodities prices may move in tandem with","page_number":53,"box":{"x":69,"y":649,"width":822,"height":12}},{"id":"8acd750a-0098-4cd2-ac9b-4343271f4812","block_type":"box","text":"the prices of financial assets and thus may not provide overall portfolio diversification benefits. Under favorable","page_number":53,"box":{"x":68,"y":664,"width":797,"height":12}},{"id":"36adaaf7-ea34-4084-885a-eb6f5c4d0a85","block_type":"box","text":"economic conditions, the Fund’s investments may be expected to under-perform an investment in traditional","page_number":53,"box":{"x":69,"y":680,"width":772,"height":11}},{"id":"9769d5ba-fb65-4674-bcda-da326c97285a","block_type":"box","text":"securities. Over the long term, the returns on the Fund’s investments are expected to exhibit low or negative","page_number":53,"box":{"x":69,"y":695,"width":773,"height":11}},{"id":"5ceb447e-6ea5-4d6f-a817-6046516a94cc","block_type":"box","text":"correlation with stocks and bonds.","page_number":53,"box":{"x":69,"y":710,"width":244,"height":9}},{"id":"ce787c9b-2ac8-4c9f-9889-f97f7375a3a8","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":53,"box":{"x":102,"y":732,"width":212,"height":12}},{"id":"77373428-a6fd-470d-82dc-5596711b0cc9","block_type":"box","text":"Certain Funds may invest in hybrid instruments that qualify for exclusion from","page_number":53,"box":{"x":320,"y":732,"width":552,"height":12}},{"id":"4d21ab4a-d4f9-434e-8f9c-2e1067183c58","block_type":"box","text":"regulation under the Commodity Exchange Act and the regulations adopted thereunder. A hybrid instrument that","page_number":53,"box":{"x":69,"y":748,"width":795,"height":11}},{"id":"b2d2a763-dee6-401a-9293-2800a39732e8","block_type":"box","text":"qualifies for this exclusion from regulation must be “predominantly a security.” A hybrid instrument is considered to","page_number":53,"box":{"x":69,"y":763,"width":822,"height":11}},{"id":"7fde99ae-3e5f-47c1-bbc7-19654fcc999c","block_type":"box","text":"be predominantly a security if (a) the issuer of the hybrid instrument receives payment in full of the purchase price of","page_number":53,"box":{"x":69,"y":778,"width":834,"height":11}},{"id":"effb840a-81f4-45b2-b327-397b7ce22ec1","block_type":"box","text":"the hybrid instrument, substantially contemporaneously with delivery of the hybrid instrument; (b) the purchaser or","page_number":53,"box":{"x":68,"y":793,"width":816,"height":11}},{"id":"023b297d-5ba0-4ee4-88a2-d200db5dc4a0","block_type":"box","text":"holder of the hybrid instrument is not required to make any payment to the issuer in addition to the purchase price","page_number":53,"box":{"x":69,"y":808,"width":817,"height":11}},{"id":"2ec4e6ca-b712-4aa2-ba17-5bbd696cc017","block_type":"box","text":"paid under subparagraph (a), whether as margin, settlement payment, or otherwise, during the life of the hybrid","page_number":53,"box":{"x":70,"y":823,"width":793,"height":12}},{"id":"1bdd32c3-3580-4a57-8dd4-bfa499e4f3b6","block_type":"box","text":"instrument or at maturity; (c) the issuer of the hybrid instrument is not subject by the terms of the instrument to","page_number":53,"box":{"x":70,"y":838,"width":798,"height":11}},{"id":"0e5f016c-74f9-4766-963b-684dc1034303","block_type":"box","text":"mark-to-market margining requirements; and (d) the hybrid instrument is not marketed as a contract of sale of a","page_number":53,"box":{"x":69,"y":853,"width":797,"height":12}},{"id":"2e8f10c9-4e23-4348-be1e-7d70f7887882","block_type":"box","text":"commodity for future delivery (or option on such a contract) subject to applicable provisions of the Commodity","page_number":53,"box":{"x":69,"y":869,"width":783,"height":11}},{"id":"f65101e5-2ab4-476e-bbaf-9e9ac6e97217","block_type":"box","text":"Exchange Act. Hybrid instruments may be principal protected, partially protected, or offer no principal protection. A","page_number":53,"box":{"x":70,"y":884,"width":816,"height":11}},{"id":"2bc953dc-3d87-47c2-949f-9bafdfcb5cbc","block_type":"box","text":"principal protected hybrid instrument means that the issuer will pay, at a minimum, the par value of the note at","page_number":53,"box":{"x":70,"y":899,"width":791,"height":11}},{"id":"c5b1a8f6-0e2e-4a12-ae79-a8fca5187aaf","block_type":"box","text":"II-4","page_number":53,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"95579a7e-b870-4c34-862a-b6982d19722d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":53,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"eeabb77f-8f89-4b6f-8024-3ee5d8180275","block_type":"box","text":"maturity. Therefore, if the commodity value to which the hybrid instrument is linked declines over the life of the note,","page_number":54,"box":{"x":69,"y":45,"width":829,"height":11}},{"id":"9861df5c-e642-46e6-b195-c8bf847991b0","block_type":"box","text":"the Fund will receive at maturity the face or stated value of the note. With a principal protected hybrid instrument, the","page_number":54,"box":{"x":68,"y":60,"width":837,"height":11}},{"id":"5a8c1a5a-f68d-487d-95bd-ddc5ec19012c","block_type":"box","text":"Fund will receive at maturity the greater of the par value of the note or the increase in its value based on the","page_number":54,"box":{"x":70,"y":75,"width":772,"height":11}},{"id":"fa407cf8-60a7-477e-a08d-13f6c5c65e1f","block_type":"box","text":"underlying commodity or index. This protection is, in effect, an option whose value is subject to the volatility and price","page_number":54,"box":{"x":69,"y":90,"width":839,"height":11}},{"id":"6cde2732-43e7-4e26-af66-2a5ea2f88f1f","block_type":"box","text":"level of the underlying commodity. The Manager’s decision whether to use principal protection depends in part on the","page_number":54,"box":{"x":70,"y":105,"width":835,"height":11}},{"id":"736b3cf6-8a22-46d5-8089-70447e4f61f2","block_type":"box","text":"cost of the protection. In addition, the protection feature depends upon the ability of the issuer to meet its obligation","page_number":54,"box":{"x":69,"y":120,"width":833,"height":12}},{"id":"618d2232-e88c-4624-b480-7d650e2ea8b8","block_type":"box","text":"to buy back the security, and, therefore, depends on the creditworthiness of the issuer. With full principal protection,","page_number":54,"box":{"x":68,"y":135,"width":831,"height":11}},{"id":"cf4aa023-cba0-499f-9748-f9c0ae0c7612","block_type":"box","text":"the Fund will receive at maturity of the hybrid instrument either the stated par value of the hybrid instrument, or","page_number":54,"box":{"x":68,"y":150,"width":795,"height":12}},{"id":"9586d103-5ee0-43dd-bba9-0bb79708a633","block_type":"box","text":"potentially, an amount greater than the stated par value if the underlying commodity, index, futures contract or","page_number":54,"box":{"x":70,"y":166,"width":784,"height":11}},{"id":"9f10088e-4eda-439d-9126-826e425f4124","block_type":"box","text":"economic variable to which the hybrid instrument is linked has increased in value. Partially protected hybrid","page_number":54,"box":{"x":69,"y":181,"width":765,"height":11}},{"id":"f160cbdd-ac5c-49d8-aa9e-3582956331bd","block_type":"box","text":"instruments may suffer some loss of principal if the underlying commodity, index, futures contract or economic","page_number":54,"box":{"x":70,"y":196,"width":788,"height":11}},{"id":"b7c9dc11-447a-4f23-bf12-ff97fe497b0e","block_type":"box","text":"variable to which the hybrid instrument is linked declines in value during the term of the hybrid instrument. However,","page_number":54,"box":{"x":68,"y":211,"width":828,"height":11}},{"id":"5ccf55a0-dd8a-4c2f-ab3e-7881c3afcdae","block_type":"box","text":"partially protected hybrid instruments have a specified limit as to the amount of principal that they may lose.","page_number":54,"box":{"x":70,"y":226,"width":773,"height":11}},{"id":"eb5d711b-01e2-4635-861a-22ad889d30ed","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":54,"box":{"x":102,"y":249,"width":339,"height":11}},{"id":"bd00a181-ad51-4418-b58b-91a84f22fd87","block_type":"box","text":"Certain Funds may invest in hybrid instruments that offer no","page_number":54,"box":{"x":448,"y":249,"width":429,"height":11}},{"id":"2b81b925-2406-4756-9ff1-f89f8d6c8dbf","block_type":"box","text":"principal protection. At maturity, there is a risk that the underlying commodity price, futures contract, index or other","page_number":54,"box":{"x":70,"y":264,"width":818,"height":11}},{"id":"90c7f91a-4286-4bd0-813a-35996b51d4e7","block_type":"box","text":"economic variable may have declined sufficiently in value such that some or all of the face value of the hybrid","page_number":54,"box":{"x":69,"y":279,"width":780,"height":11}},{"id":"ba0aa8c8-6813-4119-b41c-b6bad56c6ecd","block_type":"box","text":"instrument might not be returned. The Manager, at its discretion, may invest in a partially protected principal","page_number":54,"box":{"x":70,"y":294,"width":773,"height":11}},{"id":"40224264-769d-4f42-b870-ca4d880d2286","block_type":"box","text":"structured note or a note without principal protection. In deciding to purchase a note without principal protection, the","page_number":54,"box":{"x":69,"y":309,"width":832,"height":11}},{"id":"4e7b8502-b95c-4eb3-a0c4-85fc96e1166a","block_type":"box","text":"Manager may consider, among other things, the expected performance of the underlying commodity futures contract,","page_number":54,"box":{"x":70,"y":324,"width":831,"height":12}},{"id":"66c33657-dcfe-4aa6-ad9e-a7faa5995180","block_type":"box","text":"index or other economic variable over the term of the note, the cost of the note, and any other economic factors that","page_number":54,"box":{"x":70,"y":339,"width":831,"height":12}},{"id":"83d9c2ae-b45f-4892-b24c-d41dc46b13be","block_type":"box","text":"the Manager believes are relevant.","page_number":54,"box":{"x":68,"y":355,"width":247,"height":11}},{"id":"7ddfb008-6b05-4034-96c4-dd44abab7fec","block_type":"box","text":"Limitations on Leverage.","page_number":54,"box":{"x":102,"y":377,"width":173,"height":12}},{"id":"fcc3a542-b8ba-4301-864c-839ea754858b","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve leverage. To","page_number":54,"box":{"x":281,"y":377,"width":598,"height":12}},{"id":"5c6a1365-9b68-485d-bc74-1c00b3fd3df4","block_type":"box","text":"avoid being subject to undue leverage risk, a Fund will seek to limit the amount of economic leverage it has under any","page_number":54,"box":{"x":69,"y":392,"width":840,"height":12}},{"id":"1009560e-5b5b-4b9d-8bf5-f81f3fe784d5","block_type":"box","text":"one hybrid instrument that it buys and the leverage of the Fund’s overall portfolio. A Fund will not invest in a hybrid","page_number":54,"box":{"x":69,"y":407,"width":816,"height":12}},{"id":"4350319f-53a0-4bbd-9311-12e698eff3a1","block_type":"box","text":"instrument if, at the time of purchase: (i) that instrument’s “leverage ratio” exceeds 300% of the price increase in","page_number":54,"box":{"x":70,"y":423,"width":812,"height":11}},{"id":"3ae4cf92-1655-4719-a94d-e7c7b308c2b6","block_type":"box","text":"the underlying commodity, futures contract, index or other economic variable or (ii) the Fund’s “portfolio leverage","page_number":54,"box":{"x":68,"y":438,"width":803,"height":11}},{"id":"4ad51c27-2b64-4594-97f6-348904394e85","block_type":"box","text":"ratio” exceeds 150%, measured at the time of purchase. “Leverage ratio” is the expected increase in the value of a","page_number":54,"box":{"x":69,"y":453,"width":826,"height":11}},{"id":"cdcfb630-71d7-49ce-a45c-9484609edd6d","block_type":"box","text":"hybrid instrument, assuming a one percent price increase in the underlying commodity, futures contract, index or","page_number":54,"box":{"x":69,"y":468,"width":803,"height":11}},{"id":"9e0a5aa9-5080-4cf0-8a98-5570af938246","block_type":"box","text":"other economic factor. In other words, for a hybrid instrument with a leverage factor of 150%, a 1% gain in the","page_number":54,"box":{"x":69,"y":483,"width":783,"height":11}},{"id":"6bac821f-bd37-4e5a-9bca-791f1d75d6f0","block_type":"box","text":"underlying economic variable would be expected to result in a 1.5% gain in value for the hybrid instrument.","page_number":54,"box":{"x":69,"y":498,"width":758,"height":11}},{"id":"14a5e23c-a194-4de0-82a3-f180c213f178","block_type":"box","text":"Conversely, a hybrid instrument with a leverage factor of 150% would suffer a 1.5% loss if the underlying economic","page_number":54,"box":{"x":69,"y":513,"width":818,"height":12}},{"id":"f4c922c6-0b9e-4c5f-901b-5d6d68ef6c38","block_type":"box","text":"variable lost 1% of its value. “Portfolio leverage ratio” is defined as the average (mean) leverage ratio of all","page_number":54,"box":{"x":68,"y":528,"width":763,"height":12}},{"id":"5afe8135-2430-46ef-993d-d21541918d63","block_type":"box","text":"instruments in a Fund’s portfolio, weighted by the market values of such instruments or, in the case of futures","page_number":54,"box":{"x":70,"y":543,"width":787,"height":12}},{"id":"cf893eb5-2c6e-47a5-9105-85e2464502c8","block_type":"box","text":"contracts, their notional values. A Fund may at times or from time to time decide not to use leverage in its","page_number":54,"box":{"x":69,"y":559,"width":757,"height":11}},{"id":"03182de6-b275-433e-ad06-a629e406ade1","block_type":"box","text":"investments or use less leverage than may otherwise be allowable.","page_number":54,"box":{"x":70,"y":574,"width":477,"height":11}},{"id":"a7789bea-3b78-4d20-b705-b4124738d93b","block_type":"box","text":"Counterpar ty Risk.","page_number":54,"box":{"x":102,"y":597,"width":130,"height":11}},{"id":"4a6b748b-f45f-4586-9499-92bbab612c47","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded futures","page_number":54,"box":{"x":238,"y":596,"width":646,"height":12}},{"id":"02d440fa-8daa-4e82-beec-8d7ef0ffce41","block_type":"box","text":"and options, which are standard contracts, hybrid instruments are customized securities, tailor-made by a specific","page_number":54,"box":{"x":69,"y":612,"width":813,"height":11}},{"id":"5f1e82ed-c085-418f-a028-28e098d84bc4","block_type":"box","text":"issuer. With a listed futures or options contract, an investor’s counterparty is the exchange clearinghouse. Exchange","page_number":54,"box":{"x":70,"y":627,"width":829,"height":11}},{"id":"d48c66f8-d07a-4274-af9f-9b10fd25828d","block_type":"box","text":"clearinghouses are capitalized by the exchange members and typically have high investment grade ratings (","page_number":54,"box":{"x":69,"y":642,"width":763,"height":11}},{"id":"dd39728a-9490-4f2d-87a9-87c7211733ee","block_type":"box","text":"e.g.","page_number":54,"box":{"x":834,"y":643,"width":25,"height":10}},{"id":"f3884186-1a4d-4d1f-a23b-7462febe7a94","block_type":"box","text":",","page_number":54,"box":{"x":861,"y":649,"width":2,"height":3}},{"id":"ae6dfb9d-bc6f-4829-9be8-e0bd25dd42a8","block_type":"box","text":"ratings of AAA or AA by S&P). Therefore, the risk is small that an exchange clearinghouse might be unable to meet its","page_number":54,"box":{"x":69,"y":657,"width":836,"height":11}},{"id":"79fc627b-a1bd-47fa-8e7e-c38a36d30db1","block_type":"box","text":"obligations at maturity. However, with a hybrid instrument, a Fund will take on the counterparty credit risk of the","page_number":54,"box":{"x":69,"y":672,"width":795,"height":11}},{"id":"c05ec426-6b1f-40a6-8a88-2de9f59b5b14","block_type":"box","text":"issuer. That is, at maturity of the hybrid instrument, there is a risk that the issuer may be unable to perform its","page_number":54,"box":{"x":70,"y":687,"width":791,"height":11}},{"id":"839c46c2-2256-42ec-87ac-e3c53ce29951","block_type":"box","text":"obligations under the structured note.","page_number":54,"box":{"x":69,"y":703,"width":268,"height":11}},{"id":"434b8290-c44e-4314-ac43-60d6818236ed","block_type":"box","text":"Convertible Securities.","page_number":54,"box":{"x":102,"y":725,"width":165,"height":9}},{"id":"5a2aa538-1d09-4085-a9a3-dc35a432acf9","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other security that","page_number":54,"box":{"x":273,"y":725,"width":619,"height":11}},{"id":"16947895-3aac-4f3b-9f9c-cf8137f0c68c","block_type":"box","text":"may be converted into or exchanged for a prescribed amount of common stock or other equity security of the same or","page_number":54,"box":{"x":69,"y":740,"width":839,"height":11}},{"id":"dbfbf861-2831-49aa-b7de-3d069355ede7","block_type":"box","text":"a different issuer within a particular period of time at a specified price or formula. A convertible security entitles the","page_number":54,"box":{"x":69,"y":755,"width":826,"height":11}},{"id":"2a3fe7fe-1ec8-4769-b0ff-36d8cb5b78ba","block_type":"box","text":"holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible","page_number":54,"box":{"x":69,"y":770,"width":781,"height":11}},{"id":"dbf01fc4-9b39-4f65-b483-38b206a4276b","block_type":"box","text":"security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have","page_number":54,"box":{"x":69,"y":785,"width":750,"height":12}},{"id":"7d1194a2-b215-422b-aa1a-90c7430b356a","block_type":"box","text":"characteristics similar to nonconvertible income securities in that they ordinarily provide a stable stream of income","page_number":54,"box":{"x":69,"y":801,"width":819,"height":11}},{"id":"2a975da0-1479-46cc-a944-5cda618add0c","block_type":"box","text":"with generally higher yields than those of common stocks of the same or similar issuers, but lower yields than","page_number":54,"box":{"x":68,"y":816,"width":784,"height":11}},{"id":"fddf8e69-f636-4aab-98f4-9e77703977a0","block_type":"box","text":"comparable nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":54,"box":{"x":69,"y":831,"width":823,"height":11}},{"id":"796f5342-0e35-4ea2-999b-c7a8f7f13383","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The credit","page_number":54,"box":{"x":68,"y":846,"width":780,"height":11}},{"id":"f59d0bd8-01cf-4ef3-bfbd-c054c83c964a","block_type":"box","text":"standing of the issuer and other factors also may have an effect on the convertible security’s investment value.","page_number":54,"box":{"x":69,"y":861,"width":795,"height":11}},{"id":"73a623e6-2178-42cf-882c-6d17b17f2e46","block_type":"box","text":"Convertible securities rank senior to common stock in a corporation’s capital structure but are usually subordinated","page_number":54,"box":{"x":69,"y":876,"width":826,"height":11}},{"id":"43c4b58a-bbec-444a-a1d8-ce86af453aac","block_type":"box","text":"to comparable nonconvertible securities. Convertible securities may be subject to redemption at the option of the","page_number":54,"box":{"x":68,"y":891,"width":811,"height":11}},{"id":"5a138d27-c41a-420c-994f-c6f651a2cfec","block_type":"box","text":"issuer at a price established in the convertible security’s governing instrument.","page_number":54,"box":{"x":70,"y":907,"width":563,"height":11}},{"id":"00d110da-8378-4536-9719-09bb232d94d3","block_type":"box","text":"II-5","page_number":54,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"0e253674-0675-4a09-b362-fc03eb150816","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":54,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"d30cdd77-6ba1-4677-bb7f-14af1f6dc01b","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an investment","page_number":55,"box":{"x":101,"y":45,"width":767,"height":11}},{"id":"fd694025-6d4b-4ff0-afd2-afc13bd8cf0d","block_type":"box","text":"company seeking a high total return from capital appreciation and investment income. These characteristics include","page_number":55,"box":{"x":69,"y":60,"width":826,"height":11}},{"id":"97b7d42c-edbb-4777-80b6-06a12448c647","block_type":"box","text":"the potential for capital appreciation as the value of the underlying common stock increases, the relatively high yield","page_number":55,"box":{"x":68,"y":75,"width":829,"height":11}},{"id":"78d20fc3-10d7-43d0-95ac-18aa5de3995b","block_type":"box","text":"received from dividend or interest payments as compared to common stock dividends and decreased risks of decline","page_number":55,"box":{"x":69,"y":90,"width":834,"height":11}},{"id":"f644ee55-c7e6-4d29-99e3-f7a61eb4b63b","block_type":"box","text":"in value relative to the underlying common stock due to their fixed-income nature. As a result of the conversion","page_number":55,"box":{"x":70,"y":105,"width":788,"height":11}},{"id":"869ac3f3-3b06-4cd9-8017-88e42b887e91","block_type":"box","text":"feature, however, the interest rate or dividend preference on a convertible security is generally less than would be the","page_number":55,"box":{"x":68,"y":120,"width":839,"height":12}},{"id":"26d58aa3-6321-42c7-b33f-584c82453106","block_type":"box","text":"case if the securities were issued in nonconvertible form.","page_number":55,"box":{"x":69,"y":135,"width":409,"height":9}},{"id":"b4bf7ecb-3927-4368-aaf2-9997b6d81b61","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security relative to","page_number":55,"box":{"x":102,"y":158,"width":802,"height":11}},{"id":"9fcbd5eb-d878-4b31-bb08-a9a67b9970da","block_type":"box","text":"its credit quality and the potential capital appreciation that is offered by the underlying common stock, among other","page_number":55,"box":{"x":70,"y":173,"width":824,"height":11}},{"id":"7b7eb6f6-efe7-4b7a-a682-d360ff94c71f","block_type":"box","text":"things.","page_number":55,"box":{"x":68,"y":188,"width":47,"height":12}},{"id":"bd02fdce-436b-43e9-a271-88ab7fbaa865","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":55,"box":{"x":102,"y":211,"width":731,"height":9}},{"id":"7aef7069-e651-425c-bbda-17d85af3bae4","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the underlying equity","page_number":55,"box":{"x":69,"y":226,"width":836,"height":11}},{"id":"72946e0a-77d5-48ed-8c53-a99756261a69","block_type":"box","text":"securities may be quoted in the currency of the country where the issuer is domiciled. As a result, fluctuations in the","page_number":55,"box":{"x":69,"y":241,"width":832,"height":11}},{"id":"3e626b13-fef5-40e3-b6a4-9b85785d3b05","block_type":"box","text":"exchange rate between the currency in which the debt security is denominated and the currency in which the share","page_number":55,"box":{"x":69,"y":257,"width":818,"height":11}},{"id":"c4a28b96-fc68-4890-810f-e964ea0ea1ac","block_type":"box","text":"price is quoted will affect the value of the convertible security. With respect to convertible securities denominated in","page_number":55,"box":{"x":70,"y":271,"width":828,"height":12}},{"id":"fcf9eaa4-d094-4e27-a0c2-1df279563cd5","block_type":"box","text":"a currency different from that of the underlying equity securities, the conversion price may be based on a fixed","page_number":55,"box":{"x":69,"y":286,"width":786,"height":12}},{"id":"4a5d1a88-2d7d-4d65-9860-c3f22af9b788","block_type":"box","text":"exchange rate established at the time the security is issued, which may increase the effects of currency risk. As","page_number":55,"box":{"x":69,"y":302,"width":800,"height":11}},{"id":"f7f2e9f8-f07d-4713-aacc-5fd7d75c4c45","block_type":"box","text":"described below, a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to","page_number":55,"box":{"x":69,"y":317,"width":800,"height":11}},{"id":"1a0ed73b-5e59-46dc-aac1-5c2bb729a7a6","block_type":"box","text":"reduce the effect of exchange rate fluctuations.","page_number":55,"box":{"x":69,"y":332,"width":337,"height":11}},{"id":"b0a74ec2-d718-471f-8e24-b3e6907f9627","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield on","page_number":55,"box":{"x":101,"y":355,"width":741,"height":11}},{"id":"02153caf-1e9f-431e-af5d-7be71f6c3418","block_type":"box","text":"nonconvertible securities of comparable issuers and by the value of the underlying common stock. The value of a","page_number":55,"box":{"x":69,"y":370,"width":806,"height":11}},{"id":"4cf59a51-13ea-4884-8de7-01bfc071f03b","block_type":"box","text":"convertible security viewed without regard to its conversion feature (","page_number":55,"box":{"x":69,"y":385,"width":485,"height":11}},{"id":"3d6e92c9-de9e-430e-b999-fbbd600facb3","block_type":"box","text":"i.e.","page_number":55,"box":{"x":557,"y":385,"width":20,"height":9}},{"id":"d173136f-6b23-4584-a153-425b61eaf5a3","block_type":"box","text":", strictly on the basis of its yield) is","page_number":55,"box":{"x":579,"y":385,"width":248,"height":11}},{"id":"f38db86d-38c8-4f0b-8f5c-d842bd8c957f","block_type":"box","text":"sometimes referred to as its “investment value.” To the extent interest rates change, the investment value of the","page_number":55,"box":{"x":69,"y":400,"width":808,"height":11}},{"id":"dcc4022d-5131-461d-aeb2-715ac766709c","block_type":"box","text":"convertible security typically will fluctuate. At the same time, however, the value of the convertible security will be","page_number":55,"box":{"x":69,"y":415,"width":807,"height":11}},{"id":"768d88da-650e-4c93-a82d-42606faf7651","block_type":"box","text":"influenced by its “conversion value,” which is the market value of the underlying common stock that would be","page_number":55,"box":{"x":70,"y":430,"width":778,"height":11}},{"id":"5d7c505e-74cc-4b12-a7e2-4573895f3b7d","block_type":"box","text":"obtained if the convertible security were converted. Conversion value fluctuates directly with the price of the","page_number":55,"box":{"x":69,"y":445,"width":769,"height":11}},{"id":"20e59d7e-54fa-4097-b1f1-4fac021b2021","block_type":"box","text":"underlying common stock. If the conversion value of a convertible security is substantially below its investment value,","page_number":55,"box":{"x":69,"y":460,"width":837,"height":12}},{"id":"ea37c4d7-98a4-45c9-971f-68f48507f7cb","block_type":"box","text":"the price of the convertible security is governed principally by its investment value. To the extent the conversion value","page_number":55,"box":{"x":68,"y":475,"width":837,"height":12}},{"id":"a75a0c01-7f18-4acf-9c5c-da7cb7f88c28","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the price of the","page_number":55,"box":{"x":69,"y":491,"width":800,"height":11}},{"id":"17140a01-7810-4645-a516-dd51cbda5922","block_type":"box","text":"convertible security will be influenced principally by its conversion value. A convertible security will sell at a premium","page_number":55,"box":{"x":69,"y":506,"width":828,"height":11}},{"id":"394e18c9-a9e9-4193-a272-8039a6aa1c77","block_type":"box","text":"over the conversion value to the extent investors place value on the right to acquire the underlying common stock","page_number":55,"box":{"x":69,"y":521,"width":808,"height":11}},{"id":"beef3bf6-eca4-43a8-8122-d744ef5e52d1","block_type":"box","text":"while holding a fixed-income security. The yield and conversion premium of convertible securities issued in Japan and","page_number":55,"box":{"x":68,"y":536,"width":835,"height":11}},{"id":"fcfaecda-e00e-4aaf-b8a3-2cf769140d71","block_type":"box","text":"the Euromarket are frequently determined at levels that cause the conversion value to affect their market value more","page_number":55,"box":{"x":68,"y":551,"width":836,"height":11}},{"id":"7a03173d-efd7-4f0b-b53d-650a4e9c00ca","block_type":"box","text":"than the securities’ investment value.","page_number":55,"box":{"x":68,"y":566,"width":268,"height":9}},{"id":"a6e632f5-c299-4237-afa0-54e69e9430c3","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":55,"box":{"x":102,"y":589,"width":740,"height":11}},{"id":"e190c19b-67c9-4b31-834a-a4a00f05826d","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible security may be","page_number":55,"box":{"x":69,"y":604,"width":801,"height":11}},{"id":"386ed416-9239-4ea8-b04e-1a19c20fa091","block_type":"box","text":"subject to redemption at the option of the issuer at a price established in a charter provision, indenture or other","page_number":55,"box":{"x":69,"y":619,"width":800,"height":11}},{"id":"5909f067-c5cb-40a4-9c41-b70cbdd4530b","block_type":"box","text":"governing instrument pursuant to which the convertible security was issued. If a convertible security held by a Fund is","page_number":55,"box":{"x":68,"y":634,"width":840,"height":12}},{"id":"b082c574-dd76-4db9-a192-e5f32299dfcc","block_type":"box","text":"called for redemption, the Fund will be required to redeem the security, convert it into the underlying common stock","page_number":55,"box":{"x":69,"y":649,"width":823,"height":12}},{"id":"6f2338f0-9d76-45ce-af2d-675e9dc90383","block_type":"box","text":"or sell it to a third party. Certain convertible debt securities may provide a put option to the holder, which entitles the","page_number":55,"box":{"x":69,"y":665,"width":835,"height":11}},{"id":"f1397e77-88c8-4ac4-808e-3b62c62d2b3f","block_type":"box","text":"holder to cause the security to be redeemed by the issuer at a premium over the stated principal amount of the debt","page_number":55,"box":{"x":69,"y":680,"width":832,"height":11}},{"id":"0db2a27b-cf78-46d1-8310-43fb18f1096d","block_type":"box","text":"security under certain circumstances.","page_number":55,"box":{"x":69,"y":695,"width":267,"height":11}},{"id":"3bd1dd47-482e-4dda-aeca-b4cc9b4a59cd","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include either","page_number":55,"box":{"x":101,"y":718,"width":777,"height":11}},{"id":"612c3d3e-7229-40e2-9ced-dc23fb98daad","block_type":"box","text":"Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are instruments that are","page_number":55,"box":{"x":69,"y":732,"width":789,"height":10}},{"id":"e79deb33-a33b-4c6f-b3c4-3887cfeae8cc","block_type":"box","text":"created by the issuer and have the economic characteristics of traditional convertible securities but may not actually","page_number":55,"box":{"x":69,"y":748,"width":831,"height":11}},{"id":"1ed43a07-de3b-4ebe-915d-bd415f82da61","block_type":"box","text":"permit conversion into the underlying equity securities in all circumstances. As an example, a private company may","page_number":55,"box":{"x":70,"y":763,"width":819,"height":11}},{"id":"7d5573b6-e704-4682-9730-bab0b12a7499","block_type":"box","text":"issue a Cash-Settled Convertible that is convertible into common stock only if the company successfully completes a","page_number":55,"box":{"x":70,"y":778,"width":833,"height":11}},{"id":"7808b73e-ccb1-4cda-845a-5d3119b6724a","block_type":"box","text":"public offering of its common stock prior to maturity and otherwise pays a cash amount to reflect any equity","page_number":55,"box":{"x":70,"y":793,"width":769,"height":11}},{"id":"6df41638-be16-4cf6-8c29-e507012d2ab7","block_type":"box","text":"appreciation. “Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":55,"box":{"x":69,"y":808,"width":791,"height":11}},{"id":"926624cd-43b2-4e3d-abd3-57938dd7986a","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":55,"box":{"x":69,"y":823,"width":627,"height":11}},{"id":"82a3a2e4-b87a-49dc-9404-a943f5bc6503","block_type":"box","text":"i.e.","page_number":55,"box":{"x":703,"y":823,"width":20,"height":9}},{"id":"17ec458e-4b16-426b-a528-95fa42854ddc","block_type":"box","text":", fixed-income (“fixed","page_number":55,"box":{"x":726,"y":823,"width":151,"height":11}},{"id":"c0d1279e-894e-4ba5-8157-b312d8e16405","block_type":"box","text":"income component”) or a right to acquire equity securities (“convertibility component”). The fixed-income component","page_number":55,"box":{"x":70,"y":838,"width":830,"height":12}},{"id":"1550a60e-9095-4a57-aa59-4638dda74b0d","block_type":"box","text":"is achieved by investing in nonconvertible fixed-income securities, such as nonconvertible bonds, preferred stocks","page_number":55,"box":{"x":70,"y":853,"width":814,"height":12}},{"id":"5d935a58-e3d7-49fb-90ee-7c58e2c15deb","block_type":"box","text":"and money market instruments. The convertibility component is achieved by investing in call options, warrants, or","page_number":55,"box":{"x":69,"y":869,"width":811,"height":11}},{"id":"de8d4941-c1b4-4aa5-8164-b9ed8155a24b","block_type":"box","text":"other securities with equity conversion features (“equity features”) granting the holder the right to purchase a","page_number":55,"box":{"x":69,"y":884,"width":779,"height":11}},{"id":"6d61c01a-a67f-43df-a93e-ba9ac3e292cc","block_type":"box","text":"II-6","page_number":55,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"ff359977-1db7-42fa-91af-b8e7ca734396","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":55,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"43c5e85f-22a7-46d4-9bba-3d5a1b0a04de","block_type":"box","text":"specified quantity of the underlying stocks within a specified period of time at a specified price or, in the case of a","page_number":56,"box":{"x":69,"y":45,"width":813,"height":11}},{"id":"220c16b0-6388-4850-bbf3-1b73c8cb33a1","block_type":"box","text":"stock index option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":56,"box":{"x":69,"y":60,"width":744,"height":11}},{"id":"5dddf546-b12e-494b-bd89-6407a67bbf68","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a traditional","page_number":56,"box":{"x":101,"y":82,"width":804,"height":11}},{"id":"6d6c79d2-73af-43b4-9ab7-00298f4305d1","block_type":"box","text":"convertible security, which is a single security that has a unitary market value, a Manufactured Convertible is","page_number":56,"box":{"x":69,"y":98,"width":777,"height":11}},{"id":"a0ddd209-d8e6-42cc-87c7-37c72eac86b5","block_type":"box","text":"comprised of two or more separate securities, each with its own market value. Therefore, the total “market value” of","page_number":56,"box":{"x":69,"y":113,"width":832,"height":11}},{"id":"8bd67097-ee00-445b-9998-03b0b9094f3b","block_type":"box","text":"such a Manufactured Convertible is the sum of the values of its fixed-income component and its convertibility","page_number":56,"box":{"x":69,"y":128,"width":781,"height":11}},{"id":"1050f006-23df-494a-b60a-68980d8317e9","block_type":"box","text":"component.","page_number":56,"box":{"x":69,"y":144,"width":82,"height":10}},{"id":"be277d7b-db22-4434-a539-81c80f6c5aaa","block_type":"box","text":"More flexibility is possible in the creation of a Manufactured Convertible than in the purchase of a traditional","page_number":56,"box":{"x":102,"y":166,"width":773,"height":11}},{"id":"3841cc93-b148-4b7c-a457-e804eb0d243f","block_type":"box","text":"convertible security. Because many corporations have not issued convertible securities, the Manager may combine a","page_number":56,"box":{"x":69,"y":181,"width":833,"height":11}},{"id":"a0ccb359-cde6-4032-817f-d49e201f0c98","block_type":"box","text":"fixed-income instrument and an equity feature with respect to the stock of the issuer of the fixed-income instrument","page_number":56,"box":{"x":68,"y":196,"width":826,"height":11}},{"id":"4de32744-33b5-494b-81df-29e7ddf322f0","block_type":"box","text":"to create a synthetic convertible security otherwise unavailable in the market. The Manager may also combine a","page_number":56,"box":{"x":68,"y":211,"width":800,"height":11}},{"id":"86c4b41a-75f0-4b23-b693-6c581546d80b","block_type":"box","text":"fixed-income instrument of an issuer with an equity feature with respect to the stock of a different issuer when the","page_number":56,"box":{"x":68,"y":226,"width":817,"height":11}},{"id":"b8e0c241-0d30-4096-98e6-b13d3b2a8927","block_type":"box","text":"Manager believes such a Manufactured Convertible would better promote a Fund’s objective than alternative","page_number":56,"box":{"x":70,"y":241,"width":772,"height":11}},{"id":"8dc0b695-2c91-4f5f-a07b-b4e7ead1b63b","block_type":"box","text":"investments. For example, the Manager may combine an equity feature with respect to an issuer’s stock with a fixed","page_number":56,"box":{"x":70,"y":256,"width":833,"height":12}},{"id":"af108e24-a8bb-4d2a-8292-7cbe3573015a","block_type":"box","text":"income security of a different issuer in the same industry to diversify the Fund’s credit exposure, or with a U.S.","page_number":56,"box":{"x":70,"y":271,"width":790,"height":12}},{"id":"7a964994-6971-47f5-8f24-14ccdbc0783e","block_type":"box","text":"Treasury instrument to create a Manufactured Convertible with a higher credit profile than a traditional convertible","page_number":56,"box":{"x":68,"y":286,"width":815,"height":12}},{"id":"e3dece10-bdf1-40d8-b069-d93e881a45c9","block_type":"box","text":"security issued by that issuer. A Manufactured Convertible also is a more flexible investment in that its two","page_number":56,"box":{"x":69,"y":302,"width":764,"height":11}},{"id":"989d3ead-c719-4dd3-9088-5f4dfdcfba01","block_type":"box","text":"components may be purchased separately and, upon purchasing the separate securities, “combined” to create a","page_number":56,"box":{"x":69,"y":317,"width":806,"height":11}},{"id":"b1634f97-e547-41cf-a132-ad120a67e20f","block_type":"box","text":"Manufactured Convertible. For example, the Fund may purchase a warrant for eventual inclusion in a Manufactured","page_number":56,"box":{"x":70,"y":332,"width":818,"height":11}},{"id":"a3bc705c-0736-42ef-887f-aa74229244e3","block_type":"box","text":"Convertible while postponing the purchase of a suitable bond to pair with the warrant pending development of more","page_number":56,"box":{"x":69,"y":347,"width":824,"height":11}},{"id":"0ab2c12f-c9af-4da7-b3be-187f6ef9fe1b","block_type":"box","text":"favorable market conditions.","page_number":56,"box":{"x":68,"y":362,"width":202,"height":9}},{"id":"87504c2e-c635-4856-9f14-ba546f707994","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a traditional","page_number":56,"box":{"x":101,"y":385,"width":805,"height":11}},{"id":"4e6b354f-b654-4153-b9c5-b0e6dd97071c","block_type":"box","text":"convertible security with similar characteristics. For example, in the event a Fund created a Manufactured Convertible","page_number":56,"box":{"x":69,"y":400,"width":837,"height":11}},{"id":"bfc528d7-b196-4cc6-a5f4-b07b676a2439","block_type":"box","text":"by combining a short-term U.S. Treasury instrument and a call option on a stock, the Manufactured Convertible would","page_number":56,"box":{"x":69,"y":415,"width":839,"height":11}},{"id":"072078a7-7258-41b2-9a2a-344f4e94ae79","block_type":"box","text":"be expected to outperform a traditional convertible of similar maturity that is convertible into that stock during","page_number":56,"box":{"x":69,"y":430,"width":787,"height":11}},{"id":"4d1d3731-4c60-4634-a82f-c7cd4db049f9","block_type":"box","text":"periods when Treasury instruments outperform corporate fixed-income securities and underperform during periods","page_number":56,"box":{"x":70,"y":445,"width":815,"height":12}},{"id":"7d7843a5-e543-4493-9b48-c0d9a44306a7","block_type":"box","text":"when corporate fixed-income securities outperform Treasury instruments.","page_number":56,"box":{"x":68,"y":460,"width":523,"height":12}},{"id":"3bdb9439-46bb-4ee0-a943-81d26ff1b7eb","block_type":"box","text":"Corporate Loans.","page_number":56,"box":{"x":102,"y":483,"width":123,"height":11}},{"id":"7ccdd6ce-6b44-4080-bfd2-21e704c80bdd","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally non-investment","page_number":56,"box":{"x":231,"y":483,"width":647,"height":11}},{"id":"28920726-1f8f-4256-b88b-9757162023bf","block_type":"box","text":"grade floating rate instruments. Usually, they are freely callable at the issuer’s option. Certain Funds may invest in","page_number":56,"box":{"x":68,"y":498,"width":817,"height":11}},{"id":"7bff864d-6211-4e95-ac66-e032cbede300","block_type":"box","text":"fixed and floating rate loans (“Loans”) arranged through private negotiations between a corporate borrower or a","page_number":56,"box":{"x":68,"y":513,"width":794,"height":12}},{"id":"ff78083e-2d25-421a-8157-425b892f9332","block_type":"box","text":"foreign sovereign entity and one or more financial institutions or institutional investors (“Lenders”). A Fund may invest","page_number":56,"box":{"x":68,"y":528,"width":841,"height":12}},{"id":"479f119f-b8c1-4092-bf5d-871f182d4814","block_type":"box","text":"in such Loans in the form of participations in Loans (“Participations”) and assignments of all or a portion of Loans","page_number":56,"box":{"x":70,"y":543,"width":818,"height":12}},{"id":"54150e5b-7eb0-4dee-992a-36ee12867e98","block_type":"box","text":"from third parties (“Assignments”). A Fund considers these investments to be investments in debt securities for","page_number":56,"box":{"x":68,"y":559,"width":801,"height":11}},{"id":"e4181165-1632-4ccf-907b-894a0217febe","block_type":"box","text":"purposes of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":56,"box":{"x":70,"y":574,"width":811,"height":11}},{"id":"005df044-aaf4-4d28-99dd-a36e1e94f65e","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of principal, interest and","page_number":56,"box":{"x":69,"y":589,"width":833,"height":11}},{"id":"c32280a0-8793-434f-9496-bdfe1125eba9","block_type":"box","text":"any fees to which it is entitled only from the Lender selling the Participation and only upon receipt by the Lender of","page_number":56,"box":{"x":69,"y":604,"width":817,"height":11}},{"id":"dcbd53a4-fcc0-41c6-a5bb-a8d9c8f1aa51","block_type":"box","text":"the payments from the borrower. In connection with purchasing Participations, the Fund generally will have no right to","page_number":56,"box":{"x":68,"y":619,"width":836,"height":11}},{"id":"a7b6982f-3174-488c-9ff4-06117b3457fb","block_type":"box","text":"enforce compliance by the borrower with the terms of the loan agreement relating to the Loans, nor any rights of set","page_number":56,"box":{"x":69,"y":634,"width":833,"height":12}},{"id":"98563a24-e276-42e6-af1e-96f82408ba61","block_type":"box","text":"off against the borrower, and the Fund may not benefit directly from any collateral supporting the Loan in which it has","page_number":56,"box":{"x":69,"y":649,"width":837,"height":12}},{"id":"1a885562-fb23-4b05-8460-f18d457f9667","block_type":"box","text":"purchased the Participation. As a result, the Fund will assume the credit risk of both the borrower and the Lender","page_number":56,"box":{"x":70,"y":664,"width":809,"height":11}},{"id":"3cc29947-02fb-4113-9167-809eb1f7f7ad","block_type":"box","text":"that is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the Fund may be","page_number":56,"box":{"x":68,"y":680,"width":838,"height":11}},{"id":"343dac3e-3480-47e6-baa0-e07a1b66d0c3","block_type":"box","text":"treated as a general creditor of the Lender and may not benefit from any set-off between the Lender and the","page_number":56,"box":{"x":68,"y":695,"width":772,"height":11}},{"id":"636a9bcc-c551-4d05-80f2-79d759e660dd","block_type":"box","text":"borrower. The Fund will acquire Participations only if the Lender interpositioned between the Fund and the borrower is","page_number":56,"box":{"x":69,"y":710,"width":837,"height":11}},{"id":"4c992576-6732-4b76-acf6-11566c25e704","block_type":"box","text":"determined by the Fund’s manager to be creditworthy. When the Fund purchases Assignments from Lenders, the","page_number":56,"box":{"x":69,"y":725,"width":804,"height":11}},{"id":"e76b82c1-ddf2-4af0-86eb-d3ab3364ba2d","block_type":"box","text":"Fund will acquire direct rights against the borrower on the Loan, and will not have exposure to a counterparty’s credit","page_number":56,"box":{"x":70,"y":740,"width":834,"height":11}},{"id":"9f0519ea-d0c3-4d5f-a90f-89cf4fa44a74","block_type":"box","text":"risk. The Funds may enter into Participations and Assignments on a forward commitment or “when-issued” basis,","page_number":56,"box":{"x":69,"y":755,"width":809,"height":11}},{"id":"bfbe7166-ea4f-4b16-a0f2-06ad5e3b82a7","block_type":"box","text":"whereby a Fund would agree to purchase a Participation or Assignment at set terms in the future. For more","page_number":56,"box":{"x":68,"y":770,"width":764,"height":12}},{"id":"08e3fc43-c36a-4cdc-b7c8-38ee0ce3080b","block_type":"box","text":"information on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":56,"box":{"x":70,"y":785,"width":805,"height":12}},{"id":"dc70cc10-b038-4f8d-be8c-6d5158fa5e93","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":56,"box":{"x":69,"y":801,"width":324,"height":9}},{"id":"aff69cb1-251f-4b68-8a35-7c8b6d65ff30","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market for such","page_number":56,"box":{"x":101,"y":823,"width":782,"height":12}},{"id":"8a832d2c-765b-4897-bb6c-a41aae76324c","block_type":"box","text":"instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases such instruments","page_number":56,"box":{"x":70,"y":838,"width":803,"height":11}},{"id":"f6c7c06d-0804-48b9-a4d7-329acf0ed4d8","block_type":"box","text":"could be sold only to a limited number of institutional investors. The lack of a sufficiently liquid secondary market","page_number":56,"box":{"x":69,"y":853,"width":809,"height":12}},{"id":"6076af17-5fe8-4843-94df-0042754994f5","block_type":"box","text":"may have an adverse impact on the value of such instruments and on the Fund’s ability to dispose of particular","page_number":56,"box":{"x":69,"y":869,"width":795,"height":11}},{"id":"090a3e07-4e57-46f9-931b-3463d4d997a8","block_type":"box","text":"Assignments or Participations in response to a specific economic event, such as deterioration in the creditworthiness","page_number":56,"box":{"x":68,"y":884,"width":841,"height":11}},{"id":"4ca9f488-8061-4007-8454-b6e0ebf7f8c1","block_type":"box","text":"of the borrower.","page_number":56,"box":{"x":69,"y":899,"width":111,"height":9}},{"id":"f104cc77-5dd4-4571-9246-d8172114f848","block_type":"box","text":"II-7","page_number":56,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"a6413e4f-80f8-4810-85e7-b302409c9ed5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":56,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b04948af-cd42-4934-9dbf-8df89e71331b","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as a","page_number":57,"box":{"x":102,"y":45,"width":750,"height":11}},{"id":"d483c0d8-9166-4a67-915c-a24f129e4d77","block_type":"box","text":"syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of principal and interest.","page_number":57,"box":{"x":69,"y":60,"width":834,"height":11}},{"id":"ccc2965e-0b94-4030-be92-a9f54a35b7a6","block_type":"box","text":"Failure by the syndicate agent to fulfill its obligations may delay or adversely affect receipt of payment by the Fund.","page_number":57,"box":{"x":70,"y":75,"width":816,"height":11}},{"id":"c0fa5f04-154d-417c-bd25-b8f6614c8dd4","block_type":"box","text":"The Loans in which the Fund may invest are subject to the risk of loss of principal and income. Although","page_number":57,"box":{"x":101,"y":98,"width":740,"height":11}},{"id":"f6318f09-ca56-45c5-af1e-d82ac0e77577","block_type":"box","text":"borrowers frequently provide collateral to secure repayment of these obligations they do not always do so. If they do","page_number":57,"box":{"x":69,"y":113,"width":827,"height":11}},{"id":"b514d7ac-a762-4df5-899c-0c040b5a382c","block_type":"box","text":"provide collateral, the value of the collateral may not completely cover the borrower’s obligations at the time of a","page_number":57,"box":{"x":70,"y":128,"width":802,"height":11}},{"id":"6d23e204-19c3-46fb-a7d5-632c4b4cf42f","block_type":"box","text":"default. If a borrower files for protection from its creditors under the U.S. bankruptcy laws, these laws may limit a","page_number":57,"box":{"x":69,"y":143,"width":808,"height":11}},{"id":"488d6f28-4c24-40fa-b923-25287ca0e353","block_type":"box","text":"Fund’s rights to its collateral. In addition, the value of collateral may erode during a bankruptcy case. In the event of","page_number":57,"box":{"x":70,"y":158,"width":827,"height":11}},{"id":"d6b17b31-3599-4cc0-b9c3-853945794f19","block_type":"box","text":"a bankruptcy, the holder of a Loan may not recover its principal, may experience a long delay in recovering its","page_number":57,"box":{"x":69,"y":173,"width":777,"height":11}},{"id":"eb92ab9d-fbdc-46cc-ac3e-c914147c6f40","block_type":"box","text":"investment and may not receive interest during the delay.","page_number":57,"box":{"x":70,"y":188,"width":406,"height":12}},{"id":"4aad8295-ff21-4211-bd2b-cd83b5132c56","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale of","page_number":57,"box":{"x":101,"y":211,"width":752,"height":11}},{"id":"a6d1a0ea-82aa-47d9-99a9-75f412fb056a","block_type":"box","text":"corporate loans may not be readily available to make additional investments or to meet a Fund’s redemption","page_number":57,"box":{"x":69,"y":226,"width":773,"height":11}},{"id":"6f6c9d09-b33c-4c52-b04b-2b9ea64d1a55","block_type":"box","text":"obligations. To the extent the extended settlement process gives rise to short-term liquidity needs, a Fund may hold","page_number":57,"box":{"x":69,"y":241,"width":824,"height":11}},{"id":"63bf21a2-2eb3-4934-ba8b-497f995babea","block_type":"box","text":"additional cash, sell investments or temporarily borrow from banks and other lenders.","page_number":57,"box":{"x":69,"y":256,"width":610,"height":11}},{"id":"5040ee00-0bfb-4b54-bc0d-a31553111d07","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities laws.","page_number":57,"box":{"x":102,"y":279,"width":759,"height":11}},{"id":"aa6cfcc0-cfeb-43e9-bcfe-730d673ef1b5","block_type":"box","text":"Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and purchasers of","page_number":57,"box":{"x":68,"y":294,"width":784,"height":11}},{"id":"d64e595f-34e6-4efa-9883-c5d26a14bed5","block_type":"box","text":"interests in Loans, such as the Funds, may not have the protection of the anti-fraud provisions of the federal","page_number":57,"box":{"x":70,"y":309,"width":772,"height":11}},{"id":"2ccc1ca5-c089-448b-85bf-6031be41d49e","block_type":"box","text":"securities laws as would otherwise be available for bonds or stocks. Instead, in such cases, parties generally would","page_number":57,"box":{"x":69,"y":324,"width":827,"height":12}},{"id":"c6c6409a-37a2-4ee9-b159-c6e5d0ea689f","block_type":"box","text":"rely on the contractual provisions in the Loan agreement itself and common-law fraud protections under applicable","page_number":57,"box":{"x":69,"y":339,"width":815,"height":12}},{"id":"ddd0770f-ce9b-493c-87c9-78dc59c89897","block_type":"box","text":"state law.","page_number":57,"box":{"x":69,"y":355,"width":67,"height":9}},{"id":"528c9a6c-45c1-417e-80fe-967bd61bfbc2","block_type":"box","text":"Direct Lending.","page_number":57,"box":{"x":102,"y":377,"width":105,"height":12}},{"id":"36f1588e-542e-4f07-90c2-cd55e4e0f06d","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct loans","page_number":57,"box":{"x":213,"y":377,"width":660,"height":12}},{"id":"2f84b13b-1625-4453-89b0-aafd1519fb87","block_type":"box","text":"between the Fund and a borrower may not be administered by an underwriter or agent bank. The Fund may provide","page_number":57,"box":{"x":69,"y":393,"width":817,"height":11}},{"id":"c33f1a3f-4290-4dde-9a1a-f763d31a1d2b","block_type":"box","text":"financing to commercial borrowers directly or through companies acquired (or created) and owned by or otherwise","page_number":57,"box":{"x":68,"y":407,"width":811,"height":12}},{"id":"f75be7bb-f59f-4dd9-937d-39ac8b07cadc","block_type":"box","text":"affiliated with the Fund. The terms of the direct loans are negotiated with borrowers in private transactions.","page_number":57,"box":{"x":69,"y":423,"width":764,"height":11}},{"id":"abf70ffc-b458-49e8-9a8c-a6fb3e2e551c","block_type":"box","text":"Furthermore, a direct loan may be secured or unsecured.","page_number":57,"box":{"x":70,"y":438,"width":405,"height":11}},{"id":"2f688688-fb84-41da-bd0a-3604126637cd","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of the","page_number":57,"box":{"x":102,"y":460,"width":750,"height":12}},{"id":"461c5948-da7d-4dfe-be28-77621b96524b","block_type":"box","text":"borrower and/or any collateral for payment of interest and repayment of principal. The risks associated with direct","page_number":57,"box":{"x":69,"y":475,"width":813,"height":12}},{"id":"8fdeacc9-a65e-455c-a811-851c7dc2eb6d","block_type":"box","text":"loans are substantially similar to those associated with investing in corporate loans. In making a direct loan, the Fund","page_number":57,"box":{"x":70,"y":491,"width":838,"height":11}},{"id":"dbcc8979-edbf-4157-bf10-93747de9ef44","block_type":"box","text":"is exposed to the risk that the borrower may default or become insolvent and, consequently, that the Fund will lose","page_number":57,"box":{"x":70,"y":506,"width":818,"height":11}},{"id":"bd8d138d-c753-4699-8c64-0d77e55bec03","block_type":"box","text":"money on the loan. Furthermore, direct loans may subject the Fund to liquidity and interest rate risk and certain","page_number":57,"box":{"x":69,"y":521,"width":798,"height":11}},{"id":"1dc5e648-eb28-423d-bad5-d939ecc92419","block_type":"box","text":"direct loans may be deemed illiquid. Direct loans are not publicly traded and may not have a secondary market. The","page_number":57,"box":{"x":69,"y":536,"width":825,"height":11}},{"id":"4939a678-b46e-4388-92bf-43828626b476","block_type":"box","text":"lack of a secondary market for direct loans may have an adverse impact on the ability of the Fund to dispose of a","page_number":57,"box":{"x":70,"y":551,"width":807,"height":11}},{"id":"54133bc9-824d-445f-8a9e-ab68d30f67fe","block_type":"box","text":"direct loan and/or to value the direct loan.","page_number":57,"box":{"x":69,"y":566,"width":301,"height":11}},{"id":"4ea49b94-4215-4736-9553-586553f63155","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the Fund to","page_number":57,"box":{"x":101,"y":589,"width":762,"height":11}},{"id":"efec655f-f139-4bb9-bb88-a2fd9b8b1fa1","block_type":"box","text":"originate loans on advantageous terms. In originating loans, the Fund will compete with a broad spectrum of lenders.","page_number":57,"box":{"x":69,"y":604,"width":833,"height":11}},{"id":"9bfe6e30-225b-4b55-ac5f-bddd3a3e6e57","block_type":"box","text":"Increased competition for, or a diminishment in the available supply of, qualifying loans could result in lower yields on","page_number":57,"box":{"x":70,"y":619,"width":836,"height":11}},{"id":"4f19a4e8-8efd-49d1-9e25-3d4f7ce1da3e","block_type":"box","text":"such loans, which could reduce Fund performance.","page_number":57,"box":{"x":69,"y":634,"width":362,"height":11}},{"id":"8c774cdb-e176-4aaf-90a4-f8c9826aae70","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing significant","page_number":57,"box":{"x":101,"y":657,"width":767,"height":11}},{"id":"4d1aa596-f2c4-4605-82cb-603bbcb315a0","block_type":"box","text":"financial or business difficulties, including companies involved in bankruptcy or other reorganization and liquidation","page_number":57,"box":{"x":68,"y":672,"width":821,"height":11}},{"id":"4f26b1e0-9fea-4d50-97f0-f00edee6ed33","block_type":"box","text":"proceedings. Although the terms of such financing may result in significant financial returns to the Fund, they involve","page_number":57,"box":{"x":70,"y":687,"width":830,"height":11}},{"id":"2d365812-cebd-46c5-ad1a-78f50b0d7e30","block_type":"box","text":"a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful","page_number":57,"box":{"x":69,"y":702,"width":826,"height":12}},{"id":"a094a9ac-a685-47a9-91e2-f2c1a90cb783","block_type":"box","text":"financing to companies experiencing significant business and financial difficulties is unusually high.","page_number":57,"box":{"x":68,"y":717,"width":709,"height":12}},{"id":"6d696977-45bd-4dfb-9441-19e1b9e53a1c","block_type":"box","text":"Credit Linked Securities.","page_number":57,"box":{"x":102,"y":740,"width":179,"height":9}},{"id":"33f55bf1-5b5d-418e-a906-4ea6f0c0dc9f","block_type":"box","text":"Among the income producing securities in which a Fund may invest are credit linked","page_number":57,"box":{"x":287,"y":740,"width":596,"height":11}},{"id":"ecb2f871-5ec4-4313-9884-6588e1db9984","block_type":"box","text":"securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests in a derivative instrument","page_number":57,"box":{"x":69,"y":755,"width":837,"height":11}},{"id":"eac3ca48-8131-4f26-b3c0-6610bbdb81d4","block_type":"box","text":"or basket of derivative instruments, such as credit default swaps, interest rate swaps and other securities, in order","page_number":57,"box":{"x":69,"y":770,"width":823,"height":11}},{"id":"f47364fe-ff8b-4eb0-821a-3dc954ffde87","block_type":"box","text":"to provide exposure to certain fixed-income markets. For instance, a Fund may invest in credit linked securities as a","page_number":57,"box":{"x":68,"y":785,"width":827,"height":12}},{"id":"c0fc3147-eb4f-429f-9c03-7e34515aefa7","block_type":"box","text":"cash management tool in order to gain exposure to a certain market and/or to remain fully invested when more","page_number":57,"box":{"x":69,"y":801,"width":795,"height":11}},{"id":"e55ed920-162b-4277-b742-7d914f4de104","block_type":"box","text":"traditional income producing securities are not available.","page_number":57,"box":{"x":68,"y":816,"width":404,"height":11}},{"id":"047143c6-f106-4a02-a076-53e517406949","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive periodic","page_number":57,"box":{"x":102,"y":839,"width":804,"height":11}},{"id":"b01dbcf6-1e22-4e9c-896e-42000f4db11b","block_type":"box","text":"income payments (in the form of distributions) and payment of principal at the end of the term of the security.","page_number":57,"box":{"x":70,"y":853,"width":780,"height":12}},{"id":"b1a81ae9-da83-4fec-872f-dc3440b8482c","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s potential","page_number":57,"box":{"x":102,"y":876,"width":785,"height":11}},{"id":"2eb76ba8-3674-4753-89e7-d95f7d288153","block_type":"box","text":"obligations to, the counterparties to the derivative instruments and other securities in which the issuer invests. For","page_number":57,"box":{"x":69,"y":891,"width":821,"height":12}},{"id":"e149d648-8d76-4908-a977-0db5c08b7a69","block_type":"box","text":"instance, the issuer may sell one or more credit default swaps, under which the issuer would receive a stream of","page_number":57,"box":{"x":70,"y":906,"width":806,"height":12}},{"id":"e08640bd-2a11-49bd-8b77-96e7fdd3d927","block_type":"box","text":"II-8","page_number":57,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"61a74d21-2ffe-4c45-a17a-bfd64f9d7f3d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":57,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ff45acd5-3d49-4428-a2e7-6e80440fb7fc","block_type":"box","text":"payments over the term of the swap agreements provided that no event of default has occurred with respect to the","page_number":58,"box":{"x":70,"y":45,"width":819,"height":11}},{"id":"700017c7-0e11-4a5d-8aaf-4e2d3f82f8ea","block_type":"box","text":"referenced debt obligation upon which the swap is based. If a default occurs, the stream of payments may stop and","page_number":58,"box":{"x":69,"y":60,"width":826,"height":11}},{"id":"f3f879e3-4a41-44a5-b348-7c130c9671da","block_type":"box","text":"the issuer would be obligated to pay the counterparty the par (or other agreed upon value) of the referenced debt","page_number":58,"box":{"x":68,"y":75,"width":807,"height":11}},{"id":"589348d5-678f-434b-91ba-c693ef729233","block_type":"box","text":"obligation. This, in turn, would reduce the amount of income and principal that a Fund would receive. A Fund’s","page_number":58,"box":{"x":69,"y":90,"width":783,"height":11}},{"id":"7edf9650-dd90-40ac-b517-00c9616f5b4d","block_type":"box","text":"investments in these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":58,"box":{"x":70,"y":105,"width":833,"height":11}},{"id":"8982aca9-94b3-458a-b47d-4cc4e41de9f0","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk and","page_number":58,"box":{"x":69,"y":120,"width":771,"height":12}},{"id":"0cf8a8d4-e656-4c24-b87a-a43d58efab01","block_type":"box","text":"management risk. It is also expected that the securities will be exempt from registration under the Securities Act.","page_number":58,"box":{"x":69,"y":135,"width":808,"height":12}},{"id":"5fa6fcf2-de19-45c9-9ad5-55964b5314fb","block_type":"box","text":"Accordingly, there may be no established trading market for the securities and they may constitute illiquid","page_number":58,"box":{"x":68,"y":150,"width":752,"height":12}},{"id":"c2352a1d-a595-4ff1-9565-c23864ba312a","block_type":"box","text":"investments.","page_number":58,"box":{"x":70,"y":166,"width":89,"height":9}},{"id":"14740040-8767-421b-916e-44ac1131c058","block_type":"box","text":"Debt Securities.","page_number":58,"box":{"x":102,"y":188,"width":116,"height":9}},{"id":"5a1b84fa-bcf9-4214-95a7-e650cad572f6","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will not make","page_number":58,"box":{"x":225,"y":188,"width":677,"height":11}},{"id":"97044763-93c6-43f8-a982-1a875e5f97d0","block_type":"box","text":"timely payments of principal and interest. The degree of credit risk depends on the issuer’s financial condition and on","page_number":58,"box":{"x":68,"y":203,"width":839,"height":12}},{"id":"32e7e336-a348-4c50-b994-434d7e16ef7b","block_type":"box","text":"the terms of the debt securities. Changes in an issuer’s credit rating or the market’s perception of an issuer’s","page_number":58,"box":{"x":68,"y":218,"width":787,"height":12}},{"id":"32d26f6c-1a1c-4991-8ce4-d489a88c5ac5","block_type":"box","text":"creditworthiness may also affect the value of a Fund’s investment in that issuer. Credit risk is reduced to the extent","page_number":58,"box":{"x":69,"y":234,"width":828,"height":11}},{"id":"e27c82f5-78bc-43c8-844d-10042af0869b","block_type":"box","text":"a Fund limits its debt investments to U.S. Government Securities.","page_number":58,"box":{"x":69,"y":249,"width":466,"height":9}},{"id":"a3fcbc5d-245b-468b-900e-951a13d960ef","block_type":"box","text":"All debt securities, however, are subject to interest rate risk. This is the risk that the value of the security may","page_number":58,"box":{"x":101,"y":271,"width":784,"height":12}},{"id":"cc1877c7-db68-4faf-91e7-39c803d9f0aa","block_type":"box","text":"fall when interest rates rise. If interest rates move sharply in a manner not anticipated by Fund management, a","page_number":58,"box":{"x":68,"y":286,"width":792,"height":12}},{"id":"d3d0f08c-e254-4457-98ce-e4181cd16507","block_type":"box","text":"Fund’s investments in debt securities could be adversely affected and the Fund could lose money. In general, the","page_number":58,"box":{"x":70,"y":302,"width":806,"height":11}},{"id":"09220ec6-7085-4d4a-9e84-2ad2b6348f55","block_type":"box","text":"market price of debt securities with longer maturities will go up or down more in response to changes in interest","page_number":58,"box":{"x":69,"y":317,"width":800,"height":11}},{"id":"79d3ff0e-9566-4de8-b8cd-697eb4e4c777","block_type":"box","text":"rates than will the market price of shorter-term debt securities.","page_number":58,"box":{"x":69,"y":332,"width":448,"height":11}},{"id":"43cf92d4-5ed2-4df0-8769-bddce726c343","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended because of","page_number":58,"box":{"x":102,"y":355,"width":798,"height":11}},{"id":"dc0d3c2b-d924-44a5-81e9-f6ac1a76505d","block_type":"box","text":"slower than expected principal payments. This may lock in a below-market interest rate and extend the duration of","page_number":58,"box":{"x":69,"y":370,"width":813,"height":11}},{"id":"4abcbb3a-235b-4261-946c-5c2b37e8bd44","block_type":"box","text":"these fixed-income securities, especially mortgage-related securities, making them more sensitive to changes in","page_number":58,"box":{"x":68,"y":385,"width":801,"height":11}},{"id":"cc946707-33cd-49db-a81f-bca9441767ae","block_type":"box","text":"interest rates. As a result, in a period of rising interest rates, these securities may exhibit additional volatility and","page_number":58,"box":{"x":70,"y":400,"width":806,"height":11}},{"id":"773136ae-0d1e-4c42-9aa0-61f64dc62c58","block_type":"box","text":"lose value. This is known as extension risk.","page_number":58,"box":{"x":70,"y":415,"width":307,"height":9}},{"id":"9c2f416f-7686-43a0-be74-57993bb17272","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in prevailing","page_number":58,"box":{"x":101,"y":438,"width":778,"height":11}},{"id":"9e27ce2e-90b4-41f9-a875-49b90f768798","block_type":"box","text":"interest rates. Fixed-income securities with longer maturities, which tend to produce higher yields, are subject to","page_number":58,"box":{"x":70,"y":453,"width":798,"height":11}},{"id":"dcc16583-9553-4a69-9dfc-89e2cbdd04b6","block_type":"box","text":"potentially greater capital appreciation and depreciation than securities with shorter maturities. The Funds are not","page_number":58,"box":{"x":70,"y":468,"width":812,"height":11}},{"id":"1323cf8a-11db-438d-97fa-4b575aa8e613","block_type":"box","text":"restricted to any maximum or minimum time to maturity in purchasing individual portfolio securities, and the average","page_number":58,"box":{"x":69,"y":483,"width":831,"height":11}},{"id":"85cad4a1-8d36-402f-af28-d6c0d93b5740","block_type":"box","text":"maturity of a Fund’s assets will vary.","page_number":58,"box":{"x":69,"y":498,"width":259,"height":11}},{"id":"61a12537-3650-42c0-a6df-6f93d89e7fd7","block_type":"box","text":"Floating and Variable Rate Securities","page_number":58,"box":{"x":102,"y":521,"width":260,"height":11}},{"id":"298abcd3-5202-419d-a6c6-bc51b6ae6d32","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable coupon","page_number":58,"box":{"x":364,"y":521,"width":526,"height":11}},{"id":"47309e52-bacf-41b9-8662-c34110d9ec06","block_type":"box","text":"rate. Securities with floating or variable interest rates can be less sensitive to interest rate changes than securities","page_number":58,"box":{"x":69,"y":536,"width":821,"height":11}},{"id":"3e20c006-9263-412f-895c-f098b68ff92c","block_type":"box","text":"with fixed interest rates, but may decline in value if their interest rates do not rise as much, or as quickly, as interest","page_number":58,"box":{"x":68,"y":551,"width":834,"height":11}},{"id":"7a3c4a41-e9da-488d-a8c2-0f40dfe040c2","block_type":"box","text":"rates in general. Conversely, floating rate securities will not generally increase in value if interest rates decline. The","page_number":58,"box":{"x":69,"y":566,"width":820,"height":11}},{"id":"e43cbc03-5c8f-4e8e-8975-667759944883","block_type":"box","text":"impact of interest rate changes on floating rate investments is typically mitigated by the periodic interest rate reset of","page_number":58,"box":{"x":70,"y":581,"width":838,"height":12}},{"id":"3205d9e0-7386-4e3c-a46a-42b277117e9b","block_type":"box","text":"the investments. Benchmark interest rates used for floating and variable rate securities may not accurately track","page_number":58,"box":{"x":68,"y":596,"width":804,"height":12}},{"id":"7402e5ac-f910-49d5-9db0-dcb767f36a30","block_type":"box","text":"market interest rates.","page_number":58,"box":{"x":69,"y":612,"width":153,"height":9}},{"id":"7b5b46d9-4e93-4974-904d-79b4380c1ecb","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":58,"box":{"x":102,"y":634,"width":169,"height":9}},{"id":"edb5dc19-b12a-4a68-8108-79ff572f110c","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income securities or","page_number":58,"box":{"x":278,"y":634,"width":632,"height":11}},{"id":"a3172a79-f5f8-4630-90dc-7dc379c50233","block_type":"box","text":"other instruments whose principal value is periodically adjusted according to the rate of inflation. Two structures are","page_number":58,"box":{"x":69,"y":649,"width":828,"height":12}},{"id":"62168258-f561-47d9-a93a-a62210d53211","block_type":"box","text":"common. The U.S. Treasury and some other issuers use a structure that accrues inflation into the principal value of","page_number":58,"box":{"x":69,"y":664,"width":827,"height":12}},{"id":"b0404825-6b41-4326-b01e-1ce32c7e1e72","block_type":"box","text":"the bond. Most other issuers pay out the Consumer Price Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":58,"box":{"x":68,"y":680,"width":810,"height":11}},{"id":"098c9371-910d-447e-8aab-e1e7b6cbe264","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years, although it is","page_number":58,"box":{"x":102,"y":702,"width":792,"height":12}},{"id":"53989fec-af38-48d3-a26e-9388d7e3830a","block_type":"box","text":"possible that securities with other maturities will be issued in the future. The U.S. Treasury securities pay interest on","page_number":58,"box":{"x":70,"y":717,"width":833,"height":12}},{"id":"0767662d-76ae-4821-ab5c-4fa597797343","block_type":"box","text":"a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. For example, if a Fund","page_number":58,"box":{"x":69,"y":732,"width":810,"height":12}},{"id":"2701d642-7f7c-4254-ba31-f793a569fee2","block_type":"box","text":"purchased an inflation-indexed bond with a par value of $1,000 and a 3% real rate of return coupon (payable 1.5%","page_number":58,"box":{"x":70,"y":747,"width":814,"height":12}},{"id":"868ca3f5-076f-4e7f-9192-946aad198f45","block_type":"box","text":"semi-annually), and inflation over the first six months was 1%, the mid-year par value of the bond would be $1,010","page_number":58,"box":{"x":69,"y":762,"width":816,"height":12}},{"id":"814ff761-8526-4ed4-b054-3f02fa70563c","block_type":"box","text":"and the first semi-annual interest payment would be $15.15 ($1,010 times 1.5%). If inflation during the second half","page_number":58,"box":{"x":69,"y":777,"width":828,"height":12}},{"id":"55015191-cb5a-404b-aa59-b2c4c2940310","block_type":"box","text":"of the year resulted in the whole year’s inflation equaling 3%, the end-of-year par value of the bond would be $1,030","page_number":58,"box":{"x":69,"y":792,"width":828,"height":12}},{"id":"639a77b2-e7be-419a-8ca4-4951d20deb4d","block_type":"box","text":"and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":58,"box":{"x":69,"y":807,"width":610,"height":12}},{"id":"e7782518-e4b2-4e70-a354-591b054e2f5d","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds will be","page_number":58,"box":{"x":102,"y":831,"width":767,"height":11}},{"id":"c46544c7-ff8d-46dd-ab3b-30b2891c03d9","block_type":"box","text":"adjusted downward, and, consequently, the interest payable on these securities (calculated with respect to a smaller","page_number":58,"box":{"x":69,"y":846,"width":833,"height":11}},{"id":"cb363a8f-269c-4d68-822e-b152c53c3ed1","block_type":"box","text":"principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is","page_number":58,"box":{"x":70,"y":861,"width":834,"height":11}},{"id":"2712d9ea-ee99-4071-876c-e9fa72b474e5","block_type":"box","text":"guaranteed in the case of U.S. Treasury inflation-indexed bonds, even during a period of deflation. However, the","page_number":58,"box":{"x":68,"y":876,"width":795,"height":11}},{"id":"541f8b9b-fcee-418d-b8ca-fe9e328c71a5","block_type":"box","text":"current market value of the bonds is not guaranteed, and will fluctuate. Certain Funds may also invest in other","page_number":58,"box":{"x":69,"y":891,"width":788,"height":12}},{"id":"6da38ffe-027b-486a-8219-0d5d99c0fcf1","block_type":"box","text":"inflation related bonds which may or may not provide a similar guarantee. If a guarantee of principal is not provided,","page_number":58,"box":{"x":70,"y":906,"width":823,"height":12}},{"id":"2c65376c-566b-4a1c-b6ad-4c5cb28372f7","block_type":"box","text":"II-9","page_number":58,"box":{"x":478,"y":943,"width":22,"height":9}},{"id":"f3e41583-f6c3-4788-a360-321a09249c28","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":58,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"41001bf2-0394-468c-ae9f-723ab31be16d","block_type":"box","text":"the adjusted principal value of the bond repaid at maturity may be less than the original principal. In addition, if the","page_number":59,"box":{"x":68,"y":45,"width":821,"height":11}},{"id":"d9b845da-955c-485a-b49d-3084a029eb18","block_type":"box","text":"Fund purchases inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign","page_number":59,"box":{"x":70,"y":60,"width":792,"height":11}},{"id":"427f7453-1ec5-4b5e-9a38-ed6652c9a08b","block_type":"box","text":"inflation index may not be correlated to the rate of inflation in the United States.","page_number":59,"box":{"x":70,"y":75,"width":570,"height":11}},{"id":"81fcc0ef-9f85-4aa4-a181-6e7e803740fd","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real","page_number":59,"box":{"x":101,"y":98,"width":780,"height":11}},{"id":"7cb5436f-e6c8-44b7-9e07-27fc54f96a6f","block_type":"box","text":"interest rates, in turn, are tied to the relationship between nominal interest rates and the rate of inflation. Therefore,","page_number":59,"box":{"x":70,"y":113,"width":831,"height":11}},{"id":"cf3fbc00-ff49-4773-a082-859c04b6295a","block_type":"box","text":"if inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an","page_number":59,"box":{"x":70,"y":128,"width":808,"height":11}},{"id":"eecce7dc-d07c-4977-b851-2c56db150b25","block_type":"box","text":"increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increased at a faster rate than","page_number":59,"box":{"x":70,"y":143,"width":796,"height":10}},{"id":"ec1adfc8-82fd-4b99-8780-0e9eeed03ca2","block_type":"box","text":"inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds. There can be no","page_number":59,"box":{"x":70,"y":158,"width":805,"height":11}},{"id":"66f47295-d7f2-460e-b25d-b211d81a3a00","block_type":"box","text":"assurance, however, that the value of inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":59,"box":{"x":69,"y":173,"width":824,"height":11}},{"id":"3f7fe266-49d5-483f-9aa9-86b23603d2d9","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term increases in","page_number":59,"box":{"x":101,"y":196,"width":788,"height":11}},{"id":"ff2f8737-71aa-4305-b8e9-f6c79f79fd5e","block_type":"box","text":"inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation (for example, due to","page_number":59,"box":{"x":70,"y":211,"width":825,"height":11}},{"id":"6a351882-ca02-4366-8ff9-dddba43326bd","block_type":"box","text":"changes in currency exchange rates), investors in these securities may not be protected to the extent that the","page_number":59,"box":{"x":69,"y":226,"width":784,"height":11}},{"id":"543921e0-7d4d-4936-86d6-23609820c7f2","block_type":"box","text":"increase is not reflected in the bond’s inflation measure.","page_number":59,"box":{"x":70,"y":241,"width":403,"height":9}},{"id":"da587b63-f298-42e6-9eb1-ba7ae09359e6","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is the","page_number":59,"box":{"x":102,"y":264,"width":746,"height":11}},{"id":"ad0a9640-0b8a-4abd-8d65-fed54a796b87","block_type":"box","text":"Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S. Bureau of Labor","page_number":59,"box":{"x":69,"y":279,"width":786,"height":11}},{"id":"892eff1e-2a68-4a5c-bbf8-2fff2101522b","block_type":"box","text":"Statistics. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing,","page_number":59,"box":{"x":69,"y":294,"width":810,"height":11}},{"id":"fb1bcc91-54e4-4736-ab8d-188edad63754","block_type":"box","text":"food, transportation and energy. Inflation-indexed bonds issued by a foreign government are generally adjusted to","page_number":59,"box":{"x":68,"y":309,"width":809,"height":11}},{"id":"1ed9ec33-9a53-4f51-865f-d52319bca120","block_type":"box","text":"reflect a comparable inflation index, calculated by that government. There can be no assurance that the CPI-U or any","page_number":59,"box":{"x":69,"y":324,"width":830,"height":12}},{"id":"a2d02797-8493-4e55-b6fc-4f887b5eb30a","block_type":"box","text":"foreign inflation index will accurately measure the real rate of inflation in the prices of goods and services. Moreover,","page_number":59,"box":{"x":68,"y":339,"width":833,"height":12}},{"id":"ffcf0bb8-8306-495c-818a-5bcde033e878","block_type":"box","text":"there can be no assurance that the rate of inflation in a foreign country will be correlated to the rate of inflation in the","page_number":59,"box":{"x":68,"y":355,"width":840,"height":11}},{"id":"5d420dd4-c133-47f5-8d19-a2f14e56eb4e","block_type":"box","text":"United States.","page_number":59,"box":{"x":70,"y":370,"width":99,"height":9}},{"id":"3b7c83da-a30e-4324-ac6c-bf0bd30090f1","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income,","page_number":59,"box":{"x":101,"y":392,"width":774,"height":12}},{"id":"e7f0b44b-410d-4248-91fa-5c9551e6035c","block_type":"box","text":"even though investors do not receive their principal until maturity.","page_number":59,"box":{"x":69,"y":408,"width":464,"height":11}},{"id":"1f0aad49-b1e2-48da-858b-ce923f971566","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":59,"box":{"x":102,"y":430,"width":252,"height":11}},{"id":"555c93d1-8ec2-4945-99d1-b4d85fe8da85","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which are","page_number":59,"box":{"x":360,"y":430,"width":493,"height":11}},{"id":"9d3f6523-a053-4a2b-b012-8b67e8d128cb","block_type":"box","text":"securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent quality by a Fund’s","page_number":59,"box":{"x":69,"y":445,"width":823,"height":12}},{"id":"f005a3bc-826c-4c06-babd-009146eb42da","block_type":"box","text":"Manager. Certain Funds may invest in debt securities rated Aaa by Moody’s or AAA by S&P. It should be noted that","page_number":59,"box":{"x":70,"y":460,"width":815,"height":12}},{"id":"449dfa97-93d1-47bb-8bb1-6c72c05d3afc","block_type":"box","text":"debt obligations rated in the lowest of the top four ratings (","page_number":59,"box":{"x":69,"y":475,"width":420,"height":12}},{"id":"a65f11df-551a-4c71-80a4-133d500813dd","block_type":"box","text":"i.e.","page_number":59,"box":{"x":492,"y":476,"width":20,"height":8}},{"id":"60c7c291-1f5d-4a5d-b5a8-d171317f5493","block_type":"box","text":", “Baa” by Moody’s or “BBB” by S&P) are considered","page_number":59,"box":{"x":514,"y":476,"width":377,"height":11}},{"id":"d49cb42e-36a8-457f-9670-200753746c28","block_type":"box","text":"to have some speculative characteristics and are more sensitive to economic change than higher rated securities. If","page_number":59,"box":{"x":68,"y":491,"width":829,"height":11}},{"id":"fccc654d-af30-4f02-888d-c4b4234993ef","block_type":"box","text":"an investment grade security of a Fund is subsequently downgraded below investment grade, the Fund’s Manager will","page_number":59,"box":{"x":69,"y":506,"width":836,"height":11}},{"id":"a1580f23-2c0c-46a4-a51d-0265f98d9979","block_type":"box","text":"consider such an event in determining whether the Fund should continue to hold the security. Subject to its","page_number":59,"box":{"x":69,"y":521,"width":763,"height":11}},{"id":"cfc0e8b7-adb1-4db0-b285-97ffa177cbd2","block_type":"box","text":"investment strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":59,"box":{"x":70,"y":536,"width":731,"height":11}},{"id":"b6ed9d72-9eca-45c3-8da2-bc2e032f756c","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":59,"box":{"x":102,"y":559,"width":536,"height":11}},{"id":"74b639d9-5725-403a-aea5-3b89bd1f62dd","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":59,"box":{"x":102,"y":582,"width":278,"height":11}},{"id":"4e588d09-70e3-4476-901a-4887fd539ab4","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to investors as","page_number":59,"box":{"x":102,"y":604,"width":767,"height":11}},{"id":"6b17a6b6-9f14-4b2f-8607-0584b7aac0f2","block_type":"box","text":"“junk bonds” are debt securities that are rated below investment grade by the major rating agencies or are securities","page_number":59,"box":{"x":70,"y":619,"width":834,"height":11}},{"id":"89b6a5cc-c4d9-4e33-9ef6-ad4a14d0b63b","block_type":"box","text":"that Fund management believes are of comparable quality. While generally providing greater income and opportunity","page_number":59,"box":{"x":68,"y":634,"width":828,"height":12}},{"id":"c0bd61a2-b99c-4349-9ba2-c35586b40200","block_type":"box","text":"for gain, non-investment grade debt securities may be subject to greater risks than securities which have higher credit","page_number":59,"box":{"x":68,"y":649,"width":841,"height":12}},{"id":"bab1fbb3-9a8f-4f41-9100-a2cd0f4b2940","block_type":"box","text":"ratings, including a high risk of default, and their yields will fluctuate over time. High yield securities will generally be","page_number":59,"box":{"x":69,"y":664,"width":827,"height":12}},{"id":"c357cc2e-9de0-41d5-8b31-23a1918ab072","block_type":"box","text":"in the lower rating categories of recognized rating agencies (rated “Ba” or lower by Moody’s or “BB” or lower by S&P)","page_number":59,"box":{"x":70,"y":680,"width":830,"height":11}},{"id":"fe1c2380-6f25-4ba1-a01c-045a936033e2","block_type":"box","text":"or will be non-rated. The credit rating of a high yield security does not necessarily address its market value risk, and","page_number":59,"box":{"x":69,"y":695,"width":824,"height":11}},{"id":"2c96aa71-9e57-46fe-a32f-2556dd0f365f","block_type":"box","text":"ratings may from time to time change, positively or negatively, to reflect developments regarding the issuer’s financial","page_number":59,"box":{"x":69,"y":710,"width":838,"height":11}},{"id":"d4a7693d-52ef-407b-8d65-0616908c8cc9","block_type":"box","text":"condition. High yield securities are considered to be speculative with respect to the capacity of the issuer to timely","page_number":59,"box":{"x":69,"y":725,"width":817,"height":11}},{"id":"eee87135-6216-4bb2-a251-873ead0acf78","block_type":"box","text":"repay principal and pay interest or dividends in accordance with the terms of the obligation and may have more credit","page_number":59,"box":{"x":69,"y":740,"width":837,"height":11}},{"id":"97894ca0-de32-49da-980e-a58d3862e2a2","block_type":"box","text":"risk than higher rated securities.","page_number":59,"box":{"x":69,"y":755,"width":230,"height":11}},{"id":"7a247134-93ff-433f-8753-4845b53b90e4","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":59,"box":{"x":101,"y":778,"width":447,"height":11}},{"id":"922a6009-deca-4223-8a21-1ba932821336","block_type":"box","text":"•","page_number":59,"box":{"x":69,"y":801,"width":6,"height":4}},{"id":"bc5bd01e-32cf-4deb-a96b-0146eac856c2","block_type":"box","text":"Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to adverse changes","page_number":59,"box":{"x":101,"y":798,"width":796,"height":11}},{"id":"efe0686f-82bf-4816-9327-bcc539d7d782","block_type":"box","text":"in the issuer’s industry and to general economic conditions. Issuers of junk bonds may be unable to meet their","page_number":59,"box":{"x":102,"y":813,"width":792,"height":11}},{"id":"bd756d9e-d032-40fd-80b6-8e3ce2dad633","block_type":"box","text":"interest or principal payment obligations because of an economic downturn, specific issuer developments or the","page_number":59,"box":{"x":102,"y":828,"width":799,"height":12}},{"id":"fe7d95a6-7fc9-4aec-91fc-6e3b440cfd99","block_type":"box","text":"unavailability of additional financing.","page_number":59,"box":{"x":102,"y":843,"width":256,"height":12}},{"id":"43619b80-c463-4dbb-803f-d6851f0b7a6e","block_type":"box","text":"•","page_number":59,"box":{"x":69,"y":866,"width":6,"height":5}},{"id":"ec05b9ea-89d4-4f4b-96c7-46caa263370a","block_type":"box","text":"The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of","page_number":59,"box":{"x":101,"y":863,"width":797,"height":12}},{"id":"91b98745-5169-42af-aa10-95fe47559285","block_type":"box","text":"investment grade bonds. If the issuer experiences financial stress, it may be unable to meet its debt obligations.","page_number":59,"box":{"x":102,"y":879,"width":804,"height":11}},{"id":"f985c2e0-e0c6-4e29-b8f0-d5ff2fef0bf2","block_type":"box","text":"The issuer’s ability to pay its debt obligations also may be lessened by specific issuer developments, or the","page_number":59,"box":{"x":101,"y":894,"width":769,"height":11}},{"id":"5a3efd79-de4e-43e9-a3ee-0d55b127a20e","block_type":"box","text":"II-10","page_number":59,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"1ca97bbd-0a28-47cc-8534-70c0dd4b646b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":59,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"515bc82e-2d35-429d-8737-a36a64495786","block_type":"box","text":"unavailability of additional financing. Issuers of high yield securities are often in the growth stage of their","page_number":60,"box":{"x":102,"y":45,"width":746,"height":11}},{"id":"2f96b222-c0ca-4314-bb8c-a4192ef2f24e","block_type":"box","text":"development and/or involved in a reorganization or takeover.","page_number":60,"box":{"x":101,"y":60,"width":432,"height":11}},{"id":"f62fff54-e9c8-4d2a-a76a-7f04feb7d2f9","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":83,"width":6,"height":4}},{"id":"d9759bb5-1630-4eac-822a-e66fb0ecdbf5","block_type":"box","text":"Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its obligations, the","page_number":60,"box":{"x":101,"y":80,"width":808,"height":11}},{"id":"912468eb-67c5-49f7-adaf-42f6adfd414c","block_type":"box","text":"senior obligations are generally paid off before the junior obligations, which will potentially limit a Fund’s ability","page_number":60,"box":{"x":102,"y":95,"width":789,"height":11}},{"id":"3118a96a-d7a2-4023-b3ab-1dcdf21f4276","block_type":"box","text":"to fully recover principal or to receive interest payments when senior securities are in default. Thus, investors in","page_number":60,"box":{"x":101,"y":110,"width":796,"height":11}},{"id":"0d1ce9b9-37f4-4007-9842-19155ddfd83e","block_type":"box","text":"high yield securities have a lower degree of protection with respect to principal and interest payments than do","page_number":60,"box":{"x":102,"y":125,"width":782,"height":12}},{"id":"7ddfb25a-0919-40aa-9ab3-305f8a2ad070","block_type":"box","text":"investors in higher rated securities.","page_number":60,"box":{"x":102,"y":141,"width":249,"height":11}},{"id":"831fe95b-831d-47e3-b09d-4c7e2e07474c","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":163,"width":6,"height":5}},{"id":"3cbe1486-2b43-430f-af65-fb44d1b7f991","block_type":"box","text":"Junk bonds frequently have redemption features that permit an issuer to repurchase the security from a Fund","page_number":60,"box":{"x":101,"y":161,"width":780,"height":11}},{"id":"37eab903-860b-4d16-b3df-e2e5dd618e5b","block_type":"box","text":"before it matures. If an issuer redeems the junk bonds, a Fund may have to invest the proceeds in bonds with","page_number":60,"box":{"x":102,"y":176,"width":784,"height":11}},{"id":"36e03a3b-e204-47c7-b0e9-80d4057ef2d3","block_type":"box","text":"lower yields and may lose income.","page_number":60,"box":{"x":102,"y":191,"width":242,"height":11}},{"id":"0e754600-25df-40ed-9a4b-59ab6803a7a0","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":214,"width":6,"height":4}},{"id":"dcfc5c68-0368-48f0-a950-6364cf30b30c","block_type":"box","text":"Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments may have a","page_number":60,"box":{"x":102,"y":211,"width":772,"height":11}},{"id":"21281f52-b035-4ca6-819a-bbd602eaafe9","block_type":"box","text":"greater impact on the prices of junk bonds than on those of other higher rated fixed-income securities.","page_number":60,"box":{"x":101,"y":226,"width":729,"height":11}},{"id":"f21bede1-085b-46f0-8cc9-5f9e695664ad","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":249,"width":6,"height":5}},{"id":"1c00037f-546a-4b9e-99cd-3c932054658e","block_type":"box","text":"Junk bonds may be less liquid than higher rated fixed-income securities even under normal economic conditions.","page_number":60,"box":{"x":101,"y":246,"width":802,"height":11}},{"id":"768c3656-5135-46b2-bb2e-4857794697e4","block_type":"box","text":"Under certain economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":60,"box":{"x":102,"y":261,"width":768,"height":12}},{"id":"e911b0e8-2da2-4417-888f-0e46ac194eae","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. There are fewer dealers in the junk","page_number":60,"box":{"x":102,"y":276,"width":805,"height":12}},{"id":"44cbd780-b93d-471f-9778-17be2b224e6c","block_type":"box","text":"bond market, and there may be significant differences in the prices quoted for junk bonds by the dealers, and","page_number":60,"box":{"x":102,"y":292,"width":781,"height":11}},{"id":"d8814d0e-00c6-4746-805e-decbb05d2cfb","block_type":"box","text":"such quotations may not be the actual prices available for a purchase or sale. Because junk bonds are less","page_number":60,"box":{"x":102,"y":307,"width":767,"height":11}},{"id":"09da8b93-6ade-41ca-a227-403eec73fd46","block_type":"box","text":"liquid than higher rated bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities","page_number":60,"box":{"x":102,"y":322,"width":806,"height":11}},{"id":"638554ac-ffd6-4e36-a9e3-13755ccedc45","block_type":"box","text":"than in the case of securities trading in a more liquid market.","page_number":60,"box":{"x":101,"y":337,"width":436,"height":11}},{"id":"4f6c75bc-531f-47c0-a5f9-18324678ad3a","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":360,"width":6,"height":5}},{"id":"ebe22346-93d6-494e-9681-a6b39fdc621b","block_type":"box","text":"The secondary markets for high yield securities are not as liquid as the secondary markets for higher rated","page_number":60,"box":{"x":101,"y":357,"width":763,"height":11}},{"id":"96dc9ee6-8993-476b-a394-7f4186d05499","block_type":"box","text":"securities. The secondary markets for high yield securities are concentrated in relatively few market makers and","page_number":60,"box":{"x":102,"y":372,"width":798,"height":11}},{"id":"099f7986-1f7b-4b24-9341-f1facbad7484","block_type":"box","text":"participants in the markets are mostly institutional investors, including insurance companies, banks, other","page_number":60,"box":{"x":102,"y":388,"width":759,"height":11}},{"id":"b52ca050-b364-489a-ab64-aa6aabf7ae12","block_type":"box","text":"financial institutions and mutual funds. In addition, the trading volume for high yield securities is generally lower","page_number":60,"box":{"x":101,"y":402,"width":798,"height":12}},{"id":"aa2d5ec6-24e8-4b56-9ffc-b1264b92b325","block_type":"box","text":"than that for higher rated securities and the secondary markets could contract under adverse market or","page_number":60,"box":{"x":101,"y":418,"width":739,"height":11}},{"id":"25e9d9c2-3058-4a74-858e-1a32999402f0","block_type":"box","text":"economic conditions independent of any specific adverse changes in the condition of a particular issuer. Under","page_number":60,"box":{"x":101,"y":433,"width":792,"height":11}},{"id":"00e69690-1c5b-4e0a-b69f-23ce8d029ebc","block_type":"box","text":"certain economic and/or market conditions, a Fund may have difficulty disposing of certain high yield securities","page_number":60,"box":{"x":101,"y":448,"width":797,"height":11}},{"id":"aa4c8b50-88d1-4bff-8dca-030114490d8e","block_type":"box","text":"due to the limited number of investors in that sector of the market. An illiquid secondary market may adversely","page_number":60,"box":{"x":101,"y":463,"width":791,"height":11}},{"id":"30874394-c13e-42c6-9522-9fc97787b255","block_type":"box","text":"affect the market price of the high yield security, which may result in increased difficulty selling the particular","page_number":60,"box":{"x":102,"y":478,"width":777,"height":11}},{"id":"690fd946-cd4b-4aaf-9d55-341fb6a4f6aa","block_type":"box","text":"issue and obtaining accurate market quotations on the issue when valuing a Fund’s assets. Market quotations","page_number":60,"box":{"x":102,"y":493,"width":788,"height":11}},{"id":"f3873f23-dd99-4609-826e-95cdfbed282b","block_type":"box","text":"on high yield securities are available only from a limited number of dealers, and such quotations may not be the","page_number":60,"box":{"x":102,"y":508,"width":797,"height":12}},{"id":"f3657905-d12a-4242-ba29-e2d5e6ac0e15","block_type":"box","text":"actual prices available for a purchase or sale. When the secondary market for high yield securities becomes","page_number":60,"box":{"x":102,"y":523,"width":769,"height":12}},{"id":"4ed34d0e-9491-45a2-82bd-48d2e0e36c99","block_type":"box","text":"more illiquid, or in the absence of readily available market quotations for such securities, the relative lack of","page_number":60,"box":{"x":102,"y":538,"width":772,"height":12}},{"id":"802c9a72-5769-46db-8f1e-fa6b9d52bce2","block_type":"box","text":"reliable objective data makes it more difficult to value a Fund’s securities, and judgment plays a more important","page_number":60,"box":{"x":102,"y":554,"width":801,"height":11}},{"id":"34ea324a-8bb2-4d03-8c97-405f487e7799","block_type":"box","text":"role in determining such valuations.","page_number":60,"box":{"x":102,"y":569,"width":252,"height":11}},{"id":"5217eac5-ca03-43cf-9ccc-4f8e8a604292","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":592,"width":6,"height":4}},{"id":"84e0b77d-2d9a-4dcd-bea0-3cf4ee29ee6a","block_type":"box","text":"A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with","page_number":60,"box":{"x":101,"y":589,"width":808,"height":11}},{"id":"60d3a951-0b7d-4216-a7b5-067e0f1e4f77","block_type":"box","text":"a defaulting issuer.","page_number":60,"box":{"x":102,"y":604,"width":134,"height":11}},{"id":"abc1b3db-91b3-4b67-be26-b2136dc5ede9","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":627,"width":6,"height":5}},{"id":"208df64e-1a4d-4abc-8991-bc6f0a489cac","block_type":"box","text":"The junk bond markets may react strongly to adverse news about an issuer or the economy, or to the perception","page_number":60,"box":{"x":101,"y":624,"width":800,"height":11}},{"id":"9ec381e2-4e08-4c63-9881-53359def1060","block_type":"box","text":"or expectation of adverse news, whether or not it is based on fundamental analysis. Additionally, prices for high","page_number":60,"box":{"x":102,"y":639,"width":793,"height":12}},{"id":"79b823c9-82f0-46fd-be4a-b145ab3c52d6","block_type":"box","text":"yield securities may be affected by legislative and regulatory developments. These developments could adversely","page_number":60,"box":{"x":101,"y":654,"width":808,"height":12}},{"id":"98a6af35-75af-4f33-807d-a14ca04f8f92","block_type":"box","text":"affect a Fund’s NAV and investment practices, the secondary market for high yield securities, the financial","page_number":60,"box":{"x":102,"y":669,"width":756,"height":12}},{"id":"e635a1d6-517c-4e0e-8b30-c09e6ba76794","block_type":"box","text":"condition of issuers of these securities and the value and liquidity of outstanding high yield securities, especially","page_number":60,"box":{"x":101,"y":685,"width":803,"height":11}},{"id":"f3c90b24-23ab-4148-801c-2e6599ea598a","block_type":"box","text":"in a thinly traded market. For example, federal legislation requiring the divestiture by federally insured savings","page_number":60,"box":{"x":102,"y":700,"width":781,"height":11}},{"id":"c68e8565-5603-4f5d-be82-3a882b1d2d56","block_type":"box","text":"and loan associations of their investments in high yield bonds and limiting the deductibility of interest by certain","page_number":60,"box":{"x":102,"y":715,"width":798,"height":11}},{"id":"20e79b14-aee5-4713-8e30-2747a94c27a6","block_type":"box","text":"corporate issuers of high yield bonds adversely affected the market in the past.","page_number":60,"box":{"x":101,"y":730,"width":566,"height":11}},{"id":"5a06b724-cabe-4bc4-b109-b9c6eae6d71f","block_type":"box","text":"•","page_number":60,"box":{"x":69,"y":753,"width":6,"height":5}},{"id":"f8a78daf-5bd2-4bc0-baf7-55d133810024","block_type":"box","text":"The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of a non","page_number":60,"box":{"x":101,"y":750,"width":751,"height":11}},{"id":"bc6d89e1-94dd-49a2-b33b-64a9b65ca446","block_type":"box","text":"investment grade security’s principal and interest payments, but does not address market value risk. Because","page_number":60,"box":{"x":102,"y":766,"width":786,"height":11}},{"id":"c284d2fd-92f2-4f29-aa1c-b8427aadcb37","block_type":"box","text":"such ratings of the ratings agencies may not always reflect current conditions and events, in addition to using","page_number":60,"box":{"x":102,"y":780,"width":782,"height":12}},{"id":"5eaed115-e6b1-4764-873f-0d3cae77b51f","block_type":"box","text":"recognized rating agencies and other sources, the Manager or sub-adviser performs its own analysis of the","page_number":60,"box":{"x":102,"y":795,"width":762,"height":12}},{"id":"eb1753a4-f5a5-4eae-85e7-6b86d86cd1cf","block_type":"box","text":"issuers whose non-investment grade securities a Fund holds. Because of this, the Fund’s performance may","page_number":60,"box":{"x":102,"y":811,"width":767,"height":11}},{"id":"f86446a3-5ad3-48b3-a23b-db96904c5e6c","block_type":"box","text":"depend more on the Manager’s or sub-adviser’s own credit analysis than in the case of mutual funds investing in","page_number":60,"box":{"x":101,"y":826,"width":806,"height":11}},{"id":"261b6d08-0eb3-44f8-9e4f-0c0dca365634","block_type":"box","text":"higher-rated securities.","page_number":60,"box":{"x":102,"y":841,"width":161,"height":11}},{"id":"919d3d59-e39c-4bc6-93e6-5d67d9f993cb","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as those","page_number":60,"box":{"x":102,"y":863,"width":751,"height":12}},{"id":"99ac590e-d381-4368-90b2-887b4f8c41bd","block_type":"box","text":"relating to the creditworthiness of issuers, the ratings and performance of the securities, the protections afforded","page_number":60,"box":{"x":69,"y":879,"width":814,"height":11}},{"id":"c0d23cb7-fa00-402a-b6fd-9cd00dc6a0a6","block_type":"box","text":"the securities and the diversity of the Fund. The Manager or sub-adviser continuously monitors the issuers of non","page_number":60,"box":{"x":68,"y":894,"width":812,"height":11}},{"id":"8636b948-044c-4102-8b2f-1fda5e49a31b","block_type":"box","text":"investment grade securities held by the Fund for their ability to make required principal and interest payments, as","page_number":60,"box":{"x":70,"y":909,"width":808,"height":11}},{"id":"4fa0b82c-b432-44e7-9b47-6dc25f0f4ee4","block_type":"box","text":"II-11","page_number":60,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"6709cc8b-d496-45e1-b677-f08b179f6b1e","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":60,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1c0a0ba7-086e-471c-b4aa-f3366fc57ccf","block_type":"box","text":"well as in an effort to control the liquidity of the Fund so that it can meet redemption requests. If a security’s rating","page_number":61,"box":{"x":68,"y":45,"width":825,"height":11}},{"id":"ffbb29e1-cf1d-40af-b002-8cb18760be23","block_type":"box","text":"is reduced below the minimum credit rating that is permitted for a Fund, the Fund’s adviser or sub-adviser will","page_number":61,"box":{"x":70,"y":60,"width":779,"height":11}},{"id":"ce34d3c8-f3f1-4dfc-a10d-30e6f5bee5d4","block_type":"box","text":"consider whether the Fund should continue to hold the security.","page_number":61,"box":{"x":69,"y":75,"width":451,"height":11}},{"id":"6133549e-aac5-4402-88ab-49dd4c1e28a0","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net redemptions,","page_number":61,"box":{"x":102,"y":98,"width":782,"height":11}},{"id":"ea3608ad-feda-42c2-8199-8878eedbcb87","block_type":"box","text":"the Fund could be forced to sell its holdings without regard to the investment merits, thereby decreasing the assets","page_number":61,"box":{"x":68,"y":113,"width":825,"height":11}},{"id":"97a871d3-93cd-4411-af22-0fa8a8e309a3","block_type":"box","text":"upon which the Fund’s rate of return is based.","page_number":61,"box":{"x":69,"y":128,"width":328,"height":11}},{"id":"fbb5add0-e6be-4303-a1d4-8d74c6f44063","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons, such as","page_number":61,"box":{"x":101,"y":150,"width":764,"height":12}},{"id":"dc28a2b1-b68b-4715-bfa3-2a855cf8fff1","block_type":"box","text":"higher investment research costs and higher commission costs.","page_number":61,"box":{"x":69,"y":166,"width":455,"height":11}},{"id":"43e14549-66a2-4c40-9680-9a2c1a809d71","block_type":"box","text":"Mezzanine Investments.","page_number":61,"box":{"x":102,"y":188,"width":170,"height":9}},{"id":"20a43edd-f45b-4bb8-973a-461a05faa315","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a specific","page_number":61,"box":{"x":279,"y":188,"width":612,"height":12}},{"id":"e3eecacf-8031-41bf-ad65-25a47937e008","block_type":"box","text":"credit quality, may invest in certain high yield securities known as mezzanine investments, which are subordinated","page_number":61,"box":{"x":69,"y":204,"width":813,"height":11}},{"id":"49af8441-7670-48d8-be3e-df0cf1095e62","block_type":"box","text":"debt securities which are generally issued in private placements in connection with an equity security (","page_number":61,"box":{"x":69,"y":219,"width":729,"height":11}},{"id":"e834b749-82d0-40ae-9bfc-87a7efa51811","block_type":"box","text":"e.g.","page_number":61,"box":{"x":800,"y":220,"width":24,"height":10}},{"id":"0f0c33bf-f468-4b23-9938-082a58f338ba","block_type":"box","text":", with","page_number":61,"box":{"x":827,"y":219,"width":36,"height":10}},{"id":"5fb193c1-c187-4ca5-83c4-4f9c3b17aa4d","block_type":"box","text":"attached warrants). Such mezzanine investments may be issued with or without registration rights. Similar to other","page_number":61,"box":{"x":69,"y":234,"width":818,"height":11}},{"id":"12e56d9c-1358-4a6e-9ce3-418b2d916bde","block_type":"box","text":"high yield securities, maturities of mezzanine investments are typically seven to ten years, but the expected average","page_number":61,"box":{"x":69,"y":249,"width":827,"height":11}},{"id":"920b8b04-f39c-495b-b647-1b39ae1a8734","block_type":"box","text":"life is significantly shorter at three to five years. Mezzanine investments are usually unsecured and subordinate to","page_number":61,"box":{"x":70,"y":264,"width":813,"height":11}},{"id":"6fe79a3d-4fb2-485c-8c32-f37a6e6d9c7a","block_type":"box","text":"other obligations of the issuer.","page_number":61,"box":{"x":69,"y":279,"width":216,"height":11}},{"id":"10d2f119-f522-4ac7-aeb9-cf00243b2c53","block_type":"box","text":"Pay-in-kind Bonds.","page_number":61,"box":{"x":102,"y":302,"width":127,"height":11}},{"id":"d2a948d1-aef5-45bf-9221-04ff22cf99b7","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which pay","page_number":61,"box":{"x":236,"y":302,"width":615,"height":11}},{"id":"e6d40637-9fd6-46ed-84c4-a7b98dcff7eb","block_type":"box","text":"interest through the issuance of additional debt or equity securities. Similar to zero coupon obligations, pay-in-kind","page_number":61,"box":{"x":70,"y":317,"width":813,"height":11}},{"id":"33d8c248-8682-42d3-b67c-c77354a5692a","block_type":"box","text":"bonds also carry additional risk as holders of these types of securities realize no cash until the cash payment date","page_number":61,"box":{"x":69,"y":332,"width":820,"height":11}},{"id":"90af7684-d350-4d7a-8d08-73940c9c0db1","block_type":"box","text":"unless a portion of such securities is sold and, if the issuer defaults, a Fund may obtain no return at all on its","page_number":61,"box":{"x":69,"y":347,"width":784,"height":11}},{"id":"54bd65ce-60da-4105-ad17-d8274289d66f","block_type":"box","text":"investment. The market price of pay-in-kind bonds is affected by interest rate changes to a greater extent, and","page_number":61,"box":{"x":70,"y":362,"width":783,"height":11}},{"id":"d4162969-3572-4715-ab2c-e27ea89cb75e","block_type":"box","text":"therefore tends to be more volatile, than that of securities which pay interest in cash. Additionally, current U.S.","page_number":61,"box":{"x":68,"y":377,"width":790,"height":11}},{"id":"5566a9e6-a5e8-46ee-abbe-2e0bfd5a18ad","block_type":"box","text":"federal tax law requires the holder of pay-in-kind bonds to accrue income with respect to these securities prior to the","page_number":61,"box":{"x":68,"y":392,"width":831,"height":12}},{"id":"cd3d35f4-8430-49d8-a2bc-2d36a088a376","block_type":"box","text":"receipt of cash payments. To maintain its qualification as a regulated investment company and avoid liability for U.S.","page_number":61,"box":{"x":69,"y":407,"width":830,"height":12}},{"id":"6ed61e73-823f-45f3-a0c4-b2740ce5d8ed","block_type":"box","text":"federal income and excise taxes, each Fund may be required to distribute income accrued with respect to these","page_number":61,"box":{"x":68,"y":423,"width":798,"height":11}},{"id":"dfc1c0d7-cd68-47c6-9d3c-2da37c869af5","block_type":"box","text":"securities and may have to dispose of portfolio securities under disadvantageous circumstances in order to generate","page_number":61,"box":{"x":69,"y":438,"width":835,"height":11}},{"id":"b7308617-045a-4f0d-b614-ab9261aa9b75","block_type":"box","text":"cash to satisfy these distribution requirements.","page_number":61,"box":{"x":69,"y":453,"width":336,"height":11}},{"id":"2a64b734-1f8a-4a79-8f34-9e380ed0a2a4","block_type":"box","text":"Supranational Entities.","page_number":61,"box":{"x":102,"y":476,"width":160,"height":10}},{"id":"4ffd4887-90dd-49f1-bdd1-f68033ebf342","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of such entities","page_number":61,"box":{"x":268,"y":475,"width":629,"height":12}},{"id":"55c76084-6d49-4e7f-865c-b9a284ad1f07","block_type":"box","text":"include the International Bank for Reconstruction and Development (the World Bank), the European Steel and Coal","page_number":61,"box":{"x":70,"y":491,"width":814,"height":11}},{"id":"12b4b7a7-a8c2-462f-a9d0-a651a0f80569","block_type":"box","text":"Community, the Asian Development Bank and the Inter-American Development Bank. The government members, or","page_number":61,"box":{"x":69,"y":506,"width":817,"height":11}},{"id":"b5bdd7e3-2a30-4f51-8127-37b2fafa128d","block_type":"box","text":"“stockholders,” usually make initial capital contributions to the supranational entity and in many cases are","page_number":61,"box":{"x":70,"y":521,"width":759,"height":11}},{"id":"d6e97fc3-2749-4149-ab24-e32d1ace9438","block_type":"box","text":"committed to make additional capital contributions if the supranational entity is unable to repay its borrowings. There","page_number":61,"box":{"x":69,"y":536,"width":836,"height":11}},{"id":"873ee002-bffa-4d17-b7d8-f211a8896d1c","block_type":"box","text":"is no guarantee that one or more stockholders of a supranational entity will continue to make any necessary","page_number":61,"box":{"x":70,"y":551,"width":772,"height":11}},{"id":"a8d6c3fc-6013-4288-acb2-0cc380a72a07","block_type":"box","text":"additional capital contributions. If such contributions are not made, the entity may be unable to pay interest or repay","page_number":61,"box":{"x":69,"y":566,"width":830,"height":11}},{"id":"9972fd4b-a640-494e-95c0-5650a4a804b4","block_type":"box","text":"principal on its debt securities, and a Fund may lose money on such investments.","page_number":61,"box":{"x":70,"y":582,"width":580,"height":10}},{"id":"690c2167-fd60-43e2-ae80-aa3011c40c9d","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":61,"box":{"x":102,"y":604,"width":334,"height":11}},{"id":"b4fc6d42-f923-491f-a8f0-6161bcef89d7","block_type":"box","text":"Certain Funds may invest in the securities of foreign issuers in","page_number":61,"box":{"x":442,"y":604,"width":446,"height":11}},{"id":"f9e947de-9eaf-4b0c-9e35-660c791b70c4","block_type":"box","text":"the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Depositary Receipts","page_number":61,"box":{"x":68,"y":619,"width":835,"height":11}},{"id":"23db1c01-9e25-4b77-9239-cdc8b75f95b7","block_type":"box","text":"may not necessarily be denominated in the same currency as the underlying securities into which they may be","page_number":61,"box":{"x":69,"y":634,"width":784,"height":12}},{"id":"171ed1c1-6860-46f8-aada-c632cedf92e1","block_type":"box","text":"converted. The Fund may invest in both sponsored and unsponsored American Depositary Receipts (“ADRs”),","page_number":61,"box":{"x":69,"y":650,"width":781,"height":11}},{"id":"ad016aee-fcd6-4078-8c92-6d0b88d6bba2","block_type":"box","text":"European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”) and other similar global instruments.","page_number":61,"box":{"x":70,"y":665,"width":823,"height":11}},{"id":"02f48312-0af9-4fcc-8def-d8ebdeebfe3f","block_type":"box","text":"ADRs typically are issued by an American bank or trust company and evidence ownership of underlying securities","page_number":61,"box":{"x":68,"y":680,"width":804,"height":11}},{"id":"09bfe4c3-8f3c-48d2-8807-de958cfa981f","block_type":"box","text":"issued by a foreign corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are","page_number":61,"box":{"x":70,"y":695,"width":799,"height":11}},{"id":"9fd36feb-d524-48ab-9a1c-624ca8730ef1","block_type":"box","text":"receipts issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either foreign","page_number":61,"box":{"x":69,"y":710,"width":821,"height":11}},{"id":"dc0d1936-0c4f-4d86-adab-e34d9300b1cf","block_type":"box","text":"or domestic underlying securities. GDRs are depositary receipts structured like global debt issues to facilitate trading","page_number":61,"box":{"x":69,"y":725,"width":837,"height":11}},{"id":"d03adde4-db87-43ba-9aa1-d98ccd5bc56d","block_type":"box","text":"on an international basis. In addition to investment risks associated with the underlying issuer, Depositary Receipts","page_number":61,"box":{"x":69,"y":740,"width":825,"height":11}},{"id":"c2908e1c-56e0-4432-b028-e9ee4f389952","block_type":"box","text":"expose a Fund to additional risks associated with the non-uniform terms that apply to Depositary Receipt programs,","page_number":61,"box":{"x":69,"y":755,"width":825,"height":11}},{"id":"bec0919e-dc97-441a-91ac-d555780ce1e6","block_type":"box","text":"credit exposure to the depository bank and to the sponsors and other parties with whom the depository bank","page_number":61,"box":{"x":69,"y":771,"width":780,"height":10}},{"id":"60e3680e-884b-4dd9-ab60-f4c557e5bca7","block_type":"box","text":"establishes the programs, currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR,","page_number":61,"box":{"x":69,"y":785,"width":833,"height":12}},{"id":"62ba858f-7dd7-4c86-bfb7-e03154eb1700","block_type":"box","text":"EDR and GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":61,"box":{"x":70,"y":801,"width":796,"height":11}},{"id":"da1aeea7-af27-4613-ad1f-1980e3ae84ac","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored programs and do not","page_number":61,"box":{"x":69,"y":816,"width":822,"height":11}},{"id":"bcd8da8d-705d-4333-9efd-ef88e684d8c9","block_type":"box","text":"provide holders with many of the shareholder benefits that come from investing in a sponsored Depositary Receipt.","page_number":61,"box":{"x":70,"y":831,"width":820,"height":11}},{"id":"5622b080-9ce2-4ebd-a05b-572cdafe738b","block_type":"box","text":"Available information concerning the issuer may not be as current as for sponsored ADRs, EDRs and GDRs, and the","page_number":61,"box":{"x":68,"y":846,"width":827,"height":11}},{"id":"341c1cac-8970-4d58-9fc0-48288dbc1aba","block_type":"box","text":"prices of unsponsored ADRs, EDRs and GDRs may be more volatile than if such instruments were sponsored by the","page_number":61,"box":{"x":70,"y":861,"width":825,"height":11}},{"id":"7df60cba-24c9-406a-b108-eb9d96451567","block_type":"box","text":"issuer. Depositary Receipts are generally subject to the same risks as the foreign securities that they evidence or","page_number":61,"box":{"x":70,"y":876,"width":810,"height":11}},{"id":"5ce38330-d15e-4ecf-b0d7-c8dd2c10a12e","block_type":"box","text":"into which they may be converted. Investments in ADRs, EDRs and GDRs present additional investment","page_number":61,"box":{"x":70,"y":891,"width":737,"height":11}},{"id":"503bd61c-0808-4dad-b338-b1b40966bde9","block_type":"box","text":"considerations as described under “Foreign Investment Risks.”","page_number":61,"box":{"x":69,"y":907,"width":449,"height":11}},{"id":"fca6aead-4470-4d34-95c8-9b036c8a010b","block_type":"box","text":"II-12","page_number":61,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"9991453f-124d-4f1f-943f-1553fca16ab4","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":61,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b2b09901-d9f6-48e9-8b7d-7ea70851d001","block_type":"box","text":"Derivatives.","page_number":62,"box":{"x":102,"y":45,"width":84,"height":9}},{"id":"4045951e-2823-4271-a75f-d878b8084072","block_type":"box","text":"General.","page_number":62,"box":{"x":102,"y":67,"width":58,"height":9}},{"id":"e73ee6c9-a057-4067-8868-d7b667aba35e","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments that derive","page_number":62,"box":{"x":167,"y":67,"width":725,"height":11}},{"id":"f0129811-1a7e-4067-816e-f52dc8c47b8d","block_type":"box","text":"their value from one or more securities, commodities (such as gold or oil), currencies, interest rates, credit events or","page_number":62,"box":{"x":68,"y":82,"width":836,"height":12}},{"id":"a6ffd272-bb0a-438f-ba22-41f8563762ca","block_type":"box","text":"indices (a measure of value or rates, such as the S&P 500 Index or the prime lending rate) or other reference asset.","page_number":62,"box":{"x":70,"y":98,"width":829,"height":11}},{"id":"501beadd-2f72-47a4-bba7-16acc42ec32e","block_type":"box","text":"Derivatives may allow a Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and","page_number":62,"box":{"x":70,"y":113,"width":830,"height":11}},{"id":"7a556ab0-7966-4ff9-99e3-c2912915a259","block_type":"box","text":"efficiently than with other transactions. Certain Funds may use derivatives to maintain a portion of their long and","page_number":62,"box":{"x":69,"y":128,"width":804,"height":11}},{"id":"b0618fb6-80ab-40a5-8089-6898eec76cc0","block_type":"box","text":"short positions. Unless otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset","page_number":62,"box":{"x":69,"y":143,"width":800,"height":11}},{"id":"aaabd3eb-f96f-45ed-a0ab-5e43cae7222e","block_type":"box","text":"class it is prohibited by its investment restrictions from purchasing directly. As described below, derivatives can be","page_number":62,"box":{"x":69,"y":158,"width":816,"height":11}},{"id":"e86fbf22-dc1b-4e3a-8068-8097124ebbc5","block_type":"box","text":"used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":62,"box":{"x":69,"y":173,"width":691,"height":11}},{"id":"4bc0c119-0ae5-4c02-88e5-6eb4cbdfec73","block_type":"box","text":"i.e.","page_number":62,"box":{"x":768,"y":173,"width":20,"height":9}},{"id":"8729cccf-b7c1-48c4-80ec-bdc31c164ec0","block_type":"box","text":", the payment","page_number":62,"box":{"x":791,"y":173,"width":96,"height":11}},{"id":"18e29463-fb83-4128-ac96-0c69a8a90e7e","block_type":"box","text":"obligations of derivatives contracts are netted against one another with the Fund receiving or paying, as the case may","page_number":62,"box":{"x":69,"y":188,"width":839,"height":12}},{"id":"7c2795a2-9f0c-499d-b4fc-66974558bb67","block_type":"box","text":"be, only the net amount of the two payment streams.","page_number":62,"box":{"x":69,"y":203,"width":378,"height":12}},{"id":"dacb79d9-4fcb-4ce1-8554-3f4c4edcc83f","block_type":"box","text":"Hedging.","page_number":62,"box":{"x":102,"y":226,"width":60,"height":11}},{"id":"f75a20f2-c2f2-4228-90cb-3b4d554a0f10","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset the risks","page_number":62,"box":{"x":169,"y":226,"width":717,"height":11}},{"id":"86fb3860-81de-4d34-a8c5-7800238b1dbb","block_type":"box","text":"associated with other Fund holdings. Losses on other investments may be substantially reduced by gains on a","page_number":62,"box":{"x":69,"y":241,"width":786,"height":11}},{"id":"e28aa724-fe99-4fc3-9294-370f69f96155","block_type":"box","text":"derivative that reacts in an opposite manner to market movements. Although hedging may reduce losses, it may also","page_number":62,"box":{"x":69,"y":257,"width":834,"height":11}},{"id":"d52846fb-e48d-408d-8cf8-d9b490f41ecb","block_type":"box","text":"reduce or eliminate gains. In addition, hedging may cause losses if the market moves in an unanticipated manner, or","page_number":62,"box":{"x":69,"y":271,"width":834,"height":12}},{"id":"d6cae5be-37e5-47fe-8b44-dd72c2b93b26","block_type":"box","text":"if the cost of the derivative outweighs the benefit of the hedge. The effectiveness of hedging may be reduced by","page_number":62,"box":{"x":70,"y":286,"width":797,"height":12}},{"id":"553dd661-173a-40df-9a31-94b157890e00","block_type":"box","text":"correlation risk,","page_number":62,"box":{"x":69,"y":302,"width":109,"height":10}},{"id":"74fb7c19-e63e-4ab1-89b4-c246bceb728f","block_type":"box","text":"i.e.","page_number":62,"box":{"x":186,"y":302,"width":20,"height":9}},{"id":"5057b9c2-d8be-41c6-b836-0ccd47a80510","block_type":"box","text":", the risk that changes in the value of the derivative will not match those of the holdings being","page_number":62,"box":{"x":209,"y":302,"width":669,"height":11}},{"id":"a906075e-5df2-4526-8cff-b52b1c437422","block_type":"box","text":"hedged as expected by a Fund, which may result in additional losses to the Fund. The inability to close or offset","page_number":62,"box":{"x":69,"y":317,"width":797,"height":11}},{"id":"9131cdea-011d-4ebd-81ed-258027763f5a","block_type":"box","text":"derivatives could also reduce the effectiveness of a Fund’s hedging. There is no assurance that a Fund’s hedging will","page_number":62,"box":{"x":69,"y":332,"width":835,"height":11}},{"id":"7a468600-7a12-48d8-9f69-42da1f7642e0","block_type":"box","text":"be effective. No Fund is required to use derivatives to hedge.","page_number":62,"box":{"x":69,"y":347,"width":434,"height":11}},{"id":"93246d09-6247-406c-9764-b1791f835468","block_type":"box","text":"Speculation.","page_number":62,"box":{"x":102,"y":370,"width":86,"height":11}},{"id":"975f0c63-f5c4-4817-b8d9-c539c9a7ac2e","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance returns. The","page_number":62,"box":{"x":195,"y":370,"width":694,"height":11}},{"id":"8c434e7c-5ff0-4e3f-a6c5-4dbb9442023b","block_type":"box","text":"use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather than offset the risk of other","page_number":62,"box":{"x":69,"y":385,"width":831,"height":11}},{"id":"4fe0dcf5-d3a6-45c1-81bb-2394ea94aa44","block_type":"box","text":"positions. To the extent a Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the","page_number":62,"box":{"x":70,"y":400,"width":824,"height":11}},{"id":"0b26f085-9c0d-4ee1-8094-ea70b34317e6","block_type":"box","text":"risks of loss of that derivative, which may sometimes be greater than the derivative’s cost, and the potential for loss","page_number":62,"box":{"x":69,"y":415,"width":831,"height":11}},{"id":"bd8c763a-2d9d-492f-a91e-f061cc85f95d","block_type":"box","text":"in certain cases may be unlimited.","page_number":62,"box":{"x":70,"y":430,"width":243,"height":11}},{"id":"7ba02ee7-7b71-4bdc-a5cc-b998a7d1021e","block_type":"box","text":"Regulation of Derivatives.","page_number":62,"box":{"x":102,"y":453,"width":180,"height":11}},{"id":"1ec3613c-5b0c-4bbe-9daa-35b2b508447e","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":62,"box":{"x":102,"y":475,"width":333,"height":12}},{"id":"02bb9dde-e447-4bbd-8b12-8ef222607aa1","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to","page_number":62,"box":{"x":442,"y":475,"width":458,"height":12}},{"id":"a4b4b1ae-6760-4fef-9675-1335e241aa87","block_type":"box","text":"enter into Derivatives Transactions (as defined below) and certain other transactions notwithstanding the restrictions","page_number":62,"box":{"x":69,"y":491,"width":833,"height":11}},{"id":"4b04d96f-6184-4df2-88c3-bf7bfe1dfbdf","block_type":"box","text":"on the issuance of “senior securities” under Section 18 of the Investment Company Act. Section 18 of the","page_number":62,"box":{"x":69,"y":506,"width":759,"height":11}},{"id":"a132e06d-9380-4537-b821-aff932fac999","block_type":"box","text":"Investment Company Act, among other things, prohibits open-end funds, including the Funds, from issuing or selling","page_number":62,"box":{"x":70,"y":521,"width":825,"height":11}},{"id":"65ffa799-777e-4adc-94ad-44732ea464e2","block_type":"box","text":"any “senior security,” other than borrowing from a bank (subject to a requirement to maintain 300% “asset","page_number":62,"box":{"x":69,"y":536,"width":763,"height":11}},{"id":"6de2a81c-e126-4120-9f9f-be1401a21121","block_type":"box","text":"coverage”).","page_number":62,"box":{"x":69,"y":551,"width":79,"height":11}},{"id":"6da0420e-2144-464e-8e88-a8c524669376","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap (including","page_number":62,"box":{"x":102,"y":574,"width":796,"height":11}},{"id":"24645178-77ff-4d4e-858f-2aab8e79449b","block_type":"box","text":"a contract for differences), futures contract, forward contract, option (excluding purchased options), any combination","page_number":62,"box":{"x":69,"y":589,"width":832,"height":11}},{"id":"9094f23a-406f-49e1-97f3-5af2695f31f5","block_type":"box","text":"of the foregoing, or any similar instrument, under which a Fund is or may be required to make any payment or delivery","page_number":62,"box":{"x":69,"y":604,"width":840,"height":11}},{"id":"ec755576-6a35-47e4-8ffd-8ca76fcd7ad3","block_type":"box","text":"of cash or other assets during the life of the instrument or at maturity or early termination, whether as margin or","page_number":62,"box":{"x":69,"y":619,"width":801,"height":11}},{"id":"6dc9ead9-dfd2-4301-9961-450e1a2babd6","block_type":"box","text":"settlement payment or otherwise; (2) any short sale borrowing; (3) reverse repurchase agreements and similar","page_number":62,"box":{"x":69,"y":634,"width":791,"height":12}},{"id":"11851214-58a6-4179-bab9-857e2d3e4375","block_type":"box","text":"financing transactions (","page_number":62,"box":{"x":68,"y":649,"width":166,"height":12}},{"id":"819fcb29-9190-4dfa-8dd6-7d8763955f04","block_type":"box","text":"e.g.","page_number":62,"box":{"x":236,"y":651,"width":25,"height":10}},{"id":"5cf9fcca-9898-4d12-8435-995d564290c1","block_type":"box","text":", recourse and non-recourse tender option bonds, and borrowed bonds), if a Fund elects to","page_number":62,"box":{"x":263,"y":649,"width":646,"height":11}},{"id":"1658d3fe-b597-4cbc-b8dd-f504f6538d80","block_type":"box","text":"treat all of these transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":62,"box":{"x":68,"y":664,"width":825,"height":12}},{"id":"87f6a768-0c00-4688-bb41-01f5cfb2c295","block_type":"box","text":"securities (","page_number":62,"box":{"x":69,"y":680,"width":78,"height":11}},{"id":"42a0dab3-bede-42f2-a453-5e4e78bfd6af","block_type":"box","text":"e.g.","page_number":62,"box":{"x":148,"y":681,"width":25,"height":10}},{"id":"5a9206a4-17da-4493-83bc-53b5cb966e97","block_type":"box","text":", firm and standby commitments, including to-be-announced (“TBA”) commitments, and dollar rolls)","page_number":62,"box":{"x":176,"y":680,"width":704,"height":11}},{"id":"cd59f0d6-6cb0-4d7e-b9e5-df0069f41294","block_type":"box","text":"and non-standard settlement cycle securities, unless such transactions meet the Delayed-Settlement Securities","page_number":62,"box":{"x":69,"y":695,"width":796,"height":11}},{"id":"0a92bcad-15a1-45c5-b591-c673652f2013","block_type":"box","text":"Provision (as defined below under “—When-Issued Securities, Delayed Delivery Securities and Forward","page_number":62,"box":{"x":69,"y":710,"width":732,"height":11}},{"id":"ba34639b-3832-4ca0-b46d-fb3d37e2070c","block_type":"box","text":"Commitments”).","page_number":62,"box":{"x":69,"y":725,"width":115,"height":11}},{"id":"863434f8-5ebb-410e-b135-80a71498cce0","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must comply with","page_number":62,"box":{"x":102,"y":748,"width":805,"height":11}},{"id":"501d0c83-36b6-478b-9dda-1c1e70fae737","block_type":"box","text":"Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things, requires a Fund to adopt and","page_number":62,"box":{"x":70,"y":763,"width":832,"height":11}},{"id":"9c27f2c4-d70e-40ad-a0a1-0ec0ccd71b19","block_type":"box","text":"implement a comprehensive written derivatives risk management program (“DRMP”) and comply with a relative or","page_number":62,"box":{"x":70,"y":778,"width":808,"height":11}},{"id":"747069b7-b71e-45eb-9b63-da01cf523846","block_type":"box","text":"absolute limit on Fund leverage risk calculated based on value-at-risk (“VaR”). The DRMP is administered by a","page_number":62,"box":{"x":69,"y":793,"width":780,"height":11}},{"id":"872add73-64e9-44c6-ac03-556e48975cea","block_type":"box","text":"“derivatives risk manager,” who is appointed by the Fund’s Board, including a majority of the independent Directors,","page_number":62,"box":{"x":70,"y":808,"width":824,"height":11}},{"id":"1a3df2a5-6870-410d-a48d-1b788a6fc3bb","block_type":"box","text":"and periodically reviews the DRMP and reports to the Fund’s Board.","page_number":62,"box":{"x":69,"y":823,"width":482,"height":11}},{"id":"a93829ca-4386-4251-98ee-845ba5cdab6d","block_type":"box","text":"Rule 18f-4 provides an exception from the DRMP, VaR limit and certain other requirements if a Fund’s","page_number":62,"box":{"x":102,"y":846,"width":724,"height":11}},{"id":"a071a775-7b97-4c8f-b37e-c7bed4120eda","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4) and the Fund","page_number":62,"box":{"x":70,"y":861,"width":830,"height":11}},{"id":"6b44337d-30cb-40a9-9a89-1f7156854ca7","block_type":"box","text":"adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the","page_number":62,"box":{"x":69,"y":876,"width":803,"height":11}},{"id":"b98c4ea4-6acf-4943-8531-1a2ba5de6b7a","block_type":"box","text":"“Limited Derivatives User Exception”).","page_number":62,"box":{"x":70,"y":891,"width":268,"height":11}},{"id":"48012095-4158-424a-8daa-e049d6a73c09","block_type":"box","text":"II-13","page_number":62,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"879b3ae7-1998-4c91-9e00-00ad200a8d32","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":62,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"423f9a9a-dbb5-4194-9956-88fb9235c4a8","block_type":"box","text":"Dodd-Frank Regulations.","page_number":63,"box":{"x":102,"y":45,"width":171,"height":11}},{"id":"bb4da637-5a5f-4b86-a70e-d3ac1d615787","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”),","page_number":63,"box":{"x":279,"y":45,"width":575,"height":11}},{"id":"eccb8ee1-ac86-4235-9663-ae712ad220cd","block_type":"box","text":"enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter (“OTC”) derivatives","page_number":63,"box":{"x":69,"y":60,"width":800,"height":11}},{"id":"8ccaba12-6ace-411c-bd51-092c88b156ab","block_type":"box","text":"markets for the first time. While the Commodity Futures Trading Commission (“CFTC”) and other U.S. regulators have","page_number":63,"box":{"x":69,"y":75,"width":834,"height":11}},{"id":"875b72bb-e4d6-484e-a367-93d4b16e9a91","block_type":"box","text":"adopted many of the required Dodd-Frank regulations, certain regulations have only recently become effective and","page_number":63,"box":{"x":69,"y":90,"width":813,"height":11}},{"id":"7384bb9b-bb17-4c4a-80eb-c3e352bde8a5","block_type":"box","text":"other regulations remain to be adopted. The full impact of Dodd-Frank on the Funds remains uncertain.","page_number":63,"box":{"x":69,"y":105,"width":733,"height":11}},{"id":"4f3e9a1f-4128-4f85-a0c3-db88f45c3a04","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the SEC as","page_number":63,"box":{"x":102,"y":128,"width":789,"height":11}},{"id":"3c245e0b-b74e-479d-84bd-ce8e47f69c8c","block_type":"box","text":"“security-based swap dealers”. Registered swap dealers and security-based swap dealers are subject to various","page_number":63,"box":{"x":70,"y":143,"width":797,"height":11}},{"id":"26ead036-e61a-4ff2-af92-7c1d0a50fcb3","block_type":"box","text":"regulatory requirements, including, but not limited to, margin, recordkeeping, reporting, transparency, position limits,","page_number":63,"box":{"x":69,"y":158,"width":833,"height":11}},{"id":"7208b881-6eb3-44e2-b3e1-0481c7189c2d","block_type":"box","text":"limitations on conflicts of interest, business conduct standards, minimum capital requirements and other regulatory","page_number":63,"box":{"x":70,"y":173,"width":826,"height":11}},{"id":"5f3ffc36-d45e-4b1d-bbcd-535a93c179d7","block_type":"box","text":"requirements, which indirectly impact the Funds that enter into transactions with them.","page_number":63,"box":{"x":69,"y":188,"width":618,"height":11}},{"id":"1946cb4b-ddc4-4eea-8fa8-0a2a7b784025","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed in","page_number":63,"box":{"x":101,"y":211,"width":745,"height":11}},{"id":"e1ead9d8-3329-4cfd-a8d5-cf62f0ef83d7","block_type":"box","text":"regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also expected to impose","page_number":63,"box":{"x":69,"y":226,"width":813,"height":11}},{"id":"ca9218d6-ba34-4275-8381-78d385c92384","block_type":"box","text":"similar requirements on certain security-based derivatives in the future. OTC derivatives trades submitted for clearing","page_number":63,"box":{"x":69,"y":241,"width":835,"height":11}},{"id":"340ea207-d831-453c-a7e7-836387f8401f","block_type":"box","text":"are subject to minimum initial and variation margin requirements set by the relevant clearinghouse, as well as margin","page_number":63,"box":{"x":69,"y":257,"width":837,"height":11}},{"id":"b811ced0-f29d-4e00-aa69-d266eeeff8fe","block_type":"box","text":"requirements mandated by the CFTC, SEC and/or federal prudential regulators. In addition, futures commission","page_number":63,"box":{"x":69,"y":271,"width":794,"height":12}},{"id":"e1395d64-1ae0-4b4c-8223-92d892d7fc5e","block_type":"box","text":"merchants (“FCMs”), who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":63,"box":{"x":69,"y":286,"width":815,"height":12}},{"id":"201511cc-ff20-41f8-8be9-3d1f546ca464","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond any","page_number":63,"box":{"x":69,"y":302,"width":770,"height":11}},{"id":"869a9dd6-f05f-426a-b6f3-efd7d0f77bf9","block_type":"box","text":"regulatory and clearinghouse minimums subject to any restrictions on such discretion in the documentation between","page_number":63,"box":{"x":69,"y":317,"width":831,"height":11}},{"id":"879a190c-3d63-48eb-b004-20c93b4bde0c","block_type":"box","text":"the FCM and the customer. These regulatory requirements may make it more difficult and costly for the Funds to","page_number":63,"box":{"x":68,"y":332,"width":804,"height":11}},{"id":"a5630e92-49ba-49d5-9bd3-08cc7ac1d539","block_type":"box","text":"enter into highly tailored or customized transactions, potentially rendering certain investment strategies impossible or","page_number":63,"box":{"x":69,"y":347,"width":839,"height":11}},{"id":"6795f3a8-2d8c-41df-a248-b71ee5539cd0","block_type":"box","text":"not economically feasible. If a Fund decides to execute and clear cleared OTC derivatives and/or futures contracts","page_number":63,"box":{"x":69,"y":362,"width":814,"height":11}},{"id":"395620b6-a518-4402-8f85-040a6cbb5e82","block_type":"box","text":"through execution facilities, exchanges or clearinghouses, either indirectly through an executing broker, clearing","page_number":63,"box":{"x":68,"y":377,"width":796,"height":12}},{"id":"297cff8f-7467-45cb-b199-9602663aaad8","block_type":"box","text":"member FCM or as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":63,"box":{"x":69,"y":392,"width":793,"height":12}},{"id":"692dde99-7a88-4da6-a554-6d9f5f693e23","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":63,"box":{"x":69,"y":408,"width":370,"height":11}},{"id":"0dd59e09-20b9-4477-a863-9a4682211f9b","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not face a","page_number":63,"box":{"x":101,"y":430,"width":766,"height":11}},{"id":"bebd931b-52a1-45e7-a900-709b3ff8109b","block_type":"box","text":"clearinghouse directly but rather will do so through a FCM that is registered with the CFTC and/or SEC and that acts","page_number":63,"box":{"x":69,"y":445,"width":826,"height":12}},{"id":"af64de42-342e-4c8b-b068-3f326db3f2ad","block_type":"box","text":"as a clearing member. A Fund may face the indirect risk of the failure of another clearing member customer to meet","page_number":63,"box":{"x":69,"y":460,"width":825,"height":12}},{"id":"d57ea9b4-9687-4be3-9a67-e033be09db06","block_type":"box","text":"its obligations to its clearing member. Such scenario could arise due to a default by the clearing member on its","page_number":63,"box":{"x":70,"y":475,"width":791,"height":12}},{"id":"2ba36111-4430-4b88-84af-41090138839f","block_type":"box","text":"obligations to the clearinghouse simultaneously with a customer’s failure to meet its obligations to the clearing","page_number":63,"box":{"x":69,"y":491,"width":793,"height":11}},{"id":"3ecbc6b9-bb9f-4003-9816-e51163a4af38","block_type":"box","text":"member.","page_number":63,"box":{"x":69,"y":506,"width":60,"height":9}},{"id":"c1e18f34-4e5c-4b60-8ae0-6a37c3963c9f","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they clear their","page_number":63,"box":{"x":102,"y":529,"width":782,"height":11}},{"id":"5caae17d-df36-4324-bdf2-af41d899ce60","block_type":"box","text":"customers’ cleared OTC derivatives and futures contracts, instead of using such initial margin in their businesses, as","page_number":63,"box":{"x":69,"y":543,"width":837,"height":12}},{"id":"87999636-0c90-4a08-a282-e48f255adeff","block_type":"box","text":"was widely permitted for OTC derivatives before Dodd-Frank. While an FCM may require its customer to post initial","page_number":63,"box":{"x":68,"y":559,"width":811,"height":11}},{"id":"41f30c3d-bed9-4545-a0a1-75a8933e148e","block_type":"box","text":"margin in excess of clearinghouse requirements, and certain clearinghouses may share a portion of their earnings on","page_number":63,"box":{"x":69,"y":574,"width":838,"height":11}},{"id":"326eb2a6-e421-44be-b8f9-cdfe7a7e2b86","block_type":"box","text":"initial margin with their clearing members, some portion of the initial margin that is passed through to the","page_number":63,"box":{"x":70,"y":589,"width":754,"height":11}},{"id":"958f1bd6-7be8-49cc-8e93-f53dc4adb391","block_type":"box","text":"clearinghouse does not generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on","page_number":63,"box":{"x":69,"y":604,"width":815,"height":11}},{"id":"802bc2e6-dd4f-4ad0-b235-d7699800f20f","block_type":"box","text":"initial margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives may cause","page_number":63,"box":{"x":70,"y":619,"width":817,"height":11}},{"id":"abae39f7-6929-48bc-b688-2949ea1b28e9","block_type":"box","text":"FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives than swap dealers will","page_number":63,"box":{"x":70,"y":634,"width":788,"height":12}},{"id":"4448a258-9c49-4524-9fa3-5a05bd00c57f","block_type":"box","text":"provide for non-cleared OTC derivatives. Furthermore, customers, including the Funds, are subject to additional fees","page_number":63,"box":{"x":70,"y":649,"width":825,"height":12}},{"id":"9c6c3981-42b2-43b2-943a-882024095812","block_type":"box","text":"payable to FCMs with respect to cleared OTC derivatives, which may raise the cost to Funds of clearing as compared","page_number":63,"box":{"x":70,"y":664,"width":829,"height":12}},{"id":"9285b019-69f8-43d5-9f3f-9c9e9e090cd7","block_type":"box","text":"to trading non-cleared OTC derivatives bilaterally.","page_number":63,"box":{"x":68,"y":680,"width":346,"height":11}},{"id":"fa24239c-4ace-41d6-b9a9-644969956195","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are required to","page_number":63,"box":{"x":101,"y":703,"width":762,"height":11}},{"id":"ed7c72fd-29ef-43a7-b7e4-832cff560332","block_type":"box","text":"exchange variation margin with a Fund and may be required by applicable regulations to collect (and in some cases","page_number":63,"box":{"x":69,"y":718,"width":820,"height":11}},{"id":"bab41bbe-a59e-4635-ab79-e4c69c5196f3","block_type":"box","text":"exchange) initial margin with a Fund. Both initial and variation margin may be comprised of cash and/or securities,","page_number":63,"box":{"x":69,"y":732,"width":816,"height":12}},{"id":"bf78b47b-ef8e-46df-aa13-701437bfa456","block_type":"box","text":"subject to applicable regulatory haircuts and other restrictions. Shares of investment companies (other than certain","page_number":63,"box":{"x":69,"y":748,"width":825,"height":11}},{"id":"95c47024-b8be-442e-a8f4-db3942b2bf21","block_type":"box","text":"money market funds) may not be posted as collateral under applicable regulations.","page_number":63,"box":{"x":69,"y":763,"width":590,"height":11}},{"id":"21bfaa53-e33b-444a-a83c-e8b4646c9a1d","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to evaluate","page_number":63,"box":{"x":101,"y":785,"width":783,"height":12}},{"id":"df5031b7-2e18-4cdf-a77d-805f7ab654bc","block_type":"box","text":"and monitor) speculative position limits (“position limits”) on the maximum speculative position which any person, or","page_number":63,"box":{"x":69,"y":801,"width":833,"height":11}},{"id":"b5c8bf0a-64f1-460e-8854-a80f3bba1fd7","block_type":"box","text":"group of persons acting in concert, may hold or control in particular contracts. In addition, U.S. federal position limits","page_number":63,"box":{"x":68,"y":816,"width":837,"height":11}},{"id":"f1ad24f5-de0c-42d9-957a-de2e7a40bf7c","block_type":"box","text":"apply to swaps that are economically equivalent to futures contracts on certain agricultural, metals and energy","page_number":63,"box":{"x":69,"y":831,"width":789,"height":11}},{"id":"62629ec7-1e21-4c33-9ae7-98266676d133","block_type":"box","text":"commodities. All positions owned or controlled by the same person or entity, even if in different accounts, must be","page_number":63,"box":{"x":69,"y":846,"width":818,"height":11}},{"id":"59501aee-0f62-4401-b513-755338b473ae","block_type":"box","text":"aggregated for purposes of complying with the speculative limits. Thus, even if a Fund does not intend to exceed","page_number":63,"box":{"x":69,"y":861,"width":801,"height":11}},{"id":"3b95a74a-8fc0-41df-9859-087297e72837","block_type":"box","text":"applicable position limits, it is possible that different clients managed by the Manager and its affiliates may be","page_number":63,"box":{"x":69,"y":876,"width":791,"height":11}},{"id":"910c970a-9785-4aaa-a54e-fcea2f27ed46","block_type":"box","text":"aggregated for this purpose. Therefore, the trading decisions of the Manager may have to be modified and positions","page_number":63,"box":{"x":69,"y":891,"width":827,"height":12}},{"id":"2c97cc56-120c-4c95-b33f-099783c1a840","block_type":"box","text":"held by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions or the","page_number":63,"box":{"x":69,"y":906,"width":805,"height":12}},{"id":"2a2edb0f-597a-41ce-b9a6-1d25c4c2847b","block_type":"box","text":"II-14","page_number":63,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"62ab7702-8b03-4bbc-b741-26d3ea717edc","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":63,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"28e41175-7f9a-4caa-93ea-5db7860f9108","block_type":"box","text":"elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A violation of position limits","page_number":64,"box":{"x":69,"y":45,"width":837,"height":11}},{"id":"8dcdaa9a-a766-4898-b73e-382211241b9a","block_type":"box","text":"could also lead to regulatory action materially adverse to a Fund’s investment strategy. A Fund may also be affected","page_number":64,"box":{"x":69,"y":60,"width":827,"height":11}},{"id":"dc096068-7d40-4ee4-a370-e17224306b30","block_type":"box","text":"by other regimes, including those of the European Union and United Kingdom, and trading venues that impose","page_number":64,"box":{"x":69,"y":75,"width":785,"height":11}},{"id":"c1aaa88b-ef61-473b-b495-00b5a5f65844","block_type":"box","text":"position limits on commodity derivative contracts.","page_number":64,"box":{"x":70,"y":90,"width":350,"height":11}},{"id":"bfc42c02-a747-4981-8df7-d0c5dc420b33","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":64,"box":{"x":101,"y":113,"width":256,"height":11}},{"id":"dc267a9b-e175-4d66-9e2a-00c0253fd9f7","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed, or may","page_number":64,"box":{"x":364,"y":113,"width":513,"height":11}},{"id":"ac3e6e67-d866-46a3-9b17-de0d3f08843e","block_type":"box","text":"propose in the future, legislation similar to Dodd-Frank or other legislation that could increase the costs of","page_number":64,"box":{"x":70,"y":128,"width":757,"height":11}},{"id":"bbc6d696-b120-4f13-92ad-b2297efbf0e1","block_type":"box","text":"participating in, or otherwise adversely impact the liquidity of, participating in the commodities markets. For example,","page_number":64,"box":{"x":70,"y":143,"width":836,"height":11}},{"id":"f974c2f6-4c45-4aa5-a7d9-0ceb89dd14cb","block_type":"box","text":"the European Market Infrastructure Regulation (Regulation (EU) No 648/2012) (“EMIR”) introduced certain","page_number":64,"box":{"x":68,"y":158,"width":762,"height":11}},{"id":"09953ca8-56e1-4249-b60c-b5169df5e9f4","block_type":"box","text":"requirements in respect of OTC derivatives including: (i) the mandatory clearing of OTC derivative contracts declared","page_number":64,"box":{"x":69,"y":173,"width":825,"height":11}},{"id":"3ea22355-c589-4900-80c2-cde45f95c4b7","block_type":"box","text":"subject to the clearing obligation; (ii) risk mitigation techniques in respect of uncleared OTC derivative contracts,","page_number":64,"box":{"x":69,"y":188,"width":798,"height":12}},{"id":"b0b66e2e-391c-4a79-9ab8-bfa55ebbf30c","block_type":"box","text":"including the mandatory margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping","page_number":64,"box":{"x":70,"y":203,"width":785,"height":12}},{"id":"b7eb82d7-6de0-4ed9-afa8-807ed5b8395c","block_type":"box","text":"requirements in respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":64,"box":{"x":69,"y":218,"width":787,"height":12}},{"id":"edc81d89-891a-4bf6-8993-dbcb984de1bf","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments Regulation (Regulation","page_number":64,"box":{"x":70,"y":234,"width":830,"height":11}},{"id":"faadaa3f-365c-4f44-beef-f5047fc38330","block_type":"box","text":"(EU) No 600/2014) (together “MiFID II”), which have applied since January 3, 2018, govern the provision of","page_number":64,"box":{"x":69,"y":249,"width":771,"height":11}},{"id":"cd5085e8-3e77-4cd7-98a9-e2ffe37fc8e9","block_type":"box","text":"investment services and activities in relation to, as well as the organized trading of, financial instruments such as","page_number":64,"box":{"x":70,"y":264,"width":812,"height":11}},{"id":"9d2fb2c9-271c-4558-bbc5-ccbcd8a85ded","block_type":"box","text":"shares, bonds, units in collective investment schemes and derivatives. In particular, MiFID II requires European Union","page_number":64,"box":{"x":69,"y":279,"width":839,"height":11}},{"id":"3503f5d0-a0ad-4fae-b952-14cf1e19a1f0","block_type":"box","text":"Member States to apply position limits to the size of a net position a person can hold at any time in commodity","page_number":64,"box":{"x":70,"y":294,"width":793,"height":11}},{"id":"de4ff9e6-6b93-4b4d-942d-1ce3bfc30fa7","block_type":"box","text":"derivatives traded on European Union trading venues and in “economically equivalent” OTC contracts. If the","page_number":64,"box":{"x":69,"y":309,"width":765,"height":11}},{"id":"e69a2031-3354-4f6a-be7f-80070f965454","block_type":"box","text":"requirements of EMIR and MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":64,"box":{"x":69,"y":324,"width":720,"height":11}},{"id":"3072a913-1052-4eb7-86e1-b5e36506e9aa","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain prudentially","page_number":64,"box":{"x":102,"y":347,"width":802,"height":11}},{"id":"7b6bf24b-2b06-4998-b3b2-84a869d90cc2","block_type":"box","text":"regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to include in their","page_number":64,"box":{"x":69,"y":362,"width":762,"height":11}},{"id":"bc588370-f37c-4853-a56c-ef2674798a69","block_type":"box","text":"derivatives contracts and certain other financial contracts, terms that delay or restrict the rights of counterparties","page_number":64,"box":{"x":69,"y":377,"width":810,"height":12}},{"id":"1b015109-7e80-48fb-a7ad-de54ebdacc16","block_type":"box","text":"(such as the Funds) to terminate such contracts, foreclose upon collateral, exercise other default rights or restrict","page_number":64,"box":{"x":69,"y":392,"width":812,"height":12}},{"id":"92365206-44c1-4d0d-8a55-ada31612b58a","block_type":"box","text":"transfers of credit support in the event that the prudentially regulated entity and/or its affiliates are subject to","page_number":64,"box":{"x":68,"y":407,"width":787,"height":12}},{"id":"09ac942a-9715-4e21-8407-c42bf7d02473","block_type":"box","text":"certain types of resolution or insolvency proceedings. Similar regulations and laws have been adopted in non-U.S.","page_number":64,"box":{"x":69,"y":423,"width":810,"height":11}},{"id":"9defa1fa-87cd-448b-bd76-aa96e56824b2","block_type":"box","text":"jurisdictions that may apply to a Fund’s counterparties located in those jurisdictions. In particular, in the United","page_number":64,"box":{"x":67,"y":438,"width":795,"height":11}},{"id":"db2549f2-1ac0-4808-8c72-37797bc36f17","block_type":"box","text":"Kingdom and the European Union, governmental authorities could reduce, eliminate or convert to equity the liabilities","page_number":64,"box":{"x":70,"y":453,"width":835,"height":11}},{"id":"15eb38f0-ecb2-47c1-a589-29f1330cd020","block_type":"box","text":"to a Fund of a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":64,"box":{"x":68,"y":468,"width":839,"height":11}},{"id":"70fe7e6c-08a5-4b77-acdc-404a6f425bd0","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely affect a Fund’s","page_number":64,"box":{"x":68,"y":483,"width":814,"height":11}},{"id":"a00af9e1-9013-4959-9455-2afa8a5f1bd1","block_type":"box","text":"ability to terminate existing derivatives contracts, exercise default rights or satisfy obligations owed to it with","page_number":64,"box":{"x":69,"y":498,"width":773,"height":11}},{"id":"e9050a55-9863-4bb0-b387-cd5423ebf70c","block_type":"box","text":"collateral received under such contracts.","page_number":64,"box":{"x":69,"y":514,"width":288,"height":8}},{"id":"73817061-d621-4310-8af6-0b9513e67373","block_type":"box","text":"Risk Factors in Derivatives.","page_number":64,"box":{"x":102,"y":536,"width":191,"height":9}},{"id":"42b40497-25b6-483e-b203-af44c123091a","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":64,"box":{"x":101,"y":559,"width":597,"height":11}},{"id":"5e06dba7-2990-4126-afc3-5a32fabb0970","block_type":"box","text":"Correlation Risk","page_number":64,"box":{"x":102,"y":581,"width":114,"height":9}},{"id":"e215a475-af65-4977-b22f-e30ae1b594a3","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the value of","page_number":64,"box":{"x":220,"y":581,"width":668,"height":12}},{"id":"7d34f7a5-ed75-445d-9557-2b092e511720","block_type":"box","text":"the portfolio holdings that are being hedged or of the particular market or security to which the Fund seeks exposure.","page_number":64,"box":{"x":68,"y":596,"width":837,"height":12}},{"id":"e0bf692a-81d9-409e-85bd-0a2045c0acdf","block_type":"box","text":"There are a number of factors which may prevent a derivative instrument from achieving the desired correlation (or","page_number":64,"box":{"x":68,"y":612,"width":818,"height":11}},{"id":"5ea37919-d83e-4323-88fe-e246556a0f4e","block_type":"box","text":"inverse correlation) with an underlying asset, rate or index, such as the impact of fees, expenses and transaction","page_number":64,"box":{"x":70,"y":627,"width":806,"height":11}},{"id":"b55edf34-2933-47db-afdc-da4499c5cfde","block_type":"box","text":"costs, the timing of pricing, and disruptions or illiquidity in the markets for such derivative instrument.","page_number":64,"box":{"x":69,"y":642,"width":725,"height":11}},{"id":"554dd1fc-96b0-45c8-9674-a3a169318edc","block_type":"box","text":"Counterpar ty Risk","page_number":64,"box":{"x":102,"y":665,"width":128,"height":11}},{"id":"8d390076-8279-42a2-9bea-4b2089543140","block_type":"box","text":"— the risk that a derivatives transaction counterparty will be unable or unwilling to make","page_number":64,"box":{"x":233,"y":665,"width":632,"height":11}},{"id":"d9c0ad18-3cae-4e9d-854d-9ae2bc529e5e","block_type":"box","text":"payments or otherwise honor its obligations to a Fund and the related risks of having concentrated exposure to such","page_number":64,"box":{"x":70,"y":680,"width":830,"height":11}},{"id":"3a5f7244-433b-4338-8d13-652e59ff6fd1","block_type":"box","text":"a counterparty. In particular, derivatives traded in OTC markets often are not guaranteed by an exchange or clearing","page_number":64,"box":{"x":69,"y":695,"width":824,"height":11}},{"id":"4d20dbf3-65e4-4433-918c-e72d23997ec8","block_type":"box","text":"corporation and often do not require payment of margin, and to the extent that the Fund has unrealized gains in such","page_number":64,"box":{"x":69,"y":710,"width":834,"height":11}},{"id":"7e2886ee-9e2c-48db-aa8f-9b6f60df20fa","block_type":"box","text":"instruments or has deposited collateral with its counterparties the Fund is at risk that its counterparties will become","page_number":64,"box":{"x":70,"y":725,"width":831,"height":11}},{"id":"49425b29-2622-4edf-a985-8d3cbc3c174e","block_type":"box","text":"bankrupt or otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":64,"box":{"x":69,"y":740,"width":806,"height":11}},{"id":"b5bda18f-d264-43e8-b53e-3851069ed46d","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or that have","page_number":64,"box":{"x":69,"y":755,"width":803,"height":11}},{"id":"6093e964-e989-419d-92bc-07b13f9b604a","block_type":"box","text":"provided the Fund with a third-party guaranty or other credit support. When a Fund enters into a derivatives","page_number":64,"box":{"x":70,"y":771,"width":760,"height":11}},{"id":"2ebe96a5-cf92-458e-8dc3-69b853f7b626","block_type":"box","text":"transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is subject to the credit risk of the","page_number":64,"box":{"x":68,"y":785,"width":819,"height":12}},{"id":"2f1a9480-b06b-4ac4-96d1-1a3abd5e84f0","block_type":"box","text":"clearing house and the clearing member through which it holds its cleared position. Credit risk of market participants","page_number":64,"box":{"x":69,"y":801,"width":834,"height":11}},{"id":"2cc27b3b-b7be-441b-bbfd-997fe6903010","block_type":"box","text":"with respect to derivatives that are centrally cleared is concentrated in a few clearing houses and increasingly fewer","page_number":64,"box":{"x":68,"y":816,"width":826,"height":11}},{"id":"617693b5-ae4d-41e2-92a1-4432e3fb0e25","block_type":"box","text":"clearing members. It is not clear how an insolvency proceeding of a clearing house would be conducted and what","page_number":64,"box":{"x":69,"y":831,"width":805,"height":11}},{"id":"25731b40-c4be-472a-a10f-9d993e98cd98","block_type":"box","text":"impact an insolvency of a clearing house would have on the financial system. Also, a Fund will not be fully protected","page_number":64,"box":{"x":70,"y":846,"width":824,"height":11}},{"id":"84025357-d075-4cce-addc-27ccd95ac848","block_type":"box","text":"in the event of the bankruptcy of a Fund’s clearing member because the Fund would be limited to recovering only a","page_number":64,"box":{"x":70,"y":861,"width":816,"height":11}},{"id":"c13b5f1d-2a63-4858-9e2f-d0f4dfe77eb8","block_type":"box","text":"pro rata share of the funds held by the clearing member on behalf of customers by account class for cleared","page_number":64,"box":{"x":70,"y":876,"width":771,"height":11}},{"id":"53bea5f1-d18d-48f6-9e3b-c8cfc0d2307e","block_type":"box","text":"derivatives. Although a clearing member is required to segregate assets from customers with respect to cleared","page_number":64,"box":{"x":69,"y":891,"width":797,"height":12}},{"id":"6324b4f2-b91c-4fe7-9a9c-9b064f9a8744","block_type":"box","text":"derivatives positions from the clearing member’s proprietary assets, if a clearing member does not comply with the","page_number":64,"box":{"x":69,"y":906,"width":822,"height":12}},{"id":"3aa37893-5344-40f8-8153-d7a56c6279a9","block_type":"box","text":"II-15","page_number":64,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"0a7e97d3-d2c3-4e2d-a3ae-aac8bdb852f8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":64,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ab3a5fcd-0067-4770-abe2-f3eb664d90da","block_type":"box","text":"applicable regulations, or in the event of fraud or misappropriation of customer assets by a clearing member, a Fund","page_number":65,"box":{"x":69,"y":45,"width":829,"height":11}},{"id":"b64b5ca0-b598-4401-9ba1-2b99c91a7ab9","block_type":"box","text":"could have only an unsecured creditor claim in an insolvency of the clearing member with respect to the assets held","page_number":65,"box":{"x":69,"y":60,"width":827,"height":11}},{"id":"06f12bea-c95f-4154-8506-917367b1d22d","block_type":"box","text":"by the clearing member.","page_number":65,"box":{"x":69,"y":75,"width":169,"height":11}},{"id":"342b13fb-36c0-45f6-878c-4533739248f1","block_type":"box","text":"Credit Risk","page_number":65,"box":{"x":102,"y":98,"width":78,"height":9}},{"id":"2f698570-a4e3-4fb9-aeb8-9a2bcbc5cc75","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be able to","page_number":65,"box":{"x":184,"y":98,"width":698,"height":11}},{"id":"d5a5aa55-0ea7-4dbb-a310-190af95f8120","block_type":"box","text":"honor its financial obligations.","page_number":65,"box":{"x":69,"y":113,"width":213,"height":11}},{"id":"0508e88a-031e-469b-a109-ee8f20f02077","block_type":"box","text":"Currency Risk","page_number":65,"box":{"x":102,"y":135,"width":98,"height":11}},{"id":"a1a26b47-ffad-47b6-93bf-1c7baf5e69e1","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely affect the","page_number":65,"box":{"x":204,"y":135,"width":669,"height":12}},{"id":"91e9b737-b999-4247-ab59-6a57f744753b","block_type":"box","text":"value (in U.S. dollar terms) of a derivative.","page_number":65,"box":{"x":68,"y":150,"width":300,"height":11}},{"id":"398ce09c-1b44-4818-ae7b-4a64f835790c","block_type":"box","text":"Illiquidity Risk","page_number":65,"box":{"x":102,"y":173,"width":98,"height":11}},{"id":"d06dc8c3-41cf-4c70-ab52-cf2661fed56b","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at the time","page_number":65,"box":{"x":204,"y":173,"width":693,"height":11}},{"id":"273ff74c-cfa3-4344-b6ae-4610d643907f","block_type":"box","text":"or at the price desired by a Fund in connection with payments of margin, collateral, or settlement payments. There","page_number":65,"box":{"x":69,"y":188,"width":814,"height":12}},{"id":"97274492-66ee-47bb-924c-6238cc90616b","block_type":"box","text":"can be no assurance that a Fund will be able to unwind or offset a derivative at its desired price, in a secondary","page_number":65,"box":{"x":69,"y":203,"width":799,"height":12}},{"id":"484be897-cf59-4162-8970-ec0ba6cc6a25","block_type":"box","text":"market or otherwise. It may, therefore, not be possible for the Fund to unwind its position in a derivative without","page_number":65,"box":{"x":69,"y":218,"width":799,"height":12}},{"id":"96d078c3-4660-4824-92a6-ce5d10af9d4d","block_type":"box","text":"incurring substantial losses (if at all). Certain OTC derivatives, including swaps and OTC options, involve substantial","page_number":65,"box":{"x":70,"y":234,"width":824,"height":11}},{"id":"0436f9d7-6410-47db-805f-3c55d894deb4","block_type":"box","text":"illiquidity risk. Illiquidity may also make it more difficult for a Fund to ascertain a market value for such derivatives. A","page_number":65,"box":{"x":70,"y":249,"width":830,"height":11}},{"id":"8d3187a4-d1f5-4810-a9a6-a4d69ec8ef84","block_type":"box","text":"Fund will, therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":65,"box":{"x":70,"y":264,"width":762,"height":11}},{"id":"b53b52ec-ea94-43b2-8a4a-e23202e6a044","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which the Manager","page_number":65,"box":{"x":70,"y":279,"width":827,"height":11}},{"id":"f8f86b3d-ec1a-49d4-806e-c44043b1dc67","block_type":"box","text":"anticipates the Fund can receive on each business day at least two independent bids or offers, unless a quotation","page_number":65,"box":{"x":69,"y":294,"width":816,"height":11}},{"id":"dc365c14-b2e3-459b-bc4f-10223ba7d823","block_type":"box","text":"from only one dealer is available, in which case that dealer’s quotation may be used. The illiquidity of the derivatives","page_number":65,"box":{"x":68,"y":309,"width":831,"height":11}},{"id":"d2471dac-1a24-44ef-99aa-199fd2d610b2","block_type":"box","text":"markets may be due to various factors, including congestion, disorderly markets, limitations on deliverable supplies,","page_number":65,"box":{"x":69,"y":324,"width":828,"height":12}},{"id":"aa043bbd-0bde-4ba4-aa61-c942de044af5","block_type":"box","text":"the participation of speculators, government regulation and intervention, and technical and operational or system","page_number":65,"box":{"x":68,"y":339,"width":809,"height":12}},{"id":"c25f9ea8-a77f-410e-a30a-36a0e9308a8a","block_type":"box","text":"failures. In addition, the liquidity of a market in an exchange-traded derivative contract may be adversely affected by","page_number":65,"box":{"x":68,"y":355,"width":826,"height":11}},{"id":"7f72dc85-e15e-405f-8c8f-d5d912cfadc7","block_type":"box","text":"“daily price fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":65,"box":{"x":70,"y":370,"width":806,"height":11}},{"id":"59569ef2-8788-4bd0-8b06-9658266458a5","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract, no trades may","page_number":65,"box":{"x":68,"y":385,"width":838,"height":11}},{"id":"8982f569-3979-408f-8410-863be8e9eddb","block_type":"box","text":"be entered into at a price beyond the limit, thus preventing the liquidation of open positions. Prices have in the past","page_number":65,"box":{"x":69,"y":400,"width":827,"height":11}},{"id":"a2d294a5-ba5e-4cb3-a703-969e1b2ce21c","block_type":"box","text":"moved to the daily limit on a number of consecutive trading days with little to no trading. If it is not possible to close","page_number":65,"box":{"x":69,"y":415,"width":828,"height":11}},{"id":"c7c56828-5c64-4278-a1be-0a462f893ede","block_type":"box","text":"an open derivative position entered into by the Fund, the Fund would continue to be required to make daily cash","page_number":65,"box":{"x":69,"y":430,"width":796,"height":11}},{"id":"a940f0c2-1fba-457a-bdef-4830867cab2f","block_type":"box","text":"payments of variation margin in the event of adverse price movements. In such a situation, if the Fund has","page_number":65,"box":{"x":70,"y":445,"width":759,"height":12}},{"id":"74dfb15c-a342-4801-b3c7-81bbd93f7876","block_type":"box","text":"insufficient cash, it may have to sell portfolio securities to meet daily variation margin requirements at a time when it","page_number":65,"box":{"x":70,"y":460,"width":837,"height":12}},{"id":"ab852247-4b4e-4eab-b500-2741b2e9a4cd","block_type":"box","text":"may be disadvantageous to do so.","page_number":65,"box":{"x":69,"y":476,"width":243,"height":11}},{"id":"1638f3e8-3df8-4181-888e-7158929bf915","block_type":"box","text":"Index Risk","page_number":65,"box":{"x":102,"y":498,"width":73,"height":9}},{"id":"69780b65-a157-4775-b4ba-3a4133a1d73c","block_type":"box","text":"— if the derivative is linked to the performance of an index, it will be subject to the risks associated","page_number":65,"box":{"x":179,"y":498,"width":714,"height":11}},{"id":"6fa0148d-5611-43d2-a835-47ad0ada819e","block_type":"box","text":"with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a","page_number":65,"box":{"x":68,"y":513,"width":800,"height":12}},{"id":"feafb68a-8693-4a2c-ba81-4036c20c1537","block_type":"box","text":"reduction in the value of the derivative to below the price that the Fund paid for such derivative.","page_number":65,"box":{"x":69,"y":528,"width":678,"height":11}},{"id":"48f480d3-e964-4326-a9c6-b8caed905115","block_type":"box","text":"Legal Risk","page_number":65,"box":{"x":102,"y":551,"width":73,"height":11}},{"id":"84f5bda3-a1fe-4128-9554-1e773981b4c3","block_type":"box","text":"— the risk of insufficient documentation, insufficient capacity or authority of counterparty, or legality","page_number":65,"box":{"x":179,"y":551,"width":717,"height":11}},{"id":"3d3fefd7-ebac-4b3c-9bb2-0bfa1d257602","block_type":"box","text":"or enforceability of a contract.","page_number":65,"box":{"x":69,"y":566,"width":211,"height":11}},{"id":"6a2eef5d-1f39-4024-8006-afef18981722","block_type":"box","text":"Leverage Risk","page_number":65,"box":{"x":102,"y":589,"width":99,"height":11}},{"id":"f26a207d-7fca-41a3-8768-3f5eaddba3c0","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and losses.","page_number":65,"box":{"x":205,"y":589,"width":648,"height":11}},{"id":"5d88dee1-4dd3-4090-a9de-7e044dee58b6","block_type":"box","text":"Relatively small market movements may result in large changes in the value of a derivatives position and can result","page_number":65,"box":{"x":70,"y":604,"width":823,"height":11}},{"id":"4540b2bf-277a-48e8-81a7-ae9a8e9c3615","block_type":"box","text":"in losses that greatly exceed the amount originally invested.","page_number":65,"box":{"x":70,"y":619,"width":425,"height":11}},{"id":"a7c03ef3-6eea-4a96-9b5d-1eec5438597a","block_type":"box","text":"Market Risk","page_number":65,"box":{"x":102,"y":642,"width":85,"height":9}},{"id":"a8b3f575-200e-42f6-92cd-538b22ce5557","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to the value of","page_number":65,"box":{"x":191,"y":642,"width":716,"height":11}},{"id":"a9d211ba-8838-4e8d-aa9d-37e9cccb5b8e","block_type":"box","text":"the underlying asset will adversely affect the value of a derivative. In the event of an adverse movement, a Fund may","page_number":65,"box":{"x":68,"y":657,"width":833,"height":11}},{"id":"eb33bdf6-0f53-4a88-934c-04e23fb3e8fa","block_type":"box","text":"be required to pay substantial additional margin to maintain its position or the Fund’s returns may be adversely","page_number":65,"box":{"x":69,"y":672,"width":794,"height":11}},{"id":"22471179-a5a7-4c27-b9dd-051a8e53567a","block_type":"box","text":"affected.","page_number":65,"box":{"x":69,"y":687,"width":62,"height":9}},{"id":"bcdeb110-f107-498c-bd8f-0e3dd6d6e92a","block_type":"box","text":"Operational Risk","page_number":65,"box":{"x":102,"y":710,"width":117,"height":11}},{"id":"7447028d-a109-43a2-93af-f87b9a269c80","block_type":"box","text":"— the risk related to potential operational issues, including documentation issues, settlement","page_number":65,"box":{"x":223,"y":710,"width":674,"height":11}},{"id":"e375b377-2c62-4537-9df7-5c756c999d77","block_type":"box","text":"issues, systems failures, inadequate controls and human error.","page_number":65,"box":{"x":70,"y":725,"width":451,"height":11}},{"id":"ef5ee78c-5c2c-4a2d-a62d-f708acc526c5","block_type":"box","text":"Valuation Risk","page_number":65,"box":{"x":103,"y":748,"width":99,"height":9}},{"id":"7c374ea7-af8a-499f-8db4-b35d9c82430b","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the market. This is","page_number":65,"box":{"x":206,"y":748,"width":701,"height":11}},{"id":"38eac243-1a11-4f16-81c2-dee5d4300a58","block_type":"box","text":"possible especially in times of market distress, since many market participants may be reluctant to purchase","page_number":65,"box":{"x":70,"y":763,"width":779,"height":11}},{"id":"48d3232e-d96c-4b59-8489-59b51b088414","block_type":"box","text":"complex instruments or quote prices for them.","page_number":65,"box":{"x":69,"y":778,"width":329,"height":11}},{"id":"f7ee9f68-4406-4d92-a150-dab16e30dd86","block_type":"box","text":"Volatility Risk","page_number":65,"box":{"x":103,"y":801,"width":93,"height":11}},{"id":"a2d728cc-ed03-4721-b72a-3f9d4af99ae2","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time period.","page_number":65,"box":{"x":200,"y":801,"width":652,"height":11}},{"id":"03e74c48-1e22-488e-b654-106c5b7bce06","block_type":"box","text":"Types of Derivatives Transactions.","page_number":65,"box":{"x":103,"y":823,"width":240,"height":11}},{"id":"3f4585b4-ac4f-4377-b31e-13d5534ad588","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and restrictions,","page_number":65,"box":{"x":101,"y":846,"width":771,"height":11}},{"id":"46e322c3-86c4-4895-8029-39a986b92cec","block_type":"box","text":"including the following:","page_number":65,"box":{"x":70,"y":861,"width":159,"height":11}},{"id":"4677da32-a36c-4348-8364-968f5ea1a9e3","block_type":"box","text":"Futures.","page_number":65,"box":{"x":102,"y":884,"width":56,"height":9}},{"id":"bbe77321-ee32-4c9b-b36c-1c074d411aa6","block_type":"box","text":"II-16","page_number":65,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"65030475-af94-4cd4-8223-ce0361699214","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":65,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"fc901def-8ac8-4d9f-86b3-14f1756f3f8e","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are standardized,","page_number":66,"box":{"x":101,"y":45,"width":791,"height":11}},{"id":"2dbb8d79-bf38-4bb7-b777-558fa7b45ca3","block_type":"box","text":"exchange-traded contracts that require a purchaser to take delivery, and a seller to make delivery, of a specified","page_number":66,"box":{"x":69,"y":60,"width":799,"height":11}},{"id":"b87ea60a-248b-4a8e-a4b3-316196a950e6","block_type":"box","text":"amount of an asset at a specified future date and price. Upon purchasing or selling a futures contract, a Fund is","page_number":66,"box":{"x":69,"y":75,"width":800,"height":11}},{"id":"8970fe17-f11b-43c5-a4cf-48e683956064","block_type":"box","text":"required to deposit initial margin equal to a percentage of the contract value. Futures contracts are marked to market","page_number":66,"box":{"x":69,"y":90,"width":838,"height":11}},{"id":"a051a163-f3f2-4bf1-8bfe-0342244fcc4f","block_type":"box","text":"daily for the duration of the contract, and the Fund will either post additional margin or be entitled to a payment, as","page_number":66,"box":{"x":69,"y":105,"width":820,"height":11}},{"id":"34af7ab3-fd01-4420-9fa3-e1bf1a58ed29","block_type":"box","text":"applicable, based on the mark-to-market movement of the contract.","page_number":66,"box":{"x":69,"y":120,"width":478,"height":11}},{"id":"d87e9a7d-ba60-4fde-8dec-468425c3e879","block_type":"box","text":"A Fund may sell a futures contract prior to the completion of its term to limit its risk of loss from a decline in the","page_number":66,"box":{"x":101,"y":143,"width":801,"height":11}},{"id":"a2c3280e-b746-4b5c-a90a-31ba35bfc9c7","block_type":"box","text":"market value of portfolio holdings correlated with the futures contract. However, in the event the market value of the","page_number":66,"box":{"x":69,"y":158,"width":829,"height":11}},{"id":"97fd8d36-aaae-42cf-a790-01b978187410","block_type":"box","text":"portfolio holdings correlated with the futures contract increases rather than decreases, a Fund will realize a loss on","page_number":66,"box":{"x":70,"y":173,"width":822,"height":11}},{"id":"324b6806-d708-4ed3-b6a2-79df75a04fdc","block_type":"box","text":"the futures position and a lower return on the portfolio holdings than would have been realized without the purchase","page_number":66,"box":{"x":68,"y":188,"width":830,"height":12}},{"id":"6c8138ca-2432-4023-8021-367df7023eba","block_type":"box","text":"of the futures contract.","page_number":66,"box":{"x":69,"y":203,"width":162,"height":9}},{"id":"51d7405a-c9f2-4fff-8654-a1dea392928d","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing securities or","page_number":66,"box":{"x":101,"y":226,"width":756,"height":11}},{"id":"bdb63096-ac34-440f-abfb-f98879b7a26e","block_type":"box","text":"commodities directly. In the event that such securities or commodities decline in value or a Fund determines not to","page_number":66,"box":{"x":69,"y":241,"width":820,"height":11}},{"id":"32d8ac7e-756f-41b0-a720-6e49081b45a9","block_type":"box","text":"complete an anticipatory hedge transaction relating to a futures contract, however, the Fund may realize a loss","page_number":66,"box":{"x":69,"y":256,"width":789,"height":12}},{"id":"3aad5603-08fa-45f3-ba79-2a5ef666beb2","block_type":"box","text":"relating to the futures position.","page_number":66,"box":{"x":69,"y":271,"width":219,"height":12}},{"id":"c1715692-7456-42d1-9355-32a698948a26","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may be","page_number":66,"box":{"x":102,"y":294,"width":757,"height":11}},{"id":"8b411d1c-90da-49c6-934c-e99de89849ae","block_type":"box","text":"required to liquidate positions or may not be able to fully implement trading instructions. Any such liquidation or","page_number":66,"box":{"x":69,"y":309,"width":797,"height":11}},{"id":"a5de70d2-c638-4670-8392-7b875562e986","block_type":"box","text":"limited implementation could result in substantial costs to a Fund. See “—Regulation of Derivatives — Dodd-Frank","page_number":66,"box":{"x":70,"y":324,"width":816,"height":12}},{"id":"0183367b-ef4a-49c1-932c-31761e2a0407","block_type":"box","text":"Regulations” above.","page_number":66,"box":{"x":70,"y":340,"width":140,"height":11}},{"id":"ef15105d-7b14-457d-a25d-a1fcb5326b99","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including financial futures","page_number":66,"box":{"x":101,"y":362,"width":799,"height":11}},{"id":"f3d284ed-fed6-400f-a1f5-0ec61e9c7a5d","block_type":"box","text":"and stock indices. Generally, these strategies would be used under the same market and market sector conditions","page_number":66,"box":{"x":69,"y":377,"width":818,"height":12}},{"id":"fd73876a-11f2-49d6-877f-759e49cdae60","block_type":"box","text":"(","page_number":66,"box":{"x":69,"y":393,"width":3,"height":10}},{"id":"e4e09835-27c0-4e84-9c5e-b828c034206f","block_type":"box","text":"i.e.","page_number":66,"box":{"x":74,"y":393,"width":21,"height":8}},{"id":"786806c9-09ac-4df3-996e-c028ff98b7e7","block_type":"box","text":", conditions relating to specific types of investments) in which the Fund entered into futures transactions. A Fund","page_number":66,"box":{"x":97,"y":392,"width":803,"height":12}},{"id":"66414794-d1c9-4b7a-9240-e0a9bd2d7e6a","block_type":"box","text":"may purchase put options or write call options on futures contracts and stock indices in lieu of selling the underlying","page_number":66,"box":{"x":69,"y":407,"width":830,"height":12}},{"id":"0c88787d-ecad-4c70-a1e0-276fef836587","block_type":"box","text":"futures contract in anticipation of a decrease in the market value of its securities. Similarly, a Fund can purchase call","page_number":66,"box":{"x":68,"y":423,"width":835,"height":11}},{"id":"a50ea08b-dbbf-4828-8cdc-b9cd92ef4f45","block_type":"box","text":"options, or write put options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":66,"box":{"x":69,"y":438,"width":831,"height":11}},{"id":"4fda92d6-cf43-4461-be73-05f9315e650d","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of securities which the","page_number":66,"box":{"x":69,"y":453,"width":826,"height":11}},{"id":"2b488c74-9d9f-4064-a0aa-28610a2dcf0a","block_type":"box","text":"Fund intends to purchase.","page_number":66,"box":{"x":70,"y":468,"width":183,"height":11}},{"id":"4d82e58e-4ed1-4023-a2f1-aa6acace5742","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to futures","page_number":66,"box":{"x":101,"y":491,"width":768,"height":11}},{"id":"fcef2b3c-94f8-42ef-96b0-e83851602be1","block_type":"box","text":"contracts. These instruments may take a variety of forms, such as debt securities with interest or principal payments","page_number":66,"box":{"x":69,"y":506,"width":835,"height":11}},{"id":"c0c7fe72-e077-4fee-93ef-a51abcf62390","block_type":"box","text":"determined by reference to the value of a security, an index of securities or a commodity at a future point in time. The","page_number":66,"box":{"x":69,"y":521,"width":839,"height":11}},{"id":"e018da79-2b7e-49ea-8403-19458a910249","block_type":"box","text":"risks of such investments could reflect the risks of investing in futures and securities, including volatility and","page_number":66,"box":{"x":69,"y":536,"width":773,"height":11}},{"id":"b88f82f3-755e-4ca5-b934-61ba46398432","block_type":"box","text":"illiquidity.","page_number":66,"box":{"x":70,"y":551,"width":63,"height":11}},{"id":"c8977b0e-4852-4288-9c06-4ce2882641e2","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage risk,","page_number":66,"box":{"x":102,"y":574,"width":757,"height":11}},{"id":"36f6bc1d-8605-41d9-ace8-ac6c5a26cde1","block_type":"box","text":"illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the clearinghouse. See","page_number":66,"box":{"x":70,"y":589,"width":807,"height":11}},{"id":"c6a4a9c0-7395-4451-9d27-c9d0eb144ca2","block_type":"box","text":"“—Risk Factors in Derivatives” above.","page_number":66,"box":{"x":70,"y":604,"width":269,"height":9}},{"id":"862eb869-704e-4f82-97dc-c1a522146b4a","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a limit is","page_number":66,"box":{"x":102,"y":627,"width":791,"height":11}},{"id":"360f270c-20db-4695-b0b7-5e5c861f1b33","block_type":"box","text":"set by a regulator, such as a government entity, on the total amount of specific greenhouse gases, such as CO2, that","page_number":66,"box":{"x":69,"y":642,"width":838,"height":11}},{"id":"02f494cd-f9f4-44a2-a897-b45f088ec6df","block_type":"box","text":"can be emitted by regulated entities, such as manufacturers or energy producers. The regulator then may issue or","page_number":66,"box":{"x":69,"y":657,"width":814,"height":11}},{"id":"557d1422-d455-46b7-ad9a-8ec5fe119421","block_type":"box","text":"sell individual “emission allowances” to regulated entities, which can then be traded on the open market. Commodity","page_number":66,"box":{"x":69,"y":672,"width":837,"height":11}},{"id":"6a2e404c-9bbd-4158-8e0b-2b04ad85a39c","block_type":"box","text":"futures contracts linked to the value of emission allowances are known as “carbon futures.”","page_number":66,"box":{"x":68,"y":687,"width":657,"height":9}},{"id":"494289d4-80a8-4b71-ab50-22979045a747","block_type":"box","text":"The price for carbon futures contracts is based on a number of factors, including the supply of and the demand","page_number":66,"box":{"x":101,"y":710,"width":792,"height":11}},{"id":"4711e2e2-1ab3-467d-8c59-8936934bec3d","block_type":"box","text":"for carbon futures contracts. Changes in law, market conditions and expectations, position limits, collateral","page_number":66,"box":{"x":68,"y":725,"width":764,"height":11}},{"id":"1ece4894-54fe-453a-a3a5-c117e944131d","block_type":"box","text":"requirements, and other factors each can impact the supply of and demand for carbon futures contracts. The market","page_number":66,"box":{"x":69,"y":740,"width":832,"height":11}},{"id":"8e8d8938-11e7-44a2-b61a-51a2cf44bcd0","block_type":"box","text":"for carbon futures contracts is still developing and may be subject to periods of illiquidity. During such times it may be","page_number":66,"box":{"x":68,"y":755,"width":841,"height":11}},{"id":"206e072a-1d11-45d5-936a-6ed9d2daeba3","block_type":"box","text":"difficult or impossible to buy or sell a position at the desired price. Market disruptions or volatility can also make it","page_number":66,"box":{"x":69,"y":770,"width":819,"height":11}},{"id":"22316137-f4a9-4c32-9534-4650a1ead707","block_type":"box","text":"difficult to find a counterparty willing to transact at a reasonable price and sufficient size.","page_number":66,"box":{"x":69,"y":785,"width":637,"height":12}},{"id":"bb577656-951b-4944-953f-854c06c2658f","block_type":"box","text":"Swap Agreements.","page_number":66,"box":{"x":102,"y":808,"width":131,"height":11}},{"id":"20ea4437-04c6-4130-af1e-b7a2876b602e","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap agreements are","page_number":66,"box":{"x":101,"y":831,"width":782,"height":11}},{"id":"cbe142eb-e069-4b51-a8dd-4aa31323f56a","block_type":"box","text":"OTC contracts entered into primarily by financial institutions and institutional investors which may or may not be","page_number":66,"box":{"x":69,"y":846,"width":796,"height":11}},{"id":"a9cdcdc8-9ea3-4b59-aa84-e22e1b95c4c8","block_type":"box","text":"cleared by a central clearinghouse. In a standard “swap” transaction, two parties agree to exchange the returns","page_number":66,"box":{"x":69,"y":861,"width":799,"height":11}},{"id":"e0d3991c-03c8-4f7b-9cbd-602c5c5d2f2a","block_type":"box","text":"earned or realized from one or more underlying assets or rates of return, which may be adjusted for an interest","page_number":66,"box":{"x":69,"y":876,"width":792,"height":11}},{"id":"09dcb9a8-502d-466c-94ca-882f8215c319","block_type":"box","text":"factor. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to","page_number":66,"box":{"x":68,"y":891,"width":832,"height":12}},{"id":"60dc9874-bb7d-4d48-8f41-03f02eab4ffe","block_type":"box","text":"a “notional amount,”","page_number":66,"box":{"x":69,"y":907,"width":147,"height":10}},{"id":"d541c808-0f3b-4df2-9ee9-8b778a382ea8","block_type":"box","text":"e.g.","page_number":66,"box":{"x":223,"y":908,"width":25,"height":10}},{"id":"efc73699-13fb-461e-8808-90f3ed0bde0c","block_type":"box","text":", the return or increase in value of a particular dollar amount invested at a particular","page_number":66,"box":{"x":251,"y":906,"width":602,"height":11}},{"id":"c1512687-5f8a-4eb4-bb09-e34ca7aecef3","block_type":"box","text":"II-17","page_number":66,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"55077b8d-1fe5-4001-b72d-a0dfb62d1fc5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":66,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"fb0ad88a-8bde-4a22-aaad-ab8b18aaddec","block_type":"box","text":"interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index. The","page_number":67,"box":{"x":70,"y":45,"width":787,"height":11}},{"id":"2b90c53c-b9eb-4d21-9d03-8384b3c1682a","block_type":"box","text":"notional amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":67,"box":{"x":69,"y":60,"width":762,"height":11}},{"id":"7fa77c1d-f504-4ba5-8dd0-d3302df0b240","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will generally be equal","page_number":67,"box":{"x":69,"y":75,"width":828,"height":11}},{"id":"1a128e09-4036-4c3b-a709-3d631a501b76","block_type":"box","text":"only to the net amount to be paid or received under the agreement based on the relative values of the positions held","page_number":67,"box":{"x":69,"y":90,"width":832,"height":11}},{"id":"77c76025-03ff-4c75-b6c6-b60026122af0","block_type":"box","text":"by each party to the agreement. Swaps that are not cleared involve substantial counterparty risk. A Fund will typically","page_number":67,"box":{"x":69,"y":105,"width":835,"height":11}},{"id":"ab75fcaa-9fca-4b46-82f2-419966510aa9","block_type":"box","text":"attempt to mitigate this counterparty risk by entering into swap agreements only with creditworthy entities that have","page_number":67,"box":{"x":69,"y":120,"width":826,"height":12}},{"id":"e2bb0e5e-70cd-4067-a3b9-26398c2e2e74","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. A Fund’s ability","page_number":67,"box":{"x":69,"y":136,"width":827,"height":11}},{"id":"4e3f98fc-86b7-4e17-aeac-545aa9e08d3e","block_type":"box","text":"to use swap agreements may be restricted by the tax rules applicable to registered investment companies.","page_number":67,"box":{"x":68,"y":151,"width":763,"height":11}},{"id":"085d1f40-2d83-42f6-aac6-8d904b268bfa","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":67,"box":{"x":102,"y":173,"width":329,"height":11}},{"id":"d6faf919-2494-4ab3-a698-47f9f4f4bcab","block_type":"box","text":"Certain Funds may enter into credit default swaps and similar","page_number":67,"box":{"x":438,"y":173,"width":439,"height":11}},{"id":"b97c762a-4f68-4fa9-acfb-d1d73c5d2093","block_type":"box","text":"instruments. Credit default swaps are standardized agreements in which the protection “buyer” pays the protection","page_number":67,"box":{"x":70,"y":188,"width":821,"height":12}},{"id":"66ba60ce-e82f-44ef-beb4-ae1bbceee5b9","block_type":"box","text":"“seller” an up-front payment, or a periodic stream of payments, over the term of the contract, provided generally that","page_number":67,"box":{"x":70,"y":203,"width":831,"height":12}},{"id":"c58abd68-fca8-479a-9daa-f5907f50d7fd","block_type":"box","text":"no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the","page_number":67,"box":{"x":69,"y":218,"width":801,"height":12}},{"id":"f6afc008-bf14-4e40-9d63-2993ef86601c","block_type":"box","text":"buyer the difference between the notional amount of the contract and the value of a portfolio of securities issued by","page_number":67,"box":{"x":69,"y":234,"width":829,"height":11}},{"id":"8db373ac-ce14-4b8c-8bba-ea16ed16f3f9","block_type":"box","text":"the reference entity. A Fund may be either the buyer or seller in the transaction. The Funds may enter into credit","page_number":67,"box":{"x":68,"y":249,"width":798,"height":11}},{"id":"f2fd4174-c4eb-4bfe-8eb4-e191f5b55588","block_type":"box","text":"default swaps that reference the obligations of a single entity (“single-name CDS”) or the obligations of entities that","page_number":67,"box":{"x":69,"y":264,"width":827,"height":11}},{"id":"a49f7c7b-b315-4032-9c8d-fc5afa8943ec","block_type":"box","text":"make up an index (“index CDS”). References to “credit default swaps” shall collectively refer to single-name CDS and","page_number":67,"box":{"x":69,"y":279,"width":836,"height":11}},{"id":"9202f22f-8295-440c-aaf6-a43e5bc7c91d","block_type":"box","text":"index CDS.","page_number":67,"box":{"x":70,"y":294,"width":75,"height":9}},{"id":"f3d719d2-bb3b-4bf9-bb0d-13762b2197b6","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not currently held by","page_number":67,"box":{"x":102,"y":317,"width":800,"height":11}},{"id":"4baf2e47-990a-4ac9-bfc2-5d177fc37526","block_type":"box","text":"a Fund. In circumstances in which a Fund does not own the securities or loans that are deliverable under a credit","page_number":67,"box":{"x":69,"y":332,"width":806,"height":9}},{"id":"2d099da5-ced7-43c8-b056-5295767e56fe","block_type":"box","text":"default swap, the Fund is exposed to the risk that deliverable securities will not be available in the market, or will be","page_number":67,"box":{"x":69,"y":347,"width":828,"height":11}},{"id":"ba8269a7-dd86-451b-aac1-c3efc5e10e10","block_type":"box","text":"available only at unfavorable prices, as would be the case in a so-called “short squeeze.” In certain instances of","page_number":67,"box":{"x":69,"y":362,"width":804,"height":11}},{"id":"c4b10224-72c0-4d7d-8812-fa2d184565ac","block_type":"box","text":"issuer defaults or restructurings, it has been unclear under the standard industry documentation for credit default","page_number":67,"box":{"x":70,"y":377,"width":812,"height":12}},{"id":"16a52d29-ec19-4c2c-a675-0b40c688ef08","block_type":"box","text":"swaps whether or not a “credit event” triggering the seller’s payment obligation had occurred. Certain initiatives","page_number":67,"box":{"x":69,"y":392,"width":798,"height":12}},{"id":"98b0b28c-f856-47ac-9559-015d82e174c8","block_type":"box","text":"adopted by derivatives market participants, including the International Swaps and Derivatives Association (“ISDA”),","page_number":67,"box":{"x":69,"y":408,"width":819,"height":11}},{"id":"5b886a9f-30fc-41d1-8101-b61e6301079d","block_type":"box","text":"are designed to implement uniform settlement terms into standard credit default swap documentation, as well as","page_number":67,"box":{"x":69,"y":423,"width":810,"height":11}},{"id":"403f0a44-55ef-420d-919d-eba7e51f2969","block_type":"box","text":"refine the practices for the transparent conduct of the credit default swap market generally. Among these initiatives","page_number":67,"box":{"x":69,"y":438,"width":821,"height":11}},{"id":"e997927c-2e1a-4d12-a2fa-dba535736f61","block_type":"box","text":"are the ISDA Credit Derivatives Determination Committee and the implementation of market-wide cash settlement","page_number":67,"box":{"x":69,"y":453,"width":811,"height":11}},{"id":"8eeaf43b-1a56-4564-aca7-2b1b7383f477","block_type":"box","text":"protocols applicable to all market-standard credit default swaps. These initiatives are intended to reduce both the","page_number":67,"box":{"x":70,"y":468,"width":809,"height":11}},{"id":"d5235ee0-e139-4dff-bd90-607f431370e7","block_type":"box","text":"uncertainty as to the occurrence of credit events and the risk of a “short squeeze” by providing that the ISDA Credit","page_number":67,"box":{"x":69,"y":483,"width":827,"height":11}},{"id":"5debef5b-676a-40b7-896c-058da36d71a0","block_type":"box","text":"Derivatives Determinations Committee will make determinations as to whether a credit event has occurred, establish","page_number":67,"box":{"x":70,"y":498,"width":834,"height":11}},{"id":"8dbb171b-2fae-40c0-b9ab-1623ff96296b","block_type":"box","text":"an auction to determine a settlement price and identify the deliverable securities for purposes of the auction,","page_number":67,"box":{"x":69,"y":513,"width":778,"height":11}},{"id":"0bf2bb26-9693-4a6f-8293-afc07a5aa776","block_type":"box","text":"although the ISDA Credit Derivatives Determinations Committee may in certain limited circumstances refrain from","page_number":67,"box":{"x":69,"y":528,"width":809,"height":12}},{"id":"d00be76d-6ccc-4973-bfde-609bccc6b4fe","block_type":"box","text":"doing so. In the event the ISDA Credit Derivatives Determinations Committee cannot reach a timely resolution with","page_number":67,"box":{"x":69,"y":544,"width":815,"height":11}},{"id":"5f92a02d-8310-4075-a981-50b1509c61dd","block_type":"box","text":"respect to a “credit event” or otherwise does not establish a cash settlement auction, a Fund may not be able to","page_number":67,"box":{"x":69,"y":559,"width":807,"height":11}},{"id":"57ae9f88-84e1-4db3-b6dd-a29b5046a948","block_type":"box","text":"realize the full value of the credit default swap upon a default by the reference entity. Furthermore, a Fund may enter","page_number":67,"box":{"x":69,"y":574,"width":832,"height":11}},{"id":"098b9a97-5c3d-4a3e-88ed-04e99e31beb5","block_type":"box","text":"into certain credit default swaps or similar instruments that may not be covered by these initiatives.","page_number":67,"box":{"x":70,"y":589,"width":711,"height":11}},{"id":"41315272-d923-4f57-95de-c6cec2c3888f","block_type":"box","text":"If a Fund is a buyer, it will lose the payments made under the terms of the credit default swap and recover","page_number":67,"box":{"x":102,"y":612,"width":757,"height":11}},{"id":"9b48d719-9ff2-4286-9c84-8f62b18a20e2","block_type":"box","text":"nothing should no credit event occur. If a Fund is a seller and a credit event occurs, the value of any deliverable","page_number":67,"box":{"x":69,"y":627,"width":794,"height":11}},{"id":"17a3aa48-5677-4181-bf53-3bb1009ad99d","block_type":"box","text":"obligation received by the Fund or the amount of cash settlement received by the Fund pursuant to the relevant cash","page_number":67,"box":{"x":69,"y":642,"width":830,"height":11}},{"id":"dca85cba-bd4c-4884-af02-f1c93a2e3471","block_type":"box","text":"settlement auction, together with the up-front or periodic payments previously received, may be less than the amount","page_number":67,"box":{"x":69,"y":657,"width":835,"height":11}},{"id":"66dbd8f4-5410-4029-92fe-579ff219f856","block_type":"box","text":"it pays to the buyer, resulting in a loss of value to the Fund. A Fund that sells credit default swaps incurs leveraged","page_number":67,"box":{"x":70,"y":672,"width":817,"height":11}},{"id":"ba70be59-33e2-483c-be69-6215237a469f","block_type":"box","text":"exposure to the credit of one or more reference entities and is subject to many of the same risks it would incur if it","page_number":67,"box":{"x":69,"y":687,"width":820,"height":11}},{"id":"8f3b1a64-e093-4fe8-a562-6752e48998bc","block_type":"box","text":"were holding debt securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":67,"box":{"x":68,"y":702,"width":833,"height":12}},{"id":"ce32f349-5bc8-4d05-bf1b-0a488797e99b","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt obligations. In","page_number":67,"box":{"x":69,"y":717,"width":837,"height":12}},{"id":"be196702-1da4-4e12-ace5-2d92165feaaf","block_type":"box","text":"the event the ISDA Credit Derivatives Determinations Committee does not establish a cash settlement auction and","page_number":67,"box":{"x":68,"y":733,"width":820,"height":9}},{"id":"ec51b5b3-5998-43d4-a94b-6c8d8c8ece9f","block_type":"box","text":"identify the relevant deliverable securities or loans, the credit default swap buyer will have broad discretion to select","page_number":67,"box":{"x":70,"y":748,"width":828,"height":11}},{"id":"10ade31b-d6fd-48f7-be1a-6e23238831a3","block_type":"box","text":"which of the reference entity’s debt obligations to deliver to the Fund following a credit event and will likely choose","page_number":67,"box":{"x":68,"y":763,"width":815,"height":11}},{"id":"301b58a9-88ef-4b99-b004-71daae9c42e8","block_type":"box","text":"the obligations with the lowest market value in order to maximize the payment obligations of the Fund. In addition,","page_number":67,"box":{"x":68,"y":778,"width":814,"height":11}},{"id":"4b0fffab-6493-48af-8f87-3db2daf250b2","block_type":"box","text":"credit default swaps generally trade on the basis of theoretical pricing and valuation models, which may not","page_number":67,"box":{"x":69,"y":793,"width":766,"height":11}},{"id":"818eb5eb-8c91-4c52-8f50-36e5868d6eb3","block_type":"box","text":"accurately value such swap positions when established or when subsequently traded or unwound under actual market","page_number":67,"box":{"x":69,"y":808,"width":840,"height":11}},{"id":"b7624546-9c6c-453f-9dc3-d9e6728d40a5","block_type":"box","text":"conditions.","page_number":67,"box":{"x":69,"y":823,"width":76,"height":9}},{"id":"7c6a44d5-82b9-44d1-80d6-b4a8f1e63eda","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for clearing to","page_number":67,"box":{"x":102,"y":846,"width":762,"height":11}},{"id":"500e9516-1da2-4b6b-b070-61122d155994","block_type":"box","text":"regulated clearinghouses. See “—Derivatives — Regulation of Derivatives — Dodd-Frank Regulations” above. Other","page_number":67,"box":{"x":69,"y":861,"width":824,"height":11}},{"id":"1789cdd0-b572-4bd4-8f59-a4b9863df22c","block_type":"box","text":"single-name CDS and index CDS are permitted, although not required, to be cleared through regulated","page_number":67,"box":{"x":69,"y":876,"width":727,"height":11}},{"id":"431f8045-0790-4a2a-b26c-848c86e40222","block_type":"box","text":"clearinghouses. The Funds clear all credit default swaps that are subject to mandatory clearing and may voluntarily","page_number":67,"box":{"x":69,"y":891,"width":819,"height":12}},{"id":"35262e7e-b525-4368-baef-26264731b3ef","block_type":"box","text":"clear some, but not all, of the other credit default swaps not subject to mandatory clearing. The Funds face","page_number":67,"box":{"x":69,"y":906,"width":764,"height":12}},{"id":"7b54fdc9-db11-4c1a-903a-04cd7c0cc0f5","block_type":"box","text":"II-18","page_number":67,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"f7288883-b70c-4821-9d4c-73faf0c2acea","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":67,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c180522c-a6ab-41f3-a581-b58d9f4db925","block_type":"box","text":"counterparty risk with respect to the clearinghouse when entering into cleared single-name CDS and cleared index","page_number":68,"box":{"x":69,"y":45,"width":813,"height":11}},{"id":"a31a4039-9167-4f3e-adba-aaae3f61b73b","block_type":"box","text":"CDS. The Funds face significant counterparty risk with respect to their counterparties to non-cleared credit default","page_number":68,"box":{"x":69,"y":60,"width":813,"height":11}},{"id":"b12f0fce-8ec6-4c6e-aaf2-68fa3eb29019","block_type":"box","text":"swaps and similar instruments. A Fund typically will enter into non-cleared credit default swaps and similar","page_number":68,"box":{"x":69,"y":75,"width":759,"height":11}},{"id":"4a291534-443b-444d-b987-ac5b4a16b4b9","block_type":"box","text":"instruments with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":68,"box":{"x":70,"y":90,"width":828,"height":11}},{"id":"bb138f86-dccd-4de6-81a6-582194e6c5e4","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":68,"box":{"x":68,"y":105,"width":355,"height":11}},{"id":"ee20612b-f719-4715-aaa0-ac131555e2b0","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either as","page_number":68,"box":{"x":102,"y":128,"width":750,"height":11}},{"id":"0e19b7bd-e461-4b9f-b92e-0836e1b2f7f4","block_type":"box","text":"protection buyer or protection seller. While these contracts are similar in their operation to the market-standard credit","page_number":68,"box":{"x":70,"y":143,"width":836,"height":11}},{"id":"f9b913e9-cf86-4ba6-95f8-541655ac3578","block_type":"box","text":"default swaps described above, they are less standardized and instead have bespoke or tailored features. For","page_number":68,"box":{"x":69,"y":158,"width":785,"height":11}},{"id":"17329ef0-f091-4f34-9aff-d04bbd15a53b","block_type":"box","text":"example, as compared to market-standard credit defaults, the range of “credit events” triggering settlement of such","page_number":68,"box":{"x":69,"y":173,"width":825,"height":11}},{"id":"d9c16e41-6f53-484f-a313-ff05160aef38","block_type":"box","text":"bespoke contracts may be narrower or broader, any such triggered contracts are settled by physical delivery of the","page_number":68,"box":{"x":69,"y":188,"width":814,"height":12}},{"id":"0c543640-a649-4c67-8f78-9a886148f4b7","block_type":"box","text":"underlying security or loan to or by the Fund rather than by way of cash settlement, and there may be a wider range of","page_number":68,"box":{"x":69,"y":203,"width":839,"height":12}},{"id":"3bd8b8ee-5ebe-497e-9953-3f81e8c73869","block_type":"box","text":"securities as the reference obligations and/or deliverable obligations.","page_number":68,"box":{"x":69,"y":218,"width":495,"height":12}},{"id":"0c1550a8-81e4-43a1-80ff-47b5a244637e","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund had","page_number":68,"box":{"x":102,"y":241,"width":752,"height":11}},{"id":"90a2fa4e-801d-4258-83fc-9fb11b1bf710","block_type":"box","text":"invested in the reference obligation directly and are subject to significant credit risk, correlation risk, leverage risk,","page_number":68,"box":{"x":70,"y":256,"width":814,"height":12}},{"id":"379d69fe-bf28-4f0d-905a-d110758a6dfd","block_type":"box","text":"illiquidity risk and market risk. See “—Risk Factors in Derivatives” above.","page_number":68,"box":{"x":70,"y":272,"width":520,"height":11}},{"id":"14d9c7d0-0341-4f63-946a-f094786e336d","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":68,"box":{"x":102,"y":294,"width":273,"height":11}},{"id":"246a50b9-d4a8-430b-85fb-6e48709586b2","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of interest rate","page_number":68,"box":{"x":381,"y":294,"width":515,"height":11}},{"id":"c57067e5-9bfd-4c44-a446-f1192d3b4020","block_type":"box","text":"swaps and interest rate caps and floors. As described in further detail below, a Fund may enter into these","page_number":68,"box":{"x":69,"y":309,"width":755,"height":11}},{"id":"9324e9ec-44fc-4a2e-a47c-3b704f1aad95","block_type":"box","text":"transactions primarily to preserve a return or spread on a particular investment or portion of its holdings, as a","page_number":68,"box":{"x":68,"y":324,"width":788,"height":12}},{"id":"eb1d3dc8-3fdd-42cc-8287-f4c416e2fa56","block_type":"box","text":"duration management technique, to protect against an increase in the price of securities a Fund anticipates","page_number":68,"box":{"x":69,"y":339,"width":768,"height":12}},{"id":"557041a5-31fb-4094-b5f1-9fd1a8ec8d60","block_type":"box","text":"purchasing at a later date, or for speculation to increase returns.","page_number":68,"box":{"x":70,"y":355,"width":461,"height":11}},{"id":"e65fce9b-1869-4cdc-bea0-299c133c1c02","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted for","page_number":68,"box":{"x":102,"y":377,"width":748,"height":12}},{"id":"671d3810-3e05-4d36-b425-3c9e4d1cbde9","block_type":"box","text":"clearing to regulated clearinghouses. See “—Regulation of Derivatives — Dodd-Frank Regulations” above. Other","page_number":68,"box":{"x":69,"y":392,"width":799,"height":12}},{"id":"591b5328-00e3-4e81-b785-48979d6e9155","block_type":"box","text":"interest rate swaps are permitted, although not required, to be cleared. Most of the interest rate swaps entered into","page_number":68,"box":{"x":70,"y":407,"width":829,"height":12}},{"id":"eae6c134-c815-4525-86a9-7a04c63d65d7","block_type":"box","text":"by the Funds are cleared. The Funds face counterparty risk with respect to the clearinghouse when entering into","page_number":68,"box":{"x":69,"y":423,"width":797,"height":11}},{"id":"2e581c3b-dce9-455c-9e65-4cca6d6a7698","block_type":"box","text":"cleared interest rate swaps.","page_number":68,"box":{"x":69,"y":438,"width":198,"height":11}},{"id":"e6f3c9ff-8cc9-49d9-b0c5-831c7946864f","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest rate","page_number":68,"box":{"x":101,"y":460,"width":766,"height":12}},{"id":"4b4244a8-c4c5-4b0e-9ee4-002edeb13b3f","block_type":"box","text":"swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared interest rate derivatives","page_number":68,"box":{"x":69,"y":475,"width":829,"height":12}},{"id":"a0e076b5-a163-46b9-b331-558cfec14b10","block_type":"box","text":"transactions are swap dealers and other creditworthy entities that have substantial capital or that have provided the","page_number":68,"box":{"x":68,"y":491,"width":830,"height":11}},{"id":"152d9b2a-87ea-43ee-a204-762d04e7b87d","block_type":"box","text":"Fund with a third-party guaranty or other credit support. If the Fund’s counterparty defaults on such a transaction, a","page_number":68,"box":{"x":70,"y":506,"width":822,"height":11}},{"id":"8b7f6b75-34bc-4b49-94e4-207f4a092207","block_type":"box","text":"Fund will have contractual remedies with respect to the transaction but there can be no guarantee that the Fund will","page_number":68,"box":{"x":70,"y":521,"width":824,"height":11}},{"id":"1b6b3255-d253-4260-ad25-c2e77c44560f","block_type":"box","text":"be successful in enforcing such remedies. The market for interest rate swaps is relatively liquid in comparison with","page_number":68,"box":{"x":69,"y":536,"width":819,"height":11}},{"id":"3f72f00b-568d-489e-87ed-424a0308ce77","block_type":"box","text":"other similar instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":68,"box":{"x":69,"y":551,"width":801,"height":11}},{"id":"58711679-7661-4683-a75d-0a3acd758075","block_type":"box","text":"interest rate derivatives due to applicable income tax requirements.","page_number":68,"box":{"x":70,"y":566,"width":480,"height":11}},{"id":"442e62c6-1ef1-41db-87a0-960c9339ab17","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a fixed or","page_number":68,"box":{"x":102,"y":589,"width":790,"height":11}},{"id":"de5df1f1-8637-4314-a9f5-c6ca8be8c607","block_type":"box","text":"variable interest rate, index or asset in return for periodic payments from its counterparty based on a different fixed","page_number":68,"box":{"x":68,"y":604,"width":825,"height":11}},{"id":"ff0cd9ac-9158-4fc4-b156-c38d7de4428e","block_type":"box","text":"or variable interest rate, index or asset.","page_number":68,"box":{"x":69,"y":619,"width":280,"height":11}},{"id":"e46d0df2-f86d-4493-b52d-0bfc55ea4c65","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a","page_number":68,"box":{"x":101,"y":642,"width":780,"height":11}},{"id":"c15274eb-29e6-4d7c-9d77-6c66c021faba","block_type":"box","text":"predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling","page_number":68,"box":{"x":70,"y":657,"width":805,"height":11}},{"id":"943d1fb9-e23a-405c-8198-73ef832cbe1a","block_type":"box","text":"such interest rate floor.","page_number":68,"box":{"x":69,"y":672,"width":165,"height":9}},{"id":"7f8398ca-5d41-4581-8c78-571070d8bced","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises above a","page_number":68,"box":{"x":101,"y":695,"width":780,"height":11}},{"id":"7133841f-05e8-4cf7-99e8-8847b69217df","block_type":"box","text":"predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling","page_number":68,"box":{"x":70,"y":710,"width":805,"height":11}},{"id":"1c57c5e4-23c4-4efe-baae-7158f52a6cc5","block_type":"box","text":"such interest rate cap.","page_number":68,"box":{"x":69,"y":725,"width":159,"height":11}},{"id":"8867457c-4c6c-410d-bbee-e773a7678ccb","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":68,"box":{"x":101,"y":748,"width":729,"height":11}},{"id":"9bc82f7d-4dee-435f-8ba2-3652da7bb924","block_type":"box","text":"commitments to pay or receive interest,","page_number":68,"box":{"x":69,"y":763,"width":282,"height":11}},{"id":"ace6f16d-d706-4d8b-bd8a-c9d8678fd547","block_type":"box","text":"e.g.","page_number":68,"box":{"x":359,"y":764,"width":24,"height":10}},{"id":"21937771-5488-41b1-89e7-069b3f013d01","block_type":"box","text":", an exchange of fixed rate payments for floating rate payments. For","page_number":68,"box":{"x":386,"y":763,"width":482,"height":11}},{"id":"c80492de-74ea-41ee-a858-c5f40ab3baf8","block_type":"box","text":"example, if a Fund holds a mortgage-backed security with an interest rate that is reset only once each year, it may","page_number":68,"box":{"x":69,"y":778,"width":814,"height":11}},{"id":"75e017d8-444b-4ed0-b96a-55a546b85751","block_type":"box","text":"swap the right to receive interest at this fixed rate for the right to receive interest at a rate that is reset every week.","page_number":68,"box":{"x":69,"y":793,"width":823,"height":11}},{"id":"0d0395c6-a848-42eb-9489-a97ced637a8c","block_type":"box","text":"This would enable a Fund to offset a decline in the value of the mortgage-backed security due to rising interest rates","page_number":68,"box":{"x":68,"y":808,"width":832,"height":11}},{"id":"8a6ab7b8-3906-468a-8603-399e9ff130f9","block_type":"box","text":"but would also limit its ability to benefit from falling interest rates. Conversely, if a Fund holds a mortgage-backed","page_number":68,"box":{"x":69,"y":823,"width":807,"height":12}},{"id":"8b04025c-b67d-4c5e-a9f2-4866d24d5c60","block_type":"box","text":"security with an interest rate that is reset every week and it would like to lock in what it believes to be a high interest","page_number":68,"box":{"x":69,"y":839,"width":836,"height":11}},{"id":"f823be20-cdad-40d4-84e0-b1f72342e19e","block_type":"box","text":"rate for one year, it may swap the right to receive interest at this variable weekly rate for the right to receive interest","page_number":68,"box":{"x":69,"y":853,"width":826,"height":12}},{"id":"eb94c91a-4e5a-4015-a7b8-431e71b41ff7","block_type":"box","text":"at a rate that is fixed for one year. Such a swap would protect the Fund from a reduction in yield due to falling interest","page_number":68,"box":{"x":69,"y":869,"width":840,"height":11}},{"id":"7e323f3c-4e9c-42f7-8ff2-9ff9fc978a4a","block_type":"box","text":"rates and may permit the Fund to enhance its income through the positive differential between one week and one","page_number":68,"box":{"x":69,"y":884,"width":810,"height":11}},{"id":"38e2698b-6263-4730-b2df-0466f457beab","block_type":"box","text":"year interest rates, but would preclude it from taking full advantage of rising interest rates.","page_number":68,"box":{"x":68,"y":899,"width":646,"height":11}},{"id":"a881e592-4c00-4d96-9738-b330442f782a","block_type":"box","text":"II-19","page_number":68,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"338f4c48-142a-48c6-9971-0e58f34b3dc7","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":68,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7de34a3c-8c51-49e0-af60-c1d809045573","block_type":"box","text":"Gains from transactions in interest rate swaps distributed to shareholders will be taxable as ordinary income or,","page_number":69,"box":{"x":102,"y":45,"width":798,"height":11}},{"id":"ca6bf85f-62af-488a-843d-92d2752bf829","block_type":"box","text":"in certain circumstances, as long term capital gains to shareholders.","page_number":69,"box":{"x":70,"y":60,"width":490,"height":11}},{"id":"09560872-31fc-4f65-b417-8dfd822f47bc","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk, illiquidity","page_number":69,"box":{"x":102,"y":82,"width":791,"height":12}},{"id":"29fe2389-1d79-4995-b769-8fcbe6b259d5","block_type":"box","text":"risk and market risk. See “—Risk Factors in Derivatives” above.","page_number":69,"box":{"x":69,"y":98,"width":454,"height":9}},{"id":"f8b481cc-03d2-4be1-9bdd-570956f8b6b5","block_type":"box","text":"Total Return Swaps.","page_number":69,"box":{"x":103,"y":120,"width":139,"height":11}},{"id":"7efde16c-376d-46a6-b50b-604fb700da79","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic payments to","page_number":69,"box":{"x":249,"y":120,"width":634,"height":12}},{"id":"e4823b16-aba7-4a47-918e-031551d741d3","block_type":"box","text":"the other party based on the return of the assets underlying the contract in exchange for periodic payments based on","page_number":69,"box":{"x":68,"y":135,"width":838,"height":12}},{"id":"7c78891e-da9e-4cb2-a67a-d8f4b083c75c","block_type":"box","text":"a fixed or variable interest rate or the total return from different underlying assets. The return of the assets","page_number":69,"box":{"x":69,"y":150,"width":764,"height":12}},{"id":"7ec5e22b-dd41-4b5f-9cc0-27fea9439d87","block_type":"box","text":"underlying the contract includes both the income generated by the asset and the change in market value of the","page_number":69,"box":{"x":69,"y":166,"width":791,"height":11}},{"id":"78e98bcf-006a-40f5-8383-804f43c6a2bc","block_type":"box","text":"asset. The asset underlying the contract may include a specified security, basket of securities or securities indices.","page_number":69,"box":{"x":69,"y":181,"width":821,"height":11}},{"id":"1c4b1236-6c61-448a-b34e-82c4895b3093","block_type":"box","text":"Total return swaps on a specified security, basket of securities or securities indices may sometimes be referred to as","page_number":69,"box":{"x":68,"y":196,"width":838,"height":11}},{"id":"9ee1a639-4d64-4afe-86f7-06edce64fbc7","block_type":"box","text":"“contracts for difference.”","page_number":69,"box":{"x":70,"y":211,"width":184,"height":9}},{"id":"ffd2ab80-9e99-463b-b93d-ec07a87df351","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking physical","page_number":69,"box":{"x":101,"y":234,"width":770,"height":11}},{"id":"0a34b029-c1b8-4895-a40e-2eb6ccf3b705","block_type":"box","text":"custody of such security or investing directly in such market. Upon entering into a total return swap, a Fund is","page_number":69,"box":{"x":69,"y":249,"width":780,"height":11}},{"id":"e3e2d64d-3ceb-40e0-9c3e-e59ed329fd25","block_type":"box","text":"required to deposit initial margin but the parties do not exchange the notional amount. As a result, total return swaps","page_number":69,"box":{"x":69,"y":264,"width":839,"height":11}},{"id":"282fb8c5-9901-4180-ae11-589a45c82c46","block_type":"box","text":"may effectively add leverage to the Fund’s portfolio because the Fund would be subject to investment exposure on","page_number":69,"box":{"x":69,"y":279,"width":816,"height":11}},{"id":"9d08825d-8358-453e-9360-e789c2f233b5","block_type":"box","text":"the notional amount of the swap.","page_number":69,"box":{"x":68,"y":294,"width":235,"height":11}},{"id":"9978e6ac-dc0e-43a2-bff8-b0373e30412d","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk and","page_number":69,"box":{"x":101,"y":317,"width":746,"height":11}},{"id":"5a924d94-b4c4-44ba-b8ff-6d117a14e549","block_type":"box","text":"counterparty risk. See “—Risk Factors in Derivatives” above.","page_number":69,"box":{"x":69,"y":332,"width":433,"height":11}},{"id":"2615a249-b2f3-496f-8e5c-9de2f62bfea0","block_type":"box","text":"Options.","page_number":69,"box":{"x":102,"y":355,"width":57,"height":11}},{"id":"ce677b66-4c69-4fc2-87ba-b1fd0e6c2e15","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":69,"box":{"x":102,"y":377,"width":319,"height":11}},{"id":"d26f5976-4c23-4c36-8658-2297a9fdc0ad","block_type":"box","text":"A Fund may engage in transactions in options on individual","page_number":69,"box":{"x":427,"y":377,"width":418,"height":12}},{"id":"fedee927-6b26-4d76-a672-f14565f55051","block_type":"box","text":"securities, baskets of securities or securities indices, or particular measurements of value or rates, such as an index","page_number":69,"box":{"x":69,"y":392,"width":838,"height":11}},{"id":"b8421e80-c24e-4cd4-acc8-a76623ea6046","block_type":"box","text":"of the price of treasury securities or an index representative of short-term interest rates. Such investments may be","page_number":69,"box":{"x":69,"y":407,"width":820,"height":12}},{"id":"d3ab2906-f437-4088-9f02-0b6b0eb21bbe","block_type":"box","text":"made on exchanges and in the OTC markets. In general, exchange-traded options have standardized exercise prices","page_number":69,"box":{"x":69,"y":423,"width":826,"height":11}},{"id":"3558e3df-1adb-41d4-8d6b-eeaf26b2dbba","block_type":"box","text":"and expiration dates and require the parties to post margin against their obligations, and the performance of the","page_number":69,"box":{"x":69,"y":438,"width":806,"height":11}},{"id":"62526d90-5c24-477e-b867-33696a03bb27","block_type":"box","text":"parties’ obligations in connection with such options is guaranteed by the exchange or a related clearing corporation.","page_number":69,"box":{"x":70,"y":453,"width":825,"height":11}},{"id":"3e38b30b-3ded-4f79-ae81-127b36b956cc","block_type":"box","text":"OTC options have more flexible terms negotiated between the buyer and the seller, but are subject to greater credit","page_number":69,"box":{"x":69,"y":468,"width":822,"height":11}},{"id":"3641738f-3066-417b-b685-515a9f5aa9f3","block_type":"box","text":"risk. OTC options also involve greater illiquidity risk.","page_number":69,"box":{"x":69,"y":483,"width":366,"height":11}},{"id":"af4dcbd0-0836-45eb-b57b-7f5988f94487","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in different","page_number":69,"box":{"x":101,"y":506,"width":743,"height":11}},{"id":"f230f35c-7437-4673-9cee-33404f729084","block_type":"box","text":"payment structures and/or expirations (commonly referred to as exotic options). For example, barrier options are","page_number":69,"box":{"x":70,"y":521,"width":804,"height":11}},{"id":"a9074c66-3fa7-4c91-8a81-6a2b5e12fdd8","block_type":"box","text":"exotic options that can only be exercised (or automatically expire) if the price of the underlying asset reaches one or","page_number":69,"box":{"x":69,"y":536,"width":827,"height":11}},{"id":"c947165b-1664-4072-8652-d0e1148ca3e8","block_type":"box","text":"more predetermined levels on or before expiration. Binary options are another example of exotic options which have","page_number":69,"box":{"x":69,"y":551,"width":827,"height":11}},{"id":"390eebed-5f43-4755-8de6-8016cf27118a","block_type":"box","text":"a fixed all-or-nothing payout if one or more predetermined conditions are met. Exotic options are typically traded in","page_number":69,"box":{"x":69,"y":566,"width":812,"height":11}},{"id":"19410542-ce8c-4fab-9b0a-3a6b9af92025","block_type":"box","text":"OTC markets.","page_number":69,"box":{"x":69,"y":581,"width":95,"height":9}},{"id":"81083250-a4bf-46c6-81b2-ec2a5711bee7","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example, there are","page_number":69,"box":{"x":101,"y":604,"width":806,"height":11}},{"id":"9e9886d3-aa06-43ce-9493-1b37317dd0df","block_type":"box","text":"significant differences between the securities and options markets that could result in an imperfect correlation","page_number":69,"box":{"x":69,"y":619,"width":791,"height":11}},{"id":"25eb8345-49de-4268-a2b4-09becec41631","block_type":"box","text":"between these markets, causing a given transaction not to achieve its objectives. In addition, a liquid market for","page_number":69,"box":{"x":69,"y":634,"width":801,"height":12}},{"id":"1da5731d-3644-49c8-9ea9-5f896e1d317f","block_type":"box","text":"particular options, whether traded OTC or on a national securities exchange (“Exchange”) may be absent for reasons","page_number":69,"box":{"x":70,"y":649,"width":831,"height":12}},{"id":"f4a8efb5-30fd-4279-ae6b-d3e23c186648","block_type":"box","text":"which include the following: there may be insufficient trading interest in certain options; restrictions may be imposed","page_number":69,"box":{"x":68,"y":664,"width":833,"height":12}},{"id":"650c6c4d-1754-4c3c-a22e-ce7dcdf48a82","block_type":"box","text":"by an Exchange on opening transactions or closing transactions or both; trading halts, suspensions or other","page_number":69,"box":{"x":69,"y":680,"width":769,"height":11}},{"id":"8b8480e6-4fcf-4654-b790-25369bd8d466","block_type":"box","text":"restrictions may be imposed with respect to particular classes or series of options or underlying securities; unusual","page_number":69,"box":{"x":69,"y":695,"width":824,"height":11}},{"id":"77d721c9-35ae-48ac-ba86-487b0bb9737b","block_type":"box","text":"or unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an Exchange or the","page_number":69,"box":{"x":69,"y":710,"width":816,"height":11}},{"id":"92529b9f-107c-4168-9c77-dc2552a39962","block_type":"box","text":"Options Clearing Corporation may not at all times be adequate to handle current trading volume; or one or more","page_number":69,"box":{"x":69,"y":725,"width":796,"height":11}},{"id":"257030e6-989d-407f-984f-51936705a202","block_type":"box","text":"Exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the","page_number":69,"box":{"x":70,"y":740,"width":798,"height":11}},{"id":"7d33f059-5c2a-4156-a84b-a9a38f07bde0","block_type":"box","text":"trading of options (or a particular class or series of options), in which event the market on that Exchange (or in that","page_number":69,"box":{"x":68,"y":755,"width":822,"height":11}},{"id":"e4736bfc-6ae5-49a1-80d6-781c9f264493","block_type":"box","text":"class or series of options) would cease to exist, although outstanding options that had been issued by the Options","page_number":69,"box":{"x":69,"y":770,"width":818,"height":12}},{"id":"856e0206-bf02-4c1b-831a-1a2b679ea53e","block_type":"box","text":"Clearing Corporation as a result of trades on that Exchange would continue to be exercisable in accordance with their","page_number":69,"box":{"x":69,"y":785,"width":836,"height":12}},{"id":"941f2926-ae2b-4b4c-8b46-003edef1514b","block_type":"box","text":"terms.","page_number":69,"box":{"x":68,"y":801,"width":45,"height":9}},{"id":"3456f9e1-9ee1-4442-a317-e5a144f28c38","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or put options","page_number":69,"box":{"x":102,"y":823,"width":801,"height":12}},{"id":"c51da660-aade-4775-8fc0-66710c5f727e","block_type":"box","text":"on the same asset that may be bought or written by a single investor, whether acting alone or in concert with others","page_number":69,"box":{"x":69,"y":839,"width":826,"height":11}},{"id":"f90cbdcc-edca-4f0c-8151-72553563fcac","block_type":"box","text":"(regardless of whether such options are written on the same or different exchanges or are held or written on one or","page_number":69,"box":{"x":69,"y":853,"width":823,"height":12}},{"id":"15959796-f2e6-4c20-bce5-046c3c3413e8","block_type":"box","text":"more accounts or through one or more brokers). Under these limitations, option positions of all investment","page_number":69,"box":{"x":69,"y":869,"width":762,"height":11}},{"id":"b966c2f2-0261-4425-8e3a-ccdef1a20152","block_type":"box","text":"companies advised by the Manager are combined for purposes of these limits. Pursuant to these limitations, an","page_number":69,"box":{"x":69,"y":884,"width":798,"height":11}},{"id":"dc14158c-3cdb-4837-a3a3-b957f8fd8a48","block_type":"box","text":"II-20","page_number":69,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"0f28c942-65ab-4871-ad91-de83e0b17804","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":69,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7a028422-89d0-4a2b-bbfb-973df6398c72","block_type":"box","text":"exchange may order the liquidation of positions and may impose other sanctions or restrictions. These position limits","page_number":70,"box":{"x":69,"y":45,"width":837,"height":11}},{"id":"1a280e6d-fb8c-4302-ae3d-ddaa1846ae03","block_type":"box","text":"may restrict the number of listed options that a Fund may buy or sell.","page_number":70,"box":{"x":69,"y":60,"width":491,"height":11}},{"id":"8a1e7b2b-595f-46c9-8883-e21b1605362b","block_type":"box","text":"Call Options.","page_number":70,"box":{"x":102,"y":83,"width":89,"height":10}},{"id":"e7fd179b-8c09-4a4e-bf8b-1af1fb5932ca","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in which it may","page_number":70,"box":{"x":197,"y":82,"width":694,"height":12}},{"id":"2ae2e304-6a58-4d87-ac16-b9b1166a5fac","block_type":"box","text":"invest. A purchased call option gives a Fund the right to buy, and obligates the seller to sell, the underlying security at","page_number":70,"box":{"x":70,"y":98,"width":838,"height":11}},{"id":"98bfea9f-7ac9-4967-a1a6-ff3c6902cb7d","block_type":"box","text":"the exercise price at any time during the option period. A Fund also may purchase and sell call options on indices.","page_number":70,"box":{"x":68,"y":113,"width":813,"height":11}},{"id":"075bfe63-859b-4c58-b771-ef68eb56f5e3","block_type":"box","text":"Index options are similar to options on securities except that, rather than taking or making delivery of securities","page_number":70,"box":{"x":70,"y":128,"width":795,"height":11}},{"id":"a4f44dc9-348a-4d85-93ff-91412bdd05d0","block_type":"box","text":"underlying the option at a specified price upon exercise, an index option gives the holder the right to receive cash","page_number":70,"box":{"x":69,"y":143,"width":807,"height":11}},{"id":"fc9b06b1-4f3a-457c-9cfb-43072c718056","block_type":"box","text":"upon exercise of the option if the level of the index upon which the option is based is greater than the exercise price","page_number":70,"box":{"x":69,"y":158,"width":830,"height":11}},{"id":"9fc4124d-9170-45c5-9968-37cf0e31d2e7","block_type":"box","text":"of the option.","page_number":70,"box":{"x":69,"y":173,"width":93,"height":11}},{"id":"04eb76b7-f198-46ab-b7a8-0e7b14c380f5","block_type":"box","text":"A written call option is covered if a Fund holds a call on the same security or index as the call written where the","page_number":70,"box":{"x":101,"y":196,"width":794,"height":11}},{"id":"adba0faf-377d-47d2-923b-65b4389e55fc","block_type":"box","text":"exercise price of the call held is (i) equal to or less than the exercise price of the call written, or (ii) greater than the","page_number":70,"box":{"x":69,"y":211,"width":823,"height":11}},{"id":"271fa409-b1c9-4618-8092-3fe8dc9b3f55","block_type":"box","text":"exercise price of the call written provided the difference is maintained by the Fund in assets which are not considered","page_number":70,"box":{"x":69,"y":226,"width":839,"height":11}},{"id":"32306363-be0b-4d3b-9a82-c0a25855e4c4","block_type":"box","text":"illiquid investments under the Funds’ Liquidity Program (as defined below) (“liquid assets”) designated on the","page_number":70,"box":{"x":70,"y":241,"width":778,"height":11}},{"id":"8d75279b-9d2f-48d7-89c1-f2843267573a","block_type":"box","text":"Manager’s or the sub-adviser’s books and records to the extent required by Commission guidelines.","page_number":70,"box":{"x":70,"y":256,"width":711,"height":12}},{"id":"a9b8d372-23d8-4758-8ae3-4341f6da6493","block_type":"box","text":"A Fund may write (","page_number":70,"box":{"x":101,"y":279,"width":130,"height":11}},{"id":"32597b7a-a91a-432c-80fc-3acd298e64b6","block_type":"box","text":"i.e.","page_number":70,"box":{"x":233,"y":279,"width":20,"height":9}},{"id":"de1cf526-b5e8-488a-95bd-ef5da36ea326","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest and to","page_number":70,"box":{"x":256,"y":279,"width":627,"height":11}},{"id":"69f25470-8729-4e18-8844-fdc7c0f68aaf","block_type":"box","text":"enter into closing purchase transactions with respect to certain of such options. A covered call option is an option in","page_number":70,"box":{"x":69,"y":294,"width":831,"height":11}},{"id":"fa94906d-4a67-4bef-a375-fcd10376133e","block_type":"box","text":"which a Fund, in return for a premium, gives another party a right to buy specified securities owned by the Fund at a","page_number":70,"box":{"x":68,"y":309,"width":827,"height":11}},{"id":"7a9d2f39-f509-4b44-ae77-0b5c0b149f0e","block_type":"box","text":"specified future date and price set at the time of the contract. The principal reason for writing call options is the","page_number":70,"box":{"x":69,"y":324,"width":797,"height":12}},{"id":"880a7a80-541d-4995-93c9-32b74d51e90a","block_type":"box","text":"attempt to realize, through the receipt of premiums, a greater return than would be realized on the securities alone.","page_number":70,"box":{"x":69,"y":339,"width":823,"height":12}},{"id":"0645d0e9-9422-46b4-b19a-80946e62525e","block_type":"box","text":"By writing covered call options, a Fund gives up the opportunity, while the option is in effect, to profit from any price","page_number":70,"box":{"x":70,"y":355,"width":823,"height":11}},{"id":"f9164c29-4b6f-4f39-8e4a-b573a869570b","block_type":"box","text":"increase in the underlying security above the option exercise price. In addition, a Fund’s ability to sell the underlying","page_number":70,"box":{"x":70,"y":370,"width":825,"height":11}},{"id":"be0f4cf3-cde1-447d-985b-c74a88ffb5ca","block_type":"box","text":"security will be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":70,"box":{"x":69,"y":385,"width":800,"height":11}},{"id":"30e394ac-3b67-4590-9c67-77fe4a5c513d","block_type":"box","text":"closing purchase transaction cancels out a Fund’s position as the writer of an option by means of an offsetting","page_number":70,"box":{"x":69,"y":400,"width":792,"height":11}},{"id":"5796f3ec-2507-4fae-a03b-06bfec4a6721","block_type":"box","text":"purchase of an identical option prior to the expiration of the option it has written. Covered call options also serve as","page_number":70,"box":{"x":70,"y":415,"width":826,"height":11}},{"id":"2923a840-9cb7-446e-bfd7-b233d5d5f57f","block_type":"box","text":"a partial hedge to the extent of the premium received against the price of the underlying security declining.","page_number":70,"box":{"x":69,"y":430,"width":760,"height":11}},{"id":"0fd121a5-171c-404e-bf1e-1a1bf3aa780c","block_type":"box","text":"A Fund may write","page_number":70,"box":{"x":101,"y":453,"width":120,"height":11}},{"id":"de9c2d0c-b056-4c72-b007-1cff412c0b53","block_type":"box","text":"(i.e.","page_number":70,"box":{"x":228,"y":453,"width":25,"height":11}},{"id":"c53036a9-d1b7-44c4-99ef-167e2340624e","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest but that","page_number":70,"box":{"x":256,"y":453,"width":628,"height":11}},{"id":"e1a04c99-6f1c-4405-a85e-572110e66c3c","block_type":"box","text":"are not currently held by the Fund. The principal reason for writing uncovered call options is to realize income without","page_number":70,"box":{"x":69,"y":468,"width":834,"height":11}},{"id":"e0408908-14de-4b14-8cd2-361b5f0bb09b","block_type":"box","text":"committing capital to the ownership of the underlying securities or instruments. When writing uncovered call options,","page_number":70,"box":{"x":69,"y":483,"width":830,"height":11}},{"id":"4bd107b7-13ec-4117-9c08-1f54a868c7c1","block_type":"box","text":"a Fund must deposit and maintain sufficient margin with the broker-dealer through which it made the uncovered call","page_number":70,"box":{"x":69,"y":498,"width":825,"height":11}},{"id":"1763c2e5-1da9-426e-b863-5f05d097040c","block_type":"box","text":"option as collateral to ensure that the securities can be purchased for delivery if and when the option is exercised.","page_number":70,"box":{"x":69,"y":513,"width":818,"height":11}},{"id":"aa0a55f2-03fa-41f3-8f08-3466a4cf03c1","block_type":"box","text":"During periods of declining securities prices or when prices are stable, writing uncovered calls can be a profitable","page_number":70,"box":{"x":70,"y":528,"width":806,"height":12}},{"id":"6d63c077-7d10-48d0-9a50-a230ec040079","block_type":"box","text":"strategy to increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls because","page_number":70,"box":{"x":69,"y":544,"width":839,"height":11}},{"id":"591296b0-1d82-43e7-bb8d-8c4da0746963","block_type":"box","text":"there is no underlying security held by a Fund that can act as a partial hedge. Uncovered calls have speculative","page_number":70,"box":{"x":68,"y":559,"width":793,"height":11}},{"id":"badcf696-34ef-4be8-9306-9565e5536efe","block_type":"box","text":"characteristics and the potential for loss is unlimited. When an uncovered call is exercised, a Fund must purchase","page_number":70,"box":{"x":69,"y":574,"width":814,"height":11}},{"id":"2cd5d7b7-31a7-4bbc-828f-7665b60b8a98","block_type":"box","text":"the underlying security to meet its call obligation. There is also a risk, especially with preferred and debt securities","page_number":70,"box":{"x":68,"y":589,"width":818,"height":11}},{"id":"e1a6d2ce-ea0d-4385-b48c-6cfd78aa6b93","block_type":"box","text":"that lack sufficient liquidity, that the securities may not be available for purchase. If the purchase price exceeds the","page_number":70,"box":{"x":68,"y":604,"width":825,"height":11}},{"id":"d70c1836-d1a6-4ab0-a3d3-26b98051fcf6","block_type":"box","text":"exercise price, a Fund will lose the difference.","page_number":70,"box":{"x":69,"y":619,"width":326,"height":11}},{"id":"cc251e57-6eeb-4cc0-87ad-f14686bcac75","block_type":"box","text":"Put Options.","page_number":70,"box":{"x":102,"y":642,"width":85,"height":11}},{"id":"e5c41492-b2a1-4e47-8861-c5b076ad642f","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its securities or","page_number":70,"box":{"x":194,"y":642,"width":712,"height":11}},{"id":"3c4b44bc-43af-40fa-889b-d5c76dbfe71a","block_type":"box","text":"to enhance its return. By buying a put option, a Fund acquires a right to sell the underlying securities or instruments","page_number":70,"box":{"x":68,"y":657,"width":828,"height":11}},{"id":"883c552c-6b37-45ed-ad89-ed0f2533b9fa","block_type":"box","text":"at the exercise price, thus limiting the Fund’s risk of loss through a decline in the market value of the securities or","page_number":70,"box":{"x":69,"y":672,"width":816,"height":11}},{"id":"ecaee7e0-b6ad-4c69-8591-f8967796c3df","block_type":"box","text":"instruments until the put option expires. The amount of any appreciation in the value of the underlying securities or","page_number":70,"box":{"x":70,"y":687,"width":820,"height":11}},{"id":"ef9ab88d-10a2-482a-9b5a-4ddc90ef76a9","block_type":"box","text":"instruments will be partially offset by the amount of the premium paid for the put option and any related transaction","page_number":70,"box":{"x":70,"y":702,"width":826,"height":11}},{"id":"cc994ef2-906a-476c-a1c6-80534f074068","block_type":"box","text":"costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from the sale","page_number":70,"box":{"x":69,"y":717,"width":815,"height":12}},{"id":"fe8a44cd-481c-4482-b68d-6108790f0b96","block_type":"box","text":"will depend on whether the amount received is more or less than the premium paid for the put option plus the related","page_number":70,"box":{"x":68,"y":732,"width":839,"height":11}},{"id":"8e12e298-c879-454f-b270-a1f9750cfc72","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an option by means of","page_number":70,"box":{"x":68,"y":748,"width":841,"height":11}},{"id":"98dda48a-d19b-46c7-9da2-204b3ebd193f","block_type":"box","text":"an offsetting sale of an identical option prior to the expiration of the option it has purchased. A Fund also may","page_number":70,"box":{"x":69,"y":763,"width":785,"height":11}},{"id":"1166b2d0-1026-4f50-a84f-bcecfb7dccff","block_type":"box","text":"purchase uncovered put options.","page_number":70,"box":{"x":70,"y":778,"width":231,"height":11}},{"id":"e994b9c5-83ff-4f74-bee5-b669ba3d9216","block_type":"box","text":"A Fund also may write (","page_number":70,"box":{"x":101,"y":801,"width":165,"height":11}},{"id":"2ef06c8b-a27e-4079-8b1f-7580a3b62ff3","block_type":"box","text":"i.e.","page_number":70,"box":{"x":268,"y":801,"width":20,"height":9}},{"id":"0966a8cd-a2e4-4841-8e39-3e221880ba59","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held by the","page_number":70,"box":{"x":291,"y":801,"width":591,"height":11}},{"id":"1615e809-0970-4515-8850-700415b10f04","block_type":"box","text":"Fund. A Fund will receive a premium for writing a put option, which increases the Fund’s return.","page_number":70,"box":{"x":70,"y":816,"width":675,"height":11}},{"id":"2d93a1b0-0ebd-4db5-a7c4-0d873e35a071","block_type":"box","text":"A Fund also may write (","page_number":70,"box":{"x":101,"y":839,"width":165,"height":10}},{"id":"47ad21e2-c72f-4610-971a-7f0b7c0e6589","block_type":"box","text":"i.e.","page_number":70,"box":{"x":268,"y":839,"width":20,"height":8}},{"id":"34b782a3-56a4-48b1-8da4-fdbae30a4904","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest but","page_number":70,"box":{"x":291,"y":839,"width":593,"height":10}},{"id":"38d5f697-ec4c-497f-8e5d-aae49540dded","block_type":"box","text":"with respect to which the Fund does not currently have a corresponding short position or has not deposited as","page_number":70,"box":{"x":68,"y":854,"width":789,"height":11}},{"id":"02640bca-d6d5-415a-b942-ef55dfefdcbc","block_type":"box","text":"collateral cash equal to the exercise value of the put option with the broker-dealer through which it made the","page_number":70,"box":{"x":69,"y":869,"width":773,"height":11}},{"id":"e2fd6ffb-9210-4779-8680-c94b91f55186","block_type":"box","text":"uncovered put option. The principal reason for writing uncovered put options is to receive premium income and to","page_number":70,"box":{"x":69,"y":884,"width":807,"height":11}},{"id":"deaece03-a942-440d-bb1c-a0b6ff7730e9","block_type":"box","text":"acquire such securities or instruments at a net cost below the current market value. A Fund has the obligation to buy","page_number":70,"box":{"x":69,"y":899,"width":835,"height":11}},{"id":"3c795bcc-e9ab-419e-a3fc-e57faa474851","block_type":"box","text":"II-21","page_number":70,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"3b75d809-adfc-41c3-bf7d-5a4b24d8a0ca","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":70,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"150a0a4a-c66e-4b4c-9956-d752806acca5","block_type":"box","text":"the securities or instruments at an agreed upon price if the price of the securities or instruments decreases below","page_number":71,"box":{"x":68,"y":45,"width":818,"height":11}},{"id":"f75af100-590d-487f-a66d-a2e1dd63a6e0","block_type":"box","text":"the exercise price. If the price of the securities or instruments increases during the option period, the option will","page_number":71,"box":{"x":68,"y":60,"width":800,"height":11}},{"id":"44499b78-7b06-40fc-a89f-0ffd0d15a676","block_type":"box","text":"expire worthless and a Fund will retain the premium and will not have to purchase the securities or instruments at","page_number":71,"box":{"x":69,"y":75,"width":814,"height":11}},{"id":"6552cdea-afe7-498c-89c1-1bc1e88a5042","block_type":"box","text":"the exercise price.","page_number":71,"box":{"x":68,"y":90,"width":130,"height":11}},{"id":"f6b456c3-417a-476c-9da1-40c120896895","block_type":"box","text":"Options on Government National Mor tgage Association (“GNMA”) Cer tificates.","page_number":71,"box":{"x":102,"y":113,"width":556,"height":11}},{"id":"35095ce1-52aa-4dde-bd3a-256718bd8be8","block_type":"box","text":"The following information relates","page_number":71,"box":{"x":664,"y":113,"width":232,"height":11}},{"id":"323d7118-28f4-4af5-bae9-9df3367b5dd6","block_type":"box","text":"to the unique characteristics of options on GNMA Certificates. Since the remaining principal balance of GNMA","page_number":71,"box":{"x":68,"y":128,"width":784,"height":11}},{"id":"79c9853c-d443-4b25-b5b6-a3902ae96b0c","block_type":"box","text":"Certificates declines each month as a result of mortgage payments, a Fund, as a writer of a GNMA call holding GNMA","page_number":71,"box":{"x":69,"y":143,"width":840,"height":11}},{"id":"d6a70e41-5da9-443d-be37-cec38b2d9bca","block_type":"box","text":"Certificates as “cover” to satisfy its delivery obligation in the event of exercise, may find that the GNMA Certificates","page_number":71,"box":{"x":69,"y":158,"width":827,"height":11}},{"id":"67eb5b63-80b4-4916-a804-ea1c98547d3e","block_type":"box","text":"it holds no longer have a sufficient remaining principal balance for this purpose. Should this occur, a Fund will","page_number":71,"box":{"x":70,"y":173,"width":781,"height":11}},{"id":"3c4bfb80-c270-4c07-89dc-a834db2c9840","block_type":"box","text":"purchase additional GNMA Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash","page_number":71,"box":{"x":70,"y":188,"width":803,"height":11}},{"id":"3f1ce8fc-dd40-41c2-b375-1ebc95483ba6","block_type":"box","text":"market in order to maintain its “cover.”","page_number":71,"box":{"x":69,"y":204,"width":277,"height":8}},{"id":"803e69a6-88ac-4e25-bdef-a356335af38c","block_type":"box","text":"A GNMA Certificate held by a Fund to cover an option position in any but the nearest expiration month may cease","page_number":71,"box":{"x":101,"y":226,"width":807,"height":11}},{"id":"99a453bb-6c52-4860-ac1a-f4fbb74649e0","block_type":"box","text":"to represent cover for the option in the event of a decline in the GNMA coupon rate at which new pools are originated","page_number":71,"box":{"x":68,"y":241,"width":835,"height":11}},{"id":"8f4b9438-1bb6-4358-88d8-481d63ac156c","block_type":"box","text":"under the FHA/VA loan ceiling in effect at any given time. If this should occur, a Fund will no longer be covered, and","page_number":71,"box":{"x":69,"y":256,"width":821,"height":12}},{"id":"5a56f616-f7d0-4fae-bb54-5dfe80a6b947","block_type":"box","text":"the Fund will either enter into a closing purchase transaction or replace such Certificate with a certificate that","page_number":71,"box":{"x":68,"y":271,"width":784,"height":12}},{"id":"1453e733-660c-43e2-a6d7-65983261eafc","block_type":"box","text":"represents cover. When a Fund closes its position or replaces such Certificate, it may realize an unanticipated loss","page_number":71,"box":{"x":69,"y":286,"width":820,"height":12}},{"id":"c49ff1a2-2ede-4abf-8b0b-a03a9be640b4","block_type":"box","text":"and incur transaction costs.","page_number":71,"box":{"x":69,"y":302,"width":197,"height":9}},{"id":"7cfcbfe0-bfcf-4f9a-87b5-ea759d54fbf8","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":71,"box":{"x":102,"y":324,"width":235,"height":11}},{"id":"576cb32c-a255-4340-960b-4eed6c54f0ec","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to enter into","page_number":71,"box":{"x":343,"y":325,"width":563,"height":11}},{"id":"242983aa-5e93-4ecc-84d4-99181b6e795f","block_type":"box","text":"a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at a","page_number":71,"box":{"x":69,"y":339,"width":763,"height":12}},{"id":"98b03923-4a3c-4eb2-a6a7-333e69a3090a","block_type":"box","text":"designated future time on specified terms. A Fund may write (","page_number":71,"box":{"x":69,"y":355,"width":439,"height":11}},{"id":"ed95bf65-0547-49f7-b3f4-de9cf898585c","block_type":"box","text":"i.e.","page_number":71,"box":{"x":510,"y":355,"width":20,"height":9}},{"id":"9504fa68-4a94-4d7a-96d7-bc6eec14ec58","block_type":"box","text":", sell) and purchase put and call swaptions.","page_number":71,"box":{"x":533,"y":355,"width":309,"height":11}},{"id":"fd569b18-06d5-4b65-b489-24b66ccb8475","block_type":"box","text":"Depending on the terms of the particular option agreement, a Fund will generally incur a greater degree of risk when","page_number":71,"box":{"x":70,"y":370,"width":826,"height":11}},{"id":"7f4f1c67-f598-4ae4-9de7-12b3add74ca3","block_type":"box","text":"it writes a swaption than it will incur when it purchases a swaption. When a Fund purchases a swaption, it risks","page_number":71,"box":{"x":70,"y":385,"width":793,"height":11}},{"id":"e135c9f4-2b22-4af2-95b7-a769d41d785d","block_type":"box","text":"losing only the amount of the premium it has paid should it decide to let the option expire unexercised. However,","page_number":71,"box":{"x":70,"y":400,"width":802,"height":11}},{"id":"527fb8ce-9eca-4c3f-a9af-c7495966fa26","block_type":"box","text":"when a Fund writes a swaption, upon exercise of the option the Fund will become obligated according to the terms of","page_number":71,"box":{"x":68,"y":415,"width":836,"height":11}},{"id":"5ece3856-3bf8-4ff6-bd6d-b852f6748455","block_type":"box","text":"the underlying agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":71,"box":{"x":68,"y":430,"width":832,"height":11}},{"id":"153b3b00-01c5-4a34-a1a7-4e89746b8a8d","block_type":"box","text":"required, to be cleared.","page_number":71,"box":{"x":69,"y":446,"width":165,"height":10}},{"id":"37dc5cb2-9d5f-41dd-bf60-78a9f2c44f0f","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment or","page_number":71,"box":{"x":101,"y":468,"width":760,"height":11}},{"id":"dcc80c70-ec78-4a00-9de4-1ce383d61f5b","block_type":"box","text":"portion of its portfolio or to protect against any increase in the price of securities the Fund anticipates purchasing at","page_number":71,"box":{"x":70,"y":483,"width":830,"height":11}},{"id":"7122ae5b-e522-42b3-86bb-e714791996ec","block_type":"box","text":"a later date. A Fund generally will use these transactions for hedging purposes, not for speculation.","page_number":71,"box":{"x":69,"y":498,"width":706,"height":11}},{"id":"1253a0ba-3d43-49d2-9aec-f12dfae19211","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “—Risk Factors in","page_number":71,"box":{"x":102,"y":521,"width":805,"height":11}},{"id":"e797d8f8-2437-4864-a6ae-4cc121ae7374","block_type":"box","text":"Derivatives” above.","page_number":71,"box":{"x":70,"y":536,"width":135,"height":9}},{"id":"c877d204-635d-435c-88de-8f68c43c291c","block_type":"box","text":"FLEX Options.","page_number":71,"box":{"x":102,"y":559,"width":96,"height":11}},{"id":"ca8a2b56-ad89-47cc-a793-76d612208818","block_type":"box","text":"FLEX Options are customized option contracts available through national securities exchanges that","page_number":71,"box":{"x":206,"y":559,"width":702,"height":11}},{"id":"3dbb3271-4132-4efb-9498-5a2652988d35","block_type":"box","text":"are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX Options are listed on a U.S. national","page_number":71,"box":{"x":69,"y":574,"width":839,"height":11}},{"id":"af7b7558-c4b8-4351-94e2-66de37241074","block_type":"box","text":"securities exchange. FLEX Options provide investors with the ability to customize assets referenced by the options,","page_number":71,"box":{"x":69,"y":589,"width":818,"height":11}},{"id":"ef3d1ede-c687-4e0c-8068-a92d74125e3e","block_type":"box","text":"exercise prices, exercise styles (","page_number":71,"box":{"x":69,"y":604,"width":231,"height":11}},{"id":"1e27105d-27c7-4072-8fc1-7b809cec2692","block_type":"box","text":"i.e.","page_number":71,"box":{"x":302,"y":604,"width":20,"height":9}},{"id":"a046fd15-b7b8-4ed4-8371-cceaaa53e668","block_type":"box","text":", American-style, exercisable any time prior to the expiration date, or European","page_number":71,"box":{"x":325,"y":604,"width":561,"height":11}},{"id":"1c200cc4-a267-49dc-a8e5-9b24b8286020","block_type":"box","text":"style, exercisable only on the option expiration date) and expiration dates, while achieving price discovery in","page_number":71,"box":{"x":69,"y":619,"width":768,"height":11}},{"id":"812f9051-aa37-4f6f-ac31-02e04c679290","block_type":"box","text":"competitive, transparent auctions markets and avoiding the counterparty exposure of OTC options positions. Each","page_number":71,"box":{"x":69,"y":634,"width":812,"height":12}},{"id":"25050cca-5104-480f-954c-490cfdfbe231","block_type":"box","text":"option contract entitles the holder thereof to purchase (for the call options) or sell (for the put options) shares of the","page_number":71,"box":{"x":69,"y":649,"width":830,"height":11}},{"id":"7caf0ff0-1e84-4973-8681-a62c402b0b20","block_type":"box","text":"reference asset at the strike price. A Fund’s portfolio may include several types of FLEX Options, including both","page_number":71,"box":{"x":69,"y":664,"width":792,"height":12}},{"id":"7db8eecd-8ca3-4e0e-8922-311c2f08f1ea","block_type":"box","text":"purchased and written put and call options (as further described below). The FLEX Options are all European style","page_number":71,"box":{"x":70,"y":680,"width":802,"height":11}},{"id":"a7672879-ab0f-4317-bbe7-fc87047bef33","block_type":"box","text":"options, which means that they are exercisable at a predetermined specified price (the “strike price”) only on the","page_number":71,"box":{"x":69,"y":695,"width":806,"height":11}},{"id":"1db1eaa6-7af0-487c-b784-038d3da7957b","block_type":"box","text":"FLEX Option’s expiration date.","page_number":71,"box":{"x":70,"y":710,"width":211,"height":11}},{"id":"5f8873c6-2c0e-4333-b48a-c51743e812f2","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the “buyer for","page_number":71,"box":{"x":101,"y":732,"width":783,"height":12}},{"id":"e775334e-48e2-4ec4-a7be-faf2d0389d02","block_type":"box","text":"every seller and the seller for every buyer”, reducing counterparty risk for clearing members and options traders.","page_number":71,"box":{"x":69,"y":748,"width":802,"height":11}},{"id":"2a3e0be1-8108-4c16-a99e-afe61ecc3ead","block_type":"box","text":"Although guaranteed for settlement by the OCC, FLEX Options are still subject to counterparty risk with the OCC and","page_number":71,"box":{"x":68,"y":763,"width":826,"height":11}},{"id":"76911b8a-8b15-4ecf-834b-cfe96ee24336","block_type":"box","text":"subject to the risk that the OCC may fail to perform the settlement of the FLEX Options due to bankruptcy or other","page_number":71,"box":{"x":69,"y":778,"width":814,"height":11}},{"id":"22a92a3f-4ef5-4e6d-8cdf-e2d0e08f79b8","block_type":"box","text":"adverse reasons. A Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the","page_number":71,"box":{"x":69,"y":793,"width":822,"height":11}},{"id":"81ac422d-c8c6-424e-a8a4-10a77cbda078","block_type":"box","text":"FLEX Options contracts.","page_number":71,"box":{"x":70,"y":808,"width":166,"height":11}},{"id":"1c4bf13b-a606-4747-ae2a-e03b99a497f9","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the FLEX","page_number":71,"box":{"x":102,"y":831,"width":748,"height":11}},{"id":"56ca84da-691d-48b7-ab18-4a9423d3887f","block_type":"box","text":"Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and rules: certain stock","page_number":71,"box":{"x":69,"y":846,"width":822,"height":11}},{"id":"c1d571d1-385a-4d55-90c2-a76009a7f744","block_type":"box","text":"dividends or distributions, stock splits, reverse stock splits, rights offerings, distributions, reorganizations,","page_number":71,"box":{"x":69,"y":861,"width":759,"height":11}},{"id":"8bb55f2f-460c-4976-a9ae-f292a7fb7cd1","block_type":"box","text":"recapitalizations, or reclassifications with respect to an underlying security, or a merger, consolidation, dissolution or","page_number":71,"box":{"x":69,"y":876,"width":833,"height":11}},{"id":"66db20f7-1592-445e-802e-aef198c7cea9","block_type":"box","text":"liquidation of the issuer of the underlying security. According to the OCC’s by-laws, the nature and extent of any such","page_number":71,"box":{"x":70,"y":891,"width":829,"height":12}},{"id":"1d90fc7a-a5e7-433a-aa44-1dcf2d4a1950","block_type":"box","text":"adjustment is to be determined by the OCC’s Securities Committee, in light of the circumstances known to it at the","page_number":71,"box":{"x":69,"y":906,"width":821,"height":12}},{"id":"d04d25b8-27db-48ba-bc58-3565320600ae","block_type":"box","text":"II-22","page_number":71,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"aef58d85-b096-48ed-8274-28fd570211bf","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":71,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"eaf87ab8-b888-4e3b-863f-9b442334f51c","block_type":"box","text":"time such determination is made, based on its judgment as to what is appropriate for the protection of investors and","page_number":72,"box":{"x":68,"y":45,"width":835,"height":11}},{"id":"8082d77f-d8df-4161-bbfb-52eab7ebadbf","block_type":"box","text":"the public interest, taking into account such factors as fairness to holders and writers (or purchasers and sellers) of","page_number":72,"box":{"x":68,"y":60,"width":829,"height":11}},{"id":"bfc70b9f-587a-4393-8247-d9649461992b","block_type":"box","text":"the affected options, the maintenance of a fair and orderly market in the affected options, consistency of","page_number":72,"box":{"x":68,"y":75,"width":753,"height":11}},{"id":"b90ab943-d9e6-4241-8432-de8b1db0e50d","block_type":"box","text":"interpretation and practice, efficiency of exercise settlement procedures, and the coordination with other clearing","page_number":72,"box":{"x":70,"y":90,"width":806,"height":11}},{"id":"d3018942-b5e7-48d0-9e84-f064fd0e773d","block_type":"box","text":"agencies of the clearance and settlement of transactions in the underlying interest.","page_number":72,"box":{"x":69,"y":105,"width":593,"height":11}},{"id":"89cd3d39-16ba-44b0-9bbe-14cd53674cf4","block_type":"box","text":"Cer tain Considerations Regarding Options","page_number":72,"box":{"x":135,"y":128,"width":298,"height":11}},{"id":"b610acb4-33c3-4f23-acb0-a3e3145f4f7d","block_type":"box","text":". The FLEX Options in which each Fund may invest will be options","page_number":72,"box":{"x":435,"y":128,"width":461,"height":11}},{"id":"a163e2d0-d754-46e2-af93-6e1745a94162","block_type":"box","text":"on an exchange-traded fund (“ETF”) or the S&P 500 Index (together with such ETF, a “Reference Asset”). As","page_number":72,"box":{"x":102,"y":143,"width":768,"height":11}},{"id":"a337bcc4-d430-4925-aced-2c4abdc9377b","block_type":"box","text":"such, the value of a Fund’s FLEX Options will fluctuate with changes in the value of the securities held by the","page_number":72,"box":{"x":102,"y":158,"width":775,"height":11}},{"id":"c933ef94-639f-46f8-a85d-c2b5de3f4804","block_type":"box","text":"ETF, and thus the ETF’s share price. In addition to the value of the ETF, the value of an option, in general, will","page_number":72,"box":{"x":102,"y":173,"width":777,"height":11}},{"id":"b378f6d7-2b39-47cc-bcc9-dec1201113e8","block_type":"box","text":"reflect, among other things, the time remaining until expiration (the end of the Outcome Period), the relationship","page_number":72,"box":{"x":102,"y":188,"width":799,"height":12}},{"id":"b73cffed-113e-46ef-9575-6bf4e79a4a33","block_type":"box","text":"of the exercise price to the market price of the Reference Asset, and general market conditions. Options that","page_number":72,"box":{"x":102,"y":203,"width":777,"height":12}},{"id":"40ae0851-a04d-446c-a562-6903b9fb4921","block_type":"box","text":"expire unexercised have no value.","page_number":72,"box":{"x":101,"y":219,"width":240,"height":10}},{"id":"22812273-c734-43b0-aeac-1290605dda52","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase (for a","page_number":72,"box":{"x":134,"y":241,"width":747,"height":11}},{"id":"d7580b0b-ca6c-4ad2-b28d-e4d7167bd260","block_type":"box","text":"call option) or sell (for a put option) the Reference Asset at a predetermined specified price (the “strike price”).","page_number":72,"box":{"x":101,"y":256,"width":792,"height":11}},{"id":"7ed3c321-537b-443c-8f32-44b489a388ed","block_type":"box","text":"When a Fund writes a call on the Reference Asset, it receives a premium and agrees that the purchaser of the","page_number":72,"box":{"x":101,"y":271,"width":786,"height":12}},{"id":"b15d43fd-09fe-434c-b5cf-4ac87a94ac4c","block_type":"box","text":"call, upon exercise of the call, will receive from the Fund the delivery of a specified number of shares of the ETF","page_number":72,"box":{"x":101,"y":286,"width":798,"height":12}},{"id":"7c216ace-bd36-484e-a386-0e9a752fd5d4","block_type":"box","text":"in exchange for the strike price. When a Fund buys a call on the Reference Asset, it pays a premium and has the","page_number":72,"box":{"x":102,"y":302,"width":802,"height":11}},{"id":"f771edb1-0f4c-400e-bc25-9e9d76c022bc","block_type":"box","text":"same rights to such call as indicated above. When a Fund buys a put on the Reference Asset, it pays a premium","page_number":72,"box":{"x":102,"y":317,"width":800,"height":11}},{"id":"531097dd-3679-4846-a5dd-2144a8bace78","block_type":"box","text":"and has the right to require the seller of the put, upon the Fund’s exercise of the put, to deliver the specified","page_number":72,"box":{"x":102,"y":332,"width":774,"height":11}},{"id":"fff747fd-ed81-4cf8-b94f-9ff367693353","block_type":"box","text":"number of shares of the ETF in exchange for the strike price. When a Fund writes a put on the Reference Asset,","page_number":72,"box":{"x":102,"y":347,"width":793,"height":11}},{"id":"4cde28ca-f469-4fed-853e-bf0ae1a743de","block_type":"box","text":"it receives a premium and the purchaser of the put has the right to require the Fund to deliver the specified","page_number":72,"box":{"x":102,"y":362,"width":764,"height":11}},{"id":"5db4130d-734e-4a0b-85fb-5ffb389e4bb0","block_type":"box","text":"number of shares of the ETF in exchange for the strike price.","page_number":72,"box":{"x":102,"y":377,"width":430,"height":12}},{"id":"29c172b4-74de-4244-847b-8cba15cd747d","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may also utilize","page_number":72,"box":{"x":134,"y":400,"width":740,"height":11}},{"id":"d6633dd1-eeaa-409e-8da7-6d5900d30247","block_type":"box","text":"FLEX Options that are cash-settled. Cash-settled options give the holder the right to receive an amount (or owe","page_number":72,"box":{"x":102,"y":415,"width":787,"height":11}},{"id":"38f078a2-6a95-4208-b3aa-84d6ea148c82","block_type":"box","text":"an amount) of cash upon the exercise of the option. Gain or loss depends on changes in the value of the ETF’s","page_number":72,"box":{"x":102,"y":430,"width":790,"height":11}},{"id":"3dce64c3-5fa6-4a61-977a-c4f12fe575b6","block_type":"box","text":"share price relative to the strike price for a given option contract. The amount of cash is equal to the difference","page_number":72,"box":{"x":102,"y":445,"width":793,"height":12}},{"id":"6b47e774-fac0-45ff-9ec7-379a50fe6059","block_type":"box","text":"between the closing price of the ETF’s share price and the exercise price of the option contract times a specified","page_number":72,"box":{"x":102,"y":460,"width":802,"height":12}},{"id":"936337e3-3c13-489e-baa3-657b9274ebd0","block_type":"box","text":"multiple (“multiplier”), which determines the total value for each point of such difference.","page_number":72,"box":{"x":102,"y":475,"width":635,"height":12}},{"id":"86de2520-a8ba-4166-8dd9-748e6c608c77","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":72,"box":{"x":135,"y":498,"width":297,"height":11}},{"id":"c063ebe9-1e28-48ac-b48e-6bc5938b1200","block_type":"box","text":". If a Fund has purchased an option and exercises it before the","page_number":72,"box":{"x":433,"y":498,"width":448,"height":11}},{"id":"f2f34ee3-9961-44f1-bd84-6ce92f164a28","block_type":"box","text":"closing value for that day is available, it runs the risk that the level of the Reference Asset may subsequently","page_number":72,"box":{"x":101,"y":513,"width":777,"height":12}},{"id":"0e12c9b8-1de8-4f97-9226-f0746a20f5ca","block_type":"box","text":"change. If such a change causes the exercised option to fall out of the money, the applicable Fund will be","page_number":72,"box":{"x":101,"y":528,"width":753,"height":12}},{"id":"3ef9308f-7359-4515-a3a5-aa5e1a4a80f0","block_type":"box","text":"required to pay the difference between the closing Reference Asset value and the exercise price of the option","page_number":72,"box":{"x":102,"y":543,"width":780,"height":12}},{"id":"3a0e219d-e81d-4c83-9217-4b752b166b38","block_type":"box","text":"(times the applicable multiplier) to the assigned writer.","page_number":72,"box":{"x":102,"y":559,"width":387,"height":11}},{"id":"4fc0e1fd-514d-4487-a1cf-8f4635e9a09f","block_type":"box","text":"Foreign Exchange Transactions.","page_number":72,"box":{"x":102,"y":582,"width":222,"height":11}},{"id":"73e995db-69c2-4305-8956-d4fec9ea4578","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX forwards”)","page_number":72,"box":{"x":101,"y":604,"width":807,"height":11}},{"id":"6ba1690d-8fc3-45dd-a2db-6539532367f1","block_type":"box","text":"and currency swaps, purchase and sell currency options, currency futures and related options thereon (collectively,","page_number":72,"box":{"x":69,"y":619,"width":818,"height":11}},{"id":"664266fc-d6bc-4715-a849-a03877869b50","block_type":"box","text":"“Currency Instruments”) for purposes of hedging against the decline in the value of currencies in which its portfolio","page_number":72,"box":{"x":70,"y":634,"width":821,"height":12}},{"id":"a00e9c8b-d99d-4ff7-bffa-b654640b6a09","block_type":"box","text":"holdings are denominated against the U.S. dollar or, with respect to certain Funds, to seek to enhance returns.","page_number":72,"box":{"x":69,"y":649,"width":792,"height":12}},{"id":"041eb49c-3edc-4399-9384-bfe5cf5ba2ba","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities owned by a","page_number":72,"box":{"x":102,"y":672,"width":790,"height":11}},{"id":"1c04e740-8b31-490c-9a61-cbfc0c31bacf","block_type":"box","text":"Fund, sold by a Fund but not yet delivered, or committed or anticipated to be purchased by a Fund. As an illustration,","page_number":72,"box":{"x":70,"y":687,"width":830,"height":11}},{"id":"167e54f4-0a7b-4261-a028-1f084c9b944b","block_type":"box","text":"a Fund may use such techniques to hedge the stated value in U.S. dollars of an investment in a yen-denominated","page_number":72,"box":{"x":69,"y":702,"width":808,"height":12}},{"id":"729fdba2-9c6e-431c-a594-da4eb3256e2f","block_type":"box","text":"security. For example, the Fund may purchase a foreign currency put option enabling it to sell a specified amount of","page_number":72,"box":{"x":69,"y":717,"width":824,"height":12}},{"id":"31e73200-dcfc-463f-8b58-342b21d18711","block_type":"box","text":"yen for dollars at a specified price by a future date. To the extent the hedge is successful, a loss in the value of the","page_number":72,"box":{"x":68,"y":732,"width":823,"height":12}},{"id":"c7f72de7-8682-4cf9-a2f7-01730e606e55","block_type":"box","text":"yen relative to the dollar will tend to be offset by an increase in the value of the put option. To offset, in whole or in","page_number":72,"box":{"x":68,"y":748,"width":821,"height":11}},{"id":"d1b49f43-d60e-4766-8135-39f75c16c4cd","block_type":"box","text":"part, the cost of acquiring such a put option, the Fund may also sell a call option which, if exercised, requires it to","page_number":72,"box":{"x":70,"y":763,"width":813,"height":11}},{"id":"0c585d5c-acf5-42c5-86c9-90c71fba163f","block_type":"box","text":"sell a specified amount of yen for dollars at a specified price by a future date (a technique called a “straddle”). By","page_number":72,"box":{"x":69,"y":778,"width":813,"height":11}},{"id":"7ebedd32-5946-444f-a1ac-c385b2fcf383","block_type":"box","text":"selling such a call option in this illustration, the Fund gives up the opportunity to profit without limit from increases in","page_number":72,"box":{"x":69,"y":793,"width":835,"height":11}},{"id":"fad117c8-6eb1-4a68-94d3-34e99fd86e03","block_type":"box","text":"the relative value of the yen to the dollar. “Straddles” of the type that may be used by a Fund are considered hedging","page_number":72,"box":{"x":68,"y":808,"width":836,"height":11}},{"id":"03f11016-6aef-41ed-97c8-3f694be7207e","block_type":"box","text":"transactions. Certain Funds have a fundamental investment restriction that restricts currency option strategies.","page_number":72,"box":{"x":68,"y":823,"width":794,"height":12}},{"id":"60faf924-4ecf-4fc9-a581-0d9dbde37726","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation risk. A Fund’s","page_number":72,"box":{"x":102,"y":846,"width":805,"height":11}},{"id":"9b84f2fc-ff76-48a2-bc75-f5cf4f6edaf8","block_type":"box","text":"use of Currency Instruments to effect hedging strategies is intended to reduce the volatility of the NAV of the Fund’s","page_number":72,"box":{"x":69,"y":861,"width":828,"height":11}},{"id":"54f9a6fd-feab-4a08-b896-1a3f8bb7e539","block_type":"box","text":"shares; however, the use of such hedging strategies will not prevent the NAV of the Fund’s shares from fluctuating.","page_number":72,"box":{"x":69,"y":876,"width":819,"height":11}},{"id":"76adb8c9-d386-4dfe-82e3-745014c028c9","block_type":"box","text":"Moreover, although Currency Instruments will be used with the intention of hedging against adverse currency","page_number":72,"box":{"x":70,"y":891,"width":773,"height":12}},{"id":"bb0bd2c2-58d5-495d-b284-b4fdb8a5ac94","block_type":"box","text":"movements, transactions in Currency Instruments involve the risk that anticipated currency movements will not be","page_number":72,"box":{"x":69,"y":906,"width":814,"height":12}},{"id":"44e1fc48-529a-491e-9802-27baab9dbab9","block_type":"box","text":"II-23","page_number":72,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"94784de0-e17b-46e3-8b4f-156936e18f4e","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":72,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"70e56fe3-12d9-4ff0-83fd-01a7d269c081","block_type":"box","text":"accurately predicted and that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges","page_number":73,"box":{"x":69,"y":45,"width":796,"height":11}},{"id":"a0bf5736-1891-4322-bbe9-f0466d7ab8a5","block_type":"box","text":"against anticipated currency movements that do not occur, the Fund may realize losses and decrease its total return.","page_number":73,"box":{"x":69,"y":60,"width":835,"height":11}},{"id":"46426935-5d3c-4c7a-a23a-e390539dba05","block_type":"box","text":"Furthermore, a Fund will only engage in hedging activities from time to time and may not be engaging in hedging","page_number":73,"box":{"x":70,"y":75,"width":798,"height":11}},{"id":"993161fd-ee90-4dc4-bee2-b486690dd1fb","block_type":"box","text":"activities when movements in currency exchange rates actually occur.","page_number":73,"box":{"x":69,"y":90,"width":493,"height":11}},{"id":"9df2ebb1-6ce6-4213-981e-8d060050ea99","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign or","page_number":73,"box":{"x":102,"y":113,"width":738,"height":11}},{"id":"0acf7115-96f2-4bea-a37f-b1f424bbdcef","block_type":"box","text":"domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified amount of a","page_number":73,"box":{"x":69,"y":128,"width":814,"height":11}},{"id":"49bc2a0e-5706-4311-b909-6843ec525493","block_type":"box","text":"particular currency. There are no limitations on daily price moves in such forward contracts, and banks and dealers","page_number":73,"box":{"x":70,"y":143,"width":819,"height":11}},{"id":"731a254d-43a7-49c5-818d-7a6e7f885bc7","block_type":"box","text":"are not required to continue to make markets in such contracts. There have been periods during which certain banks","page_number":73,"box":{"x":69,"y":158,"width":834,"height":11}},{"id":"03555d24-4d4f-47d6-96f3-81f577a857b1","block_type":"box","text":"or dealers have refused to quote prices for such forward contracts or have quoted prices with an unusually wide","page_number":73,"box":{"x":69,"y":173,"width":797,"height":11}},{"id":"d009a5f3-9b7f-44e8-af1a-4580e5255448","block_type":"box","text":"spread between the price at which the bank or dealer is prepared to buy and that at which it is prepared to sell.","page_number":73,"box":{"x":69,"y":188,"width":794,"height":11}},{"id":"c8a30585-4975-4241-99d4-8556e7aff9d1","block_type":"box","text":"Governmental imposition of currency controls might limit any such forward contract trading. With respect to its trading","page_number":73,"box":{"x":69,"y":203,"width":841,"height":12}},{"id":"8b7b88c0-526d-448e-a009-1cbab7bc03cb","block_type":"box","text":"of forward contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a counterparty","page_number":73,"box":{"x":69,"y":218,"width":831,"height":12}},{"id":"c07a79e9-cd5c-42a3-a07d-30bed9ad9b17","block_type":"box","text":"would deprive the Fund of any profit potential or force the Fund to cover its commitments for resale, if any, at the","page_number":73,"box":{"x":68,"y":234,"width":805,"height":11}},{"id":"2995423c-26fc-4f0c-9d1d-b6c9ca8dc066","block_type":"box","text":"then market price and could result in a loss to the Fund.","page_number":73,"box":{"x":68,"y":249,"width":401,"height":11}},{"id":"f07fc99e-43df-4227-b1c3-89aeea7a5773","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if correctly","page_number":73,"box":{"x":102,"y":271,"width":738,"height":12}},{"id":"069a01ff-6b49-41ab-9d31-c141ea200543","block_type":"box","text":"anticipated, in the event that (i) the currency exchange rate movement is so generally anticipated that the Fund is not","page_number":73,"box":{"x":69,"y":287,"width":837,"height":11}},{"id":"474d1dd6-98de-4bb1-a5c2-d53e897660ed","block_type":"box","text":"able to enter into a hedging transaction at an effective price, or (ii) the currency exchange rate movement relates to a","page_number":73,"box":{"x":69,"y":302,"width":837,"height":11}},{"id":"cdc4da06-6017-48c6-bf06-366568c0d4b8","block_type":"box","text":"market with respect to which Currency Instruments are not available and it is not possible to engage in effective","page_number":73,"box":{"x":69,"y":317,"width":800,"height":11}},{"id":"58d1567e-debc-4f69-8226-c5911a6f33a9","block_type":"box","text":"foreign currency hedging. The cost to a Fund of engaging in foreign currency transactions varies with such factors as","page_number":73,"box":{"x":68,"y":332,"width":829,"height":11}},{"id":"886dd219-66d7-4a00-a036-dddcb412f3bb","block_type":"box","text":"the currencies involved, the length of the contract period and the market conditions then prevailing. Since","page_number":73,"box":{"x":68,"y":347,"width":753,"height":11}},{"id":"0a6b3937-bfc0-4abf-8e77-d37d1ac3491b","block_type":"box","text":"transactions in foreign currency exchange usually are conducted on a principal basis, no fees or commissions are","page_number":73,"box":{"x":68,"y":362,"width":811,"height":11}},{"id":"c0ffcfce-b7a0-4cdc-9b93-88cd44cca6c2","block_type":"box","text":"involved.","page_number":73,"box":{"x":70,"y":377,"width":59,"height":9}},{"id":"03f131c5-62be-4f23-b2c4-14b99e220486","block_type":"box","text":"A Fund will not hedge a currency in excess of the aggregate market value of the securities that it owns (including","page_number":73,"box":{"x":101,"y":400,"width":803,"height":11}},{"id":"00244ba7-8441-40a5-b8e3-c9bc48e616ad","block_type":"box","text":"receivables for unsettled securities sales), or has committed to purchase or anticipates purchasing, which are","page_number":73,"box":{"x":69,"y":415,"width":785,"height":11}},{"id":"fae990f2-58ef-4ce7-b835-d1c94d15b824","block_type":"box","text":"denominated in such currency.","page_number":73,"box":{"x":69,"y":430,"width":216,"height":11}},{"id":"e1abc1b3-f1f6-4286-a15f-ecf0953705d5","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":73,"box":{"x":102,"y":453,"width":254,"height":11}},{"id":"3eca2c11-e763-4ff5-9cbc-cdce3591ff4c","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified amount of a","page_number":73,"box":{"x":364,"y":453,"width":527,"height":11}},{"id":"efd9bd69-c3a6-4198-8b8b-44afa10c6fc4","block_type":"box","text":"specified currency or multinational currency unit at a specified price and specified future date. Spot foreign exchange","page_number":73,"box":{"x":69,"y":468,"width":834,"height":11}},{"id":"c4739737-1105-4bc4-94d6-52c5ea447f43","block_type":"box","text":"transactions are similar but are settled in the current, or “spot”, market. A Fund will enter into foreign exchange","page_number":73,"box":{"x":68,"y":483,"width":798,"height":11}},{"id":"9b57d9f8-2599-4bfe-941c-1e38e168bcba","block_type":"box","text":"transactions for purposes of hedging either a specific transaction or a portfolio position, or, with respect to certain","page_number":73,"box":{"x":68,"y":498,"width":817,"height":11}},{"id":"11c6300f-0877-4c2d-bb74-e357f1b60e38","block_type":"box","text":"Funds, to seek to enhance returns. FX forwards involve substantial currency risk, credit risk and liquidity risk. A Fund","page_number":73,"box":{"x":70,"y":513,"width":830,"height":11}},{"id":"bf7aa084-83fc-4381-8d89-de8057a46959","block_type":"box","text":"may enter into a foreign exchange transaction for purposes of hedging a specific transaction by, for example,","page_number":73,"box":{"x":69,"y":528,"width":774,"height":12}},{"id":"beafbb91-df0b-49f0-b81f-88a84ea09b28","block_type":"box","text":"purchasing a currency needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":73,"box":{"x":70,"y":544,"width":828,"height":11}},{"id":"3bbc447a-898a-488b-b91f-299d1630a10c","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction for purposes of","page_number":73,"box":{"x":69,"y":559,"width":830,"height":11}},{"id":"5aae7172-3117-40e5-8da8-6e189b2a1ced","block_type":"box","text":"hedging a portfolio position by selling forward a currency in which a portfolio position of the Fund is denominated or","page_number":73,"box":{"x":69,"y":574,"width":826,"height":11}},{"id":"2cd74005-e78f-4b9b-8fcf-f9e03eb0fc30","block_type":"box","text":"by purchasing a currency in which the Fund anticipates acquiring a portfolio position in the near future. A Fund may","page_number":73,"box":{"x":69,"y":589,"width":819,"height":11}},{"id":"91a89f58-2c5f-457e-9217-21b9f40fb4b2","block_type":"box","text":"also hedge a currency by entering into a transaction in a Currency Instrument denominated in a currency other than","page_number":73,"box":{"x":69,"y":604,"width":822,"height":11}},{"id":"6d018e13-fcbc-4be9-895c-235e8c32ec5a","block_type":"box","text":"the currency being hedged (a “cross-hedge”). A Fund will only enter into a cross-hedge if the Manager believes that","page_number":73,"box":{"x":68,"y":619,"width":819,"height":11}},{"id":"bc3b7b54-95a4-4693-a38b-7c13e3ae15e0","block_type":"box","text":"(i) there is a demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":73,"box":{"x":69,"y":634,"width":814,"height":12}},{"id":"c62155e5-cb17-43bc-b676-f00cb2fa6297","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross-hedge is","page_number":73,"box":{"x":69,"y":650,"width":745,"height":11}},{"id":"dd98bf4d-a81d-4fec-9b08-e34ecc4b7b70","block_type":"box","text":"denominated will be significantly more cost-effective or provide substantially greater liquidity than executing a similar","page_number":73,"box":{"x":69,"y":664,"width":832,"height":12}},{"id":"bb31632a-6153-4d72-bb64-f99eaccf721f","block_type":"box","text":"hedging transaction by means of the currency being hedged.","page_number":73,"box":{"x":69,"y":680,"width":428,"height":11}},{"id":"7afb7bb9-5bdf-4bf9-83ce-6ad5b80ebd2a","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on the value","page_number":73,"box":{"x":101,"y":702,"width":797,"height":12}},{"id":"a28eef32-3eae-458c-8687-8472f21856af","block_type":"box","text":"of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when the currency to which the","page_number":73,"box":{"x":69,"y":717,"width":829,"height":12}},{"id":"4c9cb14f-3d9b-4f5d-9aa2-1961d1def062","block_type":"box","text":"Fund is exposed is difficult to hedge, or to hedge against the U.S. dollar. Proxy hedging entails entering into a forward","page_number":73,"box":{"x":70,"y":732,"width":838,"height":12}},{"id":"4a294e8e-a83b-4078-a338-a5497ad8e517","block_type":"box","text":"contract to sell a currency whose changes in value are generally considered to be linked to a currency or currencies","page_number":73,"box":{"x":69,"y":748,"width":823,"height":11}},{"id":"c4fa8f06-2a77-44a8-9818-dad511565bbd","block_type":"box","text":"in which some or all of the Fund’s securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy","page_number":73,"box":{"x":70,"y":763,"width":827,"height":11}},{"id":"f5d12def-cd51-4e95-a575-a39959511d28","block_type":"box","text":"hedging involves some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":73,"box":{"x":69,"y":778,"width":838,"height":11}},{"id":"db0cb4b0-26ae-4124-8481-7dab65afa712","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a degree or in a","page_number":73,"box":{"x":68,"y":793,"width":798,"height":11}},{"id":"190f8455-a867-4ee1-9fec-ac8b55ccf27e","block_type":"box","text":"direction that is not anticipated. In addition, there is the risk that the perceived linkage between various currencies","page_number":73,"box":{"x":69,"y":808,"width":819,"height":11}},{"id":"2552d5db-3785-4275-ac0b-ffd19b1dd92c","block_type":"box","text":"may not be present, including during the particular time that a Fund is engaging in proxy hedging.","page_number":73,"box":{"x":69,"y":823,"width":691,"height":12}},{"id":"09b41a6a-a1f8-4ede-93f2-22009757fc74","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more currencies that","page_number":73,"box":{"x":101,"y":846,"width":785,"height":11}},{"id":"9151f322-af3e-4b04-9087-f1c11dfb6795","block_type":"box","text":"are expected to decline in value relative to other currencies to which the Fund has or in which the Fund expects to","page_number":73,"box":{"x":69,"y":861,"width":811,"height":11}},{"id":"d89a0fc3-8147-4966-b3bd-ab9cc40aee0a","block_type":"box","text":"have portfolio exposure. For example, a Fund may hold both Canadian government bonds and Japanese government","page_number":73,"box":{"x":69,"y":876,"width":828,"height":11}},{"id":"5c1be642-1bd8-42ea-935c-67f17f95e7e5","block_type":"box","text":"bonds, and the Manager or sub-adviser may believe that Canadian dollars will deteriorate against Japanese yen. The","page_number":73,"box":{"x":69,"y":891,"width":829,"height":12}},{"id":"05fb307d-66f6-44c2-8e6d-f6ad63b0080d","block_type":"box","text":"Fund would sell Canadian dollars to reduce its exposure to that currency and buy Japanese yen. This strategy would","page_number":73,"box":{"x":70,"y":906,"width":823,"height":12}},{"id":"0dabc4c4-6e91-43b8-98db-7aba62702046","block_type":"box","text":"II-24","page_number":73,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"cc42139f-bf05-4567-bf6e-6538d71cefc0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":73,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a373ab6d-d8f8-4364-b175-2c68d003dfcc","block_type":"box","text":"be a hedge against a decline in the value of Canadian dollars, although it would expose the Fund to declines in the","page_number":74,"box":{"x":69,"y":45,"width":818,"height":11}},{"id":"7b21ece4-1827-4bf7-ba0f-fd16afc3ccf2","block_type":"box","text":"value of the Japanese yen relative to the U.S. dollar.","page_number":74,"box":{"x":68,"y":60,"width":372,"height":11}},{"id":"83f64025-90f9-47bd-9ccb-b716bef294e3","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as non-deliverable","page_number":74,"box":{"x":102,"y":82,"width":768,"height":12}},{"id":"047bd27b-edd1-4fff-985d-6c1e0aa8de9d","block_type":"box","text":"forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be thinly traded or are denominated","page_number":74,"box":{"x":68,"y":98,"width":838,"height":11}},{"id":"f1389193-3d45-4cd6-99a7-c0a403a7a95c","block_type":"box","text":"in non-convertible foreign currency, where the profit or loss at the time at the settlement date is calculated by taking","page_number":74,"box":{"x":70,"y":113,"width":829,"height":11}},{"id":"7c824520-5bda-4669-ba99-e8fe5b0ab1f6","block_type":"box","text":"the difference between the agreed upon exchange rate and the spot rate at the time of settlement, for an agreed","page_number":74,"box":{"x":68,"y":128,"width":806,"height":11}},{"id":"6f260db5-b520-469e-8632-d65479f9007c","block_type":"box","text":"upon notional amount of funds. All NDFs have a fixing date and a settlement date. The fixing date is the date at which","page_number":74,"box":{"x":69,"y":143,"width":839,"height":11}},{"id":"3a6d09e0-434f-4776-95f6-0da0a8c66835","block_type":"box","text":"the difference between the prevailing market exchange rate and the agreed upon exchange rate is calculated. The","page_number":74,"box":{"x":68,"y":158,"width":812,"height":11}},{"id":"a005f665-1f13-4bd7-9831-8a5b7dc8eae0","block_type":"box","text":"settlement date is the date by which the payment of the difference is due to the party receiving payment. NDFs are","page_number":74,"box":{"x":69,"y":173,"width":821,"height":11}},{"id":"02995930-3ae2-494e-aa0a-38443a552ecc","block_type":"box","text":"commonly quoted for time periods of one month up to two years, and are normally quoted and settled in U.S. dollars.","page_number":74,"box":{"x":69,"y":188,"width":835,"height":11}},{"id":"bdb67b82-9bea-4f06-91ed-2be8fc00d64b","block_type":"box","text":"They are often used to gain exposure to and/or hedge exposure to foreign currencies that are not internationally","page_number":74,"box":{"x":68,"y":203,"width":802,"height":12}},{"id":"d907314a-96a2-4f39-b041-73cc40dc47e5","block_type":"box","text":"traded.","page_number":74,"box":{"x":68,"y":219,"width":49,"height":8}},{"id":"c4f7cc85-dae1-4056-9f54-e4b1ed26ed6c","block_type":"box","text":"Currency Futures.","page_number":74,"box":{"x":102,"y":241,"width":123,"height":11}},{"id":"2262e08a-6125-4ace-ade3-4d48b0af3af9","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a currency","page_number":74,"box":{"x":232,"y":241,"width":654,"height":11}},{"id":"e0802f90-f6d7-4f6c-95aa-1d20653f65ac","block_type":"box","text":"through use of currency futures or options on currency futures. Currency futures are similar to forward foreign","page_number":74,"box":{"x":68,"y":256,"width":782,"height":12}},{"id":"c4206ae4-216e-4b72-989f-232a6441d5a3","block_type":"box","text":"exchange transactions except that futures are standardized, exchange-traded contracts while forward foreign","page_number":74,"box":{"x":69,"y":271,"width":774,"height":12}},{"id":"6a6d6e35-6681-4c31-8531-767a2052e675","block_type":"box","text":"exchange transactions are traded in the OTC market. Currency futures involve substantial currency risk as well as the","page_number":74,"box":{"x":69,"y":286,"width":836,"height":12}},{"id":"194e3f1c-cdc2-4951-b5a5-7b0dfcf03228","block_type":"box","text":"risks discussed above in “—Futures.”","page_number":74,"box":{"x":69,"y":302,"width":269,"height":9}},{"id":"3b415fa0-ead9-474e-bac6-f19ffdaf2e87","block_type":"box","text":"Currency Options.","page_number":74,"box":{"x":102,"y":324,"width":125,"height":11}},{"id":"b65369be-7c56-480c-9701-5dbf5409a5b1","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a currency","page_number":74,"box":{"x":233,"y":324,"width":654,"height":12}},{"id":"d8501b26-2d3e-4028-ae25-1fe3997796d3","block_type":"box","text":"through the use of currency options. Certain Funds have fundamental investment restrictions that permit the","page_number":74,"box":{"x":68,"y":339,"width":776,"height":12}},{"id":"142d5367-26a4-409a-8ad4-d79f1ad96e52","block_type":"box","text":"purchase of currency options, but prohibit the writing of currency options. Currency options are similar to options on","page_number":74,"box":{"x":70,"y":355,"width":825,"height":11}},{"id":"887e0b02-d34a-4d00-8233-b00bac947a2c","block_type":"box","text":"securities. For example, in consideration for an option premium the writer of a currency option is obligated to sell (in","page_number":74,"box":{"x":69,"y":370,"width":827,"height":11}},{"id":"a64f1b4f-16a2-45c9-ba3f-6376ce86fdda","block_type":"box","text":"the case of a call option) or purchase (in the case of a put option) a specified amount of a specified currency on or","page_number":74,"box":{"x":68,"y":385,"width":820,"height":11}},{"id":"22c9a255-bddc-4fee-a431-329d2ee26d5f","block_type":"box","text":"before the expiration date for a specified amount of another currency. A Fund may engage in transactions in options","page_number":74,"box":{"x":69,"y":400,"width":824,"height":11}},{"id":"a4b28159-3623-4584-beee-a4fa01466246","block_type":"box","text":"on currencies either on exchanges or OTC markets. Such transactions in options may include exotic options on","page_number":74,"box":{"x":69,"y":415,"width":790,"height":11}},{"id":"d7b9d4d3-74b9-4ebb-803d-f048ba5113b0","block_type":"box","text":"currencies, which are typically traded in OTC markets and have additional features that result in different payment","page_number":74,"box":{"x":69,"y":430,"width":813,"height":11}},{"id":"0581e29c-7ae5-4b98-a6d5-3e7b9ee57d13","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered call options","page_number":74,"box":{"x":69,"y":446,"width":826,"height":10}},{"id":"fb0dca1e-6e56-4b45-8789-09ae7d26824d","block_type":"box","text":"on up to 100% of the currencies in its portfolio. See “—Options” above. Currency options involve substantial","page_number":74,"box":{"x":69,"y":460,"width":776,"height":12}},{"id":"670b0093-b559-47c2-84ec-71b10568843d","block_type":"box","text":"currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":74,"box":{"x":69,"y":476,"width":483,"height":11}},{"id":"42eebfe6-e379-4857-8bcb-c6d182624c11","block_type":"box","text":"Currency Swaps.","page_number":74,"box":{"x":102,"y":498,"width":117,"height":11}},{"id":"d7d7811c-b799-42b0-8c72-184e9d161b16","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency fluctuations or to","page_number":74,"box":{"x":225,"y":498,"width":652,"height":11}},{"id":"6639c750-10f5-4dda-a842-c18d52456937","block_type":"box","text":"hedge portfolio positions. Currency swaps are transactions in which one currency is simultaneously bought for a","page_number":74,"box":{"x":69,"y":513,"width":799,"height":12}},{"id":"81e4488e-8d52-4687-b97d-a47a1ffbabbb","block_type":"box","text":"second currency on a spot basis and sold for the second currency on a forward basis. Currency swaps involve the","page_number":74,"box":{"x":69,"y":528,"width":812,"height":12}},{"id":"87b202cc-8137-44ff-aa9a-07ca5d31aa06","block_type":"box","text":"exchange of the rights of a Fund and another party to make or receive payments in specified currencies, and typically","page_number":74,"box":{"x":69,"y":543,"width":836,"height":12}},{"id":"9db47e94-2e41-4b3e-ba9e-31fb998d337f","block_type":"box","text":"require the delivery of the entire principal value of one designated currency in exchange for the other designated","page_number":74,"box":{"x":69,"y":559,"width":800,"height":11}},{"id":"d55d5c6b-2508-4018-bde1-dd7e0f98b141","block_type":"box","text":"currency. As a result, the entire principal value of a currency swap is subject to the risk that the other party to the","page_number":74,"box":{"x":69,"y":574,"width":810,"height":11}},{"id":"a51d5083-1e01-4141-b4f7-fde9784a21a9","block_type":"box","text":"swap will default on its contractual delivery obligations.","page_number":74,"box":{"x":69,"y":589,"width":393,"height":11}},{"id":"cb1f34fd-048d-4a9d-ae8a-fa10a9731efc","block_type":"box","text":"Distressed Securities.","page_number":74,"box":{"x":102,"y":612,"width":159,"height":9}},{"id":"24224b35-0349-42d3-8787-273e7498abc3","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary market, that","page_number":74,"box":{"x":267,"y":612,"width":633,"height":11}},{"id":"d9f6ceec-dcca-470c-80a0-ee6ecd9d86e9","block_type":"box","text":"are the subject of bankruptcy proceedings or otherwise in default or in risk of being in default as to the repayment of","page_number":74,"box":{"x":69,"y":627,"width":834,"height":11}},{"id":"1c74922e-d005-456d-8387-c21f0b7cf18f","block_type":"box","text":"principal and/or interest at the time of acquisition by the Fund or that are rated in the lower rating categories by one","page_number":74,"box":{"x":70,"y":642,"width":827,"height":11}},{"id":"eb6dc91b-639d-46b7-927e-c9ee633d7d8c","block_type":"box","text":"or more nationally recognized statistical rating organizations (for example, Ca or lower by Moody’s and CC or lower by","page_number":74,"box":{"x":69,"y":657,"width":835,"height":11}},{"id":"e5f03ecc-75bd-4d6f-bd31-ec4f80a522d9","block_type":"box","text":"S&P or Fitch) or, if unrated, are in the judgment of the Manager of equivalent quality (“Distressed Securities”).","page_number":74,"box":{"x":69,"y":672,"width":784,"height":11}},{"id":"6bbd1d71-6a75-413c-bcd7-c1d6326789de","block_type":"box","text":"Investment in Distressed Securities is speculative and involves significant risks.","page_number":74,"box":{"x":70,"y":687,"width":569,"height":11}},{"id":"e59ae772-49c1-4bf3-bb6c-dc2a8e0a8f64","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely that the","page_number":74,"box":{"x":101,"y":710,"width":766,"height":11}},{"id":"b56a66f8-0226-4127-91b7-278407219de1","block_type":"box","text":"issuer of the Distressed Securities will make an exchange offer or will be the subject of a plan of reorganization","page_number":74,"box":{"x":70,"y":725,"width":795,"height":11}},{"id":"a797463c-281d-49af-9e8c-3d7c28c3f62d","block_type":"box","text":"pursuant to which the Fund will receive new securities in return for the Distressed Securities. However, there can be","page_number":74,"box":{"x":70,"y":740,"width":826,"height":11}},{"id":"c47ceb61-d131-4df6-b7fc-f6b88403dec8","block_type":"box","text":"no assurance that such an exchange offer will be made or that such a plan of reorganization will be adopted. In","page_number":74,"box":{"x":69,"y":755,"width":794,"height":11}},{"id":"1feace7d-1bbb-42a0-96b1-38c3f63966ad","block_type":"box","text":"addition, a significant period of time may pass between the time at which a Fund makes its investment in Distressed","page_number":74,"box":{"x":69,"y":770,"width":832,"height":12}},{"id":"339b17ee-899d-4a2a-98b5-e4b6e9680551","block_type":"box","text":"Securities and the time that any such exchange offer or plan of reorganization is completed. During this period, it is","page_number":74,"box":{"x":69,"y":785,"width":824,"height":12}},{"id":"ec67a82e-8cfe-4bea-9160-50fc61891027","block_type":"box","text":"unlikely that a Fund will receive any interest payments on the Distressed Securities, the Fund will be subject to","page_number":74,"box":{"x":69,"y":801,"width":789,"height":11}},{"id":"8df824a3-7dac-4724-a35c-b41c777f8d62","block_type":"box","text":"significant uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":74,"box":{"x":69,"y":816,"width":810,"height":11}},{"id":"77cef36b-0b6f-432f-967b-f647933257b8","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment. Therefore, to the","page_number":74,"box":{"x":70,"y":831,"width":831,"height":11}},{"id":"0955f34a-7b65-4c9e-b519-ce4955abf4d2","block_type":"box","text":"extent the Fund seeks capital appreciation through investment in distressed securities, the Fund’s ability to achieve","page_number":74,"box":{"x":69,"y":846,"width":826,"height":11}},{"id":"98542e49-b525-460a-800a-fd9f8df88b82","block_type":"box","text":"current income for its shareholders may be diminished. The Fund also will be subject to significant uncertainty as to","page_number":74,"box":{"x":69,"y":861,"width":827,"height":11}},{"id":"6748f5d5-de50-4f45-92c4-50a6e475ac06","block_type":"box","text":"when and in what manner and for what value the obligations evidenced by the distressed securities will eventually be","page_number":74,"box":{"x":68,"y":876,"width":834,"height":11}},{"id":"1df39abf-dbd1-4011-938d-bf9707f10183","block_type":"box","text":"satisfied (","page_number":74,"box":{"x":69,"y":891,"width":70,"height":11}},{"id":"f9e7a66c-87f2-4217-8a69-da6c9192e09b","block_type":"box","text":"e.g.","page_number":74,"box":{"x":140,"y":893,"width":25,"height":10}},{"id":"91c6e577-d8f0-49d4-a88b-8f5564cc5a8b","block_type":"box","text":", through a liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the","page_number":74,"box":{"x":168,"y":891,"width":729,"height":12}},{"id":"68d598e9-b324-4dc0-a884-5ab269416b9c","block_type":"box","text":"distressed securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":74,"box":{"x":69,"y":906,"width":807,"height":12}},{"id":"03b780ca-c220-4407-8b69-1bef63c770cb","block_type":"box","text":"II-25","page_number":74,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"c9c3ea5e-509b-4a9b-97dc-5b201ac035fe","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":74,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1a5def73-07e3-4d69-a715-a2749139b96e","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there can be no","page_number":75,"box":{"x":69,"y":45,"width":797,"height":11}},{"id":"0cded98c-4ce4-4565-bed2-1649125f8ff3","block_type":"box","text":"assurance that the securities or other assets received by a Fund in connection with such exchange offer or plan of","page_number":75,"box":{"x":69,"y":60,"width":816,"height":11}},{"id":"e8d6f51f-de34-43ba-840a-72d4f567833a","block_type":"box","text":"reorganization will not have a lower value or income potential than may have been anticipated when the investment","page_number":75,"box":{"x":69,"y":75,"width":821,"height":11}},{"id":"86ace1cd-9731-451c-b6d5-0b93ed7430f6","block_type":"box","text":"was made or no value. Moreover, any securities received by a Fund upon completion of an exchange offer or plan of","page_number":75,"box":{"x":68,"y":90,"width":827,"height":11}},{"id":"b59e3236-e970-4e98-a54a-fd3b917f4d56","block_type":"box","text":"reorganization may be restricted as to resale. Similarly, if a Fund participates in negotiations with respect to any","page_number":75,"box":{"x":69,"y":105,"width":800,"height":11}},{"id":"0c7748c0-14a7-455a-9333-fdf540b39194","block_type":"box","text":"exchange offer or plan of reorganization with respect to an issuer of Distressed Securities, the Fund may be","page_number":75,"box":{"x":69,"y":120,"width":770,"height":12}},{"id":"92fd938f-99df-47a5-9e3a-333ece786374","block_type":"box","text":"restricted from disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":75,"box":{"x":69,"y":135,"width":809,"height":12}},{"id":"7da029fb-8115-4e89-a8a1-55a175672983","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by an investor. The","page_number":75,"box":{"x":70,"y":150,"width":839,"height":12}},{"id":"c778f891-57e5-41be-b093-036d1368447c","block_type":"box","text":"Fund, however, will not make investments for the purpose of exercising day-to-day management of any issuer’s","page_number":75,"box":{"x":70,"y":166,"width":787,"height":11}},{"id":"30095d5f-8a75-47d0-b78a-23a6fa4e0e47","block_type":"box","text":"affairs.","page_number":75,"box":{"x":69,"y":181,"width":49,"height":9}},{"id":"eb47d2f2-5fe7-4171-96b0-48e1d940fd8a","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration","page_number":75,"box":{"x":102,"y":203,"width":428,"height":11}},{"id":"0a6299cf-e292-4aec-b26e-4b4c33aad96d","block_type":"box","text":". Although a Fund does not seek to implement a","page_number":75,"box":{"x":531,"y":204,"width":341,"height":11}},{"id":"d11c7d2b-42c1-4375-9c8a-7cd678b3c38d","block_type":"box","text":"specific sustainability objective, strategy or process unless disclosed in its Prospectus, Fund management will","page_number":75,"box":{"x":69,"y":218,"width":785,"height":12}},{"id":"a5f4f055-020e-4679-b6f6-0a449d30e01b","block_type":"box","text":"consider ESG factors as part of the investment process for the Fund. Fund management views ESG integration as the","page_number":75,"box":{"x":69,"y":234,"width":838,"height":11}},{"id":"c70d7be9-6af2-4c4e-9be4-1966819c6e83","block_type":"box","text":"practice of incorporating financially material ESG data or information into investment processes with the objective of","page_number":75,"box":{"x":70,"y":249,"width":827,"height":11}},{"id":"855888e7-b439-4320-b5b3-14b0610888c5","block_type":"box","text":"enhancing risk-adjusted returns. These ESG considerations will vary depending on a Fund’s particular investment","page_number":75,"box":{"x":69,"y":264,"width":806,"height":11}},{"id":"e127b893-48a6-43ec-bb5e-f13d64feeb6a","block_type":"box","text":"strategies and may include consideration of third-party research as well as consideration of proprietary BlackRock","page_number":75,"box":{"x":69,"y":279,"width":812,"height":11}},{"id":"10c31678-8404-4f36-b866-29526ec7f865","block_type":"box","text":"research across the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":75,"box":{"x":69,"y":294,"width":807,"height":11}},{"id":"76a00701-5b6a-40dd-84b0-37de077905c7","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be relevant with","page_number":75,"box":{"x":70,"y":309,"width":800,"height":11}},{"id":"11cd2cb5-0d3f-4dfc-b0f4-7442903ec447","block_type":"box","text":"respect to all issuers that are eligible for investment.","page_number":75,"box":{"x":69,"y":324,"width":377,"height":12}},{"id":"2400b03b-a65b-4f8b-bfb0-610d445b6acc","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. While Fund","page_number":75,"box":{"x":102,"y":347,"width":778,"height":11}},{"id":"35e6e1f6-7470-4506-b240-87d98352ae8b","block_type":"box","text":"management views ESG considerations as having the potential to contribute to a Fund’s long-term performance,","page_number":75,"box":{"x":69,"y":362,"width":800,"height":11}},{"id":"1ace604e-0763-46a5-8734-f0722a1945bf","block_type":"box","text":"there is no guarantee that such results will be achieved.","page_number":75,"box":{"x":68,"y":377,"width":400,"height":12}},{"id":"01b08661-9a8d-4eb9-ade0-60afb6e8a2d3","block_type":"box","text":"Equity Securities.","page_number":75,"box":{"x":102,"y":400,"width":127,"height":11}},{"id":"25f386d5-df8c-4f54-b7c6-032f32dbc245","block_type":"box","text":"Certain Funds may invest in equity securities, which include common stock and, for certain","page_number":75,"box":{"x":235,"y":400,"width":648,"height":11}},{"id":"11426b44-8287-4c24-a51a-a9737b126087","block_type":"box","text":"Funds, preferred stock (including convertible preferred stock); bonds, stock purchase warrants and rights; equity","page_number":75,"box":{"x":70,"y":415,"width":802,"height":11}},{"id":"8f162bb8-43a7-4bc6-9676-8f6f8cefff32","block_type":"box","text":"interests in trusts; general and limited partnerships and limited liability companies; and depositary receipts. Stock","page_number":75,"box":{"x":70,"y":430,"width":817,"height":11}},{"id":"f8c79c55-62d2-47ab-8e53-e98a0f6ef261","block_type":"box","text":"markets are volatile. The price of equity securities will fluctuate and can decline and reduce the value of a portfolio","page_number":75,"box":{"x":69,"y":445,"width":819,"height":11}},{"id":"ce5f1524-5dac-47fc-bad8-d1ced58474be","block_type":"box","text":"investing in equities. The price of equity securities fluctuates based on changes in a company’s financial condition","page_number":75,"box":{"x":70,"y":460,"width":813,"height":12}},{"id":"a65ac5cb-9591-44c5-bf0f-9179dd37ae35","block_type":"box","text":"and overall market and economic conditions. The value of equity securities purchased by the Fund could decline if the","page_number":75,"box":{"x":69,"y":475,"width":839,"height":12}},{"id":"7171aeab-6b3d-4187-9282-60a76ba354c3","block_type":"box","text":"financial condition of the companies the Fund invests in decline or if overall market and economic conditions","page_number":75,"box":{"x":68,"y":491,"width":775,"height":11}},{"id":"d631b204-58a9-4c3b-b979-a4a6cdd88dc7","block_type":"box","text":"deteriorate. They may also decline due to factors that affect a particular industry or industries, such as labor","page_number":75,"box":{"x":69,"y":506,"width":777,"height":11}},{"id":"4b63a566-afc7-4d68-98f0-fcb73f4b8121","block_type":"box","text":"shortages or increase in production costs and competitive conditions within an industry. In addition, they may decline","page_number":75,"box":{"x":69,"y":521,"width":837,"height":11}},{"id":"94bae9a7-8bd1-45ca-be12-0aa2dd2bd4d6","block_type":"box","text":"due to general market conditions that are not specifically related to a company or industry, such as real or perceived","page_number":75,"box":{"x":69,"y":536,"width":831,"height":11}},{"id":"a04026b0-00ca-4a78-84ea-e76bbf57cab7","block_type":"box","text":"adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency","page_number":75,"box":{"x":69,"y":551,"width":829,"height":11}},{"id":"4aefb038-33af-490e-95fd-17cc50a86a6d","block_type":"box","text":"rates or generally adverse investor sentiment.","page_number":75,"box":{"x":69,"y":566,"width":325,"height":11}},{"id":"bcbdbff4-7654-4088-b972-1a1592fd9edf","block_type":"box","text":"From time to time certain of the Funds may invest in shares of companies through initial public offerings","page_number":75,"box":{"x":102,"y":589,"width":745,"height":11}},{"id":"1a2e7588-959e-4e0e-a2d4-2733139e400c","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds. There is","page_number":75,"box":{"x":69,"y":604,"width":833,"height":11}},{"id":"4a28041d-b873-4594-b789-9d397a78fe56","block_type":"box","text":"no assurance that any Fund will have continued access to profitable IPOs and therefore investors should not rely on","page_number":75,"box":{"x":69,"y":619,"width":824,"height":11}},{"id":"7198c982-b4de-4b2a-86d9-487eeae704f8","block_type":"box","text":"these past gains as an indication of future performance. The investment performance of a Fund during periods when","page_number":75,"box":{"x":68,"y":634,"width":834,"height":12}},{"id":"8fee109b-3165-4050-b343-3e58108a93db","block_type":"box","text":"it is unable to invest significantly or at all in IPOs may be lower than during periods when it is able to do so. In","page_number":75,"box":{"x":70,"y":649,"width":782,"height":12}},{"id":"9f71fe2b-7472-4852-a544-27c1b2f54383","block_type":"box","text":"addition, as a Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":75,"box":{"x":69,"y":664,"width":790,"height":12}},{"id":"832e2105-b598-43c6-b877-99f1211b01c6","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market capitalizations.","page_number":75,"box":{"x":70,"y":680,"width":823,"height":11}},{"id":"68d449d6-9c84-4f77-91b8-973a5810c5db","block_type":"box","text":"Securities issued in IPOs have no trading history, and information about the companies may be available for very","page_number":75,"box":{"x":69,"y":695,"width":805,"height":11}},{"id":"1b991820-d21b-4d07-b45c-aadf8a7986f8","block_type":"box","text":"limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or may decline shortly after the","page_number":75,"box":{"x":70,"y":710,"width":836,"height":11}},{"id":"163cdc59-41ac-4382-8268-796dc8b89935","block_type":"box","text":"initial public offering.","page_number":75,"box":{"x":70,"y":725,"width":147,"height":11}},{"id":"18362f8e-7020-4a0b-8ea8-9cb3a3eb2899","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These organizations will","page_number":75,"box":{"x":101,"y":748,"width":777,"height":11}},{"id":"9cd90b1c-0d43-47bd-86eb-1fa8f317db0f","block_type":"box","text":"normally have more limited product lines, markets and financial resources and will be dependent upon a more limited","page_number":75,"box":{"x":69,"y":763,"width":838,"height":11}},{"id":"cc9d6053-0855-4ccd-8c73-9eef9e505496","block_type":"box","text":"management group than larger capitalized companies. In addition, it is more difficult to get information on smaller","page_number":75,"box":{"x":69,"y":778,"width":815,"height":11}},{"id":"afc510c7-389c-48d0-b230-fb2f0c56e530","block_type":"box","text":"companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by","page_number":75,"box":{"x":69,"y":793,"width":829,"height":11}},{"id":"baf64edc-3f25-4e4b-a88b-955e9c9ca233","block_type":"box","text":"large investors and are followed by relatively few securities analysts. The securities of smaller capitalized companies","page_number":75,"box":{"x":70,"y":808,"width":831,"height":11}},{"id":"29e464ca-b000-4a6b-8fe7-8d811cc5919f","block_type":"box","text":"are often traded in the OTC markets and may have fewer market makers and wider price spreads. This may result in","page_number":75,"box":{"x":69,"y":823,"width":826,"height":11}},{"id":"69ef74f1-58cd-4edd-adc2-d09c3c1fb538","block_type":"box","text":"greater price movements and less ability to sell a Fund’s investment than if the Fund held the securities of larger,","page_number":75,"box":{"x":68,"y":838,"width":810,"height":12}},{"id":"b5ca5d93-b700-4f08-9b5f-6a9c9c968b2e","block_type":"box","text":"more established companies.","page_number":75,"box":{"x":69,"y":854,"width":209,"height":10}},{"id":"c7d29837-15ae-43e8-a21b-ff878d92c2d7","block_type":"box","text":"II-26","page_number":75,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"c7ecfb30-9c52-41d3-ba15-93f890f8dd7f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":75,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"fcc98047-3b2d-482c-9acd-561f6f07c340","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks associated with","page_number":76,"box":{"x":102,"y":45,"width":776,"height":11}},{"id":"b051c4cd-8a91-44bf-a8e3-799538931507","block_type":"box","text":"investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds may also invest in shares of","page_number":76,"box":{"x":70,"y":60,"width":810,"height":11}},{"id":"35886a0e-eb3f-4925-a7ab-9af207dd6833","block_type":"box","text":"private companies, which are subject to the risks of “Illiquid Investments” and “Restricted Securities” described","page_number":76,"box":{"x":70,"y":75,"width":799,"height":11}},{"id":"2ed498a1-89f8-4757-9133-63a4c3814550","block_type":"box","text":"below.","page_number":76,"box":{"x":69,"y":90,"width":43,"height":9}},{"id":"2ec9cf9f-0963-4f7d-8de7-347e6cfdd051","block_type":"box","text":"Real Estate-Related Securities.","page_number":76,"box":{"x":102,"y":113,"width":219,"height":9}},{"id":"d6eb7ada-d584-4c21-b725-0485dbbf5a70","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may invest in","page_number":76,"box":{"x":327,"y":113,"width":565,"height":11}},{"id":"480588ce-9972-4286-aafe-4923e9f87c27","block_type":"box","text":"equity securities of issuers that are principally engaged in the real estate industry. Such investments are subject to","page_number":76,"box":{"x":69,"y":128,"width":822,"height":11}},{"id":"74e45d8b-8740-4905-8d8f-8b408a4467ac","block_type":"box","text":"certain risks associated with the ownership of real estate and with the real estate industry in general. These risks","page_number":76,"box":{"x":69,"y":143,"width":814,"height":11}},{"id":"ab7de5ce-769f-4c9a-9173-b9b305c21a46","block_type":"box","text":"include, among others: possible declines in the value of real estate; risks related to general and local economic","page_number":76,"box":{"x":70,"y":158,"width":796,"height":11}},{"id":"f2630643-1a27-4171-9c9d-955d5aac4a88","block_type":"box","text":"conditions; possible lack of availability of mortgage funds or other limitations on access to capital; overbuilding; risks","page_number":76,"box":{"x":69,"y":173,"width":836,"height":11}},{"id":"244779ea-7608-47df-a9db-b4e9d243f78f","block_type":"box","text":"associated with leverage; market illiquidity; extended vacancies of properties; increase in competition, property","page_number":76,"box":{"x":69,"y":188,"width":795,"height":12}},{"id":"d244b18e-f48d-4b02-8cdf-da1568c96854","block_type":"box","text":"taxes, capital expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":76,"box":{"x":68,"y":204,"width":828,"height":11}},{"id":"edc7e6e9-9c6e-4618-93ac-54d9d2ed5210","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems;","page_number":76,"box":{"x":69,"y":218,"width":794,"height":12}},{"id":"64747fa1-b755-4b4a-aac4-539eab912fa3","block_type":"box","text":"tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured damages from floods,","page_number":76,"box":{"x":68,"y":234,"width":805,"height":11}},{"id":"d71741cf-cd62-4e89-b4f9-4fa49104d2cd","block_type":"box","text":"earthquakes or other natural disasters; limitations on and variations in rents, including decreases in market rates for","page_number":76,"box":{"x":69,"y":249,"width":836,"height":11}},{"id":"1f2148b9-4e6f-47e8-a7fb-81758fd7d5de","block_type":"box","text":"rents; investment in developments that are not completed or that are subject to delays in completion; and changes in","page_number":76,"box":{"x":69,"y":264,"width":838,"height":11}},{"id":"e47977ad-549a-49ed-b72d-1b954a519302","block_type":"box","text":"interest rates. To the extent that assets underlying a Fund’s investments are concentrated geographically, by property","page_number":76,"box":{"x":70,"y":279,"width":838,"height":11}},{"id":"0b0ba71f-2cb4-4146-b740-d5cabce28904","block_type":"box","text":"type or in certain other respects, the Fund may be subject to certain of the foregoing risks to a greater extent.","page_number":76,"box":{"x":68,"y":294,"width":785,"height":11}},{"id":"572fece5-e2c8-48ba-83e7-e60d6c8b3af0","block_type":"box","text":"Investments by a Fund in securities of companies providing mortgage servicing will be subject to the risks associated","page_number":76,"box":{"x":70,"y":309,"width":836,"height":11}},{"id":"a717d13a-9a69-476b-864b-323d0cef7b22","block_type":"box","text":"with refinancings and their impact on servicing rights.","page_number":76,"box":{"x":68,"y":324,"width":381,"height":12}},{"id":"ce876cfe-0c05-42dc-aef1-d59f047e9183","block_type":"box","text":"In addition, if a Fund receives rental income or income from the disposition of real property acquired as a result","page_number":76,"box":{"x":102,"y":347,"width":797,"height":11}},{"id":"bac66de3-dc40-4a8a-86ea-337d0465220b","block_type":"box","text":"of a default on securities the Fund owns, the receipt of such income may adversely affect the Fund’s ability to retain","page_number":76,"box":{"x":69,"y":362,"width":829,"height":11}},{"id":"b09ef94f-b6ec-4aa0-b437-4f200292ebbe","block_type":"box","text":"its tax status as a regulated investment company because of certain income source requirements applicable to","page_number":76,"box":{"x":70,"y":377,"width":794,"height":12}},{"id":"73955eef-7d5a-424a-9131-54014a01d3d4","block_type":"box","text":"regulated investment companies under the Internal Revenue Code of 1986, as amended (the “Code”).","page_number":76,"box":{"x":69,"y":392,"width":730,"height":12}},{"id":"223597a7-d2f9-4ce5-b8e7-40165bde506b","block_type":"box","text":"Securities of Smaller or Emerging Growth Companies.","page_number":76,"box":{"x":102,"y":415,"width":381,"height":11}},{"id":"ac6207f2-cd1a-48f9-857d-e78a78a073b4","block_type":"box","text":"Investment in smaller or emerging growth companies","page_number":76,"box":{"x":490,"y":415,"width":376,"height":11}},{"id":"9df4b228-002e-423c-8574-7cc4f9509b2b","block_type":"box","text":"involves greater risk than is customarily associated with investments in more established companies. The securities","page_number":76,"box":{"x":70,"y":430,"width":828,"height":11}},{"id":"9dafa552-e433-4307-979e-9aa2d3581e8f","block_type":"box","text":"of smaller or emerging growth companies may be subject to more abrupt or erratic market movements than larger,","page_number":76,"box":{"x":69,"y":445,"width":815,"height":12}},{"id":"16492055-30d3-49a4-8d28-27a6fee65b62","block_type":"box","text":"more established companies or the market average in general. These companies may have limited product lines,","page_number":76,"box":{"x":69,"y":461,"width":804,"height":11}},{"id":"5039f043-4f34-478a-8120-989dde251168","block_type":"box","text":"markets or financial resources, or they may be dependent on a limited management group.","page_number":76,"box":{"x":69,"y":475,"width":647,"height":12}},{"id":"3e4f5bbb-709d-49d9-8069-a992fa3529f5","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be considered","page_number":76,"box":{"x":102,"y":498,"width":773,"height":11}},{"id":"76f4c99e-80f6-4994-91b2-a60cdfb08922","block_type":"box","text":"speculative. Full development of these companies and trends frequently takes time.","page_number":76,"box":{"x":69,"y":513,"width":597,"height":11}},{"id":"97343cff-023f-40d4-9cf0-c79e17a045ce","block_type":"box","text":"Small cap and emerging growth securities will often be traded only in the OTC market or on a regional securities","page_number":76,"box":{"x":102,"y":536,"width":797,"height":11}},{"id":"217c11d8-62b4-4f87-a1b0-f7372ab1e193","block_type":"box","text":"exchange and may not be traded every day or in the volume typical of trading on a national securities exchange. As a","page_number":76,"box":{"x":69,"y":551,"width":832,"height":11}},{"id":"7395a2a8-e015-406b-8b56-2b61d1845932","block_type":"box","text":"result, the disposition by a Fund of portfolio securities to meet redemptions or otherwise may require the Fund to","page_number":76,"box":{"x":69,"y":566,"width":808,"height":11}},{"id":"d6c163fc-3f41-45bc-9b66-6c85460d380c","block_type":"box","text":"make many small sales over a lengthy period of time, or to sell these securities at a discount from market prices or","page_number":76,"box":{"x":69,"y":581,"width":825,"height":12}},{"id":"0767ab34-d931-4127-938f-eb92224227cf","block_type":"box","text":"during periods when, in Fund management’s judgment, such disposition is not desirable.","page_number":76,"box":{"x":69,"y":597,"width":631,"height":11}},{"id":"522f5eda-f0a9-4a82-9414-ca36b008100f","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee successful","page_number":76,"box":{"x":101,"y":619,"width":758,"height":11}},{"id":"b79ad71c-9e19-4124-a67f-b4191d82d88c","block_type":"box","text":"investment results. Careful initial selection is particularly important in this area as many new enterprises have","page_number":76,"box":{"x":70,"y":634,"width":787,"height":11}},{"id":"a6177b47-555e-43c3-9930-ca9f57c816cb","block_type":"box","text":"promise but lack certain of the fundamental factors necessary to prosper. Investing in small cap and emerging","page_number":76,"box":{"x":70,"y":649,"width":789,"height":12}},{"id":"07569325-e609-4582-84a1-b3ba71a54a0e","block_type":"box","text":"growth companies requires specialized research and analysis.","page_number":76,"box":{"x":68,"y":665,"width":442,"height":11}},{"id":"e863c0b8-1ee5-4aac-8475-1f688613519c","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into significant","page_number":76,"box":{"x":102,"y":687,"width":795,"height":11}},{"id":"ef11f094-eabe-42ac-96ce-c9276213e63f","block_type":"box","text":"business enterprises. A Fund may invest in securities of small issuers in the relatively early stages of business","page_number":76,"box":{"x":69,"y":702,"width":791,"height":12}},{"id":"aed5a8ee-2770-4376-bb6c-feee715e5243","block_type":"box","text":"development that have a new technology, a unique or proprietary product or service, or a favorable market position.","page_number":76,"box":{"x":69,"y":717,"width":823,"height":12}},{"id":"574bd930-4e03-4f29-9cfe-465bc7fd1801","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":76,"box":{"x":102,"y":740,"width":729,"height":11}},{"id":"8b5178b4-1536-40ff-b001-a8c4579b0020","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying stages of their","page_number":76,"box":{"x":69,"y":755,"width":837,"height":11}},{"id":"1123b3a2-ee45-4ea8-918b-0cf800c51794","block_type":"box","text":"business development. The market valuation of small cap issuers tends to fluctuate during economic or market","page_number":76,"box":{"x":69,"y":770,"width":794,"height":12}},{"id":"7d6b7ab0-c9a7-4e26-81bd-9106807d6b0c","block_type":"box","text":"cycles.","page_number":76,"box":{"x":69,"y":786,"width":46,"height":11}},{"id":"e64b5d7d-d7a3-4d93-86b9-3eb845accc42","block_type":"box","text":"Tracking Stocks","page_number":76,"box":{"x":103,"y":808,"width":110,"height":11}},{"id":"3fe59953-82ef-49c8-bb99-da50c8093fbe","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a specific","page_number":76,"box":{"x":214,"y":808,"width":640,"height":11}},{"id":"dc6f167e-24f9-4fd1-bd73-11c7f8b785cd","block_type":"box","text":"business unit or operating division within a larger company and is designed to “track” the performance of such","page_number":76,"box":{"x":69,"y":823,"width":791,"height":12}},{"id":"95402160-2ff9-4b3e-a810-6845667f3c7a","block_type":"box","text":"business unit or division. The tracking stock may pay dividends to shareholders independent of the parent company.","page_number":76,"box":{"x":69,"y":838,"width":826,"height":12}},{"id":"6088cb36-bea5-488c-9888-ef35690a6bbe","block_type":"box","text":"The parent company, rather than the business unit or division, generally is the issuer of tracking stock. However,","page_number":76,"box":{"x":68,"y":853,"width":801,"height":12}},{"id":"99455e37-8a61-479d-80aa-bf9b9c8b9cd8","block_type":"box","text":"holders of the tracking stock may not have the same rights as holders of the company’s common stock.","page_number":76,"box":{"x":69,"y":869,"width":740,"height":11}},{"id":"1cd56459-4014-447f-a744-69b93bd30b85","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":76,"box":{"x":102,"y":891,"width":245,"height":11}},{"id":"a106b33a-4129-4c04-859f-0258f0a6947d","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes representing","page_number":76,"box":{"x":354,"y":891,"width":521,"height":12}},{"id":"08ddd37f-83ea-4331-97b1-9f31987974c1","block_type":"box","text":"debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and ETFs. An ETN’s returns","page_number":76,"box":{"x":69,"y":906,"width":814,"height":12}},{"id":"5b2ad221-10d4-48aa-aa3d-0f0e18905c1d","block_type":"box","text":"II-27","page_number":76,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"6fea1be6-0669-4c55-8b27-c53c98eb6dd5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":76,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"0c4a1ec7-97d8-4290-9e01-1488007eb7d1","block_type":"box","text":"are based on the performance of one or more underlying assets, reference rates or indexes, minus fees and","page_number":77,"box":{"x":69,"y":45,"width":774,"height":11}},{"id":"eeb22e33-dffb-46a8-8f8f-7e2edf4cfc39","block_type":"box","text":"expenses. Similar to ETFs, ETNs are listed on an exchange and traded in the secondary market. However, unlike an","page_number":77,"box":{"x":69,"y":60,"width":822,"height":11}},{"id":"822a6f69-f233-484e-97ce-5f8c5a6206bb","block_type":"box","text":"ETF, an ETN can be held until the ETN’s maturity, at which time the issuer will pay a return linked to the performance","page_number":77,"box":{"x":70,"y":75,"width":831,"height":11}},{"id":"7fadb43b-97d3-4222-bdfe-df6dc9b84fe6","block_type":"box","text":"of the specific asset, index or rate (“reference instrument”) to which the ETN is linked minus certain fees. Unlike","page_number":77,"box":{"x":69,"y":90,"width":805,"height":11}},{"id":"15ffb19e-afb7-4c77-bc7b-89600b68c4df","block_type":"box","text":"regular bonds, ETNs do not make periodic interest payments, and principal is not protected.","page_number":77,"box":{"x":69,"y":105,"width":654,"height":11}},{"id":"22bc2853-c6bd-49c3-b4de-df9b80a85c59","block_type":"box","text":"The value of an ETN may be influenced by, among other things, time to maturity, level of supply and demand for","page_number":77,"box":{"x":101,"y":128,"width":794,"height":11}},{"id":"013d6c9f-a78d-4b9a-96a2-de91be100e19","block_type":"box","text":"the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable interest rates, the","page_number":77,"box":{"x":68,"y":143,"width":748,"height":11}},{"id":"697de3d7-43c4-4f81-8959-22f9accbba93","block_type":"box","text":"performance of the reference instrument, changes in the issuer’s credit rating and economic, legal, political or","page_number":77,"box":{"x":70,"y":158,"width":789,"height":11}},{"id":"260f89fb-e950-4a68-b4ba-04d711071568","block_type":"box","text":"geographic events that affect the reference instrument. ETNs are subject to credit risk and the value of the ETN may","page_number":77,"box":{"x":68,"y":173,"width":831,"height":11}},{"id":"6a4b139f-0c1e-4f23-ab9c-3354e7db2819","block_type":"box","text":"drop due to a downgrade in an issuer’s credit rating, despite the underlying reference instrument remaining","page_number":77,"box":{"x":69,"y":188,"width":766,"height":12}},{"id":"d5fc754d-1f31-41e6-aba9-6cc3f2a078b6","block_type":"box","text":"unchanged. When a Fund invests in ETNs, it will bear its proportionate share of any fees and expenses borne by the","page_number":77,"box":{"x":69,"y":203,"width":828,"height":12}},{"id":"613fab2b-de1b-49ab-85f2-82c0d5bf6499","block_type":"box","text":"ETN.","page_number":77,"box":{"x":70,"y":219,"width":30,"height":8}},{"id":"ad8e3a82-51ce-4878-9482-955233441863","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference instrument.","page_number":77,"box":{"x":101,"y":241,"width":776,"height":11}},{"id":"a124bc2d-18ec-4051-a160-0673cae03f9a","block_type":"box","text":"ETNs also incur certain expenses not incurred by their applicable reference instrument. Some ETNs that use leverage","page_number":77,"box":{"x":70,"y":256,"width":837,"height":12}},{"id":"5f7fb4e7-8f46-44a4-a41f-e48b45193e56","block_type":"box","text":"may, at times, be illiquid and may be difficult to purchase or sell at a fair price. Levered ETNs are subject to the same","page_number":77,"box":{"x":69,"y":271,"width":840,"height":12}},{"id":"4d7a73d4-9710-4c37-bee1-911b86490d65","block_type":"box","text":"risk as other instruments that use leverage in any form. While leverage allows for greater potential return, the","page_number":77,"box":{"x":69,"y":286,"width":781,"height":12}},{"id":"7ebb5fce-bb66-4f8b-b3de-f0c7af55fd6c","block_type":"box","text":"potential for loss is also greater. Finally, additional losses may be incurred if the investment loses value because, in","page_number":77,"box":{"x":70,"y":302,"width":827,"height":11}},{"id":"9fe882ce-e1ba-4343-8281-d3d664799c75","block_type":"box","text":"addition to the money lost on the investment, the loan still needs to be repaid.","page_number":77,"box":{"x":69,"y":317,"width":560,"height":11}},{"id":"ee329fad-f72d-4d98-8cb2-fb131a7b523a","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its obligations, the","page_number":77,"box":{"x":102,"y":340,"width":774,"height":11}},{"id":"cce9eeec-1821-4d3e-ae2b-99af84fc2027","block_type":"box","text":"value of the ETN may change due to a change in the issuer’s credit rating, despite no change in the underlying","page_number":77,"box":{"x":68,"y":355,"width":788,"height":11}},{"id":"3b260120-8c0f-442a-bb1b-0f4f814013d3","block_type":"box","text":"reference instrument. The market value of ETN shares may differ from the value of the reference instrument. This","page_number":77,"box":{"x":69,"y":370,"width":810,"height":11}},{"id":"77537c57-bdfe-4113-98c8-83ab32c6fbda","block_type":"box","text":"difference in price may be due to the fact that the supply and demand in the market for ETN shares at any point in","page_number":77,"box":{"x":69,"y":385,"width":815,"height":11}},{"id":"68b62632-84c0-47ff-a98b-fdc74c900652","block_type":"box","text":"time is not always identical to the supply and demand in the market for the assets underlying the reference","page_number":77,"box":{"x":68,"y":400,"width":766,"height":11}},{"id":"2591268e-3199-490d-b81b-81f2ea3c3728","block_type":"box","text":"instrument that the ETN seeks to track.","page_number":77,"box":{"x":70,"y":415,"width":279,"height":9}},{"id":"e50ca298-1b8f-425c-8138-6a39bf92d133","block_type":"box","text":"There may be restrictions on the Fund’s right to redeem its investment in an ETN, which are generally meant to","page_number":77,"box":{"x":101,"y":438,"width":791,"height":11}},{"id":"689a1c1c-34eb-4cb9-ab56-61dee360ea43","block_type":"box","text":"be held until maturity. The Fund’s decision to sell its ETN holdings may be limited by the availability of a secondary","page_number":77,"box":{"x":69,"y":453,"width":818,"height":11}},{"id":"782dcef5-c929-4c4a-be12-43ffd45595f1","block_type":"box","text":"market. An investor in an ETN could lose some or all of the amount invested.","page_number":77,"box":{"x":69,"y":468,"width":547,"height":9}},{"id":"36256dd3-a26b-401b-bd06-7a60aa87f986","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a court may not","page_number":77,"box":{"x":102,"y":491,"width":807,"height":11}},{"id":"25c198c1-863f-4a31-966a-b82f86ca8254","block_type":"box","text":"uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and character of income and gains","page_number":77,"box":{"x":69,"y":506,"width":819,"height":11}},{"id":"adf3de19-51ec-404f-bdfc-4733decde7f3","block_type":"box","text":"derived by a Fund from investments in ETNs may be affected by future legislation.","page_number":77,"box":{"x":69,"y":521,"width":581,"height":11}},{"id":"2bbef2b4-d53c-4e6b-ac29-c218ea2edf02","block_type":"box","text":"Foreign Investments.","page_number":77,"box":{"x":102,"y":544,"width":152,"height":11}},{"id":"fdfcda7c-b5f8-449c-b1d3-30b7d91a6d8e","block_type":"box","text":"Foreign Investment Risks.","page_number":77,"box":{"x":102,"y":566,"width":182,"height":11}},{"id":"3dfc326c-5dc9-4c1f-8c6f-0f929ff46012","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from issuers","page_number":77,"box":{"x":291,"y":566,"width":567,"height":11}},{"id":"7ea88a65-f70f-4036-b6da-dd014656414b","block_type":"box","text":"located in emerging market countries. These securities may be denominated in U.S. dollars or in a foreign currency.","page_number":77,"box":{"x":70,"y":581,"width":822,"height":12}},{"id":"fee1847d-0bd9-46d8-8a44-2f927fc678f4","block_type":"box","text":"Investing in foreign securities involves risks not typically associated with investing in securities of companies","page_number":77,"box":{"x":70,"y":596,"width":774,"height":12}},{"id":"90ebe456-2a88-4c05-a905-3c0ed8ca29ce","block_type":"box","text":"organized and operated in the United States that can increase the chances that a Fund will lose money.","page_number":77,"box":{"x":69,"y":612,"width":738,"height":11}},{"id":"b5ac1150-772e-4ffb-bfcc-e37916b24cba","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be foreign","page_number":77,"box":{"x":102,"y":634,"width":782,"height":12}},{"id":"a1aaedf6-ca44-4a09-badd-09587ae23e8d","block_type":"box","text":"securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are conducted from the","page_number":77,"box":{"x":69,"y":649,"width":824,"height":12}},{"id":"5bf95196-5eb9-465a-8405-4b1584aa4eeb","block_type":"box","text":"U.S., (ii) the company’s equity securities trade principally on a U.S. stock exchange, (iii) the company does a","page_number":77,"box":{"x":70,"y":665,"width":771,"height":11}},{"id":"4e21a382-a6ea-4890-86d4-800e54fc7d37","block_type":"box","text":"substantial amount of business in the U.S. or (iv) the issuer of securities is included in the Fund’s primary U.S.","page_number":77,"box":{"x":69,"y":680,"width":792,"height":11}},{"id":"feb90dcf-b557-40be-b9d7-2bbdb2c0f075","block_type":"box","text":"benchmark index.","page_number":77,"box":{"x":69,"y":695,"width":124,"height":9}},{"id":"a5559785-b89c-4ca7-b04c-25b16cb0a5be","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations issued or","page_number":77,"box":{"x":102,"y":717,"width":767,"height":12}},{"id":"89eab3be-34b6-499f-b8af-a8a9a5242c25","block_type":"box","text":"guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities or political","page_number":77,"box":{"x":68,"y":732,"width":742,"height":12}},{"id":"d0625bb8-79ff-4f26-a635-11c1b71332ff","block_type":"box","text":"subdivisions, including a foreign state, province or municipality; (b) debt obligations of supranational organizations;","page_number":77,"box":{"x":69,"y":748,"width":818,"height":11}},{"id":"6442d554-7906-4356-8ae4-d46bfdbecee6","block_type":"box","text":"(c) debt obligations of foreign banks and bank holding companies; (d) debt obligations of domestic banks and","page_number":77,"box":{"x":69,"y":763,"width":780,"height":11}},{"id":"545fe375-e91a-416a-8a5d-c32d39b1e27f","block_type":"box","text":"corporations issued in foreign currencies; (e) debt obligations denominated in the Euro; and (f) foreign corporate debt","page_number":77,"box":{"x":69,"y":778,"width":837,"height":11}},{"id":"983654e6-a049-48f8-a3e6-89fc74b8ce7a","block_type":"box","text":"securities and commercial paper. Such securities may include loan participations and assignments, convertible","page_number":77,"box":{"x":69,"y":793,"width":794,"height":11}},{"id":"25f7ef67-fb84-4ada-bde1-da0b1e36d320","block_type":"box","text":"securities and zero-coupon securities.","page_number":77,"box":{"x":69,"y":808,"width":268,"height":11}},{"id":"8e57b5c4-947e-41bf-8519-6154eb93ceaa","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign withholding","page_number":77,"box":{"x":102,"y":831,"width":785,"height":11}},{"id":"798a48b4-c98e-4b18-a691-826777826c37","block_type":"box","text":"taxes.","page_number":77,"box":{"x":68,"y":847,"width":42,"height":8}},{"id":"ba49c5d7-9fc6-4d65-9481-cc669938da5a","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign exchanges or in","page_number":77,"box":{"x":101,"y":869,"width":798,"height":11}},{"id":"7657b1e3-e7e4-48d1-83a5-a5518ae06d13","block_type":"box","text":"foreign markets that are closed when the securities exchange on which the Fund’s shares trade is open, there are","page_number":77,"box":{"x":68,"y":884,"width":815,"height":11}},{"id":"81a5c555-6e61-488d-b03c-9b42b2b69909","block_type":"box","text":"likely to be deviations between the current price of such an underlying security and the last quoted price for the","page_number":77,"box":{"x":70,"y":899,"width":792,"height":11}},{"id":"792db88b-99cf-4cd1-bd33-df2da9e2525f","block_type":"box","text":"II-28","page_number":77,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"11f1c8ca-5424-47ce-bd2c-c6952fa2e50f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":77,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a5611933-68f4-442c-b885-1091e68ad98b","block_type":"box","text":"underlying security (","page_number":78,"box":{"x":69,"y":45,"width":140,"height":11}},{"id":"b9f985cb-c7bd-4aaa-b4cb-d49ece80e1b6","block_type":"box","text":"i.e.","page_number":78,"box":{"x":211,"y":45,"width":20,"height":9}},{"id":"8f94ae06-31ff-4792-859d-306db30ab1de","block_type":"box","text":", the Fund’s quote from the closed foreign market). The impact of a closed foreign market on a","page_number":78,"box":{"x":234,"y":45,"width":675,"height":11}},{"id":"1a6b200b-8f22-4871-a00d-cf54784acd10","block_type":"box","text":"Fund is likely to be greater where a large portion of the Fund’s underlying securities or other instruments trade on","page_number":78,"box":{"x":70,"y":60,"width":809,"height":11}},{"id":"6bc91203-d4f0-499b-a221-eb90fc3b54e5","block_type":"box","text":"that closed foreign market or when the foreign market is closed for unscheduled reasons. These deviations may","page_number":78,"box":{"x":68,"y":75,"width":800,"height":11}},{"id":"aa829c46-08f3-4755-a28d-6f9fa7788ca9","block_type":"box","text":"result in premiums or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":78,"box":{"x":69,"y":90,"width":815,"height":11}},{"id":"9c5adfca-33f6-422b-9900-c25b5a0272e0","block_type":"box","text":"Foreign Market Risk.","page_number":78,"box":{"x":102,"y":113,"width":144,"height":11}},{"id":"4ba878da-e640-4317-a6e0-8da28f1a7a91","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more diversification than a","page_number":78,"box":{"x":254,"y":113,"width":652,"height":11}},{"id":"c0b7b0a5-e100-4526-a4e2-2409d70f229a","block_type":"box","text":"Fund that invests only in the United States because securities traded on foreign markets have often (though not","page_number":78,"box":{"x":70,"y":128,"width":797,"height":11}},{"id":"19a7b4a8-fe3b-40b2-9c8b-ae40f59ab295","block_type":"box","text":"always) performed differently from securities traded in the United States. However, such investments often involve","page_number":78,"box":{"x":69,"y":143,"width":817,"height":11}},{"id":"5d39a053-a58a-401b-a9a6-c13abcd1723a","block_type":"box","text":"risks not present in U.S. investments that can increase the chances that a Fund will lose money. In particular, a Fund","page_number":78,"box":{"x":69,"y":158,"width":836,"height":11}},{"id":"a5fe8597-27dd-4a82-982a-47e787a89778","block_type":"box","text":"is subject to the risk that, because there are generally fewer investors on foreign exchanges and a smaller number of","page_number":78,"box":{"x":70,"y":173,"width":835,"height":11}},{"id":"ab4b2a8b-8f87-4688-b41f-9a23d8eed8a7","block_type":"box","text":"shares traded each day, it may be difficult for the Fund to buy and sell securities on those exchanges. In addition,","page_number":78,"box":{"x":69,"y":188,"width":810,"height":12}},{"id":"d9a79232-3cb4-4eca-b670-427db3ea66e4","block_type":"box","text":"prices of foreign securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":78,"box":{"x":70,"y":203,"width":820,"height":12}},{"id":"915179a0-533a-44ca-a07e-32c56531b676","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of punitive taxes or","page_number":78,"box":{"x":68,"y":218,"width":826,"height":12}},{"id":"3c633efd-9858-4a4d-9e89-0fe9f5360497","block_type":"box","text":"tariffs. In addition, economic conditions, such as volatile currency exchange rates and interest rates, political events,","page_number":78,"box":{"x":68,"y":234,"width":836,"height":11}},{"id":"21a170cc-776a-4523-a399-d415ce375601","block_type":"box","text":"military action and other conditions may, without prior warning, lead to the governments of certain countries, or the","page_number":78,"box":{"x":69,"y":249,"width":821,"height":11}},{"id":"5d1a7d4f-484f-49dc-8851-685daa4cb044","block_type":"box","text":"U.S. Government with respect to certain countries, prohibiting or imposing substantial restrictions through capital","page_number":78,"box":{"x":70,"y":264,"width":807,"height":11}},{"id":"c3e41a5b-0eed-4f69-8dcc-03709ffda996","block_type":"box","text":"controls and/or sanctions on foreign investing in the capital markets or certain industries in those countries. Capital","page_number":78,"box":{"x":69,"y":279,"width":830,"height":11}},{"id":"99e6f5bd-5906-4271-8cac-48693f357017","block_type":"box","text":"controls and/or sanctions may include the prohibition of, or restrictions on, the ability to own or transfer currency,","page_number":78,"box":{"x":69,"y":294,"width":810,"height":11}},{"id":"15fbdd1f-c98a-46e6-a9d6-f5cf78e57ad0","block_type":"box","text":"securities, derivatives or other assets and may also include retaliatory actions of one government against another","page_number":78,"box":{"x":69,"y":309,"width":813,"height":11}},{"id":"ce73a3e1-8e58-4322-805e-c991176eb614","block_type":"box","text":"government, such as seizure of assets. Any of these actions could severely impair a Fund’s ability to purchase, sell,","page_number":78,"box":{"x":68,"y":324,"width":828,"height":12}},{"id":"9b7c82a8-d192-4b11-b634-bd4ef40db343","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the ability to","page_number":78,"box":{"x":68,"y":339,"width":782,"height":12}},{"id":"450788d8-aa37-4477-8cc1-c01a0c3481de","block_type":"box","text":"transfer the Fund’s assets or income back into the United States, and could negatively impact the value and/or","page_number":78,"box":{"x":68,"y":355,"width":796,"height":11}},{"id":"b0b4eb85-edaa-49ba-88f5-1cd8c2cf0311","block_type":"box","text":"liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the Fund to decline in value. Other","page_number":78,"box":{"x":70,"y":370,"width":837,"height":11}},{"id":"9260d465-ea2b-4464-b5bb-7c66a8dff51b","block_type":"box","text":"potential foreign market risks include exchange controls, difficulties in pricing securities, defaults on foreign","page_number":78,"box":{"x":70,"y":385,"width":768,"height":11}},{"id":"bc06c92f-adb7-44c1-a3df-a6f82b7ec1bf","block_type":"box","text":"government securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social","page_number":78,"box":{"x":68,"y":400,"width":813,"height":11}},{"id":"2940c56d-224a-4a05-9976-c15a2db3895e","block_type":"box","text":"conditions, such as diplomatic relations, confiscatory taxation, expropriation, limitation on the removal of funds or","page_number":78,"box":{"x":69,"y":415,"width":814,"height":11}},{"id":"9416577f-d245-4b3a-ae89-3cb20859fbfc","block_type":"box","text":"assets, or imposition of (or change in) exchange control regulations. Legal remedies available to investors in certain","page_number":78,"box":{"x":69,"y":430,"width":828,"height":11}},{"id":"8939e162-6a40-4ca2-89a5-7e28b1c57b23","block_type":"box","text":"foreign countries may be less extensive than those available to investors in the United States or other foreign","page_number":78,"box":{"x":68,"y":445,"width":782,"height":12}},{"id":"a23025ba-0db6-4cdc-9095-de1687fa5d8d","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the United States","page_number":78,"box":{"x":69,"y":460,"width":830,"height":12}},{"id":"fb0066bd-8152-4e00-871a-c9f34e907696","block_type":"box","text":"or abroad could result in appreciation or depreciation of portfolio securities and could favorably or adversely affect a","page_number":78,"box":{"x":69,"y":475,"width":829,"height":12}},{"id":"6f04fa46-ef27-4e69-b727-61a6bcd2a5ce","block_type":"box","text":"Fund’s operations.","page_number":78,"box":{"x":70,"y":491,"width":130,"height":11}},{"id":"b3f5891a-ca25-4df2-833c-10ef8cb2481d","block_type":"box","text":"Foreign Economy Risk.","page_number":78,"box":{"x":102,"y":514,"width":158,"height":11}},{"id":"3eda1d33-bc76-46fe-8310-06ae0f12e121","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with that of the","page_number":78,"box":{"x":267,"y":513,"width":636,"height":12}},{"id":"f4c60fda-59cf-45da-8390-c7a08ce3aa81","block_type":"box","text":"United States with respect to such issues as growth of gross national product, reinvestment of capital, resources,","page_number":78,"box":{"x":70,"y":528,"width":812,"height":12}},{"id":"f89f4d3a-4d8e-4094-90c2-953ea7b0a2d1","block_type":"box","text":"and balance of payments position. Certain such economies may rely heavily on particular industries or foreign capital","page_number":78,"box":{"x":69,"y":543,"width":835,"height":12}},{"id":"2ee83ce0-94ca-444d-9b0d-ee860df4a84f","block_type":"box","text":"and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular","page_number":78,"box":{"x":69,"y":559,"width":795,"height":11}},{"id":"df62c661-5bc7-4db3-884d-e4ba1e343321","block_type":"box","text":"country or countries, changes in international trading patterns, trade barriers, and other protectionist or retaliatory","page_number":78,"box":{"x":69,"y":574,"width":817,"height":11}},{"id":"86c1010a-31bb-420e-bdb1-daca724103e9","block_type":"box","text":"measures.","page_number":78,"box":{"x":69,"y":591,"width":74,"height":7}},{"id":"7a73b138-b01d-4c17-b071-044a390de0a8","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":78,"box":{"x":102,"y":612,"width":240,"height":11}},{"id":"31ef7679-1b51-41d0-835e-fd42495e0730","block_type":"box","text":"Because foreign securities generally are denominated and pay dividends or","page_number":78,"box":{"x":349,"y":612,"width":534,"height":11}},{"id":"1c99b784-6791-4791-a161-0f11a8cb5d2e","block_type":"box","text":"interest in foreign currencies, the value of a Fund that invests in foreign securities as measured in U.S. dollars will be","page_number":78,"box":{"x":70,"y":627,"width":838,"height":11}},{"id":"14eeb73b-cc35-4983-b2a0-645f6be446cc","block_type":"box","text":"affected favorably or unfavorably by changes in exchange rates. Generally, when the U.S. dollar rises in value against","page_number":78,"box":{"x":69,"y":642,"width":833,"height":11}},{"id":"60995811-5773-4e0c-a57f-b0f77a0f8708","block_type":"box","text":"a foreign currency, a security denominated in that currency loses value because the currency is worth fewer U.S.","page_number":78,"box":{"x":69,"y":657,"width":801,"height":11}},{"id":"baa99df7-36d2-4a4d-947d-513ba82bfd15","block_type":"box","text":"dollars. Conversely, when the U.S. dollar decreases in value against a foreign currency, a security denominated in","page_number":78,"box":{"x":69,"y":672,"width":808,"height":11}},{"id":"a1aee208-b8be-4c23-ad61-12d82c54382c","block_type":"box","text":"that currency gains value because the currency is worth more U.S. dollars. This risk, generally known as “currency","page_number":78,"box":{"x":68,"y":687,"width":816,"height":11}},{"id":"620019b6-a9b1-45e0-b3eb-719d7ad0df09","block_type":"box","text":"risk,” means that a stronger U.S. dollar will reduce returns for U.S. investors while a weak U.S. dollar will increase","page_number":78,"box":{"x":69,"y":702,"width":814,"height":12}},{"id":"64eb8924-3d8c-4769-8e8c-f1bcb693f0a8","block_type":"box","text":"those returns. Currency exchange rates can also be affected unpredictably by intervention by U.S. or foreign","page_number":78,"box":{"x":68,"y":717,"width":771,"height":12}},{"id":"882e6517-36fd-4a1f-bac2-639fa12f89c6","block_type":"box","text":"governments or central banks, or the failure to intervene, or buy currency controls or political developments in the","page_number":78,"box":{"x":68,"y":732,"width":813,"height":12}},{"id":"ab09e3e8-412c-4418-855a-48c3e8ffe976","block_type":"box","text":"United States or abroad.","page_number":78,"box":{"x":70,"y":748,"width":172,"height":9}},{"id":"232cb426-7267-4d82-be22-456262bcad20","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards.","page_number":78,"box":{"x":102,"y":770,"width":466,"height":12}},{"id":"078a2cd6-adf4-4ed6-8c34-99b71b0ad2a6","block_type":"box","text":"Many foreign governments supervise and","page_number":78,"box":{"x":575,"y":770,"width":293,"height":12}},{"id":"b6205b73-881e-4c41-aaff-7f4a335956bd","block_type":"box","text":"regulate stock exchanges, brokers and the sale of securities less than does the United States. Some countries may","page_number":78,"box":{"x":69,"y":785,"width":828,"height":12}},{"id":"cf120c08-2d41-4b04-b189-6d0ce233329f","block_type":"box","text":"not have laws to protect investors comparable to the U.S. securities laws. For example, some foreign countries may","page_number":78,"box":{"x":69,"y":801,"width":826,"height":11}},{"id":"58964562-28a1-4e88-8016-fecfb7aff180","block_type":"box","text":"have no laws or rules against insider trading. Insider trading occurs when a person buys or sells a company’s","page_number":78,"box":{"x":69,"y":816,"width":778,"height":11}},{"id":"09727c6f-f7ca-4c28-85c5-bc8a1ad8329f","block_type":"box","text":"securities based on nonpublic information about that company. Accounting standards in other countries are not","page_number":78,"box":{"x":69,"y":831,"width":794,"height":11}},{"id":"2e4935d0-f6b2-4504-a160-3bf47c9fc548","block_type":"box","text":"necessarily the same as in the United States. If the accounting standards in another country do not require as much","page_number":78,"box":{"x":69,"y":846,"width":831,"height":11}},{"id":"504a0752-3d8f-4f6f-963e-9e51c89c9329","block_type":"box","text":"detail as U.S. accounting standards, it may be harder for Fund management to completely and accurately determine a","page_number":78,"box":{"x":69,"y":861,"width":840,"height":11}},{"id":"64d700c1-60bf-4de9-8d87-4d074b31ab12","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past imposed","page_number":78,"box":{"x":69,"y":876,"width":760,"height":11}},{"id":"dc93a1a8-de3b-4a92-a248-32bae2f1a2af","block_type":"box","text":"restrictions, through penalties and otherwise, on foreign investments by U.S. investors such as the Fund. If such","page_number":78,"box":{"x":69,"y":891,"width":803,"height":12}},{"id":"be2310e0-57de-4b93-ac8a-e88a1707291e","block_type":"box","text":"restrictions should be reinstituted, it might become necessary for the Fund to invest all or substantially all of its","page_number":78,"box":{"x":69,"y":906,"width":798,"height":12}},{"id":"3bb374d1-d5d4-48a5-841e-ca40e8a4e5c9","block_type":"box","text":"II-29","page_number":78,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"d3ac2471-7771-4bf5-b24a-036d1f3a9f4d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":78,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"758e5e98-caec-4e67-be2b-6bf7997b8ba3","block_type":"box","text":"assets in U.S. securities. Also, brokerage commissions and other costs of buying or selling securities often are","page_number":79,"box":{"x":69,"y":45,"width":793,"height":11}},{"id":"abcd1f89-8069-4f7e-9d7e-eeadfb9f3dd2","block_type":"box","text":"higher in foreign countries than they are in the United States. This reduces the amount the Fund can earn on its","page_number":79,"box":{"x":69,"y":60,"width":797,"height":11}},{"id":"b97f87ff-e055-4cd5-bf90-40d6f8d1e89b","block_type":"box","text":"investments.","page_number":79,"box":{"x":70,"y":75,"width":89,"height":9}},{"id":"9eb7c26a-0ce1-4a76-84a1-8582b6989b0c","block_type":"box","text":"Cer tain Risks of Holding Fund Assets Outside the United States.","page_number":79,"box":{"x":102,"y":98,"width":458,"height":11}},{"id":"cff4ce9b-0c51-45ad-a855-7febc431a49b","block_type":"box","text":"A Fund generally holds its foreign securities and","page_number":79,"box":{"x":566,"y":98,"width":341,"height":11}},{"id":"ecbf9c02-1c8e-4db7-acbd-11d0387de152","block_type":"box","text":"cash in foreign banks and securities depositories. Some foreign banks and securities depositories may be recently","page_number":79,"box":{"x":69,"y":113,"width":819,"height":11}},{"id":"62bdde41-058d-4ae5-8774-5b58246a9499","block_type":"box","text":"organized or new to the foreign custody business. In addition, there may be limited or no regulatory oversight over","page_number":79,"box":{"x":69,"y":128,"width":813,"height":11}},{"id":"4d65af70-aa70-47f5-a2a5-c79bf49bb446","block_type":"box","text":"their operations. Also, the laws of certain countries may put limits on a Fund’s ability to recover its assets if a foreign","page_number":79,"box":{"x":68,"y":143,"width":838,"height":11}},{"id":"3fc7300d-3d0a-49ab-ba94-b95d33c40ff5","block_type":"box","text":"bank or depository or issuer of a security or any of their agents goes bankrupt. In addition, it is often more expensive","page_number":79,"box":{"x":69,"y":158,"width":835,"height":11}},{"id":"042d9152-809d-4d47-b24b-1116e30f9320","block_type":"box","text":"for a Fund to buy, sell and hold securities in certain foreign markets than in the United States. The increased","page_number":79,"box":{"x":68,"y":173,"width":777,"height":11}},{"id":"608c4e06-67a8-4287-9180-6bbeb109c2ff","block_type":"box","text":"expense of investing in foreign markets reduces the amount a Fund can earn on its investments and typically results","page_number":79,"box":{"x":69,"y":188,"width":831,"height":12}},{"id":"bb8054ec-e464-478a-b727-704a6cc0614f","block_type":"box","text":"in a higher operating expense ratio for the Fund as compared to investment companies that invest only in the United","page_number":79,"box":{"x":70,"y":203,"width":828,"height":12}},{"id":"98222f97-9e75-436e-a376-c43ad37db753","block_type":"box","text":"States.","page_number":79,"box":{"x":69,"y":219,"width":49,"height":8}},{"id":"f25cf2af-2b43-4cf7-a287-ca9d74faa03a","block_type":"box","text":"Publicly Available Information.","page_number":79,"box":{"x":102,"y":241,"width":210,"height":11}},{"id":"56419303-316c-436a-a923-8f7f4fc793b4","block_type":"box","text":"In general, less information is publicly available with respect to foreign issuers","page_number":79,"box":{"x":319,"y":241,"width":558,"height":11}},{"id":"47d4912c-cfff-4e3b-9817-2658d715aa69","block_type":"box","text":"than is available with respect to U.S. companies. Most foreign companies are also not subject to the uniform","page_number":79,"box":{"x":68,"y":256,"width":779,"height":12}},{"id":"92eeba4e-3260-4dcc-895e-43a608c8ce4a","block_type":"box","text":"accounting and financial reporting requirements applicable to issuers in the United States. While the volume of","page_number":79,"box":{"x":69,"y":271,"width":793,"height":12}},{"id":"c8f3622d-77ce-4700-b00f-38af160af09f","block_type":"box","text":"transactions effected on foreign stock exchanges has increased in recent years, it remains appreciably below that of","page_number":79,"box":{"x":68,"y":286,"width":834,"height":12}},{"id":"3c201674-71d3-458c-aa98-a7d17f4805d8","block_type":"box","text":"the New York Stock Exchange. Accordingly, a Fund’s foreign investments may be less liquid than, and their prices may","page_number":79,"box":{"x":68,"y":302,"width":841,"height":11}},{"id":"efc00c63-7a25-4e34-ba62-106b2b5333df","block_type":"box","text":"be more volatile than, comparable investments in securities in U.S. companies. In addition, there is generally less","page_number":79,"box":{"x":69,"y":317,"width":813,"height":11}},{"id":"1dd1cac1-891b-4b37-b032-807fac70ae79","block_type":"box","text":"government supervision and regulation of securities exchanges, brokers and issuers in foreign countries than in the","page_number":79,"box":{"x":68,"y":332,"width":827,"height":11}},{"id":"86ce859c-6387-4e65-909d-cf2e78122922","block_type":"box","text":"United States.","page_number":79,"box":{"x":70,"y":347,"width":99,"height":9}},{"id":"ad899f01-2055-4bae-95ce-47c383b2b1d1","block_type":"box","text":"Settlement Risk.","page_number":79,"box":{"x":102,"y":370,"width":116,"height":9}},{"id":"275cab06-9ad8-47f0-b15e-ab34130e6a1f","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly from those","page_number":79,"box":{"x":225,"y":370,"width":669,"height":11}},{"id":"38b70a7a-c411-49c0-91af-b7078c3d249c","block_type":"box","text":"in the United States. Supervisory authorities may also be unable to apply standards which are comparable with those","page_number":79,"box":{"x":70,"y":385,"width":837,"height":11}},{"id":"8597fe9c-7530-48c3-b030-dead5b75b343","block_type":"box","text":"in the United States. Foreign settlement procedures and trade regulations also may involve certain risks (such as","page_number":79,"box":{"x":70,"y":400,"width":808,"height":11}},{"id":"80bf3338-b595-4d1b-9ab4-6c807cc4d60b","block_type":"box","text":"delays in payment for or delivery of securities) not typically generated by the settlement of U.S. investments.","page_number":79,"box":{"x":69,"y":415,"width":772,"height":11}},{"id":"28572259-d097-4b9b-ae43-8e0115e3ed64","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable, increasing the","page_number":79,"box":{"x":102,"y":438,"width":781,"height":11}},{"id":"00a2074b-a9d4-4716-8d37-6db5466624fe","block_type":"box","text":"risk of delayed settlements or losses of security certificates in markets that still rely on physical settlement.","page_number":79,"box":{"x":69,"y":453,"width":771,"height":11}},{"id":"4ca85c10-410c-4e2e-a7c8-a92287e56318","block_type":"box","text":"Settlements in certain foreign countries at times have not kept pace with the number of securities transactions;","page_number":79,"box":{"x":69,"y":468,"width":797,"height":11}},{"id":"c45ed237-2463-46d5-b764-a50b380ce210","block_type":"box","text":"these problems may make it difficult for a Fund to carry out transactions. If a Fund cannot settle or is delayed in","page_number":79,"box":{"x":68,"y":483,"width":802,"height":11}},{"id":"16033ee1-4ae9-4473-b16e-c1fbc2122c18","block_type":"box","text":"settling a purchase of securities, it may miss attractive investment opportunities and certain of its assets may be","page_number":79,"box":{"x":69,"y":498,"width":812,"height":11}},{"id":"e029d27c-cff6-4583-adc9-0903e7226e3c","block_type":"box","text":"uninvested with no return earned thereon for some period. If a Fund cannot settle or is delayed in settling a sale of","page_number":79,"box":{"x":69,"y":513,"width":821,"height":12}},{"id":"45411940-1a1e-4ed4-9126-8472ad8b4617","block_type":"box","text":"securities, it may lose money if the value of the security then declines or, if it has contracted to sell the security to","page_number":79,"box":{"x":69,"y":528,"width":816,"height":12}},{"id":"b4a8826d-7adc-4aab-9d31-2069ca3ce7b5","block_type":"box","text":"another party, the Fund could be liable to that party for any losses incurred.","page_number":79,"box":{"x":69,"y":543,"width":539,"height":12}},{"id":"a151ab71-1e2a-4d4c-b47e-2e8cdcaea0e7","block_type":"box","text":"Because of uncertainties in the operation of settlement systems in individual markets, competing claims may","page_number":79,"box":{"x":102,"y":566,"width":781,"height":11}},{"id":"d126623e-6c25-42e2-a470-fa79f4dc96f5","block_type":"box","text":"arise in respect of securities held by or to be transferred to a Fund. Compensation schemes may not exist or may","page_number":79,"box":{"x":69,"y":581,"width":810,"height":11}},{"id":"902a32a6-0d56-4730-bb07-88ece7cc38d4","block_type":"box","text":"otherwise be limited or inadequate to meet the Fund’s claims in case of such event.","page_number":79,"box":{"x":69,"y":596,"width":601,"height":11}},{"id":"532b86dd-0109-4f2f-98e4-d19e9def9dbb","block_type":"box","text":"Sovereign Debt.","page_number":79,"box":{"x":102,"y":619,"width":111,"height":11}},{"id":"986c460d-74f0-40de-9d5a-55b164d925f6","block_type":"box","text":"Investment in sovereign debt can involve a high degree of risk. The governmental entity that","page_number":79,"box":{"x":221,"y":619,"width":653,"height":11}},{"id":"d5148667-d018-414e-ac85-f70c896081d4","block_type":"box","text":"controls the repayment of sovereign debt may not be able or willing to repay the principal and/or interest when due in","page_number":79,"box":{"x":69,"y":634,"width":837,"height":12}},{"id":"578c63c9-355f-4bd2-984a-a4c9734a135a","block_type":"box","text":"accordance with the terms of such debt. A governmental entity’s willingness or ability to repay principal and interest","page_number":79,"box":{"x":69,"y":649,"width":826,"height":12}},{"id":"753f2dc7-c3a0-488c-858a-b9a039ae4f06","block_type":"box","text":"due in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign","page_number":79,"box":{"x":69,"y":664,"width":798,"height":12}},{"id":"a11b154c-6148-41c1-8d15-c174cc7c3885","block_type":"box","text":"reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt","page_number":79,"box":{"x":69,"y":680,"width":809,"height":11}},{"id":"d03b4a8c-2c0f-4973-999a-1d8045b08206","block_type":"box","text":"service burden to the economy as a whole, the governmental entity’s policy towards the International Monetary Fund","page_number":79,"box":{"x":69,"y":695,"width":832,"height":11}},{"id":"c4ac8e80-397a-46e2-8353-65e3353506ed","block_type":"box","text":"and the political constraints to which a governmental entity may be subject. Governmental entities may also be","page_number":79,"box":{"x":69,"y":710,"width":790,"height":11}},{"id":"d29d3044-3070-4fcb-b61c-e81f017f096e","block_type":"box","text":"dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce","page_number":79,"box":{"x":69,"y":725,"width":831,"height":11}},{"id":"a5d740c5-369b-4771-93d1-d227e72636c5","block_type":"box","text":"principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and","page_number":79,"box":{"x":70,"y":740,"width":805,"height":11}},{"id":"6a7a979c-9d79-464b-bbd3-1ad99dcbb84b","block_type":"box","text":"others to make such disbursements may be conditioned on the implementation of economic reforms and/or","page_number":79,"box":{"x":69,"y":755,"width":772,"height":11}},{"id":"9dc826a1-e9b7-4f4c-aa0e-b78e659b8407","block_type":"box","text":"economic performance and the timely service of such debtor’s obligations. Failure to implement such reforms,","page_number":79,"box":{"x":69,"y":770,"width":789,"height":12}},{"id":"e90fb044-f068-48d9-96fc-c01fa6df4295","block_type":"box","text":"achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of","page_number":79,"box":{"x":69,"y":785,"width":839,"height":12}},{"id":"0c013af3-858e-40d2-bf35-00d687de7d9a","block_type":"box","text":"such third parties’ commitments to lend funds to the governmental entity, which may further impair such debtor’s","page_number":79,"box":{"x":69,"y":801,"width":810,"height":11}},{"id":"7e9bdf7e-f4fe-4b8f-b9ad-92200ac97c2f","block_type":"box","text":"ability or willingness to timely service its debts. Consequently, governmental entities may default on their sovereign","page_number":79,"box":{"x":69,"y":816,"width":821,"height":11}},{"id":"145e5d8f-dbce-47d3-ae0d-c45e32a017a5","block_type":"box","text":"debt.","page_number":79,"box":{"x":69,"y":831,"width":34,"height":9}},{"id":"9ff344d9-4ca1-4aaf-9206-7100523bd7e7","block_type":"box","text":"Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to extend further","page_number":79,"box":{"x":102,"y":853,"width":807,"height":12}},{"id":"1e5639e4-53e6-4d21-a02c-3ebb7853bf92","block_type":"box","text":"loans to governmental entities. In the event of a default by a governmental entity, there may be few or no effective","page_number":79,"box":{"x":70,"y":869,"width":814,"height":11}},{"id":"b7459de3-0d84-4955-8001-6c5b17f6b249","block_type":"box","text":"legal remedies for collecting on such debt.","page_number":79,"box":{"x":70,"y":884,"width":300,"height":11}},{"id":"b070dc65-0d54-4993-9041-b890a59e664f","block_type":"box","text":"II-30","page_number":79,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"553eec24-32dd-441d-9e57-12edd22d57d0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":79,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7768596e-67be-4168-aa60-45d3eb38c849","block_type":"box","text":"Withholding Tax Reclaims Risk","page_number":80,"box":{"x":103,"y":45,"width":215,"height":11}},{"id":"c7304044-c619-448c-9196-a9dda7e18706","block_type":"box","text":". A Fund may file claims to recover foreign withholding taxes on dividend and","page_number":80,"box":{"x":318,"y":45,"width":542,"height":11}},{"id":"dc1707d8-c79c-4810-9044-90dea13c98f2","block_type":"box","text":"interest income (if any) received from issuers in certain countries and capital gains on the disposition of stocks or","page_number":80,"box":{"x":70,"y":60,"width":813,"height":11}},{"id":"f7e5cf99-637b-4370-bac5-c41017e8e42c","block_type":"box","text":"securities where such withholding tax reclaim is possible. Whether or when a Fund will receive a withholding tax","page_number":80,"box":{"x":69,"y":75,"width":795,"height":11}},{"id":"9e59cc79-892f-413a-9fdb-8597df9d085f","block_type":"box","text":"refund is within the control of the tax authorities in such countries. Where a Fund expects to recover withholding","page_number":80,"box":{"x":69,"y":90,"width":799,"height":11}},{"id":"0dda64cc-21aa-45da-a0eb-18c384d3e37b","block_type":"box","text":"taxes, the net asset value of the Fund generally includes accruals for such tax refunds. Each Fund regularly evaluates","page_number":80,"box":{"x":68,"y":105,"width":838,"height":11}},{"id":"96b96dee-9eda-4c38-a1e5-be22a45842d5","block_type":"box","text":"the probability of recovery. If the likelihood of recovery materially decreases, due to, for example, a change in tax","page_number":80,"box":{"x":68,"y":120,"width":807,"height":12}},{"id":"555acf22-5e09-44b1-a800-42d8887b98fc","block_type":"box","text":"regulation or approach in the foreign country, accruals in a Fund’s net asset value for such refunds may be written","page_number":80,"box":{"x":69,"y":135,"width":814,"height":12}},{"id":"02aadf35-aff2-4517-a027-21c5597b4fca","block_type":"box","text":"down partially or in full, which will adversely affect the Fund’s net asset value. Shareholders in a Fund at the time an","page_number":80,"box":{"x":69,"y":150,"width":831,"height":12}},{"id":"c8cb0491-27dd-45eb-b4cf-ce67542d59a2","block_type":"box","text":"accrual is written down will bear the impact of the resulting reduction in net asset value regardless of whether they","page_number":80,"box":{"x":69,"y":166,"width":819,"height":11}},{"id":"d1b140d6-eac9-442f-92a5-6473d4912819","block_type":"box","text":"were shareholders during the accrual period. Conversely, if a Fund receives a tax refund that has not been previously","page_number":80,"box":{"x":68,"y":181,"width":833,"height":11}},{"id":"3e5ed51d-6629-46b3-b380-dade61fa1397","block_type":"box","text":"accrued, shareholders in the Fund at the time of the successful recovery will benefit from the resulting increase in","page_number":80,"box":{"x":69,"y":196,"width":814,"height":11}},{"id":"7fa67f99-6061-43fb-a516-83343e60fa43","block_type":"box","text":"the Fund’s net asset value. Shareholders who sold their shares prior to such time will not benefit from such increase","page_number":80,"box":{"x":68,"y":211,"width":835,"height":11}},{"id":"16cd90e0-c9f9-4849-aa06-1092de75333b","block_type":"box","text":"in the Fund’s net asset value.","page_number":80,"box":{"x":70,"y":226,"width":209,"height":9}},{"id":"ddbbd1af-a608-49f7-966e-fdb8d7e55571","block_type":"box","text":"U.S. Economic Trading Par tners Risk.","page_number":80,"box":{"x":103,"y":249,"width":263,"height":11}},{"id":"5056dcdb-85dc-4600-a5b7-0d13138c64aa","block_type":"box","text":"The United States is a significant, and in some cases the most significant,","page_number":80,"box":{"x":372,"y":249,"width":532,"height":11}},{"id":"e0ff4e82-d96f-4d94-a228-e78ef20eafde","block_type":"box","text":"trading partner of, or foreign investor in, certain countries in which a Fund may invest. As a result, economic","page_number":80,"box":{"x":68,"y":264,"width":773,"height":11}},{"id":"e009a976-67c6-41f7-8e00-d208806fe5d8","block_type":"box","text":"conditions of such countries may be particularly affected by changes in the U.S. economy. A decrease in U.S. imports","page_number":80,"box":{"x":69,"y":279,"width":839,"height":11}},{"id":"1f0e6456-e6b3-4a29-a53b-01af28d1767e","block_type":"box","text":"or exports, new trade and financial regulations or tariffs, changes in the U.S. dollar exchange rate or an economic","page_number":80,"box":{"x":69,"y":294,"width":812,"height":11}},{"id":"9db4bf47-bd8a-4683-ae7f-36b04a448342","block_type":"box","text":"slowdown in the United States may have a material adverse effect on a country’s economic conditions and, as a","page_number":80,"box":{"x":69,"y":309,"width":803,"height":11}},{"id":"19b78dfb-42cc-4b33-8fd4-3db36ec36a4b","block_type":"box","text":"result, securities to which the Fund has exposure. Circumstances could arise that could prevent the timely payment","page_number":80,"box":{"x":69,"y":324,"width":824,"height":11}},{"id":"c9ede4ad-8e15-4521-870b-4878097630fe","block_type":"box","text":"of interest or principal on U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment","page_number":80,"box":{"x":69,"y":339,"width":819,"height":12}},{"id":"a0fa6c73-98c9-40b6-9f18-5bd192b7bc69","block_type":"box","text":"would result in substantial negative consequences for the U.S. economy and the global financial system.","page_number":80,"box":{"x":68,"y":355,"width":746,"height":11}},{"id":"5cef40da-34be-4256-9dcc-35d9a725d07a","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including traditional","page_number":80,"box":{"x":101,"y":377,"width":787,"height":12}},{"id":"bb23ec43-cd2f-400e-a24a-c40cca204ffb","block_type":"box","text":"allies, such as certain European countries, and historical adversaries, such as North Korea, Iran, China and Russia.","page_number":80,"box":{"x":69,"y":392,"width":827,"height":11}},{"id":"8a4c8e8e-7980-4aed-af23-0d7700362365","block_type":"box","text":"If these relations were to worsen, it could adversely affect U.S. issuers as well as non-U.S. issuers that rely on the","page_number":80,"box":{"x":70,"y":407,"width":817,"height":12}},{"id":"88f4d3bf-d939-4197-adb5-26264cda1c80","block_type":"box","text":"United States for trade. The United States has also experienced increased internal unrest and discord. If these","page_number":80,"box":{"x":70,"y":423,"width":791,"height":11}},{"id":"b4a8b399-4651-4f7c-9f12-32700029e9f1","block_type":"box","text":"trends were to continue, it may have an adverse impact on the U.S. economy and many of the issuers in which a","page_number":80,"box":{"x":68,"y":438,"width":803,"height":11}},{"id":"8a35a06e-2b78-4744-958c-5abed870bc80","block_type":"box","text":"Fund may invest.","page_number":80,"box":{"x":70,"y":453,"width":117,"height":11}},{"id":"46ba2deb-9b6d-4164-8e7b-836a8e61e3fd","block_type":"box","text":"Funding Agreements.","page_number":80,"box":{"x":102,"y":476,"width":154,"height":11}},{"id":"e34b5df2-17d2-47e4-afbf-e0eaadb1f05b","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar funding","page_number":80,"box":{"x":262,"y":475,"width":584,"height":12}},{"id":"ad4a60d8-fc3e-4b03-827f-4e536db7c74b","block_type":"box","text":"agreements. In connection with these investments, a Fund makes cash contributions to a deposit fund of an","page_number":80,"box":{"x":69,"y":491,"width":773,"height":11}},{"id":"25e7e4a2-1f60-492e-8c03-4176e4c47e3c","block_type":"box","text":"insurance company’s general account. The insurance company then credits to the Fund on a monthly basis","page_number":80,"box":{"x":70,"y":506,"width":761,"height":11}},{"id":"7372a257-7fc7-4d92-8eda-95286ddffe45","block_type":"box","text":"guaranteed interest, which is based on an index. The funding agreements provide that this guaranteed interest will","page_number":80,"box":{"x":68,"y":521,"width":817,"height":11}},{"id":"70d0a00b-867a-4b5e-bf64-fefd073bcc95","block_type":"box","text":"not be less than a certain minimum rate. The purchase price paid for a funding agreement becomes part of the","page_number":80,"box":{"x":69,"y":536,"width":794,"height":11}},{"id":"926c3bd1-b340-4caf-8dda-2c7eb06ba558","block_type":"box","text":"general assets of the insurance company, and the contract is paid from the general assets of the insurance company.","page_number":80,"box":{"x":68,"y":551,"width":839,"height":11}},{"id":"5f8d81c8-e90c-4a65-b8d7-7134328334fb","block_type":"box","text":"Generally, funding agreements are not assignable or transferable without the permission of the issuing insurance","page_number":80,"box":{"x":69,"y":566,"width":806,"height":11}},{"id":"c86f83dd-3a79-4786-8f6d-03db691c6f7c","block_type":"box","text":"companies, and an active secondary market in some funding agreements does not currently exist.","page_number":80,"box":{"x":69,"y":581,"width":700,"height":12}},{"id":"e76bd5ee-ab5f-4767-8baa-c99316e6a45e","block_type":"box","text":"Guarantees.","page_number":80,"box":{"x":102,"y":604,"width":87,"height":9}},{"id":"1a500ec4-0a97-42dd-ba64-e020540cf421","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate from the","page_number":80,"box":{"x":194,"y":604,"width":685,"height":11}},{"id":"0f93a314-5356-434f-9cd7-7e16bc1f232a","block_type":"box","text":"issuer of the security. 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The Manager will make investment changes to a Fund’s portfolio to accommodate cash flow","page_number":81,"box":{"x":70,"y":135,"width":810,"height":12}},{"id":"76d433f2-5261-461a-a824-97efdffb13c4","block_type":"box","text":"while continuing to seek to replicate the total return of the Fund’s target index. 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Finally, since each Fund seeks to","page_number":81,"box":{"x":101,"y":196,"width":749,"height":11}},{"id":"5e386124-a288-42c3-85f0-dde52151c04e","block_type":"box","text":"replicate the total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":81,"box":{"x":69,"y":211,"width":774,"height":11}},{"id":"888f1d8c-769f-4499-8721-7f3f75f54907","block_type":"box","text":"particular security as an investment.","page_number":81,"box":{"x":70,"y":226,"width":258,"height":11}},{"id":"43c47ef4-8445-41b8-9aea-6b5c86a1c630","block_type":"box","text":"Tracking Error Risk","page_number":81,"box":{"x":103,"y":249,"width":132,"height":11}},{"id":"acfff8be-9f79-49df-ba8e-8fcc3ac7cc49","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s performance","page_number":81,"box":{"x":236,"y":249,"width":658,"height":11}},{"id":"4c49689c-49db-4f9d-80f6-b4cb034ca6a1","block_type":"box","text":"from that of the Underlying Index. Tracking error may occur because of differences between the securities and other","page_number":81,"box":{"x":68,"y":264,"width":827,"height":11}},{"id":"9351c6b3-7590-42a5-a516-0b146a996882","block_type":"box","text":"instruments held in the Fund’s portfolio and those included in the Underlying Index, pricing differences (including, as","page_number":81,"box":{"x":70,"y":279,"width":830,"height":11}},{"id":"8c287717-3fac-47f8-b180-866389480e8f","block_type":"box","text":"applicable, differences between a security’s price at the local market close and the Fund’s valuation of a security at","page_number":81,"box":{"x":69,"y":294,"width":827,"height":11}},{"id":"7e12739a-4aad-4720-af47-91319ca0d417","block_type":"box","text":"the time of calculation of the Fund’s net asset value), differences in transaction costs incurred by the Fund, the","page_number":81,"box":{"x":68,"y":309,"width":797,"height":11}},{"id":"38a81710-4e51-4928-9f01-23b3499ad81e","block_type":"box","text":"Fund’s holding of uninvested cash, differences in timing of the accrual of or the valuation of dividends or other","page_number":81,"box":{"x":70,"y":324,"width":787,"height":12}},{"id":"6403ed56-bfac-49ac-a7b6-0cd019a9f1f0","block_type":"box","text":"distributions, interest, the requirements to maintain pass-through tax treatment, portfolio transactions carried out to","page_number":81,"box":{"x":69,"y":339,"width":830,"height":12}},{"id":"dd6cf775-aa7c-40ad-837b-1545bd0fa500","block_type":"box","text":"minimize the distribution of capital gains to shareholders, changes to the Underlying Index or the costs to the Fund of","page_number":81,"box":{"x":69,"y":355,"width":838,"height":11}},{"id":"308b452e-1635-497c-9727-21821770e08e","block_type":"box","text":"complying with various new or existing regulatory requirements. These risks may be heightened during times of","page_number":81,"box":{"x":69,"y":370,"width":791,"height":11}},{"id":"18710361-289c-43b7-b479-1a1ea7953b22","block_type":"box","text":"increased market volatility or other unusual market conditions. 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If the securities continue to be included in the index, the Manager may underweight or","page_number":81,"box":{"x":68,"y":528,"width":819,"height":12}},{"id":"abf3ec4b-d688-4fce-adb7-5e676bdf8d6a","block_type":"box","text":"exclude such securities from a Fund’s portfolio and, if it does so, such Fund will be subject to increased tracking","page_number":81,"box":{"x":69,"y":543,"width":804,"height":12}},{"id":"3685eaea-b474-4228-a779-3e761996bcd8","block_type":"box","text":"error due to the divergence in the securities included in its portfolio from its underlying index. The application of the","page_number":81,"box":{"x":69,"y":559,"width":825,"height":11}},{"id":"dcb3be28-5e0a-4e0a-a0e8-564f951ca4bc","block_type":"box","text":"abovementioned analysis and screening to a Fund and its Underlying Index is in the sole discretion of the Manager","page_number":81,"box":{"x":69,"y":574,"width":818,"height":11}},{"id":"4170eb14-47fa-465d-9bf1-e630226092ff","block_type":"box","text":"and its affiliates (without any guarantees). 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S&P is not responsible for and has not","page_number":81,"box":{"x":70,"y":778,"width":803,"height":11}},{"id":"91673c0b-f0f0-4659-a065-118f6602d276","block_type":"box","text":"participated in the determination of the prices and amount of any Fund or the timing of the issuance or sale of","page_number":81,"box":{"x":70,"y":793,"width":787,"height":11}},{"id":"eb2698b6-480b-49c5-bb63-87131c162c97","block_type":"box","text":"shares of a Fund or in the determination or calculation of the equation by which a Fund is to be converted into cash.","page_number":81,"box":{"x":69,"y":808,"width":828,"height":11}},{"id":"d5290167-3493-48dd-8084-5e2dbbbb6c11","block_type":"box","text":"S&P has no obligation or liability in connection with the administration, marketing or trading of any Fund.","page_number":81,"box":{"x":69,"y":823,"width":742,"height":12}},{"id":"94bceba6-cf33-4cf7-b0ba-9f4533cebe6d","block_type":"box","text":"S&P does not guarantee the accuracy and/or the completeness of the S&P 500 Index or any data included","page_number":81,"box":{"x":102,"y":846,"width":761,"height":11}},{"id":"30278129-9ccf-4fb1-bf6d-da65acc13ed3","block_type":"box","text":"therein, and S&P shall have no liability for any errors, omissions, or interruptions therein. 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The Manager believes that indexed and inverse floating obligations represent flexible","page_number":83,"box":{"x":69,"y":506,"width":798,"height":11}},{"id":"73eac809-1529-4867-b4c9-8ae711cd0f2c","block_type":"box","text":"portfolio management instruments for a Fund that allow the Fund to seek potential investment rewards, hedge other","page_number":83,"box":{"x":70,"y":521,"width":829,"height":11}},{"id":"07fa2073-ae37-4ff5-9db5-9037a5be7158","block_type":"box","text":"portfolio positions or vary the degree of investment leverage relatively efficiently under different market conditions. A","page_number":83,"box":{"x":70,"y":536,"width":834,"height":11}},{"id":"2ad928c0-76ec-41b0-aab4-8be02a82705d","block_type":"box","text":"Fund may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for","page_number":83,"box":{"x":70,"y":551,"width":839,"height":11}},{"id":"99e33cf3-2cc0-41c1-bcc9-ac8de0dc790f","block_type":"box","text":"hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a security","page_number":83,"box":{"x":69,"y":566,"width":781,"height":11}},{"id":"d9fce4e3-edb8-4d2b-8c88-de0a222e2716","block_type":"box","text":"includes a contingent liability, in the event of an adverse movement in the underlying index or interest rate, a Fund","page_number":83,"box":{"x":70,"y":581,"width":812,"height":12}},{"id":"365beeec-a4b5-48d0-a898-9efe1f2cbdb0","block_type":"box","text":"may be required to pay substantial additional margin to maintain the position.","page_number":83,"box":{"x":69,"y":597,"width":553,"height":11}},{"id":"ba773d74-ca65-4f3f-8d35-1adbd763142a","block_type":"box","text":"The Funds may invest up to 10% of their total assets in leveraged inverse floating rate debt instruments","page_number":83,"box":{"x":101,"y":619,"width":741,"height":11}},{"id":"813807f8-5c67-4531-bed8-c01902fc1f79","block_type":"box","text":"(“inverse floaters”). Inverse floaters are securities the potential of which is inversely related to changes in interest","page_number":83,"box":{"x":69,"y":634,"width":815,"height":12}},{"id":"9158368e-576c-4da7-b855-dfbca1e46ed7","block_type":"box","text":"rates. In general, the return on inverse floaters will decrease when short-term interest rates increase and increase","page_number":83,"box":{"x":69,"y":649,"width":817,"height":12}},{"id":"74de7904-6e3c-497a-b35f-f560a12cf72b","block_type":"box","text":"when short-term rates decrease. Municipal tender option bonds, both taxable and tax-exempt, which may include","page_number":83,"box":{"x":68,"y":665,"width":805,"height":11}},{"id":"26498f19-b498-4272-98c7-5736c2c4f6c3","block_type":"box","text":"inverse floating rate debt instruments, (including residual interests thereon) are excluded from this 10% limitation.","page_number":83,"box":{"x":70,"y":680,"width":813,"height":11}},{"id":"aa8d29d9-b2bd-489d-8647-a787a1ad811b","block_type":"box","text":"Inflation Risk.","page_number":83,"box":{"x":102,"y":702,"width":100,"height":9}},{"id":"6ffc7740-2857-475d-b199-04d1a1e7c715","block_type":"box","text":"Like all funds, the Funds are subject to inflation risk. Inflation risk is the risk that the present","page_number":83,"box":{"x":209,"y":702,"width":663,"height":11}},{"id":"478456cc-700b-4a92-8c69-2ee95fb7d464","block_type":"box","text":"value of assets or income from investments will be less in the future as inflation decreases the value of money. As","page_number":83,"box":{"x":68,"y":717,"width":820,"height":12}},{"id":"c3e32923-a670-4ffd-9868-e92c78cb95cd","block_type":"box","text":"inflation increases, the present value of a Fund’s assets can decline as can the value of a Fund’s distributions.","page_number":83,"box":{"x":70,"y":732,"width":792,"height":11}},{"id":"d9802355-d759-4059-91f2-0eebb4295100","block_type":"box","text":"Inflation rates may change frequently and significantly due to a number of potential factors, including, among others,","page_number":83,"box":{"x":70,"y":748,"width":829,"height":11}},{"id":"b9fcd313-d15c-49a9-98d7-1a245118db65","block_type":"box","text":"unexpected economic shifts or changes in fiscal or monetary policies.","page_number":83,"box":{"x":69,"y":763,"width":497,"height":11}},{"id":"bbeee770-71f5-4d62-80f0-d56286f925c6","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":83,"box":{"x":102,"y":785,"width":253,"height":12}},{"id":"a0033df9-1dcd-409a-8ab9-68a9c5a8c5d7","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued stocks trade in","page_number":83,"box":{"x":361,"y":785,"width":540,"height":12}},{"id":"71be3f6b-b4e2-4c73-8025-83bea57e46c5","block_type":"box","text":"the secondary market are affected by the performance of the stock market overall. If IPOs are brought to the market,","page_number":83,"box":{"x":68,"y":801,"width":836,"height":11}},{"id":"6ce042a1-c3d6-45eb-9379-69f8162f6de4","block_type":"box","text":"availability may be limited and a Fund may not be able to buy any shares at the offering price, or if it is able to buy","page_number":83,"box":{"x":69,"y":816,"width":815,"height":11}},{"id":"d95192c6-1347-488d-893b-b88318942dfc","block_type":"box","text":"shares, it may not be able to buy as many shares at the offering price as it would like. In addition, the prices of","page_number":83,"box":{"x":69,"y":831,"width":795,"height":11}},{"id":"1625e15d-7db1-4828-b2c4-7f1fb29e639c","block_type":"box","text":"securities involved in IPOs are often subject to greater and more unpredictable price changes than more established","page_number":83,"box":{"x":69,"y":846,"width":829,"height":11}},{"id":"8b934018-ee7c-4411-b415-93f5aa1efa8b","block_type":"box","text":"stocks. IPOs have the potential to produce substantial gains. A Fund may hold shares from an IPO for only a short","page_number":83,"box":{"x":69,"y":861,"width":814,"height":11}},{"id":"d79a688b-5c44-4ea3-8cd5-4d8b007da9c6","block_type":"box","text":"period of time given possible price volatility. This may result in increased portfolio turnover and expenses, such as","page_number":83,"box":{"x":70,"y":876,"width":813,"height":11}},{"id":"6d9a4c66-8ed5-482a-81cd-71cd0bf46c88","block_type":"box","text":"commissions and transaction costs, and potentially result in taxable gains that the Fund will subsequently distribute","page_number":83,"box":{"x":69,"y":891,"width":828,"height":12}},{"id":"c77114e4-df19-4fd5-9a57-a572e4410676","block_type":"box","text":"to shareholders. There is no assurance that any Fund will have access to profitable IPOs and therefore investors","page_number":83,"box":{"x":68,"y":906,"width":802,"height":12}},{"id":"bce8c02b-d9a1-4739-8b11-e244579b158e","block_type":"box","text":"II-34","page_number":83,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"1f366122-6e9b-4314-b2ec-17b6ff4ff6e9","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":83,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9439230d-97a8-40d5-ac74-e61be6334b24","block_type":"box","text":"should not rely on any past gains from IPOs as an indication of future performance. The investment performance of a","page_number":84,"box":{"x":69,"y":45,"width":837,"height":11}},{"id":"ae22b5ca-7d46-4851-b740-5200a18c96c7","block_type":"box","text":"Fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when it","page_number":84,"box":{"x":70,"y":60,"width":832,"height":11}},{"id":"a6e5147f-a546-4f31-9fc2-ba50eb5834f5","block_type":"box","text":"is able to do so. In addition, as a Fund increases in size, the impact of IPOs on its performance will generally","page_number":84,"box":{"x":70,"y":75,"width":777,"height":11}},{"id":"819ffd82-5fc7-4f23-aecd-5ed70a67bd8f","block_type":"box","text":"decrease. Securities issued in IPOs are subject to many of the same risks as investing in companies with smaller","page_number":84,"box":{"x":69,"y":90,"width":810,"height":11}},{"id":"219cafbd-f22a-4a73-8332-10b8fb8fbafd","block_type":"box","text":"market capitalizations. Securities issued in IPOs have no trading history, and information about the companies may","page_number":84,"box":{"x":69,"y":105,"width":823,"height":11}},{"id":"5478ab50-4097-4f84-9764-27457f3209aa","block_type":"box","text":"be available for very limited periods.","page_number":84,"box":{"x":69,"y":120,"width":257,"height":11}},{"id":"4b6aa69d-0752-4b1b-955e-68bc75cec408","block_type":"box","text":"Investment in Emerging Markets.","page_number":84,"box":{"x":102,"y":143,"width":242,"height":11}},{"id":"1d212d31-a0c2-486f-af3f-d51e8d0e0217","block_type":"box","text":"General.","page_number":84,"box":{"x":102,"y":166,"width":58,"height":9}},{"id":"6598a579-7c95-4a17-8802-3b1b5bd552db","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging capital","page_number":84,"box":{"x":102,"y":188,"width":748,"height":12}},{"id":"79fcd119-83d3-4d1b-85cc-abbf27b91642","block_type":"box","text":"markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital market is any country","page_number":84,"box":{"x":69,"y":204,"width":840,"height":11}},{"id":"fda53650-5f4e-4283-81fd-2a0a08103a7d","block_type":"box","text":"that is (i) generally recognized to be an emerging market country by the international financial community, such as","page_number":84,"box":{"x":68,"y":218,"width":813,"height":12}},{"id":"0368c5fe-2cdf-4351-8e15-c10edfdf3265","block_type":"box","text":"the International Finance Corporation, or determined by the World Bank to have a low, middle or middle upper income","page_number":84,"box":{"x":68,"y":234,"width":836,"height":11}},{"id":"3e7d5688-457c-4113-9974-39a3f5fa8a44","block_type":"box","text":"economy; (ii) classified by the United Nations or its authorities to be developing; and/or (iii) included in a broad-based","page_number":84,"box":{"x":69,"y":249,"width":839,"height":11}},{"id":"f36c66a2-74a3-4d4f-be73-adfb136c6e60","block_type":"box","text":"index that is generally representative of emerging markets. Countries with emerging markets can be found in regions","page_number":84,"box":{"x":70,"y":264,"width":831,"height":11}},{"id":"56aaeaa7-12f7-4e82-a40e-a52de33f9d33","block_type":"box","text":"such as Asia, Latin America, Eastern Europe and Africa.","page_number":84,"box":{"x":69,"y":279,"width":396,"height":11}},{"id":"b71c646a-e783-40e1-96f6-ef260a506d68","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve certain","page_number":84,"box":{"x":102,"y":302,"width":770,"height":11}},{"id":"4cda1351-c539-48ba-90ca-966a553c2fd2","block_type":"box","text":"additional risks that do not generally apply to investments in securities of issuers in more developed capital markets,","page_number":84,"box":{"x":69,"y":317,"width":835,"height":11}},{"id":"4cb2d958-cbe3-4cbc-ace3-ca75215c3c35","block_type":"box","text":"such as (i) low or non-existent trading volume, resulting in market illiquidity and increased volatility in prices for such","page_number":84,"box":{"x":69,"y":332,"width":828,"height":11}},{"id":"65c8db85-4d6e-49ca-ba40-a2374b32249b","block_type":"box","text":"securities, as compared to securities of comparable issuers in more developed capital markets; (ii) uncertain","page_number":84,"box":{"x":69,"y":347,"width":779,"height":11}},{"id":"4f55ab23-4679-40ec-adc3-717451cc1c91","block_type":"box","text":"national policies and social, political and economic instability, increasing the potential for expropriation of assets,","page_number":84,"box":{"x":69,"y":362,"width":809,"height":11}},{"id":"eaec58f3-0bef-48ed-945f-0e94c5522aac","block_type":"box","text":"confiscatory taxation, high rates of inflation or unfavorable diplomatic developments; (iii) possible fluctuations in","page_number":84,"box":{"x":69,"y":377,"width":800,"height":12}},{"id":"d91af51e-4394-4b44-a688-dc307a26aadf","block_type":"box","text":"exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial","page_number":84,"box":{"x":69,"y":392,"width":800,"height":12}},{"id":"b15608ba-e38a-4b28-9319-03b66856ee6b","block_type":"box","text":"restrictions or other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":84,"box":{"x":69,"y":407,"width":811,"height":12}},{"id":"855b83c1-f67c-434d-a28c-b68f96732520","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers or industries","page_number":84,"box":{"x":70,"y":423,"width":824,"height":11}},{"id":"2605c00b-afbf-4ac0-af77-923a9e0e8e27","block_type":"box","text":"deemed sensitive to national interests; and (v) the lack or relatively early development of legal structures governing","page_number":84,"box":{"x":69,"y":438,"width":823,"height":11}},{"id":"d0bf6c60-763c-4fb4-8f6b-0db60128759f","block_type":"box","text":"private and foreign investments and private property. In addition to withholding taxes on investment income, some","page_number":84,"box":{"x":70,"y":453,"width":813,"height":11}},{"id":"5b6b7391-6c89-4aaf-bef2-d7b2857d2bea","block_type":"box","text":"countries with emerging markets may impose differential capital gains taxes on foreign investors.","page_number":84,"box":{"x":69,"y":468,"width":694,"height":11}},{"id":"eaef679c-aba1-4eb2-956f-d07d04a66594","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant evolution and","page_number":84,"box":{"x":102,"y":491,"width":767,"height":11}},{"id":"74025327-47ca-4f84-bd60-1512095cbe57","block_type":"box","text":"rapid development, and these countries may lack the social, political and economic stability characteristic of more","page_number":84,"box":{"x":69,"y":506,"width":814,"height":11}},{"id":"7b4cd5f5-5084-4ea5-a366-80a489fb3bf2","block_type":"box","text":"developed countries. In such a dynamic environment, there can be no assurance that any or all of these capital","page_number":84,"box":{"x":69,"y":521,"width":792,"height":11}},{"id":"305aa98d-fef8-4ecb-8153-187841961d9a","block_type":"box","text":"markets will continue to present viable investment opportunities for a Fund. In the past, governments of such nations","page_number":84,"box":{"x":69,"y":536,"width":838,"height":11}},{"id":"156766b7-da47-45db-9c83-b7095be9a8a1","block_type":"box","text":"have expropriated substantial amounts of private property, and most claims of the property owners have never been","page_number":84,"box":{"x":69,"y":551,"width":828,"height":11}},{"id":"c6c02555-d87a-4b76-b6fe-874306d0953b","block_type":"box","text":"fully settled. There is no assurance that such expropriations will not reoccur. In such an event, it is possible that a","page_number":84,"box":{"x":68,"y":566,"width":816,"height":11}},{"id":"1b1bd770-b4a9-4b60-980e-fdacb116782c","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks described above,","page_number":84,"box":{"x":70,"y":581,"width":802,"height":11}},{"id":"589d69ff-b984-47ba-bd35-1b3b682898f5","block_type":"box","text":"including the risks of nationalization or expropriation of assets, may be heightened. In addition, unanticipated political","page_number":84,"box":{"x":70,"y":596,"width":838,"height":12}},{"id":"71a93d50-6860-4f04-a509-33d2269af961","block_type":"box","text":"or social developments may affect the value of investments in these countries and the availability to a Fund of","page_number":84,"box":{"x":69,"y":612,"width":788,"height":11}},{"id":"c71f33a8-e9ec-40b9-9404-40ae07acc74e","block_type":"box","text":"additional investments. The small size and inexperience of the securities markets in certain of these countries and","page_number":84,"box":{"x":69,"y":627,"width":819,"height":11}},{"id":"908ed12f-1d9f-4ba8-b0e5-0ba25bdd8b37","block_type":"box","text":"the limited volume of trading in securities in these countries may make investments in the countries illiquid and more","page_number":84,"box":{"x":68,"y":642,"width":838,"height":11}},{"id":"5a5b37d7-37e7-4876-b64d-8ad07d3214dc","block_type":"box","text":"volatile than investments in more established markets.","page_number":84,"box":{"x":68,"y":657,"width":392,"height":9}},{"id":"68fde845-3108-4b17-9e95-21a378c5497a","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be available","page_number":84,"box":{"x":101,"y":680,"width":805,"height":11}},{"id":"01445176-624b-4bad-9e41-cb9852d777c7","block_type":"box","text":"about issuers in more developed capital markets, and such issuers may not be subject to accounting, auditing and","page_number":84,"box":{"x":69,"y":695,"width":818,"height":11}},{"id":"52f8616b-0b57-4812-bfc9-c957b136ca7f","block_type":"box","text":"financial reporting standards and requirements comparable to those to which U.S. companies are subject. In certain","page_number":84,"box":{"x":68,"y":710,"width":831,"height":11}},{"id":"04187839-f829-45c4-97b4-4362ed97501e","block_type":"box","text":"countries with emerging capital markets, reporting standards vary widely. As a result, traditional investment","page_number":84,"box":{"x":69,"y":725,"width":768,"height":11}},{"id":"23efa0f1-c83d-4254-bab2-09a3bd63ef74","block_type":"box","text":"measurements used in the United States, such as price/earnings ratios, may not be applicable. Emerging market","page_number":84,"box":{"x":69,"y":740,"width":811,"height":11}},{"id":"59d1bac3-b25b-4d60-8586-3087a20c19a7","block_type":"box","text":"securities may be substantially less liquid than, and more volatile than, those of mature markets, and company","page_number":84,"box":{"x":69,"y":755,"width":795,"height":11}},{"id":"77e36ba9-e261-49c0-99da-614441be7c8b","block_type":"box","text":"shares may be held by a limited number of persons. This may adversely affect the timing and pricing of the Fund’s","page_number":84,"box":{"x":69,"y":770,"width":814,"height":12}},{"id":"896777bb-4bd2-4bef-a9a1-25d147586bb9","block_type":"box","text":"acquisition or disposal of securities.","page_number":84,"box":{"x":69,"y":785,"width":257,"height":11}},{"id":"62280e80-75b2-4e60-8b09-b75be40d338e","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those","page_number":84,"box":{"x":102,"y":808,"width":800,"height":11}},{"id":"8050e18f-89d2-4963-bee9-09ca1fae7585","block_type":"box","text":"in developed markets, in part because a Fund will need to use brokers and counterparties that are less well","page_number":84,"box":{"x":70,"y":823,"width":769,"height":11}},{"id":"0dcf267f-1e76-4db0-9e9c-2c6e48d464d7","block_type":"box","text":"capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud,","page_number":84,"box":{"x":69,"y":838,"width":798,"height":12}},{"id":"4350a4a3-9b2a-4baa-a4a4-b8af1f4fda73","block_type":"box","text":"negligence, undue influence being exerted by the issuer or refusal to recognize ownership exists in some emerging","page_number":84,"box":{"x":69,"y":853,"width":819,"height":12}},{"id":"6e39886d-4897-4021-b245-72b0caf754e5","block_type":"box","text":"markets, and, along with other factors, could result in ownership registration being completely lost. A Fund would","page_number":84,"box":{"x":69,"y":869,"width":804,"height":11}},{"id":"918ba848-ec65-4807-afeb-e67bd5002f9c","block_type":"box","text":"absorb any loss resulting from such registration problems and may have no successful claim for compensation.","page_number":84,"box":{"x":69,"y":884,"width":794,"height":11}},{"id":"97c5d334-a436-45c7-86c0-a1d4256b4954","block_type":"box","text":"II-35","page_number":84,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"95693c2a-4699-43dd-9a1d-bd4a4e59aeb0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":84,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b842d04f-c344-4c8b-85d2-220acd163c4f","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging market","page_number":85,"box":{"x":102,"y":45,"width":778,"height":11}},{"id":"f6a6619c-79d1-4cad-8ae3-31140fcb9d66","block_type":"box","text":"countries may be on either a currency hedged or unhedged basis, and the Funds may hold from time to time various","page_number":85,"box":{"x":69,"y":60,"width":827,"height":11}},{"id":"a44d04a3-fb2b-4053-9cb2-eac80cd388ae","block_type":"box","text":"foreign currencies pending investment or conversion into U.S. dollars. Some of these instruments may have the","page_number":85,"box":{"x":68,"y":75,"width":797,"height":11}},{"id":"bc8821fd-4148-49b2-94f5-42f7c3252146","block_type":"box","text":"characteristics of futures contracts. In addition, certain Funds may engage in foreign currency exchange transactions","page_number":85,"box":{"x":69,"y":90,"width":832,"height":11}},{"id":"315c63c8-ecfe-460b-8079-c4d37273cbe9","block_type":"box","text":"to seek to protect against changes in the level of future exchange rates which would adversely affect the Fund’s","page_number":85,"box":{"x":68,"y":105,"width":799,"height":11}},{"id":"c090cb95-844e-4dd8-8714-a73ba6eb0e37","block_type":"box","text":"performance. These investments and transactions involving foreign securities, currencies, options (including options","page_number":85,"box":{"x":70,"y":120,"width":829,"height":12}},{"id":"9e51688e-19fe-4953-871a-937583ccf169","block_type":"box","text":"that relate to foreign currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":85,"box":{"x":68,"y":135,"width":740,"height":12}},{"id":"9d0a52f7-98ac-4baa-8eee-dd60465c0e13","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":85,"box":{"x":102,"y":158,"width":305,"height":11}},{"id":"9dde5e07-6d58-4fa6-892f-1917df87d6b9","block_type":"box","text":"In addition to the risks of foreign investing and the risks of investing","page_number":85,"box":{"x":414,"y":158,"width":485,"height":11}},{"id":"4765aa2e-acdc-4f0e-b0e4-626a8897d0c9","block_type":"box","text":"in developing markets, the developing market Asia-Pacific countries in which a Fund may invest are subject to certain","page_number":85,"box":{"x":70,"y":173,"width":832,"height":11}},{"id":"a7a46a67-1263-4502-9bc2-47bb8a7c2ed3","block_type":"box","text":"additional or specific risks. Certain Funds may make substantial investments in Asia-Pacific countries. In many of","page_number":85,"box":{"x":69,"y":188,"width":808,"height":11}},{"id":"24043c73-5a2c-470f-86e9-e3494ee1dd4c","block_type":"box","text":"these markets, there is a high concentration of market capitalization and trading volume in a small number of issuers","page_number":85,"box":{"x":68,"y":203,"width":838,"height":12}},{"id":"3453de09-eaea-47a0-8c55-aee8ade5a791","block_type":"box","text":"representing a limited number of industries, as well as a high concentration of investors and financial intermediaries.","page_number":85,"box":{"x":69,"y":218,"width":834,"height":12}},{"id":"e5719c5e-b1c6-4696-a588-268d89d7bd56","block_type":"box","text":"Many of these markets also may be affected by developments with respect to more established markets in the","page_number":85,"box":{"x":70,"y":234,"width":791,"height":11}},{"id":"b711f1f8-9d32-42f1-91a8-cd9bab581fac","block_type":"box","text":"region such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are fewer in","page_number":85,"box":{"x":69,"y":249,"width":804,"height":11}},{"id":"c44d41c9-4549-463c-b32e-49a841486eac","block_type":"box","text":"number and less well capitalized than brokers in the United States. These factors, combined with the U.S. regulatory","page_number":85,"box":{"x":69,"y":264,"width":833,"height":11}},{"id":"d04005e3-066c-462a-8734-a986c928a453","block_type":"box","text":"requirements for open-end investment companies and the restrictions on foreign investment discussed below, result","page_number":85,"box":{"x":69,"y":279,"width":830,"height":11}},{"id":"24940052-f2d9-46c7-b901-58dce580b828","block_type":"box","text":"in potentially fewer investment opportunities for a Fund and may have an adverse impact on the investment","page_number":85,"box":{"x":70,"y":294,"width":766,"height":11}},{"id":"788b195a-6beb-4270-b4bd-a935fda1385d","block_type":"box","text":"performance of the Fund.","page_number":85,"box":{"x":70,"y":309,"width":179,"height":11}},{"id":"49f671b7-3e2a-462f-9c65-92b3d4553ce2","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic, political","page_number":85,"box":{"x":102,"y":332,"width":784,"height":11}},{"id":"42dca079-08d9-489c-9095-4000fd39d224","block_type":"box","text":"and social instability than is the case in the United States and Western European countries. Such instability may","page_number":85,"box":{"x":69,"y":347,"width":803,"height":11}},{"id":"24591bcd-297d-41e1-95c5-a8a486229758","block_type":"box","text":"result from, among other things: (i) authoritarian governments or military involvement in political and economic","page_number":85,"box":{"x":69,"y":362,"width":788,"height":11}},{"id":"fa525f25-e1fd-4bd1-a4bb-ef09b70c3041","block_type":"box","text":"decision-making, including changes in government through extra-constitutional means; (ii) popular unrest associated","page_number":85,"box":{"x":69,"y":377,"width":827,"height":12}},{"id":"f32923f8-ee01-43f0-8547-788ea32e7e1e","block_type":"box","text":"with demands for improved political, economic and social conditions; (iii) internal insurgencies; (iv) hostile relations","page_number":85,"box":{"x":68,"y":392,"width":823,"height":12}},{"id":"889b62f7-30e3-431e-8adc-d2949ecad569","block_type":"box","text":"with neighboring countries; and (v) ethnic, religious and racial disaffection. In addition, the governments of many of","page_number":85,"box":{"x":68,"y":407,"width":822,"height":12}},{"id":"9fc3d4ea-db33-4af0-b103-784f81e21b5e","block_type":"box","text":"such countries, such as Indonesia, have a substantial role in regulating and supervising the economy. Another risk","page_number":85,"box":{"x":69,"y":423,"width":818,"height":11}},{"id":"6000aacd-1dec-448c-9ced-c7e48cd54204","block_type":"box","text":"common to most such countries is that the economy is heavily export oriented and, accordingly, is dependent upon","page_number":85,"box":{"x":69,"y":438,"width":821,"height":11}},{"id":"904332f8-df2c-4f11-a073-e97b5ebd7e1e","block_type":"box","text":"international trade. The existence of overburdened infrastructure and obsolete financial systems also presents risks","page_number":85,"box":{"x":70,"y":453,"width":827,"height":11}},{"id":"0a298a1d-76e9-42a1-b2b8-cdf84821b312","block_type":"box","text":"in certain countries, as do environmental problems. Certain economies also depend to a significant degree upon","page_number":85,"box":{"x":70,"y":468,"width":803,"height":11}},{"id":"a72dee83-a958-4dfb-b47e-432585111ac6","block_type":"box","text":"exports of primary commodities and, therefore, are vulnerable to changes in commodity prices that, in turn, may be","page_number":85,"box":{"x":69,"y":483,"width":824,"height":11}},{"id":"b1492d7e-39ba-4fda-95d5-10076880fe38","block_type":"box","text":"affected by a variety of factors.","page_number":85,"box":{"x":69,"y":498,"width":220,"height":11}},{"id":"fce69c67-3bb4-43bb-8a91-6e4f1e2ea995","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse impact on the","page_number":85,"box":{"x":101,"y":521,"width":785,"height":11}},{"id":"1a0ea301-4608-496d-8ba9-65ac874ca8d5","block_type":"box","text":"Fund. For example, while the potential liability of a shareholder in a U.S. corporation with respect to acts of the","page_number":85,"box":{"x":70,"y":536,"width":789,"height":11}},{"id":"82b948b4-e727-4373-8bf7-25ddff4eea5c","block_type":"box","text":"corporation is generally limited to the amount of the shareholder’s investment, the notion of limited liability is less","page_number":85,"box":{"x":69,"y":551,"width":814,"height":11}},{"id":"9566fb24-6866-4695-8c1a-ea5b2de55c80","block_type":"box","text":"clear in certain emerging market Asia-Pacific countries. Similarly, the rights of investors in developing market Asia","page_number":85,"box":{"x":69,"y":566,"width":813,"height":11}},{"id":"e449efd1-3dd4-494e-9ede-f37ffde23bd7","block_type":"box","text":"Pacific companies may be more limited than those of shareholders of U.S. corporations. It may be difficult or","page_number":85,"box":{"x":69,"y":581,"width":777,"height":11}},{"id":"4afd13d9-3e35-465b-8db1-7b0b17c4610c","block_type":"box","text":"impossible to obtain and/or enforce a judgment in a developing market Asia-Pacific country.","page_number":85,"box":{"x":70,"y":596,"width":652,"height":12}},{"id":"082449e2-3e2d-4d84-b890-538966b5b456","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to exercise","page_number":85,"box":{"x":102,"y":619,"width":737,"height":11}},{"id":"21530e65-b7b0-47d4-9ac1-388460db21dc","block_type":"box","text":"substantial influence over many aspects of the private sector. In certain cases, the government owns or controls","page_number":85,"box":{"x":69,"y":634,"width":803,"height":12}},{"id":"f35f90d8-6ca6-4d19-bf8b-f6d0aceabb06","block_type":"box","text":"many companies, including the largest in the country. Accordingly, government actions in the future could have a","page_number":85,"box":{"x":69,"y":649,"width":801,"height":12}},{"id":"cfd71668-9b60-41c7-9db4-436f8b3f7a2c","block_type":"box","text":"significant effect on economic conditions in developing market Asia-Pacific countries, which could affect private","page_number":85,"box":{"x":69,"y":664,"width":793,"height":12}},{"id":"6c074b21-bb43-479f-a6ec-ed125bc3869a","block_type":"box","text":"sector companies and a Fund itself, as well as the value of securities in the Fund’s portfolio. In addition, economic","page_number":85,"box":{"x":69,"y":680,"width":820,"height":11}},{"id":"765e0983-a6ae-4207-9387-0fe49ad608f9","block_type":"box","text":"statistics of developing market Asia-Pacific countries may be less reliable than economic statistics of more developed","page_number":85,"box":{"x":69,"y":695,"width":839,"height":11}},{"id":"ca520337-c457-49db-9b4a-1f21fa5d7fca","block_type":"box","text":"nations.","page_number":85,"box":{"x":69,"y":710,"width":56,"height":9}},{"id":"cdd49e62-4137-4944-8de6-2c4e3ca14de1","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific issuers and","page_number":85,"box":{"x":102,"y":732,"width":794,"height":12}},{"id":"669a5cb6-7375-4c7e-bf8b-378b05aa5e21","block_type":"box","text":"the possibility that such issuers may not be subject to the same accounting, auditing and financial reporting","page_number":85,"box":{"x":68,"y":748,"width":773,"height":11}},{"id":"bbeb1037-4f78-449c-99b1-ca193901a19e","block_type":"box","text":"standards as U.S. companies, inflation accounting rules in some developing market Asia-Pacific countries require","page_number":85,"box":{"x":69,"y":763,"width":808,"height":11}},{"id":"01f048cd-2b3e-4286-bc4a-f1d4ba6770cb","block_type":"box","text":"companies that keep accounting records in the local currency, for both tax and accounting purposes, to restate","page_number":85,"box":{"x":69,"y":778,"width":791,"height":11}},{"id":"abcfbe49-7d49-4a86-b067-980b7acd5fb6","block_type":"box","text":"certain assets and liabilities on the company’s balance sheet in order to express items in terms of currency of","page_number":85,"box":{"x":69,"y":793,"width":790,"height":11}},{"id":"791c1288-7b29-4577-9d6b-b544893d6458","block_type":"box","text":"constant purchasing power. Inflation accounting may indirectly generate losses or profits for certain developing","page_number":85,"box":{"x":69,"y":808,"width":790,"height":11}},{"id":"2ca2287f-c7b5-434d-a91a-66252d0fdd1c","block_type":"box","text":"market Asia-Pacific companies.","page_number":85,"box":{"x":69,"y":823,"width":220,"height":11}},{"id":"fd15720a-de76-44e8-848c-73af0b78763f","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia-Pacific","page_number":85,"box":{"x":102,"y":846,"width":780,"height":11}},{"id":"5aec01f1-beea-48fb-a061-2ec2753c89d5","block_type":"box","text":"countries, which may result in the Fund incurring additional costs and delays in providing transportation and custody","page_number":85,"box":{"x":69,"y":861,"width":829,"height":11}},{"id":"a07bb9e2-3fbc-4414-bbd2-321eec889da9","block_type":"box","text":"services for such securities outside such countries.","page_number":85,"box":{"x":69,"y":876,"width":367,"height":9}},{"id":"66bca2af-7e3f-4d97-bac3-1f01634fe416","block_type":"box","text":"II-36","page_number":85,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"11739405-e68c-4533-b8e0-a2ab09a6b3e1","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":85,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"92f74727-2e0c-4a56-bb7a-3d0152c1bb6c","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially large debtors","page_number":86,"box":{"x":102,"y":45,"width":795,"height":11}},{"id":"7dedf56a-a794-4576-8524-788c9a52098d","block_type":"box","text":"to commercial banks and foreign governments.","page_number":86,"box":{"x":68,"y":60,"width":335,"height":11}},{"id":"53544834-5fbe-44ef-908f-6907717b8a04","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and negative impact","page_number":86,"box":{"x":102,"y":82,"width":788,"height":12}},{"id":"f8154c63-d04c-46a9-a67e-a817dc9ea199","block_type":"box","text":"on a Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests","page_number":86,"box":{"x":69,"y":98,"width":830,"height":11}},{"id":"ac31d383-35e6-4c13-aec4-c4bab8e81b1b","block_type":"box","text":"to conduct their businesses in the manner normally conducted.","page_number":86,"box":{"x":68,"y":113,"width":450,"height":11}},{"id":"987c899a-03a8-4e1b-80fb-457b0c23edc9","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may not be","page_number":86,"box":{"x":102,"y":135,"width":782,"height":12}},{"id":"6a9f19cc-a40c-4397-b3ed-d44e55e103aa","block_type":"box","text":"practicable or appropriate to invest in a particular developing Asia-Pacific country. A Fund may invest in countries in","page_number":86,"box":{"x":70,"y":150,"width":819,"height":12}},{"id":"319756f5-a74d-4655-b1de-d2e18237afa5","block_type":"box","text":"which foreign investors, including management of the Fund, have had no or limited prior experience.","page_number":86,"box":{"x":68,"y":166,"width":711,"height":11}},{"id":"c448291c-3c14-4090-abac-daa28902711c","block_type":"box","text":"Restrictions on Foreign Investments in Asia-Pacific Countries.","page_number":86,"box":{"x":102,"y":188,"width":435,"height":12}},{"id":"fe124117-5e2c-4884-b139-6a6477ddffe9","block_type":"box","text":"Some developing Asia-Pacific countries prohibit or","page_number":86,"box":{"x":543,"y":188,"width":355,"height":12}},{"id":"b23688a1-cca1-4bb3-982e-b4cd1e57144f","block_type":"box","text":"impose substantial restrictions on investments in their capital markets, particularly their equity markets, by foreign","page_number":86,"box":{"x":70,"y":203,"width":817,"height":12}},{"id":"c631b406-e014-4bad-b0ad-ea19c553e573","block_type":"box","text":"entities such as a Fund. As illustrations, certain countries may require governmental approval prior to investments by","page_number":86,"box":{"x":69,"y":219,"width":836,"height":11}},{"id":"af4b2761-e724-44c5-b09c-84bdb222ab33","block_type":"box","text":"foreign persons or limit the amount of investment by foreign persons in a particular company or limit the investment","page_number":86,"box":{"x":68,"y":234,"width":828,"height":11}},{"id":"20b998e9-d52e-4f68-b875-ec09d11f2c9d","block_type":"box","text":"by foreign persons to only a specific class of securities of a company which may have less advantageous terms","page_number":86,"box":{"x":69,"y":249,"width":794,"height":11}},{"id":"3e4dc3e1-c0f5-442f-8c90-b1a13a3e4917","block_type":"box","text":"(including price and shareholder rights) than securities of the company available for purchase by nationals. There can","page_number":86,"box":{"x":69,"y":264,"width":835,"height":11}},{"id":"943d0d9d-e48a-43ea-8f66-7c99261baec5","block_type":"box","text":"be no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In addition,","page_number":86,"box":{"x":69,"y":279,"width":820,"height":11}},{"id":"f0ea78ae-2831-417a-a13c-7da658e03782","block_type":"box","text":"changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of such securities may","page_number":86,"box":{"x":69,"y":294,"width":820,"height":11}},{"id":"26078bc1-4a71-4674-9eb1-5969f8718f46","block_type":"box","text":"have an adverse effect on the value of such shares. Certain countries may restrict investment opportunities in","page_number":86,"box":{"x":69,"y":309,"width":788,"height":11}},{"id":"bde28f46-272e-442b-98c9-b50224acd9b1","block_type":"box","text":"issuers or industries deemed important to national interests.","page_number":86,"box":{"x":70,"y":325,"width":434,"height":10}},{"id":"a01559d8-87d8-4bd4-bf0d-45e3a51e9d29","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific countries, as","page_number":86,"box":{"x":101,"y":347,"width":787,"height":11}},{"id":"6bee0194-e87c-466a-9257-c866c2977e81","block_type":"box","text":"well as limitations on such investments, also may have an adverse impact on the operations of a Fund. For example,","page_number":86,"box":{"x":68,"y":362,"width":833,"height":11}},{"id":"772ca0ad-92ed-42ed-a365-5315b730ca37","block_type":"box","text":"a Fund may be required in certain of such countries to invest initially through a local broker or other entity and then","page_number":86,"box":{"x":69,"y":377,"width":820,"height":12}},{"id":"e1345358-8820-4c11-81ea-8a7656fc25dc","block_type":"box","text":"have the shares purchased re-registered in the name of the Fund. Re-registration may in some instances not be able","page_number":86,"box":{"x":69,"y":392,"width":831,"height":12}},{"id":"1191cf9e-e81c-4bea-a34d-f43f0855e656","block_type":"box","text":"to occur on a timely basis, resulting in a delay during which a Fund may be denied certain of its rights as an investor,","page_number":86,"box":{"x":68,"y":407,"width":834,"height":12}},{"id":"8e3b16c5-8bf6-4a86-ab42-ac8428b2b8cb","block_type":"box","text":"including rights as to dividends or to be made aware of certain corporate actions. There also may be instances where","page_number":86,"box":{"x":70,"y":423,"width":836,"height":11}},{"id":"8589b7d2-27f3-4fb5-9933-ee47391ed646","block_type":"box","text":"a Fund places a purchase order but is subsequently informed, at the time of re-registration, that the permissible","page_number":86,"box":{"x":69,"y":438,"width":800,"height":11}},{"id":"f7069712-249f-4e49-8418-cecb3d3bf67e","block_type":"box","text":"allocation of the investment to foreign investors has been filled, depriving the Fund of the ability to make its desired","page_number":86,"box":{"x":69,"y":453,"width":826,"height":11}},{"id":"1f801373-de00-413d-9df9-56b94dabf582","block_type":"box","text":"investment at that time.","page_number":86,"box":{"x":70,"y":468,"width":168,"height":9}},{"id":"f978eef5-30cf-46b6-947c-7d0d5c6a3482","block_type":"box","text":"Substantial limitations may exist in certain countries with respect to a Fund’s ability to repatriate investment","page_number":86,"box":{"x":102,"y":491,"width":774,"height":11}},{"id":"ff7cf7ff-d02f-4aa6-bbd2-cc36f695fff3","block_type":"box","text":"income, capital or the proceeds of sales of securities by foreign investors. A Fund could be adversely affected by","page_number":86,"box":{"x":70,"y":506,"width":803,"height":11}},{"id":"1ae3b6f0-bd93-42d8-baf5-8dce6a9dcfab","block_type":"box","text":"delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as by the","page_number":86,"box":{"x":69,"y":521,"width":789,"height":11}},{"id":"f2fa45d4-188d-43e3-9e9c-c30364ff85c8","block_type":"box","text":"application to the Fund of any restrictions on investments. It is possible that certain countries may impose currency","page_number":86,"box":{"x":69,"y":536,"width":826,"height":11}},{"id":"ffe18ebb-e29f-4c07-957e-1a0ed5c615c0","block_type":"box","text":"controls or other restrictions relating to their currencies or to securities of issuers in those countries. To the extent","page_number":86,"box":{"x":69,"y":551,"width":818,"height":11}},{"id":"e8687a76-c8fc-4b7f-8056-70c037633684","block_type":"box","text":"that such restrictions have the effect of making certain investments illiquid, securities may not be available for sale","page_number":86,"box":{"x":68,"y":566,"width":826,"height":11}},{"id":"148bd872-1028-4cc5-b502-028923a10145","block_type":"box","text":"to meet redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":86,"box":{"x":68,"y":581,"width":800,"height":12}},{"id":"87e0dfe9-14f6-41ef-94f2-ecccfcd7b38f","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the Fund’s assets","page_number":86,"box":{"x":69,"y":596,"width":839,"height":12}},{"id":"aff6347e-0234-435d-9684-8e718ce55855","block_type":"box","text":"that may be used to meet redemptions may be further decreased. Even where there is no outright restriction on","page_number":86,"box":{"x":68,"y":612,"width":798,"height":11}},{"id":"b237ed5f-b429-4509-adac-b35664c0f580","block_type":"box","text":"repatriation of capital, the mechanics of repatriation may affect certain aspects of the operations of a Fund (for","page_number":86,"box":{"x":69,"y":627,"width":795,"height":11}},{"id":"4b312bfc-34a3-43e8-bc6b-65ad05b5befb","block_type":"box","text":"example, if funds may be withdrawn only in certain currencies and/or only at an exchange rate established by the","page_number":86,"box":{"x":69,"y":642,"width":808,"height":11}},{"id":"936b7267-a1a5-4ecd-866c-6b360b4c7908","block_type":"box","text":"government).","page_number":86,"box":{"x":68,"y":657,"width":92,"height":11}},{"id":"04b8cf98-3a91-40e9-8fcf-b0f40493587b","block_type":"box","text":"In certain countries, banks or other financial institutions may be among the leading companies or have actively","page_number":86,"box":{"x":102,"y":680,"width":790,"height":11}},{"id":"b2cc1949-e3f4-42d2-be9d-0f1fe93faa50","block_type":"box","text":"traded securities available for investment. The Investment Company Act restricts a Fund’s investments in any equity","page_number":86,"box":{"x":68,"y":695,"width":828,"height":11}},{"id":"efc28f35-c185-494b-8f17-2dc42ac5ff49","block_type":"box","text":"securities of an issuer that, in its most recent fiscal year, derived more than 15% of its revenues from “securities","page_number":86,"box":{"x":69,"y":710,"width":808,"height":11}},{"id":"62612f0e-d1d6-4eb4-adac-137c5d5719aa","block_type":"box","text":"related activities,” as defined by the rules thereunder. These provisions may restrict a Fund’s investments in certain","page_number":86,"box":{"x":69,"y":725,"width":829,"height":11}},{"id":"7172ad79-0da8-4f34-a858-a12cde5d8c79","block_type":"box","text":"foreign banks and other financial institutions.","page_number":86,"box":{"x":68,"y":740,"width":322,"height":11}},{"id":"f3e1cff8-9b29-4f64-9be2-bd1b4dec9920","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant evolution and","page_number":86,"box":{"x":102,"y":763,"width":767,"height":11}},{"id":"37d7a9fe-3cdf-4e33-8551-768031cac2e6","block_type":"box","text":"rapid development, and these countries may lack the social, political and economic stability characteristic of more","page_number":86,"box":{"x":69,"y":778,"width":814,"height":11}},{"id":"7d757250-3723-4c7f-a8dc-4710199222d8","block_type":"box","text":"developed countries. Some of these countries may have in the past failed to recognize private property rights and","page_number":86,"box":{"x":69,"y":793,"width":809,"height":11}},{"id":"b444975f-6358-4e3a-8921-48b78831096a","block_type":"box","text":"have at times nationalized or expropriated the assets of private companies. As a result the risks described above,","page_number":86,"box":{"x":69,"y":808,"width":812,"height":11}},{"id":"9d1d7209-0f07-4b99-a0ce-f5879edd90f7","block_type":"box","text":"including the risks of nationalization or expropriation of assets, may be heightened. In addition, unanticipated political","page_number":86,"box":{"x":70,"y":823,"width":838,"height":12}},{"id":"a8a0bc9f-7c98-40a3-b96a-a76a3372b0a5","block_type":"box","text":"or social developments may affect the value of investments in these countries and the availability to a Fund of","page_number":86,"box":{"x":69,"y":838,"width":788,"height":11}},{"id":"c4e42bb2-a3ac-458d-a2cd-9c98d5c6c5b0","block_type":"box","text":"additional investments in emerging market countries. The small size and inexperience of the securities markets in","page_number":86,"box":{"x":69,"y":853,"width":812,"height":12}},{"id":"03001c58-9dc2-48e3-9404-acd469daad39","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make investments in","page_number":86,"box":{"x":69,"y":869,"width":835,"height":11}},{"id":"dbab97aa-6187-40e3-b7c7-c196b29bca3e","block_type":"box","text":"the countries illiquid and more volatile than investments in Japan or most Western European countries. There may be","page_number":86,"box":{"x":68,"y":884,"width":837,"height":11}},{"id":"9f52bd79-8864-49ff-911b-551b5c77b382","block_type":"box","text":"II-37","page_number":86,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"074cc6ed-4369-44bf-95e8-4d98d61744af","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":86,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3df40fb7-8da7-426e-b77b-832fa59d80c4","block_type":"box","text":"little financial or accounting information available with respect to issuers located in certain emerging market","page_number":87,"box":{"x":70,"y":45,"width":771,"height":11}},{"id":"29a4dbb8-7a69-41ca-8797-d1897dd9358b","block_type":"box","text":"countries, and it may be difficult to assess the value or prospects of an investment in such issuers.","page_number":87,"box":{"x":69,"y":60,"width":711,"height":11}},{"id":"2d59fe14-b74f-417a-98fa-5277a38e87a2","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be higher than","page_number":87,"box":{"x":101,"y":82,"width":779,"height":12}},{"id":"b6270857-2a5c-4263-ab0c-c59835bd7721","block_type":"box","text":"those of Funds investing primarily in domestic securities. The costs attributable to investing abroad are usually higher","page_number":87,"box":{"x":68,"y":98,"width":840,"height":11}},{"id":"41943b3f-4c55-42a0-a9db-454bb138be8e","block_type":"box","text":"for several reasons, such as the higher cost of custody of foreign securities, higher commissions paid on comparable","page_number":87,"box":{"x":68,"y":113,"width":838,"height":11}},{"id":"2c696bb0-7956-4e24-b12f-f70463d0ed13","block_type":"box","text":"transactions on foreign markets and additional costs arising from delays in settlements of transactions involving","page_number":87,"box":{"x":68,"y":128,"width":802,"height":11}},{"id":"e1029f39-85ce-4a06-bbe9-db56dc112a37","block_type":"box","text":"foreign securities.","page_number":87,"box":{"x":68,"y":143,"width":127,"height":11}},{"id":"e8b0d1f1-46a7-4f4c-aa36-41d34cb83796","block_type":"box","text":"Risks of Investments in Russia.","page_number":87,"box":{"x":102,"y":166,"width":224,"height":9}},{"id":"d33971a9-fd09-43ae-8756-5832ed0c7554","block_type":"box","text":"A Fund may invest a portion of its assets in securities issued by companies","page_number":87,"box":{"x":332,"y":166,"width":539,"height":11}},{"id":"c1f7cd1a-e3b7-4c22-b7ff-00b9bc5ad263","block_type":"box","text":"located in Russia. The Russian securities market suffers from a variety of problems described above in “Investment","page_number":87,"box":{"x":70,"y":181,"width":826,"height":11}},{"id":"72bfb0a4-3050-4f1d-9fad-06adbc01ed2b","block_type":"box","text":"in Emerging Markets” not encountered in more developed markets. The Russian securities market is relatively new,","page_number":87,"box":{"x":70,"y":196,"width":821,"height":11}},{"id":"5df0960f-bc03-4e93-bfe1-431915e05306","block_type":"box","text":"and a substantial portion of securities transactions in Russia are privately negotiated outside of stock exchanges.","page_number":87,"box":{"x":69,"y":211,"width":812,"height":11}},{"id":"859313c6-033f-46b6-94af-84a7e4547e2b","block_type":"box","text":"The inexperience of the Russian securities market and the limited volume of trading in securities in the market may","page_number":87,"box":{"x":68,"y":226,"width":824,"height":11}},{"id":"1bd28a86-6881-427f-b145-cf1afd131a7c","block_type":"box","text":"make obtaining accurate prices on portfolio securities from independent sources more difficult than in more","page_number":87,"box":{"x":69,"y":241,"width":771,"height":11}},{"id":"54333032-052a-46b8-8566-55a70af02462","block_type":"box","text":"developed markets.","page_number":87,"box":{"x":69,"y":257,"width":138,"height":10}},{"id":"97e7c65c-e6fe-4196-80f6-80bc7789fb9f","block_type":"box","text":"Because of the underdeveloped state of Russia’s securities markets and banking and telecommunication","page_number":87,"box":{"x":102,"y":279,"width":751,"height":11}},{"id":"27138c87-7c21-44f1-82dd-87337a23d252","block_type":"box","text":"systems, settlement, clearing and registration of securities transactions are subject to additional risks. Prior to 2013,","page_number":87,"box":{"x":69,"y":294,"width":839,"height":11}},{"id":"d4bea148-0761-4d24-bc61-148fc4e806ec","block_type":"box","text":"there was no central registration system for equity share registration in Russia and registration was carried out either","page_number":87,"box":{"x":68,"y":309,"width":838,"height":11}},{"id":"d159a54d-2a5c-4d3f-8cbd-45f68b8a8639","block_type":"box","text":"by the issuers themselves or by registrars located throughout Russia. These registrars may not have been subject to","page_number":87,"box":{"x":69,"y":325,"width":831,"height":11}},{"id":"872fea2a-13c2-4c76-978a-8748398f9a91","block_type":"box","text":"effective state supervision or licensed with any governmental entity. In 2013, Russia established the National","page_number":87,"box":{"x":69,"y":339,"width":783,"height":12}},{"id":"df54e339-9866-4610-9ff4-cc477a3c2153","block_type":"box","text":"Settlement Depository (“NSD”) as a recognized central securities depository, and title to Russian equities held","page_number":87,"box":{"x":69,"y":355,"width":790,"height":11}},{"id":"537bcc0c-fe17-4549-bb7f-42d80c1abfec","block_type":"box","text":"through the NSD is now based on the records of the NSD and not on the records of the local registrars. Although the","page_number":87,"box":{"x":68,"y":370,"width":833,"height":11}},{"id":"c6cf6344-429e-4b3e-8da5-82ec5c5cb9a3","block_type":"box","text":"implementation of the NSD has enhanced the efficiency and transparency of the Russian securities market, loss still","page_number":87,"box":{"x":70,"y":385,"width":831,"height":11}},{"id":"d3da7062-c219-47e1-8134-1981b6a4fc85","block_type":"box","text":"can occur. Additionally, issuers and registrars remain prominent in the validation and approval of documentation","page_number":87,"box":{"x":69,"y":400,"width":797,"height":11}},{"id":"9518627b-50a4-4f10-b8ae-287f4eb05b41","block_type":"box","text":"requirements for corporate action processing in Russia, and, because the documentation requirements and approval","page_number":87,"box":{"x":69,"y":415,"width":832,"height":11}},{"id":"bf23ace2-644c-474b-bf98-b4f5c2ec8251","block_type":"box","text":"criteria vary between registrars and issuers, there remain inconsistent market standards in the Russian market with","page_number":87,"box":{"x":69,"y":430,"width":827,"height":11}},{"id":"4bd98920-d4f2-4f8a-bcca-a2d2f6c39f42","block_type":"box","text":"respect to the completion and submission of corporate action elections. To the extent that a Fund suffers a loss","page_number":87,"box":{"x":69,"y":445,"width":800,"height":11}},{"id":"ac89b437-43a3-4faa-8d0c-732d48f956f5","block_type":"box","text":"relating to title or corporate actions relating to its portfolio securities, it may be difficult for the Fund to enforce its","page_number":87,"box":{"x":69,"y":460,"width":813,"height":12}},{"id":"483ee7f9-b599-4fa3-ba2f-bfc7d77e90de","block_type":"box","text":"rights or otherwise remedy the loss. Russian securities laws may not recognize foreign nominee accounts held with a","page_number":87,"box":{"x":69,"y":475,"width":836,"height":12}},{"id":"f830e597-362f-46ce-8780-49ab0d1e6892","block_type":"box","text":"custodian bank, and as a result the custodian may be considered the ultimate owner of securities held on behalf of","page_number":87,"box":{"x":69,"y":491,"width":824,"height":11}},{"id":"9e7e3ec9-a75e-4419-9c4f-bd8490fbf077","block_type":"box","text":"their clients. A Fund also may experience difficulty in obtaining and/or enforcing judgments in Russia.","page_number":87,"box":{"x":68,"y":506,"width":723,"height":11}},{"id":"5eff0d12-8935-43ec-bff6-d9432f9b0d01","block_type":"box","text":"In addition, Russia continues to assert its influence in the region through economic and military measures, as it","page_number":87,"box":{"x":102,"y":528,"width":801,"height":12}},{"id":"4c55b747-e715-473f-b6c4-9d4d14e7ece4","block_type":"box","text":"did with Georgia in the summer of 2008 and the Ukraine in 2014 and 2022. Russia launched a large-scale invasion","page_number":87,"box":{"x":69,"y":543,"width":826,"height":12}},{"id":"f5d22df8-0f48-4dc1-85da-a0cf6de896f5","block_type":"box","text":"of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting","page_number":87,"box":{"x":69,"y":559,"width":809,"height":11}},{"id":"17c35c58-3452-409a-be88-882fe1b9336f","block_type":"box","text":"future market disruptions, including declines in its stock markets and the value of the ruble against the U.S. dollar,","page_number":87,"box":{"x":68,"y":574,"width":821,"height":11}},{"id":"6c3dd976-7b1d-43c2-9d1c-bc139b450654","block_type":"box","text":"are impossible to predict. Any such disruptions caused by Russian military action or other actions (including","page_number":87,"box":{"x":69,"y":589,"width":770,"height":11}},{"id":"9f5c9b50-a518-46bd-b5c8-e5455dd89f03","block_type":"box","text":"cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and","page_number":87,"box":{"x":69,"y":604,"width":827,"height":11}},{"id":"0ce8a9c8-47ef-44ee-963b-3168d1687c73","block_type":"box","text":"financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks","page_number":87,"box":{"x":68,"y":619,"width":824,"height":11}},{"id":"81292fe5-bb1e-4b76-bd9a-739cc3d24791","block_type":"box","text":"on the Russian government, Russian companies or Russian individuals, including politicians, may impact Russia’s","page_number":87,"box":{"x":69,"y":634,"width":814,"height":12}},{"id":"3d7d3b1b-7c55-4d4f-99dc-5258ded9605e","block_type":"box","text":"economy and Russian issuers of securities in which the Fund invests. Actual and threatened responses to such","page_number":87,"box":{"x":69,"y":649,"width":795,"height":12}},{"id":"9e194e42-a2a2-4c56-aab9-8be9a5aa689c","block_type":"box","text":"activity, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Russian government or Russian","page_number":87,"box":{"x":69,"y":664,"width":814,"height":12}},{"id":"57942df0-d395-449a-a24d-386fd590db69","block_type":"box","text":"companies, may impact Russia’s economy and Russian issuers of securities in which the Fund invests. Actual and","page_number":87,"box":{"x":69,"y":680,"width":816,"height":11}},{"id":"0e82385d-9958-45c8-bca7-145858878bac","block_type":"box","text":"threatened responses to such military action may also impact the markets for certain Russian commodities, such as","page_number":87,"box":{"x":68,"y":695,"width":836,"height":11}},{"id":"66403461-341e-41a1-abd6-7d299c098c30","block_type":"box","text":"oil and natural gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":87,"box":{"x":69,"y":710,"width":829,"height":11}},{"id":"f1a6a9c0-a98a-4db7-a78f-2ccd688bc6ee","block_type":"box","text":"sectors globally.","page_number":87,"box":{"x":69,"y":725,"width":112,"height":11}},{"id":"3634b093-a9b9-401d-9203-3c35eb455bd6","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”) have","page_number":87,"box":{"x":102,"y":748,"width":745,"height":11}},{"id":"e07bde8d-ce71-4fbd-a8ba-00bb9d890a78","block_type":"box","text":"imposed economic sanctions, which can consist of prohibiting certain securities trades, certain private transactions","page_number":87,"box":{"x":70,"y":763,"width":826,"height":11}},{"id":"73079532-3a35-4908-b6ea-aa39f11f2fcb","block_type":"box","text":"in the energy sector, asset freezes and prohibition of all business, against certain Russian individuals, including","page_number":87,"box":{"x":70,"y":778,"width":799,"height":11}},{"id":"ac9db20d-0c5b-4964-83e0-f629ac935c34","block_type":"box","text":"politicians, and Russian corporate and banking entities. The Sanctioning Bodies, or others, could also institute","page_number":87,"box":{"x":70,"y":793,"width":788,"height":11}},{"id":"e8b7e23c-6174-48ce-97a6-7347288244f8","block_type":"box","text":"broader sanctions on Russia, including banning Russia from global payments systems that facilitate cross-border","page_number":87,"box":{"x":69,"y":808,"width":807,"height":11}},{"id":"54d0476a-993a-4695-ab16-3783a0392b9f","block_type":"box","text":"payments. These sanctions, or even the threat of further sanctions, may result in the decline of the value and","page_number":87,"box":{"x":70,"y":823,"width":782,"height":11}},{"id":"723b42ad-f116-4c4f-bc20-67f86a31b1f9","block_type":"box","text":"liquidity of Russian securities, a weakening of the ruble or other adverse consequences to the Russian economy.","page_number":87,"box":{"x":70,"y":838,"width":802,"height":12}},{"id":"7b839b1f-db07-40f3-8024-157f0d3f791e","block_type":"box","text":"These sanctions have resulted and may continue to result in the immediate freeze of Russian securities and/or","page_number":87,"box":{"x":68,"y":853,"width":797,"height":12}},{"id":"c59b2409-e0d3-49d1-85f4-61df1902b1b1","block_type":"box","text":"funds invested in prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities","page_number":87,"box":{"x":68,"y":869,"width":804,"height":11}},{"id":"a131c955-b559-41a3-9ced-203862c900f2","block_type":"box","text":"and/or assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may","page_number":87,"box":{"x":69,"y":884,"width":791,"height":11}},{"id":"e574c61e-697c-4532-bd9c-22a03ed89914","block_type":"box","text":"further impair the value and liquidity of Russian securities.","page_number":87,"box":{"x":68,"y":899,"width":417,"height":11}},{"id":"7cdb440c-761a-46e3-9fef-2f425387fa40","block_type":"box","text":"II-38","page_number":87,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"7241d29f-8ea9-43d0-96a9-ccde959da8f2","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":87,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"17d08c6c-873a-44bd-8f41-221604b251bc","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":88,"box":{"x":102,"y":45,"width":241,"height":11}},{"id":"cd0ad59e-cb31-4128-a0cc-43f7295394ba","block_type":"box","text":"The ability of foreign investors (such as a Fund) to invest in Saudi Arabian","page_number":88,"box":{"x":350,"y":45,"width":523,"height":11}},{"id":"84115aa6-06b3-4eac-9720-76225a69ea4a","block_type":"box","text":"issuers is new and untested. Such ability could be restricted or revoked by the Saudi Arabian government at any time,","page_number":88,"box":{"x":70,"y":60,"width":838,"height":11}},{"id":"f30f4c18-18da-4357-97d7-0b144d6ec887","block_type":"box","text":"and unforeseen risks could materialize due to foreign ownership in such securities. In addition, the Capital Market","page_number":88,"box":{"x":69,"y":75,"width":814,"height":11}},{"id":"dc464e2d-c5ad-4bb0-b85e-e0804e9d0c57","block_type":"box","text":"Authority (“CMA”) places investment limitations on the ownership of Saudi Arabian issuers by foreign investors,","page_number":88,"box":{"x":68,"y":90,"width":793,"height":11}},{"id":"8e4d401b-5f3f-4ef8-b97a-8d6d42e5573d","block_type":"box","text":"including a limitation on a Fund’s ownership of any single issuer listed on the Saudi Arabian Stock Exchange, which","page_number":88,"box":{"x":70,"y":105,"width":819,"height":11}},{"id":"5a9bcc90-b8bb-4477-9d6f-ecda9d00330c","block_type":"box","text":"may prevent a Fund from investing in accordance with its strategy and contribute to tracking error against the","page_number":88,"box":{"x":69,"y":120,"width":777,"height":12}},{"id":"9767ff34-b31a-4f7b-af34-70870d201033","block_type":"box","text":"Underlying Index. These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":88,"box":{"x":70,"y":136,"width":803,"height":11}},{"id":"c70aef42-3869-40c3-8889-a4c227bacf0f","block_type":"box","text":"approvals or additional foreign taxes, may be instituted at any time. A Fund may not be able to obtain or maintain any","page_number":88,"box":{"x":69,"y":150,"width":837,"height":12}},{"id":"e1e2b09a-8e61-4dd0-8fa5-3476f30daece","block_type":"box","text":"such licenses or approvals and may not be able to buy and sell securities at full value. Major disruptions or","page_number":88,"box":{"x":69,"y":166,"width":765,"height":11}},{"id":"fcb6b3ce-64cc-4817-925b-e3b4f7d958f4","block_type":"box","text":"regulatory changes could occur in the Saudi Arabian market, any of which could negatively impact a Fund. These risks","page_number":88,"box":{"x":69,"y":181,"width":838,"height":11}},{"id":"940880e6-6afd-4392-a1fe-acbafdcd82dc","block_type":"box","text":"may be exacerbated, compared to more developed markets, given the limited history of foreign investment in the","page_number":88,"box":{"x":69,"y":196,"width":805,"height":11}},{"id":"b1b24ddd-28c5-44b1-94b8-22d08fcb42ea","block_type":"box","text":"Saudi Arabian market. Investments in Saudi Arabia may also be subject to loss due to expropriation or nationalization","page_number":88,"box":{"x":69,"y":211,"width":837,"height":11}},{"id":"d5b7e248-32ec-47f7-a609-f9aab6e8fd2f","block_type":"box","text":"of assets and property or the imposition of restrictions on additional foreign investments and repatriation of capital.","page_number":88,"box":{"x":69,"y":226,"width":826,"height":11}},{"id":"de5e7ff6-f849-4e4b-8da2-f269e5333463","block_type":"box","text":"Such heightened risks may include, among others, restrictions on and government intervention in international trade,","page_number":88,"box":{"x":69,"y":241,"width":834,"height":11}},{"id":"ec175f8f-7692-474e-bdd6-5726b1b55efa","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in governmental decision","page_number":88,"box":{"x":69,"y":256,"width":835,"height":12}},{"id":"e84a6244-ed1c-4d09-a335-0414ea31bd04","block_type":"box","text":"making, armed conflict, crime and instability as a result of religious, ethnic and/or socioeconomic unrest. Saudi","page_number":88,"box":{"x":69,"y":271,"width":797,"height":12}},{"id":"a1af1f7b-158e-41a7-ae09-a70f79312113","block_type":"box","text":"Arabia has privatized, or has begun the process of privatizing, certain entities and industries. Newly privatized","page_number":88,"box":{"x":68,"y":286,"width":781,"height":12}},{"id":"21b06e27-03b5-445c-aaf2-a35827c8995f","block_type":"box","text":"companies may face strong competition from government-sponsored competitors that have not been privatized. In","page_number":88,"box":{"x":69,"y":302,"width":811,"height":11}},{"id":"a51fcce7-0cbf-4e20-a68d-f3fcbc9c0bf6","block_type":"box","text":"some instances, investors in newly privatized entities have suffered losses due to the inability of the newly privatized","page_number":88,"box":{"x":69,"y":317,"width":833,"height":11}},{"id":"befe1130-9733-42b7-8921-fe30a8c952fe","block_type":"box","text":"entities to adjust quickly to a competitive environment or changing regulatory and legal standards or, in some cases,","page_number":88,"box":{"x":69,"y":332,"width":831,"height":11}},{"id":"0f92e455-6240-4872-a474-a5499080348d","block_type":"box","text":"due to re-nationalization of such privatized entities. There is no assurance that similar losses will not recur. Further,","page_number":88,"box":{"x":69,"y":347,"width":823,"height":11}},{"id":"2bd81347-55da-4c37-8548-761cadb9af3e","block_type":"box","text":"under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid by a Saudi Arabian","page_number":88,"box":{"x":69,"y":362,"width":791,"height":11}},{"id":"acddfd48-1488-4828-be7b-8834ffa1deb3","block_type":"box","text":"company to foreign stockholders are generally subject to a 5% withholding tax (different tax rates may apply pursuant","page_number":88,"box":{"x":69,"y":377,"width":835,"height":12}},{"id":"c5839503-5a0c-498c-9ab7-fc66831366d1","block_type":"box","text":"to an applicable treaty). Saudi Arabia is highly reliant on income from the sale of petroleum and trade with other","page_number":88,"box":{"x":68,"y":392,"width":799,"height":12}},{"id":"d8bc2911-d586-430b-891b-8056db934670","block_type":"box","text":"countries involved in the sale of petroleum, and its economy is therefore vulnerable to changes in foreign currency","page_number":88,"box":{"x":69,"y":407,"width":815,"height":12}},{"id":"bb19c348-00f4-4057-9d14-0aa0e4b2b1ed","block_type":"box","text":"values and the market for petroleum. As global demand for petroleum fluctuates, Saudi Arabia may be significantly","page_number":88,"box":{"x":68,"y":423,"width":818,"height":11}},{"id":"64788ee9-24c8-4ddf-8086-26f2a2f1c2e1","block_type":"box","text":"impacted.","page_number":88,"box":{"x":70,"y":438,"width":67,"height":11}},{"id":"dde177c5-0ccd-4ad0-90f0-e945149f6d72","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial influence over","page_number":88,"box":{"x":102,"y":460,"width":773,"height":12}},{"id":"d11ba038-86ba-494b-91ea-12853010b624","block_type":"box","text":"many aspects of the private sector. Although liberalization in the wider economy is underway, in many areas it has","page_number":88,"box":{"x":69,"y":475,"width":812,"height":12}},{"id":"1f303123-db74-46ec-b361-da76ae61fbcc","block_type":"box","text":"lagged significantly: restrictions on foreign ownership persist, and the government has an ownership stake in many","page_number":88,"box":{"x":70,"y":491,"width":818,"height":11}},{"id":"267f2588-084c-405c-a1ba-18f8f7b80423","block_type":"box","text":"key industries. The situation is exacerbated by the fact that Saudi Arabia is governed by an absolute monarchy. Saudi","page_number":88,"box":{"x":69,"y":506,"width":836,"height":11}},{"id":"b2e89a00-367f-43fa-83f3-dd816b9f41bf","block_type":"box","text":"Arabia has historically experienced strained relations with economic partners worldwide, including other countries in","page_number":88,"box":{"x":68,"y":521,"width":826,"height":11}},{"id":"3ed4113a-8225-4df7-b2fa-f907e22ca40e","block_type":"box","text":"the Middle East due to geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security,","page_number":88,"box":{"x":68,"y":536,"width":809,"height":11}},{"id":"5bf43c84-b982-4952-b0ef-57873d56e3ec","block_type":"box","text":"including terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":88,"box":{"x":70,"y":551,"width":790,"height":11}},{"id":"76b8b704-62d3-4153-9260-5eee9ffabc00","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions in Saudi","page_number":88,"box":{"x":70,"y":566,"width":798,"height":11}},{"id":"d4373fb4-06b2-47ec-89a5-5e5cd1786576","block_type":"box","text":"Arabia, which could affect private sector companies and a Fund, as well as the value of securities in a Fund’s","page_number":88,"box":{"x":68,"y":581,"width":781,"height":11}},{"id":"316b08db-2b52-4569-aa95-0f1436f072bf","block_type":"box","text":"portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian corporate entities, or even the threat","page_number":88,"box":{"x":70,"y":596,"width":836,"height":12}},{"id":"6887c805-4b72-46ab-9383-535fb2d95a1f","block_type":"box","text":"of sanctions, may result in the decline of the value and liquidity of Saudi Arabian securities, a weakening of the Saudi","page_number":88,"box":{"x":69,"y":612,"width":837,"height":11}},{"id":"a7a0cb30-199c-46e6-a259-90c1e1febb09","block_type":"box","text":"riyal or other adverse consequences to the Saudi Arabian economy. In addition, Saudi Arabia’s economy relies heavily","page_number":88,"box":{"x":69,"y":627,"width":838,"height":11}},{"id":"75f29439-b464-4519-9d08-a5a5f5b61ce9","block_type":"box","text":"on cheap, foreign labor, and changes in the availability of this labor supply could have an adverse effect on the","page_number":88,"box":{"x":69,"y":642,"width":790,"height":11}},{"id":"3ae31a45-10e2-4fdb-b548-adfd4ac0ac2e","block_type":"box","text":"economy.","page_number":88,"box":{"x":69,"y":659,"width":65,"height":9}},{"id":"b22823eb-400d-46b9-b65d-6c6bb12c6040","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a result,","page_number":88,"box":{"x":101,"y":680,"width":747,"height":11}},{"id":"8d77e557-7b91-4359-b401-ffd0f9835ab0","block_type":"box","text":"securities markets in Saudi Arabia are subject to greater risks associated with market volatility, lower market","page_number":88,"box":{"x":69,"y":695,"width":776,"height":11}},{"id":"22f32add-55d1-4e8a-9d59-27ecf66cc0df","block_type":"box","text":"capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations, uncertainty regarding the existence","page_number":88,"box":{"x":69,"y":710,"width":836,"height":11}},{"id":"617ee735-7fd8-48c2-b1ca-289965ece02a","block_type":"box","text":"of trading markets, governmental control and heavy regulation of labor and industry. Shares of certain Saudi Arabian","page_number":88,"box":{"x":69,"y":725,"width":830,"height":11}},{"id":"e8a93a49-2598-492d-9742-fe8a6bbb3c62","block_type":"box","text":"companies tend to trade less frequently than those of companies on exchanges in more developed markets. Such","page_number":88,"box":{"x":69,"y":740,"width":813,"height":11}},{"id":"e3ee2590-0b45-4739-a62b-7531fcc363b5","block_type":"box","text":"infrequent trading may adversely affect the pricing of these securities and a Fund’s ability to sell these securities in","page_number":88,"box":{"x":70,"y":755,"width":822,"height":11}},{"id":"37220041-8dcd-4345-a587-4744ba5909ae","block_type":"box","text":"the future. Current regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":88,"box":{"x":68,"y":770,"width":837,"height":12}},{"id":"d9dcc185-19b6-4ef6-b1fb-92a430fd9676","block_type":"box","text":"single broker. As a result, the Manager will have less flexibility to choose among brokers on behalf of a Fund than is","page_number":88,"box":{"x":69,"y":785,"width":826,"height":12}},{"id":"d743d33e-ae3c-4ce5-9e1f-7db99e1f7781","block_type":"box","text":"typically the case for investment managers.","page_number":88,"box":{"x":68,"y":801,"width":309,"height":11}},{"id":"d2ffb6dc-5be8-486c-a15c-beb422471fca","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically experienced political","page_number":88,"box":{"x":101,"y":823,"width":806,"height":12}},{"id":"b16a2382-7ac9-48c4-a0e3-7a277d73eb17","block_type":"box","text":"instability, and there remains the possibility that the stability will not hold in the future or that instability in the larger","page_number":88,"box":{"x":70,"y":838,"width":828,"height":12}},{"id":"203b1652-605b-43e0-8b64-b7bb039f8a63","block_type":"box","text":"Middle East region could adversely impact the economy of Saudi Arabia. Instability may be caused by military","page_number":88,"box":{"x":70,"y":853,"width":777,"height":12}},{"id":"ef0a833d-7265-4233-80eb-cd223d5822eb","block_type":"box","text":"developments, government interventions in the marketplace, terrorism, extremist attitudes, attempted social or","page_number":88,"box":{"x":69,"y":869,"width":796,"height":11}},{"id":"a5551346-3ac6-463f-ae24-976aac9c8ba4","block_type":"box","text":"political reforms, religious differences, or other factors. Additionally, anti-Western views held by certain groups in the","page_number":88,"box":{"x":70,"y":884,"width":830,"height":11}},{"id":"ec67ba1a-ee9f-4775-9f10-8a4fc0bafd17","block_type":"box","text":"Middle East may influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":88,"box":{"x":70,"y":899,"width":827,"height":11}},{"id":"2886af2e-a9b5-4a42-97c3-69b88e374483","block_type":"box","text":"II-39","page_number":88,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"8927cbc6-cb96-43f4-9595-552dd8835f93","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":88,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"70a380af-6dcf-440d-809c-ab783c06076c","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S. is a","page_number":89,"box":{"x":68,"y":45,"width":764,"height":11}},{"id":"dfb4f22f-798e-4f55-8c35-1a33cb5ae063","block_type":"box","text":"significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi Arabia. As a","page_number":89,"box":{"x":69,"y":60,"width":795,"height":11}},{"id":"53abedca-bab5-420d-b286-6208ac54e556","block_type":"box","text":"result, economic conditions of Saudi Arabia may be particularly affected by changes in the U.S. economy. A decrease","page_number":89,"box":{"x":69,"y":75,"width":835,"height":11}},{"id":"b605900d-0b16-40c9-b41d-125bd47b4a27","block_type":"box","text":"in U.S. imports or exports, new trade and financial regulations or tariffs, changes in the U.S. dollar exchange rate or","page_number":89,"box":{"x":70,"y":90,"width":829,"height":11}},{"id":"cb2c971c-9d5f-4bed-8785-f51c07a0748f","block_type":"box","text":"an economic slowdown in the U.S. may have a material adverse effect on the economic conditions of Saudi Arabia","page_number":89,"box":{"x":69,"y":105,"width":815,"height":11}},{"id":"b78bd04d-c1ba-4922-9db2-b3bb256b7b43","block_type":"box","text":"and, as a result, securities to which the Fund has exposure. Political instability in North Africa and the larger Middle","page_number":89,"box":{"x":69,"y":120,"width":825,"height":12}},{"id":"f4509119-d2f1-441b-b673-4f542dd4cd78","block_type":"box","text":"East region has caused significant disruptions to many industries. Continued political and social unrest in these","page_number":89,"box":{"x":70,"y":135,"width":797,"height":12}},{"id":"e718b5af-e123-41a9-bbed-8f33eee48572","block_type":"box","text":"areas may negatively affect the value of securities in a Fund’s portfolio.","page_number":89,"box":{"x":69,"y":150,"width":510,"height":12}},{"id":"6b6887b4-087e-4760-9b00-d75affb98b56","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to sanctions","page_number":89,"box":{"x":102,"y":173,"width":773,"height":11}},{"id":"b25b5012-4a73-45bc-a856-d694c3119fbf","block_type":"box","text":"and/or embargoes imposed by the U.S. Government and the United Nations and/or countries identified by the U.S.","page_number":89,"box":{"x":69,"y":188,"width":820,"height":12}},{"id":"3f35ee50-6e0f-4ef4-bdd1-ed6bf3509b1c","block_type":"box","text":"Government as state sponsors of terrorism. As a result, an issuer may sustain damage to its reputation if it is","page_number":89,"box":{"x":69,"y":203,"width":787,"height":12}},{"id":"90f9d188-d3db-436a-8506-5bb23e3718fa","block_type":"box","text":"identified as an issuer which operates in, or has dealings with, such countries. A Fund, as an investor in such issuers","page_number":89,"box":{"x":70,"y":218,"width":837,"height":12}},{"id":"222bb21b-29a5-4cfe-b46f-a0b3cc54c3c4","block_type":"box","text":"will be indirectly subject to those risks.","page_number":89,"box":{"x":68,"y":234,"width":277,"height":11}},{"id":"97d84965-0b3d-483b-bfcf-1975a1322c76","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":89,"box":{"x":102,"y":256,"width":223,"height":12}},{"id":"496f295b-2042-4f43-9af0-4d811055da85","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory, political,","page_number":89,"box":{"x":332,"y":257,"width":521,"height":11}},{"id":"1900648d-1a96-45a1-9c37-2845021e5c89","block_type":"box","text":"currency, security, expropriation and/or nationalization of assets and economic risk specific to Venezuela. Venezuela","page_number":89,"box":{"x":69,"y":271,"width":829,"height":12}},{"id":"e3bce4f3-de1d-4c72-8331-36a6a350337a","block_type":"box","text":"is extremely well endowed with natural resources, including oil and natural gas, and its economy is heavily dependent","page_number":89,"box":{"x":70,"y":287,"width":837,"height":11}},{"id":"56e116cc-185e-4103-9409-64df18f59e09","block_type":"box","text":"on export of natural resources to key trading partners. Any act of terrorism, an armed conflict or a breakdown of a","page_number":89,"box":{"x":69,"y":302,"width":813,"height":11}},{"id":"389ee932-65cb-4349-b785-c1e187b2fe1b","block_type":"box","text":"key trading relationship that disrupts the production or export of natural resources will likely negatively affect the","page_number":89,"box":{"x":69,"y":317,"width":804,"height":11}},{"id":"6d470ac5-89eb-4d32-8791-785c0219620a","block_type":"box","text":"Venezuelan economy. The government continues to control key sectors of the economy, including upstream oil and","page_number":89,"box":{"x":68,"y":332,"width":816,"height":11}},{"id":"244679e2-b49e-43c0-90bf-5c47ef44b1a2","block_type":"box","text":"gas production, and has sought to increase its role in key sectors, such as telecommunications and steel.","page_number":89,"box":{"x":68,"y":347,"width":758,"height":11}},{"id":"25dd536e-7e94-4789-8fd0-33d9a8f0c6cc","block_type":"box","text":"Meanwhile, ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":89,"box":{"x":70,"y":362,"width":803,"height":11}},{"id":"f6ccc84d-f1ce-4cc4-9dd4-2c1c2258d342","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues between the","page_number":89,"box":{"x":69,"y":377,"width":804,"height":12}},{"id":"25008a31-3971-4aa6-8e57-dd03f4a79d02","block_type":"box","text":"governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions, which consist of asset freezes","page_number":89,"box":{"x":68,"y":392,"width":822,"height":12}},{"id":"0cc33a9f-c11f-48c6-ba63-8d6226fb4da0","block_type":"box","text":"and sectoral sanctions, on certain Venezuelan individuals and Venezuelan corporate entities, and on the Venezuelan","page_number":89,"box":{"x":69,"y":408,"width":827,"height":10}},{"id":"aa72c536-b667-46f6-b33b-aa0c505eb8ac","block_type":"box","text":"government. The U.S. could also institute broader sanctions on Venezuela. The U.S. has also taken military action","page_number":89,"box":{"x":68,"y":423,"width":814,"height":11}},{"id":"5ba3394f-07cb-420e-92e9-63ee3ccc0a79","block_type":"box","text":"against Venezuela in an effort to effect regime change. Military action, sanctions, or even the threat of further","page_number":89,"box":{"x":69,"y":438,"width":787,"height":11}},{"id":"543c5817-ab32-4f6e-950b-d59b8412c0f4","block_type":"box","text":"military action and sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a","page_number":89,"box":{"x":69,"y":453,"width":766,"height":11}},{"id":"f5737a9e-71d5-4540-819e-00fc6302e371","block_type":"box","text":"weakening of the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":89,"box":{"x":68,"y":468,"width":804,"height":11}},{"id":"9b67e869-142b-4477-af67-6a42e6abe9e1","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions against Venezuela","page_number":89,"box":{"x":69,"y":483,"width":838,"height":11}},{"id":"fb395a9e-8f58-49eb-90ed-5b79734c94f5","block_type":"box","text":"may in the future be imposed by the U.S. or other countries. These factors, among others, can have a negative","page_number":89,"box":{"x":69,"y":498,"width":790,"height":11}},{"id":"b0c70713-2eff-4056-8388-b1acdaf1f9c6","block_type":"box","text":"impact on a Fund’s investments.","page_number":89,"box":{"x":70,"y":514,"width":230,"height":10}},{"id":"af65faba-da01-4a60-990a-03340f1dbe72","block_type":"box","text":"Brady Bonds.","page_number":89,"box":{"x":102,"y":536,"width":92,"height":11}},{"id":"0185b244-9952-4105-8e91-3b037f9b3131","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities may include","page_number":89,"box":{"x":201,"y":536,"width":689,"height":11}},{"id":"20dcb4ed-45a6-4e12-aadd-970884549947","block_type":"box","text":"emerging market governmental debt obligations commonly referred to as Brady Bonds. Brady Bonds are securities","page_number":89,"box":{"x":69,"y":551,"width":815,"height":11}},{"id":"04c9dfd2-e923-4cef-8e9c-3e359474b308","block_type":"box","text":"created through the exchange of existing commercial bank loans to sovereign entities for new obligations in","page_number":89,"box":{"x":69,"y":566,"width":766,"height":11}},{"id":"0b1b100d-9673-4628-b3eb-9ae452bf7299","block_type":"box","text":"connection with debt restructurings under a debt restructuring plan introduced by former U.S. Secretary of the","page_number":89,"box":{"x":69,"y":581,"width":784,"height":12}},{"id":"63c87cfe-fdd9-4b35-b922-955baf40e6f5","block_type":"box","text":"Treasury, Nicholas F. Brady (the “Brady Plan”). Brady Plan debt restructurings have been implemented in a number of","page_number":89,"box":{"x":68,"y":596,"width":837,"height":12}},{"id":"d08cfcd7-a756-4c06-8542-26661f288969","block_type":"box","text":"countries, including: Argentina, Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico,","page_number":89,"box":{"x":69,"y":612,"width":839,"height":11}},{"id":"c06a9203-5011-4b0c-a28d-648d24f0d7f6","block_type":"box","text":"Niger, Nigeria, Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. Beginning in the early","page_number":89,"box":{"x":70,"y":627,"width":786,"height":11}},{"id":"691fa74b-c72d-4823-b055-331c6e6ed975","block_type":"box","text":"2000s, certain countries began retiring their Brady Bonds, including Brazil, Colombia, Mexico, the Philippines, and","page_number":89,"box":{"x":69,"y":642,"width":814,"height":11}},{"id":"21da37ea-fa42-47ca-ab32-ba52f3148d2b","block_type":"box","text":"Venezuela.","page_number":89,"box":{"x":68,"y":657,"width":75,"height":9}},{"id":"3cd4dd6c-c735-4a0c-b981-fc9bf45ce78f","block_type":"box","text":"Brady Bonds may be collateralized or uncollateralized, are issued in various currencies (primarily the U.S. dollar)","page_number":89,"box":{"x":102,"y":680,"width":798,"height":11}},{"id":"83b9d78b-ef10-460e-b204-8da4c17882d9","block_type":"box","text":"and are actively traded in the OTC secondary market. Brady Bonds are not considered to be U.S. Government","page_number":89,"box":{"x":69,"y":695,"width":780,"height":11}},{"id":"41535ae2-de67-4a26-b74c-a0d1c1c1c2a3","block_type":"box","text":"Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed rate par bonds or floating rate","page_number":89,"box":{"x":69,"y":710,"width":812,"height":11}},{"id":"637c66f9-2063-4480-badf-a30d9279c723","block_type":"box","text":"discount bonds, are generally collateralized in full as to principal by U.S. Treasury zero-coupon bonds having the","page_number":89,"box":{"x":69,"y":725,"width":796,"height":11}},{"id":"fc01c90d-5614-4e01-8dc7-56d26daff13f","block_type":"box","text":"same maturity as the Brady Bonds. Interest payments on these Brady Bonds generally are collateralized on a one","page_number":89,"box":{"x":69,"y":740,"width":812,"height":11}},{"id":"9e0d4654-cc50-411d-8601-106d6e4307af","block_type":"box","text":"year or longer rolling-forward basis by cash or securities in an amount that, in the case of fixed rate bonds, is equal","page_number":89,"box":{"x":68,"y":755,"width":823,"height":11}},{"id":"87512435-1f80-452a-ae3b-e88f4f2649b2","block_type":"box","text":"to at least one year of interest payments or, in the case of floating rate bonds, initially is equal to at least one year’s","page_number":89,"box":{"x":68,"y":770,"width":833,"height":12}},{"id":"1a2e5f2a-8bbf-4ade-8b88-1ddf07b29bde","block_type":"box","text":"interest payments based on the applicable interest rate at that time and is adjusted at regular intervals thereafter.","page_number":89,"box":{"x":70,"y":785,"width":816,"height":12}},{"id":"9ad65f9b-1ddf-45fd-b211-d5a9880ee3ab","block_type":"box","text":"Certain Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect constitute","page_number":89,"box":{"x":69,"y":801,"width":818,"height":11}},{"id":"fe803fb3-e87a-44bb-a16e-d28c93d7ec33","block_type":"box","text":"supplemental interest payments but generally are not collateralized. Brady Bonds are often viewed as having three or","page_number":89,"box":{"x":69,"y":816,"width":835,"height":11}},{"id":"b35b95d0-b647-41f4-a74c-179aa7000d02","block_type":"box","text":"four valuation components: (i) the collateralized repayment of principal at final maturity; (ii) the collateralized interest","page_number":89,"box":{"x":68,"y":831,"width":832,"height":11}},{"id":"8d93c92d-f60b-41d0-a201-cf2061de9f48","block_type":"box","text":"payments; (iii) the uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity","page_number":89,"box":{"x":70,"y":846,"width":828,"height":11}},{"id":"8336c3a9-3dcc-4b68-adb6-c0f99911e935","block_type":"box","text":"(the uncollateralized amounts constitute the “residual risk”).","page_number":89,"box":{"x":69,"y":861,"width":430,"height":11}},{"id":"df92230a-e48c-42b2-9489-2178816c3f95","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign securities, including","page_number":89,"box":{"x":102,"y":884,"width":807,"height":11}},{"id":"d7b6ca9e-9059-4982-96ed-6193201af518","block_type":"box","text":"the history of defaults with respect to commercial bank loans by public and private entities of countries issuing Brady","page_number":89,"box":{"x":68,"y":899,"width":838,"height":11}},{"id":"cd20d473-737b-43b0-af03-8edb9f571873","block_type":"box","text":"II-40","page_number":89,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"e8cdbbcb-0252-4b63-8365-f50b1b6583f5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":89,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7d5585d8-3d41-4c47-ac2a-53b5ea2ed83b","block_type":"box","text":"Bonds. In light of the residual risk of Brady Bonds and, among other factors, the history of defaults, investments in","page_number":90,"box":{"x":70,"y":45,"width":819,"height":11}},{"id":"21f36c82-49c6-4987-baba-f3be02b72717","block_type":"box","text":"Brady Bonds are considered speculative. There can be no assurance that Brady Bonds in which the Funds may invest","page_number":90,"box":{"x":70,"y":60,"width":835,"height":11}},{"id":"b6318bf0-e618-4fa6-817e-548db04c4791","block_type":"box","text":"will not be subject to restructuring arrangements or to requests for new credit, which may cause the Funds to suffer a","page_number":90,"box":{"x":68,"y":75,"width":841,"height":11}},{"id":"10663bcd-4588-4dec-941c-e04b9d1031f7","block_type":"box","text":"loss of interest or principal on any of its holdings.","page_number":90,"box":{"x":70,"y":90,"width":351,"height":11}},{"id":"b7c5711c-0718-4832-a2d1-95771d4ab03f","block_type":"box","text":"China Investments Risk.","page_number":90,"box":{"x":102,"y":113,"width":171,"height":9}},{"id":"f65a11be-71d4-47c6-b06c-abc8b50227c5","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the “PRC”),","page_number":90,"box":{"x":102,"y":135,"width":763,"height":11}},{"id":"30d59434-0ebf-4cb4-9c95-d40e4ff241f9","block_type":"box","text":"including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and special considerations","page_number":90,"box":{"x":70,"y":150,"width":830,"height":12}},{"id":"dc5f8db9-3371-4a74-90b0-e32bd3594436","block_type":"box","text":"not typically associated with investing in the U.S. securities markets. Such heightened risks include, among others,","page_number":90,"box":{"x":69,"y":166,"width":821,"height":11}},{"id":"cb82eab6-dd24-46b8-baee-62734fcccbb5","block_type":"box","text":"an authoritarian government, popular unrest associated with demands for improved political, economic and social","page_number":90,"box":{"x":69,"y":181,"width":809,"height":11}},{"id":"80049bc2-d85f-4918-8e6f-0ad8b4d39959","block_type":"box","text":"conditions, the impact of regional conflict on the economy and hostile relations with other countries.","page_number":90,"box":{"x":69,"y":196,"width":713,"height":11}},{"id":"314f5729-059b-4cbc-87d2-675f8fb8f727","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could disrupt","page_number":90,"box":{"x":102,"y":218,"width":762,"height":12}},{"id":"297d1cdc-5c22-4ce0-9755-aff630c1f6a3","block_type":"box","text":"economic development. The Chinese economy is vulnerable to the long-running disagreements and religious and","page_number":90,"box":{"x":69,"y":234,"width":800,"height":11}},{"id":"c4f992e1-1af8-486c-b8c5-a7f9b56b7048","block_type":"box","text":"nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been tensions between the Chinese","page_number":90,"box":{"x":69,"y":249,"width":820,"height":11}},{"id":"f7d169e9-1979-4b1f-86d4-80c8f2dc86fc","block_type":"box","text":"government and many people in Hong Kong who perceive China as tightening control over Hong Kong’s semi","page_number":90,"box":{"x":68,"y":264,"width":777,"height":11}},{"id":"5599cbe3-3bef-4748-b1a9-af56e6a52972","block_type":"box","text":"autonomous liberal political, economic, legal, and social framework. Protests and unrest have increased tensions","page_number":90,"box":{"x":69,"y":279,"width":809,"height":11}},{"id":"4f19b57b-1af5-43b0-9854-cf99b66c9b8b","block_type":"box","text":"even further. Due to the interconnected nature of the Hong Kong and Chinese economies, this instability in Hong","page_number":90,"box":{"x":69,"y":294,"width":805,"height":11}},{"id":"987af171-d0cb-4a51-9247-8cdb3dbb8eb5","block_type":"box","text":"Kong may cause uncertainty in the Hong Kong and Chinese markets. China has a complex territorial dispute","page_number":90,"box":{"x":70,"y":309,"width":770,"height":11}},{"id":"2a557256-082b-426a-94cb-78311bed7ac3","block_type":"box","text":"regarding the sovereignty of Taiwan and has made threats of invasion. Taiwan-based companies and individuals are","page_number":90,"box":{"x":69,"y":324,"width":821,"height":12}},{"id":"3d06cba2-c14e-4129-a7e2-2367bbea50d6","block_type":"box","text":"significant investors in China. The continuing hostility between China and Taiwan may have an adverse impact on the","page_number":90,"box":{"x":69,"y":339,"width":831,"height":12}},{"id":"5b2fad48-1121-4ea7-9210-e088c725bbd4","block_type":"box","text":"value of the Fund’s investments in China or Taiwan, may cause a suspension in a Fund’s ability to trade in certain","page_number":90,"box":{"x":68,"y":355,"width":812,"height":11}},{"id":"8cf25c9f-c5f0-46a8-83cd-37e7630757e3","block_type":"box","text":"securities or other assets or may otherwise make such investments impracticable or impossible. Any escalation of","page_number":90,"box":{"x":69,"y":370,"width":818,"height":11}},{"id":"4be02b4d-33c2-4ad4-bcd9-23ef8f93ae50","block_type":"box","text":"hostility between China and Taiwan would likely have a significant adverse impact on the value of the Fund’s","page_number":90,"box":{"x":69,"y":385,"width":769,"height":11}},{"id":"208fab17-c34b-489b-8620-2c2fc5eb716b","block_type":"box","text":"investments in both countries and the region. In addition, China has strained international relations with Japan, India,","page_number":90,"box":{"x":70,"y":400,"width":836,"height":11}},{"id":"582fe118-d93c-4c0f-ac4b-aecee8b257b3","block_type":"box","text":"the Philippines and other neighbors due to territorial disputes, historical animosities and other defense concerns.","page_number":90,"box":{"x":68,"y":415,"width":810,"height":11}},{"id":"1eb18233-b393-47d5-aad0-cb96a616479f","block_type":"box","text":"Frictions between China and the Philippines in the South China Sea pose a risk of escalation potentially leading to","page_number":90,"box":{"x":70,"y":430,"width":813,"height":11}},{"id":"df2f4b2d-8556-4826-a7d7-6027e1aebe6b","block_type":"box","text":"military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks against foreign","page_number":90,"box":{"x":69,"y":445,"width":811,"height":12}},{"id":"e1d591c9-145d-4157-baba-11615edae4ac","block_type":"box","text":"companies and foreign governments. Actual and threatened responses to such activity and strained international","page_number":90,"box":{"x":69,"y":460,"width":804,"height":12}},{"id":"0dcc10c0-07c8-4842-b89f-5ac7b96acdff","block_type":"box","text":"relations, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese government or Chinese","page_number":90,"box":{"x":69,"y":475,"width":829,"height":12}},{"id":"dc6a10d6-f75d-446b-98e5-881a1153ec25","block_type":"box","text":"companies, may impact China’s economy and Chinese issuers of securities in which a Fund invests. China could be","page_number":90,"box":{"x":69,"y":491,"width":825,"height":11}},{"id":"e57b4ddc-05bc-478f-8825-dc196ef00600","block_type":"box","text":"affected by military events on the Korean peninsula or internal instability within North Korea. These situations may","page_number":90,"box":{"x":69,"y":506,"width":819,"height":11}},{"id":"0f0302ec-35ee-47c7-a3b0-4835fdb61cce","block_type":"box","text":"cause uncertainty in the Chinese market and may adversely affect the performance of the Chinese economy.","page_number":90,"box":{"x":69,"y":521,"width":776,"height":11}},{"id":"ba238788-0ffc-420f-90b8-44c397944919","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy, promote foreign","page_number":90,"box":{"x":101,"y":543,"width":792,"height":12}},{"id":"afb335c5-1861-4af7-b01c-f10c5858c1df","block_type":"box","text":"investment in the economy, reduce government control of the economy and develop market mechanisms. However,","page_number":90,"box":{"x":70,"y":559,"width":818,"height":11}},{"id":"7845c096-ff30-489b-af13-d445caac0bab","block_type":"box","text":"the Chinese government still exercises substantial influence over many aspects of the private sector and may own or","page_number":90,"box":{"x":68,"y":574,"width":835,"height":11}},{"id":"56ce9b66-7139-492c-8b77-1470aac7fc3b","block_type":"box","text":"control many companies. Chinese companies, such as those in the financial services or technology sectors, and","page_number":90,"box":{"x":69,"y":589,"width":802,"height":11}},{"id":"c76568ec-6f3d-43a3-a65b-97f71edf4b4c","block_type":"box","text":"potentially other sectors in the future, are subject to the risk that Chinese authorities can intervene in their","page_number":90,"box":{"x":70,"y":604,"width":763,"height":11}},{"id":"236c17bd-2c8f-4792-bbef-6caff1bc7085","block_type":"box","text":"operations and structure. The Chinese government continues to maintain a major role in economic policymaking and","page_number":90,"box":{"x":69,"y":619,"width":829,"height":11}},{"id":"5c4b8f59-590a-41c4-be09-f676d7c94d67","block_type":"box","text":"investing in China involves risk of loss due to expropriation, nationalization, confiscation of assets and property or","page_number":90,"box":{"x":70,"y":634,"width":813,"height":12}},{"id":"b14f8fa4-72c4-42de-887e-8992f9f3e22f","block_type":"box","text":"the imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":90,"box":{"x":68,"y":649,"width":653,"height":12}},{"id":"cfb434ee-fd2e-4c0e-af06-6afb2f60118f","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of trading","page_number":90,"box":{"x":101,"y":672,"width":783,"height":11}},{"id":"547b638b-dc01-4b5a-be65-6e2fa58cb00b","block_type":"box","text":"restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks. This may affect","page_number":90,"box":{"x":69,"y":687,"width":805,"height":11}},{"id":"6413b340-1c2b-49df-9bed-d8962f1813dd","block_type":"box","text":"market price and liquidity of these stocks, and may have an unpredictable impact on the investment activities of the","page_number":90,"box":{"x":69,"y":702,"width":827,"height":11}},{"id":"45408d7e-5892-4f78-97d4-8ae78d453c9a","block_type":"box","text":"Funds. Furthermore, such market interventions may have a negative impact on market sentiment which may in turn","page_number":90,"box":{"x":70,"y":718,"width":821,"height":11}},{"id":"40287836-a44b-4cbf-9c25-dd507655855e","block_type":"box","text":"affect the performance of the securities markets and as a result the performance of the Funds.","page_number":90,"box":{"x":69,"y":732,"width":683,"height":11}},{"id":"1e8650f2-9613-4b5c-9512-77699276e40a","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of investors,","page_number":90,"box":{"x":102,"y":755,"width":797,"height":11}},{"id":"ddd81b38-6761-4fbf-bbfc-5a278934e6b1","block_type":"box","text":"brokers and other participants than in the United States. Accordingly, issuers of securities in China, including","page_number":90,"box":{"x":69,"y":770,"width":779,"height":12}},{"id":"f14ce6ac-0118-43fb-a5e4-e3786acf17e3","block_type":"box","text":"Chinese companies that are listed on U.S. exchanges, are not subject to the same degree of regulation as are U.S.","page_number":90,"box":{"x":69,"y":785,"width":822,"height":12}},{"id":"55f7349a-eb8b-4719-bd18-3408b59b0949","block_type":"box","text":"issuers with respect to such matters as insider trading rules, tender offer regulation, accounting standards or auditor","page_number":90,"box":{"x":70,"y":801,"width":836,"height":11}},{"id":"b912f412-fa74-4880-80c4-0e2ecc96e15d","block_type":"box","text":"oversight, stockholder proxy requirements and the requirements mandating timely and accurate disclosure of","page_number":90,"box":{"x":69,"y":816,"width":778,"height":11}},{"id":"e5d923c8-99af-4191-9912-c7473fa35d43","block_type":"box","text":"information. Securities markets in China are in the process of change and further development. This may lead to","page_number":90,"box":{"x":70,"y":831,"width":803,"height":11}},{"id":"872e1c28-9329-49ae-b175-bec0e31dd72a","block_type":"box","text":"trading volatility, difficulty in the settlement and recording of transactions and difficulty in interpreting and applying","page_number":90,"box":{"x":68,"y":846,"width":816,"height":11}},{"id":"28d15226-42ac-4a7f-874d-06bb05720e68","block_type":"box","text":"the relevant regulation. Custodians may not be able to offer the level of service and safe-keeping in relation to the","page_number":90,"box":{"x":68,"y":861,"width":816,"height":11}},{"id":"308f4add-2351-4452-ae5b-3ddcf490110a","block_type":"box","text":"settlement and administration of securities in China that is customary in more developed markets. In particular,","page_number":90,"box":{"x":69,"y":876,"width":798,"height":11}},{"id":"d3ce2ef9-d19b-4b55-b6b9-a7d9f7b573e4","block_type":"box","text":"there is a risk that a Fund may not be recognized as the owner of securities that are held on behalf of the Fund by a","page_number":90,"box":{"x":68,"y":891,"width":826,"height":12}},{"id":"3de5332f-6014-481d-836d-d72af02c21d9","block_type":"box","text":"sub-custodian.","page_number":90,"box":{"x":69,"y":907,"width":102,"height":8}},{"id":"b036b331-14a3-43cc-b156-0d870d8c3870","block_type":"box","text":"II-41","page_number":90,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"c21a04a6-a3a5-4ab0-9a1d-e9865358d287","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":90,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"5472f3a3-b7f1-441a-bbf8-f196971b7bef","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or litigation against","page_number":91,"box":{"x":101,"y":45,"width":801,"height":11}},{"id":"8d05303d-703b-4a11-aed6-f5f4101f05be","block_type":"box","text":"Chinese companies, and shareholders may have limited legal remedies. The Funds do not select investments based","page_number":91,"box":{"x":69,"y":60,"width":829,"height":11}},{"id":"721a1d8d-867f-4185-9fba-f1061723af3a","block_type":"box","text":"on investor protection considerations.","page_number":91,"box":{"x":69,"y":75,"width":268,"height":11}},{"id":"6eb9e5cb-d21b-4d01-8aca-4c59de2f1363","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company Accounting Oversight","page_number":91,"box":{"x":101,"y":98,"width":806,"height":11}},{"id":"c1a27401-ce6c-4cec-971b-6eddfcbbab26","block_type":"box","text":"Board (“PCAOB”) from inspecting the audit work and practices of accounting firms in mainland China and Hong Kong","page_number":91,"box":{"x":70,"y":113,"width":829,"height":11}},{"id":"095c65e6-3624-466f-b3ac-de7053385c0f","block_type":"box","text":"for compliance with U.S. law and professional standards. On August 26, 2022, the PCAOB signed a Statement of","page_number":91,"box":{"x":68,"y":128,"width":810,"height":11}},{"id":"76e54066-e506-4118-828c-316dcc9c85b8","block_type":"box","text":"Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the PRC, which marked the","page_number":91,"box":{"x":69,"y":143,"width":829,"height":11}},{"id":"e09f8a98-98b6-42c9-89b8-19833fac9f0b","block_type":"box","text":"first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms","page_number":91,"box":{"x":68,"y":158,"width":774,"height":11}},{"id":"a41dc9a1-a916-42c1-a5ab-64635d62009b","block_type":"box","text":"headquartered in mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":91,"box":{"x":69,"y":173,"width":760,"height":11}},{"id":"88ea9280-5906-4798-a656-d804158ea423","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested. Audits","page_number":91,"box":{"x":69,"y":188,"width":788,"height":11}},{"id":"4b6ada0e-e68b-4299-be40-d62e4abc9a7b","block_type":"box","text":"performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be less reliable than those","page_number":91,"box":{"x":70,"y":203,"width":822,"height":12}},{"id":"4c85bc01-08a3-4470-835f-5c20bf26f582","block_type":"box","text":"performed by firms subject to PCAOB inspection. Accordingly, information about the Chinese securities in which the","page_number":91,"box":{"x":70,"y":218,"width":821,"height":12}},{"id":"cc95a5e9-5a2d-4118-9481-3ee0e7adaefd","block_type":"box","text":"Funds invest may be less reliable or complete. Under amendments to the Sarbanes-Oxley Act enacted in December","page_number":91,"box":{"x":70,"y":234,"width":820,"height":11}},{"id":"c9be90b6-b179-4946-a520-039e31a652eb","block_type":"box","text":"2020, which requires that the PCAOB be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer,","page_number":91,"box":{"x":69,"y":249,"width":805,"height":11}},{"id":"6f2799da-db02-4cb5-b8dd-a277ee5e5d32","block_type":"box","text":"Chinese companies with securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":91,"box":{"x":69,"y":264,"width":816,"height":11}},{"id":"d55382d3-e285-442e-884f-d569a620ed92","block_type":"box","text":"accounting firm.","page_number":91,"box":{"x":69,"y":279,"width":112,"height":11}},{"id":"c112eb46-8326-40b3-8527-96a8426e7b48","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange control","page_number":91,"box":{"x":101,"y":302,"width":780,"height":11}},{"id":"099f12a4-0715-4e6f-a0fa-a7aff78c09ec","block_type":"box","text":"policies and repatriation restrictions imposed by the Chinese government. The imposition of currency controls may","page_number":91,"box":{"x":70,"y":317,"width":815,"height":11}},{"id":"2d79caac-f2db-4dd7-bc2a-a87eb6d5dd37","block_type":"box","text":"negatively impact performance and liquidity of the Funds as capital may become trapped in the PRC. The Funds could","page_number":91,"box":{"x":69,"y":332,"width":837,"height":11}},{"id":"896ac3e2-45d3-424b-a6d0-561b8956923f","block_type":"box","text":"be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of","page_number":91,"box":{"x":69,"y":347,"width":787,"height":11}},{"id":"c2cd2b41-c769-41f4-8ff0-6571cbd17500","block_type":"box","text":"capital, as well as by the application to the Funds of any restrictions on investments. Investing in entities either in, or","page_number":91,"box":{"x":69,"y":362,"width":837,"height":11}},{"id":"c5d10334-c4f9-4ac8-8f2a-1d6950cbcf80","block_type":"box","text":"which have a substantial portion of their operations in, the PRC may require the Funds to adopt special procedures,","page_number":91,"box":{"x":68,"y":377,"width":825,"height":11}},{"id":"f2585a31-2c2b-44da-b91f-080034a842be","block_type":"box","text":"seek local government approvals or take other actions, each of which may involve additional costs and delays to the","page_number":91,"box":{"x":69,"y":392,"width":828,"height":12}},{"id":"53813014-b1d1-438c-82c1-6b99a9231cd2","block_type":"box","text":"Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and RMB, as well as in","page_number":91,"box":{"x":70,"y":408,"width":812,"height":11}},{"id":"eeccc9fc-645b-4788-bb5c-22979dc926e3","block_type":"box","text":"connection with conversions between the two separate types of RMB, the onshore RMB (“CNY”) and the offshore","page_number":91,"box":{"x":69,"y":423,"width":808,"height":11}},{"id":"dbbe17f8-8f94-4de4-9e1e-3124224db598","block_type":"box","text":"RMB (“CNH”).","page_number":91,"box":{"x":70,"y":438,"width":97,"height":11}},{"id":"b809895e-3dc6-445d-8f85-14f4a7aed788","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their structure as a","page_number":91,"box":{"x":102,"y":460,"width":802,"height":12}},{"id":"72746e27-23f5-4e11-b510-5ff217f5b364","block_type":"box","text":"result of foreign ownership restrictions. In a VIE structure, a Chinese operating company establishes a shell company","page_number":91,"box":{"x":69,"y":475,"width":837,"height":12}},{"id":"c69391c0-bf53-4c04-99bc-30a56b6c6ee6","block_type":"box","text":"in another jurisdiction to issue stock to public shareholders. When a VIE structure is used by a Chinese company to","page_number":91,"box":{"x":70,"y":491,"width":822,"height":11}},{"id":"5ffb3028-7531-41a6-974a-13bb8f2b186e","block_type":"box","text":"list its stock in the U.S., instead of owning the equity securities of the Chinese company, the U.S.-listed shell","page_number":91,"box":{"x":70,"y":506,"width":775,"height":11}},{"id":"472392c4-331b-4239-98ad-0f0a1ee01b04","block_type":"box","text":"company directly or indirectly enters into contracts with the Chinese operating company under Chinese law. These","page_number":91,"box":{"x":69,"y":521,"width":809,"height":11}},{"id":"4c2a92fd-c1dd-4a9a-bfa0-23942aac1e91","block_type":"box","text":"contracts provide the U.S.-listed shell company with only economic exposure to the Chinese company and do not","page_number":91,"box":{"x":69,"y":536,"width":803,"height":11}},{"id":"b4f82749-e515-4377-8106-d7c718793919","block_type":"box","text":"represent equity ownership in the operating company.","page_number":91,"box":{"x":69,"y":551,"width":380,"height":11}},{"id":"524bafe7-3b46-4eeb-b1a2-b2bd65d75ea2","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have not been","page_number":91,"box":{"x":101,"y":574,"width":801,"height":11}},{"id":"fd8c3f7c-d617-470d-9e5a-31ffa0057c9d","block_type":"box","text":"formally recognized under Chinese law. The Chinese government has provided guidance to and placed restrictions on","page_number":91,"box":{"x":68,"y":589,"width":833,"height":11}},{"id":"449803ed-afb9-450c-8573-6855faba358f","block_type":"box","text":"Chinese-based companies raising capital offshore, including through VIEs. In 2023, the China Securities Regulatory","page_number":91,"box":{"x":69,"y":604,"width":825,"height":11}},{"id":"497545fe-92e5-475b-bc12-ff8d1eba3609","block_type":"box","text":"Commission (“CSRC”) released new rules that permit the use of VIE structures, provided they abide by Chinese laws","page_number":91,"box":{"x":69,"y":619,"width":832,"height":11}},{"id":"ee1eed4f-3b99-4287-b6de-2f3c1af5c2fb","block_type":"box","text":"and register with the CSRC. The rules, however, may cause Chinese companies to undergo greater scrutiny and add","page_number":91,"box":{"x":69,"y":634,"width":826,"height":12}},{"id":"81be3255-509b-4e1e-83de-70613add5d64","block_type":"box","text":"costs to VIE structures. Intervention, rulemaking or guidance by the Chinese government with respect to VIE","page_number":91,"box":{"x":69,"y":649,"width":770,"height":12}},{"id":"1b518f9b-adcf-42ae-81c8-418494c2d8ae","block_type":"box","text":"structures or the non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":91,"box":{"x":69,"y":664,"width":829,"height":12}},{"id":"ccb8868d-53ba-4bf0-a3f2-5a401ca0c925","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with the Chinese","page_number":91,"box":{"x":69,"y":680,"width":815,"height":11}},{"id":"ef223c9e-9702-40ab-b879-ea2f0cf69509","block_type":"box","text":"company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement would likely be subject to","page_number":91,"box":{"x":69,"y":695,"width":815,"height":11}},{"id":"5262acd4-8cbe-4dc2-b65a-f4298e8dd587","block_type":"box","text":"Chinese law and jurisdiction, and remedies available to the U.S.-listed shell company are uncertain and could be","page_number":91,"box":{"x":69,"y":710,"width":802,"height":11}},{"id":"e869f035-5c34-404f-8b77-5813d9c8fefc","block_type":"box","text":"ineffective. In addition to the risk of government intervention, investments through a VIE structure are subject to the","page_number":91,"box":{"x":70,"y":725,"width":828,"height":11}},{"id":"a96537b6-7767-48c0-873a-4aa2eb0c99f8","block_type":"box","text":"risk that the China-based company (or its officers, directors, or Chinese equity owners) may breach those contractual","page_number":91,"box":{"x":69,"y":740,"width":833,"height":11}},{"id":"a088513a-6012-427b-93a9-04aa3e9e369e","block_type":"box","text":"arrangements, or Chinese law changes in a way that adversely affects the enforceability of these arrangements, or","page_number":91,"box":{"x":69,"y":755,"width":819,"height":11}},{"id":"95c0f258-4500-4651-a0a4-7535956f0333","block_type":"box","text":"those contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer significant","page_number":91,"box":{"x":68,"y":770,"width":798,"height":12}},{"id":"3d3a79d5-d8f9-4dd7-bb04-5d63e4a38238","block_type":"box","text":"losses on its investments through a VIE structure with little or no recourse available. Any change in the operations of","page_number":91,"box":{"x":70,"y":785,"width":833,"height":12}},{"id":"fa63713e-ff69-4ecc-9bf8-2dbfc8ecb092","block_type":"box","text":"entities in a VIE structure, the status of VIE contractual arrangements or the legal or regulatory environment in China,","page_number":91,"box":{"x":69,"y":801,"width":837,"height":11}},{"id":"bf704396-357a-4f54-98ef-faa414ecf566","block_type":"box","text":"generally or with respect to specific industries, could result in significant, and possibly permanent and/or total,","page_number":91,"box":{"x":68,"y":816,"width":792,"height":11}},{"id":"b956d352-c987-4551-8c12-3437141f34e2","block_type":"box","text":"losses to a Fund.","page_number":91,"box":{"x":70,"y":831,"width":120,"height":9}},{"id":"91fa787e-0304-4c30-b905-99e7a0abf6dc","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that such","page_number":91,"box":{"x":101,"y":853,"width":760,"height":12}},{"id":"a3ed7177-7a82-4d5f-b1a5-dc883516a70c","block_type":"box","text":"growth rates will recur. Other economic challenges for China include indebtedness, weak consumer demand, trade","page_number":91,"box":{"x":68,"y":869,"width":815,"height":11}},{"id":"5c8f9c23-fca3-4e53-9089-768e1ba22518","block_type":"box","text":"tensions, and an aging population. China continues to face pressure from its trading partners over its exporting of its","page_number":91,"box":{"x":68,"y":884,"width":837,"height":11}},{"id":"12711fea-b24c-4ccb-8f95-d8409bc295e4","block_type":"box","text":"excess industrial capacity and overall approach to economic management. China’s economy is heavily dependent on","page_number":91,"box":{"x":69,"y":899,"width":830,"height":11}},{"id":"900f00e4-a90e-43e5-a880-8c04e0a4bf94","block_type":"box","text":"II-42","page_number":91,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"6d2047dd-8657-48ae-8212-481e1b68794f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":91,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"819f79ac-82d3-48e0-be9d-7d3478ebddaa","block_type":"box","text":"export growth. Reduction in spending on Chinese products and services, supply chain diversification, institution of","page_number":92,"box":{"x":69,"y":45,"width":815,"height":11}},{"id":"4df9b6b8-874f-4059-a92d-7aaa13214953","block_type":"box","text":"additional tariffs, sanctions or other trade barriers (including as a result of heightened trade tensions between China","page_number":92,"box":{"x":69,"y":60,"width":832,"height":11}},{"id":"468e5922-d768-4d2e-bb60-f88520342660","block_type":"box","text":"and the United States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":92,"box":{"x":69,"y":75,"width":765,"height":11}},{"id":"3cad0ae4-7f2d-4c22-978b-0f117ddd2cb7","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and the companies","page_number":92,"box":{"x":69,"y":90,"width":833,"height":11}},{"id":"884aa650-8cdc-4b8e-9872-3023f2959bb5","block_type":"box","text":"in which a Fund invests. Certain Chinese companies (which may change from time to time) are directly or indirectly","page_number":92,"box":{"x":70,"y":105,"width":816,"height":11}},{"id":"bf2a544a-e341-46a5-b599-bebf34bf3780","block_type":"box","text":"subject to economic or trade restrictions imposed by the U.S. or other governments due to national security, human","page_number":92,"box":{"x":69,"y":120,"width":824,"height":12}},{"id":"5b5439db-e5c8-4cb6-8d41-aaef092d6bfe","block_type":"box","text":"rights or other concerns of such government. For example, certain foreign technology companies are subject to U.S.","page_number":92,"box":{"x":69,"y":135,"width":825,"height":12}},{"id":"dbd7ec27-f27d-4a3a-96a9-d500f1975cef","block_type":"box","text":"export controls as those companies are believed to pose a risk to U.S. interests. The U.S. also bans imports of","page_number":92,"box":{"x":69,"y":150,"width":798,"height":11}},{"id":"f89d88bf-1caf-4d53-ade3-cbe78651fcea","block_type":"box","text":"goods produced in certain regions of China or by certain Chinese companies due to concerns about forced labor.","page_number":92,"box":{"x":68,"y":166,"width":805,"height":11}},{"id":"cfb2b5b1-c9d5-4e08-9983-6955c6813b50","block_type":"box","text":"Such restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any action","page_number":92,"box":{"x":69,"y":181,"width":817,"height":11}},{"id":"121d6bde-a7d0-4712-a71b-4a0b4a853e40","block_type":"box","text":"that targets Chinese financial markets or securities exchanges could interfere with orderly trading, delay settlement","page_number":92,"box":{"x":68,"y":196,"width":825,"height":11}},{"id":"05097461-b16f-4dde-8d9c-1e0dbd3f7357","block_type":"box","text":"or cause market disruptions. Certain companies may be subject to economic or trade restrictions (but not investment","page_number":92,"box":{"x":69,"y":211,"width":839,"height":11}},{"id":"35e55e31-03e0-4371-b7b1-e56ed27120b9","block_type":"box","text":"restrictions) imposed by the U.S. or other governments due to national security, human rights or other concerns of","page_number":92,"box":{"x":69,"y":226,"width":815,"height":11}},{"id":"d5f217c5-bc95-45b5-b332-d0491147115f","block_type":"box","text":"such government. So long as these restrictions do not include restrictions on investments, the Fund may invest in","page_number":92,"box":{"x":69,"y":241,"width":812,"height":11}},{"id":"49043aea-badb-4c26-bc0f-7cbe13c5bb8b","block_type":"box","text":"such companies.","page_number":92,"box":{"x":69,"y":257,"width":119,"height":10}},{"id":"2ed2c97f-969f-4548-9905-2cb553766efb","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative guidance","page_number":92,"box":{"x":101,"y":279,"width":792,"height":11}},{"id":"d64c6e40-0ba3-4574-bbd5-1995c9490e79","block_type":"box","text":"or enforcement, possibly with retroactive effect. The interpretation, applicability and enforcement of such laws by PRC","page_number":92,"box":{"x":69,"y":294,"width":840,"height":11}},{"id":"6302ebeb-4f5c-4f44-b49c-a8f545190f0e","block_type":"box","text":"tax authorities are not as consistent and transparent as those of more developed nations, and may vary over time","page_number":92,"box":{"x":68,"y":309,"width":815,"height":11}},{"id":"e28913c9-74b0-4c75-bd51-ea3907b2c2cc","block_type":"box","text":"and from region to region. The application and enforcement of PRC tax rules could have a significant adverse effect","page_number":92,"box":{"x":69,"y":324,"width":823,"height":12}},{"id":"20a9b9f7-6d92-4461-9431-5e71269d480b","block_type":"box","text":"on a Fund and its investors, particularly in relation to capital gains withholding tax imposed upon non-residents. In","page_number":92,"box":{"x":69,"y":340,"width":812,"height":11}},{"id":"0826674a-624d-401e-99b2-79b32adf70e5","block_type":"box","text":"addition, the accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":92,"box":{"x":69,"y":355,"width":821,"height":11}},{"id":"6a6ea079-c8ab-4367-a5b1-52c3ed306eda","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared in accordance","page_number":92,"box":{"x":69,"y":370,"width":832,"height":11}},{"id":"ca9c0f39-0f81-4175-a96b-8488e858cb6b","block_type":"box","text":"with PRC accounting standards and practice and those prepared in accordance with international accounting","page_number":92,"box":{"x":68,"y":385,"width":773,"height":11}},{"id":"3e718a57-2f1d-4d6a-b3bd-d1fe1f44eca2","block_type":"box","text":"standards.","page_number":92,"box":{"x":69,"y":400,"width":74,"height":9}},{"id":"a75e9829-cef6-4c12-a5a7-19124e520723","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the country","page_number":92,"box":{"x":102,"y":423,"width":794,"height":11}},{"id":"b8c10de3-7eaf-4c5f-bd30-f27273e5cbc8","block_type":"box","text":"may be subject to other public health threats, infectious illnesses, diseases or similar issues in the future. Any","page_number":92,"box":{"x":69,"y":438,"width":792,"height":11}},{"id":"9a7b6a76-3061-42d5-b55b-b9bb4cb39599","block_type":"box","text":"spread of an infectious illness, public health threat or similar issue could reduce consumer demand or economic","page_number":92,"box":{"x":69,"y":453,"width":803,"height":11}},{"id":"857e7f87-a1e5-4a82-9f5e-c769c91ed67c","block_type":"box","text":"output, result in market closures, travel restrictions or quarantines, and generally have a significant impact on the","page_number":92,"box":{"x":69,"y":468,"width":811,"height":11}},{"id":"3cc27974-7c71-4b60-9a52-91ec4ea13b80","block_type":"box","text":"Chinese economy, which in turn could adversely affect a Fund’s investments.","page_number":92,"box":{"x":69,"y":483,"width":548,"height":11}},{"id":"04c9430a-0cad-4315-a220-70cc5173c113","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":92,"box":{"x":102,"y":506,"width":288,"height":11}},{"id":"d8ed9fcd-879a-4c4e-96c6-34af061e1ff7","block_type":"box","text":"General","page_number":92,"box":{"x":102,"y":529,"width":55,"height":8}},{"id":"f56e9598-aebd-435b-9ed4-8700e33561f0","block_type":"box","text":". China A-shares are equity securities of companies domiciled in China that trade on Chinese stock","page_number":92,"box":{"x":158,"y":528,"width":704,"height":12}},{"id":"654fc849-1eb5-420b-8c1d-c5c5dec958c4","block_type":"box","text":"exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange (“SZSE”) and the Beijing","page_number":92,"box":{"x":69,"y":544,"width":815,"height":11}},{"id":"5930b8a8-39a3-4143-8697-1a2dbcd08e13","block_type":"box","text":"Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the SSE and SZSE is not permitted, other","page_number":92,"box":{"x":69,"y":559,"width":815,"height":11}},{"id":"03627c0b-460b-4c17-8b1e-5943bd1811aa","block_type":"box","text":"than pursuant to available exceptions, such as through a qualified foreign investor approved pursuant to the relevant","page_number":92,"box":{"x":68,"y":574,"width":833,"height":11}},{"id":"aa9b651f-4f8a-48da-b68c-ad14d7eb18b2","block_type":"box","text":"mainland China laws and regulations as may be promulgated and/or amended from time to time (“QFI”).","page_number":92,"box":{"x":69,"y":589,"width":744,"height":11}},{"id":"3aeeafa0-0b62-4525-88fa-9b6b92e9fc61","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE (“Stock","page_number":92,"box":{"x":102,"y":612,"width":745,"height":11}},{"id":"b451e34b-a4a0-45f5-82c2-8ec6e6a3e8a2","block_type":"box","text":"Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect program or the Shenzhen","page_number":92,"box":{"x":69,"y":627,"width":807,"height":11}},{"id":"a9670e5a-41dd-43d8-be90-26a098931425","block_type":"box","text":"Hong Kong Stock Connect program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). Each","page_number":92,"box":{"x":70,"y":642,"width":834,"height":11}},{"id":"a55e60bb-a4f7-49b8-b88d-98f43522a63a","block_type":"box","text":"Stock Connect is a securities trading and clearing links program established by The Stock Exchange of Hong Kong","page_number":92,"box":{"x":69,"y":657,"width":812,"height":11}},{"id":"dfd09994-92dd-4bfe-8e45-31729c5140f5","block_type":"box","text":"Limited (“SEHK”), the Hong Kong Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable,","page_number":92,"box":{"x":70,"y":672,"width":819,"height":11}},{"id":"3860a764-7b2e-47ab-9971-509896b98175","block_type":"box","text":"and China Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":92,"box":{"x":69,"y":687,"width":793,"height":11}},{"id":"e8d35958-26bc-461d-8692-4e8a36547224","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on each market","page_number":92,"box":{"x":69,"y":702,"width":818,"height":12}},{"id":"99c6b9ca-4930-4fad-a67a-b2de9b832cf9","block_type":"box","text":"through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock Connect Securities listed on","page_number":92,"box":{"x":68,"y":717,"width":824,"height":12}},{"id":"2b0f3201-1a7f-4e1f-a9c2-acf68e8a7ada","block_type":"box","text":"the SSE or SZSE, as applicable, would be effectuated through its Hong Kong broker and a securities trading service","page_number":92,"box":{"x":68,"y":732,"width":827,"height":12}},{"id":"442954f3-c323-47dd-b2c4-63d5ca02858e","block_type":"box","text":"company established by SEHK.","page_number":92,"box":{"x":69,"y":748,"width":219,"height":11}},{"id":"d686fbac-dcae-4f70-867e-a50cced606ac","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock Connect, trading","page_number":92,"box":{"x":101,"y":770,"width":794,"height":12}},{"id":"8fbee6ef-c2cf-4077-812d-0bcc806f3554","block_type":"box","text":"through a Stock Connect’s Northbound Trading Link is subject to daily investment quota limitations which require that","page_number":92,"box":{"x":68,"y":786,"width":839,"height":11}},{"id":"9694585b-a059-48c7-87e0-c8062f58085b","block_type":"box","text":"buy orders for Stock Connect Securities be rejected once the daily quota is exceeded (although a Fund will be","page_number":92,"box":{"x":69,"y":801,"width":779,"height":11}},{"id":"533e1adf-d390-4e30-8ba0-84351db9065d","block_type":"box","text":"permitted to sell their Stock Connect Securities regardless of the quota). These limitations may restrict a Fund from","page_number":92,"box":{"x":70,"y":816,"width":824,"height":11}},{"id":"5e8198e8-4403-4461-a0ce-d4f1ce65d732","block_type":"box","text":"investing in Stock Connect Securities on a timely basis, which could affect the Fund’s ability to effectively pursue its","page_number":92,"box":{"x":70,"y":831,"width":827,"height":11}},{"id":"867aff7c-9f48-40ed-8198-64365afe8671","block_type":"box","text":"investment strategy. Investment quotas are also subject to change. Investment in Stock Connect Securities through a","page_number":92,"box":{"x":70,"y":846,"width":837,"height":11}},{"id":"3aeabfbb-df9d-4f0f-b287-29d79a343d2f","block_type":"box","text":"Stock Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund. Stock","page_number":92,"box":{"x":69,"y":861,"width":802,"height":11}},{"id":"9c202b78-0f34-4527-a2d4-24242345e73e","block_type":"box","text":"Connect Securities purchased through Stock Connects generally may not be sold or otherwise transferred other than","page_number":92,"box":{"x":69,"y":876,"width":831,"height":11}},{"id":"53d83103-d32f-4ae0-a584-90c21a05ddb2","block_type":"box","text":"through Stock Connects in accordance with applicable rules. For example, the PRC regulations require that in order","page_number":92,"box":{"x":68,"y":891,"width":821,"height":12}},{"id":"06b4aa9f-8ebf-4c85-88d8-e4c90daca369","block_type":"box","text":"for an investor to sell any Stock Connect Securities on a certain trading day, there must be sufficient Stock Connect","page_number":92,"box":{"x":68,"y":906,"width":829,"height":12}},{"id":"e43bcade-e5dd-49e4-9c7b-af63aef409b8","block_type":"box","text":"II-43","page_number":92,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"c2dd6ffe-7c37-47bc-8454-17b94b10cf54","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":92,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"61c607a7-72aa-4a88-a10c-acd666e14087","block_type":"box","text":"Securities in the investor’s account before the market opens on that day. If there are insufficient Stock Connect","page_number":93,"box":{"x":69,"y":45,"width":797,"height":11}},{"id":"4d57a301-3d2b-4778-bf05-97aa76883889","block_type":"box","text":"Securities in the investor’s account, the sell order will be rejected by the SSE or SZSE, as applicable. SEHK carries","page_number":93,"box":{"x":69,"y":60,"width":820,"height":11}},{"id":"ac38da15-029f-4246-b7e8-75afea3e8c7a","block_type":"box","text":"out pre-trade checking on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market","page_number":93,"box":{"x":69,"y":75,"width":820,"height":11}},{"id":"8986214c-594d-44de-884a-0b3fa4d3b745","block_type":"box","text":"(“SZSE Securities”) of its participants (","page_number":93,"box":{"x":69,"y":90,"width":278,"height":11}},{"id":"e4753515-d68e-4ce6-8302-988a8a66b1ba","block_type":"box","text":"i.e.","page_number":93,"box":{"x":349,"y":90,"width":21,"height":9}},{"id":"33a7bcc7-32fa-46e7-a382-9fe23d810d8e","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While shares","page_number":93,"box":{"x":372,"y":90,"width":524,"height":11}},{"id":"500e1eb7-2d4b-4ad5-9469-2042c9c5d869","block_type":"box","text":"must be designated as eligible to be traded under a Stock Connect, those shares may also lose such designation,","page_number":93,"box":{"x":69,"y":105,"width":815,"height":11}},{"id":"2574e85a-22a4-473a-81be-b21ee500d520","block_type":"box","text":"and if this occurs, such shares may be sold but cannot be purchased through a Stock Connect. In addition, Stock","page_number":93,"box":{"x":69,"y":120,"width":810,"height":12}},{"id":"29970155-595a-4962-bf4f-3cf57d6f6096","block_type":"box","text":"Connects will only operate on days when both the Chinese and Hong Kong markets are open for trading, and banking","page_number":93,"box":{"x":69,"y":135,"width":834,"height":12}},{"id":"8a72b839-f769-41c6-b452-868033a12b8c","block_type":"box","text":"services are available in both markets on the corresponding settlement days. Therefore, an investment in Stock","page_number":93,"box":{"x":69,"y":150,"width":799,"height":12}},{"id":"7e933da1-8bb8-48a2-8317-5204c5bd8d43","block_type":"box","text":"Connect Securities through a Stock Connect may subject a Fund to a risk of price fluctuations on days when the","page_number":93,"box":{"x":69,"y":166,"width":797,"height":11}},{"id":"77423059-db1a-436f-af7a-2d032a27f58b","block_type":"box","text":"Chinese market is open, but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on","page_number":93,"box":{"x":69,"y":181,"width":818,"height":11}},{"id":"12bfa4c8-fdae-4cb1-af5f-1d19984aaeaa","block_type":"box","text":"the Stock Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will only","page_number":93,"box":{"x":68,"y":196,"width":820,"height":11}},{"id":"53136a41-baed-496d-987a-a1d9e187df2b","block_type":"box","text":"be able to sell the Stock Connect Securities on or after day T+1. Further, since all trades of Stock Connect Securities","page_number":93,"box":{"x":69,"y":211,"width":836,"height":11}},{"id":"50b1a98a-452e-44e3-b3b6-eac08af8c9ec","block_type":"box","text":"must be settled in RMB, investors must have timely access to a reliable supply of offshore RMB, which cannot be","page_number":93,"box":{"x":69,"y":226,"width":811,"height":11}},{"id":"52390453-9443-4d92-a6ce-95e99d8a356a","block_type":"box","text":"guaranteed. There is also no assurance that RMB will not be subject to devaluation. Any devaluation of RMB could","page_number":93,"box":{"x":68,"y":241,"width":815,"height":11}},{"id":"0a11443e-6d92-4fe9-964b-9086c8a3327a","block_type":"box","text":"adversely affect a Fund’s investments. If a Fund holds a class of shares denominated in a local currency other than","page_number":93,"box":{"x":69,"y":256,"width":824,"height":11}},{"id":"72c7230d-548e-4437-bfb2-fa0e8a1719aa","block_type":"box","text":"RMB, the Fund will be exposed to currency exchange risk if the Fund converts the local currency into RMB for","page_number":93,"box":{"x":70,"y":271,"width":777,"height":12}},{"id":"af8b5baf-5714-48db-8ec7-170f778708aa","block_type":"box","text":"investments in Stock Connect Securities. A Fund may also incur conversion costs.","page_number":93,"box":{"x":70,"y":287,"width":582,"height":11}},{"id":"5cd45794-7e3d-488a-ad94-9da538e33c27","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held through HKSCC","page_number":93,"box":{"x":102,"y":309,"width":802,"height":11}},{"id":"af0de4fc-fe6d-4700-9419-ae0e700e8498","block_type":"box","text":"as nominee on behalf of investors. The precise nature and rights of a Fund as the beneficial owner of the SSE","page_number":93,"box":{"x":69,"y":324,"width":784,"height":12}},{"id":"3c5261a7-0bf3-4542-b5bd-42407ce3994f","block_type":"box","text":"Securities or SZSE Securities through HKSCC as nominee is not well defined under the PRC laws. There is a lack of a","page_number":93,"box":{"x":69,"y":339,"width":837,"height":12}},{"id":"2dc5aeae-71ab-45bb-822b-17fea19e1a82","block_type":"box","text":"clear definition of, and distinction between, legal ownership and beneficial ownership under the PRC laws and there","page_number":93,"box":{"x":69,"y":355,"width":822,"height":11}},{"id":"769d9202-5f4d-4346-860e-cc119a6946d2","block_type":"box","text":"have been few cases involving a nominee account structure in the PRC courts. The exact nature and methods of","page_number":93,"box":{"x":69,"y":370,"width":802,"height":11}},{"id":"94627783-ba5d-43da-b0d0-e44c88a99f59","block_type":"box","text":"enforcement of the rights and interests of a Fund under the PRC laws is also uncertain. In the unlikely event that","page_number":93,"box":{"x":69,"y":385,"width":805,"height":11}},{"id":"6d6891fb-6ea7-40d6-ae86-da29afef18a7","block_type":"box","text":"HKSCC becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or SZSE","page_number":93,"box":{"x":70,"y":400,"width":807,"height":11}},{"id":"7933c118-3366-45c0-8716-6786fc2f9e63","block_type":"box","text":"Securities may not be regarded as held for the beneficial ownership of a Fund or as part of the general assets of","page_number":93,"box":{"x":69,"y":415,"width":805,"height":11}},{"id":"7ef24ceb-c817-4938-8e56-5c676b2e7968","block_type":"box","text":"HKSCC available for general distribution to its creditors. Notwithstanding the fact that HKSCC does not claim","page_number":93,"box":{"x":70,"y":430,"width":774,"height":11}},{"id":"a2ab9c0d-725c-4fc5-aa20-6fceafad7037","block_type":"box","text":"proprietary interests in the SSE Securities or SZSE Securities held in its omnibus stock account in the CSDCC, the","page_number":93,"box":{"x":70,"y":445,"width":816,"height":11}},{"id":"a975f0f4-8501-4f0b-8b97-2c337a87929d","block_type":"box","text":"CSDCC as the share registrar for SSE- or SZSE-listed companies will still treat HKSCC as one of the shareholders","page_number":93,"box":{"x":69,"y":460,"width":808,"height":12}},{"id":"b1a7808a-ddc9-408c-a2ad-a4a3618d1f76","block_type":"box","text":"when it handles corporate actions in respect of such SSE Securities or SZSE Securities. HKSCC monitors the","page_number":93,"box":{"x":68,"y":475,"width":779,"height":11}},{"id":"83c10b85-f987-42b9-97c3-a9893bb26ecd","block_type":"box","text":"corporate actions affecting SSE Securities and SZSE Securities and keeps participants of Central Clearing and","page_number":93,"box":{"x":69,"y":491,"width":788,"height":11}},{"id":"76105dc5-2c47-43f6-93ab-58e76978dee4","block_type":"box","text":"Settlement System (“CCASS”) informed of all such corporate actions that require CCASS participants to take steps in","page_number":93,"box":{"x":69,"y":506,"width":839,"height":11}},{"id":"8540d8a6-8263-468a-bb72-53daeec381fa","block_type":"box","text":"order to participate in them. Investors may only exercise their voting rights by providing their voting instructions to","page_number":93,"box":{"x":69,"y":521,"width":811,"height":11}},{"id":"4c3cf12f-93eb-4ef3-aec6-53491a39db87","block_type":"box","text":"HKSCC through participants of CCASS. All voting instructions from CCASS participants will be consolidated by","page_number":93,"box":{"x":70,"y":536,"width":783,"height":11}},{"id":"c5a6f7b5-d9dc-44a2-a803-41415eaf7bd6","block_type":"box","text":"HKSCC, who will then submit a combined single voting instruction to the relevant SSE- or SZSE-listed company. As a","page_number":93,"box":{"x":70,"y":551,"width":826,"height":11}},{"id":"72626804-01e7-420f-8e13-395af39d6503","block_type":"box","text":"result, a Fund may suffer difficulties or delays in enforcing its rights in SSE Securities or SZSE Securities.","page_number":93,"box":{"x":69,"y":566,"width":752,"height":11}},{"id":"fa458665-bed9-4ff8-b216-757f7ddeef90","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any nationality who","page_number":93,"box":{"x":102,"y":589,"width":804,"height":11}},{"id":"af3e6e53-1448-4c34-9f19-dcab0f526f9d","block_type":"box","text":"suffer pecuniary losses as a result of default of a licensed intermediary or authorized financial institution in relation","page_number":93,"box":{"x":69,"y":604,"width":826,"height":11}},{"id":"faf3ef41-0237-4337-aee8-3a8d57c8ffa2","block_type":"box","text":"to exchange-traded products in Hong Kong. For defaults occurring on or after January 1, 2020, Hong Kong’s","page_number":93,"box":{"x":68,"y":619,"width":769,"height":11}},{"id":"4ba8b1e4-ac26-4541-8e0e-4f82c190b8f0","block_type":"box","text":"Investor Compensation Fund covers investors’ losses in relation to securities (i) that are traded on the SSE or the","page_number":93,"box":{"x":70,"y":634,"width":809,"height":11}},{"id":"d3d1a34c-d6dc-472e-997e-b504fab10fcc","block_type":"box","text":"SZSE and (ii) in respect of which an order for sale or purchase is permitted to be routed through the Northbound","page_number":93,"box":{"x":69,"y":649,"width":801,"height":12}},{"id":"6d2f17e7-f3c8-4e55-b25a-5ca026956679","block_type":"box","text":"Trading Link of a Stock Connect. On the other hand, since a Fund carries out Northbound trading through securities","page_number":93,"box":{"x":68,"y":664,"width":822,"height":12}},{"id":"7b4737d7-65a5-4af4-8c3d-8cc02de5a9d9","block_type":"box","text":"brokers in Hong Kong but not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the","page_number":93,"box":{"x":69,"y":680,"width":829,"height":11}},{"id":"df6c2693-afd7-4f21-b37b-858f1be2fa1c","block_type":"box","text":"PRC.","page_number":93,"box":{"x":69,"y":695,"width":32,"height":9}},{"id":"125686aa-8516-4d5d-8cb4-510c0864fe09","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information technology","page_number":93,"box":{"x":102,"y":717,"width":796,"height":12}},{"id":"5311e0ab-55a2-4804-9f71-3aac10b9092a","block_type":"box","text":"capability, risk management and other requirements as may be specified by the relevant exchange and/or clearing","page_number":93,"box":{"x":69,"y":732,"width":815,"height":12}},{"id":"ff0decf1-7707-44e0-8a9c-caa24988b32b","block_type":"box","text":"house. Further, the “connectivity” in Stock Connects requires routing of orders across the border of Hong Kong and","page_number":93,"box":{"x":69,"y":748,"width":822,"height":11}},{"id":"d48862ae-e740-4531-98c3-c3fe8113385e","block_type":"box","text":"the PRC. This requires the development of new information technology systems on the part of SEHK and exchange","page_number":93,"box":{"x":68,"y":763,"width":818,"height":11}},{"id":"31af92b4-2621-44a2-a08c-eaa16ed9a81d","block_type":"box","text":"participants. There is no assurance that the systems of SEHK and market participants will function properly or will","page_number":93,"box":{"x":70,"y":778,"width":813,"height":11}},{"id":"753ea6ce-1981-4ff9-a311-8840810f3620","block_type":"box","text":"continue to be adapted to changes and developments in both markets. In the event that the relevant systems fail to","page_number":93,"box":{"x":69,"y":793,"width":827,"height":11}},{"id":"705d3ce6-fc5e-4ca3-b90c-ca4185208cd6","block_type":"box","text":"function properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":93,"box":{"x":68,"y":808,"width":695,"height":11}},{"id":"74a574af-1eb3-499d-a2eb-6896c9b366a1","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen-Hong Kong","page_number":93,"box":{"x":101,"y":831,"width":772,"height":11}},{"id":"3237eae5-f1af-41d7-9940-a523abe69a2e","block_type":"box","text":"Stock Connect program launched in December 2016. Each program does not have an extensive operating history.","page_number":93,"box":{"x":69,"y":846,"width":810,"height":11}},{"id":"d676a7c6-09e5-4071-9429-0fde73cd1025","block_type":"box","text":"New or revised regulations may be issued from time to time by the regulators and stock exchanges in China and","page_number":93,"box":{"x":70,"y":861,"width":798,"height":11}},{"id":"de4cebd7-faf5-40e6-bdf7-3c90d52188f5","block_type":"box","text":"Hong Kong in connection with operations, legal enforcement and cross-border trades under Stock Connects. In","page_number":93,"box":{"x":70,"y":876,"width":786,"height":11}},{"id":"ed04e663-03ef-4e53-a9d6-a3f334f7e125","block_type":"box","text":"addition, there can be no assurance that Stock Connect will not be discontinued. A Fund may be adversely affected","page_number":93,"box":{"x":69,"y":891,"width":821,"height":11}},{"id":"8442ca88-8489-4de6-9a8a-9ffb35649e29","block_type":"box","text":"as a result of such changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":93,"box":{"x":69,"y":906,"width":819,"height":12}},{"id":"e05cca76-6a5f-4b8e-b242-3c38847c91a6","block_type":"box","text":"II-44","page_number":93,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"52d37e97-f7a2-46bc-8cd3-16fd73130ebd","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":93,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"80e16605-21e0-4249-8d79-a9e725256190","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the relevant systems","page_number":94,"box":{"x":69,"y":45,"width":823,"height":11}},{"id":"a35b4916-792c-4949-85d9-7f3fb083021e","block_type":"box","text":"fail to function properly, trading in both markets through Stock Connects could be disrupted and a Fund’s ability to","page_number":94,"box":{"x":68,"y":60,"width":814,"height":11}},{"id":"d132ab20-1845-4bc5-b9ee-a69024a69667","block_type":"box","text":"achieve its investment objective may be adversely affected. In addition, a Fund’s investments in Stock Connect","page_number":94,"box":{"x":69,"y":75,"width":793,"height":11}},{"id":"26311449-86e1-4e37-a54b-a4a09db9d40c","block_type":"box","text":"Securities through Stock Connects are generally subject to Chinese securities regulations and listing rules, among","page_number":94,"box":{"x":69,"y":90,"width":815,"height":11}},{"id":"7b71094f-b4a0-4ec1-a4eb-509192c65bae","block_type":"box","text":"other restrictions. Further, different fees, costs and taxes are imposed on foreign investors acquiring Stock Connect","page_number":94,"box":{"x":69,"y":105,"width":828,"height":11}},{"id":"d53c2887-34b3-4472-a448-d75fb5cfe2e7","block_type":"box","text":"Securities through Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":94,"box":{"x":69,"y":120,"width":831,"height":12}},{"id":"6900a055-afe7-4ad5-a19f-ae3e5a029121","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":94,"box":{"x":68,"y":135,"width":596,"height":12}},{"id":"01599eab-13dd-4a5d-be6f-80846dd32174","block_type":"box","text":"Suspension Risk.","page_number":94,"box":{"x":102,"y":158,"width":122,"height":11}},{"id":"588cf98c-553b-407c-9f28-ae6d680df666","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at times when","page_number":94,"box":{"x":231,"y":158,"width":675,"height":11}},{"id":"d9837fa7-6cde-467e-9caa-0acfad2b15a4","block_type":"box","text":"the relevant SSE Securities and SZSE Securities may be sold or purchased on the relevant Chinese stock exchange.","page_number":94,"box":{"x":68,"y":173,"width":829,"height":11}},{"id":"808a84f4-8bdc-4b7d-8fe2-ecba70eb36bb","block_type":"box","text":"The SSE Securities and SZSE Securities markets have a higher propensity for trading suspensions than many other","page_number":94,"box":{"x":68,"y":188,"width":823,"height":12}},{"id":"f3d49e9f-ec17-4756-81ee-570b2de170c1","block_type":"box","text":"global equity markets. Each of the SEHK, SSE and SZSE reserves the right to suspend trading of SSE Securities and","page_number":94,"box":{"x":68,"y":203,"width":831,"height":12}},{"id":"4a27ff75-ebb0-44ae-a09e-9073f404d23c","block_type":"box","text":"SZSE Securities purchased on the Stock Connects if necessary for ensuring an orderly and fair market and ensuring","page_number":94,"box":{"x":69,"y":218,"width":828,"height":12}},{"id":"4f24ddb8-e924-44a9-bb23-30eb9e7a1c27","block_type":"box","text":"that risks are managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":94,"box":{"x":68,"y":234,"width":791,"height":11}},{"id":"36854e4c-363e-410d-b6fa-e02bc1440589","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit breakers” and other","page_number":94,"box":{"x":70,"y":249,"width":837,"height":11}},{"id":"5b1065e9-1c2f-43a6-9744-1e4247daab89","block_type":"box","text":"measures to halt or suspend Northbound trading. Where a suspension in the Northbound trading through Stock","page_number":94,"box":{"x":69,"y":264,"width":796,"height":11}},{"id":"f4a25412-d858-4439-836d-a387b1c9a442","block_type":"box","text":"Connect is effected, the Fund’s ability to access the PRC market will be adversely affected. Trading suspensions in","page_number":94,"box":{"x":69,"y":279,"width":820,"height":11}},{"id":"e5b37356-01af-40c4-b152-38332e99e4bb","block_type":"box","text":"certain stocks could lead to greater market execution risk and costs for a Fund. The SSE and SZSE currently apply a","page_number":94,"box":{"x":69,"y":294,"width":829,"height":11}},{"id":"5590e076-c768-474c-8abe-b591d5f8257c","block_type":"box","text":"daily price limit, generally set at 10%, of the amount of fluctuation permitted in the prices of the relevant SSE","page_number":94,"box":{"x":69,"y":309,"width":778,"height":11}},{"id":"5110a4fe-47de-4146-9224-02d12680b77f","block_type":"box","text":"Securities and SZSE Securities during a single trading day. The daily price limit refers to price movements only and","page_number":94,"box":{"x":69,"y":324,"width":815,"height":12}},{"id":"9b8e155b-16e2-4ab0-9176-7fb874aec1e0","block_type":"box","text":"does not restrict trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":94,"box":{"x":69,"y":340,"width":833,"height":11}},{"id":"e1d877c5-bea6-456e-87a8-b7457a853979","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":94,"box":{"x":69,"y":355,"width":563,"height":11}},{"id":"532081db-1be7-4899-bf79-46f21300da6f","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":94,"box":{"x":102,"y":377,"width":542,"height":12}},{"id":"38b51811-6b5b-45cb-9911-5a97afd17519","block_type":"box","text":"A Fund may invest directly in the","page_number":94,"box":{"x":650,"y":377,"width":230,"height":11}},{"id":"c535d537-0269-4b65-9c94-966a4ff1f292","block_type":"box","text":"domestic bond market in the PRC (the “China Interbank Bond Market”) through the northbound trading of Bond","page_number":94,"box":{"x":69,"y":392,"width":791,"height":12}},{"id":"d8ce7b19-78fb-4557-8bf9-ebbf2629152f","block_type":"box","text":"Connect (“Bond Connect”). Bond Connect is an initiative launched in July 2017 for mutual bond market access","page_number":94,"box":{"x":69,"y":407,"width":790,"height":12}},{"id":"108beeea-d3ff-410c-a650-60722f54d24d","block_type":"box","text":"between the PRC and Hong Kong, established by the China Foreign Exchange Trade System & National Interbank","page_number":94,"box":{"x":69,"y":423,"width":803,"height":11}},{"id":"4bf1fce7-c4fe-4a01-bd2a-c05df4cd53c3","block_type":"box","text":"Funding Centre (“CFETS”), China Central Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”),","page_number":94,"box":{"x":70,"y":438,"width":832,"height":11}},{"id":"de3e8106-8ac8-40a3-ab11-31c1730ca991","block_type":"box","text":"Hong Kong Exchanges and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":94,"box":{"x":70,"y":453,"width":821,"height":11}},{"id":"a78bf780-4852-47cf-9fdf-016e6cc744ef","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the China Interbank","page_number":94,"box":{"x":69,"y":468,"width":825,"height":11}},{"id":"fb9eae88-cdfa-445a-9985-09e886e9c987","block_type":"box","text":"Bond Market through Bond Connect. Eligible foreign investors may submit trade requests for bonds circulated in the","page_number":94,"box":{"x":70,"y":483,"width":825,"height":11}},{"id":"3468a1eb-83f4-4c03-b24b-0b73ab45ebd7","block_type":"box","text":"China Interbank Bond Market through offshore electronic bond trading platforms (such as Tradeweb), which will in","page_number":94,"box":{"x":69,"y":498,"width":809,"height":11}},{"id":"7dd79553-eed4-45f6-ae70-cfa06ca769b2","block_type":"box","text":"turn transmit their requests for quotation to CFETS. CFETS will send the requests for quotation to a number of","page_number":94,"box":{"x":68,"y":513,"width":786,"height":11}},{"id":"02363bf2-913e-4ad9-ae09-f2ccc6977378","block_type":"box","text":"approved onshore dealers (including market makers and others engaged in the market making business) in the PRC.","page_number":94,"box":{"x":69,"y":529,"width":830,"height":11}},{"id":"a82112cf-4a60-4e60-885d-e98315b7bf64","block_type":"box","text":"The approved onshore dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their","page_number":94,"box":{"x":68,"y":543,"width":788,"height":12}},{"id":"435587c4-8491-4214-b739-c77fd6d44705","block_type":"box","text":"responses to those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":94,"box":{"x":69,"y":559,"width":827,"height":11}},{"id":"ee184549-6062-4c17-a233-459ca4e2f493","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":94,"box":{"x":69,"y":574,"width":570,"height":11}},{"id":"8312271d-154b-4de6-8afd-44583233df1a","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect will be","page_number":94,"box":{"x":101,"y":596,"width":773,"height":12}},{"id":"2c4b4b27-04cc-48c2-bfaa-0ed4f1111d52","block_type":"box","text":"effected through the settlement and custody link between CMU, as an offshore custody agent, and CDCC and SCH,","page_number":94,"box":{"x":69,"y":612,"width":823,"height":11}},{"id":"2f362bde-7379-42db-beca-9834942373f6","block_type":"box","text":"as onshore custodians and clearing institutions in the PRC. Under the settlement link, CDCC or SCH will effect gross","page_number":94,"box":{"x":69,"y":627,"width":832,"height":11}},{"id":"de493632-aaa3-4449-a8aa-db19f59b102b","block_type":"box","text":"settlement of confirmed trades onshore and CMU will process bond settlement instructions from CMU members on","page_number":94,"box":{"x":69,"y":642,"width":822,"height":11}},{"id":"06bc73f4-e776-4031-abbd-076e9a2f029b","block_type":"box","text":"behalf of eligible foreign investors in accordance with its relevant rules. Since the introduction in August 2018 of","page_number":94,"box":{"x":69,"y":657,"width":804,"height":11}},{"id":"53613d44-3366-4d33-9d3e-2bdf17e041c5","block_type":"box","text":"delivery versus payment (DVP) settlement in respect of Bond Connect, the movement of cash and securities is","page_number":94,"box":{"x":69,"y":672,"width":787,"height":11}},{"id":"218a7ba5-445e-42bd-ad74-84e31652a044","block_type":"box","text":"carried out simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":94,"box":{"x":69,"y":687,"width":788,"height":11}},{"id":"9d75cbea-472e-4e7e-9179-31e30529ab5b","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee accounts with","page_number":94,"box":{"x":69,"y":702,"width":820,"height":12}},{"id":"5e90e485-f1f3-4e18-88dd-bbfbd64ef847","block_type":"box","text":"the onshore custody agent recognized by the People’s Bank of China (","page_number":94,"box":{"x":68,"y":717,"width":500,"height":12}},{"id":"e95869be-b509-4c45-addf-3310e849fd63","block_type":"box","text":"i.e.","page_number":94,"box":{"x":570,"y":718,"width":20,"height":8}},{"id":"434504a6-22d1-43d6-9c92-8260fb7188e4","block_type":"box","text":", CDCC and SCH). All bonds traded by","page_number":94,"box":{"x":593,"y":718,"width":267,"height":11}},{"id":"f841c006-224b-47f2-89fc-8b57a008fe30","block_type":"box","text":"eligible foreign investors through Bond Connect will be registered in the name of CMU, which will hold such bonds as","page_number":94,"box":{"x":69,"y":732,"width":832,"height":12}},{"id":"1bc75d8c-ade3-4871-b4ba-76823e9b07d5","block_type":"box","text":"a nominee owner. Therefore, a Fund will be exposed to custody risks with respect to CMU. In the remote event of a","page_number":94,"box":{"x":69,"y":748,"width":819,"height":11}},{"id":"5c9edcb4-5f84-442b-82de-5eb24908dcd2","block_type":"box","text":"CDCC or SCH default, CMU’s liabilities in Bond Connect bonds under its market contracts with clearing participants","page_number":94,"box":{"x":69,"y":763,"width":822,"height":11}},{"id":"39ca8925-a8c9-45ba-b7c0-23a4cd0209ab","block_type":"box","text":"will be limited to assisting clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer","page_number":94,"box":{"x":68,"y":778,"width":822,"height":11}},{"id":"0679791c-3010-4ea4-8b76-de84205d56a9","block_type":"box","text":"delay in the recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":94,"box":{"x":69,"y":793,"width":793,"height":11}},{"id":"b25edf32-f884-4a4a-8dc2-f0332d1b9c09","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by third parties,","page_number":94,"box":{"x":68,"y":808,"width":802,"height":11}},{"id":"67a6e81e-04b5-4c2d-9e0f-f7b44b60b8c4","block_type":"box","text":"including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or errors on the part of such third","page_number":94,"box":{"x":70,"y":823,"width":812,"height":12}},{"id":"aeeb4031-cb91-4a23-82cc-69efae5e754a","block_type":"box","text":"parties.","page_number":94,"box":{"x":70,"y":839,"width":52,"height":10}},{"id":"ba42e404-9d1b-4ed9-9f23-eeb7443aa63d","block_type":"box","text":"The precise nature and rights of a Fund as the beneficial owner of the bonds traded in the China Interbank Bond","page_number":94,"box":{"x":101,"y":861,"width":799,"height":11}},{"id":"d044fcc0-8732-4bf9-9469-639b8f04704f","block_type":"box","text":"Market through CMU as nominee is not well-defined under PRC law. There is a lack of a clear definition of, and","page_number":94,"box":{"x":70,"y":876,"width":785,"height":11}},{"id":"52836bfb-cedf-4913-80e7-0ebad7fca64c","block_type":"box","text":"distinction between, legal ownership and beneficial ownership under PRC law and there have been few cases","page_number":94,"box":{"x":69,"y":891,"width":776,"height":12}},{"id":"5c9a61c3-caf6-48f6-87ff-61931211d2c2","block_type":"box","text":"II-45","page_number":94,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"606d749f-33c6-424c-830d-11f76d43b64b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":94,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f3c71d2c-cea5-4ee8-8a16-e95afb1ed4f2","block_type":"box","text":"involving a nominee account structure in the PRC courts. The exact nature and methods of enforcement of the rights","page_number":95,"box":{"x":70,"y":45,"width":830,"height":11}},{"id":"072c59c3-b5a4-4b9c-b5d7-53296bfdb44c","block_type":"box","text":"and interests of a Fund under PRC law are also uncertain.","page_number":95,"box":{"x":69,"y":60,"width":412,"height":9}},{"id":"cb353e30-333a-4bb9-a0fa-5b386e77aa34","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China Interbank","page_number":95,"box":{"x":102,"y":82,"width":793,"height":12}},{"id":"f868e690-77e4-4f38-8684-e7baa3758e94","block_type":"box","text":"Bond Market may result in prices of certain bonds traded on such market fluctuating significantly. A Fund investing in","page_number":95,"box":{"x":70,"y":98,"width":832,"height":11}},{"id":"14d1eb39-191c-409e-8d96-fe680728ce23","block_type":"box","text":"such market is therefore subject to liquidity and volatility risks. The bid-ask spreads of the prices of such securities","page_number":95,"box":{"x":69,"y":113,"width":821,"height":11}},{"id":"18de28c4-c416-462f-933c-c851f0fcd57a","block_type":"box","text":"may be large, and a Fund may therefore incur significant costs and may suffer losses when selling such investments.","page_number":95,"box":{"x":69,"y":128,"width":836,"height":11}},{"id":"a5bacd9b-77a8-4a59-8665-7f50708246c6","block_type":"box","text":"The bonds traded in the China Interbank Bond Market may be difficult or impossible to sell, which may impact a","page_number":95,"box":{"x":68,"y":143,"width":798,"height":11}},{"id":"d4cf9d5a-6df1-4870-94b3-0d95418e7b5a","block_type":"box","text":"Fund’s ability to acquire or dispose of such securities at their expected prices.","page_number":95,"box":{"x":70,"y":158,"width":556,"height":11}},{"id":"c0d1c832-4df6-4c89-b1e7-bc902a9bb1be","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks. The","page_number":95,"box":{"x":102,"y":181,"width":762,"height":11}},{"id":"3b57bba2-fd06-4a14-8ade-8b7e46a0d5e7","block_type":"box","text":"relevant rules and regulations are subject to change, which may have potential retrospective effect, and there can be","page_number":95,"box":{"x":69,"y":196,"width":835,"height":11}},{"id":"bf741ae5-68b1-4145-b544-7f5fbd7b98b1","block_type":"box","text":"no assurance that Bond Connect will not be discontinued or abolished. Furthermore, the securities regimes and legal","page_number":95,"box":{"x":69,"y":211,"width":835,"height":11}},{"id":"d94d092c-e2cf-446f-8842-c9a3af2f2135","block_type":"box","text":"systems of China and Hong Kong differ significantly and issues may arise based on these differences. In the event","page_number":95,"box":{"x":69,"y":226,"width":820,"height":11}},{"id":"97c97612-6964-4e54-b844-b799a2f55166","block_type":"box","text":"that the relevant authorities suspend account opening or trading on the China Interbank Bond Market, a Fund’s ability","page_number":95,"box":{"x":68,"y":241,"width":840,"height":11}},{"id":"b77c4e48-8538-4ca7-92c4-90870a8e67d3","block_type":"box","text":"to invest in the China Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability","page_number":95,"box":{"x":68,"y":256,"width":826,"height":11}},{"id":"91fefaa3-63ba-46e6-a16d-1def68f1d579","block_type":"box","text":"to achieve its investment objective will be negatively affected and, after exhausting other trading alternatives, the","page_number":95,"box":{"x":68,"y":271,"width":808,"height":12}},{"id":"7e16d8e6-6c78-40a0-818f-1c71b7b8ce59","block_type":"box","text":"Fund may suffer substantial losses as a result. Further, if Bond Connect is not operating, a Fund may not be able to","page_number":95,"box":{"x":70,"y":286,"width":826,"height":12}},{"id":"9e7459b9-63ab-44e6-bf34-e68eba8ac9f7","block_type":"box","text":"acquire or dispose of bonds through Bond Connect in a timely manner, which could adversely affect the Fund’s","page_number":95,"box":{"x":69,"y":302,"width":789,"height":11}},{"id":"6fbdcafb-33f3-41f1-898d-c7e2560803e4","block_type":"box","text":"performance.","page_number":95,"box":{"x":70,"y":317,"width":93,"height":11}},{"id":"3fa66d8c-2e90-4e3f-8180-503438c7f88e","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and operational systems.","page_number":95,"box":{"x":101,"y":339,"width":803,"height":12}},{"id":"0a91bd8a-06fa-4728-afbb-163b2a3d62e6","block_type":"box","text":"There is no assurance that such systems will function properly or will continue to be adapted to changes and","page_number":95,"box":{"x":68,"y":355,"width":776,"height":11}},{"id":"89a7fe8e-8a25-4408-a904-37dd1984c3ac","block_type":"box","text":"developments in the market. In the event that the relevant systems fail to function properly, trading through Bond","page_number":95,"box":{"x":69,"y":370,"width":806,"height":11}},{"id":"b9b22a6a-bf7b-42af-955e-372336d1882d","block_type":"box","text":"Connect may be disrupted. A Fund’s ability to trade through Bond Connect (and hence to pursue its investment","page_number":95,"box":{"x":69,"y":385,"width":791,"height":11}},{"id":"1846072b-77dc-4e73-bee9-afcd5e9539e2","block_type":"box","text":"strategy) may therefore be adversely affected. In addition, where a Fund invests in the China Interbank Bond Market","page_number":95,"box":{"x":69,"y":400,"width":827,"height":11}},{"id":"33056efc-4098-4f4b-a804-5a060440c8de","block_type":"box","text":"through Bond Connect, it may be subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":95,"box":{"x":68,"y":415,"width":827,"height":11}},{"id":"d09157d7-6e64-4e63-b9e6-1a659c5da1a1","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not freely","page_number":95,"box":{"x":102,"y":438,"width":755,"height":11}},{"id":"f5c0fded-6b86-461e-9a40-52afcf3bbc9d","block_type":"box","text":"convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed that investors will have","page_number":95,"box":{"x":69,"y":453,"width":830,"height":11}},{"id":"5b53e909-7fa6-43b0-9805-1681d2978e25","block_type":"box","text":"timely access to a reliable supply of RMB.","page_number":95,"box":{"x":68,"y":468,"width":298,"height":11}},{"id":"5d7cae83-bd0b-42ec-964c-b731d4ab87b6","block_type":"box","text":"Tax Risk – Withholding Income Tax Risk","page_number":95,"box":{"x":103,"y":491,"width":277,"height":11}},{"id":"75bc9253-fffa-4858-a083-1a91a5acf0a5","block_type":"box","text":".","page_number":95,"box":{"x":381,"y":498,"width":2,"height":2}},{"id":"5af54418-a366-443c-9368-3f58b594b6f0","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced dividends and","page_number":95,"box":{"x":101,"y":513,"width":758,"height":12}},{"id":"d64b09f5-86fe-406a-90f6-9f7d13c10ab7","block_type":"box","text":"interests from non-government bonds paid to a non-PRC tax resident enterprise, unless the rate is reduced under an","page_number":95,"box":{"x":70,"y":528,"width":828,"height":12}},{"id":"c7ebd79b-5c8b-4d94-8329-03268deaebcf","block_type":"box","text":"applicable tax treaty. From a technical perspective, withholding income tax is also applicable to capital gains realized","page_number":95,"box":{"x":69,"y":544,"width":831,"height":11}},{"id":"4fae12d1-771a-4d6a-b4bc-aa8bb9a9afe1","block_type":"box","text":"by foreign investors on the disposal of PRC equity interests.","page_number":95,"box":{"x":69,"y":559,"width":425,"height":11}},{"id":"93c0b040-c639-46b7-87dd-990aabd622ad","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":95,"box":{"x":101,"y":582,"width":697,"height":11}},{"id":"45e5aebd-7698-4dd8-a4b9-8f272f40f01d","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and the State","page_number":95,"box":{"x":102,"y":604,"width":803,"height":11}},{"id":"be5258a1-6ae3-4a25-bc52-897c74b5794b","block_type":"box","text":"Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular 79, which temporarily","page_number":95,"box":{"x":68,"y":619,"width":822,"height":11}},{"id":"7fe222ac-9284-4ea4-a85e-ba14a2e5c0ee","block_type":"box","text":"exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi Qualified Foreign Institutional Investors","page_number":95,"box":{"x":69,"y":634,"width":794,"height":12}},{"id":"548b1c78-8df7-4f9b-942c-dcb22dde239b","block_type":"box","text":"(“RQFIIs”) from tax on capital gains derived from the trading of shares and other equity interest investments on or","page_number":95,"box":{"x":69,"y":649,"width":812,"height":12}},{"id":"d4347cc1-f366-4485-a262-253126c18267","block_type":"box","text":"after November 17, 2014. Subsequently, Circulars 81 and 127 were issued to temporarily exempt tax on capital","page_number":95,"box":{"x":69,"y":664,"width":800,"height":12}},{"id":"83e04f74-6f5a-4344-96d4-59e9ca870f6b","block_type":"box","text":"gains derived from trading of equity securities of companies domiciled in the PRC that trade on Chinese stock","page_number":95,"box":{"x":68,"y":680,"width":783,"height":11}},{"id":"e647d27f-de52-43e1-a5c0-11df68542509","block_type":"box","text":"exchanges (“A-Shares”) through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock","page_number":95,"box":{"x":69,"y":695,"width":825,"height":11}},{"id":"a7a21b81-991f-4ae1-9f7c-02ff0ec8a32f","block_type":"box","text":"Connect program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of the","page_number":95,"box":{"x":69,"y":710,"width":809,"height":11}},{"id":"4c386838-78a0-419d-9858-ad2a781f900d","block_type":"box","text":"temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax authorities with or","page_number":95,"box":{"x":68,"y":725,"width":818,"height":11}},{"id":"8efdf2ea-c7c7-4735-a0fc-7217c686bb3a","block_type":"box","text":"without notice.","page_number":95,"box":{"x":68,"y":740,"width":103,"height":9}},{"id":"24fe920d-245c-4ce4-9b70-1df35dafea23","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign institutional","page_number":95,"box":{"x":102,"y":763,"width":759,"height":11}},{"id":"7aab3ed9-1d8e-463b-b823-4eeed17e14cb","block_type":"box","text":"investors are temporarily exempt from withholding income tax with respect to interest income on bonds derived from","page_number":95,"box":{"x":70,"y":778,"width":827,"height":11}},{"id":"a8b0c372-017d-42c6-9e7b-25aa7aff0440","block_type":"box","text":"the PRC bond market from November 7, 2018 to November 6, 2021. On November 22, 2021, the MoF and STA","page_number":95,"box":{"x":68,"y":793,"width":798,"height":10}},{"id":"2c474ae4-fbd2-4160-9e10-82f265679830","block_type":"box","text":"issued Public Notice 34 to extend the temporary exemption from November 7, 2021 to December 31, 2025. On","page_number":95,"box":{"x":70,"y":808,"width":798,"height":11}},{"id":"0d2da82b-bd98-4455-8b39-1bbda745b289","block_type":"box","text":"January 15, 2026, it was announced via Public Notice No. 5 of 2026 that the exemption was extended through","page_number":95,"box":{"x":69,"y":823,"width":792,"height":12}},{"id":"5d385178-4a3e-40ca-a3fb-ab313d9ece2f","block_type":"box","text":"December 31, 2027.","page_number":95,"box":{"x":70,"y":838,"width":147,"height":11}},{"id":"4a6bf842-8a90-4d01-bdf8-a94b89e59923","block_type":"box","text":"Value Added Tax (“VAT”) Risk —","page_number":95,"box":{"x":103,"y":861,"width":225,"height":11}},{"id":"6e451f40-eb4e-48d6-a702-db5d09616cd2","block_type":"box","text":"From May 1, 2016, VAT applies to certain income derived by the Fund, including","page_number":95,"box":{"x":333,"y":861,"width":569,"height":11}},{"id":"4692d356-7063-4bfa-8ffd-68ea41d49793","block_type":"box","text":"PRC sourced interest income on non-government bonds and trading gains.","page_number":95,"box":{"x":69,"y":876,"width":528,"height":11}},{"id":"eb610258-efb9-4365-b3db-8138efb07691","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":95,"box":{"x":101,"y":899,"width":697,"height":11}},{"id":"312289aa-67f3-4856-90ce-30245c2992b8","block_type":"box","text":"II-46","page_number":95,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"824dd75a-841e-409e-babd-8b926c0464d7","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":95,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"184c0b88-0d40-45cd-bb0a-5c7c888ac0ae","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares traded on the","page_number":96,"box":{"x":101,"y":45,"width":789,"height":11}},{"id":"82e4eace-d3e9-4ad2-a3a0-178cf429a67b","block_type":"box","text":"Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":96,"box":{"x":69,"y":60,"width":565,"height":9}},{"id":"f272e62f-9fa6-44e8-a934-45a0712c9ba6","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign institutional","page_number":96,"box":{"x":102,"y":82,"width":749,"height":12}},{"id":"1c1ac4ba-e619-427a-9d5e-aadf498b8823","block_type":"box","text":"investors are temporarily exempt from VAT with respect to interest income on bonds derived from the PRC bond","page_number":96,"box":{"x":70,"y":98,"width":791,"height":11}},{"id":"0a867325-d3b2-4573-9b31-ac8bb1c4a824","block_type":"box","text":"market from November 7, 2018 to November 6, 2021. On November 22, 2021, the MoF and STA jointly issued Public","page_number":96,"box":{"x":69,"y":113,"width":840,"height":11}},{"id":"5c282026-318c-45bf-b49a-a56703873fb7","block_type":"box","text":"Notice 34 to extend the temporary exemption from November 7, 2021 to December 31, 2025. However, on","page_number":96,"box":{"x":70,"y":128,"width":766,"height":11}},{"id":"1f0ed021-c6fe-4110-ae0e-c16082faa0c1","block_type":"box","text":"July 31, 2025, the MoF and STA jointly issued Public Notice No 4 of 2025, stating that VAT will apply with respect to","page_number":96,"box":{"x":69,"y":143,"width":826,"height":11}},{"id":"d7b85712-360c-483b-a4be-ca13211dd403","block_type":"box","text":"interest income derived from treasury bonds, local government bonds and financial bonds issued on or after","page_number":96,"box":{"x":70,"y":158,"width":772,"height":11}},{"id":"2d8dee77-6a77-4d3d-9736-6361f85f015c","block_type":"box","text":"August 8, 2025. It is understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption","page_number":96,"box":{"x":68,"y":173,"width":840,"height":11}},{"id":"1e492e63-f791-4d45-9afa-5e5f2640745a","block_type":"box","text":"for foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":96,"box":{"x":68,"y":188,"width":665,"height":12}},{"id":"aa8d5e07-31dc-4108-8c77-5ba456920327","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement by the PRC","page_number":96,"box":{"x":101,"y":211,"width":801,"height":11}},{"id":"4513ed72-e607-4d3e-9225-e3736f98e553","block_type":"box","text":"tax authorities may result in a loss which could be material to the Fund. There is a risk the PRC tax authorities may","page_number":96,"box":{"x":68,"y":226,"width":821,"height":11}},{"id":"6d75e925-94a8-4ae2-9945-6e156f6f2b51","block_type":"box","text":"withdraw the temporary tax exemptions in the future and seek to collect taxes realized on the sale of A-Shares or","page_number":96,"box":{"x":68,"y":241,"width":808,"height":11}},{"id":"d5861cc3-18d9-41ca-9a45-bfcd0bc75251","block_type":"box","text":"PRC sourced interest income on non-government bonds received by the Fund without giving any prior notice. If the","page_number":96,"box":{"x":69,"y":256,"width":810,"height":12}},{"id":"b0f60fbe-1121-4d49-b537-62d569b29ffa","block_type":"box","text":"temporary tax exemptions are withdrawn, any taxes may be directly borne by or indirectly passed on to the Fund and","page_number":96,"box":{"x":68,"y":272,"width":829,"height":11}},{"id":"34722313-8311-4e69-8fd6-253ffa7d560f","block_type":"box","text":"may result in a substantial impact to its net asset value. As with any net asset value adjustment, investors may be","page_number":96,"box":{"x":69,"y":287,"width":819,"height":11}},{"id":"e35fa255-9f7e-4d47-b961-e158a466c89c","block_type":"box","text":"advantaged or disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":96,"box":{"x":69,"y":302,"width":833,"height":11}},{"id":"6128f2fd-a96a-43a6-9418-be6a3d2bff7b","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":96,"box":{"x":68,"y":317,"width":474,"height":11}},{"id":"de91bee9-4739-4865-b6d2-b30119c40848","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from time to","page_number":96,"box":{"x":102,"y":339,"width":777,"height":12}},{"id":"88e1527c-a5c5-4b79-a67b-02894efb0c44","block_type":"box","text":"time, make a provision for potential tax liabilities if in its opinion such provision is warranted or as further clarified by","page_number":96,"box":{"x":68,"y":355,"width":836,"height":11}},{"id":"a2adcebc-211d-47ac-966b-2046c0ee14fa","block_type":"box","text":"the PRC in notifications.","page_number":96,"box":{"x":68,"y":370,"width":171,"height":9}},{"id":"4d335f2b-731b-4ec8-b242-8b42d4c91c05","block_type":"box","text":"Investment in Other Investment Companies.","page_number":96,"box":{"x":102,"y":392,"width":320,"height":11}},{"id":"43240b78-7c94-4277-9f7d-32120076bdb4","block_type":"box","text":"Each Fund may, subject to applicable law, invest in other","page_number":96,"box":{"x":429,"y":393,"width":402,"height":11}},{"id":"5b07ee85-3f3b-4c7e-a92d-744edb2a5b5f","block_type":"box","text":"investment companies (including investment companies managed by BlackRock and its affiliates), including money","page_number":96,"box":{"x":70,"y":407,"width":818,"height":12}},{"id":"5bcf5c23-d1f8-4ae1-bcd0-bc701c17d141","block_type":"box","text":"market funds and ETFs, which are typically open-end funds or unit investment trusts listed on a stock exchange.","page_number":96,"box":{"x":69,"y":423,"width":797,"height":11}},{"id":"ef25c45a-549c-4a88-80b4-4004ed0d186f","block_type":"box","text":"Under Section 12(d)(1)(A) of the Investment Company Act, however, a Fund may invest up to 10% of its total assets","page_number":96,"box":{"x":70,"y":438,"width":822,"height":11}},{"id":"111c9880-49e9-4d3a-9f5a-57f7dec333a3","block_type":"box","text":"in securities of other investment companies (measured at the time of such investment). In addition, under Section","page_number":96,"box":{"x":70,"y":453,"width":814,"height":11}},{"id":"e64be445-eccb-493d-aec4-b9735e8d6df8","block_type":"box","text":"12(d)(1)(A) of the Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":96,"box":{"x":70,"y":468,"width":793,"height":11}},{"id":"a00648ee-6445-498a-a45b-2bd98d6f0fa3","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such investment","page_number":96,"box":{"x":69,"y":483,"width":796,"height":11}},{"id":"aa027fde-e3e6-4e27-8e29-84ab646b5a3f","block_type":"box","text":"company and a Fund may not invest in another investment company if such investment would cause more than 5% of","page_number":96,"box":{"x":69,"y":498,"width":837,"height":11}},{"id":"864f8546-aacb-4186-891e-a64467cda572","block_type":"box","text":"the value of the Fund’s total assets to be invested in securities of such investment company. (These limits do not","page_number":96,"box":{"x":68,"y":513,"width":812,"height":11}},{"id":"2cca885b-b830-4295-af0a-c5e7b0155a34","block_type":"box","text":"restrict a Feeder Fund from investing all of its assets in shares of its Master Portfolio.) In addition to the restrictions","page_number":96,"box":{"x":69,"y":528,"width":829,"height":12}},{"id":"26565df3-bc9d-4366-bf73-8786026030de","block_type":"box","text":"on investing in other investment companies discussed above, under Section 12(d)(1)(C) of the Investment Company","page_number":96,"box":{"x":69,"y":543,"width":827,"height":12}},{"id":"deae35a5-dacf-41c0-a862-b6a62c9aa413","block_type":"box","text":"Act a Fund may not invest in a registered closed-end investment company if such investment would cause the Fund","page_number":96,"box":{"x":68,"y":559,"width":821,"height":11}},{"id":"526464cf-b130-493e-ab4a-d0488957f5a4","block_type":"box","text":"and other BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock of","page_number":96,"box":{"x":69,"y":574,"width":817,"height":11}},{"id":"95a8f9f5-b6d7-4d1e-a76f-ba074ea9de13","block_type":"box","text":"such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company Act, these","page_number":96,"box":{"x":69,"y":589,"width":776,"height":11}},{"id":"73ab0152-086f-48bc-85db-858bd547dc7f","block_type":"box","text":"percentage limitations do not apply to investments in affiliated investment companies, including ETFs, subject to","page_number":96,"box":{"x":70,"y":604,"width":802,"height":11}},{"id":"d72b4aab-4117-4c52-91d8-6f818e88f018","block_type":"box","text":"certain conditions. In addition, a Fund may be able to rely on certain rules under the Investment Company Act to","page_number":96,"box":{"x":69,"y":619,"width":801,"height":11}},{"id":"eac2ee55-0eb4-4c5b-bee7-df4fff27f87f","block_type":"box","text":"invest in shares of money market funds or other investment companies beyond the statutory limits noted above, but","page_number":96,"box":{"x":70,"y":634,"width":829,"height":11}},{"id":"b06c6a7a-7520-4b30-b94c-213de2b1a423","block_type":"box","text":"subject to certain conditions.","page_number":96,"box":{"x":69,"y":650,"width":206,"height":10}},{"id":"51092507-1a6f-42e5-abfc-60ee5d03ff47","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and selection risk.","page_number":96,"box":{"x":101,"y":672,"width":799,"height":11}},{"id":"6e60ac80-76af-4436-bb7b-8be829334ab8","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an exchange","page_number":96,"box":{"x":102,"y":695,"width":779,"height":11}},{"id":"b14c09d6-c5fb-4423-8857-7feaad2837a9","block_type":"box","text":"may at times be acquired at market prices representing premiums to their NAVs. In addition, investment companies","page_number":96,"box":{"x":69,"y":710,"width":824,"height":11}},{"id":"860611b7-fb03-4c4b-982c-de9878fb1585","block_type":"box","text":"held by a Fund that trade on an exchange could trade at a discount from NAV, and such discount could increase while","page_number":96,"box":{"x":69,"y":725,"width":836,"height":11}},{"id":"f7a4a8d6-0326-46a0-9324-57dd51de0986","block_type":"box","text":"the Fund holds the shares. If the market price of shares of an exchange-traded investment company decreases below","page_number":96,"box":{"x":68,"y":740,"width":839,"height":11}},{"id":"454014a7-3d02-4a7a-98c9-cf3740600a2b","block_type":"box","text":"the price that the Fund paid for the shares and the Fund were to sell its shares of such investment company at a","page_number":96,"box":{"x":68,"y":755,"width":806,"height":11}},{"id":"5c82616d-e5c9-4c3f-b1d1-39d44b2dca8c","block_type":"box","text":"time when the market price is lower than the price at which it purchased the shares, the Fund would experience a","page_number":96,"box":{"x":68,"y":771,"width":810,"height":10}},{"id":"a31b99e1-31db-4c33-929a-0dd03dcf2bbc","block_type":"box","text":"loss.","page_number":96,"box":{"x":70,"y":786,"width":31,"height":8}},{"id":"77113743-a9b8-4e45-a275-5c88e9e94d3a","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment companies,","page_number":96,"box":{"x":102,"y":808,"width":758,"height":11}},{"id":"4e795b65-2a6e-4021-a980-147d5561a170","block_type":"box","text":"shareholders would bear both their proportionate share of expenses in the Fund and, indirectly, the expenses of such","page_number":96,"box":{"x":69,"y":823,"width":837,"height":11}},{"id":"14109312-09e1-4fe0-894c-ab178e9d1f32","block_type":"box","text":"investment companies. Such expenses, both at the Fund level and acquired investment company level, would include","page_number":96,"box":{"x":70,"y":838,"width":835,"height":11}},{"id":"4c9a6077-37f0-4b72-ac95-fa2474d34135","block_type":"box","text":"management and advisory fees, unless such fees have been waived by BlackRock. Please see the relevant Fund’s","page_number":96,"box":{"x":69,"y":853,"width":816,"height":12}},{"id":"671a19d6-e9fb-490d-b937-e6fa090a2c59","block_type":"box","text":"Prospectus to determine whether any such management and advisory fees have been waived by BlackRock.","page_number":96,"box":{"x":69,"y":869,"width":768,"height":11}},{"id":"b931aaf2-b73f-4027-b282-f94efeb4e6f5","block_type":"box","text":"Investments by a Fund in wholly owned investment entities created under the laws of certain countries will not be","page_number":96,"box":{"x":70,"y":884,"width":807,"height":11}},{"id":"6aa6594e-e756-439f-b237-95985a067204","block_type":"box","text":"deemed an investment in other investment companies. Pursuant to guidance issued by the staff of the Commission,","page_number":96,"box":{"x":69,"y":899,"width":830,"height":11}},{"id":"96a686de-e08a-4bc5-be47-208d8347717b","block_type":"box","text":"II-47","page_number":96,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"8c36ee34-695e-450c-9dfb-784549890fbd","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":96,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"00131db8-38d0-4ec5-a0cb-50a410c24f2f","block_type":"box","text":"fees and expenses of money market funds used for the investment of cash collateral received in connection with","page_number":97,"box":{"x":68,"y":45,"width":804,"height":11}},{"id":"c1702853-c799-4485-a94c-0e7628c882c6","block_type":"box","text":"loans of Fund securities are not treated as “acquired fund fees and expenses,” which are fees and expenses","page_number":97,"box":{"x":70,"y":60,"width":778,"height":11}},{"id":"2989760e-fd07-4cd0-8a8d-d6b84b1cffd7","block_type":"box","text":"charged by other investment companies and pooled investment vehicles in which a Fund invests a portion of its","page_number":97,"box":{"x":69,"y":75,"width":796,"height":11}},{"id":"49ae340a-1909-4e76-ad2b-d94e9b004075","block_type":"box","text":"assets.","page_number":97,"box":{"x":69,"y":91,"width":51,"height":8}},{"id":"817bba88-2a18-4ad3-b311-4e0dd272787a","block_type":"box","text":"To the extent shares of a Fund are held by another fund, the ability of the Fund itself to purchase other funds","page_number":97,"box":{"x":101,"y":113,"width":776,"height":11}},{"id":"fd1121c8-697a-471e-860f-ded04cdc25d0","block_type":"box","text":"may be limited. In addition, a fund-of-funds (","page_number":97,"box":{"x":69,"y":128,"width":313,"height":11}},{"id":"9dbcb5ed-693b-4aa1-931a-985482fc089e","block_type":"box","text":"e.g.","page_number":97,"box":{"x":384,"y":129,"width":24,"height":10}},{"id":"0e93c984-0d77-4c53-bde3-67403ff75c53","block_type":"box","text":", an investment company that seeks to meet its investment objective","page_number":97,"box":{"x":411,"y":128,"width":491,"height":11}},{"id":"e22af826-3289-46bf-8329-5ad519753ec2","block_type":"box","text":"by investing significantly in other investment companies) may be limited in its ability to purchase underlying funds if","page_number":97,"box":{"x":69,"y":143,"width":823,"height":11}},{"id":"7fb16365-ad75-43e8-a822-4e69a2fbb84e","block_type":"box","text":"such underlying funds themselves own shares of underlying funds.","page_number":97,"box":{"x":69,"y":158,"width":472,"height":11}},{"id":"eddccafd-f56a-4b16-89bd-efcd6dd744e2","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate indirect foreign","page_number":97,"box":{"x":101,"y":181,"width":790,"height":11}},{"id":"ce4431b6-1246-4cbb-b8f8-e3a6ebb35eb0","block_type":"box","text":"investment in developing countries, and certain of such countries, such as Thailand, South Korea, Chile and Brazil,","page_number":97,"box":{"x":70,"y":196,"width":818,"height":11}},{"id":"0293953a-ea3d-4661-b550-8d01cb29014c","block_type":"box","text":"have specifically authorized such funds. There also are investment opportunities in certain of such countries in","page_number":97,"box":{"x":69,"y":211,"width":791,"height":11}},{"id":"9426cc2a-183d-49eb-8673-b850af0527b2","block_type":"box","text":"pooled vehicles that resemble open-end investment companies. The restrictions on investments in securities of","page_number":97,"box":{"x":70,"y":226,"width":795,"height":11}},{"id":"945bac5a-8be1-4fde-aea0-fe5343ebee56","block_type":"box","text":"investment companies set forth above may limit opportunities for a Fund to invest indirectly in certain developing","page_number":97,"box":{"x":70,"y":241,"width":807,"height":11}},{"id":"baa53f40-bd12-4ce6-8c17-d592a36a13dc","block_type":"box","text":"countries.","page_number":97,"box":{"x":69,"y":257,"width":69,"height":8}},{"id":"2820c713-9f35-455b-acc3-14c23a82f358","block_type":"box","text":"Issuer Insolvency Risk.","page_number":97,"box":{"x":102,"y":279,"width":166,"height":11}},{"id":"7fc17dee-254a-4a89-8363-422da9b61aa3","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled issuers involves","page_number":97,"box":{"x":275,"y":279,"width":631,"height":11}},{"id":"303d41b9-211b-4979-889b-1af0b0d941dc","block_type":"box","text":"a high degree of credit and market risk, which may be heightened during an economic downturn or recession. Should","page_number":97,"box":{"x":69,"y":294,"width":832,"height":11}},{"id":"ec0d6a4f-1632-4438-b9b9-6ed8f0b4fc80","block_type":"box","text":"an issuer of securities held by a Fund become involved in a bankruptcy proceeding, reorganization or financial","page_number":97,"box":{"x":69,"y":309,"width":781,"height":11}},{"id":"b948fa84-bdbc-4f76-bc52-f6f920c220cd","block_type":"box","text":"restructuring, a wide variety of considerations make an evaluation of the outcome of the Fund’s exposure to the","page_number":97,"box":{"x":69,"y":324,"width":797,"height":12}},{"id":"20e8b937-8912-47a2-b251-3d00aadc06a1","block_type":"box","text":"issuer uncertain.","page_number":97,"box":{"x":70,"y":340,"width":118,"height":8}},{"id":"7a3d8180-8dc2-49b5-9970-06f68d1f4048","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that a Fund","page_number":97,"box":{"x":102,"y":362,"width":788,"height":11}},{"id":"e8dd80c5-b6af-4ce6-a8e3-7b519ebe0010","block_type":"box","text":"will receive any interest payments on the securities of the issuer. A Fund will be subject to significant uncertainty as","page_number":97,"box":{"x":68,"y":377,"width":827,"height":12}},{"id":"0d724e88-ff3e-4b8f-86c2-ce015b1bc8a7","block_type":"box","text":"to whether the reorganization or restructuring will be completed, and the Fund may bear certain extraordinary","page_number":97,"box":{"x":68,"y":393,"width":779,"height":11}},{"id":"98b8edbb-6b7f-4633-9d41-764e2625e8ce","block_type":"box","text":"expenses to protect and recover its investment. A Fund will also be subject to significant uncertainty as to when and","page_number":97,"box":{"x":69,"y":407,"width":829,"height":12}},{"id":"e581c434-8f59-4b45-9a03-4db6881b04c6","block_type":"box","text":"in what manner and for what value the obligations evidenced by the securities of the issuer held by the Fund will","page_number":97,"box":{"x":70,"y":423,"width":797,"height":11}},{"id":"48e6fee1-1f24-47d1-9475-8587f8b255d1","block_type":"box","text":"eventually be satisfied.","page_number":97,"box":{"x":69,"y":438,"width":162,"height":11}},{"id":"eb93a688-dbfc-4650-b70a-8487d6eb5624","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer held by the","page_number":97,"box":{"x":102,"y":460,"width":805,"height":12}},{"id":"45068d8a-5cba-4d5a-86c0-0938335ffd60","block_type":"box","text":"Fund, there can be no assurance that the securities or other assets received by a Fund in connection with such plan","page_number":97,"box":{"x":70,"y":476,"width":827,"height":11}},{"id":"c08e5168-6281-46d1-991d-4d3a05757d66","block_type":"box","text":"of reorganization or restructuring will not have a lower value or income potential than may have been anticipated or","page_number":97,"box":{"x":69,"y":491,"width":819,"height":11}},{"id":"e0da961b-8927-4f9f-894c-69c35e5c8fc5","block_type":"box","text":"no value. A Fund may be unable to enforce its claims or rights in any collateral or may have its claims or security","page_number":97,"box":{"x":69,"y":506,"width":802,"height":11}},{"id":"e1af9bf0-72f9-4cd1-8f50-b33a59e15783","block_type":"box","text":"interest in any collateral challenged, disallowed or subordinated to the claims or security interests of other creditors.","page_number":97,"box":{"x":70,"y":521,"width":830,"height":11}},{"id":"1cb3d90f-1ce9-4d3d-865d-949ee63da164","block_type":"box","text":"In addition, amendments to the U.S. Bankruptcy Code or other relevant laws could alter the expected outcome or","page_number":97,"box":{"x":70,"y":536,"width":805,"height":11}},{"id":"8ce583be-5811-48d0-9b2d-a334270aa4e0","block_type":"box","text":"introduce greater uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":97,"box":{"x":70,"y":551,"width":820,"height":11}},{"id":"d7c93911-7755-46d5-aa4e-db5618627d8f","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be re-characterized or","page_number":97,"box":{"x":70,"y":566,"width":828,"height":11}},{"id":"c06d5dda-b1cc-4094-b4a1-4856a96acd3c","block_type":"box","text":"a Fund may receive different securities or other assets, including equity securities. These types of equity securities","page_number":97,"box":{"x":69,"y":581,"width":820,"height":12}},{"id":"d090ec16-5880-45f4-a8c0-738d021f8203","block_type":"box","text":"include, but are not limited to: common stock; preferred stock (including convertible preferred stock); bonds, notes","page_number":97,"box":{"x":70,"y":596,"width":820,"height":12}},{"id":"d61ed361-fb66-4614-b520-31770162777f","block_type":"box","text":"and debentures convertible into common or preferred stock; stock purchase warrants and rights; equity interests in","page_number":97,"box":{"x":69,"y":612,"width":824,"height":11}},{"id":"d0f0d7d9-fec0-47fb-b02c-0b88346e258f","block_type":"box","text":"trusts; and depositary receipts. Equity securities are subject to changes in value, and their value may be more","page_number":97,"box":{"x":68,"y":627,"width":788,"height":11}},{"id":"026b9ddf-3233-4dc3-9996-881ad7814837","block_type":"box","text":"volatile than those of other asset classes. Holders of equity securities are subject to more risk than holders of debt","page_number":97,"box":{"x":68,"y":642,"width":826,"height":11}},{"id":"d16cd520-c707-4420-b3b8-fbb2a9656245","block_type":"box","text":"securities because the status of equity holders is subordinate to debtholders in an issuer’s capital structure. The","page_number":97,"box":{"x":69,"y":657,"width":809,"height":11}},{"id":"8d9c0587-f303-4315-b2c1-3034020cceba","block_type":"box","text":"value of equity securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":97,"box":{"x":68,"y":672,"width":809,"height":11}},{"id":"9dea8c45-b830-4054-89ad-e32da0c465f7","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":97,"box":{"x":69,"y":687,"width":741,"height":11}},{"id":"9cce6ded-75c2-4988-a4b8-3a46d580f453","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding, reorganization or","page_number":97,"box":{"x":101,"y":710,"width":780,"height":11}},{"id":"4989ac79-daa7-49cd-9a2e-356d600eb309","block_type":"box","text":"financial restructuring, the Fund may also be subject to additional risks associated with the assets received. One","page_number":97,"box":{"x":68,"y":725,"width":807,"height":11}},{"id":"32deb0c7-11fe-4c8b-aff6-a6509fc265f0","block_type":"box","text":"example of assets that a Fund could receive is an interest in one or more loans made to the issuer as part of a","page_number":97,"box":{"x":69,"y":740,"width":795,"height":11}},{"id":"76b16785-1a80-4f0e-b9e2-b47b264d15fe","block_type":"box","text":"workout agreed to by a consortium of lienholders and creditors of the issuer. A Fund may receive such interests in","page_number":97,"box":{"x":68,"y":755,"width":814,"height":11}},{"id":"ef2e066c-3490-4f56-988b-adbe9906badd","block_type":"box","text":"loans to the extent permitted by the Investment Company Act.","page_number":97,"box":{"x":70,"y":770,"width":439,"height":11}},{"id":"d82a4939-8b95-421a-90bf-bea8531875e0","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree of risk than","page_number":97,"box":{"x":102,"y":793,"width":806,"height":11}},{"id":"5bf47e93-330d-491e-a17f-2ed45f255d06","block_type":"box","text":"investments in securities of issuers that have not undergone a reorganization or restructuring and may be subject to","page_number":97,"box":{"x":70,"y":808,"width":829,"height":11}},{"id":"a1c24623-4236-42e5-9bb2-a9b3551d40c0","block_type":"box","text":"heavy selling or downward pricing pressure after completion of the reorganization or restructuring. The post","page_number":97,"box":{"x":69,"y":823,"width":767,"height":12}},{"id":"3434c497-4fd2-4262-ba92-cbe417be77c9","block_type":"box","text":"reorganization/restructuring assets and securities may also be illiquid and difficult to sell or value. If a Fund","page_number":97,"box":{"x":69,"y":838,"width":771,"height":12}},{"id":"adb4d8d8-5759-4421-a906-0f8a90f1a8cb","block_type":"box","text":"participates in negotiations with respect to a plan of reorganization or restructuring with respect to securities of the","page_number":97,"box":{"x":70,"y":853,"width":823,"height":12}},{"id":"38427bb8-c293-4ad0-84ec-a407acfa457a","block_type":"box","text":"issuer held by a Fund, the Fund also may be restricted from disposing such securities for a period of time. If a Fund","page_number":97,"box":{"x":70,"y":869,"width":822,"height":11}},{"id":"28b6d6cf-24f5-4fb8-8d28-21a748df9fb1","block_type":"box","text":"becomes involved in such proceedings, the Fund may have more active participation in the affairs of the issuer than","page_number":97,"box":{"x":69,"y":884,"width":828,"height":11}},{"id":"92857bb2-208f-4914-898a-6937e9cb157e","block_type":"box","text":"that assumed generally by an investor.","page_number":97,"box":{"x":68,"y":899,"width":274,"height":11}},{"id":"3e8f09cb-635c-4c4e-ba01-83a31b20b32d","block_type":"box","text":"II-48","page_number":97,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"75e40ebe-bae1-4390-9eb3-a90154566d4a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":97,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7009a9e5-075b-488f-846b-3b5f4e0d8a45","block_type":"box","text":"Lease Obligations.","page_number":98,"box":{"x":102,"y":45,"width":133,"height":11}},{"id":"ebf890cf-20a9-4382-9158-5572d87570de","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase contract, or a","page_number":98,"box":{"x":241,"y":45,"width":653,"height":11}},{"id":"5dc4da59-3d2f-4ed8-8475-4d5d4e456bfd","block_type":"box","text":"conditional sales contract (“lease obligations”). The Manager will monitor the credit standing of each borrower and","page_number":98,"box":{"x":69,"y":60,"width":816,"height":11}},{"id":"e2cd7636-06ab-46d8-9547-bac9f55c33a0","block_type":"box","text":"each entity providing credit support and/or a put option relating to lease obligations.","page_number":98,"box":{"x":69,"y":75,"width":602,"height":11}},{"id":"f1c261c9-c60e-4757-baf8-e2f71b6c5276","block_type":"box","text":"Life Settlement Investments.","page_number":98,"box":{"x":102,"y":98,"width":210,"height":9}},{"id":"cf50e951-5701-49c9-bc8b-e9ec875652a8","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties, such as the","page_number":98,"box":{"x":318,"y":98,"width":589,"height":11}},{"id":"aacf9d82-c3e7-4d20-9e6f-48c73d086bf4","block_type":"box","text":"Fund, of existing life insurance contracts for more than their cash surrender value but less than the net benefits to be","page_number":98,"box":{"x":70,"y":113,"width":838,"height":11}},{"id":"e05733bb-f9c3-47a0-ad73-29b4b04712d1","block_type":"box","text":"paid under the policies. When a Fund acquires such a contract, it pays the policy premiums in return for the expected","page_number":98,"box":{"x":70,"y":128,"width":834,"height":11}},{"id":"615abc85-cd50-4d26-8b59-2425786c29ab","block_type":"box","text":"receipt of the net benefit as the beneficiary under the policy. Investments in these contracts involve certain risks,","page_number":98,"box":{"x":69,"y":143,"width":808,"height":11}},{"id":"6f74f9a3-b56e-4ec0-80c9-002ead0f421b","block_type":"box","text":"including liquidity risk, credit risk of the insurance company, and inaccurate estimations of life expectancy of the","page_number":98,"box":{"x":70,"y":158,"width":797,"height":11}},{"id":"2ce4839a-c28e-4f6c-bb1b-3eb94366fd49","block_type":"box","text":"insured individuals (viators). These policies may be considered illiquid because they are bought and sold in a","page_number":98,"box":{"x":70,"y":173,"width":775,"height":11}},{"id":"c2de125d-131e-48a3-9b0f-48d305cebf7e","block_type":"box","text":"secondary market through life settlement agents. Also, in the event of a bankruptcy of the insurance carrier for a","page_number":98,"box":{"x":69,"y":188,"width":805,"height":12}},{"id":"7f7f2038-8fca-4338-a0da-4124ee079b84","block_type":"box","text":"policy, the Fund may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":98,"box":{"x":70,"y":203,"width":789,"height":12}},{"id":"4d623ca3-d136-442f-8ee9-3b3cf53a5893","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund may encounter","page_number":98,"box":{"x":70,"y":218,"width":829,"height":12}},{"id":"aa8c19b6-6d0c-4c71-b39c-a0ef4e47a141","block_type":"box","text":"losses on its investments if there is an inaccurate estimation of the life expectancies of viators. A Fund intends to","page_number":98,"box":{"x":70,"y":234,"width":813,"height":11}},{"id":"f728a14b-f1a5-4471-8479-070190db1b13","block_type":"box","text":"reduce this life expectancy risk by investing only in contracts where the life expectancy was reviewed by an","page_number":98,"box":{"x":69,"y":249,"width":758,"height":11}},{"id":"b82e66d2-df3a-41de-b97b-984bb157527c","block_type":"box","text":"experienced actuary, as well as by diversifying its investments across viators of varying ages and medical profiles. In","page_number":98,"box":{"x":69,"y":264,"width":832,"height":11}},{"id":"d3779fdd-9000-4baa-8d7e-464e8a81a9e1","block_type":"box","text":"addition, it is unclear whether the income from life settlements is qualifying income for purposes of the IRS 90%","page_number":98,"box":{"x":69,"y":279,"width":800,"height":11}},{"id":"27d8f4c2-34b6-468c-b234-45a64140b4cf","block_type":"box","text":"gross income test a Fund must satisfy each year to qualify as a regulated investment company. A Fund intends to","page_number":98,"box":{"x":68,"y":294,"width":809,"height":11}},{"id":"95036669-b682-46a5-839e-9df836d1c0d9","block_type":"box","text":"monitor its investments to ensure that the Fund remains qualified as a regulated investment company.","page_number":98,"box":{"x":69,"y":309,"width":730,"height":11}},{"id":"eb1cc8f3-3eb7-4161-bc50-0e7f0f117de7","block_type":"box","text":"Liquidity Risk Management.","page_number":98,"box":{"x":102,"y":332,"width":202,"height":11}},{"id":"9864ed67-022d-483d-bffe-e86eaeaad87d","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”) requires open","page_number":98,"box":{"x":311,"y":332,"width":591,"height":11}},{"id":"e3c68d7c-b8d6-4be3-baab-e3653dbd653d","block_type":"box","text":"end funds, such as the Funds, to adopt a liquidity risk management program and enhance disclosures regarding fund","page_number":98,"box":{"x":69,"y":347,"width":835,"height":11}},{"id":"73fa6a32-670f-4894-863b-fa7db0421c20","block_type":"box","text":"liquidity. As required by the Liquidity Rule, the Funds have implemented a liquidity risk management program (the","page_number":98,"box":{"x":70,"y":362,"width":803,"height":11}},{"id":"093e9594-0137-4f77-a804-adf72b3aa02d","block_type":"box","text":"“Liquidity Program”), and the Boards of Directors of the Funds, including a majority of the independent Directors,","page_number":98,"box":{"x":70,"y":377,"width":801,"height":12}},{"id":"cb115079-7e7c-451e-b22e-75fa33bc947d","block_type":"box","text":"have appointed the Manager as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity","page_number":98,"box":{"x":69,"y":392,"width":822,"height":12}},{"id":"db8fec8d-5d1b-4618-ae64-dae36a741e1a","block_type":"box","text":"Program, the Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":98,"box":{"x":69,"y":407,"width":808,"height":12}},{"id":"5576dd14-a076-4c5d-b1e2-3d97498b751e","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid investment” or","page_number":98,"box":{"x":70,"y":423,"width":838,"height":11}},{"id":"f5f44c08-a998-4c65-ab4d-6d70f6b95a4d","block_type":"box","text":"“illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund could not meet requests to","page_number":98,"box":{"x":70,"y":438,"width":804,"height":11}},{"id":"588f0a87-8151-4852-8dfd-65700e495385","block_type":"box","text":"redeem shares issued by the Fund without significant dilution of the remaining investors’ interests in the Fund. The","page_number":98,"box":{"x":69,"y":453,"width":821,"height":11}},{"id":"e67eb0d8-5249-4b75-a707-cfab8f4df027","block_type":"box","text":"liquidity of a Fund’s portfolio investments is determined based on relevant market, trading and investment-specific","page_number":98,"box":{"x":70,"y":468,"width":815,"height":11}},{"id":"237695d7-27c6-4dd5-a64a-89ad66701d28","block_type":"box","text":"considerations under the Liquidity Program. To the extent that an investment is deemed to be an illiquid investment","page_number":98,"box":{"x":69,"y":483,"width":823,"height":11}},{"id":"01f567f9-dd3f-4609-baca-6cfc9b8e477c","block_type":"box","text":"or a less liquid investment, a Fund can expect to be exposed to greater liquidity risk.","page_number":98,"box":{"x":69,"y":498,"width":601,"height":11}},{"id":"25373772-63c7-40b9-8a4e-7bb66cb84922","block_type":"box","text":"Master Limited Partnerships.","page_number":98,"box":{"x":102,"y":521,"width":211,"height":11}},{"id":"851f49c7-9879-43c3-b154-607209205dce","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships (“MLPs”)","page_number":98,"box":{"x":320,"y":521,"width":577,"height":11}},{"id":"c1ce9c6b-12e7-46bd-a1ab-2cf1cba69e5f","block_type":"box","text":"which are limited partnerships or limited liability companies taxable as partnerships. MLPs may derive income and","page_number":98,"box":{"x":68,"y":536,"width":816,"height":11}},{"id":"5c5a63ec-f266-4e13-be62-51628e8da20e","block_type":"box","text":"gains from the exploration, development, mining or production, processing, refining, transportation (including","page_number":98,"box":{"x":68,"y":551,"width":777,"height":11}},{"id":"25112bfd-08f4-44dd-b634-7a5eb756bcfe","block_type":"box","text":"pipelines transporting gas, oil, or products thereof), or the marketing of any mineral or natural resources. MLPs","page_number":98,"box":{"x":70,"y":566,"width":792,"height":11}},{"id":"bc11fc31-e3f9-4eb5-b7fa-8f2ac641a0d8","block_type":"box","text":"generally have two classes of owners, the general partner and limited partners. When investing in an MLP, a Fund","page_number":98,"box":{"x":68,"y":581,"width":811,"height":12}},{"id":"cc05d036-687a-4935-a24f-aea9db0162a2","block_type":"box","text":"intends to purchase publicly traded common units issued to limited partners of the MLP. The general partner is","page_number":98,"box":{"x":70,"y":596,"width":791,"height":12}},{"id":"f8c1da9d-223e-4062-9eb3-1545919e6c75","block_type":"box","text":"typically owned by a major energy company, an investment fund, the direct management of the MLP or is an entity","page_number":98,"box":{"x":68,"y":612,"width":812,"height":11}},{"id":"dbaed45c-a8a6-46a9-b882-5280d3649ebf","block_type":"box","text":"owned by one or more of such parties. The general partner may be structured as a private or publicly traded","page_number":98,"box":{"x":69,"y":627,"width":770,"height":11}},{"id":"7673a36a-00f3-4448-a091-76df5138572f","block_type":"box","text":"corporation or other entity. The general partner typically controls the operations and management of the MLP through","page_number":98,"box":{"x":69,"y":642,"width":833,"height":11}},{"id":"4c9b5ebf-ec7f-46c7-8937-30fc0c0c1a02","block_type":"box","text":"an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units.","page_number":98,"box":{"x":69,"y":657,"width":799,"height":11}},{"id":"74be2922-e81e-49aa-89a4-9f962ee6c054","block_type":"box","text":"Limited partners own the remainder of the partnership, through ownership of common units, and have a limited role","page_number":98,"box":{"x":70,"y":672,"width":825,"height":11}},{"id":"29788d1d-47a8-4d61-8de2-d15000c50569","block_type":"box","text":"in the partnership’s operations and management.","page_number":98,"box":{"x":70,"y":687,"width":352,"height":11}},{"id":"6fed9d5e-54e7-4363-a5a4-8b7a51417474","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to receive","page_number":98,"box":{"x":102,"y":710,"width":794,"height":11}},{"id":"254bb268-14d6-44c9-a04e-572e77e46fe9","block_type":"box","text":"quarterly cash distributions up to an established minimum amount (“minimum quarterly distributions” or “MQD”).","page_number":98,"box":{"x":69,"y":725,"width":809,"height":11}},{"id":"d792da3c-be5c-4c50-a171-2df4ba64f761","block_type":"box","text":"Common and general partner interests also accrue arrearages in distributions to the extent the MQD is not paid.","page_number":98,"box":{"x":69,"y":740,"width":804,"height":11}},{"id":"0c8a7585-ed5f-4777-88f5-a7c78a4d5fb4","block_type":"box","text":"Once common and general partner interests have been paid, subordinated units receive distributions of up to the","page_number":98,"box":{"x":69,"y":755,"width":808,"height":11}},{"id":"00e0d7c8-71a7-4755-bcae-46e51d3e3731","block_type":"box","text":"MQD; however, subordinated units do not accrue arrearages. Distributable cash in excess of the MQD paid to both","page_number":98,"box":{"x":70,"y":770,"width":816,"height":12}},{"id":"d5c3c5ee-43cb-417d-bd9b-da5928ce0337","block_type":"box","text":"common and subordinated units is distributed to both common and subordinated units generally on a pro rata basis.","page_number":98,"box":{"x":69,"y":786,"width":831,"height":11}},{"id":"6008061d-c8f1-4c4f-848b-c883982afb94","block_type":"box","text":"The general partner is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":98,"box":{"x":68,"y":801,"width":835,"height":11}},{"id":"c7c30001-f1c2-4ed9-b91b-0897d36860f9","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the general partner","page_number":98,"box":{"x":69,"y":816,"width":838,"height":11}},{"id":"571ee6e4-c09e-4775-babc-7e4a8188346d","block_type":"box","text":"increases cash distributions to the limited partners, the general partner receives an increasingly higher percentage of","page_number":98,"box":{"x":70,"y":831,"width":839,"height":11}},{"id":"f0dd931d-1cff-4ec2-aad1-dc5c8cf49d27","block_type":"box","text":"the incremental cash distributions. A common arrangement provides that the general partner can reach a tier where","page_number":98,"box":{"x":68,"y":846,"width":828,"height":11}},{"id":"7154ef5c-b421-41d1-bcfc-d45ece8a8abb","block_type":"box","text":"it receives 50% of every incremental dollar paid to common and subordinated unit holders. These incentive","page_number":98,"box":{"x":70,"y":861,"width":761,"height":11}},{"id":"667b3b41-0756-4d5c-85f6-f6b6f28e2b3f","block_type":"box","text":"distributions encourage the general partner to streamline costs, increase capital expenditures and acquire assets in","page_number":98,"box":{"x":69,"y":876,"width":830,"height":11}},{"id":"d585146b-f92d-4856-a4fe-226882a12ef3","block_type":"box","text":"order to increase the partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers.","page_number":98,"box":{"x":69,"y":891,"width":824,"height":12}},{"id":"4f761e6b-0e22-489b-854f-64d1a8f50ff6","block_type":"box","text":"Such results benefit all security holders of the MLP.","page_number":98,"box":{"x":69,"y":906,"width":366,"height":12}},{"id":"0969c99a-ba06-4881-9539-65ba098017a2","block_type":"box","text":"II-49","page_number":98,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"2123b19d-d116-4c10-a644-c6f55914f57f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":98,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"d75e54b7-7f43-4da2-9bd9-ab4687e487b3","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and traded on","page_number":99,"box":{"x":102,"y":45,"width":790,"height":11}},{"id":"67063d56-7c5a-4a47-94f7-29596b590b53","block_type":"box","text":"U.S. securities exchanges, with their value fluctuating predominantly based on prevailing market conditions and the","page_number":99,"box":{"x":70,"y":60,"width":820,"height":11}},{"id":"4e5a67e7-0b12-4e91-8367-9c5527796ac7","block_type":"box","text":"success of the MLP. Certain Funds intend to purchase common units in market transactions. Unlike owners of","page_number":99,"box":{"x":69,"y":75,"width":787,"height":11}},{"id":"5ba96a08-8877-4de3-94b0-665676fa7a5f","block_type":"box","text":"common stock of a corporation, owners of common units have limited voting rights and have no ability to annually","page_number":99,"box":{"x":69,"y":90,"width":810,"height":11}},{"id":"c553381c-bf94-4d49-a97f-137e67dd6298","block_type":"box","text":"elect directors. In the event of liquidation, common units have preference over subordinated units, but not over debt","page_number":99,"box":{"x":69,"y":105,"width":828,"height":11}},{"id":"bba4239a-052e-4675-80ee-19d1f91c4c69","block_type":"box","text":"or preferred units, to the remaining assets of the MLP.","page_number":99,"box":{"x":69,"y":120,"width":387,"height":12}},{"id":"98ed8afa-efbd-4e0b-8586-44fd4a2134ec","block_type":"box","text":"Merger Transaction Risk.","page_number":99,"box":{"x":102,"y":143,"width":183,"height":11}},{"id":"fb80f240-1bb4-412f-b8f0-5424b032eb9f","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger transaction prior","page_number":99,"box":{"x":291,"y":143,"width":616,"height":11}},{"id":"90fbc109-679f-433f-a6bb-5d27df4ef574","block_type":"box","text":"to the consummation of such transaction. In that circumstance, a Fund would expect to receive an amount (whether","page_number":99,"box":{"x":68,"y":158,"width":827,"height":11}},{"id":"9bff7492-1a53-4d0a-82db-35f22522a6c7","block_type":"box","text":"in cash, stock of the acquiring company or a combination of both) in excess of the purchase price paid by the Fund","page_number":99,"box":{"x":70,"y":173,"width":816,"height":11}},{"id":"c189d6b7-b132-4bff-be2c-c0adde303489","block_type":"box","text":"for the target company’s stock. However, a Fund is subject to the risk that the merger transaction may be canceled,","page_number":99,"box":{"x":68,"y":188,"width":825,"height":12}},{"id":"cb5d629d-ae55-45d3-b4e0-d23d80ac3cb7","block_type":"box","text":"delayed or restructured, in which case a Fund’s holding of the target company’s stock may not result in any profit for","page_number":99,"box":{"x":69,"y":203,"width":832,"height":12}},{"id":"94c4636a-f4e9-428e-9954-68c445be45d7","block_type":"box","text":"the Fund and may lose significant value.","page_number":99,"box":{"x":68,"y":218,"width":286,"height":12}},{"id":"45b39084-5c9b-42f4-9d75-acbb34b2cb28","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks.","page_number":99,"box":{"x":102,"y":241,"width":723,"height":11}},{"id":"78d45424-c21d-4bdc-a62f-f4fa25afa996","block_type":"box","text":"Certain","page_number":99,"box":{"x":831,"y":241,"width":50,"height":9}},{"id":"c16b7297-c45b-4a01-8be5-f7aafc2b5f7c","block_type":"box","text":"Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’ acceptances and time","page_number":99,"box":{"x":70,"y":256,"width":778,"height":12}},{"id":"adb61d55-bb0e-497c-90a1-55d895c7c519","block_type":"box","text":"deposits, including instruments issued or supported by the credit of U.S. or foreign banks or savings institutions","page_number":99,"box":{"x":69,"y":271,"width":802,"height":12}},{"id":"cb10bee7-e9c9-4430-96e1-210bc271ce50","block_type":"box","text":"having total assets at the time of purchase in excess of $1 billion. These obligations may be general obligations of","page_number":99,"box":{"x":69,"y":286,"width":820,"height":12}},{"id":"158f042d-234e-4972-9777-8bfbe8584142","block_type":"box","text":"the parent bank or may be limited to the issuing branch or subsidiary by the terms of a specific obligation or by","page_number":99,"box":{"x":68,"y":302,"width":794,"height":11}},{"id":"1e9e49cd-b7e6-4714-a392-e861253c5575","block_type":"box","text":"government regulation. The assets of a bank or savings institution will be deemed to include the assets of its","page_number":99,"box":{"x":68,"y":317,"width":781,"height":11}},{"id":"a504a120-d3f2-4ba2-a53d-2b52e6a8112f","block_type":"box","text":"domestic and foreign branches for purposes of a Fund’s investment policies. Investments in short-term bank","page_number":99,"box":{"x":69,"y":332,"width":776,"height":11}},{"id":"2ef0a339-f98b-4a7a-92cd-a9358b1a265a","block_type":"box","text":"obligations may include obligations of foreign banks and domestic branches of foreign banks, and also foreign","page_number":99,"box":{"x":69,"y":347,"width":785,"height":11}},{"id":"1d890c57-572e-45d4-ab67-8c8792d2e7c3","block_type":"box","text":"branches of domestic banks.","page_number":99,"box":{"x":69,"y":362,"width":205,"height":9}},{"id":"e1f64bfd-13a8-49cc-895c-188dd668606c","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of domestic or","page_number":99,"box":{"x":101,"y":385,"width":785,"height":11}},{"id":"09854dc4-76c7-4438-bdf3-3bca267c9d6c","block_type":"box","text":"foreign corporations and banks, and may acquire commercial obligations issued by Canadian corporations and","page_number":99,"box":{"x":68,"y":400,"width":787,"height":11}},{"id":"2291b6dd-5b8c-48ae-8a22-43c29c920691","block_type":"box","text":"Canadian counterparts of U.S. corporations, as well as Europaper, which is U.S. dollar-denominated commercial","page_number":99,"box":{"x":69,"y":415,"width":797,"height":11}},{"id":"a754c75f-2f52-4460-99da-41101585da48","block_type":"box","text":"paper of a foreign issuer.","page_number":99,"box":{"x":70,"y":430,"width":176,"height":11}},{"id":"cd20650c-b4b4-4ce6-9fcb-f25427146601","block_type":"box","text":"Money Market Securities.","page_number":99,"box":{"x":102,"y":453,"width":188,"height":11}},{"id":"18ae5fe5-5525-4446-88b0-a02fdda9f1fb","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S. dollar","page_number":99,"box":{"x":296,"y":453,"width":578,"height":11}},{"id":"5d876782-7089-4e16-b122-c1de030da06d","block_type":"box","text":"denominated instruments, such as government, bank, commercial and other obligations that are available in the","page_number":99,"box":{"x":69,"y":468,"width":802,"height":11}},{"id":"e317b5a4-6e62-4764-b945-764bfdb328ea","block_type":"box","text":"money markets. In particular, the Funds may invest in:","page_number":99,"box":{"x":69,"y":483,"width":386,"height":11}},{"id":"2678e4b1-4e6d-470f-9461-47c5a06ed63d","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks or savings","page_number":99,"box":{"x":69,"y":503,"width":779,"height":12}},{"id":"01203f15-8fde-49c4-9a1d-8aab53b802a6","block_type":"box","text":"institutions with total assets in excess of $1 billion (including obligations of foreign branches of such banks);","page_number":99,"box":{"x":102,"y":518,"width":776,"height":12}},{"id":"63f23477-c0d6-4c47-9902-010de3ca85aa","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign corporations and","page_number":99,"box":{"x":69,"y":538,"width":821,"height":12}},{"id":"5b6c2ffc-3d10-4289-98c3-eb9955283c89","block_type":"box","text":"other issuers rated (at the time of purchase) A-2 or higher by S&P, Prime-2 or higher by Moody’s or F-2 or higher","page_number":99,"box":{"x":102,"y":554,"width":795,"height":11}},{"id":"c90c2900-e15d-4915-9859-d27c9ba97094","block_type":"box","text":"by Fitch, as well as high quality corporate bonds rated (at the time of purchase) A or higher by those rating","page_number":99,"box":{"x":102,"y":569,"width":757,"height":11}},{"id":"8ed4a589-8712-41bc-b15a-7274918a1476","block_type":"box","text":"agencies;","page_number":99,"box":{"x":102,"y":584,"width":66,"height":11}},{"id":"84accac4-58e3-4671-9b31-296f04c564a2","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments described in","page_number":99,"box":{"x":69,"y":604,"width":792,"height":11}},{"id":"b6ceb323-934c-40e9-8468-77a50a2e61ed","block_type":"box","text":"(b) above as determined by the Fund’s Manager;","page_number":99,"box":{"x":102,"y":619,"width":344,"height":11}},{"id":"86f38da2-aa5b-4c6d-9d0c-20f0477bfe9a","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment purchase","page_number":99,"box":{"x":69,"y":639,"width":776,"height":12}},{"id":"3eb883b6-f665-4feb-9f4a-3f9f27b002a6","block_type":"box","text":"obligations and credit card receivables);","page_number":99,"box":{"x":102,"y":655,"width":283,"height":11}},{"id":"7eef5501-2872-47e0-a95e-7f5451340cf0","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its agencies or","page_number":99,"box":{"x":69,"y":675,"width":778,"height":11}},{"id":"abf30e1a-3a32-4402-aef7-04bdcdf2e06e","block_type":"box","text":"authorities and related custodial receipts;","page_number":99,"box":{"x":102,"y":690,"width":296,"height":11}},{"id":"f4408514-03fd-4fca-801e-1308bfd6907d","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political subdivisions,","page_number":99,"box":{"x":69,"y":710,"width":782,"height":11}},{"id":"69ca2fb2-0c0f-4591-9307-4031b7125bd4","block_type":"box","text":"agencies or authorities;","page_number":99,"box":{"x":102,"y":725,"width":166,"height":11}},{"id":"a87883e3-9bcd-4db5-b6c0-9bc3ec1d7d07","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":99,"box":{"x":69,"y":745,"width":528,"height":11}},{"id":"8bf16417-333a-413d-927c-46aa208e0c44","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":99,"box":{"x":69,"y":766,"width":534,"height":11}},{"id":"82c1947a-3360-4a47-b2c3-d4420f9c82ae","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":99,"box":{"x":69,"y":786,"width":447,"height":11}},{"id":"559b8451-a30f-4a57-946a-9f7a06c3c5a3","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S. Government or","page_number":99,"box":{"x":69,"y":806,"width":812,"height":11}},{"id":"c0611f13-5dcc-44f5-b584-ab23cdd76591","block_type":"box","text":"one of its agencies or authorities or which otherwise depend directly or indirectly on the credit of the United","page_number":99,"box":{"x":102,"y":821,"width":766,"height":11}},{"id":"9de8ec4b-2eff-4648-87c4-ec769dcbd001","block_type":"box","text":"States;","page_number":99,"box":{"x":102,"y":836,"width":49,"height":10}},{"id":"8465ff2a-610e-43e0-9a18-8d61963a59e0","block_type":"box","text":"(k) fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s,","page_number":99,"box":{"x":69,"y":856,"width":829,"height":11}},{"id":"671a31d7-963d-4dd5-a043-08b368e7b8b7","block_type":"box","text":"SP-2 or A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":99,"box":{"x":102,"y":871,"width":379,"height":11}},{"id":"040eaaf9-4d1d-46d3-b0f5-208be2caabb5","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by","page_number":99,"box":{"x":69,"y":891,"width":826,"height":12}},{"id":"c981516b-45fe-411a-a876-f5f47681e3c7","block_type":"box","text":"S&P, or F-2 or higher by Fitch;","page_number":99,"box":{"x":102,"y":906,"width":207,"height":12}},{"id":"c2c02dc9-0f1c-431a-bac1-1af16d29cebd","block_type":"box","text":"II-50","page_number":99,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"3442ea21-c10b-4c9c-a17e-14199ec42290","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":99,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a6429765-2d59-4174-9df6-664f2e2bbae1","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":100,"box":{"x":69,"y":45,"width":458,"height":11}},{"id":"3468d3c2-fb14-4133-ba48-cd1efe907c41","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments described above, as","page_number":100,"box":{"x":69,"y":65,"width":837,"height":11}},{"id":"d0e9314e-2dd8-4b84-be97-e839b42e3d14","block_type":"box","text":"determined by the Fund’s Manager under guidelines established by the Board; and","page_number":100,"box":{"x":101,"y":80,"width":589,"height":11}},{"id":"e34e32a5-a8ac-483c-ac59-9ffad93c726f","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S. Government or an","page_number":100,"box":{"x":69,"y":100,"width":795,"height":11}},{"id":"1eebb067-9781-4416-a529-98b3b90f0827","block_type":"box","text":"agency or instrumentality thereof or which otherwise depend directly or indirectly on the credit of the United","page_number":100,"box":{"x":102,"y":115,"width":764,"height":11}},{"id":"46a5abdf-160b-449c-86f7-3839500b03c4","block_type":"box","text":"States.","page_number":100,"box":{"x":102,"y":130,"width":49,"height":9}},{"id":"82e345f8-27c2-4f79-bb32-142d8b5a7cf6","block_type":"box","text":"Mortgage-Related Securities.","page_number":100,"box":{"x":102,"y":153,"width":213,"height":11}},{"id":"b5a37d42-e690-46b6-8522-1b56a2b09213","block_type":"box","text":"Mor tgage-Backed Securities.","page_number":100,"box":{"x":102,"y":176,"width":203,"height":11}},{"id":"dacafba2-31fc-43d9-9530-6961b4e57739","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in which","page_number":100,"box":{"x":312,"y":176,"width":560,"height":11}},{"id":"b7dd8cac-3686-4acf-80d2-c0d0fa880385","block_type":"box","text":"payments of both principal and interest on the securities are generally made monthly, in effect “passing through”","page_number":100,"box":{"x":70,"y":191,"width":805,"height":11}},{"id":"eccaa876-521f-4126-b7ba-7e60cd53f016","block_type":"box","text":"monthly payments made by borrowers on the residential or commercial mortgage loans that underlie the securities","page_number":100,"box":{"x":69,"y":206,"width":819,"height":11}},{"id":"c9c9a0fe-d239-45cc-9ec2-42d59a9355f3","block_type":"box","text":"(net of any fees paid to the issuer or guarantor of the securities). Mortgage-backed securities differ from other forms","page_number":100,"box":{"x":69,"y":221,"width":832,"height":11}},{"id":"fa7331ec-c28e-473d-a0d0-86a0c1932fb9","block_type":"box","text":"of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at","page_number":100,"box":{"x":69,"y":236,"width":838,"height":11}},{"id":"4578a6eb-fb8c-46b1-94a3-633ba3690682","block_type":"box","text":"maturity or specified call dates.","page_number":100,"box":{"x":69,"y":251,"width":222,"height":11}},{"id":"75f09344-d406-4829-bc29-0de352900114","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate securities;","page_number":100,"box":{"x":102,"y":274,"width":785,"height":11}},{"id":"60e8e827-3574-4d49-b96a-c6b7fe6feac2","block_type":"box","text":"that is, they may lose value if the value of the underlying real estate to which a pool of mortgages relates declines. In","page_number":100,"box":{"x":68,"y":289,"width":838,"height":11}},{"id":"f55e1c4a-0d9e-47c1-a018-c51b367b9094","block_type":"box","text":"addition, investments in mortgage-backed securities involve certain specific risks. These risks include the failure of a","page_number":100,"box":{"x":69,"y":304,"width":836,"height":11}},{"id":"3fffebac-ab91-45d4-91ec-b462b2149cfa","block_type":"box","text":"party to meet its commitments under the related operative documents, adverse interest rate changes and the effects","page_number":100,"box":{"x":70,"y":319,"width":837,"height":12}},{"id":"b7a7cb2f-0867-437a-a74f-a335797a3a60","block_type":"box","text":"of prepayments on mortgage cash flows. Mortgage-backed securities are “pass-through” securities, meaning that","page_number":100,"box":{"x":69,"y":334,"width":810,"height":12}},{"id":"040d7705-0cfe-4336-b67e-d2ae129a5f99","block_type":"box","text":"principal and interest payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":100,"box":{"x":70,"y":350,"width":811,"height":11}},{"id":"5ac46b88-14a0-4b30-a86e-e1bc6d8c35e9","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly sensitive to changes","page_number":100,"box":{"x":68,"y":365,"width":837,"height":11}},{"id":"3f2e6923-4a3a-4a15-ad91-1c584ca9d5e3","block_type":"box","text":"in prevailing interest rates, and, like other fixed income investments, the ability of a Fund to utilize these instruments","page_number":100,"box":{"x":70,"y":380,"width":834,"height":11}},{"id":"5b8a3886-90b7-45c8-b68a-3321fee3cf54","block_type":"box","text":"successfully may depend in part upon the ability of the Manager to forecast interest rates and other economic factors","page_number":100,"box":{"x":69,"y":395,"width":840,"height":11}},{"id":"3c2e20b5-8cc9-41f3-8dc6-c94aae5390bf","block_type":"box","text":"correctly. The value of mortgage-backed securities, like that of traditional fixed-income securities, typically increases","page_number":100,"box":{"x":69,"y":410,"width":827,"height":11}},{"id":"c52431f2-aab7-43ce-999f-556b8c6e12ba","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, mortgage-backed securities differ from","page_number":100,"box":{"x":68,"y":425,"width":805,"height":11}},{"id":"3149a110-c901-447b-804c-f2b4551d6a49","block_type":"box","text":"traditional fixed-income securities because of their potential for prepayment without penalty. The price paid by a Fund","page_number":100,"box":{"x":68,"y":440,"width":834,"height":11}},{"id":"96774db5-1e4c-4a7b-84bd-8bc497d96b9d","block_type":"box","text":"for its mortgage-backed securities, the yield the Fund expects to receive from such securities and the weighted","page_number":100,"box":{"x":68,"y":455,"width":791,"height":12}},{"id":"7c1229d5-74f0-4b37-8803-8395d6a5707a","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of prepayment of the","page_number":100,"box":{"x":69,"y":470,"width":816,"height":12}},{"id":"d57723e9-380c-4117-bd2b-5e3eb1c55df0","block_type":"box","text":"underlying mortgages. In a period of declining interest rates, borrowers may prepay the underlying mortgages more","page_number":100,"box":{"x":69,"y":486,"width":819,"height":11}},{"id":"4a8fb00c-3250-4f59-b235-3054753cc087","block_type":"box","text":"quickly than anticipated, thereby reducing the yield to maturity and the average life of the mortgage-backed","page_number":100,"box":{"x":69,"y":501,"width":761,"height":11}},{"id":"2e2a6908-89bf-48c1-8318-4536a7d8b5ac","block_type":"box","text":"securities. Moreover, when a Fund reinvests the proceeds of a prepayment in these circumstances, it will likely","page_number":100,"box":{"x":69,"y":516,"width":791,"height":11}},{"id":"f59b8014-5192-426d-a64d-af0b14ad22e2","block_type":"box","text":"receive a rate of interest that is lower than the rate on the security that was prepaid.","page_number":100,"box":{"x":69,"y":531,"width":602,"height":11}},{"id":"a08743e5-2334-41c3-8b2b-391e513e56b4","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures and","page_number":100,"box":{"x":101,"y":554,"width":761,"height":11}},{"id":"cbe8a87c-54a1-4e24-ab25-9eeaf171da54","block_type":"box","text":"principal prepayments may result in a loss to the extent of the premium paid. If a Fund buys such securities at a","page_number":100,"box":{"x":70,"y":569,"width":800,"height":11}},{"id":"90367e66-e917-478a-b80b-59e73edad33d","block_type":"box","text":"discount, both scheduled payments of principal and unscheduled prepayments will increase current and total returns","page_number":100,"box":{"x":69,"y":584,"width":833,"height":11}},{"id":"dc4cd07e-81e4-4476-ac8f-c81f6ae27f89","block_type":"box","text":"and will accelerate the recognition of income, which, when distributed to shareholders, will be taxable as ordinary","page_number":100,"box":{"x":69,"y":599,"width":809,"height":11}},{"id":"303f4c1a-32fa-4641-8463-ace5229e31ed","block_type":"box","text":"income. In a period of rising interest rates, prepayments of the underlying mortgages may occur at a slower than","page_number":100,"box":{"x":70,"y":614,"width":801,"height":11}},{"id":"b161eb0b-d9f8-4c6f-85b7-31af0275c444","block_type":"box","text":"expected rate, creating maturity extension risk. This particular risk may effectively change a security that was","page_number":100,"box":{"x":69,"y":629,"width":778,"height":11}},{"id":"8c37be51-88ad-4e16-88ec-ff411e4bbecd","block_type":"box","text":"considered short- or intermediate-term at the time of purchase into a long-term security. Since the value of long-term","page_number":100,"box":{"x":69,"y":644,"width":831,"height":12}},{"id":"6c00cfd5-b81a-4440-b177-00cf9b9c86c8","block_type":"box","text":"securities generally fluctuates more widely in response to changes in interest rates than that of shorter-term","page_number":100,"box":{"x":69,"y":659,"width":773,"height":12}},{"id":"d5bcd482-3543-4167-a491-ddb9622ca61c","block_type":"box","text":"securities, maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":100,"box":{"x":69,"y":675,"width":818,"height":11}},{"id":"8731088e-e26e-43c2-99fd-4be6f99d1cac","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities notwithstanding","page_number":100,"box":{"x":70,"y":690,"width":822,"height":11}},{"id":"e11e5e63-eb13-46f0-ab4a-63de11159947","block_type":"box","text":"any direct or indirect governmental or agency guarantee.","page_number":100,"box":{"x":69,"y":705,"width":399,"height":11}},{"id":"e09d4205-e46e-436a-a7b3-ba933125b237","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S. Government or","page_number":100,"box":{"x":101,"y":727,"width":802,"height":12}},{"id":"578f6388-415c-4860-b0ea-f6567a9be26d","block_type":"box","text":"one of its agencies or instrumentalities, such as the Government National Mortgage Association (“Ginnie Mae”), the","page_number":100,"box":{"x":69,"y":743,"width":830,"height":11}},{"id":"b7313f95-9c6a-4d54-afbb-8bb9f58ea91c","block_type":"box","text":"Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie","page_number":100,"box":{"x":70,"y":758,"width":818,"height":11}},{"id":"aa297967-22c9-4b93-a4f8-5efca4953a16","block_type":"box","text":"Mac”); (2) those issued by private issuers that represent an interest in or are collateralized by pass-through","page_number":100,"box":{"x":70,"y":773,"width":766,"height":11}},{"id":"1c944f54-007c-4232-933e-d8233c2e65a6","block_type":"box","text":"securities issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities; and (3) those","page_number":100,"box":{"x":69,"y":788,"width":808,"height":11}},{"id":"f1154ddc-e405-4350-b5ff-ed0d91669682","block_type":"box","text":"issued by private issuers that represent an interest in or are collateralized by whole mortgage loans or pass-through","page_number":100,"box":{"x":70,"y":803,"width":825,"height":11}},{"id":"ec5c9bed-8457-43d9-bdb5-f4109bd227be","block_type":"box","text":"securities without a government guarantee but that usually have some form of private credit enhancement.","page_number":100,"box":{"x":69,"y":818,"width":761,"height":11}},{"id":"668de3dc-a9e0-4e38-b5be-e95ec5683e48","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and Urban","page_number":100,"box":{"x":102,"y":841,"width":743,"height":11}},{"id":"696a1f85-34c8-4a2c-9066-c2d1ba8ef7e0","block_type":"box","text":"Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely","page_number":100,"box":{"x":70,"y":856,"width":831,"height":11}},{"id":"825c104f-ceda-4c09-bbf2-7fdf7604323a","block_type":"box","text":"payment of principal and interest on securities issued by the institutions approved by Ginnie Mae (such as savings","page_number":100,"box":{"x":70,"y":871,"width":815,"height":11}},{"id":"1fd255a6-4143-4df9-80f5-7fc8526d2973","block_type":"box","text":"and loan institutions, commercial banks and mortgage banks), and backed by pools of Federal Housing","page_number":100,"box":{"x":69,"y":886,"width":737,"height":12}},{"id":"be0b2a03-a5c1-4a7f-ba2e-a9993001f4db","block_type":"box","text":"Administration (“FHA”)-insured or Veterans’ Administration (“VA”)-guaranteed mortgages. Pass-through certificates","page_number":100,"box":{"x":68,"y":901,"width":814,"height":12}},{"id":"9e541fd9-5c2d-4813-be83-3aa2c1a3f6ab","block_type":"box","text":"II-51","page_number":100,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"6e27f01f-8942-4397-a5c3-c91cbbac047f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":100,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9d077cf7-4d6d-4f1f-a0da-a37a86089a00","block_type":"box","text":"guaranteed by Ginnie Mae (such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely","page_number":101,"box":{"x":68,"y":45,"width":794,"height":11}},{"id":"94b5d020-02ec-43d0-a4bb-0af10184a164","block_type":"box","text":"payment of principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the United","page_number":101,"box":{"x":70,"y":60,"width":828,"height":11}},{"id":"e9b077a2-0217-4d0b-a0d4-93e63da6f3e8","block_type":"box","text":"States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow funds from the U.S.","page_number":101,"box":{"x":69,"y":75,"width":798,"height":11}},{"id":"da281ee0-70d7-48f9-ae88-02b47156bdd9","block_type":"box","text":"Treasury Department to make payments under its guarantee. Mortgage-related securities issued by Fannie Mae","page_number":101,"box":{"x":68,"y":90,"width":798,"height":11}},{"id":"00c7e5ad-46a2-4560-8bc1-168cf0acf447","block_type":"box","text":"include Fannie Mae guaranteed Mortgage Pass-Through Certificates (also known as “Fannie Maes”), which are","page_number":101,"box":{"x":70,"y":105,"width":788,"height":11}},{"id":"77e05869-0e73-4df0-a5f0-04ff76c687aa","block_type":"box","text":"guaranteed as to timely payment of principal and interest by Fannie Mae. They are not backed by or entitled to the full","page_number":101,"box":{"x":68,"y":120,"width":840,"height":12}},{"id":"3aa7ae04-b4a6-4322-94ad-ca2bd7e33f81","block_type":"box","text":"faith and credit of the United States, but are supported by the right of Fannie Mae to borrow from the U.S. Treasury","page_number":101,"box":{"x":68,"y":135,"width":825,"height":12}},{"id":"0ba33fbc-02cb-40ff-ab13-44c9ebae9c2f","block_type":"box","text":"Department. Fannie Mae was established as a federal agency in 1938 and in 1968 was chartered by Congress as a","page_number":101,"box":{"x":70,"y":150,"width":830,"height":12}},{"id":"d1c8b111-4a9d-49e2-92b8-9c7bdc906ef5","block_type":"box","text":"private shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":101,"box":{"x":70,"y":166,"width":770,"height":11}},{"id":"e9d76025-a842-42ca-b462-0ca4a8a7193a","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a stockholder-owned","page_number":101,"box":{"x":70,"y":181,"width":812,"height":11}},{"id":"9d3d812c-433c-446d-94af-0321233df13d","block_type":"box","text":"corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by the United States or by any Federal","page_number":101,"box":{"x":69,"y":196,"width":829,"height":11}},{"id":"638f59db-ea91-4143-9859-737f8be679ce","block_type":"box","text":"Home Loan Banks and do not constitute a debt or obligation of the United States or of any Federal Home Loan Bank.","page_number":101,"box":{"x":70,"y":211,"width":832,"height":11}},{"id":"ee8e7f73-5b72-439a-8864-be3497b3d5fc","block_type":"box","text":"Freddie Macs entitle the holder to timely payment of interest, which is guaranteed by Freddie Mac. Freddie Mac","page_number":101,"box":{"x":70,"y":226,"width":792,"height":11}},{"id":"921b2801-72e6-4486-a8d5-bf7acdf3ad91","block_type":"box","text":"guarantees either ultimate collection or timely payment of all principal payments on the underlying mortgage loans.","page_number":101,"box":{"x":68,"y":241,"width":819,"height":11}},{"id":"0c0d7302-feda-41d8-b422-6257073d1b50","block_type":"box","text":"While Freddie Mac generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due","page_number":101,"box":{"x":68,"y":256,"width":829,"height":12}},{"id":"34b089f4-bd88-4def-9a45-bc36b89f9e48","block_type":"box","text":"on account of its guarantee of ultimate payment of principal at any time after default on an underlying mortgage, but","page_number":101,"box":{"x":69,"y":271,"width":829,"height":12}},{"id":"91ec045f-2e43-4215-9e38-67fae347901e","block_type":"box","text":"in no event later than one year after it becomes payable.","page_number":101,"box":{"x":70,"y":286,"width":401,"height":12}},{"id":"f0239b1d-7a7f-42dd-875a-b29ea69843e6","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and Freddie Mac","page_number":101,"box":{"x":102,"y":309,"width":786,"height":11}},{"id":"2f9f271c-7855-4358-9dcb-02dfe07732df","block_type":"box","text":"mortgage pass-through securities and are issued by originators of and investors in mortgage loans, including","page_number":101,"box":{"x":69,"y":324,"width":777,"height":12}},{"id":"46fea99f-3275-4a37-8c30-b2c1b1807b42","block_type":"box","text":"depository institutions, mortgage banks, investment banks and special purpose subsidiaries of the foregoing.","page_number":101,"box":{"x":69,"y":339,"width":782,"height":12}},{"id":"42597041-96c4-47ca-a0c9-270af1462224","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than government","page_number":101,"box":{"x":102,"y":362,"width":802,"height":11}},{"id":"8086fa4e-f29e-482d-a5e5-360c46b57d3d","block_type":"box","text":"and government-related pools because there are no direct or indirect government or agency guarantees of payments","page_number":101,"box":{"x":69,"y":377,"width":828,"height":12}},{"id":"be35a8b2-8925-4417-8234-b1e393948e0d","block_type":"box","text":"in the private pools. However, timely payment of interest and principal of these pools may be supported by various","page_number":101,"box":{"x":70,"y":392,"width":814,"height":12}},{"id":"571b4066-0fa7-4b1e-86e6-0c87b9bd8168","block_type":"box","text":"forms of insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The","page_number":101,"box":{"x":68,"y":407,"width":833,"height":12}},{"id":"ea040b5a-a03c-4de6-9f21-6a8237cca051","block_type":"box","text":"insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. The","page_number":101,"box":{"x":70,"y":423,"width":789,"height":11}},{"id":"b6467a1d-f0f2-4e02-8873-db4c80b52965","block_type":"box","text":"insurance and guarantees and the creditworthiness of the issuers thereof will be considered in determining whether","page_number":101,"box":{"x":70,"y":438,"width":827,"height":11}},{"id":"7d6f2c4d-06b4-4f7a-ae65-dfb5700f0a66","block_type":"box","text":"a mortgage-related security meets a Fund’s investment quality standards. There can be no assurance that the private","page_number":101,"box":{"x":69,"y":453,"width":838,"height":11}},{"id":"11811d7c-5b30-42f9-b236-8e612a52aa05","block_type":"box","text":"insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. Private","page_number":101,"box":{"x":70,"y":468,"width":810,"height":11}},{"id":"3fdffd01-8413-4527-8b1b-1ae3a1312c43","block_type":"box","text":"mortgage pass-through securities may be bought without insurance or guarantees if, through an examination of the","page_number":101,"box":{"x":69,"y":483,"width":820,"height":11}},{"id":"812471e4-7c23-4e5f-bc88-844e4764c52a","block_type":"box","text":"loan experience and practices of the originator/servicers and poolers, the Manager determines that the securities","page_number":101,"box":{"x":70,"y":498,"width":812,"height":11}},{"id":"0ba63a9d-a7c1-46b2-b3bf-d791041743a9","block_type":"box","text":"meet a Fund’s quality standards. Any mortgage-related securities that are issued by private issuers have some","page_number":101,"box":{"x":69,"y":514,"width":790,"height":11}},{"id":"573c9b7c-3ad2-4655-a03d-8c6a3b75bf24","block_type":"box","text":"exposure to subprime loans as well as to the mortgage and credit markets generally.","page_number":101,"box":{"x":69,"y":529,"width":604,"height":11}},{"id":"d300ee80-71f9-4687-a0a0-cf0a977a6d3e","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the underwriting","page_number":101,"box":{"x":102,"y":551,"width":774,"height":11}},{"id":"13ec81df-2dc8-4468-93c8-bc71679b5474","block_type":"box","text":"requirements for the underlying mortgages that are applicable to those mortgage-related securities that have a","page_number":101,"box":{"x":69,"y":566,"width":791,"height":11}},{"id":"78ccf6ea-94c1-425d-a4af-eb551cc7ebc7","block_type":"box","text":"government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private mortgage","page_number":101,"box":{"x":68,"y":582,"width":832,"height":11}},{"id":"283afe11-07ac-4bf3-8d29-a0fe00f07eee","block_type":"box","text":"related securities may, and frequently do, have less favorable collateral, credit risk or other underwriting","page_number":101,"box":{"x":69,"y":596,"width":742,"height":12}},{"id":"9b88652e-673b-419f-b8da-bba43ef86fab","block_type":"box","text":"characteristics than government or government-sponsored mortgage-related securities and have wider variances in a","page_number":101,"box":{"x":69,"y":612,"width":831,"height":11}},{"id":"3d0f956d-e415-49cf-94c1-469f062a6d60","block_type":"box","text":"number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more","page_number":101,"box":{"x":69,"y":627,"width":840,"height":11}},{"id":"8b39831d-5341-496c-9b38-878c38c0ab6a","block_type":"box","text":"frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon","page_number":101,"box":{"x":68,"y":642,"width":809,"height":11}},{"id":"e608d58c-78d9-4cdb-a8bd-ea8a84dab41b","block_type":"box","text":"rates and maturities of the underlying mortgage loans in a private-label mortgage-related securities pool may vary to","page_number":101,"box":{"x":69,"y":657,"width":828,"height":11}},{"id":"09c9165a-3121-4142-9ecd-21f941c77de3","block_type":"box","text":"a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage","page_number":101,"box":{"x":69,"y":672,"width":830,"height":11}},{"id":"19479c0e-f246-40d9-9457-d1c5433cf29e","block_type":"box","text":"loans. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to","page_number":101,"box":{"x":70,"y":687,"width":810,"height":11}},{"id":"f48d5e83-cd08-47aa-bfd7-b8541b953b97","block_type":"box","text":"make timely payments on their loans. For these reasons, the loans underlying these securities have had in many","page_number":101,"box":{"x":69,"y":703,"width":804,"height":11}},{"id":"884d0662-0013-479e-870c-8154acbaa731","block_type":"box","text":"cases higher default rates than those loans that meet government underwriting requirements.","page_number":101,"box":{"x":69,"y":717,"width":669,"height":12}},{"id":"ed29b42a-6177-45a6-8a9c-54be8058c0e1","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools that","page_number":101,"box":{"x":101,"y":740,"width":754,"height":11}},{"id":"e5e4f6f1-c9f3-433d-ba6e-4b4a76a785ed","block_type":"box","text":"contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting mortgage loan","page_number":101,"box":{"x":69,"y":755,"width":795,"height":11}},{"id":"eeeb99c0-ed48-48b8-aa7e-3a15b5cae352","block_type":"box","text":"repayments may include a general economic turndown, high unemployment, a general slowdown in the real estate","page_number":101,"box":{"x":69,"y":771,"width":812,"height":11}},{"id":"fec44d81-e546-4029-b09e-2f0f7d44ff52","block_type":"box","text":"market, a drop in the market prices of real estate, or an increase in interest rates resulting in higher mortgage","page_number":101,"box":{"x":69,"y":785,"width":788,"height":12}},{"id":"6185e220-1fcc-474f-ae18-94de13284eaa","block_type":"box","text":"payments by holders of adjustable rate mortgages.","page_number":101,"box":{"x":70,"y":801,"width":361,"height":11}},{"id":"e4852dbd-3436-40ed-8963-1e234f5231de","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited market","page_number":101,"box":{"x":102,"y":823,"width":784,"height":12}},{"id":"f525fb62-afe6-412d-bad3-0dd9426b5e79","block_type":"box","text":"for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors.","page_number":101,"box":{"x":68,"y":838,"width":813,"height":12}},{"id":"92337dff-5fc6-45c2-b410-3cfd4ce1dc46","block_type":"box","text":"Without an active trading market, mortgage-related securities held in a Fund’s portfolio may be particularly difficult to","page_number":101,"box":{"x":68,"y":853,"width":837,"height":12}},{"id":"12453e74-5846-45c8-9d58-380b7b657dab","block_type":"box","text":"value because of the complexities involved in assessing the value of the underlying mortgage loans.","page_number":101,"box":{"x":68,"y":869,"width":714,"height":11}},{"id":"c6afacff-f6de-432b-b251-7cfaf20fc7f4","block_type":"box","text":"Collateralized Mor tgage Obligations (“CMOs”).","page_number":101,"box":{"x":102,"y":891,"width":328,"height":12}},{"id":"96f88c15-4646-42d8-a5ce-82cf6a5e1fca","block_type":"box","text":"CMOs are debt obligations collateralized by residential or","page_number":101,"box":{"x":437,"y":891,"width":407,"height":12}},{"id":"9a3c8b2e-df06-476d-aa2b-cb4f0a38df36","block_type":"box","text":"commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest and prepaid","page_number":101,"box":{"x":69,"y":907,"width":800,"height":11}},{"id":"58b5492a-ed8d-4a63-a3cb-795978e86257","block_type":"box","text":"II-52","page_number":101,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"9fdb5a99-ee15-4263-ad0d-c7a3d0ebbed9","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":101,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b7b7184b-76ca-4930-b2b4-63e06832db80","block_type":"box","text":"principal are generally paid monthly. CMOs may be collateralized by whole mortgage loans or private mortgage pass","page_number":102,"box":{"x":70,"y":45,"width":827,"height":11}},{"id":"96ac4257-24af-464f-a6ba-9bc11ae4a099","block_type":"box","text":"through securities but are more typically collateralized by portfolios of mortgage pass-through securities guaranteed","page_number":102,"box":{"x":68,"y":60,"width":826,"height":11}},{"id":"50e4b23c-3192-4496-9ab9-2fbe4850ba01","block_type":"box","text":"by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer of a series of CMOs may elect to be treated as a Real Estate","page_number":102,"box":{"x":69,"y":75,"width":833,"height":11}},{"id":"433b5c79-28c8-4ae6-a5c1-8a909e41d35c","block_type":"box","text":"Mortgage Investment Conduit (“REMIC”). All future references to CMOs also include REMICs.","page_number":102,"box":{"x":70,"y":90,"width":661,"height":11}},{"id":"662519cf-6ac1-44c0-810c-fa8a4caf3933","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific adjustable","page_number":102,"box":{"x":102,"y":113,"width":803,"height":11}},{"id":"8bd8e260-dd8c-4a78-ac06-195d9a6496c0","block_type":"box","text":"or fixed interest rate, and bearing a different stated maturity date and each must be fully retired no later than its final","page_number":102,"box":{"x":69,"y":128,"width":837,"height":11}},{"id":"ec3795d1-b9b5-47e2-a5e8-761306a8c75e","block_type":"box","text":"distribution date. Actual maturity and average life will depend upon the prepayment experience of the collateral, which","page_number":102,"box":{"x":69,"y":143,"width":838,"height":11}},{"id":"35771262-8b27-40d2-a2d3-c868da790fa5","block_type":"box","text":"is ordinarily unrelated to the stated maturity date. CMOs often provide for a modified form of call protection through a","page_number":102,"box":{"x":70,"y":158,"width":836,"height":11}},{"id":"63c98d7e-b75d-4f6b-b9fa-7f4db04c7fdd","block_type":"box","text":"de facto breakdown of the underlying pool of mortgages according to how quickly the loans are repaid. Monthly","page_number":102,"box":{"x":69,"y":173,"width":791,"height":11}},{"id":"20d7ff1a-8554-41dd-8b24-385c125e66f8","block_type":"box","text":"payment of principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":102,"box":{"x":70,"y":188,"width":792,"height":12}},{"id":"150a86a6-368e-4030-b8b1-36281ca8ca65","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually receive principal","page_number":102,"box":{"x":70,"y":204,"width":820,"height":11}},{"id":"5ec57c86-209b-46cd-a22f-eae5e8ff6d1b","block_type":"box","text":"only after the first class has been retired. An investor may be partially protected against a sooner than desired return","page_number":102,"box":{"x":69,"y":218,"width":836,"height":12}},{"id":"6a901a42-ff53-487b-bf7e-dae9ad7a8dd3","block_type":"box","text":"of principal because of the sequential payments.","page_number":102,"box":{"x":69,"y":234,"width":346,"height":11}},{"id":"5d62f10d-1371-4f69-a7ec-ec25959f782c","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":102,"box":{"x":102,"y":256,"width":723,"height":11}},{"id":"f211a62c-6526-4737-9f4d-00216e56ac6e","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by the","page_number":102,"box":{"x":69,"y":271,"width":768,"height":12}},{"id":"03a674eb-2de9-485c-b523-6421360c6baf","block_type":"box","text":"Investment Company Act on investments by a Fund in other investment companies. In addition, in reliance on an","page_number":102,"box":{"x":70,"y":287,"width":800,"height":11}},{"id":"10a68194-2d36-4942-9553-9dd4ddad857e","block_type":"box","text":"earlier Commission interpretation, a Fund’s investments in certain other qualifying CMOs, which cannot or do not rely","page_number":102,"box":{"x":69,"y":302,"width":836,"height":11}},{"id":"877960df-93d3-419a-ad0a-a248afaeb59a","block_type":"box","text":"on the rule, are also not subject to the limitation of the Investment Company Act on acquiring interests in other","page_number":102,"box":{"x":69,"y":317,"width":793,"height":11}},{"id":"9f5c6ef0-9c99-4b24-ba0d-277457156492","block_type":"box","text":"investment companies. In order to be able to rely on the Commission’s interpretation, these CMOs must be","page_number":102,"box":{"x":70,"y":332,"width":767,"height":11}},{"id":"09de6408-70fd-4677-a984-8bc1f4c617f7","block_type":"box","text":"unmanaged, fixed asset issuers, that: (1) invest primarily in mortgage-backed securities; (2) do not issue redeemable","page_number":102,"box":{"x":69,"y":347,"width":838,"height":11}},{"id":"b4132466-5225-46fc-9cf0-550ed7387c1f","block_type":"box","text":"securities; (3) operate under general exemptive orders exempting them from all provisions of the Investment","page_number":102,"box":{"x":69,"y":362,"width":773,"height":11}},{"id":"f955cb12-f261-42ca-b1a0-be9e70409773","block_type":"box","text":"Company Act; and (4) are not registered or regulated under the Investment Company Act as investment companies.","page_number":102,"box":{"x":69,"y":377,"width":821,"height":12}},{"id":"775f3476-9079-4f1a-a9a2-a2dd6236d7d3","block_type":"box","text":"To the extent that a Fund selects CMOs that cannot rely on the rule or do not meet the above requirements, the Fund","page_number":102,"box":{"x":68,"y":392,"width":836,"height":12}},{"id":"9041a752-1fff-46c2-beb0-92aac44880e2","block_type":"box","text":"may not invest more than 10% of its assets in all such entities and may not acquire more than 3% of the voting","page_number":102,"box":{"x":69,"y":407,"width":795,"height":12}},{"id":"85f5065a-00fc-45c0-ae7e-7340a622c131","block_type":"box","text":"securities of any single such entity.","page_number":102,"box":{"x":69,"y":423,"width":248,"height":11}},{"id":"ece43728-9118-4c3e-86d5-24f78f34feb2","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating rate CMOs.","page_number":102,"box":{"x":101,"y":445,"width":807,"height":12}},{"id":"56b6d9c3-a667-4932-a63a-47a0d0069812","block_type":"box","text":"Parallel pay CMOs are structured to provide payments of principal on each payment date to more than one class,","page_number":102,"box":{"x":69,"y":460,"width":805,"height":12}},{"id":"08e7013f-292e-49e2-af4f-874a23df4027","block_type":"box","text":"concurrently on a proportionate or disproportionate basis. These simultaneous payments are taken into account in","page_number":102,"box":{"x":69,"y":476,"width":819,"height":11}},{"id":"86990c03-c5cd-4c29-bb60-23f11b67906b","block_type":"box","text":"calculating the final distribution date of each class. Sequential pay CMOs generally pay principal to only one class at","page_number":102,"box":{"x":69,"y":491,"width":829,"height":11}},{"id":"c7ab1e66-3c07-4816-9444-51f8935d2b28","block_type":"box","text":"a time while paying interest to several classes. A wide variety of REMIC Certificates may be issued in the parallel pay","page_number":102,"box":{"x":69,"y":506,"width":835,"height":11}},{"id":"b09b492b-fe21-4c4c-b0b4-8895c474823d","block_type":"box","text":"or sequential pay structures. These securities include accrual certificates (also known as “Z-Bonds”), which only","page_number":102,"box":{"x":69,"y":521,"width":802,"height":11}},{"id":"cdced62e-f9b0-4522-b25c-fc388362645f","block_type":"box","text":"accrue interest at a specified rate until all other certificates having an earlier final distribution date have been retired","page_number":102,"box":{"x":69,"y":536,"width":833,"height":11}},{"id":"695a110a-76ff-41f4-aa75-3d0d3aa13513","block_type":"box","text":"and are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose coupon rate","page_number":102,"box":{"x":69,"y":551,"width":801,"height":11}},{"id":"7f913d6f-d145-4e76-b9f5-95d39961d097","block_type":"box","text":"fluctuates according to some formula related to an existing market index or rate. Typical indices would include the","page_number":102,"box":{"x":68,"y":566,"width":813,"height":11}},{"id":"da951b5e-e90e-4f93-af3c-c1bebd623286","block_type":"box","text":"eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and ten-year Treasury yields.","page_number":102,"box":{"x":69,"y":581,"width":708,"height":11}},{"id":"0386f4ef-dc50-4c49-b16b-7b9e18fdaed1","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization classes","page_number":102,"box":{"x":102,"y":604,"width":742,"height":11}},{"id":"9e4a7e7a-c1c2-4805-b59b-3fe00f75045e","block_type":"box","text":"(“TACs”). PAC bonds generally require payments of a specified amount of principal on each payment date. The","page_number":102,"box":{"x":69,"y":619,"width":784,"height":11}},{"id":"854c3b79-4222-4c3f-9fa8-92d122f1c452","block_type":"box","text":"scheduled principal payments for PAC Certificates generally have the highest priority on each payment date after","page_number":102,"box":{"x":69,"y":634,"width":800,"height":12}},{"id":"9077eaa6-ddc2-4bc2-815a-fa3504169dc5","block_type":"box","text":"interest due has been paid to all classes entitled to receive interest currently. Shortfalls, if any, are added to the","page_number":102,"box":{"x":70,"y":649,"width":802,"height":12}},{"id":"2563fbeb-2ba2-4da2-86e1-4d7c5f74dfea","block_type":"box","text":"amount payable on the next payment date. The PAC Certificate payment schedule is taken into account in calculating","page_number":102,"box":{"x":69,"y":664,"width":834,"height":12}},{"id":"640eefc7-7212-47f9-b1a6-f1b28522397d","block_type":"box","text":"the final distribution date of each class of PAC. In order to create PAC tranches, one or more tranches generally must","page_number":102,"box":{"x":68,"y":680,"width":835,"height":11}},{"id":"cac73d84-9d06-4939-815f-10d7170f978c","block_type":"box","text":"be created that absorb most of the volatility in the underlying mortgage assets. These tranches (often called","page_number":102,"box":{"x":69,"y":695,"width":772,"height":11}},{"id":"f8dd985b-7d4f-4505-82de-489fad24c8f4","block_type":"box","text":"“supports” or “companion” tranches) tend to have market prices and yields that are more volatile than the PAC","page_number":102,"box":{"x":70,"y":710,"width":792,"height":11}},{"id":"f8343edd-af86-4462-98d3-94a492934546","block_type":"box","text":"classes.","page_number":102,"box":{"x":69,"y":725,"width":57,"height":9}},{"id":"4f18c5f9-fff9-4517-b4bc-aabdc55a8634","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each payment","page_number":102,"box":{"x":101,"y":748,"width":774,"height":11}},{"id":"60840720-9225-4925-aa43-5b1af755d1bb","block_type":"box","text":"date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however, remains in effect as long as","page_number":102,"box":{"x":69,"y":763,"width":835,"height":11}},{"id":"0637e5f3-2b1b-4201-8796-e640430a8210","block_type":"box","text":"prepayment rates on the underlying mortgages do not exceed certain ranges. In contrast, a TAC provides investors","page_number":102,"box":{"x":70,"y":778,"width":815,"height":11}},{"id":"dce2e1af-d7c5-48f9-b0aa-eea1a1a7f881","block_type":"box","text":"with protection, to a certain level, against either faster than expected or slower than expected prepayment rates, but","page_number":102,"box":{"x":68,"y":793,"width":833,"height":11}},{"id":"c07664c9-1f98-47dc-bdfb-d2ed9a3151be","block_type":"box","text":"not both. TACs thus provide more cash flow stability than a regular sequential paying class, but less than a PAC. TACs","page_number":102,"box":{"x":69,"y":808,"width":839,"height":11}},{"id":"eb0bf629-9718-4efd-be39-a2208aa8fae6","block_type":"box","text":"also tend to have market prices and yields that are more volatile than PACs.","page_number":102,"box":{"x":69,"y":823,"width":541,"height":11}},{"id":"b3029e7f-6367-475e-bd9e-1870152a53e7","block_type":"box","text":"Adjustable Rate Mor tgage Securities.","page_number":102,"box":{"x":101,"y":846,"width":265,"height":11}},{"id":"e89ce765-28dc-42a2-ba82-e822a3add525","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through securities","page_number":102,"box":{"x":372,"y":846,"width":523,"height":11}},{"id":"d6a59399-b813-4e1e-9540-f26392dd4ffa","block_type":"box","text":"collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for inclusion in a mortgage pool","page_number":102,"box":{"x":69,"y":861,"width":807,"height":11}},{"id":"6ab95f63-bb0d-466b-bb35-4a46c17e53cd","block_type":"box","text":"generally provide for a fixed initial mortgage interest rate for a set number of scheduled monthly payments. After that","page_number":102,"box":{"x":68,"y":876,"width":835,"height":11}},{"id":"2b02657d-e6d3-4dd9-ad24-92a6e0d647d1","block_type":"box","text":"schedule of payments has been completed, the interest rates are subject to periodic adjustment based on changes","page_number":102,"box":{"x":69,"y":891,"width":824,"height":12}},{"id":"8caac3c6-4121-4bc6-acaf-18bb3cde34ac","block_type":"box","text":"to a designated benchmark index.","page_number":102,"box":{"x":68,"y":907,"width":241,"height":11}},{"id":"159152a1-9882-4c9f-ba99-aa97ce6a7d2d","block_type":"box","text":"II-53","page_number":102,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"280c84a6-3129-4af8-be28-d7b94b549866","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":102,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4e8f1a90-4124-4c0a-8dec-e10555599fd7","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary over the","page_number":103,"box":{"x":101,"y":45,"width":767,"height":11}},{"id":"1a1c51f7-17ca-49a8-952c-ae06003d9a8f","block_type":"box","text":"lifetime of the security. In addition, certain ARMs provide for additional limitations on the maximum amount by which","page_number":103,"box":{"x":70,"y":60,"width":828,"height":11}},{"id":"e1f0d455-60be-448c-ac47-844e5c27b5cf","block_type":"box","text":"the mortgage interest rate may adjust for any single adjustment period. In the event that market rates of interest rise","page_number":103,"box":{"x":68,"y":75,"width":837,"height":11}},{"id":"d2d1bfbf-943f-4eeb-873a-20be42016006","block_type":"box","text":"more rapidly to levels above that of the ARM’s maximum rate, the ARM’s coupon may represent a below market rate","page_number":103,"box":{"x":69,"y":90,"width":830,"height":11}},{"id":"770d8432-4593-494b-b6f3-ca1837f81773","block_type":"box","text":"of interest. In these circumstances, the market value of the ARM security will likely have fallen.","page_number":103,"box":{"x":69,"y":105,"width":676,"height":11}},{"id":"2c4bc38f-539f-4210-8d6c-0bbf0b42ca6e","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a monthly","page_number":103,"box":{"x":102,"y":128,"width":757,"height":11}},{"id":"b42f0824-ba18-4d46-ae7d-1e20c98ad1d1","block_type":"box","text":"payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is added to the principal","page_number":103,"box":{"x":70,"y":143,"width":822,"height":11}},{"id":"97089f76-5c29-4b28-b08a-6528c7668e33","block_type":"box","text":"balance of the mortgage loan, which is repaid through future monthly payments. If the monthly payment for such an","page_number":103,"box":{"x":69,"y":158,"width":823,"height":11}},{"id":"f6868919-ae06-4cd4-97eb-0ecdd08000da","block_type":"box","text":"instrument exceeds the sum of the interest accrued at the applicable mortgage interest rate and the principal","page_number":103,"box":{"x":70,"y":173,"width":782,"height":11}},{"id":"488e96e8-81d0-4927-b920-9ed1c8cefc3e","block_type":"box","text":"payment required at such point to amortize the outstanding principal balance over the remaining term of the loan, the","page_number":103,"box":{"x":70,"y":188,"width":838,"height":12}},{"id":"3c746374-2869-4296-9140-597765ed32ef","block_type":"box","text":"excess is then used to reduce the outstanding principal balance of the ARM.","page_number":103,"box":{"x":69,"y":203,"width":544,"height":12}},{"id":"823832ec-72ce-437d-a633-1c3147a675e5","block_type":"box","text":"CMO Residuals.","page_number":103,"box":{"x":102,"y":226,"width":112,"height":9}},{"id":"547c4202-96e4-4c67-b7a1-a8f99ef0c8d9","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or instrumentalities of the","page_number":103,"box":{"x":221,"y":226,"width":682,"height":11}},{"id":"98d83b01-f094-4d27-b896-a29c4feb8fd1","block_type":"box","text":"U.S. Government or by private originators of, or investors in, mortgage loans, including savings and loan","page_number":103,"box":{"x":70,"y":241,"width":740,"height":11}},{"id":"3d36c121-8716-4d7c-95bc-8a757749786a","block_type":"box","text":"associations, homebuilders, mortgage banks, commercial banks, investment banks, and special purpose entities of","page_number":103,"box":{"x":69,"y":256,"width":829,"height":12}},{"id":"278c6b1b-9c54-4c85-a760-9b9db6bfd8ad","block_type":"box","text":"the foregoing. The cash flow generated by the mortgage assets underlying a series of CMOs is applied first to make","page_number":103,"box":{"x":68,"y":271,"width":826,"height":12}},{"id":"f103103d-57ea-4706-acc6-72ac99888559","block_type":"box","text":"required payments of principal and interest on the CMOs and second to pay the related administrative expenses and","page_number":103,"box":{"x":69,"y":286,"width":831,"height":12}},{"id":"f7b51f1d-1cfc-4503-964c-85d092f3bf49","block_type":"box","text":"any management fees of the issuer. The residual in a CMO structure generally represents the interest in any excess","page_number":103,"box":{"x":69,"y":302,"width":827,"height":11}},{"id":"b3917691-8703-4ac5-8a66-218b4bcc6d47","block_type":"box","text":"cash flow remaining after making the foregoing payments. Each payment of such excess cash flow to a holder of the","page_number":103,"box":{"x":69,"y":317,"width":829,"height":11}},{"id":"309511ba-e7b9-4393-ae4a-8bb5bacb4812","block_type":"box","text":"related CMO residual represents income and/or a return of capital. The amount of residual cash flow resulting from a","page_number":103,"box":{"x":69,"y":332,"width":838,"height":11}},{"id":"54d6e89f-0092-426a-ac77-0dc5961d9b59","block_type":"box","text":"CMO will depend on, among other things, the characteristics of the mortgage assets, the coupon rate of each class","page_number":103,"box":{"x":69,"y":347,"width":825,"height":11}},{"id":"b3780653-4ef7-474a-8f75-5ad96646eca6","block_type":"box","text":"of CMO, prevailing interest rates, the amount of administrative expenses and the prepayment experience on the","page_number":103,"box":{"x":69,"y":362,"width":798,"height":11}},{"id":"0341d15b-a5da-402b-bdd6-63fc4982eeeb","block_type":"box","text":"mortgage assets. In part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the","page_number":103,"box":{"x":69,"y":377,"width":813,"height":12}},{"id":"a376631b-b9f4-4e17-b8b5-c4b0ae6af3d8","block_type":"box","text":"related underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":103,"box":{"x":69,"y":392,"width":790,"height":12}},{"id":"5d943ab4-a9a0-41fd-b064-eba58b9d9810","block_type":"box","text":"securities. In addition, if a series of a CMO includes a class that bears interest at an adjustable rate, the yield to","page_number":103,"box":{"x":69,"y":407,"width":805,"height":12}},{"id":"96b3af11-b290-497b-a6d0-efc8a97e4c48","block_type":"box","text":"maturity on the related CMO residual will also be extremely sensitive to changes in the level of the index upon which","page_number":103,"box":{"x":69,"y":423,"width":828,"height":11}},{"id":"fea05844-87e8-495b-a798-722d17824dd5","block_type":"box","text":"interest rate adjustments are based. In certain circumstances, a Fund may fail to recoup fully its initial investment in","page_number":103,"box":{"x":70,"y":438,"width":831,"height":11}},{"id":"22ba4d0a-280d-40c3-903a-b037d0d7d292","block_type":"box","text":"a CMO residual.","page_number":103,"box":{"x":69,"y":453,"width":112,"height":9}},{"id":"45f93852-c35c-4e4f-bc2b-7ac4150acb93","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more investment","page_number":103,"box":{"x":102,"y":476,"width":758,"height":11}},{"id":"6dc2d37e-642e-4521-970a-69a53b07acd5","block_type":"box","text":"banking firms acting as brokers or dealers. Transactions in CMO residuals are generally completed only after careful","page_number":103,"box":{"x":69,"y":491,"width":827,"height":11}},{"id":"b59a5dd5-679a-43f5-880d-432da668c9ad","block_type":"box","text":"review of the characteristics of the securities in question. In addition, CMO residuals may or, pursuant to an","page_number":103,"box":{"x":69,"y":506,"width":769,"height":11}},{"id":"90d609bf-089f-4efe-a603-1ee3b26a71d0","block_type":"box","text":"exemption therefrom, may not have been registered under the Securities Act. Residual interests generally are junior","page_number":103,"box":{"x":69,"y":521,"width":825,"height":11}},{"id":"c59f1bf0-51c0-4dc3-8925-e0fe2dd98217","block_type":"box","text":"to, and may be significantly more volatile than, “regular” CMO and REMIC interests. CMO residuals, whether or not","page_number":103,"box":{"x":68,"y":536,"width":820,"height":11}},{"id":"0c4c92ec-e875-4791-98e6-aefc765c4384","block_type":"box","text":"registered under the Securities Act, may be subject to certain restrictions on transferability.","page_number":103,"box":{"x":69,"y":551,"width":650,"height":11}},{"id":"54c79a26-8c8a-4cd3-985a-673615c7a3e1","block_type":"box","text":"Stripped Mor tgage-Backed Securities.","page_number":103,"box":{"x":102,"y":574,"width":267,"height":11}},{"id":"465135f5-c793-4756-9a76-e31152d3e1db","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities (“SMBSs”)","page_number":103,"box":{"x":375,"y":574,"width":493,"height":11}},{"id":"ef9a711d-debb-447c-acc1-aa300af728b7","block_type":"box","text":"issued by agencies or instrumentalities of the United States. SMBSs are derivative multi-class mortgage-backed","page_number":103,"box":{"x":70,"y":589,"width":798,"height":11}},{"id":"05f58030-cadb-4560-97b9-18b9661af01c","block_type":"box","text":"securities. SMBS arrangements commonly involve two classes of securities that receive different proportions of the","page_number":103,"box":{"x":69,"y":604,"width":826,"height":11}},{"id":"a83ea93b-838c-4c94-a20a-eeb6baef8c89","block_type":"box","text":"interest and principal distributions on a pool of mortgage assets. A common variety of SMBS is where one class (the","page_number":103,"box":{"x":70,"y":619,"width":832,"height":11}},{"id":"ee895c91-7f76-4b6a-9a97-d06b817d6c68","block_type":"box","text":"principal only or PO class) receives some of the interest and most of the principal from the underlying assets, while","page_number":103,"box":{"x":70,"y":634,"width":821,"height":12}},{"id":"4aa141c9-c71c-4f0c-ba7f-c704c02439e5","block_type":"box","text":"the other class (the interest only or IO class) receives most of the interest and the remainder of the principal. In the","page_number":103,"box":{"x":68,"y":649,"width":826,"height":12}},{"id":"85356862-13da-49b2-9344-9253a1765e35","block_type":"box","text":"most extreme case, the IO class receives all of the interest, while the PO class receives all of the principal. While a","page_number":103,"box":{"x":69,"y":664,"width":822,"height":11}},{"id":"9845c321-14ad-427e-be60-44820fed3746","block_type":"box","text":"Fund may purchase securities of a PO class, a Fund is more likely to purchase the securities of an IO class. The yield","page_number":103,"box":{"x":70,"y":680,"width":834,"height":11}},{"id":"2eda2177-cf5d-45de-bcce-18b978936f4a","block_type":"box","text":"to maturity of an IO class is extremely sensitive to the rate of principal payments (including prepayments) on the","page_number":103,"box":{"x":68,"y":695,"width":800,"height":11}},{"id":"979fcf45-fb7b-48be-a64a-6dd56870ce22","block_type":"box","text":"related underlying assets, and a rapid rate of principal prepayments in excess of that considered in pricing the","page_number":103,"box":{"x":69,"y":710,"width":786,"height":11}},{"id":"5f39ee0f-1166-4ca3-9de6-20d4f8f21e94","block_type":"box","text":"securities will have a material adverse effect on an IO security’s yield to maturity. If the underlying mortgage assets","page_number":103,"box":{"x":69,"y":725,"width":823,"height":11}},{"id":"234357cf-f3ce-443e-a834-d4bee83c5d40","block_type":"box","text":"experience greater than anticipated payments of principal, a Fund may fail to recoup fully its initial investment in IOs.","page_number":103,"box":{"x":69,"y":740,"width":832,"height":11}},{"id":"6abffad2-0998-44f0-9c0f-28c34ed3291a","block_type":"box","text":"In addition, there are certain types of IOs that represent the interest portion of a particular class as opposed to the","page_number":103,"box":{"x":70,"y":755,"width":824,"height":11}},{"id":"876ae90c-e18a-49f4-8212-7e4caa3aa054","block_type":"box","text":"interest portion of the entire pool. The sensitivity of this type of IO to interest rate fluctuations may be increased","page_number":103,"box":{"x":70,"y":770,"width":800,"height":11}},{"id":"fdfa6b65-16a0-4026-9b33-429f50e29483","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above factors, a Fund","page_number":103,"box":{"x":69,"y":785,"width":818,"height":12}},{"id":"83fa991e-8309-4cdd-8547-ca870a3322cf","block_type":"box","text":"generally will purchase IOs only as a component of so called “synthetic” securities. This means that purchases of IOs","page_number":103,"box":{"x":68,"y":801,"width":840,"height":11}},{"id":"344ad0f1-a2c6-42e9-926e-e0e436274379","block_type":"box","text":"will be matched with certain purchases of other securities, such as POs, inverse floating rate CMOs or fixed rate","page_number":103,"box":{"x":68,"y":816,"width":802,"height":11}},{"id":"01b01efd-f65f-45a0-b696-6efa47ce06f2","block_type":"box","text":"securities; as interest rates fall, presenting a greater risk of unanticipated prepayments of principal, the negative","page_number":103,"box":{"x":69,"y":831,"width":805,"height":11}},{"id":"321bfea6-684c-4eae-839f-b6a66acb61b0","block_type":"box","text":"effect on a Fund because of its holdings of IOs should be diminished somewhat because of the increased yield on","page_number":103,"box":{"x":69,"y":846,"width":814,"height":11}},{"id":"70b84cec-287a-48ce-bf4d-9715cef9cd9b","block_type":"box","text":"the inverse floating rate CMOs or the increased appreciation on the POs or fixed rate securities.","page_number":103,"box":{"x":68,"y":861,"width":683,"height":11}},{"id":"93160bed-73bc-48ca-a323-a68b9b05cd8b","block_type":"box","text":"Tiered Index Bonds.","page_number":103,"box":{"x":103,"y":884,"width":138,"height":9}},{"id":"91310e35-4ea6-44af-90bc-eb1a858da20d","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on a tiered","page_number":103,"box":{"x":247,"y":884,"width":638,"height":11}},{"id":"d8f9e527-8d6e-4541-9cde-da12bef382f7","block_type":"box","text":"index bond is tied to a specified index or market rate. So long as this index or market rate is below a predetermined","page_number":103,"box":{"x":70,"y":899,"width":825,"height":11}},{"id":"6a5ca15b-52c8-4086-9d44-39b766e0f0f7","block_type":"box","text":"II-54","page_number":103,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"365f85d3-d1f6-499c-ba37-da90452ca43c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":103,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"0639d2e6-901c-4a0d-8c40-5e6387fbef0a","block_type":"box","text":"“strike” rate, the interest rate on the tiered index bond remains fixed. If, however, the specified index or market rate","page_number":104,"box":{"x":70,"y":45,"width":827,"height":11}},{"id":"8d19ad79-52b8-4f2c-b455-49180a3178ab","block_type":"box","text":"rises above the “strike” rate, the interest rate of the tiered index bond will decrease. Thus, under these","page_number":104,"box":{"x":69,"y":60,"width":738,"height":10}},{"id":"fe947034-e779-44d3-8971-70f50ac8deda","block_type":"box","text":"circumstances, the interest rate on a tiered index bond, like an inverse floater, will move in the opposite direction of","page_number":104,"box":{"x":69,"y":75,"width":828,"height":11}},{"id":"d8f382cd-05ae-48b3-9c01-8f7bca9c311a","block_type":"box","text":"prevailing interest rates, with the result that the price of the tiered index bond may be considerably more volatile than","page_number":104,"box":{"x":70,"y":90,"width":836,"height":11}},{"id":"0b7aea86-8d61-49bc-a62a-a2b51095717b","block_type":"box","text":"that of a fixed-rate bond.","page_number":104,"box":{"x":68,"y":105,"width":174,"height":9}},{"id":"e0b55ea8-41f2-4a74-84fa-de753408890b","block_type":"box","text":"TBA Commitments.","page_number":104,"box":{"x":103,"y":128,"width":133,"height":9}},{"id":"f0dace63-e5d7-4e3a-8392-e33413edb037","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA commitments","page_number":104,"box":{"x":243,"y":128,"width":653,"height":11}},{"id":"729f8e14-985a-445c-a3e2-36d946659d30","block_type":"box","text":"are forward agreements for the purchase or sale of securities, including mortgage-backed securities for a fixed price,","page_number":104,"box":{"x":69,"y":143,"width":834,"height":11}},{"id":"508d44b1-1e80-4961-b9c5-be643f7368a8","block_type":"box","text":"with payment and delivery on an agreed upon future settlement date. The specific securities to be delivered are not","page_number":104,"box":{"x":68,"y":158,"width":825,"height":11}},{"id":"e1cc0e7f-5449-4076-823f-b323146bd738","block_type":"box","text":"identified at the trade date. However, delivered securities must meet specified terms, including issuer, rate and","page_number":104,"box":{"x":70,"y":173,"width":793,"height":11}},{"id":"fb85ab62-9bef-4a7e-86ae-628ba6ad0e51","block_type":"box","text":"mortgage terms. When the Fund enters into a TBA commitment for the sale of mortgage-backed securities for a fixed","page_number":104,"box":{"x":69,"y":188,"width":833,"height":12}},{"id":"11358857-c0af-44d5-a18c-1366b9e992a5","block_type":"box","text":"price, with payment and delivery on an agreed upon future settlement date (which may be referred to as having a","page_number":104,"box":{"x":70,"y":203,"width":804,"height":12}},{"id":"508a89a2-c9f8-4fc7-ae51-e46abfd2cc1c","block_type":"box","text":"short position in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":104,"box":{"x":69,"y":218,"width":779,"height":12}},{"id":"6a16a16f-289f-430d-8fd3-97030dbda31a","block_type":"box","text":"required to be delivered. See “—When-Issued Securities, Delayed Delivery Securities and Forward Commitments”","page_number":104,"box":{"x":69,"y":234,"width":810,"height":11}},{"id":"16f30493-6730-43eb-b267-1c5579fe26dd","block_type":"box","text":"below.","page_number":104,"box":{"x":69,"y":249,"width":43,"height":9}},{"id":"e1d25af2-5b7e-41b7-b9ac-3b0b7cd4a5c8","block_type":"box","text":"Mor tgage Dollar Rolls.","page_number":104,"box":{"x":102,"y":272,"width":157,"height":11}},{"id":"18bcdd46-c29c-4110-b81d-7e10c7202756","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll transaction, a","page_number":104,"box":{"x":266,"y":272,"width":634,"height":11}},{"id":"4e34061c-929f-4605-8dde-60bba9b44979","block_type":"box","text":"Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase","page_number":104,"box":{"x":70,"y":286,"width":825,"height":12}},{"id":"3d261bb1-10ee-44f5-9d72-c8cf1b44f448","block_type":"box","text":"substantially similar securities on a specified future date. The securities that are repurchased will bear the same","page_number":104,"box":{"x":69,"y":302,"width":805,"height":11}},{"id":"68ebafbd-cbe0-4023-9575-14e35052e6c3","block_type":"box","text":"interest rate and a similar maturity as those sold, but pools of mortgages collateralizing those securities may have","page_number":104,"box":{"x":70,"y":317,"width":817,"height":11}},{"id":"abd7e95d-ce09-4782-b014-dfa9eda74f25","block_type":"box","text":"different prepayment histories than those sold. During the period between the sale and repurchase, a Fund will not","page_number":104,"box":{"x":69,"y":332,"width":820,"height":11}},{"id":"6ba169a3-d8b7-4e2b-a81a-179c8a1f5637","block_type":"box","text":"be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale will be invested in","page_number":104,"box":{"x":69,"y":347,"width":827,"height":11}},{"id":"d2e0a931-959b-4228-bbc5-1636fc2b6125","block_type":"box","text":"additional instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":104,"box":{"x":69,"y":362,"width":806,"height":11}},{"id":"1e310075-1634-4491-ac52-72c484a7a7c2","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been realized on the","page_number":104,"box":{"x":69,"y":377,"width":833,"height":12}},{"id":"4f83caea-2171-4c40-9795-a12360a4c2c6","block_type":"box","text":"securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of a Fund","page_number":104,"box":{"x":69,"y":392,"width":836,"height":11}},{"id":"9d7f8fe8-c94a-45b9-b9d9-595fbbcab398","block_type":"box","text":"compared with what the performance would have been without the use of dollar rolls.","page_number":104,"box":{"x":69,"y":407,"width":607,"height":11}},{"id":"2bf41158-b82a-45ea-b5b6-a78f3a14c7b7","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and a","page_number":104,"box":{"x":102,"y":430,"width":744,"height":11}},{"id":"4b643d0a-7c8b-45f8-84a5-d85b83b21552","block_type":"box","text":"subsequent purchase or sale of a substantially similar security in the forward market. Transactions in mortgage","page_number":104,"box":{"x":69,"y":445,"width":796,"height":12}},{"id":"68d036e2-bf58-4eb8-90c0-d5b0cc43aed2","block_type":"box","text":"dollar rolls may increase trading costs and portfolio turnover.","page_number":104,"box":{"x":69,"y":460,"width":433,"height":12}},{"id":"3140ace2-16e9-4a30-8fe9-a5d68187e2ef","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes insolvent, a","page_number":104,"box":{"x":102,"y":483,"width":795,"height":11}},{"id":"7227c231-2f3a-47ab-8f7c-cd8e423290e4","block_type":"box","text":"Fund’s use of the proceeds of the current sale portion of the transaction may be restricted pending a determination","page_number":104,"box":{"x":70,"y":498,"width":824,"height":11}},{"id":"654a4e36-12d5-47b3-ad0f-a0cb7345c917","block_type":"box","text":"by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the similar","page_number":104,"box":{"x":69,"y":513,"width":774,"height":12}},{"id":"fb0d4890-6221-4882-b349-568b51485d6a","block_type":"box","text":"securities in the forward transaction.","page_number":104,"box":{"x":69,"y":528,"width":261,"height":9}},{"id":"3821f90a-430b-4513-b52b-34a3729da1d5","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar rolls may","page_number":104,"box":{"x":101,"y":551,"width":785,"height":11}},{"id":"0d80d598-5276-49cc-8ad6-202ba992828a","block_type":"box","text":"depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar rolls involve the risk","page_number":104,"box":{"x":69,"y":566,"width":812,"height":11}},{"id":"11091368-27e9-44c7-ae98-d8cbdd384df9","block_type":"box","text":"that the market value of the securities subject to a Fund’s forward purchase commitment may decline below, or the","page_number":104,"box":{"x":68,"y":581,"width":824,"height":11}},{"id":"3e12af0c-4924-40f4-bd7d-b109e795bf0d","block_type":"box","text":"market value of the securities subject to a Fund’s forward sale commitment may increase above, the exercise price","page_number":104,"box":{"x":69,"y":596,"width":824,"height":12}},{"id":"8882b7df-ed4f-4e9e-a12b-fc2a27519aec","block_type":"box","text":"of the forward commitment. Dollar rolls are speculative techniques that can be deemed to involve leverage. There is","page_number":104,"box":{"x":69,"y":612,"width":828,"height":11}},{"id":"267b0665-117e-4ac2-b440-281dffccc8d2","block_type":"box","text":"no assurance that dollar rolls can be successfully employed.","page_number":104,"box":{"x":69,"y":627,"width":430,"height":11}},{"id":"72cc65b5-f4a1-44d5-addf-90e23b3eaab9","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward-settling","page_number":104,"box":{"x":102,"y":649,"width":759,"height":12}},{"id":"644aac13-ab64-4d01-b793-6a472de9ca62","block_type":"box","text":"securities (","page_number":104,"box":{"x":69,"y":665,"width":78,"height":11}},{"id":"148185df-0a9e-450b-a09b-597705d0d50f","block_type":"box","text":"e.g.","page_number":104,"box":{"x":148,"y":666,"width":25,"height":10}},{"id":"5ff3a935-885e-4ae5-b9f2-4952816063c0","block_type":"box","text":", dollar rolls and firm and standby commitments, including TBA commitments) and non-standard","page_number":104,"box":{"x":176,"y":664,"width":681,"height":12}},{"id":"a316289d-3ab4-44b4-b911-58c764b0922d","block_type":"box","text":"settlement cycle securities notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":104,"box":{"x":69,"y":680,"width":813,"height":11}},{"id":"b0186359-a923-49be-9d4c-2b9f7aa64e3d","block_type":"box","text":"Investment Company Act, provided that the transaction meets the Delayed-Settlement Securities Provision (as","page_number":104,"box":{"x":70,"y":695,"width":783,"height":11}},{"id":"cd30614b-b80d-42b7-ac10-d79368ac58cb","block_type":"box","text":"defined below under “—When-Issued Securities, Delayed Delivery Securities and Forward Commitments”). If a when","page_number":104,"box":{"x":69,"y":710,"width":832,"height":11}},{"id":"c05fcfe1-e170-4b0e-b1f0-517ea727f5ca","block_type":"box","text":"issued, forward-settling or non-standard settlement cycle security does not satisfy the Delayed-Settlement Securities","page_number":104,"box":{"x":70,"y":725,"width":830,"height":11}},{"id":"f0415ddb-5704-468b-b277-e257887555ff","block_type":"box","text":"Provision, then it is treated as a Derivatives Transaction under Rule 18f-4. See “—Derivatives — Regulation of","page_number":104,"box":{"x":69,"y":740,"width":788,"height":11}},{"id":"a6648250-e606-47c0-bb7b-00c574067e0d","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":104,"box":{"x":70,"y":755,"width":489,"height":11}},{"id":"7e558212-d61e-4eae-b7a3-71473021ddc7","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":104,"box":{"x":102,"y":778,"width":260,"height":11}},{"id":"66764d3f-3a70-40c2-b7bf-271282802fad","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities. These","page_number":104,"box":{"x":368,"y":778,"width":473,"height":11}},{"id":"67c1dcab-78d8-490e-8d1f-f24cdfef65f1","block_type":"box","text":"securities are derivative interest-only mortgage securities structured off home equity loan transactions. NIM","page_number":104,"box":{"x":69,"y":793,"width":768,"height":11}},{"id":"b76692fc-117d-4c4f-a88a-d2a9c1a659f8","block_type":"box","text":"securities receive any “excess” interest computed after paying coupon costs, servicing costs and fees and any credit","page_number":104,"box":{"x":69,"y":808,"width":836,"height":11}},{"id":"57f29c3c-eb8c-456d-ac32-2002bb951dfa","block_type":"box","text":"losses associated with the underlying pool of home equity loans. Like traditional stripped mortgage-backed","page_number":104,"box":{"x":70,"y":823,"width":760,"height":12}},{"id":"22750fd3-c071-40c3-b90e-62cd4fd743f9","block_type":"box","text":"securities, the yield to maturity on a NIM security is sensitive not only to changes in prevailing interest rates but also","page_number":104,"box":{"x":69,"y":839,"width":832,"height":11}},{"id":"875838e4-c799-4ea2-8736-d54409010cb9","block_type":"box","text":"to the rate of principal payments (including prepayments) on the underlying home equity loans. NIM securities are","page_number":104,"box":{"x":68,"y":853,"width":810,"height":12}},{"id":"e2714d47-4af6-43ea-aaef-94d0c7586bf0","block_type":"box","text":"highly sensitive to credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":104,"box":{"x":69,"y":869,"width":764,"height":11}},{"id":"8e3c451d-a9fc-4756-9c1a-c667b1321132","block_type":"box","text":"Municipal Investments.","page_number":104,"box":{"x":102,"y":891,"width":169,"height":11}},{"id":"0df958a2-a548-4271-b6e8-c0801cc25504","block_type":"box","text":"II-55","page_number":104,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"cf88df53-02da-49e1-9ffd-ffdf082a7f46","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":104,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3a4df032-d86a-4351-8e8d-85d99fffd4cb","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of the","page_number":105,"box":{"x":102,"y":45,"width":763,"height":11}},{"id":"7ea1d4ba-8d2a-4899-81ba-0c7041ba3170","block_type":"box","text":"United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, the","page_number":105,"box":{"x":70,"y":60,"width":783,"height":11}},{"id":"9f922c44-fd6a-4575-912e-3e3fe843d76a","block_type":"box","text":"payments from which, in the opinion of bond counsel to the issuer, are excludable from gross income for U.S. federal","page_number":105,"box":{"x":70,"y":75,"width":833,"height":11}},{"id":"b952036f-1216-4b5b-a536-e7327a046308","block_type":"box","text":"income tax purposes (“Municipal Bonds”). Certain of the Municipal Funds may also invest in Municipal Bonds that","page_number":105,"box":{"x":70,"y":90,"width":813,"height":11}},{"id":"8fa450c6-e37c-4d2b-9665-bad669668e15","block_type":"box","text":"pay interest excludable from gross income for purposes of state and local income taxes of the designated state and/","page_number":105,"box":{"x":70,"y":105,"width":836,"height":11}},{"id":"420da987-7bd7-4c33-9bff-423a4c66d94b","block_type":"box","text":"or allow the value of a Fund’s shares to be exempt from state and local taxes of the designated state (“State","page_number":105,"box":{"x":69,"y":120,"width":779,"height":12}},{"id":"93dccd02-65c3-4248-a023-35d4bf62bf01","block_type":"box","text":"Municipal Bonds”). The Municipal Funds may also invest in securities not issued by or on behalf of a state or territory","page_number":105,"box":{"x":70,"y":135,"width":838,"height":11}},{"id":"62dffd60-f9f6-451f-81a2-524d301ccfc3","block_type":"box","text":"or by an agency or instrumentality thereof, if the Manager believes such securities to pay interest excludable from","page_number":105,"box":{"x":69,"y":150,"width":810,"height":12}},{"id":"58541b23-a9b3-4334-8797-ad8ff898a6bb","block_type":"box","text":"gross income for purposes of U.S. federal income tax and state and local income taxes of the designated state and/","page_number":105,"box":{"x":68,"y":166,"width":834,"height":11}},{"id":"fa5b53f3-1476-4972-a433-c8dd2e965a7d","block_type":"box","text":"or state and local personal property taxes of the designated state (“Non-Municipal Tax-Exempt Securities”). Non","page_number":105,"box":{"x":69,"y":181,"width":801,"height":11}},{"id":"0f030fb8-d242-429b-b6df-720e64b73931","block_type":"box","text":"Municipal Tax-Exempt Securities could include trust certificates or other instruments evidencing interest in one or","page_number":105,"box":{"x":70,"y":196,"width":807,"height":11}},{"id":"3a3bbf83-c7cf-4f85-bf63-57142a96ef65","block_type":"box","text":"more long-term municipal securities. Non-Municipal Tax-Exempt Securities also may include securities issued by other","page_number":105,"box":{"x":69,"y":211,"width":837,"height":11}},{"id":"78b90cea-5120-4734-8dc1-2771b2c7e414","block_type":"box","text":"investment companies that invest in municipal bonds, to the extent such investments are permitted by applicable","page_number":105,"box":{"x":70,"y":226,"width":809,"height":11}},{"id":"0fd0c70d-4af9-4096-a581-231258c8bb25","block_type":"box","text":"law. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":105,"box":{"x":70,"y":241,"width":826,"height":11}},{"id":"6b145083-e592-47e2-bae4-2194cd97e8cb","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective and policies.","page_number":105,"box":{"x":70,"y":256,"width":834,"height":11}},{"id":"9a893eb4-29c2-4b3a-909b-99d0deec7406","block_type":"box","text":"Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for purposes of U.S. federal","page_number":105,"box":{"x":70,"y":271,"width":800,"height":12}},{"id":"7f267e68-7558-457d-8fe8-6560ce092b57","block_type":"box","text":"income tax and state and local income taxes of a designated state and/or allow the value of a Fund’s shares to be","page_number":105,"box":{"x":70,"y":286,"width":819,"height":12}},{"id":"f3a40ac3-8f44-49f9-a6df-7a5792dc79ca","block_type":"box","text":"exempt from state and local personal property taxes of that state will be considered “State Municipal Bonds” for","page_number":105,"box":{"x":69,"y":302,"width":805,"height":11}},{"id":"8f5b27cd-61a6-49dd-ad78-603a23f5349c","block_type":"box","text":"purposes of the investment objective and policies of each of California Municipal Opportunities Fund, New Jersey","page_number":105,"box":{"x":70,"y":317,"width":805,"height":11}},{"id":"c7cf0d72-fd2f-4c6c-826d-32fa6c431df5","block_type":"box","text":"Municipal Bond Fund, New York Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":105,"box":{"x":70,"y":332,"width":721,"height":11}},{"id":"5a238435-0aae-4f99-ba43-c8369c09b8b3","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":105,"box":{"x":102,"y":355,"width":495,"height":11}},{"id":"258cbf41-e9e1-45a3-b4cb-21dd880ab3cd","block_type":"box","text":"The risks and special considerations","page_number":105,"box":{"x":603,"y":355,"width":260,"height":11}},{"id":"6f4d5763-f2fb-4ddf-9d15-987215287b98","block_type":"box","text":"involved in investment in Municipal Bonds vary with the types of instruments being acquired. Investments in Non","page_number":105,"box":{"x":70,"y":370,"width":806,"height":11}},{"id":"a913f9d5-71cb-4877-8246-b2f96ecf87d1","block_type":"box","text":"Municipal Tax-Exempt Securities may present similar risks, depending on the particular product. Certain municipal","page_number":105,"box":{"x":70,"y":385,"width":810,"height":11}},{"id":"44749b15-40ca-46b1-a634-c53c45c94436","block_type":"box","text":"instruments in which a Fund may invest may be characterized as derivatives.","page_number":105,"box":{"x":70,"y":400,"width":544,"height":11}},{"id":"2b9daaff-68bb-48fb-9ea3-c82cd931d44e","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a result of","page_number":105,"box":{"x":101,"y":423,"width":799,"height":11}},{"id":"93fce0af-cdad-4e3e-b1a0-237fb278f3ca","block_type":"box","text":"legislation or litigation, including legislation or litigation that changes the taxation of Municipal Bonds or the rights of","page_number":105,"box":{"x":70,"y":438,"width":829,"height":11}},{"id":"a12cf8de-7fde-46cb-b677-2e089b5c677f","block_type":"box","text":"Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are rare and certain provisions of the","page_number":105,"box":{"x":70,"y":453,"width":814,"height":11}},{"id":"a1c939b9-95d9-4397-94fa-56ea6bbd5d89","block_type":"box","text":"U.S. Bankruptcy Code governing such bankruptcies are unclear. Further, the application of state law to Municipal","page_number":105,"box":{"x":70,"y":468,"width":802,"height":11}},{"id":"0988fd94-330d-4d66-94be-2d00432e3aa2","block_type":"box","text":"Bond issuers could produce varying results among the states or among Municipal Bond issuers within a state. These","page_number":105,"box":{"x":70,"y":483,"width":834,"height":11}},{"id":"f0bf4073-1150-404e-9e56-1e3da37f1ae0","block_type":"box","text":"uncertainties could have a significant impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":105,"box":{"x":69,"y":498,"width":761,"height":11}},{"id":"0bca71e2-5331-4b9b-9338-890c96d74fbb","block_type":"box","text":"II-56","page_number":105,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"80ede498-3682-4967-8149-e7c01fd13b93","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":105,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"6b601075-6a17-46cb-b6e8-7f6fd8968eb5","block_type":"box","text":"Description of Municipal Bonds.","page_number":106,"box":{"x":70,"y":45,"width":224,"height":11}},{"id":"80f95bc9-fb2b-4a16-b369-5cd496a8c1e4","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including the","page_number":106,"box":{"x":102,"y":67,"width":754,"height":12}},{"id":"e297b920-fce3-4255-bd9a-cf421d2440ba","block_type":"box","text":"construction of a wide range of public facilities, refunding of outstanding obligations and obtaining funds for general","page_number":106,"box":{"x":69,"y":82,"width":824,"height":12}},{"id":"68e0ca15-e2f5-41f4-9b53-5c0fed021c8e","block_type":"box","text":"operating expenses and loans to other public institutions and facilities. In addition, certain types of bonds are issued","page_number":106,"box":{"x":69,"y":98,"width":836,"height":11}},{"id":"30402111-fd91-43d3-9f12-da415201c1ce","block_type":"box","text":"by or on behalf of public authorities to finance various privately owned or operated facilities, including certain","page_number":106,"box":{"x":69,"y":113,"width":776,"height":11}},{"id":"8f8ed24f-5bb7-4096-977c-a45e46aa867a","block_type":"box","text":"facilities for the local furnishing of electric energy or gas, sewage facilities, solid waste disposal facilities and other","page_number":106,"box":{"x":68,"y":128,"width":822,"height":11}},{"id":"7c7c9dbf-1913-4308-a38f-5dd374805968","block_type":"box","text":"specialized facilities. Such obligations are included within the term Municipal Bonds if the interest paid thereon is","page_number":106,"box":{"x":69,"y":143,"width":810,"height":11}},{"id":"742689d6-d461-45cc-98b1-a88e04b4afed","block_type":"box","text":"excluded from gross income for U.S. federal income tax purposes and any applicable state and local taxes. Other","page_number":106,"box":{"x":69,"y":158,"width":808,"height":11}},{"id":"67357e87-ebaf-44d6-93eb-3c98885fa3fd","block_type":"box","text":"types of private activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":106,"box":{"x":68,"y":173,"width":812,"height":11}},{"id":"6c3ae567-f493-49b7-8be0-40be2ba4c174","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the current U.S.","page_number":106,"box":{"x":70,"y":188,"width":792,"height":12}},{"id":"a2db1d36-5ea1-4c7a-85b9-94a4f027b079","block_type":"box","text":"federal tax laws place substantial limitations on the size of such issues. The interest on Municipal Bonds may bear a","page_number":106,"box":{"x":68,"y":203,"width":835,"height":12}},{"id":"17ffb4de-74bb-4ae8-b8cf-725774a0281e","block_type":"box","text":"fixed rate or be payable at a variable or floating rate. The two principal classifications of Municipal Bonds are “general","page_number":106,"box":{"x":68,"y":218,"width":840,"height":12}},{"id":"57702e64-e364-4d21-8b92-5b1eb1ea10a0","block_type":"box","text":"obligation” and “revenue” or “special obligation” bonds, which latter category includes private activity bonds (“PABs”)","page_number":106,"box":{"x":69,"y":234,"width":838,"height":11}},{"id":"7f3a0edd-233a-4286-a05f-70ea20ed4712","block_type":"box","text":"(or “industrial development bonds” under pre-1986 law).","page_number":106,"box":{"x":69,"y":249,"width":401,"height":11}},{"id":"c39a028a-cf23-4f1d-af92-77df9312f4ab","block_type":"box","text":"General Obligation Bonds.","page_number":106,"box":{"x":102,"y":272,"width":184,"height":11}},{"id":"8ac0c459-16ad-45bc-8f41-a65209c045bd","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith, credit and","page_number":106,"box":{"x":292,"y":271,"width":613,"height":12}},{"id":"dd92ddb6-c14e-463b-887a-56c7259257ac","block_type":"box","text":"taxing power for the payment of principal and interest. The taxing power of any governmental entity may be limited,","page_number":106,"box":{"x":68,"y":286,"width":816,"height":12}},{"id":"90b17e59-1a33-42e9-af0c-28ea9d80a534","block_type":"box","text":"however, by provisions of its state constitution or laws, and an entity’s creditworthiness will depend on many factors,","page_number":106,"box":{"x":69,"y":302,"width":834,"height":11}},{"id":"32e7150a-0d1c-4152-8947-3e5cd02dd0b5","block_type":"box","text":"including potential erosion of its tax base due to population declines, natural disasters, declines in the state’s","page_number":106,"box":{"x":70,"y":317,"width":786,"height":11}},{"id":"86891de0-6d76-4167-9419-af7e1d2a59d4","block_type":"box","text":"industrial base or inability to attract new industries, economic limits on the ability to tax without eroding the tax base,","page_number":106,"box":{"x":70,"y":332,"width":835,"height":11}},{"id":"bb421f45-5733-4ac3-8d60-07bd1c888be4","block_type":"box","text":"state legislative proposals or voter initiatives to limit ad valorem real property taxes and the extent to which the entity","page_number":106,"box":{"x":69,"y":347,"width":840,"height":11}},{"id":"1cbf9c81-62af-4b01-a48b-ab8dd4289f70","block_type":"box","text":"relies on federal or state aid, access to capital markets or other factors beyond the state’s or entity’s control.","page_number":106,"box":{"x":69,"y":362,"width":782,"height":11}},{"id":"50f256be-1d88-4c3c-8550-6386e6cade81","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest and the","page_number":106,"box":{"x":68,"y":377,"width":791,"height":12}},{"id":"40a66cfd-8ebe-4276-87a2-c6e08f2ca146","block_type":"box","text":"repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":106,"box":{"x":69,"y":392,"width":630,"height":12}},{"id":"dd732ef6-a174-4fd6-8778-710889202d1e","block_type":"box","text":"Revenue Bonds.","page_number":106,"box":{"x":102,"y":415,"width":114,"height":9}},{"id":"8265ad6a-ec59-4545-b52c-a953095a1379","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility or class of","page_number":106,"box":{"x":223,"y":415,"width":676,"height":11}},{"id":"b7e06cc5-6a51-4ae9-b90d-2c7c10ca59f8","block_type":"box","text":"facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source such as","page_number":106,"box":{"x":68,"y":430,"width":791,"height":11}},{"id":"2d4733df-2f4c-44bf-96f4-3d670e2ed170","block_type":"box","text":"payments from the user of the facility being financed; accordingly, the timely payment of interest and the repayment","page_number":106,"box":{"x":70,"y":445,"width":824,"height":12}},{"id":"1d6757af-96e9-4418-a54e-bf9551e90e21","block_type":"box","text":"of principal in accordance with the terms of the revenue or special obligation bond is a function of the economic","page_number":106,"box":{"x":69,"y":460,"width":798,"height":12}},{"id":"f67e84b3-75ec-4167-a617-4238494a5bfb","block_type":"box","text":"viability of such facility or such revenue source.","page_number":106,"box":{"x":68,"y":475,"width":336,"height":12}},{"id":"19e1242f-e7bc-4389-9c3c-d701c8ae3ccb","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi-family housing","page_number":106,"box":{"x":102,"y":498,"width":801,"height":11}},{"id":"e82f9b28-e4d4-4d4e-b797-409da0b5dd43","block_type":"box","text":"involve special risks in addition to those associated with municipal bonds generally, including that the underlying","page_number":106,"box":{"x":70,"y":514,"width":800,"height":11}},{"id":"d9ab5a17-ecab-44ca-80f4-9c54d86ae0b7","block_type":"box","text":"properties may not generate sufficient income to pay expenses and interest costs. Such bonds are generally non","page_number":106,"box":{"x":70,"y":528,"width":810,"height":12}},{"id":"942fdea8-883f-4da0-9ae7-b4135728af16","block_type":"box","text":"recourse against the property owner, may be junior to the rights of others with an interest in the properties, may pay","page_number":106,"box":{"x":69,"y":543,"width":830,"height":12}},{"id":"8357271c-2b8f-4a8a-9373-1a8a3844e772","block_type":"box","text":"interest that changes based in part on the financial performance of the property, may be prepayable without penalty","page_number":106,"box":{"x":70,"y":559,"width":828,"height":11}},{"id":"c99ec18f-2481-4e47-af52-dd34cd83c0ab","block_type":"box","text":"and may be used to finance the construction of housing developments which, until completed and rented, do not","page_number":106,"box":{"x":69,"y":574,"width":804,"height":11}},{"id":"2623d5a9-e511-4b94-95c8-877465d23679","block_type":"box","text":"generate income to pay interest. Increases in interest rates payable on senior obligations may make it more difficult","page_number":106,"box":{"x":68,"y":589,"width":830,"height":11}},{"id":"8519e156-fea9-41e5-9adc-ae051c798d5d","block_type":"box","text":"for issuers to meet payment obligations on subordinated bonds.","page_number":106,"box":{"x":68,"y":604,"width":457,"height":11}},{"id":"c0ffd440-e945-4149-831c-799ce4b0d4b2","block_type":"box","text":"PABs.","page_number":106,"box":{"x":102,"y":627,"width":38,"height":9}},{"id":"96f320c9-7a7b-4edf-bddf-c3230ae389f3","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public authorities to","page_number":106,"box":{"x":147,"y":627,"width":730,"height":11}},{"id":"81c9f99f-7e91-47bd-8039-029fe03162b6","block_type":"box","text":"provide funds, usually through a loan or lease arrangement, to a private entity for the purpose of financing","page_number":106,"box":{"x":70,"y":642,"width":755,"height":11}},{"id":"2b4cc75f-2fcc-40b5-b9fe-5ed5aef13ac9","block_type":"box","text":"construction or improvement of a facility to be used by the entity. Such bonds are secured primarily by revenues","page_number":106,"box":{"x":69,"y":657,"width":797,"height":11}},{"id":"932557ff-78b2-4ac9-a1ec-544b132df51e","block_type":"box","text":"derived from loan repayments or lease payments due from the entity, which may or may not be guaranteed by a","page_number":106,"box":{"x":69,"y":672,"width":793,"height":11}},{"id":"17ee8e37-7401-4ecd-8063-c7fa589fce24","block_type":"box","text":"parent company or otherwise secured. PABs generally are not secured by a pledge of the taxing power of the issuer of","page_number":106,"box":{"x":70,"y":687,"width":840,"height":11}},{"id":"98b22da6-a635-475f-b182-131683c8b732","block_type":"box","text":"such bonds. Therefore, an investor should understand that repayment of such bonds generally depends on the","page_number":106,"box":{"x":69,"y":702,"width":789,"height":12}},{"id":"b6e209ee-116c-44dc-ae34-dd468edc717a","block_type":"box","text":"revenues of a private entity and be aware of the risks that such an investment may entail. The continued ability of an","page_number":106,"box":{"x":69,"y":717,"width":832,"height":12}},{"id":"8304115f-e56a-47ca-8bcf-100a79019810","block_type":"box","text":"entity to generate sufficient revenues for the payment of principal and interest on such bonds will be affected by","page_number":106,"box":{"x":69,"y":732,"width":802,"height":12}},{"id":"6b4d7fea-76fd-4b6d-8cb0-5e81c48ca119","block_type":"box","text":"many factors including the size of the entity, its capital structure, demand for its products or services, competition,","page_number":106,"box":{"x":69,"y":748,"width":819,"height":11}},{"id":"67fb93f4-91e5-481e-b70e-42230794b413","block_type":"box","text":"general economic conditions, government regulation and the entity’s dependence on revenues for the operation of","page_number":106,"box":{"x":68,"y":763,"width":816,"height":11}},{"id":"111b5389-c368-401b-9c6e-224989d99ea7","block_type":"box","text":"the particular facility being financed.","page_number":106,"box":{"x":68,"y":778,"width":258,"height":11}},{"id":"a0df178d-4616-40fa-b8e8-ef13463a19ac","block_type":"box","text":"Moral Obligation Bonds.","page_number":106,"box":{"x":102,"y":801,"width":169,"height":11}},{"id":"9c299c81-96c5-43c0-980c-6540e4fecdcb","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public authorities. If an","page_number":106,"box":{"x":278,"y":801,"width":628,"height":11}},{"id":"962983f3-80fc-4ce8-a3b8-b8034d658309","block_type":"box","text":"issuer of moral obligation bonds is unable to meet its obligations, the repayment of such bonds becomes a moral","page_number":106,"box":{"x":70,"y":816,"width":809,"height":11}},{"id":"34cd0c9b-6255-4057-93ba-057d16d005ed","block_type":"box","text":"commitment but not a legal obligation of the state or municipality that created the special purpose public authority","page_number":106,"box":{"x":69,"y":831,"width":816,"height":11}},{"id":"dbf276d6-b39d-436e-a27f-e52267bcef98","block_type":"box","text":"that issued the bonds.","page_number":106,"box":{"x":68,"y":846,"width":160,"height":9}},{"id":"536015f5-d92a-46fd-97be-83f544a4e344","block_type":"box","text":"Municipal Notes.","page_number":106,"box":{"x":102,"y":869,"width":118,"height":11}},{"id":"4d00fa9a-c281-479b-885e-027f8992df97","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim financing","page_number":106,"box":{"x":227,"y":869,"width":683,"height":11}},{"id":"b5f14300-167b-4c00-a671-128fc3884e7f","block_type":"box","text":"in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the anticipated proceeds,","page_number":106,"box":{"x":70,"y":884,"width":807,"height":11}},{"id":"5e7c01e4-5dd3-400a-8a3d-e63ae4ee4d18","block_type":"box","text":"repayment on the note may be delayed or the note may not be fully repaid, and a Fund may lose money.","page_number":106,"box":{"x":69,"y":899,"width":739,"height":11}},{"id":"22f5ef90-b000-49fa-b3a8-2bc7416c0708","block_type":"box","text":"II-57","page_number":106,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"05cf45f3-d064-4678-90b7-3e6a264e6b48","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":106,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ff8dcf10-c850-439c-94c4-5f1d2f7332b7","block_type":"box","text":"Municipal Commercial Paper.","page_number":107,"box":{"x":102,"y":45,"width":205,"height":11}},{"id":"e99a322a-c630-4dee-ab99-814a86926621","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet short-term","page_number":107,"box":{"x":314,"y":45,"width":586,"height":11}},{"id":"0cf4a7eb-7ac2-417c-bd99-3eefaa42af78","block_type":"box","text":"financing needs. The lack of security presents some risk of loss to a Fund since, in the event of an issuer’s","page_number":107,"box":{"x":68,"y":60,"width":767,"height":11}},{"id":"b074b5b6-ba67-4c96-8d24-5208fe707578","block_type":"box","text":"bankruptcy, unsecured creditors are repaid only after the secured creditors out of the assets, if any, that remain.","page_number":107,"box":{"x":69,"y":75,"width":803,"height":11}},{"id":"6e09b9ae-4eb6-402b-8668-e15c64916f99","block_type":"box","text":"Municipal Lease Obligations.","page_number":107,"box":{"x":102,"y":98,"width":203,"height":11}},{"id":"6d574771-f1e1-4298-9ff8-9cef922bd26d","block_type":"box","text":"Also included within the general category of Municipal Bonds are certificates of","page_number":107,"box":{"x":311,"y":98,"width":566,"height":11}},{"id":"f568f3e1-9b6e-4fd8-b18e-5afeda7ab837","block_type":"box","text":"participation (“COPs”) issued by government authorities or entities to finance the acquisition or construction of","page_number":107,"box":{"x":70,"y":113,"width":791,"height":11}},{"id":"72bb6566-d9f8-4a09-a031-6e4b43554eb4","block_type":"box","text":"equipment, land and/or facilities. The COPs represent participations in a lease, an installment purchase contract or a","page_number":107,"box":{"x":69,"y":128,"width":840,"height":11}},{"id":"4e76ddba-c09c-4b01-a903-47ab33826a0a","block_type":"box","text":"conditional sales contract (hereinafter collectively called “lease obligations”) relating to such equipment, land or","page_number":107,"box":{"x":69,"y":143,"width":800,"height":11}},{"id":"53369904-481d-47a8-aaa4-bc9150939e9a","block_type":"box","text":"facilities. Municipal leases, like other municipal debt obligations, are subject to the risk of non-payment. Although","page_number":107,"box":{"x":68,"y":158,"width":809,"height":11}},{"id":"8d9a1fb1-b8f0-4481-907a-5af079900ba1","block_type":"box","text":"lease obligations do not constitute general obligations of the issuer for which the issuer’s unlimited taxing power is","page_number":107,"box":{"x":70,"y":173,"width":820,"height":11}},{"id":"7e3a0dd3-5121-4379-b718-723f89eaa4f0","block_type":"box","text":"pledged, a lease obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":107,"box":{"x":70,"y":188,"width":808,"height":12}},{"id":"4e301831-126c-407a-829e-03bed6171a77","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses,","page_number":107,"box":{"x":70,"y":204,"width":809,"height":11}},{"id":"aefbe58f-88a3-4ad4-81c7-33b9e339f9a4","block_type":"box","text":"which provide that the issuer has no obligation to make lease or installment purchase payments in future years","page_number":107,"box":{"x":68,"y":218,"width":795,"height":12}},{"id":"bfefddb9-d5ee-48f1-ac41-983056a41ebb","block_type":"box","text":"unless money is appropriated for such purpose on a yearly basis. Although “non-appropriation” lease obligations are","page_number":107,"box":{"x":69,"y":234,"width":829,"height":11}},{"id":"fb222a04-be36-4b9c-9afb-5e2af5ae0839","block_type":"box","text":"secured by the leased property, disposition of the property in the event of foreclosure might prove difficult. These","page_number":107,"box":{"x":69,"y":249,"width":810,"height":11}},{"id":"38e0d40e-6334-442a-b488-9bba22944fb5","block_type":"box","text":"securities represent a type of financing that has not yet developed the depth of marketability associated with more","page_number":107,"box":{"x":69,"y":264,"width":817,"height":11}},{"id":"b11ce161-4440-4884-b332-a0e3f34baea5","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":107,"box":{"x":69,"y":279,"width":572,"height":11}},{"id":"32cf5ec2-b216-4ff4-948d-fbdfa7e351ed","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in general","page_number":107,"box":{"x":101,"y":302,"width":791,"height":11}},{"id":"834ad829-b018-45ea-bbea-217fda94f773","block_type":"box","text":"economic downturns and as relative governmental cost burdens are allocated and reallocated among federal, state","page_number":107,"box":{"x":69,"y":317,"width":822,"height":11}},{"id":"a930b753-e0ec-4499-94be-420f4cad3015","block_type":"box","text":"and local governmental units. Such non-payment would result in a reduction of income to a Fund and could result in a","page_number":107,"box":{"x":69,"y":332,"width":837,"height":11}},{"id":"385abc27-2dba-4b27-8d36-944a78958fcd","block_type":"box","text":"reduction in the value of the municipal lease experiencing non-payment and a potential decrease in the NAV of a","page_number":107,"box":{"x":69,"y":347,"width":798,"height":11}},{"id":"e163fee5-733f-43e2-abc9-d11494a49887","block_type":"box","text":"Fund. Issuers of municipal securities might seek protection under the bankruptcy laws. In the event of bankruptcy of","page_number":107,"box":{"x":70,"y":362,"width":828,"height":11}},{"id":"915725d3-5ef4-4aba-871e-53512b75bf50","block_type":"box","text":"such an issuer, a Fund could experience delays and limitations with respect to the collection of principal and interest","page_number":107,"box":{"x":69,"y":377,"width":833,"height":11}},{"id":"c0bbb13f-19c3-463c-b881-e6aa2ccfbb24","block_type":"box","text":"on such municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest to","page_number":107,"box":{"x":69,"y":393,"width":807,"height":11}},{"id":"14d97ffc-5888-4feb-83ff-3d7dbf1f24b9","block_type":"box","text":"which it is entitled. To enforce its rights in the event of a default in lease payments, a Fund might take possession of","page_number":107,"box":{"x":68,"y":407,"width":835,"height":12}},{"id":"59d7b019-b9cb-4e6b-9014-9737cc000a6b","block_type":"box","text":"and manage the assets securing the issuer’s obligations on such securities, which may increase a Fund’s operating","page_number":107,"box":{"x":69,"y":423,"width":828,"height":11}},{"id":"1a82c0ef-b591-44b7-aaeb-821ec6f6b276","block_type":"box","text":"expenses and adversely affect the NAV of a Fund. When the lease contains a non-appropriation clause, however, the","page_number":107,"box":{"x":69,"y":438,"width":829,"height":11}},{"id":"ef71bec0-4ee9-4bc7-bf8b-e608ef44f3b5","block_type":"box","text":"failure to pay would not be a default and a Fund would not have the right to take possession of the assets. Any","page_number":107,"box":{"x":68,"y":453,"width":793,"height":11}},{"id":"8e041495-eb37-421a-80ce-d1f0a45c7a9c","block_type":"box","text":"income derived from a Fund’s ownership or operation of such assets may not be tax-exempt. In addition, a Fund’s","page_number":107,"box":{"x":70,"y":468,"width":810,"height":11}},{"id":"593e48f8-9cec-443f-8fb9-1bd4546e9143","block_type":"box","text":"intention to qualify as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":107,"box":{"x":70,"y":483,"width":820,"height":11}},{"id":"ce756fb4-5e4a-4b7e-8686-35060b790494","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a Fund is","page_number":107,"box":{"x":69,"y":498,"width":790,"height":11}},{"id":"0043ae65-da18-44fd-91cf-a2dc5dbab0e3","block_type":"box","text":"subject to certain limitations on its investments and on the nature of its income.","page_number":107,"box":{"x":69,"y":513,"width":574,"height":11}},{"id":"eeff4a27-4eaf-4b7d-b3a4-78b4593d7599","block_type":"box","text":"Tender Option Bonds.","page_number":107,"box":{"x":103,"y":536,"width":150,"height":11}},{"id":"e245bd50-5d1a-4486-ac72-3fd9255df68b","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option bonds","page_number":107,"box":{"x":260,"y":536,"width":613,"height":11}},{"id":"11ae1e01-8798-4a3b-b63a-70fffaf5d91d","block_type":"box","text":"(“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in which the Funds will","page_number":107,"box":{"x":69,"y":551,"width":796,"height":11}},{"id":"9786fe76-3f28-4a84-8bc5-92d1fd1fa471","block_type":"box","text":"invest pay interest or income that, in the opinion of counsel to the issuer, is exempt from regular U.S. federal income","page_number":107,"box":{"x":70,"y":566,"width":834,"height":11}},{"id":"e38e1dc0-c4ab-40e0-86b6-c5750b8f92f8","block_type":"box","text":"tax. BlackRock will not conduct its own analysis of the tax status of the interest or income paid by TOB Residuals","page_number":107,"box":{"x":68,"y":581,"width":807,"height":11}},{"id":"7aa9f4de-7ec5-4859-a318-b9c845ee5d9f","block_type":"box","text":"held by the Funds, but will rely on the opinion of counsel to the issuer. Although volatile, TOB Residuals typically offer","page_number":107,"box":{"x":69,"y":596,"width":836,"height":12}},{"id":"11d781f4-33e4-4a57-afa7-c2d5848fd040","block_type":"box","text":"the potential for yields exceeding the yields available on fixed rate Municipal Bonds with comparable credit quality.","page_number":107,"box":{"x":68,"y":612,"width":814,"height":11}},{"id":"df57ed59-fbcb-4cdb-a930-1c676630605d","block_type":"box","text":"The Funds may invest in TOB Residuals for the purpose of using economic leverage.","page_number":107,"box":{"x":68,"y":627,"width":598,"height":11}},{"id":"878e376f-2bae-4500-aae4-7c4bbe62a299","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of holding","page_number":107,"box":{"x":101,"y":649,"width":751,"height":12}},{"id":"67ebd27a-c640-4363-bc2c-50435cc6e3b8","block_type":"box","text":"Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically issues two classes of","page_number":107,"box":{"x":70,"y":664,"width":786,"height":12}},{"id":"73a87033-b53b-47b8-a81b-236da3f19e56","block_type":"box","text":"beneficial interests: short-term floating rate interests (“TOB Floaters”), which are sold to third-party investors, and","page_number":107,"box":{"x":69,"y":680,"width":813,"height":11}},{"id":"9474b4f6-8531-4cd7-bdb9-65ad9338a6d2","block_type":"box","text":"TOB Residuals, which are generally issued to the fund(s) that transferred Municipal Bonds to the TOB Trust. The","page_number":107,"box":{"x":68,"y":695,"width":799,"height":11}},{"id":"c9c2715c-c291-496d-8e36-060883a604e9","block_type":"box","text":"Funds may invest in both TOB Floaters and TOB Residuals. TOB Floaters may have first priority on the cash flow from","page_number":107,"box":{"x":70,"y":710,"width":830,"height":11}},{"id":"8014685b-150e-4b15-842f-5087a6b8ad6b","block_type":"box","text":"the Municipal Bonds held by the TOB Trust and are enhanced with a liquidity support arrangement from a third-party","page_number":107,"box":{"x":68,"y":725,"width":828,"height":11}},{"id":"2b5cba2e-7392-48dd-8402-b235a1b3d325","block_type":"box","text":"Liquidity Provider (defined below) which allows holders to tender their position at par (plus accrued interest). A Fund,","page_number":107,"box":{"x":70,"y":740,"width":826,"height":11}},{"id":"157a62bd-dd77-4944-b025-459fa4a3525f","block_type":"box","text":"as a holder of TOB Residuals, is paid the residual cash flow from the TOB Trust. A Fund that contributes the","page_number":107,"box":{"x":69,"y":755,"width":768,"height":11}},{"id":"75c9458e-e6e1-42d6-90d1-69880f9d4f6a","block_type":"box","text":"Municipal Bonds to the TOB Trust is paid the cash received by the TOB Trust from the sale of the TOB Floaters, less","page_number":107,"box":{"x":70,"y":770,"width":825,"height":11}},{"id":"1417fb81-ec42-4743-9cd4-5aa1781d146b","block_type":"box","text":"certain transaction costs, and typically will invest the cash to purchase additional Municipal Bonds or other","page_number":107,"box":{"x":69,"y":786,"width":764,"height":11}},{"id":"f3c8f15d-2128-4ef3-a721-801363e63cc5","block_type":"box","text":"investments permitted by its investment policies. If a Fund ever purchases all or a portion of the TOB Floaters sold by","page_number":107,"box":{"x":70,"y":801,"width":838,"height":11}},{"id":"0e86d44f-102d-4b59-8f3c-3c6f480d561c","block_type":"box","text":"the TOB Trust, it may surrender those TOB Floaters together with a proportionate amount of TOB Residuals to the","page_number":107,"box":{"x":68,"y":816,"width":810,"height":11}},{"id":"2f0b545f-8898-4b4f-9077-3d80e044e01c","block_type":"box","text":"TOB Trust in exchange for a proportionate amount of the Municipal Bonds owned by the TOB Trust.","page_number":107,"box":{"x":68,"y":831,"width":704,"height":11}},{"id":"e957556c-63ac-4618-878c-98940d336d86","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has contributed","page_number":107,"box":{"x":102,"y":853,"width":804,"height":12}},{"id":"e775cd59-d57f-4ce9-abde-f666b6789e7e","block_type":"box","text":"Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust, the economic rights and","page_number":107,"box":{"x":70,"y":869,"width":805,"height":11}},{"id":"6b87e088-9784-4f42-889b-a688119d21f6","block_type":"box","text":"obligations under the TOB Residual will generally be shared among the funds ratably in proportion to their","page_number":107,"box":{"x":69,"y":884,"width":752,"height":11}},{"id":"40d1b31d-11cc-4d8d-b897-a8d111f00de9","block_type":"box","text":"participation in the TOB Trust.","page_number":107,"box":{"x":70,"y":899,"width":211,"height":11}},{"id":"a8815800-1f80-47ca-a5a8-dabb998c8226","block_type":"box","text":"II-58","page_number":107,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"eb0e0802-fa01-409c-a0cf-a33639ec44d6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":107,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"63936d2e-b87f-43b6-b8c0-b7a244d0aea4","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain cases, when","page_number":108,"box":{"x":101,"y":45,"width":802,"height":11}},{"id":"2f874e8a-9470-443b-9892-66f960d2e78e","block_type":"box","text":"Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction includes a credit","page_number":108,"box":{"x":70,"y":60,"width":753,"height":11}},{"id":"3668a9ac-0eae-4f7c-a9a2-71fb7825a287","block_type":"box","text":"enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by","page_number":108,"box":{"x":69,"y":75,"width":829,"height":11}},{"id":"00a728a2-192f-470d-a946-29e7e1602aff","block_type":"box","text":"a credit enhancement provider. The TOB Trust would be responsible for the payment of the credit enhancement fee","page_number":108,"box":{"x":69,"y":90,"width":819,"height":11}},{"id":"c0637c06-f942-48ee-9f90-a07f11cb4cb1","block_type":"box","text":"and a Fund, as a TOB Residual holder, would be responsible for reimbursement of any payments of principal and","page_number":108,"box":{"x":69,"y":105,"width":802,"height":11}},{"id":"d7875a00-931d-42ae-93cd-6a4028b812a4","block_type":"box","text":"interest made by the credit enhancement provider.","page_number":108,"box":{"x":70,"y":120,"width":357,"height":11}},{"id":"665307dd-16a2-453a-aaa4-151d99054926","block_type":"box","text":"The TOB Residuals held by a Fund generally provide the Fund with the right to cause the holders of a proportional","page_number":108,"box":{"x":101,"y":143,"width":807,"height":11}},{"id":"22f9daab-ef58-4c30-bc5e-9a8468c9390d","block_type":"box","text":"share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued interest. Thereafter, the Fund","page_number":108,"box":{"x":69,"y":158,"width":810,"height":11}},{"id":"82bcf026-29f8-4649-8771-4b887f9c9014","block_type":"box","text":"may withdraw a corresponding share of the Municipal Bonds from the TOB Trust. This transaction, in effect, creates","page_number":108,"box":{"x":69,"y":173,"width":825,"height":11}},{"id":"96990aee-47ab-4809-9b58-4600e84c544a","block_type":"box","text":"exposure for the Fund to the entire return of the Municipal Bonds in the TOB Trust, with a net cash investment by the","page_number":108,"box":{"x":69,"y":188,"width":834,"height":11}},{"id":"2770020d-db1e-4803-9aad-f869c40ddc62","block_type":"box","text":"Fund that is less than the value of the Municipal Bonds in the TOB Trust. This multiplies the positive or negative","page_number":108,"box":{"x":70,"y":203,"width":797,"height":12}},{"id":"044ffaf4-55b0-47ba-9884-dd8b1bc2ebfe","block_type":"box","text":"impact of the Municipal Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust","page_number":108,"box":{"x":70,"y":218,"width":809,"height":12}},{"id":"0776343d-a21d-4475-93ae-5ac716de4fbc","block_type":"box","text":"depends on the value of the Municipal Bonds deposited in the TOB Trust relative to the value of the TOB Floaters it","page_number":108,"box":{"x":69,"y":234,"width":820,"height":11}},{"id":"d1e1684f-6471-4bcd-b8e9-18c867ca488b","block_type":"box","text":"issues.","page_number":108,"box":{"x":70,"y":249,"width":49,"height":9}},{"id":"9d339118-4790-4850-af84-6b099128d311","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly leveraged if","page_number":108,"box":{"x":101,"y":271,"width":795,"height":12}},{"id":"b70f3d87-094a-4521-9845-328ee5b67362","block_type":"box","text":"the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of the principal amount of the","page_number":108,"box":{"x":68,"y":286,"width":833,"height":12}},{"id":"5e06a4b1-abfc-4b2e-88b7-23393ee3548a","block_type":"box","text":"Municipal Bonds owned by the TOB Trust.","page_number":108,"box":{"x":70,"y":302,"width":293,"height":11}},{"id":"196e93c0-9f82-428e-bdfe-bb3775fd5b35","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option termination","page_number":108,"box":{"x":101,"y":324,"width":802,"height":11}},{"id":"a30b3a27-b34f-49ea-b8a5-c06412c07390","block_type":"box","text":"events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust agreements. TOTEs","page_number":108,"box":{"x":69,"y":339,"width":788,"height":12}},{"id":"64586c85-4ec5-4d6d-990c-2d1aa32300b6","block_type":"box","text":"include the bankruptcy or default of the issuer of the Municipal Bonds held in the TOB Trust, a substantial downgrade","page_number":108,"box":{"x":70,"y":355,"width":836,"height":11}},{"id":"e50048ea-267a-4c71-b761-1d36bf028e50","block_type":"box","text":"in the credit quality of the issuer of the Municipal Bonds held in the TOB Trust, failure of any scheduled payment of","page_number":108,"box":{"x":70,"y":370,"width":819,"height":11}},{"id":"17300547-82a4-440a-b7e5-c61b564856b9","block_type":"box","text":"principal or interest on the Municipal Bonds, and a judgment or ruling that interest on the Municipal Bonds is subject","page_number":108,"box":{"x":70,"y":385,"width":833,"height":11}},{"id":"4abea23a-0de4-47eb-b07c-9b840d92bd96","block_type":"box","text":"to U.S. federal income taxation. MTEs may include, among other things, a failed remarketing of the TOB Floaters, the","page_number":108,"box":{"x":68,"y":400,"width":834,"height":11}},{"id":"0528a1d0-195d-4e7c-988a-aff6d0f21cb7","block_type":"box","text":"inability of the TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":108,"box":{"x":70,"y":415,"width":838,"height":11}},{"id":"abdaa971-7c95-4544-a965-004a24c2343c","block_type":"box","text":"value of the Municipal Bonds held in the TOB Trust. Upon the occurrence of a TOTE or an MTE, a TOB Trust would be","page_number":108,"box":{"x":68,"y":430,"width":831,"height":11}},{"id":"8234a52e-457a-4832-a528-556be84009c0","block_type":"box","text":"liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the remarketing","page_number":108,"box":{"x":70,"y":445,"width":823,"height":12}},{"id":"b7add3c5-8758-4daa-83cb-ac9f28bd16c3","block_type":"box","text":"agent of the TOB Floaters and the Liquidity Provider (defined below). In the case of an MTE, after the payment of fees,","page_number":108,"box":{"x":69,"y":460,"width":839,"height":12}},{"id":"3a2de62d-e69a-479b-8869-322809cf177f","block_type":"box","text":"the holders of the TOB Floaters would be paid senior to the TOB Residual holders (","page_number":108,"box":{"x":68,"y":475,"width":589,"height":12}},{"id":"13f4ccff-a59f-4a19-abde-1f5626b705bd","block_type":"box","text":"i.e.","page_number":108,"box":{"x":659,"y":476,"width":21,"height":8}},{"id":"bcae027f-9dff-44bd-b212-9473ebb2e49c","block_type":"box","text":", the Fund). In contrast, in the","page_number":108,"box":{"x":682,"y":476,"width":211,"height":11}},{"id":"b74f1245-a2cd-4247-86c5-95f3cb89d152","block_type":"box","text":"case of a TOTE, after payment of fees, the holders of TOB Floaters and the TOB Residual holders would be paid pro","page_number":108,"box":{"x":69,"y":491,"width":822,"height":11}},{"id":"c373f5ec-ce36-4c54-b439-aae4e9ad6a34","block_type":"box","text":"rata in proportion to the respective face values of their certificates.","page_number":108,"box":{"x":69,"y":506,"width":479,"height":11}},{"id":"f62e1dbd-6705-4e5c-a62e-17e8de3cfa37","block_type":"box","text":"A Fund may invest in a TOB Trust on either a non-recourse or recourse basis. TOB Trusts are typically supported","page_number":108,"box":{"x":101,"y":529,"width":797,"height":11}},{"id":"8fa0f696-9eae-4a9a-a8aa-18f648489ab3","block_type":"box","text":"by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity Provider”) that allows","page_number":108,"box":{"x":69,"y":543,"width":815,"height":12}},{"id":"e98b2102-96d7-4f87-b344-4cf4fd734c28","block_type":"box","text":"the holders of the TOB Floaters to tender their TOB Floaters in exchange for payment of par plus accrued interest on","page_number":108,"box":{"x":68,"y":559,"width":828,"height":11}},{"id":"971af8e4-d9e4-4cfd-b8fb-1a487da26a81","block_type":"box","text":"any business day (subject to the non-occurrence of a TOTE described above). Depending on the structure of the TOB","page_number":108,"box":{"x":69,"y":574,"width":828,"height":11}},{"id":"01f91d01-604c-479e-a7d3-3b5cda117ba2","block_type":"box","text":"Trust, the Liquidity Provider may purchase the tendered TOB Floaters, or the TOB Trust may draw upon a loan from","page_number":108,"box":{"x":68,"y":589,"width":815,"height":11}},{"id":"065ec7d4-6694-4b22-ade6-8390fa80b7d9","block_type":"box","text":"the Liquidity Provider to purchase the tendered TOB Floaters.","page_number":108,"box":{"x":68,"y":604,"width":434,"height":11}},{"id":"0746027a-e920-4ee7-a40c-d8852bc5f774","block_type":"box","text":"When a Fund invests in TOB Trusts on a non-recourse basis, and the Liquidity Provider is required to make a","page_number":108,"box":{"x":101,"y":627,"width":772,"height":11}},{"id":"34395e6c-49bc-42eb-b233-14daebf16f84","block_type":"box","text":"payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion of the Municipal Bonds","page_number":108,"box":{"x":70,"y":642,"width":831,"height":11}},{"id":"96e95449-a2cb-470d-b4ea-24552a7aeb2d","block_type":"box","text":"held in the TOB Trust and then fund the balance, if any, of the amount owed under the liquidity facility over the","page_number":108,"box":{"x":69,"y":657,"width":785,"height":11}},{"id":"8f6fb8ef-1854-41df-867c-da9cc52e89cb","block_type":"box","text":"liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in a TOB Trust on a recourse basis, it will typically","page_number":108,"box":{"x":70,"y":672,"width":831,"height":11}},{"id":"a1d34ba7-694d-4140-81c3-6123ecb891f3","block_type":"box","text":"enter into a reimbursement agreement with the Liquidity Provider pursuant to which the Fund is required to reimburse","page_number":108,"box":{"x":69,"y":687,"width":836,"height":11}},{"id":"8ab21530-f13f-419f-955e-f1d63080b6d9","block_type":"box","text":"the Liquidity Provider the amount of any Liquidation Shortfall. As a result, if the Fund invests in a recourse TOB Trust,","page_number":108,"box":{"x":68,"y":702,"width":836,"height":11}},{"id":"697f2a60-1784-4fe4-992b-47627210462e","block_type":"box","text":"the Fund will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":108,"box":{"x":68,"y":717,"width":788,"height":12}},{"id":"2ba6a903-c95c-457b-bb9b-bf26c6a1aba0","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their participation in the TOB","page_number":108,"box":{"x":70,"y":733,"width":823,"height":11}},{"id":"0d023c63-d661-4e99-ad65-b4e61d16cb91","block_type":"box","text":"Trust.","page_number":108,"box":{"x":68,"y":748,"width":39,"height":9}},{"id":"94a18742-2973-4f16-be71-02940c8c202f","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are investments of the","page_number":108,"box":{"x":102,"y":770,"width":784,"height":12}},{"id":"24ec5948-fa87-4e7f-90bc-76db8d35e898","block_type":"box","text":"Fund and are presented on the Fund’s Schedule of Investments and outstanding TOB Floaters issued by a TOB Trust","page_number":108,"box":{"x":70,"y":785,"width":830,"height":12}},{"id":"aab7858f-a8f9-4bd7-bff3-13000a997511","block_type":"box","text":"are presented as liabilities in the Fund’s Statement of Assets and Liabilities. Interest income from the underlying","page_number":108,"box":{"x":69,"y":801,"width":806,"height":11}},{"id":"cd1770aa-762e-4116-9b01-bc765c980ace","block_type":"box","text":"Municipal Bonds is recorded by a Fund on an accrual basis. Interest expense incurred on the TOB Floaters and other","page_number":108,"box":{"x":70,"y":816,"width":831,"height":11}},{"id":"d9d75442-a06b-46e1-9ea5-2bf6c974ca24","block_type":"box","text":"expenses related to remarketing, administration, trustee and other services to a TOB Trust are reported as expenses","page_number":108,"box":{"x":69,"y":831,"width":837,"height":11}},{"id":"ce489b9f-fded-4aca-9a1d-6de55cc1ee80","block_type":"box","text":"of a Fund. In addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented as","page_number":108,"box":{"x":69,"y":846,"width":832,"height":11}},{"id":"feffa916-0536-451b-be8b-99c8f7df7440","block_type":"box","text":"loans of the Fund in the Fund’s financial statements even if there is no recourse to the Fund’s assets.","page_number":108,"box":{"x":70,"y":861,"width":728,"height":9}},{"id":"d48d9428-1799-4879-9eec-33d37abf75f9","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal Bonds","page_number":108,"box":{"x":102,"y":884,"width":776,"height":11}},{"id":"7a6ff7d4-050d-450d-ad9c-7c4b8c57ed9d","block_type":"box","text":"with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option.","page_number":108,"box":{"x":68,"y":899,"width":837,"height":11}},{"id":"f65863b2-8ac7-4578-b787-221df3e4b7f4","block_type":"box","text":"II-59","page_number":108,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"35e240cc-5d27-46ed-821f-cfe7538c23c6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":108,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f2687e20-6f53-4747-9f15-03357bfec27b","block_type":"box","text":"Since the tender option feature has a shorter term than the final maturity or first call date of the underlying Municipal","page_number":109,"box":{"x":69,"y":45,"width":836,"height":11}},{"id":"aa7e45a8-8490-49bb-9626-a3d57d1a7868","block_type":"box","text":"Bonds deposited in the TOB Trust, the holder of the TOB Floaters relies upon the terms of the agreement with the","page_number":109,"box":{"x":70,"y":60,"width":809,"height":11}},{"id":"832938f1-f050-4ce7-9ca4-a337b292ba8d","block_type":"box","text":"financial institution furnishing the liquidity facility as well as the credit strength of that institution. The risk associated","page_number":109,"box":{"x":68,"y":75,"width":836,"height":11}},{"id":"858c1331-f0d7-448d-ad87-8e109d1a9fdf","block_type":"box","text":"with TOB Floaters, however, may be increased in the current market environment as a result of recent downgrades to","page_number":109,"box":{"x":68,"y":90,"width":835,"height":11}},{"id":"bdb59c1f-0365-41b2-a409-e7731e12407c","block_type":"box","text":"the credit ratings, and thus the perceived reliability and creditworthiness, of many major financial institutions, some","page_number":109,"box":{"x":68,"y":105,"width":827,"height":11}},{"id":"0b8ef889-e887-4ce1-8cae-22d83206eb94","block_type":"box","text":"of which sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":109,"box":{"x":69,"y":120,"width":790,"height":11}},{"id":"11a13f35-a34a-4fb9-9463-c45cb909e4f5","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":109,"box":{"x":70,"y":135,"width":599,"height":11}},{"id":"77e711fa-f483-4d93-a6b5-2926a34ab03a","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions, reverse","page_number":109,"box":{"x":102,"y":158,"width":762,"height":11}},{"id":"ceaeeaa1-4fa9-40ae-b3fc-90acf7088f42","block_type":"box","text":"repurchase agreements and similar financing transactions (e.g., borrowed bonds) notwithstanding the limitation on","page_number":109,"box":{"x":69,"y":173,"width":818,"height":11}},{"id":"a24d975e-0463-4de9-953e-9cb5573fcd7f","block_type":"box","text":"the issuance of senior securities in Section 18 of the Investment Company Act, provided that the Fund either","page_number":109,"box":{"x":68,"y":188,"width":778,"height":11}},{"id":"1ac76d5f-5016-4c5c-9e00-18cfda95fbee","block_type":"box","text":"(i) complies with the 300% asset coverage ratio with respect to such transactions and any other borrowings in the","page_number":109,"box":{"x":69,"y":203,"width":811,"height":12}},{"id":"9de78f23-fe37-4464-b982-f7b397f0e274","block_type":"box","text":"aggregate, or (ii) treats such transactions as Derivatives Transactions under Rule 18f-4. See “—Derivatives —","page_number":109,"box":{"x":69,"y":218,"width":786,"height":12}},{"id":"7cae4711-eed6-44e3-9fac-f312bbf4bac9","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":109,"box":{"x":70,"y":234,"width":588,"height":11}},{"id":"7026ff8b-0a5b-47da-b915-cbfeb5a2413d","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":109,"box":{"x":102,"y":256,"width":279,"height":11}},{"id":"5aa699d4-611a-4437-8f08-5ed3d3a871fe","block_type":"box","text":"In response to the restrictions imposed by section 619 of the Dodd-Frank Wall Street Reform and Consumer","page_number":109,"box":{"x":102,"y":279,"width":771,"height":11}},{"id":"7aa7a5e6-9a38-4a0e-9306-5a4ecad5e2c4","block_type":"box","text":"Protection Act (the “Volcker Rule”), market participants have developed a structure for TOB Trusts designed to","page_number":109,"box":{"x":69,"y":294,"width":786,"height":11}},{"id":"deb36620-748b-48a6-818f-483bf58ab763","block_type":"box","text":"ensure that no banking entity is sponsoring the TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will","page_number":109,"box":{"x":69,"y":309,"width":816,"height":11}},{"id":"4aca3b22-b51f-4425-ae54-42abccb73576","block_type":"box","text":"establish, structure and “sponsor” the TOB Trusts in which it holds TOB Residuals. In such a structure, certain","page_number":109,"box":{"x":69,"y":324,"width":791,"height":11}},{"id":"6901b031-639f-4abe-b1f3-b33e416b1f50","block_type":"box","text":"responsibilities that previously belonged to the sponsor bank will be performed by, or on behalf of, a Fund. A Fund","page_number":109,"box":{"x":69,"y":339,"width":812,"height":12}},{"id":"1dcf8bf6-aa0b-4b5d-9435-03aa89d2eb9a","block_type":"box","text":"may utilize service providers in meeting these responsibilities. It is possible that regulators could take positions that","page_number":109,"box":{"x":69,"y":355,"width":832,"height":11}},{"id":"38d81eb6-aee0-42af-962f-9cb3957d5f8c","block_type":"box","text":"could limit the market for such structured TOB Trust transactions or a Fund’s ability to hold TOB Residuals. Under","page_number":109,"box":{"x":69,"y":370,"width":810,"height":11}},{"id":"ae440f12-dd9e-4885-aa4d-9cc9ace140d5","block_type":"box","text":"this TOB Trust structure, a Fund has certain additional duties and responsibilities, which may give rise to certain","page_number":109,"box":{"x":68,"y":385,"width":803,"height":11}},{"id":"358c03de-1222-42a6-a329-b8ff52013022","block_type":"box","text":"additional risks including, but not limited to, compliance, securities law and operational risks.","page_number":109,"box":{"x":69,"y":400,"width":665,"height":11}},{"id":"0ea40bab-2c88-452d-9595-8b2bbeef38d2","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers, trustees, and","page_number":109,"box":{"x":102,"y":423,"width":793,"height":11}},{"id":"279c5655-b19e-4420-b8bc-a93c6a634347","block_type":"box","text":"remarketing agents, act at the direction of, and as agent of, a Fund as the TOB Residual holder. Similar to the","page_number":109,"box":{"x":69,"y":438,"width":783,"height":11}},{"id":"39245cc7-36ca-4094-b2a6-f4283a9f0ab6","block_type":"box","text":"traditional tender option bond structure, a Fund deposits Municipal Bonds into the TOB Trust in exchange for TOB","page_number":109,"box":{"x":68,"y":453,"width":808,"height":11}},{"id":"bc3fe0a5-075e-49fc-abe4-d82d82581e45","block_type":"box","text":"Residuals, the TOB Trust then issues and sells TOB Floaters to third-party investors, and the proceeds of the sale of","page_number":109,"box":{"x":70,"y":468,"width":830,"height":11}},{"id":"abcd71bc-8b35-45b9-9569-4ceeca61f130","block_type":"box","text":"the TOB Floaters is distributed to such TOB Residual holders (","page_number":109,"box":{"x":68,"y":483,"width":442,"height":11}},{"id":"5a249246-0bbc-4240-9450-e19a6a9a50de","block_type":"box","text":"i.e.","page_number":109,"box":{"x":512,"y":483,"width":20,"height":9}},{"id":"19839196-27fb-48df-8f45-faa9a0bd3ed8","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be","page_number":109,"box":{"x":535,"y":483,"width":352,"height":11}},{"id":"91137804-e97a-45fd-803c-f089dd44a964","block_type":"box","text":"supported by a remarketing agent and a liquidity facility. However, the remarketing agent does not purchase tendered","page_number":109,"box":{"x":69,"y":498,"width":836,"height":11}},{"id":"cef43466-d050-4939-a066-f53b71c2546b","block_type":"box","text":"TOB Floaters for its own account in the event of a failed remarketing, which may increase the likelihood that a TOB","page_number":109,"box":{"x":68,"y":513,"width":816,"height":12}},{"id":"dd2000a0-5c15-4d90-9c72-1fc01d77f981","block_type":"box","text":"Trust will need to be collapsed and liquidated in order to purchase the tendered TOB Floaters. In the event of a failed","page_number":109,"box":{"x":68,"y":528,"width":835,"height":11}},{"id":"7410eedf-3c15-41ec-bacc-46c521245309","block_type":"box","text":"remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the TOB Trust the proceeds","page_number":109,"box":{"x":69,"y":543,"width":822,"height":12}},{"id":"ed6478db-c01f-47f0-8c06-2ed7bcb8d884","block_type":"box","text":"of which would be used by the TOB Trust to purchase the tendered TOB Floaters. The Liquidity Provider is not","page_number":109,"box":{"x":69,"y":559,"width":777,"height":11}},{"id":"326ffbbb-8eaa-4b16-bef0-97c41a7680f9","block_type":"box","text":"obligated to advance such a loan. The TOB Trust would be the borrower with respect to any such loan. Any loans","page_number":109,"box":{"x":69,"y":574,"width":800,"height":11}},{"id":"c69a10cf-0a41-434c-a118-946a6b2efa7a","block_type":"box","text":"made by a Liquidity Provider will be secured by the purchased TOB Floaters held by the TOB Trust.","page_number":109,"box":{"x":69,"y":589,"width":696,"height":11}},{"id":"de49996f-d2db-475f-bdac-bbd2bbbe2c25","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals or","page_number":109,"box":{"x":102,"y":612,"width":745,"height":11}},{"id":"f1063c68-b0d0-4ea0-b284-4cce049845fb","block_type":"box","text":"recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would generally be no","page_number":109,"box":{"x":69,"y":627,"width":797,"height":11}},{"id":"210f85d3-d3e5-4fd6-8336-525b29dd0eab","block_type":"box","text":"contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB Residual. However, as described","page_number":109,"box":{"x":69,"y":642,"width":803,"height":10}},{"id":"11aa546d-7dbe-4b6d-85ba-e4bca4b731db","block_type":"box","text":"above, a Fund would bear the risk of loss with respect to any Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":109,"box":{"x":69,"y":657,"width":838,"height":11}},{"id":"72af6793-9f55-42ac-bd7e-95a2d1e29e11","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for securitizations","page_number":109,"box":{"x":101,"y":680,"width":801,"height":11}},{"id":"4521099d-15b3-4fd0-bd9c-72ec3fd472d3","block_type":"box","text":"(the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention Rules require the sponsor of a","page_number":109,"box":{"x":69,"y":695,"width":838,"height":11}},{"id":"a79ccedb-f98b-4f90-9ca4-354285f08a67","block_type":"box","text":"TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trust’s Municipal","page_number":109,"box":{"x":68,"y":710,"width":787,"height":11}},{"id":"a0c0c89e-8337-41f7-a9b8-be06f1cccd01","block_type":"box","text":"Bonds. The Risk Retention Rules may adversely affect the Fund’s ability to engage in TOB Trust transactions or","page_number":109,"box":{"x":70,"y":725,"width":791,"height":11}},{"id":"5d70b4cb-7f13-4e89-b1e6-f2eb99f98cbc","block_type":"box","text":"increase the costs of such transactions in certain circumstances.","page_number":109,"box":{"x":70,"y":740,"width":466,"height":9}},{"id":"2823371e-bd26-4c6b-a8a9-6ce9a8aab542","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":109,"box":{"x":101,"y":763,"width":726,"height":11}},{"id":"752381c5-2ede-49a4-833a-8c3e8dd5f6aa","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through reduced demand","page_number":109,"box":{"x":70,"y":778,"width":816,"height":11}},{"id":"79bfe162-0580-424f-8392-25464234cb02","block_type":"box","text":"for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments","page_number":109,"box":{"x":68,"y":793,"width":799,"height":11}},{"id":"f1037077-bb26-4b9b-ac07-8e23d57d0d41","block_type":"box","text":"could adversely affect the Funds. The ultimate impact of these rules on the TOB market and the overall municipal","page_number":109,"box":{"x":69,"y":808,"width":807,"height":11}},{"id":"a11e70bc-c53f-4d91-9fed-5c64fb70ad8b","block_type":"box","text":"market is not yet certain.","page_number":109,"box":{"x":69,"y":823,"width":178,"height":11}},{"id":"d8d23e2c-58d3-4798-aedc-6f94226b8ad9","block_type":"box","text":"Yields.","page_number":109,"box":{"x":103,"y":846,"width":45,"height":9}},{"id":"8ba8df7a-bda4-45b4-9587-85901d3f97a7","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general condition of the","page_number":109,"box":{"x":154,"y":846,"width":730,"height":11}},{"id":"58985a53-b3f7-42f5-a4a5-a04bf402ba5c","block_type":"box","text":"money market and of the municipal bond market, the size of a particular offering, the financial condition of the","page_number":109,"box":{"x":69,"y":861,"width":788,"height":11}},{"id":"bf7c0b92-518f-4faa-b6dd-8f1cd079a3e8","block_type":"box","text":"issuer, the maturity of the obligation and the rating of the issue. The ability of a Fund to achieve its investment","page_number":109,"box":{"x":70,"y":876,"width":787,"height":11}},{"id":"77b07e5d-1e49-476b-bc0c-8fb4febf18b0","block_type":"box","text":"objective is also dependent on the continuing ability of the issuers of the securities in which the Fund invests to meet","page_number":109,"box":{"x":69,"y":891,"width":838,"height":12}},{"id":"14118c3b-4329-45e9-935a-08e88481ffb6","block_type":"box","text":"their obligations for the payment of interest and principal when due. There are variations in the risks involved in","page_number":109,"box":{"x":68,"y":906,"width":794,"height":12}},{"id":"5476be2f-ad55-4e55-8556-2a862dba80d7","block_type":"box","text":"II-60","page_number":109,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"2d8aeb46-cb2a-4369-b2d3-2ebd098555a1","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":109,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"41ce32e2-36b9-408e-9ead-876c0e45f2b1","block_type":"box","text":"holding Municipal Bonds, both within a particular classification and between classifications, depending on numerous","page_number":110,"box":{"x":69,"y":45,"width":831,"height":11}},{"id":"8c0536aa-2d77-4f95-aca7-c37e05b26a42","block_type":"box","text":"factors. Furthermore, the rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal","page_number":110,"box":{"x":68,"y":60,"width":806,"height":11}},{"id":"bff55e5f-e86c-43da-90cf-c4c816b9ebf2","block_type":"box","text":"Bonds may be subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights","page_number":110,"box":{"x":70,"y":75,"width":823,"height":11}},{"id":"2e5f36e3-a8a0-4b5b-ac50-a91e3e69a625","block_type":"box","text":"of creditors generally and to general equitable principles, which may limit the enforcement of certain remedies.","page_number":110,"box":{"x":69,"y":90,"width":790,"height":11}},{"id":"7a6b0dca-624e-43d0-b4d1-e9ddb282385f","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":110,"box":{"x":103,"y":113,"width":323,"height":11}},{"id":"8c72f5ae-a0b1-4029-955a-41e952d55e50","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a floating or","page_number":110,"box":{"x":432,"y":113,"width":422,"height":11}},{"id":"c0dd83f8-4dbd-47ff-9fc8-84b4dd9478fe","block_type":"box","text":"variable interest rate adjustment formula and a right of demand on the part of the holder thereof to receive payment","page_number":110,"box":{"x":68,"y":128,"width":830,"height":11}},{"id":"bb80acd9-9b64-40f4-aa83-26f1398e1267","block_type":"box","text":"of the unpaid principal balance plus accrued interest upon a short notice period not to exceed seven days.","page_number":110,"box":{"x":69,"y":143,"width":759,"height":11}},{"id":"518bb690-782c-4278-8fe7-3c0fc8ed3843","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be honored.","page_number":110,"box":{"x":101,"y":166,"width":798,"height":11}},{"id":"a74efc83-a370-4f8e-a3eb-83b83d404ed5","block_type":"box","text":"The interest rates are adjustable at periodic intervals to some prevailing market rate for similar investments, such","page_number":110,"box":{"x":68,"y":181,"width":815,"height":11}},{"id":"79416005-c55b-415a-b2ec-786bf953474f","block_type":"box","text":"adjustment formula being calculated to maintain the market rate of the VRDOs at approximately the par value of the","page_number":110,"box":{"x":69,"y":196,"width":826,"height":11}},{"id":"6a9ae888-3044-40d2-8502-49d4b3b3eea3","block_type":"box","text":"VRDOs on the adjustment date. The adjustments typically are based upon the Securities Industry and Financial","page_number":110,"box":{"x":68,"y":211,"width":791,"height":11}},{"id":"5b4f527c-687e-431c-af94-b255fd198d6a","block_type":"box","text":"Markets Association (“SIFMA”) Index.","page_number":110,"box":{"x":70,"y":226,"width":264,"height":11}},{"id":"a0c86fb4-01e1-441c-b16b-702052216775","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate securities.","page_number":110,"box":{"x":102,"y":249,"width":791,"height":11}},{"id":"5effff04-6b89-4417-9d51-7654a9c1498d","block_type":"box","text":"During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its shareholders will forego the","page_number":110,"box":{"x":70,"y":264,"width":833,"height":11}},{"id":"6655f48e-b991-46a5-aa5f-258ea85a464d","block_type":"box","text":"opportunity for capital appreciation. During periods of rising interest rates, however, a Fund’s yield on a VRDO will","page_number":110,"box":{"x":69,"y":279,"width":808,"height":11}},{"id":"b501f30f-049c-41fb-abb5-67dd12e8a574","block_type":"box","text":"increase and the Fund’s shareholders will have a reduced risk of capital depreciation.","page_number":110,"box":{"x":70,"y":294,"width":608,"height":11}},{"id":"feb7ac87-d4fe-4154-8827-0fdf27e834af","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":110,"box":{"x":103,"y":317,"width":465,"height":11}},{"id":"a5bb59ae-c388-4bd3-a1ee-96e3efed6ba7","block_type":"box","text":"The Municipal Funds and certain other funds","page_number":110,"box":{"x":574,"y":317,"width":318,"height":11}},{"id":"c918efcd-ae0d-4a71-b99a-5355acd020a6","block_type":"box","text":"deal in financial futures contracts based on a long-term municipal bond index developed by the Chicago Board of","page_number":110,"box":{"x":69,"y":332,"width":803,"height":11}},{"id":"a9a4791b-ed57-4f43-94ce-04321fe32f2f","block_type":"box","text":"Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal Bond Index is comprised of 40 long","page_number":110,"box":{"x":68,"y":347,"width":825,"height":11}},{"id":"b5eabd98-8225-412b-8ae8-f36cfa068f68","block_type":"box","text":"term, actively traded tax-exempt municipal revenue and general obligation bonds. Each bond included in the Municipal","page_number":110,"box":{"x":68,"y":362,"width":840,"height":11}},{"id":"24236b97-f8f2-40ea-97cf-baffd1e1e5b4","block_type":"box","text":"Bond Index must be rated A or higher by Moody’s or S&P and must have a remaining maturity of 19 years or more.","page_number":110,"box":{"x":70,"y":377,"width":815,"height":12}},{"id":"3e7df118-426c-4784-b512-788aa794b28d","block_type":"box","text":"Twice a month new issues satisfying the eligibility requirements are added to, and an equal number of old issues are","page_number":110,"box":{"x":68,"y":392,"width":836,"height":12}},{"id":"01aa834b-6590-4370-91aa-55771caa27a6","block_type":"box","text":"deleted from, the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":110,"box":{"x":69,"y":407,"width":796,"height":12}},{"id":"dfb7d302-dd2b-4aae-be16-16d45a942ebe","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six dealer-to-dealer brokers.","page_number":110,"box":{"x":68,"y":423,"width":816,"height":11}},{"id":"8ba2158f-9acd-43d6-9f8d-fcfe24288afe","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the CBT","page_number":110,"box":{"x":101,"y":445,"width":756,"height":11}},{"id":"9bf705aa-a61c-4c7b-b34c-17c2129ec2c2","block_type":"box","text":"assures performance under futures contracts through a clearing corporation, a nonprofit organization managed by the","page_number":110,"box":{"x":69,"y":460,"width":839,"height":12}},{"id":"3d17b9b4-8a36-4259-ae2a-87c78bce42de","block_type":"box","text":"exchange membership that is also responsible for handling daily accounting of deposits or withdrawals of margin.","page_number":110,"box":{"x":69,"y":475,"width":808,"height":12}},{"id":"1d9f14e6-d4b3-446a-be89-fbbaa6cc0c5e","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial futures","page_number":110,"box":{"x":101,"y":498,"width":753,"height":11}},{"id":"88e4f64b-b28d-42ab-9a3a-b8edce30e726","block_type":"box","text":"contract may vary from the bonds held by a Municipal Fund. As a result, a Municipal Fund’s ability to hedge","page_number":110,"box":{"x":69,"y":513,"width":764,"height":12}},{"id":"7f59eae4-f0b5-4e68-93f9-b39f298c4bae","block_type":"box","text":"effectively all or a portion of the value of its Municipal Bonds through the use of such financial futures contracts will","page_number":110,"box":{"x":69,"y":528,"width":826,"height":12}},{"id":"0a5c170a-8785-4426-bd4b-d2d222bc65c4","block_type":"box","text":"depend in part on the degree to which price movements in the index underlying the financial futures contract","page_number":110,"box":{"x":69,"y":543,"width":774,"height":12}},{"id":"693d0e21-9372-4bf9-aa87-7e17fe757bd6","block_type":"box","text":"correlate with the price movements of the Municipal Bonds held by the Fund. The correlation may be affected by","page_number":110,"box":{"x":69,"y":559,"width":801,"height":11}},{"id":"cb91393e-89f1-4bf4-b0eb-14ee1df6e427","block_type":"box","text":"disparities in the average maturity, ratings, geographical mix or structure of a Municipal Fund’s investments as","page_number":110,"box":{"x":69,"y":574,"width":788,"height":11}},{"id":"62f1ce6f-84e2-43a2-8ce2-ae3b2e7324c0","block_type":"box","text":"compared to those comprising the Municipal Bond Index and general economic or political factors. In addition, the","page_number":110,"box":{"x":69,"y":589,"width":812,"height":11}},{"id":"29e09102-fa95-4b7b-b631-ed8f50d68968","block_type":"box","text":"correlation between movements in the value of the Municipal Bond Index may be subject to change over time as","page_number":110,"box":{"x":69,"y":604,"width":799,"height":11}},{"id":"6c03f9ac-dca2-419e-b8cd-b470dc707aed","block_type":"box","text":"additions to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":110,"box":{"x":69,"y":619,"width":772,"height":11}},{"id":"4f8f3b91-abed-490b-beb0-4980b27896e5","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be adversely","page_number":110,"box":{"x":69,"y":634,"width":782,"height":11}},{"id":"7ce4ac72-4653-41c5-a15e-d41fb045620b","block_type":"box","text":"affected by similar factors and the risk of imperfect correlation between movements in the prices of such futures","page_number":110,"box":{"x":69,"y":649,"width":806,"height":12}},{"id":"5ef8bf80-50ad-4513-9e40-705f2536eddf","block_type":"box","text":"contracts and the prices of Municipal Bonds held by a Municipal Fund may be greater. Municipal Bond Index futures","page_number":110,"box":{"x":69,"y":664,"width":823,"height":12}},{"id":"dfd73f71-d6ce-483f-9499-4a609ae5bf4e","block_type":"box","text":"contracts were approved for trading in 1985. Trading in such futures contracts may tend to be less liquid than trading","page_number":110,"box":{"x":69,"y":680,"width":837,"height":11}},{"id":"67d768f5-552d-4f81-a99f-84fe3dc74865","block_type":"box","text":"in other futures contracts. The trading of futures contracts also is subject to certain market risks, such as inadequate","page_number":110,"box":{"x":70,"y":695,"width":839,"height":11}},{"id":"345383be-d7a0-4360-b048-a682716f367a","block_type":"box","text":"trading activity, which could at times make it difficult or impossible to liquidate existing positions.","page_number":110,"box":{"x":68,"y":710,"width":693,"height":11}},{"id":"72c489b1-0d96-448f-a1b1-71182e1db0cd","block_type":"box","text":"Call Rights.","page_number":110,"box":{"x":102,"y":733,"width":79,"height":11}},{"id":"f70ca39f-74d3-4f21-88ac-2acbf08e14bb","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such Municipal Bond","page_number":110,"box":{"x":187,"y":732,"width":708,"height":12}},{"id":"a755dff1-8748-4f0f-b54f-92816286f931","block_type":"box","text":"for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may exercise such right to require a","page_number":110,"box":{"x":68,"y":748,"width":790,"height":11}},{"id":"1e715700-76cb-490f-b1e6-5cee9e39b5b4","block_type":"box","text":"mandatory tender for the purchase of related Municipal Bonds, subject to certain conditions. A Call Right that is not","page_number":110,"box":{"x":69,"y":763,"width":827,"height":11}},{"id":"dada864e-cf1f-48c1-8584-b9891d33ca47","block_type":"box","text":"exercised prior to maturity of the related Municipal Bond will expire without value. The economic effect of holding","page_number":110,"box":{"x":69,"y":778,"width":805,"height":11}},{"id":"9fa4f0f4-18ff-4135-9c25-4b241592af74","block_type":"box","text":"both the Call Right and the related Municipal Bond is identical to holding a Municipal Bond as a non-callable security.","page_number":110,"box":{"x":69,"y":793,"width":833,"height":11}},{"id":"11fdcb7e-a838-490b-85c9-792be1cd6c23","block_type":"box","text":"Certain investments in such obligations may be illiquid.","page_number":110,"box":{"x":69,"y":808,"width":393,"height":11}},{"id":"ffe55c37-1d67-4a7d-b434-680d577b4b4c","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":110,"box":{"x":102,"y":831,"width":307,"height":11}},{"id":"bfa96a5c-ebc9-43d0-b8c5-2096478be1b0","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":110,"box":{"x":417,"y":831,"width":411,"height":11}},{"id":"028eb8aa-6c82-4158-bd5b-ab3dfb3386e7","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such as Municipal","page_number":110,"box":{"x":68,"y":846,"width":835,"height":11}},{"id":"aafdc90e-1dd5-4e75-8ca4-023c1e47221b","block_type":"box","text":"Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial Markets Association","page_number":110,"box":{"x":70,"y":861,"width":781,"height":11}},{"id":"002e780e-f3f5-4e51-a234-dcbdd207e55b","block_type":"box","text":"Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters into these transactions, the Fund","page_number":110,"box":{"x":70,"y":876,"width":808,"height":11}},{"id":"5c0e7199-f6ae-4c1f-a5f3-a172f1e70196","block_type":"box","text":"expects to do so primarily to preserve a return or spread on a particular investment or portion of its portfolio or to","page_number":110,"box":{"x":69,"y":891,"width":814,"height":11}},{"id":"4dcd9e69-01c1-4a9b-a660-ac8ff31f2760","block_type":"box","text":"protect against any increase in the price of securities the Fund anticipates purchasing at a later date. A Fund intends","page_number":110,"box":{"x":70,"y":906,"width":832,"height":12}},{"id":"816fb235-3be5-4dd6-b1ad-70c035a90b3c","block_type":"box","text":"II-61","page_number":110,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"ac67d6fc-58e8-4def-b2af-8d882f6533bd","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":110,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a512bab4-2e2d-4691-bd42-7c20cd5a596f","block_type":"box","text":"to use these transactions primarily as a hedge rather than as a speculative investment. However, a Fund also may","page_number":111,"box":{"x":68,"y":45,"width":817,"height":11}},{"id":"cc0e17da-40b1-4160-b149-f73e6faa8689","block_type":"box","text":"invest in MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for example,","page_number":111,"box":{"x":70,"y":60,"width":797,"height":11}},{"id":"2adc2d49-3824-4fe5-9553-3455c2b0b17e","block_type":"box","text":"during periods of steep interest rate yield curves (","page_number":111,"box":{"x":69,"y":75,"width":356,"height":11}},{"id":"c7a0762c-8531-4b50-97ca-ac40217f476d","block_type":"box","text":"i.e.","page_number":111,"box":{"x":427,"y":75,"width":20,"height":9}},{"id":"91fbbc1a-74ea-4604-87e0-c8f7ece81cce","block_type":"box","text":", wide differences between short-term and long-term interest","page_number":111,"box":{"x":449,"y":75,"width":433,"height":11}},{"id":"eedad682-55c5-4b4e-afb8-4c4b1a065e5c","block_type":"box","text":"rates).","page_number":111,"box":{"x":69,"y":90,"width":44,"height":11}},{"id":"5335ae5b-b9db-4a35-8ae1-9104cdad7270","block_type":"box","text":"A Fund may purchase and sell SIFMA Swaps in the SIFMA swap market. In a SIFMA Swap, a Fund exchanges with","page_number":111,"box":{"x":101,"y":113,"width":807,"height":11}},{"id":"0dad450a-75eb-4b99-9b6f-170dedfde84e","block_type":"box","text":"another party their respective commitments to pay or receive interest (","page_number":111,"box":{"x":69,"y":128,"width":503,"height":11}},{"id":"78993ddb-9d57-4fca-b12f-f8d9df194d7b","block_type":"box","text":"e.g.","page_number":111,"box":{"x":574,"y":129,"width":25,"height":10}},{"id":"c5c8b695-4f6b-4792-a6b1-044399118407","block_type":"box","text":", an exchange of fixed rate payments for","page_number":111,"box":{"x":601,"y":128,"width":286,"height":11}},{"id":"32a48608-d6e8-4f8f-926b-b3a742a543b2","block_type":"box","text":"floating rate payments linked to the SIFMA Municipal Swap Index). Because the underlying index is a tax-exempt","page_number":111,"box":{"x":68,"y":143,"width":798,"height":11}},{"id":"8e004dea-26a8-48d4-95fb-fb0f2280597d","block_type":"box","text":"index, SIFMA Swaps may reduce cross-market risks incurred by a Fund and increase a Fund’s ability to hedge","page_number":111,"box":{"x":70,"y":158,"width":778,"height":11}},{"id":"dcf30232-fd1a-4238-a434-2ff13380a33a","block_type":"box","text":"effectively. SIFMA Swaps are typically quoted for the entire yield curve, beginning with a seven day floating rate index","page_number":111,"box":{"x":69,"y":173,"width":833,"height":11}},{"id":"7f6c1580-b73d-4062-8b11-8d2e69f1315c","block_type":"box","text":"out to 30 years. The duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond","page_number":111,"box":{"x":69,"y":188,"width":823,"height":11}},{"id":"e35235ec-9f83-4b47-a79d-bf87e9741f02","block_type":"box","text":"with the same attributes as the swap (","page_number":111,"box":{"x":68,"y":204,"width":275,"height":10}},{"id":"304cc32e-fd86-43f1-a578-efb3d3a104dd","block_type":"box","text":"e.g.","page_number":111,"box":{"x":345,"y":205,"width":24,"height":10}},{"id":"53afa0d5-c40f-48b6-9b6a-41dff1783e2d","block_type":"box","text":", coupon, maturity, call feature).","page_number":111,"box":{"x":372,"y":203,"width":224,"height":12}},{"id":"c23957fc-6cde-4b0d-b928-2d6b4be5a880","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap permits a Fund","page_number":111,"box":{"x":101,"y":226,"width":797,"height":11}},{"id":"2e012f15-bd1f-4e9c-bdea-e5a7381c0514","block_type":"box","text":"to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular","page_number":111,"box":{"x":68,"y":241,"width":770,"height":11}},{"id":"9e6386ce-df33-4a31-98ef-b309be1c2ede","block_type":"box","text":"investment or a portion of its portfolio as a duration management technique or to protect against any increase in the","page_number":111,"box":{"x":70,"y":256,"width":832,"height":12}},{"id":"768ac99b-e9d6-43ea-8a48-e8e1465bbd53","block_type":"box","text":"price of securities to be purchased at a later date. By using an MMD Swap, a Fund can create a synthetic long or","page_number":111,"box":{"x":70,"y":271,"width":805,"height":12}},{"id":"778931e3-9edb-4a46-928a-e712f0857c6c","block_type":"box","text":"short position, allowing the Fund to select the most attractive part of the yield curve. An MMD Swap is a contract","page_number":111,"box":{"x":69,"y":286,"width":808,"height":12}},{"id":"47d8337b-ac7b-46ee-b65e-33796df50cfd","block_type":"box","text":"between a Fund and an MMD Swap provider pursuant to which the parties agree to make payments to each other on","page_number":111,"box":{"x":69,"y":302,"width":832,"height":11}},{"id":"b754293f-7b05-4c80-b96a-017b50f6e191","block_type":"box","text":"a notional amount, contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or","page_number":111,"box":{"x":69,"y":317,"width":804,"height":11}},{"id":"fc147d42-34ef-4d13-914b-d64012b81c96","block_type":"box","text":"below a specified level on the expiration date of the contract. For example, if a Fund buys an MMD Swap and the","page_number":111,"box":{"x":69,"y":332,"width":803,"height":11}},{"id":"669e0da1-3fd9-4cda-ac50-f8da060a2cf2","block_type":"box","text":"Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration date, the","page_number":111,"box":{"x":70,"y":347,"width":763,"height":11}},{"id":"fc4c1fec-0350-4d6f-ba06-322dc882edc6","block_type":"box","text":"counterparty to the contract will make a payment to the Fund equal to the specified level minus the actual level,","page_number":111,"box":{"x":69,"y":362,"width":797,"height":11}},{"id":"6efaf5d3-5c7e-40e4-8650-8676b31aff9a","block_type":"box","text":"multiplied by the notional amount of the contract. If the Municipal Market Data AAA General Obligation Scale is above","page_number":111,"box":{"x":69,"y":377,"width":836,"height":12}},{"id":"551291cd-16a2-4db6-8bc4-5b4d18114f5c","block_type":"box","text":"the specified level on the expiration date, a Fund will make a payment to the counterparty equal to the actual level","page_number":111,"box":{"x":68,"y":392,"width":816,"height":12}},{"id":"22e550ae-2098-4f42-84e3-22c5cbefdd73","block_type":"box","text":"minus the specified level, multiplied by the notional amount of the contract.","page_number":111,"box":{"x":69,"y":407,"width":537,"height":12}},{"id":"60c7f523-f578-43a0-80f4-fec5d304a442","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps, there is a risk that municipal yields will move in the","page_number":111,"box":{"x":102,"y":430,"width":788,"height":11}},{"id":"30f8dd83-8fc1-42d7-a1ca-df1c89ae5c8d","block_type":"box","text":"opposite direction than anticipated by a Fund, which would cause the Fund to make payments to its counterparty in","page_number":111,"box":{"x":69,"y":446,"width":821,"height":10}},{"id":"6cce2b01-a995-430f-a3cd-9ed7ff2c99d7","block_type":"box","text":"the transaction that could adversely affect the Fund’s performance.","page_number":111,"box":{"x":68,"y":460,"width":482,"height":12}},{"id":"c3921e25-e7aa-40b5-832b-dc464529dc49","block_type":"box","text":"Insured Municipal Bonds.","page_number":111,"box":{"x":102,"y":483,"width":179,"height":11}},{"id":"3043dfff-3cd1-4de2-ab85-c46e636a3009","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees that interest","page_number":111,"box":{"x":288,"y":483,"width":619,"height":11}},{"id":"a0b98a79-09c2-4799-83fc-93d03a6d9c52","block_type":"box","text":"payments on the bond will be made on time and the principal will be repaid when the bond matures. Either the issuer","page_number":111,"box":{"x":70,"y":498,"width":835,"height":11}},{"id":"23771643-c232-4649-bd8e-a3ed54c63dd6","block_type":"box","text":"of the bond or the Fund purchases the insurance. Insurance is expected to protect the Fund against losses caused by","page_number":111,"box":{"x":69,"y":513,"width":840,"height":12}},{"id":"710912f2-a5b2-480a-bc01-77325e52d2e4","block_type":"box","text":"a bond issuer’s failure to make interest or principal payments. However, insurance does not protect the Fund or its","page_number":111,"box":{"x":69,"y":528,"width":818,"height":12}},{"id":"13d72e10-7be9-4218-8320-5805d7f23596","block_type":"box","text":"shareholders against losses caused by declines in a bond’s market value. Also, the Fund cannot be certain that any","page_number":111,"box":{"x":69,"y":544,"width":829,"height":11}},{"id":"4d82f988-40f9-4ef4-af24-5c123ec6a6a7","block_type":"box","text":"insurance company does not make these payments. In addition, if the Fund purchases the insurance, it may pay the","page_number":111,"box":{"x":70,"y":559,"width":827,"height":11}},{"id":"1c377c44-7048-41d1-a137-6e8eb4a8cf23","block_type":"box","text":"premiums, which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims paying","page_number":111,"box":{"x":70,"y":574,"width":815,"height":11}},{"id":"f6117543-b54c-44d1-bf0a-23df7959099a","block_type":"box","text":"ability, financial strength, or equivalent ratings of at least investment grade. However, if insurance from insurers with","page_number":111,"box":{"x":69,"y":589,"width":829,"height":11}},{"id":"9f2a505b-b2b3-4aa3-99aa-9970c7704336","block_type":"box","text":"these ratings is not available, the Fund may use insurance companies with lower ratings or stop purchasing","page_number":111,"box":{"x":68,"y":604,"width":767,"height":11}},{"id":"0a2dab71-279d-419a-b884-e3a8701673cc","block_type":"box","text":"insurance or insured bonds. If a bond’s insurer fails to fulfill its obligations or loses its credit rating, the value of the","page_number":111,"box":{"x":70,"y":619,"width":827,"height":11}},{"id":"14aeb49d-1bdb-4c43-a7b4-1e998811c61a","block_type":"box","text":"bond could drop.","page_number":111,"box":{"x":69,"y":634,"width":118,"height":11}},{"id":"c47724a9-d899-4fd5-9fce-0e041e268bcd","block_type":"box","text":"Build America Bonds.","page_number":111,"box":{"x":102,"y":657,"width":150,"height":9}},{"id":"082a1225-8fb3-4282-91f5-12b03220c6fa","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S. federal","page_number":111,"box":{"x":259,"y":657,"width":616,"height":11}},{"id":"29bb340f-2264-4239-a609-bfa70daa128d","block_type":"box","text":"income tax credit; however, the issuer of a Build America Bond may instead elect to receive a cash payment directly","page_number":111,"box":{"x":70,"y":672,"width":825,"height":11}},{"id":"15a049a5-07a7-4427-8816-9f7182aeef82","block_type":"box","text":"from the federal government in lieu of holders such as the fund receiving a tax credit. The interest on Build America","page_number":111,"box":{"x":68,"y":687,"width":824,"height":11}},{"id":"a235b06e-978e-4f3e-afcf-2e3a50687d7c","block_type":"box","text":"Bonds is taxable for U.S. federal income tax purposes. If the Fund does receive tax credits from Build America Bonds","page_number":111,"box":{"x":70,"y":702,"width":833,"height":11}},{"id":"c7e080a6-ab1b-493f-921e-79d271dafa71","block_type":"box","text":"or other tax credit bonds on one or more specified dates during the fund’s taxable year, and the Fund satisfies the","page_number":111,"box":{"x":69,"y":717,"width":815,"height":12}},{"id":"fb920b31-c3cd-485a-bf27-c10ff3b3c30c","block_type":"box","text":"minimum distribution requirement, the Fund may elect for U.S. federal income tax purposes to pass through to","page_number":111,"box":{"x":69,"y":732,"width":788,"height":12}},{"id":"8bce2079-9345-4bf7-a3f0-7c4229c0b13c","block_type":"box","text":"shareholders tax credits otherwise allowable to the Fund for that year with respect to such bonds. A tax credit bond","page_number":111,"box":{"x":69,"y":748,"width":823,"height":11}},{"id":"0b6c2e0c-092b-47e0-9e25-fa6fb1792ae4","block_type":"box","text":"is defined in the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":111,"box":{"x":70,"y":763,"width":825,"height":11}},{"id":"d2adec11-2a18-4dbd-b8b0-96c26151a393","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy bond, each of which","page_number":111,"box":{"x":69,"y":778,"width":837,"height":11}},{"id":"e4b15917-6b69-4811-aa2e-15c5483c9ea0","block_type":"box","text":"must meet certain requirements specified in the Code), a “Build America Bond” (which includes certain qualified","page_number":111,"box":{"x":69,"y":793,"width":802,"height":11}},{"id":"a0f228d7-3d99-474f-b90c-7d7a43daa4dc","block_type":"box","text":"bonds issued before January 1, 2011) or certain other specified bonds. If the Fund were to so elect, a shareholder","page_number":111,"box":{"x":69,"y":808,"width":821,"height":11}},{"id":"9a3e0ac9-8d43-44e5-9a59-7e83551831a2","block_type":"box","text":"would be required to include in income and would be entitled to claim as a tax credit an amount equal to a","page_number":111,"box":{"x":68,"y":823,"width":760,"height":11}},{"id":"0b51a0a6-701f-4ce8-a2c2-aa53afaba78d","block_type":"box","text":"proportionate share of such credits, and such amount would be subject to withholding provisions of the Code.","page_number":111,"box":{"x":70,"y":838,"width":782,"height":12}},{"id":"4f13f05a-202d-4bea-91f8-8658ace00581","block_type":"box","text":"Certain limitations may apply on the extent to which the credit may be claimed.","page_number":111,"box":{"x":69,"y":854,"width":563,"height":11}},{"id":"e7edfe61-d1ca-4349-add2-06fa1302704b","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":111,"box":{"x":103,"y":876,"width":246,"height":11}},{"id":"7a0087b9-13d8-44de-80eb-4c29b6563d25","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which may be in","page_number":111,"box":{"x":355,"y":876,"width":534,"height":11}},{"id":"723d6604-1cd1-4489-a70c-00182a1e5bdf","block_type":"box","text":"the form of tender option bonds, variable rate demand obligations, participations, beneficial interests in a trust,","page_number":111,"box":{"x":68,"y":891,"width":798,"height":12}},{"id":"e6671f99-b888-4071-9196-754440225857","block_type":"box","text":"partnership interests or other forms. These investments are described in greater detail above in this section. Some","page_number":111,"box":{"x":70,"y":906,"width":823,"height":12}},{"id":"958bb552-a246-4fac-8124-b793666db9ed","block_type":"box","text":"II-62","page_number":111,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"1caa49f8-699d-4893-bd7d-065b5d8d2c3a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":111,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"31e54bfd-a90a-41f5-b72a-1d5ca93e40d0","block_type":"box","text":"of the structures used by certain Funds include interests in long-term fixed-rate municipal debt obligations, held by a","page_number":112,"box":{"x":69,"y":45,"width":830,"height":11}},{"id":"d8146038-d78e-46e9-8217-b15536e3c8e0","block_type":"box","text":"trustee or custodian, that are coupled with tender option, demand and other features when the tax-exempt municipal","page_number":112,"box":{"x":68,"y":60,"width":832,"height":11}},{"id":"1829b6f8-0a24-4c04-8fed-0c5b25dc6ccc","block_type":"box","text":"investments are created. Together, these features entitle the holder of the interest to tender (or put) the underlying","page_number":112,"box":{"x":70,"y":75,"width":819,"height":11}},{"id":"0af07a47-69e3-4af4-83a7-caee6f1ad6f6","block_type":"box","text":"municipal debt obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":112,"box":{"x":69,"y":90,"width":752,"height":11}},{"id":"15fe7d21-adba-4de7-9067-a9561902b049","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to receive","page_number":112,"box":{"x":102,"y":113,"width":770,"height":11}},{"id":"170c432b-97c3-48e2-8c51-e7751ee3fd26","block_type":"box","text":"specific future interest payments, principal payments, or both, on the underlying securities held by the custodian.","page_number":112,"box":{"x":69,"y":128,"width":806,"height":11}},{"id":"e269aba0-1a91-4f8a-82d7-9ab4a1b3117d","block_type":"box","text":"Under such arrangements, the holder of the custodial receipt has the option to tender the underlying securities at","page_number":112,"box":{"x":70,"y":143,"width":809,"height":11}},{"id":"52b3eacd-bdc2-43db-a3fe-eb4d340536a7","block_type":"box","text":"their face value to the sponsor (","page_number":112,"box":{"x":68,"y":158,"width":228,"height":11}},{"id":"80e890c5-9a6f-49e1-a633-202e4bda5883","block_type":"box","text":"e.g.","page_number":112,"box":{"x":297,"y":160,"width":25,"height":9}},{"id":"d3c1b074-cb5e-40e3-a281-1d77ae9acb6b","block_type":"box","text":", a Fund, or a bank or broker-dealer or other financial institution), which is paid","page_number":112,"box":{"x":325,"y":158,"width":557,"height":11}},{"id":"3bfbcb7e-60f4-401b-81bf-3ea706d65c28","block_type":"box","text":"periodic fees equal to the difference between the securities’ fixed coupon rate and the rate that would cause the","page_number":112,"box":{"x":70,"y":173,"width":803,"height":11}},{"id":"e67af32c-858a-4fd5-afc4-3e37ae789fa0","block_type":"box","text":"securities, coupled with the tender option, to trade at par on the date of a rate adjustment.","page_number":112,"box":{"x":69,"y":188,"width":648,"height":11}},{"id":"1226200a-ab37-42f5-867f-0e31d1d2b82d","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the Fund’s","page_number":112,"box":{"x":101,"y":211,"width":775,"height":11}},{"id":"5966b5e3-9e7c-4ba3-a134-9f8398e516ff","block_type":"box","text":"participation bears to the total principal amount of the Municipal Bond, and typically provides for a repurchase","page_number":112,"box":{"x":70,"y":226,"width":785,"height":11}},{"id":"f341ac07-0dc3-407f-aa8a-8e6d09161002","block_type":"box","text":"feature for all or any part of the full principal amount of the participation interest, plus accrued interest. Trusts and","page_number":112,"box":{"x":68,"y":241,"width":821,"height":11}},{"id":"7bc9a096-ec05-4908-a827-b35d4ec112fb","block_type":"box","text":"partnerships are typically used to convert long-term fixed rate high quality bonds of a single state or municipal issuer","page_number":112,"box":{"x":70,"y":256,"width":833,"height":12}},{"id":"5edf5de9-23f6-44bd-814a-04ffcc1bf9be","block_type":"box","text":"into variable or floating rate demand instruments.","page_number":112,"box":{"x":70,"y":271,"width":351,"height":12}},{"id":"39b007ef-d5ad-43c6-99db-85a0c56c5b4d","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt obligations","page_number":112,"box":{"x":101,"y":294,"width":797,"height":11}},{"id":"1bf4b0f1-25d9-4e6e-bd30-dbb124c97ed5","block_type":"box","text":"which give the holder the right to receive payment of principal subject to the conditions described above. The IRS has","page_number":112,"box":{"x":68,"y":309,"width":836,"height":11}},{"id":"1f18dede-1df3-4747-9751-feacc40d9396","block_type":"box","text":"not ruled on whether the interest received on tax-exempt municipal investments in the form of participation interests","page_number":112,"box":{"x":69,"y":324,"width":831,"height":11}},{"id":"bbac38d4-e4f3-4973-b194-fd3e8360f24b","block_type":"box","text":"or custodial receipts is tax-exempt, and accordingly, purchases of any such interests or receipts are based on the","page_number":112,"box":{"x":69,"y":339,"width":809,"height":12}},{"id":"e52b454b-a6a1-4c0b-afcc-c5b14662635b","block_type":"box","text":"opinions of counsel to the sponsors of such derivative securities. Neither a Fund nor its investment adviser or sub","page_number":112,"box":{"x":69,"y":355,"width":818,"height":11}},{"id":"dbd69e1f-a9eb-4052-bd8e-e656d33f4ac0","block_type":"box","text":"advisers will review the proceedings related to the creation of any tax-exempt municipal investments or the basis for","page_number":112,"box":{"x":69,"y":370,"width":828,"height":11}},{"id":"c472d24f-8d8a-45be-9c2e-87d0ddd343ed","block_type":"box","text":"such opinions.","page_number":112,"box":{"x":69,"y":385,"width":102,"height":11}},{"id":"2b015441-973e-41f0-90a5-e31518634d95","block_type":"box","text":"Operational and Technology Risks.","page_number":112,"box":{"x":102,"y":408,"width":250,"height":11}},{"id":"c289392c-271c-4a9a-81d5-b59936b75ed0","block_type":"box","text":"The Fund and the entities with which it interacts directly or indirectly are","page_number":112,"box":{"x":358,"y":408,"width":512,"height":11}},{"id":"c4fc257a-b9f8-4b4e-959f-5d1179c1ebe0","block_type":"box","text":"susceptible to operational and technology risks, including those related to human errors, processing errors,","page_number":112,"box":{"x":69,"y":423,"width":766,"height":11}},{"id":"38d719c2-ea30-4e98-b0cf-6a57f085e434","block_type":"box","text":"communication errors, systems failures, cybersecurity incidents, and the use of artificial intelligence and machine","page_number":112,"box":{"x":69,"y":438,"width":812,"height":11}},{"id":"fb7bd6f5-c579-4239-a2bb-b2b4f599d388","block_type":"box","text":"learning (“AI”), which may result in losses for the Fund and its shareholders or impair the Fund’s operations. These","page_number":112,"box":{"x":70,"y":453,"width":820,"height":11}},{"id":"f5a8e1e4-62e8-4b5c-b3cf-e0afa603f0ec","block_type":"box","text":"entities include, but are not limited to, the Fund’s adviser, administrator, distributor, other service providers (e.g.,","page_number":112,"box":{"x":69,"y":468,"width":807,"height":11}},{"id":"4e0a7be4-bc30-4d64-a07f-bb6812ae1a9d","block_type":"box","text":"index and benchmark providers, accountants, custodians, and transfer agents), financial intermediaries,","page_number":112,"box":{"x":70,"y":483,"width":741,"height":11}},{"id":"9808bf49-c6d4-40a5-af13-e6c74d2e1cb5","block_type":"box","text":"counterparties, market makers, Authorized Participants, listing exchanges, other financial market operators, and","page_number":112,"box":{"x":69,"y":498,"width":802,"height":11}},{"id":"ca29130b-c7e4-44c4-b75b-94702ea92751","block_type":"box","text":"governmental authorities, as applicable. Operational and technology risks for the issuers in which the Fund invests","page_number":112,"box":{"x":68,"y":513,"width":818,"height":12}},{"id":"cab58cb4-a062-4b3d-9b8c-232d4434d443","block_type":"box","text":"could also result in material adverse consequences for such issuers and may cause the Fund’s investments in such","page_number":112,"box":{"x":69,"y":528,"width":827,"height":12}},{"id":"cc20670c-0f36-4f46-87b2-811f30c22062","block_type":"box","text":"issuers to lose value. The Fund may incur substantial costs in order to mitigate operational and technology risks.","page_number":112,"box":{"x":70,"y":544,"width":803,"height":11}},{"id":"f9c2383e-774c-4b54-b0a3-ce029a99d7fe","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in which the","page_number":112,"box":{"x":102,"y":566,"width":796,"height":11}},{"id":"6bbf373d-f6a6-46cb-9a8b-3b7027d8ffdc","block_type":"box","text":"Fund invests, the Fund or any of its service providers. They include, but are not limited to, gaining unauthorized","page_number":112,"box":{"x":70,"y":581,"width":790,"height":12}},{"id":"b2777bab-df39-4fc4-90a9-fe365765c6c8","block_type":"box","text":"access to systems, misappropriating assets or sensitive information, corrupting or destroying data, and causing","page_number":112,"box":{"x":69,"y":596,"width":800,"height":12}},{"id":"d4a14e69-3f3b-4e93-a9c3-99215779f341","block_type":"box","text":"operational disruption. Geopolitical tension may increase the scale and sophistication of deliberate attacks,","page_number":112,"box":{"x":69,"y":612,"width":768,"height":11}},{"id":"4b8d37c4-b38a-46c1-a151-17af02c66513","block_type":"box","text":"particularly those from nation states or from entities with nation state backing. Cybersecurity incidents may result in","page_number":112,"box":{"x":70,"y":627,"width":827,"height":11}},{"id":"9c6e64e2-ce54-42cb-a5d0-ddf22bc91150","block_type":"box","text":"any of the following: financial losses; interference with the Fund’s ability to calculate its NAV; disclosure of","page_number":112,"box":{"x":69,"y":642,"width":760,"height":11}},{"id":"6c590017-4e8c-4ddb-b5da-aa4c119000f5","block_type":"box","text":"confidential information; impediments to trading; submission of erroneous trades by the Fund or erroneous","page_number":112,"box":{"x":69,"y":657,"width":763,"height":11}},{"id":"01443163-9369-414c-8c25-34e904649145","block_type":"box","text":"subscription or redemption orders; the inability of the Fund or its service providers to transact business; violations of","page_number":112,"box":{"x":69,"y":672,"width":835,"height":11}},{"id":"e3bece70-0ec8-4b75-9a10-c31e7fe63df8","block_type":"box","text":"applicable privacy and other laws; regulatory fines; penalties; reputational damage; reimbursement or other","page_number":112,"box":{"x":69,"y":687,"width":766,"height":11}},{"id":"c3a61ec0-c5d9-47aa-acdb-d40e309c9c0a","block_type":"box","text":"compensation costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render","page_number":112,"box":{"x":69,"y":703,"width":804,"height":11}},{"id":"2d47efc1-7114-4435-ad98-5b0f597748d3","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of Fund shares,","page_number":112,"box":{"x":69,"y":717,"width":833,"height":12}},{"id":"f50ee875-2629-46a8-b1c7-f0458de009b1","block_type":"box","text":"and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete. Power outages, natural","page_number":112,"box":{"x":69,"y":732,"width":800,"height":12}},{"id":"2249c860-e497-42c3-9ecc-2d978e213c5b","block_type":"box","text":"disasters, equipment malfunctions and processing errors that threaten information and technology systems relied","page_number":112,"box":{"x":69,"y":748,"width":812,"height":11}},{"id":"99c32ead-43fe-4bbe-9d97-fb2cb50888cf","block_type":"box","text":"upon by the Fund or its service providers, as well as market events that occur at a pace that overloads these","page_number":112,"box":{"x":69,"y":763,"width":777,"height":11}},{"id":"9757ed80-b175-4a38-86e2-12b7fba05ad4","block_type":"box","text":"systems, may also disrupt business operations or impact critical data. Recent advances in AI technology pose risks","page_number":112,"box":{"x":69,"y":778,"width":824,"height":11}},{"id":"36b47528-0530-4429-a22c-c7795aa6fa03","block_type":"box","text":"to the Fund and its portfolio investments. These advancements could harm the Fund and its portfolio investments by","page_number":112,"box":{"x":68,"y":793,"width":836,"height":11}},{"id":"827bba82-66c5-4089-a392-c2a7af3ad81a","block_type":"box","text":"reducing the demand for both the technology and software offerings of the Fund’s portfolio investments. Additionally,","page_number":112,"box":{"x":69,"y":808,"width":833,"height":11}},{"id":"c99dedd9-a756-41a3-b109-abb8c1370ff0","block_type":"box","text":"these advancements could significantly disrupt the Fund’s portfolio investments and subject them to increased","page_number":112,"box":{"x":68,"y":823,"width":793,"height":12}},{"id":"ded62e57-8947-4c83-adbd-e01ee1226577","block_type":"box","text":"competition, which could have a material adverse effect on business, financial condition, and results of operations.","page_number":112,"box":{"x":69,"y":838,"width":822,"height":11}},{"id":"06f054c0-c9a4-4cb0-a6dd-a294abd585ba","block_type":"box","text":"AI technology advancements, including efficiency improvements, without related increases in the adoption and","page_number":112,"box":{"x":68,"y":853,"width":787,"height":12}},{"id":"c99fc690-28f4-474c-8fe0-6700b6886e12","block_type":"box","text":"development of such technologies, could also negatively impact demand for, and the valuation of, digital","page_number":112,"box":{"x":69,"y":869,"width":742,"height":11}},{"id":"c1ee323e-1b65-4b1d-9834-c428b1c428ee","block_type":"box","text":"infrastructure assets.","page_number":112,"box":{"x":70,"y":884,"width":151,"height":9}},{"id":"7a436eae-388e-4300-9c75-21fccbbc7605","block_type":"box","text":"II-63","page_number":112,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"299dcbff-3723-436b-b390-8204b77f2012","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":112,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4349d354-0b94-4d01-816e-b67a48ca3528","block_type":"box","text":"The Fund and its portfolio investments could be exposed to the risks of AI technology if third-party service","page_number":113,"box":{"x":101,"y":45,"width":755,"height":11}},{"id":"2c48e956-c469-4903-a4e1-4f293d7e3ee5","block_type":"box","text":"providers or any counterparties, whether or not known to the Fund, also use AI technology in their business activities.","page_number":113,"box":{"x":70,"y":60,"width":835,"height":11}},{"id":"6ebdd213-ddd1-4a0e-b398-98fe0ce2fb5d","block_type":"box","text":"The Fund and its service providers may not be in a position to control the use of AI technology in third-party products","page_number":113,"box":{"x":68,"y":75,"width":833,"height":11}},{"id":"dbbb5c3e-9243-49a7-aa3a-4ce2bb4e5cda","block_type":"box","text":"or services.","page_number":113,"box":{"x":69,"y":90,"width":82,"height":9}},{"id":"78c47fb2-8629-450b-bfff-b12d309ce4da","block_type":"box","text":"Use of AI technology could include the input of confidential information in contravention of applicable policies,","page_number":113,"box":{"x":102,"y":113,"width":781,"height":11}},{"id":"a8403fb3-b45f-42e8-83ea-10ed00a9e81b","block_type":"box","text":"contractual or other obligations or restrictions, resulting in such confidential information becoming accessible by","page_number":113,"box":{"x":69,"y":128,"width":801,"height":11}},{"id":"34012df9-3485-4fb3-a04f-3a520889b9d7","block_type":"box","text":"other third-party AI technology applications and users.","page_number":113,"box":{"x":69,"y":143,"width":383,"height":11}},{"id":"2925ab5b-a448-4ae0-94ab-5f6581f91dcd","block_type":"box","text":"Independent of its context of use, AI technology is generally highly reliant on the collection and analysis of large","page_number":113,"box":{"x":102,"y":166,"width":795,"height":11}},{"id":"21580bef-34b9-4764-a76f-ed19e93181e1","block_type":"box","text":"amounts of data, may incorporate biased or inaccurate data, and it is not possible or practicable to incorporate all","page_number":113,"box":{"x":69,"y":181,"width":813,"height":11}},{"id":"567ec3aa-18cc-4d6f-86b7-3613c23d368b","block_type":"box","text":"relevant data into the models that AI technology utilizes to operate. Certain data in such models will inevitably","page_number":113,"box":{"x":69,"y":196,"width":785,"height":11}},{"id":"3d023e0c-c0da-43ce-b7be-a3922b104510","block_type":"box","text":"contain a degree of inaccuracy and error, or could otherwise be inadequate or flawed, which would be likely to","page_number":113,"box":{"x":69,"y":211,"width":782,"height":11}},{"id":"3746e128-e087-4c2a-ba53-cf7d6de7bdb4","block_type":"box","text":"degrade the effectiveness of AI technology. The output or results of any such AI technologies may therefore be","page_number":113,"box":{"x":69,"y":226,"width":787,"height":11}},{"id":"9d887bc0-b19e-4073-8114-f4b5be17cceb","block_type":"box","text":"incomplete, erroneous, distorted, or misleading. Further, AI tools may lack transparency as to how data is utilized","page_number":113,"box":{"x":70,"y":241,"width":809,"height":11}},{"id":"84ad5c77-2545-477e-9bee-a7905f1dfec3","block_type":"box","text":"and how outputs are generated. AI technologies may also allow the unintended introduction of vulnerabilities into","page_number":113,"box":{"x":69,"y":256,"width":805,"height":12}},{"id":"8096f5aa-e41d-47da-a11c-da04811212c8","block_type":"box","text":"infrastructures and applications. To the extent that the Fund or its portfolio investments are exposed to the risks of","page_number":113,"box":{"x":70,"y":271,"width":822,"height":11}},{"id":"c53fd1da-f6d8-430a-a7f9-cfb7b7086785","block_type":"box","text":"AI technology use, any such inaccuracies or errors could have adverse impacts on the Fund or its investments.","page_number":113,"box":{"x":68,"y":287,"width":789,"height":11}},{"id":"4a8cbf54-2231-4f07-8759-7ebd715666f6","block_type":"box","text":"Regulations related to AI technology could also impose certain obligations and costs related to monitoring and","page_number":113,"box":{"x":102,"y":309,"width":786,"height":11}},{"id":"8ee107a0-81c3-4457-9311-899f905ef693","block_type":"box","text":"compliance. For example, in April 2023, the Federal Trade Commission, U.S. Department of Justice, Consumer","page_number":113,"box":{"x":69,"y":324,"width":791,"height":11}},{"id":"b6c45876-28a0-4a66-a6e3-13b9e1b9bfe3","block_type":"box","text":"Financial Protection Bureau, and U.S. Equal Employment Opportunity Commission released a joint statement on","page_number":113,"box":{"x":70,"y":340,"width":796,"height":11}},{"id":"d8a18c38-8b09-4b94-ab2a-f8eebe10a5ae","block_type":"box","text":"artificial intelligence demonstrating interest in monitoring the development and use of automated systems and","page_number":113,"box":{"x":69,"y":355,"width":788,"height":11}},{"id":"73dec4f0-7b94-4286-8371-672dddc31306","block_type":"box","text":"enforcement of their respective laws and regulations. In October 2023, an executive order established new standards","page_number":113,"box":{"x":69,"y":370,"width":839,"height":11}},{"id":"04b47e70-4573-430e-a1bb-c4676a5537cf","block_type":"box","text":"for AI safety and security. In addition to the U.S. regulatory framework, in 2024, the EU adopted the Artificial","page_number":113,"box":{"x":68,"y":385,"width":773,"height":11}},{"id":"906b7185-5722-4023-8671-6e9c9ae1c08f","block_type":"box","text":"Intelligence Act, which applies to certain AI technology and the data used to train, test, and deploy them, which may","page_number":113,"box":{"x":70,"y":400,"width":826,"height":11}},{"id":"05ff2f77-9b43-4ae8-9b3e-bcbdf63224b6","block_type":"box","text":"create additional compliance burdens, higher administrative costs, and significant penalties should the Fund, the","page_number":113,"box":{"x":69,"y":415,"width":805,"height":11}},{"id":"dbee6cc0-682d-4629-a315-a61d017cf595","block_type":"box","text":"adviser, or the Fund’s portfolio investments fail to comply.","page_number":113,"box":{"x":69,"y":430,"width":412,"height":11}},{"id":"77775ce3-253b-495d-8666-7ceee3608ed2","block_type":"box","text":"AI technology and its applications, including in the investment and financial sectors, continue to develop rapidly,","page_number":113,"box":{"x":101,"y":453,"width":797,"height":11}},{"id":"7720369c-3bd0-450d-a2a0-87a1be38260d","block_type":"box","text":"and it is impossible to predict the future risks that may arise from such developments. The full extent of current or","page_number":113,"box":{"x":69,"y":468,"width":817,"height":11}},{"id":"1f3c4c99-1c76-4171-a09d-4e13f7dc25b1","block_type":"box","text":"future risks related thereto is not possible to predict, and the Fund may not be able to anticipate, prevent, mitigate,","page_number":113,"box":{"x":68,"y":483,"width":824,"height":11}},{"id":"8ef7bab7-d8e5-478b-953a-246bd481a5f0","block_type":"box","text":"or remediate all of the potential risks, challenges, or impacts of such changes.","page_number":113,"box":{"x":69,"y":498,"width":561,"height":11}},{"id":"534e7e04-14ea-480b-b753-0d22908e1fe6","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security and","page_number":113,"box":{"x":101,"y":521,"width":747,"height":11}},{"id":"23c88e83-4a51-4353-ab12-dccad6f9a3f4","block_type":"box","text":"cybersecurity risk management policies and procedures, their methods of risk management may differ from those of","page_number":113,"box":{"x":69,"y":536,"width":830,"height":11}},{"id":"adda7fbd-28c1-4be2-8440-23e35927ce7a","block_type":"box","text":"the Fund in the setting of priorities, the personnel and resources available or the effectiveness of relevant controls.","page_number":113,"box":{"x":68,"y":551,"width":823,"height":11}},{"id":"d8ad6946-a2c5-4cf2-ba2a-9007f600c55f","block_type":"box","text":"The Fund and its adviser seek to reduce these risks through controls, procedures and oversight, including","page_number":113,"box":{"x":68,"y":566,"width":755,"height":11}},{"id":"75ed1094-4455-44cc-b4d0-fc357593b49f","block_type":"box","text":"establishing business continuity plans and risk management systems. However, there are inherent limitations in such","page_number":113,"box":{"x":69,"y":582,"width":838,"height":11}},{"id":"e28f1c89-0a1e-4468-aaf3-4b864b40a095","block_type":"box","text":"plans and systems, including the possibility that certain risks that may affect the Fund have not been identified or","page_number":113,"box":{"x":70,"y":596,"width":812,"height":12}},{"id":"a99d888d-627b-4566-ad6a-6bb7b8c1c58a","block_type":"box","text":"may emerge in the future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":113,"box":{"x":69,"y":612,"width":828,"height":11}},{"id":"dfcbf0da-09b6-4b28-a850-95b1222b443e","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that prevention","page_number":113,"box":{"x":69,"y":627,"width":819,"height":11}},{"id":"00d35650-85ca-4543-96f7-c61e1c22de0b","block_type":"box","text":"and remediation efforts will not be successful or that incidents will go undetected. The Fund cannot control the","page_number":113,"box":{"x":69,"y":642,"width":792,"height":11}},{"id":"a488a99d-f31c-4155-8c6d-454ef6d20bd8","block_type":"box","text":"systems, information security or other cybersecurity of the issuers in which it invests or its service providers,","page_number":113,"box":{"x":69,"y":657,"width":775,"height":11}},{"id":"fa57f3a2-fa8c-45fd-8552-ffa70d69b1d1","block_type":"box","text":"counterparties, and other third parties whose activities affect the Fund.","page_number":113,"box":{"x":69,"y":672,"width":510,"height":11}},{"id":"739c031d-c0e6-4f0d-870b-c54171cfea90","block_type":"box","text":"Lastly, the regulatory climate governing cybersecurity and data protection is developing quickly and may vary","page_number":113,"box":{"x":102,"y":695,"width":771,"height":11}},{"id":"08720d86-c581-4887-ae5f-90d0e5ee88f5","block_type":"box","text":"considerably across jurisdictions. Regulators continue to develop new rules and standards related to cybersecurity","page_number":113,"box":{"x":69,"y":710,"width":816,"height":11}},{"id":"7a967169-87b5-492e-a5b4-764ec48e213d","block_type":"box","text":"and data protection. Compliance with evolving regulations can be demanding and costly, requiring substantial","page_number":113,"box":{"x":69,"y":725,"width":778,"height":11}},{"id":"e2919aff-31cb-42a0-a0f0-142ee0db3312","block_type":"box","text":"resources to monitor and implement required changes.","page_number":113,"box":{"x":69,"y":740,"width":391,"height":11}},{"id":"e430acfc-a7af-488b-87fd-6f578ea68fcc","block_type":"box","text":"Participation Notes.","page_number":113,"box":{"x":102,"y":763,"width":145,"height":11}},{"id":"feb8cb15-1c4e-4c06-a96d-97b52602e1b7","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that entitle the","page_number":113,"box":{"x":253,"y":763,"width":641,"height":11}},{"id":"10519db9-4b1c-44f0-94f3-7481e71ae5f8","block_type":"box","text":"Fund to a return measured by the change in value of an identified underlying security or basket of securities","page_number":113,"box":{"x":70,"y":778,"width":766,"height":11}},{"id":"697c42ee-81d5-462a-9081-4dea91766817","block_type":"box","text":"(collectively, the “underlying security”). Participation notes are typically used when a direct investment in the","page_number":113,"box":{"x":69,"y":793,"width":772,"height":11}},{"id":"238be2d7-3e49-4f36-b6b9-3a6ac5967992","block_type":"box","text":"underlying security is restricted due to country-specific regulations.","page_number":113,"box":{"x":69,"y":808,"width":475,"height":11}},{"id":"b45b6101-df4f-4d26-93e4-ce3e189c60b8","block_type":"box","text":"The Fund is subject to counterparty risk associated with each issuer. Investment in a participation note is not","page_number":113,"box":{"x":101,"y":831,"width":782,"height":11}},{"id":"0567254a-85b9-4b53-a982-3b24bf5eb7aa","block_type":"box","text":"the same as investment in the constituent shares of the company. A participation note represents only an obligation","page_number":113,"box":{"x":68,"y":846,"width":831,"height":11}},{"id":"46ed95cd-0afd-4c34-a69b-1fb471f1c6e2","block_type":"box","text":"of the issuer to provide the Fund the economic performance equivalent to holding shares of an underlying security. A","page_number":113,"box":{"x":69,"y":861,"width":831,"height":11}},{"id":"1b1b23ba-6792-4148-a6a9-85b3ccde65a3","block_type":"box","text":"participation note does not provide any beneficial or equitable entitlement or interest in the relevant underlying","page_number":113,"box":{"x":70,"y":876,"width":789,"height":11}},{"id":"f62df72f-8ac4-4494-8281-65593ac11252","block_type":"box","text":"security. In other words, shares of the underlying security are not in any way owned by the Fund. However, each","page_number":113,"box":{"x":69,"y":891,"width":791,"height":12}},{"id":"758fa6bd-0890-418d-bad0-f41d1e4158c6","block_type":"box","text":"participation note synthetically replicates the economic benefit of holding shares in the underlying security. Because","page_number":113,"box":{"x":70,"y":906,"width":827,"height":12}},{"id":"b55a01c9-6ee7-402b-b29a-e0a080bc0457","block_type":"box","text":"II-64","page_number":113,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"bd406c54-6993-4c79-83b9-959cce3e75d4","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":113,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2204ea6f-d455-4704-b899-dba6b43e5d06","block_type":"box","text":"a participation note is an obligation of the issuer, rather than a direct investment in shares of the underlying security,","page_number":114,"box":{"x":69,"y":45,"width":834,"height":11}},{"id":"29bc1790-6f77-4638-92b1-b107b1b126b3","block_type":"box","text":"a Fund may suffer losses potentially equal to the full value of the participation note if the issuer fails to perform its","page_number":114,"box":{"x":69,"y":60,"width":822,"height":11}},{"id":"7216b7f3-2afe-4485-b434-095393739876","block_type":"box","text":"obligations. A Fund attempts to mitigate that risk by purchasing only from issuers determined to be creditworthy.","page_number":114,"box":{"x":69,"y":75,"width":801,"height":11}},{"id":"223913f4-1ae9-4688-8777-8e6f47db9d4c","block_type":"box","text":"The counterparty may, but is not required to, purchase the shares of the underlying security to hedge its","page_number":114,"box":{"x":101,"y":98,"width":743,"height":11}},{"id":"9a5c5001-a6c5-4ccc-991a-68676f75342f","block_type":"box","text":"obligation. A Fund may, but is not required to, purchase credit protection against the default of the issuer. When the","page_number":114,"box":{"x":69,"y":113,"width":826,"height":11}},{"id":"07270df8-e3e1-494a-a165-a5b658b0d1e7","block_type":"box","text":"participation note expires or a Fund exercises the participation note and closes its position, the Fund receives a","page_number":114,"box":{"x":70,"y":128,"width":799,"height":11}},{"id":"7679d0dc-ee22-4bc9-bf24-6f1fee357a61","block_type":"box","text":"payment that is based upon the then-current value of the underlying security converted into U.S. dollars (less","page_number":114,"box":{"x":70,"y":143,"width":776,"height":11}},{"id":"4ebe45f2-1a2f-4dcc-939d-8aabad0942eb","block_type":"box","text":"transaction costs). The price, performance and liquidity of a participation note are all linked directly to the underlying","page_number":114,"box":{"x":68,"y":158,"width":834,"height":11}},{"id":"5b44b3bc-61f3-43eb-9e4e-3c525fae6e2a","block_type":"box","text":"security. A Fund’s ability to redeem or exercise a participation note generally is dependent on the liquidity in the local","page_number":114,"box":{"x":69,"y":173,"width":834,"height":11}},{"id":"128bd1e1-de69-4e21-95bf-0f58db5e0724","block_type":"box","text":"trading market for the security underlying the participation note.","page_number":114,"box":{"x":68,"y":188,"width":454,"height":12}},{"id":"e631439e-8536-44e0-be96-dcc70ec11dd2","block_type":"box","text":"Portfolio Turnover Rates.","page_number":114,"box":{"x":102,"y":211,"width":181,"height":9}},{"id":"4fbecd6b-4bd9-44f7-985c-920bcf895743","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale or","page_number":114,"box":{"x":289,"y":211,"width":558,"height":11}},{"id":"69b0298c-f7f3-49aa-bf29-c561747c9736","block_type":"box","text":"purchase when the Manager believes investment considerations warrant such sale or purchase. Although certain","page_number":114,"box":{"x":70,"y":226,"width":804,"height":11}},{"id":"c892beb3-0b5a-4301-885d-e1302006c89c","block_type":"box","text":"Funds will use an approach to investing that is largely a passive, indexing approach, such Funds may engage in a","page_number":114,"box":{"x":70,"y":241,"width":806,"height":11}},{"id":"6317ce8d-67cb-41ee-8c9a-a828aa2de8cc","block_type":"box","text":"substantial number of portfolio transactions. With respect to these Funds, the rate of portfolio turnover will be a","page_number":114,"box":{"x":69,"y":256,"width":800,"height":11}},{"id":"baf63534-b9db-4206-9279-7f26387d6ed8","block_type":"box","text":"limiting factor when the Manager considers whether to purchase or sell securities for a Fund only to the extent that","page_number":114,"box":{"x":70,"y":271,"width":818,"height":12}},{"id":"ef7bbd2f-811c-431d-982e-57f8406fd7c4","block_type":"box","text":"the Manager will consider the impact of transaction costs on a Fund’s tracking error. Portfolio turnover may vary","page_number":114,"box":{"x":68,"y":286,"width":800,"height":12}},{"id":"a8b7ed80-7698-4bdd-a087-977757ca0cf4","block_type":"box","text":"greatly from year to year as well as within a particular year. High portfolio turnover (","page_number":114,"box":{"x":68,"y":302,"width":595,"height":11}},{"id":"c0548f6c-b57a-42b4-a6f6-dcc2b9604efa","block_type":"box","text":"i.e.","page_number":114,"box":{"x":665,"y":302,"width":20,"height":9}},{"id":"b8821f98-2563-4033-bfa6-a982082c6c6d","block_type":"box","text":", 100% or more) may result in","page_number":114,"box":{"x":687,"y":302,"width":210,"height":11}},{"id":"826d79f8-1ed8-4458-b217-8b0c5fda8e1c","block_type":"box","text":"increased transaction costs to a Fund, including brokerage commissions, dealer mark-ups and other transaction","page_number":114,"box":{"x":70,"y":317,"width":797,"height":11}},{"id":"492cdf61-21d8-46ce-b6f3-5d9fa21c177f","block_type":"box","text":"costs on the sale of the securities and reinvestment in other securities. The sale of a Fund’s securities may result in","page_number":114,"box":{"x":69,"y":332,"width":832,"height":11}},{"id":"96ff51be-0e6c-40ed-8329-e0f8377623d2","block_type":"box","text":"the recognition of capital gain or loss. Given the frequency of sales, such gain or loss will likely be short-term capital","page_number":114,"box":{"x":68,"y":347,"width":831,"height":11}},{"id":"18635d60-debb-470a-8231-300ac289229f","block_type":"box","text":"gain or loss. These effects of higher than normal portfolio turnover may adversely affect a Fund’s performance.","page_number":114,"box":{"x":68,"y":362,"width":795,"height":11}},{"id":"71122db4-d90d-456a-9852-24bedf990470","block_type":"box","text":"Preferred Stock.","page_number":114,"box":{"x":102,"y":385,"width":118,"height":9}},{"id":"75fd5be0-43af-4326-8326-d0ba8c62f568","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over common","page_number":114,"box":{"x":226,"y":385,"width":665,"height":11}},{"id":"f1786be4-b843-406f-9b62-39fbdc095d74","block_type":"box","text":"stock in liquidation (and generally dividends as well) but is subordinated to bond holders and other creditors in all","page_number":114,"box":{"x":69,"y":400,"width":808,"height":11}},{"id":"edba37c8-02af-4f8b-ae2a-0f93d27d1fc0","block_type":"box","text":"respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element","page_number":114,"box":{"x":69,"y":415,"width":834,"height":11}},{"id":"47dea193-6d7c-4964-95ba-4df603590991","block_type":"box","text":"varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock","page_number":114,"box":{"x":68,"y":430,"width":808,"height":11}},{"id":"78b800d0-b184-4a5a-84ac-751e2e3bbd04","block_type":"box","text":"generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and","page_number":114,"box":{"x":68,"y":445,"width":813,"height":12}},{"id":"b7dfa64e-3a0d-4ff1-940e-b29902731fe8","block_type":"box","text":"other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value","page_number":114,"box":{"x":69,"y":460,"width":831,"height":12}},{"id":"18916e14-51b0-4825-87e4-bd6a5bb956ad","block_type":"box","text":"of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest","page_number":114,"box":{"x":69,"y":475,"width":791,"height":12}},{"id":"9a2c0105-4761-4fcd-8cf1-e0281c8d5aab","block_type":"box","text":"payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors.","page_number":114,"box":{"x":70,"y":491,"width":838,"height":11}},{"id":"dd4eefd0-f3e0-4442-957a-093592b4d8dd","block_type":"box","text":"Preferred stock also may be subject to optional or mandatory redemption provisions.","page_number":114,"box":{"x":69,"y":506,"width":604,"height":11}},{"id":"c660b0ae-350a-4fd8-838a-f9067f31c92d","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":114,"box":{"x":103,"y":528,"width":207,"height":11}},{"id":"ac78dc83-63cf-4e29-864c-ac5ef43bcf72","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment funds that pay","page_number":114,"box":{"x":316,"y":528,"width":588,"height":12}},{"id":"39f06ffd-bc55-4293-bc82-5422f9c96a60","block_type":"box","text":"dividends that are exempt from regular U.S. federal income tax. Such funds in turn invest in municipal bonds and","page_number":114,"box":{"x":69,"y":543,"width":806,"height":12}},{"id":"c632cc32-027c-43af-be7a-4db0fdb92a86","block_type":"box","text":"other assets that pay interest or make distributions that are exempt from regular U.S. federal income tax, such as","page_number":114,"box":{"x":69,"y":559,"width":814,"height":11}},{"id":"3febc6e1-7de4-4d6a-b030-3b8fd5bdecad","block_type":"box","text":"revenue bonds issued by state or local agencies to fund the development of low-income, multi-family housing.","page_number":114,"box":{"x":69,"y":574,"width":780,"height":11}},{"id":"15e44c48-3e3e-4028-bfdc-feb5351df0e4","block_type":"box","text":"Investment in such tax-exempt preferred shares involves many of the same issues as investing in other investment","page_number":114,"box":{"x":70,"y":589,"width":820,"height":11}},{"id":"54d654fc-0cd9-49e8-8f07-d41a422c6a22","block_type":"box","text":"companies. These investments also have additional risks, including illiquid investments risk, the absence of","page_number":114,"box":{"x":69,"y":604,"width":772,"height":11}},{"id":"bd62d7a1-b4ef-4a50-bd30-62443f8ef1da","block_type":"box","text":"regulation governing investment practices, capital structure and leverage, affiliated transactions and other matters,","page_number":114,"box":{"x":69,"y":619,"width":821,"height":11}},{"id":"0fd1c61e-226d-4e4d-93fc-57c6580b0556","block_type":"box","text":"and concentration of investments in particular issuers or industries. The Municipal Bond Funds will treat investments","page_number":114,"box":{"x":69,"y":634,"width":834,"height":11}},{"id":"d221ee86-8029-4807-8a69-4908b04c88fb","block_type":"box","text":"in tax-exempt preferred shares as investments in municipal bonds.","page_number":114,"box":{"x":70,"y":649,"width":474,"height":11}},{"id":"c39fa262-63a5-4e4f-ad0a-640a11d004b4","block_type":"box","text":"Trust Preferred Securities.","page_number":114,"box":{"x":103,"y":672,"width":184,"height":9}},{"id":"49d544ba-ee56-40e8-9efe-ba1204dc2e58","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred securities are","page_number":114,"box":{"x":294,"y":672,"width":599,"height":11}},{"id":"76b36087-3945-4f6a-9ee0-3ebf9aa5ef90","block_type":"box","text":"typically issued by corporations, generally in the form of interest bearing notes with preferred securities","page_number":114,"box":{"x":68,"y":687,"width":737,"height":11}},{"id":"63d0db91-abfd-43e5-b76e-609e18d362cc","block_type":"box","text":"characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in","page_number":114,"box":{"x":69,"y":702,"width":796,"height":12}},{"id":"9df8f080-5e0a-4993-b392-89ded9919f26","block_type":"box","text":"subordinated debentures or similarly structured securities. The trust preferred securities market consists of both","page_number":114,"box":{"x":69,"y":717,"width":805,"height":12}},{"id":"5ee8d1ba-8cd3-402c-aa27-7c75c098c94c","block_type":"box","text":"fixed and adjustable coupon rate securities that are either perpetual in nature or have stated maturity dates.","page_number":114,"box":{"x":68,"y":732,"width":773,"height":12}},{"id":"0b18a410-d891-4d4a-bfb6-760406a3dd29","block_type":"box","text":"Trust preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit from a","page_number":114,"box":{"x":101,"y":755,"width":770,"height":11}},{"id":"6a398d87-4cda-4942-bddd-02f46e72f5b0","block_type":"box","text":"guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition, trust preferred","page_number":114,"box":{"x":68,"y":770,"width":801,"height":12}},{"id":"81f42428-27b0-4371-ae13-75d8dabbec26","block_type":"box","text":"securities typically permit an issuer to defer the payment of income for five years or more without triggering an event","page_number":114,"box":{"x":69,"y":785,"width":830,"height":12}},{"id":"2c4155ef-8a61-4ca5-a7d9-ab4c49054fe8","block_type":"box","text":"of default. Because of their subordinated position in the capital structure of an issuer, the ability to defer payments","page_number":114,"box":{"x":69,"y":801,"width":822,"height":11}},{"id":"348b2a9b-8f3d-458d-91fd-9a3cc7b005d3","block_type":"box","text":"for extended periods of time without default consequences to the issuer, and certain other features (such as","page_number":114,"box":{"x":68,"y":816,"width":777,"height":11}},{"id":"a47eb989-98fc-46c4-b9c4-2df5d4e6a400","block_type":"box","text":"restrictions on common dividend payments by the issuer or ultimate guarantor when full cumulative payments on the","page_number":114,"box":{"x":69,"y":831,"width":831,"height":11}},{"id":"5926ea7d-5409-4f41-87aa-fbdcabbfca39","block_type":"box","text":"trust preferred securities have not been made), these trust preferred securities are often treated as close","page_number":114,"box":{"x":68,"y":846,"width":757,"height":11}},{"id":"6c529e04-28ae-41f7-b9c6-ab1d282806ae","block_type":"box","text":"substitutes for traditional preferred securities, both by issuers and investors.","page_number":114,"box":{"x":69,"y":861,"width":548,"height":11}},{"id":"42109fda-102c-416e-ab8d-0500108de98a","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":114,"box":{"x":101,"y":884,"width":715,"height":11}},{"id":"49213dde-ca05-4945-bd2b-450fed2926f4","block_type":"box","text":"®","page_number":114,"box":{"x":817,"y":884,"width":5,"height":5}},{"id":"cbb937e6-4228-4de9-bfbe-5646ae87fcb5","block_type":"box","text":"”); monthly","page_number":114,"box":{"x":824,"y":884,"width":77,"height":11}},{"id":"642ebe70-f70e-4434-99c3-05f9151d46dc","block_type":"box","text":"income preferred securities (“MIPS","page_number":114,"box":{"x":70,"y":899,"width":248,"height":11}},{"id":"954f28ee-0688-4abd-a979-87605acaff48","block_type":"box","text":"®","page_number":114,"box":{"x":319,"y":899,"width":6,"height":5}},{"id":"326283da-4038-4622-bd6f-ccc0531701e5","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":114,"box":{"x":326,"y":899,"width":317,"height":11}},{"id":"a466d78f-dd88-4352-84d3-08ff2826228c","block_type":"box","text":"®","page_number":114,"box":{"x":644,"y":899,"width":6,"height":5}},{"id":"1f25ec49-0838-4dea-83d8-8a75e2e5f4c8","block_type":"box","text":"” ); quarterly income debt securities","page_number":114,"box":{"x":652,"y":899,"width":255,"height":11}},{"id":"626d3301-bce4-40b2-bdb1-c1d723f9fde6","block_type":"box","text":"II-65","page_number":114,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"a248748a-2c30-4518-a49a-9d316b4b8181","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":114,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"364c0215-dce0-4d12-83d9-375dd66ea576","block_type":"box","text":"(“QUIDS","page_number":115,"box":{"x":69,"y":45,"width":57,"height":11}},{"id":"63a5e725-0791-4018-a2af-11b9e62bc662","block_type":"box","text":"®","page_number":115,"box":{"x":127,"y":45,"width":6,"height":4}},{"id":"fef74fbd-f479-4afc-9522-190e6a391192","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":115,"box":{"x":135,"y":45,"width":346,"height":11}},{"id":"7414324a-504f-4ebd-9c59-96b69d63a840","block_type":"box","text":"SM","page_number":115,"box":{"x":482,"y":45,"width":11,"height":4}},{"id":"d00f0c87-d45e-4180-8668-f42220f28a01","block_type":"box","text":"”); corporate trust securities (“CORTS","page_number":115,"box":{"x":495,"y":45,"width":267,"height":11}},{"id":"93253cc7-10d2-4552-ada2-d50d6ccba672","block_type":"box","text":"®","page_number":115,"box":{"x":762,"y":45,"width":6,"height":4}},{"id":"1021346a-b933-43bc-a3c7-f9a0820d6796","block_type":"box","text":"”); public income","page_number":115,"box":{"x":770,"y":45,"width":118,"height":11}},{"id":"a145b45a-40dc-4769-ad04-43a5fa4207d2","block_type":"box","text":"notes (“PINES","page_number":115,"box":{"x":69,"y":60,"width":99,"height":11}},{"id":"3c741731-15f1-4c4d-b5f7-30a0b101ee84","block_type":"box","text":"®","page_number":115,"box":{"x":169,"y":60,"width":6,"height":5}},{"id":"e4fde0d9-3cf1-46de-bc18-1d61bcee2aac","block_type":"box","text":"”); and other trust preferred securities.","page_number":115,"box":{"x":177,"y":60,"width":275,"height":11}},{"id":"a938f9fb-017d-4568-bdc9-7e605502c84d","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in nature.","page_number":115,"box":{"x":101,"y":82,"width":790,"height":12}},{"id":"0fc92774-22d2-4341-b65d-0a9dc9b6ec4d","block_type":"box","text":"In certain instances, a final maturity date may be extended and/or the final payment of principal may be deferred at","page_number":115,"box":{"x":70,"y":98,"width":825,"height":11}},{"id":"8bc783c5-50ee-4693-8b51-5397ef174f31","block_type":"box","text":"the issuer’s option for a specified time without default. No redemption can typically take place unless all cumulative","page_number":115,"box":{"x":68,"y":113,"width":827,"height":11}},{"id":"0adb4fd7-ef43-4ec6-a840-6bde2ba65a50","block_type":"box","text":"payment obligations have been met, although issuers may be able to engage in open-market repurchases without","page_number":115,"box":{"x":70,"y":128,"width":808,"height":11}},{"id":"99e0ae81-c99b-4bee-9814-fd6965307817","block_type":"box","text":"regard to whether all payments have been paid.","page_number":115,"box":{"x":69,"y":143,"width":338,"height":11}},{"id":"673fb04d-53e1-44e6-81c1-c233c84d7267","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by operating","page_number":115,"box":{"x":102,"y":166,"width":784,"height":11}},{"id":"a4e7ab76-a2e7-43d5-a5f2-b8f0903dd51b","block_type":"box","text":"companies and are not a direct obligation of an operating company. At the time the trust or special purpose entity","page_number":115,"box":{"x":69,"y":181,"width":811,"height":11}},{"id":"5e00a952-22cd-492d-917e-ff168af317ee","block_type":"box","text":"sells such preferred securities to investors, it purchases debt of the operating company (with terms comparable to","page_number":115,"box":{"x":69,"y":196,"width":817,"height":11}},{"id":"3fddec24-be95-4e29-897d-b1d76770ac84","block_type":"box","text":"those of the trust or special purpose entity securities), which enables the operating company to deduct for tax","page_number":115,"box":{"x":68,"y":211,"width":785,"height":11}},{"id":"1d919157-e206-4201-8a78-bdc4016be58b","block_type":"box","text":"purposes the interest paid on the debt held by the trust or special purpose entity. The trust or special purpose entity","page_number":115,"box":{"x":70,"y":226,"width":830,"height":11}},{"id":"d3b8d830-6b94-40e0-8295-02113fcd016d","block_type":"box","text":"is generally required to be treated as transparent for U.S. federal income tax purposes such that the holders of the","page_number":115,"box":{"x":70,"y":241,"width":819,"height":11}},{"id":"e3375cbe-d68c-45fd-8d55-70a68fe862c0","block_type":"box","text":"trust preferred securities are treated as owning beneficial interests in the underlying debt of the operating company.","page_number":115,"box":{"x":68,"y":256,"width":827,"height":12}},{"id":"62470909-5235-4064-8f91-92ddf356586a","block_type":"box","text":"Accordingly, payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":115,"box":{"x":68,"y":271,"width":824,"height":12}},{"id":"a10f9f6e-de15-4829-b830-3f1c73ddfed9","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating company’s debt","page_number":115,"box":{"x":70,"y":286,"width":819,"height":12}},{"id":"81cf42c3-efb6-4c24-9661-0377b6ac21e8","block_type":"box","text":"and would have priority with respect to the operating company’s earnings and profits over the operating company’s","page_number":115,"box":{"x":69,"y":302,"width":817,"height":11}},{"id":"e4f44660-a42e-44b1-b244-49d03831e9e6","block_type":"box","text":"common shareholders, but would typically be subordinated to other classes of the operating company’s debt.","page_number":115,"box":{"x":69,"y":317,"width":778,"height":11}},{"id":"71d80b9e-f928-4206-a8e6-574ab65fe2cc","block_type":"box","text":"Typically a preferred share has a rating that is slightly below that of its corresponding operating company’s senior","page_number":115,"box":{"x":68,"y":332,"width":811,"height":11}},{"id":"2f97b57a-b9e2-4cd5-b17e-1e9df1377505","block_type":"box","text":"debt securities.","page_number":115,"box":{"x":69,"y":347,"width":109,"height":9}},{"id":"61178cd5-c6fb-48b4-8eb7-853ef39490b6","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":115,"box":{"x":102,"y":370,"width":300,"height":11}},{"id":"d40c5af4-a869-4d60-8237-c33a5a916119","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in shares of","page_number":115,"box":{"x":409,"y":370,"width":473,"height":11}},{"id":"971cb4da-856e-45dd-bf6d-17c3cbfbc74c","block_type":"box","text":"REITs. REITs possess certain risks which differ from an investment in common stocks. REITs are financial vehicles","page_number":115,"box":{"x":70,"y":385,"width":814,"height":11}},{"id":"f72a00e0-a5b6-4315-996c-176cad2d00a5","block_type":"box","text":"that pool investor’s capital to purchase or finance real estate. REITs may concentrate their investments in specific","page_number":115,"box":{"x":68,"y":400,"width":814,"height":11}},{"id":"9b31c820-1710-46fe-906a-b7c5ee5a22d1","block_type":"box","text":"geographic areas or in specific property types,","page_number":115,"box":{"x":68,"y":415,"width":329,"height":11}},{"id":"0703197e-7a6b-4da2-b88b-be5d134c9dca","block_type":"box","text":"i.e.","page_number":115,"box":{"x":405,"y":415,"width":20,"height":9}},{"id":"86ed1102-a7fa-4843-9e3b-35c7dd068047","block_type":"box","text":", hotels, shopping malls, residential complexes and office","page_number":115,"box":{"x":428,"y":415,"width":411,"height":11}},{"id":"cf048e3d-7e3d-4253-aa2c-933701103402","block_type":"box","text":"buildings.","page_number":115,"box":{"x":69,"y":430,"width":66,"height":11}},{"id":"6d166b81-5ba8-4f86-8d57-7c756b821c3a","block_type":"box","text":"REITs are subject to management fees and other expenses, and so a Fund that invests in REITs will bear its","page_number":115,"box":{"x":102,"y":453,"width":768,"height":11}},{"id":"a7bf087d-57d5-4b50-9ed0-ce114c8f2ead","block_type":"box","text":"proportionate share of the costs of the REITs’ operations. There are three general categories of REITs: Equity REITs,","page_number":115,"box":{"x":70,"y":468,"width":824,"height":11}},{"id":"79c461e3-f6e5-4ad1-a65b-e726c42bd74b","block_type":"box","text":"Mortgage REITs and Hybrid REITs. Equity REITs invest primarily in direct fee ownership or leasehold ownership of real","page_number":115,"box":{"x":70,"y":483,"width":829,"height":11}},{"id":"3497acca-c07f-40f0-be75-7a616bb28a59","block_type":"box","text":"property, which derive most of their income from rents. Mortgage REITs invest mostly in mortgages on real estate,","page_number":115,"box":{"x":70,"y":498,"width":813,"height":11}},{"id":"ceec941a-7a0e-4468-87ac-62156226f31c","block_type":"box","text":"which may secure construction, development or long-term loans; the main source of their income is mortgage","page_number":115,"box":{"x":68,"y":513,"width":782,"height":12}},{"id":"d3026336-501b-4f66-ad75-f82f10914b20","block_type":"box","text":"interest payments. Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":115,"box":{"x":70,"y":529,"width":649,"height":11}},{"id":"e8c485d5-4014-4326-ad3f-a82314727c95","block_type":"box","text":"Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real","page_number":115,"box":{"x":102,"y":551,"width":776,"height":11}},{"id":"6cfbb63f-3de0-4de4-b756-f33cfea46665","block_type":"box","text":"estate industry in general. The market value of REIT shares and the ability of the REITs to distribute income may be","page_number":115,"box":{"x":69,"y":566,"width":822,"height":11}},{"id":"258f73ba-c383-4d50-a595-9e13ebfddb81","block_type":"box","text":"adversely affected by several factors, including rising interest rates, changes in the national, state and local","page_number":115,"box":{"x":69,"y":581,"width":769,"height":12}},{"id":"b6f1ecb0-b011-4572-b090-3026f660bf33","block_type":"box","text":"economic climate and real estate conditions, occupancy and rental rates, perceptions of prospective tenants of the","page_number":115,"box":{"x":69,"y":596,"width":822,"height":12}},{"id":"05293720-a5eb-417c-b6a5-9252a69153ff","block_type":"box","text":"safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management,","page_number":115,"box":{"x":69,"y":612,"width":831,"height":11}},{"id":"be44e91f-cac1-48d8-9977-a9e29ef1dd6f","block_type":"box","text":"maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition","page_number":115,"box":{"x":69,"y":627,"width":810,"height":11}},{"id":"f62f87b2-d812-4bd5-a206-d7617dc3447d","block_type":"box","text":"from new properties, the impact of present or future environmental legislation and compliance with environmental","page_number":115,"box":{"x":68,"y":642,"width":812,"height":11}},{"id":"b6416ba7-0088-475d-b9c8-310072571141","block_type":"box","text":"laws, failing to maintain their exemptions from registration under the Investment Company Act, changes in real estate","page_number":115,"box":{"x":70,"y":657,"width":838,"height":11}},{"id":"48982567-12b3-4f8c-935e-c6db4410e9e3","block_type":"box","text":"taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, adverse changes in","page_number":115,"box":{"x":68,"y":672,"width":826,"height":11}},{"id":"c0cdca6e-c7ab-4daa-b38c-ea4332ae907b","block_type":"box","text":"zoning laws and other factors beyond the control of the issuers of the REITs. To the extent that assets underlying a","page_number":115,"box":{"x":69,"y":687,"width":817,"height":11}},{"id":"8fb89578-596d-44d8-9062-c1775810fb98","block_type":"box","text":"REIT are concentrated geographically, by property type, or in certain other respects, these risks may be heightened.","page_number":115,"box":{"x":70,"y":703,"width":822,"height":11}},{"id":"0062c473-7070-4740-9b17-7e6d418f1612","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or return of","page_number":115,"box":{"x":70,"y":717,"width":792,"height":12}},{"id":"bfae2dc8-0703-45a2-8c7a-9e6a64dcc725","block_type":"box","text":"capital. As REITs generally pay a higher rate of dividends (on a pre-tax basis) than operating companies, to the extent","page_number":115,"box":{"x":69,"y":732,"width":834,"height":12}},{"id":"b7af8832-86ab-4623-9806-97c8d852db8a","block_type":"box","text":"application of the Fund’s investment strategy results in the Fund investing in REIT shares, the percentage of the","page_number":115,"box":{"x":69,"y":748,"width":798,"height":11}},{"id":"2240ee1b-2213-4b7f-b786-7d0c98576362","block_type":"box","text":"Fund’s dividend income received from REIT shares will likely exceed the percentage of the Fund’s portfolio which is","page_number":115,"box":{"x":70,"y":763,"width":818,"height":11}},{"id":"1ecbcd1c-3b7f-45e2-bf19-826f993429f8","block_type":"box","text":"comprised of REIT shares. Ordinary REIT dividends received by the Fund and distributed to the Fund’s shareholders","page_number":115,"box":{"x":69,"y":778,"width":821,"height":11}},{"id":"646c8fc5-ad64-473c-9b0f-cffc2737f8e2","block_type":"box","text":"will generally be taxable as ordinary income and will not constitute “qualified dividend income.” However, a non","page_number":115,"box":{"x":68,"y":793,"width":797,"height":11}},{"id":"8fd4e0ab-0bff-4ea0-a9c9-94fc63b1bf07","block_type":"box","text":"corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for","page_number":115,"box":{"x":69,"y":808,"width":798,"height":11}},{"id":"ed286f30-d129-4b8e-9443-208c20416835","block_type":"box","text":"ordinary REIT dividends, and a regulated investment company may report dividends as eligible for this deduction to","page_number":115,"box":{"x":69,"y":823,"width":820,"height":12}},{"id":"d33c5057-c9fc-43c2-9ebf-336b042d279f","block_type":"box","text":"the extent the regulated investment company’s income is derived from ordinary REIT dividends (reduced by allocable","page_number":115,"box":{"x":68,"y":838,"width":831,"height":12}},{"id":"f3899c19-501d-492d-9a7d-810018e1763b","block_type":"box","text":"regulated investment company expenses). A shareholder may treat the dividends as such provided the regulated","page_number":115,"box":{"x":69,"y":854,"width":801,"height":11}},{"id":"0af347e7-ce34-403e-909e-e0c34aab2f91","block_type":"box","text":"investment company and the shareholder satisfy applicable holding period requirements.","page_number":115,"box":{"x":70,"y":869,"width":631,"height":11}},{"id":"8c36901f-de4a-4b85-864e-d7c0f589fcc2","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may cause REIT","page_number":115,"box":{"x":102,"y":891,"width":772,"height":12}},{"id":"b42949ce-e38e-40ef-8590-57130aa9cb1b","block_type":"box","text":"investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity","page_number":115,"box":{"x":70,"y":906,"width":790,"height":12}},{"id":"55317e6b-a430-455c-85fa-761575a5121b","block_type":"box","text":"II-66","page_number":115,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"19ead292-2f3c-46eb-84aa-c3fdef10f5a8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":115,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a40595c7-4d60-4cd8-a00a-73d20c8abecb","block_type":"box","text":"securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could","page_number":116,"box":{"x":69,"y":45,"width":834,"height":11}},{"id":"8848bf10-2a27-4f13-8068-21a3e4c3c7a1","block_type":"box","text":"cause the value of a Fund’s REIT investments to decline. During periods when interest rates are declining, mortgages","page_number":116,"box":{"x":69,"y":60,"width":837,"height":11}},{"id":"cd5ef290-5c98-480c-b053-53658398fccd","block_type":"box","text":"are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs","page_number":116,"box":{"x":69,"y":75,"width":812,"height":11}},{"id":"c24b22b7-ddd4-4f01-9995-9a05d00c72b0","block_type":"box","text":"depend on payment under their mortgage loans and leases to generate cash to make distributions to their","page_number":116,"box":{"x":69,"y":90,"width":759,"height":11}},{"id":"9db73865-2bd8-449b-8c86-709fe6f064bc","block_type":"box","text":"shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":116,"box":{"x":69,"y":105,"width":778,"height":11}},{"id":"f9fdefbe-1a38-4fc1-99fd-8ec3b86f3e6c","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same risks as","page_number":116,"box":{"x":102,"y":128,"width":773,"height":11}},{"id":"63ef9014-ec10-4022-8cb4-183ffcde507a","block_type":"box","text":"investing in other small capitalization companies. REITs may have limited financial resources and their securities may","page_number":116,"box":{"x":70,"y":143,"width":836,"height":11}},{"id":"813e742a-d8f4-4cec-b8eb-b606444fb48c","block_type":"box","text":"trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger","page_number":116,"box":{"x":68,"y":158,"width":839,"height":11}},{"id":"46ee3cd2-1b6a-4adb-86b2-9dfc7f503710","block_type":"box","text":"company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the","page_number":116,"box":{"x":69,"y":173,"width":832,"height":11}},{"id":"41f19ecb-b68b-466d-a387-9cb79bf142a5","block_type":"box","text":"larger capitalization stocks such as those included in the S&P 500 Index. The management of a REIT may be subject","page_number":116,"box":{"x":70,"y":188,"width":832,"height":12}},{"id":"8a6810c8-a977-4a1f-8647-c9120b19af3b","block_type":"box","text":"to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate","page_number":116,"box":{"x":68,"y":203,"width":815,"height":12}},{"id":"ea14217e-1cde-4baa-8a33-018342f2b7de","block_type":"box","text":"activities competitive with the REIT. REITs may own properties through joint ventures or in other circumstances in","page_number":116,"box":{"x":69,"y":219,"width":804,"height":11}},{"id":"6e7d9583-9137-45cb-b61b-8c1f36486bcc","block_type":"box","text":"which the REIT may not have control over its investments. REITs may incur significant amounts of leverage.","page_number":116,"box":{"x":68,"y":234,"width":761,"height":11}},{"id":"f5fbf3a9-b5b3-4773-8ed7-8441016f8b4a","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":116,"box":{"x":102,"y":256,"width":275,"height":11}},{"id":"afbd9335-6593-457a-9f13-d83a021329ae","block_type":"box","text":"Securities may decline in value due to factors affecting securities","page_number":116,"box":{"x":383,"y":256,"width":466,"height":12}},{"id":"3d31ec8c-6c0f-4b61-adc1-70f14c99a8c7","block_type":"box","text":"markets generally or particular industries represented in the markets. The value of a security may decline due to","page_number":116,"box":{"x":69,"y":271,"width":801,"height":12}},{"id":"b4be9776-156f-4b50-9513-0ae54487a599","block_type":"box","text":"general market conditions, economic trends or events that are not specifically related to a company or to factors that","page_number":116,"box":{"x":68,"y":286,"width":837,"height":12}},{"id":"afa9feb9-db89-43af-ad83-493163030db6","block_type":"box","text":"affect a particular industry or industries, or factors that affect a particular issuer or issuers, exchange, country,","page_number":116,"box":{"x":69,"y":302,"width":795,"height":11}},{"id":"08e40340-c4dd-4838-ba33-7c85b13cba97","block_type":"box","text":"group of countries, region, market, industry, group of industries, sector or asset class. The success of a Fund’s","page_number":116,"box":{"x":68,"y":317,"width":796,"height":11}},{"id":"765c0e49-a553-40ba-ba02-0f662dfffa72","block_type":"box","text":"activities could be affected by interest rates, availability of credit, inflation rates, economic uncertainty, changes in","page_number":116,"box":{"x":69,"y":332,"width":817,"height":11}},{"id":"dce86af9-71e1-4f5e-85c4-f8e50ea87eb9","block_type":"box","text":"laws, trade barriers, economic sanctions, currency exchange controls, and local, regional or global events such as","page_number":116,"box":{"x":70,"y":347,"width":812,"height":11}},{"id":"ff366935-d9d1-43bd-b61f-016584ea7ba7","block_type":"box","text":"war, acts of terrorism, natural and environmental disasters, the spread of infectious illness or other public health","page_number":116,"box":{"x":68,"y":362,"width":807,"height":11}},{"id":"027657b8-88ce-46b5-9a06-eeaa5d14ea1c","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments. During a general","page_number":116,"box":{"x":70,"y":377,"width":822,"height":12}},{"id":"60bf0ced-a6f5-48a3-aa28-61aff71b04ae","block_type":"box","text":"economic downturn in the securities markets, multiple asset classes may be negatively affected. These factors may","page_number":116,"box":{"x":69,"y":392,"width":828,"height":12}},{"id":"f7fc10df-e861-478b-b803-83739eddbcfd","block_type":"box","text":"affect the level and volatility of securities prices and the liquidity of a Fund’s investments, which could impair the","page_number":116,"box":{"x":69,"y":407,"width":804,"height":12}},{"id":"193b2a46-e129-403f-a428-e6c96c197249","block_type":"box","text":"Fund’s profitability or result in losses. A Fund may maintain substantial trading positions that can be adversely","page_number":116,"box":{"x":70,"y":423,"width":787,"height":11}},{"id":"d49dfbdb-5120-4a7a-ac68-1521d643bef2","block_type":"box","text":"affected by the level of volatility in the financial markets; the larger the positions, the greater the potential for loss.","page_number":116,"box":{"x":69,"y":438,"width":819,"height":11}},{"id":"52ffdfbb-a9cc-4147-aa63-10132071e037","block_type":"box","text":"Unpredictable or unstable market conditions may result in reduced opportunities to find suitable investments to","page_number":116,"box":{"x":70,"y":453,"width":796,"height":11}},{"id":"056225f9-27c4-4cc2-8cef-6dd1d2601e1c","block_type":"box","text":"deploy capital or make it more difficult to exit and realize value from a Fund’s existing investments. It is important to","page_number":116,"box":{"x":69,"y":468,"width":832,"height":11}},{"id":"53d2f284-945e-4ab1-92ab-658f90c3b59f","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions and there can","page_number":116,"box":{"x":69,"y":483,"width":831,"height":11}},{"id":"a4d62e93-9ae9-4798-95e8-49ba8bcb7217","block_type":"box","text":"be no assurance that a Fund will not suffer material adverse effects from broad and rapid changes in market","page_number":116,"box":{"x":69,"y":498,"width":776,"height":11}},{"id":"d7301551-653b-41cf-8e8e-39fbc84a2196","block_type":"box","text":"conditions.","page_number":116,"box":{"x":69,"y":514,"width":76,"height":8}},{"id":"c7372a1c-5f7e-48c1-8322-ace7d18ba507","block_type":"box","text":"Periods of unusually high volatility in the financial markets and restrictive credit conditions, sometimes limited to","page_number":116,"box":{"x":102,"y":536,"width":802,"height":11}},{"id":"2d70cbaa-94c0-47a8-b9c8-be8c51c47e90","block_type":"box","text":"a particular sector or a geography, can occur. Some countries, including the United States, have adopted and/or are","page_number":116,"box":{"x":69,"y":551,"width":829,"height":11}},{"id":"7484d819-1102-45b7-bdfa-b57d29acaf97","block_type":"box","text":"considering the adoption of more protectionist trade policies, a move away from the tighter financial industry","page_number":116,"box":{"x":69,"y":566,"width":775,"height":11}},{"id":"53bf6dc7-9e77-4e9b-833f-9f5cf490aa63","block_type":"box","text":"regulations that followed the financial crisis of 2008, and/or substantially reducing corporate taxes. The exact shape","page_number":116,"box":{"x":69,"y":581,"width":833,"height":12}},{"id":"eab81069-35a6-4518-88f2-151deecc695c","block_type":"box","text":"of these policies is still being considered, but the equity and debt markets may react strongly to expectations of","page_number":116,"box":{"x":69,"y":596,"width":799,"height":12}},{"id":"86b43318-fc94-4c34-a15d-a98deeacf508","block_type":"box","text":"change, which could increase volatility, especially if the market’s expectations are not borne out. A rise in","page_number":116,"box":{"x":69,"y":612,"width":751,"height":11}},{"id":"d2b5e533-bde8-41c4-b2fe-c2fb42795ef8","block_type":"box","text":"protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the","page_number":116,"box":{"x":70,"y":627,"width":822,"height":11}},{"id":"19d76a27-3979-4b7a-8eb3-73ea10621d74","block_type":"box","text":"economies of many nations in ways that cannot necessarily be foreseen at the present time. In addition, geopolitical","page_number":116,"box":{"x":69,"y":642,"width":831,"height":11}},{"id":"5409ae9f-bb67-4fe1-9e18-91c59147c7de","block_type":"box","text":"and other risks, including environmental and public health, may add to instability in world economies and markets","page_number":116,"box":{"x":69,"y":657,"width":810,"height":11}},{"id":"80394f28-26aa-4844-8894-d77a90dce450","block_type":"box","text":"generally. Economies and financial markets throughout the world are increasingly interconnected. As a result, whether","page_number":116,"box":{"x":68,"y":672,"width":841,"height":11}},{"id":"afd22301-af74-4727-9729-69fcdb21fa75","block_type":"box","text":"or not a Fund invests in securities of issuers located in or with significant exposure to countries experiencing","page_number":116,"box":{"x":69,"y":687,"width":775,"height":11}},{"id":"3dd11c6b-e6db-468b-86b0-7ec1ab37895f","block_type":"box","text":"economic, political and/or financial difficulties, the value and liquidity of the Fund’s investments may be negatively","page_number":116,"box":{"x":69,"y":702,"width":818,"height":12}},{"id":"fd8e96da-4076-41e4-a592-5a112288dc63","block_type":"box","text":"affected by such events.","page_number":116,"box":{"x":69,"y":717,"width":173,"height":12}},{"id":"947b4466-4798-41ba-86c0-a85c9735b550","block_type":"box","text":"Governments and regulators may take actions that affect the regulation of the Fund or the instruments in which","page_number":116,"box":{"x":102,"y":740,"width":795,"height":11}},{"id":"d2b77317-bf71-4390-98ad-6038055adc8e","block_type":"box","text":"the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Future legislation or regulation","page_number":116,"box":{"x":68,"y":755,"width":830,"height":11}},{"id":"ef4e8acf-071b-497c-a1d9-500de888601f","block_type":"box","text":"or other governmental actions could limit or preclude the Fund’s abilities to achieve its investment objectives or","page_number":116,"box":{"x":69,"y":771,"width":796,"height":11}},{"id":"4fd9dba1-0b32-4fdb-8e4d-5e7419d9d4f7","block_type":"box","text":"otherwise adversely impact an investment in the Fund. Recent policy initiatives undertaken by the U.S. government","page_number":116,"box":{"x":69,"y":786,"width":820,"height":11}},{"id":"3e3086e4-636c-4009-9ead-69f139cd50bd","block_type":"box","text":"have the potential to impact international relations, trade agreements and the overall regulatory environment in ways","page_number":116,"box":{"x":69,"y":801,"width":833,"height":11}},{"id":"ace6e6c3-c0a4-4b47-8944-4a649fd2e9bc","block_type":"box","text":"that could create uncertainty and instability in domestic and global markets and could adversely affect the","page_number":116,"box":{"x":68,"y":816,"width":759,"height":11}},{"id":"c38ffb56-1a99-40db-8804-94649a478279","block_type":"box","text":"investment performance of the Fund. In particular, actions taken by the U.S. government in respect of international","page_number":116,"box":{"x":70,"y":831,"width":819,"height":11}},{"id":"58df44a5-c7d1-4a74-9eb8-26bfdad9734d","block_type":"box","text":"trade relations could lead to trade wars, increased costs for imported goods, disruptions in supply chains, reduced","page_number":116,"box":{"x":68,"y":846,"width":821,"height":11}},{"id":"dce66f6a-0e7e-4902-a79f-cb30bfae6746","block_type":"box","text":"foreign investment, and instability in regions where the Fund invests. Political and diplomatic events within the United","page_number":116,"box":{"x":68,"y":861,"width":837,"height":11}},{"id":"58a679db-0359-4554-b55f-6ae5724bc590","block_type":"box","text":"States, including a contentious domestic political environment, changes in political party control of one or more","page_number":116,"box":{"x":69,"y":876,"width":795,"height":11}},{"id":"f10db749-dee7-4d05-8e12-7b01c9349493","block_type":"box","text":"branches of the U.S. Government, the U.S. Government’s inability at times to agree on a long-term budget and deficit","page_number":116,"box":{"x":69,"y":891,"width":836,"height":12}},{"id":"edb67c4c-d148-48c5-af33-ba7b36ee74fd","block_type":"box","text":"reduction plan, the threat of a U.S. Government shutdown, and disagreements over, or threats not to increase, the","page_number":116,"box":{"x":69,"y":906,"width":817,"height":12}},{"id":"81e56a5e-12bd-47cd-b4b6-71bbd16e86ec","block_type":"box","text":"II-67","page_number":116,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"2f7e8425-dc0e-40d4-af39-8bf65657668c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":116,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e19bf9b5-34cf-4d61-9035-a72425576567","block_type":"box","text":"U.S. Government’s borrowing limit (or “debt ceiling”), as well as political and diplomatic events abroad, may affect","page_number":117,"box":{"x":70,"y":45,"width":816,"height":11}},{"id":"861b8938-3af1-4909-bc98-b8fc694f6f05","block_type":"box","text":"investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps","page_number":117,"box":{"x":70,"y":60,"width":813,"height":11}},{"id":"0ee53077-cd1f-43f7-bcf5-8e035861f6d5","block_type":"box","text":"suddenly and to a significant degree. A downgrade of the ratings of U.S. Government debt obligations, or concerns","page_number":117,"box":{"x":69,"y":75,"width":815,"height":11}},{"id":"ca556d63-55d2-41e8-8636-96ef8a5bd7e3","block_type":"box","text":"about the U.S. Government’s credit quality in general, could have a substantial negative effect on the U.S. and global","page_number":117,"box":{"x":69,"y":90,"width":836,"height":11}},{"id":"1d434e6a-7d7d-4a0e-8cf2-83459c3eb968","block_type":"box","text":"economies. For example, concerns about the U.S. Government’s credit quality may cause increased volatility in the","page_number":117,"box":{"x":69,"y":105,"width":820,"height":11}},{"id":"40b9602e-2be4-4467-bbe0-88b28a3f0826","block_type":"box","text":"stock and bond markets, higher interest rates, reduced prices and liquidity of U.S. Treasury securities, and/or","page_number":117,"box":{"x":69,"y":120,"width":785,"height":12}},{"id":"45a1d8b6-99e4-4e47-abb8-3ed3a64e94f5","block_type":"box","text":"increased costs of various kinds of debt. Moreover, although the U.S. Government has honored its credit obligations,","page_number":117,"box":{"x":70,"y":135,"width":832,"height":12}},{"id":"56180fd1-858e-4d8b-84f6-d16fb20dc6ab","block_type":"box","text":"there remains a possibility that the United States could default on its obligations. The consequences of such an","page_number":117,"box":{"x":68,"y":150,"width":799,"height":12}},{"id":"fd1d0496-a084-43d8-83a0-1d02458a2bcc","block_type":"box","text":"unprecedented event are impossible to predict, but it is likely that a default by the United States would be highly","page_number":117,"box":{"x":69,"y":166,"width":802,"height":11}},{"id":"a42edbfa-230a-40ed-b48f-83c85f60d499","block_type":"box","text":"disruptive to the U.S. and global securities markets and could significantly impair the value of the Fund’s","page_number":117,"box":{"x":69,"y":181,"width":746,"height":11}},{"id":"f39c7ff1-f91e-4413-8fb5-82b541f98e9c","block_type":"box","text":"investments.","page_number":117,"box":{"x":70,"y":196,"width":89,"height":9}},{"id":"9f3a5827-385f-4dc1-8613-f0df7701ef4d","block_type":"box","text":"The COVID-19 pandemic resulted in significant market volatility, exchange suspensions and closures, declines in","page_number":117,"box":{"x":101,"y":218,"width":802,"height":12}},{"id":"2e07113d-69bc-43a6-9728-4dc79d530aba","block_type":"box","text":"global financial markets, higher default rates, supply chain disruptions, and a substantial economic downturn in","page_number":117,"box":{"x":68,"y":234,"width":796,"height":11}},{"id":"94d058dd-f59b-4f93-a2d1-ae2d1a355a0d","block_type":"box","text":"economies throughout the world. The impact of this coronavirus, and other epidemics and pandemics that may arise","page_number":117,"box":{"x":69,"y":249,"width":830,"height":11}},{"id":"69ce435b-36cf-489e-acc2-2fde69bd7cec","block_type":"box","text":"in the future, could affect the economies of many nations, individual companies and the market in general in ways","page_number":117,"box":{"x":70,"y":264,"width":813,"height":11}},{"id":"d9c8a60c-f091-455d-93db-38efd1e99fa8","block_type":"box","text":"that cannot necessarily be foreseen at the present time. These health crises may be short term or long term, and","page_number":117,"box":{"x":68,"y":279,"width":812,"height":11}},{"id":"801edbf0-99b3-43bd-9fbb-b721dca185b3","block_type":"box","text":"may exacerbate other pre-existing political, social and economic risks, disrupt normal market conditions and","page_number":117,"box":{"x":69,"y":294,"width":771,"height":11}},{"id":"9fc05603-588e-4219-910f-47bdbfe48626","block_type":"box","text":"operations, and negatively impact performance. In addition, the impact of infectious diseases in emerging developing","page_number":117,"box":{"x":69,"y":309,"width":837,"height":11}},{"id":"f6eab377-ec5b-405a-bdcb-c0dba3a949ef","block_type":"box","text":"or emerging market countries may be greater due to less established health care systems.","page_number":117,"box":{"x":69,"y":325,"width":646,"height":11}},{"id":"3a98b8e3-167e-46f6-8917-4f127d8ad248","block_type":"box","text":"Legal and Regulatory Risks.","page_number":117,"box":{"x":102,"y":347,"width":197,"height":11}},{"id":"3dc3c89a-5492-4c5a-a21e-923e6096191b","block_type":"box","text":"The Manager is part of a larger firm with multiple business lines active in multiple","page_number":117,"box":{"x":305,"y":347,"width":583,"height":11}},{"id":"a2689e3f-8b82-4d45-ba96-b46fcbd48721","block_type":"box","text":"jurisdictions that are governed by a multitude of legal systems and regulatory regimes, some of which are new and","page_number":117,"box":{"x":67,"y":362,"width":819,"height":11}},{"id":"03434a9a-8e0a-4396-b473-1ac7b9807fdb","block_type":"box","text":"evolving. As a result, the Funds and the Manager and its affiliates are subject to extensive and sophisticated legal,","page_number":117,"box":{"x":69,"y":377,"width":820,"height":12}},{"id":"9999853a-820c-4026-9693-0ff759d8f3e0","block_type":"box","text":"tax and regulatory risks, including changing laws and regulations, developing interpretations of such laws and","page_number":117,"box":{"x":68,"y":392,"width":781,"height":12}},{"id":"50e71cab-accd-4a14-a548-7596fd06ec1d","block_type":"box","text":"regulations, as well as existing laws, and increased scrutiny by regulators and law enforcement authorities.","page_number":117,"box":{"x":69,"y":407,"width":763,"height":12}},{"id":"0222f18d-b403-41fa-98e2-f05c12dca131","block_type":"box","text":"Unexpected economic, political, regulatory and diplomatic events within the United States and abroad can trigger new","page_number":117,"box":{"x":70,"y":423,"width":838,"height":11}},{"id":"d5581ba7-75a3-40d3-ad9a-65233f635fdf","block_type":"box","text":"and complex regulations that the Manager and/or the Funds may need to comply with. The implementation of","page_number":117,"box":{"x":69,"y":438,"width":781,"height":11}},{"id":"d845d018-723b-4f4a-895a-68de8feb611a","block_type":"box","text":"changes to comply with current and/or new regulations applicable to the Funds and/or the Manager could have a","page_number":117,"box":{"x":69,"y":453,"width":807,"height":11}},{"id":"69d252a7-4941-4e0e-afa6-e9dd1b8ac780","block_type":"box","text":"material adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit margins,","page_number":117,"box":{"x":69,"y":468,"width":807,"height":11}},{"id":"2da0d734-4a08-452e-892d-0a5dfbdc1c46","block_type":"box","text":"reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":117,"box":{"x":69,"y":483,"width":666,"height":11}},{"id":"dd6a317f-dbe9-4507-b71c-c7c49af9a4d0","block_type":"box","text":"Tariff and Trade Policy Risks.","page_number":117,"box":{"x":103,"y":506,"width":202,"height":11}},{"id":"fe30313b-cb36-4127-8648-ecfdba013f65","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist trade policies.","page_number":117,"box":{"x":312,"y":506,"width":593,"height":11}},{"id":"20bb1464-19b2-4594-a1bf-2c892b6fa44b","block_type":"box","text":"The U.S. government recently altered its approach to international trade policy, resulting in significant impacts on","page_number":117,"box":{"x":68,"y":521,"width":806,"height":11}},{"id":"163001f4-97f3-464b-a0c2-2277014d4372","block_type":"box","text":"international trade relations, certain tax and immigration policies, and other aspects of the national and international","page_number":117,"box":{"x":70,"y":536,"width":833,"height":11}},{"id":"2f7d14ab-3135-45ee-ba59-a8272ba39d36","block_type":"box","text":"political and financial landscape. The rise in protectionist trade policies, slowing economic growth, changes to some","page_number":117,"box":{"x":70,"y":551,"width":827,"height":11}},{"id":"639d15a1-e693-42cb-9f0d-e414e4555794","block_type":"box","text":"major international trade agreements, risks associated with trade agreements between the U.S. and the European","page_number":117,"box":{"x":69,"y":566,"width":814,"height":11}},{"id":"66a70a0e-6fc2-4477-b0ba-79ab381f8379","block_type":"box","text":"Union, and the risks associated with trade negotiations between the U.S. and China, could affect the economies of","page_number":117,"box":{"x":70,"y":581,"width":821,"height":12}},{"id":"8a9c424b-da50-4a30-8aa6-bd9be7e3b3b9","block_type":"box","text":"many nations in ways that cannot necessarily be foreseen at the present time.","page_number":117,"box":{"x":69,"y":596,"width":559,"height":12}},{"id":"68daa2c6-c082-4cc9-98ef-afa4783c8e29","block_type":"box","text":"Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together with any","page_number":117,"box":{"x":102,"y":619,"width":796,"height":11}},{"id":"b67710a1-fa29-4af5-963f-5109c10fab97","block_type":"box","text":"future downturns in the global economy resulting therefrom, could adversely affect the financial performance of a","page_number":117,"box":{"x":68,"y":634,"width":809,"height":12}},{"id":"ad7ccf75-2a01-4f5a-8e72-0bcdae7311cf","block_type":"box","text":"Fund and its investments. Trade policy may be an ongoing source of instability, potentially resulting in significant","page_number":117,"box":{"x":70,"y":649,"width":799,"height":12}},{"id":"3dc17481-9f5c-4155-9421-3d8bb697f606","block_type":"box","text":"currency fluctuations and/or having other adverse effects on international markets, international trade agreements,","page_number":117,"box":{"x":69,"y":664,"width":823,"height":12}},{"id":"a33484e2-3216-404f-a7f6-27dad858bd10","block_type":"box","text":"and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or","page_number":117,"box":{"x":69,"y":680,"width":801,"height":11}},{"id":"60bb5c1f-d10a-431d-97b8-e7124f503e20","block_type":"box","text":"otherwise). To the extent trade disputes escalate globally, there could be additional significant impacts on the","page_number":117,"box":{"x":69,"y":695,"width":783,"height":11}},{"id":"318788f2-eedb-4907-a819-e7cf84113fa9","block_type":"box","text":"sectors or industries in which a Fund invests and other adverse impacts on a Fund’s overall performance.","page_number":117,"box":{"x":69,"y":710,"width":753,"height":11}},{"id":"145beeb6-9b61-466e-93ff-8e62baae0f1a","block_type":"box","text":"Geographic Risks","page_number":117,"box":{"x":102,"y":733,"width":123,"height":11}},{"id":"20c8c6ba-ef23-4a4d-945f-c501790a06e7","block_type":"box","text":". Some of the companies in which the Fund invests may be located in, or otherwise connected","page_number":117,"box":{"x":226,"y":732,"width":671,"height":12}},{"id":"8a53fa8e-a14b-41e1-9ce8-69fada7c24e5","block_type":"box","text":"to, parts of the world affected by natural disasters such as severe heat, earthquakes, tornadoes, volcanic eruptions,","page_number":117,"box":{"x":68,"y":748,"width":835,"height":11}},{"id":"7c994e8c-7be0-4858-a5e4-b4c638c3f48e","block_type":"box","text":"wildfires, droughts, floods, hurricanes or tsunamis, and are economically sensitive to environmental events. In","page_number":117,"box":{"x":68,"y":763,"width":787,"height":11}},{"id":"23939f37-cc1a-4c1e-b43b-8d55f987271d","block_type":"box","text":"addition, issuers may be impacted by security concerns with respect to a country or region, such as war and other","page_number":117,"box":{"x":69,"y":778,"width":814,"height":11}},{"id":"96f0508b-3c2a-49b4-a946-4a5b4d373dfd","block_type":"box","text":"types of conflict, terrorism, strained international relations and territorial disputes. Any of these events may adversely","page_number":117,"box":{"x":68,"y":793,"width":840,"height":11}},{"id":"86a00fae-4704-4590-ba64-dfa638c71ef3","block_type":"box","text":"affect the issuers, markets and economies to which a Fund is exposed, which may adversely affect the value of the","page_number":117,"box":{"x":69,"y":808,"width":824,"height":11}},{"id":"940e9cd6-8720-4aed-8a06-546686a6b110","block_type":"box","text":"Fund.","page_number":117,"box":{"x":70,"y":823,"width":36,"height":9}},{"id":"8a0290a0-eeb5-4400-9093-fc7422659c22","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":117,"box":{"x":102,"y":846,"width":255,"height":11}},{"id":"48cbd703-bc7a-4721-8927-955a878f9bbf","block_type":"box","text":"A Fund’s investments, payment obligations and financing terms may be","page_number":117,"box":{"x":363,"y":846,"width":508,"height":11}},{"id":"2b1b3b94-a06a-4d71-9e19-2714e35d796e","block_type":"box","text":"based on floating rates, such as the Secured Overnight Financing Rate (“SOFR”), Sterling Overnight Interbank Average","page_number":117,"box":{"x":69,"y":861,"width":839,"height":11}},{"id":"08e5ed22-1c72-4e24-8f63-a2f0fb6f0ab0","block_type":"box","text":"Rate (“SONIA”), and other similar types of reference rates (“Reference Rates”). The elimination of a Reference Rate","page_number":117,"box":{"x":70,"y":876,"width":825,"height":11}},{"id":"1a7bd11b-5f32-41f0-b98b-7b45602db66d","block_type":"box","text":"or any other changes or reforms to the determination or supervision of a Reference Rate could have an adverse","page_number":117,"box":{"x":69,"y":891,"width":797,"height":12}},{"id":"b548717f-541e-4ac0-8345-e9f3f315beb7","block_type":"box","text":"impact on the market for, or value of, any instruments (including debt instruments and certain derivative instruments)","page_number":117,"box":{"x":70,"y":906,"width":837,"height":12}},{"id":"1863daf5-9e28-47a5-84b0-6685ec9dc59a","block_type":"box","text":"II-68","page_number":117,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"768342d7-8543-4dd3-b8e1-de9025eced90","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":117,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"54153180-f2b4-4aad-9e84-16e89dd0e005","block_type":"box","text":"or payments linked to those Reference Rates. In addition, any substitute Reference Rate and any pricing adjustments","page_number":118,"box":{"x":69,"y":45,"width":837,"height":11}},{"id":"9ee56b37-b988-490d-8264-591d647aec98","block_type":"box","text":"imposed by a regulator or by counterparties or otherwise may adversely affect a Fund’s performance and/or net","page_number":118,"box":{"x":70,"y":60,"width":800,"height":11}},{"id":"6afbf11a-a694-4ed1-88c3-3b568e8d9c20","block_type":"box","text":"asset value. The London Interbank Offered Rate (“LIBOR”) had historically been used extensively in the U.S. and","page_number":118,"box":{"x":69,"y":75,"width":800,"height":11}},{"id":"e5bbcd58-79e8-4253-aa17-60cbdce74394","block_type":"box","text":"globally as a “benchmark” or “reference rate” for various commercial and financial contracts, including corporate and","page_number":118,"box":{"x":68,"y":90,"width":836,"height":11}},{"id":"2f630a89-c685-4f6a-b546-7def5daf147b","block_type":"box","text":"municipal bonds, bank loans, asset-backed and mortgage-related securities, interest rate swaps and other","page_number":118,"box":{"x":69,"y":105,"width":761,"height":11}},{"id":"53db95f0-6790-429a-8ca2-0d5d93cd37ab","block_type":"box","text":"derivatives. Instruments in which a Fund may have historically paid interest at floating rates based on LIBOR or may","page_number":118,"box":{"x":69,"y":120,"width":824,"height":12}},{"id":"4d1cfb10-2f9b-46b0-a815-51c0eb21dccc","block_type":"box","text":"have been subject to interest caps or floors based on LIBOR. The Funds and issuers of instruments in which a Fund","page_number":118,"box":{"x":69,"y":135,"width":825,"height":11}},{"id":"7831acae-78d1-4f6d-be5f-093dfbf485e9","block_type":"box","text":"invests may have also historically obtained financing at floating rates based on LIBOR. In connection with the global","page_number":118,"box":{"x":70,"y":150,"width":822,"height":12}},{"id":"a7075b69-a25e-4959-830d-1b32c123e4e4","block_type":"box","text":"transition away from LIBOR led by regulators and market participants as a result of benchmark reforms, LIBOR was","page_number":118,"box":{"x":68,"y":166,"width":822,"height":11}},{"id":"45b9252d-e549-42c9-88b7-a9d4767213a2","block_type":"box","text":"last published on a representative basis at the end of June 2023. Alternative Reference Rates to LIBOR have been","page_number":118,"box":{"x":70,"y":181,"width":817,"height":11}},{"id":"a040e578-f6f1-434a-987f-94314ad8d789","block_type":"box","text":"established in most major currencies and markets in these alternative rates are continuing to develop (","page_number":118,"box":{"x":69,"y":196,"width":736,"height":11}},{"id":"f7a4036b-e39d-4fa8-9f0a-860149318cdc","block_type":"box","text":"e.g.","page_number":118,"box":{"x":807,"y":197,"width":25,"height":10}},{"id":"9f07838f-aa5a-4415-b59d-d8cfa890fcea","block_type":"box","text":", SOFR for","page_number":118,"box":{"x":835,"y":196,"width":70,"height":10}},{"id":"c9a7b662-a620-470b-a5f7-47de2b62c967","block_type":"box","text":"USD-LIBOR and SONIA for GBP-LIBOR). While the transition from LIBOR has gone relatively smoothly, residual risks","page_number":118,"box":{"x":70,"y":211,"width":814,"height":11}},{"id":"ad01a22d-035e-4df7-8726-862a9c377407","block_type":"box","text":"associated with the transition may remain that may impact markets or particular investments and, as such, the full","page_number":118,"box":{"x":69,"y":226,"width":820,"height":11}},{"id":"e7c542e7-c27e-4e98-82d9-102cdfafb049","block_type":"box","text":"impact of the transition on the Funds or the financial instruments in which the Funds invest cannot yet be fully","page_number":118,"box":{"x":70,"y":241,"width":784,"height":11}},{"id":"353e7c7e-45b2-4b6a-afdc-f5b0eed00ef7","block_type":"box","text":"determined.","page_number":118,"box":{"x":69,"y":257,"width":84,"height":8}},{"id":"676fb877-d1b1-4c17-9e29-bd31584fdc55","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that are","page_number":118,"box":{"x":102,"y":279,"width":750,"height":11}},{"id":"6fe4bad8-ffb3-4927-b415-6427576d4e61","block_type":"box","text":"collateralized by U.S. Treasury securities. SOFR is calculated based on transaction-level repo data collected from","page_number":118,"box":{"x":69,"y":294,"width":803,"height":11}},{"id":"a066bd9e-31e9-43b7-83cd-35c86399ea74","block_type":"box","text":"various sources. For each trading day, SOFR is calculated as a volume-weighted median rate derived from such data.","page_number":118,"box":{"x":68,"y":309,"width":831,"height":11}},{"id":"25b52148-21e6-4a23-838f-cfc102090e42","block_type":"box","text":"Because SOFR is a financing rate based on overnight secured funding transactions, it differs fundamentally from","page_number":118,"box":{"x":70,"y":324,"width":801,"height":12}},{"id":"2a347c51-b6c9-4496-b580-492f26ab9e4d","block_type":"box","text":"LIBOR. LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short-term","page_number":118,"box":{"x":70,"y":339,"width":810,"height":12}},{"id":"99922b1e-2b92-4262-b4f3-16c8f952216c","block_type":"box","text":"maturities or tenors. It is a forward-looking rate reflecting expectations regarding interest rates for the applicable","page_number":118,"box":{"x":69,"y":355,"width":803,"height":11}},{"id":"c2656846-a2b9-471f-baad-3bf9379c3231","block_type":"box","text":"tenor. Thus, LIBOR is intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk.","page_number":118,"box":{"x":68,"y":370,"width":825,"height":11}},{"id":"e2deda81-1dfc-4f13-b9b6-e0b94a50341d","block_type":"box","text":"In contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as collateral. Thus, it is","page_number":118,"box":{"x":70,"y":385,"width":828,"height":11}},{"id":"5f9ff684-f117-4936-8313-62d0d6aec8e5","block_type":"box","text":"largely insensitive to credit-risk considerations and to short-term interest rate risks. SOFR is a transaction-based rate,","page_number":118,"box":{"x":70,"y":400,"width":838,"height":11}},{"id":"b1889c37-55e1-4e0d-bf72-813d14653d9c","block_type":"box","text":"and it has been more volatile than other benchmark or market rates, such as three-month LIBOR, during certain","page_number":118,"box":{"x":69,"y":415,"width":796,"height":11}},{"id":"0d8013e9-30df-4c06-ba17-879078ca2c4c","block_type":"box","text":"periods. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform","page_number":118,"box":{"x":70,"y":430,"width":836,"height":11}},{"id":"0b33a425-e1de-412c-8103-837f9a620bb6","block_type":"box","text":"in the same or similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based","page_number":118,"box":{"x":70,"y":445,"width":824,"height":11}},{"id":"cc52dcf1-0a67-4e99-9915-defaa159b0df","block_type":"box","text":"rates will be a suitable substitute for LIBOR. SOFR has a relatively limited history, having been first published in April","page_number":118,"box":{"x":69,"y":460,"width":830,"height":12}},{"id":"a7a29676-596f-4c4f-b2c0-45a4544e45d9","block_type":"box","text":"2018. The future performance of SOFR, and SOFR-based Reference Rates, cannot be predicted based on SOFR’s","page_number":118,"box":{"x":69,"y":475,"width":809,"height":11}},{"id":"7babc718-4401-43dc-9480-445244595fa4","block_type":"box","text":"history or otherwise. Levels of SOFR in the future may bear little or no relation to historical levels of SOFR, LIBOR or","page_number":118,"box":{"x":69,"y":491,"width":827,"height":11}},{"id":"3ea85ae1-8e0a-4518-a102-0a0641a116e3","block_type":"box","text":"other rates. There can also be no assurance that SOFR will not be discontinued or fundamentally altered in a manner","page_number":118,"box":{"x":69,"y":506,"width":835,"height":11}},{"id":"f1a70f45-e0e0-4f98-81a5-a7fccea869b8","block_type":"box","text":"that is materially adverse to the interests of the Fund.","page_number":118,"box":{"x":68,"y":521,"width":384,"height":11}},{"id":"12c331ed-4c54-405f-a1d5-e3db42b0724a","block_type":"box","text":"In addition, interest rates or other types of rates and indices which are classified as “benchmarks” have been","page_number":118,"box":{"x":102,"y":543,"width":782,"height":12}},{"id":"976144d4-705d-47ac-a666-8f5f2b3ce0e7","block_type":"box","text":"the subject of ongoing national and international regulatory reform, including under the European Union (“EU”)","page_number":118,"box":{"x":68,"y":559,"width":786,"height":11}},{"id":"ada33cb6-fefb-4db7-827c-9aea0e70e6ce","block_type":"box","text":"regulation on indices used as benchmarks in financial instruments and financial contracts (known as the","page_number":118,"box":{"x":69,"y":574,"width":746,"height":11}},{"id":"5d0b26da-021f-4976-8b03-b456cf8c075b","block_type":"box","text":"“Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United Kingdom (“UK”) law by virtue","page_number":118,"box":{"x":70,"y":589,"width":822,"height":11}},{"id":"1a469ff0-b93b-489a-8ff7-bcd1181760bf","block_type":"box","text":"of the EU (Withdrawal) Act 2018 (as amended), subject to amendments made by the Benchmarks (Amendment and","page_number":118,"box":{"x":69,"y":604,"width":821,"height":11}},{"id":"472beaf0-d16d-4997-9c89-f67698c56d23","block_type":"box","text":"Transitional Provision) (EU Exit) Regulations 2019 (SI 2019/657) and other statutory instruments. Following the","page_number":118,"box":{"x":68,"y":619,"width":799,"height":11}},{"id":"c2af04f7-760b-4bc8-bafa-5583e6162ad3","block_type":"box","text":"implementation of these reforms, the manner of administration of benchmarks has changed and may further change","page_number":118,"box":{"x":70,"y":634,"width":830,"height":12}},{"id":"2fd183d5-65e1-4ec1-b1b8-eaacc4205f63","block_type":"box","text":"in the future, with the result that relevant benchmarks may perform differently than in the past, the use of","page_number":118,"box":{"x":70,"y":649,"width":757,"height":12}},{"id":"b179852e-c048-4118-976f-1dcdd1ab487c","block_type":"box","text":"benchmarks that are not compliant with the new standards by certain supervised entities may be restricted, and","page_number":118,"box":{"x":69,"y":665,"width":802,"height":11}},{"id":"67d106cb-c7f2-400f-8d00-3fb548efc835","block_type":"box","text":"certain benchmarks may be eliminated entirely. Such changes could cause increased market volatility and disruptions","page_number":118,"box":{"x":69,"y":680,"width":840,"height":11}},{"id":"f88d0f2d-60b5-4842-92ff-c1349df3f70f","block_type":"box","text":"in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally, there could be other","page_number":118,"box":{"x":70,"y":695,"width":782,"height":11}},{"id":"c06582ce-ab86-4b1a-bfff-c60f21c200be","block_type":"box","text":"consequences which cannot be predicted.","page_number":118,"box":{"x":69,"y":710,"width":298,"height":11}},{"id":"adfcc943-95fc-4d1b-8b45-bc8f897f9960","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":118,"box":{"x":102,"y":733,"width":432,"height":11}},{"id":"9e9f0a00-8c63-4284-999b-a733215a998f","block_type":"box","text":"Under repurchase agreements and purchase and","page_number":118,"box":{"x":541,"y":733,"width":347,"height":11}},{"id":"65cddb7f-8c5f-44e3-963a-614bec45ea28","block_type":"box","text":"sale contracts, the other party agrees, upon entering into the contract with a Fund, to repurchase a security sold to","page_number":118,"box":{"x":69,"y":748,"width":821,"height":11}},{"id":"08e485f2-c6da-4ba1-b0a0-26b27a48bdd8","block_type":"box","text":"the Fund at a mutually agreed-upon time and price in a specified currency, thereby determining the yield during the","page_number":118,"box":{"x":68,"y":763,"width":815,"height":11}},{"id":"e577e4dd-5708-4be6-bbfa-1eb6c287b01a","block_type":"box","text":"term of the agreement.","page_number":118,"box":{"x":68,"y":778,"width":164,"height":11}},{"id":"334555c5-df2b-4f0a-8c39-ccb7b82b69f3","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements stipulate","page_number":118,"box":{"x":101,"y":801,"width":788,"height":11}},{"id":"62fb13f1-062a-4097-806d-46d24165aef6","block_type":"box","text":"that securities are owned by the Fund and the purchaser receives any interest on the security paid during the period.","page_number":118,"box":{"x":68,"y":816,"width":831,"height":11}},{"id":"3d26b7cf-bef4-40de-9331-0e4340f07fb1","block_type":"box","text":"In the case of repurchase agreements, the prices at which the trades are conducted do not reflect accrued interest","page_number":118,"box":{"x":70,"y":831,"width":821,"height":11}},{"id":"df8e8e5b-1855-4b43-bbe8-8584ac7d2c46","block_type":"box","text":"on the underlying obligation; whereas, in the case of purchase and sale contracts, the prices take into account","page_number":118,"box":{"x":69,"y":846,"width":790,"height":11}},{"id":"04b69d4f-17a8-495a-9341-9659aef9e8f0","block_type":"box","text":"accrued interest. A Fund may enter into “tri-party” repurchase agreements. In “tri-party” repurchase agreements, an","page_number":118,"box":{"x":69,"y":861,"width":827,"height":11}},{"id":"90175ffb-48d5-4a6d-bec6-5a48214bceb1","block_type":"box","text":"unaffiliated third-party custodian maintains accounts to hold collateral for the Fund and its counterparties and,","page_number":118,"box":{"x":69,"y":876,"width":788,"height":11}},{"id":"cac839be-2ffb-4f5f-b59f-3fa18c64cba4","block_type":"box","text":"therefore, the Fund may be subject to the credit risk of those custodians.","page_number":118,"box":{"x":68,"y":891,"width":522,"height":11}},{"id":"c0ffbdbd-6fe3-412c-96b8-53561785e255","block_type":"box","text":"II-69","page_number":118,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"f2fa7c9b-109d-4d80-b5fa-ea8a8a850f0b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":118,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"042664db-9572-4b8f-a7a8-9356614c2356","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate of return","page_number":119,"box":{"x":102,"y":45,"width":792,"height":11}},{"id":"5c316758-6453-4ea4-a75b-c0c0b60a5b03","block_type":"box","text":"insulated from market fluctuations during the term of the agreement, although such return may be affected by","page_number":119,"box":{"x":70,"y":60,"width":784,"height":11}},{"id":"83d67e39-4424-4eda-b4b8-1b71d4e1b50a","block_type":"box","text":"currency fluctuations. However, in the event of a default under a repurchase agreement or under a purchase and sale","page_number":119,"box":{"x":69,"y":75,"width":837,"height":11}},{"id":"57d4e270-2a92-4a3f-9fc2-e08d83bda6b6","block_type":"box","text":"contract, instead of the contractual fixed rate, the rate of return to the Fund would be dependent upon intervening","page_number":119,"box":{"x":69,"y":90,"width":812,"height":11}},{"id":"565f4f21-0002-46c8-b3f4-014595704959","block_type":"box","text":"fluctuations of the market values of the securities underlying the contract and the accrued interest on those","page_number":119,"box":{"x":68,"y":105,"width":770,"height":11}},{"id":"75607fff-b56b-4532-bbf6-daed60a64aaa","block_type":"box","text":"securities. In such event, the Fund would have rights against the seller for breach of contract with respect to any","page_number":119,"box":{"x":69,"y":120,"width":802,"height":12}},{"id":"ebf543cb-fffc-4d8a-8bb1-69639006fc2d","block_type":"box","text":"losses arising from market fluctuations following the default.","page_number":119,"box":{"x":70,"y":135,"width":430,"height":12}},{"id":"88bc0993-1d87-4150-be18-a4eb0d928114","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may have","page_number":119,"box":{"x":102,"y":158,"width":759,"height":11}},{"id":"1fd16110-1834-4156-b7ed-d1b0d426ed56","block_type":"box","text":"longer terms, and may be construed to be collateralized loans by the purchaser to the seller secured by the","page_number":119,"box":{"x":70,"y":173,"width":765,"height":11}},{"id":"97783861-6e1d-4b46-831f-5df364f5fc03","block_type":"box","text":"securities transferred to the purchaser. In the case of a repurchase agreement, as a purchaser, a Fund’s Manager or","page_number":119,"box":{"x":69,"y":188,"width":835,"height":12}},{"id":"a7b16e4c-e0cf-42b8-91c0-f97b74340875","block_type":"box","text":"sub-adviser will monitor the creditworthiness of the seller, and a Fund will require the seller to provide additional","page_number":119,"box":{"x":69,"y":203,"width":799,"height":11}},{"id":"9d83572f-eea7-41df-b4fc-b08cd4353022","block_type":"box","text":"collateral if the market value of the securities falls below the repurchase price at any time during the term of the","page_number":119,"box":{"x":69,"y":218,"width":801,"height":12}},{"id":"2748272e-d9e8-42b2-bbd6-ae9959311812","block_type":"box","text":"repurchase agreement. The Fund does not have this right to seek additional collateral as a purchaser in the case of","page_number":119,"box":{"x":69,"y":234,"width":826,"height":11}},{"id":"356e9a17-4b86-415a-bf5e-879e4c1f35d6","block_type":"box","text":"purchase and sale contracts. The Fund’s Manager or sub-adviser will mark-to-market daily the value of the securities.","page_number":119,"box":{"x":70,"y":249,"width":831,"height":11}},{"id":"94cf289e-fb0a-4908-8156-78da8fb2296a","block_type":"box","text":"Securities subject to repurchase agreements (other than tri-party repurchase agreements) and purchase and sale","page_number":119,"box":{"x":69,"y":264,"width":810,"height":11}},{"id":"a5c392a1-ba7d-4129-b3d3-37dd40d640ee","block_type":"box","text":"contracts will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry system","page_number":119,"box":{"x":69,"y":279,"width":829,"height":11}},{"id":"450b35c7-e275-478c-824a-b5165139351a","block_type":"box","text":"or by another authorized securities depository.","page_number":119,"box":{"x":69,"y":294,"width":329,"height":11}},{"id":"27f4caa0-52a1-4eb8-a1f7-21788ea86a9d","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan, the","page_number":119,"box":{"x":102,"y":317,"width":770,"height":11}},{"id":"0f295f43-dc82-454b-b3be-a24201e37cec","block_type":"box","text":"underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation to pay the","page_number":119,"box":{"x":69,"y":332,"width":805,"height":11}},{"id":"99ccbb88-b31a-440c-aa48-6442d65557c5","block_type":"box","text":"repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses in connection with","page_number":119,"box":{"x":69,"y":347,"width":819,"height":11}},{"id":"bd50633b-cdbf-4365-95ab-a46c71382637","block_type":"box","text":"disposition of the collateral. If the seller becomes insolvent and subject to liquidation or reorganization under","page_number":119,"box":{"x":69,"y":362,"width":778,"height":11}},{"id":"c3c8d9f5-94d5-4d0d-b52b-ffcd888deb96","block_type":"box","text":"applicable bankruptcy or other laws, a Fund’s ability to dispose of the underlying securities may be restricted. Finally,","page_number":119,"box":{"x":69,"y":377,"width":832,"height":12}},{"id":"6be93cea-4fc8-4591-bb2d-d31aa047f042","block_type":"box","text":"it is possible that a Fund may not be able to substantiate its interest in the underlying securities. To minimize this","page_number":119,"box":{"x":70,"y":393,"width":810,"height":11}},{"id":"b4b82c04-9739-4d1d-b27f-a9ef37b31f8a","block_type":"box","text":"risk, the securities underlying the repurchase agreement will be held by the applicable custodian at all times in an","page_number":119,"box":{"x":69,"y":408,"width":812,"height":11}},{"id":"aa315a18-73e6-4bd1-9f9e-8bef99d5e059","block_type":"box","text":"amount at least equal to the repurchase price, including accrued interest. If the seller fails to repurchase the","page_number":119,"box":{"x":69,"y":423,"width":778,"height":11}},{"id":"d61c9e19-4713-4418-86eb-2ca66fdf048c","block_type":"box","text":"securities, a Fund may suffer a loss to the extent proceeds from the sale of the underlying securities are less than","page_number":119,"box":{"x":69,"y":438,"width":817,"height":11}},{"id":"bd18dd8c-7d6b-46ac-97f4-6ef6723da1ca","block_type":"box","text":"the repurchase price.","page_number":119,"box":{"x":68,"y":453,"width":151,"height":11}},{"id":"92070a6c-aad9-4367-bb3f-9a129fb20415","block_type":"box","text":"In any repurchase transaction to which a Fund is a party, collateral for a repurchase agreement may include cash","page_number":119,"box":{"x":102,"y":475,"width":805,"height":12}},{"id":"31ffdf27-da39-428b-bfd0-cb6584284e3a","block_type":"box","text":"items and obligations issued by the U.S. Government or its agencies or instrumentalities. For certain Funds, however,","page_number":119,"box":{"x":70,"y":491,"width":837,"height":11}},{"id":"ef785d97-d7d2-43ab-893b-bfcf9cda5728","block_type":"box","text":"collateral may include instruments other than cash items and obligations issued by the U.S. Government or its","page_number":119,"box":{"x":69,"y":506,"width":788,"height":11}},{"id":"7bb01bed-c154-4964-b5e2-b13ce3558686","block_type":"box","text":"agencies or instrumentalities, including securities that the Fund could not hold directly under its investment","page_number":119,"box":{"x":69,"y":521,"width":767,"height":11}},{"id":"396c11a0-fbe2-4d8c-98e8-173a1ca74c45","block_type":"box","text":"strategies without the repurchase obligation.","page_number":119,"box":{"x":69,"y":536,"width":317,"height":11}},{"id":"055f589a-e466-4ca5-8b46-ebc9a3ab2535","block_type":"box","text":"The type of collateral underlying repurchase agreements may also pose certain risks for a Fund. Lower quality","page_number":119,"box":{"x":101,"y":559,"width":782,"height":11}},{"id":"c62abeda-6689-45b5-970f-348726a81183","block_type":"box","text":"collateral and collateral with longer maturities may be subject to greater price fluctuations than higher quality","page_number":119,"box":{"x":69,"y":574,"width":776,"height":11}},{"id":"7cbe1e87-060b-4943-9dbe-ee506148409d","block_type":"box","text":"collateral and collateral with shorter maturities. If the repurchase agreement counterparty were to default, lower","page_number":119,"box":{"x":69,"y":589,"width":799,"height":11}},{"id":"b8f04c14-c6c7-4704-b38c-d09b70abae1b","block_type":"box","text":"quality collateral may be more difficult to liquidate than higher quality collateral. Should the counterparty default and","page_number":119,"box":{"x":69,"y":604,"width":829,"height":11}},{"id":"b37db48b-f60e-4aa8-8c60-ac95c989ef67","block_type":"box","text":"the amount of collateral not be sufficient to cover the counterparty’s repurchase obligation, a Fund would retain the","page_number":119,"box":{"x":68,"y":619,"width":825,"height":11}},{"id":"d3d3a9f5-4e48-4e90-b63a-ea5929cf4728","block_type":"box","text":"status of an unsecured creditor of the counterparty (","page_number":119,"box":{"x":69,"y":634,"width":374,"height":11}},{"id":"a7e1dc72-54bc-46fd-b176-46b71801b6c2","block_type":"box","text":"i.e.","page_number":119,"box":{"x":445,"y":634,"width":20,"height":9}},{"id":"8b26473e-a781-4a6c-80bf-a92150b81da9","block_type":"box","text":", the position the Fund would normally be in if it were to hold,","page_number":119,"box":{"x":468,"y":634,"width":434,"height":11}},{"id":"95427373-1770-424e-ae77-15f88c045f98","block_type":"box","text":"pursuant to its investment policies, other unsecured debt securities of the defaulting counterparty) with respect to","page_number":119,"box":{"x":70,"y":649,"width":813,"height":12}},{"id":"751a917c-7e81-47e5-a228-00878aebd4e6","block_type":"box","text":"the amount of the shortfall. As an unsecured creditor, a Fund would be at risk of losing some or all of the principal","page_number":119,"box":{"x":68,"y":664,"width":816,"height":12}},{"id":"389cb29f-6d16-4f74-bfce-f47beb1cc9ea","block_type":"box","text":"and income involved in the transaction.","page_number":119,"box":{"x":69,"y":680,"width":278,"height":9}},{"id":"72ef3dee-1496-4d2f-9d23-307b9f4153a8","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and certain of","page_number":119,"box":{"x":102,"y":702,"width":800,"height":12}},{"id":"281d2385-02f9-4001-b1b1-4fb070bf4df1","block_type":"box","text":"their affiliates to include in certain financial contracts, including many repurchase agreements and purchase and sale","page_number":119,"box":{"x":68,"y":717,"width":840,"height":12}},{"id":"1e8cf8eb-f339-4cb2-9fea-f32866d08532","block_type":"box","text":"contracts, terms that delay or restrict the rights of counterparties, such as a Fund, to terminate such agreements,","page_number":119,"box":{"x":69,"y":732,"width":814,"height":12}},{"id":"a40cb316-4f70-4f47-a44a-f509f1ab7729","block_type":"box","text":"take foreclosure action, exercise other default rights or restrict transfers of credit support in the event that the","page_number":119,"box":{"x":68,"y":748,"width":790,"height":11}},{"id":"43e782e3-da90-420b-a144-b70f5d5f8591","block_type":"box","text":"counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible","page_number":119,"box":{"x":69,"y":763,"width":818,"height":11}},{"id":"2ceb168d-0dd4-48f0-9502-88a573876b26","block_type":"box","text":"that these requirements, as well as potential additional government regulation and other developments in the","page_number":119,"box":{"x":68,"y":778,"width":783,"height":11}},{"id":"1cd71726-c256-4244-8479-6bf9e38842df","block_type":"box","text":"market, could adversely affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale","page_number":119,"box":{"x":69,"y":793,"width":821,"height":11}},{"id":"610c7737-4d63-4d93-871c-606ab91517aa","block_type":"box","text":"contracts or to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":119,"box":{"x":69,"y":808,"width":800,"height":11}},{"id":"f5cccbe0-551a-48d3-8543-237dc77dbfca","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally cleared.","page_number":119,"box":{"x":69,"y":823,"width":796,"height":12}},{"id":"98e0d9f9-b3a9-48f9-9e43-a355971b4fbb","block_type":"box","text":"Compliance with these rules is expected to be required by the middle of 2027. Although the impact of these rules on","page_number":119,"box":{"x":69,"y":838,"width":834,"height":12}},{"id":"6e9b1341-98de-4081-871f-5ba79778112c","block_type":"box","text":"the Funds is difficult to predict, they may reduce the availability or increase the costs of such transactions and may","page_number":119,"box":{"x":68,"y":853,"width":824,"height":12}},{"id":"bdb38003-906e-47e0-8658-e83f5d571b10","block_type":"box","text":"adversely affect a Fund’s performance.","page_number":119,"box":{"x":69,"y":869,"width":279,"height":11}},{"id":"817b17a1-8bd7-4e2c-9e49-625077c50b9a","block_type":"box","text":"Restricted Securities.","page_number":119,"box":{"x":102,"y":891,"width":157,"height":9}},{"id":"ec879787-8864-4592-b680-3e7958002de3","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the Securities Act","page_number":119,"box":{"x":265,"y":891,"width":617,"height":12}},{"id":"6deeafd6-c71b-4145-9c74-610517da29ed","block_type":"box","text":"(“restricted securities”), which may include securities in private companies and Rule 144A Securities. Restricted","page_number":119,"box":{"x":69,"y":906,"width":801,"height":12}},{"id":"d8d2feb4-f5f4-4ed4-ac0e-fab06365ec92","block_type":"box","text":"II-70","page_number":119,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"ade74a7e-4eb5-4966-a473-8b585d697521","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":119,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"263360b7-934a-43d2-9086-e572affb3bb2","block_type":"box","text":"securities may be sold in private placement transactions between issuers and their purchasers, including through","page_number":120,"box":{"x":69,"y":45,"width":808,"height":11}},{"id":"ce8bf0fc-65f2-4a30-a6e3-37a7e2e345a8","block_type":"box","text":"private negotiated transactions between the issuer and their purchasers, such as the Funds, and may be neither","page_number":120,"box":{"x":70,"y":60,"width":802,"height":11}},{"id":"dbd3977c-d504-4437-afd6-6fd80edb67d8","block_type":"box","text":"listed on an exchange nor traded in other established markets. In many cases, privately placed securities may not be","page_number":120,"box":{"x":70,"y":75,"width":834,"height":11}},{"id":"670731ed-1ead-48f9-9f3c-5510640d0e97","block_type":"box","text":"freely transferable under the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of","page_number":120,"box":{"x":68,"y":90,"width":825,"height":11}},{"id":"b2d81a54-ad64-4018-95e3-d98617afef4e","block_type":"box","text":"these securities are new and complex, and trade only among institutions; the markets for these securities are still","page_number":120,"box":{"x":68,"y":105,"width":815,"height":11}},{"id":"22eecbae-dc02-4723-9085-2555db5c4d56","block_type":"box","text":"developing, and may not function as efficiently as established markets. Typically, investments in private companies","page_number":120,"box":{"x":69,"y":120,"width":821,"height":12}},{"id":"08bfcfb8-1122-4d0c-a2ae-9e901f5f6872","block_type":"box","text":"are in restricted securities that are not traded in public markets and subject to substantial holding periods, so that a","page_number":120,"box":{"x":69,"y":136,"width":831,"height":11}},{"id":"3488eab8-162d-4b41-ad08-28f6e6cd3089","block_type":"box","text":"Fund may not be able to resell some of its holdings for extended periods, which may be several years. There can be","page_number":120,"box":{"x":70,"y":150,"width":824,"height":12}},{"id":"2f35c0e4-cabd-4023-ad0d-ee5ec47ade3e","block_type":"box","text":"no assurance that a Fund will be able to realize the value of such restricted securities in a timely manner or at all. As","page_number":120,"box":{"x":69,"y":166,"width":834,"height":11}},{"id":"c4f0f9ef-b77d-43fc-9786-faa9404aa872","block_type":"box","text":"a result of the absence of a public trading market and the potential bespoke nature on certain transactions,","page_number":120,"box":{"x":69,"y":181,"width":769,"height":11}},{"id":"9335fbf9-fd24-4929-a8cb-3a110b2e6fdd","block_type":"box","text":"restricted securities may be deemed to be illiquid investments or less liquid investments and may be more difficult to","page_number":120,"box":{"x":69,"y":196,"width":838,"height":11}},{"id":"69e339d3-029d-42a9-9223-cea54c333438","block_type":"box","text":"value than publicly traded securities. To the extent that restricted securities may be resold in privately negotiated","page_number":120,"box":{"x":68,"y":211,"width":805,"height":11}},{"id":"955f1c2d-09d6-409b-8e80-ee405d45d35a","block_type":"box","text":"transactions, the prices realized from the sales, due to lack of liquidity, could be less than those originally paid by the","page_number":120,"box":{"x":68,"y":226,"width":840,"height":11}},{"id":"d2792284-7531-4c7f-b6fb-d6db24cd0810","block_type":"box","text":"Fund or less than their fair market value. The amount of any discount may vary depending on the security type, the","page_number":120,"box":{"x":70,"y":241,"width":815,"height":11}},{"id":"3bdc97c9-3f79-4c4f-9ea4-b4c91ac5f549","block_type":"box","text":"character of the issuer, which party (if any) will bear the expenses of registering the restricted security, and prevailing","page_number":120,"box":{"x":69,"y":256,"width":835,"height":12}},{"id":"c2d47dfb-b6bf-44fc-8ff1-6b471fcd48db","block_type":"box","text":"market conditions. In addition, issuers whose securities are not publicly traded or who are not otherwise publicly","page_number":120,"box":{"x":69,"y":272,"width":803,"height":11}},{"id":"31d5ae6a-0aa8-4356-a4bf-463bb2fa3d24","block_type":"box","text":"listed may not be subject to the disclosure and other investor protection requirements that may be applicable if their","page_number":120,"box":{"x":70,"y":286,"width":830,"height":12}},{"id":"b8451a6e-144b-4b8e-8242-6456abc74e6c","block_type":"box","text":"securities were publicly traded. If any privately placed securities held by a Fund are required to be registered under","page_number":120,"box":{"x":69,"y":302,"width":817,"height":11}},{"id":"00e4ed2b-4e15-499a-81b8-4437b1c310a5","block_type":"box","text":"the securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the expenses","page_number":120,"box":{"x":68,"y":317,"width":825,"height":11}},{"id":"465d51a5-3531-4661-9a8a-0168e907edd9","block_type":"box","text":"of registration. Where registration is required for restricted securities, a considerable time period may elapse","page_number":120,"box":{"x":69,"y":332,"width":777,"height":11}},{"id":"d9c1bc88-7654-4379-8a2f-b3ff5fe8937b","block_type":"box","text":"between the time the Fund decides to sell the security and the time it is actually permitted to sell the security under","page_number":120,"box":{"x":69,"y":347,"width":828,"height":11}},{"id":"ef61fd1f-1ef2-43fe-97cd-f6ce43e2410e","block_type":"box","text":"an effective registration statement. If during such period, adverse market conditions were to develop, the Fund might","page_number":120,"box":{"x":69,"y":362,"width":834,"height":11}},{"id":"a4a9de6f-681d-43d7-b7e4-024e5d799f80","block_type":"box","text":"obtain less favorable pricing terms than when it decided to sell the security. In addition, the Fund may be deemed to","page_number":120,"box":{"x":69,"y":377,"width":828,"height":12}},{"id":"bb3468db-939c-4c10-8fd5-07c55f10da5b","block_type":"box","text":"be an “underwriter” for purposes of the Securities Act when selling restricted securities. If so, the Fund may be liable","page_number":120,"box":{"x":69,"y":392,"width":836,"height":12}},{"id":"91266156-b663-4756-9df6-467ac7cb1777","block_type":"box","text":"to purchasers of the restricted securities if the registration statement prepared by the issuer, or the corresponding","page_number":120,"box":{"x":68,"y":407,"width":819,"height":12}},{"id":"68f62e01-8051-44c3-a67f-5db5e3e88447","block_type":"box","text":"prospectus, is materially inaccurate or misleading. Transactions in restricted securities may entail other transaction","page_number":120,"box":{"x":70,"y":423,"width":822,"height":11}},{"id":"34256239-cd9a-4f45-afe8-94eaecfba28f","block_type":"box","text":"costs that are higher than those for transactions in unrestricted securities. Certain of the Fund’s investments in","page_number":120,"box":{"x":69,"y":438,"width":798,"height":11}},{"id":"912a2121-b512-457f-9672-4e88419da4f2","block_type":"box","text":"private placements may consist of direct investments and may include investments in smaller, less seasoned","page_number":120,"box":{"x":70,"y":453,"width":780,"height":11}},{"id":"8e094ed2-a7ba-434d-8ad9-4b8519d86595","block_type":"box","text":"issuers, which may involve greater risks. Issuers of restricted securities may not be subject to SEC reporting","page_number":120,"box":{"x":70,"y":468,"width":773,"height":11}},{"id":"fd3911c1-d54d-496f-8e16-f7881f2e20ec","block_type":"box","text":"requirements, may not be required to maintain their accounting records in accordance with generally accepted","page_number":120,"box":{"x":69,"y":483,"width":784,"height":11}},{"id":"51e283dc-0039-4127-aeba-fdfa63ef4c66","block_type":"box","text":"accounting principles, and may not be required to maintain effective internal controls over financial reporting. As a","page_number":120,"box":{"x":69,"y":498,"width":816,"height":11}},{"id":"ebf714cd-3c39-4cb3-9715-1f551554f022","block_type":"box","text":"result, BlackRock may not have timely or accurate information about the business, financial condition and results of","page_number":120,"box":{"x":69,"y":513,"width":828,"height":11}},{"id":"586ae78c-6cde-49bc-8825-86b24197e736","block_type":"box","text":"operations of such issuers, and investments in securities of such issuers may involve a high degree of business and","page_number":120,"box":{"x":69,"y":528,"width":831,"height":12}},{"id":"30a6a962-0650-4172-a777-d17dee231da7","block_type":"box","text":"financial risk and may result in substantial losses to the Fund. Such issuers may also have limited product lines,","page_number":120,"box":{"x":68,"y":543,"width":804,"height":12}},{"id":"d1123a1f-4666-4528-b8a8-6e9024d4d3c4","block_type":"box","text":"markets or financial resources, or they may be dependent on a limited management group.","page_number":120,"box":{"x":69,"y":559,"width":647,"height":11}},{"id":"fa455647-6115-43ca-9daf-3f60ebe1f1ce","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":120,"box":{"x":102,"y":581,"width":714,"height":11}},{"id":"154c93e5-0e08-475b-9a43-ce9073c74b53","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced proportionately as the","page_number":120,"box":{"x":70,"y":597,"width":823,"height":11}},{"id":"a44eeed9-1bb1-49c0-9227-6d8a9cf20782","block_type":"box","text":"Fund’s net assets grow from new or additional investments made in the Fund by other shareholders. The issuer of a","page_number":120,"box":{"x":70,"y":612,"width":826,"height":11}},{"id":"8deea5fa-f7f2-46ea-be92-afbdea188d8f","block_type":"box","text":"private placement may later register those shares for public sale in an IPO, but there is no guarantee that an IPO will","page_number":120,"box":{"x":70,"y":627,"width":830,"height":11}},{"id":"c3b934e8-5e93-463d-ba88-cdd6ef716b81","block_type":"box","text":"ever be completed. Even after an IPO, there may be a limited trading market for securities of that issuer, including","page_number":120,"box":{"x":69,"y":642,"width":812,"height":11}},{"id":"0286939b-67a9-4622-a408-61eed42f40cb","block_type":"box","text":"any direct investment by a Fund, or the Fund may be subject to contractual limitations on its ability to resell its","page_number":120,"box":{"x":69,"y":657,"width":787,"height":11}},{"id":"964c76dc-14e4-4595-bf6f-f4b10cfacc61","block_type":"box","text":"existing securities following an IPO. The inability of an applicable issuer of a restricted security to complete an IPO or","page_number":120,"box":{"x":69,"y":672,"width":833,"height":11}},{"id":"b673051a-6ab9-4f1b-8a8e-006bd104159f","block_type":"box","text":"offer other liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":120,"box":{"x":69,"y":687,"width":759,"height":11}},{"id":"052b601a-9a5b-4a39-9a80-1761fe880484","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making investments in","page_number":120,"box":{"x":70,"y":702,"width":833,"height":12}},{"id":"56091e3b-6810-4dfc-96bf-47062a61c936","block_type":"box","text":"such securities, a Fund may obtain access to material nonpublic information, which may restrict the Fund’s ability to","page_number":120,"box":{"x":69,"y":717,"width":828,"height":12}},{"id":"d05a0c93-97de-44d4-8c28-2b39d759b850","block_type":"box","text":"conduct portfolio transactions in such securities. The activity of identifying, completing, and realizing upon attractive","page_number":120,"box":{"x":69,"y":732,"width":827,"height":12}},{"id":"1b6e72c2-c25e-406f-8d2f-d47dce01660a","block_type":"box","text":"investments in restricted securities is highly competitive and involves a high degree of uncertainty. A Fund will be","page_number":120,"box":{"x":70,"y":748,"width":804,"height":11}},{"id":"1e69d30e-c517-4513-990c-3483e1d936c7","block_type":"box","text":"competing for investments against other similarly situated investors. It is possible that competition for appropriate","page_number":120,"box":{"x":69,"y":763,"width":816,"height":11}},{"id":"c0e98253-5d9a-4607-90f3-8f36ca52faae","block_type":"box","text":"investment opportunities may increase, thus potentially reducing the number of investment opportunities available to","page_number":120,"box":{"x":70,"y":778,"width":835,"height":11}},{"id":"5b11f9ae-f3c0-47e3-bef3-8b3cf528d302","block_type":"box","text":"a Fund and adversely affecting the terms upon which investments can be made. There is no assurance that","page_number":120,"box":{"x":69,"y":793,"width":768,"height":11}},{"id":"48adf02e-e95b-4465-86bd-66099b96efa9","block_type":"box","text":"investment opportunities for restricted securities will be available at any given time or at a level desired by a Fund,","page_number":120,"box":{"x":70,"y":808,"width":815,"height":11}},{"id":"8f6e8710-a3d0-4cc4-bf0b-099249d16d81","block_type":"box","text":"especially as that Fund grows in size.","page_number":120,"box":{"x":69,"y":823,"width":264,"height":12}},{"id":"5f9f986d-e62e-409d-b84d-3ae82cf9e22d","block_type":"box","text":"There may not be a readily available market value for a Fund’s restricted securities (in particular, restricted","page_number":120,"box":{"x":101,"y":846,"width":762,"height":11}},{"id":"7f29bd72-74c2-4478-a2b0-ccdd17423f87","block_type":"box","text":"securities issued by private companies) and thus they may be considered “illiquid”. Each Fund values restricted","page_number":120,"box":{"x":69,"y":861,"width":795,"height":11}},{"id":"e78472f8-883e-4c93-9bda-63cea975a3fb","block_type":"box","text":"securities in accordance with BlackRock’s valuation policies and procedures, which are designed to value","page_number":120,"box":{"x":69,"y":876,"width":751,"height":11}},{"id":"0a1892b5-e49b-45b2-b000-f5b80b0fc3f2","block_type":"box","text":"investments such that they accurately reflect fair value. Due to the inherent uncertainty and subjectivity of","page_number":120,"box":{"x":70,"y":891,"width":755,"height":11}},{"id":"c73042c6-b484-4e46-a8ba-6a2eee6ee749","block_type":"box","text":"determining the fair value of investments that do not have a readily available market value, the fair value of a Fund’s","page_number":120,"box":{"x":69,"y":906,"width":830,"height":12}},{"id":"eaf52c98-8e40-4527-87cb-2f5eece7b067","block_type":"box","text":"II-71","page_number":120,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"3c6e7654-fcad-43d8-ad78-df7e895a66c0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":120,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"dc5529a0-8c9f-44cb-98a1-e350dada78a6","block_type":"box","text":"private investments may differ significantly from the values that would have been used had a readily available market","page_number":121,"box":{"x":70,"y":45,"width":835,"height":11}},{"id":"c5829fe8-87bf-4c7c-8d83-81222eec2530","block_type":"box","text":"value existed for such investments and may differ materially from the amounts the Fund may realize on any","page_number":121,"box":{"x":68,"y":60,"width":766,"height":11}},{"id":"8ffb6c97-b91e-4dc2-89a9-6c42b233cba2","block_type":"box","text":"dispositions of such investments. Differences in the value of the Fund’s private investments could result in the","page_number":121,"box":{"x":69,"y":75,"width":792,"height":11}},{"id":"1c84a539-c9ad-443b-be1b-4e0713b670f1","block_type":"box","text":"Fund’s shareholder transactions being effected at a NAV that does not accurately reflect the underlying value of the","page_number":121,"box":{"x":70,"y":90,"width":821,"height":11}},{"id":"e59672df-5925-4e6c-85a5-ea19ede3217d","block_type":"box","text":"Fund’s portfolio, potentially resulting in the dilution of shareholder interests and increasing opportunities for","page_number":121,"box":{"x":70,"y":105,"width":771,"height":11}},{"id":"dfa745e7-0706-4dfe-8805-2b1d7a1e426f","block_type":"box","text":"shareholder arbitrage. The values used by the Fund to price its restricted securities may also differ from those used","page_number":121,"box":{"x":69,"y":120,"width":826,"height":12}},{"id":"8acffec3-905e-446d-8e4d-0ee9a19c1a19","block_type":"box","text":"by other investment companies and investors to price the same restricted securities. In addition, the impact of","page_number":121,"box":{"x":69,"y":135,"width":790,"height":11}},{"id":"41c91e19-f3b8-4665-ac85-6a3cb45a0a6d","block_type":"box","text":"changes in the market environment and other events on the fair values of a Fund’s investments that have no readily","page_number":121,"box":{"x":69,"y":150,"width":828,"height":12}},{"id":"d7f198c5-158b-4b77-89ce-68c6f50e4ca0","block_type":"box","text":"available market values may differ from the impact of such changes on the readily available market values for the","page_number":121,"box":{"x":69,"y":166,"width":810,"height":11}},{"id":"b48e504c-38ae-4529-8d14-4197fdd031d1","block_type":"box","text":"Fund’s other investments. A Fund’s NAV could be adversely affected if the Fund’s determinations regarding the fair","page_number":121,"box":{"x":70,"y":181,"width":818,"height":11}},{"id":"d37f54ea-56ba-49cf-bea9-1c19979a0d76","block_type":"box","text":"value of the Fund’s investments were materially higher than the investment’s actual market or fair value or the values","page_number":121,"box":{"x":68,"y":196,"width":839,"height":11}},{"id":"1ef07c87-81f5-4bcb-98c0-096d994a734f","block_type":"box","text":"that the Fund ultimately realizes upon the disposal of such investments.","page_number":121,"box":{"x":68,"y":211,"width":514,"height":11}},{"id":"556356b0-85af-45c4-b67e-9f44a0efa49e","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":121,"box":{"x":102,"y":234,"width":385,"height":11}},{"id":"0324ac50-166d-484d-94eb-0d4beb570b51","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":121,"box":{"x":102,"y":257,"width":246,"height":10}},{"id":"994b8b67-0ccf-41c7-b67f-39f4c132c02d","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the same parties","page_number":121,"box":{"x":354,"y":257,"width":548,"height":11}},{"id":"09b6726b-9e12-42e1-b645-7a370d6836b6","block_type":"box","text":"with whom it may enter into repurchase agreements. Under a reverse repurchase agreement, a Fund sells securities","page_number":121,"box":{"x":68,"y":272,"width":830,"height":11}},{"id":"ae863260-8271-463f-a394-1ac051172078","block_type":"box","text":"to another party and agrees to repurchase them at a particular date and price. A Fund may enter into a reverse","page_number":121,"box":{"x":68,"y":287,"width":793,"height":11}},{"id":"db6a54fb-4cbb-495e-909d-3c92f33bd376","block_type":"box","text":"repurchase agreement when it is anticipated that the interest income to be earned from the investment of the","page_number":121,"box":{"x":69,"y":302,"width":784,"height":11}},{"id":"172093e0-227f-4c18-846a-c6ad1ccb92af","block_type":"box","text":"proceeds of the transaction is greater than the interest expense of the transaction.","page_number":121,"box":{"x":70,"y":317,"width":591,"height":11}},{"id":"9aee913b-d0b0-4876-ba00-4047c4f2dccb","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":121,"box":{"x":101,"y":339,"width":730,"height":12}},{"id":"78c16218-f6d5-445d-83c1-3631a55ae923","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the investment","page_number":121,"box":{"x":70,"y":355,"width":822,"height":11}},{"id":"8394cc7b-ce2a-46c9-8ad0-18ce08977794","block_type":"box","text":"of the proceeds will be less than the interest expense, (ii) the market value of the securities retained in lieu of sale","page_number":121,"box":{"x":69,"y":370,"width":821,"height":11}},{"id":"344b5be9-02cb-40b9-a220-f37b835527fd","block_type":"box","text":"by a Fund may decline below the price of the securities the Fund has sold but is obligated to repurchase, (iii) the","page_number":121,"box":{"x":69,"y":385,"width":801,"height":11}},{"id":"3f715d60-2fac-4a8b-bd82-4601eebc7c67","block_type":"box","text":"market value of the securities sold will decline below the price at which the Fund is required to repurchase them and","page_number":121,"box":{"x":69,"y":400,"width":830,"height":11}},{"id":"6706d96b-67b9-4752-990e-96980411980b","block_type":"box","text":"(iv) the securities will not be returned to the Fund.","page_number":121,"box":{"x":69,"y":415,"width":354,"height":11}},{"id":"56bbc410-5495-447e-9e9d-af7df3bdcc76","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes","page_number":121,"box":{"x":102,"y":438,"width":769,"height":11}},{"id":"4c27fb12-532b-43d2-b2a0-7cafca11ba45","block_type":"box","text":"insolvent, such buyer or its trustee or receiver may receive an extension of time to determine whether to enforce a","page_number":121,"box":{"x":70,"y":453,"width":815,"height":11}},{"id":"43892c6d-c031-498a-ad55-56e03b293e54","block_type":"box","text":"Fund’s obligations to repurchase the securities and the Fund’s use of the proceeds of the reverse repurchase","page_number":121,"box":{"x":70,"y":468,"width":782,"height":11}},{"id":"85e6e035-aa7c-4309-a86a-bb3d61df9719","block_type":"box","text":"agreement may effectively be restricted pending such decision.","page_number":121,"box":{"x":69,"y":483,"width":449,"height":11}},{"id":"e81416c9-a938-4e04-acca-2a6ca83a6b22","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase agreements and","page_number":121,"box":{"x":102,"y":506,"width":794,"height":11}},{"id":"705d1d3e-05f2-4bcd-b6ea-18e946049c49","block_type":"box","text":"similar financing transactions (","page_number":121,"box":{"x":69,"y":521,"width":218,"height":11}},{"id":"ac6fd10c-5740-43ab-8095-5d93edd9927a","block_type":"box","text":"e.g.","page_number":121,"box":{"x":289,"y":522,"width":24,"height":10}},{"id":"09e87819-7f06-400f-b4ad-6d6ab5cb5be2","block_type":"box","text":", recourse and non-recourse tender option bonds, borrowed bonds) notwithstanding","page_number":121,"box":{"x":316,"y":521,"width":594,"height":11}},{"id":"feaf3693-2c19-4b53-aab1-e380b295eba4","block_type":"box","text":"the limitation on the issuance of senior securities in Section 18 of the Investment Company Act, provided that the","page_number":121,"box":{"x":68,"y":536,"width":813,"height":11}},{"id":"d44af100-6025-465f-bdd8-3d26fca641a6","block_type":"box","text":"Fund either (i) complies with the 300% asset coverage ratio with respect to all such transactions and any other","page_number":121,"box":{"x":70,"y":551,"width":789,"height":11}},{"id":"ef9e3e15-5717-48b7-9c96-2809ecb88aa9","block_type":"box","text":"borrowings in the aggregate, or (ii) treats all such transactions as Derivatives Transactions under Rule 18f-4. See “—","page_number":121,"box":{"x":69,"y":566,"width":836,"height":11}},{"id":"5f46ab83-1141-42f9-942e-284243326e3d","block_type":"box","text":"Derivatives — Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also","page_number":121,"box":{"x":70,"y":581,"width":824,"height":12}},{"id":"e2c4237f-be71-4da2-8e04-23dc61b450be","block_type":"box","text":"finalized rules that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":121,"box":{"x":68,"y":596,"width":758,"height":12}},{"id":"b316e41b-04b2-4b1f-8eee-4dc4f3d9e258","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the middle of 2027.","page_number":121,"box":{"x":69,"y":612,"width":822,"height":11}},{"id":"7e95775d-4954-4bf6-ab11-a754ea9a5e41","block_type":"box","text":"Although the impact of these rules on the Funds is difficult to predict, they may reduce the availability or increase the","page_number":121,"box":{"x":68,"y":627,"width":838,"height":11}},{"id":"aaf55b5e-428f-4d27-b92e-8a716059405d","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":121,"box":{"x":69,"y":642,"width":538,"height":11}},{"id":"3732a503-7451-41c7-9b41-d01637469f76","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated counterparties","page_number":121,"box":{"x":101,"y":665,"width":780,"height":11}},{"id":"4fd07498-c56f-41d6-9cd2-627d6ba59c58","block_type":"box","text":"and certain of their affiliates to include in certain financial contracts, including many reverse repurchase agreements,","page_number":121,"box":{"x":69,"y":680,"width":838,"height":11}},{"id":"0e29f461-60f4-4df0-9095-f302b1e6af8f","block_type":"box","text":"terms that delay or restrict the rights of counterparties, such as a Fund, to terminate such agreements, take","page_number":121,"box":{"x":68,"y":695,"width":775,"height":11}},{"id":"e599bdec-23b7-4464-b710-7103ebbf3989","block_type":"box","text":"foreclosure action, exercise other default rights or restrict transfers of credit support in the event that the","page_number":121,"box":{"x":68,"y":710,"width":754,"height":11}},{"id":"aae36032-5cc8-41a2-9d86-947c04a777ae","block_type":"box","text":"counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible","page_number":121,"box":{"x":69,"y":725,"width":818,"height":11}},{"id":"00fbcb08-6675-4261-b305-49e654cb83d4","block_type":"box","text":"that these requirements, as well as potential additional government regulation and other developments in the","page_number":121,"box":{"x":68,"y":740,"width":783,"height":11}},{"id":"722f4419-8654-4901-8a9b-876ecad9526e","block_type":"box","text":"market, could adversely affect a Fund’s ability to terminate existing reverse repurchase agreements or to realize","page_number":121,"box":{"x":69,"y":755,"width":800,"height":11}},{"id":"c7e395ed-fc6e-4927-b8a1-1372ea59cea2","block_type":"box","text":"amounts to be received under such agreements.","page_number":121,"box":{"x":69,"y":771,"width":345,"height":11}},{"id":"21790f6b-4320-4cc7-8eba-b74cea5267e8","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":121,"box":{"x":102,"y":793,"width":316,"height":11}},{"id":"d8a512af-e464-45d2-8fa7-1af648abaa94","block_type":"box","text":"Certain Funds may participate in rights offerings and may purchase","page_number":121,"box":{"x":424,"y":793,"width":481,"height":11}},{"id":"cc497773-a9e0-4bb3-a4a6-55c0ccb0f80e","block_type":"box","text":"warrants, which are privileges issued by corporations enabling the owners to subscribe to and purchase a specified","page_number":121,"box":{"x":68,"y":808,"width":822,"height":11}},{"id":"82c3ce65-f67d-418f-bcad-d60a9c9936b9","block_type":"box","text":"number of shares of the corporation at a specified price during a specified period of time. Subscription rights","page_number":121,"box":{"x":69,"y":823,"width":776,"height":12}},{"id":"129a99c3-2f43-47a2-86f4-8db98f00713c","block_type":"box","text":"normally have a short life span to expiration. The purchase of rights or warrants involves the risk that a Fund could","page_number":121,"box":{"x":69,"y":838,"width":817,"height":12}},{"id":"9ff374c7-ad94-4b96-87ce-c911527a491e","block_type":"box","text":"lose the purchase value of a right or warrant if the right to subscribe to additional shares is not exercised prior to the","page_number":121,"box":{"x":70,"y":853,"width":833,"height":12}},{"id":"09d1030f-da2a-4ae9-a172-f8369cb9908a","block_type":"box","text":"rights’ and warrants’ expiration. Also, the purchase of rights and/or warrants involves the risk that the effective price","page_number":121,"box":{"x":69,"y":869,"width":835,"height":11}},{"id":"8fb525fc-69a2-4710-a508-0492065b9111","block_type":"box","text":"paid for the right and/or warrant added to the subscription price of the related security may exceed the value of the","page_number":121,"box":{"x":70,"y":884,"width":821,"height":11}},{"id":"0b6061c7-df5c-482e-a144-bde9dcd5ba2b","block_type":"box","text":"subscribed security’s market price such as when there is no movement in the level of the underlying security. Buying","page_number":121,"box":{"x":69,"y":899,"width":830,"height":11}},{"id":"d332be93-1419-4dcc-9f6b-320690748cc6","block_type":"box","text":"II-72","page_number":121,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"504be43d-46ef-4ec5-85a2-8f54adaacf76","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":121,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8effd28a-eca9-4596-846c-9f23535f6863","block_type":"box","text":"a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder has no voting or","page_number":122,"box":{"x":69,"y":45,"width":777,"height":11}},{"id":"b5535100-bd70-45df-8307-b5b6a88e6355","block_type":"box","text":"dividend rights with respect to the underlying stock. A warrant does not carry any right to assets of the issuer, and for","page_number":122,"box":{"x":69,"y":60,"width":839,"height":11}},{"id":"1b030433-a774-4d9d-b6b4-a76c4637d737","block_type":"box","text":"this reason investments in warrants may be more speculative than other equity-based investments.","page_number":122,"box":{"x":68,"y":75,"width":708,"height":11}},{"id":"3c4034ff-e306-4e96-9162-acc204a9b1ce","block_type":"box","text":"Rule 144A Securities.","page_number":122,"box":{"x":102,"y":98,"width":159,"height":9}},{"id":"a752705c-166b-4ba7-8319-fafacfa53bdf","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":122,"box":{"x":266,"y":98,"width":560,"height":11}},{"id":"fb559537-3293-4225-a5ab-5c783d28d265","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":122,"box":{"x":70,"y":113,"width":741,"height":11}},{"id":"ade1919a-f87d-4af2-beb9-d4584f28f7cc","block_type":"box","text":"Securities Lending.","page_number":122,"box":{"x":101,"y":135,"width":139,"height":11}},{"id":"3994e120-4d8d-41e3-98eb-b14153e08ec7","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock determines to","page_number":122,"box":{"x":247,"y":135,"width":645,"height":11}},{"id":"2c0f1930-1b0b-46cc-aff8-880f255e5a58","block_type":"box","text":"be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide collateral that is maintained in","page_number":122,"box":{"x":69,"y":150,"width":825,"height":12}},{"id":"73e93083-7eff-4617-8135-320c6aee88cf","block_type":"box","text":"an amount at least equal to the current market value of the securities loaned. No securities loan shall be made on","page_number":122,"box":{"x":69,"y":166,"width":817,"height":11}},{"id":"68b3e4be-7265-446f-9200-54a83f047478","block_type":"box","text":"behalf of a Fund if, as a result, the aggregate value of all securities loans of the particular Fund exceeds one-third of","page_number":122,"box":{"x":69,"y":181,"width":831,"height":11}},{"id":"13b0bd40-73a1-481f-b61e-de9224f68dd8","block_type":"box","text":"the value of such Fund’s total assets (including the value of the collateral received). A Fund may terminate a loan at","page_number":122,"box":{"x":68,"y":196,"width":827,"height":11}},{"id":"0b62837a-5550-4860-82df-ec12abff44b8","block_type":"box","text":"any time and obtain the return of the securities loaned. Each Fund receives, by way of substitute payment, the value","page_number":122,"box":{"x":69,"y":211,"width":829,"height":11}},{"id":"d12c2903-a7c1-4b13-96fc-8e6e920fccc0","block_type":"box","text":"of any interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise received if","page_number":122,"box":{"x":69,"y":226,"width":838,"height":11}},{"id":"ead616e3-8fa4-4f98-a609-434f2dabdf88","block_type":"box","text":"the securities were not on loan.","page_number":122,"box":{"x":68,"y":241,"width":225,"height":9}},{"id":"9ac25656-07ec-45eb-8993-ad863f3de809","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee based on the","page_number":122,"box":{"x":101,"y":264,"width":799,"height":11}},{"id":"d39ec64d-8a4c-41ce-99ba-13fb28aadf2f","block_type":"box","text":"amount of cash collateral. The Funds are compensated by any positive difference between the amount earned on the","page_number":122,"box":{"x":69,"y":279,"width":835,"height":11}},{"id":"52b6e71c-88d3-4979-b1a5-f7ed1e1fad27","block_type":"box","text":"reinvestment of cash collateral and the fee paid to the borrower. In the case of collateral other than cash, a Fund is","page_number":122,"box":{"x":69,"y":294,"width":824,"height":11}},{"id":"ed4a455a-0f54-488d-871a-306b8749fc5d","block_type":"box","text":"compensated by a fee paid by the borrower equal to a percentage of the market value of the loaned securities. Any","page_number":122,"box":{"x":69,"y":309,"width":821,"height":11}},{"id":"e9d03928-c891-4af1-bee2-a82bea452f06","block_type":"box","text":"cash collateral received by the Fund for such loans, and uninvested cash, may be reinvested in certain short-term","page_number":122,"box":{"x":69,"y":324,"width":810,"height":11}},{"id":"5dedb212-587e-4172-b4b3-ef1c4039895b","block_type":"box","text":"instruments either directly on behalf of the Fund or through one or more joint accounts or money market funds,","page_number":122,"box":{"x":70,"y":339,"width":789,"height":12}},{"id":"b774eb37-322c-4eb4-bc2d-6be65852babd","block_type":"box","text":"including those affiliated with BlackRock; such investments are subject to investment risk.","page_number":122,"box":{"x":70,"y":355,"width":643,"height":11}},{"id":"fed8a79d-f35f-4b2f-a98c-a45ff54bc36f","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":122,"box":{"x":102,"y":377,"width":568,"height":12}},{"id":"6b075bc0-c7f4-46dd-92f6-816fd12e34c1","block_type":"box","text":"i.e.","page_number":122,"box":{"x":672,"y":377,"width":20,"height":9}},{"id":"95f6f910-3bc5-45fa-92d4-3df96db6fe4a","block_type":"box","text":", the risk of losses resulting","page_number":122,"box":{"x":695,"y":377,"width":198,"height":12}},{"id":"d8298b2d-d2d3-428e-ac38-2151ac88f5e3","block_type":"box","text":"from problems in the settlement and accounting process), “gap” risk (","page_number":122,"box":{"x":68,"y":392,"width":501,"height":12}},{"id":"6bbb7971-3f3e-4cf8-b877-0407ca06bf0f","block_type":"box","text":"i.e.","page_number":122,"box":{"x":571,"y":393,"width":20,"height":8}},{"id":"4dc9d7b0-2774-4c8c-babf-e50859000fd2","block_type":"box","text":", the risk of a mismatch between the return","page_number":122,"box":{"x":594,"y":392,"width":307,"height":11}},{"id":"bfce60b4-9f1e-403d-98df-af99720d17d7","block_type":"box","text":"on cash collateral reinvestments and the fees each Fund has agreed to pay a borrower), foreign exchange risk (","page_number":122,"box":{"x":69,"y":407,"width":794,"height":12}},{"id":"ccd62b43-f831-48dd-842f-e6bbbfaacddf","block_type":"box","text":"i.e.","page_number":122,"box":{"x":865,"y":408,"width":20,"height":8}},{"id":"bd319a29-dbb5-4c95-ae42-0b281decac50","block_type":"box","text":",","page_number":122,"box":{"x":888,"y":415,"width":2,"height":3}},{"id":"5556af33-98d4-454f-a543-8351b9be2c89","block_type":"box","text":"the risk of a shortfall at default when a cash collateral investment is denominated in a currency other than the","page_number":122,"box":{"x":68,"y":423,"width":788,"height":11}},{"id":"c6c18242-e089-4d79-a82f-0a97877dfbff","block_type":"box","text":"currency of the assets being loaned due to movements in foreign exchange rates), and credit, legal, counterparty and","page_number":122,"box":{"x":69,"y":438,"width":837,"height":11}},{"id":"eb462169-569f-4d6f-8310-8bb9f8c26639","block_type":"box","text":"market risks (including the risk that market events, including but not limited to corporate actions, could lead a Fund","page_number":122,"box":{"x":69,"y":453,"width":822,"height":11}},{"id":"7ded7f2d-b4cc-421e-a52b-fb28ccaa4d2b","block_type":"box","text":"to lend securities that are trading at a premium due to increased demand, or to recall loaned securities or to lend","page_number":122,"box":{"x":68,"y":468,"width":811,"height":11}},{"id":"cb536a08-6fcc-48e5-8f06-37a5b7ba04b1","block_type":"box","text":"less or not at all, which could lead to reduced securities lending revenue). If a Fund were to lend out securities that","page_number":122,"box":{"x":70,"y":483,"width":820,"height":11}},{"id":"3ff6e789-280f-459b-908b-fbb74fa20bfb","block_type":"box","text":"are subject to a corporate action and commit to the borrower a particular election as determined by the Fund’s","page_number":122,"box":{"x":69,"y":498,"width":790,"height":11}},{"id":"6d008729-3a64-46b7-ac0d-403631760ad4","block_type":"box","text":"investment adviser, the benefit the Fund would receive in respect of committing to such election may or may not be","page_number":122,"box":{"x":70,"y":513,"width":820,"height":12}},{"id":"961a8c7d-79b3-4877-a062-28cf7ca025a8","block_type":"box","text":"less than the benefit the Fund would have received from making a different election in such corporate action. If a","page_number":122,"box":{"x":70,"y":528,"width":805,"height":12}},{"id":"20932000-d4be-477d-b820-31cb3d795c40","block_type":"box","text":"securities lending counterparty were to default, a Fund would be subject to the risk of a possible delay in receiving","page_number":122,"box":{"x":69,"y":543,"width":816,"height":12}},{"id":"0705ff37-cf74-4ce2-8ff3-cdb77cf8dea3","block_type":"box","text":"collateral or in recovering the loaned securities, or to a possible loss of rights in the collateral. In the event a","page_number":122,"box":{"x":69,"y":559,"width":775,"height":11}},{"id":"22930e57-2d0d-4651-a219-bdb1c0416f9c","block_type":"box","text":"borrower does not return a Fund’s securities as agreed, the Fund’s ability to participate in a corporate action event","page_number":122,"box":{"x":69,"y":574,"width":821,"height":11}},{"id":"97f7a4c3-ab30-4516-892e-8480b9603a07","block_type":"box","text":"may be impacted, or the Fund may experience losses if the proceeds received from liquidating the collateral do not at","page_number":122,"box":{"x":69,"y":589,"width":838,"height":11}},{"id":"1deb2450-e2a6-4017-a013-694b8067e51d","block_type":"box","text":"least equal the value of the loaned security at the time the collateral is liquidated, plus the transaction costs incurred","page_number":122,"box":{"x":70,"y":604,"width":837,"height":11}},{"id":"66af9520-e18c-4122-9d34-1b16ed94e44e","block_type":"box","text":"in purchasing replacement securities. This latter event could trigger adverse tax consequences for a Fund. A Fund","page_number":122,"box":{"x":70,"y":619,"width":808,"height":11}},{"id":"b4a2ccda-7f57-43e7-a17e-1b9b2be7797e","block_type":"box","text":"could lose money if its short-term investment of the collateral declines in value over the period of the loan. Substitute","page_number":122,"box":{"x":69,"y":634,"width":839,"height":11}},{"id":"a260d5f4-42e4-45dc-91ca-e868697a8531","block_type":"box","text":"payments received by a Fund representing dividends paid on securities loaned out by the Fund will not be considered","page_number":122,"box":{"x":70,"y":650,"width":832,"height":11}},{"id":"abb506aa-6f2c-43f4-9020-e80b7b95dfc1","block_type":"box","text":"qualified dividend income, and distributions by the Fund of such substitute payments will not constitute qualified","page_number":122,"box":{"x":69,"y":664,"width":801,"height":12}},{"id":"8004ba3b-c1cd-4365-9237-1d0fb6254a34","block_type":"box","text":"dividend income. Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":122,"box":{"x":69,"y":680,"width":823,"height":11}},{"id":"6e09bf3e-1bd9-4df0-9355-f5717b58c19a","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and distributions by the Fund","page_number":122,"box":{"x":70,"y":695,"width":823,"height":11}},{"id":"027dd524-9b5d-46e6-9a52-c57795f5edc3","block_type":"box","text":"of such substitute payments will not be eligible for a 20% deduction currently available for ordinary REIT dividends","page_number":122,"box":{"x":69,"y":710,"width":812,"height":11}},{"id":"1b87ce43-a7eb-4c15-9f6c-899926b21ca0","block_type":"box","text":"paid to non-corporate shareholders provided certain other requirements are satisfied. The securities lending agent","page_number":122,"box":{"x":70,"y":725,"width":814,"height":11}},{"id":"6aa92eec-5851-4f01-adb1-068cb401d2cc","block_type":"box","text":"will take into account the tax effects on shareholders caused by these differences in connection with a Fund’s","page_number":122,"box":{"x":68,"y":740,"width":787,"height":11}},{"id":"af4c20dc-f209-483a-9d08-e350cf8e07ea","block_type":"box","text":"securities lending program. Substitute payments received on tax-exempt securities loaned out will not be tax-exempt","page_number":122,"box":{"x":69,"y":755,"width":828,"height":11}},{"id":"77a9c1df-bd96-4a86-85b6-2f76410fc77b","block_type":"box","text":"income. There could also be changes in the status of issuers under applicable laws and regulations, including tax","page_number":122,"box":{"x":70,"y":770,"width":809,"height":12}},{"id":"b1adc7d7-010f-4da0-b08f-ec7e1e2c8292","block_type":"box","text":"regulations, that may impact the regulatory or tax treatment of loaned securities and could, for example, result in a","page_number":122,"box":{"x":69,"y":785,"width":821,"height":12}},{"id":"45f4fb3f-0f6c-4df1-90cd-fe6f95761c57","block_type":"box","text":"delay in the payment of dividend equivalent payments owed to a Fund (as permitted by applicable law).","page_number":122,"box":{"x":69,"y":801,"width":731,"height":11}},{"id":"1e5aa43d-71dd-446b-91f3-980f4d0dcee2","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and certain of","page_number":122,"box":{"x":102,"y":823,"width":800,"height":12}},{"id":"cb76cdef-f3df-4a98-b01e-b244b5130848","block_type":"box","text":"their affiliates to include in certain financial contracts, including many securities lending agreements, terms that","page_number":122,"box":{"x":68,"y":838,"width":802,"height":12}},{"id":"99e199b1-1571-4d40-87ee-e994790dd39d","block_type":"box","text":"delay or restrict the rights of counterparties, such as the Fund, to terminate such agreements, foreclose upon","page_number":122,"box":{"x":69,"y":853,"width":783,"height":12}},{"id":"32f8843c-9bf0-4efe-9975-3ce8aee8aab4","block_type":"box","text":"collateral, exercise other default rights or restrict transfers of credit support in the event that the counterparty and/or","page_number":122,"box":{"x":69,"y":869,"width":839,"height":11}},{"id":"f7f56afc-b35e-488f-9d7d-0b7d0a59459f","block_type":"box","text":"its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that these","page_number":122,"box":{"x":70,"y":884,"width":747,"height":11}},{"id":"94570ee8-e850-4b7e-bb61-7476dace560c","block_type":"box","text":"requirements, as well as potential additional government regulation and other developments in the market, could","page_number":122,"box":{"x":69,"y":899,"width":806,"height":11}},{"id":"ffcc6a1f-3fe5-4126-8200-ab8de81d927b","block_type":"box","text":"II-73","page_number":122,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"9788e5c5-1dda-41e4-8441-97f817eab17b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":122,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"0585e179-905b-4ad6-a4ea-e365dd44e843","block_type":"box","text":"adversely affect the Fund’s ability to terminate existing securities lending agreements or to realize amounts to be","page_number":123,"box":{"x":69,"y":45,"width":808,"height":11}},{"id":"4fd518c8-b6ff-403d-b736-18452b89f0e4","block_type":"box","text":"received under such agreements. Prudential regulation may also favor lenders that can provide additional protections,","page_number":123,"box":{"x":69,"y":60,"width":839,"height":11}},{"id":"9859f7eb-eccd-47e9-b779-5c81316fca22","block_type":"box","text":"such as liens that are exercisable in connection with a lender default, to borrowers. Certain Funds expect to provide","page_number":123,"box":{"x":69,"y":75,"width":827,"height":11}},{"id":"27d2795f-6d56-41b3-a0c3-3f5015c44c3c","block_type":"box","text":"additional protections to borrowers, where permitted pursuant to a Fund’s investment policies and if BlackRock","page_number":123,"box":{"x":69,"y":90,"width":794,"height":11}},{"id":"e9cb4227-3ecf-4a34-b3e5-50ad4f60ab59","block_type":"box","text":"believes doing so is in the best interest of the Fund.","page_number":123,"box":{"x":69,"y":105,"width":371,"height":11}},{"id":"51bd42ae-7087-4c8d-bbb8-ed2214110b25","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan transaction","page_number":123,"box":{"x":101,"y":128,"width":753,"height":11}},{"id":"157c4289-3286-43ca-9c1f-e3fe796992d6","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information about securities loans","page_number":123,"box":{"x":70,"y":143,"width":808,"height":11}},{"id":"6580ac7e-61e9-4aa6-a83a-2c83fdc3e13b","block_type":"box","text":"entered into in connection with short sales. Compliance with this rule is expected to be required in late 2028,","page_number":123,"box":{"x":69,"y":158,"width":784,"height":11}},{"id":"08e17acc-b886-48b9-8828-679cf6754022","block_type":"box","text":"although in response to the outcome of a legal challenge against the rule, the SEC may amend the rule and/or delay","page_number":123,"box":{"x":69,"y":173,"width":833,"height":11}},{"id":"2c0ae680-9190-4b2c-9204-89abcf0785bd","block_type":"box","text":"the current expected compliance date.","page_number":123,"box":{"x":68,"y":188,"width":273,"height":11}},{"id":"8b901066-8a98-4313-9183-ea575032e3dc","block_type":"box","text":"Short Sales.","page_number":123,"box":{"x":101,"y":211,"width":89,"height":9}},{"id":"54dddb17-541d-4401-895a-172ccd4a81c7","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential declines in","page_number":123,"box":{"x":196,"y":211,"width":696,"height":11}},{"id":"8a687d49-b1fe-47f3-b148-96aefd3ce921","block_type":"box","text":"value of a portfolio security or to realize appreciation when a security that the Fund does not own declines in value.","page_number":123,"box":{"x":68,"y":226,"width":821,"height":11}},{"id":"05f8ec99-c8ea-47e7-ba21-156e101f7465","block_type":"box","text":"Certain Funds have a fundamental investment restriction prohibiting short sales of securities unless they are","page_number":123,"box":{"x":69,"y":241,"width":778,"height":11}},{"id":"aaff02ee-bd89-4908-9c74-1e7e9a4c2cef","block_type":"box","text":"“against-the-box.” In a short sale “against-the-box,” at the time of the sale, the Fund owns or has the immediate and","page_number":123,"box":{"x":70,"y":256,"width":831,"height":12}},{"id":"8a7e7628-11a0-48b5-ba37-685bf4c8452b","block_type":"box","text":"unconditional right to acquire the identical security at no additional cost. When a Fund makes a short sale, it borrows","page_number":123,"box":{"x":69,"y":272,"width":837,"height":11}},{"id":"699c0fe9-ccd5-42a0-81b3-1e9919ba6a18","block_type":"box","text":"the security sold short and delivers it to the broker-dealer through which it made the short sale. A Fund may have to","page_number":123,"box":{"x":68,"y":287,"width":828,"height":11}},{"id":"19779354-1b52-4487-8675-1193d68c0d85","block_type":"box","text":"pay a fee to borrow particular securities and is often obligated to turn over any payments received on such borrowed","page_number":123,"box":{"x":70,"y":302,"width":829,"height":11}},{"id":"72230f64-b723-44fa-9b8e-b1d80c1c112f","block_type":"box","text":"securities to the lender of the securities.","page_number":123,"box":{"x":69,"y":317,"width":289,"height":9}},{"id":"824be2fe-9dbd-4a81-b2a7-2a4ec524f4e4","block_type":"box","text":"A Fund secures its obligation to replace the borrowed security by depositing collateral with the broker-dealer,","page_number":123,"box":{"x":101,"y":340,"width":772,"height":11}},{"id":"dc44abf9-887f-42c1-a9cd-337eb6142b15","block_type":"box","text":"usually in cash, U.S. Government Securities or other liquid securities similar to those borrowed. With respect to","page_number":123,"box":{"x":69,"y":355,"width":795,"height":11}},{"id":"fd6a3d9f-0d61-4c6c-a2a9-aaa95c2d8008","block_type":"box","text":"uncovered short positions, a Fund is required to deposit similar collateral with its custodian, if necessary, to the","page_number":123,"box":{"x":69,"y":370,"width":801,"height":11}},{"id":"cd494859-a5cf-4166-8e57-275af993a4fc","block_type":"box","text":"extent that the value of both collateral deposits in the aggregate is at all times equal to at least 100% of the current","page_number":123,"box":{"x":69,"y":385,"width":830,"height":11}},{"id":"5d7ba445-6b1f-47a7-8770-7962b6d201a6","block_type":"box","text":"market value of the security sold short. Depending on arrangements made with the broker-dealer from which the Fund","page_number":123,"box":{"x":69,"y":400,"width":839,"height":11}},{"id":"cd10f9b4-b8a9-4974-b995-af62750f8f85","block_type":"box","text":"borrowed the security, regarding payment received by the Fund on such security, a Fund may not receive any","page_number":123,"box":{"x":69,"y":415,"width":770,"height":11}},{"id":"3d16c5c0-0d7e-44f5-b5eb-3a2f44db1773","block_type":"box","text":"payments (including interest) on its collateral deposited with such broker-dealer.","page_number":123,"box":{"x":70,"y":430,"width":568,"height":11}},{"id":"852904d5-54a4-4fcb-a0d1-ab937e5e8995","block_type":"box","text":"Because making short sales in securities that it does not own exposes a Fund to the risks associated with those","page_number":123,"box":{"x":102,"y":453,"width":806,"height":11}},{"id":"a361b6e1-2720-4da2-bfd0-7e58d26ca83f","block_type":"box","text":"securities, such short sales involve speculative exposure risk. A Fund will incur a loss as a result of a short sale if","page_number":123,"box":{"x":69,"y":468,"width":817,"height":11}},{"id":"cf195230-0443-40c4-9c4c-f46a4126c1db","block_type":"box","text":"the price of the security increases between the date of the short sale and the date on which the Fund replaces the","page_number":123,"box":{"x":68,"y":483,"width":819,"height":11}},{"id":"928af973-dd8a-48f4-933f-a6601e8478be","block_type":"box","text":"borrowed security. As a result, if a Fund makes short sales in securities that increase in value, it will likely","page_number":123,"box":{"x":69,"y":498,"width":758,"height":11}},{"id":"ff9ae202-efa8-4c8f-bd1c-93d5c5a93322","block_type":"box","text":"underperform similar mutual funds that do not make short sales in securities. A Fund will realize a gain on a short","page_number":123,"box":{"x":69,"y":513,"width":817,"height":12}},{"id":"665dd779-a643-4aa3-abe3-e8e601310585","block_type":"box","text":"sale if the security declines in price between those dates. There can be no assurance that a Fund will be able to","page_number":123,"box":{"x":69,"y":528,"width":800,"height":12}},{"id":"8f717989-85a5-4f32-85ce-fdf9ea346ee6","block_type":"box","text":"close out a short sale position at any particular time or at an acceptable price. Although a Fund’s gain is limited to","page_number":123,"box":{"x":69,"y":544,"width":818,"height":11}},{"id":"bd741d9b-6682-4932-b284-f6fed4383c9d","block_type":"box","text":"the price at which it sold the security short, its potential loss is limited only by the maximum attainable price of the","page_number":123,"box":{"x":68,"y":559,"width":821,"height":11}},{"id":"a88634da-f906-488a-af94-048fab733810","block_type":"box","text":"security, less the price at which the security was sold and may, theoretically, be unlimited.","page_number":123,"box":{"x":69,"y":574,"width":640,"height":11}},{"id":"eb50323c-6cc9-42cc-a4c8-dc2210c81060","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":123,"box":{"x":101,"y":597,"width":673,"height":11}},{"id":"6acfe89a-7ac0-47e2-a0ed-aeed71687b9a","block_type":"box","text":"A Fund must comply with Rule 18f-4 under the Investment Company Act with respect to its short sale","page_number":123,"box":{"x":101,"y":619,"width":721,"height":11}},{"id":"5e0c9344-ae81-4f40-bd8d-a50750115b00","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “—Derivatives — Regulation of","page_number":123,"box":{"x":69,"y":634,"width":791,"height":12}},{"id":"69eda39f-6af6-4382-b82a-3d403f2fc6cf","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":123,"box":{"x":70,"y":649,"width":489,"height":12}},{"id":"5fb65993-ede7-425c-a4b9-56266dc52d4e","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United Kingdom","page_number":123,"box":{"x":102,"y":672,"width":745,"height":11}},{"id":"9089bb91-4c90-4e54-b47a-b768f04284e0","block_type":"box","text":"regulations (under which there are restrictions on net short sales in certain securities). If the SEC or regulatory","page_number":123,"box":{"x":69,"y":687,"width":793,"height":11}},{"id":"8abba454-4d37-4b60-8d45-67c9dfbd0660","block_type":"box","text":"authorities in other jurisdictions were to adopt additional restrictions regarding short sales, they could restrict a","page_number":123,"box":{"x":69,"y":703,"width":796,"height":11}},{"id":"c9449bc3-bb99-4f82-8a5a-60b2fad97c7a","block_type":"box","text":"Fund’s ability to engage in short sales in certain circumstances, and the Fund may be unable to execute its","page_number":123,"box":{"x":70,"y":718,"width":766,"height":11}},{"id":"b582472e-1a3d-42c6-bb46-64ca312f1724","block_type":"box","text":"investment strategy as a result. In response to market events, the SEC and regulatory authorities in other","page_number":123,"box":{"x":70,"y":733,"width":754,"height":11}},{"id":"c9e74c94-257b-4cf1-8072-cb4ee284d10f","block_type":"box","text":"jurisdictions may adopt (and in certain cases, have adopted) bans or other restrictions on short sales of certain","page_number":123,"box":{"x":67,"y":748,"width":800,"height":11}},{"id":"ca5dbe72-8554-49a9-ad2c-b7b15ea7a009","block_type":"box","text":"securities or on derivatives and other hedging instruments used to achieve a similar economic effect. Such bans or","page_number":123,"box":{"x":69,"y":763,"width":823,"height":11}},{"id":"bdd5511c-d778-4ef8-9ad2-0bb8c17c4eca","block_type":"box","text":"other restrictions may make it impossible for a Fund to execute certain investment strategies and may have a","page_number":123,"box":{"x":69,"y":778,"width":782,"height":11}},{"id":"7566e002-4fb6-4dda-bd00-c4d16da0111c","block_type":"box","text":"material adverse effect on the Fund’s ability to generate returns.","page_number":123,"box":{"x":69,"y":793,"width":460,"height":11}},{"id":"8cc10564-c2a4-477c-a053-3ea88a0fd2e1","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":123,"box":{"x":101,"y":816,"width":293,"height":11}},{"id":"64e8cccd-ce7c-4c1d-aed0-324f216a6895","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other interests issued","page_number":123,"box":{"x":400,"y":816,"width":504,"height":11}},{"id":"4953afd5-4a2c-465f-8782-33b3a8859aca","block_type":"box","text":"by special purpose acquisition companies (“SPACs”) or similar special purpose entities that pool funds to seek","page_number":123,"box":{"x":69,"y":831,"width":791,"height":11}},{"id":"869d802f-df2f-4f84-a12e-b63ace8292e2","block_type":"box","text":"potential acquisition opportunities, including the “founder’s” shares and warrants described below. A SPAC is a","page_number":123,"box":{"x":70,"y":846,"width":793,"height":11}},{"id":"09b4d2f2-e2a8-441b-a9a2-bbb16ffbc844","block_type":"box","text":"publicly traded company that raises investment capital via an IPO for the purpose of identifying and acquiring one or","page_number":123,"box":{"x":70,"y":861,"width":824,"height":11}},{"id":"a53d4427-3abd-430b-9c8b-d10de108e948","block_type":"box","text":"more operating businesses or assets. In connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s”","page_number":123,"box":{"x":69,"y":876,"width":821,"height":11}},{"id":"ac7919eb-a53a-469c-a294-0b054d9670b9","block_type":"box","text":"shares, generally for nominal consideration, and warrants that will result in the sponsors owning a specified","page_number":123,"box":{"x":69,"y":891,"width":768,"height":12}},{"id":"e34bb1d5-3381-48ea-98a1-e36863d80ae4","block_type":"box","text":"percentage (typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a SPAC","page_number":123,"box":{"x":70,"y":906,"width":826,"height":12}},{"id":"07008194-1447-4140-ac38-5aa1bc5a3bef","block_type":"box","text":"II-74","page_number":123,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"022b6c27-3a1b-4a70-b3f0-5f4727322f6c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":123,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2819c22a-ef70-46e1-ab38-60d971be6481","block_type":"box","text":"conducts an IPO, it has selected a management team but has not yet identified a specific acquisition opportunity.","page_number":124,"box":{"x":69,"y":45,"width":809,"height":11}},{"id":"db78b93d-7009-4e4d-9cfb-cba762015635","block_type":"box","text":"Unless and until an acquisition is completed, a SPAC generally invests its assets in U.S. Government securities,","page_number":124,"box":{"x":70,"y":60,"width":797,"height":11}},{"id":"e6d796c3-d038-4831-8d8f-0c866ad6b697","block_type":"box","text":"money market securities and cash. If an acquisition that meets the requirements for the SPAC is not completed","page_number":124,"box":{"x":69,"y":75,"width":795,"height":11}},{"id":"8f7ad062-2c3f-4e67-a29c-58d97cc5b8a4","block_type":"box","text":"within a pre-established period of time, the invested funds are returned to the SPAC’s public shareholders, the","page_number":124,"box":{"x":68,"y":90,"width":788,"height":11}},{"id":"cafccc7f-5a94-492b-9643-bd94e0373410","block_type":"box","text":"warrants expire, and the “founder’s” shares and such warrants become worthless. Because SPACs and similar","page_number":124,"box":{"x":68,"y":105,"width":794,"height":11}},{"id":"3d984d20-cc07-41e4-98d5-d91d8193e242","block_type":"box","text":"entities are in essence “blank check” companies without operating histories or ongoing business operations (other","page_number":124,"box":{"x":69,"y":120,"width":820,"height":12}},{"id":"ef6fd6cc-fc05-4e18-8a33-ee5ac465c7ac","block_type":"box","text":"than identifying and pursuing acquisitions), the potential for the long-term capital appreciation of their securities is","page_number":124,"box":{"x":68,"y":135,"width":815,"height":12}},{"id":"4d96e5a8-d2d3-4f71-9eee-69ef8da593e0","block_type":"box","text":"particularly dependent on the ability of the SPAC’s management to identify and complete a profitable acquisition.","page_number":124,"box":{"x":70,"y":150,"width":802,"height":12}},{"id":"689d3026-4f96-45b1-b86b-fc97e7bab3d3","block_type":"box","text":"There is no guarantee that the SPACs in which a Fund invests will complete an acquisition or that any acquisitions","page_number":124,"box":{"x":68,"y":166,"width":812,"height":11}},{"id":"10b31ad6-2b53-4c79-9bbf-4b7bf1e91560","block_type":"box","text":"completed by the SPACs in which the Fund invests will be profitable. Some SPACs may pursue acquisitions only within","page_number":124,"box":{"x":69,"y":181,"width":838,"height":11}},{"id":"f7593937-e043-4c7f-8c46-6269a3617270","block_type":"box","text":"certain industries or regions, which may ultimately lead to an increase in the volatility of their prices following the","page_number":124,"box":{"x":69,"y":196,"width":806,"height":11}},{"id":"563da469-ebc2-482c-a176-04f5f4a8db2d","block_type":"box","text":"acquisition. In addition, some of these securities may be considered illiquid and/or subject to restrictions on resale.","page_number":124,"box":{"x":69,"y":211,"width":828,"height":11}},{"id":"4b727078-3508-499b-ac55-48654d5718b9","block_type":"box","text":"Standby Commitment Agreements.","page_number":124,"box":{"x":101,"y":234,"width":255,"height":11}},{"id":"dbc8eb76-0425-4f89-9327-acd5cd585bc5","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated period of","page_number":124,"box":{"x":362,"y":234,"width":511,"height":11}},{"id":"fda89d97-49a6-4e3f-86a5-ff41fca6d727","block_type":"box","text":"time, to purchase a stated amount of securities that may be issued and sold to that Fund at the option of the issuer.","page_number":124,"box":{"x":68,"y":249,"width":834,"height":11}},{"id":"2942dd1d-2e8c-4307-8216-96c4c61db82e","block_type":"box","text":"The price of the security is fixed at the time of the commitment. At the time of entering into the agreement, a Fund is","page_number":124,"box":{"x":68,"y":264,"width":834,"height":11}},{"id":"4621fdc4-22f1-4412-83b2-c9a93bfdedde","block_type":"box","text":"paid a commitment fee, regardless of whether or not the security is ultimately issued. A Fund will enter into such","page_number":124,"box":{"x":70,"y":279,"width":802,"height":11}},{"id":"84d0571e-e80e-4f67-a968-6c435e186789","block_type":"box","text":"agreements for the purpose of investing in the security underlying the commitment at a price that is considered","page_number":124,"box":{"x":69,"y":294,"width":793,"height":11}},{"id":"0806f708-f9fc-4ae5-96fd-c952c9cdcaa2","block_type":"box","text":"advantageous to the Fund.","page_number":124,"box":{"x":69,"y":309,"width":188,"height":11}},{"id":"237639a8-6b81-4bab-9f8c-f3e48acb7142","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the value of","page_number":124,"box":{"x":101,"y":332,"width":800,"height":11}},{"id":"37b7d1ef-42fc-4fc8-b491-1b4ccaeb54aa","block_type":"box","text":"the security, if issued, on the delivery date may be more or less than its purchase price. Since the issuance of the","page_number":124,"box":{"x":68,"y":347,"width":816,"height":11}},{"id":"d4f8ed96-49f7-4751-a462-4d779f28f804","block_type":"box","text":"security underlying the commitment is at the option of the issuer, the Fund may bear the risk of a decline in the value","page_number":124,"box":{"x":69,"y":362,"width":835,"height":11}},{"id":"d18cc4d5-548c-4d9f-a6b3-43e5e3fe0ea1","block_type":"box","text":"of such security and may not benefit from an appreciation in the value of the security during the commitment period.","page_number":124,"box":{"x":69,"y":377,"width":828,"height":12}},{"id":"68a91ab6-0697-4065-bba0-48638581759d","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment fee will","page_number":124,"box":{"x":101,"y":400,"width":785,"height":11}},{"id":"22d9d69e-2c72-404a-a6e5-dfb4f8cc3a59","block_type":"box","text":"be recorded on the date on which the security can reasonably be expected to be issued, and the value of the security","page_number":124,"box":{"x":69,"y":415,"width":837,"height":11}},{"id":"b900a04d-961c-4d53-80ea-9e49abd1a809","block_type":"box","text":"thereafter will be reflected in the calculation of a Fund’s NAV. The cost basis of the security will be adjusted by the","page_number":124,"box":{"x":68,"y":430,"width":815,"height":11}},{"id":"a7bb5c2f-aa89-4d03-acff-6efefeebd11a","block_type":"box","text":"amount of the commitment fee. In the event the security is not issued, the commitment fee will be recorded as","page_number":124,"box":{"x":69,"y":445,"width":792,"height":11}},{"id":"1e1cab1b-bc86-48fd-a46d-bfe8619ac9e3","block_type":"box","text":"income on the expiration date of the standby commitment.","page_number":124,"box":{"x":70,"y":460,"width":415,"height":12}},{"id":"55c2552a-6dc4-41b6-99e7-400f9c241bb8","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the Manager’s","page_number":124,"box":{"x":102,"y":483,"width":789,"height":11}},{"id":"d080aa9d-9aa0-48a8-8b2f-69cdbd9cb8d4","block_type":"box","text":"or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby commitments solely to facilitate","page_number":124,"box":{"x":69,"y":498,"width":814,"height":11}},{"id":"42d6a076-f229-44cb-a1b5-e63843869837","block_type":"box","text":"portfolio liquidity and not to exercise its rights thereunder for trading purposes. Standby commitments will be valued","page_number":124,"box":{"x":70,"y":513,"width":827,"height":12}},{"id":"c7c0ee6e-584b-4583-aa3a-d51ebbd27772","block_type":"box","text":"at zero in determining NAV. Accordingly, where a Fund pays directly or indirectly for a standby commitment, its cost","page_number":124,"box":{"x":69,"y":528,"width":815,"height":12}},{"id":"3a1aeb86-0f40-4a19-9908-b9fac1fc8953","block_type":"box","text":"will be reflected as an unrealized loss for the period during which the commitment is held by such Fund and will be","page_number":124,"box":{"x":68,"y":543,"width":817,"height":12}},{"id":"016237c6-4a61-40c8-962e-2917e5289f76","block_type":"box","text":"reflected as a realized gain or loss when the commitment is exercised or expires.","page_number":124,"box":{"x":69,"y":559,"width":578,"height":11}},{"id":"7f7626d1-765f-4a1a-a707-c78b8548e78e","block_type":"box","text":"Stripped Securities.","page_number":124,"box":{"x":101,"y":581,"width":143,"height":11}},{"id":"0a01a310-9a1c-4fea-8a57-128961c0bd32","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and principal","page_number":124,"box":{"x":251,"y":581,"width":596,"height":11}},{"id":"65832c7d-e78b-4f27-8c7e-de18155aeafd","block_type":"box","text":"components of an instrument and sells them as separate securities. In general, one security is entitled to receive the","page_number":124,"box":{"x":69,"y":596,"width":839,"height":12}},{"id":"9484189d-69f2-4047-ba0f-eae9b6bbd508","block_type":"box","text":"interest payments on the underlying assets (the interest only or “IO” security) and the other to receive the principal","page_number":124,"box":{"x":70,"y":612,"width":818,"height":11}},{"id":"f8994ff8-ca09-4d98-9814-3313d4c8be7e","block_type":"box","text":"payments (the principal only or “PO” security). Some stripped securities may receive a combination of interest and","page_number":124,"box":{"x":70,"y":627,"width":813,"height":11}},{"id":"22783fc9-6db4-4c65-be0f-b72fe2ffa4f5","block_type":"box","text":"principal payments. The yields to maturity on IOs and POs are sensitive to the expected or anticipated rate of","page_number":124,"box":{"x":70,"y":642,"width":777,"height":11}},{"id":"7018f4da-8564-49e4-bcbc-4f3547d65629","block_type":"box","text":"principal payments (including prepayments) on the related underlying assets, and principal payments may have a","page_number":124,"box":{"x":70,"y":657,"width":802,"height":11}},{"id":"040440c8-b823-4584-a303-b944a48362ac","block_type":"box","text":"material effect on yield to maturity. If the underlying assets experience greater than anticipated prepayments of","page_number":124,"box":{"x":69,"y":672,"width":794,"height":11}},{"id":"386af80a-f3d6-4a1c-a4da-4f6765f8c808","block_type":"box","text":"principal, a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets experience less","page_number":124,"box":{"x":70,"y":687,"width":837,"height":11}},{"id":"6acd86d4-6a9f-48da-8515-58c3a78e3b55","block_type":"box","text":"than anticipated prepayments of principal, the yield on POs could be adversely affected. Stripped securities may be","page_number":124,"box":{"x":68,"y":702,"width":823,"height":11}},{"id":"24ee5a32-110b-437a-ad16-7e9dc7487614","block_type":"box","text":"highly sensitive to changes in interest rates and rates of prepayment.","page_number":124,"box":{"x":69,"y":717,"width":494,"height":12}},{"id":"388db2d3-ac65-4dc8-b6a0-80f485686c9b","block_type":"box","text":"Structured Notes.","page_number":124,"box":{"x":101,"y":740,"width":130,"height":9}},{"id":"1e8fff98-32c4-4693-8bd3-ce776e084738","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally privately","page_number":124,"box":{"x":237,"y":740,"width":650,"height":11}},{"id":"2a23bf35-a2b9-495d-9921-704d718629c1","block_type":"box","text":"negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a","page_number":124,"box":{"x":69,"y":755,"width":818,"height":11}},{"id":"d862a5bb-066f-4a9f-b983-3ce8cdbd01c2","block_type":"box","text":"specific asset, benchmark asset, market or interest rate (“reference measure”). Issuers of structured notes generally","page_number":124,"box":{"x":69,"y":770,"width":839,"height":12}},{"id":"1c84a407-371f-4ddc-9250-decab7a46a9b","block_type":"box","text":"include corporations and banks. The interest rate or the principal amount payable upon maturity or redemption may","page_number":124,"box":{"x":70,"y":786,"width":821,"height":11}},{"id":"a6a11327-2ffe-4149-88ad-4f47220ff6ec","block_type":"box","text":"increase or decrease, depending upon changes in the value of the reference measure. The terms of a structured note","page_number":124,"box":{"x":70,"y":801,"width":839,"height":11}},{"id":"8694caf5-732e-4e53-8c79-8654e0a74dc5","block_type":"box","text":"may provide that, in certain circumstances, no principal is due at maturity and, therefore, may result in a loss of","page_number":124,"box":{"x":69,"y":816,"width":801,"height":11}},{"id":"dbb427a2-0b8f-44b8-9ed0-9d4751f73850","block_type":"box","text":"invested capital by a Fund. The interest and/or principal payments that may be made on a structured product may","page_number":124,"box":{"x":70,"y":831,"width":813,"height":11}},{"id":"2ffd3f36-846d-492a-8ac8-8bd63fdde820","block_type":"box","text":"vary widely, depending on a variety of factors, including the volatility of the reference measure.","page_number":124,"box":{"x":68,"y":846,"width":673,"height":11}},{"id":"e6e26463-e05f-46d5-81a9-c3e53d550180","block_type":"box","text":"Structured notes may be positively or negatively indexed, so the appreciation of the reference measure may","page_number":124,"box":{"x":102,"y":869,"width":768,"height":11}},{"id":"afad70ce-f2d8-4088-96d7-bcb184e63dd5","block_type":"box","text":"produce an increase or a decrease in the interest rate or the value of the principal at maturity. The rate of return on","page_number":124,"box":{"x":70,"y":884,"width":821,"height":11}},{"id":"29c56829-9741-4c7e-adac-0e2a4e183f0e","block_type":"box","text":"II-75","page_number":124,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"0e541ed9-180b-4441-bd9b-7e984898d6b6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":124,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ba698e18-4eaf-4665-b890-83d8b716f2fc","block_type":"box","text":"structured notes may be determined by applying a multiplier to the performance or differential performance of","page_number":125,"box":{"x":69,"y":45,"width":787,"height":11}},{"id":"ae45d1d0-2461-40b5-aef3-015b88721042","block_type":"box","text":"reference measures. Application of a multiplier involves leverage that will serve to magnify the potential for gain and","page_number":125,"box":{"x":69,"y":60,"width":827,"height":11}},{"id":"c397dc93-36c8-477c-bbbb-43331d7bd94b","block_type":"box","text":"the risk of loss.","page_number":125,"box":{"x":68,"y":75,"width":110,"height":9}},{"id":"e6a18e8c-68f4-41bc-ac73-47367e66d7e7","block_type":"box","text":"The purchase of structured notes exposes a Fund to the credit risk of the issuer of the structured product.","page_number":125,"box":{"x":101,"y":98,"width":759,"height":11}},{"id":"d891e641-30ff-4726-95aa-50554a619ed1","block_type":"box","text":"Structured notes may also be more volatile, less liquid, and more difficult to price accurately than less complex","page_number":125,"box":{"x":69,"y":113,"width":795,"height":11}},{"id":"6c227408-6194-401b-b92e-687cd6fd0962","block_type":"box","text":"securities and instruments or more traditional debt securities. The secondary market for structured notes could be","page_number":125,"box":{"x":69,"y":128,"width":819,"height":11}},{"id":"06ccf3b4-cc28-456d-9299-a49c5eba371c","block_type":"box","text":"illiquid making them difficult to sell when the Fund determines to sell them. The possible lack of a liquid secondary","page_number":125,"box":{"x":70,"y":143,"width":821,"height":11}},{"id":"aaaefa8f-6a7a-4910-8f94-2d67d50b402d","block_type":"box","text":"market for structured notes and the resulting inability of the Fund to sell a structured note could expose the Fund to","page_number":125,"box":{"x":69,"y":158,"width":827,"height":11}},{"id":"83e26f9b-63b3-4666-84d9-dba94ee13ab5","block_type":"box","text":"losses and could make structured notes more difficult for the Fund to value accurately.","page_number":125,"box":{"x":70,"y":173,"width":618,"height":11}},{"id":"8df68edf-9041-4c8b-88ff-6ad22567dffc","block_type":"box","text":"Taxability Risk.","page_number":125,"box":{"x":103,"y":196,"width":109,"height":11}},{"id":"baeb397e-79fe-4f71-915f-2b3b69fae13c","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to shareholders by","page_number":125,"box":{"x":218,"y":196,"width":644,"height":11}},{"id":"84ccda3d-c155-4715-a492-f14c1cf6ce7e","block_type":"box","text":"investing in tax-exempt or municipal securities in reliance at the time of purchase on an opinion of bond counsel to","page_number":125,"box":{"x":70,"y":211,"width":817,"height":11}},{"id":"a03d9529-f2c5-4f45-9a26-0462f028789c","block_type":"box","text":"the issuer and, in the case of derivative securities, sponsors’ counsel, that the interest paid on those securities will","page_number":125,"box":{"x":68,"y":226,"width":827,"height":11}},{"id":"ddd7fa5c-d634-4064-aab0-dfd69ed4d38f","block_type":"box","text":"be excludable from gross income for U.S. federal income tax purposes. Such securities, however, may be determined","page_number":125,"box":{"x":69,"y":241,"width":835,"height":11}},{"id":"e6befd91-6021-446a-841b-fbcf9a096f35","block_type":"box","text":"to pay, or have paid, taxable income subsequent to the Fund’s acquisition of the securities. In that event, the IRS","page_number":125,"box":{"x":68,"y":256,"width":809,"height":11}},{"id":"f8c82bbf-80a3-42cb-a8d1-aee3e1c49c67","block_type":"box","text":"may demand that the Fund pay U.S. federal income taxes on the affected interest income, and, if the Fund agrees to","page_number":125,"box":{"x":69,"y":271,"width":832,"height":12}},{"id":"965c7dbf-5eef-4511-9309-1250c4ad17be","block_type":"box","text":"do so, the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or to be","page_number":125,"box":{"x":69,"y":286,"width":816,"height":12}},{"id":"61088854-0556-4b96-b3c3-df500f194c1e","block_type":"box","text":"paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the Fund’s shareholders to","page_number":125,"box":{"x":70,"y":302,"width":822,"height":11}},{"id":"a1d3289d-6d17-4320-b3ad-e3ea69b77fdf","block_type":"box","text":"increased U.S. federal income tax liabilities. If the interest paid on any tax-exempt or municipal security held by the","page_number":125,"box":{"x":70,"y":317,"width":818,"height":11}},{"id":"5b5f1cdc-e71a-4a9a-b864-16f81326d537","block_type":"box","text":"Fund is subsequently determined to be taxable, the Fund will dispose of that security as soon as reasonably","page_number":125,"box":{"x":70,"y":332,"width":771,"height":11}},{"id":"727300d5-a93e-4c18-b932-07ac61e45697","block_type":"box","text":"practicable. In addition, future laws, regulations, rulings or court decisions may cause interest on municipal","page_number":125,"box":{"x":70,"y":347,"width":765,"height":11}},{"id":"113fef77-bdee-4745-b765-a7a644df1a5c","block_type":"box","text":"securities to be subject, directly or indirectly, to U.S. federal income taxation or interest on state municipal securities","page_number":125,"box":{"x":69,"y":362,"width":834,"height":11}},{"id":"2a1f47e7-b3b9-46d6-a985-eac0d88ca94a","block_type":"box","text":"to be subject to state or local income taxation, or the value of state municipal securities to be subject to state or","page_number":125,"box":{"x":68,"y":377,"width":807,"height":11}},{"id":"56410e46-cc5f-47f4-8fa9-516c0031ab5d","block_type":"box","text":"local intangible personal property tax, or may otherwise prevent the Fund from realizing the full current benefit of the","page_number":125,"box":{"x":70,"y":392,"width":830,"height":12}},{"id":"aee74ec8-bf8a-4fc0-9145-80d60b588410","block_type":"box","text":"tax-exempt status of such securities. Any such change could also affect the market price of such securities, and thus","page_number":125,"box":{"x":68,"y":407,"width":838,"height":12}},{"id":"2bf0e012-3cef-4104-9819-513be8c7fb76","block_type":"box","text":"the value of an investment in the Fund.","page_number":125,"box":{"x":68,"y":423,"width":278,"height":9}},{"id":"6443f429-fc8a-473b-b08e-0b118e62794a","block_type":"box","text":"Temporary Defensive Measures.","page_number":125,"box":{"x":103,"y":445,"width":230,"height":11}},{"id":"23cebdbc-f75f-46f4-b5cc-6dbf87e18e6b","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse market,","page_number":125,"box":{"x":339,"y":445,"width":542,"height":12}},{"id":"ff6ba3d0-0959-4f9d-beb8-ac11f1c5e51b","block_type":"box","text":"economic, political or other conditions, a Fund may depart from its principal investment strategies and may invest","page_number":125,"box":{"x":69,"y":460,"width":811,"height":12}},{"id":"5de4bb35-4161-460b-b5b7-f21a80a41713","block_type":"box","text":"without limitation in cash, high quality money market instruments, or other short term investments. Certain Funds","page_number":125,"box":{"x":68,"y":476,"width":813,"height":11}},{"id":"a68db56f-a874-4739-a046-689b7779ef34","block_type":"box","text":"may also invest in cash and other such instruments pending investment or to meet anticipated redemption requests.","page_number":125,"box":{"x":69,"y":491,"width":833,"height":11}},{"id":"7254adc3-d88c-4e41-9a5d-98edfe92a0cc","block_type":"box","text":"High quality money market instruments include U.S. Government obligations, U.S. Government agency obligations,","page_number":125,"box":{"x":70,"y":506,"width":813,"height":11}},{"id":"317f6656-9369-4dae-9f81-50cd180aa27f","block_type":"box","text":"dollar denominated obligations of foreign issuers, bank obligations, including U.S. subsidiaries and branches of","page_number":125,"box":{"x":69,"y":521,"width":795,"height":11}},{"id":"bbaf6c29-b6da-450c-b60b-42334a3b0c0b","block_type":"box","text":"foreign banks, corporate obligations, commercial paper, repurchase agreements and obligations of supranational","page_number":125,"box":{"x":68,"y":536,"width":806,"height":11}},{"id":"baa01aa9-fd26-4473-ae21-6e95b84a9b16","block_type":"box","text":"organizations. Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":125,"box":{"x":69,"y":551,"width":808,"height":11}},{"id":"eca25617-df60-43ca-8470-89b8e41f322a","block_type":"box","text":"within two years from the date of settlement. Temporary defensive measures may affect a Fund’s ability to achieve","page_number":125,"box":{"x":68,"y":566,"width":820,"height":11}},{"id":"5eeefe4e-2669-4f06-8cc3-8951921b7f92","block_type":"box","text":"its investment objective.","page_number":125,"box":{"x":70,"y":582,"width":171,"height":10}},{"id":"48e034f4-d02f-4f6a-b22e-ae588dbd3b78","block_type":"box","text":"U.S. Government Obligations.","page_number":125,"box":{"x":102,"y":604,"width":213,"height":11}},{"id":"d3e7afe0-c930-4d06-acd2-602a0ea3e589","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S. Government","page_number":125,"box":{"x":321,"y":604,"width":566,"height":11}},{"id":"c4320542-33d7-4696-a561-8bdf2eb1cde6","block_type":"box","text":"and U.S. Government agencies and instrumentalities. Obligations of certain agencies and instrumentalities of the","page_number":125,"box":{"x":69,"y":619,"width":810,"height":11}},{"id":"0bb82c0b-5e70-4d9d-b639-d9ac2bd47baf","block_type":"box","text":"U.S. Government are supported by the full faith and credit of the U.S. Treasury. Others are supported by the right of","page_number":125,"box":{"x":70,"y":634,"width":826,"height":12}},{"id":"c7481242-f75f-4edf-bb66-5e3884a99394","block_type":"box","text":"the issuer to borrow from the U.S. Treasury; and still others are supported only by the credit of the agency or","page_number":125,"box":{"x":68,"y":649,"width":779,"height":12}},{"id":"511a7427-a25d-4cbd-8075-824d86d98b5e","block_type":"box","text":"instrumentality issuing the obligation. No assurance can be given that the U.S. Government will provide financial","page_number":125,"box":{"x":70,"y":664,"width":798,"height":12}},{"id":"70b3f3b4-4ebf-4450-92f3-b3033b71e3a7","block_type":"box","text":"support to U.S. Government-sponsored instrumentalities if it is not obligated to do so by law. Certain U.S. Treasury","page_number":125,"box":{"x":69,"y":680,"width":822,"height":11}},{"id":"3c0a9386-0aac-486c-826a-41e7c9845179","block_type":"box","text":"and agency securities may be held by trusts that issue participation certificates (such as Treasury income growth","page_number":125,"box":{"x":69,"y":695,"width":809,"height":11}},{"id":"1fd11358-2ad1-432c-ac00-aa7fa4d53f12","block_type":"box","text":"receipts and certificates of accrual on Treasury certificates). These certificates, as well as Treasury receipts and","page_number":125,"box":{"x":69,"y":710,"width":805,"height":11}},{"id":"27a4b789-f4f7-4f26-aaef-4df5e150badb","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or the future","page_number":125,"box":{"x":69,"y":725,"width":807,"height":11}},{"id":"0bfa6e91-e255-42c3-b9a6-3c10d10923b4","block_type":"box","text":"principal payments on U.S. Government obligations. These instruments are issued at a discount to their “face value”","page_number":125,"box":{"x":70,"y":740,"width":832,"height":11}},{"id":"0fcf7838-5c60-4075-8668-b6fbbc2c3d49","block_type":"box","text":"and may (particularly in the case of stripped mortgage-backed securities) exhibit greater price volatility than ordinary","page_number":125,"box":{"x":69,"y":755,"width":829,"height":11}},{"id":"9c8378ce-1579-4f6e-8bb1-8bc45c2d6076","block_type":"box","text":"debt securities because of the manner in which their principal and interest are returned to investors.","page_number":125,"box":{"x":69,"y":770,"width":716,"height":11}},{"id":"f93a7de1-255c-4ec2-95c3-cd9c0b94f1f9","block_type":"box","text":"Examples of the types of U.S. Government obligations that may be held by the Funds include U.S. Treasury Bills,","page_number":125,"box":{"x":102,"y":793,"width":800,"height":11}},{"id":"a5c92fb4-92af-488a-831d-ba834ff71b01","block_type":"box","text":"Treasury Notes and Treasury Bonds and the obligations of the Federal Housing Administration, Farmers Home","page_number":125,"box":{"x":68,"y":808,"width":785,"height":11}},{"id":"151359a0-49ee-4545-9390-e8b0145115ac","block_type":"box","text":"Administration, Export-Import Bank of the United States, Small Business Administration, Ginnie Mae, Fannie Mae,","page_number":125,"box":{"x":68,"y":823,"width":813,"height":11}},{"id":"8e66dd2f-2df4-496d-a86d-2f5455bf9915","block_type":"box","text":"Federal Financing Bank, General Services Administration, Student Loan Marketing Association, Central Bank for","page_number":125,"box":{"x":70,"y":838,"width":794,"height":12}},{"id":"860fab7e-6aa2-4cf5-9c28-69ecb4ddfa7a","block_type":"box","text":"Cooperatives, Federal Home Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Farm","page_number":125,"box":{"x":69,"y":854,"width":835,"height":10}},{"id":"114962b2-fd62-4000-bf9f-9b6875ae0297","block_type":"box","text":"Credit Banks System, Maritime Administration, Tennessee Valley Authority and Washington D.C. Armory Board. The","page_number":125,"box":{"x":69,"y":869,"width":818,"height":11}},{"id":"ff9356bd-256e-4226-a853-0040713fa8c2","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government agencies and","page_number":125,"box":{"x":70,"y":884,"width":777,"height":11}},{"id":"abe9ae45-e64e-4d47-a806-36a0aef063b2","block_type":"box","text":"instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae and Freddie Mac.","page_number":125,"box":{"x":70,"y":899,"width":749,"height":11}},{"id":"3bcefcb4-b48b-4336-a041-563baea9ded9","block_type":"box","text":"II-76","page_number":125,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"bda3a8f6-de88-4041-91f0-485d03328b5c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":125,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c2a84c0c-cbc1-4eac-ace9-3acbb8c4592b","block_type":"box","text":"U.S. Treasury Obligations.","page_number":126,"box":{"x":103,"y":45,"width":183,"height":11}},{"id":"f4a3c78f-b1d6-4fee-8e52-e80138bd76d2","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of issuance","page_number":126,"box":{"x":292,"y":45,"width":593,"height":11}},{"id":"b8de7d7a-7d9d-48a6-a79f-b1407cb0f949","block_type":"box","text":"and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees","page_number":126,"box":{"x":69,"y":60,"width":835,"height":11}},{"id":"93f68ed2-4ac3-4b09-9fc1-cfd79b893c88","block_type":"box","text":"of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given","page_number":126,"box":{"x":69,"y":75,"width":827,"height":11}},{"id":"5916f217-db74-448d-ba6d-a35931bc315f","block_type":"box","text":"that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to","page_number":126,"box":{"x":68,"y":90,"width":823,"height":11}},{"id":"19a56a68-15ea-45c3-b733-03735566d2ea","block_type":"box","text":"do so.","page_number":126,"box":{"x":69,"y":105,"width":42,"height":9}},{"id":"fe7cae49-9f73-4f7d-a0e3-eacd790152d1","block_type":"box","text":"U.S. Treasury Rolls","page_number":126,"box":{"x":102,"y":128,"width":139,"height":11}},{"id":"afde67da-4705-4cd3-a20c-45fbaf8bd770","block_type":"box","text":".","page_number":126,"box":{"x":241,"y":135,"width":3,"height":2}},{"id":"a6440602-86e3-4587-9a81-9edb60cf2e13","block_type":"box","text":"Certain Funds may invest in U.S. Treasury rolls. In a U.S. Treasury roll transaction, the Fund","page_number":126,"box":{"x":250,"y":128,"width":656,"height":11}},{"id":"c395f6db-4b5a-4439-94f3-24f9c84d00fd","block_type":"box","text":"sells a treasury security to a counterparty with a simultaneous agreement to repurchase the same security at an","page_number":126,"box":{"x":69,"y":143,"width":804,"height":11}},{"id":"ba591b78-0078-4af1-ba7f-c4f46f81a213","block_type":"box","text":"agreed upon price and future settlement date. U.S. Treasury roll transactions may incrementally adjust the average","page_number":126,"box":{"x":69,"y":158,"width":820,"height":11}},{"id":"7a14dc3f-9af4-4497-a20f-d9dff76a02f5","block_type":"box","text":"maturity of a Fund’s portfolio and increase the interest yield on the Fund’s portfolio by extending the average maturity","page_number":126,"box":{"x":69,"y":173,"width":840,"height":11}},{"id":"3fe8d75f-98b5-450c-be04-1a42b024dfe2","block_type":"box","text":"of the portfolio in a normal yield curve environment. During the period before the settlement date of a U.S. Treasury","page_number":126,"box":{"x":69,"y":188,"width":828,"height":12}},{"id":"668b27dd-ea0c-48ad-85c3-92d9a0d0007a","block_type":"box","text":"roll, a Fund continues to earn interest on the securities it is selling; however, it does not earn interest on the","page_number":126,"box":{"x":69,"y":204,"width":775,"height":11}},{"id":"fbbed720-2f6a-4b09-b1f4-e43ac5468cf3","block_type":"box","text":"securities it is purchasing until after the settlement date. A Fund could suffer an opportunity loss if the counterparty","page_number":126,"box":{"x":69,"y":218,"width":829,"height":12}},{"id":"0aab5c97-c560-4368-9cee-29ed35208730","block_type":"box","text":"to the U.S. Treasury roll transaction failed to perform its obligations on the settlement date.","page_number":126,"box":{"x":68,"y":234,"width":657,"height":11}},{"id":"364f00fb-0d2a-4cb5-aa3f-c405134fc365","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed upon","page_number":126,"box":{"x":101,"y":256,"width":756,"height":12}},{"id":"3be08315-31f2-4d02-bea1-e972e0533e9b","block_type":"box","text":"purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be deemed to involve","page_number":126,"box":{"x":70,"y":271,"width":800,"height":12}},{"id":"4c149979-913a-467f-b850-570e8c4173e8","block_type":"box","text":"leverage. There is no assurance that U.S. Treasury rolls can be successfully employed.","page_number":126,"box":{"x":70,"y":286,"width":617,"height":12}},{"id":"03c02a44-b591-46be-b07f-5126b9ce7914","block_type":"box","text":"Utility Industries.","page_number":126,"box":{"x":102,"y":309,"width":124,"height":11}},{"id":"0831150d-28fb-465b-8f07-1a05ded7e81d","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an adequate return","page_number":126,"box":{"x":233,"y":309,"width":674,"height":11}},{"id":"ac96e064-b529-41ed-9632-f67bab285ac6","block_type":"box","text":"on invested capital, difficulty in financing large construction programs during an inflationary period, restrictions on","page_number":126,"box":{"x":69,"y":324,"width":812,"height":12}},{"id":"feedc4a2-82b4-4fdc-a34e-29a5a31ce2a7","block_type":"box","text":"operations and increased cost and delays attributable to environmental considerations and regulation, difficulty in","page_number":126,"box":{"x":69,"y":339,"width":812,"height":12}},{"id":"4cae07dc-15ae-4683-b5e5-e047e50c30dc","block_type":"box","text":"raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets,","page_number":126,"box":{"x":69,"y":355,"width":821,"height":11}},{"id":"0e080188-5467-439a-b15c-ca4525b2ab40","block_type":"box","text":"technological innovations that may render existing plants, equipment or products obsolete, the potential impact of","page_number":126,"box":{"x":68,"y":370,"width":815,"height":11}},{"id":"2332c1c5-6c33-49e1-a4cb-5caf00480770","block_type":"box","text":"natural or man-made disasters, increased costs and reduced availability of certain types of fuel, occasional reduced","page_number":126,"box":{"x":69,"y":385,"width":827,"height":11}},{"id":"272dfd3e-dcf4-4026-b9b4-4fa22e6db7e1","block_type":"box","text":"availability and high costs of natural gas for resale, the effects of energy conservation, the effects of a national","page_number":126,"box":{"x":69,"y":400,"width":795,"height":11}},{"id":"de15b9f4-c4e0-47ad-ae4e-cdf7ed42cc41","block_type":"box","text":"energy policy and lengthy delays and greatly increased costs and other problems associated with the design,","page_number":126,"box":{"x":69,"y":415,"width":774,"height":11}},{"id":"806044fa-20b2-4d76-b740-bcf010d00a76","block_type":"box","text":"construction, licensing, regulation and operation of nuclear facilities for electric generation, including, among other","page_number":126,"box":{"x":69,"y":430,"width":817,"height":11}},{"id":"effc6dd4-1e5b-4699-a2e8-158b05484f47","block_type":"box","text":"considerations, the problems associated with the use of radioactive materials and the disposal of radioactive wastes.","page_number":126,"box":{"x":69,"y":445,"width":839,"height":11}},{"id":"1257b173-8219-4d19-a575-e11a3e82bdb5","block_type":"box","text":"There are substantial differences among the regulatory practices and policies of various jurisdictions, and any given","page_number":126,"box":{"x":68,"y":460,"width":827,"height":12}},{"id":"0a478306-2a99-47a3-95f9-bc12f4cb0a5f","block_type":"box","text":"regulatory agency may make major shifts in policy from time to time. There is no assurance that regulatory","page_number":126,"box":{"x":69,"y":475,"width":761,"height":12}},{"id":"4cdb33be-c4fa-4aad-bfbe-0bffd24e1c34","block_type":"box","text":"authorities will, in the future, grant rate increases or that such increases will be adequate to permit the payment of","page_number":126,"box":{"x":69,"y":491,"width":821,"height":11}},{"id":"7c69d082-b359-4b92-b28d-18708bfb4236","block_type":"box","text":"dividends on common stocks issued by a utility company. Additionally, existing and possible future regulatory","page_number":126,"box":{"x":69,"y":506,"width":777,"height":11}},{"id":"e20d0e86-ffdf-4974-b5e9-92ddc4db5220","block_type":"box","text":"legislation may make it even more difficult for utilities to obtain adequate relief. Certain of the issuers of securities","page_number":126,"box":{"x":70,"y":521,"width":820,"height":11}},{"id":"4e27c20d-22e5-4604-a8f2-bdeacff2f7eb","block_type":"box","text":"held in the Fund’s portfolio may own or operate nuclear generating facilities. Governmental authorities may from time","page_number":126,"box":{"x":69,"y":536,"width":835,"height":11}},{"id":"e20d1d4f-0ab3-4d14-b1b5-48976c82a9ee","block_type":"box","text":"to time review existing policies and impose additional requirements governing the licensing, construction and","page_number":126,"box":{"x":68,"y":551,"width":778,"height":11}},{"id":"48d54f99-eede-4585-aa50-8375315848c6","block_type":"box","text":"operation of nuclear power plants. Prolonged changes in climatic conditions can also have a significant impact on","page_number":126,"box":{"x":69,"y":566,"width":808,"height":11}},{"id":"4689d57c-5a1e-4a98-86bf-cf2bbcac4aad","block_type":"box","text":"both the revenues of an electric and gas utility as well as the expenses of a utility, particularly a hydro-based electric","page_number":126,"box":{"x":69,"y":581,"width":831,"height":12}},{"id":"b87e9162-3e39-44cd-9a58-cc2e6bfc4624","block_type":"box","text":"utility.","page_number":126,"box":{"x":69,"y":597,"width":39,"height":11}},{"id":"1ce5140b-3dd9-49fd-aaea-8a4ecdb5d8c6","block_type":"box","text":"Companies in the utilities sector may be adversely affected by changes in exchange rates, domestic and","page_number":126,"box":{"x":102,"y":619,"width":744,"height":11}},{"id":"abfd0ea2-b8a2-406a-83fd-a804a7d00a3a","block_type":"box","text":"international competition, and governmental limitations on rates charged to customers. The value of regulated utility","page_number":126,"box":{"x":70,"y":634,"width":828,"height":12}},{"id":"29972bd2-4a1f-4fa6-8abd-f0022c452b3e","block_type":"box","text":"debt securities and, to a lesser extent, equity securities, tends to have an inverse relationship to the movement of","page_number":126,"box":{"x":69,"y":649,"width":817,"height":12}},{"id":"6b27c83b-127a-46f0-8189-8a7d19e7b44f","block_type":"box","text":"interest rates and therefore may lead to volatility in performance.","page_number":126,"box":{"x":70,"y":664,"width":464,"height":12}},{"id":"ea81fa8f-e234-4c0c-b833-60074fbd71f4","block_type":"box","text":"Utility companies in the United States and in foreign countries are generally subject to regulation. In the United","page_number":126,"box":{"x":102,"y":687,"width":789,"height":11}},{"id":"52dbfb4a-0415-4b96-8101-0158b883176e","block_type":"box","text":"States, most utility companies are regulated by state and/or federal authorities. Such regulation is intended to","page_number":126,"box":{"x":69,"y":702,"width":790,"height":12}},{"id":"e3699314-6711-43ca-94b3-9c6e2886d5f9","block_type":"box","text":"ensure appropriate standards of service and adequate capacity to meet public demand. Generally, prices are also","page_number":126,"box":{"x":69,"y":717,"width":811,"height":12}},{"id":"96e07bad-6f62-4705-b10b-b7ae00f4afd0","block_type":"box","text":"regulated in the United States and in foreign countries with the intention of protecting the public while ensuring that","page_number":126,"box":{"x":69,"y":732,"width":824,"height":12}},{"id":"c744790a-9ec6-4b18-b44c-c66d1379e2a5","block_type":"box","text":"the rate of return earned by utility companies is sufficient to allow them to attract capital in order to grow and","page_number":126,"box":{"x":68,"y":748,"width":781,"height":11}},{"id":"2ae185b5-4eb7-476e-89ed-b3e6dc584685","block_type":"box","text":"continue to provide appropriate services. There can be no assurance that such pricing policies or rates of return will","page_number":126,"box":{"x":69,"y":763,"width":826,"height":11}},{"id":"fc970674-9a9e-4eea-8d02-9423258f2623","block_type":"box","text":"continue in the future.","page_number":126,"box":{"x":69,"y":778,"width":156,"height":9}},{"id":"7bed8499-3fbb-468f-af63-65f6641913e2","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in foreign","page_number":126,"box":{"x":101,"y":801,"width":763,"height":11}},{"id":"dc1aca29-9957-40f6-9118-a661db11791f","block_type":"box","text":"countries. In recent years, changes in regulation in the United States increasingly have allowed utility companies to","page_number":126,"box":{"x":69,"y":816,"width":820,"height":11}},{"id":"28d60f25-e361-4921-be42-5611d9eb9650","block_type":"box","text":"provide services and products outside their traditional geographic areas and lines of business, creating new areas of","page_number":126,"box":{"x":70,"y":831,"width":834,"height":11}},{"id":"32cd96d2-aa9d-4b63-9f31-7f7e153cda54","block_type":"box","text":"competition within the industries. In some instances, utility companies are operating on an unregulated basis.","page_number":126,"box":{"x":69,"y":846,"width":784,"height":11}},{"id":"67216b2b-d1c8-4383-8365-28f91be3684e","block_type":"box","text":"Because of trends toward deregulation and the evolution of independent power producers as well as new entrants to","page_number":126,"box":{"x":70,"y":861,"width":830,"height":11}},{"id":"62c4e8e5-258a-43b3-9a8b-47a9d32e205e","block_type":"box","text":"the field of telecommunications, non-regulated providers of utility services have become a significant part of their","page_number":126,"box":{"x":68,"y":876,"width":809,"height":11}},{"id":"35f6141f-90d5-4752-bde1-26840c3a0626","block_type":"box","text":"respective industries. The Manager believes that the emergence of competition and deregulation will result in certain","page_number":126,"box":{"x":69,"y":891,"width":834,"height":12}},{"id":"6dcd4bc3-398a-4521-bdad-7f3b468ec9f0","block_type":"box","text":"utility companies being able to earn more than their traditional regulated rates of return, while others may be forced","page_number":126,"box":{"x":69,"y":906,"width":825,"height":12}},{"id":"8af65dfb-eb93-4fc7-82ae-6f49745f6b5d","block_type":"box","text":"II-77","page_number":126,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"a75f5f35-f02e-467d-a368-7fc2fc0b577b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":126,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"34a2dae1-3869-4284-9ee0-fa0b9de22e8d","block_type":"box","text":"to defend their core business from increased competition and may be less profitable. Reduced profitability, as well as","page_number":127,"box":{"x":68,"y":45,"width":840,"height":11}},{"id":"d98a21d0-af15-4b56-b06b-c69564fb3310","block_type":"box","text":"new uses of funds (such as for expansion, operations or stock buybacks) could result in cuts in dividend payout","page_number":127,"box":{"x":69,"y":60,"width":796,"height":11}},{"id":"5f0116c0-6793-4d4a-9780-3b557f0b7367","block_type":"box","text":"rates. As deregulation allows utility companies to diversify outside of their original geographic regions and their","page_number":127,"box":{"x":69,"y":75,"width":790,"height":11}},{"id":"43ead300-b123-46c5-841e-ac6c7de8e036","block_type":"box","text":"traditional lines of business, utility companies may engage in riskier ventures. Therefore, deregulation may eliminate","page_number":127,"box":{"x":68,"y":90,"width":831,"height":11}},{"id":"cfabb9c3-8991-4a7c-a4c9-a83004b7c01d","block_type":"box","text":"restrictions on the maximum level of profits of certain utility companies, but may also subject these companies to","page_number":127,"box":{"x":69,"y":105,"width":812,"height":11}},{"id":"77fb07cc-bcaf-4d28-b90d-d23a3ab605d3","block_type":"box","text":"greater risk of loss. The Manager seeks to take advantage of favorable investment opportunities that may arise from","page_number":127,"box":{"x":68,"y":120,"width":833,"height":12}},{"id":"9deee4af-293b-43bc-bc12-6ecedd7f753a","block_type":"box","text":"these structural changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":127,"box":{"x":68,"y":135,"width":831,"height":12}},{"id":"58621c22-5f64-4f52-96e5-dd11eaa04073","block_type":"box","text":"Foreign utility companies are also subject to regulation, although such regulations may or may not be","page_number":127,"box":{"x":102,"y":158,"width":720,"height":11}},{"id":"1b09a3f8-8c49-4fe6-a3c4-cc3a71979b35","block_type":"box","text":"comparable to those in the United States. Foreign utility companies may be more heavily regulated by their respective","page_number":127,"box":{"x":69,"y":173,"width":838,"height":11}},{"id":"403062bd-a102-4d92-9465-360c0ab73d0a","block_type":"box","text":"governments than utilities in the United States and, as in the United States, generally are required to seek","page_number":127,"box":{"x":68,"y":188,"width":762,"height":12}},{"id":"f31fedc2-7989-4173-9e92-41d8357287bb","block_type":"box","text":"government approval for rate increases. In addition, many foreign utilities use fuels that may cause more pollution","page_number":127,"box":{"x":68,"y":203,"width":815,"height":12}},{"id":"2e9180bd-14c5-4b09-8cf9-cc6c531c814f","block_type":"box","text":"than those used in the United States, which may require such utilities to invest in pollution control equipment to","page_number":127,"box":{"x":68,"y":219,"width":801,"height":11}},{"id":"d47567aa-ff82-4c77-9b82-63c3c1dd04ef","block_type":"box","text":"meet any proposed pollution restrictions. Foreign regulatory systems vary from country to country and may evolve in","page_number":127,"box":{"x":69,"y":234,"width":828,"height":11}},{"id":"b95cd08e-dfdf-4dcc-9529-e6eae94831b6","block_type":"box","text":"ways different from regulation in the United States.","page_number":127,"box":{"x":68,"y":249,"width":365,"height":11}},{"id":"9e824a8e-7c85-4ab1-a345-aeefc2632e4f","block_type":"box","text":"A Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities","page_number":127,"box":{"x":101,"y":272,"width":745,"height":11}},{"id":"5f2f98ea-121c-45d3-8e33-4fe570c58349","block_type":"box","text":"throughout the world. For example, the rapid growth of certain foreign economies will necessitate expansion of","page_number":127,"box":{"x":68,"y":286,"width":790,"height":12}},{"id":"c09ca391-526d-4643-8322-20661bf4610c","block_type":"box","text":"capacity in the utility industries in those countries. Although many foreign utility companies currently are government","page_number":127,"box":{"x":69,"y":302,"width":833,"height":11}},{"id":"9391a49d-2018-48b6-b657-9ec45fabd3f5","block_type":"box","text":"owned, thereby limiting current investment opportunities for a Fund, the Manager believes that, in order to attract","page_number":127,"box":{"x":69,"y":317,"width":810,"height":11}},{"id":"9ee589b6-e539-4b36-86c6-870a41d0becf","block_type":"box","text":"significant capital for growth, foreign governments are likely to seek global investors through the privatization of their","page_number":127,"box":{"x":69,"y":332,"width":831,"height":11}},{"id":"ad1d7a51-899b-4f2e-8a1a-f7b020781b23","block_type":"box","text":"utility industries. Privatization, which refers to the trend toward investor ownership of assets rather than government","page_number":127,"box":{"x":69,"y":347,"width":828,"height":11}},{"id":"8ee6a543-4624-4dca-a01a-5e362d54f451","block_type":"box","text":"ownership, is expected to occur in newer, faster-growing economies and in mature economies. Of course, there is no","page_number":127,"box":{"x":69,"y":362,"width":832,"height":11}},{"id":"c053ce76-4d23-409b-8331-21a2cbe3a905","block_type":"box","text":"assurance that such favorable developments will occur or that investment opportunities in foreign markets will","page_number":127,"box":{"x":69,"y":377,"width":786,"height":12}},{"id":"0ce4bf6e-d92a-4a0d-b5b2-cbead1b13b04","block_type":"box","text":"increase.","page_number":127,"box":{"x":70,"y":393,"width":63,"height":8}},{"id":"2d8e341b-fb82-47b0-9cb7-1ef76eadd42d","block_type":"box","text":"The revenues of domestic and foreign utility companies generally reflect the economic growth and development","page_number":127,"box":{"x":101,"y":415,"width":793,"height":11}},{"id":"f02e4eb9-7a28-4a79-b4a7-8b2438c63eb1","block_type":"box","text":"in the geographic areas in which they do business. The Manager will take into account anticipated economic growth","page_number":127,"box":{"x":70,"y":430,"width":821,"height":11}},{"id":"72764a15-454e-4875-92ab-76fffbaf6745","block_type":"box","text":"rates and other economic developments when selecting securities of utility companies.","page_number":127,"box":{"x":69,"y":445,"width":619,"height":12}},{"id":"922e8bac-9ff5-48c6-924b-8ab6acf734a0","block_type":"box","text":"Electric.","page_number":127,"box":{"x":102,"y":468,"width":54,"height":9}},{"id":"cbad6f1a-3f19-4867-bae2-41d2b4bd0a35","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the generation,","page_number":127,"box":{"x":163,"y":468,"width":684,"height":11}},{"id":"7c7ea293-afbd-4fce-991d-14cc1fd99e96","block_type":"box","text":"transmission and sale of electric energy, although many also provide other energy-related services. In the past,","page_number":127,"box":{"x":68,"y":483,"width":793,"height":11}},{"id":"53d3a8cd-f86c-435b-9734-a9732b5bbf46","block_type":"box","text":"electric utility companies, in general, have been favorably affected by lower fuel and financing costs and the full or","page_number":127,"box":{"x":69,"y":498,"width":814,"height":11}},{"id":"04671ce8-9dd5-4310-a33f-8278e1c899e1","block_type":"box","text":"near completion of major construction programs. In addition, many of these companies have generated cash flows in","page_number":127,"box":{"x":69,"y":513,"width":833,"height":12}},{"id":"e2281a02-7042-4020-beae-d60c9a3a910d","block_type":"box","text":"excess of current operating expenses and construction expenditures, permitting some degree of diversification into","page_number":127,"box":{"x":69,"y":528,"width":821,"height":12}},{"id":"21087586-8090-4c0d-b784-76b55a56572e","block_type":"box","text":"unregulated businesses. Some electric utilities have also taken advantage of the right to sell power outside of their","page_number":127,"box":{"x":69,"y":543,"width":823,"height":12}},{"id":"87b8160e-5bef-4fa6-aeda-d77187ab3b25","block_type":"box","text":"traditional geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":127,"box":{"x":68,"y":559,"width":803,"height":11}},{"id":"40bfca78-e187-48a8-b55b-92a9d228486d","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital construction","page_number":127,"box":{"x":70,"y":574,"width":778,"height":11}},{"id":"715e4e1c-2921-41ba-99f6-6ffc67b46b05","block_type":"box","text":"programs, costs associated with compliance with environmental and safety regulations and changes in the regulatory","page_number":127,"box":{"x":70,"y":589,"width":836,"height":11}},{"id":"f45b0ed6-f11e-4664-8f47-8aad85e5c5cd","block_type":"box","text":"climate. As interest rates declined, many utilities refinanced high cost debt and in doing so improved their fixed","page_number":127,"box":{"x":69,"y":604,"width":793,"height":11}},{"id":"41f3a2fb-e7a6-4d51-9de2-4466ca65124f","block_type":"box","text":"charges coverage. Regulators, however, lowered allowed rates of return as interest rates declined and thereby","page_number":127,"box":{"x":69,"y":619,"width":786,"height":11}},{"id":"975cfedf-9232-4a58-b3d4-ddbaa8798d8b","block_type":"box","text":"caused the benefits of the rate declines to be shared wholly or in part with customers. In a period of rising interest","page_number":127,"box":{"x":69,"y":634,"width":819,"height":12}},{"id":"db3b2702-232d-4933-91ea-c26688375a6b","block_type":"box","text":"rates, the allowed rates of return may not keep pace with the utilities’ increased costs. The construction and","page_number":127,"box":{"x":69,"y":649,"width":775,"height":12}},{"id":"4dd3c624-4454-4eaf-9adb-7ceb3403cf3c","block_type":"box","text":"operation of nuclear power facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear","page_number":127,"box":{"x":69,"y":664,"width":770,"height":12}},{"id":"1fafb716-579d-42d3-8eea-e2dcb446c844","block_type":"box","text":"Regulatory Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in higher","page_number":127,"box":{"x":70,"y":680,"width":826,"height":11}},{"id":"3b302c19-9f0f-44be-9afa-426c544bfb9d","block_type":"box","text":"operating costs and higher capital expenditures, with the risk that the regulators may disallow inclusion of these","page_number":127,"box":{"x":69,"y":695,"width":800,"height":11}},{"id":"d97d2839-8a5b-4e44-bd39-51beba34ab08","block_type":"box","text":"costs in rate authorizations or the risk that a company may not be permitted to operate or complete construction of a","page_number":127,"box":{"x":69,"y":710,"width":836,"height":11}},{"id":"84464acd-3e63-4acf-abcd-3721b4b6454c","block_type":"box","text":"facility. In addition, operators of nuclear power plants may be subject to significant costs for disposal of nuclear fuel","page_number":127,"box":{"x":68,"y":725,"width":826,"height":11}},{"id":"97314168-e26c-4584-ae56-5aa4d2257f59","block_type":"box","text":"and for decommissioning such plants.","page_number":127,"box":{"x":69,"y":740,"width":270,"height":11}},{"id":"3d0a9827-3e2d-455f-b10a-ea4a82724f1f","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected to be","page_number":127,"box":{"x":101,"y":763,"width":776,"height":11}},{"id":"58fb5321-c647-4530-97ac-9d486ab841ca","block_type":"box","text":"impacted to a greater extent in the future by the division of their asset base. Electric utility companies that focus","page_number":127,"box":{"x":70,"y":778,"width":802,"height":11}},{"id":"cd11649d-1346-451e-9256-81e2a7f2e1c2","block_type":"box","text":"more on the generation of electricity may be assigned less favorable ratings as this business is expected to be","page_number":127,"box":{"x":69,"y":793,"width":791,"height":11}},{"id":"9f39fbe4-384f-44cb-85ca-2723011047f9","block_type":"box","text":"competitive and the least regulated. On the other hand, companies that focus on transmission and distribution, which","page_number":127,"box":{"x":69,"y":808,"width":839,"height":11}},{"id":"c1a46be2-737c-4219-8463-b948d24af701","block_type":"box","text":"is expected to be the least competitive and the more regulated part of the business, may see higher ratings given the","page_number":127,"box":{"x":70,"y":823,"width":838,"height":12}},{"id":"590876f8-43ff-45cf-a1b5-377dfe6e2e76","block_type":"box","text":"greater predictability of cash flow.","page_number":127,"box":{"x":68,"y":838,"width":239,"height":12}},{"id":"1eb4aab1-40d2-4657-9438-d88ae2c9d29a","block_type":"box","text":"A number of states are considering or have enacted deregulation proposals. The introduction of competition into","page_number":127,"box":{"x":101,"y":861,"width":801,"height":11}},{"id":"4bd95cf7-f5a2-4519-980d-ac3be0c1cb01","block_type":"box","text":"the industry as a result of such deregulation has at times resulted in lower revenue, lower credit ratings, increased","page_number":127,"box":{"x":68,"y":876,"width":821,"height":11}},{"id":"c7015656-0a09-420e-ab73-d03f877a545b","block_type":"box","text":"default risk, and lower electric utility security prices. Such increased competition may also cause long-term contracts,","page_number":127,"box":{"x":69,"y":891,"width":835,"height":12}},{"id":"bbd05f8b-3106-4608-9947-8e12020401cd","block_type":"box","text":"which electric utilities previously entered into to buy power, to become “stranded assets” which have no economic","page_number":127,"box":{"x":68,"y":907,"width":815,"height":11}},{"id":"f456d4c7-b9e5-47d1-a552-c911f5ed7fd1","block_type":"box","text":"II-78","page_number":127,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"59179efb-06bb-4d97-ad06-ea9e0180b072","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":127,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c065309c-e05d-4e08-b5ec-6ecff4cf39e8","block_type":"box","text":"value. Any loss associated with such contracts must be absorbed by ratepayers and investors. In addition, some","page_number":128,"box":{"x":68,"y":45,"width":803,"height":11}},{"id":"762d5cc2-7d62-4b06-8cec-7240b48fc346","block_type":"box","text":"electric utilities have acquired electric utilities overseas to diversify, enhance earnings and gain experience in","page_number":128,"box":{"x":69,"y":60,"width":777,"height":11}},{"id":"73f8fd38-935b-495b-8c15-03dc392df025","block_type":"box","text":"operating in a deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":128,"box":{"x":69,"y":75,"width":819,"height":11}},{"id":"5c5b01ed-f1d8-41c7-85b2-68fe62f5c7a3","block_type":"box","text":"which have burdened the acquirer’s balance sheet. There is no assurance that current deregulation proposals will be","page_number":128,"box":{"x":68,"y":90,"width":835,"height":11}},{"id":"54dc626a-c70c-4662-bd43-10b7aa79da92","block_type":"box","text":"adopted. However, deregulation in any form could significantly impact the electric utilities industry.","page_number":128,"box":{"x":69,"y":105,"width":700,"height":11}},{"id":"4294b78c-0f82-40fd-ad4b-1c7675c1d73c","block_type":"box","text":"Telecommunications.","page_number":128,"box":{"x":103,"y":128,"width":147,"height":9}},{"id":"5e6f48dd-8b8f-4826-94a9-ec05974436d2","block_type":"box","text":"The telecommunications industry today includes both traditional telephone companies, with","page_number":128,"box":{"x":256,"y":128,"width":652,"height":11}},{"id":"753eb097-409f-4d28-a60a-4ba972b03df7","block_type":"box","text":"a history of broad market coverage and highly regulated businesses, and cable companies, which began as small,","page_number":128,"box":{"x":69,"y":143,"width":813,"height":11}},{"id":"6cf2da7f-7342-4685-890c-8dd861401edb","block_type":"box","text":"lightly regulated businesses focused on limited markets. Today these two historically different businesses are","page_number":128,"box":{"x":70,"y":158,"width":782,"height":11}},{"id":"cbcdccb4-dd7d-4d00-9d24-e0f57ce99a5d","block_type":"box","text":"converging in an industry that is trending toward larger, competitive national and international markets with an","page_number":128,"box":{"x":69,"y":173,"width":786,"height":11}},{"id":"5784d1af-e094-4413-ae95-7a0dac7282d2","block_type":"box","text":"emphasis on deregulation. Companies that distribute telephone services and provide access to the telephone","page_number":128,"box":{"x":69,"y":188,"width":784,"height":12}},{"id":"17aa7da0-862e-451f-8a53-0eb950b6802d","block_type":"box","text":"networks still comprise the greatest portion of this segment, but non-regulated activities such as wireless telephone","page_number":128,"box":{"x":69,"y":203,"width":830,"height":12}},{"id":"57916963-71a3-4cfa-bfa0-2d60c8c51395","block_type":"box","text":"services, paging, data transmission and processing, equipment retailing, computer software and hardware and","page_number":128,"box":{"x":69,"y":218,"width":790,"height":12}},{"id":"2db9149a-9ff5-4ca9-950d-df43648845b4","block_type":"box","text":"internet services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":128,"box":{"x":70,"y":234,"width":788,"height":11}},{"id":"ba38367f-615d-4bd2-b286-fb141825995b","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies. The presence","page_number":128,"box":{"x":68,"y":249,"width":825,"height":11}},{"id":"2541b899-d6c4-443d-922e-6c0b45965a64","block_type":"box","text":"of unregulated companies in this industry and the entry of traditional telephone companies into unregulated or less","page_number":128,"box":{"x":69,"y":264,"width":823,"height":11}},{"id":"15e3ce2e-b268-48cc-be7f-d452019e8e84","block_type":"box","text":"regulated businesses provide significant investment opportunities with companies that may increase their earnings","page_number":128,"box":{"x":69,"y":279,"width":821,"height":11}},{"id":"14419e08-89e7-47cc-a2ec-f50b9ebbe037","block_type":"box","text":"at faster rates than had been allowed in traditional regulated businesses. Still, increasing competition, technological","page_number":128,"box":{"x":69,"y":294,"width":830,"height":11}},{"id":"ad30886d-84ab-4d44-8da0-cba3d1402e16","block_type":"box","text":"innovations and other structural changes could adversely affect the profitability of such utilities and the growth rate","page_number":128,"box":{"x":70,"y":309,"width":821,"height":11}},{"id":"f41919e2-4b4f-4477-a2db-67609339eb53","block_type":"box","text":"of their dividends. Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":128,"box":{"x":69,"y":324,"width":827,"height":12}},{"id":"04667260-edf8-4711-a566-1f50d3370c44","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility services to both","page_number":128,"box":{"x":68,"y":339,"width":804,"height":12}},{"id":"059b0e07-79a5-4a08-8ff0-a58da3096b72","block_type":"box","text":"residential, corporate and governmental customers.","page_number":128,"box":{"x":69,"y":355,"width":367,"height":11}},{"id":"e721ac6b-8b94-4315-9137-b15d3a3a049f","block_type":"box","text":"Gas.","page_number":128,"box":{"x":102,"y":377,"width":31,"height":9}},{"id":"49f37bd0-480a-4c3b-a14d-009bdc594e70","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes. In the","page_number":128,"box":{"x":139,"y":377,"width":740,"height":12}},{"id":"2b22afea-847a-4ca1-8a0f-6eb1e3fb21f3","block_type":"box","text":"United States, interstate transmission companies are regulated by the Federal Energy Regulatory Commission, which","page_number":128,"box":{"x":70,"y":392,"width":834,"height":12}},{"id":"076da95a-36e0-4a19-b883-398bf9de70d2","block_type":"box","text":"is reducing its regulation of the industry. Many companies have diversified into oil and gas exploration and","page_number":128,"box":{"x":70,"y":407,"width":756,"height":12}},{"id":"41a3e731-a7c6-48d2-a2bb-55b7c6161785","block_type":"box","text":"development, making returns more sensitive to energy prices. In the recent decade, gas utility companies have been","page_number":128,"box":{"x":69,"y":423,"width":831,"height":11}},{"id":"258023ec-0be6-484e-a9e2-8c58ed2b2555","block_type":"box","text":"adversely affected by disruptions in the oil industry and have also been affected by increased concentration and","page_number":128,"box":{"x":69,"y":438,"width":801,"height":11}},{"id":"6be42d3a-70b8-4038-a78c-157bfdfb2cb3","block_type":"box","text":"competition. In the opinion of the Manager, however, environmental considerations could improve the gas industry","page_number":128,"box":{"x":69,"y":453,"width":815,"height":11}},{"id":"91449979-9b79-491e-835b-0366317d4b4a","block_type":"box","text":"outlook in the future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":128,"box":{"x":69,"y":468,"width":782,"height":11}},{"id":"6db0e4a3-92bb-4c47-b26d-d903ede4e6e6","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for electricity generation.","page_number":128,"box":{"x":70,"y":483,"width":829,"height":11}},{"id":"387f8893-d4f7-4989-bc22-217510f2f70a","block_type":"box","text":"However, technological or regulatory changes within the industry may delay or prevent this result.","page_number":128,"box":{"x":70,"y":498,"width":691,"height":11}},{"id":"73724817-4b59-4a65-acf8-e775c8d9039a","block_type":"box","text":"Water.","page_number":128,"box":{"x":103,"y":521,"width":42,"height":9}},{"id":"960f041b-72b7-47bb-9fe9-a16508df766a","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United States and","page_number":128,"box":{"x":151,"y":521,"width":754,"height":11}},{"id":"1faa47c3-1fd0-4d2a-be8a-3c765e9544df","block_type":"box","text":"around the world the industry is highly fragmented because most of the supplies are owned by local authorities.","page_number":128,"box":{"x":69,"y":536,"width":796,"height":11}},{"id":"6ce72d69-2328-47d4-ae8c-c449913a07f2","block_type":"box","text":"Companies in this industry are generally mature and are experiencing little or no per capita volume growth. In the","page_number":128,"box":{"x":69,"y":551,"width":806,"height":11}},{"id":"9b803488-bfcf-45df-8a20-b7b481f4efc1","block_type":"box","text":"opinion of the Manager, there may be opportunities for certain companies to acquire other water utility companies","page_number":128,"box":{"x":69,"y":566,"width":814,"height":11}},{"id":"fb41afd2-9d18-47b2-b831-fc8cb20ed978","block_type":"box","text":"and for foreign acquisition of domestic companies. The Manager believes that favorable investment opportunities","page_number":128,"box":{"x":69,"y":581,"width":808,"height":12}},{"id":"c289b74c-054d-4731-b235-4cf9fbce8780","block_type":"box","text":"may result from consolidation of this segment. As with other utilities, however, increased regulation, increased costs","page_number":128,"box":{"x":69,"y":596,"width":832,"height":12}},{"id":"71157b33-930c-47ab-93cd-0f1a81fff4d2","block_type":"box","text":"and potential disruptions in supply may adversely affect investments in water supply utilities.","page_number":128,"box":{"x":69,"y":612,"width":662,"height":11}},{"id":"1b77d10f-4c55-4058-a064-41256939478a","block_type":"box","text":"Utility Industries Generally.","page_number":128,"box":{"x":103,"y":634,"width":186,"height":11}},{"id":"04cbc46f-c36e-43f1-9f14-31195533d82f","block_type":"box","text":"There can be no assurance that the positive developments noted above, including","page_number":128,"box":{"x":296,"y":634,"width":584,"height":12}},{"id":"ae92f504-d1e5-47b8-8898-55250ff60a5b","block_type":"box","text":"those relating to privatization and changing regulation, will occur or that risk factors other than those noted above will","page_number":128,"box":{"x":68,"y":649,"width":837,"height":12}},{"id":"84822eb1-b8e3-4b7d-9fc1-0b02a19bfd7e","block_type":"box","text":"not develop in the future.","page_number":128,"box":{"x":69,"y":664,"width":178,"height":11}},{"id":"eec899ad-5481-4a0b-9a20-768db0791c99","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":128,"box":{"x":103,"y":687,"width":585,"height":11}},{"id":"2777776d-d6bc-4420-84f1-5c7205c8daf2","block_type":"box","text":"A Fund may purchase or sell","page_number":128,"box":{"x":694,"y":687,"width":200,"height":11}},{"id":"14d5b0b2-7deb-4150-81b0-a301a0a1e485","block_type":"box","text":"securities that it is entitled to receive on a when-issued basis. A Fund may also purchase or sell securities on a","page_number":128,"box":{"x":69,"y":703,"width":795,"height":10}},{"id":"b01b704d-fa69-458b-9694-207319f4cdb3","block_type":"box","text":"delayed delivery basis or through a forward commitment (including on a TBA (to be announced) basis). These","page_number":128,"box":{"x":69,"y":717,"width":777,"height":12}},{"id":"53f29be4-87d5-40f7-aaca-e391bf12b354","block_type":"box","text":"transactions involve the purchase or sale of securities by a Fund at an established price with payment and delivery","page_number":128,"box":{"x":68,"y":732,"width":820,"height":12}},{"id":"f99c2472-d0f5-4a56-9073-648d02c1c1e1","block_type":"box","text":"taking place in the future. The Fund enters into these transactions to obtain what is considered an advantageous","page_number":128,"box":{"x":68,"y":748,"width":807,"height":11}},{"id":"71af2e09-ac79-4079-a7b3-7d0e03eab10e","block_type":"box","text":"price to the Fund at the time of entering into the transaction.","page_number":128,"box":{"x":70,"y":763,"width":430,"height":11}},{"id":"00adaa0a-f7f9-41c2-b6c8-769161379e86","block_type":"box","text":"Pursuant to recommendations of the Treasury Market Practices Group, which is sponsored by the Federal","page_number":128,"box":{"x":102,"y":785,"width":750,"height":12}},{"id":"29fc421c-3d51-43fe-8f0a-fb78ac0d035c","block_type":"box","text":"Reserve Bank of New York, a Fund or its counterparty generally will be required to post collateral when entering into","page_number":128,"box":{"x":70,"y":801,"width":823,"height":11}},{"id":"fe5b0e89-73bd-4f75-9200-d52954169955","block_type":"box","text":"certain forward-settling transactions, including without limitation TBA transactions. FINRA rules have also been","page_number":128,"box":{"x":69,"y":816,"width":788,"height":11}},{"id":"7a2e6194-508b-42d7-b5db-9d3d66ca72ca","block_type":"box","text":"implemented that include mandatory margin requirements for the TBA market with limited exceptions. The","page_number":128,"box":{"x":70,"y":831,"width":755,"height":11}},{"id":"39ace64e-3411-4986-869a-6e679a768a5a","block_type":"box","text":"collateralization of TBA trades is intended to mitigate counterparty credit risk between trade and settlement, but","page_number":128,"box":{"x":69,"y":846,"width":799,"height":11}},{"id":"c63b0117-cfea-4ec6-9c27-bef31f6aea2a","block_type":"box","text":"could increase the cost of TBA transactions and impose added operational complexity.","page_number":128,"box":{"x":69,"y":861,"width":614,"height":11}},{"id":"13ececf0-83e0-47a4-8df2-45effa879f25","block_type":"box","text":"There can be no assurance that a security purchased on a when-issued basis will be issued or that a security","page_number":128,"box":{"x":101,"y":884,"width":780,"height":11}},{"id":"81f1aace-cf8d-44cc-9156-cb2a5a3930e1","block_type":"box","text":"purchased or sold on a delayed delivery basis or through a forward commitment will be delivered. Also, the value of","page_number":128,"box":{"x":70,"y":899,"width":823,"height":11}},{"id":"cc08f53a-e24b-467c-8aca-32fc472cb2a5","block_type":"box","text":"II-79","page_number":128,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"dbec1293-d7dc-45e1-a47a-c2082c5ab721","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":128,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a52de3fe-d905-47bb-b9c8-618356d6e374","block_type":"box","text":"securities in these transactions on the delivery date may be more or less than the price paid by the Fund to purchase","page_number":129,"box":{"x":69,"y":45,"width":838,"height":11}},{"id":"6ffce50a-bab6-460d-8e3e-91ac2242506a","block_type":"box","text":"the securities. The Fund will lose money if the value of the security in such a transaction declines below the purchase","page_number":129,"box":{"x":68,"y":60,"width":839,"height":11}},{"id":"4706d40c-61fa-4f50-b7e5-8ed2cb8ae057","block_type":"box","text":"price and will not benefit if the value of the security appreciates above the sale price during the commitment period.","page_number":129,"box":{"x":70,"y":75,"width":824,"height":11}},{"id":"e6ae0497-b9f1-4ea6-ae3e-1e5f04ca404a","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a commitment","page_number":129,"box":{"x":102,"y":98,"width":776,"height":11}},{"id":"d5715730-8201-48e7-9e85-e1007557c1f0","block_type":"box","text":"after it has been entered into, and may sell securities it has committed to purchase before those securities are","page_number":129,"box":{"x":69,"y":113,"width":795,"height":11}},{"id":"49f957d3-dc69-4f1d-97d6-1d20a7fcc9cb","block_type":"box","text":"delivered to the Fund on the settlement date. In these cases the Fund may realize a taxable capital gain or loss.","page_number":129,"box":{"x":69,"y":128,"width":799,"height":11}},{"id":"b57a3765-76ae-4db9-a598-1fa014e9f396","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other party to","page_number":129,"box":{"x":101,"y":150,"width":784,"height":12}},{"id":"7a590164-15ce-4a3a-8f4c-22b0b2246d9e","block_type":"box","text":"consummate the trade. Failure of such party to do so may result in the Fund’s incurring a loss or missing an","page_number":129,"box":{"x":69,"y":166,"width":772,"height":11}},{"id":"86e6abee-953d-4632-9ef1-53949a34ab9e","block_type":"box","text":"opportunity to obtain a price considered to be advantageous.","page_number":129,"box":{"x":69,"y":181,"width":434,"height":11}},{"id":"7af31c04-a92d-4e19-afe1-22f95ac37350","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any subsequent","page_number":129,"box":{"x":101,"y":203,"width":745,"height":12}},{"id":"1bb70996-2a5f-4fa5-833f-36cff73c9646","block_type":"box","text":"fluctuations in their market value, is taken into account when determining the market value of a Fund starting on the","page_number":129,"box":{"x":68,"y":218,"width":831,"height":12}},{"id":"5ae496d6-5283-4d92-b449-365117bf2029","block_type":"box","text":"day the Fund agrees to purchase the securities. The Fund does not earn interest on the securities it has committed","page_number":129,"box":{"x":69,"y":234,"width":823,"height":11}},{"id":"ab5c499c-cd69-4561-9347-8a5a1b5d6320","block_type":"box","text":"to purchase until they are paid for and delivered on the settlement date.","page_number":129,"box":{"x":68,"y":249,"width":514,"height":11}},{"id":"52e091a1-6312-4d42-a747-60f5e655c668","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward-settling","page_number":129,"box":{"x":102,"y":271,"width":759,"height":12}},{"id":"48c70545-7a0f-4495-a6ad-f7b70add3d21","block_type":"box","text":"securities (","page_number":129,"box":{"x":69,"y":287,"width":78,"height":11}},{"id":"0d2d1a6e-8922-4c63-a41d-d744c1617f3c","block_type":"box","text":"e.g.","page_number":129,"box":{"x":148,"y":288,"width":25,"height":10}},{"id":"3be59dcf-be26-49e7-abed-6fc67e4a1ca3","block_type":"box","text":", firm and standby commitments, including TBA commitments, and dollar rolls) and non-standard","page_number":129,"box":{"x":176,"y":286,"width":686,"height":12}},{"id":"40460fbf-d85a-4837-9baf-fb6f791bea1a","block_type":"box","text":"settlement cycle securities notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":129,"box":{"x":69,"y":302,"width":813,"height":11}},{"id":"209ff93d-17d0-428b-b7e0-bf91d9d7501e","block_type":"box","text":"Investment Company Act, provided that the Fund intends to physically settle the transaction and the transaction will","page_number":129,"box":{"x":70,"y":317,"width":822,"height":11}},{"id":"450d623b-e6f6-4571-b491-c26cfbcd1a62","block_type":"box","text":"settle within 35 days of its trade date (the “Delayed-Settlement Securities Provision”). If a when-issued, forward","page_number":129,"box":{"x":69,"y":332,"width":802,"height":11}},{"id":"201dfd4e-2bd5-46c6-877f-0ab037bd2fcf","block_type":"box","text":"settling or non-standard settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then","page_number":129,"box":{"x":69,"y":347,"width":826,"height":11}},{"id":"c28d1d5f-5afd-432e-b168-7f613f079f45","block_type":"box","text":"it is treated as a Derivatives Transaction under Rule 18f-4. See “—Derivatives — Regulation of Derivatives — Rule","page_number":129,"box":{"x":70,"y":362,"width":816,"height":11}},{"id":"3acae448-6eac-4259-9fbe-ef799a6fbd72","block_type":"box","text":"18f-4 under the Investment Company Act” above.","page_number":129,"box":{"x":70,"y":377,"width":349,"height":11}},{"id":"7ad6cb3d-a9c2-4aad-8ff2-aca51d8f2135","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and certain of","page_number":129,"box":{"x":102,"y":400,"width":800,"height":11}},{"id":"2bec21c9-838f-4a3c-970f-a04e45338934","block_type":"box","text":"their affiliates to include in certain financial contracts, including many agreements with respect to when-issued, TBA","page_number":129,"box":{"x":68,"y":415,"width":829,"height":11}},{"id":"2e443293-cb11-40c7-9e1f-98190fea8781","block_type":"box","text":"and forward commitment transactions, terms that delay or restrict the rights of counterparties, such as a Fund, to","page_number":129,"box":{"x":69,"y":430,"width":814,"height":11}},{"id":"f1bd3aef-919d-492f-bd76-0289b0bd4951","block_type":"box","text":"terminate such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":129,"box":{"x":68,"y":445,"width":799,"height":12}},{"id":"38f9a123-aa05-4224-8544-717b55bdd4fe","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution or insolvency","page_number":129,"box":{"x":69,"y":460,"width":836,"height":12}},{"id":"2844b94f-907a-45d2-9677-daed3229a8ec","block_type":"box","text":"proceedings. It is possible that these requirements, as well as potential additional government regulation and other","page_number":129,"box":{"x":70,"y":476,"width":824,"height":11}},{"id":"38a257c8-7130-44f8-b7ed-b2b818e1df59","block_type":"box","text":"developments in the market, could adversely affect a Fund’s ability to terminate existing agreements with respect to","page_number":129,"box":{"x":69,"y":491,"width":829,"height":11}},{"id":"77b38986-a17b-419d-ac08-8732a8c27519","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":129,"box":{"x":68,"y":506,"width":573,"height":11}},{"id":"16bcb5e9-428d-4b98-b4b5-84fac9b9d5cd","block_type":"box","text":"Yields and Ratings.","page_number":129,"box":{"x":103,"y":529,"width":139,"height":11}},{"id":"e7110694-6c7f-4213-9da2-1c7c713b269f","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including general","page_number":129,"box":{"x":247,"y":528,"width":628,"height":12}},{"id":"e4cc8f70-f884-4ad4-9c16-2164592e7ca0","block_type":"box","text":"market conditions, conditions in the particular market for the obligation, the financial condition of the issuer, the size","page_number":129,"box":{"x":69,"y":543,"width":834,"height":12}},{"id":"ef3b3db3-99e6-4b27-b9b8-ec6a0dd4b3d7","block_type":"box","text":"of the offering, the maturity of the obligation and the ratings of the issue. The ratings of Moody’s, Fitch and S&P","page_number":129,"box":{"x":69,"y":559,"width":799,"height":11}},{"id":"146e286b-943c-4694-8b45-fe07e08a4cf3","block_type":"box","text":"represent their respective opinions as to the quality of the obligations they undertake to rate. Ratings, however, are","page_number":129,"box":{"x":69,"y":574,"width":824,"height":11}},{"id":"4d1d7499-5663-4f53-b1bd-b0aca7e492fb","block_type":"box","text":"general and are not absolute standards of quality. Consequently, obligations with the same rating, maturity and","page_number":129,"box":{"x":68,"y":589,"width":792,"height":11}},{"id":"668d0b35-afbd-437a-88f4-ec98316f1af9","block_type":"box","text":"interest rate may have different market prices. Subsequent to its purchase by a Fund, a rated security may cease to","page_number":129,"box":{"x":70,"y":604,"width":827,"height":11}},{"id":"76f5473e-b3d5-4f09-8b7d-250121551c45","block_type":"box","text":"be rated. A Fund’s Manager or sub-adviser will consider such an event in determining whether the Fund should","page_number":129,"box":{"x":69,"y":619,"width":786,"height":11}},{"id":"dfd0d031-09fa-4d3b-a73d-a5b9e60cc84a","block_type":"box","text":"continue to hold the security.","page_number":129,"box":{"x":69,"y":634,"width":204,"height":11}},{"id":"92cf9262-aef3-49ed-9146-de083c334421","block_type":"box","text":"Zero Coupon Securities.","page_number":129,"box":{"x":102,"y":657,"width":175,"height":11}},{"id":"23c4c5f9-be2a-471a-91f2-57e1d7a4d1da","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value and do","page_number":129,"box":{"x":283,"y":657,"width":601,"height":11}},{"id":"8e322a42-ec3d-4068-a193-e57c5831b7e3","block_type":"box","text":"not pay interest during the life of the security. The discount approximates the total amount of interest the security will","page_number":129,"box":{"x":69,"y":672,"width":837,"height":11}},{"id":"38240d87-2c0b-4104-8a47-30f32a9deddd","block_type":"box","text":"accrue and compound over the period until maturity at a rate of interest reflecting the market rate of the security at","page_number":129,"box":{"x":69,"y":687,"width":822,"height":11}},{"id":"4d30cd29-4917-4978-aab9-dcb68ca30ce2","block_type":"box","text":"the time of issuance. Upon maturity, the holder of a zero coupon security is entitled to receive the par value of the","page_number":129,"box":{"x":68,"y":702,"width":814,"height":11}},{"id":"3d5fc56f-8d5f-4e3d-8f31-130f6fd571f9","block_type":"box","text":"security.","page_number":129,"box":{"x":69,"y":718,"width":57,"height":11}},{"id":"b8452b96-7829-468e-a410-86a40051931f","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to have","page_number":129,"box":{"x":101,"y":740,"width":749,"height":11}},{"id":"c97a9e6b-d174-4579-ab5c-766699e417a1","block_type":"box","text":"received income (“phantom income”) annually, notwithstanding that cash may not be received currently. The effect of","page_number":129,"box":{"x":69,"y":755,"width":835,"height":11}},{"id":"cfa17fd7-9cfe-4e2a-a4ed-4bb6619be0ef","block_type":"box","text":"owning instruments that do not make current interest payments is that a fixed yield is earned not only on the original","page_number":129,"box":{"x":69,"y":770,"width":833,"height":12}},{"id":"c2fe57a3-9764-45f3-8d99-da238b08e2e9","block_type":"box","text":"investment but also, in effect, on all discount accretion during the life of the obligations. This implicit reinvestment of","page_number":129,"box":{"x":70,"y":785,"width":836,"height":12}},{"id":"d025ba1e-70f7-4230-af7c-f79826359bea","block_type":"box","text":"earnings at a fixed rate eliminates the risk of being unable to invest distributions at a rate as high as the implicit","page_number":129,"box":{"x":69,"y":801,"width":804,"height":11}},{"id":"5e70017f-61a1-4452-b3b1-387c2c4010ae","block_type":"box","text":"yield on the zero coupon bond, but at the same time eliminates the holder’s ability to reinvest at higher rates in the","page_number":129,"box":{"x":68,"y":816,"width":824,"height":11}},{"id":"e40997df-2874-4345-9771-94a7be058174","block_type":"box","text":"future. For this reason, some of these securities may be subject to substantially greater price fluctuations during","page_number":129,"box":{"x":68,"y":831,"width":805,"height":11}},{"id":"b6ab11bf-ce86-4eec-8380-db26e09dbd51","block_type":"box","text":"periods of changing market interest rates than are comparable securities that pay interest currently. Longer term zero","page_number":129,"box":{"x":70,"y":846,"width":837,"height":11}},{"id":"9e6338be-58f5-4640-837b-27d6bce3a8d7","block_type":"box","text":"coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These investments","page_number":129,"box":{"x":69,"y":861,"width":791,"height":11}},{"id":"911dcb2a-6354-41a3-bd72-2abfc801c574","block_type":"box","text":"benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to","page_number":129,"box":{"x":69,"y":876,"width":800,"height":11}},{"id":"8ed7ac8a-ee0c-45d3-afba-dd5f75d03f84","block_type":"box","text":"attract investors who are willing to defer receipt of cash.","page_number":129,"box":{"x":69,"y":891,"width":400,"height":12}},{"id":"99013e17-6c26-40e5-847f-e528e7237183","block_type":"box","text":"II-80","page_number":129,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"56b8f856-784a-47af-b697-b37965e8565b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":129,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e904b248-5197-40d4-91f9-fe1eb4d79cc8","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting purposes","page_number":130,"box":{"x":101,"y":45,"width":775,"height":11}},{"id":"37c76358-363f-45b9-89d7-6890fb4b79ee","block_type":"box","text":"prior to the receipt of cash payments. Zero coupon securities may be subject to greater fluctuation in value and less","page_number":130,"box":{"x":70,"y":60,"width":827,"height":11}},{"id":"eb326959-61fa-45d6-bf55-dbcbf713d995","block_type":"box","text":"liquidity in the event of adverse market conditions than comparably rated securities that pay cash interest at regular","page_number":130,"box":{"x":70,"y":75,"width":826,"height":11}},{"id":"0068e1c7-c42e-4213-97a7-514a3a946a8a","block_type":"box","text":"intervals.","page_number":130,"box":{"x":70,"y":90,"width":64,"height":9}},{"id":"2f2d6330-241d-4d4e-9dfc-8eaf9391c99b","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund is","page_number":130,"box":{"x":102,"y":113,"width":749,"height":11}},{"id":"9c7e518d-2916-4f87-830b-ef517d5098f1","block_type":"box","text":"required to distribute income to its shareholders and, consequently, may have to dispose of other, more liquid","page_number":130,"box":{"x":69,"y":128,"width":784,"height":11}},{"id":"c80bb50d-88cf-405d-b2a3-cc97bd706192","block_type":"box","text":"portfolio securities under disadvantageous circumstances or may have to leverage itself by borrowing in order to","page_number":130,"box":{"x":70,"y":143,"width":799,"height":11}},{"id":"0b71db6d-af67-483a-a45f-03c132cb31d9","block_type":"box","text":"generate the cash to satisfy these distributions. The required distributions may result in an increase in a Fund’s","page_number":130,"box":{"x":68,"y":158,"width":799,"height":11}},{"id":"8390e8a9-2b45-47fb-81e0-420c70386f2d","block_type":"box","text":"exposure to zero coupon securities.","page_number":130,"box":{"x":69,"y":173,"width":253,"height":11}},{"id":"f4a0c10e-7a0f-44e4-ab3d-c9ef32b2392c","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero coupon","page_number":130,"box":{"x":102,"y":196,"width":740,"height":11}},{"id":"62f1a92e-527e-4a83-9144-b485b51e1dbe","block_type":"box","text":"securities. During a period of severe market conditions, the market for such securities may become even less liquid.","page_number":130,"box":{"x":69,"y":211,"width":829,"height":11}},{"id":"eb54c359-a24b-4b4f-aa2d-b2fc07435157","block_type":"box","text":"In addition, as these securities do not pay cash interest, a Fund’s investment exposure to these securities and their","page_number":130,"box":{"x":70,"y":226,"width":829,"height":11}},{"id":"3f306bae-535e-4e7a-9a06-08ea05a489b7","block_type":"box","text":"risks, including credit risk, will increase during the time these securities are held in the Fund’s portfolio.","page_number":130,"box":{"x":69,"y":241,"width":741,"height":11}},{"id":"21c734f4-9a1c-46f8-8b8f-58138aeb8ae6","block_type":"box","text":"Suitability. (All Funds)","page_number":130,"box":{"x":101,"y":264,"width":161,"height":11}},{"id":"41ed8349-5ce5-4578-997c-e9f5e352bc8c","block_type":"box","text":"The economic benefit of an investment in any Fund depends upon many factors beyond the control of the Fund,","page_number":130,"box":{"x":101,"y":286,"width":793,"height":12}},{"id":"6e139a46-8a34-4da3-afe5-cf05cd19641f","block_type":"box","text":"the Manager and its affiliates. Each Fund should be considered a vehicle for diversification and not as a balanced","page_number":130,"box":{"x":68,"y":302,"width":811,"height":11}},{"id":"247d586f-80b3-4bf9-9e2a-a85914394c7e","block_type":"box","text":"investment program. The suitability for any particular investor of a purchase of shares in a Fund will depend upon,","page_number":130,"box":{"x":70,"y":317,"width":810,"height":11}},{"id":"26ac0e83-41b1-4a2a-bc53-bb30c28d6177","block_type":"box","text":"among other things, such investor’s investment objectives and such investor’s ability to accept the risks associated","page_number":130,"box":{"x":69,"y":332,"width":826,"height":11}},{"id":"be1bbca5-fffe-43f9-bdf5-d3b67cf2a1f7","block_type":"box","text":"with investing in securities, including the risk of loss of principal.","page_number":130,"box":{"x":68,"y":347,"width":460,"height":11}},{"id":"846f471e-91d4-43e7-89a9-3a839cda4a8a","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":130,"box":{"x":102,"y":370,"width":264,"height":11}},{"id":"e37ff3b7-fe26-4791-a917-944fd3ed4bfe","block_type":"box","text":"See “Investment Restrictions” or “Investment Policies,” as applicable in each Fund’s SAI for the specific","page_number":130,"box":{"x":102,"y":392,"width":745,"height":11}},{"id":"a5b6a3f0-dd8b-42f4-8a32-aec0a5ce2512","block_type":"box","text":"fundamental and non-fundamental investment restrictions adopted by each Fund. In addition to those investment","page_number":130,"box":{"x":68,"y":407,"width":807,"height":12}},{"id":"4b371d33-3811-43f2-ac7f-f5b5c3b5abd3","block_type":"box","text":"restrictions, each Fund is also subject to the restrictions discussed below.","page_number":130,"box":{"x":69,"y":423,"width":528,"height":11}},{"id":"f51730ea-9cab-46b2-bc0a-a12616e772cb","block_type":"box","text":"Each Fund’s investments will be limited in order to allow the Fund to qualify as a “regulated investment","page_number":130,"box":{"x":102,"y":445,"width":735,"height":12}},{"id":"fa87589c-fad4-4587-8c3d-d83fe5d96963","block_type":"box","text":"company” for purposes of the Code. See “Dividends and Taxes — Taxes” or “Taxes.” To qualify, among other","page_number":130,"box":{"x":69,"y":460,"width":775,"height":12}},{"id":"c760ef0e-1f4b-4cf2-aae2-49ec81595041","block_type":"box","text":"requirements, each Fund will limit its investments so that, at the close of each quarter of the taxable year, (i) at least","page_number":130,"box":{"x":69,"y":475,"width":837,"height":12}},{"id":"17ace642-dbf4-479d-b903-794f20946a43","block_type":"box","text":"50% of the market value of each Fund’s assets is represented by cash, securities of other regulated investment","page_number":130,"box":{"x":69,"y":491,"width":799,"height":11}},{"id":"d35b669e-cd09-4ce7-a8de-c6c747f3e29e","block_type":"box","text":"companies, U.S. Government Securities and other securities, with such other securities limited, in respect of any one","page_number":130,"box":{"x":69,"y":506,"width":837,"height":11}},{"id":"75ef8eff-0f51-4450-bd27-f7acd8d32b26","block_type":"box","text":"issuer, to an amount not greater in value than 5% of the Fund’s assets and not greater than 10% of the outstanding","page_number":130,"box":{"x":70,"y":521,"width":825,"height":11}},{"id":"c6405bd9-cf67-41a4-b487-2b9119cb4e0c","block_type":"box","text":"voting securities of such issuer and (ii) not more than 25% of the value of its assets is invested in the securities","page_number":130,"box":{"x":68,"y":536,"width":802,"height":11}},{"id":"7cfcf43b-65dc-45b1-8941-4dd7b45c4c98","block_type":"box","text":"(other than U.S. Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":130,"box":{"x":69,"y":551,"width":837,"height":11}},{"id":"5612ef07-7def-4d89-b3ab-7df7ca052a52","block_type":"box","text":"two or more issuers that the Fund controls and that are determined to be engaged in the same or similar trades or","page_number":130,"box":{"x":68,"y":566,"width":819,"height":11}},{"id":"1d0e7163-f310-42bb-b14f-70835ab483e1","block_type":"box","text":"businesses or related trades or businesses or in the securities of one or more qualified publicly traded partnerships","page_number":130,"box":{"x":69,"y":581,"width":828,"height":11}},{"id":"c72ff67b-ac2f-41cb-9aa7-a42d8502973a","block_type":"box","text":"(","page_number":130,"box":{"x":69,"y":597,"width":3,"height":10}},{"id":"e1ad3a9c-af6a-45f2-b7ad-3dcb7c8924b6","block_type":"box","text":"i.e.","page_number":130,"box":{"x":74,"y":597,"width":21,"height":8}},{"id":"9a9ac869-81a1-45c7-bece-b22d0be57b69","block_type":"box","text":", partnerships that are traded on an established securities market or tradable on a secondary market, other than","page_number":130,"box":{"x":97,"y":597,"width":806,"height":11}},{"id":"1f8d1af9-5ff1-42c9-9eb7-30d65b0f375e","block_type":"box","text":"partnerships that derive 90% of their income from interest, dividends, capital gains and other traditionally permitted","page_number":130,"box":{"x":70,"y":612,"width":824,"height":11}},{"id":"a8160262-2ed9-405e-bb15-387d7e6e7a24","block_type":"box","text":"mutual fund income). For purposes of this restriction, the Municipal Funds generally will regard each state and each","page_number":130,"box":{"x":69,"y":627,"width":824,"height":11}},{"id":"4e82bdfa-7a26-4671-ab2c-b7181f026111","block_type":"box","text":"of its political subdivisions, agencies or instrumentalities and each multi-state agency of which the state is a member","page_number":130,"box":{"x":69,"y":642,"width":838,"height":11}},{"id":"cf397070-f50a-4df0-81a0-c261b2f89893","block_type":"box","text":"as a separate issuer. Each public authority that issues securities on behalf of a private entity generally will also be","page_number":130,"box":{"x":69,"y":657,"width":815,"height":11}},{"id":"caa1d146-69f5-4178-9216-ebf57c3644fb","block_type":"box","text":"regarded as a separate issuer, except that if the security is backed only by the assets and revenues of a non","page_number":130,"box":{"x":69,"y":672,"width":781,"height":11}},{"id":"2f939962-6143-4af3-b9dc-7290b24d9675","block_type":"box","text":"government entity, then the entity with the ultimate responsibility for the payment of interest and principal may be","page_number":130,"box":{"x":68,"y":687,"width":810,"height":11}},{"id":"00c431e0-15d2-4a8c-8342-fecf2b46d63b","block_type":"box","text":"regarded as the sole issuer.","page_number":130,"box":{"x":69,"y":703,"width":198,"height":11}},{"id":"98d4fa50-ecb9-40c2-9423-e917ec4ff63f","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10% and 25%","page_number":130,"box":{"x":102,"y":725,"width":784,"height":11}},{"id":"b37f1ade-2c0c-4850-b046-22f6d30b6b02","block_type":"box","text":"diversification requirements of the Code discussed above and the securities of each foreign government issuer are","page_number":130,"box":{"x":69,"y":740,"width":819,"height":11}},{"id":"ab021198-c49c-42f8-bd04-f49955b7d522","block_type":"box","text":"considered to be obligations of a single issuer. These tax-related limitations may be changed by the Directors of a","page_number":130,"box":{"x":69,"y":755,"width":811,"height":11}},{"id":"7e98dab6-7718-41df-8837-680642261ffc","block_type":"box","text":"Fund to the extent necessary to comply with changes to the U.S. federal tax requirements. A Fund that is","page_number":130,"box":{"x":70,"y":770,"width":747,"height":12}},{"id":"b6d65907-0427-4037-91fb-5efd8717f94f","block_type":"box","text":"“diversified” under the Investment Company Act must satisfy the foregoing 5% and 10% requirements with respect to","page_number":130,"box":{"x":70,"y":785,"width":834,"height":12}},{"id":"aa37dd1d-777a-4aee-8b2b-53d69ebd9a82","block_type":"box","text":"75% of its total assets.","page_number":130,"box":{"x":69,"y":801,"width":165,"height":9}},{"id":"2da8ea23-74e5-464b-a3df-ae432aa382eb","block_type":"box","text":"II-81","page_number":130,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"bb842dbb-99a4-4397-9a59-d9cbe6f79c21","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":130,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"07ab41bc-43c7-4735-ae83-954d3f941c1f","block_type":"box","text":"MANAGEMENT AND OTHER SERVICE ARRANGEMENTS","page_number":131,"box":{"x":268,"y":45,"width":442,"height":10}},{"id":"cdfabc54-c120-4787-92c3-719f7832f63a","block_type":"box","text":"Directors and Officers","page_number":131,"box":{"x":69,"y":76,"width":159,"height":8}},{"id":"49f5cd97-8e97-44b9-a57b-8dd1b2e0394b","block_type":"box","text":"See “Information on Directors and Officers, ‘—Biographical Information,’ ‘— Share Ownership’ and ‘—","page_number":131,"box":{"x":102,"y":98,"width":733,"height":11}},{"id":"a20020a7-a7d7-40f5-b1b5-8d33ac87a8e2","block_type":"box","text":"Compensation of Directors’” or “Information on Trustees and Officers, ‘—Biographical Information,’ ‘— Share","page_number":131,"box":{"x":69,"y":113,"width":783,"height":12}},{"id":"ef76be25-a6f1-4d43-b92e-5d5276e61053","block_type":"box","text":"Ownership’ and ‘— Compensation of Trustees’,” as applicable, in Part I of each Fund’s SAI for biographical and","page_number":131,"box":{"x":69,"y":128,"width":795,"height":12}},{"id":"9a06feff-cb13-4841-9fb8-b9cfb0ad6373","block_type":"box","text":"certain other information relating to the Directors and officers of your Fund, including Directors’ compensation.","page_number":131,"box":{"x":69,"y":143,"width":789,"height":12}},{"id":"ba16fe4c-8da1-481c-85fe-d5642c2f5259","block_type":"box","text":"Management Arrangements","page_number":131,"box":{"x":69,"y":174,"width":202,"height":11}},{"id":"553a8430-3a1b-42fc-a4ed-e1d815d3752d","block_type":"box","text":"Management Services.","page_number":131,"box":{"x":102,"y":197,"width":162,"height":11}},{"id":"b17e423f-0c91-4691-87c9-5603be5aeadc","block_type":"box","text":"The Manager provides each Fund with investment advisory and management services.","page_number":131,"box":{"x":270,"y":197,"width":615,"height":11}},{"id":"a00fc6af-0cdd-4ab5-a0b6-d1e61b6e7acd","block_type":"box","text":"Subject to the oversight of the Board of Directors, the Manager is responsible for the actual management of a Fund’s","page_number":131,"box":{"x":69,"y":212,"width":836,"height":11}},{"id":"140297ef-a6f4-469a-b84b-1d740fe8bbff","block_type":"box","text":"portfolio and reviews the Fund’s holdings in light of its own research analysis and that from other relevant sources.","page_number":131,"box":{"x":70,"y":227,"width":820,"height":11}},{"id":"31feb889-191d-4740-9ce9-3d4728f10d62","block_type":"box","text":"The responsibility for making decisions to buy, sell or hold a particular security rests with the Manager. The Manager","page_number":131,"box":{"x":68,"y":242,"width":832,"height":11}},{"id":"2c7a4938-9360-483f-b8d0-0cc9eaabba3a","block_type":"box","text":"performs certain of the other administrative services and provides all the office space, facilities, equipment and","page_number":131,"box":{"x":70,"y":257,"width":801,"height":11}},{"id":"74e904fb-a981-4f20-a771-e9c726b2f9dd","block_type":"box","text":"necessary personnel for management of each Fund.","page_number":131,"box":{"x":69,"y":272,"width":370,"height":11}},{"id":"b9e840fc-b575-4d1d-9b5e-6ab1a4b84ae9","block_type":"box","text":"Each Feeder Fund invests all or a portion of its assets in shares of a Master Portfolio. 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Certain accounting services are provided to each Fund","page_number":131,"box":{"x":69,"y":597,"width":825,"height":11}},{"id":"711a3a96-94bf-42af-b251-61224c7d099b","block_type":"box","text":"by State Street Bank and Trust Company (“State Street”), The Bank of New York Mellon (“BNY Mellon”) or JPMorgan","page_number":131,"box":{"x":69,"y":612,"width":827,"height":11}},{"id":"0d4742ce-63a1-44da-84ae-f3da5a0f4193","block_type":"box","text":"Chase Bank, N.A. (“JPM”) pursuant to an agreement between State Street, BNY Mellon or JPM, as applicable, and","page_number":131,"box":{"x":69,"y":627,"width":814,"height":12}},{"id":"6238adbc-ea82-4098-9e59-0e02010b29ce","block_type":"box","text":"each Fund. Each Fund pays a fee for these services. The Distributor pays certain promotional expenses of the Funds","page_number":131,"box":{"x":69,"y":642,"width":832,"height":12}},{"id":"b32d6191-db7a-4ffc-956b-2ca297d73b68","block_type":"box","text":"incurred in connection with the offering of shares of the Funds. Certain expenses are financed by each Fund pursuant","page_number":131,"box":{"x":70,"y":658,"width":839,"height":11}},{"id":"2c58b42e-dc1a-4c7c-b393-ed9b932a82e9","block_type":"box","text":"to distribution plans in compliance with Rule 12b-1 under the Investment Company Act. 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Each Manager is an indirect, majority-owned subsidiary of BlackRock, Inc.","page_number":131,"box":{"x":70,"y":778,"width":819,"height":12}},{"id":"08b2d6be-4a46-4291-87d8-7c24310d7a94","block_type":"box","text":"BlackRock, Inc., through its subsidiaries and divisions, provides (i) investment management services to individuals","page_number":131,"box":{"x":70,"y":794,"width":817,"height":11}},{"id":"6c44407f-9851-48dc-8088-76bb9587f81d","block_type":"box","text":"and institutional investors through separate account management, non-discretionary advisory programs and","page_number":131,"box":{"x":69,"y":809,"width":768,"height":11}},{"id":"410b493f-4c68-4af4-a11c-0e369c3f2fef","block_type":"box","text":"commingled investment vehicles; (ii) risk management services, investment accounting and trade processing tools;","page_number":131,"box":{"x":69,"y":824,"width":821,"height":11}},{"id":"47f66eca-c152-42e3-b196-5c9ea37b6e8e","block_type":"box","text":"(iii) transition management services, and (iv) securities lending services.","page_number":131,"box":{"x":69,"y":839,"width":517,"height":11}},{"id":"8c2aa66d-3d4e-412c-a2a4-9545d0cf5a37","block_type":"box","text":"Duration and Termination.","page_number":131,"box":{"x":102,"y":862,"width":182,"height":9}},{"id":"c96b2407-5f36-4707-a7f9-46fa75a195b7","block_type":"box","text":"Unless earlier terminated as described below, each Management Agreement and each","page_number":131,"box":{"x":292,"y":862,"width":613,"height":11}},{"id":"701607a1-cd66-4292-b446-87cf6be9a6e1","block_type":"box","text":"Sub-Advisory Agreement will remain in effect for an initial two year period and from year to year thereafter if approved","page_number":131,"box":{"x":69,"y":877,"width":835,"height":11}},{"id":"5b93adfc-4147-4bd5-99e1-a19f34e8b855","block_type":"box","text":"annually (a) by the Board of Directors or by a vote of a majority of the outstanding voting securities of a Fund and","page_number":131,"box":{"x":69,"y":892,"width":803,"height":11}},{"id":"2de2c4cc-a3f8-453d-8850-2c3844250f8e","block_type":"box","text":"(b) by a majority of the Directors of the Fund who are not parties to such agreement or interested persons (as defined","page_number":131,"box":{"x":69,"y":907,"width":839,"height":11}},{"id":"53ec0e28-1bb1-44d8-ae90-f3a10aef3d4f","block_type":"box","text":"II-82","page_number":131,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"65364785-6be4-4201-8ce4-e441655959cc","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":131,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"6c854e8d-ce6e-46b7-a818-5fc08aebd38c","block_type":"box","text":"in the Investment Company Act) of any such party. 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For information regarding any administrative fees paid by","page_number":132,"box":{"x":69,"y":173,"width":833,"height":11}},{"id":"56769ec5-a5a6-4724-b733-a79cc1166f8b","block_type":"box","text":"your Fund to the Administrator for the periods indicated, see “Management, Advisory and Other Service","page_number":132,"box":{"x":68,"y":188,"width":738,"height":12}},{"id":"bee5b3ab-df2d-49b4-a411-9754ee414f13","block_type":"box","text":"Arrangements — Administration Agreement” or “Management and Advisory Arrangements,” as applicable, in Part I of","page_number":132,"box":{"x":68,"y":203,"width":839,"height":12}},{"id":"c95c9c55-106f-499f-9457-270b2071ccc9","block_type":"box","text":"that Fund’s SAI.","page_number":132,"box":{"x":68,"y":219,"width":113,"height":8}},{"id":"42b4cfb9-8723-4d00-945b-46c5c3cf4204","block_type":"box","text":"For Funds that have an Administrator, the Administration Agreement obligates the Administrator to provide","page_number":132,"box":{"x":102,"y":241,"width":755,"height":11}},{"id":"15a9685a-8b30-4bcd-8204-e28a9c6139d7","block_type":"box","text":"certain administrative services to the Fund and to pay, or cause its affiliates to pay, for maintaining its staff and","page_number":132,"box":{"x":69,"y":256,"width":800,"height":12}},{"id":"736819cc-71fd-4d29-b8f9-c71014c964e1","block_type":"box","text":"personnel and to provide office space, facilities and necessary personnel for the Fund. 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Such contract is not assignable","page_number":132,"box":{"x":70,"y":385,"width":810,"height":11}},{"id":"44d6f01c-fcef-4beb-bc94-052e959558c3","block_type":"box","text":"and may be terminated without penalty on written notice at the option of either party thereto or by the vote of the","page_number":132,"box":{"x":69,"y":400,"width":805,"height":11}},{"id":"6d7888bf-8864-4b5c-a630-3fb0e1d573c4","block_type":"box","text":"shareholders of the Fund.","page_number":132,"box":{"x":69,"y":415,"width":181,"height":9}},{"id":"846d2000-2f19-4264-9271-51655ef362c7","block_type":"box","text":"Transfer Agency Services.","page_number":132,"box":{"x":103,"y":438,"width":180,"height":11}},{"id":"aa81bffe-58a6-4ba8-908d-9e0f19663f45","block_type":"box","text":"BNY Mellon Investment Servicing (US) Inc. (in this capacity, the “Transfer Agent”), a","page_number":132,"box":{"x":291,"y":438,"width":595,"height":11}},{"id":"7ecbe301-d176-457a-959d-acbffcddb3d8","block_type":"box","text":"subsidiary of The Bank of New York Mellon Corporation, acts as each Fund’s Transfer Agent pursuant to a Transfer","page_number":132,"box":{"x":69,"y":453,"width":816,"height":11}},{"id":"a6ccc336-8be7-4466-8943-276b632e7f63","block_type":"box","text":"Agency, Dividend Disbursing Agency and Shareholder Servicing Agency Agreement (the “Transfer Agency Agreement”)","page_number":132,"box":{"x":68,"y":468,"width":833,"height":11}},{"id":"e0c46e11-e49d-4292-ac45-21e7a3b6573a","block_type":"box","text":"with the Funds. 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Employees subject to the Code of Ethics may invest in securities for their personal","page_number":133,"box":{"x":69,"y":370,"width":803,"height":11}},{"id":"51875a90-b009-4652-b6e2-3c2644150686","block_type":"box","text":"investment accounts, including securities that may be purchased or held by a Fund.","page_number":133,"box":{"x":70,"y":385,"width":593,"height":11}},{"id":"3b6c3b8a-34b9-4e18-9c90-d786f476a5cf","block_type":"box","text":"SELECTIVE DISCLOSURE OF PORTFOLIO HOLDINGS","page_number":133,"box":{"x":282,"y":414,"width":413,"height":10}},{"id":"53fd95ad-4253-4db0-bcbc-b2d4800d8c36","block_type":"box","text":"The Board of Directors of each Fund and the Board of Directors of the Manager have each approved Portfolio","page_number":133,"box":{"x":101,"y":437,"width":777,"height":11}},{"id":"3c5f6e7d-19db-4bee-b701-542fcfe2b7f6","block_type":"box","text":"Holdings and Related Information Distribution Guidelines (the “Policy”) regarding the disclosure of each Fund’s","page_number":133,"box":{"x":70,"y":452,"width":788,"height":11}},{"id":"baee777c-24fc-41e6-a70c-5eb3a3594666","block_type":"box","text":"portfolio securities, as applicable, and other portfolio information. 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BlackRock may have a potentially conflicting division of","page_number":139,"box":{"x":69,"y":634,"width":791,"height":12}},{"id":"b9afeaab-55e8-4870-99c9-e3180a05be7b","block_type":"box","text":"loyalties and responsibilities to the parties in such transactions.","page_number":139,"box":{"x":70,"y":650,"width":457,"height":11}},{"id":"f74b7bf2-9cd5-4092-b209-2d670a86850f","block_type":"box","text":"BlackRock and its clients may pursue or enforce rights with respect to an issuer in which a Fund has invested,","page_number":139,"box":{"x":102,"y":672,"width":784,"height":11}},{"id":"553292af-01bf-4709-8aff-f674810a0a65","block_type":"box","text":"and those activities may have an adverse effect on the Fund. 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It is possible that one or more accounts managed or advised by BlackRock and such other","page_number":139,"box":{"x":69,"y":786,"width":798,"height":11}},{"id":"fb9eb855-625c-4755-a91f-e44105ec4155","block_type":"box","text":"accounts will achieve investment results that are substantially more or less favorable than the results achieved by a","page_number":139,"box":{"x":69,"y":801,"width":828,"height":11}},{"id":"bdab3c8b-79b6-4f7e-b680-45ae96698e29","block_type":"box","text":"Fund. Moreover, it is possible that a Fund will sustain losses during periods in which one or more proprietary or other","page_number":139,"box":{"x":70,"y":816,"width":835,"height":11}},{"id":"2e0dc894-bf9a-4a02-9d29-6bf80eddae7c","block_type":"box","text":"accounts managed or advised by BlackRock achieve significant profits. The opposite result is also possible.","page_number":139,"box":{"x":69,"y":831,"width":767,"height":11}},{"id":"fdfc3624-39d1-4cc2-a11b-4016f46a2ce3","block_type":"box","text":"From time to time, a Fund may be restricted from purchasing or selling securities, or from engaging in other","page_number":139,"box":{"x":102,"y":853,"width":766,"height":12}},{"id":"7d52671b-858a-462d-a872-b92751c38e13","block_type":"box","text":"investment activities because of regulatory, legal or contractual requirements applicable to BlackRock or other","page_number":139,"box":{"x":70,"y":869,"width":786,"height":11}},{"id":"bd82fb17-b34c-4286-a16d-c0f10aa5d964","block_type":"box","text":"accounts managed or advised by BlackRock, and/or the internal policies of BlackRock designed to comply with such","page_number":139,"box":{"x":69,"y":884,"width":828,"height":11}},{"id":"7a6890d4-dc51-4464-918f-17cee450a3bf","block_type":"box","text":"requirements. As a result, there may be periods, for example, when BlackRock will not initiate or recommend certain","page_number":139,"box":{"x":69,"y":899,"width":831,"height":11}},{"id":"003708c9-3321-49dd-85d3-45c4a7dbb44f","block_type":"box","text":"II-90","page_number":139,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"f9b312dd-f395-49db-844b-7828511cc882","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":139,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"59639389-2732-497e-871b-2c9005c3fd91","block_type":"box","text":"types of transactions in certain securities or instruments with respect to which BlackRock is performing services or","page_number":140,"box":{"x":68,"y":45,"width":825,"height":11}},{"id":"79152a8c-ce47-4b9e-a57c-ccc211e9b519","block_type":"box","text":"when position limits have been reached. For example, the investment activities of BlackRock for its proprietary","page_number":140,"box":{"x":68,"y":60,"width":790,"height":11}},{"id":"8a9237f9-b2d9-402e-ac6e-1fc2d51e795f","block_type":"box","text":"accounts and accounts under its management may limit the investment opportunities for a Fund in certain emerging","page_number":140,"box":{"x":69,"y":75,"width":830,"height":11}},{"id":"713bc4a2-180c-4b54-b748-e689dd154f22","block_type":"box","text":"and other markets in which limitations are imposed upon the amount of investment, in the aggregate or in individual","page_number":140,"box":{"x":69,"y":90,"width":827,"height":11}},{"id":"29a98a2f-e7a9-463b-917b-10b6439fa3f7","block_type":"box","text":"issuers, by affiliated foreign investors.","page_number":140,"box":{"x":70,"y":105,"width":271,"height":11}},{"id":"1a93fd2a-3fb1-49a4-afb0-5b9369402a5f","block_type":"box","text":"In connection with its management of a Fund, BlackRock may have access to certain fundamental analysis and","page_number":140,"box":{"x":102,"y":128,"width":792,"height":11}},{"id":"7461e134-d52d-4837-a267-12c36a175a00","block_type":"box","text":"proprietary technical models developed by BlackRock. BlackRock will not be under any obligation, however, to effect","page_number":140,"box":{"x":70,"y":143,"width":826,"height":11}},{"id":"9f5f9572-56d2-4851-ab20-597fdb8a73be","block_type":"box","text":"transactions on behalf of a Fund in accordance with such analysis and models. In addition, BlackRock will not have","page_number":140,"box":{"x":68,"y":158,"width":821,"height":11}},{"id":"9d56d1d7-772b-4048-aad1-29cd76f49a4c","block_type":"box","text":"any obligation to make available any information regarding its proprietary activities or strategies, or the activities or","page_number":140,"box":{"x":69,"y":173,"width":821,"height":11}},{"id":"d6e658f3-518d-4576-93e2-b2237afb3abf","block_type":"box","text":"strategies used for other accounts managed by them, for the benefit of the management of a Fund and it is not","page_number":140,"box":{"x":69,"y":188,"width":793,"height":12}},{"id":"504395aa-3b0e-4b20-ba59-d201bbd37e8c","block_type":"box","text":"anticipated that BlackRock will have access to such information for the purpose of managing the Fund. The","page_number":140,"box":{"x":69,"y":203,"width":762,"height":12}},{"id":"5181ed68-07ab-4f7d-bf2f-a45f3b122a20","block_type":"box","text":"proprietary activities or portfolio strategies of BlackRock, or the activities or strategies used for accounts managed by","page_number":140,"box":{"x":70,"y":218,"width":839,"height":12}},{"id":"b81c714c-d8ff-4f4d-87e2-0ec010e023a4","block_type":"box","text":"BlackRock or other client accounts could conflict with the transactions and strategies employed by BlackRock in","page_number":140,"box":{"x":70,"y":234,"width":795,"height":11}},{"id":"c2799f0b-3240-42b3-a811-37ddafd4a9d3","block_type":"box","text":"managing a Fund.","page_number":140,"box":{"x":69,"y":249,"width":124,"height":11}},{"id":"5cfd0bcd-af61-4812-8fdf-116d80f25577","block_type":"box","text":"The Funds may be included in investment models developed by BlackRock for use by clients and financial","page_number":140,"box":{"x":101,"y":271,"width":751,"height":12}},{"id":"8a09bc22-6767-44fd-a6cb-12a05f0b4f9d","block_type":"box","text":"advisors. To the extent clients invest in these investment models and increase the assets under management of the","page_number":140,"box":{"x":69,"y":286,"width":830,"height":12}},{"id":"dac10ac9-8155-4419-8c39-241a6f6654ad","block_type":"box","text":"Funds, the investment management fee amounts paid by the Funds to BlackRock may also increase. The net asset","page_number":140,"box":{"x":70,"y":302,"width":820,"height":11}},{"id":"77917298-d408-4db2-bb6c-3d1aa8da21b9","block_type":"box","text":"value and liquidity of a Fund may be impacted by purchases and sales of the Fund by model-driven investment","page_number":140,"box":{"x":68,"y":317,"width":785,"height":11}},{"id":"a7e37b65-d51c-44f9-99fe-bf3a097f955b","block_type":"box","text":"portfolios, as well as by BlackRock itself and by its advisory clients.","page_number":140,"box":{"x":70,"y":332,"width":481,"height":11}},{"id":"9f265a9a-1ae7-424d-8334-e181648c6b44","block_type":"box","text":"In addition, certain principals and certain employees of a Fund’s investment adviser are also principals or","page_number":140,"box":{"x":102,"y":355,"width":754,"height":11}},{"id":"4c7774cc-1d11-4906-ba2d-06eb7f1c2ca4","block_type":"box","text":"employees of other business units or entities within BlackRock. As a result, these principals and employees may","page_number":140,"box":{"x":69,"y":370,"width":804,"height":11}},{"id":"bda321b6-b06b-4d8b-b08f-f23abed098c3","block_type":"box","text":"have obligations to such other business units or entities or their clients and such obligations to other business units","page_number":140,"box":{"x":69,"y":385,"width":831,"height":11}},{"id":"563f8f88-a7d4-44d3-ad0f-4f577b3cca74","block_type":"box","text":"or entities or their clients may be a consideration of which investors in a Fund should be aware.","page_number":140,"box":{"x":69,"y":400,"width":680,"height":11}},{"id":"65abad4f-602c-449e-8a0f-a2045aacbbe5","block_type":"box","text":"BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of a Fund","page_number":140,"box":{"x":102,"y":423,"width":791,"height":11}},{"id":"5760ba20-abce-4d18-9ec5-52527e6de82c","block_type":"box","text":"in which clients of BlackRock, or, to the extent permitted by the Commission and applicable law, BlackRock, serves","page_number":140,"box":{"x":70,"y":438,"width":820,"height":11}},{"id":"48c8d8a3-7d9f-4a48-8e06-6fb9234988e2","block_type":"box","text":"as the counterparty, principal or issuer. In such cases, such party’s interests in the transaction will be adverse to the","page_number":140,"box":{"x":69,"y":453,"width":837,"height":11}},{"id":"18105def-5241-44cb-addc-8a5dfcacacf8","block_type":"box","text":"interests of the Fund, and such party may have no incentive to assure that the Fund obtains the best possible prices","page_number":140,"box":{"x":70,"y":468,"width":832,"height":11}},{"id":"d9592370-71a3-469f-94a4-07a15358c853","block_type":"box","text":"or terms in connection with the transactions. In addition, the purchase, holding and sale of such investments by a","page_number":140,"box":{"x":69,"y":483,"width":813,"height":11}},{"id":"a36657f7-21cf-4e9b-8716-c13f4fabcff2","block_type":"box","text":"Fund may enhance the profitability of BlackRock.","page_number":140,"box":{"x":70,"y":498,"width":344,"height":11}},{"id":"3568c929-1278-4b3a-8905-9b7748313fef","block_type":"box","text":"BlackRock may also create, write or issue derivatives for clients, the underlying securities, currencies or","page_number":140,"box":{"x":102,"y":521,"width":741,"height":11}},{"id":"0134e7b6-af51-422f-8e6d-b5fe02ebeba1","block_type":"box","text":"instruments of which may be those in which a Fund invests or which may be based on the performance of the Fund.","page_number":140,"box":{"x":70,"y":536,"width":824,"height":11}},{"id":"bc65a584-3420-46af-ae72-4f196f7bf718","block_type":"box","text":"Additionally, an affiliate of BlackRock will create, write or issue options, which may be based on the performance of","page_number":140,"box":{"x":68,"y":551,"width":825,"height":11}},{"id":"05b51e25-8f14-48f8-89d8-adf58d0c4a1b","block_type":"box","text":"certain Funds. BlackRock has entered into an arrangement with Markit Indices Limited, the index provider for","page_number":140,"box":{"x":69,"y":566,"width":777,"height":11}},{"id":"8d2fcb53-8922-4af6-b9e3-65e1761c22ad","block_type":"box","text":"underlying fixed-income indexes used by certain iShares ETFs, related to derivative fixed-income products that are","page_number":140,"box":{"x":69,"y":581,"width":810,"height":12}},{"id":"6420b674-5144-4dfe-a2e0-084fdc7f4aea","block_type":"box","text":"based on such iShares ETFs. Trading activity in these derivative products could also potentially lead to greater","page_number":140,"box":{"x":69,"y":597,"width":784,"height":11}},{"id":"7b41d767-927c-44f6-a51f-763f6d783f88","block_type":"box","text":"liquidity for such products, increased purchase activity with respect to these iShares ETFs and increased assets","page_number":140,"box":{"x":70,"y":612,"width":798,"height":11}},{"id":"212404f6-514f-42de-88f8-a3826511e9ba","block_type":"box","text":"under management for BlackRock.","page_number":140,"box":{"x":69,"y":627,"width":243,"height":11}},{"id":"47fb5781-3dac-424f-979b-311046ad97a0","block_type":"box","text":"A Fund may, subject to applicable law, purchase investments that are the subject of an underwriting or other","page_number":140,"box":{"x":101,"y":649,"width":773,"height":12}},{"id":"615fdf7b-dc5e-4af8-bd4a-70839ad38506","block_type":"box","text":"distribution by BlackRock and may also enter into transactions with other clients of BlackRock where such other","page_number":140,"box":{"x":69,"y":664,"width":797,"height":12}},{"id":"7f7080fa-27fc-4f9e-bb68-7a2582c4c4da","block_type":"box","text":"clients have interests adverse to those of the Fund. At times, these activities may cause business units or entities","page_number":140,"box":{"x":69,"y":680,"width":817,"height":11}},{"id":"f9d16a34-4d97-40bb-8d23-182a4ffd75df","block_type":"box","text":"within BlackRock to give advice to clients that may cause these clients to take actions adverse to the interests of the","page_number":140,"box":{"x":68,"y":695,"width":837,"height":11}},{"id":"03549d57-025e-4e5c-9d99-e464223b8d6c","block_type":"box","text":"Fund. To the extent such transactions are permitted, a Fund will deal with BlackRock on an arms-length basis.","page_number":140,"box":{"x":70,"y":710,"width":781,"height":11}},{"id":"d6b92a56-7dd7-4f13-8f83-a3d89e6cee86","block_type":"box","text":"To the extent authorized by applicable law, BlackRock may act as broker, dealer, agent, lender or adviser or in","page_number":140,"box":{"x":101,"y":733,"width":779,"height":11}},{"id":"0583f541-0569-4f15-aa9e-0cf3d0b18143","block_type":"box","text":"other commercial capacities for a Fund. It is anticipated that the commissions, mark-ups, mark-downs, financial","page_number":140,"box":{"x":69,"y":748,"width":795,"height":11}},{"id":"abba8d5e-e495-42a4-abd2-e81bd8c3bd49","block_type":"box","text":"advisory fees, underwriting and placement fees, sales fees, financing and commitment fees, brokerage fees, other","page_number":140,"box":{"x":69,"y":763,"width":821,"height":11}},{"id":"44a90fec-2246-4018-aa44-7f80e80620cb","block_type":"box","text":"fees, compensation or profits, rates, terms and conditions charged by BlackRock will be in its view commercially","page_number":140,"box":{"x":68,"y":778,"width":802,"height":11}},{"id":"b01a62d8-43d7-46ed-bbd1-9ee2df4bdd1d","block_type":"box","text":"reasonable, although BlackRock, including its sales personnel, will have an interest in obtaining fees and other","page_number":140,"box":{"x":69,"y":793,"width":792,"height":11}},{"id":"89924427-1e5b-458b-aa78-0894a191d50d","block_type":"box","text":"amounts that are favorable to BlackRock and such sales personnel, which may have an adverse effect on the Funds.","page_number":140,"box":{"x":69,"y":808,"width":832,"height":11}},{"id":"a12c53b1-e46c-4892-9ccf-b6c8dd31b212","block_type":"box","text":"Index based funds may use an index provider that is affiliated with another service provider of the Fund or BlackRock","page_number":140,"box":{"x":70,"y":823,"width":833,"height":11}},{"id":"c675bf0b-eab5-4fee-bcb9-a43f1c1ea5e0","block_type":"box","text":"that acts as a broker, dealer, agent, lender or in other commercial capacities for a Fund or BlackRock.","page_number":140,"box":{"x":68,"y":838,"width":726,"height":12}},{"id":"5a363f76-9287-4439-8f2c-16709bce3ddf","block_type":"box","text":"Subject to applicable law, BlackRock (and its personnel and other distributors) will be entitled to retain fees and","page_number":140,"box":{"x":102,"y":861,"width":796,"height":11}},{"id":"3919f854-dcc4-4ad9-958e-c289279f6f3e","block_type":"box","text":"other amounts that they receive in connection with their service to the Funds as broker, dealer, agent, lender, adviser","page_number":140,"box":{"x":69,"y":876,"width":837,"height":11}},{"id":"ff39575b-bae8-47d6-8325-6b6a2f640377","block_type":"box","text":"or in other commercial capacities. No accounting to the Funds or their shareholders will be required, and no fees or","page_number":140,"box":{"x":69,"y":891,"width":823,"height":12}},{"id":"adc8fcb1-6604-4444-b05c-cf1a20ac8dc0","block_type":"box","text":"II-91","page_number":140,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"b94babc5-aa7d-4013-8d17-9ab22f5acf1f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":140,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"76e1e50e-f363-42e8-8742-c491ae46bf50","block_type":"box","text":"other compensation payable by the Funds or their shareholders will be reduced by reason of receipt by BlackRock of","page_number":141,"box":{"x":69,"y":45,"width":828,"height":11}},{"id":"f6693d01-e171-44c9-a766-57dfcd1418ad","block_type":"box","text":"any such fees or other amounts.","page_number":141,"box":{"x":69,"y":60,"width":230,"height":11}},{"id":"1be2355a-74c7-4a04-b9d5-ddb5a012ddce","block_type":"box","text":"When BlackRock acts as broker, dealer, agent, adviser or in other commercial capacities in relation to the Funds,","page_number":141,"box":{"x":101,"y":83,"width":805,"height":11}},{"id":"db4885c5-cf00-4473-9b85-b271cfb9e3f4","block_type":"box","text":"BlackRock may take commercial steps in its own interests, which may have an adverse effect on the Funds.","page_number":141,"box":{"x":70,"y":98,"width":768,"height":11}},{"id":"5721da09-bfaf-4d9a-832e-15a621de7a29","block_type":"box","text":"A Fund will be required to establish business relationships with its counterparties based on the Fund’s own","page_number":141,"box":{"x":101,"y":120,"width":766,"height":11}},{"id":"b0900ad8-3d95-4f7a-a738-511915fba56f","block_type":"box","text":"credit standing. BlackRock will not have any obligation to allow its credit to be used in connection with a Fund’s","page_number":141,"box":{"x":69,"y":136,"width":793,"height":11}},{"id":"99990d1b-fd8a-4321-90c3-5972732e44db","block_type":"box","text":"establishment of its business relationships, nor is it expected that the Fund’s counterparties will rely on the credit of","page_number":141,"box":{"x":69,"y":150,"width":835,"height":12}},{"id":"8e45263a-44fa-4c64-b121-e8cafcfd6c2f","block_type":"box","text":"BlackRock in evaluating the Fund’s creditworthiness.","page_number":141,"box":{"x":70,"y":166,"width":374,"height":11}},{"id":"79a7b42d-3151-4aad-a69c-011f91862515","block_type":"box","text":"BlackRock Investment Management, LLC (“BIM”) or BlackRock Institutional Trust Company, N.A. (“BTC”), as","page_number":141,"box":{"x":102,"y":188,"width":768,"height":12}},{"id":"274b7b8c-a79e-4ac2-b00b-399f23cb0c89","block_type":"box","text":"applicable, each an affiliate of BlackRock, pursuant to SEC exemptive relief, acts as securities lending agent to, and","page_number":141,"box":{"x":69,"y":203,"width":829,"height":12}},{"id":"cc736c7c-cf45-45be-ad67-ac6e1f7948c0","block_type":"box","text":"receives a share of securities lending revenues from, the Funds. BlackRock will also receive compensation for","page_number":141,"box":{"x":69,"y":218,"width":785,"height":12}},{"id":"6b23185e-5694-4a40-898f-8e1b28d43498","block_type":"box","text":"managing the reinvestment of the cash collateral from securities lending. There are potential conflicts of interests in","page_number":141,"box":{"x":69,"y":234,"width":829,"height":11}},{"id":"41aca6fd-d854-4719-b95f-3a5db439b7fd","block_type":"box","text":"managing a securities lending program, including but not limited to: (i) BlackRock as securities lending agent may","page_number":141,"box":{"x":69,"y":249,"width":809,"height":11}},{"id":"9cd974f3-2770-42a0-8c5b-8c4bd9f9f0b2","block_type":"box","text":"have an incentive to, among other things, increase or decrease the amount of securities on loan or to lend particular","page_number":141,"box":{"x":69,"y":264,"width":833,"height":11}},{"id":"d3cd35d1-12ee-45bb-80dc-6c6c76d0bd35","block_type":"box","text":"securities in order to generate additional risk-adjusted revenue for BlackRock and its affiliates; and (ii) BlackRock as","page_number":141,"box":{"x":69,"y":279,"width":829,"height":11}},{"id":"ec3488e7-c54a-4784-bd0e-9927b8f7c6ed","block_type":"box","text":"securities lending agent may have an incentive to allocate loans to clients that would provide more revenue to","page_number":141,"box":{"x":69,"y":294,"width":783,"height":11}},{"id":"a72619f8-e18c-4188-a60b-b25699a93db7","block_type":"box","text":"BlackRock. As described further below, BlackRock seeks to mitigate this conflict by providing its securities lending","page_number":141,"box":{"x":70,"y":309,"width":814,"height":11}},{"id":"6cf8c0a2-11a2-4733-912c-ea743e35d302","block_type":"box","text":"clients with equal lending opportunities over time in order to approximate pro rata allocation.","page_number":141,"box":{"x":69,"y":325,"width":660,"height":11}},{"id":"cb53b8df-bc77-4c4d-8445-7497c235b8cf","block_type":"box","text":"As part of its securities lending program, BlackRock indemnifies the Funds and certain other clients and/or","page_number":141,"box":{"x":101,"y":347,"width":767,"height":11}},{"id":"d8cae01d-714c-491e-93a1-a297e34df3dc","block_type":"box","text":"funds against a shortfall in collateral in the event of borrower default. On a regular basis, BlackRock calculates the","page_number":141,"box":{"x":68,"y":362,"width":820,"height":11}},{"id":"6e7f567e-1ce7-481b-bc0e-aae82fc25a26","block_type":"box","text":"potential dollar exposure of collateral shortfall resulting from a borrower default (“shortfall risk”) in the securities","page_number":141,"box":{"x":70,"y":377,"width":806,"height":12}},{"id":"6d916b7a-41f5-4d61-b024-6163584a05fa","block_type":"box","text":"lending program. BlackRock establishes program-wide borrower limits (“credit limits”) to actively manage borrower","page_number":141,"box":{"x":70,"y":393,"width":816,"height":11}},{"id":"be187288-b3f2-4d71-8f3c-4106b21594c6","block_type":"box","text":"specific credit exposure. BlackRock oversees the risk model that calculates projected collateral shortfall values using","page_number":141,"box":{"x":69,"y":407,"width":838,"height":12}},{"id":"6b4de4a0-010c-4741-b577-1eead0481832","block_type":"box","text":"loan-level factors such as loan and collateral type and market value as well as specific borrower credit","page_number":141,"box":{"x":70,"y":423,"width":727,"height":11}},{"id":"30656c46-12ad-432c-9fb5-99f3d0034ddb","block_type":"box","text":"characteristics. When necessary, BlackRock may adjust securities lending program attributes by restricting eligible","page_number":141,"box":{"x":69,"y":438,"width":815,"height":11}},{"id":"25589a03-7cf7-47cd-b174-1e2f74a660c9","block_type":"box","text":"collateral or reducing borrower credit limits. As a result, the management of program-wide exposure as well as","page_number":141,"box":{"x":69,"y":453,"width":786,"height":11}},{"id":"2eaa3c16-2755-47da-96c9-07973898f17d","block_type":"box","text":"BlackRock-specific indemnification exposure may affect the amount of securities lending activity BlackRock may","page_number":141,"box":{"x":70,"y":468,"width":796,"height":11}},{"id":"4c768a8e-c608-4588-8794-7e944a4083b5","block_type":"box","text":"conduct at any given point in time by reducing the volume of lending opportunities for certain loans (including by","page_number":141,"box":{"x":69,"y":483,"width":799,"height":11}},{"id":"0d5433be-5657-402b-903e-aebc5a814708","block_type":"box","text":"asset type, collateral type and/or revenue profile).","page_number":141,"box":{"x":69,"y":498,"width":356,"height":11}},{"id":"f8b4a2ba-6c77-4079-8372-f8e59cf43b41","block_type":"box","text":"BlackRock may decline to make a securities loan on behalf of a Fund, discontinue lending on behalf of a Fund or","page_number":141,"box":{"x":102,"y":521,"width":801,"height":11}},{"id":"7364179e-1e8a-4338-8364-e919c2b3056f","block_type":"box","text":"terminate a securities loan on behalf of a Fund for any reason, including but not limited to regulatory requirements","page_number":141,"box":{"x":68,"y":536,"width":817,"height":11}},{"id":"05fd644a-73b1-4296-81a8-6e7c6fb7a357","block_type":"box","text":"and/or market rules, liquidity considerations, or credit considerations, which may impact Funds by reducing or","page_number":141,"box":{"x":69,"y":551,"width":784,"height":11}},{"id":"c75949fe-f8bf-430a-b9ce-52f86de2be44","block_type":"box","text":"eliminating the volume of lending opportunities for certain types of loans, loans in particular markets, loans of","page_number":141,"box":{"x":69,"y":566,"width":789,"height":11}},{"id":"65caf742-dd15-44ed-bfd3-22eedf836dc2","block_type":"box","text":"particular securities or types of securities, or for loans overall. In addition, some borrowers may prefer certain","page_number":141,"box":{"x":70,"y":581,"width":783,"height":11}},{"id":"27ca83d0-7e9c-4d80-bb46-1c43163e514a","block_type":"box","text":"BlackRock lenders that provide additional protections against lender default that are favored by their prudential","page_number":141,"box":{"x":70,"y":596,"width":790,"height":12}},{"id":"15e7e08d-c8dc-4add-a516-0b68c1927d04","block_type":"box","text":"regulation.","page_number":141,"box":{"x":69,"y":612,"width":73,"height":11}},{"id":"340a8834-d976-4c22-87ed-4ff701fa1905","block_type":"box","text":"BlackRock uses a predetermined systematic process in order to approximate pro rata allocation over time. In","page_number":141,"box":{"x":102,"y":634,"width":777,"height":11}},{"id":"38c2883e-ec89-483e-9bd9-2096234d7199","block_type":"box","text":"order to allocate a loan to a portfolio: (i) BlackRock as a whole must have sufficient lending capacity pursuant to the","page_number":141,"box":{"x":69,"y":649,"width":830,"height":12}},{"id":"713b3e2e-7dbc-4853-821e-a22e244789b9","block_type":"box","text":"various program limits (","page_number":141,"box":{"x":68,"y":665,"width":168,"height":11}},{"id":"94d2c4fd-d7f9-4e3f-a9c8-61d774024aa6","block_type":"box","text":"i.e.","page_number":141,"box":{"x":238,"y":665,"width":20,"height":8}},{"id":"7f88b2f1-9ecd-4020-a959-51243b11efb4","block_type":"box","text":"indemnification exposure limit and borrower credit limits); (ii) the lending portfolio must","page_number":141,"box":{"x":265,"y":664,"width":621,"height":12}},{"id":"aecabbd8-85f9-41da-bb50-60e8358e155b","block_type":"box","text":"hold the asset at the time a loan opportunity arrives; and (iii) the lending portfolio must also have enough inventory,","page_number":141,"box":{"x":69,"y":680,"width":827,"height":11}},{"id":"56349c8e-24a7-4a6f-bc78-8c8290b55c33","block_type":"box","text":"either on its own or when aggregated with other portfolios into one single market delivery, to satisfy the loan request.","page_number":141,"box":{"x":69,"y":695,"width":836,"height":11}},{"id":"6d20a109-2476-4ac4-ab97-aabbc4cc4a37","block_type":"box","text":"In doing so, BlackRock seeks to provide equal lending opportunities for all portfolios, independent of whether","page_number":141,"box":{"x":70,"y":710,"width":780,"height":11}},{"id":"22952ad0-4462-4e01-bd6d-f203636c9113","block_type":"box","text":"BlackRock indemnifies the portfolio. Equal opportunities for lending portfolios does not guarantee equal outcomes.","page_number":141,"box":{"x":70,"y":725,"width":820,"height":11}},{"id":"e208d530-0eda-4c90-ab08-336d7f4aa782","block_type":"box","text":"Specifically, short and long-term outcomes for individual clients may vary due to asset mix, asset/liability spreads on","page_number":141,"box":{"x":69,"y":740,"width":834,"height":11}},{"id":"6f0c56b5-28cd-48f9-9a70-d7f148a20aed","block_type":"box","text":"different securities, and the overall limits imposed by the firm.","page_number":141,"box":{"x":69,"y":755,"width":444,"height":11}},{"id":"5119326e-685a-42dd-8bb5-857068ba9a5a","block_type":"box","text":"Purchases and sales of securities and other assets for a Fund may be aggregated with orders for other","page_number":141,"box":{"x":102,"y":778,"width":734,"height":11}},{"id":"81b79538-a44c-4598-8d5d-145ea3b911e2","block_type":"box","text":"BlackRock client accounts, including with accounts that pay different transaction costs solely due to the fact that they","page_number":141,"box":{"x":70,"y":793,"width":840,"height":11}},{"id":"9305d6dc-b1bb-48e4-bf1f-75751e490d13","block_type":"box","text":"have different research payment arrangements. BlackRock, however, is not required to aggregate orders if portfolio","page_number":141,"box":{"x":69,"y":808,"width":822,"height":11}},{"id":"f1d4dfd4-44e7-4221-9ef6-1c9fa90d9cd0","block_type":"box","text":"management decisions for different accounts are made separately, or if they determine that aggregating is not","page_number":141,"box":{"x":69,"y":823,"width":788,"height":12}},{"id":"2ec9a4a7-b892-42a5-9fab-86400de71005","block_type":"box","text":"practicable or required, or in cases involving client direction.","page_number":141,"box":{"x":70,"y":839,"width":426,"height":11}},{"id":"63fbe70d-f4d5-4133-b8e3-5b177fd08f42","block_type":"box","text":"Prevailing trading activity frequently may make impossible the receipt of the same price or execution on the","page_number":141,"box":{"x":102,"y":861,"width":763,"height":11}},{"id":"f7022ac7-cc55-46b6-9972-139ec33e2e86","block_type":"box","text":"entire volume of securities purchased or sold. When this occurs, the various prices may be averaged, and the Funds","page_number":141,"box":{"x":69,"y":876,"width":828,"height":11}},{"id":"0a68082a-4c00-4d65-a7a3-92a4d6d588dd","block_type":"box","text":"will be charged or credited with the average price. Thus, the effect of the aggregation may operate on some","page_number":141,"box":{"x":68,"y":891,"width":767,"height":12}},{"id":"4172b436-de16-4793-9c02-64c5ba769df4","block_type":"box","text":"II-92","page_number":141,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"700fa689-84ac-4f1b-b473-50442feb59f3","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":141,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"bbbb6ef9-6f05-4c94-bbed-410e776d0c75","block_type":"box","text":"occasions to the disadvantage of the Funds. In addition, under certain circumstances, the Funds will not be charged","page_number":142,"box":{"x":69,"y":45,"width":828,"height":11}},{"id":"d51648e4-3371-44da-a0e8-45154cc08ef3","block_type":"box","text":"the same commission or commission equivalent rates in connection with an aggregated order.","page_number":142,"box":{"x":68,"y":60,"width":672,"height":11}},{"id":"890718fb-8a88-4ea2-bd63-eed924bb595d","block_type":"box","text":"As discussed in the section below entitled “Portfolio Transactions and Brokerage—Transactions in Portfolio","page_number":142,"box":{"x":101,"y":82,"width":767,"height":12}},{"id":"b4a05dd5-4521-4751-b3e6-94a504812b2c","block_type":"box","text":"Securities,” BlackRock, unless prohibited by applicable law, may cause a Fund or account to pay a broker or dealer a","page_number":142,"box":{"x":69,"y":98,"width":832,"height":11}},{"id":"a3c9e875-1214-4d86-9f3b-0162bbc9ea6f","block_type":"box","text":"commission for effecting a transaction that exceeds the amount another broker or dealer would have charged for","page_number":142,"box":{"x":69,"y":113,"width":805,"height":11}},{"id":"c507f137-f8b1-4ebb-b4e8-b4ab11a84905","block_type":"box","text":"effecting the same transaction in recognition of the value of brokerage and research services provided by that broker","page_number":142,"box":{"x":69,"y":128,"width":836,"height":11}},{"id":"812c4c4f-5193-4738-ac74-2e77ae128dc7","block_type":"box","text":"or dealer. Under MiFID II, EU investment managers, including BlackRock International Limited (“BIL”) which acts as a","page_number":142,"box":{"x":69,"y":143,"width":831,"height":11}},{"id":"73c7dbe8-d79e-40e9-b936-a761dec6f61e","block_type":"box","text":"sub-adviser to certain Funds, pay for research from brokers and dealers directly out of their own resources, rather","page_number":142,"box":{"x":69,"y":158,"width":812,"height":11}},{"id":"e9e18c6d-ae5c-4c8d-9e68-cb4cf9cd9110","block_type":"box","text":"than through client commissions.","page_number":142,"box":{"x":68,"y":173,"width":237,"height":11}},{"id":"cda5edc5-c8e2-46c6-b293-3a2d516f68d7","block_type":"box","text":"Subject to applicable law, BlackRock may select brokers that furnish BlackRock, the Funds, other BlackRock","page_number":142,"box":{"x":102,"y":196,"width":770,"height":11}},{"id":"6b103aa9-5a1a-4523-85bd-529723310a27","block_type":"box","text":"client accounts or personnel, directly or through correspondent relationships, with research or other appropriate","page_number":142,"box":{"x":69,"y":211,"width":797,"height":11}},{"id":"f4bc7995-2d93-436a-9edd-523468ef8dfb","block_type":"box","text":"services which provide, in BlackRock’s view, appropriate assistance to BlackRock in the investment decision making","page_number":142,"box":{"x":69,"y":226,"width":830,"height":11}},{"id":"09084c2d-f715-47d1-ad50-ae255dc218f9","block_type":"box","text":"process (including with respect to futures, fixed-price offerings and OTC transactions). Such research or other","page_number":142,"box":{"x":70,"y":241,"width":780,"height":11}},{"id":"8d0253ac-aa09-427a-a0ee-585c576c0f8b","block_type":"box","text":"services may include, to the extent permitted by law, research reports on companies, industries and securities;","page_number":142,"box":{"x":69,"y":257,"width":795,"height":10}},{"id":"5d732608-3f59-4150-9101-f396c2e27657","block_type":"box","text":"economic and financial data; financial publications; proxy analysis; trade industry seminars; computer data bases;","page_number":142,"box":{"x":69,"y":271,"width":815,"height":12}},{"id":"00d25423-57ea-40c1-86ab-03943f8bc64f","block_type":"box","text":"research-oriented software and other services and products.","page_number":142,"box":{"x":69,"y":286,"width":430,"height":11}},{"id":"e7687f18-dc8f-45a4-9bef-54ca24f3b795","block_type":"box","text":"Research or other services obtained in this manner may be used in servicing any or all of the Funds and other","page_number":142,"box":{"x":102,"y":309,"width":785,"height":11}},{"id":"51cbc32a-8f93-4092-9048-cdba5d1fc3ef","block_type":"box","text":"BlackRock client accounts, including in connection with BlackRock client accounts other than those that pay","page_number":142,"box":{"x":70,"y":325,"width":768,"height":11}},{"id":"fc722a16-14c2-47f6-8c8b-5ea4f1cef5fb","block_type":"box","text":"commissions to the broker relating to the research or other service arrangements. Such products and services may","page_number":142,"box":{"x":69,"y":340,"width":826,"height":11}},{"id":"32aa0845-5e35-42a9-9f22-358d0bb7438e","block_type":"box","text":"disproportionately benefit other BlackRock client accounts relative to the Funds based on the amount of brokerage","page_number":142,"box":{"x":69,"y":355,"width":818,"height":11}},{"id":"79c6f4b9-1063-46ee-821b-f927758e30ae","block_type":"box","text":"commissions paid by the Funds and such other BlackRock client accounts. For example, research or other services","page_number":142,"box":{"x":69,"y":370,"width":821,"height":11}},{"id":"03ea0e48-1cc8-48b7-b5f4-89e042520e61","block_type":"box","text":"that are paid for through one client’s commissions may not be used in managing that client’s account. In addition,","page_number":142,"box":{"x":68,"y":385,"width":815,"height":11}},{"id":"a770067e-d982-41c6-ba9a-7b27f0f1bf4d","block_type":"box","text":"other BlackRock client accounts may receive the benefit, including disproportionate benefits, of economies of scale","page_number":142,"box":{"x":69,"y":400,"width":824,"height":11}},{"id":"e16b1e56-cbdb-484a-adc0-d636c9a475c5","block_type":"box","text":"or price discounts in connection with products and services that may be provided to the Funds and to such other","page_number":142,"box":{"x":69,"y":415,"width":804,"height":11}},{"id":"0677edf5-e651-40ec-bf84-1a1d9d5ad116","block_type":"box","text":"BlackRock client accounts. To the extent that BlackRock uses soft dollars, it will not have to pay for those products","page_number":142,"box":{"x":70,"y":430,"width":819,"height":11}},{"id":"5dead03d-2df5-48d4-9ded-511b8afb9a4e","block_type":"box","text":"and services itself.","page_number":142,"box":{"x":69,"y":445,"width":134,"height":9}},{"id":"132a921a-90d2-4e1e-97ce-8ed9fd114b3d","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may endeavor to execute trades through brokers who, pursuant","page_number":142,"box":{"x":102,"y":468,"width":793,"height":11}},{"id":"e730cc41-290d-4e2e-a9ad-63bf456addfd","block_type":"box","text":"to such arrangements, provide research or other services in order to ensure the continued receipt of research or","page_number":142,"box":{"x":68,"y":483,"width":805,"height":11}},{"id":"93719832-2aeb-447f-a73d-8f779b424130","block_type":"box","text":"other services BlackRock believes are useful in its investment decision-making process. BlackRock may from time to","page_number":142,"box":{"x":69,"y":498,"width":833,"height":11}},{"id":"5455fa15-6148-4636-872b-f009b3b8f85b","block_type":"box","text":"time choose not to engage in the above described arrangements to varying degrees. BlackRock, unless prohibited by","page_number":142,"box":{"x":68,"y":514,"width":836,"height":11}},{"id":"61ce7c16-f054-49ae-bf85-89f3461fd94b","block_type":"box","text":"applicable law, may also enter into commission sharing arrangements under which BlackRock may execute","page_number":142,"box":{"x":69,"y":529,"width":760,"height":11}},{"id":"99c36179-dcd2-4eab-b100-225532b3288b","block_type":"box","text":"transactions through a broker-dealer and request that the broker-dealer allocate a portion of the commissions or","page_number":142,"box":{"x":68,"y":543,"width":803,"height":12}},{"id":"8f56e8d9-7194-47bd-9e0f-3467b02fa6c9","block_type":"box","text":"commission credits to another firm that provides research to BlackRock. To the extent that BlackRock engages in","page_number":142,"box":{"x":69,"y":559,"width":807,"height":11}},{"id":"4b6a3c6f-3812-4a4d-9f9c-a2013c179ac1","block_type":"box","text":"commission sharing arrangements, many of the same conflicts related to traditional soft dollars may exist.","page_number":142,"box":{"x":69,"y":574,"width":760,"height":11}},{"id":"358c76d0-b394-4506-9c44-9bc1f70eda79","block_type":"box","text":"BlackRock may utilize certain electronic crossing networks (“ECNs”) (including, without limitation, ECNs in which","page_number":142,"box":{"x":102,"y":597,"width":799,"height":11}},{"id":"58a0bbbf-0fd1-4f4a-b041-53fcdc59cd3d","block_type":"box","text":"BlackRock has an investment or other interest, to the extent permitted by applicable law) in executing client","page_number":142,"box":{"x":70,"y":612,"width":767,"height":11}},{"id":"9dc53f93-df70-48b9-944d-c30dd77c7ccf","block_type":"box","text":"securities transactions for certain types of securities. These ECNs may charge fees for their services, including","page_number":142,"box":{"x":69,"y":627,"width":794,"height":11}},{"id":"c0de22c6-767f-4e9e-acfb-dc997e66c80b","block_type":"box","text":"access fees and transaction fees. The transaction fees, which are similar to commissions or markups/ markdowns,","page_number":142,"box":{"x":69,"y":642,"width":825,"height":11}},{"id":"247f0abf-c496-4346-bcf8-5964212640cb","block_type":"box","text":"will generally be charged to clients and, like commissions and markups/markdowns, would generally be included in","page_number":142,"box":{"x":68,"y":657,"width":821,"height":11}},{"id":"0da25769-241c-4d98-b0e7-e98249aadce8","block_type":"box","text":"the cost of the securities purchased. Access fees may be paid by BlackRock even though incurred in connection with","page_number":142,"box":{"x":68,"y":672,"width":833,"height":11}},{"id":"524fb3ad-0d99-4edf-bf48-42e9dfa84b42","block_type":"box","text":"executing transactions on behalf of clients, including the Funds. In certain circumstances, ECNs may offer volume","page_number":142,"box":{"x":69,"y":687,"width":812,"height":11}},{"id":"430cc747-3013-40b7-98f0-57f323958e7b","block_type":"box","text":"discounts that will reduce the access fees typically paid by BlackRock. BlackRock will only utilize ECNs consistent","page_number":142,"box":{"x":69,"y":702,"width":809,"height":11}},{"id":"57816f5b-12e2-40dc-9b72-0ed0a96f44be","block_type":"box","text":"with its obligation to seek to obtain best execution in client transactions.","page_number":142,"box":{"x":68,"y":718,"width":519,"height":11}},{"id":"764fc7ef-0520-47c6-a87f-0ef14da08aed","block_type":"box","text":"BlackRock owns a minority interest in, and is a member of, Members Exchange (“MEMX”), a newly created U.S.","page_number":142,"box":{"x":102,"y":740,"width":793,"height":11}},{"id":"f5e219b8-0061-45a8-a2e7-7abc501b8219","block_type":"box","text":"stock exchange. Transactions for a Fund may be executed on MEMX if third party brokers select MEMX as the","page_number":142,"box":{"x":69,"y":755,"width":782,"height":11}},{"id":"a82991de-8bc4-49da-b4f8-7a310f9eb863","block_type":"box","text":"appropriate venue for execution of orders placed by BlackRock traders on behalf of client portfolios.","page_number":142,"box":{"x":69,"y":770,"width":710,"height":11}},{"id":"5f0318a7-ec78-4305-a4f0-c12943aaaf03","block_type":"box","text":"BlackRock has adopted policies and procedures designed to prevent conflicts of interest from influencing proxy","page_number":142,"box":{"x":102,"y":793,"width":792,"height":11}},{"id":"caf273f2-87a4-4e3f-9d82-de4c7161e788","block_type":"box","text":"voting decisions that it makes on behalf of advisory clients, including the Funds, and to help ensure that such","page_number":142,"box":{"x":68,"y":808,"width":784,"height":11}},{"id":"c37d1548-d785-4716-8c62-9f1ecad5b893","block_type":"box","text":"decisions are made in accordance with BlackRock’s fiduciary obligations to its clients. Nevertheless, notwithstanding","page_number":142,"box":{"x":69,"y":823,"width":837,"height":12}},{"id":"7d576666-c992-433a-9aaf-23cc3a72872d","block_type":"box","text":"such proxy voting policies and procedures, actual proxy voting decisions of BlackRock may have the effect of favoring","page_number":142,"box":{"x":69,"y":838,"width":835,"height":12}},{"id":"7125cf7b-d4c2-49ee-8d95-44a4fae8905a","block_type":"box","text":"the interests of other clients or businesses of other divisions or units of BlackRock, provided that BlackRock believes","page_number":142,"box":{"x":68,"y":853,"width":837,"height":11}},{"id":"e50aa911-b876-4d26-aae4-641821bb4892","block_type":"box","text":"such voting decisions to be in accordance with its fiduciary obligations. For a more detailed discussion of these","page_number":142,"box":{"x":69,"y":869,"width":795,"height":11}},{"id":"059984a7-3c17-43ad-8bca-2381e2b553fb","block_type":"box","text":"policies and procedures, see “Proxy Voting Policies and Procedures.”","page_number":142,"box":{"x":70,"y":884,"width":490,"height":11}},{"id":"9ac1c6b5-f869-454d-887d-1aef0c7753e8","block_type":"box","text":"II-93","page_number":142,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"69dd63e6-6115-4735-be94-6ae391ca0e67","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":142,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"faf20c04-7537-4332-bb66-226cfe51fae8","block_type":"box","text":"It is also possible that, from time to time, BlackRock and/or its advisory clients (including other funds and","page_number":143,"box":{"x":102,"y":45,"width":757,"height":11}},{"id":"de47ac47-d635-45ae-8ff7-2327edfe2d4c","block_type":"box","text":"separately managed accounts) may, subject to compliance with applicable law, purchase and hold shares of a Fund.","page_number":143,"box":{"x":69,"y":60,"width":825,"height":11}},{"id":"1c000f1a-f94c-4bb6-a0c6-b11fa10d1c66","block_type":"box","text":"Increasing a Fund’s assets may enhance investment flexibility and diversification and may contribute to economies of","page_number":143,"box":{"x":70,"y":75,"width":837,"height":11}},{"id":"3cc8591e-f786-4056-b0c2-23f4747ac070","block_type":"box","text":"scale that tend to reduce the Fund’s expense ratio. BlackRock reserves the right, subject to compliance with","page_number":143,"box":{"x":69,"y":90,"width":774,"height":11}},{"id":"8bf80e59-48bf-4548-8d91-1272f3cbedcf","block_type":"box","text":"applicable law, to redeem at any time some or all of the shares of a Fund acquired for its own accounts. A large","page_number":143,"box":{"x":69,"y":105,"width":796,"height":11}},{"id":"6eb0c6e7-5637-4ab7-b724-112ed1ce027c","block_type":"box","text":"redemption of shares of a Fund by BlackRock could significantly reduce the asset size of the Fund, which might have","page_number":143,"box":{"x":69,"y":120,"width":830,"height":12}},{"id":"286c66a3-f7a4-4640-8c23-0445319f5437","block_type":"box","text":"an adverse effect on the Fund’s investment flexibility, portfolio diversification and expense ratio. BlackRock seeks to","page_number":143,"box":{"x":69,"y":135,"width":831,"height":11}},{"id":"1dab4497-8f3f-499e-9b63-3f806e952c65","block_type":"box","text":"consider the effect of redemptions on a Fund and other shareholders in deciding whether to redeem its shares but is","page_number":143,"box":{"x":69,"y":150,"width":834,"height":12}},{"id":"8e57bc6b-adbc-40bb-a1b3-261c6e106640","block_type":"box","text":"not obligated to do so and may elect not to do so.","page_number":143,"box":{"x":69,"y":166,"width":355,"height":11}},{"id":"a93154f1-e26a-4957-b6b4-bbaec7236051","block_type":"box","text":"It is possible that a Fund may invest in securities of, or engage in transactions with, companies in which","page_number":143,"box":{"x":102,"y":188,"width":742,"height":12}},{"id":"df91610c-cb3d-47e2-aaf1-f0d996765d09","block_type":"box","text":"BlackRock has significant debt or equity investments or other interests. A Fund may also invest in issuances (such as","page_number":143,"box":{"x":70,"y":203,"width":838,"height":12}},{"id":"d9610b5e-953e-4e9a-9b2d-b2f8ea7e3e03","block_type":"box","text":"structured notes) by entities for which BlackRock provides and is compensated for cash management services","page_number":143,"box":{"x":69,"y":218,"width":788,"height":12}},{"id":"1d11e47e-b88a-4caf-811f-5c5e042e266e","block_type":"box","text":"relating to the proceeds from the sale of such issuances. In making investment decisions for a Fund, BlackRock is","page_number":143,"box":{"x":69,"y":234,"width":816,"height":11}},{"id":"bdb578cd-03c4-4ab1-ab06-f2ced713ebd4","block_type":"box","text":"not permitted to obtain or use material non-public information acquired by any unit of BlackRock, in the course of","page_number":143,"box":{"x":69,"y":249,"width":806,"height":11}},{"id":"88c955c5-a188-41c6-acb7-b4c82e6dd556","block_type":"box","text":"these activities. 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With respect to BlackRock and its personnel, the remuneration and profitability relating to services to and","page_number":143,"box":{"x":70,"y":332,"width":805,"height":11}},{"id":"b2f747fb-1879-4898-8966-109f37f9e4fd","block_type":"box","text":"sales of the Funds or other products may be greater than remuneration and profitability relating to services to and","page_number":143,"box":{"x":69,"y":347,"width":813,"height":11}},{"id":"f4217ab7-5f29-49d9-b5fd-11f9359e617b","block_type":"box","text":"sales of certain funds or other products that might be provided or offered. BlackRock and its sales personnel may","page_number":143,"box":{"x":69,"y":362,"width":814,"height":11}},{"id":"139529fe-cd62-4513-992b-9d917b4644f0","block_type":"box","text":"directly or indirectly receive a portion of the fees and commissions charged to the Funds or their shareholders.","page_number":143,"box":{"x":69,"y":377,"width":788,"height":12}},{"id":"0585e004-f71b-4131-85b6-ad813d44a06e","block_type":"box","text":"BlackRock and its advisory or other personnel may also benefit from increased amounts of assets under","page_number":143,"box":{"x":70,"y":392,"width":745,"height":12}},{"id":"6a09ade5-a8a8-4f5d-9abe-9aba7c8417e5","block_type":"box","text":"management. Fees and commissions may also be higher than for other products or services, and the remuneration","page_number":143,"box":{"x":69,"y":407,"width":822,"height":12}},{"id":"960f09ab-c420-4de1-b7f2-d7256b0f02bb","block_type":"box","text":"and profitability to BlackRock and such personnel resulting from transactions on behalf of or management of the","page_number":143,"box":{"x":69,"y":423,"width":801,"height":11}},{"id":"f4460a6c-1f70-4df4-bd28-a0a80bf1cfc5","block_type":"box","text":"Funds may be greater than the remuneration and profitability resulting from other funds or products.","page_number":143,"box":{"x":70,"y":438,"width":711,"height":11}},{"id":"e7f0f585-02e3-47c0-b5cc-e3538c015200","block_type":"box","text":"BlackRock may provide valuation assistance to certain clients with respect to certain securities or other","page_number":143,"box":{"x":102,"y":461,"width":741,"height":11}},{"id":"7fe94ffe-bb0f-4b9d-b5a2-b81bf4430dd8","block_type":"box","text":"investments and the valuation recommendations made for such clients’ accounts may differ from the valuations for","page_number":143,"box":{"x":70,"y":475,"width":823,"height":12}},{"id":"16c1311c-18a8-424d-81f9-32d7b7ba1e02","block_type":"box","text":"the same securities or investments assigned by a Fund’s pricing vendors, especially if such valuations are based on","page_number":143,"box":{"x":68,"y":491,"width":829,"height":11}},{"id":"3bec44e5-97ab-49ea-ad4f-bb7cd220bb7f","block_type":"box","text":"broker-dealer quotes or other data sources unavailable to the Fund’s pricing vendors. While BlackRock will generally","page_number":143,"box":{"x":69,"y":506,"width":825,"height":11}},{"id":"de086f79-15c0-49c3-8408-c4b292d0496f","block_type":"box","text":"communicate its valuation information or determinations to a Fund’s pricing vendors and/or fund accountants, there","page_number":143,"box":{"x":69,"y":521,"width":830,"height":11}},{"id":"f573fa04-7fb9-4c01-8c7d-b3d281163eed","block_type":"box","text":"may be instances where the Fund’s pricing vendors or fund accountants assign a different valuation to a security or","page_number":143,"box":{"x":69,"y":536,"width":824,"height":11}},{"id":"a0791dca-8cb2-4289-8700-ed90e425dd28","block_type":"box","text":"other investment than the valuation for such security or investment determined or recommended by BlackRock.","page_number":143,"box":{"x":69,"y":551,"width":792,"height":11}},{"id":"05b83eab-64bf-4afb-9128-90b3fa966a89","block_type":"box","text":"As disclosed in more detail in “Pricing of Shares—Determination of Net Asset Value” in this SAI, when market","page_number":143,"box":{"x":101,"y":574,"width":784,"height":11}},{"id":"8f5038ff-0cad-4cb4-8e2f-156604e3992b","block_type":"box","text":"quotations are not readily available or are believed by BlackRock to be unreliable, a Fund’s investments are valued at","page_number":143,"box":{"x":69,"y":589,"width":837,"height":11}},{"id":"e35d2c4f-fb53-4b08-b7eb-c6c29764427d","block_type":"box","text":"fair value by BlackRock. BlackRock has been designated as the Fund’s valuation designee pursuant to Rule 2a-5","page_number":143,"box":{"x":68,"y":604,"width":803,"height":11}},{"id":"31252b48-0a88-478d-b362-609629850318","block_type":"box","text":"under the Investment Company Act and acts through BlackRock’s Rule 2a-5 Committee (the “2a-5 Committee”), with","page_number":143,"box":{"x":69,"y":619,"width":831,"height":11}},{"id":"f85ddad3-1663-4b16-80b8-9ee498d4a3fc","block_type":"box","text":"assistance from other BlackRock pricing committees and in accordance with BlackRock’s policies and procedures","page_number":143,"box":{"x":69,"y":634,"width":811,"height":12}},{"id":"36ea9170-50b0-4a89-9732-4b6f13bd8a27","block_type":"box","text":"(the “Valuation Procedures”). When determining a “fair value price,” the 2a-5 Committee seeks to determine the","page_number":143,"box":{"x":69,"y":649,"width":802,"height":12}},{"id":"91c55af2-9145-4dcc-96d6-adb26f2bcfc4","block_type":"box","text":"price that a Fund might reasonably expect to receive from the current sale of that asset or liability in an arm’s-length","page_number":143,"box":{"x":70,"y":664,"width":829,"height":12}},{"id":"87be8fed-0cc2-4403-9eb7-93d11528f351","block_type":"box","text":"transaction. The price generally may not be determined based on what a Fund might reasonably expect to receive for","page_number":143,"box":{"x":68,"y":680,"width":832,"height":11}},{"id":"f169138a-6eba-4e62-80d0-cabd83ba8fa0","block_type":"box","text":"selling an asset or liability at a later time or if it holds the asset or liability to maturity. While fair value determinations","page_number":143,"box":{"x":69,"y":695,"width":837,"height":11}},{"id":"0949de14-bb74-4c7b-bdf8-c88cd15c0e98","block_type":"box","text":"will be based upon all available factors that BlackRock deems relevant at the time of the determination, and may be","page_number":143,"box":{"x":68,"y":710,"width":829,"height":11}},{"id":"4a000161-cc38-4275-94f7-6a41ad252613","block_type":"box","text":"based on analytical values determined by BlackRock using proprietary or third party valuation models, fair value","page_number":143,"box":{"x":69,"y":725,"width":796,"height":11}},{"id":"34e0c026-8f88-438a-927a-dc1caff3e496","block_type":"box","text":"represents only a good faith approximation of the value of an asset or liability. The fair value of one or more assets or","page_number":143,"box":{"x":69,"y":740,"width":839,"height":11}},{"id":"a36443b8-ce6b-406c-a062-f414f709f185","block_type":"box","text":"liabilities may not, in retrospect, be the price at which those assets or liabilities could have been sold during the","page_number":143,"box":{"x":70,"y":755,"width":800,"height":11}},{"id":"ab831a15-d278-49ae-a571-7724e34e6021","block_type":"box","text":"period in which the particular fair values were used in determining a Fund’s NAV. As a result, a Fund’s sale or","page_number":143,"box":{"x":70,"y":770,"width":779,"height":12}},{"id":"abe4a274-63e7-4c3f-81c3-a18a37fde47b","block_type":"box","text":"redemption of its shares at NAV, at a time when a holding or holdings are valued by the 2a-5 Committee at fair value,","page_number":143,"box":{"x":69,"y":785,"width":834,"height":12}},{"id":"c334b0f4-daf0-44cb-80ec-0435fdcdb3c2","block_type":"box","text":"may have the effect of diluting or increasing the economic interest of existing shareholders and may affect the","page_number":143,"box":{"x":69,"y":801,"width":788,"height":11}},{"id":"f145d516-3c90-4b9e-b3e0-bd9115fce2ae","block_type":"box","text":"amount of revenue received by BlackRock with respect to services for which it receives an asset-based fee.","page_number":143,"box":{"x":69,"y":816,"width":765,"height":11}},{"id":"397020d2-2943-4ba1-a208-5aa0fbe28f3d","block_type":"box","text":"To the extent permitted by applicable law, a Fund may invest all or some of its short term cash investments in","page_number":143,"box":{"x":101,"y":838,"width":784,"height":11}},{"id":"5dc043b3-fae2-4801-8a1b-452cc0b2d005","block_type":"box","text":"any money market fund or similarly-managed private fund advised or managed by BlackRock. In connection with any","page_number":143,"box":{"x":69,"y":853,"width":823,"height":12}},{"id":"08393723-25db-4f57-84b8-19cd8fffef9e","block_type":"box","text":"such investments, a Fund, to the extent permitted by the Investment Company Act, may pay its share of expenses of","page_number":143,"box":{"x":69,"y":869,"width":833,"height":11}},{"id":"807d6a70-058b-4f8e-ab9a-38d88b88bf43","block_type":"box","text":"a money market fund or other similarly-managed private fund in which it invests, which may result in a Fund bearing","page_number":143,"box":{"x":69,"y":884,"width":822,"height":11}},{"id":"e19daf86-2dd2-4419-9ead-ed218569b463","block_type":"box","text":"some additional expenses.","page_number":143,"box":{"x":69,"y":899,"width":190,"height":11}},{"id":"7387027f-0836-47bd-a6e3-84b0e7c3bcd8","block_type":"box","text":"II-94","page_number":143,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"2b00d887-1ad0-4b0c-b321-4bb37349d25c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":143,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c2eb8b8f-36a7-4bf8-931a-686d48d52c84","block_type":"box","text":"BlackRock and its directors, officers and employees, may buy and sell securities or other investments for their","page_number":144,"box":{"x":102,"y":45,"width":787,"height":11}},{"id":"9b54d661-092e-40d4-8e91-da211b933e02","block_type":"box","text":"own accounts and may have conflicts of interest with respect to investments made on behalf of a Fund. As a result of","page_number":144,"box":{"x":69,"y":60,"width":839,"height":11}},{"id":"5cc4232f-1045-4774-9198-38a306593cf9","block_type":"box","text":"differing trading and investment strategies or constraints, positions may be taken by directors, officers and","page_number":144,"box":{"x":69,"y":75,"width":764,"height":11}},{"id":"6a9fc53d-47ae-416b-bc7e-1f6b78fc0a3d","block_type":"box","text":"employees of BlackRock that are the same, different from or made at different times than positions taken for the","page_number":144,"box":{"x":69,"y":90,"width":809,"height":11}},{"id":"742856a6-907e-4d1a-a938-0cbb1e8f851b","block_type":"box","text":"Fund. To lessen the possibility that a Fund will be adversely affected by this personal trading, the Fund, BRIL and","page_number":144,"box":{"x":70,"y":105,"width":802,"height":11}},{"id":"f6f3ec4e-b23d-4131-aa44-7df47d58fbe6","block_type":"box","text":"BlackRock each have adopted a Code of Ethics in compliance with Section 17(j) of the Investment Company Act that","page_number":144,"box":{"x":70,"y":120,"width":828,"height":11}},{"id":"70ca3880-d285-428b-8169-fd736a63b930","block_type":"box","text":"restricts securities trading in the personal accounts of investment professionals and others who normally come into","page_number":144,"box":{"x":69,"y":135,"width":825,"height":12}},{"id":"183b0753-a232-460c-875a-51c0e6981bf7","block_type":"box","text":"possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics is also available on the","page_number":144,"box":{"x":70,"y":150,"width":816,"height":12}},{"id":"7e491e12-c2ac-43bb-a004-77554d5afc7b","block_type":"box","text":"EDGAR Database on the Commission’s Internet site at http://www.sec.gov, and copies may be obtained, after paying","page_number":144,"box":{"x":70,"y":166,"width":836,"height":11}},{"id":"80e40f66-403f-444e-94bb-0a6ae5dba2cb","block_type":"box","text":"a duplicating fee, by e-mail at publicinfo@sec.gov.","page_number":144,"box":{"x":69,"y":181,"width":352,"height":11}},{"id":"bd80839a-eb5a-4553-93f8-f6b952eb39c2","block_type":"box","text":"BlackRock will not purchase securities or other property from, or sell securities or other property to, a Fund,","page_number":144,"box":{"x":102,"y":203,"width":768,"height":12}},{"id":"153b896b-949f-4fa4-bdae-af4329f6030a","block_type":"box","text":"except that the Fund may in accordance with rules or guidance adopted under the Investment Company Act engage in","page_number":144,"box":{"x":69,"y":219,"width":836,"height":11}},{"id":"bce0993f-a047-47e1-b476-779f14463b86","block_type":"box","text":"transactions with another Fund or accounts that are affiliated with the Fund as a result of common officers, directors,","page_number":144,"box":{"x":68,"y":234,"width":839,"height":10}},{"id":"105dcdc3-05af-4ac3-b34a-154dae035a0f","block_type":"box","text":"or investment advisers or pursuant to exemptive orders granted to the Funds and/or BlackRock by the Commission.","page_number":144,"box":{"x":69,"y":249,"width":824,"height":11}},{"id":"e6acf8d8-b1d9-48e6-9620-c60a667d31b1","block_type":"box","text":"These transactions would be effected in circumstances in which BlackRock determined that it would be appropriate","page_number":144,"box":{"x":68,"y":264,"width":824,"height":11}},{"id":"749d9740-2365-43fb-bda5-7f6f70cd9a35","block_type":"box","text":"for the Fund to purchase and another client of BlackRock to sell, or the Fund to sell and another client of BlackRock","page_number":144,"box":{"x":68,"y":279,"width":826,"height":11}},{"id":"8778a994-f2ef-4881-808f-25cf5a690dd8","block_type":"box","text":"to purchase, the same security or instrument on the same day. From time to time, the activities of a Fund may be","page_number":144,"box":{"x":68,"y":294,"width":810,"height":11}},{"id":"c5c9c880-66cd-422a-acbb-74dc7aa7c3d9","block_type":"box","text":"restricted because of regulatory requirements applicable to BlackRock and/or BlackRock’s internal policies designed","page_number":144,"box":{"x":69,"y":309,"width":834,"height":11}},{"id":"dc41a6ce-fc0f-4198-bf22-5aa7a5754280","block_type":"box","text":"to comply with, limit the applicability of, or that otherwise relate to such requirements. A client not advised by","page_number":144,"box":{"x":68,"y":324,"width":782,"height":11}},{"id":"c02c4786-8348-48ad-83d3-0763b28c196c","block_type":"box","text":"BlackRock would not be subject to some of those considerations. There may be periods when BlackRock may not","page_number":144,"box":{"x":70,"y":339,"width":807,"height":12}},{"id":"05ce561f-c495-4179-9af4-4bdee1c87c8b","block_type":"box","text":"initiate or recommend certain types of transactions, or may otherwise restrict or limit its advice regarding certain","page_number":144,"box":{"x":70,"y":355,"width":804,"height":11}},{"id":"932f2990-1452-4763-a134-0346aefd2215","block_type":"box","text":"securities or instruments issued by or related to companies for which BlackRock is performing advisory or other","page_number":144,"box":{"x":69,"y":370,"width":799,"height":11}},{"id":"c659fdb0-e548-4416-a941-888b2a4f06d9","block_type":"box","text":"services or has proprietary positions. For example, when BlackRock is engaged to provide advisory or risk","page_number":144,"box":{"x":69,"y":385,"width":755,"height":11}},{"id":"52ce2bc0-b6a7-4565-a7ed-df544ecf142b","block_type":"box","text":"management services for a company, BlackRock may be prohibited from or limited in purchasing or selling securities","page_number":144,"box":{"x":69,"y":400,"width":831,"height":11}},{"id":"368b1f01-a7f2-4c08-9cad-ad4d9d99f4c6","block_type":"box","text":"of that company on behalf of a Fund, particularly where such services result in BlackRock obtaining material non","page_number":144,"box":{"x":69,"y":415,"width":806,"height":11}},{"id":"d19d1d53-5b5c-4bff-aa84-0c5f42190ded","block_type":"box","text":"public information about the company (","page_number":144,"box":{"x":70,"y":430,"width":276,"height":11}},{"id":"6fbaeb16-f61d-4846-a83e-175550b65e18","block_type":"box","text":"e.g.","page_number":144,"box":{"x":348,"y":432,"width":25,"height":9}},{"id":"8c6be811-9996-4e08-96b2-4b96b2b4e470","block_type":"box","text":", in connection with participation in a creditors’ committee). Moreover,","page_number":144,"box":{"x":376,"y":430,"width":499,"height":11}},{"id":"114a41cb-c095-405b-ab1d-782fa144a0a0","block_type":"box","text":"applicable provisions of the Investment Company Act or other regulatory considerations may restrict a Fund or","page_number":144,"box":{"x":69,"y":445,"width":784,"height":12}},{"id":"8309f2ad-3e76-48d3-b4a7-bad6d6d7aa40","block_type":"box","text":"BlackRock from effecting certain portfolio transactions or taking other actions in respect of an investment on behalf","page_number":144,"box":{"x":70,"y":460,"width":827,"height":12}},{"id":"d285d440-0e79-43fd-a5cb-88a91eddb068","block_type":"box","text":"of a Fund, including where BlackRock and/or clients advised by BlackRock already have an interest in such issuer or","page_number":144,"box":{"x":69,"y":475,"width":830,"height":12}},{"id":"12168442-c13b-49be-8172-8c96beb10944","block_type":"box","text":"the investment. Similar situations could arise if personnel of BlackRock serve as directors of companies the","page_number":144,"box":{"x":68,"y":491,"width":773,"height":11}},{"id":"a11ad51e-eb23-4ea0-9ed6-0cf298f142a5","block_type":"box","text":"securities of which the Funds wish to purchase or sell. However, if permitted by applicable law, and where consistent","page_number":144,"box":{"x":69,"y":506,"width":832,"height":11}},{"id":"bd0d11fe-45be-49c9-b62e-b1522853d926","block_type":"box","text":"with BlackRock’s policies and procedures (including the necessary implementation of appropriate information","page_number":144,"box":{"x":68,"y":521,"width":781,"height":11}},{"id":"8c7b4ef2-dede-40db-8432-8d0e7b043a0f","block_type":"box","text":"barriers), the Funds may purchase securities or instruments that are issued by such companies, are the subject of","page_number":144,"box":{"x":69,"y":536,"width":819,"height":11}},{"id":"18fd927f-57f7-466d-bbd5-d33f79864e9b","block_type":"box","text":"an advisory or risk management assignment by BlackRock, or where personnel of BlackRock are directors or officers","page_number":144,"box":{"x":69,"y":551,"width":832,"height":11}},{"id":"ae88db1b-735c-4100-8a7f-ca678dd43bdb","block_type":"box","text":"of the issuer.","page_number":144,"box":{"x":69,"y":566,"width":92,"height":9}},{"id":"9e220ae9-cd74-47f1-8076-1efe25b94b50","block_type":"box","text":"BlackRock has adopted and implemented policies and procedures that are designed to address potential","page_number":144,"box":{"x":102,"y":589,"width":748,"height":11}},{"id":"9a83923a-40e1-470c-b8a2-11bc47dfb2dc","block_type":"box","text":"conflicts that arise in connection with the advisory services BlackRock provides to Funds and other clients. Certain","page_number":144,"box":{"x":69,"y":604,"width":819,"height":11}},{"id":"dcd788da-e660-400d-9ca8-0d6d94789a64","block_type":"box","text":"BlackRock advisory personnel may take views, and make decisions or recommendations, that are different than or","page_number":144,"box":{"x":70,"y":619,"width":817,"height":11}},{"id":"d1e9c94e-7fa6-4523-9caf-efda9078753d","block_type":"box","text":"opposite those of other BlackRock advisory personnel. Certain portfolio management teams within BlackRock may","page_number":144,"box":{"x":69,"y":634,"width":818,"height":12}},{"id":"b87431ac-1c6d-4299-b8f7-4f59db8102a1","block_type":"box","text":"make decisions or take (or refrain from taking) actions with respect to clients they advise in a manner different than","page_number":144,"box":{"x":69,"y":649,"width":827,"height":12}},{"id":"b65019f8-c8ef-4f64-92a1-62f6eee4aa8f","block_type":"box","text":"or adverse to the decisions made or the actions taken (or not taken) by the Funds’ portfolio management teams. The","page_number":144,"box":{"x":69,"y":664,"width":835,"height":12}},{"id":"1ca2560a-c2dd-48ae-bb56-054a0fe9190b","block_type":"box","text":"various portfolio management teams may not share information with each other, including as a result of certain","page_number":144,"box":{"x":68,"y":680,"width":797,"height":11}},{"id":"896435b9-f0ae-404d-ae0c-3a73f8cbc7a7","block_type":"box","text":"information barriers and other policies, and will not have any obligation or other duty to do so.","page_number":144,"box":{"x":70,"y":695,"width":667,"height":11}},{"id":"0077d843-08f6-470b-8ad9-cace32a9f746","block_type":"box","text":"BlackRock has established certain information barriers and other policies to address the sharing of information","page_number":144,"box":{"x":102,"y":717,"width":794,"height":12}},{"id":"97696df5-b827-4edc-89a8-8a5023b24286","block_type":"box","text":"between different businesses within BlackRock, including with respect to personnel responsible with managing","page_number":144,"box":{"x":69,"y":732,"width":791,"height":12}},{"id":"b969b230-68a0-4751-8026-d0d10eae6415","block_type":"box","text":"portfolios and voting proxies with respect to certain index equity portfolios versus those responsible for managing","page_number":144,"box":{"x":70,"y":748,"width":812,"height":11}},{"id":"242b959f-0899-4020-a5dc-c7bffa1c7310","block_type":"box","text":"portfolios and voting proxies with respect to all other portfolios. As a result of information barriers, certain units of","page_number":144,"box":{"x":70,"y":763,"width":818,"height":11}},{"id":"118b8ffe-3dc5-4343-9ba8-de9c1eaf7c80","block_type":"box","text":"BlackRock generally will not have access, or will have limited access, to certain information and personnel, including","page_number":144,"box":{"x":70,"y":778,"width":830,"height":11}},{"id":"370ca576-cc7a-436a-b821-b16b74a1c97d","block_type":"box","text":"senior personnel, in other units of BlackRock, and generally will not manage the Funds with the benefit of information","page_number":144,"box":{"x":69,"y":793,"width":835,"height":11}},{"id":"ce3ffd80-d3ee-4c47-bc06-9fe2a2ec0d3e","block_type":"box","text":"possessed by such other units. Therefore, BlackRock may not be able to review potential investments for the Funds","page_number":144,"box":{"x":70,"y":808,"width":824,"height":11}},{"id":"9333ca25-3a1f-49b6-8289-b2852b273a11","block_type":"box","text":"with the benefit of information held by certain areas of BlackRock.","page_number":144,"box":{"x":68,"y":823,"width":472,"height":11}},{"id":"75fb7abf-fdb3-4cb4-8090-c4f471e2f007","block_type":"box","text":"BlackRock may determine to move certain personnel, businesses, or business units from one side of an","page_number":144,"box":{"x":102,"y":846,"width":744,"height":11}},{"id":"e84acc13-8be6-4d6c-a2dc-87afec85cc30","block_type":"box","text":"information barrier to the other side of the information barrier. In connection therewith, BlackRock personnel,","page_number":144,"box":{"x":70,"y":861,"width":775,"height":11}},{"id":"d8265416-d9c0-4832-9504-4a22f7ad3404","block_type":"box","text":"businesses, and business units that were moved will no longer have access to the information and personnel from","page_number":144,"box":{"x":69,"y":876,"width":818,"height":11}},{"id":"d28db07a-c786-4e0a-950a-2a33105e84c9","block_type":"box","text":"the side of the information barrier from which they were moved. Information obtained in connection with such","page_number":144,"box":{"x":68,"y":891,"width":779,"height":11}},{"id":"9c59a15a-756a-457f-8ac6-554107568a16","block_type":"box","text":"changes to information barriers may limit or restrict the ability of BlackRock to engage in or otherwise effect","page_number":144,"box":{"x":69,"y":906,"width":771,"height":12}},{"id":"990bde75-98e0-4398-9cbc-010cab380d78","block_type":"box","text":"II-95","page_number":144,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"d1e7ae61-c966-42e6-a845-df43ffc7090e","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":144,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"053dc326-d57a-4006-85f9-1a095d179bd6","block_type":"box","text":"transactions on behalf of the Funds (including purchasing or selling securities that BlackRock may otherwise have","page_number":145,"box":{"x":68,"y":45,"width":812,"height":11}},{"id":"861a65c3-c511-4aa9-9c7c-8a376ad469ad","block_type":"box","text":"purchased or sold for a client in the absence of a change to an information barrier). Information barriers may not","page_number":145,"box":{"x":70,"y":60,"width":803,"height":11}},{"id":"d89c3e1f-e27e-46ce-8814-26c111209699","block_type":"box","text":"have their intended impact due to, for example, changes in applicable law or inadvertent crossings of the barriers,","page_number":145,"box":{"x":69,"y":75,"width":813,"height":11}},{"id":"d46d5661-25fd-4b95-afc8-de766d6984d2","block_type":"box","text":"and actions by personnel on one side of a barrier may impact the potential actions of personnel on the other side of","page_number":145,"box":{"x":69,"y":90,"width":829,"height":11}},{"id":"acb2b6b4-5db6-4f68-b057-b025c295938d","block_type":"box","text":"a barrier.","page_number":145,"box":{"x":69,"y":105,"width":62,"height":9}},{"id":"48848327-0d64-4e2c-8111-aaa3016eb8ff","block_type":"box","text":"Although the information barriers are intended to allow for independent portfolio management decision-making","page_number":145,"box":{"x":101,"y":128,"width":788,"height":11}},{"id":"299d8c9d-5ada-4a00-ab09-b383fecfea42","block_type":"box","text":"and proxy voting among certain BlackRock businesses, the investment activities of BlackRock for BlackRock clients,","page_number":145,"box":{"x":69,"y":143,"width":827,"height":11}},{"id":"6b5987ca-336f-4189-9f7c-fb0c36be5b4e","block_type":"box","text":"as well as BlackRock’s proprietary accounts, may nonetheless limit the investment strategies and rights of other","page_number":145,"box":{"x":69,"y":158,"width":805,"height":11}},{"id":"fb88f1bc-557a-40e7-a06f-f4ca5c18fdfd","block_type":"box","text":"clients (including the Fund). As BlackRock’s assets under management increases, BlackRock clients may face greater","page_number":145,"box":{"x":69,"y":173,"width":840,"height":11}},{"id":"cd32d156-38be-4e9b-9bc2-67850d08f58b","block_type":"box","text":"negative impacts due to ownership restrictions and limitations imposed by laws, regulations, rules, regulators, or","page_number":145,"box":{"x":69,"y":188,"width":806,"height":12}},{"id":"3f0c90ee-ea90-4804-9790-b361ee818f68","block_type":"box","text":"issuers. For example, in certain circumstances where a BlackRock client invests in securities issued by companies","page_number":145,"box":{"x":70,"y":204,"width":818,"height":11}},{"id":"cdec7ffb-020e-41f2-a15e-30fe22732775","block_type":"box","text":"that operate in certain industries (","page_number":145,"box":{"x":68,"y":219,"width":244,"height":11}},{"id":"69af4db1-d0d9-4f6c-bbbc-d195767f1484","block_type":"box","text":"e.g.","page_number":145,"box":{"x":314,"y":220,"width":25,"height":10}},{"id":"f75af18a-05a3-48a7-8f14-8e829af75b46","block_type":"box","text":", banking, insurance, and utilities) or in certain emerging or international","page_number":145,"box":{"x":342,"y":219,"width":515,"height":11}},{"id":"cc4cc42e-c009-43ec-8e38-c29e6f13d86b","block_type":"box","text":"markets, or are subject to regulatory or corporate ownership restrictions (","page_number":145,"box":{"x":69,"y":234,"width":523,"height":11}},{"id":"7a308059-4ae5-4a81-9a03-8ae76141bbef","block_type":"box","text":"e.g.","page_number":145,"box":{"x":594,"y":235,"width":25,"height":10}},{"id":"a920ce04-33ac-4e7f-afe5-482cc70f5863","block_type":"box","text":", with mechanisms such as poison pills","page_number":145,"box":{"x":621,"y":234,"width":280,"height":11}},{"id":"ab28cc46-7854-4ed9-80ac-e8abccb82478","block_type":"box","text":"in place to prevent takeovers), or where a BlackRock client invests in certain futures and derivatives, there may be","page_number":145,"box":{"x":70,"y":249,"width":816,"height":11}},{"id":"8cfac5c9-71fd-4915-b60b-25ca958f667e","block_type":"box","text":"limits on the aggregate amount invested by BlackRock for its clients and BlackRock’s proprietary accounts that may","page_number":145,"box":{"x":70,"y":264,"width":825,"height":11}},{"id":"53fd89d2-9bb9-4f91-a94c-1460effcd956","block_type":"box","text":"not be exceeded without the grant of a license or other regulatory or corporate approval, order, consent, relief, waiver","page_number":145,"box":{"x":69,"y":279,"width":837,"height":11}},{"id":"78cd9283-2c2b-47c9-a762-909c4397004d","block_type":"box","text":"or non-disapproval or, if exceeded, may cause BlackRock or its clients to be subject to enforcement actions,","page_number":145,"box":{"x":69,"y":294,"width":769,"height":11}},{"id":"cc45e110-7ea4-412f-bbdb-8f05da140aee","block_type":"box","text":"disgorgement of share ownership or profits, regulatory restrictions, complex compliance reporting, increased","page_number":145,"box":{"x":69,"y":309,"width":775,"height":11}},{"id":"a675101d-9987-4211-9a3b-54f713022ab0","block_type":"box","text":"compliance costs or suffer disadvantages or business restrictions. In light of certain restrictions, BlackRock may also","page_number":145,"box":{"x":69,"y":324,"width":839,"height":12}},{"id":"09b42eee-9a8e-48bd-bd24-f02856a8820e","block_type":"box","text":"seek to make indirect investments (","page_number":145,"box":{"x":69,"y":340,"width":255,"height":10}},{"id":"140e2dc0-8293-44ee-847c-dc8f474384c1","block_type":"box","text":"e.g.","page_number":145,"box":{"x":326,"y":341,"width":24,"height":10}},{"id":"4bc7fbbe-0eb6-4301-816c-8a0d49f7417e","block_type":"box","text":", using derivatives) on behalf of its clients to receive exposure to certain","page_number":145,"box":{"x":353,"y":339,"width":514,"height":12}},{"id":"1a7fdf81-fdb2-4362-ab17-4c433ce5d44e","block_type":"box","text":"securities in excess of the applicable ownership restrictions and limitations when legally permitted that will expose","page_number":145,"box":{"x":69,"y":355,"width":817,"height":11}},{"id":"fab70780-87e7-4f43-97c7-8e433302eb0f","block_type":"box","text":"such clients to additional costs and additional risks, including any risks associated with investing in derivatives.","page_number":145,"box":{"x":69,"y":370,"width":795,"height":11}},{"id":"100d6772-a8d6-450b-90a9-d8f307a38ff4","block_type":"box","text":"There may be limited availability of derivatives that provide indirect exposure to an impacted security. BlackRock","page_number":145,"box":{"x":68,"y":385,"width":799,"height":11}},{"id":"ac4541e6-871e-4261-9c7b-ad969b097dd1","block_type":"box","text":"clients can be subject to more than one ownership limitation depending on each client’s holdings, and each","page_number":145,"box":{"x":69,"y":400,"width":767,"height":11}},{"id":"1decc274-af8b-4b4e-9fee-167476a27a6b","block_type":"box","text":"ownership limitation can impact multiple securities held by the client. Certain clients or shareholders may have their","page_number":145,"box":{"x":69,"y":415,"width":829,"height":11}},{"id":"bc55f3bc-5924-49dc-93ff-c2bfa1fcd9bf","block_type":"box","text":"own overlapping obligations to monitor their compliance with ownership limitations across their investments.","page_number":145,"box":{"x":69,"y":430,"width":772,"height":11}},{"id":"1e6a341e-76af-4f14-a6e9-b614ef2ce286","block_type":"box","text":"If certain aggregate ownership thresholds are reached either through the actions of BlackRock or a BlackRock","page_number":145,"box":{"x":102,"y":453,"width":783,"height":11}},{"id":"462c30a5-883a-47ea-befa-838dd64080fb","block_type":"box","text":"client or as a result of corporate actions by the issuer, the ability of BlackRock on behalf of clients to purchase or","page_number":145,"box":{"x":69,"y":468,"width":808,"height":11}},{"id":"41d62008-0bf8-4de7-bcc2-62f81bec169d","block_type":"box","text":"dispose of investments, or exercise rights (including voting) or undertake business transactions, may be restricted by","page_number":145,"box":{"x":69,"y":483,"width":837,"height":11}},{"id":"04b4dd92-3112-4718-898d-0aa82f241456","block_type":"box","text":"law, regulation, rule, or organizational documents or otherwise impaired. For example, to meet the requirements of","page_number":145,"box":{"x":70,"y":498,"width":818,"height":11}},{"id":"44463aac-b9ba-42af-a026-739ccd6b2516","block_type":"box","text":"an ownership limitation or restriction, a client may be unable to purchase or directly hold a security the client would","page_number":145,"box":{"x":69,"y":514,"width":821,"height":10}},{"id":"61e5c6c6-0936-45d7-a76f-73fb2b9a8789","block_type":"box","text":"otherwise purchase or hold. The limitation or restriction may be based on the holdings of other BlackRock clients","page_number":145,"box":{"x":69,"y":528,"width":806,"height":12}},{"id":"67047f10-5bfa-465a-8821-3b139df180b1","block_type":"box","text":"instead of the specific client being restricted. For index funds, this means a fund may not be able to track its index as","page_number":145,"box":{"x":70,"y":543,"width":839,"height":12}},{"id":"6d4a29f3-1c07-4d89-ab57-7e8c80592d5d","block_type":"box","text":"closely as it would if it was not subject to an ownership limitation or restriction because the fund cannot acquire the","page_number":145,"box":{"x":69,"y":559,"width":826,"height":11}},{"id":"cf275196-e472-41e7-a0cd-5b8a395aebd6","block_type":"box","text":"amount of the impacted security included in its index. BlackRock on behalf of its clients may limit purchases, sell","page_number":145,"box":{"x":69,"y":574,"width":807,"height":11}},{"id":"b712dc5b-3d8f-4559-82b4-8c8ba64fd05a","block_type":"box","text":"existing investments, utilize indirect investments, utilize information barriers, or otherwise restrict, forgo, or limit the","page_number":145,"box":{"x":69,"y":589,"width":830,"height":11}},{"id":"7619c86c-d33c-4a29-b2d7-428157dc9880","block_type":"box","text":"exercise of rights (including transferring, outsourcing, or limiting voting rights or forgoing the right to receive","page_number":145,"box":{"x":69,"y":604,"width":765,"height":11}},{"id":"09d66733-0cc0-427d-8266-1df6f56e5635","block_type":"box","text":"dividends) when BlackRock, in its sole discretion, deems it appropriate in light of potential regulatory or other","page_number":145,"box":{"x":69,"y":619,"width":781,"height":11}},{"id":"71a09c37-36cd-4e7f-bd7e-ec5c56c6e684","block_type":"box","text":"restrictions on ownership or other consequences resulting from reaching investment thresholds. These types of","page_number":145,"box":{"x":69,"y":634,"width":796,"height":12}},{"id":"85a8ab72-dc71-41d7-ae5f-97dd704337fc","block_type":"box","text":"restrictions could negatively impact a client’s performance or ability to meet its investment objective.","page_number":145,"box":{"x":69,"y":649,"width":720,"height":12}},{"id":"68cb4455-ccfe-4351-b978-0d9281dbc55d","block_type":"box","text":"When BlackRock or a BlackRock client is subject to an ownership limitation, BlackRock may in its discretion seek","page_number":145,"box":{"x":101,"y":672,"width":807,"height":11}},{"id":"7c428372-3404-473e-8096-506fe7c131f1","block_type":"box","text":"permission from the applicable issuers or regulators to exceed the limitation. However, there is no guarantee that","page_number":145,"box":{"x":70,"y":687,"width":810,"height":11}},{"id":"410e18f3-e367-4476-915f-21fdab2c44c2","block_type":"box","text":"permission will be granted, or that, once granted, it will not be modified or revoked at a later date with minimal or no","page_number":145,"box":{"x":70,"y":702,"width":829,"height":12}},{"id":"e4e566f1-54a3-4903-bed0-43e7e5a77e69","block_type":"box","text":"notice. The issuer and/or regulator may also require that BlackRock on behalf of itself and its clients take or refrain","page_number":145,"box":{"x":69,"y":717,"width":824,"height":12}},{"id":"63815a8c-22b7-468f-aa63-d09f6d726389","block_type":"box","text":"from taking certain actions in connection with the approval, order, consent, relief or non-disapproval, which BlackRock","page_number":145,"box":{"x":68,"y":732,"width":841,"height":12}},{"id":"5a9c7cfe-5a5c-43fe-aec0-3104ff40f98b","block_type":"box","text":"may accept if it believes the benefits outweigh the costs and may limit BlackRock from taking actions that it","page_number":145,"box":{"x":69,"y":748,"width":770,"height":11}},{"id":"a6d29c77-912f-4d74-8f91-81493c6ed4bf","block_type":"box","text":"otherwise would take. In those circumstances where ownership thresholds or limitations must be observed,","page_number":145,"box":{"x":69,"y":763,"width":769,"height":11}},{"id":"8a770f94-5d3e-47a4-838b-934bf7ce2a7e","block_type":"box","text":"BlackRock seeks to allocate limited investment opportunities equitably among clients, taking into consideration","page_number":145,"box":{"x":70,"y":778,"width":794,"height":11}},{"id":"207b19d0-52e8-4160-ae29-2c9d982c305a","block_type":"box","text":"benchmark weight and investment strategy. BlackRock may adopt certain controls designed to prevent the","page_number":145,"box":{"x":69,"y":793,"width":757,"height":11}},{"id":"8bd11fb1-941f-4b27-a07f-0f841da577bf","block_type":"box","text":"occurrence of a breach of any applicable ownership threshold or limits, including, for example, when ownership in","page_number":145,"box":{"x":69,"y":808,"width":807,"height":11}},{"id":"52cb93aa-9223-439d-9093-402e9f7dca9d","block_type":"box","text":"certain securities nears an applicable threshold, BlackRock may limit additional purchases in such securities or, with","page_number":145,"box":{"x":69,"y":823,"width":833,"height":11}},{"id":"f1e3a627-64a5-4240-8c99-e7ee3a22d408","block_type":"box","text":"respect to ETFs, remove such securities from the list of Deposit Securities to be delivered to the Fund in connection","page_number":145,"box":{"x":69,"y":838,"width":827,"height":11}},{"id":"7a220a90-e131-41ab-8356-f14125a3c756","block_type":"box","text":"with purchases of Creation Units of such Fund. If client holdings of an issuer exceed an applicable threshold and","page_number":145,"box":{"x":68,"y":853,"width":803,"height":12}},{"id":"db83e366-d75f-4268-89d7-9a64e631acd5","block_type":"box","text":"BlackRock is unable to obtain relief to enable the continued holding of such investments, it may be necessary to","page_number":145,"box":{"x":70,"y":869,"width":802,"height":11}},{"id":"98c37c90-a2f3-4782-b0fe-ca55e45c03f5","block_type":"box","text":"reduce these positions to meet the applicable limitations and BlackRock or such client may be subject to regulatory","page_number":145,"box":{"x":69,"y":884,"width":826,"height":11}},{"id":"007f3ebc-fdaf-4a4a-86c3-b1e8f386fb08","block_type":"box","text":"actions. In these cases, the investments will be sold in a manner that BlackRock deems fair and equitable over time.","page_number":145,"box":{"x":69,"y":899,"width":834,"height":11}},{"id":"c6eac9bd-657b-410c-a9a5-b3fa601a094a","block_type":"box","text":"II-96","page_number":145,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"0f0dd1ae-deb4-495e-b105-6a003383d670","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":145,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3b443312-1d6d-4554-b63d-747c1f24b2fe","block_type":"box","text":"Ownership limitations are highly complex. It is possible that, despite BlackRock’s intent to either comply with or","page_number":146,"box":{"x":102,"y":45,"width":795,"height":11}},{"id":"9dae592b-d6b9-43c6-91d9-1a1a81b6f4fe","block_type":"box","text":"be granted permission to exceed ownership limitations, it may inadvertently breach a limit or violate the corporate or","page_number":146,"box":{"x":69,"y":60,"width":831,"height":11}},{"id":"19192415-ffb9-49d0-8a5c-a20b921f3877","block_type":"box","text":"regulatory approval, order, consent, relief or non-disapproval that was obtained.","page_number":146,"box":{"x":69,"y":75,"width":566,"height":11}},{"id":"0c4b657f-e8cb-4d1e-90e6-6f3f80243b11","block_type":"box","text":"In addition to the foregoing, other ownership thresholds may trigger reporting requirements to governmental and","page_number":146,"box":{"x":102,"y":98,"width":798,"height":11}},{"id":"6c9b4f6c-2f57-41be-93de-6ab0436a6bd4","block_type":"box","text":"regulatory authorities, and such reports may entail the disclosure of the identity of a client or BlackRock’s intended","page_number":146,"box":{"x":69,"y":113,"width":823,"height":11}},{"id":"2466cd97-af9b-41d4-a580-ec7ed792336f","block_type":"box","text":"strategy with respect to such security or asset.","page_number":146,"box":{"x":69,"y":128,"width":333,"height":11}},{"id":"ff8813c1-438b-4ed6-8ccc-06de6ac5de42","block_type":"box","text":"BlackRock may maintain securities indices. To the extent permitted by applicable laws, the Funds may seek to","page_number":146,"box":{"x":102,"y":151,"width":785,"height":11}},{"id":"cfcaa88b-f350-4939-b746-f83fee612079","block_type":"box","text":"license and use such indices as part of their investment strategy. Index based funds that seek to track the","page_number":146,"box":{"x":70,"y":166,"width":760,"height":11}},{"id":"3b8abdc0-c986-4031-a6b4-1904aa0e8cf4","block_type":"box","text":"performance of securities indices also may use the name of the index or index provider in the fund name. Index","page_number":146,"box":{"x":70,"y":181,"width":796,"height":11}},{"id":"13604ca3-0966-4ec2-b2d3-c0acaa068184","block_type":"box","text":"providers, including BlackRock (to the extent permitted by applicable law), may be paid licensing fees for use of their","page_number":146,"box":{"x":70,"y":196,"width":830,"height":11}},{"id":"852172bd-2962-496a-8376-04d6eb7f0236","block_type":"box","text":"index or index name. In instances where BlackRock charges a unitary management fee, BlackRock may have a","page_number":146,"box":{"x":70,"y":211,"width":788,"height":11}},{"id":"f6ace788-f9f3-40ef-bd8c-bafbe2496c7e","block_type":"box","text":"financial incentive to use a BlackRock index that is less costly to BlackRock than a third party index. BlackRock may","page_number":146,"box":{"x":68,"y":226,"width":829,"height":11}},{"id":"05f3e352-f960-4cd2-9a5b-a74a67da53df","block_type":"box","text":"benefit from the Funds using BlackRock indices by creating increasing acceptance in the marketplace for such","page_number":146,"box":{"x":69,"y":241,"width":784,"height":11}},{"id":"2c7ee3a2-c392-4974-91b9-3735e750bd2c","block_type":"box","text":"indices. BlackRock is not obligated to license its indices to a Fund and the Funds are under no obligation to use","page_number":146,"box":{"x":70,"y":257,"width":797,"height":11}},{"id":"f15e1bff-f01a-49e1-8483-db09df03dcff","block_type":"box","text":"BlackRock indices. Any Fund that enters into a license for a BlackRock index cannot be assured that the terms of any","page_number":146,"box":{"x":70,"y":271,"width":837,"height":12}},{"id":"df4cb87b-3d20-4b0a-9912-cb307da3cb1c","block_type":"box","text":"index licensing agreement with BlackRock will be as favorable as those terms offered to other licensees.","page_number":146,"box":{"x":70,"y":286,"width":746,"height":12}},{"id":"b61a98e6-6b07-433b-8205-c3c30f53b38c","block_type":"box","text":"BlackRock may enter into contractual arrangements with third-party service providers to a Fund (","page_number":146,"box":{"x":102,"y":309,"width":686,"height":11}},{"id":"be61f445-2ad5-4b48-86cd-a98de3f10012","block_type":"box","text":"e.g.","page_number":146,"box":{"x":790,"y":311,"width":25,"height":9}},{"id":"4645c10d-c151-4b85-912d-9367e36aa88c","block_type":"box","text":", custodians,","page_number":146,"box":{"x":817,"y":309,"width":90,"height":11}},{"id":"8f9a3cb4-3661-402b-93b4-ecfea3a023ab","block_type":"box","text":"administrators and index providers) pursuant to which BlackRock receives fee discounts or concessions in","page_number":146,"box":{"x":69,"y":324,"width":756,"height":11}},{"id":"e631056f-bb5b-4d40-af23-34b205097eb0","block_type":"box","text":"recognition of BlackRock’s overall relationship with such service providers. BlackRock may also enter into contractual","page_number":146,"box":{"x":69,"y":339,"width":836,"height":12}},{"id":"cc1b7d7e-8d6d-48a1-919b-6873260a391c","block_type":"box","text":"arrangements with such service providers pursuant to which BlackRock incurs additional costs if the service","page_number":146,"box":{"x":69,"y":355,"width":772,"height":11}},{"id":"215a1a51-9884-4d33-922a-641780922659","block_type":"box","text":"provider’s services are terminated with respect to a Fund. To the extent that BlackRock is responsible for paying","page_number":146,"box":{"x":70,"y":370,"width":800,"height":11}},{"id":"2344e39e-b304-49fa-81b6-5ff3f552f961","block_type":"box","text":"service providers out of its fees that it receives from the Funds, the benefits of lower fees, including any fee","page_number":146,"box":{"x":69,"y":385,"width":771,"height":11}},{"id":"a2411d6e-d52f-4f08-8d6e-a9dc5b372a43","block_type":"box","text":"discounts or concessions, or any additional savings, may accrue, in whole or in part, to BlackRock, which could result","page_number":146,"box":{"x":69,"y":400,"width":839,"height":11}},{"id":"d718a74c-ba41-4201-951e-319f38cfa4e0","block_type":"box","text":"in conflicts of interest relating to the use or termination of service providers to a Fund. In addition, conflicts of","page_number":146,"box":{"x":70,"y":415,"width":785,"height":11}},{"id":"c9632dcf-81b9-4662-9aa3-d0e94a3e9ae6","block_type":"box","text":"interest may arise with respect to contractual arrangements with third-party service providers to a Fund, or the","page_number":146,"box":{"x":70,"y":430,"width":786,"height":11}},{"id":"b1b0469e-1064-4eea-a13e-e293bfd86aa4","block_type":"box","text":"selection of such providers, particularly in circumstances where BlackRock is negotiating on behalf of both funds that","page_number":146,"box":{"x":69,"y":445,"width":837,"height":12}},{"id":"1631a8ac-c0fd-4f09-99d4-4f6125b8623d","block_type":"box","text":"have a unitary management fee and those that do not or different service providers have different fee structures.","page_number":146,"box":{"x":69,"y":460,"width":809,"height":12}},{"id":"51c55d44-1614-4e98-8860-013c63f8e5ce","block_type":"box","text":"Conflicts of interest may arise as a result of simultaneous investment management of multiple client accounts","page_number":146,"box":{"x":102,"y":483,"width":788,"height":11}},{"id":"38a9134b-cbc5-44e7-8138-0034b5fdbd18","block_type":"box","text":"by BlackRock’s investment professionals. For example, differences in the advisory fee structure may create the","page_number":146,"box":{"x":69,"y":498,"width":795,"height":11}},{"id":"fbfcd941-e76d-43bf-b93d-6f3cb0e5b94b","block_type":"box","text":"appearance of actual or potential conflicts of interest because such differences could create pecuniary incentives for","page_number":146,"box":{"x":69,"y":513,"width":835,"height":11}},{"id":"ab4038a7-8eb4-4124-a882-42255ad042cc","block_type":"box","text":"BlackRock to favor one client account over another.","page_number":146,"box":{"x":70,"y":528,"width":363,"height":9}},{"id":"15f2fa9b-a7b1-4e44-8977-b380187d40e7","block_type":"box","text":"BlackRock owns or has an ownership interest in certain trading, portfolio management, operations and/or","page_number":146,"box":{"x":102,"y":551,"width":757,"height":11}},{"id":"9ddb7d86-603e-4aa0-b4fa-c73cbc55e849","block_type":"box","text":"information systems used by Fund service providers. These systems are, or will be, used by a Fund service provider","page_number":146,"box":{"x":70,"y":566,"width":826,"height":11}},{"id":"25d6ff8e-4d09-4b1a-97f8-eceaadcb48a6","block_type":"box","text":"in connection with the provision of services to accounts managed by BlackRock and funds managed and sponsored","page_number":146,"box":{"x":70,"y":581,"width":822,"height":12}},{"id":"874e9d0c-67a2-417c-8807-275d9f63ff55","block_type":"box","text":"by BlackRock, including the Funds, that engage the service provider (typically the custodian). A Fund’s service","page_number":146,"box":{"x":69,"y":597,"width":782,"height":11}},{"id":"98a251b4-f799-47da-9311-203dc4fddac8","block_type":"box","text":"provider remunerates BlackRock for the use of the systems. A Fund service provider’s payments to BlackRock for the","page_number":146,"box":{"x":70,"y":612,"width":835,"height":11}},{"id":"668302e6-d7e0-46a2-8b72-e6cb3d2e4889","block_type":"box","text":"use of these systems may enhance the profitability of BlackRock.","page_number":146,"box":{"x":69,"y":627,"width":465,"height":11}},{"id":"6f8b7c4e-2d64-4171-bb06-738f7cb3bbc9","block_type":"box","text":"BlackRock’s receipt of fees from a service provider in connection with the use of systems provided by BlackRock","page_number":146,"box":{"x":102,"y":649,"width":804,"height":12}},{"id":"79edb612-da94-4263-a79d-d5ce11b1fb0d","block_type":"box","text":"may create an incentive for BlackRock to recommend that a Fund enter into or renew an arrangement with the service","page_number":146,"box":{"x":69,"y":664,"width":840,"height":12}},{"id":"981bf7a1-28d5-4b62-9b71-1ab7dd0c19d5","block_type":"box","text":"provider.","page_number":146,"box":{"x":70,"y":680,"width":58,"height":11}},{"id":"1ca95006-c30b-4484-8a56-4163dfe8ee20","block_type":"box","text":"In recognition of a BlackRock client’s overall relationship with BlackRock, BlackRock may offer special pricing","page_number":146,"box":{"x":102,"y":702,"width":778,"height":12}},{"id":"4030d817-8ebf-4326-b45d-3a2543b11d38","block_type":"box","text":"arrangements for certain services provided by BlackRock. Any such special pricing arrangements will not affect Fund","page_number":146,"box":{"x":69,"y":717,"width":831,"height":12}},{"id":"33759927-c8bf-4735-9c46-e60771ff1ec4","block_type":"box","text":"fees and expenses applicable to such client’s investment in a Fund.","page_number":146,"box":{"x":68,"y":732,"width":485,"height":11}},{"id":"545208ae-9092-4119-91b1-bced2915bfb1","block_type":"box","text":"Present and future activities of BlackRock and its directors, officers and employees, in addition to those","page_number":146,"box":{"x":102,"y":755,"width":742,"height":11}},{"id":"e0bce3fd-4c13-43a6-a9a3-676b7c209c33","block_type":"box","text":"described in this section, may give rise to additional conflicts of interest.","page_number":146,"box":{"x":69,"y":770,"width":517,"height":12}},{"id":"0a423ff2-a790-4961-b113-53bb4f912709","block_type":"box","text":"PURCHASE OF SHARES","page_number":146,"box":{"x":395,"y":800,"width":188,"height":10}},{"id":"a33e5a67-1cb9-4f64-9a10-20301cf53989","block_type":"box","text":"Most BlackRock-advised open-end funds offer multiple classes of shares under a plan adopted under Rule 18f-3","page_number":146,"box":{"x":102,"y":823,"width":800,"height":11}},{"id":"410e50f2-7835-46e1-9302-4cff77a8248f","block_type":"box","text":"under the Investment Company Act. Investor A Shares are sold to investors choosing the initial sales charge","page_number":146,"box":{"x":69,"y":838,"width":771,"height":11}},{"id":"2c238057-e0e3-4616-9072-bb8e3041d6c0","block_type":"box","text":"alternative, except that Investor A Shares of Index Funds (defined below) and BlackRock Short Obligations Fund are","page_number":146,"box":{"x":69,"y":853,"width":822,"height":11}},{"id":"0868c1a2-2a47-464c-8546-1882caa28ef2","block_type":"box","text":"generally not subject to an initial sales charge, and Investor C Shares are sold to investors choosing the deferred","page_number":146,"box":{"x":68,"y":868,"width":809,"height":11}},{"id":"39fc6939-ed9e-486e-bd2e-1bbda63113ff","block_type":"box","text":"sales charge alternative. Investor P Shares are available only to certain investors purchasing shares of Funds","page_number":146,"box":{"x":69,"y":883,"width":781,"height":11}},{"id":"e72024bc-e0c8-4366-87bd-64be6c4622a4","block_type":"box","text":"through registered representatives of an insurance company’s broker-dealer that has entered into an agreement with","page_number":146,"box":{"x":68,"y":898,"width":833,"height":11}},{"id":"c49c212b-d72e-4924-b2f5-08bfa001d0b5","block_type":"box","text":"II-97","page_number":146,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"332cf402-f25e-42ee-870e-9ad30da63aca","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":146,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"721f72cb-a791-4ac3-a0af-2721ffddff24","block_type":"box","text":"the Distributor to offer such shares. Institutional Shares are sold to certain eligible investors without a sales charge.","page_number":147,"box":{"x":68,"y":45,"width":833,"height":11}},{"id":"09927b1a-a5ad-44f4-a000-2656f6bb6db3","block_type":"box","text":"Certain Funds offer Class R Shares, which are available only to certain employer-sponsored retirement plans and are","page_number":147,"box":{"x":69,"y":60,"width":835,"height":11}},{"id":"aac1b7e7-850b-4406-bc55-25b16a12b140","block_type":"box","text":"sold without a sales charge. Certain Funds offer Class G Shares, which are available only to investors on eligible","page_number":147,"box":{"x":69,"y":75,"width":804,"height":11}},{"id":"335b9f13-8db8-4733-b47a-fd0f39badf92","block_type":"box","text":"platforms, which are platforms where clients invest in the Fund through a single omnibus account in the name of a","page_number":147,"box":{"x":70,"y":90,"width":816,"height":11}},{"id":"6b75c3a5-807d-43dc-b650-51ddbe88521c","block_type":"box","text":"financial intermediary that meets an initial investment minimum of $2 billion. In addition, certain Funds offer Service","page_number":147,"box":{"x":68,"y":104,"width":835,"height":12}},{"id":"d4d95e91-6ead-432c-9bd0-8bebaf8dc783","block_type":"box","text":"Shares, BlackRock Shares and/or Class K Shares that are available only to certain eligible investors. Please see the","page_number":147,"box":{"x":69,"y":120,"width":834,"height":12}},{"id":"b5ebf17f-3382-477a-9a1a-dce1326fca98","block_type":"box","text":"appropriate Prospectus for your Fund to determine which classes are offered by your Fund and under what","page_number":147,"box":{"x":69,"y":135,"width":757,"height":11}},{"id":"7a983ec7-d5fe-443b-8574-b8a7fc8c7120","block_type":"box","text":"circumstances. Each class has different exchange privileges. See “Shareholder Services — Exchange Privilege.”","page_number":147,"box":{"x":69,"y":150,"width":802,"height":12}},{"id":"8e4eb807-78ba-4f3b-8ef2-8a1e20e93a58","block_type":"box","text":"The applicable offering price for purchase orders is based on the NAV of a Fund next determined after receipt of","page_number":147,"box":{"x":101,"y":173,"width":799,"height":11}},{"id":"6e170286-b491-4452-899c-1b9246bfbaf7","block_type":"box","text":"the purchase order by a dealer or other financial intermediary (“Selling Dealer”) that has been authorized by the","page_number":147,"box":{"x":68,"y":188,"width":798,"height":12}},{"id":"a93723d6-19de-4b7a-8ab0-133293132a39","block_type":"box","text":"Distributor by contract to accept such orders. In addition, with respect to the affiliated underlying funds in which","page_number":147,"box":{"x":70,"y":203,"width":795,"height":12}},{"id":"cd25ef5f-1fc8-46f2-9ad5-48c6c8fa9b09","block_type":"box","text":"target date funds advised by BlackRock or its affiliates (“BlackRock Target Date Funds”) invest, the applicable","page_number":147,"box":{"x":68,"y":218,"width":786,"height":12}},{"id":"4318a9dc-ec36-48de-a826-05c97698fc6d","block_type":"box","text":"offering price of each affiliated underlying fund is based on the NAV of such affiliated underlying fund next determined","page_number":147,"box":{"x":69,"y":234,"width":839,"height":11}},{"id":"64ac579d-c690-4087-a7ac-ce51ab60b562","block_type":"box","text":"after a purchase order is received, or deemed to be received upon receipt by a Selling Dealer, by the BlackRock","page_number":147,"box":{"x":69,"y":249,"width":795,"height":11}},{"id":"8dace517-6d01-417e-82d8-0edc81b1c3cb","block_type":"box","text":"Target Date Funds that allocate a portion of such purchase order to such affiliated underlying fund. As to purchase","page_number":147,"box":{"x":68,"y":264,"width":819,"height":11}},{"id":"c205fab4-8ec6-4891-b69c-436c089dd40c","block_type":"box","text":"orders received by Selling Dealers or BlackRock Target Date Funds prior to the close of business on the New York","page_number":147,"box":{"x":69,"y":279,"width":808,"height":11}},{"id":"9b3a8e5c-cece-4445-a145-2c07da82e2d5","block_type":"box","text":"Stock Exchange (“NYSE”) (generally, the NYSE closes at 4:00 p.m. Eastern time), on the day the order is placed,","page_number":147,"box":{"x":69,"y":294,"width":803,"height":11}},{"id":"f43d0cff-1a0d-42f5-bf57-a8802be8269f","block_type":"box","text":"including orders received after the close of business on the previous day, the applicable offering price is based on","page_number":147,"box":{"x":70,"y":309,"width":812,"height":11}},{"id":"f223052e-5eee-4af9-be84-c5be601d034e","block_type":"box","text":"the NAV determined as of the close of business on the NYSE on that day. If the purchase orders are not received by","page_number":147,"box":{"x":68,"y":324,"width":828,"height":11}},{"id":"906d65ee-a040-4d60-9c26-8092e6d4b47c","block_type":"box","text":"the Selling Dealer or a BlackRock Target Date Fund before the close of business on the NYSE, such orders are","page_number":147,"box":{"x":68,"y":339,"width":788,"height":12}},{"id":"e900bf9c-fab6-4337-9330-cb8ce4b4d870","block_type":"box","text":"deemed received on the next business day. It is the responsibility of brokers to transmit purchase orders and","page_number":147,"box":{"x":69,"y":355,"width":779,"height":11}},{"id":"736b932a-5fe3-482c-8695-662ddcec9240","block_type":"box","text":"payment on a timely basis. Generally, if payment is not received within the period described in the Prospectuses, the","page_number":147,"box":{"x":70,"y":370,"width":830,"height":11}},{"id":"81fe7d34-b0d3-4e80-8b27-c6ddc36ec373","block_type":"box","text":"order will be canceled, notice thereof will be given, and the broker and its customers will be responsible for any loss","page_number":147,"box":{"x":69,"y":385,"width":828,"height":11}},{"id":"df811c1e-a4c5-4f11-a378-e0447f1b190b","block_type":"box","text":"to the Fund or its shareholders. Orders of less than $500 may be mailed by a broker to the Transfer Agent.","page_number":147,"box":{"x":68,"y":399,"width":762,"height":12}},{"id":"a0125a23-e27d-4543-a87b-a9785204f8bb","block_type":"box","text":"The minimum investment for the initial purchase of shares is set forth in the Prospectus for each Fund. The","page_number":147,"box":{"x":101,"y":423,"width":768,"height":11}},{"id":"7d55187c-c746-46de-bf48-d0ff1ff1a0ec","block_type":"box","text":"minimum initial investment for employees of a Fund, a Fund’s Manager, Sub-Advisers or BRIL or employees of their","page_number":147,"box":{"x":69,"y":438,"width":819,"height":11}},{"id":"bd6acb31-1f01-4b7b-8afe-fc3312091e41","block_type":"box","text":"affiliates is $100, unless payment is made through a payroll deduction program in which case the minimum","page_number":147,"box":{"x":69,"y":452,"width":769,"height":12}},{"id":"20545541-ae77-414f-b6dd-22102a330ad3","block_type":"box","text":"investment is $25.","page_number":147,"box":{"x":70,"y":467,"width":132,"height":11}},{"id":"d5129cd1-190d-41f9-bc68-1a05546ad671","block_type":"box","text":"Each Fund has lower investment minimums for other categories of shareholders eligible to purchase Institutional","page_number":147,"box":{"x":102,"y":491,"width":802,"height":11}},{"id":"22298da2-e937-4251-8238-d87cd4f5c079","block_type":"box","text":"Shares, including selected fee-based programs. Each Fund may permit a lower initial investment for certain investors","page_number":147,"box":{"x":69,"y":506,"width":833,"height":11}},{"id":"d1989cca-5519-49db-b1e5-e6afce5a09bc","block_type":"box","text":"if their purchase, combined with purchases by other investors received together by the Fund, meets the minimum","page_number":147,"box":{"x":70,"y":521,"width":806,"height":11}},{"id":"26700a2a-0b4a-498a-800d-820280c05591","block_type":"box","text":"investment requirement. Each Fund may reject any purchase order, modify or waive the minimum initial or","page_number":147,"box":{"x":70,"y":536,"width":751,"height":11}},{"id":"4fcf3185-aac4-4a92-b3b0-4d82e2c7aee4","block_type":"box","text":"subsequent investment requirements and suspend and resume the sale of any share class of any Fund at any time.","page_number":147,"box":{"x":69,"y":551,"width":826,"height":11}},{"id":"550379de-fa62-4366-a5ff-1a7181479a1f","block_type":"box","text":"Financial intermediaries may, in connection with a change in account type or otherwise in accordance with a","page_number":147,"box":{"x":102,"y":574,"width":768,"height":11}},{"id":"c0284b63-c58d-432e-922a-de311edce454","block_type":"box","text":"financial intermediary’s policies and procedures, exchange shares of a Fund from one class of shares to another","page_number":147,"box":{"x":68,"y":589,"width":807,"height":11}},{"id":"cd73797c-01df-4adb-8fb7-de81479f739a","block_type":"box","text":"class of shares of the same Fund, provided that the exchanged shares are not subject to a contingent deferred sales","page_number":147,"box":{"x":69,"y":604,"width":836,"height":11}},{"id":"b3d255c6-4525-45df-8c60-4e8b81bcec0a","block_type":"box","text":"charge (“CDSC”) and that shareholders meet eligibility requirements of the new share class. Please speak to your","page_number":147,"box":{"x":69,"y":619,"width":814,"height":11}},{"id":"79306a7a-fa0b-49dd-870d-58b1c32d71c7","block_type":"box","text":"financial intermediary for information about specific policies and procedures applicable to your account.","page_number":147,"box":{"x":68,"y":634,"width":740,"height":11}},{"id":"2943c324-d506-46c1-b23f-98e4f2284b61","block_type":"box","text":"Each Fund or the Distributor may suspend the continuous offering of the Fund’s shares of any class at any time","page_number":147,"box":{"x":102,"y":657,"width":795,"height":11}},{"id":"66e2b4ff-165c-4e31-a828-f87d1e794f1c","block_type":"box","text":"in response to conditions in the securities markets or otherwise and may resume offering the shares from time to","page_number":147,"box":{"x":70,"y":672,"width":813,"height":11}},{"id":"f7ffd115-6560-40b9-ae12-e4b70b470c46","block_type":"box","text":"time. Any order may be rejected by a Fund or the Distributor. Neither the Distributor, the securities dealers nor other","page_number":147,"box":{"x":68,"y":687,"width":827,"height":11}},{"id":"fed499b7-61d4-47bb-a32c-03ce86f785f3","block_type":"box","text":"financial intermediaries are permitted to withhold placing orders to benefit themselves by a price change.","page_number":147,"box":{"x":68,"y":702,"width":750,"height":12}},{"id":"af0db3e5-3af5-4aee-8097-540336e73f8e","block_type":"box","text":"The term “purchase,” as used in the Prospectus and this SAI, refers to (i) a single purchase by an individual,","page_number":147,"box":{"x":101,"y":725,"width":776,"height":11}},{"id":"983a7e9d-5db5-4081-83a0-94a35551abad","block_type":"box","text":"(ii) concurrent purchases by an individual, his or her spouse and their children purchasing shares for his, her or their","page_number":147,"box":{"x":69,"y":740,"width":831,"height":11}},{"id":"63a5c7a8-8545-4328-a3b0-bd7b6cd9bb55","block_type":"box","text":"own account, and (iii) single purchases by a trustee or other fiduciary purchasing shares for a single trust estate or","page_number":147,"box":{"x":69,"y":755,"width":822,"height":11}},{"id":"94e9fc2a-6ddf-4211-933a-ccc83686e9d6","block_type":"box","text":"single fiduciary account although more than one beneficiary may be involved. The term “purchase” also includes","page_number":147,"box":{"x":69,"y":770,"width":802,"height":12}},{"id":"f77e144c-340b-4f54-bbdc-a2121805447f","block_type":"box","text":"purchases by any “company,” as that term is defined in the Investment Company Act, but does not include purchases","page_number":147,"box":{"x":70,"y":785,"width":839,"height":12}},{"id":"6c893522-2635-4885-bdc0-2d23de6794cd","block_type":"box","text":"by (i) any company that has not been in existence for at least six months, (ii) a company that has no purpose other","page_number":147,"box":{"x":69,"y":801,"width":819,"height":11}},{"id":"8a4641e6-9ab7-40bd-961d-a7c85a4adb21","block_type":"box","text":"than the purchase of shares of a Fund or shares of other registered investment companies at a discount, or (iii) any","page_number":147,"box":{"x":68,"y":816,"width":827,"height":11}},{"id":"13ed9ccd-ac37-4072-a061-6c8452747809","block_type":"box","text":"group of individuals whose sole organizational nexus is that its participants are credit cardholders of a company,","page_number":147,"box":{"x":68,"y":831,"width":803,"height":11}},{"id":"9337aecb-0237-442b-ae59-de11f421dcef","block_type":"box","text":"policyholders of an insurance company, customers of either a bank or broker-dealer or clients of an investment","page_number":147,"box":{"x":70,"y":846,"width":788,"height":11}},{"id":"3d2c7e57-9c99-45d3-ae17-30eae93b5769","block_type":"box","text":"adviser.","page_number":147,"box":{"x":69,"y":861,"width":53,"height":9}},{"id":"882fd0d5-df93-4cac-b6e2-4d6db87d7407","block_type":"box","text":"With certain limited exceptions, the Funds are generally available only to investors residing in the United States","page_number":147,"box":{"x":101,"y":884,"width":795,"height":11}},{"id":"a3ba63c7-0d6f-4bf9-9edd-b567bf7af772","block_type":"box","text":"and may not be distributed by a foreign financial intermediary. Under this policy, in order to accept new accounts or","page_number":147,"box":{"x":69,"y":899,"width":821,"height":11}},{"id":"ebdc846b-755b-4893-a0da-6e4bf47dab19","block_type":"box","text":"II-98","page_number":147,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"66139133-df5f-4f19-9ba0-57eea24cbb93","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":147,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3dac2642-a154-459c-ba57-ad236fff4fbd","block_type":"box","text":"additional investments (including by way of exchange from another Fund) into existing accounts, a Fund generally","page_number":148,"box":{"x":69,"y":45,"width":803,"height":11}},{"id":"7c4e5505-175d-4df9-968c-a38b71df8480","block_type":"box","text":"requires that (i) a shareholder that is a natural person be a U.S. citizen or resident alien, in each case residing within","page_number":148,"box":{"x":69,"y":60,"width":834,"height":11}},{"id":"97b641ac-b5ea-4639-9061-a686490b838c","block_type":"box","text":"the United States or a U.S. territory (including APO/FPO/DPO addresses), and have a valid U.S. taxpayer","page_number":148,"box":{"x":68,"y":75,"width":747,"height":11}},{"id":"ec5d1c65-6180-4914-a721-44bb3a78b619","block_type":"box","text":"identification number, and (ii) a financial intermediary or a shareholder that is an entity be domiciled in the United","page_number":148,"box":{"x":70,"y":90,"width":809,"height":11}},{"id":"a36e062a-17eb-4b37-a23c-9f6f061fd475","block_type":"box","text":"States and have a valid U.S. taxpayer identification number or be domiciled in a U.S. territory and have a valid U.S.","page_number":148,"box":{"x":69,"y":105,"width":819,"height":11}},{"id":"7959ca59-9d7a-4b83-91be-9eae2b658100","block_type":"box","text":"taxpayer identification number or IRS Form W-8. Any existing account that is updated to reflect a non-U.S. address will","page_number":148,"box":{"x":68,"y":120,"width":840,"height":12}},{"id":"e4cd57df-09a9-41b0-87fe-afbf78ac2be6","block_type":"box","text":"also be restricted from making additional investments.","page_number":148,"box":{"x":69,"y":135,"width":388,"height":12}},{"id":"ae4a46d9-987b-45dd-86e3-6b429683257a","block_type":"box","text":"In-Kind Purchases","page_number":148,"box":{"x":102,"y":158,"width":127,"height":9}},{"id":"2ffaada9-83c3-4a12-ba58-0621b4b75c8b","block_type":"box","text":". Payment for shares of a Fund may, at the discretion of BlackRock, be made in the form of","page_number":148,"box":{"x":230,"y":158,"width":649,"height":11}},{"id":"41c4d294-bdd1-4714-9860-d7aa4ee574c8","block_type":"box","text":"securities that are permissible investments for the Fund and that meet the investment objective, policies and","page_number":148,"box":{"x":69,"y":173,"width":779,"height":11}},{"id":"90c5d49e-bc0b-4df1-b02f-25c44b81560c","block_type":"box","text":"limitations of the Fund as described herein. In connection with an in-kind securities payment, the Fund may require,","page_number":148,"box":{"x":70,"y":188,"width":820,"height":11}},{"id":"fda817d7-2fac-4790-97ef-339c2d43e204","block_type":"box","text":"among other things, that the securities: (i) be valued on the day of purchase in accordance with the pricing methods","page_number":148,"box":{"x":69,"y":203,"width":827,"height":12}},{"id":"eb13e913-27ab-44a9-9d87-4b1ccb20f149","block_type":"box","text":"used by the Fund; (ii) be accompanied by satisfactory assurance that the Fund will have good and marketable title to","page_number":148,"box":{"x":69,"y":218,"width":831,"height":12}},{"id":"4015d511-352d-404f-99af-6778ea641caa","block_type":"box","text":"such securities; (iii) not be subject to any restrictions upon resale by the Fund; (iv) be in proper form for transfer to","page_number":148,"box":{"x":69,"y":234,"width":817,"height":11}},{"id":"2870d803-a4d2-4155-b9e7-cbdc90c598f1","block_type":"box","text":"the Fund; and (v) be accompanied by adequate information concerning the basis and other tax matters relating to the","page_number":148,"box":{"x":68,"y":249,"width":837,"height":11}},{"id":"c0457f97-2f1b-4830-9407-53a61cb1ee41","block_type":"box","text":"securities. All dividends, interest, subscription or other rights pertaining to such securities shall become the property","page_number":148,"box":{"x":69,"y":264,"width":835,"height":11}},{"id":"d7ad0bea-40ec-4571-a71b-ba8e85600c63","block_type":"box","text":"of the Fund engaged in the in-kind purchase transaction and must be delivered to the Fund by the investor upon","page_number":148,"box":{"x":69,"y":279,"width":795,"height":11}},{"id":"3e0e6956-570b-48f6-852b-5d2e04e83d05","block_type":"box","text":"receipt from the issuer. Shares purchased in exchange for securities generally cannot be redeemed until the transfer","page_number":148,"box":{"x":69,"y":294,"width":833,"height":11}},{"id":"ad49b313-6251-418f-accc-2eca5292db52","block_type":"box","text":"has settled.","page_number":148,"box":{"x":69,"y":309,"width":83,"height":9}},{"id":"3898adb0-59fe-4e98-a28a-1e7fb826ace4","block_type":"box","text":"Institutional Shares","page_number":148,"box":{"x":69,"y":340,"width":142,"height":8}},{"id":"6a91d6ac-86e6-46f3-8480-a65daa75b965","block_type":"box","text":"Institutional Shares may be purchased at NAV without a sales charge. Only certain investors are eligible to","page_number":148,"box":{"x":102,"y":362,"width":759,"height":11}},{"id":"a3bdcef0-3c23-4abf-ac41-3a3f6ec9902d","block_type":"box","text":"purchase Institutional Shares. Investors who are eligible to purchase Institutional Shares should purchase","page_number":148,"box":{"x":70,"y":377,"width":756,"height":12}},{"id":"51c822d2-4ae3-43f6-bc4a-9332a0a1a275","block_type":"box","text":"Institutional Shares because they are not subject to any sales charge and have lower ongoing expenses than","page_number":148,"box":{"x":70,"y":392,"width":775,"height":12}},{"id":"c499a4cb-cbaf-4a06-8e56-6d9abcc764af","block_type":"box","text":"Investor A, Investor A1, Investor C, Investor P, Class R or Service Shares. A Fund may in its discretion waive or modify","page_number":148,"box":{"x":70,"y":407,"width":839,"height":12}},{"id":"874b24b6-1216-4988-8e0f-6ef83d7fe86f","block_type":"box","text":"any minimum investment amount, may reject any order for any class of shares and may suspend and resume the","page_number":148,"box":{"x":69,"y":423,"width":807,"height":11}},{"id":"1e6c4186-c73b-4293-a3f8-4158f5fc7d30","block_type":"box","text":"sale of shares of any Fund at any time.","page_number":148,"box":{"x":69,"y":438,"width":276,"height":11}},{"id":"e2c9820c-3b32-42d2-b419-6d23bb0f1e99","block_type":"box","text":"Eligible Institutional Share Investors.","page_number":148,"box":{"x":102,"y":460,"width":259,"height":12}},{"id":"5ac2b466-c475-4fcf-b8e2-2fde7a0855db","block_type":"box","text":"Institutional Shares of the Funds may be purchased by customers of broker","page_number":148,"box":{"x":369,"y":460,"width":540,"height":12}},{"id":"9bcefe8e-5b4d-4fef-b1d6-bfe8172c8721","block_type":"box","text":"dealers and agents that have established a servicing relationship with the Fund on behalf of their customers. These","page_number":148,"box":{"x":69,"y":475,"width":826,"height":12}},{"id":"742b1223-d9e9-4bf1-8d93-97e51f1104db","block_type":"box","text":"broker-dealers and agents may impose additional or different conditions on the purchase or redemption of Fund","page_number":148,"box":{"x":69,"y":491,"width":796,"height":11}},{"id":"5cdd3789-b921-4452-b2c1-936fdbe0a93e","block_type":"box","text":"shares by their customers and may charge their customers transaction, account or other fees on the purchase and","page_number":148,"box":{"x":69,"y":506,"width":819,"height":11}},{"id":"4ff31c20-29bd-4d5c-9917-3efb747a926a","block_type":"box","text":"redemption of Fund shares. Each broker-dealer or agent is responsible for transmitting to its customers a schedule of","page_number":148,"box":{"x":69,"y":521,"width":840,"height":11}},{"id":"1755a2d5-9d3b-40dd-ac7c-9e3e66898c5e","block_type":"box","text":"any such fees and information regarding any additional or different conditions regarding purchases and redemptions.","page_number":148,"box":{"x":69,"y":536,"width":833,"height":11}},{"id":"49bc59cf-b997-47e0-9e86-814f422268a0","block_type":"box","text":"Shareholders who are customers of such broker-dealers or agents should consult them for information regarding","page_number":148,"box":{"x":69,"y":551,"width":802,"height":11}},{"id":"9b73b371-19dc-49ef-b6a1-8c4abc96643e","block_type":"box","text":"these fees and conditions.","page_number":148,"box":{"x":68,"y":566,"width":189,"height":9}},{"id":"b7ffa832-e7e6-4dc4-8d5b-f301fef3541c","block_type":"box","text":"Payment for Institutional Shares must normally be made in Federal funds or other funds immediately available by","page_number":148,"box":{"x":102,"y":589,"width":805,"height":11}},{"id":"a7eb7809-024c-4cab-88d5-f2898d75566a","block_type":"box","text":"4 p.m. (Eastern time) on the first business day following receipt of the order. Payment may also, in the discretion of","page_number":148,"box":{"x":69,"y":604,"width":825,"height":11}},{"id":"f74bbb15-9892-4cd2-8ee4-2c970ab20403","block_type":"box","text":"certain Funds, be made in the form of securities that are permissible investments for such Funds. If payment for a","page_number":148,"box":{"x":69,"y":619,"width":817,"height":11}},{"id":"21f6b2aa-2050-49c0-a5d2-585d842f3c44","block_type":"box","text":"purchase order is not received by the prescribed time, an investor may be liable for any resulting losses or expenses","page_number":148,"box":{"x":70,"y":634,"width":831,"height":12}},{"id":"6cb47877-bd85-4b95-a055-d27cfacf4d32","block_type":"box","text":"incurred by the Fund.","page_number":148,"box":{"x":70,"y":650,"width":147,"height":11}},{"id":"01eb5cf9-1de0-4f7e-9be6-9c31348ae926","block_type":"box","text":"Certain of the Funds offer Institutional Shares as described in each such Fund’s Prospectus. In addition, the","page_number":148,"box":{"x":102,"y":672,"width":774,"height":11}},{"id":"12476ae1-5950-4b3f-8507-eaee02eff82e","block_type":"box","text":"following investors may purchase Institutional Shares: employees, officers and directors/trustees of BlackRock, Inc.,","page_number":148,"box":{"x":68,"y":687,"width":834,"height":11}},{"id":"a2f31643-557e-43cf-973d-45635deae594","block_type":"box","text":"BlackRock Funds, Bank of America Corporation (“BofA Corp.”), Barclays PLC or their respective affiliates and","page_number":148,"box":{"x":70,"y":702,"width":773,"height":11}},{"id":"c6efcb58-440d-4e8d-a1f3-d853cd42f33d","block_type":"box","text":"immediate family members of such persons, individuals and “Institutional Investors” with a minimum initial","page_number":148,"box":{"x":70,"y":717,"width":762,"height":12}},{"id":"6b09e476-b706-49e8-8a6c-8eeff3096ccc","block_type":"box","text":"investment of $2 million who may purchase shares of a Fund through a financial intermediary that has entered into","page_number":148,"box":{"x":70,"y":732,"width":821,"height":12}},{"id":"c8083c83-514d-4c29-add5-b5322b094b22","block_type":"box","text":"an agreement with the Distributor to purchase such shares (“Institutional Investors” include, but are not limited to,","page_number":148,"box":{"x":69,"y":748,"width":819,"height":11}},{"id":"dc8ad4a5-1d3e-4384-8bac-50175df8e79a","block_type":"box","text":"endowments, foundations, family offices, local, city, and state governmental institutions, corporations, and insurance","page_number":148,"box":{"x":69,"y":763,"width":836,"height":11}},{"id":"67dea5a5-b959-4e7d-ba65-37577ca03983","block_type":"box","text":"company separate accounts); employer-sponsored retirement plans (which, for this purpose, do not include SEP IRAs,","page_number":148,"box":{"x":69,"y":778,"width":837,"height":11}},{"id":"23a1a340-5996-4db6-b407-ddff1def5d37","block_type":"box","text":"SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies","page_number":148,"box":{"x":69,"y":793,"width":832,"height":11}},{"id":"18e253c3-bbbf-4ef8-8524-8e35f55a0ce3","block_type":"box","text":"or other pooled investment vehicles, unaffiliated thrifts and unaffiliated banks and trust companies, each of which","page_number":148,"box":{"x":69,"y":808,"width":815,"height":11}},{"id":"b8792bfa-687f-4da0-ad6c-b5391c65b387","block_type":"box","text":"may purchase shares of the Fund through a financial intermediary that has entered into an agreement with the","page_number":148,"box":{"x":69,"y":823,"width":789,"height":12}},{"id":"da6df0d2-f3b4-4b71-b52d-a20ef58cc9b1","block_type":"box","text":"Distributor to purchase such shares; clients investing through a self-directed IRA brokerage account program","page_number":148,"box":{"x":70,"y":838,"width":772,"height":12}},{"id":"ed7df915-e17e-4382-a371-fd4106ab9eaf","block_type":"box","text":"sponsored by a retirement plan record-keeper, provided that such program offers only mutual fund options and that","page_number":148,"box":{"x":69,"y":853,"width":822,"height":12}},{"id":"474f8b7a-1513-4644-8e8b-4e6ced9a1eb9","block_type":"box","text":"the program maintains an account with the Fund on an omnibus basis; clients of financial intermediaries that:","page_number":148,"box":{"x":68,"y":869,"width":783,"height":11}},{"id":"7e132f9f-c043-493a-bf12-f7527d5c1cfa","block_type":"box","text":"(i) charge such clients a fee for advisory, investment consulting, or similar services or (ii) have entered into an","page_number":148,"box":{"x":69,"y":884,"width":785,"height":11}},{"id":"ca89369b-375d-4de5-90ea-d8318a89c97c","block_type":"box","text":"agreement with the Distributor to offer Institutional Shares through a no-load program or investment platform, in each","page_number":148,"box":{"x":69,"y":899,"width":838,"height":11}},{"id":"3628a65c-a3f9-45f9-a04f-c97b9e338f0b","block_type":"box","text":"II-99","page_number":148,"box":{"x":473,"y":943,"width":32,"height":9}},{"id":"10acffa7-79c6-4692-8a9a-cebd7fcaa1bc","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":148,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2505691b-2e34-4894-b429-1ccdaabffa91","block_type":"box","text":"case, with no minimum initial investment; clients investing through financial intermediaries that have entered into an","page_number":149,"box":{"x":69,"y":45,"width":831,"height":11}},{"id":"7770ae8f-091b-4d4c-bf69-1806ac6c4a20","block_type":"box","text":"agreement with the Distributor to offer such shares on a platform that charges a transaction based sales","page_number":149,"box":{"x":69,"y":60,"width":751,"height":11}},{"id":"ee92a6b4-21ae-43f3-adbf-301da4bb69ee","block_type":"box","text":"commission outside of the Fund, with a minimum initial investment of $1,000; tax-qualified accounts for insurance","page_number":149,"box":{"x":69,"y":74,"width":817,"height":12}},{"id":"24fa6af5-2cdc-4849-811c-522fabbe3668","block_type":"box","text":"agents that are registered representatives of an insurance company’s broker-dealer that has entered into an","page_number":149,"box":{"x":69,"y":90,"width":773,"height":11}},{"id":"10e2d93f-34fe-4dbb-9ae3-4c278678b231","block_type":"box","text":"agreement with the Distributor to offer Institutional Shares, and the family members of such persons, with a","page_number":149,"box":{"x":69,"y":105,"width":771,"height":11}},{"id":"df2ccb48-74c2-4cb2-bdfb-3a36a20706f5","block_type":"box","text":"minimum initial investment of $1,000; trust department clients of Bank of America, N.A. and its affiliates for whom","page_number":149,"box":{"x":69,"y":120,"width":822,"height":11}},{"id":"6e4a73fc-9a44-4923-947a-9e760489a30b","block_type":"box","text":"they (i) act in a fiduciary capacity (excluding participant directed employee benefit plans), (ii) otherwise have","page_number":149,"box":{"x":68,"y":135,"width":771,"height":12}},{"id":"fc6bb128-ab2d-421a-bce4-01828b7827af","block_type":"box","text":"investment discretion, or (iii) act as custodian for at least $2 million in assets; and holders of certain BofA Corp.","page_number":149,"box":{"x":70,"y":150,"width":801,"height":11}},{"id":"401cc80a-d875-4eef-969a-9c9abf25999b","block_type":"box","text":"sponsored unit investment trusts (UITs) who reinvest dividends received from such UITs in shares of a Fund.","page_number":149,"box":{"x":69,"y":166,"width":770,"height":11}},{"id":"c4b9de0c-b730-4f8c-b4b3-aeab49437682","block_type":"box","text":"Purchase Privileges of Cer tain Persons.","page_number":149,"box":{"x":102,"y":188,"width":280,"height":12}},{"id":"c6ade853-eddf-4416-b131-d22b8168a6bf","block_type":"box","text":"Employees, officers, directors/trustees of BlackRock, Inc., BlackRock","page_number":149,"box":{"x":389,"y":188,"width":496,"height":11}},{"id":"218ccccc-8ce6-4064-a9d9-be17d7a6017a","block_type":"box","text":"Funds, BofA Corp. or their respective affiliates; and any trust, pension, profit-sharing or other benefit plan for such","page_number":149,"box":{"x":70,"y":203,"width":812,"height":12}},{"id":"78fe6611-9a88-4db4-a923-395bf05dbb9e","block_type":"box","text":"persons may purchase Institutional Shares at lower investment minimums than stated in each Fund’s Prospectus. A","page_number":149,"box":{"x":70,"y":219,"width":828,"height":11}},{"id":"147bc938-67e4-476f-95f0-3255fd41e210","block_type":"box","text":"Fund realizes economies of scale and reduction of sales-related expenses by virtue of the familiarity of these persons","page_number":149,"box":{"x":70,"y":234,"width":838,"height":11}},{"id":"f4f891f8-a2fa-4935-97e8-304422f9a7d9","block_type":"box","text":"with the Fund. Employees, directors, and board members of other funds wishing to purchase shares of a Fund must","page_number":149,"box":{"x":68,"y":249,"width":826,"height":11}},{"id":"c8fb5853-03bd-444e-96a4-8e3269559b02","block_type":"box","text":"satisfy the Fund’s suitability standards.","page_number":149,"box":{"x":69,"y":264,"width":279,"height":11}},{"id":"9eaedc93-e2a8-4e9a-82de-5f785c9446d1","block_type":"box","text":"Initial Sales Charge Alternative — Investor A Shares","page_number":149,"box":{"x":69,"y":294,"width":382,"height":11}},{"id":"5c990768-9264-4c37-8b09-b4a230e72990","block_type":"box","text":"Investors who prefer an initial sales charge alternative may elect to purchase Investor A Shares. Investor A1","page_number":149,"box":{"x":102,"y":317,"width":770,"height":11}},{"id":"e34de3b8-86f6-4885-9566-3ca83f7256c9","block_type":"box","text":"Shares are offered only (i) for purchase by certain employer-sponsored retirement plans and fee-based programs that","page_number":149,"box":{"x":69,"y":332,"width":837,"height":11}},{"id":"bd3856d0-23ed-4a01-a04f-85a79d40dc7e","block_type":"box","text":"have been previously approved by certain Funds, and (ii) to certain investors who currently hold Investor A1 Shares","page_number":149,"box":{"x":69,"y":347,"width":819,"height":11}},{"id":"b40f6b1a-afb1-47ca-b0ec-76e90eaabe6a","block_type":"box","text":"for dividend and capital gain reinvestment only. The Investor A1 initial sales charge does not apply to the transactions","page_number":149,"box":{"x":68,"y":362,"width":840,"height":11}},{"id":"fdda8be2-c69c-4abb-819a-f8e2b4227682","block_type":"box","text":"described in (i) and (ii). For ease of reference, Investor A, Investor A1 and Investor P (discussed below) Shares are","page_number":149,"box":{"x":69,"y":377,"width":815,"height":11}},{"id":"e2e6f7f9-0efc-481d-8d4f-501b1c52db9a","block_type":"box","text":"sometimes referred to herein as “front-end load shares.” Investor A Shares of Index Funds (defined below) and","page_number":149,"box":{"x":69,"y":392,"width":791,"height":11}},{"id":"fd2db32e-67d4-4bba-ab06-0b0886ea9466","block_type":"box","text":"BlackRock Short Obligations Fund generally are not subject to an initial sales charge or front-end load.","page_number":149,"box":{"x":70,"y":407,"width":727,"height":12}},{"id":"afbb0de8-4765-459c-8e17-754c0bd1a5ac","block_type":"box","text":"Investors qualifying for significantly reduced initial sales charges may find the initial sales charge alternative","page_number":149,"box":{"x":102,"y":430,"width":770,"height":11}},{"id":"d0802233-ce6a-4e53-99d3-9ef5cb80b195","block_type":"box","text":"particularly attractive because similar sales charge reductions are not available with respect to the deferred sales","page_number":149,"box":{"x":70,"y":445,"width":812,"height":12}},{"id":"bbe4ff9e-4a1e-4e19-8369-0a4623212748","block_type":"box","text":"charges imposed in connection with investments in Investor C Shares (sometimes referred to herein as “CDSC","page_number":149,"box":{"x":69,"y":460,"width":791,"height":12}},{"id":"6ec8d44f-1d35-4fcf-ac26-0773eaa7da5c","block_type":"box","text":"shares”). Investors who do not qualify for reduced initial sales charges and who expect to maintain their investment","page_number":149,"box":{"x":69,"y":475,"width":826,"height":12}},{"id":"ef1456f5-38d7-4ef4-b473-31389763e773","block_type":"box","text":"for an extended period of time also may elect to purchase Investor A Shares, because over time the accumulated","page_number":149,"box":{"x":68,"y":491,"width":808,"height":11}},{"id":"1da96d8f-1231-4139-861c-83a80bde8426","block_type":"box","text":"ongoing service and distribution fees on CDSC shares may exceed the front-end load shares’ initial sales charge and","page_number":149,"box":{"x":69,"y":506,"width":834,"height":11}},{"id":"d7bc8833-c051-4564-b892-860c39dac7bf","block_type":"box","text":"service fee. Although some investors who previously purchased Institutional Shares may no longer be eligible to","page_number":149,"box":{"x":69,"y":521,"width":798,"height":11}},{"id":"1e6bcefa-3991-4f61-993b-2e0a37e115ed","block_type":"box","text":"purchase Institutional Shares of other Funds, those previously purchased Institutional Shares, together with all","page_number":149,"box":{"x":70,"y":536,"width":789,"height":11}},{"id":"4e4e893e-60d7-4077-95f0-4487c29be4c2","block_type":"box","text":"BlackRock front-end load and CDSC share holdings, will count toward a right of accumulation that may qualify the","page_number":149,"box":{"x":70,"y":551,"width":805,"height":11}},{"id":"c90bcc50-37bf-45c5-96df-65f12754bc85","block_type":"box","text":"investor for a reduced initial sales charge on new initial sales charge purchases. In addition, the ongoing CDSC","page_number":149,"box":{"x":70,"y":566,"width":792,"height":11}},{"id":"92ec5e16-745a-4ec1-afd0-a699937db9f0","block_type":"box","text":"shares service and distribution fees will cause CDSC shares to have higher expense ratios, pay lower dividends and","page_number":149,"box":{"x":69,"y":581,"width":826,"height":12}},{"id":"90d31f36-9739-4bf1-812d-e1974c46ca4d","block_type":"box","text":"have lower total returns than the initial sales charge shares. The ongoing front-end load shares’ service fees will","page_number":149,"box":{"x":69,"y":596,"width":802,"height":12}},{"id":"4f127f5e-bcd1-45af-bbc7-05fe73017a48","block_type":"box","text":"cause Investor A, Investor A1, Investor P and Service Shares to have a higher expense ratio, pay lower dividends and","page_number":149,"box":{"x":69,"y":612,"width":834,"height":11}},{"id":"5d90753a-ed78-4936-9cfb-a79b92fde87d","block_type":"box","text":"have a lower total return than Institutional Shares.","page_number":149,"box":{"x":69,"y":627,"width":358,"height":9}},{"id":"1f44633b-0ac3-4309-8428-bcd827329637","block_type":"box","text":"See “Information on Sales Charges and Distribution Related Expenses” in Part I of each Fund’s SAI for","page_number":149,"box":{"x":102,"y":649,"width":734,"height":12}},{"id":"9c741c21-5ffe-4262-8a8c-5f9282d5e902","block_type":"box","text":"information about amounts paid to the Distributor in connection with Investor A and Investor A1 Shares for the","page_number":149,"box":{"x":70,"y":664,"width":785,"height":11}},{"id":"16377574-a254-40d1-9d97-283c4b699dc2","block_type":"box","text":"periods indicated.","page_number":149,"box":{"x":70,"y":680,"width":124,"height":11}},{"id":"beb415cf-06cc-44cd-a352-d2270e3a78a3","block_type":"box","text":"The Distributor may reallow discounts to selected securities dealers and other financial intermediaries and retain","page_number":149,"box":{"x":101,"y":702,"width":806,"height":11}},{"id":"cfbd8f90-b4d0-4dd8-9dae-9c381dc48727","block_type":"box","text":"the balance over such discounts. At times the Distributor may reallow the entire sales charge to such dealers. Since","page_number":149,"box":{"x":68,"y":718,"width":830,"height":11}},{"id":"5a8ac684-b14d-4abf-9caf-47158d02935d","block_type":"box","text":"securities dealers and other financial intermediaries selling front-end load shares of a Fund will receive a concession","page_number":149,"box":{"x":69,"y":732,"width":832,"height":12}},{"id":"9e02a1ec-d131-4fe1-93ac-45eafafff713","block_type":"box","text":"equal to most of the sales charge, they may be deemed to be underwriters under the Securities Act.","page_number":149,"box":{"x":69,"y":748,"width":714,"height":11}},{"id":"13ffd4f0-f933-434f-b231-ed1e7353d04c","block_type":"box","text":"Initial Sales Charge — Investor P Shares","page_number":149,"box":{"x":69,"y":778,"width":297,"height":11}},{"id":"68866d8e-4806-43d4-9439-a15567db430a","block_type":"box","text":"Certain Funds offer Investor P Shares as described in each such Fund’s Prospectus, Investor P Shares are","page_number":149,"box":{"x":102,"y":801,"width":761,"height":11}},{"id":"1cd8fca7-31fd-4a62-9ebc-f5ae4fe04c83","block_type":"box","text":"available for purchase only through registered representatives of an insurance company’s broker-dealer that has","page_number":149,"box":{"x":69,"y":816,"width":800,"height":11}},{"id":"ec4ad48e-2bf5-4e62-bb26-86fdb06ef35c","block_type":"box","text":"entered into an agreement with the Distributor to offer such shares and are subject to an initial sales charge. The","page_number":149,"box":{"x":69,"y":831,"width":812,"height":11}},{"id":"63a7e751-9e37-49bb-8893-2e971d0b517e","block_type":"box","text":"ongoing front-end load shares’ service fees will cause Investor P Shares to have a higher expense ratio, pay lower","page_number":149,"box":{"x":69,"y":846,"width":813,"height":11}},{"id":"4bd50a28-6f6e-4a92-b8d7-8c6f0f2d24f7","block_type":"box","text":"dividends and have a lower total return than Investor A Shares of the same Fund.","page_number":149,"box":{"x":69,"y":861,"width":578,"height":9}},{"id":"6b1a725d-5b1f-49eb-bcc7-4af508217dc1","block_type":"box","text":"See “Information on Sales Charges and Distribution Related Expenses” in Part I of each Fund’s SAI for","page_number":149,"box":{"x":102,"y":884,"width":734,"height":11}},{"id":"9c8a5026-ead9-4a0a-9db6-0c2be676e800","block_type":"box","text":"information about amounts paid to the Distributor in connection with Investor P Shares for the periods indicated.","page_number":149,"box":{"x":70,"y":899,"width":800,"height":11}},{"id":"deb7a25d-6eed-4ecd-a057-160766d072e7","block_type":"box","text":"II-100","page_number":149,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"a9f7e1d2-6c3c-48d8-8be7-ff4243c4b15b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":149,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"139c5a88-f848-4844-a849-68bd338b20b0","block_type":"box","text":"The Distributor may reallow discounts to selected securities dealers and other financial intermediaries and retain","page_number":150,"box":{"x":101,"y":45,"width":806,"height":11}},{"id":"8d71b87f-6c4c-42e8-a0c9-79d59a746eba","block_type":"box","text":"the balance over such discounts. At times the Distributor may reallow the entire sales charge to such dealers. Since","page_number":150,"box":{"x":68,"y":60,"width":830,"height":11}},{"id":"4da858cf-5af6-4879-8751-5c4a4ac9d39d","block_type":"box","text":"securities dealers and other financial intermediaries selling front-end load shares of a Fund will receive a concession","page_number":150,"box":{"x":69,"y":75,"width":832,"height":11}},{"id":"2858a2d7-a0bb-4cfe-b394-b7d945e7ea8c","block_type":"box","text":"equal to most of the sales charge, they may be deemed to be underwriters under the Securities Act.","page_number":150,"box":{"x":69,"y":90,"width":714,"height":11}},{"id":"0f967643-d949-4c1e-9efb-c537cad11173","block_type":"box","text":"Reduced Initial Sales Charges","page_number":150,"box":{"x":69,"y":120,"width":219,"height":11}},{"id":"ab8959ef-5cd7-4ed2-8a60-6a4778243120","block_type":"box","text":"Certain investors may be eligible for a reduction in or waiver of a sales load due to the nature of the investors","page_number":150,"box":{"x":102,"y":143,"width":782,"height":11}},{"id":"9bbae8c9-7be0-4caf-b55d-ed89d83ac333","block_type":"box","text":"and/or the reduced sales efforts necessary to obtain their investments. Financial intermediaries may, in connection","page_number":150,"box":{"x":69,"y":158,"width":827,"height":11}},{"id":"defb9474-5173-4159-abf6-b45487710da1","block_type":"box","text":"with a change in account type or otherwise in accordance with a financial intermediary’s policies and procedures,","page_number":150,"box":{"x":68,"y":173,"width":809,"height":11}},{"id":"e3d5c522-33bd-4d58-86ac-a12cf1c47304","block_type":"box","text":"exchange shares of a Fund from one class of shares to another class of shares of the same Fund provided that the","page_number":150,"box":{"x":69,"y":188,"width":823,"height":12}},{"id":"05b98238-ccac-4305-a3b4-663a79e9dc10","block_type":"box","text":"exchanged shares are not subject to a contingent deferred sales charge and that shareholders meet the eligibility","page_number":150,"box":{"x":69,"y":203,"width":812,"height":12}},{"id":"5c18698e-86c6-43ee-a46e-7aac218c10a5","block_type":"box","text":"requirements of the new share class. Certain sales load reductions and waivers may be available to customers of","page_number":150,"box":{"x":69,"y":218,"width":813,"height":12}},{"id":"326afd9d-66f9-42a1-b4d6-30218569e094","block_type":"box","text":"certain financial intermediaries, as described under “Intermediary-Defined Sales Charge Waiver Policies” in the","page_number":150,"box":{"x":69,"y":234,"width":793,"height":11}},{"id":"4849765d-ba05-41ca-9257-7ac5e13acce0","block_type":"box","text":"Fund’s Prospectus. Please speak to your financial intermediary for more information.","page_number":150,"box":{"x":70,"y":249,"width":603,"height":11}},{"id":"b62cd661-ea99-4cd1-9ffb-248baf5f2d82","block_type":"box","text":"Reinvested Dividends.","page_number":150,"box":{"x":102,"y":272,"width":156,"height":8}},{"id":"e46c4ca6-ea5b-452e-bab0-0f4e208cf69e","block_type":"box","text":"No sales charges are imposed upon shares issued as a result of the automatic","page_number":150,"box":{"x":265,"y":271,"width":566,"height":12}},{"id":"34831d3f-e98f-4e0c-82dd-7a5a16dde4d6","block_type":"box","text":"reinvestment of dividends.","page_number":150,"box":{"x":69,"y":286,"width":186,"height":10}},{"id":"b6a2b122-8e35-42b8-a524-dd0896907fa1","block_type":"box","text":"Right of Accumulation.","page_number":150,"box":{"x":102,"y":309,"width":158,"height":11}},{"id":"5396d1e8-c536-4958-84ea-5b669660dfb2","block_type":"box","text":"Investors have a “right of accumulation” under which any of the following may be","page_number":150,"box":{"x":267,"y":309,"width":574,"height":11}},{"id":"8bd298d2-e573-47a2-8845-e56654a3c0a2","block_type":"box","text":"combined with the amount of the current purchase in determining whether an investor qualifies for a breakpoint and","page_number":150,"box":{"x":69,"y":324,"width":826,"height":12}},{"id":"b91d7a06-3f67-4590-82f6-4744db5bdf04","block_type":"box","text":"a reduced front-end sales charge: (i) the current value of an investor’s existing Investor A, Investor A1, Investor C,","page_number":150,"box":{"x":69,"y":339,"width":810,"height":12}},{"id":"450cd980-9cee-49c8-aa46-c48f9018a2b9","block_type":"box","text":"Investor P, Institutional, Class K and Premier Shares in most BlackRock Funds, (ii) the current value of an investor’s","page_number":150,"box":{"x":70,"y":355,"width":825,"height":11}},{"id":"35cf0282-b0a7-4574-b72d-da90b1250458","block_type":"box","text":"existing shares of certain unlisted closed-end management investment companies sponsored and advised by","page_number":150,"box":{"x":69,"y":370,"width":780,"height":11}},{"id":"05227ae0-81b1-46e0-80b2-ea41e99bd255","block_type":"box","text":"BlackRock or its affiliates (“Eligible Unlisted BlackRock Closed-End Funds”) and (iii) the investment in the BlackRock","page_number":150,"box":{"x":70,"y":385,"width":828,"height":11}},{"id":"dbe10ede-14b3-4b9c-8b32-71429a898a59","block_type":"box","text":"CollegeAdvantage 529 Program by the investor or by or on behalf of the investor’s spouse and children. Financial","page_number":150,"box":{"x":69,"y":400,"width":804,"height":11}},{"id":"8f57c4b0-694a-4fe1-8b40-176a4ae18e97","block_type":"box","text":"intermediaries may value current holdings of their customers differently for purposes of determining whether an","page_number":150,"box":{"x":70,"y":415,"width":794,"height":11}},{"id":"991fec27-5e28-404d-a079-9cb2617ef144","block_type":"box","text":"investor qualifies for a breakpoint and a reduced front-end sales charge, although customers of the same financial","page_number":150,"box":{"x":70,"y":430,"width":814,"height":11}},{"id":"17fbf6a1-0da3-4a9b-a157-753f18c45c4b","block_type":"box","text":"intermediary will be treated similarly. In order to use this right, the investor must alert BlackRock to the existence of","page_number":150,"box":{"x":70,"y":445,"width":828,"height":12}},{"id":"40e01fd3-8bc2-4f47-b94c-676bd48643df","block_type":"box","text":"any previously purchased shares. Certain funds employ a “passive” management approach and attempt to match the","page_number":150,"box":{"x":69,"y":460,"width":838,"height":12}},{"id":"ef36ae5b-5fb8-474c-973d-db621e48d198","block_type":"box","text":"performance of a target index as closely as possible before the deduction of Fund expenses (“Index Funds”).","page_number":150,"box":{"x":70,"y":475,"width":776,"height":12}},{"id":"ae2b74f1-9d01-45c6-acbb-868910233836","block_type":"box","text":"Although Investor A Shares of Index Funds and BlackRock Short Obligations Fund generally are not subject to a sales","page_number":150,"box":{"x":68,"y":491,"width":835,"height":11}},{"id":"85821781-cb1a-4f49-9333-49d8c79cc092","block_type":"box","text":"charge, an investor’s existing Investor A, Investor A1, Investor C, Investor P, Institutional, Class K and Premier Shares","page_number":150,"box":{"x":69,"y":506,"width":839,"height":11}},{"id":"9bfb5c0c-a6d3-4d31-89f5-6ff91b94636a","block_type":"box","text":"in the Index Funds and BlackRock Short Obligations Fund may be combined with the amount of an investor’s current","page_number":150,"box":{"x":70,"y":521,"width":829,"height":11}},{"id":"bb36a244-9833-48c1-bc11-7973173e4953","block_type":"box","text":"purchase in determining whether an investor qualifies for a breakpoint and a reduced front-end sales charge.","page_number":150,"box":{"x":70,"y":536,"width":774,"height":11}},{"id":"c7cb2b01-fdd1-4032-9f8d-8639c44545e3","block_type":"box","text":"Letter of Intent.","page_number":150,"box":{"x":102,"y":559,"width":109,"height":9}},{"id":"4c198c75-efaf-4be8-b2b7-fc2019e5d466","block_type":"box","text":"An investor may qualify for a reduced front-end sales charge immediately by signing a “Letter of","page_number":150,"box":{"x":217,"y":559,"width":681,"height":11}},{"id":"57aac89b-8f8a-4869-89a1-28cc816cb8d7","block_type":"box","text":"Intent” stating the investor’s intention to make one or more of the following investments within the next 13 months","page_number":150,"box":{"x":70,"y":574,"width":820,"height":11}},{"id":"0f5f90ff-38e8-436c-8040-78004b412e0e","block_type":"box","text":"which would, if bought all at once, qualify the investor for a reduced sales charge: (i) buy a specified amount of","page_number":150,"box":{"x":68,"y":589,"width":792,"height":11}},{"id":"6e618e97-d42f-4c92-a223-35b38f0b26c1","block_type":"box","text":"Investor A, Investor C, Investor P, Institutional, Class K and/or Premier Shares, (ii) make an investment in one or","page_number":150,"box":{"x":70,"y":604,"width":802,"height":11}},{"id":"2dfe07cc-35f5-4c95-81da-8a714643d1ea","block_type":"box","text":"more Eligible Unlisted BlackRock Closed-End Funds and/or (iii) make an investment through the BlackRock","page_number":150,"box":{"x":69,"y":619,"width":760,"height":11}},{"id":"57b977a5-cf2b-4250-8596-7ec14d0d5edb","block_type":"box","text":"CollegeAdvantage 529 Program in one or more BlackRock Funds. The initial investment must meet the minimum","page_number":150,"box":{"x":69,"y":634,"width":800,"height":12}},{"id":"a9da61d8-871d-45df-8164-c8f017efd820","block_type":"box","text":"initial purchase requirement. The 13-month Letter of Intent period commences on the day that the Letter of Intent is","page_number":150,"box":{"x":70,"y":649,"width":826,"height":12}},{"id":"42fd6664-2e23-4aea-a6a4-86dbd0b37c22","block_type":"box","text":"received by the Fund. The market value of current holdings in the BlackRock Funds (including Investor A, Investor C,","page_number":150,"box":{"x":69,"y":664,"width":822,"height":12}},{"id":"8b00dd5f-c7ee-47d6-9db5-50949621eb29","block_type":"box","text":"Investor P, Institutional, Class K and Premier Shares, Eligible Unlisted BlackRock Closed-End Funds and the","page_number":150,"box":{"x":70,"y":680,"width":764,"height":11}},{"id":"706fee03-4c55-450e-bbf7-3371827518a0","block_type":"box","text":"BlackRock CollegeAdvantage 529 Program Class A and Class C Units) as of the date of commencement that are","page_number":150,"box":{"x":70,"y":695,"width":800,"height":11}},{"id":"cb4f8eb6-84d8-4493-8173-0245d654d6d6","block_type":"box","text":"eligible under the Right of Accumulation may be counted towards the sales charge reduction. The investor must notify","page_number":150,"box":{"x":69,"y":710,"width":838,"height":11}},{"id":"c4d3181a-d35c-4dfb-b12a-ba8444a75c13","block_type":"box","text":"the Fund of (i) any current holdings in the BlackRock Funds, Eligible Unlisted BlackRock Closed-End Funds and/or the","page_number":150,"box":{"x":68,"y":725,"width":835,"height":11}},{"id":"8c461b6c-cab3-4e18-b69d-cab25945b9a2","block_type":"box","text":"BlackRock CollegeAdvantage 529 Program that should be counted towards the sales charge reduction and (ii) any","page_number":150,"box":{"x":70,"y":740,"width":811,"height":11}},{"id":"28db3cbd-12dc-4b1f-b553-a5125ea6a96f","block_type":"box","text":"subsequent purchases that should be counted towards the Letter of Intent. During the term of the Letter of Intent,","page_number":150,"box":{"x":69,"y":755,"width":814,"height":11}},{"id":"a323be01-d663-4ab7-85ec-e8f1ed371071","block_type":"box","text":"the Fund will hold Investor A Shares and/or Investor P Shares, as applicable, representing up to 5% of the indicated","page_number":150,"box":{"x":68,"y":770,"width":827,"height":12}},{"id":"257c67ab-ddbd-452b-b1a3-04db5d992ed2","block_type":"box","text":"amount in an escrow account for payment of a higher sales load if the full amount indicated in the Letter of Intent is","page_number":150,"box":{"x":69,"y":785,"width":827,"height":12}},{"id":"dd29c5f4-eba6-4918-817b-7049e39085d4","block_type":"box","text":"not purchased. If the full amount indicated is not purchased within the 13-month period, and the investor does not","page_number":150,"box":{"x":69,"y":801,"width":817,"height":11}},{"id":"f835a523-2d69-48e1-87a7-f2a53c079b84","block_type":"box","text":"pay the higher sales load within 20 days, the Fund will redeem enough of the Investor A Shares and/or Investor P","page_number":150,"box":{"x":70,"y":816,"width":807,"height":11}},{"id":"ac042cca-1f93-4d7d-bdd1-7cc53556f1df","block_type":"box","text":"Shares, as applicable, held in escrow to pay the difference.","page_number":150,"box":{"x":69,"y":831,"width":423,"height":11}},{"id":"f5790cfb-3326-4795-a8bb-92beb25abb34","block_type":"box","text":"Placement Fees.","page_number":150,"box":{"x":102,"y":854,"width":116,"height":8}},{"id":"801f4e12-4cb2-4400-aecc-2434ce272172","block_type":"box","text":"BlackRock may pay placement fees to dealers on purchases of Investor A and Investor P Shares of all Funds,","page_number":150,"box":{"x":102,"y":876,"width":777,"height":11}},{"id":"f9b4bbb4-073b-498b-834f-3e06a404a85e","block_type":"box","text":"which may depend on the policies, procedures and trading platforms of your financial intermediary.","page_number":150,"box":{"x":68,"y":891,"width":704,"height":12}},{"id":"a3a7f889-60db-4a14-b396-3ef756a8399c","block_type":"box","text":"II-101","page_number":150,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"c59e6d19-d2ee-4c46-adfc-f48541619755","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":150,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3692526b-3fe1-4c27-a22f-9b98e043d403","block_type":"box","text":"Except as noted below, these placement fees may be up to the following amounts for Investor A Shares:","page_number":151,"box":{"x":102,"y":45,"width":741,"height":11}},{"id":"7faf8815-9089-4dff-913c-3d29f71f9392","block_type":"box","text":"$1 million but less than $3 million . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":72,"width":361,"height":10}},{"id":"e3833385-f1b9-4c90-94b7-660a72af4273","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00%","page_number":151,"box":{"x":535,"y":72,"width":288,"height":9}},{"id":"974b205e-c00c-4365-9f15-4329bd1b1e7b","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":87,"width":361,"height":10}},{"id":"d9971422-2381-4124-a7ff-ffa79aa63e17","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":535,"y":88,"width":288,"height":8}},{"id":"8f186abe-bbad-4c03-8604-740d4e8e3b63","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":102,"width":345,"height":10}},{"id":"24e28171-cf98-4eb9-b4d8-1f30cda62c76","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":518,"y":103,"width":305,"height":9}},{"id":"db24a708-7980-4113-87e2-f7d953c8f248","block_type":"box","text":"With respect to Investor A Shares of BlackRock Global Allocation Fund, Inc., BlackRock Dynamic High Income","page_number":151,"box":{"x":101,"y":126,"width":776,"height":12}},{"id":"58a0368e-a2bd-44ca-9f7e-5df56afa3946","block_type":"box","text":"Portfolio (for shares purchased prior to July 1, 2020) and BlackRock Multi-Asset Income Portfolio (for shares","page_number":151,"box":{"x":69,"y":142,"width":774,"height":11}},{"id":"0a54faed-1032-4d22-a51c-bbbc4c609c16","block_type":"box","text":"purchased prior to July 1, 2020) of BlackRock Funds II, BlackRock Credit Relative Value Fund of BlackRock Funds IV","page_number":151,"box":{"x":70,"y":157,"width":824,"height":11}},{"id":"0335108e-6f79-4f58-a5c3-c67d51849170","block_type":"box","text":"and BlackRock Event Driven Equity Fund, the placement fees may be up to the following amounts:","page_number":151,"box":{"x":69,"y":172,"width":695,"height":11}},{"id":"393b85dc-7114-4ff8-ba69-472430bff0ff","block_type":"box","text":"$250,000 but less than $3 million . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":199,"width":410,"height":11}},{"id":"33583e0c-c3ef-4cf4-aaf0-c5a18f99bc00","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . 1.00%","page_number":151,"box":{"x":583,"y":200,"width":240,"height":9}},{"id":"7659733e-7f7f-49a4-901c-187dcba65277","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":214,"width":361,"height":11}},{"id":"bb9fabfd-19bc-4c69-b483-c2df6ff5c62c","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":535,"y":215,"width":288,"height":9}},{"id":"26c8694f-c10a-40c3-b439-ec96911c6daf","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":229,"width":345,"height":11}},{"id":"54f1ef50-4b74-4ca4-8b8b-a2d7ceb1a938","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":518,"y":230,"width":305,"height":9}},{"id":"938ee073-66fb-4008-b72f-ca55fe6ac8d7","block_type":"box","text":"With respect to Investor A Shares of BlackRock Systematic Multi-Strategy Fund of BlackRock Funds IV, BlackRock","page_number":151,"box":{"x":101,"y":254,"width":806,"height":11}},{"id":"226611ea-4603-4512-88f0-efdacf35d50f","block_type":"box","text":"Advantage CoreAlpha Bond Fund of BlackRock Funds VI, BlackRock Tactical Opportunities Fund of BlackRock Funds","page_number":151,"box":{"x":68,"y":269,"width":821,"height":11}},{"id":"065859c3-5a5a-49db-bdd4-34aa8b26e3da","block_type":"box","text":"SM","page_number":151,"box":{"x":890,"y":269,"width":11,"height":5}},{"id":"ee69152a-4552-4a3f-814c-1b64486a0321","block_type":"box","text":",","page_number":151,"box":{"x":903,"y":276,"width":2,"height":3}},{"id":"e402df1f-b353-4bf9-8636-278c47ec9617","block_type":"box","text":"BlackRock High Yield Portfolio, BlackRock Core Bond Portfolio and BlackRock Sustainable High Yield Bond Fund of","page_number":151,"box":{"x":70,"y":284,"width":816,"height":11}},{"id":"f50c80cc-d1cb-4259-b6a2-5bf86b19edb8","block_type":"box","text":"BlackRock Funds V, BlackRock Securitized Income Fund of Managed Account Series II and BlackRock Strategic Global","page_number":151,"box":{"x":70,"y":299,"width":835,"height":11}},{"id":"9bbba30d-bfd1-49a8-a93d-079717ae9471","block_type":"box","text":"Bond Fund, Inc., the placement fees may be up to the following amounts:","page_number":151,"box":{"x":70,"y":314,"width":520,"height":12}},{"id":"5e0fdace-0649-4d8b-b913-d8b0a7945a8c","block_type":"box","text":"$1 million but less than $3 million . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":341,"width":361,"height":11}},{"id":"51555199-0a91-493a-83d2-9135dfad715b","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75%","page_number":151,"box":{"x":535,"y":342,"width":288,"height":9}},{"id":"433a8c71-a0b2-4bbf-854a-5dec503b0642","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":356,"width":361,"height":11}},{"id":"33f1f8a3-a7d4-4bf3-963a-430987ed39a8","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":535,"y":357,"width":288,"height":9}},{"id":"8901ccb9-d4e1-49ae-970c-82b6cca50229","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":372,"width":345,"height":10}},{"id":"5f8e98ac-a887-4585-b06a-db1e360f38b1","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":518,"y":372,"width":305,"height":9}},{"id":"819a1703-fba1-44cd-81bf-4b52fe313f3b","block_type":"box","text":"With respect to Investor A Shares of BlackRock Mortgage-Backed Securities Fund and BlackRock Impact","page_number":151,"box":{"x":101,"y":396,"width":743,"height":11}},{"id":"ab77afad-df23-46ee-9376-10481e34d619","block_type":"box","text":"Mortgage Fund of BlackRock Funds V, the placement fees may be up to the following amounts:","page_number":151,"box":{"x":70,"y":411,"width":674,"height":12}},{"id":"e91c049e-81d5-49c0-a13c-685a6a5db6cd","block_type":"box","text":"$1 million but less than $3 million . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":438,"width":361,"height":11}},{"id":"a8d285ae-61d8-4e89-8423-94eb48030cfa","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":535,"y":439,"width":288,"height":9}},{"id":"6c29f71a-4819-485f-a0a0-afd96d7b6703","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":453,"width":361,"height":11}},{"id":"535bd7a2-2d70-456d-8426-d44622305a5a","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":535,"y":454,"width":288,"height":9}},{"id":"12d2e3bc-e0d4-4236-921b-955fbcdba2a0","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":469,"width":345,"height":10}},{"id":"34bb3193-f0dc-4e33-909a-21b1a947a115","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%","page_number":151,"box":{"x":518,"y":469,"width":305,"height":9}},{"id":"d0a84fe5-9fc2-49cb-993a-daca02b090ed","block_type":"box","text":"With respect to Investor A Shares of BlackRock Managed Income Fund of BlackRock Funds II, the placement fees","page_number":151,"box":{"x":101,"y":493,"width":808,"height":11}},{"id":"0007a3b7-407e-43e4-8fc1-ac18ee1d57a6","block_type":"box","text":"may be up to the following amounts:","page_number":151,"box":{"x":69,"y":508,"width":257,"height":12}},{"id":"e762e3ec-1b13-4e91-aa7e-4cf787886f09","block_type":"box","text":"$250,000 but less than $3 million . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":535,"width":410,"height":11}},{"id":"c63d037f-8324-4624-803e-b559263100fe","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":583,"y":536,"width":240,"height":9}},{"id":"45d2ee6d-913b-429e-91cb-804112d4eb3b","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":550,"width":361,"height":11}},{"id":"20ac3e7e-7936-4b3d-8b5a-71f25cf05a6a","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":535,"y":551,"width":288,"height":9}},{"id":"1a0228ab-2abf-4d76-9d3a-1336d0d54f0e","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":566,"width":345,"height":10}},{"id":"1259f6a9-b4e5-42fc-800d-4e8ea652b0db","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%","page_number":151,"box":{"x":518,"y":566,"width":305,"height":9}},{"id":"10b4b8a3-058b-43a4-afca-ed20f314f984","block_type":"box","text":"With respect to Investor A Shares of BlackRock Inflation Protected Bond Portfolio of BlackRock Funds V, the","page_number":151,"box":{"x":101,"y":590,"width":768,"height":11}},{"id":"cb201b52-4fa0-41b8-9eae-a92f09961d5e","block_type":"box","text":"placement fees may be up to the following amounts:","page_number":151,"box":{"x":70,"y":605,"width":371,"height":12}},{"id":"fa9a0760-cb16-49a0-851f-dd7bd502a466","block_type":"box","text":"$1 million but less than $3 million . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":632,"width":361,"height":11}},{"id":"b524191c-7e12-46aa-8a25-f399895c9209","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%","page_number":151,"box":{"x":535,"y":633,"width":288,"height":9}},{"id":"c0ff4c98-ae28-42dc-a2b1-890d729771c6","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":647,"width":361,"height":11}},{"id":"a610215f-8105-400a-a368-dcdf807c43c4","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10%","page_number":151,"box":{"x":535,"y":648,"width":288,"height":9}},{"id":"edd7cfe7-c862-40cc-8196-ce940fa682db","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":663,"width":345,"height":10}},{"id":"79eb8b4a-446e-4934-bf6c-17c929008037","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.05%","page_number":151,"box":{"x":518,"y":663,"width":305,"height":9}},{"id":"dc1a0e8f-4cc9-4653-b920-50337c4d4f30","block_type":"box","text":"With respect to Investor A Shares of BlackRock Low Duration Bond Portfolio, BlackRock Floating Rate Income","page_number":151,"box":{"x":101,"y":687,"width":778,"height":11}},{"id":"51f94de8-91b3-437d-8214-7a8d61bc3882","block_type":"box","text":"Portfolio, BlackRock Income Fund and BlackRock Strategic Income Opportunities Portfolio of BlackRock Funds V, the","page_number":151,"box":{"x":69,"y":702,"width":830,"height":12}},{"id":"6b4c1678-d8d1-44d3-9d94-0e35f5031ba1","block_type":"box","text":"placement fees may be up to the following amounts:","page_number":151,"box":{"x":70,"y":717,"width":371,"height":12}},{"id":"873c2a31-f137-4976-97b3-9817b4ba1961","block_type":"box","text":"$500,000 but less than $3 million . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":744,"width":410,"height":12}},{"id":"184b8bf0-5136-40c4-bbcb-6144787fb747","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . 0.75%","page_number":151,"box":{"x":583,"y":745,"width":240,"height":9}},{"id":"cbf16531-f792-4d98-806a-f62ee441e933","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":760,"width":361,"height":10}},{"id":"75a63d70-3747-4957-b9a6-dacd810164eb","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":535,"y":760,"width":288,"height":9}},{"id":"3ac3d9d4-c738-4e3b-9aed-8d4c7cb3c9ed","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":151,"box":{"x":167,"y":775,"width":345,"height":10}},{"id":"7a75a96d-9f6c-4176-83bc-b68cd643f218","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":151,"box":{"x":518,"y":775,"width":305,"height":9}},{"id":"43df1c70-0969-4d29-828f-a1893ffead62","block_type":"box","text":"With respect to Investor A Shares of BlackRock Short Duration Muni Fund of BlackRock Municipal Bond Fund,","page_number":151,"box":{"x":101,"y":799,"width":779,"height":11}},{"id":"7eb3b586-d154-4989-b030-e8ba37e2f4d8","block_type":"box","text":"Inc. (for shares purchased prior to March 18, 2019), the placement fees may be up to the following amounts:","page_number":151,"box":{"x":70,"y":814,"width":780,"height":12}},{"id":"9cc87612-35ed-44f7-8906-7e7f66903571","block_type":"box","text":"$250,000 and above . . . .","page_number":151,"box":{"x":167,"y":841,"width":182,"height":12}},{"id":"97e302df-f366-4bad-a569-6958be1097b5","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":151,"box":{"x":355,"y":842,"width":468,"height":9}},{"id":"74fadaf7-c85d-4723-8933-ea6325667cb2","block_type":"box","text":"II-102","page_number":151,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"923923b4-102e-47e5-bd29-a99a4926e1e9","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":151,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"16a2533d-45fd-45f0-9f62-556d8648d7da","block_type":"box","text":"With respect to Investor A Shares of BlackRock Short Duration Muni Fund of BlackRock Municipal Bond Fund,","page_number":152,"box":{"x":101,"y":45,"width":779,"height":11}},{"id":"e27e63e5-f778-4255-8e5e-c4a6c5a42f66","block_type":"box","text":"Inc. (for shares purchased on or after March 18, 2019 and prior to July 1, 2020), the placement fees may be up to","page_number":152,"box":{"x":70,"y":60,"width":819,"height":11}},{"id":"7fcca2d2-2875-4ca0-bf9e-dff0a7c75d2e","block_type":"box","text":"the following amounts:","page_number":152,"box":{"x":68,"y":75,"width":161,"height":11}},{"id":"6a968145-92e0-4384-9acc-b2c9bebda98d","block_type":"box","text":"$100,000 and above . . . .","page_number":152,"box":{"x":167,"y":102,"width":182,"height":11}},{"id":"f916d3a9-2551-4b02-bdfd-1bc4a162b035","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":152,"box":{"x":355,"y":103,"width":468,"height":9}},{"id":"d26af39b-277d-4cf3-85b2-81d5462af77c","block_type":"box","text":"With respect to Investor A Shares of BlackRock Short Duration Muni Fund of BlackRock Municipal Bond Fund,","page_number":152,"box":{"x":101,"y":126,"width":779,"height":11}},{"id":"4e7786db-fa4d-49e2-a070-f4df3f32908a","block_type":"box","text":"Inc. (for shares purchased on or after July 1, 2020), the placement fees may be up to the following amounts:","page_number":152,"box":{"x":70,"y":142,"width":775,"height":11}},{"id":"21557ab5-4160-4675-8562-ef054a46abfe","block_type":"box","text":"$250,000 and above . . . .","page_number":152,"box":{"x":167,"y":169,"width":182,"height":11}},{"id":"599e8aef-d210-4e15-abae-437a1b4e2104","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":152,"box":{"x":355,"y":169,"width":468,"height":9}},{"id":"46b025de-6b55-4fde-aa2c-6b0a890c5a09","block_type":"box","text":"With respect to Investor A Shares of BlackRock Strategic Municipal Opportunities Fund of BlackRock Municipal","page_number":152,"box":{"x":101,"y":193,"width":788,"height":12}},{"id":"7abd131b-97e7-4cd4-ae9c-d58b9d004565","block_type":"box","text":"Series Trust, BlackRock California Municipal Opportunities Fund of BlackRock California Municipal Series Trust,","page_number":152,"box":{"x":69,"y":208,"width":792,"height":11}},{"id":"6c0a0b23-2209-40c8-8ab3-01d983eda44b","block_type":"box","text":"BlackRock New York Municipal Opportunities Fund, BlackRock New Jersey Municipal Bond Fund and BlackRock","page_number":152,"box":{"x":70,"y":224,"width":787,"height":11}},{"id":"34100882-9006-4657-8660-0a1294e8de7d","block_type":"box","text":"Pennsylvania Municipal Bond Fund of BlackRock Multi-State Municipal Series Trust and BlackRock National Municipal","page_number":152,"box":{"x":69,"y":239,"width":834,"height":11}},{"id":"a73653f7-e069-4701-9821-01840ec4a7c2","block_type":"box","text":"Fund of BlackRock Municipal Bond Fund, Inc., the placement fees may be up to the following amounts:","page_number":152,"box":{"x":70,"y":254,"width":729,"height":11}},{"id":"121bbd65-2241-4cd0-b2aa-c71aa76b2d2e","block_type":"box","text":"$250,000 but less than $4 million . . . . . . . . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":281,"width":410,"height":11}},{"id":"584ab2a9-3cb2-4ad2-a70d-ec0611c40bb9","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . 1.00%","page_number":152,"box":{"x":583,"y":282,"width":240,"height":8}},{"id":"83c91a0f-cc31-4548-ad24-6adf7c551f59","block_type":"box","text":"$4 million but less than $10 million . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":296,"width":361,"height":10}},{"id":"b53dd056-ba30-44da-a56d-3e0676409428","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":152,"box":{"x":535,"y":297,"width":288,"height":9}},{"id":"c4ed2582-3651-44f9-be96-7c92fa1e7cfa","block_type":"box","text":"$10 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":311,"width":345,"height":11}},{"id":"b1ec85c6-1646-4067-9beb-70b9d205dad6","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":152,"box":{"x":518,"y":312,"width":305,"height":9}},{"id":"f9d73b08-16af-4003-9d79-af34fa3eb080","block_type":"box","text":"With respect to Investor A Shares of BlackRock Dynamic High Income Portfolio (for shares purchased on or after","page_number":152,"box":{"x":101,"y":336,"width":801,"height":11}},{"id":"71b6ef2f-423c-4e1a-9a84-e2acc2d46659","block_type":"box","text":"July 1, 2020) and BlackRock Multi-Asset Income Portfolio (for shares purchased on or after July 1, 2020) of","page_number":152,"box":{"x":69,"y":351,"width":769,"height":11}},{"id":"00d6ed5f-f3b3-4fb8-b0da-a606540a2d25","block_type":"box","text":"BlackRock Funds II, BlackRock Total Return Fund of BlackRock Bond Fund, Inc. and BlackRock Balanced Fund, Inc.,","page_number":152,"box":{"x":70,"y":366,"width":818,"height":10}},{"id":"f3d899d9-9a68-48ea-913b-0300844c32ad","block_type":"box","text":"the placement fees may be up to the following amounts:","page_number":152,"box":{"x":68,"y":381,"width":401,"height":11}},{"id":"2b476bcb-51f0-4265-9eb9-cc1cd9ef70c3","block_type":"box","text":"$250,000 but less than $3 million . . . . . . . . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":408,"width":410,"height":11}},{"id":"bc4a36a0-659d-4066-a0b7-0f5909151936","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . 0.75%","page_number":152,"box":{"x":583,"y":409,"width":240,"height":9}},{"id":"dfca7f93-def7-434d-9208-62e69c1d43ac","block_type":"box","text":"$3 million but less than $15 million . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":423,"width":361,"height":11}},{"id":"bb1c809a-2283-4386-8646-c8bb5ab4eba8","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%","page_number":152,"box":{"x":535,"y":424,"width":288,"height":9}},{"id":"787d948d-7b4b-422c-b25d-a7abad7db87c","block_type":"box","text":"$15 million and above . . . . . . . . . . . . . . . . . . . . . . .","page_number":152,"box":{"x":167,"y":438,"width":345,"height":11}},{"id":"98703305-73a9-42bf-a8b3-01e94b3bf7fe","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%","page_number":152,"box":{"x":518,"y":439,"width":305,"height":9}},{"id":"09f2c33c-61d4-4ff0-93e7-f2848a0863b5","block_type":"box","text":"With respect to Investor P Shares of BlackRock LifePath","page_number":152,"box":{"x":101,"y":463,"width":398,"height":11}},{"id":"365f1bfb-b357-4cf1-b537-babe6d4ea521","block_type":"box","text":"®","page_number":152,"box":{"x":500,"y":463,"width":6,"height":5}},{"id":"68da1804-621e-44f6-bcf8-24125919ccdb","block_type":"box","text":"Index 2030 Fund, BlackRock LifePath","page_number":152,"box":{"x":513,"y":463,"width":264,"height":10}},{"id":"96e493b2-2c8a-4fa2-8e53-39634541b604","block_type":"box","text":"®","page_number":152,"box":{"x":778,"y":463,"width":6,"height":5}},{"id":"84100399-4c0b-49df-b0ea-f9a5b695f2ee","block_type":"box","text":"Index 2035","page_number":152,"box":{"x":791,"y":463,"width":79,"height":9}},{"id":"5762954d-3b9f-47c0-8848-3371eaeeae5c","block_type":"box","text":"Fund, BlackRock LifePath","page_number":152,"box":{"x":70,"y":478,"width":177,"height":11}},{"id":"f9341346-5d89-4928-b665-41f01e34f01b","block_type":"box","text":"®","page_number":152,"box":{"x":249,"y":478,"width":6,"height":5}},{"id":"06143586-b0f3-440b-9a5c-1d46acc367e2","block_type":"box","text":"Index 2040 Fund, BlackRock LifePath","page_number":152,"box":{"x":261,"y":478,"width":265,"height":11}},{"id":"db1758e8-ea37-40a4-a064-d7ee78a30ddd","block_type":"box","text":"®","page_number":152,"box":{"x":527,"y":478,"width":6,"height":5}},{"id":"c52660ad-bb05-4bdb-a6ab-17ecff66ce2d","block_type":"box","text":"Index 2045 Fund, BlackRock LifePath","page_number":152,"box":{"x":539,"y":478,"width":265,"height":11}},{"id":"b7a1a180-7141-4747-bec2-9c05dd858cff","block_type":"box","text":"®","page_number":152,"box":{"x":805,"y":478,"width":6,"height":5}},{"id":"07b3bc5b-f783-40bb-8030-e1b07a5743a8","block_type":"box","text":"Index 2050","page_number":152,"box":{"x":817,"y":478,"width":80,"height":9}},{"id":"7ed36b24-ac4b-413c-b3e5-8bd7e03171d8","block_type":"box","text":"Fund, BlackRock LifePath","page_number":152,"box":{"x":70,"y":493,"width":177,"height":11}},{"id":"7e464aa1-75bc-4f26-a7df-a54c89930014","block_type":"box","text":"®","page_number":152,"box":{"x":248,"y":494,"width":6,"height":4}},{"id":"6c71d9c3-4b78-4aa2-b03e-4945ec365227","block_type":"box","text":"Index 2055 Fund, BlackRock LifePath","page_number":152,"box":{"x":261,"y":493,"width":263,"height":11}},{"id":"d0fcb033-7c21-4814-9c35-2f8ddad541da","block_type":"box","text":"®","page_number":152,"box":{"x":526,"y":494,"width":6,"height":4}},{"id":"048a0833-74e3-4eb8-8b67-01fd85f793ab","block_type":"box","text":"Index 2060 Fund, BlackRock LifePath","page_number":152,"box":{"x":538,"y":493,"width":264,"height":11}},{"id":"f39a0c00-506c-4f67-925d-e189de7a2b55","block_type":"box","text":"®","page_number":152,"box":{"x":803,"y":494,"width":6,"height":4}},{"id":"feb98dd2-aabe-4eeb-a24f-e76d11748da9","block_type":"box","text":"Index 2065","page_number":152,"box":{"x":815,"y":493,"width":80,"height":9}},{"id":"1215f955-c6e3-4aae-8acd-4a88254eddf0","block_type":"box","text":"Fund, BlackRock LifePath","page_number":152,"box":{"x":70,"y":508,"width":177,"height":11}},{"id":"2940d54b-77f7-4b20-91d6-66e29da9f8ee","block_type":"box","text":"®","page_number":152,"box":{"x":248,"y":509,"width":6,"height":4}},{"id":"80951f3e-a5c2-499b-b53f-ee347d9f516a","block_type":"box","text":"Index 2070 Fund and BlackRock LifePath","page_number":152,"box":{"x":261,"y":508,"width":290,"height":9}},{"id":"0839c090-e706-4397-9ad8-6cb2a4fb5f80","block_type":"box","text":"®","page_number":152,"box":{"x":552,"y":509,"width":6,"height":4}},{"id":"3c090720-25e0-45c0-84c8-e2de96374969","block_type":"box","text":"Index Retirement Fund of BlackRock Funds III,","page_number":152,"box":{"x":564,"y":508,"width":324,"height":11}},{"id":"41c645f7-38a0-4047-89fb-8ade50a019fd","block_type":"box","text":"the placement fees may be up to the following amounts:","page_number":152,"box":{"x":68,"y":523,"width":401,"height":12}},{"id":"f3e6cb39-b0f6-4c99-9626-d45d6cc3afb5","block_type":"box","text":"$1,000,000 and above . . . . .","page_number":152,"box":{"x":167,"y":550,"width":206,"height":12}},{"id":"1530bada-1574-4eaf-8985-edb8a1b49bb8","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10%","page_number":152,"box":{"x":380,"y":551,"width":443,"height":9}},{"id":"53534d57-7fa5-4c32-a075-9dc06b9fc84f","block_type":"box","text":"With respect to Investor P Shares of iShares Municipal Bond Index Fund of BlackRock Funds","page_number":152,"box":{"x":101,"y":575,"width":657,"height":11}},{"id":"223cecc0-683d-4be9-829a-b6c307ba9bd9","block_type":"box","text":"SM","page_number":152,"box":{"x":760,"y":575,"width":10,"height":5}},{"id":"90cc6c20-f982-4d96-81da-0e2164d67698","block_type":"box","text":", the placement","page_number":152,"box":{"x":773,"y":575,"width":110,"height":11}},{"id":"9f39a15b-04ef-446c-9355-cbf7d8851e70","block_type":"box","text":"fees may be up to the following amounts:","page_number":152,"box":{"x":68,"y":590,"width":294,"height":11}},{"id":"c1bc1fdc-8ff7-4499-b5c9-fcfe407ea45a","block_type":"box","text":"$1,000,000 and above . . . . .","page_number":152,"box":{"x":167,"y":617,"width":206,"height":11}},{"id":"465affad-6927-4b4f-b2a2-309c3f56cb03","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%","page_number":152,"box":{"x":380,"y":618,"width":443,"height":9}},{"id":"5e24f31d-d061-48a8-8fe8-6af79a73323f","block_type":"box","text":"There are no placement fees for Investor P Shares of iShares MSCI EAFE International Index Fund and iShares","page_number":152,"box":{"x":101,"y":642,"width":787,"height":11}},{"id":"627d9af8-f93a-4394-a040-de64ed1fad30","block_type":"box","text":"Russell 2000 Small-Cap Index Fund of BlackRock Index Funds, Inc. and iShares S&P 500 Index Fund and iShares","page_number":152,"box":{"x":70,"y":657,"width":808,"height":11}},{"id":"72d2f95b-9beb-4c85-acf5-8863edff4108","block_type":"box","text":"U.S. Aggregate Bond Index Fund of BlackRock Funds III.","page_number":152,"box":{"x":70,"y":672,"width":393,"height":11}},{"id":"5f53853c-8429-4a9b-a9a2-e9766abcab20","block_type":"box","text":"For the tables above, the placement fees indicated will apply up to the indicated breakpoint (so that, for","page_number":152,"box":{"x":102,"y":695,"width":740,"height":11}},{"id":"2d3d4253-e895-4313-ae09-a2ec492fe215","block_type":"box","text":"example, a sale of $4 million worth of Investor A Shares of BlackRock Impact Mortgage Fund of BlackRock Funds V","page_number":152,"box":{"x":69,"y":709,"width":823,"height":12}},{"id":"6524af36-24c7-4cf8-972e-a66bae5a00f1","block_type":"box","text":"will result in a placement fee of up to 0.50% on the first $3 million and a placement fee of 0.25% on the final","page_number":152,"box":{"x":68,"y":724,"width":780,"height":12}},{"id":"ddf5071a-a090-4cf5-973e-d96d485ffebd","block_type":"box","text":"$1 million).","page_number":152,"box":{"x":69,"y":739,"width":79,"height":12}},{"id":"03d04301-a3c6-4116-aa6e-0a852c6addd2","block_type":"box","text":"Other.","page_number":152,"box":{"x":102,"y":763,"width":41,"height":9}},{"id":"48961b85-4e55-4388-a399-bb282c171835","block_type":"box","text":"The following persons may also buy Investor A or Investor P Shares without paying a sales charge:","page_number":152,"box":{"x":149,"y":763,"width":698,"height":11}},{"id":"7cb4445b-571f-448c-9f32-dd7bed0a3383","block_type":"box","text":"(a) certain employer-sponsored retirement plans (for purposes of this waiver, employer-sponsored retirement plans do","page_number":152,"box":{"x":69,"y":778,"width":839,"height":11}},{"id":"6b3f619b-e0a3-4d83-80b0-a049f63a81a6","block_type":"box","text":"not include SEP IRAs, SIMPLE IRAs or SARSEPs); (b) rollovers of current investments through certain employer","page_number":152,"box":{"x":69,"y":793,"width":790,"height":11}},{"id":"e17a28b9-e9bd-4eb6-9250-59d62275a8a9","block_type":"box","text":"sponsored retirement plans provided the shares are transferred to Investor A or Investor P, as applicable, shares of","page_number":152,"box":{"x":69,"y":808,"width":825,"height":11}},{"id":"ad93f44e-d55f-494e-b231-1860f50233a0","block_type":"box","text":"the same or another BlackRock Fund as either a direct rollover, or subsequent to distribution, the rolled-over","page_number":152,"box":{"x":68,"y":823,"width":773,"height":11}},{"id":"83a2906f-7995-4e29-9e17-93f47b5a9470","block_type":"box","text":"proceeds are contributed to a BlackRock IRA through an account directly with the Fund; or purchases by IRA programs","page_number":152,"box":{"x":70,"y":839,"width":838,"height":11}},{"id":"2bafb563-e7de-4c18-a688-aa5c9aa7de6b","block_type":"box","text":"that are sponsored by financial intermediary firms provided the financial intermediary firm has entered into a Class A","page_number":152,"box":{"x":68,"y":853,"width":837,"height":12}},{"id":"a20607e6-0fa1-49dc-9cc3-d9a9da574550","block_type":"box","text":"or Investor P NAV agreement, as applicable, with respect to such program with the Distributor; (c) insurance company","page_number":152,"box":{"x":69,"y":869,"width":836,"height":11}},{"id":"15ccd541-9b54-4c51-afcb-f5e0705e5a6a","block_type":"box","text":"separate accounts; (d) registered investment advisers, trust companies and bank trust departments exercising","page_number":152,"box":{"x":69,"y":884,"width":793,"height":11}},{"id":"9182b273-c3ea-4542-821c-209bc2a19abf","block_type":"box","text":"discretionary investment authority with respect to amounts to be invested in a Fund; (e) persons participating in a","page_number":152,"box":{"x":69,"y":899,"width":811,"height":11}},{"id":"19be4838-68a6-4b77-a94e-73b65dae1536","block_type":"box","text":"II-103","page_number":152,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"b8c0323d-8325-4178-bdeb-9edc9b20b298","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":152,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8609c9d1-fa9d-441e-a65e-0d2fc8c0e299","block_type":"box","text":"fee-based program (such as a wrap account) under which they pay advisory fees to a broker-dealer or other financial","page_number":153,"box":{"x":68,"y":45,"width":827,"height":11}},{"id":"a68f5f41-e715-4633-bc5c-cf9037a87f7a","block_type":"box","text":"institution; (f) financial intermediaries who have entered into an agreement with the Distributor and have been","page_number":153,"box":{"x":70,"y":60,"width":782,"height":11}},{"id":"f5022a4d-d7fa-4179-a4e7-32edfa369dcc","block_type":"box","text":"approved by the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may not","page_number":153,"box":{"x":69,"y":75,"width":830,"height":11}},{"id":"08afc416-71b6-4fc4-8f0a-5399d345b58d","block_type":"box","text":"charge a transaction fee; (g) state sponsored 529 college savings plans and rollovers of such 529 plans into Roth","page_number":153,"box":{"x":69,"y":90,"width":815,"height":11}},{"id":"e89faf55-23c9-472d-8887-8befbbcf5369","block_type":"box","text":"IRAs as permitted under the Internal Revenue Code; (h) with respect to Investor A Shares only, accounts opened","page_number":153,"box":{"x":70,"y":105,"width":799,"height":11}},{"id":"0f92617f-a78b-4294-8d2e-03e86374f838","block_type":"box","text":"directly with a Fund that do not have a financial intermediary associated with the account; and (i) persons","page_number":153,"box":{"x":69,"y":120,"width":752,"height":11}},{"id":"6354cbbd-f7a0-4ed5-b6f8-46ad6c5c63d5","block_type":"box","text":"involuntarily liquidated from a Fund, who within 60 days of liquidation buy new shares of another BlackRock Fund (but","page_number":153,"box":{"x":70,"y":135,"width":836,"height":11}},{"id":"0ce63ef1-fc4f-4e77-9e33-262fc4dca80e","block_type":"box","text":"only up to the amount that was liquidated). The following persons associated with the Funds, the Fund’s Manager,","page_number":153,"box":{"x":69,"y":150,"width":812,"height":12}},{"id":"18b9a140-e480-44b2-b89e-50734a831512","block_type":"box","text":"Sub-Advisers, Transfer Agent, Distributor, fund accounting agents, Barclays PLC and their affiliates may buy Investor A","page_number":153,"box":{"x":69,"y":166,"width":840,"height":11}},{"id":"e3a819cd-5bfe-4606-bd55-7a739638d667","block_type":"box","text":"or Investor P Shares of each of the Funds without paying a sales charge to the extent permitted by these firms","page_number":153,"box":{"x":69,"y":181,"width":788,"height":11}},{"id":"913edf28-7be4-4f3a-a8b9-f06e099085c6","block_type":"box","text":"including: (a) officers, directors and partners; (b) employees and retirees; (c) employees or registered representatives","page_number":153,"box":{"x":70,"y":196,"width":838,"height":11}},{"id":"2f16de53-8006-4883-8e9d-a7d9f9129a6c","block_type":"box","text":"of firms who have entered into selling agreements to distribute shares of BlackRock-advised funds; (d) immediate","page_number":153,"box":{"x":69,"y":211,"width":810,"height":11}},{"id":"817b5c3a-abc8-4857-a0d6-4536bad281be","block_type":"box","text":"family members of such persons (“immediate family members” shall be defined as the investor, the investor’s","page_number":153,"box":{"x":68,"y":226,"width":787,"height":11}},{"id":"130018a1-baa0-45fc-ad43-e0a51357b24a","block_type":"box","text":"spouse or domestic partner, children, parents and siblings); and (e) any trust, pension, profit-sharing or other benefit","page_number":153,"box":{"x":69,"y":241,"width":834,"height":11}},{"id":"9d90f03c-5c39-43e8-a2f4-7a5e84c8b29c","block_type":"box","text":"plan for any of the persons set forth in (a) through (d). Investors who qualify for any of these exemptions from the","page_number":153,"box":{"x":70,"y":256,"width":808,"height":12}},{"id":"64ed232c-00ae-4805-a50f-c3ba4f4bf553","block_type":"box","text":"sales charge should purchase Investor A or Investor P Shares. In addition, a sales charge waiver may be available for","page_number":153,"box":{"x":69,"y":271,"width":837,"height":12}},{"id":"04643a89-47c1-41ff-8f25-c4f5b584fe67","block_type":"box","text":"investors exchanging Investor A Shares of one BlackRock Fund for Investor P Shares of another BlackRock Fund, or","page_number":153,"box":{"x":70,"y":286,"width":820,"height":12}},{"id":"df14d936-0857-45a3-ae19-edff48edf93a","block_type":"box","text":"exchanging Investor P Shares of one BlackRock Fund for Investor A Shares of another BlackRock Fund, through an","page_number":153,"box":{"x":69,"y":302,"width":813,"height":11}},{"id":"320ea025-09dd-4e01-a6dc-8b13a438ecd3","block_type":"box","text":"intermediary-processed exchange, provided that the investor had previously paid a sales charge with respect to such","page_number":153,"box":{"x":70,"y":317,"width":831,"height":11}},{"id":"6d80e10b-24ab-488d-8449-cbb065ffe3d3","block_type":"box","text":"shares. The availability of Investor A or Investor P Shares sales charge waivers may depend upon the policies,","page_number":153,"box":{"x":69,"y":332,"width":783,"height":11}},{"id":"79247628-4f32-4e5f-bcaa-654b76cf4c96","block_type":"box","text":"procedures and trading platforms of your financial intermediary; consult your financial adviser.","page_number":153,"box":{"x":70,"y":347,"width":668,"height":11}},{"id":"5fb3fc0b-8fb6-44b5-a4d6-b972e43996aa","block_type":"box","text":"If you invest $1,000,000 ($250,000 for BlackRock Dynamic High Income Portfolio, BlackRock Multi-Asset","page_number":153,"box":{"x":102,"y":369,"width":754,"height":12}},{"id":"be77ed05-c927-4b66-a257-71afd28aface","block_type":"box","text":"Income Portfolio and BlackRock Managed Income Fund of BlackRock Funds II, BlackRock Credit Relative Value Fund","page_number":153,"box":{"x":70,"y":385,"width":823,"height":11}},{"id":"c24b8219-ffbd-4261-a4ba-5edb55b79d2e","block_type":"box","text":"of BlackRock Funds IV, BlackRock Total Return Fund of BlackRock Bond Fund, Inc., BlackRock Global Allocation Fund,","page_number":153,"box":{"x":69,"y":400,"width":833,"height":10}},{"id":"1f13f1c5-a9ea-402a-ab24-24d7a057a5a3","block_type":"box","text":"Inc., BlackRock National Municipal Fund of BlackRock Municipal Bond Fund, Inc., BlackRock Short Duration Muni","page_number":153,"box":{"x":70,"y":415,"width":802,"height":11}},{"id":"f10c2f63-97ab-4b41-9fbd-4f7cc03a38b3","block_type":"box","text":"Fund of BlackRock Municipal Bond Fund, Inc., BlackRock Strategic Municipal Opportunities Fund of BlackRock","page_number":153,"box":{"x":70,"y":430,"width":781,"height":11}},{"id":"b7322c1c-7f79-4be0-927f-81f869adae16","block_type":"box","text":"Municipal Series Trust, BlackRock California Municipal Opportunities Fund of BlackRock California Municipal Series","page_number":153,"box":{"x":70,"y":445,"width":819,"height":11}},{"id":"ddc4da51-35e8-43c5-89bd-417d0fd925f8","block_type":"box","text":"Trust, BlackRock New York Municipal Opportunities Fund, BlackRock New Jersey Municipal Bond Fund and BlackRock","page_number":153,"box":{"x":68,"y":460,"width":835,"height":12}},{"id":"cca419d8-6263-4869-aaa0-4deafc1a2d10","block_type":"box","text":"Pennsylvania Municipal Bond Fund of BlackRock Multi-State Municipal Series Trust, BlackRock Event Driven Equity","page_number":153,"box":{"x":69,"y":475,"width":813,"height":12}},{"id":"2a577293-f9fe-4092-b7d4-4f7089e6d127","block_type":"box","text":"Fund and BlackRock Balanced Fund, Inc., and $500,000 for BlackRock Low Duration Bond Portfolio, BlackRock","page_number":153,"box":{"x":70,"y":490,"width":792,"height":11}},{"id":"882b45ac-3c82-45ff-85e2-80ca433ba800","block_type":"box","text":"Floating Rate Income Portfolio, BlackRock Income Fund and BlackRock Strategic Income Opportunities Portfolio of","page_number":153,"box":{"x":70,"y":506,"width":813,"height":11}},{"id":"ef53da11-9de5-4acb-9902-ac54dad588dc","block_type":"box","text":"BlackRock Funds V) or more in Investor A or Investor P Shares, as applicable, you may not pay an initial sales charge.","page_number":153,"box":{"x":70,"y":521,"width":837,"height":11}},{"id":"c5d27e55-4503-4442-91a0-5c12dd6b4980","block_type":"box","text":"However, if you redeem your Investor A or Investor P Shares, as applicable, within 18 months after purchase (a","page_number":153,"box":{"x":70,"y":536,"width":790,"height":11}},{"id":"c84b91c1-3501-4a7d-ade8-6527be4189b0","block_type":"box","text":"shorter holding period may apply depending on the Fund), you may be charged a deferred sales charge.","page_number":153,"box":{"x":69,"y":551,"width":736,"height":11}},{"id":"dca3436c-5d4f-4bbb-9d0c-798a16edd5c6","block_type":"box","text":"A deferred sales charge of up to 1.00% may apply to certain redemptions of Investor A Shares of the Index","page_number":153,"box":{"x":101,"y":574,"width":763,"height":11}},{"id":"2bef25d1-55dd-47c3-9d87-0a55b50114bc","block_type":"box","text":"Funds and BlackRock Short Obligations Fund purchased in an exchange transaction for Investor A Shares of a","page_number":153,"box":{"x":70,"y":589,"width":782,"height":11}},{"id":"de056a4c-27fa-469f-94fc-3ae023b760f8","block_type":"box","text":"portfolio advised by BlackRock or its affiliates where no initial sales charge was paid at the time of purchase of such","page_number":153,"box":{"x":70,"y":604,"width":832,"height":11}},{"id":"e82df777-052a-40c5-bd44-e4d0f816f1d7","block_type":"box","text":"fund (an “Investor A Load-Waived BlackRock Portfolio”) as part of an investment of $1,000,000 (lesser amounts may","page_number":153,"box":{"x":68,"y":618,"width":839,"height":12}},{"id":"67650c23-dfb6-4bce-9641-c8c6bd209dcf","block_type":"box","text":"apply depending on the Investor A Load-Waived BlackRock Portfolio) or more. The Investor A Shares deferred sales","page_number":153,"box":{"x":69,"y":634,"width":817,"height":12}},{"id":"c5e30672-f21a-45d0-94dd-450e8aa12114","block_type":"box","text":"charge is only charged upon redemptions of Investor A Shares within 18 months after you originally acquired such","page_number":153,"box":{"x":69,"y":649,"width":811,"height":12}},{"id":"730b2007-2d6f-4d2a-853e-65cc373a5fb6","block_type":"box","text":"Investor A Shares of the Investor A Load-Waived BlackRock Portfolio (a shorter holding period may apply depending","page_number":153,"box":{"x":70,"y":664,"width":818,"height":12}},{"id":"4942cbb0-7475-4590-8881-8054bbd5bc97","block_type":"box","text":"on the Investor A Load-Waived BlackRock Portfolio), unless you qualify for a waiver. There is no deferred sales charge","page_number":153,"box":{"x":69,"y":680,"width":836,"height":11}},{"id":"a788d8f8-8a89-49bb-af53-cce1e49e16c1","block_type":"box","text":"charged on redemptions if you have owned your Investor A Shares for more than 18 months (or for a shorter holding","page_number":153,"box":{"x":69,"y":695,"width":830,"height":11}},{"id":"89a3c703-ff97-40ce-b2e1-384be367be31","block_type":"box","text":"period, as applicable) (as measured from your original purchase of Investor A Shares that you exchanged into","page_number":153,"box":{"x":70,"y":710,"width":778,"height":11}},{"id":"37004f16-fa3c-45fe-81f1-03eaad7d1e4a","block_type":"box","text":"Investor A Shares of the Index Fund or BlackRock Short Obligations Fund).","page_number":153,"box":{"x":70,"y":725,"width":526,"height":11}},{"id":"12d504f5-04ce-4dca-9092-e6b22188cb5e","block_type":"box","text":"The deferred sales charge on Investor A or Investor P Shares, as applicable, is not charged in connection with:","page_number":153,"box":{"x":101,"y":748,"width":788,"height":11}},{"id":"66a7ce24-e364-4788-b75d-86e463fc4a2d","block_type":"box","text":"(a) redemptions of Investor A or Investor P Shares purchased through certain employer-sponsored retirement plans","page_number":153,"box":{"x":69,"y":763,"width":819,"height":11}},{"id":"a7b76521-f757-4d2c-ac6b-9069d8fccd3e","block_type":"box","text":"and rollovers of current investments in a Fund through such plans; (b) exchanges described in “Exchange Privilege”","page_number":153,"box":{"x":69,"y":778,"width":820,"height":11}},{"id":"0d6cf7ab-5cbc-484c-8716-264d0d6def8b","block_type":"box","text":"below; (c) redemptions made in connection with minimum required distributions from IRA and 403(b)(7) accounts due","page_number":153,"box":{"x":69,"y":793,"width":837,"height":11}},{"id":"847aceef-fcd2-43a8-b6b0-52aeb491bac9","block_type":"box","text":"to the shareholder reaching the applicable age triggering such distributions; (d) redemptions made with respect to","page_number":153,"box":{"x":68,"y":808,"width":812,"height":11}},{"id":"ce6d5fd9-f08a-4347-a9c6-e82785f28a51","block_type":"box","text":"certain retirement plans sponsored by a Fund, BlackRock or its affiliates; (e) redemptions (i) within one year of a","page_number":153,"box":{"x":69,"y":823,"width":803,"height":11}},{"id":"df5fbe35-7572-4dab-a0e8-32bdb27e832e","block_type":"box","text":"shareholder’s death or, if later, the receipt of a certified probate settlement (including in connection with the","page_number":153,"box":{"x":69,"y":838,"width":772,"height":12}},{"id":"d4458bb4-4663-4bdd-9dca-8ad237b39942","block_type":"box","text":"distribution of account assets to a beneficiary of the decedent) or (ii) in connection with a shareholder’s disability (as","page_number":153,"box":{"x":69,"y":853,"width":835,"height":12}},{"id":"614f1277-93e7-4c25-a3bc-39d11ec1e028","block_type":"box","text":"defined in the Code) subsequent to the purchase of Investor A or Investor P Shares; (f) involuntary redemptions of","page_number":153,"box":{"x":69,"y":869,"width":814,"height":11}},{"id":"cfb2d071-e572-4313-a857-82e5381223e8","block_type":"box","text":"Investor A or Investor P Shares in accounts with low balances; (g) certain redemptions made pursuant to the","page_number":153,"box":{"x":70,"y":884,"width":772,"height":11}},{"id":"d525fb7e-e935-42fb-a65a-0baf06db790d","block_type":"box","text":"Systematic Withdrawal Plan (described below); (h) redemptions related to the payment of BNY Mellon Investment","page_number":153,"box":{"x":69,"y":899,"width":805,"height":11}},{"id":"bbafb653-5db3-4b9d-b672-181d33013fc6","block_type":"box","text":"II-104","page_number":153,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"85472f30-6f27-4dd7-afb0-1221c1d7a93a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":153,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"d0179b49-0f73-484c-9b3f-f6ddda9d793c","block_type":"box","text":"Servicing Trust Company custodial IRA fees; and (i) redemptions when a shareholder can demonstrate hardship, in","page_number":154,"box":{"x":69,"y":45,"width":817,"height":11}},{"id":"df906bf2-db11-4fbd-bc25-8590f229910c","block_type":"box","text":"the absolute discretion of a Fund.","page_number":154,"box":{"x":68,"y":60,"width":239,"height":9}},{"id":"c06c239b-af1f-44e1-adab-1e6d60a9ff52","block_type":"box","text":"With respect to certain employer-sponsored retirement plans, if a dealer waives its right to receive a placement","page_number":154,"box":{"x":101,"y":82,"width":794,"height":12}},{"id":"34bc1d17-04a6-43ac-8430-42c32f8b424f","block_type":"box","text":"fee, the Fund may, at its own discretion, waive the CDSC related to purchases of $1,000,000 ($250,000 for","page_number":154,"box":{"x":68,"y":97,"width":776,"height":12}},{"id":"6152a8be-2cfa-4195-8a14-26ea2e522735","block_type":"box","text":"BlackRock Dynamic High Income Portfolio, BlackRock Multi-Asset Income Portfolio and BlackRock Managed Income","page_number":154,"box":{"x":70,"y":113,"width":821,"height":11}},{"id":"922ebcc2-6017-469a-b2b4-27c3056357cf","block_type":"box","text":"Fund of BlackRock Funds II, BlackRock Credit Relative Value Fund of BlackRock Funds IV, BlackRock Total Return","page_number":154,"box":{"x":70,"y":128,"width":800,"height":10}},{"id":"83f6afa8-cf1d-408b-8fd8-30063abee0f2","block_type":"box","text":"Fund of BlackRock Bond Fund, Inc., BlackRock Global Allocation Fund, Inc., BlackRock National Municipal Fund of","page_number":154,"box":{"x":70,"y":143,"width":806,"height":11}},{"id":"37f1b6f0-519a-4bf7-96b7-3c62bba4b8c7","block_type":"box","text":"BlackRock Municipal Bond Fund, Inc., BlackRock Short Duration Muni Fund of BlackRock Municipal Bond Fund, Inc.,","page_number":154,"box":{"x":70,"y":158,"width":823,"height":11}},{"id":"e5673768-5628-4e64-bcb5-4a4027a44776","block_type":"box","text":"BlackRock Strategic Municipal Opportunities Fund of BlackRock Municipal Series Trust, BlackRock California","page_number":154,"box":{"x":70,"y":173,"width":770,"height":11}},{"id":"279f75e3-8436-43a8-924e-d1639eab7214","block_type":"box","text":"Municipal Opportunities Fund of BlackRock California Municipal Series Trust, BlackRock New York Municipal","page_number":154,"box":{"x":70,"y":188,"width":766,"height":11}},{"id":"8c247465-4c59-4828-a429-c81efce01760","block_type":"box","text":"Opportunities Fund, BlackRock New Jersey Municipal Bond Fund and BlackRock Pennsylvania Municipal Bond Fund of","page_number":154,"box":{"x":69,"y":203,"width":837,"height":12}},{"id":"e735a2fa-56d7-4a78-b642-467da5e39ae2","block_type":"box","text":"BlackRock Multi-State Municipal Series Trust, BlackRock Event Driven Equity Fund and BlackRock Balanced Fund,","page_number":154,"box":{"x":70,"y":219,"width":805,"height":11}},{"id":"79af4576-3691-4d7f-8de3-02658158e80d","block_type":"box","text":"Inc., and $500,000 for BlackRock Low Duration Bond Portfolio, BlackRock Floating Rate Income Portfolio, BlackRock","page_number":154,"box":{"x":70,"y":233,"width":832,"height":12}},{"id":"0a460163-3377-4e3b-b577-5f6bfb46f46c","block_type":"box","text":"Income Fund and BlackRock Strategic Income Opportunities Portfolio of BlackRock Funds V) or more of Investor A or","page_number":154,"box":{"x":70,"y":249,"width":828,"height":11}},{"id":"83845bd1-5de3-450a-b7ee-4e33f7a05927","block_type":"box","text":"Investor P Shares. This may depend upon the policies, procedures and trading platforms of your financial","page_number":154,"box":{"x":70,"y":264,"width":746,"height":11}},{"id":"20a02cbf-68d4-464c-af73-e63c280f5bb1","block_type":"box","text":"intermediary; consult your financial adviser.","page_number":154,"box":{"x":70,"y":279,"width":307,"height":11}},{"id":"44f7717c-304a-4782-8774-d9322bc9e7bf","block_type":"box","text":"Investor A and Investor P Shares are also available at NAV to investors that, for regulatory reasons, are required","page_number":154,"box":{"x":102,"y":302,"width":799,"height":11}},{"id":"7c2a8adf-3323-4f3a-8599-75547373d98f","block_type":"box","text":"to transfer investment positions from a foreign registered investment company advised by BlackRock or its affiliates","page_number":154,"box":{"x":68,"y":317,"width":829,"height":11}},{"id":"c258fa5b-abc4-4106-b9ee-1ccc3bbdfa69","block_type":"box","text":"to a U.S. registered BlackRock-advised fund.","page_number":154,"box":{"x":68,"y":332,"width":317,"height":11}},{"id":"4cece41c-d029-4c43-948e-2952fa73a84f","block_type":"box","text":"Acquisition of Cer tain Investment Companies.","page_number":154,"box":{"x":101,"y":355,"width":326,"height":11}},{"id":"a70b5e10-b572-4511-87a8-a58febf5a0f8","block_type":"box","text":"Investor A and Investor P Shares may be offered at NAV in","page_number":154,"box":{"x":434,"y":355,"width":413,"height":11}},{"id":"063d1059-4949-4239-a922-bf9b89580ff2","block_type":"box","text":"connection with the acquisition of the assets of, or merger or consolidation with, a personal holding company or a","page_number":154,"box":{"x":69,"y":370,"width":811,"height":11}},{"id":"29f0d37a-095d-4f6c-bf0e-ddc4b5e6e80b","block_type":"box","text":"public or private investment company.","page_number":154,"box":{"x":70,"y":385,"width":266,"height":11}},{"id":"0ba00145-aa47-4be1-a848-a7de5f2a9e02","block_type":"box","text":"Purchases Through Cer tain Financial Intermediaries.","page_number":154,"box":{"x":102,"y":408,"width":372,"height":11}},{"id":"0434ef1a-f1cf-4aed-aebd-8c257e15185b","block_type":"box","text":"Reduced sales charges may be applicable for purchases of","page_number":154,"box":{"x":481,"y":407,"width":421,"height":12}},{"id":"9740e059-7422-4283-9e89-f8e82c89ceeb","block_type":"box","text":"Investor A, Investor A1 or Investor P Shares of a Fund through certain financial advisers, selected securities dealers","page_number":154,"box":{"x":70,"y":423,"width":825,"height":11}},{"id":"6aa77ef8-d5ee-4e5a-913c-8d1dfd3052fe","block_type":"box","text":"and other financial intermediaries that meet and adhere to standards established by the Manager from time to time.","page_number":154,"box":{"x":69,"y":438,"width":830,"height":11}},{"id":"9e025691-7501-4736-bcf6-0f9116b9f70b","block_type":"box","text":"Deferred Sales Charge Alternative — Investor C Shares","page_number":154,"box":{"x":69,"y":468,"width":405,"height":11}},{"id":"08f0fad7-187b-4bb3-b26f-231ce83739b1","block_type":"box","text":"Investors choosing the deferred sales charge alternative should consider Investor C Shares if they are uncertain","page_number":154,"box":{"x":102,"y":491,"width":799,"height":11}},{"id":"07ced1b1-994a-4678-b9f0-64278fda1366","block_type":"box","text":"as to the length of time they intend to hold their assets in a Fund. If you select Investor C Shares, you do not pay an","page_number":154,"box":{"x":69,"y":506,"width":828,"height":11}},{"id":"b4c48af4-eef8-4a62-80d8-4ad304f516fa","block_type":"box","text":"initial sales charge at the time of purchase. A Fund will not accept a purchase order of $500,000 or more for","page_number":154,"box":{"x":70,"y":520,"width":778,"height":12}},{"id":"01bfb2f6-2e3c-463d-9a9e-decb0c963a3e","block_type":"box","text":"Investor C Shares (may be lower on funds that have set a lower breakpoint for NAV). Your financial intermediary may","page_number":154,"box":{"x":70,"y":536,"width":826,"height":11}},{"id":"73b28d15-a5fe-4114-a044-a03e51b3d5ba","block_type":"box","text":"set a lower maximum for Investor C Shares.","page_number":154,"box":{"x":69,"y":551,"width":311,"height":9}},{"id":"dc2fd2ee-60d6-47ca-8531-6f6a4b223c88","block_type":"box","text":"Investor C Shares are not available in accounts opened or held directly with a Fund that do not have a financial","page_number":154,"box":{"x":102,"y":574,"width":789,"height":11}},{"id":"2cc66f26-c4ee-4f4c-8be6-a980c7d6c5dc","block_type":"box","text":"intermediary associated with the account.","page_number":154,"box":{"x":70,"y":589,"width":297,"height":11}},{"id":"101c2d18-f1c7-4b71-b669-8b2ff693c524","block_type":"box","text":"If you select Investor C Shares, you do not pay an initial sales charge at the time of purchase.","page_number":154,"box":{"x":102,"y":612,"width":669,"height":11}},{"id":"85c2a281-de31-4fdb-a13c-5896b49a06f1","block_type":"box","text":"The deferred sales charge alternatives may be particularly appealing to investors who do not qualify for the","page_number":154,"box":{"x":101,"y":634,"width":763,"height":12}},{"id":"a3141791-b864-4e27-b1e9-32a14791477d","block_type":"box","text":"reduction in initial sales charges. CDSC shares are subject to ongoing service fees and distribution fees; however,","page_number":154,"box":{"x":69,"y":649,"width":815,"height":12}},{"id":"8a49039c-e60e-468a-acac-e592600ad35c","block_type":"box","text":"these fees potentially may be offset to the extent any return is realized on the additional funds initially invested in","page_number":154,"box":{"x":68,"y":664,"width":813,"height":12}},{"id":"c120fbfb-719a-461c-983f-3d532b7beda3","block_type":"box","text":"CDSC shares.","page_number":154,"box":{"x":69,"y":680,"width":97,"height":9}},{"id":"0c334bab-68b8-4403-94f0-29396bee250d","block_type":"box","text":"BlackRock compensates financial advisers and other financial intermediaries for selling CDSC shares at the time","page_number":154,"box":{"x":102,"y":702,"width":804,"height":12}},{"id":"f335613e-43ae-4810-a6ee-dc3314f1c81a","block_type":"box","text":"of purchase from its own funds. Proceeds from the CDSC and the distribution fee are paid to the Distributor and are","page_number":154,"box":{"x":69,"y":717,"width":827,"height":11}},{"id":"afc1e88d-df47-4d76-8c93-810c143ac2ae","block_type":"box","text":"used by the Distributor to defray the expenses of securities dealers or other financial intermediaries related to","page_number":154,"box":{"x":69,"y":732,"width":786,"height":12}},{"id":"b83748fa-b5d2-4a53-b441-69d9ca6f646d","block_type":"box","text":"providing distribution-related services to each Fund in connection with the sale of the CDSC shares. The combination","page_number":154,"box":{"x":70,"y":748,"width":831,"height":11}},{"id":"9baa3c98-33a0-44c6-8a0c-a7aaf3dbb452","block_type":"box","text":"of the CDSC and the ongoing distribution fee facilitates the ability of each Fund to sell the CDSC shares without a","page_number":154,"box":{"x":69,"y":763,"width":809,"height":11}},{"id":"c7e5a074-b4b5-4daf-9d0f-112d084d0c21","block_type":"box","text":"sales charge being deducted at the time of purchase. See “Distribution and/or Shareholder Servicing Plans” below.","page_number":154,"box":{"x":69,"y":778,"width":824,"height":11}},{"id":"e6ba53cc-9543-48b9-ac4d-95148d1b41cb","block_type":"box","text":"Imposition of the CDSC and the distribution fee on CDSC shares is limited by FINRA (as defined below) asset-based","page_number":154,"box":{"x":70,"y":793,"width":822,"height":11}},{"id":"88834913-09af-46c7-b183-583f82436d05","block_type":"box","text":"sales charge rule. See “Limitations on the Payment of Deferred Sales Charges” below.","page_number":154,"box":{"x":69,"y":808,"width":618,"height":11}},{"id":"8946e0a0-3fe4-4c00-b429-2c83b100a556","block_type":"box","text":"Dealers will generally immediately receive commissions equal to 1.00% of the Investor C Shares sold by them","page_number":154,"box":{"x":102,"y":831,"width":782,"height":11}},{"id":"e259918d-d0da-412c-b924-6a4e09360ef9","block_type":"box","text":"plus ongoing fees under the Fund’s Distribution and Service Plan. Dealers may not receive a commission in","page_number":154,"box":{"x":70,"y":846,"width":764,"height":11}},{"id":"4d91b003-12d1-4a37-b02b-0f8e736fcf08","block_type":"box","text":"connection with sales of Investor C Shares to certain employer-sponsored retirement plans sponsored by the Fund,","page_number":154,"box":{"x":69,"y":861,"width":820,"height":11}},{"id":"26916651-c0e4-4ad2-b257-6dd4baab0fb5","block_type":"box","text":"BlackRock or its affiliates, but may receive fees under the Distribution and Service Plan. These commissions and","page_number":154,"box":{"x":70,"y":876,"width":806,"height":11}},{"id":"2c523b53-da2a-4785-9280-7cb073ba8da3","block_type":"box","text":"payments may be different than the reallowances, placement fees and commissions paid to dealers in connection","page_number":154,"box":{"x":70,"y":891,"width":813,"height":11}},{"id":"f7aa34f3-b607-4d9e-9182-c3693ad06027","block_type":"box","text":"II-105","page_number":154,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"694d8a0f-4a95-435a-841e-417a17f7884c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":154,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"205aa3bf-38d6-4427-a780-dfdb851ea357","block_type":"box","text":"with sales of Investor A, Investor A1 and Investor P Shares. These may depend upon the policies, procedures and","page_number":155,"box":{"x":68,"y":45,"width":811,"height":11}},{"id":"9537855f-ced3-4dc1-acba-2f1878502f35","block_type":"box","text":"trading platforms of your financial intermediary; consult your financial adviser.","page_number":155,"box":{"x":68,"y":60,"width":554,"height":11}},{"id":"4f2820ef-7441-44b7-a494-5fed6edb135b","block_type":"box","text":"Each Fund has adopted an automatic conversion feature for Investor C Shares. Effective November 23, 2020,","page_number":155,"box":{"x":102,"y":82,"width":783,"height":11}},{"id":"94826fe7-e30b-4102-be83-d5676223cf5a","block_type":"box","text":"Investor C Shares held for approximately eight years will be converted into Investor A Shares, as set forth in each","page_number":155,"box":{"x":70,"y":98,"width":808,"height":11}},{"id":"869583fe-a1bb-4fba-b4c2-88dbe6846806","block_type":"box","text":"Fund’s Prospectus. In addition, accounts that do not have a financial intermediary associated with them are not","page_number":155,"box":{"x":70,"y":113,"width":797,"height":11}},{"id":"714e9173-256a-4a21-9c05-b2320fe75d8c","block_type":"box","text":"eligible to hold Investor C Shares, and any Investor C Shares held in such accounts will be automatically converted to","page_number":155,"box":{"x":69,"y":128,"width":837,"height":11}},{"id":"e9bd100f-f22b-4f3a-931a-9eacb11139f5","block_type":"box","text":"Investor A Shares.","page_number":155,"box":{"x":70,"y":143,"width":128,"height":9}},{"id":"bfa773de-19f3-4bed-90c8-db0af71616df","block_type":"box","text":"Conversion of Investor C Shares to Investor A Shares","page_number":155,"box":{"x":102,"y":166,"width":378,"height":9}},{"id":"b66259b8-4f75-489b-8fa3-d2a83baccc40","block_type":"box","text":"Effective November 23, 2020 (the “Effective Date”), approximately eight years after purchase, Investor C Shares","page_number":155,"box":{"x":102,"y":188,"width":804,"height":12}},{"id":"2719f8a0-a85a-4da4-aa05-712165829408","block_type":"box","text":"of each Fund will convert automatically into Investor A Shares of that Fund (the “Investor C 8-Year Conversion”).","page_number":155,"box":{"x":69,"y":203,"width":794,"height":12}},{"id":"a13c0467-5069-4340-96a6-b4e4b763c8a2","block_type":"box","text":"Certain funds (the “Predecessor Funds”) were reorganized into new Funds (the “Successor Funds”) pursuant to","page_number":155,"box":{"x":69,"y":218,"width":794,"height":12}},{"id":"a954a679-be59-43b8-99f9-70de29121f6c","block_type":"box","text":"reorganizations which occurred in September 2018. The holding period for Investor C Shares of Successor Funds","page_number":155,"box":{"x":69,"y":234,"width":806,"height":11}},{"id":"31667999-30ca-4ca2-b0a0-ee074d17e5c8","block_type":"box","text":"includes the period such shares were held in the respective Predecessor Fund. It is the financial intermediary’s","page_number":155,"box":{"x":70,"y":249,"width":793,"height":11}},{"id":"09a8e9ca-eb3a-4a08-a559-82cea8fdce30","block_type":"box","text":"responsibility to ensure that the shareholder is credited with the proper holding period. As of the Effective Date,","page_number":155,"box":{"x":69,"y":264,"width":796,"height":11}},{"id":"cd44c2c2-8765-416e-a0a4-f999e405151f","block_type":"box","text":"certain financial intermediaries, including group retirement recordkeeping platforms, may not have been tracking","page_number":155,"box":{"x":69,"y":279,"width":802,"height":11}},{"id":"63e584ee-4f46-48a2-9c93-941549d19bce","block_type":"box","text":"such holding periods and therefore may not be able to process such conversions. In such instances, Investor C","page_number":155,"box":{"x":69,"y":294,"width":793,"height":11}},{"id":"32c6bac6-0f4b-42a6-986b-ca12b9c0bcc5","block_type":"box","text":"Shares held as of the Effective Date will automatically convert to Investor A Shares approximately eight years after","page_number":155,"box":{"x":69,"y":309,"width":817,"height":11}},{"id":"31227d2a-32c2-428d-a83c-f6822f14ab1f","block_type":"box","text":"the Effective Date. If, as of November 23, 2028 (eight years after the Effective Date), a financial intermediary has","page_number":155,"box":{"x":68,"y":324,"width":814,"height":12}},{"id":"31ddf606-cfca-45a6-b392-2544d51781c7","block_type":"box","text":"not implemented systems or procedures to track holding periods commencing from the Effective Date, shareholders","page_number":155,"box":{"x":69,"y":339,"width":828,"height":12}},{"id":"08665ab1-d3b3-40af-a4cd-e4c9f11ed934","block_type":"box","text":"holding Investor C Shares through such financial intermediary will no longer be eligible to hold Investor C Shares and","page_number":155,"box":{"x":69,"y":355,"width":832,"height":11}},{"id":"d826a462-b4e8-4e7c-8b04-3d553d07a8cd","block_type":"box","text":"any such shares will convert to Investor A Shares as soon as reasonably practicable after such date.","page_number":155,"box":{"x":69,"y":370,"width":718,"height":11}},{"id":"45d7e78a-9058-4011-a856-9be28500324a","block_type":"box","text":"In addition, accounts that do not have a financial intermediary associated with them are not eligible to hold","page_number":155,"box":{"x":102,"y":392,"width":764,"height":12}},{"id":"161e5f91-856a-4a6f-9703-51af88ee6661","block_type":"box","text":"Investor C Shares, and any Investor C Shares held in such accounts will be automatically converted into Investor A","page_number":155,"box":{"x":70,"y":408,"width":816,"height":11}},{"id":"172bcaa6-a097-41b2-9a1b-f6b11bdcabf8","block_type":"box","text":"Shares (the “Investor C Direct Accounts Conversion” and together with the Investor C 8-Year Conversion, the","page_number":155,"box":{"x":69,"y":423,"width":772,"height":11}},{"id":"74ede273-bf43-4cfa-a710-2e50e2e6c6ac","block_type":"box","text":"“Investor C Conversions”).","page_number":155,"box":{"x":70,"y":438,"width":186,"height":11}},{"id":"32fcb2b0-0022-4677-a1eb-5a4f3b1bda17","block_type":"box","text":"The Investor C Conversions will occur at least once each month (on the “Investor C Conversion Date”) on the","page_number":155,"box":{"x":101,"y":460,"width":776,"height":11}},{"id":"c739e279-6391-47ef-8597-fb1511afed58","block_type":"box","text":"basis of the relative NAV of the shares of the two applicable classes on the Investor C Conversion Date, without the","page_number":155,"box":{"x":69,"y":475,"width":824,"height":11}},{"id":"81c93b2f-f75a-41d6-8d76-9c6108501742","block_type":"box","text":"imposition of any sales load, fee or other charge. The Investor C Conversions will not be deemed a purchase or sale","page_number":155,"box":{"x":70,"y":491,"width":827,"height":11}},{"id":"9667ce9d-621f-4f96-bb7d-639b4626926c","block_type":"box","text":"of the shares for U.S. federal income tax purposes. Shares acquired through reinvestment of dividends on Investor C","page_number":155,"box":{"x":69,"y":506,"width":833,"height":11}},{"id":"d78e6983-1693-460f-a8ed-dbda12db7d50","block_type":"box","text":"Shares will also convert automatically to Investor A Shares, as set forth in each Fund’s Prospectus. The Investor C","page_number":155,"box":{"x":69,"y":521,"width":818,"height":11}},{"id":"9ebf6bbd-46fd-46ea-81a6-c857dbf00648","block_type":"box","text":"Conversion Date for dividend reinvestment shares will be calculated taking into account the length of time the shares","page_number":155,"box":{"x":69,"y":536,"width":836,"height":11}},{"id":"1e79781a-3201-4c75-ab37-4acb69362cd0","block_type":"box","text":"underlying the dividend reinvestment shares were outstanding.","page_number":155,"box":{"x":69,"y":551,"width":445,"height":11}},{"id":"211b57f6-ac76-4971-90fb-f2f98f73726a","block_type":"box","text":"Contingent Deferred Sales Charge — Investor C Shares","page_number":155,"box":{"x":102,"y":574,"width":396,"height":11}},{"id":"5a374764-23a7-4882-9f48-541e01e593dc","block_type":"box","text":"Investor C Shares that are redeemed within one year of purchase may be subject to a 1.00% CDSC charged as a","page_number":155,"box":{"x":102,"y":596,"width":804,"height":12}},{"id":"37eabeef-9565-43b8-9133-a83cf72ea4c8","block_type":"box","text":"percentage of the dollar amount subject thereto. In determining whether an Investor C Shares CDSC is applicable to","page_number":155,"box":{"x":70,"y":612,"width":826,"height":11}},{"id":"64c01b20-4032-4121-8da5-9bc9dfdb4a6e","block_type":"box","text":"a redemption, the calculation will be determined in the manner that results in the lowest possible rate being charged.","page_number":155,"box":{"x":69,"y":627,"width":837,"height":11}},{"id":"fcb5dca2-1c40-4f82-aef3-cab1cfde6e5c","block_type":"box","text":"The charge will be assessed on an amount equal to the lesser of the proceeds of redemption or the cost of the","page_number":155,"box":{"x":68,"y":642,"width":795,"height":11}},{"id":"e8d1c453-eb11-45d2-8468-08c5308347f1","block_type":"box","text":"shares being redeemed. Accordingly, no CDSC will be imposed on increases in NAV above the initial purchase price of","page_number":155,"box":{"x":69,"y":657,"width":840,"height":11}},{"id":"2acaf8ec-abcf-4e5d-908c-1c01d71c1bfd","block_type":"box","text":"Investor C Shares. In addition, no CDSC will be assessed on Investor C Shares acquired through reinvestment of","page_number":155,"box":{"x":70,"y":672,"width":804,"height":11}},{"id":"4a2a2212-2687-40ac-8eab-75657233aab6","block_type":"box","text":"dividends. It will be assumed that the redemption is first of shares held for over one year or shares acquired","page_number":155,"box":{"x":69,"y":687,"width":772,"height":11}},{"id":"34f74284-a239-4a29-beb8-cbcb23fa74c5","block_type":"box","text":"pursuant to reinvestment of dividends and then of shares held longest during the one-year period. A transfer of","page_number":155,"box":{"x":70,"y":702,"width":790,"height":12}},{"id":"d2a08cac-a87d-4b67-b9da-a8aad8e54b01","block_type":"box","text":"shares from a shareholder’s account to another account will be assumed to be made in the same order as a","page_number":155,"box":{"x":69,"y":717,"width":776,"height":9}},{"id":"d505e92a-b0f7-42e7-a84a-ab7799b89e2a","block_type":"box","text":"redemption.","page_number":155,"box":{"x":69,"y":733,"width":83,"height":10}},{"id":"3479f8fa-a994-4c48-b413-2621390081d0","block_type":"box","text":"See “Information on Sales Charges and Distribution Related Expenses” in Part I of each Fund’s SAI for","page_number":155,"box":{"x":102,"y":755,"width":734,"height":11}},{"id":"2c63c7d0-ba95-4f5e-b400-cc469949cb31","block_type":"box","text":"information about amounts paid to the Distributor in connection with CDSC shares for the periods indicated.","page_number":155,"box":{"x":70,"y":770,"width":769,"height":11}},{"id":"ec833646-10ee-4cae-8dd3-b9975b4e9492","block_type":"box","text":"Investor C Shares — Contingent Deferred Sales Charge Waivers and Reductions","page_number":155,"box":{"x":102,"y":793,"width":572,"height":11}},{"id":"8c25358e-004d-471e-8d66-f2ca3ab1eff4","block_type":"box","text":"The CDSC on Investor C Shares is not charged in connection with: (1) redemptions of Investor C Shares","page_number":155,"box":{"x":101,"y":816,"width":740,"height":11}},{"id":"2eaaeced-5e8f-420c-bfde-6b27b3301f0f","block_type":"box","text":"purchased through certain employer-sponsored retirement plans and fee-based programs previously approved by","page_number":155,"box":{"x":70,"y":831,"width":802,"height":11}},{"id":"81ab9934-0576-43aa-b374-5a0a04451f71","block_type":"box","text":"certain Funds and rollovers of current investments in the Fund through such plans; (2) exchanges described in","page_number":155,"box":{"x":69,"y":846,"width":786,"height":11}},{"id":"39762018-588f-4ded-b62c-1735ea50b940","block_type":"box","text":"“Exchange Privilege” below; (3) redemptions made in connection with minimum required distributions due to the","page_number":155,"box":{"x":70,"y":861,"width":797,"height":11}},{"id":"ba037e99-ec7c-47d6-91a4-d39aa9561a4a","block_type":"box","text":"shareholder reaching age 72 from IRA and 403(b)(7) accounts; (4) redemptions made with respect to certain","page_number":155,"box":{"x":69,"y":876,"width":776,"height":11}},{"id":"bb865913-25c4-4034-8972-0c98a702c2e0","block_type":"box","text":"retirement plans sponsored by the Fund, BlackRock or its affiliates; (5) redemptions in connection with a","page_number":155,"box":{"x":69,"y":891,"width":747,"height":11}},{"id":"ce4f26c4-9397-4057-81c6-9e0263dd6d9b","block_type":"box","text":"shareholder’s death as long as the waiver request is made within one year of death or, if later, reasonably promptly","page_number":155,"box":{"x":69,"y":906,"width":822,"height":12}},{"id":"10bc3c38-9959-4117-8cb4-d228634bf66b","block_type":"box","text":"II-106","page_number":155,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"6952d138-49e7-424d-bd30-e1a77bf4cf49","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":155,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"07562d93-af6d-4194-b4ae-de0e86e33f1e","block_type":"box","text":"following completion of probate (including in connection with the distribution of account assets to a beneficiary of the","page_number":156,"box":{"x":68,"y":45,"width":836,"height":11}},{"id":"df27a1e9-97e7-4273-a3c6-52b8857cb2f2","block_type":"box","text":"decedent) or disability (as defined in the Code) subsequent to the purchase of Investor C Shares; (6) withdrawals","page_number":156,"box":{"x":69,"y":60,"width":806,"height":11}},{"id":"5ea26a06-e536-4bf9-91b1-0c812329e69b","block_type":"box","text":"resulting from shareholder disability (as defined in the Code) as long as the disability arose subsequent to the","page_number":156,"box":{"x":69,"y":75,"width":786,"height":11}},{"id":"d2ad57d7-d98a-40ae-9c71-75bfbc6d0c59","block_type":"box","text":"purchase of the shares; (7) involuntary redemptions of Investor C Shares in accounts with low balances as described","page_number":156,"box":{"x":70,"y":90,"width":834,"height":11}},{"id":"22c4a53d-9e9a-4ea9-a9a1-495cfb70cc27","block_type":"box","text":"in “Redemption of Shares” below; (8) redemptions made pursuant to a systematic withdrawal plan, subject to the","page_number":156,"box":{"x":70,"y":105,"width":809,"height":11}},{"id":"8f49215e-205f-4d26-9528-b1bfa0b90b7c","block_type":"box","text":"limitations set forth under “Systematic Withdrawal Plan” below; (9) redemptions related to the payment of BNY","page_number":156,"box":{"x":70,"y":120,"width":791,"height":11}},{"id":"68248b66-56ab-4cff-ab82-20cd4a411117","block_type":"box","text":"Mellon Investment Servicing Trust Company custodial IRA fees; and (10) redemptions when a shareholder can","page_number":156,"box":{"x":70,"y":135,"width":784,"height":12}},{"id":"708f84fd-afa8-42ff-8ed4-aeb5fa862ccc","block_type":"box","text":"demonstrate hardship, in the absolute discretion of the Fund. In addition, no CDSC is charged on Investor C Shares","page_number":156,"box":{"x":69,"y":150,"width":824,"height":12}},{"id":"19d726a3-280f-40fb-ac8b-c5abf04e3b83","block_type":"box","text":"acquired through the reinvestment of dividends or distributions.","page_number":156,"box":{"x":69,"y":166,"width":451,"height":11}},{"id":"7b864efc-404d-499b-9825-ad24404e6ca3","block_type":"box","text":"Certain CDSC waivers and reductions on Investor C Shares may be available to customers of certain financial","page_number":156,"box":{"x":102,"y":188,"width":781,"height":11}},{"id":"4c6fbd24-da81-49de-8a4f-bf7e7231aa56","block_type":"box","text":"intermediaries, as described under “Intermediary-Defined Sales Charge Waiver Policies” in the Fund’s Prospectus.","page_number":156,"box":{"x":70,"y":203,"width":813,"height":12}},{"id":"36f359e9-54de-432b-a31d-63080f5c9ac0","block_type":"box","text":"Please speak to your financial intermediary for more information.","page_number":156,"box":{"x":69,"y":218,"width":462,"height":12}},{"id":"ceaa9d65-b875-4619-b18b-1aabbb5b9d15","block_type":"box","text":"Class R Shares","page_number":156,"box":{"x":69,"y":249,"width":110,"height":9}},{"id":"c8e07abb-c802-45e3-bd63-2d47306b657d","block_type":"box","text":"Certain of the Funds offer Class R Shares as described in each such Fund’s Prospectus. Class R Shares are","page_number":156,"box":{"x":102,"y":271,"width":775,"height":11}},{"id":"9c34b2a6-ab0d-40dd-9de2-f75d9a52f5cf","block_type":"box","text":"available only to certain employer-sponsored retirement plans. Class R Shares are not subject to an initial sales","page_number":156,"box":{"x":69,"y":287,"width":799,"height":11}},{"id":"cb1ad1a2-1dc4-43b3-bfaa-52994fd512b9","block_type":"box","text":"charge or a CDSC but are subject to an ongoing distribution fee of 0.25% per year and an ongoing service fee of","page_number":156,"box":{"x":69,"y":302,"width":801,"height":11}},{"id":"1ff21471-0dc0-44b5-9a10-ba67e7b4b10d","block_type":"box","text":"0.25% per year. Distribution fees are used to support the Fund’s marketing and distribution efforts, such as","page_number":156,"box":{"x":69,"y":317,"width":772,"height":11}},{"id":"f6b135c1-36ce-4cac-a90a-dcd4fd66f0b3","block_type":"box","text":"compensating financial advisers and other financial intermediaries, advertising and promotion. Service fees are used","page_number":156,"box":{"x":69,"y":332,"width":836,"height":11}},{"id":"f566f640-d69b-4c4d-a950-ac2c91f48ad7","block_type":"box","text":"to compensate securities dealers and other financial intermediaries for service activities.","page_number":156,"box":{"x":68,"y":347,"width":636,"height":11}},{"id":"eb9b4469-5acb-4c43-9397-a628ce82f31f","block_type":"box","text":"If Class R Shares are held over time, these fees may exceed the maximum sales charge that an investor would","page_number":156,"box":{"x":102,"y":370,"width":791,"height":11}},{"id":"5c270333-db9d-4ef2-8a4d-c234aec340c8","block_type":"box","text":"have paid as a shareholder of one of the other share classes.","page_number":156,"box":{"x":69,"y":385,"width":440,"height":11}},{"id":"317814af-cb2d-47f4-84e5-1b8c34efe2f6","block_type":"box","text":"Class K Shares","page_number":156,"box":{"x":69,"y":415,"width":109,"height":9}},{"id":"1a16f283-3378-46a4-b6bf-82e8beecd091","block_type":"box","text":"Certain Funds offer Class K Shares as described in each such Fund’s Prospectus. Class K Shares are available","page_number":156,"box":{"x":102,"y":438,"width":797,"height":11}},{"id":"ac31bee8-0d80-47bf-a4a5-6ad97a701f08","block_type":"box","text":"only to (i) certain employee benefit plans, such as health savings accounts, and certain employer-sponsored","page_number":156,"box":{"x":69,"y":453,"width":772,"height":11}},{"id":"617aa3d0-e7bf-4dc8-b36e-92a74892a9f1","block_type":"box","text":"retirement plans (not including SEP IRAs, SIMPLE IRAs and SARSEPs) (collectively, “Employer-Sponsored Retirement","page_number":156,"box":{"x":69,"y":468,"width":827,"height":11}},{"id":"e90a41ba-ea71-4dec-91f0-8e6d86f1b0b6","block_type":"box","text":"Plans”), (ii) collective trust funds, investment companies and other pooled investment vehicles, each of which may","page_number":156,"box":{"x":69,"y":483,"width":817,"height":11}},{"id":"b424b885-2222-408a-8608-8d3dfdb1a3ac","block_type":"box","text":"purchase shares of the Fund through a financial intermediary that has entered into an agreement with the Distributor","page_number":156,"box":{"x":70,"y":498,"width":834,"height":11}},{"id":"b6cbde04-fd95-42fc-adac-fbbe81ef5bf5","block_type":"box","text":"to purchase such shares, (iii) “Institutional Investors,” which include but are not limited to, endowments,","page_number":156,"box":{"x":68,"y":514,"width":748,"height":10}},{"id":"fe4db0aa-e869-4212-aeff-95f657ed15f4","block_type":"box","text":"foundations, family offices, banks and bank trusts, local, city, and state governmental institutions, corporations and","page_number":156,"box":{"x":68,"y":528,"width":828,"height":12}},{"id":"89deb936-2c18-4130-a62f-2ec9cfc50a25","block_type":"box","text":"insurance company separate accounts, each of which may purchase shares of the Fund through a financial","page_number":156,"box":{"x":70,"y":543,"width":760,"height":12}},{"id":"fd99069b-6660-4ecc-ab82-dc3e81850385","block_type":"box","text":"intermediary that has entered into an agreement with the Distributor to purchase such shares, (iv) clients of private","page_number":156,"box":{"x":70,"y":559,"width":823,"height":11}},{"id":"0bf1e17f-1137-4262-a252-32583155cf2f","block_type":"box","text":"banks that purchase shares of the Fund through a financial intermediary that has entered into an agreement with the","page_number":156,"box":{"x":69,"y":574,"width":836,"height":11}},{"id":"e3cf7876-d52d-48bc-87f5-6e2fa9f2b867","block_type":"box","text":"Distributor to sell such shares; (v) fee-based advisory platforms of a financial intermediary that (a) has specifically","page_number":156,"box":{"x":70,"y":589,"width":814,"height":11}},{"id":"e0ccf20c-35fb-46a6-833c-dbfcd1f9af24","block_type":"box","text":"acknowledged in a written agreement with the Distributor and/or its affiliate(s) that the financial intermediary shall","page_number":156,"box":{"x":69,"y":604,"width":817,"height":11}},{"id":"da9fc6be-3138-4ab6-84a1-3c12de28a4fc","block_type":"box","text":"offer such shares to fee-based advisory clients through an omnibus account held at the Fund or (b) transacts in the","page_number":156,"box":{"x":69,"y":619,"width":823,"height":11}},{"id":"1e05c733-fa77-4922-95ea-cb7d08f52ef2","block_type":"box","text":"Fund’s shares through another intermediary that has executed such an agreement and (vi) any other investors who","page_number":156,"box":{"x":70,"y":634,"width":818,"height":12}},{"id":"f50d219a-f79e-42cd-9706-d577557f45f4","block_type":"box","text":"met the eligibility criteria for BlackRock Shares or Class K Shares prior to August 15, 2016 and have continually held","page_number":156,"box":{"x":69,"y":649,"width":833,"height":12}},{"id":"2e03869d-a442-4948-911b-90bf114041c6","block_type":"box","text":"Class K Shares of the Fund or the respective Predecessor Fund in the same account since August 15, 2016. The","page_number":156,"box":{"x":69,"y":664,"width":807,"height":12}},{"id":"8862f987-e9a6-483b-a130-03595588b935","block_type":"box","text":"agreement referenced in (iv) above shall appear in a supplemental agreement to any selling, sub-transfer agent, or","page_number":156,"box":{"x":69,"y":680,"width":817,"height":11}},{"id":"ad0b13c6-6558-44eb-bb10-da3f4ac5c104","block_type":"box","text":"distribution and marketing agreement.","page_number":156,"box":{"x":69,"y":695,"width":270,"height":11}},{"id":"83de9a13-0d5f-473f-9514-85fd58337d21","block_type":"box","text":"Class K Shares are also available to employees, officers and directors/trustees of BlackRock, Inc. and","page_number":156,"box":{"x":102,"y":717,"width":734,"height":12}},{"id":"b52c1e78-f5f9-4bfc-a23f-17e7a0d966e7","block_type":"box","text":"BlackRock Funds and immediate family members of such persons, if they open an account directly with BlackRock.","page_number":156,"box":{"x":70,"y":732,"width":817,"height":12}},{"id":"d65c3745-3a07-46f6-9d08-f62e7169df56","block_type":"box","text":"Eligible individuals who would like to convert existing holdings to Class K Shares must contact BlackRock.","page_number":156,"box":{"x":70,"y":748,"width":753,"height":11}},{"id":"780a6e09-1f66-4c16-9755-3e46877827c8","block_type":"box","text":"Class G Shares","page_number":156,"box":{"x":69,"y":778,"width":110,"height":9}},{"id":"f266e4d7-93e0-4380-b4ba-fa4a258c1cf2","block_type":"box","text":"Certain Funds offer Class G Shares, which are available only to investors on eligible platforms. Eligible platforms","page_number":156,"box":{"x":102,"y":801,"width":804,"height":11}},{"id":"2ba732cf-a9d7-4139-aeda-a30bd1b35f6c","block_type":"box","text":"are those where clients invest in the Fund through a single omnibus account in the name of a financial intermediary","page_number":156,"box":{"x":69,"y":816,"width":826,"height":11}},{"id":"6870ab8a-95f4-4d03-aaa2-0384327053ea","block_type":"box","text":"that meets an initial investment minimum of $2 billion. For clients investing through such eligible platforms, the Fund","page_number":156,"box":{"x":68,"y":830,"width":836,"height":12}},{"id":"156de951-5d62-4941-9ae4-9d6333ffcdec","block_type":"box","text":"does not impose investment minimums on any individual investor. Financial intermediaries may impose separate","page_number":156,"box":{"x":69,"y":846,"width":803,"height":11}},{"id":"d6351d2e-2ac5-4c4c-a714-1843c961dd0b","block_type":"box","text":"eligibility requirements.","page_number":156,"box":{"x":69,"y":861,"width":164,"height":11}},{"id":"e3b44f94-bb9b-45bf-a790-32f355b6ac4f","block_type":"box","text":"II-107","page_number":156,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"a4319e23-1877-4680-8e49-21bb2555b7bb","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":156,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"441e4036-d0e7-4558-9e6a-931b389584c7","block_type":"box","text":"Service Shares","page_number":157,"box":{"x":68,"y":45,"width":109,"height":9}},{"id":"34ef3b81-5721-4d9c-ba75-e00a20f3b157","block_type":"box","text":"Certain Funds offer Service Shares, which are available only to certain investors, including: (i) certain financial","page_number":157,"box":{"x":102,"y":67,"width":788,"height":12}},{"id":"dd9e0e5c-6673-4682-ac44-f1c9bccb23ce","block_type":"box","text":"institutions, such as banks and brokerage firms, acting on behalf of their customers; (ii) certain persons who were","page_number":157,"box":{"x":70,"y":82,"width":815,"height":12}},{"id":"4de3902a-6a43-4362-8d4a-979fe2c7a783","block_type":"box","text":"shareholders of the Compass Capital Group of Funds at the time of its combination with The PNC","page_number":157,"box":{"x":69,"y":98,"width":693,"height":11}},{"id":"b874a889-4dfc-4260-a5ba-66a4df0447e4","block_type":"box","text":"®","page_number":157,"box":{"x":763,"y":98,"width":6,"height":4}},{"id":"06655026-eaeb-42d5-be57-c982cb2f5356","block_type":"box","text":"Fund in 1996; and","page_number":157,"box":{"x":775,"y":98,"width":130,"height":10}},{"id":"a7f2d89e-2e39-4ce3-a455-99338241b472","block_type":"box","text":"(iii) participants in the Capital Directions","page_number":157,"box":{"x":69,"y":113,"width":287,"height":11}},{"id":"5c2b0eb9-8a44-4a36-9db8-5997b25ab72b","block_type":"box","text":"SM","page_number":157,"box":{"x":357,"y":113,"width":11,"height":5}},{"id":"54b30ad1-b569-40ef-af53-4dcfb87dce3a","block_type":"box","text":"asset allocation program. Service Shares are not subject to an initial sales","page_number":157,"box":{"x":374,"y":113,"width":534,"height":11}},{"id":"7cf5c7fa-b86e-473a-a994-5e4d45ef4d1e","block_type":"box","text":"charge or a CDSC but are subject to an ongoing service fee as set forth in the applicable Fund’s Prospectus.","page_number":157,"box":{"x":69,"y":128,"width":776,"height":11}},{"id":"c6c2ce4b-439d-4837-aafa-6ed2beac5db1","block_type":"box","text":"BlackRock Shares","page_number":157,"box":{"x":69,"y":158,"width":133,"height":9}},{"id":"177ab3c0-c992-4cc4-a908-921c9477eb65","block_type":"box","text":"Certain Funds offer BlackRock Shares, which are available only to certain investors. BlackRock Shares are","page_number":157,"box":{"x":102,"y":181,"width":760,"height":11}},{"id":"355eb2df-7543-4537-9ecf-377540b8b4b4","block_type":"box","text":"offered without a sales charge to institutional and individual investors, registered investment advisers and certain","page_number":157,"box":{"x":69,"y":196,"width":813,"height":11}},{"id":"d0fc63e1-6e06-403f-9f99-ce79a33bd7e9","block_type":"box","text":"fee-based programs.","page_number":157,"box":{"x":68,"y":211,"width":145,"height":11}},{"id":"c2fa79c6-5e79-40c0-8375-1bd87569b4b6","block_type":"box","text":"Distribution and/or Shareholder Servicing Plans","page_number":157,"box":{"x":69,"y":241,"width":348,"height":11}},{"id":"e0c7d0ec-5248-4943-b0be-77c3af5659b8","block_type":"box","text":"Each Fund has adopted a plan (each, a “Plan”) pursuant to Rule 12b-1 under the Investment Company Act with","page_number":157,"box":{"x":102,"y":264,"width":790,"height":11}},{"id":"f36a6fe5-c37e-4683-8423-e39f22545b0e","block_type":"box","text":"respect to certain share classes that allows the Fund to pay distribution fees for the sale of its shares and","page_number":157,"box":{"x":69,"y":279,"width":761,"height":11}},{"id":"55cc0464-ab08-4e83-9203-a942e10f6138","block_type":"box","text":"shareholder servicing fees for certain services provided to its shareholders.","page_number":157,"box":{"x":69,"y":294,"width":541,"height":11}},{"id":"023ac192-8cec-4287-aaf5-bbe0ef56f463","block_type":"box","text":"Pursuant to the Plans, a Fund may pay BRIL and/or BlackRock, or any other affiliate or significant shareholder of","page_number":157,"box":{"x":102,"y":317,"width":803,"height":11}},{"id":"be79ee1a-daa9-4ee0-b2ee-86423fd06695","block_type":"box","text":"BlackRock, fees for distribution and sales support services with respect to Investor A, Investor A1, Investor C,","page_number":157,"box":{"x":70,"y":332,"width":783,"height":11}},{"id":"9ba0631a-e48a-46de-8094-f2c63cf80bf2","block_type":"box","text":"Investor P, Service and Class R Shares. Currently, as described further below, only Investor C and Class R Shares","page_number":157,"box":{"x":70,"y":347,"width":809,"height":11}},{"id":"108a00ae-b799-4ec5-ab7f-507eed7a27ab","block_type":"box","text":"bear the expense of distribution fees under a Plan.","page_number":157,"box":{"x":69,"y":362,"width":360,"height":11}},{"id":"81bf0cc2-3680-4b1b-8b67-f9e0fe26a181","block_type":"box","text":"Each Fund has entered into a distribution agreement with BRIL under which BRIL, as agent, offers shares of","page_number":157,"box":{"x":102,"y":385,"width":770,"height":11}},{"id":"80064462-ad56-408c-b7ae-4f79ddd93a70","block_type":"box","text":"each Fund on a continuous basis. BRIL has agreed to use appropriate efforts to effect sales of the shares, but it is","page_number":157,"box":{"x":69,"y":400,"width":824,"height":11}},{"id":"01a36bc5-d1be-47cb-8c07-5ffcdb01e590","block_type":"box","text":"not obligated to sell any particular amount of shares. BRIL’s principal business address is 50 Hudson Yards, New","page_number":157,"box":{"x":69,"y":415,"width":812,"height":11}},{"id":"97f89dd2-398f-46a7-a776-53b321c053cb","block_type":"box","text":"York, NY 10001. BRIL is an affiliate of BlackRock.","page_number":157,"box":{"x":68,"y":430,"width":355,"height":11}},{"id":"3dc2f003-4a9b-4820-a264-fc3d9398edbf","block_type":"box","text":"Pursuant to the Plans, each Fund may also pay shareholder servicing fees (also referred to as general","page_number":157,"box":{"x":102,"y":453,"width":727,"height":11}},{"id":"6ee583a2-b364-411b-9416-7fcacb3d4260","block_type":"box","text":"shareholder liaison services fees) to affiliated and unaffiliated brokers, dealers, financial institutions, insurance","page_number":157,"box":{"x":69,"y":468,"width":799,"height":11}},{"id":"a03fa61b-e247-4f00-810a-4ea36f3a1748","block_type":"box","text":"companies, retirement plan record-keepers and other financial intermediaries (including BlackRock, BRIL and their","page_number":157,"box":{"x":69,"y":483,"width":813,"height":11}},{"id":"a398494c-f565-44bc-93c6-ecf8324fcf7d","block_type":"box","text":"affiliates) (collectively, “Service Organizations”) for certain support services rendered by Service Organizations to","page_number":157,"box":{"x":69,"y":498,"width":809,"height":11}},{"id":"63f89b38-ce91-45a6-847a-851be3396c87","block_type":"box","text":"their customers (“Customers”) who are the beneficial owners of Investor A, Investor A1, Investor C, Investor P,","page_number":157,"box":{"x":68,"y":513,"width":786,"height":11}},{"id":"b0f49bb6-3dda-40d6-9b80-8e5a7485da60","block_type":"box","text":"Service and Class R Shares of a Fund. Such services are intended to supplement the services provided by the","page_number":157,"box":{"x":69,"y":528,"width":789,"height":12}},{"id":"db1cfac4-825a-4a27-8343-de6d6ae5e1e5","block_type":"box","text":"Fund’s Administrators and Transfer Agent to the Fund’s shareholders of record.","page_number":157,"box":{"x":70,"y":543,"width":562,"height":12}},{"id":"978e3fae-0350-4a9b-9846-a06f6e7dc8d3","block_type":"box","text":"The support services provided by Service Organizations are general shareholder liaison services, which include,","page_number":157,"box":{"x":101,"y":566,"width":798,"height":11}},{"id":"6adfe962-5567-4998-9ac3-f0a9f3172f6d","block_type":"box","text":"but are not limited to: (i) answering Customer inquiries regarding account status and history, the manner in which","page_number":157,"box":{"x":69,"y":581,"width":808,"height":12}},{"id":"7baa83bd-e892-42ec-9bc0-2180b1a3a1db","block_type":"box","text":"purchases, exchanges and redemptions or repurchases of shares may be effected and certain other matters","page_number":157,"box":{"x":70,"y":596,"width":776,"height":12}},{"id":"7170eebf-5132-4c37-a95d-0adf0d51dbff","block_type":"box","text":"pertaining to the Customers’ investments; and (ii) assisting Customers in designating and changing dividend options,","page_number":157,"box":{"x":70,"y":612,"width":835,"height":11}},{"id":"566c84a4-d97e-4006-8622-0e737ae229bc","block_type":"box","text":"account designations and addresses. The shareholder servicing fees payable pursuant to the Plans are paid to","page_number":157,"box":{"x":69,"y":627,"width":791,"height":11}},{"id":"0ea280ec-9c2c-445d-bdeb-0aff7af389fa","block_type":"box","text":"compensate Service Organizations for the administration and servicing of shareholder accounts and are not costs","page_number":157,"box":{"x":69,"y":642,"width":813,"height":11}},{"id":"c451d122-e1ad-41a7-8605-47dcfa9580d3","block_type":"box","text":"which are primarily intended to result in the sale of the Fund’s shares.","page_number":157,"box":{"x":68,"y":657,"width":501,"height":11}},{"id":"2a98d498-d554-4b59-8337-4487f7b21118","block_type":"box","text":"Payments under the Plans are based on a percentage of average daily net assets attributable to the shares in","page_number":157,"box":{"x":102,"y":680,"width":783,"height":11}},{"id":"80a246da-a694-4dcd-8f25-c9168a80fda0","block_type":"box","text":"the applicable share class regardless of the amount of expenses incurred. As a result, payments under the Plans","page_number":157,"box":{"x":68,"y":695,"width":810,"height":11}},{"id":"561fdbff-03d5-429d-add9-83b7621311a9","block_type":"box","text":"may be more or less than expenses incurred in connection with providing distribution and/or shareholder services","page_number":157,"box":{"x":69,"y":710,"width":813,"height":11}},{"id":"2fbf15d4-a64e-437e-8b17-220ab084c2f1","block_type":"box","text":"with respect to the related class. Information with respect to the payments under the Plans and expenses incurred in","page_number":157,"box":{"x":68,"y":725,"width":836,"height":11}},{"id":"290a83c5-0412-40cb-bd5a-28b692dd3a40","block_type":"box","text":"providing services with respect to the related class is presented to the Directors for their consideration quarterly.","page_number":157,"box":{"x":70,"y":740,"width":805,"height":11}},{"id":"40192063-fab3-4015-b6be-26e8290386e2","block_type":"box","text":"Payments under the Plans consist of the shareholder servicing fees and the distribution fees. Expenses with respect","page_number":157,"box":{"x":69,"y":755,"width":832,"height":11}},{"id":"8518f12a-1d5d-43b7-9ae8-93fd775cf94c","block_type":"box","text":"to providing distribution and/or shareholder services with respect to a class may consist of Service Organization","page_number":157,"box":{"x":68,"y":770,"width":803,"height":12}},{"id":"f4d4d885-7d86-4a37-bcfb-d0e2056f653c","block_type":"box","text":"financial adviser compensation, branch office and regional operation center selling and transaction processing","page_number":157,"box":{"x":68,"y":785,"width":788,"height":12}},{"id":"bc08f242-aae3-4292-b880-755816a2d3f2","block_type":"box","text":"expenses, advertising, sales promotion and marketing expenses. Payments under the Plans with respect to one","page_number":157,"box":{"x":69,"y":801,"width":798,"height":11}},{"id":"88493257-e15a-47b4-82fc-bb77151f072b","block_type":"box","text":"class will not be used to finance the expenditures of another class. Sales personnel may receive different","page_number":157,"box":{"x":69,"y":816,"width":755,"height":11}},{"id":"00a29845-e76c-495b-b173-68ae27b96492","block_type":"box","text":"compensation for selling different classes of shares.","page_number":157,"box":{"x":69,"y":831,"width":375,"height":11}},{"id":"a2d6e795-8155-4de0-b4c1-f7f7d7b1ab8d","block_type":"box","text":"Each Plan is subject to the provisions of Rule 12b-1 under the Investment Company Act. In their consideration of","page_number":157,"box":{"x":102,"y":853,"width":803,"height":12}},{"id":"175a2c73-2a4d-4813-bdb6-d5f1756efa00","block_type":"box","text":"a Plan, the Directors must consider all factors they deem relevant, including information as to the benefits of the Plan","page_number":157,"box":{"x":69,"y":869,"width":839,"height":11}},{"id":"793878ad-cf1c-4e0f-a55b-adf9714bf8b4","block_type":"box","text":"to the Fund and the related class of shareholders. In approving a Plan in accordance with Rule 12b-1, the non","page_number":157,"box":{"x":68,"y":884,"width":788,"height":11}},{"id":"6e7ffdce-3a5f-47f5-9b31-d1c587777b5d","block_type":"box","text":"interested Directors concluded that there is reasonable likelihood that the Plan will benefit the Fund and its related","page_number":157,"box":{"x":70,"y":899,"width":818,"height":9}},{"id":"643f7a5b-c2bb-4de7-8d50-65c39330b315","block_type":"box","text":"II-108","page_number":157,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"bcb21b66-4cb3-44d1-bfb8-ef9a53f6bbee","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":157,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c919e0dd-2c7c-46cc-8df9-6a1f96a80a1e","block_type":"box","text":"class of shareholders. The Plan provides, among other things, that: (i) the Board of Directors shall receive quarterly","page_number":158,"box":{"x":69,"y":45,"width":824,"height":11}},{"id":"fe6714e5-8e26-42d5-bc13-603d747817f2","block_type":"box","text":"reports regarding the amounts expended under the Plan and the purposes for which such expenditures were made;","page_number":158,"box":{"x":69,"y":60,"width":821,"height":11}},{"id":"3e5b032a-f006-4a19-b082-cae80e9d5785","block_type":"box","text":"(ii) the Plan will continue in effect for so long as its continuance is approved at least annually by the Board of","page_number":158,"box":{"x":69,"y":75,"width":778,"height":11}},{"id":"9e716e59-d7e0-4476-a1cd-72608880566d","block_type":"box","text":"Directors, including the directors who are not “interested persons” of the Fund (as defined in the Investment","page_number":158,"box":{"x":70,"y":90,"width":773,"height":11}},{"id":"5a28982b-dc9d-44b4-a2ef-92b431225e32","block_type":"box","text":"Company Act) and who have no direct or indirect financial interest in the operation of the Plan or any agreement","page_number":158,"box":{"x":69,"y":105,"width":796,"height":11}},{"id":"d46f9345-92c4-4a71-97d0-c8c79d7a204d","block_type":"box","text":"entered into in connection with the Plan (the “12b-1 Directors”), acting in person at a meeting called for said purpose","page_number":158,"box":{"x":69,"y":120,"width":837,"height":12}},{"id":"8530e3b4-44e5-42a4-98f8-5dab0c01d89e","block_type":"box","text":"in accordance with Rule 12b-1 under the Investment Company Act; (iii) any material amendment thereto must be","page_number":158,"box":{"x":70,"y":135,"width":801,"height":11}},{"id":"ea42dc16-357b-4f2a-88d0-15a98587b13a","block_type":"box","text":"approved by the Board of Directors, including the 12b-1 Directors, acting in person at a meeting called for said","page_number":158,"box":{"x":69,"y":150,"width":787,"height":12}},{"id":"eb385b03-c5fc-4d3b-958b-61112c5c0b35","block_type":"box","text":"purpose; (iv) any amendment to increase materially the costs which any class of shares may bear for distribution","page_number":158,"box":{"x":70,"y":166,"width":802,"height":11}},{"id":"d75f5859-eb5a-4d47-8878-48d578561168","block_type":"box","text":"services pursuant to the Plan shall be effective only upon approval by a vote of a majority of the outstanding shares","page_number":158,"box":{"x":69,"y":181,"width":826,"height":11}},{"id":"f21bd980-979d-402d-b4fa-420f9442e652","block_type":"box","text":"of such class and by a majority of the Board of Directors, including the 12b-1 Directors, acting in person at a meeting","page_number":158,"box":{"x":69,"y":196,"width":836,"height":11}},{"id":"93990d3b-9643-4403-b140-89c04ecd5f1a","block_type":"box","text":"called for said purpose; and (v) while the Plan remains in effect, the selection and nomination of the Fund’s Directors","page_number":158,"box":{"x":69,"y":211,"width":836,"height":11}},{"id":"f9afb044-26ad-48a7-9f29-8645afe1fea8","block_type":"box","text":"who are not “interested persons” of the Fund shall be committed to the discretion of the Fund’s non-interested","page_number":158,"box":{"x":68,"y":226,"width":792,"height":11}},{"id":"b911ca68-17bc-46b5-b171-7d66cd4ff197","block_type":"box","text":"Directors. Rule 12b-1 further requires that each Fund preserve copies of each Plan and any report made pursuant to","page_number":158,"box":{"x":70,"y":241,"width":831,"height":11}},{"id":"55d1afde-74af-4ff2-9f0c-ee73ed5c6c73","block_type":"box","text":"such Plan for a period of not less than six years from the date of the Plan or such report, the first two years in an","page_number":158,"box":{"x":69,"y":256,"width":807,"height":11}},{"id":"f112c665-4f35-41d1-af8a-9de7699bd09a","block_type":"box","text":"easily accessible place.","page_number":158,"box":{"x":69,"y":272,"width":167,"height":11}},{"id":"71dfedb5-7d17-4225-908a-42bf2b38f412","block_type":"box","text":"Each Plan is terminable as to any class of shares without penalty at any time by a vote of a majority of the 12b-1","page_number":158,"box":{"x":102,"y":294,"width":804,"height":11}},{"id":"98560662-c358-4f74-87ca-a8719fa7ddf6","block_type":"box","text":"Directors, or by vote of the holders of a majority of the shares of such class.","page_number":158,"box":{"x":70,"y":309,"width":542,"height":11}},{"id":"203d0c32-9ce4-4e87-9302-1f43b24d5f0b","block_type":"box","text":"See “Information on Sales Charges and Distribution Related Expenses” in Part I of each Fund’s SAI for","page_number":158,"box":{"x":102,"y":332,"width":734,"height":11}},{"id":"8fe5c7f6-9a5e-400c-bb6d-b9826d7c45a0","block_type":"box","text":"information relating to the fees paid by your Fund to the Distributor under each Plan during the Fund’s most recent","page_number":158,"box":{"x":70,"y":347,"width":814,"height":11}},{"id":"b5a82e72-590c-458a-9ec4-07ff73c69eab","block_type":"box","text":"fiscal year.","page_number":158,"box":{"x":68,"y":362,"width":75,"height":11}},{"id":"b389e35c-2d94-4d3d-a1f0-f75b296e48dd","block_type":"box","text":"Limitations on the Payment of Deferred Sales Charges","page_number":158,"box":{"x":69,"y":392,"width":396,"height":11}},{"id":"bc96ae53-82ce-46a4-b46d-816dbd48a6ac","block_type":"box","text":"The maximum sales charge rule in the Conduct Rules of the Financial Industry Regulatory Authority (“FINRA”)","page_number":158,"box":{"x":101,"y":415,"width":777,"height":11}},{"id":"6c4bf548-3650-4be4-ab9d-1220654d9fa6","block_type":"box","text":"imposes a limitation on certain asset-based sales charges such as the distribution fee borne by Class R Shares, and","page_number":158,"box":{"x":70,"y":430,"width":835,"height":11}},{"id":"d3e49064-bf87-45a8-8774-8341d980bc2c","block_type":"box","text":"the distribution fee and the CDSC borne by the Investor C Shares. This limitation does not apply to the shareholder","page_number":158,"box":{"x":68,"y":445,"width":822,"height":11}},{"id":"d3cf2667-5033-4d46-9470-3ba4515e7f59","block_type":"box","text":"servicing fee. The maximum sales charge rule is applied separately to each class and limits the aggregate of","page_number":158,"box":{"x":69,"y":460,"width":778,"height":12}},{"id":"c7da2efb-2a4e-441a-8df2-c7e36220a74b","block_type":"box","text":"distribution fee payments and CDSCs payable by a Fund to (1) 6.25% of eligible gross sales of Investor C and Class R","page_number":158,"box":{"x":69,"y":475,"width":840,"height":12}},{"id":"a2c2ff99-9601-406c-bd89-b11c345b5bdc","block_type":"box","text":"Shares, computed separately (excluding shares issued pursuant to dividend reinvestments and exchanges), plus","page_number":158,"box":{"x":69,"y":491,"width":803,"height":11}},{"id":"a7dfe6c1-b17c-4ecd-ba60-0dd3d9a801a6","block_type":"box","text":"(2) interest on the unpaid balance for the respective class, computed separately, at the prime rate plus 1% (the","page_number":158,"box":{"x":69,"y":506,"width":794,"height":11}},{"id":"a1bab465-d368-4f03-b9c1-99c8ca9601f9","block_type":"box","text":"unpaid balance being the maximum amount payable minus amounts received from the payment of the distribution fee","page_number":158,"box":{"x":69,"y":521,"width":839,"height":11}},{"id":"1ae5f409-6a54-4e6b-a242-e6d5f9abe2a3","block_type":"box","text":"and the CDSC). See “Information on Sales Charges and Distribution Related Expenses” in Part I of each Fund’s SAI","page_number":158,"box":{"x":69,"y":536,"width":824,"height":11}},{"id":"7c837e98-023a-4a31-98a2-2cd1285a854a","block_type":"box","text":"for comparative information as of your Fund’s most recent fiscal year end with respect to, if applicable, the Investor C","page_number":158,"box":{"x":68,"y":551,"width":839,"height":11}},{"id":"7e827012-0852-4ddb-93f2-1e404a26e356","block_type":"box","text":"and Class R Shares of your Fund.","page_number":158,"box":{"x":69,"y":566,"width":236,"height":11}},{"id":"2ae80636-bf74-40a4-9e29-6622e9657768","block_type":"box","text":"Other Payments by the Fund","page_number":158,"box":{"x":69,"y":597,"width":206,"height":11}},{"id":"f86f7d9d-467f-4839-94d0-97002ada5faa","block_type":"box","text":"In addition to shareholder servicing fees that a Fund may pay to a Service Organization pursuant to the Plan and","page_number":158,"box":{"x":102,"y":619,"width":800,"height":11}},{"id":"6de67d07-6620-4a24-903c-06d2548c54d4","block_type":"box","text":"fees the Fund pays to its Transfer Agent, BlackRock, on behalf of a Fund, may enter into non-Plan agreements with","page_number":158,"box":{"x":68,"y":634,"width":816,"height":12}},{"id":"1400d609-bda7-4140-b28f-a94ed8158f33","block_type":"box","text":"Service Organizations pursuant to which the Fund will pay a Service Organization for administrative, networking,","page_number":158,"box":{"x":69,"y":649,"width":794,"height":12}},{"id":"b935b194-1101-4ecf-86c8-0d97e3a46e04","block_type":"box","text":"recordkeeping, sub-transfer agency, sub-accounting and/or shareholder services. These non-Plan payments are","page_number":158,"box":{"x":69,"y":664,"width":792,"height":12}},{"id":"6f57d7d3-614a-4e52-afda-f6a8804f8666","block_type":"box","text":"generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a Service","page_number":158,"box":{"x":68,"y":680,"width":841,"height":11}},{"id":"a277306b-5ed7-42a0-a2e9-c4d238ab6fda","block_type":"box","text":"Organization or (2) a fixed dollar amount for each account serviced by a Service Organization. The aggregate amount","page_number":158,"box":{"x":69,"y":695,"width":831,"height":11}},{"id":"466de38b-843f-4228-a51b-458d32ecd8c0","block_type":"box","text":"of these payments may be substantial.","page_number":158,"box":{"x":69,"y":710,"width":276,"height":11}},{"id":"be8bdfdc-10b2-4a77-afb9-2cad7460480f","block_type":"box","text":"Additional Payments by BlackRock","page_number":158,"box":{"x":68,"y":740,"width":256,"height":11}},{"id":"7cd41e93-d65c-400a-b9e8-43f41d0aa818","block_type":"box","text":"From time to time, BlackRock, BRIL and/or their affiliates (referred to in this section collectively as “BlackRock”)","page_number":158,"box":{"x":102,"y":763,"width":803,"height":11}},{"id":"de3bb35a-777d-4722-ab0e-0bf7691829f5","block_type":"box","text":"may compensate Service Organizations for the sale and distribution of shares of a Fund, for services to a Fund and","page_number":158,"box":{"x":69,"y":778,"width":823,"height":11}},{"id":"6226853f-42b6-4b91-828a-7eeecbefba1e","block_type":"box","text":"its shareholders and/or for data provision or technology support. A Service Organization may perform these","page_number":158,"box":{"x":70,"y":793,"width":768,"height":11}},{"id":"1692c06c-99f1-45a2-b9f2-03b7580612c9","block_type":"box","text":"obligations itself or may arrange for a third party to perform them. These payments, which are not made pursuant to","page_number":158,"box":{"x":69,"y":808,"width":830,"height":11}},{"id":"ffb46c2d-188e-4991-a812-87ca88a11a54","block_type":"box","text":"a Plan or otherwise paid by a Fund, are referred to as “Additional Payments” herein.","page_number":158,"box":{"x":69,"y":823,"width":599,"height":11}},{"id":"e9557e11-6745-473d-9a65-3c7ff447ff13","block_type":"box","text":"Additional Payments are made from BlackRock’s own assets (which may come directly or indirectly from fees","page_number":158,"box":{"x":101,"y":846,"width":776,"height":11}},{"id":"ed652b64-9a11-4e5b-bb56-b4fdfc77f331","block_type":"box","text":"paid by a Fund to BlackRock for various services, such as investment advisory services). These payments are not an","page_number":158,"box":{"x":70,"y":861,"width":832,"height":11}},{"id":"1e589f60-e011-46d0-b7f8-37628b2fd8ff","block_type":"box","text":"additional charge to a Fund or its shareholders and do not change the price paid by shareholders for the purchase of","page_number":158,"box":{"x":69,"y":876,"width":833,"height":11}},{"id":"12725e3d-5645-417e-9cb7-8aa45e97ce68","block_type":"box","text":"a Fund’s shares or the amount a Fund receives as proceeds from such purchases. Additional Payments made to","page_number":158,"box":{"x":69,"y":891,"width":802,"height":11}},{"id":"e5a0c45e-b81f-402c-889a-99b01ece1139","block_type":"box","text":"Service Organizations are in addition to any distribution or shareholder servicing fees paid under any Plan of any","page_number":158,"box":{"x":69,"y":906,"width":802,"height":12}},{"id":"6f31bd95-5854-45e7-a7e7-887fc5972057","block_type":"box","text":"II-109","page_number":158,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"2e874b1f-0505-4a0c-8517-13b52458f70b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":158,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"42e1a849-99e7-49b8-bf64-667ab666cde0","block_type":"box","text":"Fund, any sales charges, commissions or other concessions described in the Prospectuses or this SAI, and any","page_number":159,"box":{"x":70,"y":45,"width":796,"height":11}},{"id":"d6913fb5-ed0e-47b1-aec7-2946e00afc08","block_type":"box","text":"administrative, networking, recordkeeping, sub-transfer agency or sub-accounting fees payable by a Fund. Pursuant to","page_number":159,"box":{"x":69,"y":60,"width":836,"height":11}},{"id":"bdbf8519-2711-4d88-9a2a-20617c4da752","block_type":"box","text":"applicable FINRA regulations, the details of certain of these payments, including the Service Organizations receiving","page_number":159,"box":{"x":69,"y":75,"width":828,"height":11}},{"id":"0fdb2869-21f9-412f-8c1e-84b374948049","block_type":"box","text":"such payments in connection with the sale and distribution of Fund shares, are required to be disclosed. While FINRA","page_number":159,"box":{"x":69,"y":90,"width":837,"height":11}},{"id":"dd3ec0d6-1ee3-498c-802e-388938162e3b","block_type":"box","text":"regulations limit the sales charges that shareholders may bear, there are no limits with regard to the amounts that","page_number":159,"box":{"x":69,"y":105,"width":818,"height":11}},{"id":"07645190-18f4-4282-9c0c-cee2be937e97","block_type":"box","text":"BlackRock may pay out of its own assets.","page_number":159,"box":{"x":70,"y":120,"width":294,"height":11}},{"id":"07f4a3df-2de1-4728-9356-aa6d289a5383","block_type":"box","text":"Additional Payments may be made as a fixed dollar amount, may be based on the number of Customer accounts","page_number":159,"box":{"x":101,"y":143,"width":803,"height":11}},{"id":"1ea9bba7-ddfa-4aac-9083-6e76a5c3c07d","block_type":"box","text":"maintained by a Service Organization, may be based on a percentage of the value of shares sold to, or held by,","page_number":159,"box":{"x":69,"y":158,"width":792,"height":11}},{"id":"6155781d-3e17-415d-8d6e-05ffb1f7c0dd","block_type":"box","text":"Customers of the Service Organization involved, or may be calculated on another basis.","page_number":159,"box":{"x":69,"y":173,"width":623,"height":11}},{"id":"9f1b6402-583e-4214-8547-a5c5d9760204","block_type":"box","text":"BlackRock negotiates Additional Payments with each Service Organization on an individual basis. Additional","page_number":159,"box":{"x":102,"y":196,"width":765,"height":11}},{"id":"9a171cca-0fe0-4c39-80ef-d05fd7e83ae2","block_type":"box","text":"Payments may be different for different Service Organizations, and some Service Organizations may be paid pursuant","page_number":159,"box":{"x":69,"y":211,"width":841,"height":11}},{"id":"a0d79fa6-ee02-40fc-abae-21a02050fe34","block_type":"box","text":"to more than one of the calculations described above. Not all Service Organizations receive Additional Payments.","page_number":159,"box":{"x":68,"y":226,"width":806,"height":11}},{"id":"5ef04b37-6d9a-4e1e-ba68-8ff47a3b9ae6","block_type":"box","text":"Sales-based payments primarily create incentives to make new sales of shares of the Fund, and asset-based","page_number":159,"box":{"x":69,"y":241,"width":776,"height":11}},{"id":"2d9dc617-d261-4768-9b53-40725b60b778","block_type":"box","text":"payments primarily create incentives to retain previously sold shares of the Fund. The level of payments made to","page_number":159,"box":{"x":70,"y":256,"width":802,"height":11}},{"id":"1ad9752e-46dc-4a04-87f3-363f6866e2da","block_type":"box","text":"these Service Organizations in any year will vary and may be limited to specific Funds or share classes. In certain","page_number":159,"box":{"x":68,"y":271,"width":811,"height":12}},{"id":"95b77ffd-7633-4134-be63-0aaaea937a42","block_type":"box","text":"cases, these payments may be subject to certain minimum payment levels.","page_number":159,"box":{"x":69,"y":287,"width":538,"height":11}},{"id":"79d7683d-b927-4db3-b20f-e3b4aa42eedf","block_type":"box","text":"The aggregate amount of Additional Payments made by BlackRock may be substantial and may be significant to","page_number":159,"box":{"x":101,"y":309,"width":795,"height":11}},{"id":"8d33d248-c79d-4f08-8d61-931a3593e180","block_type":"box","text":"certain Service Organizations. The categories of Additional Payments listed below are not mutually exclusive. The","page_number":159,"box":{"x":69,"y":324,"width":807,"height":12}},{"id":"6d861719-933d-4b75-a66b-8cca4167389f","block_type":"box","text":"same Service Organization, or one or more of its affiliates, may receive payments under more than one category of","page_number":159,"box":{"x":69,"y":339,"width":823,"height":12}},{"id":"a46a3d74-28f4-4d04-b047-e6ad1439aaa1","block_type":"box","text":"Additional Payments. Such payments may be different for different Service Organizations and for different types of","page_number":159,"box":{"x":68,"y":355,"width":819,"height":11}},{"id":"f2c4c4ae-5f0d-48aa-85cc-81ec62f2352e","block_type":"box","text":"Funds.","page_number":159,"box":{"x":70,"y":370,"width":44,"height":9}},{"id":"21cc4b38-bebd-4563-b996-f4c989aa889c","block_type":"box","text":"A. Distribution and Marketing Suppor t","page_number":159,"box":{"x":101,"y":392,"width":270,"height":12}},{"id":"13e7bfd1-a432-42e0-945e-9482e56e3520","block_type":"box","text":"Additional Payments may be made by BlackRock for distribution and marketing support activities. 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These payments","page_number":159,"box":{"x":68,"y":566,"width":805,"height":11}},{"id":"bd77ad7b-de18-49dd-95a1-cd2ed772f106","block_type":"box","text":"normally will not exceed the sum of (a) 0.25% of such year’s Fund sales by that Service Organization, and (b) 0.21%","page_number":159,"box":{"x":69,"y":581,"width":828,"height":12}},{"id":"00c47052-cf03-4fa5-a48c-55a53e638e79","block_type":"box","text":"of the assets attributable to that Service Organization invested in a Fund.","page_number":159,"box":{"x":69,"y":596,"width":523,"height":12}},{"id":"5a494948-8fb9-4def-a1c9-d3b6d631c1e5","block_type":"box","text":"B. Shareholder Services","page_number":159,"box":{"x":102,"y":619,"width":172,"height":9}},{"id":"5af84c08-81b3-450b-beb7-8ce3828d18ff","block_type":"box","text":"Many Fund shares are owned or held by Service Organizations for the benefit of their Customers. 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BlackRock","page_number":163,"box":{"x":70,"y":361,"width":833,"height":11}},{"id":"24a9161a-6bb7-4ceb-ae43-d81e23eeaeb7","block_type":"box","text":"configures these tools and calculators and localizes the content for Service Organizations as part of its customary","page_number":163,"box":{"x":69,"y":376,"width":817,"height":11}},{"id":"bb4c2000-7b44-4428-8f43-42ef163e273c","block_type":"box","text":"digital marketing support and promotion of the Funds or other BlackRock funds, iShares ETFs and other exchange","page_number":163,"box":{"x":69,"y":391,"width":815,"height":11}},{"id":"143bff43-1dc3-4d21-9a1b-d7a07e0624fb","block_type":"box","text":"traded products.","page_number":163,"box":{"x":68,"y":406,"width":116,"height":11}},{"id":"bb1dee1d-946a-468e-9dcf-e96eb4f01577","block_type":"box","text":"F. Conflicts","page_number":163,"box":{"x":102,"y":429,"width":78,"height":9}},{"id":"eb1c05ac-ca6c-45f5-9d3f-7b42323ce31c","block_type":"box","text":"Additional Payments made by BlackRock to a Service Organization or its affiliates or other incentive","page_number":163,"box":{"x":101,"y":452,"width":710,"height":11}},{"id":"8fabbf46-bd0f-4c9e-9eeb-ccac527fa5f9","block_type":"box","text":"arrangements may be an important factor in the Service Organization’s willingness to support the sale of a Fund","page_number":163,"box":{"x":69,"y":467,"width":803,"height":11}},{"id":"17652540-ae7c-485b-981d-9bc0df62601a","block_type":"box","text":"and/or particular share class through its distribution system or to perform services with respect to such Fund.","page_number":163,"box":{"x":69,"y":482,"width":788,"height":11}},{"id":"34a805de-f5e5-4969-8c76-9fbc98553db4","block_type":"box","text":"Additional Payments and other incentive arrangements may also be important factors in the Service Organization’s","page_number":163,"box":{"x":68,"y":497,"width":819,"height":11}},{"id":"e0ea28f2-10e7-4737-9eb6-8759de7b1f54","block_type":"box","text":"willingness to recommend the BlackRock Fund complex in general.","page_number":163,"box":{"x":68,"y":512,"width":473,"height":11}},{"id":"d67dc1ac-4589-4c92-94a5-581af0dc851a","block_type":"box","text":"BlackRock may be motivated to pay Additional Payments and other incentive compensation to promote the sale","page_number":163,"box":{"x":102,"y":535,"width":793,"height":11}},{"id":"74cf67f1-5327-4078-8c00-f28fdb2ff351","block_type":"box","text":"of Fund shares to Customers of Service Organizations and the retention of those investments by such Customers. To","page_number":163,"box":{"x":69,"y":550,"width":835,"height":11}},{"id":"c95978e6-b965-446d-b5d3-22e5b076b2c6","block_type":"box","text":"the extent Service Organizations sell more shares of a Fund or retain shares of a Fund in their Customers’ accounts,","page_number":163,"box":{"x":68,"y":565,"width":833,"height":11}},{"id":"904d69d4-c3ec-4711-a242-f974ead6b7e0","block_type":"box","text":"BlackRock benefits from the incremental management and other fees paid by the Fund with respect to those assets.","page_number":163,"box":{"x":70,"y":580,"width":830,"height":11}},{"id":"9b1417aa-cb83-4dc1-80b4-a9a8af130f85","block_type":"box","text":"Service Organizations may have financial incentives for recommending a particular Fund, share class or fund","page_number":163,"box":{"x":102,"y":603,"width":774,"height":11}},{"id":"486bab04-46c3-4f8f-868d-0ef4a2d52463","block_type":"box","text":"complex over another. Service Organizations may charge their Customers additional fees in connection with the","page_number":163,"box":{"x":69,"y":618,"width":794,"height":11}},{"id":"e24cc06a-5e00-4f06-81ac-0ca9c099f70b","block_type":"box","text":"purchase or redemption of Fund shares or for account-related services which are in addition to the sales and other","page_number":163,"box":{"x":70,"y":633,"width":818,"height":11}},{"id":"d457e89c-2eb8-4cba-a2bb-6bcc2d18071a","block_type":"box","text":"charges described in the Fund’s Prospectus and this SAI. Such charges may vary among Service Organizations but in","page_number":163,"box":{"x":69,"y":648,"width":836,"height":11}},{"id":"f924015b-a0b9-4a1b-b89f-c75aa652e4a9","block_type":"box","text":"all cases will be retained by the Service Organization and will not be remitted to a Fund or BlackRock.","page_number":163,"box":{"x":69,"y":663,"width":723,"height":12}},{"id":"bc6a3da2-8fa4-410b-bfae-8197856474b6","block_type":"box","text":"Shareholders should consider whether such incentives exist when evaluating any recommendations from a","page_number":163,"box":{"x":102,"y":686,"width":759,"height":11}},{"id":"0e6363b1-f5e8-47d3-ae74-e9cfeaba140f","block_type":"box","text":"Service Organization to purchase or sell shares of a Fund and when considering which share class is most","page_number":163,"box":{"x":69,"y":701,"width":760,"height":11}},{"id":"a4efdf4c-c059-403d-9271-361f83197449","block_type":"box","text":"appropriate.","page_number":163,"box":{"x":69,"y":716,"width":84,"height":11}},{"id":"59e97ed4-6ee1-4018-b89f-80fce108dbec","block_type":"box","text":"You should consult with your Service Organization, and review carefully any disclosure by the Service","page_number":163,"box":{"x":160,"y":716,"width":738,"height":11}},{"id":"d53894b8-bbbe-479b-a2a5-7d546d8ad0ea","block_type":"box","text":"Organization, as to compensation received by it or its affiliates and for more information about the payments","page_number":163,"box":{"x":69,"y":731,"width":795,"height":11}},{"id":"6c0b46a4-6cbf-45ad-9b5a-4296dc655002","block_type":"box","text":"described above.","page_number":163,"box":{"x":69,"y":746,"width":122,"height":9}},{"id":"bb8a5df9-eafa-4284-9456-a7b217a0d8b1","block_type":"box","text":"REDEMPTION OF SHARES","page_number":163,"box":{"x":385,"y":776,"width":208,"height":10}},{"id":"474dbaa8-e1c1-47b8-b9f6-80b09d97445e","block_type":"box","text":"Shares normally will be redeemed for cash upon receipt of a request in proper form, although each Fund retains","page_number":163,"box":{"x":102,"y":799,"width":798,"height":11}},{"id":"ff48ce67-6978-45fb-81b4-039a80452cf2","block_type":"box","text":"the right to redeem some or all of its shares in kind (valued in the same way as they would be valued for purposes of","page_number":163,"box":{"x":68,"y":814,"width":836,"height":11}},{"id":"06b61707-c4a2-410b-9a56-1e9cd2a461fa","block_type":"box","text":"computing a Fund’s NAV), by delivery of securities and other assets selected from the Fund’s portfolio holdings at the","page_number":163,"box":{"x":69,"y":829,"width":840,"height":11}},{"id":"4c240d27-b68a-47e0-a706-71ac25a21826","block_type":"box","text":"Manager’s discretion. In kind payment means payment will be made in portfolio securities and other assets rather","page_number":163,"box":{"x":70,"y":844,"width":814,"height":11}},{"id":"3969149e-65a1-499a-9f01-3a56879d6373","block_type":"box","text":"than cash. Redemptions in kind may be used in applicable circumstances, generally if the relevant shareholder is","page_number":163,"box":{"x":68,"y":859,"width":809,"height":11}},{"id":"9da4bd4f-9b0b-45aa-bff9-94e20773724d","block_type":"box","text":"able to accept securities in kind, and may also be used in stressed market conditions. If this occurs, the redeeming","page_number":163,"box":{"x":69,"y":874,"width":827,"height":12}},{"id":"9beaadf5-57ad-42d2-9791-f41b52630b48","block_type":"box","text":"shareholder might incur brokerage or other transaction costs to convert the securities and other assets to cash. Each","page_number":163,"box":{"x":69,"y":890,"width":839,"height":11}},{"id":"88087a68-1291-4784-bd6e-090e88060ffe","block_type":"box","text":"Fund has elected, however, to be governed by Rule 18f-1 under the Investment Company Act so that the Fund is","page_number":163,"box":{"x":70,"y":904,"width":797,"height":12}},{"id":"c741a110-e68e-4300-865f-64618dea44fc","block_type":"box","text":"II-114","page_number":163,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"47f62798-393d-4ed3-bba6-59cf65600942","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":163,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"5a818a43-5dd9-462c-a215-c8f50fac1e01","block_type":"box","text":"obligated to redeem its shares solely in cash up to the lesser of $250,000 or 1% of its NAV during any 90-day period","page_number":164,"box":{"x":69,"y":44,"width":833,"height":12}},{"id":"3c3ce3a9-c4ea-4d73-9630-f465e2c2853e","block_type":"box","text":"for any shareholder of the Fund.","page_number":164,"box":{"x":68,"y":60,"width":227,"height":11}},{"id":"a2c8cfd0-91cd-4e5d-9e10-029ff50328f1","block_type":"box","text":"The redemption price is the NAV per share next determined after the initial receipt of proper notice of","page_number":164,"box":{"x":101,"y":82,"width":722,"height":11}},{"id":"863fb3c6-28c4-40ed-abb8-80e69c9f4e1f","block_type":"box","text":"redemption. The value of shares of each Fund at the time of redemption may be more or less than your cost at the","page_number":164,"box":{"x":69,"y":98,"width":818,"height":11}},{"id":"5b27aaee-d6c4-4237-be72-10288bad0115","block_type":"box","text":"time of purchase, depending in part on the market value of the securities held by the Fund at such time. Except for","page_number":164,"box":{"x":68,"y":113,"width":821,"height":11}},{"id":"e2db0435-288b-4f03-b7db-ff5ee226f5c1","block_type":"box","text":"any CDSC that may be applicable, there will be no redemption charge if your redemption request is sent directly to","page_number":164,"box":{"x":69,"y":128,"width":815,"height":11}},{"id":"672bc34a-b4ed-495e-b30a-256832c3c804","block_type":"box","text":"the Transfer Agent. If you are liquidating your holdings you will receive all dividends reinvested through the date of","page_number":164,"box":{"x":68,"y":143,"width":812,"height":11}},{"id":"75117abb-681b-4f1e-97ff-14735d1fcd54","block_type":"box","text":"redemption.","page_number":164,"box":{"x":69,"y":158,"width":83,"height":11}},{"id":"e0fcf6f7-31c7-463b-921d-08f222655a73","block_type":"box","text":"The right to redeem shares may be suspended or payment upon redemption may be delayed for more than seven","page_number":164,"box":{"x":101,"y":181,"width":807,"height":11}},{"id":"e9b860ea-fb79-4893-9bc9-be93a7daf22d","block_type":"box","text":"days only (i) for any period during which trading on the NYSE is restricted as determined by the Commission or during","page_number":164,"box":{"x":69,"y":196,"width":835,"height":11}},{"id":"87b7baf7-38df-43bc-8e00-a73f36a08f24","block_type":"box","text":"which the NYSE is closed (other than customary weekend and holiday closings), (ii) for any period during which an","page_number":164,"box":{"x":68,"y":211,"width":811,"height":11}},{"id":"cd38ba85-c892-4d53-b729-6ef64e5298e4","block_type":"box","text":"emergency exists, as defined by the Commission, as a result of which disposal of portfolio securities or","page_number":164,"box":{"x":69,"y":226,"width":741,"height":11}},{"id":"0b897386-5f7a-4e02-9022-69a7ccc2d86e","block_type":"box","text":"determination of the NAV of a Fund is not reasonably practicable, or (iii) for such other periods as the Commission","page_number":164,"box":{"x":69,"y":241,"width":813,"height":11}},{"id":"d92eaf16-892c-4c0d-9ee8-40701a9995d4","block_type":"box","text":"may by order permit for the protection of shareholders of the Fund. (A Fund may also suspend or postpone the","page_number":164,"box":{"x":69,"y":256,"width":787,"height":11}},{"id":"f0fdcbf9-00ed-46bf-abaa-2c55a7093241","block_type":"box","text":"recordation of the transfer of its shares upon the occurrence of any of the foregoing conditions.)","page_number":164,"box":{"x":69,"y":271,"width":685,"height":12}},{"id":"02857d37-2508-4845-ba3b-db2320b5250a","block_type":"box","text":"Each Fund, with other investment companies advised by the Manager, has entered into a joint committed line of","page_number":164,"box":{"x":102,"y":294,"width":798,"height":11}},{"id":"4ec6e620-5648-4cc3-aedc-5104d82c5806","block_type":"box","text":"credit with a syndicate of banks that is intended to provide the Fund with a temporary source of cash to be used to","page_number":164,"box":{"x":69,"y":309,"width":820,"height":11}},{"id":"57f95d03-75d2-40ce-8156-7e926b09a016","block_type":"box","text":"meet redemption requests from shareholders in extraordinary or emergency circumstances.","page_number":164,"box":{"x":69,"y":324,"width":653,"height":12}},{"id":"50d2fb91-9dd8-4455-a81a-d874deeffd58","block_type":"box","text":"Each Fund may redeem shares involuntarily to reimburse the Fund for any loss sustained by reason of the failure","page_number":164,"box":{"x":102,"y":347,"width":803,"height":11}},{"id":"072a5853-6b82-4b8c-b7f2-b1ae0b2bee9d","block_type":"box","text":"of a shareholder to make full payment for shares purchased by the shareholder or to collect any charge relating to a","page_number":164,"box":{"x":69,"y":362,"width":827,"height":11}},{"id":"3d0936e6-471e-4609-ad10-25127206ee6d","block_type":"box","text":"transaction effected for the benefit of a shareholder. Each Fund reserves the express right to redeem shares of the","page_number":164,"box":{"x":68,"y":377,"width":824,"height":12}},{"id":"a21da8a7-e492-48c9-bff9-c8e30ca4097e","block_type":"box","text":"Fund involuntarily at any time if the Fund’s Board of Directors determines, in its sole discretion, that failure to do so","page_number":164,"box":{"x":70,"y":392,"width":825,"height":12}},{"id":"88ee09ba-8516-49ed-b834-97c0bff1cb59","block_type":"box","text":"may have adverse consequences to the holders of shares in the Fund. Upon such redemption the holders of shares","page_number":164,"box":{"x":69,"y":407,"width":825,"height":12}},{"id":"26838d35-becb-45ad-8bc8-4ebdc508f280","block_type":"box","text":"so redeemed shall have no further right with respect thereto other than to receive payment of the redemption price.","page_number":164,"box":{"x":69,"y":423,"width":823,"height":11}},{"id":"4948dbc9-e0a6-40e4-93a9-cb18ffd40452","block_type":"box","text":"Redemption","page_number":164,"box":{"x":69,"y":453,"width":86,"height":11}},{"id":"65019bac-7874-4e6f-8f69-3a9f52b6e8cb","block_type":"box","text":"Investor A, Investor A1, Investor C, Institutional and Class R Shares","page_number":164,"box":{"x":70,"y":476,"width":481,"height":10}},{"id":"3bd35c59-1541-4f22-8718-f252914717dc","block_type":"box","text":"Redeem by Telephone:","page_number":164,"box":{"x":102,"y":498,"width":162,"height":11}},{"id":"3b904591-65d6-41c8-b3f3-35bd85599fcc","block_type":"box","text":"You may sell Investor Shares, excluding Investor P Shares, held at BlackRock by","page_number":164,"box":{"x":270,"y":498,"width":571,"height":11}},{"id":"a1b6e455-b004-4fc4-acad-11c8b2bb0e3f","block_type":"box","text":"telephone request if certain conditions are met and if the amount being sold is less than (i) $100,000 for payments","page_number":164,"box":{"x":68,"y":513,"width":829,"height":12}},{"id":"d9c74a2f-300b-40fc-b021-c9ed2a692769","block_type":"box","text":"by check or (ii) $250,000 for payments through the Automated Clearing House Network (“ACH”) or wire transfer.","page_number":164,"box":{"x":69,"y":528,"width":798,"height":12}},{"id":"722738e9-28df-41ea-bd7b-9b8c23cde391","block_type":"box","text":"Certain redemption requests, such as those in excess of these amounts, and those where (i) the Fund does not have","page_number":164,"box":{"x":69,"y":543,"width":838,"height":12}},{"id":"cb349613-f441-4401-a459-331d0d2256c1","block_type":"box","text":"verified banking information on file; or (ii) the proceeds are not paid to the record owner at the record address, must","page_number":164,"box":{"x":68,"y":559,"width":831,"height":11}},{"id":"57fb0c67-3d08-4acf-9a12-058b69e5764f","block_type":"box","text":"be in writing with a medallion signature guarantee provided by any “eligible guarantor institution” as defined in Rule","page_number":164,"box":{"x":69,"y":574,"width":822,"height":11}},{"id":"e156e6fe-d492-4f5b-a5c0-c20d9834888b","block_type":"box","text":"17Ad-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), whose existence and validity may be","page_number":164,"box":{"x":70,"y":589,"width":791,"height":11}},{"id":"1f288d9c-143d-467d-994b-18a43fa20f3d","block_type":"box","text":"verified by the Transfer Agent through the use of industry publications. For Institutional Shares, certain redemption","page_number":164,"box":{"x":68,"y":604,"width":818,"height":11}},{"id":"22fd4287-6860-4ac7-9d86-ff157af93ece","block_type":"box","text":"requests may require written instructions with a medallion signature guarantee. Call (800) 441-7762 for details. You","page_number":164,"box":{"x":69,"y":619,"width":829,"height":11}},{"id":"1efcedff-09a4-4ad1-a374-b74fe2623224","block_type":"box","text":"can obtain a medallion signature guarantee stamp from a bank, securities dealer, securities broker, credit union,","page_number":164,"box":{"x":69,"y":634,"width":803,"height":12}},{"id":"e0b0b0f4-ae1c-4b27-86b0-146c7cbe4294","block_type":"box","text":"savings and loan association, national securities exchange or registered securities association. The three recognized","page_number":164,"box":{"x":69,"y":650,"width":834,"height":11}},{"id":"ad357f24-eca3-4d39-9a2c-0708021aa774","block_type":"box","text":"medallion programs are Securities Transfer Agent Medallion Program, Stock Exchanges Medallion Program and New","page_number":164,"box":{"x":69,"y":664,"width":825,"height":12}},{"id":"36524ee3-3f10-4b79-be4d-65b1129db830","block_type":"box","text":"York Stock Exchange, Inc. Medallion Signature Program. Signature guarantees which are not a part of these programs","page_number":164,"box":{"x":68,"y":680,"width":840,"height":11}},{"id":"bb02e12c-1d74-4e5e-af42-75d223678977","block_type":"box","text":"will not be accepted. A notary public seal will not be acceptable. Generally, a properly signed written request with any","page_number":164,"box":{"x":68,"y":695,"width":835,"height":11}},{"id":"7368f024-2103-440e-a9f5-cec9bd10cb94","block_type":"box","text":"required signature guarantee is all that is required for a redemption. In some cases, however, other documents may","page_number":164,"box":{"x":69,"y":710,"width":828,"height":11}},{"id":"c0090146-cb4b-434c-860d-24bb7a576ed3","block_type":"box","text":"be necessary. Additional documentary evidence of authority is required by the Transfer Agent in the event redemption","page_number":164,"box":{"x":69,"y":725,"width":835,"height":11}},{"id":"20b8e09f-d880-49aa-8b46-7f89bae83fdf","block_type":"box","text":"is requested by a corporation, partnership, trust, fiduciary, executor or administrator.","page_number":164,"box":{"x":70,"y":740,"width":603,"height":11}},{"id":"fcdc17f5-ab94-49a1-9297-c2e084b3e35e","block_type":"box","text":"If you make a redemption request before a Fund has collected payment for the purchase of shares, the Fund","page_number":164,"box":{"x":102,"y":763,"width":774,"height":11}},{"id":"aa1bb8da-2e56-44ac-915f-1af7c07e4bde","block_type":"box","text":"may delay mailing your proceeds. This delay will usually not exceed ten days. A Fund, its Administrators and the","page_number":164,"box":{"x":69,"y":778,"width":795,"height":11}},{"id":"6a9513d0-d5d9-4458-a73d-211d961dec25","block_type":"box","text":"Distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine.","page_number":164,"box":{"x":70,"y":793,"width":821,"height":11}},{"id":"891d5cd5-113c-4bfa-ae6a-775d6a1bed66","block_type":"box","text":"Telephone redemption requests will not be honored if: (i) the accountholder is deceased, (ii) the proceeds are to be","page_number":164,"box":{"x":68,"y":808,"width":823,"height":11}},{"id":"f475431f-0e14-463b-a0f8-177c1f3733ff","block_type":"box","text":"sent to someone other than the shareholder of record, (iii) a Fund does not have verified information on file, (iv) the","page_number":164,"box":{"x":69,"y":823,"width":823,"height":11}},{"id":"389e3417-345a-4a44-950a-b0492b409204","block_type":"box","text":"request is by an individual other than the accountholder of record, (v) the account is held by joint tenants who are","page_number":164,"box":{"x":69,"y":838,"width":809,"height":11}},{"id":"b89f02ec-59e8-406b-b952-b316e8185318","block_type":"box","text":"divorced, (vi) the address on the account has changed within the last 30 days or share certificates have been issued","page_number":164,"box":{"x":69,"y":853,"width":833,"height":12}},{"id":"875a0165-4e84-4850-8c37-326d2852c40b","block_type":"box","text":"on the account, or (vii) to protect against fraud, if the caller is unable to provide the account number, the name and","page_number":164,"box":{"x":69,"y":869,"width":821,"height":11}},{"id":"98748885-f888-4f58-a4b5-9d17cb2b43b6","block_type":"box","text":"address registered on the account and the social security number registered on the account. The Fund and its","page_number":164,"box":{"x":69,"y":884,"width":785,"height":11}},{"id":"4a1eac80-b5e2-4203-a541-c05e0233de1f","block_type":"box","text":"service providers will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that","page_number":164,"box":{"x":69,"y":899,"width":820,"height":11}},{"id":"57a944cd-3db4-49be-990a-55d003aae586","block_type":"box","text":"II-115","page_number":164,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"fe35e601-75ae-4941-9c7d-744b7f014d40","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":164,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"42e6a3e8-6748-4185-b29f-43d2b150668f","block_type":"box","text":"are reasonably believed to be genuine in accordance with such procedures. Before telephone requests will be","page_number":165,"box":{"x":69,"y":45,"width":782,"height":11}},{"id":"99c86ae9-7486-4302-b474-ebddc20ce8a8","block_type":"box","text":"honored, signature approval from all shareholders of record on the account must be obtained. The Fund may refuse a","page_number":165,"box":{"x":69,"y":60,"width":838,"height":11}},{"id":"0d7c9e8b-227b-45e2-9da7-ef7a1d48525a","block_type":"box","text":"telephone redemption request if it believes it is advisable to do so. During periods of substantial economic or market","page_number":165,"box":{"x":68,"y":75,"width":837,"height":11}},{"id":"32319d8e-1437-4a0a-add1-e2104f4a7904","block_type":"box","text":"change, telephone redemptions may be difficult to complete. Please find below alternative redemption methods.","page_number":165,"box":{"x":69,"y":90,"width":800,"height":11}},{"id":"2c846bc6-d2f4-4c8a-a58a-cebe4014eb78","block_type":"box","text":"Redemption orders for Institutional Shares placed prior to 4:00 p.m. (Eastern time) on a business day will be","page_number":165,"box":{"x":102,"y":113,"width":776,"height":11}},{"id":"3d224519-786a-443b-a4a5-be27424da3cf","block_type":"box","text":"priced at the NAV determined that day. If redemption orders are received by 4:00 p.m. (Eastern time) on a business","page_number":165,"box":{"x":70,"y":128,"width":823,"height":11}},{"id":"716bfbf6-ba22-447f-b606-e6f2c8cd45cc","block_type":"box","text":"day, payment for redeemed Institutional Shares will normally be wired in Federal Funds on the next business day. If","page_number":165,"box":{"x":69,"y":143,"width":820,"height":11}},{"id":"14360f76-cab4-4eb4-922e-a93d6683c221","block_type":"box","text":"the Federal Reserve Bank of Philadelphia is not open on the business day following receipt of the redemption order,","page_number":165,"box":{"x":68,"y":158,"width":826,"height":11}},{"id":"76b5fc99-4929-4d83-8ac2-20b95d4f03f1","block_type":"box","text":"the redemption order will be accepted and processed the next succeeding business day when the Federal Reserve","page_number":165,"box":{"x":68,"y":173,"width":817,"height":11}},{"id":"e2e75598-ca87-42dc-b5f7-8fafc487b7bb","block_type":"box","text":"Bank of Philadelphia is open, provided that the Fund’s custodian is also open for business.","page_number":165,"box":{"x":70,"y":188,"width":648,"height":11}},{"id":"3f988d32-4d56-4ffc-b17d-54147af89df4","block_type":"box","text":"Redeem by VRU:","page_number":165,"box":{"x":102,"y":211,"width":120,"height":11}},{"id":"65949c7a-5d0b-48d1-884c-3d4ed5d76532","block_type":"box","text":"Investor class shares, excluding Investor P Shares, may also be redeemed by use of a Fund’s","page_number":165,"box":{"x":229,"y":211,"width":667,"height":11}},{"id":"4266300a-cb72-412d-aec3-ea54aa81e962","block_type":"box","text":"automated voice response unit service (“VRU”). Payment for Investor class shares redeemed by VRU may be made","page_number":165,"box":{"x":69,"y":226,"width":820,"height":11}},{"id":"9d7bf75b-f844-414d-b0e8-a43df7f84069","block_type":"box","text":"for non-retirement accounts in amounts up to $25,000, either through check, ACH or wire.","page_number":165,"box":{"x":68,"y":241,"width":644,"height":11}},{"id":"c1812f17-f028-4aec-a5f6-cbed01192d97","block_type":"box","text":"Redeem by Internet:","page_number":165,"box":{"x":102,"y":264,"width":147,"height":11}},{"id":"bd65b0ec-dfc5-48e6-916a-e8739d201924","block_type":"box","text":"Certain Investor and Institutional class shares may also be redeemed by logging onto the","page_number":165,"box":{"x":255,"y":264,"width":637,"height":11}},{"id":"95ac09d4-5ba3-40fa-a715-26a86290e815","block_type":"box","text":"BlackRock website at www.blackrock.com. Proceeds from Internet redemptions may be sent via check, ACH or wire to","page_number":165,"box":{"x":70,"y":279,"width":836,"height":11}},{"id":"9b4c13ad-8c55-4a59-b683-175cb1694daf","block_type":"box","text":"the bank account of record. Payment for shares redeemed by Internet may be made for non-retirement accounts up","page_number":165,"box":{"x":68,"y":294,"width":823,"height":11}},{"id":"7363062f-6c19-457d-8d5a-1e6aade5f7d9","block_type":"box","text":"to $100,000 per account per day, either through check, ACH or wire. Different maximums may apply to certain","page_number":165,"box":{"x":68,"y":309,"width":789,"height":11}},{"id":"f8b4638c-a94f-4984-b381-d7458fea4882","block_type":"box","text":"institutional investors.","page_number":165,"box":{"x":70,"y":325,"width":155,"height":8}},{"id":"21584a68-3e17-438d-98fc-d73d32e69090","block_type":"box","text":"Redeem in Writing:","page_number":165,"box":{"x":102,"y":347,"width":137,"height":11}},{"id":"47ad950d-be1d-4a62-a4b8-d7ea0f766aea","block_type":"box","text":"If you hold shares with the Transfer Agent you may redeem such shares without charge by","page_number":165,"box":{"x":247,"y":347,"width":639,"height":11}},{"id":"1b3682f6-ce63-4266-a389-b48f4e588b0b","block_type":"box","text":"writing to BlackRock, P.O. Box 534429, Pittsburgh, Pennsylvania 15253-4429. Redemption requests delivered other","page_number":165,"box":{"x":68,"y":362,"width":831,"height":11}},{"id":"87fdbd55-1587-46cd-b054-9c2531b3c2a9","block_type":"box","text":"than by mail should be sent to BlackRock, Attention: 534429, 1350 Penn Avenue Suite 102, Pittsburgh,","page_number":165,"box":{"x":68,"y":377,"width":745,"height":12}},{"id":"cdf6117e-3bb9-4d1c-8222-c33252a3d17f","block_type":"box","text":"Pennsylvania 15222. If you hold share certificates issued by your Fund, the letter must be accompanied by","page_number":165,"box":{"x":69,"y":392,"width":764,"height":12}},{"id":"8a8b54a5-843a-406a-a43a-969cf7df4f58","block_type":"box","text":"certificates for the shares. All shareholders on the account must sign the letter. A medallion signature guarantee will","page_number":165,"box":{"x":69,"y":407,"width":831,"height":12}},{"id":"93410f40-a374-4978-a84a-c0571ea124b7","block_type":"box","text":"generally be required but may be waived in certain limited circumstances. You can obtain a medallion signature","page_number":165,"box":{"x":68,"y":423,"width":794,"height":11}},{"id":"b9a298b2-eba2-4f98-918c-358bd76dd7b1","block_type":"box","text":"guarantee stamp from a bank, securities dealer, securities broker, credit union, savings and loan association,","page_number":165,"box":{"x":68,"y":438,"width":782,"height":11}},{"id":"b20d0832-4590-4780-8773-bbcc76556816","block_type":"box","text":"national securities exchange or registered securities association. A notary public seal will not be acceptable. If you","page_number":165,"box":{"x":69,"y":453,"width":817,"height":11}},{"id":"9332f167-babb-4f8b-a0a0-fe8eb31bd9ff","block_type":"box","text":"hold stock certificates, return the certificates with the letter. Proceeds from redemptions may be sent via check, ACH","page_number":165,"box":{"x":69,"y":468,"width":836,"height":11}},{"id":"0ffc2294-c3c7-4de1-b207-ca2da40b8707","block_type":"box","text":"or wire to the bank account of record.","page_number":165,"box":{"x":69,"y":483,"width":266,"height":9}},{"id":"98f52bab-a126-4899-89d5-eb70273a22e6","block_type":"box","text":"Redemptions of Investor P Shares, Service Shares, Class G Shares, Class K Shares and BlackRock Shares may","page_number":165,"box":{"x":102,"y":506,"width":802,"height":11}},{"id":"7b02f8be-4511-4b3f-94ce-9ae87805b93a","block_type":"box","text":"be made in the manner and amounts described in the Prospectuses.","page_number":165,"box":{"x":69,"y":521,"width":489,"height":11}},{"id":"727c61d0-4cdf-49fe-97d2-e1501005fdc9","block_type":"box","text":"The Funds or the Transfer Agent may temporarily suspend telephone transactions at any time.","page_number":165,"box":{"x":101,"y":543,"width":668,"height":12}},{"id":"8fa9bb26-f9c3-4ba5-9098-017bd73ced33","block_type":"box","text":"If you redeem shares directly with the Transfer Agent, payments will generally be mailed within one business day","page_number":165,"box":{"x":102,"y":566,"width":800,"height":11}},{"id":"0646b8f8-862e-470b-9d48-128d7f3e9a72","block_type":"box","text":"of receipt of the proper notice of redemption. A Fund may delay the mailing of a redemption check until good payment","page_number":165,"box":{"x":69,"y":581,"width":838,"height":12}},{"id":"3a438eb3-369e-4c5e-8921-e0106843adef","block_type":"box","text":"(that is, cash, Federal funds or certified check drawn on a U.S. bank) has been collected for the purchase of Fund","page_number":165,"box":{"x":69,"y":596,"width":811,"height":11}},{"id":"1cfb0940-cfc7-4661-a307-05745f786fda","block_type":"box","text":"shares, which delay will usually not exceed 10 days. If your account is held directly with the Transfer Agent and","page_number":165,"box":{"x":69,"y":612,"width":789,"height":11}},{"id":"c79cea57-f496-4b15-a5ef-160038e02e07","block_type":"box","text":"contains a fractional share balance following a redemption, the fractional share balance will be automatically","page_number":165,"box":{"x":69,"y":627,"width":775,"height":11}},{"id":"dedaf299-bfbc-4a08-baef-37b11ae61e07","block_type":"box","text":"redeemed by the Fund.","page_number":165,"box":{"x":69,"y":642,"width":162,"height":11}},{"id":"84d63d7c-d9eb-45dd-88c8-2ffabecc636b","block_type":"box","text":"Note on Low Balance Accounts.","page_number":165,"box":{"x":102,"y":665,"width":223,"height":8}},{"id":"81ca1057-c10e-41ec-bf2a-843ddefbc047","block_type":"box","text":"Because of the high cost of maintaining smaller shareholder accounts,","page_number":165,"box":{"x":332,"y":664,"width":503,"height":12}},{"id":"359972f6-608c-4d5c-b1d1-2892f8c9e062","block_type":"box","text":"BlackRock has set a minimum balance of $500 in each Fund position you hold within your account (“Fund","page_number":165,"box":{"x":70,"y":679,"width":752,"height":12}},{"id":"ebb8a492-4840-43a1-b997-90235afb090c","block_type":"box","text":"Minimum”), and may redeem the shares in your account if the NAV of those shares in your account falls below $500","page_number":165,"box":{"x":70,"y":694,"width":829,"height":12}},{"id":"91214ae5-dd81-4182-ba18-4c92e3afd264","block_type":"box","text":"for any reason, including market fluctuation.","page_number":165,"box":{"x":68,"y":710,"width":313,"height":11}},{"id":"dd8dda0a-0e8a-42ff-84fc-c2fbe4ce2fe8","block_type":"box","text":"You will be notified that the value of your account is less than the Fund Minimum before the Fund makes any","page_number":165,"box":{"x":101,"y":732,"width":775,"height":12}},{"id":"feba4e45-5ca7-4792-9c0d-b0349224d8e5","block_type":"box","text":"involuntary redemption. This notification will provide you with a 90 calendar day period to make an additional","page_number":165,"box":{"x":70,"y":748,"width":773,"height":11}},{"id":"5c402794-20fe-43bf-8540-be8e53fec3df","block_type":"box","text":"investment in order to bring the value of your account to at least $500 before the Fund makes an involuntary","page_number":165,"box":{"x":70,"y":762,"width":776,"height":12}},{"id":"0c1b7a77-3357-44ad-bf6f-ecd96858fd2e","block_type":"box","text":"redemption. This involuntary redemption will not charge any deferred sales charge, and may not apply to accounts of","page_number":165,"box":{"x":69,"y":778,"width":834,"height":11}},{"id":"f46e6577-68ff-4892-b88b-a9573eec2bfd","block_type":"box","text":"certain employer-sponsored retirement plans (not including IRAs), qualified state tuition plan (529 Plan) accounts,","page_number":165,"box":{"x":69,"y":793,"width":811,"height":11}},{"id":"faf9ff15-7206-4e8b-a120-3e406ec390a8","block_type":"box","text":"and select fee-based programs at your financial intermediary.","page_number":165,"box":{"x":69,"y":808,"width":435,"height":11}},{"id":"97d383e1-b8bb-4ffc-925b-080ae0e84961","block_type":"box","text":"Redemptions in Kind:","page_number":165,"box":{"x":102,"y":831,"width":153,"height":11}},{"id":"e9d03ea3-f118-4ff8-b86b-6cf6c04ce162","block_type":"box","text":"Each Fund reserves the right to honor any request for redemption by making payment in","page_number":165,"box":{"x":263,"y":831,"width":624,"height":11}},{"id":"79ea8b57-c5ab-4fdd-a73f-5174454238ad","block_type":"box","text":"whole or in part by delivering securities valued in the same way as they would be valued for purposes of computing a","page_number":165,"box":{"x":68,"y":846,"width":833,"height":11}},{"id":"752093ab-4dd3-4ce1-96ff-517601b6ec17","block_type":"box","text":"Fund’s NAV, except that each Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1%","page_number":165,"box":{"x":70,"y":860,"width":825,"height":12}},{"id":"af8c33e3-81a0-44f0-aada-4da5d1add811","block_type":"box","text":"of the Fund’s NAV during any 90-day period for any one shareholder. Redemptions in excess of those amounts will","page_number":165,"box":{"x":69,"y":876,"width":811,"height":11}},{"id":"e8b8ece0-ea18-4543-b81e-4f32c127acf9","block_type":"box","text":"normally be paid in cash but may be paid wholly or partly by a distribution in kind of securities.","page_number":165,"box":{"x":69,"y":891,"width":672,"height":11}},{"id":"eaf49f85-840f-4d35-8653-7a86889362e2","block_type":"box","text":"II-116","page_number":165,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"fcdfe796-316a-4cf5-a49d-48e706e99394","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":165,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"423d2877-0d8d-4530-8477-29cff4660990","block_type":"box","text":"The specific security or securities to be distributed will be determined by the Manager and could include a pro","page_number":166,"box":{"x":101,"y":45,"width":787,"height":11}},{"id":"6f627540-18d0-40f3-a1f2-a9edff3d5ac4","block_type":"box","text":"rata representation of the Fund’s portfolio or a non-pro-rata representation of the Fund’s portfolio depending upon","page_number":166,"box":{"x":69,"y":60,"width":812,"height":11}},{"id":"d0474175-c211-4179-8845-673d028b12ca","block_type":"box","text":"various circumstances and subject to the Funds’ policies and procedures and any applicable laws or regulations. In","page_number":166,"box":{"x":68,"y":75,"width":822,"height":11}},{"id":"987cef81-37d9-4d5a-87d6-20883263f6ed","block_type":"box","text":"effecting such redemption in kind, the Manager may select securities to distribute to the redeeming shareholder by","page_number":166,"box":{"x":69,"y":90,"width":822,"height":11}},{"id":"1f33ab28-64f4-410f-91d8-c86a912fbedf","block_type":"box","text":"considering certain factors, including, without limitation, the portfolio management team’s model or optimal portfolio,","page_number":166,"box":{"x":69,"y":105,"width":838,"height":11}},{"id":"e8069a07-6672-4f76-9e63-8ce9ad23075d","block_type":"box","text":"risk management considerations, compliance considerations, the active positioning of a Fund post-redemption, the","page_number":166,"box":{"x":69,"y":120,"width":818,"height":12}},{"id":"a49073e0-8e74-47a5-8dbd-564b50e01be5","block_type":"box","text":"liquidity of the securities, and the tax basis of the securities. There is no assurance that BlackRock will select to","page_number":166,"box":{"x":70,"y":135,"width":801,"height":11}},{"id":"1283a2f4-a5c3-408d-9f4e-873813c6c8ba","block_type":"box","text":"retain those securities that will perform the best. An Index Fund may deviate from pro rata redemptions but will seek","page_number":166,"box":{"x":69,"y":150,"width":832,"height":12}},{"id":"021056f3-f095-41f6-aa83-800522d9fe68","block_type":"box","text":"for the securities and other assets to be distributed to be deemed to be a fair representation of portfolio holdings","page_number":166,"box":{"x":68,"y":166,"width":812,"height":11}},{"id":"08e89945-2b7c-4f6d-b140-066563a5f872","block_type":"box","text":"and the interests of the remaining shareholders in the Index Fund to not be diluted.","page_number":166,"box":{"x":69,"y":181,"width":594,"height":11}},{"id":"a27c0074-8265-4877-b31a-831c480042ca","block_type":"box","text":"The Funds may effect redemptions in kind in an effort to, among other considerations: (a) manage the portfolio","page_number":166,"box":{"x":101,"y":203,"width":795,"height":12}},{"id":"0deb022a-9d1e-4d58-821c-f13852a912d0","block_type":"box","text":"efficiently or for any other portfolio management purpose, and (b) externalize certain transaction costs that would","page_number":166,"box":{"x":69,"y":218,"width":810,"height":12}},{"id":"f58a6bee-b037-421e-a171-10d283077ed3","block_type":"box","text":"otherwise be borne by a Fund in connection with redemption activity or portfolio turnover. Redemptions in kind may","page_number":166,"box":{"x":69,"y":234,"width":820,"height":11}},{"id":"143a255c-fb8b-479c-a7fd-d0f2d7c6a2f4","block_type":"box","text":"reduce the need for the Fund to maintain short-term cash reserves, reduce Fund transaction costs, reduce the need","page_number":166,"box":{"x":69,"y":249,"width":828,"height":10}},{"id":"83bd252c-2348-4d2b-b7bf-034d809b2aa8","block_type":"box","text":"for the Fund to sell its investments at inopportune times, and lower Fund capital gain recognition, all of which may be","page_number":166,"box":{"x":68,"y":264,"width":838,"height":11}},{"id":"f7c21a9c-b077-4a46-9bc0-a42f8e384699","block_type":"box","text":"considerations when determining whether to effect a redemption in kind. However, there can be no assurance that","page_number":166,"box":{"x":69,"y":279,"width":817,"height":11}},{"id":"a63b57ac-4e86-41f7-afc2-f39a0a705cdf","block_type":"box","text":"redemptions in kind can or will be effected when they would be beneficial to a Fund, and it may be impractical or","page_number":166,"box":{"x":69,"y":294,"width":802,"height":11}},{"id":"4a82ff3d-670a-4d98-8b73-a57d2679f4db","block_type":"box","text":"impossible to effect redemptions in kind with many or substantially all of the Fund’s shareholders because of, among","page_number":166,"box":{"x":70,"y":309,"width":837,"height":11}},{"id":"343b45cb-d142-4966-bc00-7e2e2a0b14fd","block_type":"box","text":"other things, how they hold their Fund shares or the small value of the redemptions.","page_number":166,"box":{"x":69,"y":324,"width":598,"height":12}},{"id":"c20fc711-6180-4a6f-8f0d-f061c328504c","block_type":"box","text":"In some circumstances, in order to meet Fund liquidity needs, for optimization of the Fund’s portfolio, or a","page_number":166,"box":{"x":102,"y":347,"width":756,"height":11}},{"id":"865c8415-0e2f-427f-b20a-4e648e9451f6","block_type":"box","text":"combination thereof, a Fund, in its discretion, may accept large purchase orders from one or more financial","page_number":166,"box":{"x":69,"y":362,"width":764,"height":11}},{"id":"fc334eec-b742-4783-a074-fcf2233fec24","block_type":"box","text":"institutions that are willing, upon redemption of their investment in the Fund, to receive their redemption proceeds in","page_number":166,"box":{"x":70,"y":377,"width":830,"height":12}},{"id":"515836a6-ccdd-4afa-9c1f-d6d35fbef458","block_type":"box","text":"kind rather than in cash. A Fund’s ability to pay these redemption proceeds in kind relieves the Fund of the need of","page_number":166,"box":{"x":69,"y":392,"width":821,"height":12}},{"id":"a7d69025-c170-4561-9d17-d5cdc6f6f062","block_type":"box","text":"the Fund to sell the securities that are distributed in kind and incur brokerage and other transaction costs associated","page_number":166,"box":{"x":68,"y":408,"width":837,"height":11}},{"id":"5f4e2862-66a8-4088-bb58-7a93e70f6116","block_type":"box","text":"with such sale, and may have the effect of reducing the amount of taxable gains the Fund would otherwise be","page_number":166,"box":{"x":68,"y":423,"width":784,"height":11}},{"id":"f21a4186-32e1-40a2-b50a-b9fce2243e1f","block_type":"box","text":"required to distribute to shareholders. A Fund’s ability to engage in such transactions is subject to, among other","page_number":166,"box":{"x":69,"y":438,"width":801,"height":11}},{"id":"b0716a1a-5eed-451e-b301-b8dbc82bb037","block_type":"box","text":"things, limitations on frequency of redemptions in kind under the Fund’s policies and availability of shareholders able","page_number":166,"box":{"x":68,"y":453,"width":835,"height":11}},{"id":"b28f5e64-370d-49c8-a518-2fd9471fd858","block_type":"box","text":"to transact in kind, and there is no assurance that the Fund can or will effect any redemptions in kind. Financial","page_number":166,"box":{"x":68,"y":468,"width":796,"height":11}},{"id":"b59fa0ec-af05-41ed-8ca8-9a565a29737f","block_type":"box","text":"institutions that participate in the transactions described in this sub-section do not receive a fee from the Fund for","page_number":166,"box":{"x":70,"y":483,"width":816,"height":11}},{"id":"dec834b6-3c89-4627-9eb2-fdb9de5e6d76","block_type":"box","text":"doing so. The Funds’ short-term trading policy shall not apply to the transactions described in this sub-section.","page_number":166,"box":{"x":69,"y":498,"width":788,"height":11}},{"id":"134549b8-444b-49f7-9267-2bdd1790df30","block_type":"box","text":"If you receive securities through a redemption in kind, and desire to convert them to cash, you may pay taxes","page_number":166,"box":{"x":102,"y":521,"width":779,"height":11}},{"id":"3e4bfa34-a67e-4924-a87a-b32f50b7027c","block_type":"box","text":"and brokerage and other transaction costs to dispose of the securities. You may also receive less for the securities","page_number":166,"box":{"x":69,"y":536,"width":823,"height":11}},{"id":"4760af64-6618-401c-856c-5e46c825f87b","block_type":"box","text":"than the price at which they were valued for purposes of effecting the redemption. There may also be a risk that","page_number":166,"box":{"x":68,"y":551,"width":800,"height":11}},{"id":"36eb19a6-ca93-4155-943c-02deb59cf9ad","block_type":"box","text":"redemption in kind activity could negatively impact the market value of the securities distributed in kind and, in turn,","page_number":166,"box":{"x":69,"y":566,"width":826,"height":11}},{"id":"1ae2b096-9c23-4b67-9cab-8fb2f352adaf","block_type":"box","text":"the NAV of the corresponding Fund.","page_number":166,"box":{"x":68,"y":581,"width":251,"height":12}},{"id":"28d71653-9f8c-4f66-bcc5-64b89bb8a9ed","block_type":"box","text":"Repurchase","page_number":166,"box":{"x":69,"y":612,"width":85,"height":11}},{"id":"f9084ab7-d784-47ce-b8cb-109629568575","block_type":"box","text":"A Fund normally will accept orders to repurchase shares from Selling Dealers for their customers. Shares will be","page_number":166,"box":{"x":101,"y":634,"width":800,"height":12}},{"id":"94e079cc-ce13-47bc-857e-d2dde3cae03e","block_type":"box","text":"priced at the NAV of the Fund next determined after receipt of the repurchase order by a Selling Dealer that has been","page_number":166,"box":{"x":70,"y":649,"width":833,"height":12}},{"id":"283e77ea-0455-42ec-ba56-7246d1fb1ede","block_type":"box","text":"authorized by the Distributor by contract to accept such orders. As to repurchase orders received by Selling Dealers","page_number":166,"box":{"x":69,"y":665,"width":822,"height":11}},{"id":"439fc5e7-28f8-4360-acdb-3ce366fefbf5","block_type":"box","text":"prior to the close of business on the NYSE (generally, the NYSE closes at 4:00 p.m. Eastern time), on the day the","page_number":166,"box":{"x":70,"y":680,"width":809,"height":11}},{"id":"c500e28c-c0c6-4611-9334-05d07639f9f7","block_type":"box","text":"order is placed, which includes orders received after the close of business on the previous day, the repurchase price","page_number":166,"box":{"x":69,"y":695,"width":831,"height":11}},{"id":"a6f5d7c0-90c4-4849-b430-6fe703c92e20","block_type":"box","text":"is the NAV determined as of the close of business on the NYSE on that day. If the orders for repurchase are not","page_number":166,"box":{"x":70,"y":710,"width":796,"height":11}},{"id":"cc9d8d40-ef05-4f37-afa0-974f2fafc5d5","block_type":"box","text":"received by the Selling Dealer before the close of business on the NYSE, such orders are deemed received on the","page_number":166,"box":{"x":69,"y":725,"width":812,"height":11}},{"id":"090542ed-c5de-4a2b-9031-7db1dac09372","block_type":"box","text":"next business day.","page_number":166,"box":{"x":69,"y":740,"width":130,"height":11}},{"id":"8154b229-d901-4cb6-b1c8-6f13a483c7e2","block_type":"box","text":"These repurchase arrangements are for your convenience and do not involve a charge by the Fund (other than","page_number":166,"box":{"x":101,"y":763,"width":783,"height":11}},{"id":"c3ab7d7d-0e3e-40b4-8f32-a9501f9654b2","block_type":"box","text":"any applicable CDSC or redemption fee). However, Selling Dealers may charge a processing fee in connection with","page_number":166,"box":{"x":69,"y":778,"width":813,"height":11}},{"id":"3c6875ef-6ed8-429a-8004-fdf17df01a81","block_type":"box","text":"such transactions. In addition, securities firms that do not have selected dealer agreements with the Distributor may","page_number":166,"box":{"x":69,"y":793,"width":832,"height":11}},{"id":"118539f6-39fd-4001-bbf9-7cc35e7aea01","block_type":"box","text":"impose a transaction charge for transmitting the notice of repurchase to the Fund. Each Fund reserves the right to","page_number":166,"box":{"x":70,"y":808,"width":814,"height":11}},{"id":"76af5fbd-8357-4584-a7d5-a60be08b6b4e","block_type":"box","text":"reject any order for repurchase. A shareholder whose order for repurchase is rejected by a Fund, however, may","page_number":166,"box":{"x":69,"y":823,"width":788,"height":11}},{"id":"cd9e4580-48f2-4964-a4c9-3cbfa13dd15d","block_type":"box","text":"redeem shares as set out above.","page_number":166,"box":{"x":69,"y":839,"width":235,"height":8}},{"id":"060e0f44-ab56-43bf-ac47-10be18a71c60","block_type":"box","text":"II-117","page_number":166,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"dc9a22f1-704b-4d8f-8ed1-f31c675a569b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":166,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"d339bc28-90fd-4136-acbd-7e020d83650d","block_type":"box","text":"Reinstatement Privilege — Investor A and Investor P Shares","page_number":167,"box":{"x":69,"y":45,"width":440,"height":11}},{"id":"e4728b97-13cc-43f4-abdf-ffc5652e8875","block_type":"box","text":"Upon redemption of Investor A, Investor A1, Investor P or Institutional Shares, as applicable, shareholders may","page_number":167,"box":{"x":102,"y":67,"width":791,"height":11}},{"id":"f5ee5915-8eea-4de9-9130-08378766c53d","block_type":"box","text":"reinvest all or a portion of their redemption proceeds (after paying any applicable CDSC) in Investor A or Investor P","page_number":167,"box":{"x":69,"y":82,"width":815,"height":12}},{"id":"4bdb41d5-dd89-4e84-a840-9cd6fcecc4bc","block_type":"box","text":"Shares of the same or another BlackRock fund without paying a front-end sales charge. This right may be exercised","page_number":167,"box":{"x":69,"y":98,"width":822,"height":11}},{"id":"d128c022-2785-4499-ab57-833e78ef5db7","block_type":"box","text":"within 90 days of the redemption, provided that the Investor A or Investor P Shares, as applicable, of that fund is","page_number":167,"box":{"x":68,"y":113,"width":806,"height":11}},{"id":"1c5b60bc-b704-462c-a943-16945c5e786b","block_type":"box","text":"currently open to new investors or the shareholder has a current account in that closed fund. Shares will be","page_number":167,"box":{"x":69,"y":128,"width":768,"height":11}},{"id":"f84d04b6-caad-4435-bf5d-f6db38f28773","block_type":"box","text":"purchased at the NAV calculated at the close of trading on the day the request is received in good order. To exercise","page_number":167,"box":{"x":70,"y":143,"width":827,"height":11}},{"id":"80f219af-c198-4b44-930c-bcecdb21db2b","block_type":"box","text":"this privilege, the Transfer Agent must receive written notification from the shareholder of record or the registered","page_number":167,"box":{"x":68,"y":158,"width":809,"height":11}},{"id":"2c277059-b5b9-4539-8438-92b71f5b484a","block_type":"box","text":"representative of record, at the time of purchase. Investors should consult a tax advisor concerning the tax","page_number":167,"box":{"x":69,"y":173,"width":764,"height":11}},{"id":"6774a0c3-3711-4079-9825-324765e2a7eb","block_type":"box","text":"consequences of exercising this reinstatement privilege.","page_number":167,"box":{"x":69,"y":188,"width":400,"height":12}},{"id":"a7c980f9-06b1-4f2e-a84a-a95817ec8371","block_type":"box","text":"SHAREHOLDER SERVICES","page_number":167,"box":{"x":384,"y":218,"width":210,"height":9}},{"id":"912ec0b5-09f5-437d-931a-9f6b7fb982c0","block_type":"box","text":"Each Fund offers one or more of the shareholder services described below that are designed to facilitate","page_number":167,"box":{"x":102,"y":241,"width":747,"height":11}},{"id":"5fdbed52-288e-482a-a82d-6a8623d3ca4e","block_type":"box","text":"investment in its shares. You can obtain more information about these services from each Fund by calling the","page_number":167,"box":{"x":70,"y":256,"width":781,"height":11}},{"id":"a5e1c582-e90a-4dbd-b880-d48254eccef6","block_type":"box","text":"telephone number on the cover page, or from the Distributor, your financial adviser, your selected securities dealer or","page_number":167,"box":{"x":68,"y":271,"width":836,"height":11}},{"id":"ddf6f9fd-5d9b-49ef-ae1a-a7c52139b1f7","block_type":"box","text":"other financial intermediary. Certain of these services are available only to U.S. investors.","page_number":167,"box":{"x":69,"y":286,"width":641,"height":11}},{"id":"2b4b888b-60e6-4e45-80b9-84e4f03510da","block_type":"box","text":"Investment Account","page_number":167,"box":{"x":69,"y":316,"width":146,"height":9}},{"id":"fc4d6a8d-59d0-42b4-a38c-dcb306d5662b","block_type":"box","text":"If your account is maintained at the Transfer Agent (an “Investment Account”) you will receive statements, at","page_number":167,"box":{"x":102,"y":339,"width":774,"height":11}},{"id":"5ee8f9d4-109c-4368-9815-48ad70741b91","block_type":"box","text":"least quarterly, from the Transfer Agent. These statements will serve as confirmations for automatic investment","page_number":167,"box":{"x":70,"y":354,"width":796,"height":11}},{"id":"3f20fe8d-d73e-4d67-9f6f-d04a304d925e","block_type":"box","text":"purchases and the reinvestment of dividends. The statements also will show any other activity in your Investment","page_number":167,"box":{"x":70,"y":369,"width":807,"height":11}},{"id":"b11b0038-7e37-4c5d-9606-5478b2fee7dd","block_type":"box","text":"Account since the last statement. You also will receive separate confirmations for each purchase or sale transaction","page_number":167,"box":{"x":68,"y":384,"width":830,"height":11}},{"id":"e3f4bb8a-aae4-45fa-9397-95a1ad5e3a7a","block_type":"box","text":"other than automatic investment purchases and the reinvestment of dividends. If your Investment Account is held at","page_number":167,"box":{"x":69,"y":399,"width":829,"height":11}},{"id":"daace7ef-0303-4e75-a473-fa8176277920","block_type":"box","text":"the Transfer Agent you may make additions to it at any time by mailing a check directly to the Transfer Agent. Each","page_number":167,"box":{"x":68,"y":414,"width":815,"height":12}},{"id":"fa31e540-4020-4e3a-980a-af58cf5ea4bb","block_type":"box","text":"Fund limits purchases by personal check to $500,000 per trade. You may also maintain an account through a","page_number":167,"box":{"x":70,"y":429,"width":781,"height":12}},{"id":"4cf362e2-40f7-4450-b3de-5247f7f6e5d2","block_type":"box","text":"selected securities dealer or other financial intermediary. If you transfer shares out of an account maintained with a","page_number":167,"box":{"x":69,"y":445,"width":825,"height":11}},{"id":"c80510e4-4e95-472d-9f6e-23f0cfc000de","block_type":"box","text":"selected securities dealer or other financial intermediary, an Investment Account in your name may be opened","page_number":167,"box":{"x":69,"y":460,"width":785,"height":11}},{"id":"aecb22a4-8079-4d24-a47e-625b1dac82a7","block_type":"box","text":"automatically at the Transfer Agent.","page_number":167,"box":{"x":69,"y":475,"width":251,"height":11}},{"id":"ff683381-5aea-42be-bcf9-e60907007ca8","block_type":"box","text":"You may transfer Fund shares from a selected securities dealer or other financial intermediary to another","page_number":167,"box":{"x":101,"y":498,"width":750,"height":11}},{"id":"3ceb862e-3192-44c3-a3c5-aa471b490ac8","block_type":"box","text":"securities dealer or other financial intermediary that has entered into an agreement with the Distributor. Certain","page_number":167,"box":{"x":69,"y":513,"width":797,"height":11}},{"id":"19388f98-40fc-4fd5-8a97-caedf0667abd","block_type":"box","text":"shareholder services may not be available for the transferred shares. All future trading of these assets must be","page_number":167,"box":{"x":69,"y":528,"width":797,"height":11}},{"id":"18aa1f9f-b1b1-4a63-9cdc-db466ae2b42e","block_type":"box","text":"coordinated by the new firm. If you wish to transfer your shares to a securities dealer or other financial intermediary","page_number":167,"box":{"x":69,"y":543,"width":826,"height":11}},{"id":"3e79414b-a485-4278-b2d5-5102b1374576","block_type":"box","text":"that has not entered into an agreement with the Distributor, you must either (i) redeem your shares, paying any","page_number":167,"box":{"x":68,"y":558,"width":792,"height":11}},{"id":"41ad9c9b-e6ae-4b4d-a112-6b8e2fa720bb","block_type":"box","text":"applicable CDSC or (ii) continue to maintain an Investment Account at the Transfer Agent for those shares. You also","page_number":167,"box":{"x":69,"y":573,"width":824,"height":11}},{"id":"7449b50f-8e37-4763-8f03-a4bfd4f34dd6","block_type":"box","text":"may request that the new securities dealer or other financial intermediary maintain the shares in an account at the","page_number":167,"box":{"x":69,"y":588,"width":820,"height":11}},{"id":"78e52195-b195-4345-a3c7-e76faa0e69d0","block_type":"box","text":"Transfer Agent registered in the name of the securities dealer or other financial intermediary for your benefit whether","page_number":167,"box":{"x":68,"y":603,"width":833,"height":12}},{"id":"71c2672d-c812-4aa8-8a90-a04d200838f0","block_type":"box","text":"the securities dealer or other financial intermediary has entered into a selected dealer agreement or not. In the","page_number":167,"box":{"x":68,"y":618,"width":795,"height":12}},{"id":"e5fdf739-0168-4907-afed-6cc4b7e43f9a","block_type":"box","text":"interest of economy and convenience and because of the operating procedures of each Fund, share certificates will","page_number":167,"box":{"x":70,"y":634,"width":822,"height":11}},{"id":"cb711faa-1f30-44b3-bbe9-9149f1fe850d","block_type":"box","text":"not be issued physically. Shares are maintained by each Fund on its register maintained by the Transfer Agent and","page_number":167,"box":{"x":69,"y":649,"width":814,"height":11}},{"id":"f41646b5-e8b0-409e-8e4c-65482a5efde7","block_type":"box","text":"the holders thereof will have the same rights and ownership with respect to such shares as if certificates had been","page_number":167,"box":{"x":68,"y":664,"width":822,"height":11}},{"id":"a4fa6d05-ae90-4ef5-8d04-f617b9cde7fa","block_type":"box","text":"issued.","page_number":167,"box":{"x":70,"y":679,"width":49,"height":9}},{"id":"82dd6976-116b-4c27-a9d0-e262b880ad7f","block_type":"box","text":"If you are considering transferring a tax-deferred retirement account, such as an individual retirement account,","page_number":167,"box":{"x":102,"y":702,"width":785,"height":11}},{"id":"f782cc05-77a9-4487-8b2c-15b5c20e9df3","block_type":"box","text":"from one selected securities dealer to another securities dealer or other financial intermediary, you should be aware","page_number":167,"box":{"x":68,"y":717,"width":830,"height":11}},{"id":"6baadf28-af59-4791-a721-1645bfd0e509","block_type":"box","text":"that if the new firm will not take delivery of shares of the Fund, you must either redeem the shares (paying any","page_number":167,"box":{"x":68,"y":732,"width":790,"height":11}},{"id":"b1a2eb56-7f39-41c9-b39f-161e6244a4c9","block_type":"box","text":"applicable CDSC) so that the cash proceeds can be transferred to the account at the new firm, or you must continue","page_number":167,"box":{"x":69,"y":747,"width":831,"height":11}},{"id":"34ff33d7-2ade-4276-b428-8a229f2df1ab","block_type":"box","text":"to maintain a retirement account at the original selected securities dealer for those shares.","page_number":167,"box":{"x":68,"y":762,"width":652,"height":11}},{"id":"257975f4-3c45-4fc5-9329-6c2d857f34b7","block_type":"box","text":"Exchange Privilege","page_number":167,"box":{"x":69,"y":792,"width":138,"height":11}},{"id":"0405efd3-fe13-469b-a92e-e078816941d3","block_type":"box","text":"U.S. shareholders of Investor A, Investor A1, Investor C, Investor P, Class K, Institutional and Class G Shares of","page_number":167,"box":{"x":102,"y":815,"width":797,"height":11}},{"id":"1c4c5ec0-ccf7-43d0-aa17-aa489e3e2039","block_type":"box","text":"each Fund have an exchange privilege with certain other Funds. However, Investor A1 Shares may only exchange out.","page_number":167,"box":{"x":69,"y":830,"width":832,"height":11}},{"id":"ddde45b9-ef7f-4679-88cb-eb31dc9545a6","block_type":"box","text":"The minimum amount for exchanges of Investor class shares is $1,000, although you may exchange less than","page_number":167,"box":{"x":68,"y":845,"width":788,"height":12}},{"id":"bac3a06b-1545-4de0-8138-608d6196f0e8","block_type":"box","text":"$1,000 if you already have an account in the Fund into which you are exchanging. You may only exchange into a","page_number":167,"box":{"x":69,"y":860,"width":796,"height":12}},{"id":"603c058f-ff11-4067-ae5e-91b6073e6e5e","block_type":"box","text":"share class and a Fund that are open to new investors or in which you have a current account if the class or fund is","page_number":167,"box":{"x":69,"y":875,"width":824,"height":12}},{"id":"1dbf80dc-d525-4cc0-b4da-201cacba8c08","block_type":"box","text":"closed to new investors. Before effecting an exchange, you should obtain a currently effective prospectus of the fund","page_number":167,"box":{"x":69,"y":891,"width":835,"height":11}},{"id":"3a0f87c3-2084-4c99-b0cc-d178b469ba3b","block_type":"box","text":"II-118","page_number":167,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"4fcb1e65-6dcc-4838-90f9-330cdb47d697","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":167,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"000001d2-290d-4cf3-b7bc-1d0ddc50d550","block_type":"box","text":"into which you wish to make the exchange. Exercise of the exchange privilege is treated as a sale of the exchanged","page_number":168,"box":{"x":70,"y":45,"width":820,"height":11}},{"id":"9ccb6328-e870-43fb-acd7-fa57d6c50d2a","block_type":"box","text":"shares and a purchase of the acquired shares for U.S. federal income tax purposes.","page_number":168,"box":{"x":69,"y":60,"width":600,"height":11}},{"id":"7cb4b434-953c-4d6e-b68a-2e5e8dda59b7","block_type":"box","text":"Exchanges of Investor A, Investor A1, Investor P, Class K, Institutional and Class G Shares.","page_number":168,"box":{"x":102,"y":82,"width":648,"height":12}},{"id":"6f00848c-9255-47cc-9aed-990c29796ce5","block_type":"box","text":"Institutional Shares","page_number":168,"box":{"x":757,"y":83,"width":137,"height":8}},{"id":"8f75573d-e47a-4513-bd54-97818cf12944","block_type":"box","text":"are exchangeable with Institutional Shares of other Funds. Investor A and Investor A1 Shares are exchangeable for","page_number":168,"box":{"x":69,"y":98,"width":817,"height":11}},{"id":"572edb05-cbeb-4b53-9ff0-a84594f36442","block_type":"box","text":"Investor A Shares of other Funds to the extent such shares are offered by your financial intermediary. Investor P","page_number":168,"box":{"x":70,"y":113,"width":798,"height":11}},{"id":"48228baa-9a1a-46b2-84e6-e62160f79114","block_type":"box","text":"Shares are exchangeable for Investor P Shares of other Funds, to the extent such shares are offered by your financial","page_number":168,"box":{"x":69,"y":128,"width":838,"height":11}},{"id":"182e6f1a-09a0-479b-b384-90287042932d","block_type":"box","text":"intermediary. Class K Shares are exchangeable for Class K Shares of other Funds. Class G Shares are exchangeable","page_number":168,"box":{"x":70,"y":143,"width":834,"height":11}},{"id":"2bb8c120-7cda-4cb3-8079-871d2a16a98c","block_type":"box","text":"for Class G Shares of other Funds.","page_number":168,"box":{"x":68,"y":158,"width":246,"height":9}},{"id":"b7943a69-3c3f-4285-adbd-e36312a421f8","block_type":"box","text":"Exchanges of Institutional Shares outstanding for Institutional Shares of a second fund or for shares of a money","page_number":168,"box":{"x":102,"y":181,"width":800,"height":11}},{"id":"a2956411-e50b-4e7a-abbc-335a42d14ffb","block_type":"box","text":"market fund are effected on the basis of relative NAV per Institutional Share. Exchanges of Investor A or Investor A1","page_number":168,"box":{"x":69,"y":196,"width":826,"height":11}},{"id":"3e54c31c-b521-4fb4-ad33-c48f89fd6f63","block_type":"box","text":"Shares outstanding (“outstanding Investor A Shares”) for Investor A Shares of a second fund, or for shares of a","page_number":168,"box":{"x":69,"y":211,"width":795,"height":11}},{"id":"f94568a8-757f-436e-abde-6dceb41f1c57","block_type":"box","text":"money market fund (“new Investor A Shares”) are effected on the basis of relative NAV per share. Exchanges of","page_number":168,"box":{"x":69,"y":226,"width":797,"height":11}},{"id":"e35fd351-e7e6-412a-8fea-355ec9f9c750","block_type":"box","text":"Investor P Shares outstanding for Investor P Shares of a second fund are effected on the basis of relative NAV per","page_number":168,"box":{"x":70,"y":241,"width":814,"height":11}},{"id":"8ee5756e-1b7a-4bd6-af2c-043f5ffbb9f9","block_type":"box","text":"share. Exchanges of Class K Shares outstanding for Class K Shares of a second fund, or for shares of a money","page_number":168,"box":{"x":69,"y":256,"width":796,"height":12}},{"id":"30ef39e6-1d57-445f-9f86-a05039b0100f","block_type":"box","text":"market fund are effected on the basis of relative NAV per share. Exchanges of Class G Shares outstanding for Class","page_number":168,"box":{"x":69,"y":271,"width":828,"height":12}},{"id":"eebc3920-fa0a-480f-92aa-1fdcd4db5e48","block_type":"box","text":"G Shares of a second fund are effected on the basis of relative NAV per share.","page_number":168,"box":{"x":69,"y":286,"width":561,"height":11}},{"id":"892b923a-61ee-4698-9926-aa5e45ed6640","block_type":"box","text":"Exchanges of Investor C Shares.","page_number":168,"box":{"x":102,"y":309,"width":229,"height":11}},{"id":"e21fa516-4b32-4c86-aa76-b5b2963d9084","block_type":"box","text":"Shareholders of certain Funds with Investor C Shares outstanding (“outstanding","page_number":168,"box":{"x":338,"y":309,"width":570,"height":11}},{"id":"ab1ba553-abe6-45f7-841a-2fbc5205614d","block_type":"box","text":"Investor C Shares”) may exchange their shares for Investor C Shares of a second Fund (“new Investor C Shares”) or","page_number":168,"box":{"x":70,"y":324,"width":827,"height":12}},{"id":"7d289483-7f50-44b2-a210-2d5ffaf221e0","block_type":"box","text":"for shares of a money market fund (“new money market fund Shares”) on the basis of relative NAV per share, without","page_number":168,"box":{"x":68,"y":339,"width":839,"height":12}},{"id":"196081ab-f2b4-4285-adcc-29bcb457782c","block_type":"box","text":"the payment of any CDSC. Certain Funds impose different CDSC schedules. For purposes of computing the CDSC","page_number":168,"box":{"x":68,"y":355,"width":811,"height":11}},{"id":"c232a334-d6d9-459b-aaef-43c0274fe196","block_type":"box","text":"upon redemption of new Investor C Shares or new money market fund Shares, as applicable, the time you held both","page_number":168,"box":{"x":69,"y":370,"width":827,"height":11}},{"id":"239c9782-fe14-4dfe-8b55-a7462a8a1d51","block_type":"box","text":"the exchanged Investor C Shares and the new Investor C Shares or new money market fund Shares will count","page_number":168,"box":{"x":68,"y":385,"width":781,"height":11}},{"id":"02ca0521-cb9e-4c0c-88ed-8bf3b048137d","block_type":"box","text":"towards the holding period of the new Investor C Shares or new money market fund Shares.","page_number":168,"box":{"x":68,"y":400,"width":654,"height":11}},{"id":"e8e8786b-505a-40b2-b0c1-7da8a765618c","block_type":"box","text":"Exchanges of Service Shares.","page_number":168,"box":{"x":102,"y":423,"width":211,"height":11}},{"id":"06f5bf81-438b-4f5c-9a17-438c2b7128d8","block_type":"box","text":"Service Shares can be exchanged for Service Shares of Funds that are covered by","page_number":168,"box":{"x":319,"y":423,"width":588,"height":11}},{"id":"9a3f5b30-1909-48a0-b786-085924c7f89e","block_type":"box","text":"selected dealer agreements with the Distributor.","page_number":168,"box":{"x":69,"y":438,"width":342,"height":11}},{"id":"a4986760-0b8a-4367-bc4d-cdcfbb542fd0","block_type":"box","text":"Exchanges for Shares of a Money Market Fund.","page_number":168,"box":{"x":102,"y":460,"width":335,"height":12}},{"id":"8093bfa3-e826-4de0-9012-4896807638eb","block_type":"box","text":"You may exchange any class of Investor class shares, excluding","page_number":168,"box":{"x":443,"y":460,"width":455,"height":12}},{"id":"9662ab73-3fab-4a46-96e7-d77e046ef053","block_type":"box","text":"Investor P Shares, for shares of an affiliated money market fund. If you exchange into BlackRock Summit Cash","page_number":168,"box":{"x":70,"y":475,"width":788,"height":12}},{"id":"5ad688c1-63b6-4070-b3b5-ca1359d9b945","block_type":"box","text":"Reserves Fund (“Summit”), a series of BlackRock Financial Institutions Series Trust, you will receive one of two","page_number":168,"box":{"x":70,"y":491,"width":793,"height":11}},{"id":"010506d4-197c-4f47-bf9f-e3e0f01f22e9","block_type":"box","text":"classes of shares: exchanges of Investor A, Investor A1 and Institutional Shares of a Fund will receive Investor A","page_number":168,"box":{"x":69,"y":506,"width":802,"height":11}},{"id":"d243c4d9-4fe4-4daf-94c4-e4ff7b74c26a","block_type":"box","text":"Shares of Summit and exchanges of Investor C Shares of a Fund will receive Investor C Shares of Summit. You may","page_number":168,"box":{"x":69,"y":521,"width":824,"height":11}},{"id":"ea118a1e-68dd-424e-b120-1d557bfcef07","block_type":"box","text":"exchange Investor A Shares of Summit back into Investor A or Institutional Shares of a Fund, if you are eligible to","page_number":168,"box":{"x":69,"y":536,"width":805,"height":11}},{"id":"353ee3bc-eba8-427e-92e6-88f4ed3a5ddf","block_type":"box","text":"hold such shares. You may exchange Investor C Shares of Summit back into Investor C Shares of a Fund and, in the","page_number":168,"box":{"x":69,"y":551,"width":827,"height":11}},{"id":"8202e828-e2fc-44cd-97f3-0e08b561872b","block_type":"box","text":"event of such an exchange, the period of time that you held Investor C Shares of Summit will count toward","page_number":168,"box":{"x":69,"y":566,"width":758,"height":11}},{"id":"aa109c70-7be2-4677-ab69-af7183bfb1cf","block_type":"box","text":"satisfaction of the holding period requirement for purposes of reducing any CDSC. Investor C Shares of Summit are","page_number":168,"box":{"x":69,"y":581,"width":822,"height":12}},{"id":"2e3d4f0f-9d80-4a11-8dda-9d13cda2a082","block_type":"box","text":"subject to a distribution fee at an annual rate of 0.75% of average daily net assets of such Investor C Shares.","page_number":168,"box":{"x":69,"y":596,"width":782,"height":12}},{"id":"b6d572dc-e69b-4d05-ad36-732c274fd4c9","block_type":"box","text":"Exchanges of Investor C Shares of a money market fund other than Summit for Investor C Shares of a Fund will be","page_number":168,"box":{"x":70,"y":612,"width":814,"height":11}},{"id":"4c7e35ea-b057-4bf3-aaff-64ed72ae50fd","block_type":"box","text":"exercised at NAV. However, a CDSC may be charged in connection with any subsequent redemption of the Investor C","page_number":168,"box":{"x":69,"y":627,"width":830,"height":11}},{"id":"4cbf7f81-ad95-47c3-9171-5cfd5aa2f19d","block_type":"box","text":"Shares of the Fund received in the exchange. In determining the holding period for calculating the CDSC payable on","page_number":168,"box":{"x":69,"y":642,"width":821,"height":11}},{"id":"fbdc2ec9-67e7-4db7-8f05-724e9bfaa6be","block_type":"box","text":"redemption of Investor C Shares of the Fund received in the exchange, the holding period of the money market fund","page_number":168,"box":{"x":69,"y":657,"width":823,"height":11}},{"id":"066560b7-5fb0-4bc5-bfbf-adb64d4d0f0e","block_type":"box","text":"Investor C Shares originally held will be added to the holding period of the Investor C Shares acquired through","page_number":168,"box":{"x":70,"y":672,"width":781,"height":11}},{"id":"e7856bcf-79da-4cf7-8816-0d1df726fc22","block_type":"box","text":"exchange.","page_number":168,"box":{"x":69,"y":687,"width":70,"height":11}},{"id":"e7ea8d21-2993-41a1-b717-13925042f450","block_type":"box","text":"Exchanges by Par ticipants in Cer tain Programs.","page_number":168,"box":{"x":102,"y":710,"width":337,"height":11}},{"id":"1df274db-2a84-403f-8582-f6a3e3372d85","block_type":"box","text":"The exchange privilege may be modified with respect to certain","page_number":168,"box":{"x":445,"y":710,"width":448,"height":11}},{"id":"013010ba-6d3c-45d9-b5bb-da44643cdca7","block_type":"box","text":"participants in mutual fund advisory programs and other fee-based programs sponsored by the Manager, an affiliate","page_number":168,"box":{"x":70,"y":725,"width":828,"height":11}},{"id":"964e7643-90de-47ce-9f4d-df22253a16e1","block_type":"box","text":"of the Manager, or selected securities dealers or other financial intermediaries that have an agreement with the","page_number":168,"box":{"x":69,"y":740,"width":796,"height":11}},{"id":"7268c5db-8cb8-46e9-bfdd-b6e72c9cb60b","block_type":"box","text":"Distributor. See “Fee-Based Programs” below.","page_number":168,"box":{"x":70,"y":755,"width":324,"height":11}},{"id":"ee1a504a-d1b0-4701-a822-55da7a9b250f","block_type":"box","text":"Exercise of the Exchange Privilege.","page_number":168,"box":{"x":102,"y":778,"width":245,"height":11}},{"id":"cb425699-3190-401e-a4d5-7731f5c21b58","block_type":"box","text":"To exercise the exchange privilege, you should contact your financial adviser","page_number":168,"box":{"x":353,"y":778,"width":543,"height":11}},{"id":"f7f89153-1f1a-44b4-9669-c179929f74f0","block_type":"box","text":"or the Transfer Agent, who will advise each Fund of the exchange. If you do not hold share certificates, you may","page_number":168,"box":{"x":69,"y":793,"width":794,"height":11}},{"id":"3bcf86f7-5d35-4b49-89e2-f372c4f59daf","block_type":"box","text":"exercise the exchange privilege by wire through your securities dealer or other financial intermediary. Each Fund","page_number":168,"box":{"x":69,"y":808,"width":795,"height":11}},{"id":"ec7c6ffd-9b69-4270-bc80-f733fcb55ad1","block_type":"box","text":"reserves the right to require a properly completed exchange application.","page_number":168,"box":{"x":69,"y":823,"width":512,"height":12}},{"id":"807b3f16-4ffe-4c9c-b81f-accf646ead22","block_type":"box","text":"A shareholder who wishes to make an exchange may do so by sending a written request to the Fund c/o the","page_number":168,"box":{"x":101,"y":846,"width":772,"height":11}},{"id":"dfc6ac23-d58e-4ab2-9ea5-103da689f4cd","block_type":"box","text":"Transfer Agent at the following address: P.O. Box 534429, Pittsburgh, Pennsylvania 15253-4429. Shareholders are","page_number":168,"box":{"x":68,"y":861,"width":824,"height":11}},{"id":"e2e866b4-c390-47a1-947c-c7276cff675d","block_type":"box","text":"automatically provided with telephone exchange privileges when opening an account, unless they indicate on the","page_number":168,"box":{"x":69,"y":876,"width":801,"height":11}},{"id":"9d5da766-041a-4fd2-b7c8-c8148901c1ea","block_type":"box","text":"Application that they do not wish to use this privilege. To add this feature to an existing account that previously did","page_number":168,"box":{"x":68,"y":891,"width":817,"height":12}},{"id":"e3437187-d8e4-44ed-bac8-fd44cb84ddc4","block_type":"box","text":"not provide this option, a Telephone Exchange Authorization Form must be filed with the Transfer Agent. This form is","page_number":168,"box":{"x":69,"y":906,"width":826,"height":12}},{"id":"779f119d-045a-4072-91ab-bffd35f5f28b","block_type":"box","text":"II-119","page_number":168,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"6a951708-57f9-4f29-bd9c-cdc152e0a291","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":168,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"95be5bc2-47d0-4188-9cd8-6c9291567165","block_type":"box","text":"available from the Transfer Agent. Once this election has been made, the shareholder may simply contact the Fund by","page_number":169,"box":{"x":69,"y":45,"width":840,"height":11}},{"id":"bf4ece36-e864-4413-b470-c799f4c05d16","block_type":"box","text":"telephone at (800) 441-7762 to request the exchange. During periods of substantial economic or market change,","page_number":169,"box":{"x":68,"y":60,"width":811,"height":11}},{"id":"b6384dae-93cc-4613-a40c-5622a13c598f","block_type":"box","text":"telephone exchanges may be difficult to complete and shareholders may have to submit exchange requests to the","page_number":169,"box":{"x":68,"y":75,"width":815,"height":11}},{"id":"d1696169-277b-4141-b195-8def8c7a934f","block_type":"box","text":"Transfer Agent in writing.","page_number":169,"box":{"x":68,"y":90,"width":175,"height":11}},{"id":"6d520986-a635-40bc-9dd4-5a7321b91239","block_type":"box","text":"If the exchanging shareholder does not currently own shares of the investment portfolio whose shares are being","page_number":169,"box":{"x":102,"y":113,"width":800,"height":11}},{"id":"f41bb23d-6626-4b95-b134-ff23f3559221","block_type":"box","text":"acquired, a new account will be established with the same registration, dividend and capital gain options and broker","page_number":169,"box":{"x":69,"y":128,"width":828,"height":11}},{"id":"b0101bc0-bd8b-4b27-a25e-52177991d153","block_type":"box","text":"of record as the account from which shares are exchanged, unless otherwise specified in writing by the shareholder","page_number":169,"box":{"x":69,"y":143,"width":826,"height":11}},{"id":"c6376978-8d04-4bc7-92f7-ef12ea851916","block_type":"box","text":"with all signatures guaranteed by an eligible guarantor institution as defined below. In order to participate in the","page_number":169,"box":{"x":68,"y":158,"width":797,"height":11}},{"id":"ef83f403-044e-4621-b830-962e71ef3acc","block_type":"box","text":"Automatic Investment Program or establish a Systematic Withdrawal Plan for the new account, however, an","page_number":169,"box":{"x":68,"y":173,"width":763,"height":11}},{"id":"4a06cc9f-3d76-4814-9244-3116f9b14fe0","block_type":"box","text":"exchanging shareholder must file a specific written request.","page_number":169,"box":{"x":69,"y":188,"width":424,"height":12}},{"id":"e7830934-2130-4238-820d-fb2972c5a868","block_type":"box","text":"Any share exchange must satisfy the requirements relating to the minimum initial investment requirement, and","page_number":169,"box":{"x":101,"y":211,"width":790,"height":11}},{"id":"07ead579-a899-43b5-83f0-dad093536b5a","block_type":"box","text":"must be legally available for sale in the state of the investor’s residence. For U.S. federal income tax purposes, a","page_number":169,"box":{"x":69,"y":226,"width":808,"height":11}},{"id":"be6f9a36-438d-47a7-9dc9-a9ef59fe7931","block_type":"box","text":"share exchange is a taxable event and, accordingly, a capital gain or loss may be realized. Before making an","page_number":169,"box":{"x":69,"y":241,"width":771,"height":11}},{"id":"7369abe0-cefd-48ed-a600-13728cad3f55","block_type":"box","text":"exchange request, shareholders should consult a tax or other financial adviser and should consider the investment","page_number":169,"box":{"x":69,"y":256,"width":819,"height":12}},{"id":"912cc749-34c1-467b-9563-992a776e52ce","block_type":"box","text":"objective, policies and restrictions of the investment portfolio into which the shareholder is making an exchange.","page_number":169,"box":{"x":69,"y":271,"width":802,"height":12}},{"id":"7ed761a5-0e38-4908-a040-c043050dc13e","block_type":"box","text":"Brokers may charge a fee for handling exchanges.","page_number":169,"box":{"x":70,"y":286,"width":354,"height":12}},{"id":"13e63d95-905d-4ce7-bf5f-c81ebb58389c","block_type":"box","text":"The Funds reserve the right to suspend, modify or terminate the exchange privilege at any time. Notice will be","page_number":169,"box":{"x":101,"y":309,"width":782,"height":11}},{"id":"1aba8b0e-b340-44ee-bccc-f750eb307f18","block_type":"box","text":"given to shareholders of any material modification or termination except where notice is not required. The Funds","page_number":169,"box":{"x":68,"y":324,"width":800,"height":12}},{"id":"cbaef99d-78a7-434b-960b-bf963adf1c03","block_type":"box","text":"reserve the right to reject any telephone exchange request. Telephone exchanges may be subject to limitations as to","page_number":169,"box":{"x":69,"y":340,"width":831,"height":11}},{"id":"16104428-98a2-4fd3-b20b-5e6799f85717","block_type":"box","text":"amount or frequency, and to other restrictions that may be established from time to time to ensure that exchanges","page_number":169,"box":{"x":69,"y":355,"width":818,"height":11}},{"id":"56615132-b579-4cf0-802a-39c9b009cc46","block_type":"box","text":"do not operate to the disadvantage of any portfolio or its shareholders.","page_number":169,"box":{"x":69,"y":370,"width":506,"height":11}},{"id":"3553c52f-894b-46c8-b14d-9fdce4c9e7be","block_type":"box","text":"The Funds, the Administrators and BRIL will employ reasonable procedures to confirm that instructions","page_number":169,"box":{"x":101,"y":392,"width":733,"height":12}},{"id":"1901a5c3-600e-44e5-a445-4456fa2e5cca","block_type":"box","text":"communicated by telephone are genuine. The Funds, the Administrators and BRIL will not be liable for any loss,","page_number":169,"box":{"x":69,"y":407,"width":793,"height":12}},{"id":"f4ee819f-ce2a-4a30-baea-2d99628ded7c","block_type":"box","text":"liability, cost or expense for acting upon telephone instructions reasonably believed to be genuine in accordance with","page_number":169,"box":{"x":70,"y":423,"width":832,"height":11}},{"id":"a57c4138-5541-46e3-9fb2-572c6a67775a","block_type":"box","text":"such procedures. By use of the exchange privilege, the investor authorizes the Fund’s Transfer Agent to act on","page_number":169,"box":{"x":69,"y":438,"width":785,"height":11}},{"id":"2d9a4aa8-8cae-4efb-8c12-a004f559fd9d","block_type":"box","text":"telephonic or written exchange instructions from any person representing himself to be the investor and believed by","page_number":169,"box":{"x":68,"y":453,"width":825,"height":11}},{"id":"6623772f-b105-42ea-ac4c-43e3cde5dad1","block_type":"box","text":"the Fund’s Transfer Agent to be genuine. The records of the Fund’s Transfer Agent pertaining to such instructions are","page_number":169,"box":{"x":68,"y":468,"width":837,"height":11}},{"id":"f9d8795c-07e4-4096-aa74-7057efbee200","block_type":"box","text":"binding. The exchange privilege may be modified or terminated at any time upon 60 days’ notice to affected","page_number":169,"box":{"x":69,"y":483,"width":767,"height":11}},{"id":"9e14385c-5608-466e-96e1-2b202bfe8193","block_type":"box","text":"shareholders. The exchange privilege is only available in states where the exchange may legally be made.","page_number":169,"box":{"x":69,"y":498,"width":750,"height":11}},{"id":"45934aec-2357-4383-8750-1d2896d694a9","block_type":"box","text":"Each Fund reserves the right to limit the number of times an investor may exercise the exchange privilege.","page_number":169,"box":{"x":102,"y":521,"width":757,"height":11}},{"id":"d5d8a992-6454-4db9-880e-1d47f6954a18","block_type":"box","text":"Certain Funds may suspend the continuous offering of their shares to the general public at any time and may resume","page_number":169,"box":{"x":69,"y":536,"width":837,"height":11}},{"id":"577b92e1-1f2c-4954-9b56-52a518a8d82b","block_type":"box","text":"such offering from time to time. The exchange privilege is available only to U.S. shareholders in states where the","page_number":169,"box":{"x":69,"y":551,"width":805,"height":11}},{"id":"fd27c436-cefa-4d84-a899-d8a275cf107d","block_type":"box","text":"exchange legally may be made. The exchange privilege may be applicable to other new mutual funds whose shares","page_number":169,"box":{"x":69,"y":566,"width":817,"height":11}},{"id":"ee9b2c15-b382-4883-a34b-bf3cbf8a2aa4","block_type":"box","text":"may be distributed by the Distributor.","page_number":169,"box":{"x":69,"y":582,"width":262,"height":10}},{"id":"8fe9b7b6-49b0-41bc-aa8c-b7dbcc3404e6","block_type":"box","text":"Participation in Fee-Based Programs","page_number":169,"box":{"x":69,"y":612,"width":266,"height":11}},{"id":"a68b9ab4-0905-457a-9167-1697b3919951","block_type":"box","text":"If you participate in certain fee-based programs offered by BlackRock or an affiliate of BlackRock, or selected","page_number":169,"box":{"x":102,"y":634,"width":780,"height":12}},{"id":"caed8916-33fc-4c9c-ac71-616158415b2e","block_type":"box","text":"securities dealers or other financial intermediaries that have agreements with the Distributor or in certain fee-based","page_number":169,"box":{"x":69,"y":649,"width":826,"height":12}},{"id":"b88b96b6-acb7-444c-8013-4d71fa1669ec","block_type":"box","text":"programs in which BlackRock participates, you may be able to buy Institutional Shares, including by exchanges from","page_number":169,"box":{"x":70,"y":664,"width":825,"height":12}},{"id":"53de81a8-e8bf-4860-8480-aa73fdfd3f6a","block_type":"box","text":"other share classes. Sales charges on the shares being exchanged may be reduced or waived under certain","page_number":169,"box":{"x":69,"y":680,"width":770,"height":11}},{"id":"6717901d-c9e6-49c5-a249-b6bbc7e0ce1c","block_type":"box","text":"circumstances. You generally cannot transfer shares held through a fee-based program into another account. Instead,","page_number":169,"box":{"x":69,"y":695,"width":837,"height":11}},{"id":"689ab484-c03b-47ab-b5fb-8541ec772b74","block_type":"box","text":"if you choose to leave the fee-based program, you may have to redeem your shares held through the program and","page_number":169,"box":{"x":70,"y":710,"width":808,"height":11}},{"id":"50a17a2e-bae0-40ce-8a88-58ce9e06055f","block_type":"box","text":"purchase shares of another class, which may be subject to distribution and service fees. This may be a taxable event","page_number":169,"box":{"x":70,"y":725,"width":838,"height":11}},{"id":"c6892abe-4df7-4e7b-bd36-5b409866877e","block_type":"box","text":"and you may pay any applicable sales charges or redemption fee. Please speak to your financial intermediary for","page_number":169,"box":{"x":69,"y":740,"width":804,"height":11}},{"id":"a9c3cafe-0aac-4fb3-b832-200077cf8b85","block_type":"box","text":"information about specific policies and procedures applicable to your account.","page_number":169,"box":{"x":70,"y":755,"width":555,"height":11}},{"id":"30bff21e-52c0-482a-9d47-5625122ab447","block_type":"box","text":"Generally, upon termination of a fee-based program, the shares may be liquidated or the shares can be held in","page_number":169,"box":{"x":102,"y":778,"width":788,"height":11}},{"id":"f0ab662a-cb46-43b4-b50b-2b01bd2dc702","block_type":"box","text":"an account. In certain circumstances, when a shareholder chooses to continue to hold the shares, whatever share","page_number":169,"box":{"x":69,"y":793,"width":817,"height":10}},{"id":"3118f736-c91e-4bac-9426-c7c574e5698b","block_type":"box","text":"class was held in the program can be held after termination. Shares that have been held for less than specified","page_number":169,"box":{"x":69,"y":808,"width":796,"height":11}},{"id":"bd7da92c-d20d-4d30-8f84-fe715af1c003","block_type":"box","text":"periods within the program may be subject to a fee upon redemption. Shareholders that held Investor A or","page_number":169,"box":{"x":70,"y":823,"width":754,"height":12}},{"id":"930ac5e3-d7ef-4fac-a704-7317148a7c96","block_type":"box","text":"Institutional Shares in the program may be eligible to purchase additional shares of the respective share class of a","page_number":169,"box":{"x":70,"y":838,"width":820,"height":12}},{"id":"6872ea26-b192-40d4-9c59-39306616709b","block_type":"box","text":"Fund, but may be subject to upfront sales charges with respect to Investor A Shares. Additional purchases of","page_number":169,"box":{"x":70,"y":853,"width":777,"height":12}},{"id":"938f28b1-d925-42d4-a4d5-666bf258c71d","block_type":"box","text":"Institutional Shares are permitted only if you have an existing position at the time of purchase or are otherwise","page_number":169,"box":{"x":70,"y":869,"width":791,"height":11}},{"id":"573bf73f-2a93-4b29-987d-ebe33802fec0","block_type":"box","text":"eligible to purchase Institutional Shares. Please speak to your financial intermediary for more information.","page_number":169,"box":{"x":69,"y":884,"width":756,"height":11}},{"id":"db439720-9493-4bb7-93bd-aa79fbd1083d","block_type":"box","text":"II-120","page_number":169,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"b7bda5fd-74d6-4b89-ab2e-5d8982a9d80c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":169,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c4941702-001d-43b9-be27-8234d60c4a38","block_type":"box","text":"Certain financial intermediaries may, in connection with a change in account type (for example, due to leaving a","page_number":170,"box":{"x":102,"y":45,"width":793,"height":11}},{"id":"be54e656-aa63-4699-ad07-986426a5e4b0","block_type":"box","text":"fee-based program or upon termination of the fee-based program) or otherwise in accordance with the financial","page_number":170,"box":{"x":68,"y":60,"width":791,"height":11}},{"id":"659707ed-5e38-4690-bfa4-3b8d093952f9","block_type":"box","text":"intermediary’s policies and procedures, exchange the share class held in the program for another share class of the","page_number":170,"box":{"x":70,"y":75,"width":830,"height":11}},{"id":"16d867e9-37b8-4a3b-aae2-4a03464a4ddb","block_type":"box","text":"same fund, provided that the exchanged shares are not subject to a sales charge and the shareholder meets the","page_number":170,"box":{"x":69,"y":90,"width":807,"height":11}},{"id":"b1da395e-02c4-411c-8c75-3266e055191a","block_type":"box","text":"eligibility requirements of the new share class. Please speak to your financial intermediary for information about","page_number":170,"box":{"x":69,"y":105,"width":801,"height":11}},{"id":"6129baeb-9fec-4479-b39d-b3fde678c48a","block_type":"box","text":"specific policies and procedures applicable to your account.","page_number":170,"box":{"x":69,"y":120,"width":424,"height":11}},{"id":"34dfc508-647f-4a8d-a593-1e839981d8fe","block_type":"box","text":"Details about the features of each fee-based program and the relevant charges, terms and conditions are","page_number":170,"box":{"x":102,"y":143,"width":752,"height":11}},{"id":"812b769b-ac79-40cd-9f11-27b2d3440dab","block_type":"box","text":"included in the client agreement for each fee-based program and are available from your financial professional,","page_number":170,"box":{"x":70,"y":158,"width":789,"height":11}},{"id":"f86bdfac-99a7-4189-9f16-0b609b9d3e44","block_type":"box","text":"selected securities dealer or other financial intermediary. Please speak to your financial intermediary for more","page_number":170,"box":{"x":69,"y":173,"width":785,"height":11}},{"id":"f4e40e79-59aa-426e-a11a-d85e42afbd3b","block_type":"box","text":"information.","page_number":170,"box":{"x":70,"y":188,"width":83,"height":9}},{"id":"6590bbe9-9d2a-4a31-86a0-62d7260b6a28","block_type":"box","text":"Retirement and Education Savings Plans","page_number":170,"box":{"x":69,"y":219,"width":296,"height":11}},{"id":"073d8d29-b3c7-4f4c-9cac-497d6ac85c1b","block_type":"box","text":"Individual retirement accounts and other retirement and education savings plans are available from your financial","page_number":170,"box":{"x":102,"y":241,"width":805,"height":11}},{"id":"e67a09e7-bd00-4f85-862b-2a2f0d677d49","block_type":"box","text":"intermediary. Under these plans, investments may be made in a Fund (other than a Municipal Fund) and certain of","page_number":170,"box":{"x":70,"y":256,"width":815,"height":11}},{"id":"e1742057-764e-411a-bce4-3430eedc8781","block_type":"box","text":"the other mutual funds sponsored by the Manager or its affiliates as well as in other securities. There may be fees","page_number":170,"box":{"x":68,"y":271,"width":819,"height":12}},{"id":"c302b858-5733-4bde-a37b-186f4104a225","block_type":"box","text":"associated with investing through these plans. Information with respect to these plans is available on request from","page_number":170,"box":{"x":69,"y":286,"width":820,"height":12}},{"id":"87a8441d-a16c-45e6-b894-8daf1748cfe2","block_type":"box","text":"your financial intermediary.","page_number":170,"box":{"x":68,"y":302,"width":191,"height":11}},{"id":"88747c42-38a4-44d9-9555-baa7d63ed61b","block_type":"box","text":"Dividends received in each of the plans referred to above are exempt from U.S. federal taxation until distributed","page_number":170,"box":{"x":102,"y":324,"width":796,"height":11}},{"id":"1f244da6-f19d-4d5c-a849-1dca1ae331b6","block_type":"box","text":"from the plans and, in the case of Roth IRAs and education savings plans, may be exempt from taxation when","page_number":170,"box":{"x":68,"y":339,"width":784,"height":12}},{"id":"6720af83-7973-43cb-ac84-c70aa2002ac3","block_type":"box","text":"distributed as well. Investors considering participation in any retirement or education savings plan should review","page_number":170,"box":{"x":69,"y":355,"width":801,"height":11}},{"id":"0376cba8-e460-4877-bdec-7ea038f2cb29","block_type":"box","text":"specific tax laws relating to the plan and should consult their attorneys or tax advisors with respect to the","page_number":170,"box":{"x":69,"y":370,"width":753,"height":11}},{"id":"39e6b09f-6f73-45b1-8e31-7c324a9adfa0","block_type":"box","text":"establishment and maintenance of any such plan.","page_number":170,"box":{"x":69,"y":385,"width":354,"height":11}},{"id":"4ad8e0f2-ad69-4652-80a2-6c1e45c0aa1a","block_type":"box","text":"Automatic Investment Plans","page_number":170,"box":{"x":68,"y":415,"width":207,"height":9}},{"id":"64bcff4b-d85f-45d6-ba1d-db8f99dd32e9","block_type":"box","text":"Investor class shareholders and certain Service Share shareholders who were shareholders of the Compass","page_number":170,"box":{"x":102,"y":438,"width":773,"height":11}},{"id":"3dac3f9c-e31d-4cb0-b291-f9cc84897b22","block_type":"box","text":"Capital Group of Funds at the time of its combination with The PNC","page_number":170,"box":{"x":69,"y":453,"width":477,"height":11}},{"id":"0bbdb3d9-db91-41eb-9ef1-eafecffee96e","block_type":"box","text":"®","page_number":170,"box":{"x":547,"y":453,"width":6,"height":5}},{"id":"b4c9b888-53ae-4dcf-b4d1-f948ca08293d","block_type":"box","text":"Fund in 1996 may arrange for periodic","page_number":170,"box":{"x":559,"y":453,"width":272,"height":11}},{"id":"ad5a6d96-4b4b-4412-a67c-aa8f81c576bf","block_type":"box","text":"investments in that Fund through automatic deductions from a checking or savings account. The minimum pre","page_number":170,"box":{"x":70,"y":468,"width":787,"height":11}},{"id":"2f11fa7d-9250-4223-a01e-09f07b514242","block_type":"box","text":"authorized investment amount is $50. If you buy shares of a Fund through certain accounts, no minimum charge to","page_number":170,"box":{"x":69,"y":482,"width":822,"height":12}},{"id":"b960fbef-bf0f-4ab1-b2af-94f2802c5aa9","block_type":"box","text":"your bank account is required. Contact your financial adviser or other financial intermediary for more information.","page_number":170,"box":{"x":68,"y":498,"width":805,"height":11}},{"id":"06f34275-f830-48cd-b58c-ea319b0c1634","block_type":"box","text":"Automatic Dividend Reinvestment Plan","page_number":170,"box":{"x":68,"y":529,"width":285,"height":8}},{"id":"44b56db0-0433-471d-8e34-c2aac3441ea3","block_type":"box","text":"Each Fund will distribute substantially all of its net investment income and net realized capital gains, if any, to","page_number":170,"box":{"x":102,"y":551,"width":782,"height":11}},{"id":"e7419f78-7c88-498b-b937-3d9534a85f70","block_type":"box","text":"shareholders. All distributions are automatically reinvested at NAV in the form of additional full and fractional shares","page_number":170,"box":{"x":69,"y":566,"width":828,"height":11}},{"id":"a25c25fb-b532-4e82-8c54-940fc4ecd272","block_type":"box","text":"of the same class of shares of the relevant Fund unless a shareholder elects otherwise or as otherwise set forth in a","page_number":170,"box":{"x":69,"y":581,"width":839,"height":9}},{"id":"3ab3e9b1-5309-4c9a-a020-84dfe6e69fea","block_type":"box","text":"Fund’s prospectus. Such election, or any revocation thereof, must be made in writing to the Transfer Agent, and will","page_number":170,"box":{"x":70,"y":596,"width":822,"height":12}},{"id":"f1897645-47e7-4c52-9161-d61ef6255492","block_type":"box","text":"become effective with respect to dividends paid after its receipt by the Transfer Agent.","page_number":170,"box":{"x":69,"y":612,"width":614,"height":11}},{"id":"301a4402-ea19-46bf-ad5a-0c09f0dd9f94","block_type":"box","text":"Systematic Withdrawal Plans","page_number":170,"box":{"x":68,"y":642,"width":214,"height":11}},{"id":"b46bc4b4-796d-4ed1-8eed-746476843e2a","block_type":"box","text":"Shareholders may receive regular distributions from their accounts via a Systematic Withdrawal Plan (“SWP”).","page_number":170,"box":{"x":102,"y":664,"width":780,"height":12}},{"id":"08df0624-534f-495f-9d73-fe4b82da833e","block_type":"box","text":"Upon commencement of the SWP, the account must have a current value of $10,000 or more in a Fund.","page_number":170,"box":{"x":70,"y":679,"width":742,"height":12}},{"id":"0438acae-7c7e-482a-8416-0a81ecfec32a","block_type":"box","text":"Shareholders may elect to receive automatic cash payments of $50 or more at any interval. You may choose any day","page_number":170,"box":{"x":69,"y":694,"width":834,"height":12}},{"id":"8e053abe-d567-4d4d-bbf6-f8c437f6a998","block_type":"box","text":"for the withdrawal. If no day is specified, the withdrawals will be processed on the 25th day of the month or, if such","page_number":170,"box":{"x":68,"y":710,"width":823,"height":11}},{"id":"d1294dd9-d476-4a37-ba03-3b4bba6f48f2","block_type":"box","text":"day is not a business day, on the prior business day and are paid promptly thereafter. An investor may utilize the SWP","page_number":170,"box":{"x":69,"y":725,"width":840,"height":11}},{"id":"ab7fe6e6-b60f-44cd-b9e6-760832510dcd","block_type":"box","text":"by completing the Systematic Withdrawal Plan Application Form which may be obtained by visiting our website at","page_number":170,"box":{"x":69,"y":740,"width":800,"height":11}},{"id":"1b4d3a1e-bc82-4ba6-b0f2-bbbfd8fb848d","block_type":"box","text":"www.blackrock.com.","page_number":170,"box":{"x":68,"y":755,"width":142,"height":9}},{"id":"ac0a229f-03e5-4967-98da-e565f80889e9","block_type":"box","text":"Shareholders should realize that if withdrawals exceed income dividends their invested principal in the account","page_number":170,"box":{"x":102,"y":778,"width":789,"height":11}},{"id":"6bb2b14e-5601-4d71-a7a7-96e0c0218a24","block_type":"box","text":"will be depleted. To participate in the SWP, shareholders must have their dividends automatically reinvested.","page_number":170,"box":{"x":68,"y":793,"width":774,"height":11}},{"id":"596946ae-1b85-4444-9dd7-202d07b2f40b","block_type":"box","text":"Shareholders may change or cancel the SWP at any time, upon written notice to the Fund, or by calling the Fund at","page_number":170,"box":{"x":69,"y":808,"width":815,"height":11}},{"id":"53814632-6849-454a-b158-c7a872a989f9","block_type":"box","text":"(800) 441-7762. Purchases of additional Investor A or Investor P Shares of the Fund concurrently with withdrawals","page_number":170,"box":{"x":69,"y":823,"width":817,"height":11}},{"id":"6211c195-1279-4e22-8274-9b13c7a35a1e","block_type":"box","text":"may be disadvantageous to investors because of the sales charges involved and, therefore, are discouraged. No","page_number":170,"box":{"x":69,"y":838,"width":803,"height":12}},{"id":"6ae07853-9ca0-4652-bdec-cde210dbdd69","block_type":"box","text":"CDSC will be assessed on redemptions of Investor C Shares made through the SWP that do not exceed 12% of the","page_number":170,"box":{"x":69,"y":853,"width":820,"height":12}},{"id":"18d7322d-60c2-4162-a166-1a91a1d369ed","block_type":"box","text":"original investment on an annualized basis. For example, monthly, quarterly and semi-annual SWP redemptions of","page_number":170,"box":{"x":69,"y":869,"width":810,"height":11}},{"id":"492f5843-ae9a-4999-a1c0-8c42d9c6cb41","block_type":"box","text":"II-121","page_number":170,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"d4193725-9d4d-462c-aaea-111159e261f6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":170,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7a5259c9-48cd-416c-a25a-2538e52157fb","block_type":"box","text":"Investor C Shares will not be subject to the CDSC if they do not exceed 1% (monthly), 3% (quarterly) and 6% (semi","page_number":171,"box":{"x":70,"y":45,"width":816,"height":11}},{"id":"4fba979b-6ad0-413b-bb4b-214012af3bfa","block_type":"box","text":"annually), respectively, of an account’s NAV on the redemption date. SWP redemptions of Investor C Shares in excess","page_number":171,"box":{"x":69,"y":60,"width":840,"height":11}},{"id":"065efa55-9141-4d7f-8bfd-d4fe35764c2a","block_type":"box","text":"of this limit are still subject to the applicable CDSC.","page_number":171,"box":{"x":69,"y":75,"width":367,"height":11}},{"id":"cb732fef-4ebf-4351-aafb-338048b57be2","block_type":"box","text":"For this reason, a shareholder may not participate in the Automatic Investment Plan described above (see “How","page_number":171,"box":{"x":102,"y":98,"width":798,"height":11}},{"id":"dc7da97e-e5e8-4171-9f26-30687eaa30a2","block_type":"box","text":"to Buy, Sell, Exchange and Transfer Shares” or “How to Buy, Sell and Exchange Shares,” as applicable, in the Fund’s","page_number":171,"box":{"x":68,"y":113,"width":834,"height":11}},{"id":"f03a9c18-b12d-4875-9915-42fbd744c650","block_type":"box","text":"Prospectus) and the SWP at the same time.","page_number":171,"box":{"x":69,"y":128,"width":311,"height":11}},{"id":"3818b6ad-61aa-46ea-bfa7-1be326d4c542","block_type":"box","text":"Dividend Allocation Plan","page_number":171,"box":{"x":69,"y":158,"width":176,"height":9}},{"id":"375be7d5-0c39-47ad-adf6-7c3820a22e26","block_type":"box","text":"The Dividend Allocation Plan, as applicable, allows shareholders to elect to have all their dividends and any other","page_number":171,"box":{"x":101,"y":181,"width":807,"height":11}},{"id":"d9210436-2ebc-49e2-b538-e77b66587447","block_type":"box","text":"distributions from any Eligible Fund (which means funds so designated by the Distributor from time to time)","page_number":171,"box":{"x":69,"y":196,"width":763,"height":11}},{"id":"d3ebc2e8-9c46-4f31-9f5d-b748618a09e9","block_type":"box","text":"automatically invested at NAV in one other such Eligible Fund designated by the shareholder, provided the account","page_number":171,"box":{"x":69,"y":211,"width":814,"height":11}},{"id":"eacf63f3-94ac-4324-8a47-72685bb139ec","block_type":"box","text":"into which the dividends and distributions are directed is initially funded with the requisite minimum amount.","page_number":171,"box":{"x":70,"y":226,"width":771,"height":11}},{"id":"b99988f4-869d-401b-b939-24f0574ef122","block_type":"box","text":"PRICING OF SHARES","page_number":171,"box":{"x":406,"y":256,"width":167,"height":9}},{"id":"e7cdc66f-fe07-4a76-8eda-48da1c1abea1","block_type":"box","text":"Determination of Net Asset Value","page_number":171,"box":{"x":69,"y":286,"width":243,"height":9}},{"id":"320c31e6-5300-486d-88a8-30f366ad361e","block_type":"box","text":"Valuation of Shares.","page_number":171,"box":{"x":101,"y":309,"width":145,"height":9}},{"id":"b0effc78-e23c-4c9b-a4cd-9d47a126353c","block_type":"box","text":"The NAV for each class of shares of each Fund is generally calculated as of the close of","page_number":171,"box":{"x":252,"y":309,"width":626,"height":11}},{"id":"b08285cd-f6ef-4c0d-90ed-34d506535e54","block_type":"box","text":"regular trading hours on the NYSE (currently 4:00 p.m. Eastern Time) on each business day the NYSE is open.","page_number":171,"box":{"x":69,"y":324,"width":785,"height":11}},{"id":"65a25962-b801-46c1-adf0-098ba314c6d1","block_type":"box","text":"Valuation of assets held by a Fund is as follows:","page_number":171,"box":{"x":68,"y":339,"width":343,"height":11}},{"id":"b9aa464f-1958-4460-90d4-2220d38fb176","block_type":"box","text":"Equity Investments.","page_number":171,"box":{"x":102,"y":362,"width":143,"height":11}},{"id":"05e44bd6-8a22-486f-a6fc-86775482585a","block_type":"box","text":"Equity securities traded on a recognized securities exchange (","page_number":171,"box":{"x":252,"y":362,"width":439,"height":11}},{"id":"f098c51d-8da7-456a-91a0-0b602b61c8cd","block_type":"box","text":"e.g.","page_number":171,"box":{"x":693,"y":363,"width":25,"height":10}},{"id":"13ebdd73-d481-4a06-bbae-50a8fcac0bc4","block_type":"box","text":", NYSE), on separate","page_number":171,"box":{"x":720,"y":362,"width":147,"height":11}},{"id":"9f9e2db1-88d4-43f2-8f9e-1217add1f510","block_type":"box","text":"trading boards of a securities exchange or through a market system that provides contemporaneous transaction","page_number":171,"box":{"x":68,"y":377,"width":799,"height":11}},{"id":"7b908c3c-594f-4792-bca3-6c67c185f6e3","block_type":"box","text":"pricing information (each, an “Exchange”) are valued using information obtained via independent pricing services,","page_number":171,"box":{"x":70,"y":392,"width":808,"height":11}},{"id":"f96dc442-b7be-4ebf-8bc0-85ed411d77c9","block_type":"box","text":"generally at the Exchange closing price or if an Exchange closing price is not available, the last traded price on that","page_number":171,"box":{"x":68,"y":407,"width":820,"height":11}},{"id":"1eea829f-50c0-45f9-af42-a12cb4ebcbee","block_type":"box","text":"Exchange prior to the time as of which the assets or liabilities are valued. However, under certain circumstances,","page_number":171,"box":{"x":70,"y":422,"width":805,"height":11}},{"id":"7a7ee2c3-ac88-46ea-a39d-d6f4ae8fad7d","block_type":"box","text":"other means of determining current market value may be used. If an equity security is traded on more than one","page_number":171,"box":{"x":69,"y":437,"width":793,"height":11}},{"id":"d4520e65-c2ea-4d31-bf89-db24f53b7d9e","block_type":"box","text":"Exchange, the current market value of the security where it is primarily traded generally will be used. In the event that","page_number":171,"box":{"x":70,"y":452,"width":836,"height":11}},{"id":"698610f7-8482-4978-b42e-264fb2a26be1","block_type":"box","text":"there are no sales involving an equity security held by a Fund on a day on which the Fund values such security, the","page_number":171,"box":{"x":68,"y":468,"width":815,"height":11}},{"id":"54ade019-549c-4ade-b807-c0465b99f961","block_type":"box","text":"last bid (long positions) or ask (short positions) price, if available, will be used as the value of such security. If a Fund","page_number":171,"box":{"x":70,"y":482,"width":837,"height":12}},{"id":"ebcaa519-f5d1-4441-ad9d-fc16d9607d2e","block_type":"box","text":"holds both long and short positions in the same security, the last bid price will be applied to securities held long and","page_number":171,"box":{"x":69,"y":498,"width":832,"height":11}},{"id":"596e71dc-c24e-4538-95e8-b2204e2bf5e4","block_type":"box","text":"the last ask price will be applied to securities sold short. If no bid or ask price is available on a day on which a Fund","page_number":171,"box":{"x":68,"y":513,"width":828,"height":11}},{"id":"38ca1831-4f43-43ee-b36a-e591ced9bfe2","block_type":"box","text":"values such security, the prior day’s price will be used, unless BlackRock determines that such prior day’s price no","page_number":171,"box":{"x":68,"y":528,"width":819,"height":11}},{"id":"663c613d-b52d-4281-a34f-21c02856fd8f","block_type":"box","text":"longer reflects the fair value of the security, in which case such asset would be treated as a Fair Value Asset (as","page_number":171,"box":{"x":70,"y":543,"width":798,"height":11}},{"id":"d31894a5-6f34-463f-8359-dc945847b1fe","block_type":"box","text":"defined below).","page_number":171,"box":{"x":69,"y":558,"width":106,"height":11}},{"id":"ad0084c8-a00b-4fba-a1df-c3125ff79786","block_type":"box","text":"Fixed-Income Investments.","page_number":171,"box":{"x":102,"y":581,"width":194,"height":9}},{"id":"95da1449-c016-4ed5-a42e-d2e7cca0513a","block_type":"box","text":"Fixed-income securities are generally valued using prices provided by dealers or","page_number":171,"box":{"x":304,"y":581,"width":565,"height":11}},{"id":"06d64de2-76f2-45c4-bb04-7d3238319c7e","block_type":"box","text":"prices (including evaluated prices) supplied by the Fund’s approved independent third-party pricing services, each in","page_number":171,"box":{"x":70,"y":596,"width":825,"height":11}},{"id":"bf0cea52-5768-4fb8-9cb3-8ffab388d7dd","block_type":"box","text":"accordance with the Valuation Procedures. The pricing services may use valuation models that utilize certain inputs","page_number":171,"box":{"x":69,"y":611,"width":823,"height":11}},{"id":"55759263-0564-44b7-8d1c-cce66e383648","block_type":"box","text":"and assumptions to derive values, including transaction data (","page_number":171,"box":{"x":69,"y":626,"width":443,"height":11}},{"id":"e3498a6e-3c5f-4a9a-9043-ebc9d2acb9b2","block_type":"box","text":"e.g.","page_number":171,"box":{"x":514,"y":628,"width":24,"height":9}},{"id":"bcb761d8-28aa-425b-b9dc-766a8504692d","block_type":"box","text":", recent representative bids and offers), credit","page_number":171,"box":{"x":541,"y":626,"width":328,"height":11}},{"id":"7ade226e-914e-49ec-b8aa-bb83ba79f42a","block_type":"box","text":"quality information, perceived market movements, news, and other relevant information and by other methods, which","page_number":171,"box":{"x":69,"y":641,"width":834,"height":11}},{"id":"0ce89ef6-4137-4cb2-908b-d5778b316261","block_type":"box","text":"may include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type;","page_number":171,"box":{"x":69,"y":656,"width":769,"height":11}},{"id":"3676c085-0f4a-4920-90ad-32264d7cb3ae","block_type":"box","text":"indications as to values from dealers; general market conditions; and/or other factors and assumptions. Pricing","page_number":171,"box":{"x":70,"y":671,"width":797,"height":12}},{"id":"e35c7643-99f6-48b7-8ecf-4336b17389cf","block_type":"box","text":"services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but","page_number":171,"box":{"x":69,"y":686,"width":821,"height":12}},{"id":"16ded484-7793-4156-9a9b-015186255bc5","block_type":"box","text":"the Fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots of securities in certain asset","page_number":171,"box":{"x":68,"y":702,"width":798,"height":11}},{"id":"5bd77622-83d7-40cb-9e57-943ca7ba920c","block_type":"box","text":"classes may trade at lower prices than institutional round lots, and the value ultimately realized when the securities","page_number":171,"box":{"x":69,"y":717,"width":825,"height":11}},{"id":"e731e17e-b945-4ed4-8a36-32110a09aa43","block_type":"box","text":"are sold could differ from the prices used by a Fund. The amortized cost method of valuation may be used with","page_number":171,"box":{"x":69,"y":732,"width":791,"height":11}},{"id":"a4b27ced-1592-4294-b085-2f67e5ea8608","block_type":"box","text":"respect to debt obligations with 60 days or less remaining to maturity unless such method does not represent fair","page_number":171,"box":{"x":69,"y":747,"width":814,"height":11}},{"id":"74e8b599-2f54-4436-82c8-591bc838cbcb","block_type":"box","text":"value. Certain fixed-income investments, including asset-backed and mortgage related securities, may be valued","page_number":171,"box":{"x":68,"y":762,"width":802,"height":11}},{"id":"899afd48-c9fb-4c10-b460-919dc13ba6e2","block_type":"box","text":"based on valuation models that consider the estimated cash flows of each tranche of the issuer, establish a","page_number":171,"box":{"x":69,"y":777,"width":773,"height":11}},{"id":"759d0d05-e0e8-4d65-8396-f59eeb6bc155","block_type":"box","text":"benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique","page_number":171,"box":{"x":69,"y":792,"width":795,"height":12}},{"id":"a6664b5e-831a-4d89-a520-8046527a0084","block_type":"box","text":"attributes of the tranche.","page_number":171,"box":{"x":69,"y":807,"width":176,"height":9}},{"id":"e6af9b99-194f-4c0b-943f-4db56f73d3f7","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":171,"box":{"x":101,"y":830,"width":344,"height":11}},{"id":"50083743-da74-406e-80b8-aa6c18998d8c","block_type":"box","text":"Exchange-traded equity options (except ETF options, equity","page_number":171,"box":{"x":453,"y":830,"width":416,"height":11}},{"id":"e2a77a10-0579-4632-ac9f-2e80dbbf5c34","block_type":"box","text":"index options or those that are customized) for which market quotations are readily available are valued at the mean","page_number":171,"box":{"x":70,"y":845,"width":829,"height":11}},{"id":"7827e740-6921-462a-9f1f-ac8a2f7111a8","block_type":"box","text":"of the last bid and ask prices as quoted on the Exchange or the board of trade on which such options are traded. In","page_number":171,"box":{"x":69,"y":860,"width":824,"height":12}},{"id":"22710d0f-50f3-428d-b9ae-2f03b7dead41","block_type":"box","text":"the event that there is no mean price available for an exchange-traded equity option held by a Fund on a day on which","page_number":171,"box":{"x":68,"y":875,"width":838,"height":12}},{"id":"4c7336fc-cd23-463e-bd29-1b3905b34b27","block_type":"box","text":"the Fund values such option, the last bid (long positions) or ask (short positions) price, if available, will be used as","page_number":171,"box":{"x":68,"y":891,"width":820,"height":11}},{"id":"5727db73-750f-46c8-ac13-d61fcc1c0aa9","block_type":"box","text":"the value of such option. If no bid or ask price is available on a day on which a Fund values such option, the prior","page_number":171,"box":{"x":68,"y":906,"width":808,"height":11}},{"id":"76bb39bb-8e2c-4b6f-bc94-bb58724e184b","block_type":"box","text":"II-122","page_number":171,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"2266480a-8e5c-4ce4-b619-c5c9543d6f3d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":171,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"5a6e4959-0b3c-413d-ba9f-a392435115fa","block_type":"box","text":"day’s price will be used, unless BlackRock determines that such prior day’s price no longer reflects the fair value of","page_number":172,"box":{"x":69,"y":45,"width":824,"height":11}},{"id":"f116b8c1-ba40-4d04-9774-d8e3e8ee9c11","block_type":"box","text":"the option, in which case such option will be treated as a Fair Value Asset. Customized exchange-traded equity","page_number":172,"box":{"x":68,"y":60,"width":789,"height":11}},{"id":"f06f8d14-6c83-463a-9b04-663c7be63510","block_type":"box","text":"options, ETF options, equity index options and OTC derivatives, may be valued using a mathematical model which","page_number":172,"box":{"x":69,"y":75,"width":807,"height":11}},{"id":"d238d235-bee0-403f-911a-7a77432eed5d","block_type":"box","text":"may incorporate a number of market data factors. Financial futures contracts and options thereon, which are traded","page_number":172,"box":{"x":69,"y":90,"width":824,"height":11}},{"id":"4a318043-92e3-4212-a23a-a11ab382352e","block_type":"box","text":"on exchanges, are valued at their last sale price or settle price as of the close of such exchanges. Swap agreements","page_number":172,"box":{"x":69,"y":105,"width":833,"height":11}},{"id":"3ea179c4-25df-4049-90cd-48672fe45284","block_type":"box","text":"and other derivatives are generally valued daily based upon quotations from market makers or by a pricing service in","page_number":172,"box":{"x":69,"y":120,"width":830,"height":12}},{"id":"7ccb335b-be60-4d39-9b05-1c5d76d324ce","block_type":"box","text":"accordance with the Valuation Procedures.","page_number":172,"box":{"x":69,"y":136,"width":301,"height":8}},{"id":"f1c6b148-cd06-48b0-9b9e-b4dda84813c6","block_type":"box","text":"Underlying Funds.","page_number":172,"box":{"x":102,"y":158,"width":128,"height":11}},{"id":"4ff5fea5-b2f1-44d4-9064-e4e40c0e206f","block_type":"box","text":"Shares of underlying open-end funds that are not traded on an exchange (including money","page_number":172,"box":{"x":237,"y":158,"width":640,"height":11}},{"id":"bf658c04-7045-4711-b001-6b159dd0035a","block_type":"box","text":"market funds) are valued at NAV. Shares of underlying exchange-traded closed-end funds or other ETFs will be valued","page_number":172,"box":{"x":69,"y":173,"width":830,"height":11}},{"id":"ff44dbe4-770d-4ded-bf12-ed1943b25188","block_type":"box","text":"at their most recent closing price.","page_number":172,"box":{"x":69,"y":188,"width":238,"height":12}},{"id":"213bc8f4-7f1f-482e-af43-6bfb45b9bcfe","block_type":"box","text":"General Valuation Information.","page_number":172,"box":{"x":101,"y":211,"width":220,"height":9}},{"id":"93f4d2a2-9939-46fd-b901-ef2070202dcb","block_type":"box","text":"Prices obtained from independent third-party pricing services, broker-dealers or","page_number":172,"box":{"x":328,"y":211,"width":564,"height":11}},{"id":"417ca63f-1590-47ef-ba89-b976660d65df","block_type":"box","text":"market makers to value each Fund’s securities and other assets and liabilities are based on information available at","page_number":172,"box":{"x":69,"y":226,"width":831,"height":9}},{"id":"97b1b1cd-880a-41f4-95b9-51f951c74ddc","block_type":"box","text":"the time the Fund values its assets and liabilities. In the event that a pricing service quotation is revised or updated","page_number":172,"box":{"x":68,"y":241,"width":828,"height":11}},{"id":"130fdd00-bd96-4b26-a5bd-efca5fbfb915","block_type":"box","text":"subsequent to the day on which the Fund valued such security, the revised pricing service quotation generally will be","page_number":172,"box":{"x":69,"y":257,"width":829,"height":11}},{"id":"7542878a-6765-4604-a32a-3faf8396db8e","block_type":"box","text":"applied prospectively. Such determination will be made considering pertinent facts and circumstances surrounding","page_number":172,"box":{"x":69,"y":271,"width":817,"height":12}},{"id":"67dcf399-7834-493e-b9e1-7480005468e9","block_type":"box","text":"the revision.","page_number":172,"box":{"x":68,"y":287,"width":87,"height":9}},{"id":"41385832-5a70-476e-9fd9-e2bf268d5671","block_type":"box","text":"In determining the market value of portfolio investments, the Fund may employ independent third-party pricing","page_number":172,"box":{"x":102,"y":309,"width":784,"height":11}},{"id":"df1ea497-85c0-44d7-96ca-0e9c9686d3cf","block_type":"box","text":"services, which may use, without limitation, evaluated pricing methods that take into consideration market indexes,","page_number":172,"box":{"x":69,"y":325,"width":823,"height":11}},{"id":"f515a8ce-4e9c-47e5-a46d-ce706e7b0207","block_type":"box","text":"matrices, yield curves and other specified inputs and assumptions. This may result in the assets being valued at a","page_number":172,"box":{"x":69,"y":339,"width":818,"height":12}},{"id":"61fbbd02-ebe1-4b4d-bf44-f918fc1289dc","block_type":"box","text":"price different from the price that would have been determined had the evaluated pricing method not been used. The","page_number":172,"box":{"x":70,"y":355,"width":832,"height":11}},{"id":"501b90b7-e31e-4026-980a-1e69876c8273","block_type":"box","text":"price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation","page_number":172,"box":{"x":70,"y":370,"width":832,"height":11}},{"id":"283fe19c-d8f2-48e5-9fe1-f8c1f91b861f","block_type":"box","text":"of the investment, particularly for assets that trade in thin or volatile markets or that are valued using a fair valuation","page_number":172,"box":{"x":69,"y":385,"width":834,"height":11}},{"id":"cdb60045-1e8e-4e38-b7c3-6828f1f6a50b","block_type":"box","text":"methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an","page_number":172,"box":{"x":69,"y":400,"width":837,"height":11}},{"id":"778f517d-22cd-4e90-8575-3f853f7cbbef","block_type":"box","text":"investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss","page_number":172,"box":{"x":70,"y":415,"width":833,"height":11}},{"id":"5a2ac8e8-d8b5-459b-972e-0ae23eb98855","block_type":"box","text":"or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investment may also be","page_number":172,"box":{"x":69,"y":430,"width":827,"height":11}},{"id":"2d086a8d-44f5-4de4-b9be-bdce3a77f638","block_type":"box","text":"impacted by technological issues and/or errors by pricing services or other third-party service providers.","page_number":172,"box":{"x":70,"y":446,"width":741,"height":11}},{"id":"0a529c72-4947-49d9-9cfc-7af57bdf30bb","block_type":"box","text":"In the event that application of the methods of valuation discussed above result in a price for a security which is","page_number":172,"box":{"x":102,"y":468,"width":800,"height":11}},{"id":"adc37577-4c58-4072-bd7a-a9e0c65e6c6e","block_type":"box","text":"deemed not to be representative of the fair market value of such security, the security will be valued by, under the","page_number":172,"box":{"x":69,"y":483,"width":811,"height":11}},{"id":"c8dd981d-e782-4c31-9511-44d13e880d12","block_type":"box","text":"direction of or in accordance with a method approved by BlackRock, the Fund’s valuation designee, as reflecting fair","page_number":172,"box":{"x":69,"y":498,"width":827,"height":11}},{"id":"348ace47-3acf-4784-82ee-c89075a5121d","block_type":"box","text":"value. All other assets and liabilities (including securities for which market quotations are not readily available) held","page_number":172,"box":{"x":68,"y":513,"width":824,"height":12}},{"id":"c073d0fb-9096-415d-9946-8801c3ee4db2","block_type":"box","text":"by a Fund (including restricted securities and private market investments, as applicable) are valued at fair value as","page_number":172,"box":{"x":69,"y":528,"width":817,"height":12}},{"id":"1e08249b-1c4a-410c-babb-80d3b60555be","block_type":"box","text":"determined in good faith by BlackRock pursuant to the Valuation Procedures. Any assets and liabilities which are","page_number":172,"box":{"x":69,"y":543,"width":802,"height":12}},{"id":"2e760897-198d-4687-a0c7-8efea002dd69","block_type":"box","text":"denominated in a foreign currency are translated into U.S. dollars at the prevailing market rates.","page_number":172,"box":{"x":69,"y":559,"width":685,"height":11}},{"id":"8764b074-74e6-4743-a6ad-b8e77ad4b94a","block_type":"box","text":"Certain of the securities acquired by the Funds may be traded on foreign exchanges or OTC markets on days on","page_number":172,"box":{"x":102,"y":581,"width":795,"height":12}},{"id":"2ae6e880-05ab-41de-a0d1-61db839237c9","block_type":"box","text":"which a Fund’s NAV is not calculated. In such cases, the NAV of a Fund’s shares may be significantly affected on","page_number":172,"box":{"x":68,"y":596,"width":805,"height":12}},{"id":"469bea3c-b6a6-4827-bbbb-501ede71f016","block_type":"box","text":"days when investors can neither purchase nor redeem shares of the Fund.","page_number":172,"box":{"x":69,"y":612,"width":529,"height":11}},{"id":"ea9f26a0-b61e-4fd5-8acf-495381a85005","block_type":"box","text":"Fair Value.","page_number":172,"box":{"x":102,"y":634,"width":74,"height":9}},{"id":"8f578185-9a72-417f-8d4f-e73ad9f8ec05","block_type":"box","text":"When market quotations are not readily available or are believed by BlackRock to be unreliable, a","page_number":172,"box":{"x":183,"y":634,"width":693,"height":11}},{"id":"72843922-5158-41b6-aa97-e299c06cc169","block_type":"box","text":"Fund’s investments are valued at fair value (“Fair Value Assets”). Fair Value Assets are valued by BlackRock in","page_number":172,"box":{"x":70,"y":649,"width":785,"height":12}},{"id":"6604a6bc-7fd2-45b0-b7b8-f269c2484067","block_type":"box","text":"accordance with the Valuation Procedures. Pursuant to Rule 2a-5 under the Investment Company Act, the Board of","page_number":172,"box":{"x":69,"y":664,"width":816,"height":12}},{"id":"312f8c9c-8cd7-4a55-9e2b-78fd5e57b1e2","block_type":"box","text":"Directors has designated BlackRock as the valuation designee for the respective Funds for which it serves as","page_number":172,"box":{"x":70,"y":680,"width":779,"height":11}},{"id":"0f2f94b4-2b82-4165-9bdd-30b351e11566","block_type":"box","text":"investment adviser. BlackRock may reasonably conclude that a market quotation is not readily available or is","page_number":172,"box":{"x":70,"y":695,"width":773,"height":11}},{"id":"6fdf1f21-b935-4975-97fa-28448de5d94c","block_type":"box","text":"unreliable if, among other things, a security or other asset or liability does not have a price source due to its","page_number":172,"box":{"x":69,"y":710,"width":772,"height":11}},{"id":"5803d0ab-1819-4b2c-b2e7-7d511ca5b953","block_type":"box","text":"complete lack of trading, if BlackRock believes a market quotation from a broker-dealer or other source is unreliable","page_number":172,"box":{"x":69,"y":725,"width":826,"height":11}},{"id":"0c9aae49-e85f-491c-af18-904a5148ba44","block_type":"box","text":"(","page_number":172,"box":{"x":69,"y":740,"width":3,"height":11}},{"id":"02f24f5a-f53c-45ba-8c8b-4368f4ef429f","block_type":"box","text":"e.g.","page_number":172,"box":{"x":74,"y":742,"width":25,"height":9}},{"id":"5a404d2c-34f3-4aae-bd39-869dd77c52cc","block_type":"box","text":", where it varies significantly from a recent trade, or no longer reflects the fair value of the security or other asset","page_number":172,"box":{"x":101,"y":740,"width":806,"height":11}},{"id":"d08478a2-1622-4d85-a782-27506b671271","block_type":"box","text":"or liability subsequent to the most recent market quotation), or where the security or other asset or liability is only","page_number":172,"box":{"x":69,"y":755,"width":813,"height":11}},{"id":"cb844fd0-a665-4e0e-b544-ad5ed7e86acb","block_type":"box","text":"thinly traded or due to the occurrence of a significant event subsequent to the most recent market quotation. For this","page_number":172,"box":{"x":68,"y":770,"width":837,"height":12}},{"id":"77851b05-f8e8-4571-af7f-7f7c3b300320","block_type":"box","text":"purpose, a “significant event” is deemed to occur if BlackRock determines, in its reasonable business judgment, that","page_number":172,"box":{"x":70,"y":785,"width":838,"height":12}},{"id":"b8ae2b75-1575-4619-a4da-ed30403a3c96","block_type":"box","text":"an event has occurred after the close of trading for an asset or liability but prior to or at the time of pricing a Fund’s","page_number":172,"box":{"x":69,"y":801,"width":824,"height":11}},{"id":"640e6d5d-f2e5-4e25-b378-be626b59b8e7","block_type":"box","text":"assets or liabilities, is likely to cause a material change to the last exchange closing price or closing market price of","page_number":172,"box":{"x":69,"y":816,"width":828,"height":11}},{"id":"086640d7-075a-4a68-ae48-ef25b5aea27c","block_type":"box","text":"one or more assets held by, or liabilities of, the Fund. On any day the NYSE is open and a foreign market or the","page_number":172,"box":{"x":69,"y":831,"width":793,"height":11}},{"id":"c2500d47-4049-4784-91ef-b23988516307","block_type":"box","text":"primary exchange on which a foreign asset or liability is traded is closed, such asset or liability will be valued using","page_number":172,"box":{"x":70,"y":846,"width":819,"height":11}},{"id":"ecc3ee06-8aae-4707-9544-d1d0495f98c0","block_type":"box","text":"the prior day’s price, provided that BlackRock is not aware of any significant event or other information that would","page_number":172,"box":{"x":68,"y":861,"width":810,"height":11}},{"id":"5ed2122d-a764-4193-88e5-7d71dcf426df","block_type":"box","text":"cause such price to no longer reflect the fair value of the asset or liability, in which case such asset or liability would","page_number":172,"box":{"x":69,"y":876,"width":828,"height":11}},{"id":"247d3aaf-6889-4da8-b420-f6639f7ca1f0","block_type":"box","text":"be treated as a Fair Value Asset. For certain foreign assets, a third-party vendor supplies evaluated, systematic fair","page_number":172,"box":{"x":69,"y":891,"width":822,"height":12}},{"id":"c2a06c01-4860-47a9-946f-80c8790a5092","block_type":"box","text":"value pricing based upon the movement of a proprietary multi-factor model after the relevant foreign markets have","page_number":172,"box":{"x":68,"y":906,"width":814,"height":12}},{"id":"ddd05418-15e5-40d7-99ba-c514d157ec84","block_type":"box","text":"II-123","page_number":172,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"11242c57-3ce8-4792-a13f-778b33499eca","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":172,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4774dc1a-d4ea-48f8-88da-c6ce238d5335","block_type":"box","text":"closed. This systematic fair value pricing methodology is designed to correlate the prices of foreign assets in one or","page_number":173,"box":{"x":69,"y":45,"width":827,"height":11}},{"id":"53309010-fe14-4a57-b1a6-8c4d62ecc4b2","block_type":"box","text":"more non-U.S. markets following the close of the local markets to the prices that might have prevailed as of a Fund’s","page_number":173,"box":{"x":69,"y":60,"width":834,"height":11}},{"id":"ede52cf2-1142-4a94-b34f-abc8d8f3536d","block_type":"box","text":"pricing time.","page_number":173,"box":{"x":70,"y":75,"width":85,"height":11}},{"id":"76b5b2a6-ab00-4272-a119-ecf6b3148c86","block_type":"box","text":"BlackRock’s Rule 2a-5 Committee is responsible for reviewing and approving methodologies by investment type","page_number":173,"box":{"x":102,"y":98,"width":794,"height":11}},{"id":"41a2bc19-af09-4824-aa6d-aac8f496e3f4","block_type":"box","text":"and significant inputs used in the fair valuation of Fund assets or liabilities. In addition, the Funds’ accounting agent","page_number":173,"box":{"x":69,"y":113,"width":829,"height":11}},{"id":"e131d323-efa0-4732-80fc-9f1c02e667fe","block_type":"box","text":"assists BlackRock by periodically endeavoring to confirm the prices it receives from all third-party pricing services,","page_number":173,"box":{"x":69,"y":128,"width":813,"height":11}},{"id":"a1db6e38-57d4-4c4a-b537-991a923fe5d8","block_type":"box","text":"index providers and broker-dealers. BlackRock regularly evaluates the values assigned to the securities and other","page_number":173,"box":{"x":70,"y":143,"width":808,"height":11}},{"id":"f9f31195-6cc1-423c-bff1-6ce9a49c7ca4","block_type":"box","text":"assets and liabilities of the Funds.","page_number":173,"box":{"x":69,"y":158,"width":245,"height":9}},{"id":"93c4a426-bfcd-42d9-acb5-b9a689be373f","block_type":"box","text":"When determining the price for a Fair Value Asset, BlackRock will seek to determine the price that a Fund might","page_number":173,"box":{"x":101,"y":181,"width":795,"height":11}},{"id":"754fc961-1e90-4082-9426-5b9bff7c9faf","block_type":"box","text":"reasonably expect to receive from the current sale of that asset or liability in an arm’s-length transaction on the date","page_number":173,"box":{"x":69,"y":196,"width":832,"height":11}},{"id":"bef01b81-ea02-4554-9be0-9c7284f37f87","block_type":"box","text":"on which the asset or liability is being valued, and does not seek to determine the price a Fund might reasonably","page_number":173,"box":{"x":69,"y":211,"width":805,"height":11}},{"id":"01ee4857-fa5a-4bf4-8699-815dcdf5484c","block_type":"box","text":"expect to receive for selling an asset or liability at a later time or if it holds the asset or liability to maturity. Fair value","page_number":173,"box":{"x":69,"y":226,"width":834,"height":11}},{"id":"d8c1af29-9bd1-4c2f-8fb1-02d6394df44b","block_type":"box","text":"determinations will be based upon all available factors that BlackRock deems relevant at the time of the","page_number":173,"box":{"x":69,"y":241,"width":744,"height":11}},{"id":"7db4453a-4215-49c6-8f30-d47353b0585b","block_type":"box","text":"determination, and may be based on analytical values determined by BlackRock using proprietary or third-party","page_number":173,"box":{"x":69,"y":257,"width":791,"height":11}},{"id":"5b072c7c-5661-4050-860d-1bc338a4835b","block_type":"box","text":"valuation models.","page_number":173,"box":{"x":68,"y":272,"width":125,"height":8}},{"id":"cc58c0c3-f241-4b69-b344-7bfad8c6b4c8","block_type":"box","text":"Fair value represents a good faith approximation of the value of an asset or liability. When determining the fair","page_number":173,"box":{"x":102,"y":294,"width":785,"height":11}},{"id":"dd044c0b-5a41-4b14-8319-816fe71f9fae","block_type":"box","text":"value of an investment, one or more fair value methodologies may be used (depending on certain factors, including","page_number":173,"box":{"x":68,"y":309,"width":822,"height":11}},{"id":"b1b1e852-8df3-4390-86fb-57dd6c24a82b","block_type":"box","text":"the asset type). For example, the investment may be initially priced based on the original cost of the investment or,","page_number":173,"box":{"x":68,"y":324,"width":820,"height":12}},{"id":"2cdadfaf-8a5b-4e61-a7fc-799cfbeb6a2f","block_type":"box","text":"alternatively, using proprietary or third-party models that may rely upon one or more unobservable inputs. Prices of","page_number":173,"box":{"x":69,"y":339,"width":818,"height":12}},{"id":"28cd5abc-46cc-4a2a-97fe-56f0baf32b56","block_type":"box","text":"actual, executed or historical transactions in the relevant investment (or comparable instruments) or, where","page_number":173,"box":{"x":69,"y":355,"width":766,"height":11}},{"id":"4adbed21-cd70-474c-83e7-f0285f6b5932","block_type":"box","text":"appropriate, an appraisal by a third-party experienced in the valuation of similar instruments, may also be used as a","page_number":173,"box":{"x":69,"y":370,"width":828,"height":11}},{"id":"761f4a22-68b1-4729-b0ab-1b74fde7d92f","block_type":"box","text":"basis for establishing the fair value of an investment.","page_number":173,"box":{"x":69,"y":385,"width":378,"height":11}},{"id":"3c137a88-4a3e-4895-9e4b-860d0e407118","block_type":"box","text":"The fair value of one or more assets or liabilities may not, in retrospect, be the price at which those assets or","page_number":173,"box":{"x":101,"y":407,"width":784,"height":12}},{"id":"f086df4d-3e1c-4b03-81a0-b56bb0789df4","block_type":"box","text":"liabilities could have been sold during the period in which the particular fair values were used in determining a Fund’s","page_number":173,"box":{"x":70,"y":423,"width":836,"height":11}},{"id":"bee2baf0-923b-4029-b614-3416b912b509","block_type":"box","text":"NAV. As a result, a Fund’s sale or redemption of its shares at NAV, at a time when a holding or holdings are valued at","page_number":173,"box":{"x":70,"y":438,"width":834,"height":11}},{"id":"94882281-6335-4128-8532-f34daf5a3549","block_type":"box","text":"fair value, may have the effect of diluting or increasing the economic interest of existing shareholders.","page_number":173,"box":{"x":68,"y":453,"width":728,"height":11}},{"id":"928c1254-15d3-43e1-ac24-59d5a0f5a08c","block_type":"box","text":"Each Fund’s annual audited financial statements, which are prepared in accordance with accounting principles","page_number":173,"box":{"x":102,"y":475,"width":786,"height":12}},{"id":"8f53ffb6-6d73-45f9-a8ad-4d93a4817e7c","block_type":"box","text":"generally accepted in the United States of America (“US GAAP”), follow the requirements for valuation set forth in","page_number":173,"box":{"x":68,"y":491,"width":809,"height":11}},{"id":"9ff9e3e2-0432-483d-9233-dee736ff1efc","block_type":"box","text":"Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and","page_number":173,"box":{"x":70,"y":506,"width":821,"height":11}},{"id":"7c574338-9c4b-4723-a00f-ed77230197a5","block_type":"box","text":"Disclosures” (“ASC 820”), which defines and establishes a framework for measuring fair value under US GAAP and","page_number":173,"box":{"x":70,"y":521,"width":818,"height":11}},{"id":"22a20e2d-2b9c-4dab-ba9a-8a07ef3d1c07","block_type":"box","text":"expands financial statement disclosure requirements relating to fair value measurements.","page_number":173,"box":{"x":69,"y":536,"width":641,"height":11}},{"id":"dcfa74d9-e047-4f56-937d-7e52b859a3f2","block_type":"box","text":"Generally, ASC 820 and other accounting rules applicable to funds and various assets in which they invest are","page_number":173,"box":{"x":102,"y":559,"width":786,"height":11}},{"id":"77738acc-eb45-4a02-891e-68faf540f2d9","block_type":"box","text":"evolving. Such changes may adversely affect a Fund. For example, the evolution of rules governing the determination","page_number":173,"box":{"x":69,"y":574,"width":832,"height":11}},{"id":"53618bfe-c61d-4574-890a-594a4556eb23","block_type":"box","text":"of the fair market value of assets or liabilities, to the extent such rules become more stringent, would tend to","page_number":173,"box":{"x":69,"y":589,"width":780,"height":11}},{"id":"1de387e9-d54b-4648-8307-51d644b68313","block_type":"box","text":"increase the cost and/or reduce the availability of third-party determinations of fair market value. This may in turn","page_number":173,"box":{"x":70,"y":604,"width":810,"height":11}},{"id":"0af1381e-e017-4099-af2c-495df772cf88","block_type":"box","text":"increase the costs associated with selling assets or affect their liquidity due to a Fund’s inability to obtain a third","page_number":173,"box":{"x":70,"y":619,"width":810,"height":11}},{"id":"92bd7c86-93c8-427d-9e46-6522e4359210","block_type":"box","text":"party determination of fair market value.","page_number":173,"box":{"x":70,"y":634,"width":285,"height":11}},{"id":"4be8a1cc-7fe7-4dcb-9ae4-1198e2efe2be","block_type":"box","text":"Computation of Offering Price Per Share","page_number":173,"box":{"x":69,"y":665,"width":292,"height":11}},{"id":"003ff684-4409-4cc3-a320-cc86a1fcfdf8","block_type":"box","text":"See “Computation of Offering Price Per Share” in Part I of a Fund’s SAI for an illustration of the computation of","page_number":173,"box":{"x":102,"y":687,"width":791,"height":11}},{"id":"ef842197-aa39-4b97-a1ae-23c24bf12383","block_type":"box","text":"the offering price for shares of your Fund.","page_number":173,"box":{"x":68,"y":702,"width":295,"height":12}},{"id":"befcca39-1c50-4fa1-8316-5022e0d86b69","block_type":"box","text":"PORTFOLIO TRANSACTIONS AND BROKERAGE","page_number":173,"box":{"x":303,"y":732,"width":373,"height":10}},{"id":"bc736def-c7d8-4d5d-b094-e5d4e89c8816","block_type":"box","text":"Transactions in Portfolio Securities","page_number":173,"box":{"x":68,"y":762,"width":257,"height":9}},{"id":"57bd83ac-64d1-40c8-b823-cc8b23c24570","block_type":"box","text":"Subject to policies established by the Board of Directors, BlackRock is primarily responsible for the execution of","page_number":173,"box":{"x":102,"y":785,"width":798,"height":11}},{"id":"1b15eb6f-84cb-41a3-b1d6-778940f155f5","block_type":"box","text":"a Fund’s portfolio transactions and the allocation of brokerage. BlackRock does not execute transactions through any","page_number":173,"box":{"x":69,"y":800,"width":839,"height":11}},{"id":"d664de89-0014-4a9d-80db-5fcd2a343fc8","block_type":"box","text":"particular broker or dealer, but seeks to obtain the best net results for the Fund, taking into account certain factors","page_number":173,"box":{"x":70,"y":815,"width":822,"height":11}},{"id":"2c545d8d-a6f0-4079-91fd-2f53b3a39a60","block_type":"box","text":"set out below. While BlackRock generally seeks reasonable trade execution costs, a Fund does not necessarily pay","page_number":173,"box":{"x":69,"y":830,"width":820,"height":11}},{"id":"34f107cb-1980-4335-8642-08a3f191edd1","block_type":"box","text":"the lowest spread or commission available, and payment of the lowest commission or spread is not necessarily","page_number":173,"box":{"x":68,"y":845,"width":798,"height":11}},{"id":"3a0f6f52-9e3c-449b-a679-010c1ef6d28f","block_type":"box","text":"consistent with obtaining the best price and execution in particular transactions. Subject to applicable legal","page_number":173,"box":{"x":69,"y":860,"width":765,"height":12}},{"id":"6cf833ae-7c49-4fba-8bd4-eb27e16f1840","block_type":"box","text":"requirements, BlackRock may select a broker based partly upon brokerage or research services provided to","page_number":173,"box":{"x":69,"y":876,"width":768,"height":11}},{"id":"c379a616-555e-497e-987d-5f211a66cf11","block_type":"box","text":"BlackRock and its clients, including a Fund. In return for such services, BlackRock may cause a Fund to pay a higher","page_number":173,"box":{"x":70,"y":891,"width":830,"height":11}},{"id":"4bedaa1a-8b70-4155-8833-08be75ebe9b0","block_type":"box","text":"II-124","page_number":173,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"7f296fb4-cfc2-44ba-8ed5-c896b4d2c290","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":173,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"26668691-d901-4a69-ace0-14a8be2056ed","block_type":"box","text":"commission than other brokers would charge if BlackRock determines in good faith that the commission is","page_number":174,"box":{"x":69,"y":45,"width":760,"height":11}},{"id":"84a056db-cbdd-48b8-8f0c-6f908ddc907e","block_type":"box","text":"reasonable in relation to the services provided.","page_number":174,"box":{"x":69,"y":60,"width":336,"height":11}},{"id":"f6cd3484-3480-410d-8fb8-fe012c4f65a3","block_type":"box","text":"In the case of Feeder Funds, because each Feeder Fund generally invests exclusively in beneficial interests of a","page_number":174,"box":{"x":102,"y":82,"width":794,"height":12}},{"id":"ece0646d-3f02-45d6-94f0-9e5a10d1c820","block_type":"box","text":"Master Portfolio, it is expected that all transactions in portfolio securities will be entered into by the Master Portfolio.","page_number":174,"box":{"x":70,"y":98,"width":835,"height":11}},{"id":"d1cc84a7-148e-40fc-94f3-f1fe129b7c2e","block_type":"box","text":"In selecting brokers or dealers to execute portfolio transactions, the Manager and sub-advisers seek to obtain","page_number":174,"box":{"x":102,"y":120,"width":784,"height":12}},{"id":"18431463-a0a7-4257-9558-b508503720e9","block_type":"box","text":"the best price and most favorable execution for a Fund, taking into account a variety of factors including: (i) the size,","page_number":174,"box":{"x":68,"y":135,"width":829,"height":12}},{"id":"2dbe875a-a62b-4cbf-bd01-287c659ecb1c","block_type":"box","text":"nature and character of the security or instrument being traded and the markets in which it is purchased or sold;","page_number":174,"box":{"x":69,"y":150,"width":802,"height":12}},{"id":"1d1073b2-5a46-46ac-905b-6d80bd3fb979","block_type":"box","text":"(ii) the desired timing of the transaction; (iii) BlackRock’s knowledge of the expected commission rates and spreads","page_number":174,"box":{"x":69,"y":166,"width":826,"height":11}},{"id":"1be782f4-68af-44bd-97cd-969b277cee36","block_type":"box","text":"currently available; (iv) the activity existing and expected in the market for the particular security or instrument,","page_number":174,"box":{"x":69,"y":181,"width":789,"height":11}},{"id":"db04299e-d018-46ba-81ee-e11560a7915b","block_type":"box","text":"including any anticipated execution difficulties; (v) the full range of brokerage services provided; (vi) the broker’s or","page_number":174,"box":{"x":70,"y":196,"width":818,"height":11}},{"id":"79ed8026-4066-4024-9e95-e45f2e075fd8","block_type":"box","text":"dealer’s capital; (vii) the quality of research and research services provided; (viii) the reasonableness of the","page_number":174,"box":{"x":69,"y":211,"width":769,"height":11}},{"id":"182a2509-4cba-4eb3-a11b-6f2e0537d242","block_type":"box","text":"commission, dealer spread or its equivalent for the specific transaction; and (ix) BlackRock’s knowledge of any actual","page_number":174,"box":{"x":69,"y":226,"width":837,"height":11}},{"id":"e4b247da-9d46-4ffa-b8b7-2ea5cf77a429","block_type":"box","text":"or apparent operational problems of a broker or dealer.","page_number":174,"box":{"x":69,"y":241,"width":391,"height":11}},{"id":"662e1e00-2bec-433a-ad4f-3e80747cfc2c","block_type":"box","text":"Section 28(e) of the Exchange Act (“Section 28(e)”) permits an investment adviser, under certain circumstances","page_number":174,"box":{"x":102,"y":264,"width":801,"height":11}},{"id":"095f6831-d36b-4af5-8a26-5774ce045e8e","block_type":"box","text":"to cause an account to pay a broker or dealer a commission for effecting a transaction that exceeds the amount","page_number":174,"box":{"x":68,"y":279,"width":802,"height":11}},{"id":"1450285b-6e24-4b60-b992-5a019e21c76f","block_type":"box","text":"another broker or dealer would have charged for effecting the same transaction in recognition of the value of","page_number":174,"box":{"x":69,"y":294,"width":775,"height":11}},{"id":"1ad36ef0-07cb-43a4-aadc-f0cd77b22c2c","block_type":"box","text":"brokerage and research services provided by that broker or dealer. This includes commissions paid on riskless","page_number":174,"box":{"x":69,"y":309,"width":790,"height":11}},{"id":"9b4de51c-d6d8-48d6-abfc-33ab607c71ee","block_type":"box","text":"principal transactions under certain conditions. Brokerage and research services include: (1) furnishing advice as to","page_number":174,"box":{"x":70,"y":324,"width":827,"height":12}},{"id":"a3f82603-e8eb-48ad-a8b8-4404a77cc383","block_type":"box","text":"the value of securities, including pricing and appraisal advice, credit analysis, risk measurement analysis,","page_number":174,"box":{"x":68,"y":339,"width":753,"height":12}},{"id":"00a90406-dd32-4032-ad78-31692680a753","block_type":"box","text":"performance and other analysis, as well as the advisability of investing in, purchasing or selling securities, and the","page_number":174,"box":{"x":70,"y":355,"width":818,"height":11}},{"id":"09d3285a-0065-41c5-9e6c-4e54b9f9e8a8","block_type":"box","text":"availability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning issuers,","page_number":174,"box":{"x":69,"y":370,"width":837,"height":11}},{"id":"78cfa4d5-66ce-44a5-9126-b61bf3571378","block_type":"box","text":"industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and","page_number":174,"box":{"x":70,"y":385,"width":775,"height":11}},{"id":"c30b7f0c-c2b0-48fc-9882-e378d3940f6b","block_type":"box","text":"(3) effecting securities transactions and performing functions incidental to securities transactions (such as","page_number":174,"box":{"x":69,"y":400,"width":764,"height":11}},{"id":"f2c17544-efa1-4a7e-b695-ad899ce7b02c","block_type":"box","text":"clearance, settlement, and custody). BlackRock believes that access to independent investment research is","page_number":174,"box":{"x":69,"y":415,"width":770,"height":11}},{"id":"f211a9df-9d7f-4c0f-83a8-a8797f04eb59","block_type":"box","text":"beneficial to its investment decision-making processes and, therefore, to the Funds.","page_number":174,"box":{"x":69,"y":430,"width":599,"height":11}},{"id":"66b212fe-6161-41eb-a1db-445681d3ef7a","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may participate in client commission arrangements under which","page_number":174,"box":{"x":102,"y":453,"width":796,"height":11}},{"id":"969876c4-4f79-48c3-84cd-7b95220f1e5a","block_type":"box","text":"BlackRock may execute transactions through a broker-dealer and request that the broker-dealer allocate a portion of","page_number":174,"box":{"x":70,"y":468,"width":829,"height":11}},{"id":"a5303e8c-f21c-4f46-9569-c46bb00b8d96","block_type":"box","text":"the commissions or commission credits to another firm that provides research to BlackRock. BlackRock believes that","page_number":174,"box":{"x":68,"y":483,"width":839,"height":11}},{"id":"d32f3763-7427-4c10-abdf-1a36dacc3f19","block_type":"box","text":"research services obtained through soft dollar or commission sharing arrangements enhance its investment decision","page_number":174,"box":{"x":69,"y":498,"width":839,"height":11}},{"id":"93cbae2d-5f10-4d69-80d8-fd689669bab3","block_type":"box","text":"making capabilities, thereby increasing the prospects for higher investment returns. BlackRock will engage only in","page_number":174,"box":{"x":69,"y":513,"width":809,"height":12}},{"id":"f0a87f6f-3725-45e9-909d-f6f58a8fbe5c","block_type":"box","text":"soft dollar or commission sharing transactions that comply with the requirements of Section 28(e). Certain Funds","page_number":174,"box":{"x":69,"y":528,"width":808,"height":12}},{"id":"cd8a148f-c066-4e22-a1af-5fd0735780e7","block_type":"box","text":"may be subject to additional regulations, including MiFID II. Under MiFID II, EU investment managers, including BIL,","page_number":174,"box":{"x":69,"y":544,"width":818,"height":11}},{"id":"5288a784-6e85-42ef-804f-3d9264c81d16","block_type":"box","text":"pay for any research out of their own resources and not through soft dollars or commission sharing arrangements.","page_number":174,"box":{"x":70,"y":559,"width":813,"height":11}},{"id":"0171260e-ed00-4b5c-9f4b-394e61c8d124","block_type":"box","text":"BlackRock regularly evaluates the soft dollar products and services utilized, as well as the overall soft dollar and","page_number":174,"box":{"x":70,"y":574,"width":801,"height":11}},{"id":"584d6e5b-2614-4100-8bd0-f7877188d2f5","block_type":"box","text":"commission sharing arrangements to ensure that trades are executed by firms that are regarded as best able to","page_number":174,"box":{"x":69,"y":589,"width":802,"height":11}},{"id":"dee99a43-f2be-4c14-a5d8-cbc6f000c42c","block_type":"box","text":"execute trades for client accounts, while at the same time providing access to the research and other services","page_number":174,"box":{"x":69,"y":604,"width":790,"height":11}},{"id":"1daf4b0d-6f78-4adf-996d-eca823e1e148","block_type":"box","text":"BlackRock views as impactful to its trading results.","page_number":174,"box":{"x":70,"y":619,"width":361,"height":11}},{"id":"6ab4a9eb-3452-4f54-abeb-754214b731de","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may utilize soft dollars and related services, including research","page_number":174,"box":{"x":102,"y":642,"width":791,"height":11}},{"id":"605e14b6-e811-4af9-af98-ffc717225e57","block_type":"box","text":"(whether prepared by the broker-dealer or prepared by a third-party and provided to BlackRock by the broker-dealer)","page_number":174,"box":{"x":69,"y":657,"width":819,"height":11}},{"id":"f7c1ba06-aeec-4f51-88cb-706b29dccf27","block_type":"box","text":"and execution or brokerage services within applicable rules and BlackRock’s policies to the extent that such","page_number":174,"box":{"x":69,"y":672,"width":772,"height":11}},{"id":"5bce7e01-3e4d-4350-a6b1-b0648cca9390","block_type":"box","text":"permitted services do not compromise BlackRock’s ability to seek to obtain best execution. In this regard, the","page_number":174,"box":{"x":70,"y":687,"width":785,"height":11}},{"id":"c289747a-5c6a-4e3c-9206-5fafa368c29d","block_type":"box","text":"portfolio management investment and/or trading teams may consider a variety of factors, including the degree to","page_number":174,"box":{"x":70,"y":702,"width":806,"height":12}},{"id":"fca04f13-fbdc-4c81-9c04-4b8c44e95786","block_type":"box","text":"which the broker-dealer: (a) provides access to company management; (b) provides access to their analysts;","page_number":174,"box":{"x":68,"y":718,"width":772,"height":11}},{"id":"cb510670-c50a-49a6-b871-c307e4a8d78b","block_type":"box","text":"(c) provides meaningful/insightful research notes on companies or other potential investments; (d) facilitates calls on","page_number":174,"box":{"x":69,"y":732,"width":838,"height":12}},{"id":"734ba22e-80e7-4599-9d5e-1f2041381386","block_type":"box","text":"which meaningful or insightful ideas about companies or potential investments are discussed; (e) facilitates","page_number":174,"box":{"x":68,"y":748,"width":769,"height":11}},{"id":"a3536738-2d31-446f-ae63-fd3eb5f8bc2f","block_type":"box","text":"conferences at which meaningful or insightful ideas about companies or potential investments are discussed; or","page_number":174,"box":{"x":69,"y":763,"width":801,"height":11}},{"id":"05f58442-9b1d-4868-8ec7-a50086cee2e6","block_type":"box","text":"(f) provides research tools such as market data, financial analysis, and other third-party related research and","page_number":174,"box":{"x":69,"y":778,"width":778,"height":11}},{"id":"d7ab1dba-d046-4716-9646-260b858008fd","block_type":"box","text":"brokerage tools that aid in the investment process.","page_number":174,"box":{"x":69,"y":793,"width":363,"height":11}},{"id":"dcfd7bcf-548a-42f8-8fd8-adee47b1c9b1","block_type":"box","text":"Research-oriented services for which BlackRock, unless prohibited by applicable law, might pay with Fund","page_number":174,"box":{"x":102,"y":816,"width":749,"height":11}},{"id":"8f8bec25-c858-448c-9b72-ee48313a46d3","block_type":"box","text":"commissions may be in written form or through direct contact with individuals and may include information as to","page_number":174,"box":{"x":69,"y":831,"width":799,"height":11}},{"id":"0f73648c-5310-4d51-ba3c-df14a3c00232","block_type":"box","text":"particular companies or industries and securities or groups of securities, as well as market, economic, or","page_number":174,"box":{"x":70,"y":846,"width":752,"height":11}},{"id":"7c443a1e-5793-45f3-9cb9-6f6fb8e822f5","block_type":"box","text":"institutional advice and statistical information, political developments and technical market information that assists","page_number":174,"box":{"x":70,"y":861,"width":823,"height":11}},{"id":"b98db2b1-a3c6-4553-903b-cc09e1563dbf","block_type":"box","text":"in the valuation of investments. Except as noted immediately below, research services furnished by brokers may be","page_number":174,"box":{"x":70,"y":876,"width":822,"height":11}},{"id":"a0486a73-a57d-4874-a2ec-93b3b470a186","block_type":"box","text":"used in servicing some or all client accounts and not all services may be used in connection with the Fund or account","page_number":174,"box":{"x":69,"y":891,"width":840,"height":12}},{"id":"c8bd3af1-c326-4f77-8992-dfbe5748efc8","block_type":"box","text":"that paid commissions to the broker providing such services. In some cases, research information received from","page_number":174,"box":{"x":68,"y":906,"width":805,"height":12}},{"id":"c40b36ea-5a09-4e2c-bcc7-11f57834eb90","block_type":"box","text":"II-125","page_number":174,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"707e1aa3-98e4-42df-a800-9dcf55091963","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":174,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a2711454-160e-4715-a50a-ecf2c179b2df","block_type":"box","text":"brokers by mutual fund management personnel, or personnel principally responsible for BlackRock’s individually","page_number":175,"box":{"x":69,"y":45,"width":798,"height":11}},{"id":"de0a2f62-daeb-4b07-aedd-307e72d086c5","block_type":"box","text":"managed portfolios, is not necessarily shared by and between such personnel. Any investment advisory or other fees","page_number":175,"box":{"x":69,"y":60,"width":836,"height":11}},{"id":"c18588ff-de3b-4e5d-85d4-7dccb7b2f467","block_type":"box","text":"paid by a Fund to BlackRock are not reduced as a result of BlackRock’s receipt of research services. In some cases,","page_number":175,"box":{"x":70,"y":75,"width":832,"height":11}},{"id":"bf3e4080-1ee2-429e-a565-e1fed6a5cc09","block_type":"box","text":"BlackRock may receive a service from a broker that has both a “research” and a “non-research” use. When this","page_number":175,"box":{"x":70,"y":90,"width":798,"height":11}},{"id":"ba003245-8efd-42d0-82b5-482b29643a84","block_type":"box","text":"occurs BlackRock makes a good faith allocation, under all the circumstances, between the research and non","page_number":175,"box":{"x":69,"y":105,"width":780,"height":11}},{"id":"ddf56745-fd86-4aba-bfb3-f2993c5a9c35","block_type":"box","text":"research uses of the service. The percentage of the service that is used for research purposes may be paid for with","page_number":175,"box":{"x":69,"y":120,"width":827,"height":12}},{"id":"03dca4cc-8c72-43c4-b0d7-3e3c075afbc8","block_type":"box","text":"client commissions, while BlackRock will use its own funds to pay for the percentage of the service that is used for","page_number":175,"box":{"x":69,"y":135,"width":821,"height":12}},{"id":"ef531099-4d8a-4072-904c-1b077afeeccd","block_type":"box","text":"non-research purposes. In making this good faith allocation, BlackRock faces a potential conflict of interest, but","page_number":175,"box":{"x":69,"y":150,"width":797,"height":12}},{"id":"fda5c6d9-20db-47f6-9436-a8934107babb","block_type":"box","text":"BlackRock believes that its allocation procedures are reasonably designed to ensure that it appropriately allocates","page_number":175,"box":{"x":70,"y":166,"width":815,"height":11}},{"id":"432962ec-c92c-4552-9cba-9c5b8e989e44","block_type":"box","text":"the anticipated use of such services to their research and non-research uses.","page_number":175,"box":{"x":68,"y":181,"width":555,"height":11}},{"id":"706f0764-b534-4288-bfe6-d3d359afdf66","block_type":"box","text":"Under MiFID II, investment managers in the EU, including BIL, are not able to use soft dollars to pay for research","page_number":175,"box":{"x":102,"y":203,"width":802,"height":12}},{"id":"d035131c-30c7-4c52-96dd-8ece55f7d20a","block_type":"box","text":"from brokers. Investment managers in the EU are required to either pay for research out of their own profit and loss","page_number":175,"box":{"x":68,"y":218,"width":825,"height":12}},{"id":"91541808-5c1b-4deb-91b1-dee1fe567f95","block_type":"box","text":"or agree with clients to have research costs paid by clients through research payment accounts that are directly","page_number":175,"box":{"x":69,"y":234,"width":798,"height":11}},{"id":"7a2234b3-f79e-4a37-81f1-3e98ae9af3a3","block_type":"box","text":"funded or funded by a specific client research charge collected alongside execution commissions, provided that the","page_number":175,"box":{"x":68,"y":249,"width":824,"height":11}},{"id":"7018b42f-57a8-479b-96a8-122c0b31c63c","block_type":"box","text":"payments for research are unbundled from the payments for execution. BIL will pay for any research out of its own","page_number":175,"box":{"x":70,"y":264,"width":812,"height":11}},{"id":"2b709cd5-5282-4bca-aa7e-61123ae250ef","block_type":"box","text":"resources and not through soft dollars or commission sharing arrangements.","page_number":175,"box":{"x":69,"y":279,"width":547,"height":11}},{"id":"3d6b6031-53de-4d05-a7b5-bda407e9e679","block_type":"box","text":"Payments of commissions to brokers who are affiliated persons of the Fund, or the Master Portfolio with respect","page_number":175,"box":{"x":102,"y":302,"width":804,"height":11}},{"id":"06304ed4-8e54-474a-abd7-306951b2a290","block_type":"box","text":"to the Feeder Fund (or affiliated persons of such persons), will be made in accordance with Rule 17e-1 under the","page_number":175,"box":{"x":68,"y":317,"width":806,"height":11}},{"id":"549ec4b8-3232-49b0-bf1c-25fecd2fdfba","block_type":"box","text":"Investment Company Act. Subject to policies established by the Board of Directors of the Master Portfolio, BlackRock","page_number":175,"box":{"x":70,"y":332,"width":836,"height":11}},{"id":"7b7038d8-a050-4b0b-8afa-fd25b6d12b0e","block_type":"box","text":"is primarily responsible for the execution of the Master Portfolio’s portfolio transactions and the allocation of","page_number":175,"box":{"x":70,"y":347,"width":777,"height":11}},{"id":"88c6ca13-f947-4e74-94ad-7bcfe6ec2e12","block_type":"box","text":"brokerage.","page_number":175,"box":{"x":69,"y":362,"width":74,"height":11}},{"id":"53cdf3e4-3208-4472-b82b-7a6f431a0e9e","block_type":"box","text":"From time to time, a Fund may purchase new issues of securities in a fixed price offering. In these situations,","page_number":175,"box":{"x":102,"y":385,"width":781,"height":11}},{"id":"5dc8bdda-569d-4481-bdba-f4f79b14706d","block_type":"box","text":"the broker may be a member of the selling group that will, in addition to selling securities, provide BlackRock with","page_number":175,"box":{"x":68,"y":400,"width":810,"height":11}},{"id":"ced45e8f-95d4-4476-9ccf-3b02630d1ae6","block_type":"box","text":"research services. FINRA has adopted rules expressly permitting these types of arrangements under certain","page_number":175,"box":{"x":69,"y":415,"width":771,"height":11}},{"id":"c6183819-009a-4917-98af-e1e4633208fe","block_type":"box","text":"circumstances. Generally, the broker will provide research “credits” in these situations at a rate that is higher than","page_number":175,"box":{"x":69,"y":430,"width":818,"height":11}},{"id":"3e2a85cb-3ce6-4cd1-a78e-4a51a2ed622d","block_type":"box","text":"that available for typical secondary market transactions. These arrangements may not fall within the safe harbor of","page_number":175,"box":{"x":68,"y":445,"width":821,"height":12}},{"id":"b9dbd891-f4a5-4812-86e5-fe8e6abe6f0d","block_type":"box","text":"Section 28(e).","page_number":175,"box":{"x":69,"y":460,"width":99,"height":11}},{"id":"e5ca0515-cf3d-4bba-b28c-4ec62eb919f1","block_type":"box","text":"BlackRock does not consider sales of shares of the mutual funds it advises as a factor in the selection of","page_number":175,"box":{"x":102,"y":483,"width":755,"height":9}},{"id":"6968ad48-a8f2-4b5d-b8a7-175c96a17b0d","block_type":"box","text":"brokers or dealers to execute portfolio transactions for a Fund; however, whether or not a particular broker or dealer","page_number":175,"box":{"x":69,"y":498,"width":828,"height":11}},{"id":"c3df2126-f74d-402f-a489-28d4f9d30eeb","block_type":"box","text":"sells shares of the mutual funds advised by BlackRock neither qualifies nor disqualifies such broker or dealer to","page_number":175,"box":{"x":69,"y":513,"width":799,"height":11}},{"id":"47e5ffa0-ba55-4fe6-9962-23c8a908c63b","block_type":"box","text":"execute transactions for those mutual funds.","page_number":175,"box":{"x":69,"y":528,"width":319,"height":9}},{"id":"2fc1b78a-ea60-41de-a713-172cd1f2d82e","block_type":"box","text":"Each Fund anticipates that its brokerage transactions involving foreign securities generally will be conducted","page_number":175,"box":{"x":102,"y":551,"width":770,"height":11}},{"id":"97e42ccc-18f6-428f-8049-818787a46720","block_type":"box","text":"primarily on the principal stock exchanges of the applicable country. Foreign equity securities may be held by a Fund","page_number":175,"box":{"x":70,"y":566,"width":825,"height":11}},{"id":"3c10200e-d9af-486c-9da3-4a2a0a3c7e07","block_type":"box","text":"in the form of depositary receipts, or other securities convertible into foreign equity securities. Depositary receipts","page_number":175,"box":{"x":70,"y":581,"width":816,"height":12}},{"id":"d1e9c6fa-08b4-4401-8f31-c7c031af3ccf","block_type":"box","text":"may be listed on stock exchanges, or traded in OTC markets in the United States or Europe, as the case may be.","page_number":175,"box":{"x":69,"y":597,"width":805,"height":11}},{"id":"3d6272d7-f804-4ae2-8dcd-a7ffb7b2224d","block_type":"box","text":"American Depositary Receipts, like other securities traded in the United States, will be subject to negotiated","page_number":175,"box":{"x":68,"y":612,"width":773,"height":11}},{"id":"7cdb0edf-4e8d-41b0-a026-fb8ecac2fb03","block_type":"box","text":"commission rates. Because the shares of each Fund are redeemable on a daily basis in U.S. dollars, each Fund","page_number":175,"box":{"x":69,"y":627,"width":798,"height":11}},{"id":"091c36cb-ed20-4ac8-b333-9b7e3c489ded","block_type":"box","text":"intends to manage its portfolio so as to give reasonable assurance that it will be able to obtain U.S. dollars to the","page_number":175,"box":{"x":70,"y":642,"width":812,"height":11}},{"id":"bd093cfd-9b6b-45be-99a4-16bb49596c92","block_type":"box","text":"extent necessary to meet anticipated redemptions. Under present conditions, it is not believed that these","page_number":175,"box":{"x":69,"y":657,"width":754,"height":11}},{"id":"92aa7bf8-5bff-4f2e-b7e0-0724ebeae30c","block_type":"box","text":"considerations will have a significant effect on a Fund’s portfolio strategies.","page_number":175,"box":{"x":69,"y":672,"width":540,"height":11}},{"id":"2e566d30-411e-4ba2-a9b0-af3b60f758e7","block_type":"box","text":"See “Portfolio Transactions and Brokerage” in the SAI for information about the brokerage commissions paid by","page_number":175,"box":{"x":102,"y":695,"width":798,"height":11}},{"id":"f7672c1d-ee0f-48b8-83cf-613a6182e163","block_type":"box","text":"your Fund, including commissions paid to affiliates, if any, for the periods indicated.","page_number":175,"box":{"x":68,"y":710,"width":597,"height":11}},{"id":"dff91471-f075-42c9-8104-f7dc5bb8956a","block_type":"box","text":"Each Fund may invest in certain securities traded in the OTC market and intends to deal directly with the dealers","page_number":175,"box":{"x":102,"y":733,"width":802,"height":11}},{"id":"e781375e-714d-42d6-a08a-3bba12be6934","block_type":"box","text":"who make a market in the particular securities, except in those circumstances in which better prices and execution","page_number":175,"box":{"x":68,"y":748,"width":822,"height":11}},{"id":"6459b4b6-0c3e-4f79-aba6-8e8e8f5ee5e3","block_type":"box","text":"are available elsewhere. Under the Investment Company Act, persons affiliated with a Fund and persons who are","page_number":175,"box":{"x":69,"y":763,"width":804,"height":11}},{"id":"eec7424f-6460-400b-8af6-b50322623140","block_type":"box","text":"affiliated with such affiliated persons are prohibited from dealing with the Fund as principal in the purchase and sale","page_number":175,"box":{"x":69,"y":778,"width":832,"height":11}},{"id":"59ea06a3-e8c4-4679-8298-a35e1e27f64b","block_type":"box","text":"of securities unless a permissive order allowing such transactions is obtained from the Commission. Since","page_number":175,"box":{"x":69,"y":793,"width":762,"height":11}},{"id":"f4b8f130-48af-4c9a-afb8-e04a73aa2923","block_type":"box","text":"transactions in the OTC market usually involve transactions with the dealers acting as principal for their own","page_number":175,"box":{"x":68,"y":808,"width":770,"height":11}},{"id":"6daa537c-26b9-419c-857f-e83ab74f6c3e","block_type":"box","text":"accounts, the Funds will not deal with affiliated persons in connection with such transactions. However, an affiliated","page_number":175,"box":{"x":69,"y":823,"width":828,"height":11}},{"id":"d59bac1a-fcd1-4dd2-9fc8-dcdf3a952f94","block_type":"box","text":"person of a Fund may serve as its broker in OTC transactions conducted on an agency basis provided that, among","page_number":175,"box":{"x":70,"y":838,"width":814,"height":12}},{"id":"1f5c3b38-a53a-478c-b093-dd2204f00448","block_type":"box","text":"other things, the fee or commission received by such affiliated broker is reasonable and fair compared to the fee or","page_number":175,"box":{"x":69,"y":853,"width":825,"height":12}},{"id":"c48ecf15-4f41-424c-b2ec-04787dbb6302","block_type":"box","text":"commission received by non-affiliated brokers in connection with comparable transactions.","page_number":175,"box":{"x":69,"y":869,"width":645,"height":11}},{"id":"9c0f0603-8193-44f2-b93d-07f263fd8c6d","block_type":"box","text":"OTC issues, including most fixed-income securities such as corporate debt and U.S. Government Securities, are","page_number":175,"box":{"x":102,"y":891,"width":797,"height":12}},{"id":"6ae28a7a-d02b-4be4-8b0a-50e9eec1fefc","block_type":"box","text":"normally traded on a “net” basis without a stated commission, through dealers acting for their own account and not","page_number":175,"box":{"x":69,"y":906,"width":826,"height":12}},{"id":"b9f5efa9-7e92-4d63-9b9a-910ff167f3f2","block_type":"box","text":"II-126","page_number":175,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"10a58545-4416-422b-aedb-e0aa705a93f3","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":175,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4a948210-421c-44e6-93b9-265d9747c9aa","block_type":"box","text":"as brokers. The Funds will primarily engage in transactions with these dealers or deal directly with the issuer unless a","page_number":176,"box":{"x":69,"y":45,"width":839,"height":11}},{"id":"3bdd15f5-cc2e-407f-b782-cbcee7dc3815","block_type":"box","text":"better price or execution could be obtained by using a broker. Prices paid to a dealer with respect to both foreign and","page_number":176,"box":{"x":69,"y":60,"width":833,"height":11}},{"id":"2ba68133-805f-471e-abaf-f001da02e444","block_type":"box","text":"domestic securities will generally include a “spread,” which is the difference between the prices at which the dealer","page_number":176,"box":{"x":69,"y":75,"width":826,"height":11}},{"id":"a12f9735-bdae-49db-acbb-d4eeffcd9d8f","block_type":"box","text":"is willing to purchase and sell the specific security at the time, and includes the dealer’s normal profit.","page_number":176,"box":{"x":70,"y":90,"width":730,"height":11}},{"id":"e6906bff-a0f4-4143-a95d-5599dac3c951","block_type":"box","text":"Purchases of money market instruments by a Fund are made from dealers, underwriters and issuers. The Funds","page_number":176,"box":{"x":102,"y":113,"width":800,"height":11}},{"id":"29986fff-8c16-4bcf-ac6a-010c07465250","block_type":"box","text":"do not currently expect to incur any brokerage commission expense on such transactions because money market","page_number":176,"box":{"x":69,"y":128,"width":807,"height":11}},{"id":"c2ae4166-b7be-4f78-981a-0b9bc59876dc","block_type":"box","text":"instruments are generally traded on a “net” basis with dealers acting as principal for their own accounts without a","page_number":176,"box":{"x":70,"y":143,"width":812,"height":11}},{"id":"adce4bec-95fb-45be-a574-a81908f5d5a8","block_type":"box","text":"stated commission. The price of the security, however, usually includes a profit to the dealer. Each money market","page_number":176,"box":{"x":69,"y":158,"width":807,"height":11}},{"id":"18de86a1-c277-418c-ad57-b932a88dedc9","block_type":"box","text":"fund intends to purchase only securities with remaining maturities of 397 days or less as determined in accordance","page_number":176,"box":{"x":68,"y":173,"width":827,"height":11}},{"id":"dcdb14f3-71f1-4ba2-bd7f-e3384aef3797","block_type":"box","text":"with the rules of the Commission. As a result, the portfolio turnover rates of a money market fund will be relatively","page_number":176,"box":{"x":68,"y":188,"width":817,"height":11}},{"id":"1fa0a8d7-dc51-44c0-a96d-bbeeadf73218","block_type":"box","text":"high. However, because brokerage commissions will not normally be paid with respect to investments made by a","page_number":176,"box":{"x":69,"y":204,"width":802,"height":11}},{"id":"460ecd28-ee27-4624-87e4-4162701477d2","block_type":"box","text":"money market fund, the turnover rates should not adversely affect the Fund’s NAVs or net income.","page_number":176,"box":{"x":69,"y":218,"width":700,"height":12}},{"id":"50e29ff4-bf27-4349-b558-b4a3ad27d808","block_type":"box","text":"Securities purchased in underwritten offerings include a fixed amount of compensation to the underwriter,","page_number":176,"box":{"x":102,"y":241,"width":756,"height":11}},{"id":"237fd0cf-7e28-46e1-be61-8c1cdf85d92f","block_type":"box","text":"generally referred to as the underwriter’s concession or discount. When offered securities are purchased or sold","page_number":176,"box":{"x":68,"y":256,"width":804,"height":12}},{"id":"d80cd510-879b-4fd1-8e3a-639cf2d07b6e","block_type":"box","text":"directly from or to an issuer, no commissions or discounts are paid except where required by local markets.","page_number":176,"box":{"x":69,"y":271,"width":766,"height":12}},{"id":"7c553898-183f-420b-b197-2672511894ab","block_type":"box","text":"The Manager or sub-advisers may seek to obtain an undertaking from issuers of commercial paper or dealers","page_number":176,"box":{"x":101,"y":294,"width":780,"height":11}},{"id":"0a3c6b3c-3ff1-4eb5-961e-aa7f20d1f8cf","block_type":"box","text":"selling commercial paper to consider the repurchase of such securities from a Fund prior to maturity at their original","page_number":176,"box":{"x":69,"y":309,"width":826,"height":11}},{"id":"af861818-0ff6-4f96-b903-b74d443c8f04","block_type":"box","text":"cost plus interest (sometimes adjusted to reflect the actual maturity of the securities), if it believes that a Fund’s","page_number":176,"box":{"x":69,"y":324,"width":806,"height":11}},{"id":"3c9e64e2-f362-4862-b877-2140ae3d6538","block_type":"box","text":"anticipated need for liquidity makes such action desirable. Any such repurchase prior to maturity reduces the","page_number":176,"box":{"x":69,"y":339,"width":776,"height":12}},{"id":"ef6c6b52-43bd-4d4f-8231-b30661c78e5b","block_type":"box","text":"possibility that a Fund would incur a capital loss in liquidating commercial paper, especially if interest rates have","page_number":176,"box":{"x":70,"y":355,"width":800,"height":11}},{"id":"d421c672-ff7e-4d87-9cbf-cf92e3686460","block_type":"box","text":"risen since acquisition of such commercial paper.","page_number":176,"box":{"x":69,"y":370,"width":352,"height":11}},{"id":"a4b54f4f-13d0-4110-8ee1-3d3872590bd6","block_type":"box","text":"Investment decisions for each Fund and for other investment accounts managed by the Manager or sub-advisers","page_number":176,"box":{"x":102,"y":392,"width":800,"height":12}},{"id":"4ea8b9e6-9e06-440e-b45a-b4325356d7a5","block_type":"box","text":"are made independently of each other in light of differing conditions. BlackRock allocates investments among client","page_number":176,"box":{"x":69,"y":407,"width":824,"height":12}},{"id":"982d3e5e-05b3-4b08-b980-94f53dddde69","block_type":"box","text":"accounts in a fair and equitable manner over time. A variety of factors will be considered in making such allocations.","page_number":176,"box":{"x":69,"y":423,"width":828,"height":11}},{"id":"31c05114-3ce4-4ec9-8a3a-2848ba1e17af","block_type":"box","text":"These factors include: (i) investment objectives or strategies for particular accounts, including sector, industry,","page_number":176,"box":{"x":68,"y":438,"width":788,"height":11}},{"id":"7ebba0b5-7b1d-48b2-b381-b58001e36ae5","block_type":"box","text":"country or region and capitalization weightings, (ii) tax considerations of an account, (iii) risk or investment","page_number":176,"box":{"x":69,"y":453,"width":759,"height":11}},{"id":"684ec1fe-9a34-4cb8-a898-e145acd667f7","block_type":"box","text":"concentration parameters for an account, (iv) supply or demand for a security at a given price level, (v) size of","page_number":176,"box":{"x":69,"y":468,"width":780,"height":11}},{"id":"c21721e9-379d-48bd-986f-865772d69917","block_type":"box","text":"available investment, (vi) cash availability and liquidity requirements for accounts, (vii) regulatory restrictions,","page_number":176,"box":{"x":69,"y":483,"width":777,"height":11}},{"id":"6253f519-dd7e-40f4-ab36-2de6794c1bd8","block_type":"box","text":"(viii) minimum investment size of an account, (ix) relative size of account, and (x) such other factors as may be","page_number":176,"box":{"x":69,"y":498,"width":788,"height":11}},{"id":"4fd9f2e2-ae99-45f7-81ec-913dd0ea9c41","block_type":"box","text":"approved by BlackRock’s general counsel. Moreover, investments may not be allocated to one client account over","page_number":176,"box":{"x":69,"y":514,"width":811,"height":11}},{"id":"d7657c08-8504-4c30-af19-18c2395e9856","block_type":"box","text":"another based on any of the following considerations: (i) to favor one client account at the expense of another, (ii) to","page_number":176,"box":{"x":69,"y":528,"width":829,"height":12}},{"id":"4b37eb78-14dc-4667-8958-a7269ea7db5b","block_type":"box","text":"generate higher fees paid by one client account over another or to produce greater performance compensation to","page_number":176,"box":{"x":68,"y":543,"width":808,"height":12}},{"id":"354c0f04-b141-4a6e-876b-8419d397392f","block_type":"box","text":"BlackRock, (iii) to develop or enhance a relationship with a client or prospective client, (iv) to compensate a client for","page_number":176,"box":{"x":70,"y":559,"width":832,"height":11}},{"id":"46a1fc5a-61ff-4544-820d-aab2385f5f76","block_type":"box","text":"past services or benefits rendered to BlackRock or to induce future services or benefits to be rendered to BlackRock,","page_number":176,"box":{"x":70,"y":574,"width":836,"height":11}},{"id":"64b9072e-e627-4e53-b61f-29e28abad8f0","block_type":"box","text":"or (v) to manage or equalize investment performance among different client accounts.","page_number":176,"box":{"x":69,"y":589,"width":613,"height":11}},{"id":"dfeb6f5b-f8c7-4fde-8217-bf21d67c0c8b","block_type":"box","text":"Equity securities will generally be allocated among client accounts within the same investment mandate on a pro","page_number":176,"box":{"x":102,"y":612,"width":802,"height":11}},{"id":"a3dccfc6-5b32-43ed-b1d8-ba7780d56bc2","block_type":"box","text":"rata basis. All allocations of equity securities will be subject, where relevant, to share minimums established for","page_number":176,"box":{"x":69,"y":627,"width":800,"height":11}},{"id":"34b64098-e110-4593-86d3-1d0e7ed66d89","block_type":"box","text":"accounts and compliance constraints.","page_number":176,"box":{"x":69,"y":642,"width":269,"height":11}},{"id":"d640cb4f-6c7b-45b5-853a-4baf4c06cc4e","block_type":"box","text":"Initial public offerings of securities may be over-subscribed and subsequently trade at a premium in the","page_number":176,"box":{"x":102,"y":664,"width":736,"height":12}},{"id":"838afd14-d6d5-46a4-bb0a-99cdb7fa16e4","block_type":"box","text":"secondary market. In these situations, the supply of securities available for client accounts is often less than the","page_number":176,"box":{"x":69,"y":680,"width":808,"height":11}},{"id":"fca33d3f-fe4f-4f8d-bb56-d4abdba997c7","block_type":"box","text":"amount of securities the accounts would otherwise take. In order to allocate these investments fairly and equitably","page_number":176,"box":{"x":69,"y":695,"width":821,"height":11}},{"id":"6924798c-011d-4305-8bac-2f0faa62f94c","block_type":"box","text":"among client accounts over time, each portfolio manager or a member of his or her respective investment team will","page_number":176,"box":{"x":69,"y":710,"width":823,"height":11}},{"id":"4c2fd02e-30b6-4ed0-b77e-9050c9856631","block_type":"box","text":"indicate to BlackRock’s trading desk their level of interest in a particular offering with respect to eligible client","page_number":176,"box":{"x":70,"y":725,"width":783,"height":11}},{"id":"7e2e0eb4-060b-400f-b8e5-d65931fd0051","block_type":"box","text":"accounts for which that team is responsible. Initial public offerings of U.S. equity securities will be identified as","page_number":176,"box":{"x":69,"y":740,"width":793,"height":11}},{"id":"e5d80a5b-5140-45e5-a969-5df094b3238f","block_type":"box","text":"eligible for particular client accounts that are managed by portfolio teams who have indicated interest in the offering","page_number":176,"box":{"x":69,"y":755,"width":831,"height":11}},{"id":"75a5f881-1c42-431f-9cc9-5a2b1c44e14d","block_type":"box","text":"based on market capitalization of the issuer of the security and the investment mandate of the client account and in","page_number":176,"box":{"x":69,"y":770,"width":828,"height":11}},{"id":"48b10a3e-2f1b-4dab-a057-ff81facd7485","block_type":"box","text":"the case of international equity securities, the country where the offering is taking place and the investment mandate","page_number":176,"box":{"x":68,"y":785,"width":839,"height":12}},{"id":"03cc73ef-00f9-452c-9bd7-d2383ef37d91","block_type":"box","text":"of the client account. Generally, shares received during the initial public offering will be allocated among participating","page_number":176,"box":{"x":69,"y":801,"width":835,"height":11}},{"id":"8ab748ef-6281-4482-bd9b-fe6d3ce04ff4","block_type":"box","text":"client accounts within each investment mandate on a pro rata basis. In situations where supply is too limited to be","page_number":176,"box":{"x":69,"y":816,"width":819,"height":11}},{"id":"4477f032-c989-4b8d-8c4c-5e1e25f167ca","block_type":"box","text":"allocated among all accounts for which the investment is eligible, portfolio managers may rotate such investment","page_number":176,"box":{"x":69,"y":831,"width":808,"height":11}},{"id":"cf1cde32-0714-4e5d-82cb-59f2daf693e2","block_type":"box","text":"opportunities among one or more accounts so long as the rotation system provides for fair access for all client","page_number":176,"box":{"x":69,"y":846,"width":791,"height":11}},{"id":"86eab3b9-8c76-404e-80b7-289eada45b19","block_type":"box","text":"accounts over time. Other allocation methodologies that are considered by BlackRock to be fair and equitable to","page_number":176,"box":{"x":69,"y":861,"width":799,"height":11}},{"id":"9d1490af-524b-4da8-a301-375987a02469","block_type":"box","text":"clients may be used as well.","page_number":176,"box":{"x":69,"y":876,"width":200,"height":11}},{"id":"c812b559-8a8d-49be-b2bb-7b7d36f843cb","block_type":"box","text":"II-127","page_number":176,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"c6a70cf5-3164-4659-9137-d58df3cdab09","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":176,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a63e540a-121c-482b-a506-abe7a1519bee","block_type":"box","text":"Because different accounts may have differing investment objectives and policies, BlackRock may buy and sell","page_number":177,"box":{"x":102,"y":45,"width":789,"height":11}},{"id":"67fc60f0-4448-4152-bb2c-fc454caa9d1d","block_type":"box","text":"the same securities at the same time for different clients based on the particular investment objective, guidelines","page_number":177,"box":{"x":68,"y":60,"width":815,"height":11}},{"id":"f58a7edd-01ff-473f-aca1-0350c9f28af1","block_type":"box","text":"and strategies of those accounts. For example, BlackRock may decide that it may be entirely appropriate for a growth","page_number":177,"box":{"x":69,"y":75,"width":835,"height":11}},{"id":"b30bc673-fb51-4a42-a1c5-a406afffddb3","block_type":"box","text":"fund to sell a security at the same time a value fund is buying that security. To the extent that transactions on behalf","page_number":177,"box":{"x":68,"y":90,"width":833,"height":11}},{"id":"abc48007-6c92-4fd0-be5a-5e41b5c7e6f2","block_type":"box","text":"of more than one client of BlackRock or its affiliates during the same period may increase the demand for securities","page_number":177,"box":{"x":69,"y":105,"width":829,"height":11}},{"id":"f26176e3-8a67-49f9-9d8a-c635a0b90ef0","block_type":"box","text":"being purchased or the supply of securities being sold, there may be an adverse effect on price. For example, sales","page_number":177,"box":{"x":69,"y":120,"width":825,"height":12}},{"id":"db092caf-5b11-47a6-894a-74fd5bf902a4","block_type":"box","text":"of a security by BlackRock on behalf of one or more of its clients may decrease the market price of such security,","page_number":177,"box":{"x":69,"y":135,"width":806,"height":11}},{"id":"43034506-c6d2-40fb-b7af-db020a7fef36","block_type":"box","text":"adversely impacting other BlackRock clients that still hold the security. If purchases or sales of securities arise for","page_number":177,"box":{"x":69,"y":150,"width":814,"height":12}},{"id":"96949d8e-d32b-4c41-bd4a-189a509ced77","block_type":"box","text":"consideration at or about the same time that would involve a Fund or other clients or funds for which BlackRock or an","page_number":177,"box":{"x":69,"y":166,"width":836,"height":9}},{"id":"b105244a-e56d-47e1-a5d4-cca42faa9d90","block_type":"box","text":"affiliate act as investment manager, transactions in such securities will be made, insofar as feasible, for the","page_number":177,"box":{"x":69,"y":181,"width":773,"height":11}},{"id":"7145ccfc-cbee-4c67-82e7-26d27120a378","block_type":"box","text":"respective funds and clients in a manner deemed equitable to all.","page_number":177,"box":{"x":69,"y":196,"width":467,"height":11}},{"id":"158ed101-30ed-4393-b14d-b49a3c2b14c1","block_type":"box","text":"In certain instances, BlackRock may find it efficient for purposes of seeking to obtain best execution, to","page_number":177,"box":{"x":102,"y":218,"width":741,"height":12}},{"id":"c6c8042e-61b8-4381-a1be-0e68c61999cb","block_type":"box","text":"aggregate certain contemporaneous purchases or sale orders of its advisory accounts. In general, all","page_number":177,"box":{"x":69,"y":234,"width":721,"height":11}},{"id":"77cb4df0-f027-4e91-b70a-a0ee81f4d81b","block_type":"box","text":"contemporaneous trades for client accounts under management by the same portfolio manager or investment team","page_number":177,"box":{"x":69,"y":249,"width":824,"height":11}},{"id":"8565acf5-6af4-4d95-ace9-eb9811fd912a","block_type":"box","text":"will be aggregated in a single order if the trader believes the aggregated trade would provide each client with an","page_number":177,"box":{"x":68,"y":264,"width":795,"height":11}},{"id":"21b5808d-6b60-4706-8dc1-4da25446a97a","block_type":"box","text":"opportunity to achieve a more favorable execution at a potentially lower execution cost. The costs associated with an","page_number":177,"box":{"x":69,"y":279,"width":834,"height":11}},{"id":"5e9d0165-88d4-4a1e-8923-2f78fdbbfdef","block_type":"box","text":"aggregated order will be shared pro rata among the clients in the aggregated order. Generally, if an order for a","page_number":177,"box":{"x":69,"y":294,"width":783,"height":11}},{"id":"20b8d380-88df-4135-891e-27c734b3521c","block_type":"box","text":"particular portfolio manager or management team is filled at several different prices through multiple trades, all","page_number":177,"box":{"x":70,"y":309,"width":796,"height":11}},{"id":"ca705b2e-543c-4f34-8f4a-2cb7ec0abc21","block_type":"box","text":"accounts participating in the order will receive the average price except in the case of certain international markets","page_number":177,"box":{"x":69,"y":324,"width":821,"height":12}},{"id":"e961a088-570e-4ef3-98f2-41ba8eef4f7a","block_type":"box","text":"where average pricing is not permitted. While in some cases this practice could have a detrimental effect upon the","page_number":177,"box":{"x":68,"y":339,"width":819,"height":12}},{"id":"822f397a-0d01-406a-a861-f803e6060588","block_type":"box","text":"price or value of the security as far as a Fund is concerned, in other cases it could be beneficial to the Fund.","page_number":177,"box":{"x":70,"y":355,"width":771,"height":11}},{"id":"653a7bcf-c6c6-4fe7-8b16-9a50f04f3266","block_type":"box","text":"Transactions effected by BlackRock on behalf of more than one of its clients during the same period may increase","page_number":177,"box":{"x":68,"y":370,"width":815,"height":11}},{"id":"6e6fd002-c4c2-4267-9542-88f11d2a2c09","block_type":"box","text":"the demand for securities being purchased or the supply of securities being sold, causing an adverse effect on price.","page_number":177,"box":{"x":68,"y":385,"width":835,"height":11}},{"id":"cc696715-0d2f-43f4-af9e-5b32320190f6","block_type":"box","text":"The trader will give the aggregated order to the broker-dealer that the trader has identified as being able to provide","page_number":177,"box":{"x":68,"y":400,"width":817,"height":11}},{"id":"3c283221-0e93-406c-8f46-45c9318548db","block_type":"box","text":"the best execution of the order. Orders for purchase or sale of securities will be placed within a reasonable amount","page_number":177,"box":{"x":68,"y":415,"width":823,"height":11}},{"id":"15fd4cf3-3ebc-48ec-bf79-3a756ad3a876","block_type":"box","text":"of time of the order receipt and aggregated orders will be kept aggregated only long enough to execute the order.","page_number":177,"box":{"x":69,"y":430,"width":803,"height":11}},{"id":"e6707d29-b27c-4b44-99e9-9e1300f25d66","block_type":"box","text":"A Fund will not purchase securities during the existence of any underwriting or selling group relating to such","page_number":177,"box":{"x":101,"y":453,"width":767,"height":11}},{"id":"c2a0f7c5-2191-4a1f-86cb-2a5a74169b9d","block_type":"box","text":"securities of which BlackRock, BRIL or any affiliated person (as defined in the Investment Company Act) thereof is a","page_number":177,"box":{"x":69,"y":468,"width":826,"height":11}},{"id":"062bf84b-886e-4681-b528-ea66cb5920e4","block_type":"box","text":"member except pursuant to procedures adopted by the Board of Directors in accordance with Rule 10f-3 under the","page_number":177,"box":{"x":69,"y":483,"width":816,"height":11}},{"id":"9f9bb627-24a3-4b11-8889-fcc573aa593d","block_type":"box","text":"Investment Company Act. In no instance will portfolio securities be purchased from or sold to BlackRock, BRIL or any","page_number":177,"box":{"x":70,"y":498,"width":833,"height":11}},{"id":"2ecb28f5-8b18-4396-ad0b-76bfdbe5cc52","block_type":"box","text":"affiliated person of the foregoing entities except as permitted by Commission exemptive order or by applicable law.","page_number":177,"box":{"x":69,"y":513,"width":818,"height":12}},{"id":"c43d1799-edeb-4e15-94e0-35e2b692d6cd","block_type":"box","text":"A Fund’s purchase and sale orders for securities may be combined with those of other investment companies,","page_number":177,"box":{"x":101,"y":536,"width":786,"height":11}},{"id":"2499c1d7-fef5-4b42-a745-c3a750ee2e2e","block_type":"box","text":"clients or accounts that BlackRock manages or advises. If purchases or sales of portfolio securities of a Fund and","page_number":177,"box":{"x":69,"y":551,"width":814,"height":11}},{"id":"8ea1ea2d-5384-4dde-bdcc-9a053aed217c","block_type":"box","text":"one or more other accounts managed or advised by BlackRock are considered at or about the same time,","page_number":177,"box":{"x":69,"y":566,"width":751,"height":11}},{"id":"b560404e-0576-4955-9c57-ddc08d0991c6","block_type":"box","text":"transactions in such securities are allocated among the Fund and the other accounts in a manner deemed equitable","page_number":177,"box":{"x":68,"y":582,"width":829,"height":11}},{"id":"2087e65b-4a29-40b7-86e6-1e3b6a953c92","block_type":"box","text":"to all by BlackRock. In some cases, this procedure could have a detrimental effect on the price or volume of the","page_number":177,"box":{"x":68,"y":596,"width":799,"height":12}},{"id":"80de4205-154e-4b54-b7b2-ae1536829362","block_type":"box","text":"security as far as a Fund is concerned. However, in other cases, it is possible that the ability to participate in volume","page_number":177,"box":{"x":69,"y":612,"width":834,"height":11}},{"id":"0546170d-3f5b-41b4-bafe-454127bc46e9","block_type":"box","text":"transactions and to negotiate lower transaction costs will be beneficial to the Fund. BlackRock may deal, trade and","page_number":177,"box":{"x":68,"y":627,"width":820,"height":11}},{"id":"da08cbb8-1c30-4d57-8f4c-8c307174cbbc","block_type":"box","text":"invest for its own account in the types of securities in which a Fund may invest. BlackRock may, from time to time,","page_number":177,"box":{"x":70,"y":642,"width":812,"height":11}},{"id":"82163707-b4da-4d9d-9723-59b83cd5d133","block_type":"box","text":"effect trades on behalf of and for the account of a Fund with brokers or dealers that are affiliated with BFA, in","page_number":177,"box":{"x":69,"y":657,"width":781,"height":10}},{"id":"0acee147-4611-4ed4-9abb-4107b1f27bc7","block_type":"box","text":"conformity with the Investment Company Act and Commission rules and regulations. Under these provisions, any","page_number":177,"box":{"x":69,"y":672,"width":805,"height":11}},{"id":"4bc8e61a-9a41-4307-8b9c-4bbfaabc10fd","block_type":"box","text":"commissions paid to affiliated brokers or dealers must be reasonable and fair compared to the commissions charged","page_number":177,"box":{"x":69,"y":687,"width":840,"height":11}},{"id":"747a7879-044e-49a2-8bcd-1713d3341cb3","block_type":"box","text":"by other brokers or dealers in comparable transactions. A Fund will not deal with affiliates in principal transactions","page_number":177,"box":{"x":69,"y":702,"width":815,"height":11}},{"id":"ac2ff904-63d7-41d9-ae24-66e8fd85d850","block_type":"box","text":"unless permitted by applicable Commission rules or regulations, or by Commission exemptive order.","page_number":177,"box":{"x":69,"y":718,"width":713,"height":11}},{"id":"c6188df3-ed3d-4b65-9415-703f4ad98ffb","block_type":"box","text":"Portfolio Turnover","page_number":177,"box":{"x":69,"y":748,"width":129,"height":9}},{"id":"c14708b1-20e7-4c29-9c18-0f42e4910b50","block_type":"box","text":"The portfolio turnover rate is calculated by dividing the lesser of a Fund’s annual sales or purchases of portfolio","page_number":177,"box":{"x":101,"y":770,"width":798,"height":12}},{"id":"6140b9b2-6e69-43c6-8343-4eb5dc6b8829","block_type":"box","text":"securities (exclusive of purchases or sales of U.S. Government Securities and all other securities whose maturities at","page_number":177,"box":{"x":69,"y":785,"width":839,"height":11}},{"id":"2238d545-7fde-4d81-b255-1abee93432ba","block_type":"box","text":"the time of acquisition were one year or less) by the monthly average value of the securities in the portfolio during","page_number":177,"box":{"x":68,"y":801,"width":814,"height":11}},{"id":"046739e6-116b-4ee7-84d1-20480dbed87b","block_type":"box","text":"the year. A high rate of portfolio turnover results in certain tax consequences, such as increased capital gain","page_number":177,"box":{"x":68,"y":816,"width":777,"height":11}},{"id":"58c0cfc2-a334-484c-8092-6617b6e2b38c","block_type":"box","text":"dividends and/or ordinary income dividends, and in correspondingly greater transaction costs in the form of dealer","page_number":177,"box":{"x":69,"y":831,"width":818,"height":11}},{"id":"8efeef0f-8f99-4d4e-84b0-b597978b2f36","block_type":"box","text":"spreads and brokerage commissions, which are borne directly by a Fund.","page_number":177,"box":{"x":69,"y":846,"width":519,"height":11}},{"id":"bd91afd6-aae1-4aff-80e7-ce85f08145f5","block_type":"box","text":"II-128","page_number":177,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"b35d2876-c4f7-461e-b88c-b7156b51b553","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":177,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3e6adcf9-0930-4342-921b-be67fe9c9ff1","block_type":"box","text":"DIVIDENDS AND TAXES","page_number":178,"box":{"x":396,"y":45,"width":186,"height":10}},{"id":"2ebb86a8-4b7a-41ad-a34d-effbc5dcf56a","block_type":"box","text":"Dividends","page_number":178,"box":{"x":69,"y":76,"width":69,"height":8}},{"id":"0b448cb2-7c21-409f-a06e-7fd4286d64bb","block_type":"box","text":"Each Fund intends to distribute substantially all of its net investment income, if any. Dividends from such net","page_number":178,"box":{"x":102,"y":98,"width":776,"height":11}},{"id":"7a98862b-2bb4-41df-af5a-5d56e274eea3","block_type":"box","text":"investment income are paid as set forth in each Fund’s Prospectus. Each Fund also intends to distribute all net","page_number":178,"box":{"x":70,"y":113,"width":795,"height":11}},{"id":"c78ed787-a8bd-448d-ac9c-f9467d9dfb23","block_type":"box","text":"realized capital gains, if any, as set forth in such Fund’s Prospectus. From time to time, a Fund may declare a special","page_number":178,"box":{"x":69,"y":128,"width":837,"height":12}},{"id":"63314984-141b-4056-b2de-707686a9c4f5","block_type":"box","text":"distribution at or about the end of the calendar year in order to comply with U.S. federal tax requirements that certain","page_number":178,"box":{"x":69,"y":143,"width":836,"height":12}},{"id":"175ba703-0222-4dd7-91c2-2cf3a1382476","block_type":"box","text":"percentages of its ordinary income and capital gains be distributed during the year. If, in any fiscal year, a Fund has","page_number":178,"box":{"x":70,"y":159,"width":822,"height":11}},{"id":"58ba7621-a1ea-446e-8c9b-91d6b8d23b6a","block_type":"box","text":"net income from certain foreign currency transactions, such income will be distributed at least annually.","page_number":178,"box":{"x":69,"y":174,"width":739,"height":11}},{"id":"3dbfe379-5723-4f75-a1a7-22938f9535c3","block_type":"box","text":"For information concerning the manner in which dividends may be reinvested automatically in shares of each","page_number":178,"box":{"x":102,"y":196,"width":773,"height":12}},{"id":"64c2c203-8d36-4c91-bc45-49bfce9430b3","block_type":"box","text":"Fund, as applicable, see “Shareholder Services — Automatic Dividend Reinvestment Plan.” Shareholders may also","page_number":178,"box":{"x":70,"y":212,"width":819,"height":11}},{"id":"1c6b8fb5-7c16-4b57-9447-c4df8f2a8c70","block_type":"box","text":"elect in writing to receive any such dividends in cash. Dividends are taxable to shareholders, as discussed below,","page_number":178,"box":{"x":69,"y":227,"width":807,"height":11}},{"id":"f23ceff5-ad1d-446c-b20e-da1d74b5b760","block_type":"box","text":"whether they are reinvested in shares of the Fund or received in cash. The per share dividends on front-end load","page_number":178,"box":{"x":68,"y":242,"width":800,"height":11}},{"id":"9ad4a0e0-1889-4c41-8c5c-518c0f65f11a","block_type":"box","text":"shares, CDSC shares and Service Shares will be lower than the per share dividends on Institutional Shares as a","page_number":178,"box":{"x":69,"y":257,"width":801,"height":11}},{"id":"07ce8ac0-f60f-4673-b7f3-3952b33d0cda","block_type":"box","text":"result of the service, distribution and higher transfer agency fees applicable to CDSC shares, the service fees","page_number":178,"box":{"x":69,"y":272,"width":783,"height":11}},{"id":"40e46476-c4f0-4bf2-ad38-4e79b34d033c","block_type":"box","text":"applicable to front-end load shares and Service Shares, and the service and distribution fees applicable to Class R","page_number":178,"box":{"x":69,"y":287,"width":820,"height":11}},{"id":"fb613c58-077f-4d1f-a9f3-79bb352514b2","block_type":"box","text":"Shares. Similarly, the per share dividends on CDSC shares and Class R Shares will be lower than the per share","page_number":178,"box":{"x":69,"y":302,"width":794,"height":11}},{"id":"7120a390-bc5e-4271-b3e6-4204f15ea747","block_type":"box","text":"dividends on front-end load shares and Service Shares as a result of the distribution fees and higher transfer agency","page_number":178,"box":{"x":69,"y":317,"width":834,"height":12}},{"id":"69ede37f-5277-4a27-bc02-6dd2c6d4c8f4","block_type":"box","text":"fees applicable to CDSC shares and the distribution fees applicable to Class R Shares, and the per share dividends","page_number":178,"box":{"x":68,"y":332,"width":826,"height":11}},{"id":"fe157a93-6e4e-47d7-8ff6-b7fd08432381","block_type":"box","text":"on CDSC shares will be lower than the per share dividends on Class R Shares as a result of the higher distribution","page_number":178,"box":{"x":69,"y":348,"width":816,"height":11}},{"id":"30b9bf93-ed06-4bce-9ae0-3aca355c9f7c","block_type":"box","text":"fees and higher transfer agency fees applicable to CDSC shares.","page_number":178,"box":{"x":68,"y":363,"width":461,"height":11}},{"id":"1aab80e2-8686-4039-9b03-8c8e47c894df","block_type":"box","text":"Taxes","page_number":178,"box":{"x":68,"y":393,"width":42,"height":9}},{"id":"cf4a3019-2125-4a94-abdb-b55d7d46a560","block_type":"box","text":"Each Fund intends to continue to qualify for the special tax treatment afforded to regulated investment","page_number":178,"box":{"x":102,"y":416,"width":732,"height":11}},{"id":"a06050bc-5c03-4249-91ea-77b5982f1e2a","block_type":"box","text":"companies under the Code. As long as a Fund so qualifies, the Fund (but not its shareholders) will not be subject to","page_number":178,"box":{"x":69,"y":431,"width":825,"height":11}},{"id":"6ad79c9b-13db-4d62-b56f-d8f6accbf4bc","block_type":"box","text":"U.S. federal income tax on the part of its investment company taxable income and net realized capital gains that it","page_number":178,"box":{"x":70,"y":446,"width":817,"height":11}},{"id":"ef907f6d-c398-4e12-b757-eaff59a8c7fa","block_type":"box","text":"distributes to its shareholders in years in which it distributes at least 90% of its investment company taxable income","page_number":178,"box":{"x":69,"y":461,"width":832,"height":11}},{"id":"001fe2b0-bd99-4bf0-836f-bbaac335770a","block_type":"box","text":"and at least 90% of its net tax-exempt interest income, if any, for the year. To qualify as a regulated investment","page_number":178,"box":{"x":69,"y":476,"width":791,"height":11}},{"id":"16ab42ac-6a7a-4ee8-98e8-ca919db1754b","block_type":"box","text":"company, a Fund must meet certain requirements regarding the source of its income and the composition and","page_number":178,"box":{"x":69,"y":491,"width":786,"height":12}},{"id":"7958ba9b-59c8-4f71-af90-c7893673334f","block_type":"box","text":"diversification of its assets. See Part II, “Investment Risks and Considerations—Investment Restrictions (All Funds)”","page_number":178,"box":{"x":69,"y":506,"width":831,"height":11}},{"id":"9ede17f8-82e5-4a55-87c0-fa9602b90dd9","block_type":"box","text":"for a discussion of the asset diversification requirements. In the case of a Feeder Fund, such Fund may look to the","page_number":178,"box":{"x":68,"y":521,"width":819,"height":12}},{"id":"a416146e-1eaf-4c44-955d-8921a0d1097d","block_type":"box","text":"underlying assets of the Master Portfolio in which it has invested for purposes of satisfying the asset diversification","page_number":178,"box":{"x":69,"y":537,"width":824,"height":11}},{"id":"f4870cbe-5fe4-43d8-83f9-9a854e905afa","block_type":"box","text":"requirement and various other requirements of the Code applicable to regulated investment companies.","page_number":178,"box":{"x":69,"y":552,"width":739,"height":11}},{"id":"c751316d-8550-4cdf-ae83-a236d4641757","block_type":"box","text":"A Fund may be able to cure a failure to derive at least 90% of its income from the sources specified above or a","page_number":178,"box":{"x":101,"y":574,"width":792,"height":12}},{"id":"5e16a4e6-8c91-47c5-8053-4ee9336df59c","block_type":"box","text":"failure to diversify its holdings in the manner described above by paying a tax, by disposing of certain assets, or by","page_number":178,"box":{"x":68,"y":589,"width":819,"height":12}},{"id":"830cb965-1038-4dd0-9f22-b31a4239c293","block_type":"box","text":"paying a tax and disposing of assets. If, in any taxable year, a Fund fails one of these tests and does not timely cure","page_number":178,"box":{"x":70,"y":605,"width":830,"height":11}},{"id":"9e9f60a0-7e30-42af-9b82-73618250f2ba","block_type":"box","text":"the failure, the Fund will be taxed in the same manner as an ordinary corporation and distributions to its","page_number":178,"box":{"x":68,"y":620,"width":744,"height":11}},{"id":"1fd5adc5-03d8-4751-8891-ecda08770fd5","block_type":"box","text":"shareholders will not be deductible by the Fund in computing its taxable income. Although in general the passive loss","page_number":178,"box":{"x":69,"y":635,"width":835,"height":11}},{"id":"62ab9840-75c6-4a03-aa04-7cf5f795df8d","block_type":"box","text":"rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment","page_number":178,"box":{"x":69,"y":650,"width":808,"height":11}},{"id":"bf4f4a7d-73ad-4a5e-a47f-f5079870c99e","block_type":"box","text":"company with respect to items attributable to an interest in a qualified publicly-traded partnership. A Fund’s","page_number":178,"box":{"x":69,"y":665,"width":767,"height":11}},{"id":"57a0cf85-590b-4755-91c1-10ad892de9ff","block_type":"box","text":"investments in partnerships, including in qualified publicly-traded partnerships, may result in the Fund being subject","page_number":178,"box":{"x":70,"y":680,"width":826,"height":12}},{"id":"241a71b5-2f00-4773-83c3-1a6195ef4040","block_type":"box","text":"to state, local, or non-U.S. income, franchise or withholding tax liabilities.","page_number":178,"box":{"x":68,"y":695,"width":521,"height":12}},{"id":"9aa50de2-4aba-4a07-9037-d7f3036490e0","block_type":"box","text":"Each Fund intends to distribute substantially all of such income and gains. If, in any taxable year, a Fund fails to","page_number":178,"box":{"x":102,"y":718,"width":798,"height":11}},{"id":"b93d03f5-cca7-40cf-80b5-6d4efd62da6d","block_type":"box","text":"qualify as a regulated investment company under the Code, notwithstanding the availability of certain relief","page_number":178,"box":{"x":69,"y":733,"width":762,"height":11}},{"id":"19da2b58-646b-4007-a2a6-fbe28ea9a34c","block_type":"box","text":"provisions, such Fund would be taxed in the same manner as an ordinary corporation and all distributions from","page_number":178,"box":{"x":70,"y":748,"width":789,"height":11}},{"id":"fe4d5ff4-b605-428a-b2ac-227955f968ac","block_type":"box","text":"earnings and profits (as determined under U.S. federal income tax principles) to its shareholders would be taxable as","page_number":178,"box":{"x":69,"y":763,"width":837,"height":12}},{"id":"4125f514-2b15-44be-abb8-f5c8d42ffe42","block_type":"box","text":"ordinary dividend income eligible for taxation at a reduced tax rate for non-corporate shareholders and the dividends","page_number":178,"box":{"x":69,"y":778,"width":831,"height":12}},{"id":"8be7394b-b615-497c-aed1-f1ca0cd9adc2","block_type":"box","text":"received deduction for corporate shareholders. However, a Municipal Fund’s distributions derived from income on tax","page_number":178,"box":{"x":69,"y":794,"width":837,"height":11}},{"id":"fcd0619c-e4d4-4142-866a-9b37f55ad6ca","block_type":"box","text":"exempt obligations, as defined herein, would no longer qualify for treatment as exempt interest. Each Fund that is a","page_number":178,"box":{"x":69,"y":809,"width":825,"height":11}},{"id":"cf490a40-64a2-4dc6-9635-5d0ea038a064","block_type":"box","text":"series of a regulated investment company that consists of multiple series is treated as a separate corporation for","page_number":178,"box":{"x":69,"y":824,"width":811,"height":11}},{"id":"5bce4edc-96a0-467f-b362-1ef44ee5ed37","block_type":"box","text":"U.S. federal income tax purposes, and therefore is considered to be a separate entity in determining its treatment","page_number":178,"box":{"x":70,"y":839,"width":813,"height":11}},{"id":"5eebb30e-f840-4132-b06c-8d791c9f0a5c","block_type":"box","text":"under the rules for regulated investment companies. Losses in one series of a regulated investment company do not","page_number":178,"box":{"x":69,"y":854,"width":834,"height":11}},{"id":"1bd38d0e-2fee-42dc-becc-3ba45ed0bb3b","block_type":"box","text":"offset gains in another, and the requirements (other than certain organizational requirements) for qualifying for","page_number":178,"box":{"x":69,"y":869,"width":790,"height":11}},{"id":"51a367cd-6315-4813-b7a9-4bbe42d46619","block_type":"box","text":"regulated investment company status will be determined at the level of the individual series. In the following","page_number":178,"box":{"x":69,"y":884,"width":771,"height":12}},{"id":"4ed5bf46-79da-478b-9dc2-59ca8deebcee","block_type":"box","text":"discussion, the term “Fund” means each individual series, if applicable.","page_number":178,"box":{"x":69,"y":899,"width":512,"height":11}},{"id":"3e3a175e-0350-4e29-848f-352ca6a73516","block_type":"box","text":"II-129","page_number":178,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"142233ea-be29-4a41-9d6e-157cfef6112c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":178,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"441b79f6-50c9-4966-86fb-bf664f0f01c3","block_type":"box","text":"The Code requires a regulated investment company to pay a nondeductible 4% excise tax to the extent the","page_number":179,"box":{"x":101,"y":45,"width":759,"height":11}},{"id":"9d29d06e-e7e8-4720-a37f-cbc97cf13e8f","block_type":"box","text":"regulated investment company does not distribute, during each calendar year, at least 98% of its ordinary income,","page_number":179,"box":{"x":69,"y":60,"width":813,"height":11}},{"id":"0c5c472a-6e6b-4595-bd1e-ef496e84c9da","block_type":"box","text":"determined on a calendar year basis, and at least 98.2% of its capital gain net income, determined, in general, as if","page_number":179,"box":{"x":69,"y":75,"width":830,"height":11}},{"id":"62059a98-0ebf-49c2-b089-43e7bd3f7c8e","block_type":"box","text":"the regulated investment company’s taxable year ended on October 31, plus certain undistributed amounts from the","page_number":179,"box":{"x":68,"y":90,"width":832,"height":11}},{"id":"c0df2d8e-c561-4b3d-a317-eb2d263d135d","block_type":"box","text":"previous years. While each Fund intends to distribute its income and capital gains in the manner necessary to avoid","page_number":179,"box":{"x":70,"y":105,"width":825,"height":11}},{"id":"60638d9c-9279-4c16-a36a-05ba6bff62c0","block_type":"box","text":"imposition of the 4% excise tax, there can be no assurance that a sufficient amount of the Fund’s taxable income","page_number":179,"box":{"x":70,"y":120,"width":810,"height":11}},{"id":"f606e7d4-58e2-4f2f-a0af-6d2ae8abc09b","block_type":"box","text":"and capital gains will be distributed to avoid entirely the imposition of the tax. In such event, a Fund will be liable for","page_number":179,"box":{"x":69,"y":135,"width":828,"height":12}},{"id":"7a693bac-72f1-43a0-a22c-b80edeee4f9d","block_type":"box","text":"the tax only on the amount by which it does not meet the foregoing distribution requirements.","page_number":179,"box":{"x":68,"y":150,"width":666,"height":12}},{"id":"90d67475-575c-4c84-9ee9-54add902d0eb","block_type":"box","text":"Net capital loss carryforwards may be applied against realized capital gains in each succeeding year, until they","page_number":179,"box":{"x":102,"y":173,"width":790,"height":11}},{"id":"fda01290-67db-4385-81a3-ead6e82ec060","block_type":"box","text":"have been reduced to zero. In the event that the Fund were to experience an ownership change as defined under the","page_number":179,"box":{"x":69,"y":188,"width":830,"height":12}},{"id":"2f010ecf-1625-4bad-adf3-2c73bfbe81dd","block_type":"box","text":"Code, the Fund’s loss carryforwards and other favorable tax attributes of the Fund, if any, may be subject to","page_number":179,"box":{"x":69,"y":203,"width":770,"height":12}},{"id":"0a715f0d-d0ef-4c46-8698-a2da4c959090","block_type":"box","text":"limitation.","page_number":179,"box":{"x":70,"y":219,"width":68,"height":8}},{"id":"01e4a121-ee40-4573-84dd-480b01dd78b7","block_type":"box","text":"Dividends paid by a Fund from its ordinary income or from an excess of net short-term capital gain over net long","page_number":179,"box":{"x":102,"y":241,"width":803,"height":11}},{"id":"5f2fe420-27a9-4244-9bd6-4692cd847e0e","block_type":"box","text":"term capital loss (together referred to as “ordinary income dividends”) are taxable to shareholders as ordinary","page_number":179,"box":{"x":68,"y":256,"width":790,"height":12}},{"id":"bbc347f9-8fb8-4bd4-b96e-e0595a95c8e7","block_type":"box","text":"income. Distributions made from an excess of net long-term capital gain over net short-term capital loss (including","page_number":179,"box":{"x":70,"y":271,"width":815,"height":12}},{"id":"42d5c9cf-7a04-4189-8ffa-910eb867e43b","block_type":"box","text":"gains or losses from certain transactions in futures and options) (“capital gain dividends”) are taxable to","page_number":179,"box":{"x":68,"y":286,"width":748,"height":12}},{"id":"a8b14f76-6fa8-4cd8-9985-a7a5052711ff","block_type":"box","text":"shareholders as long-term capital gains, regardless of the length of time the shareholder has owned Fund shares.","page_number":179,"box":{"x":69,"y":302,"width":811,"height":11}},{"id":"28fe46b8-a88a-45b5-9fa6-e997d5671962","block_type":"box","text":"Distributions paid by a Fund that are reported as exempt-interest dividends will not be subject to regular U.S. federal","page_number":179,"box":{"x":70,"y":317,"width":829,"height":11}},{"id":"6990a3ef-d308-4ed7-9560-a588689c7c52","block_type":"box","text":"income tax. Certain dividend income and long-term capital gains are eligible for taxation at a reduced rate that","page_number":179,"box":{"x":70,"y":332,"width":785,"height":11}},{"id":"fcc5d7a2-3254-458e-9f72-ee2c7dee2085","block_type":"box","text":"applies to non-corporate shareholders. Under these rules, the portion of ordinary income dividends constituting","page_number":179,"box":{"x":69,"y":347,"width":795,"height":11}},{"id":"3fc927e6-d0a0-4ed1-926a-9b59291fecd6","block_type":"box","text":"“qualified dividend income” when paid by a regulated investment company to a non-corporate shareholder may be","page_number":179,"box":{"x":70,"y":362,"width":809,"height":11}},{"id":"d15b9cfe-f645-4b3f-9fde-979abfb4cdf8","block_type":"box","text":"taxable to such shareholder at long-term capital gain rates provided the shareholder has held the shares on which","page_number":179,"box":{"x":68,"y":377,"width":814,"height":12}},{"id":"f3d40c19-9f5c-46ec-a7d4-c0c0e1e19446","block_type":"box","text":"the dividend was paid for at least 61 days during the 121-day period that begins on the date that is 60 days before","page_number":179,"box":{"x":68,"y":392,"width":822,"height":12}},{"id":"1cf420b0-837c-404c-946e-f5f4ea9f3562","block_type":"box","text":"the date on which the shares become ex-dividend with respect to such dividend (or, in the case of certain","page_number":179,"box":{"x":68,"y":407,"width":751,"height":11}},{"id":"2b88f4ba-dfec-4cbd-9bb1-dde19caf5174","block_type":"box","text":"accumulated dividends with respect to preferred stocks, the shareholder has held the shares on which the dividend","page_number":179,"box":{"x":69,"y":423,"width":823,"height":11}},{"id":"236f7780-299d-4ee7-9d06-44196c748b31","block_type":"box","text":"was paid for at least 91 days during the 181-day period that begins on the date that is 90 days before the date on","page_number":179,"box":{"x":68,"y":438,"width":817,"height":11}},{"id":"b790e99a-086f-45b4-9db1-a6edc46f0d8b","block_type":"box","text":"which the shares become ex-dividend with respect to such dividend). However, to the extent a Fund’s distributions","page_number":179,"box":{"x":68,"y":453,"width":813,"height":11}},{"id":"42fb2531-1061-4a70-9983-13c2fe008c89","block_type":"box","text":"are derived from income on debt securities, certain types of preferred stock treated as debt for U.S. federal income","page_number":179,"box":{"x":69,"y":468,"width":825,"height":11}},{"id":"dcdddbe1-d683-4ccd-8acb-2b5b787fd718","block_type":"box","text":"tax purposes and short-term capital gains, such distributions will not constitute “qualified dividend income.” In","page_number":179,"box":{"x":68,"y":483,"width":789,"height":11}},{"id":"05b588bf-3b9a-4efa-860d-df0fb4ed3df1","block_type":"box","text":"addition, distributions that are derived from securities lending income, such as substitute dividend payments, will not","page_number":179,"box":{"x":69,"y":498,"width":836,"height":11}},{"id":"90eeed2d-9d34-4071-b822-1af682399c89","block_type":"box","text":"constitute “qualified dividend income.”","page_number":179,"box":{"x":69,"y":513,"width":275,"height":11}},{"id":"d4a19403-c44d-4568-9f64-f5222f354e4b","block_type":"box","text":"A 3.8% Medicare tax is imposed on the net investment income (which includes taxable dividends and redemption","page_number":179,"box":{"x":101,"y":536,"width":806,"height":11}},{"id":"07992434-a023-4b4d-942a-5a29c09dbd03","block_type":"box","text":"proceeds) of certain individuals, trusts and estates.","page_number":179,"box":{"x":70,"y":551,"width":368,"height":11}},{"id":"e25299ef-d1e2-4c2b-91c8-e0bed0d19179","block_type":"box","text":"A Fund’s net capital gain (the excess of net long-term capital gains over net short-term capital losses) is not","page_number":179,"box":{"x":101,"y":574,"width":772,"height":11}},{"id":"7782c2ae-a94b-46c9-ae55-086bc7a7941f","block_type":"box","text":"subject to the 90% distribution requirement for taxation as a regulated investment company, described above. If a","page_number":179,"box":{"x":69,"y":589,"width":811,"height":11}},{"id":"5cf852d6-d57f-414a-943c-a96953f461e6","block_type":"box","text":"Fund retains net capital gain, it is subject to tax on that gain, and may designate the retained amount as","page_number":179,"box":{"x":70,"y":604,"width":745,"height":11}},{"id":"56b90e63-cb67-4327-b47c-c1cd94a91fea","block_type":"box","text":"undistributed capital gain in a written statement furnished to its shareholders, who will be required to include in","page_number":179,"box":{"x":69,"y":619,"width":795,"height":11}},{"id":"480d140d-31e7-4e93-9794-287a3de29dda","block_type":"box","text":"income, as long-term capital gain, their proportionate shares of such undistributed net capital gain, will be deemed to","page_number":179,"box":{"x":70,"y":634,"width":838,"height":12}},{"id":"9169e955-0aba-4f2f-9d85-c50721e64f23","block_type":"box","text":"have paid and may claim as a credit against their U.S. federal income tax liability (and as a refund to the extent it","page_number":179,"box":{"x":69,"y":649,"width":809,"height":12}},{"id":"e6d5a00c-1b88-4a9b-b3b0-39ee24b0b7e0","block_type":"box","text":"exceeds that liability) their proportionate shares of the tax paid by the Fund on that gain, and shall increase the tax","page_number":179,"box":{"x":69,"y":664,"width":822,"height":12}},{"id":"9d17d8cd-dce0-4a73-9a27-840aacec7083","block_type":"box","text":"basis of their shares in the Fund by the excess of the amount included in income over the amount allowed as a credit","page_number":179,"box":{"x":69,"y":680,"width":838,"height":11}},{"id":"3faa2068-a9d6-4583-bdc1-aca346118809","block_type":"box","text":"against their taxes.","page_number":179,"box":{"x":69,"y":695,"width":135,"height":11}},{"id":"886ceb9b-ec63-41b8-9e70-163f4e88dc2c","block_type":"box","text":"Distributions in excess of a Fund’s current and accumulated earnings and profits will first reduce the adjusted","page_number":179,"box":{"x":102,"y":717,"width":783,"height":12}},{"id":"90f8f504-2f32-44ab-b595-e0248ba3524d","block_type":"box","text":"tax basis of a holder’s shares and after such adjusted tax basis is reduced to zero, will constitute capital gains to","page_number":179,"box":{"x":68,"y":732,"width":812,"height":12}},{"id":"d98a2cbb-791d-4aef-880b-5e2588549eb6","block_type":"box","text":"such holder (assuming the shares are held as a capital asset). Distributions in excess of a Fund’s minimum","page_number":179,"box":{"x":69,"y":748,"width":769,"height":11}},{"id":"50af18f5-75ec-437c-b68a-50344a9feb41","block_type":"box","text":"distribution requirements (or taxable income) but not in excess of a Fund’s earnings and profits will be taxable to","page_number":179,"box":{"x":69,"y":763,"width":805,"height":11}},{"id":"4fddd263-c2ed-46ba-ae33-b7ee2d96dd29","block_type":"box","text":"shareholders and will not constitute nontaxable returns of capital. In the case of a Fund with a non-calendar taxable","page_number":179,"box":{"x":69,"y":778,"width":824,"height":11}},{"id":"7e4ddf9b-5cdd-4b1e-b9f5-6902a1a0d695","block_type":"box","text":"year, a Fund’s earnings and profits are allocated first to distributions made on or before December 31 of the taxable","page_number":179,"box":{"x":68,"y":793,"width":831,"height":11}},{"id":"20054229-b6cf-4a16-b164-fb8cb2fa66e0","block_type":"box","text":"year, and then to distributions made after December 31 of the taxable year. Any loss upon the sale or exchange of","page_number":179,"box":{"x":68,"y":808,"width":817,"height":11}},{"id":"2d931c5e-0471-41e4-8240-3d737a360eb4","block_type":"box","text":"Fund shares held for six months or less will be treated as long-term capital loss to the extent of any capital gain","page_number":179,"box":{"x":70,"y":823,"width":797,"height":12}},{"id":"9f9f3746-4b74-4b81-b66d-0bb18ed09b0e","block_type":"box","text":"dividends received by the shareholder.","page_number":179,"box":{"x":69,"y":839,"width":272,"height":10}},{"id":"5d0c9212-3c63-4a7d-a667-ae4f227a75d9","block_type":"box","text":"Ordinary income and capital gain dividends are taxable to shareholders even if they are reinvested in additional","page_number":179,"box":{"x":102,"y":861,"width":792,"height":11}},{"id":"1f178796-fd8a-4a82-a165-dbef72e73d55","block_type":"box","text":"shares of a Fund. Distributions by a Fund, whether from ordinary income or capital gains, generally will not be eligible","page_number":179,"box":{"x":69,"y":876,"width":835,"height":11}},{"id":"3aeee314-d7d6-4463-b39b-f107589f8ae9","block_type":"box","text":"for the dividends received deduction allowed to corporations under the Code. If a Fund pays a dividend in January","page_number":179,"box":{"x":68,"y":891,"width":809,"height":11}},{"id":"b14a2f04-8f27-439b-b82d-8b25abeb6824","block_type":"box","text":"that was declared in the previous October, November or December to shareholders of record on a specified date in","page_number":179,"box":{"x":68,"y":906,"width":819,"height":11}},{"id":"58017e5e-f295-4ae8-8361-2eb165942f34","block_type":"box","text":"II-130","page_number":179,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"cbbd98e3-5d6d-4d44-8fc5-0495adf26e79","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":179,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"46ee5306-d0a7-4173-9357-cbbc9ab414c9","block_type":"box","text":"one of such months, then such dividend will be treated for tax purposes as being paid by the Fund and received by its","page_number":180,"box":{"x":69,"y":45,"width":839,"height":11}},{"id":"28c34e2f-40a2-48ee-8250-91f8f2040a59","block_type":"box","text":"shareholders on December 31 of the year in which the dividend was declared. In the case of a Fund with a non","page_number":180,"box":{"x":69,"y":60,"width":794,"height":11}},{"id":"3ebdd1ec-9655-45f7-928c-d06cacb691e1","block_type":"box","text":"calendar taxable year, if the Fund reports more capital gain dividends than it earns in such taxable year, then the","page_number":180,"box":{"x":69,"y":75,"width":804,"height":11}},{"id":"1dd21785-b65a-4721-968f-46c212c38b3d","block_type":"box","text":"Fund will reduce the amounts reported as capital gains. Where possible, such reduction will first be allocated to","page_number":180,"box":{"x":70,"y":90,"width":797,"height":11}},{"id":"2ec37862-4381-4f4d-9ce2-df2211f27925","block_type":"box","text":"dividends made after December 31 of such taxable year. A Fund may elect to defer recognizing, until the following","page_number":180,"box":{"x":69,"y":105,"width":810,"height":11}},{"id":"605246bd-0912-4b45-a4a9-895226915128","block_type":"box","text":"taxable year, certain net capital losses arising after October 31 of the current taxable year, and certain net ordinary","page_number":180,"box":{"x":68,"y":120,"width":826,"height":12}},{"id":"eed5bdef-1b81-45bf-841a-35c161eeeea6","block_type":"box","text":"losses arising after October 31 and/or December 31 of the current taxable year. This may have the effect of","page_number":180,"box":{"x":70,"y":135,"width":772,"height":12}},{"id":"9a37dea4-90be-4f4f-8a34-70acdf3b3925","block_type":"box","text":"increasing the amount of dividends otherwise includible in the shareholder’s income with respect to the current","page_number":180,"box":{"x":70,"y":150,"width":795,"height":12}},{"id":"266377b8-7047-43a3-9754-04f01e48427b","block_type":"box","text":"taxable year.","page_number":180,"box":{"x":68,"y":166,"width":89,"height":11}},{"id":"27109d3e-1dde-4623-8171-56a5a3bd38ff","block_type":"box","text":"No gain or loss will be recognized by Investor C shareholders on the conversion to Investor A Shares. A","page_number":180,"box":{"x":102,"y":188,"width":733,"height":12}},{"id":"86fd1a89-26cf-411f-9f25-e8c0b7c2e400","block_type":"box","text":"shareholder’s tax basis in the Investor A Shares acquired upon conversion will be the same as the shareholder’s tax","page_number":180,"box":{"x":69,"y":203,"width":832,"height":11}},{"id":"ada1bf60-5a8d-4525-b124-6091e4187d22","block_type":"box","text":"basis in the converted Investor C Shares and the holding period of the acquired Investor A Shares will include the","page_number":180,"box":{"x":69,"y":218,"width":809,"height":12}},{"id":"4cd04291-68ab-4017-aa6b-30974d9deaf0","block_type":"box","text":"holding period for the converted Investor C Shares.","page_number":180,"box":{"x":69,"y":234,"width":362,"height":11}},{"id":"345c324e-a6e2-438f-87a1-64bdf2f897ec","block_type":"box","text":"If a shareholder of a Fund exercises an exchange privilege within 90 days of acquiring the shares of a Fund, but","page_number":180,"box":{"x":102,"y":256,"width":795,"height":12}},{"id":"f13e0d8f-124a-47a2-8fed-d03e917a06ec","block_type":"box","text":"on or before January 31 of the following year, then the loss that the shareholder recognizes on the exchange will be","page_number":180,"box":{"x":69,"y":271,"width":824,"height":12}},{"id":"476b40d0-6894-4149-a537-206d91324daa","block_type":"box","text":"reduced (or the gain increased) to the extent any sales charge paid on the exchanged shares reduces any sales","page_number":180,"box":{"x":69,"y":287,"width":797,"height":11}},{"id":"b49d9487-7096-41ba-a581-bc9450523560","block_type":"box","text":"charge the shareholder would have owed upon the purchase of the new shares in the absence of the exchange","page_number":180,"box":{"x":69,"y":302,"width":791,"height":11}},{"id":"c2cd0541-db10-4524-b28c-541eae556760","block_type":"box","text":"privilege. Instead, such sales charge will be treated as an amount paid for the new shares.","page_number":180,"box":{"x":70,"y":317,"width":646,"height":11}},{"id":"9f7db478-5370-4847-be73-4a747d88ee68","block_type":"box","text":"A sale, redemption, or exchange of Fund shares may give rise to a gain or loss. In general, any gain or loss","page_number":180,"box":{"x":101,"y":339,"width":762,"height":12}},{"id":"1d09075e-8771-46c4-b977-40cb0c666f02","block_type":"box","text":"realized upon a taxable disposition of shares of a Fund will be treated as long-term capital gain or loss if such shares","page_number":180,"box":{"x":69,"y":355,"width":836,"height":11}},{"id":"94bf1fc6-5aaa-4efa-b004-25c89b37d68d","block_type":"box","text":"have been held for more than 12 months. Otherwise, the gain or loss on the taxable disposition of Fund shares will","page_number":180,"box":{"x":69,"y":370,"width":822,"height":11}},{"id":"ce8a91fe-bdf8-45a9-9ea6-7e34ba7797ef","block_type":"box","text":"generally be treated as short-term capital gain or loss. Any loss realized upon a taxable disposition of shares held for","page_number":180,"box":{"x":68,"y":385,"width":838,"height":11}},{"id":"a2b5d77c-82d5-4ff8-93c2-2d7159326bbb","block_type":"box","text":"six months or less will be treated as long-term capital loss, rather than short-term capital loss, to the extent of any","page_number":180,"box":{"x":69,"y":400,"width":820,"height":11}},{"id":"4e6dc513-1b92-42f0-9b2e-092c0ee05795","block_type":"box","text":"amounts treated as distributions to the shareholder of long-term capital gain (including any amounts credited to the","page_number":180,"box":{"x":69,"y":415,"width":823,"height":11}},{"id":"ae67aeaf-a3db-4031-a55c-e6370dd678df","block_type":"box","text":"shareholder as undistributed capital gains). Shareholders that hold shares of a Fund through a qualified tax-exempt","page_number":180,"box":{"x":69,"y":430,"width":822,"height":11}},{"id":"6dd2eab8-2217-44aa-93c1-396fcf62407d","block_type":"box","text":"plan described in section 401(a) of the Internal Revenue Code should see the Fund’s Prospectus for a discussion of","page_number":180,"box":{"x":70,"y":445,"width":829,"height":11}},{"id":"b9a5f9b9-4c70-4e2d-9550-766092a1cd55","block_type":"box","text":"special tax rules that apply to their investments.","page_number":180,"box":{"x":69,"y":461,"width":343,"height":11}},{"id":"d02734c0-704e-4545-ab95-2cdf98c0c6c0","block_type":"box","text":"A loss realized on a sale or exchange of shares of a Fund will be disallowed if other substantially identical shares","page_number":180,"box":{"x":101,"y":483,"width":807,"height":11}},{"id":"90758010-4eda-4609-b62e-4a8ee6442424","block_type":"box","text":"are acquired (whether through the automatic reinvestment of dividends or otherwise) within a 61-day period beginning","page_number":180,"box":{"x":69,"y":498,"width":839,"height":11}},{"id":"ce9c70b1-add8-420b-9ee9-880b0185fcec","block_type":"box","text":"30 days before and ending 30 days after the date on which the shares are sold or exchanged. In such case, the","page_number":180,"box":{"x":69,"y":513,"width":799,"height":12}},{"id":"858c7570-6ba5-491a-a86c-27a2e4aa2b45","block_type":"box","text":"basis of the shares acquired will be adjusted to reflect the disallowed loss.","page_number":180,"box":{"x":69,"y":528,"width":534,"height":12}},{"id":"46fbfcbb-ff21-4f87-b091-d10228e49834","block_type":"box","text":"A Fund is also generally required by law to report to each shareholder and to the IRS cost basis information for","page_number":180,"box":{"x":101,"y":551,"width":792,"height":11}},{"id":"3638a536-09a7-4d37-9f01-ffc194b92a0d","block_type":"box","text":"shares of the Fund acquired on or after January 1, 2012, and sold or redeemed after that date. This information","page_number":180,"box":{"x":69,"y":566,"width":800,"height":11}},{"id":"36d00551-b06e-4fd6-837b-89445b81a77a","block_type":"box","text":"includes the adjusted cost basis of the shares, the gross proceeds from disposition, and whether the gain or loss is","page_number":180,"box":{"x":70,"y":581,"width":828,"height":12}},{"id":"c1f0eb7d-ef94-4bda-8c9a-b4a38be7863a","block_type":"box","text":"long-term or short-term. The adjusted cost basis of shares will be based on the default cost basis reporting method","page_number":180,"box":{"x":70,"y":596,"width":824,"height":12}},{"id":"26494fc0-86ea-4666-99d0-0ecdb1cfbb25","block_type":"box","text":"selected by the Fund, unless a shareholder, before the sale or redemption, informs the Fund that it has selected a","page_number":180,"box":{"x":69,"y":612,"width":816,"height":11}},{"id":"8a5103df-a042-40fb-9793-0b470f8cfe6c","block_type":"box","text":"different IRS-accepted method offered by the Fund. These requirements, however, will not apply for investments","page_number":180,"box":{"x":69,"y":627,"width":797,"height":11}},{"id":"dd1005d8-76e4-49d9-bfeb-2417b045030a","block_type":"box","text":"through an IRA or other tax-advantaged account. Shareholders should consult their tax advisors to determine the best","page_number":180,"box":{"x":68,"y":642,"width":840,"height":11}},{"id":"96eb8302-13ba-46a5-b49c-edbe667d41ff","block_type":"box","text":"cost basis method for their tax situation, and to obtain more information about how these cost basis reporting","page_number":180,"box":{"x":69,"y":657,"width":788,"height":11}},{"id":"2245b2e6-dc9b-4dec-9374-110385a454fe","block_type":"box","text":"requirements apply to them. For shares of a Fund acquired before January 1, 2012, these requirements will not","page_number":180,"box":{"x":69,"y":672,"width":797,"height":11}},{"id":"58db9ee1-c1e5-4534-abca-bbe568f5d515","block_type":"box","text":"apply, but the Fund will continue to report to the IRS the gross proceeds received by a shareholder from the sale or","page_number":180,"box":{"x":69,"y":687,"width":821,"height":11}},{"id":"1ea329cf-3f4f-4583-8766-5e5ce9b57b84","block_type":"box","text":"redemption of such shares.","page_number":180,"box":{"x":69,"y":702,"width":195,"height":11}},{"id":"6adfaaa1-cdbb-4146-805c-0671f512025a","block_type":"box","text":"The Manager may determine it is in the best interest of a Fund to distribute portfolio securities in kind for the","page_number":180,"box":{"x":101,"y":725,"width":780,"height":11}},{"id":"66585e76-b2a8-47a9-bf28-e180ba6cf4c8","block_type":"box","text":"purposes of portfolio management when meeting redemption requests. When the Manager determines to do so, a","page_number":180,"box":{"x":70,"y":740,"width":814,"height":11}},{"id":"d4911e77-ac0d-4b63-970c-66148e9f7904","block_type":"box","text":"Fund generally will not recognize taxable gains in respect of the portfolio securities it distributes to the redeeming","page_number":180,"box":{"x":70,"y":755,"width":810,"height":11}},{"id":"4ff2c9aa-58a9-43bd-b198-e6b35b4196ae","block_type":"box","text":"shareholder, which may reduce the amount of taxable gains the Fund would otherwise be required to distribute.","page_number":180,"box":{"x":69,"y":770,"width":793,"height":12}},{"id":"dcf87686-e592-421f-8c1c-0c9958acfbaf","block_type":"box","text":"While a Fund may engage in redemptions in kind that have the effect of reducing or eliminating distributable","page_number":180,"box":{"x":101,"y":793,"width":770,"height":11}},{"id":"dd05a0ef-e0b4-40df-a7c2-85c44f410c5f","block_type":"box","text":"capital gains as described above, the Funds do not employ a systematic approach to tax management. There is no","page_number":180,"box":{"x":69,"y":808,"width":817,"height":11}},{"id":"1a8cd78b-fc69-46a2-a021-7f8df149bf49","block_type":"box","text":"assurance that a Fund can or will be successful in effecting any redemptions in kind and shareholders should expect","page_number":180,"box":{"x":69,"y":823,"width":833,"height":12}},{"id":"e0e2901b-ed71-4de7-aa9f-c1f4cf99590b","block_type":"box","text":"that each Fund will distribute capital gains.","page_number":180,"box":{"x":68,"y":839,"width":305,"height":11}},{"id":"6d840ff2-468c-483f-bf6a-1dc7331c5313","block_type":"box","text":"Certain Funds may invest in derivative contracts such as options, futures contracts, forward contracts and swap","page_number":180,"box":{"x":102,"y":861,"width":799,"height":11}},{"id":"7883f7e5-31e2-454b-8473-7c98c5c9962c","block_type":"box","text":"agreements. The U.S. federal income tax treatment of a derivative contract may not be as favorable as a direct","page_number":180,"box":{"x":69,"y":876,"width":791,"height":11}},{"id":"e773766e-cc35-40b3-8e52-08a847323938","block_type":"box","text":"investment in the underlying security and may adversely affect the timing, character and amount of income the Fund","page_number":180,"box":{"x":70,"y":891,"width":826,"height":12}},{"id":"def4cf66-cbf6-4fff-ba18-93255d76e6a8","block_type":"box","text":"realizes from its investments. As a result, a larger portion of the Fund’s distributions may be treated as ordinary","page_number":180,"box":{"x":69,"y":906,"width":803,"height":12}},{"id":"b067edca-4240-4aa2-9aae-a5a16a931452","block_type":"box","text":"II-131","page_number":180,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"86f0a7d3-1904-4059-9403-2ce2d5fd1fdf","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":180,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e104e3e0-02c1-49ae-818d-5c2b351babc8","block_type":"box","text":"income rather than capital gains. In addition, section 1256 contracts held by a Fund at the end of each taxable year","page_number":181,"box":{"x":70,"y":45,"width":825,"height":11}},{"id":"69df9ee4-d361-4a63-b8c2-ab16dd246943","block_type":"box","text":"(and, for purposes of the 4% excise tax, certain other dates as prescribed under the Code) are generally “marked-to","page_number":181,"box":{"x":69,"y":60,"width":829,"height":11}},{"id":"7108c5bb-3767-4fe7-9457-9fcfe5a7acfd","block_type":"box","text":"market,” such that unrealized gains or losses are treated as though they were realized (with such gain or loss being","page_number":181,"box":{"x":69,"y":75,"width":826,"height":11}},{"id":"1276abd8-b0bf-444c-9c06-a8a59216bb8b","block_type":"box","text":"considered 60% long-term and 40% short-term capital gain or loss), which may increase the amount that must be","page_number":181,"box":{"x":69,"y":90,"width":808,"height":11}},{"id":"a5dc789e-4c12-4f01-b01e-f7c659a3c9f4","block_type":"box","text":"distributed to meet distribution requirements and avoid the excise tax. In addition, the tax treatment of certain","page_number":181,"box":{"x":69,"y":105,"width":787,"height":11}},{"id":"574c28ee-cb7d-4098-a05b-1678c8c8205e","block_type":"box","text":"derivative contracts, such as swap agreements, is unsettled and may be subject to future legislation, regulation or","page_number":181,"box":{"x":69,"y":120,"width":816,"height":12}},{"id":"b05c6b2e-7bac-426c-9836-f7d7e910f876","block_type":"box","text":"administrative pronouncements issued by the IRS. If such future guidance limits the Fund’s ability to use derivatives,","page_number":181,"box":{"x":69,"y":135,"width":832,"height":12}},{"id":"299efd77-a0eb-4780-a6cf-1acacc6c2824","block_type":"box","text":"the Fund may have to find other ways of achieving its investment objectives.","page_number":181,"box":{"x":68,"y":150,"width":542,"height":12}},{"id":"bb2542b5-87c0-4d56-95a7-dbdb1bab3aef","block_type":"box","text":"Certain swap agreements, including exchange-traded swap agreements, are treated as notional principal","page_number":181,"box":{"x":102,"y":173,"width":744,"height":11}},{"id":"5abc85cd-f642-4807-82fc-a2b9812e7c64","block_type":"box","text":"contracts rather than as section 1256 contracts. This can affect the type of income earned by such swap","page_number":181,"box":{"x":69,"y":188,"width":751,"height":11}},{"id":"dead9f4c-8b80-4c87-b8c7-41e7d04a8048","block_type":"box","text":"agreements since all the income on a notional principal contract may be ordinary income, whereas 40% of the gain","page_number":181,"box":{"x":69,"y":203,"width":819,"height":12}},{"id":"f00c74c8-902f-4466-8089-9b7fb80c0b6c","block_type":"box","text":"on a section 1256 contract is treated as short-term capital gain taxed at ordinary rates and 60% is treated as long","page_number":181,"box":{"x":69,"y":219,"width":823,"height":11}},{"id":"b2d9ef7e-c5cc-4c92-a17e-8e15764da382","block_type":"box","text":"term capital gain taxed at more favorable rates when distributed to shareholders. The rest is long-term capital gain,","page_number":181,"box":{"x":68,"y":234,"width":823,"height":11}},{"id":"8b18b1b2-eeee-4831-9b89-b1ea5adb9538","block_type":"box","text":"which may be taxable at more favorable rates than ordinary income. Proposed regulations interpret what types of","page_number":181,"box":{"x":68,"y":249,"width":807,"height":11}},{"id":"e2b2d816-c805-4b22-a1d6-f26025fdd0be","block_type":"box","text":"swap agreements are to be treated as notional principal contracts rather than as section 1256 contracts. When","page_number":181,"box":{"x":69,"y":264,"width":797,"height":11}},{"id":"fcf53ef5-085f-4538-b270-a3f99a3e3c3b","block_type":"box","text":"finalized, these regulations could result in the Fund having to treat more of its income on swap agreements and more","page_number":181,"box":{"x":68,"y":279,"width":838,"height":11}},{"id":"03c65f79-8bf1-44cf-95a6-046af91322e0","block_type":"box","text":"of the distributions made to shareholders as ordinary income and less as long-term capital gains.","page_number":181,"box":{"x":69,"y":294,"width":695,"height":11}},{"id":"12bb4ca4-74ac-42b2-93ed-49c692573bb4","block_type":"box","text":"Certain Funds may invest in zero coupon U.S. Treasury bonds and other debt securities that are issued at a","page_number":181,"box":{"x":102,"y":317,"width":768,"height":11}},{"id":"163283c1-0f5d-4acf-9adf-54dadfacb06d","block_type":"box","text":"discount or provide for deferred interest. Even though a Fund receives no actual interest payments on these","page_number":181,"box":{"x":69,"y":332,"width":769,"height":11}},{"id":"64025d43-094b-49f9-b306-1c00dfd6d21f","block_type":"box","text":"securities, it will be deemed to receive income equal, generally, to a portion of the excess of the stated redemption","page_number":181,"box":{"x":69,"y":347,"width":822,"height":11}},{"id":"ebf5ae75-db2d-4cde-96f0-299e63d68d73","block_type":"box","text":"price of the securities over their issue price (“original issue discount”) each year that the securities are held. Since","page_number":181,"box":{"x":70,"y":362,"width":819,"height":11}},{"id":"ddc8bbb4-b956-47a4-bddb-d3578866d20a","block_type":"box","text":"the original issue discount income earned by a Fund in a taxable year may not be represented by cash income, the","page_number":181,"box":{"x":68,"y":377,"width":818,"height":12}},{"id":"9ea33b39-657c-4b86-abfe-881f06064a18","block_type":"box","text":"Fund may have to dispose of securities, which it might otherwise have continued to hold, or borrow to generate cash","page_number":181,"box":{"x":70,"y":392,"width":830,"height":12}},{"id":"e28d4ef3-4a72-47fc-a64a-242cfa10fa4c","block_type":"box","text":"in order to satisfy its distribution requirements. In addition, a Fund’s investment in foreign currencies or foreign","page_number":181,"box":{"x":70,"y":407,"width":792,"height":12}},{"id":"49a33dd2-b1dd-47fd-bc1e-6cd4d1c944fc","block_type":"box","text":"currency denominated or referenced debt securities, certain asset-backed securities and contingent payment and","page_number":181,"box":{"x":69,"y":423,"width":808,"height":11}},{"id":"296c8c2e-42e2-4aa0-b7e4-cfb02b1df31d","block_type":"box","text":"inflation-indexed debt instruments also may increase or accelerate the Fund’s recognition of income, including the","page_number":181,"box":{"x":70,"y":438,"width":812,"height":11}},{"id":"400fa653-c3ec-405e-91c7-168262794ce9","block_type":"box","text":"recognition of taxable income in excess of cash generated by such investments. Any transaction by the Fund in","page_number":181,"box":{"x":69,"y":453,"width":789,"height":11}},{"id":"dffc4c8c-cf8c-4c55-b4d8-655c500d4b2f","block_type":"box","text":"foreign currencies, foreign currency-denominated debt obligations or certain foreign currency options, futures","page_number":181,"box":{"x":68,"y":468,"width":777,"height":11}},{"id":"7c5d3130-2696-493b-8f4f-5c3370beb6ca","block_type":"box","text":"contracts or forward contracts (or similar instruments) may give rise to ordinary income or loss to the extent such","page_number":181,"box":{"x":69,"y":483,"width":810,"height":11}},{"id":"46ce38ae-8bf2-4e53-8262-8f83160a7c79","block_type":"box","text":"income or loss results from fluctuations in the value of the foreign currency concerned. Any such net gains could","page_number":181,"box":{"x":70,"y":498,"width":801,"height":11}},{"id":"68baf52d-b184-48bb-9add-2c964bbae2dd","block_type":"box","text":"require a larger dividend toward the end of the calendar year. Any such net losses will generally reduce and","page_number":181,"box":{"x":69,"y":513,"width":762,"height":12}},{"id":"feef1f82-9c4d-495b-9e4a-30b695282831","block_type":"box","text":"potentially require the recharacterization of prior ordinary income distributions. Such ordinary income treatment may","page_number":181,"box":{"x":70,"y":528,"width":827,"height":12}},{"id":"afa977e1-f393-4a5d-8123-56e097dac3f2","block_type":"box","text":"accelerate Fund distributions to shareholders and increase the distributions taxed to shareholders as ordinary","page_number":181,"box":{"x":69,"y":544,"width":787,"height":11}},{"id":"1a96543a-eb27-4806-b235-fb7a563ecf48","block_type":"box","text":"income. Any net ordinary losses so created cannot be carried forward by the Fund to offset income or gains earned","page_number":181,"box":{"x":70,"y":559,"width":822,"height":11}},{"id":"efc2b179-4069-4f68-a875-c98f5a143030","block_type":"box","text":"in subsequent taxable years.","page_number":181,"box":{"x":70,"y":574,"width":203,"height":11}},{"id":"60270251-9cdc-47e6-bc0f-80f749ab6796","block_type":"box","text":"Ordinary income dividends paid to shareholders who are nonresident aliens or foreign entities (other than pass","page_number":181,"box":{"x":102,"y":596,"width":795,"height":12}},{"id":"98599f21-6d33-4bc8-a16e-0874a751a7cb","block_type":"box","text":"through entities to the extent owned by U.S. persons) generally will be subject to a 30% U.S. withholding tax under","page_number":181,"box":{"x":68,"y":612,"width":816,"height":11}},{"id":"28c0029a-bf4d-45f6-b99b-12a13a534fe7","block_type":"box","text":"existing provisions of the Code applicable to foreign individuals and entities unless a reduced rate of withholding or a","page_number":181,"box":{"x":69,"y":627,"width":835,"height":11}},{"id":"b89f7a88-8124-4de4-b8fe-5cc07e3dcd26","block_type":"box","text":"withholding exemption is provided under applicable treaty law. Capital gain dividends paid to shareholders that are","page_number":181,"box":{"x":68,"y":642,"width":815,"height":11}},{"id":"185e9c8d-5785-418a-9a1b-fb8a0fcaf433","block_type":"box","text":"nonresident aliens or foreign entities, if and to the extent properly reported as capital gain dividends, generally will","page_number":181,"box":{"x":69,"y":657,"width":816,"height":11}},{"id":"05680a26-4812-4ef4-9a43-86b6a0b72807","block_type":"box","text":"not be subject to a 30% withholding tax, unless certain exceptions apply. Dividends derived by a regulated investment","page_number":181,"box":{"x":69,"y":672,"width":840,"height":11}},{"id":"f7bc7c6c-84a2-4c6a-ae39-3a0608220f57","block_type":"box","text":"company from short-term capital gains and qualified net interest income (including income from original issue","page_number":181,"box":{"x":69,"y":687,"width":781,"height":11}},{"id":"6e9678b6-613f-4515-977c-e0b12568bc2e","block_type":"box","text":"discount and market discount) and paid to shareholders who are nonresident aliens or foreign entities, if and to the","page_number":181,"box":{"x":69,"y":702,"width":824,"height":12}},{"id":"6cfdca78-dfc9-437f-9de0-9a9eaaa4328a","block_type":"box","text":"extent properly reported as “short-term capital gain dividends” or “interest-related dividends”, respectively, generally","page_number":181,"box":{"x":69,"y":718,"width":832,"height":11}},{"id":"f0a9c816-c1bd-45a0-8922-e510fd565acf","block_type":"box","text":"will not be subject to U.S. withholding tax. Where possible, the Funds intend to report such dividends as interest","page_number":181,"box":{"x":68,"y":733,"width":808,"height":11}},{"id":"64ddb6c5-b4bd-4c52-b5a7-90104e249881","block_type":"box","text":"related dividends or short-term capital gain dividends. However, depending on its circumstances, a Fund may report","page_number":181,"box":{"x":69,"y":748,"width":826,"height":11}},{"id":"5823838b-7d68-442d-a807-49d343d6083a","block_type":"box","text":"all, some or none of its potentially eligible dividends as interest-related or as short-term capital gain dividends, and/","page_number":181,"box":{"x":69,"y":763,"width":830,"height":11}},{"id":"c10c5ba5-6d72-4c41-a6c9-dbe3dab073ac","block_type":"box","text":"or treat such dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for","page_number":181,"box":{"x":69,"y":778,"width":811,"height":11}},{"id":"31b0bb83-d22d-4f8f-ad35-a9e87742ed39","block_type":"box","text":"this exemption from withholding, a foreign shareholder must comply with applicable certification requirements","page_number":181,"box":{"x":68,"y":793,"width":784,"height":11}},{"id":"51f0d56e-72d2-44ba-8858-0054ec00f349","block_type":"box","text":"relating to its foreign status (including, in general, furnishing an IRS Form W-8BEN, IRS Form W-8BEN-E or substitute","page_number":181,"box":{"x":69,"y":808,"width":828,"height":11}},{"id":"b5dd0a3a-8e15-4dc8-88d2-f9c7b2a71585","block_type":"box","text":"Form). In the case of shares held through an intermediary, the intermediary may withhold even if the Fund reports the","page_number":181,"box":{"x":70,"y":823,"width":839,"height":12}},{"id":"6bc5f495-5e4f-4d2f-aa19-f9396189faa7","block_type":"box","text":"payment as an interest-related or short-term capital gain dividend. Foreign shareholders should contact their","page_number":181,"box":{"x":70,"y":839,"width":772,"height":11}},{"id":"cfe820e7-fcfd-4b0d-9ddc-4a97fd35b937","block_type":"box","text":"intermediaries with respect to the application of these rules to their accounts. It is not possible to predict what","page_number":181,"box":{"x":70,"y":853,"width":791,"height":11}},{"id":"20e851f9-019b-47ba-b860-fadd809b82a1","block_type":"box","text":"portion, if any, of a Fund’s distributions will be reported as interest-related dividends or short-term capital gain","page_number":181,"box":{"x":70,"y":869,"width":787,"height":11}},{"id":"ea2c6772-0b7c-4e66-adcc-985760c900a5","block_type":"box","text":"dividends under these rules.","page_number":181,"box":{"x":69,"y":884,"width":201,"height":9}},{"id":"fed2dd03-05d2-4f53-8679-905a35cb3522","block_type":"box","text":"II-132","page_number":181,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"6db5f509-25b0-4fa4-b5dd-0f29f6afc405","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":181,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2267fd99-cb34-4564-b4ce-8bfecdba8651","block_type":"box","text":"Distributions to certain foreign shareholders by a Fund at least 50% of the assets of which are “U.S. real","page_number":182,"box":{"x":102,"y":45,"width":747,"height":11}},{"id":"c15f780b-366f-48ec-86b2-1bb0ffc891a8","block_type":"box","text":"property interests” (as defined in the Code and Treasury regulations) at any time during the five-year period ending on","page_number":182,"box":{"x":70,"y":60,"width":838,"height":11}},{"id":"515c068a-4bdf-4144-aead-17844a19dbf3","block_type":"box","text":"the date of the distributions, to the extent the distributions are attributable to gains from sales or exchanges of U.S.","page_number":182,"box":{"x":68,"y":75,"width":829,"height":11}},{"id":"4ada3f2f-13db-457f-8c77-52c639f040ad","block_type":"box","text":"real property interests (including shares in certain “U.S. real property holding corporations” such as certain REITs,","page_number":182,"box":{"x":69,"y":90,"width":817,"height":11}},{"id":"3119945c-1307-4deb-9e6b-01ae196c33dd","block_type":"box","text":"although exceptions may apply if any class of stock of such a corporation is regularly traded on an established","page_number":182,"box":{"x":69,"y":105,"width":786,"height":11}},{"id":"660dbebc-abad-407e-908e-b975c862cc2f","block_type":"box","text":"securities market and the Fund has held no more than 5% of such class of stock at all times during the five-year","page_number":182,"box":{"x":69,"y":120,"width":800,"height":12}},{"id":"b82749c7-3387-4ad4-a4d4-6a166f7e507b","block_type":"box","text":"period ending on the date of the distributions), generally must be treated by such foreign shareholders as income","page_number":182,"box":{"x":70,"y":135,"width":807,"height":12}},{"id":"452e8270-f406-4e53-a35a-40b96b1b5f3f","block_type":"box","text":"effectively connected to a trade or business within the United States, which is generally subject to tax at the","page_number":182,"box":{"x":69,"y":150,"width":772,"height":12}},{"id":"5a9d9904-6e43-4409-9277-8f00978ce777","block_type":"box","text":"graduated rates applicable to U.S. shareholders, except for distributions to foreign shareholders that held no more","page_number":182,"box":{"x":68,"y":166,"width":818,"height":11}},{"id":"497781bd-9cd7-470b-9c9d-12b27899d95c","block_type":"box","text":"than 5% of any class of stock of the Fund at all times during the previous one-year period ending on the date of the","page_number":182,"box":{"x":68,"y":181,"width":820,"height":11}},{"id":"2ca38a47-7057-41db-8ab0-7c7ce84a39b3","block_type":"box","text":"distributions. Such distributions will be subject to U.S. income and withholding tax and generally will require a foreign","page_number":182,"box":{"x":69,"y":196,"width":833,"height":11}},{"id":"6c42c5b8-fefd-4d7a-8e90-72655cf2ddd1","block_type":"box","text":"shareholder to file a U.S. federal income tax return. If the foreign shareholder held no more than 5% of any class of","page_number":182,"box":{"x":69,"y":211,"width":823,"height":11}},{"id":"0cd1f012-8077-4fc9-b4c2-4c1a8eeaa411","block_type":"box","text":"stock of the Fund at all times during the previous one-year period ending on the date of the distributions, the","page_number":182,"box":{"x":69,"y":226,"width":774,"height":11}},{"id":"efbfdef9-be8a-482c-aba6-120afa3d4fe0","block_type":"box","text":"distributions will be taxable as ordinary dividends and subject to withholding at a 30% or lower treaty rate. In addition,","page_number":182,"box":{"x":69,"y":241,"width":839,"height":11}},{"id":"ec445620-3b6e-4805-8674-0580c5f8a884","block_type":"box","text":"sales or redemptions of shares held by certain foreign shareholders in such a Fund generally will be subject to U.S.","page_number":182,"box":{"x":69,"y":256,"width":822,"height":12}},{"id":"bcfe8c56-78df-416f-9c01-ff4fbf869612","block_type":"box","text":"income and withholding tax and generally will require the foreign shareholder to file a U.S. federal income tax return,","page_number":182,"box":{"x":70,"y":271,"width":827,"height":12}},{"id":"f2e92ad2-1459-41a8-83b0-b2f3a022f377","block_type":"box","text":"although exceptions may apply if more than 50% of the value of the Fund’s shares are held by U.S. shareholders or","page_number":182,"box":{"x":69,"y":286,"width":823,"height":12}},{"id":"4ea0973d-fb20-4b1e-a4de-86b5317868e5","block_type":"box","text":"the foreign shareholder selling or redeeming the shares has held no more than 5% of any class of stock of the Fund","page_number":182,"box":{"x":68,"y":302,"width":827,"height":11}},{"id":"ef75a03f-43d0-41e2-95a1-1142057d201f","block_type":"box","text":"at all times during the five-year period ending on the date of the sale or redemption.","page_number":182,"box":{"x":69,"y":317,"width":596,"height":11}},{"id":"c4a2f764-dbf1-4596-96c4-cb8bd2d87974","block_type":"box","text":"Provided that more than 50% of the value of a Fund’s stock is held by U.S. shareholders, redemptions and other","page_number":182,"box":{"x":102,"y":339,"width":802,"height":12}},{"id":"54b6c028-c7c4-408f-bb1e-6570b8bf1710","block_type":"box","text":"distributions made in the form of U.S. real property interests (including shares in certain “U.S. real property holding","page_number":182,"box":{"x":69,"y":355,"width":827,"height":11}},{"id":"2488d6e5-ffde-4c82-9bff-7bbc3a250f95","block_type":"box","text":"corporations”, although exceptions may apply if any class of stock of such a corporation is regularly traded on an","page_number":182,"box":{"x":69,"y":370,"width":804,"height":11}},{"id":"b971fc35-09f5-40ff-8df3-1b5d0dd4211a","block_type":"box","text":"established securities market and the Fund has held no more than 5% of such class of stock at all times during the","page_number":182,"box":{"x":69,"y":385,"width":824,"height":11}},{"id":"4b0c3e05-6d3f-4459-90ab-1a1cea96f271","block_type":"box","text":"five-year period ending on the date of the distribution) generally will cause the Fund to recognize a portion of any","page_number":182,"box":{"x":68,"y":400,"width":801,"height":11}},{"id":"68f42de2-03c6-4696-b1ab-12776c13c85c","block_type":"box","text":"unrecognized gain in the U.S. real property interests equal to the product of (i) the excess of fair market value of","page_number":182,"box":{"x":69,"y":415,"width":803,"height":11}},{"id":"1bea1001-52b0-414b-80df-4bdbcaca8a8b","block_type":"box","text":"such U.S. real property interests over the Fund’s adjusted bases in such interests and (ii) the greatest foreign","page_number":182,"box":{"x":69,"y":430,"width":785,"height":11}},{"id":"3ca1d31e-d6f0-4b1f-a3a8-d09b048f2756","block_type":"box","text":"ownership percentage of the Fund during the five-year period ending on the date of distribution.","page_number":182,"box":{"x":69,"y":445,"width":676,"height":12}},{"id":"5162dc71-9218-42c0-8ffb-c1f95d715ae8","block_type":"box","text":"A foreign shareholder may also be subject to certain “wash sale” rules to prevent the avoidance of the tax filing","page_number":182,"box":{"x":101,"y":468,"width":798,"height":11}},{"id":"8669c7ec-8156-4d46-b5d5-92489126a59a","block_type":"box","text":"and payment obligations discussed above through the sale and repurchase of Fund shares.","page_number":182,"box":{"x":69,"y":483,"width":651,"height":11}},{"id":"c4d53d38-eaf5-4f51-aa82-b137eb443cea","block_type":"box","text":"Shareholders that are nonresident aliens or foreign entities are urged to consult their own tax advisors","page_number":182,"box":{"x":102,"y":506,"width":731,"height":11}},{"id":"a918cc46-3af1-4ffa-af25-2d61a193c7ab","block_type":"box","text":"concerning the particular tax consequences to them of an investment in a Fund.","page_number":182,"box":{"x":69,"y":521,"width":570,"height":11}},{"id":"37459368-d9a5-43a4-826d-9e8c8cabcfef","block_type":"box","text":"Separately, a 30% withholding tax is currently imposed on U.S.-source dividends, interest and other income","page_number":182,"box":{"x":102,"y":544,"width":763,"height":11}},{"id":"5cc7b087-08c7-4d0b-8dd7-98faa73e969c","block_type":"box","text":"items paid to (i) certain foreign financial institutions and investment funds, and (ii) certain other foreign entities. To","page_number":182,"box":{"x":70,"y":559,"width":820,"height":11}},{"id":"cce0a284-e329-4867-9d46-a3fe37bc207b","block_type":"box","text":"avoid withholding, foreign financial institutions and investment funds will generally either need to (a) collect and","page_number":182,"box":{"x":69,"y":574,"width":794,"height":11}},{"id":"baf527c7-b545-4a00-8047-c0c01272b23c","block_type":"box","text":"report to the IRS detailed information identifying their U.S. accounts and U.S. account holders, comply with due","page_number":182,"box":{"x":69,"y":589,"width":794,"height":11}},{"id":"665c3bb2-ac9f-4e95-b389-0c9a4990cfdb","block_type":"box","text":"diligence procedures for identifying U.S. accounts and withhold tax on certain payments made to noncomplying","page_number":182,"box":{"x":69,"y":604,"width":791,"height":11}},{"id":"2edf2356-4ae6-4f17-a219-0df703dffc2d","block_type":"box","text":"foreign entities and account holders or (b) if an intergovernmental agreement is entered into and implementing","page_number":182,"box":{"x":68,"y":619,"width":791,"height":11}},{"id":"8d3d3ad5-99cf-4cb8-bc91-9449714193d2","block_type":"box","text":"legislation is adopted, comply with the agreement and legislation. Other foreign entities will generally either need to","page_number":182,"box":{"x":70,"y":634,"width":822,"height":12}},{"id":"1ae2a60b-e32a-4ce7-99be-4ed39aa515b5","block_type":"box","text":"provide detailed information identifying each substantial U.S. owner or certify there are no such owners.","page_number":182,"box":{"x":70,"y":649,"width":739,"height":12}},{"id":"6a2193de-3af6-4a4f-acd3-e25b8ad5cb1f","block_type":"box","text":"Under certain provisions of the Code, some shareholders may be subject to a 24% withholding tax on ordinary","page_number":182,"box":{"x":102,"y":672,"width":786,"height":11}},{"id":"ddb5b7ac-24b3-4cd0-b0e9-d6679ce06755","block_type":"box","text":"income dividends, capital gain dividends and redemption payments (“backup withholding”). Generally, shareholders","page_number":182,"box":{"x":70,"y":687,"width":820,"height":11}},{"id":"6fe90ad0-fa80-4f7f-8e4d-3463ca6848d5","block_type":"box","text":"subject to backup withholding will be non-corporate shareholders for whom no certified taxpayer identification number","page_number":182,"box":{"x":69,"y":702,"width":837,"height":12}},{"id":"568161b6-1acf-4444-8c54-c31eb561cb60","block_type":"box","text":"is on file with the Fund or who, to the Fund’s knowledge, have furnished an incorrect number. When establishing an","page_number":182,"box":{"x":70,"y":717,"width":821,"height":12}},{"id":"36cf7f61-901f-4aac-9641-8a6338a1697d","block_type":"box","text":"account, an investor must certify under penalty of perjury that such number is correct and that such investor is not","page_number":182,"box":{"x":69,"y":732,"width":819,"height":12}},{"id":"34a25ee5-5af2-4b5d-a5f3-1edd213848af","block_type":"box","text":"otherwise subject to backup withholding. Backup withholding is not an additional tax. Any amount withheld generally","page_number":182,"box":{"x":69,"y":748,"width":826,"height":11}},{"id":"ed5074ce-d57d-4ec9-94b9-8fa2bc410a7e","block_type":"box","text":"may be allowed as a refund or a credit against a shareholder’s U.S. federal income tax liability, provided that the","page_number":182,"box":{"x":69,"y":763,"width":802,"height":11}},{"id":"d14395f7-254c-47fc-8665-3affea6a3dae","block_type":"box","text":"required information is timely forwarded to the IRS.","page_number":182,"box":{"x":69,"y":778,"width":364,"height":11}},{"id":"12952df0-a8f3-4dd6-bc61-dc85f713dc53","block_type":"box","text":"If a shareholder recognizes a loss with respect to a Fund’s shares of at least $2 million in any single taxable","page_number":182,"box":{"x":102,"y":800,"width":774,"height":12}},{"id":"ce70063f-5f41-47c5-9cb7-6ed2a1af787a","block_type":"box","text":"year or $4 million in any combination of taxable years for an individual shareholder or $10 million in any single","page_number":182,"box":{"x":68,"y":815,"width":787,"height":12}},{"id":"b34d9952-1f72-403d-80a0-b46aaefbc2b9","block_type":"box","text":"taxable year or $20 million in any combination of taxable years for a corporate shareholder in any single taxable year,","page_number":182,"box":{"x":68,"y":830,"width":835,"height":12}},{"id":"1bec93a5-b830-4d30-8935-96b960db1123","block_type":"box","text":"the shareholder must file a disclosure statement on IRS Form 8886 with the IRS. Direct shareholders of portfolio","page_number":182,"box":{"x":68,"y":846,"width":809,"height":11}},{"id":"6baee6cf-1451-4f2d-98fd-d2bc05b3b267","block_type":"box","text":"securities are in many cases exempted. That a loss is reportable under these regulations does not affect the legal","page_number":182,"box":{"x":69,"y":861,"width":817,"height":11}},{"id":"4e3f34e5-64cd-4aed-9d43-ff8c2234ee40","block_type":"box","text":"determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax","page_number":182,"box":{"x":69,"y":876,"width":783,"height":11}},{"id":"6ae9df4a-89e6-425e-8ef5-0135f8936f1c","block_type":"box","text":"advisors to determine the applicability of these regulations in light of their individual circumstances.","page_number":182,"box":{"x":69,"y":891,"width":710,"height":12}},{"id":"ea422c48-5009-4456-a37a-e488dc4c426c","block_type":"box","text":"II-133","page_number":182,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"be313d36-1cb9-4e2e-a5f7-e7ce28db5d95","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":182,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a7324683-e894-49ee-a695-4e6a1b44e1d0","block_type":"box","text":"Certain types of income received by a Fund from REITs, real estate mortgage investment conduits, taxable","page_number":183,"box":{"x":102,"y":45,"width":758,"height":11}},{"id":"f88e4523-39fe-4319-a2bc-bb366e350457","block_type":"box","text":"mortgage pools or other investments may cause the Fund to report some or all of its distributions as “excess","page_number":183,"box":{"x":69,"y":60,"width":782,"height":11}},{"id":"8468094f-1d2c-4870-8097-d114386c1459","block_type":"box","text":"inclusion income.” To Fund shareholders, such excess inclusion income may: (i) constitute taxable income, as","page_number":183,"box":{"x":70,"y":75,"width":783,"height":11}},{"id":"544af533-7a20-43ef-946e-f4890394971d","block_type":"box","text":"unrelated business taxable income (“UBTI”) for those shareholders who would otherwise be tax-exempt such as","page_number":183,"box":{"x":69,"y":90,"width":797,"height":11}},{"id":"e63a627d-b7ba-4c07-aa25-2d07b77c0709","block_type":"box","text":"individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable entities; (ii) not","page_number":183,"box":{"x":70,"y":105,"width":822,"height":11}},{"id":"54a2163f-2fda-4fd4-8381-9695a6e90b36","block_type":"box","text":"be offset by otherwise allowable deductions for tax purposes; (iii) not be eligible for reduced U.S. withholding for non","page_number":183,"box":{"x":69,"y":120,"width":836,"height":12}},{"id":"a8aaa6e8-196f-47d0-a6fd-0d3730a69798","block_type":"box","text":"U.S. shareholders even from tax treaty countries; and (iv) cause the Fund to be subject to tax if certain “disqualified","page_number":183,"box":{"x":70,"y":135,"width":826,"height":11}},{"id":"776f2183-6f9c-4f97-ae18-390d4307c98a","block_type":"box","text":"organizations,” as defined by the Code, are Fund shareholders. The Fund tries to avoid investing in REITs that are","page_number":183,"box":{"x":69,"y":150,"width":808,"height":12}},{"id":"67265946-542b-44ed-a5fb-4d00f8b7bf7c","block_type":"box","text":"expected to generate excess inclusion income, but the Fund may not always be successful in doing so. Because","page_number":183,"box":{"x":69,"y":166,"width":800,"height":11}},{"id":"fd87e8f8-9de6-4c6c-b798-0df425c9024f","block_type":"box","text":"information about a REIT’s investments may be inadequate or inaccurate, or because a REIT may change its","page_number":183,"box":{"x":70,"y":181,"width":770,"height":11}},{"id":"aed54c31-5e54-4d1f-99b8-8c3729680cd3","block_type":"box","text":"investment program, the Fund may not be successful in avoiding the consequences described above. Avoidance of","page_number":183,"box":{"x":70,"y":196,"width":816,"height":11}},{"id":"f3576752-cd2b-40b1-8bce-03b9d18f88de","block_type":"box","text":"investments in REITs that generate excess inclusion income may require the Fund to forego otherwise attractive","page_number":183,"box":{"x":70,"y":211,"width":796,"height":11}},{"id":"55ca162a-67a3-46ea-96e4-ccb30c0f8450","block_type":"box","text":"investment opportunities.","page_number":183,"box":{"x":70,"y":226,"width":180,"height":11}},{"id":"433ea510-90c9-4427-bb00-0a91ef20f766","block_type":"box","text":"Dividends and interest received and capital gains realized by a Fund may give rise to withholding and other taxes","page_number":183,"box":{"x":102,"y":249,"width":801,"height":11}},{"id":"950d5d75-fe56-44f4-bfb4-b1b25037a70c","block_type":"box","text":"imposed by foreign countries. Tax conventions between certain foreign countries and the United States may reduce or","page_number":183,"box":{"x":70,"y":264,"width":839,"height":11}},{"id":"20673b90-77a4-4008-900d-877c6752b623","block_type":"box","text":"eliminate such taxes. Shareholders of a Fund more than 50% by value of the assets of which at the close of a taxable","page_number":183,"box":{"x":69,"y":279,"width":840,"height":11}},{"id":"ba5510bf-391e-4659-b4fc-2565e6714024","block_type":"box","text":"year are foreign securities may be able to claim U.S. foreign tax credits with respect to such foreign taxes paid by the","page_number":183,"box":{"x":68,"y":294,"width":837,"height":11}},{"id":"4c4d9c7b-4cb3-47f8-9acc-25aa5d1ad238","block_type":"box","text":"Fund, subject to certain requirements and limitations contained in the Code. For example, certain retirement","page_number":183,"box":{"x":70,"y":309,"width":774,"height":11}},{"id":"7ac876e1-7b8d-4d3c-bb04-7e2c540eb8a0","block_type":"box","text":"accounts and certain tax-exempt organizations cannot claim foreign tax credits on investments in foreign securities","page_number":183,"box":{"x":69,"y":324,"width":820,"height":12}},{"id":"f242429f-5980-4f6f-a6be-49516e7a6870","block_type":"box","text":"held in a Fund. In addition, a foreign tax credit may be claimed with respect to withholding tax on payments with","page_number":183,"box":{"x":69,"y":339,"width":795,"height":12}},{"id":"04316bd2-d165-4fed-89f6-a03085f7e614","block_type":"box","text":"respect to a security only if the holder of the security meets certain holding period requirements. Both the","page_number":183,"box":{"x":69,"y":355,"width":755,"height":11}},{"id":"964c3c48-143b-4877-a540-378064313976","block_type":"box","text":"shareholder and the Fund must meet these holding period requirements, and if a Fund fails to do so, it will not be","page_number":183,"box":{"x":69,"y":370,"width":811,"height":11}},{"id":"176d96e7-7fb1-4c8c-99f9-8978da451330","block_type":"box","text":"able to “pass through” to shareholders the ability to claim a credit or a deduction for the related foreign taxes paid by","page_number":183,"box":{"x":69,"y":385,"width":839,"height":11}},{"id":"9e7192c5-4d1b-4316-9f71-204b4a060f78","block_type":"box","text":"the Fund. Further, to the extent that a Fund engages in securities lending with respect to a security paying income","page_number":183,"box":{"x":68,"y":400,"width":812,"height":11}},{"id":"7e01ac3d-d880-4b8e-90b5-3b9dee5cf5ab","block_type":"box","text":"subject to foreign taxes, it may not be able to pass through to its shareholders the ability to take a foreign tax credit","page_number":183,"box":{"x":69,"y":415,"width":829,"height":11}},{"id":"a2c72ac8-1907-4923-868c-63c1cd10edb4","block_type":"box","text":"for those taxes. If a Fund satisfies the applicable requirements, such Fund will be eligible to file an election with the","page_number":183,"box":{"x":68,"y":430,"width":827,"height":11}},{"id":"1a0b2118-47c8-45cf-876d-366bb0ce8fbd","block_type":"box","text":"IRS pursuant to which shareholders of the Fund will be required to include their proportionate shares of such foreign","page_number":183,"box":{"x":70,"y":445,"width":829,"height":12}},{"id":"3f826bdd-abaf-4ebd-910d-29ad0e08f9b4","block_type":"box","text":"taxes in their U.S. income tax returns as gross income, treat such proportionate shares as taxes paid by them, and","page_number":183,"box":{"x":68,"y":460,"width":825,"height":12}},{"id":"3bfc7fb4-200d-4344-99c9-55ea0492cb5b","block_type":"box","text":"deduct such proportionate shares in computing their taxable incomes or, alternatively, use them as foreign tax","page_number":183,"box":{"x":69,"y":475,"width":788,"height":12}},{"id":"73ede78b-e998-4e6c-b6d0-13bcf0f3be75","block_type":"box","text":"credits against their U.S. income taxes. No deductions for foreign taxes, however, may be claimed by noncorporate","page_number":183,"box":{"x":69,"y":491,"width":818,"height":11}},{"id":"6936bf13-9e65-4213-920c-12e983f6b1de","block_type":"box","text":"shareholders who do not itemize deductions. A shareholder that is a nonresident alien individual or a foreign","page_number":183,"box":{"x":69,"y":506,"width":773,"height":11}},{"id":"0b89f681-41a9-4990-b427-c738d46d20d9","block_type":"box","text":"corporation may be subject to U.S. withholding tax on the income resulting from a Fund’s election described in this","page_number":183,"box":{"x":69,"y":521,"width":817,"height":11}},{"id":"d95b3ebe-c20e-4922-8a42-d666ed25567a","block_type":"box","text":"paragraph but may not be able to claim a credit or deduction against such U.S. tax for the foreign taxes treated as","page_number":183,"box":{"x":70,"y":536,"width":814,"height":11}},{"id":"ac187730-2466-4d8f-9618-bc479d51e6c0","block_type":"box","text":"having been paid by such shareholder. A Fund will report annually to its shareholders the amount per share of such","page_number":183,"box":{"x":69,"y":551,"width":821,"height":11}},{"id":"c99b7a67-b5f3-4be5-b9de-6440583d2b30","block_type":"box","text":"foreign taxes and other information needed to claim the foreign tax credit.","page_number":183,"box":{"x":68,"y":566,"width":527,"height":11}},{"id":"30857848-f44a-4f61-8c52-6f2bdc974cf4","block_type":"box","text":"Certain transactions entered into by the Funds are subject to special tax rules of the Code that may, among","page_number":183,"box":{"x":102,"y":589,"width":768,"height":11}},{"id":"93acb945-b0ba-4286-82b9-7d5007023d45","block_type":"box","text":"other things, (a) affect the character of gains and losses realized, (b) disallow, suspend or otherwise limit the","page_number":183,"box":{"x":69,"y":604,"width":780,"height":11}},{"id":"135e9a7a-7db9-421a-94ee-c7fcca204e30","block_type":"box","text":"allowance of certain losses or deductions, and (c) accelerate the recognition of income without a corresponding","page_number":183,"box":{"x":69,"y":619,"width":797,"height":11}},{"id":"29ce9c90-9acc-47dd-9799-544df1b90310","block_type":"box","text":"receipt of cash (with which to make the necessary distributions to satisfy distribution requirements applicable to","page_number":183,"box":{"x":69,"y":634,"width":802,"height":11}},{"id":"137b2d49-4978-4662-9607-cab919c9832f","block_type":"box","text":"regulated investment companies). Operation of these rules could, therefore, affect the character, amount and timing","page_number":183,"box":{"x":69,"y":649,"width":831,"height":12}},{"id":"726f2c93-fce5-43da-8d3f-29af5e0b2b4e","block_type":"box","text":"of distributions to shareholders. Special tax rules also may require a Fund to mark-to-market certain types of","page_number":183,"box":{"x":69,"y":664,"width":776,"height":12}},{"id":"e7504544-cd2a-4fc7-a59f-852abe0d4b06","block_type":"box","text":"positions in its portfolio (","page_number":183,"box":{"x":70,"y":680,"width":177,"height":11}},{"id":"c0a309ec-1105-433a-826c-81da046a600c","block_type":"box","text":"i.e.","page_number":183,"box":{"x":249,"y":680,"width":20,"height":9}},{"id":"6e5e7282-471c-4f7c-b472-c2e5d6720718","block_type":"box","text":", treat them as sold on the last day of the taxable year), and may result in the recognition","page_number":183,"box":{"x":272,"y":680,"width":636,"height":11}},{"id":"7c51b07d-c577-4b33-a979-2c0b60e09acd","block_type":"box","text":"of income without a corresponding receipt of cash. Funds engaging in transactions affected by these provisions","page_number":183,"box":{"x":69,"y":695,"width":795,"height":11}},{"id":"477687de-c0b7-454e-8797-5b374bb793d3","block_type":"box","text":"intend to monitor their transactions, make appropriate tax elections and make appropriate entries in their books and","page_number":183,"box":{"x":70,"y":710,"width":830,"height":11}},{"id":"32587159-4d81-4d33-98d9-1c3afebcdcbe","block_type":"box","text":"records to lessen the effect of these tax rules and avoid any possible disqualification from the special treatment","page_number":183,"box":{"x":69,"y":725,"width":804,"height":11}},{"id":"094c1370-45cb-44c0-ba8a-fd7d686abdbc","block_type":"box","text":"afforded regulated investment companies under the Code.","page_number":183,"box":{"x":69,"y":740,"width":415,"height":11}},{"id":"6a675e1f-7f7e-4f9e-9018-bd9140ec7c6c","block_type":"box","text":"Certain of a Fund’s investments in derivative instruments and foreign currency-denominated instruments, and","page_number":183,"box":{"x":102,"y":763,"width":781,"height":11}},{"id":"d1632c6f-b49b-4207-9518-db0dd49701b6","block_type":"box","text":"any of the Fund’s transactions in foreign currencies and hedging activities, are likely to produce a difference between","page_number":183,"box":{"x":69,"y":778,"width":835,"height":11}},{"id":"3aae808d-ff4e-4d52-a15e-fe6ab287aa5d","block_type":"box","text":"its book income and the sum of its taxable income and net tax-exempt income (if any). If such a difference arises,","page_number":183,"box":{"x":70,"y":793,"width":811,"height":11}},{"id":"32afbbd5-e891-440b-941e-39060a324490","block_type":"box","text":"and the Fund’s book income is less than the sum of its taxable income and net tax-exempt income, the Fund could","page_number":183,"box":{"x":69,"y":808,"width":818,"height":11}},{"id":"acf2a816-1465-41dc-9c5a-b1f140534fca","block_type":"box","text":"be required to make distributions exceeding book income to qualify as a RIC that is accorded special tax treatment","page_number":183,"box":{"x":69,"y":823,"width":820,"height":12}},{"id":"a0a3d681-c9f3-4d0f-b960-df9a05c16075","block_type":"box","text":"and to avoid an entity-level tax. In the alternative, if the Fund makes any distribution based on book income and such","page_number":183,"box":{"x":69,"y":838,"width":834,"height":11}},{"id":"cbb10dff-4c93-4cbc-a4ad-93943908e5e0","block_type":"box","text":"book income exceeds the sum of its taxable income (including realized capital gains) and net tax-exempt income, the","page_number":183,"box":{"x":69,"y":853,"width":833,"height":12}},{"id":"d807764d-1d46-4815-80fd-a4c3ed8b6206","block_type":"box","text":"distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining","page_number":183,"box":{"x":69,"y":869,"width":805,"height":11}},{"id":"141827fb-0a62-4365-adaa-e609c9589aac","block_type":"box","text":"II-134","page_number":183,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"1ead99c5-0cc3-40b4-ac4e-1068b30efc1f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":183,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b052915b-a359-4790-9b15-0419a9912a0d","block_type":"box","text":"earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter, as a return of","page_number":184,"box":{"x":69,"y":45,"width":805,"height":11}},{"id":"d19b1cca-ca1f-4a13-8dc6-77590d136ae7","block_type":"box","text":"capital to the extent of the recipient’s basis in its shares, and (iii) thereafter as gain from the sale or exchange of a","page_number":184,"box":{"x":69,"y":60,"width":822,"height":11}},{"id":"93a69ec3-090a-4087-87a1-03737fec02ac","block_type":"box","text":"capital asset.","page_number":184,"box":{"x":69,"y":75,"width":95,"height":11}},{"id":"c23bab84-f910-448f-a87d-8cbe9e6a7bb2","block_type":"box","text":"If a Fund invests in underlying funds, the Fund’s realized losses on sales of shares of underlying funds may be","page_number":184,"box":{"x":102,"y":98,"width":787,"height":11}},{"id":"3f51f665-9788-4972-87a8-79dbfe18aa99","block_type":"box","text":"indefinitely or permanently deferred as “wash sales.” Distributions of short-term capital gains by underlying funds will","page_number":184,"box":{"x":70,"y":113,"width":836,"height":11}},{"id":"9f0613ee-bbc7-4a04-88f5-13f9051adbc1","block_type":"box","text":"be recognized as ordinary income by the Fund and would not be offset by the Fund’s capital loss carryforwards, if","page_number":184,"box":{"x":69,"y":128,"width":812,"height":11}},{"id":"625376aa-acd6-494f-a114-0fcde2841ad4","block_type":"box","text":"any. Capital loss carryforwards of underlying funds, if any, would not offset net capital gains of the Fund. Each of","page_number":184,"box":{"x":69,"y":143,"width":805,"height":11}},{"id":"833a0a00-f8e1-457c-b38b-ced289b2c713","block_type":"box","text":"these effects is caused by the Fund’s expected investment in the underlying funds and may result in distributions to","page_number":184,"box":{"x":68,"y":158,"width":829,"height":11}},{"id":"ecf4b972-4a5c-47e1-ae2b-25075788c65d","block_type":"box","text":"Fund shareholders being of higher magnitudes and less likely to qualify for lower capital gain tax rates than if the","page_number":184,"box":{"x":70,"y":173,"width":803,"height":11}},{"id":"31cd5e4c-8652-414f-aae3-6f60603ec36c","block_type":"box","text":"Fund were to invest otherwise.","page_number":184,"box":{"x":70,"y":188,"width":216,"height":9}},{"id":"23de90d5-e03b-4b66-b196-d14febbfe393","block_type":"box","text":"A Fund may take certain positions through a wholly-owned (or majority-owned), foreign subsidiary (the","page_number":184,"box":{"x":101,"y":211,"width":721,"height":11}},{"id":"d3bd635f-57db-429f-9cb2-e933115d4d27","block_type":"box","text":"“Subsidiary”). It is expected that the Subsidiary will be a “controlled foreign corporation” and that all of its net","page_number":184,"box":{"x":70,"y":226,"width":787,"height":11}},{"id":"2326085f-c994-45b5-97e1-f69da023279f","block_type":"box","text":"income will be “subpart F income” for U.S. federal income tax purposes. If that is the case, the Fund will be required","page_number":184,"box":{"x":70,"y":241,"width":831,"height":11}},{"id":"d0f46df6-ba87-4ddc-90f0-46116305cfb1","block_type":"box","text":"to report all of the Subsidiary’s net income as ordinary income regardless of whether that income would be treated","page_number":184,"box":{"x":68,"y":256,"width":823,"height":12}},{"id":"5637f1af-95ad-474d-af59-381cb7b70e2a","block_type":"box","text":"differently (for example, as capital gain) at the Subsidiary level and regardless of whether that income is distributed","page_number":184,"box":{"x":69,"y":271,"width":825,"height":12}},{"id":"6c56e911-d2d2-4437-b2a8-983fb307285d","block_type":"box","text":"to the Fund. (Previously taxed income will not, however, be taxable again when distributed.) If a net loss is realized by","page_number":184,"box":{"x":68,"y":286,"width":838,"height":12}},{"id":"f4169929-b7c4-4c4b-8770-b1f8f4ae3f06","block_type":"box","text":"the Subsidiary in any taxable year, the loss will generally not be available to offset the Fund’s other income. It is not","page_number":184,"box":{"x":68,"y":302,"width":830,"height":11}},{"id":"58b43cf0-9b77-4f1d-b92d-b024dbcb874e","block_type":"box","text":"expected that the Subsidiary will be subject to an entity-level federal tax.","page_number":184,"box":{"x":69,"y":317,"width":515,"height":11}},{"id":"8c56d2d9-ce0e-4aca-bdc2-fa093d2f52c1","block_type":"box","text":"If a Fund purchases shares of an investment company (or similar investment entity) organized under foreign law,","page_number":184,"box":{"x":102,"y":339,"width":798,"height":12}},{"id":"00c7a0f0-8f63-43de-9dab-c45d3f544032","block_type":"box","text":"the Fund will generally be treated as owning shares in a passive foreign investment company (“PFIC”) for U.S. federal","page_number":184,"box":{"x":68,"y":355,"width":835,"height":11}},{"id":"4f972c29-1d59-44be-8e10-0d53d5f76c6a","block_type":"box","text":"income tax purposes. A Fund may be subject to U.S. federal income tax, and interest charges (at the rate applicable","page_number":184,"box":{"x":70,"y":370,"width":827,"height":11}},{"id":"5023bb08-4d34-4c13-81a6-4c6102cd4113","block_type":"box","text":"to tax underpayments) on tax liability treated as having been deferred with respect to certain distributions from such","page_number":184,"box":{"x":68,"y":385,"width":830,"height":11}},{"id":"dc72553b-3951-4728-ac2a-e633940216b5","block_type":"box","text":"a company and on gain from the disposition of the shares of such a company (collectively referred to as “excess","page_number":184,"box":{"x":69,"y":400,"width":802,"height":11}},{"id":"7040f7c4-89f3-4a9e-b672-611366e00ccc","block_type":"box","text":"distributions”), even if such excess distributions are paid by the Fund as a dividend to its shareholders. However, a","page_number":184,"box":{"x":69,"y":415,"width":821,"height":11}},{"id":"f39b4baf-c021-425c-a7bb-fffbb024535d","block_type":"box","text":"Fund may elect to “mark-to-market” at the end of each taxable year shares that it holds in PFICs. The election is","page_number":184,"box":{"x":70,"y":430,"width":797,"height":11}},{"id":"796766ef-1887-42ff-ab69-02b81276ccf6","block_type":"box","text":"made separately for each PFIC held and, once made, would be effective for all subsequent taxable years, unless","page_number":184,"box":{"x":69,"y":445,"width":801,"height":11}},{"id":"7d282988-3f23-4348-b5ff-ddb5593c0263","block_type":"box","text":"revoked with consent from the IRS. Under this election, a Fund would recognize as ordinary income any increase in","page_number":184,"box":{"x":69,"y":460,"width":818,"height":12}},{"id":"7f6df61d-4fce-47e3-ac10-3ba0b7b0030b","block_type":"box","text":"the value of its shares as of the close of the taxable year over their adjusted tax basis and as ordinary loss any","page_number":184,"box":{"x":68,"y":475,"width":797,"height":12}},{"id":"d44c6cee-0670-4f57-b6a8-0ace83c6131a","block_type":"box","text":"decrease in such value, but only to the extent of previously recognized “mark-to-market” gains. By making the mark","page_number":184,"box":{"x":69,"y":491,"width":824,"height":11}},{"id":"a097ed22-f94b-4df8-96fb-9178d377fa6a","block_type":"box","text":"to-market election, a Fund could avoid imposition of the interest charge with respect to excess distributions from","page_number":184,"box":{"x":68,"y":506,"width":804,"height":11}},{"id":"c942524f-253d-46f8-b21c-7370bcbaab5d","block_type":"box","text":"PFICs, but in any particular year might be required to recognize income in excess of the distributions it received from","page_number":184,"box":{"x":69,"y":521,"width":831,"height":11}},{"id":"aa3528d8-8d75-4df6-9e5c-728b69bd66c3","block_type":"box","text":"PFICs.","page_number":184,"box":{"x":69,"y":536,"width":42,"height":9}},{"id":"c0257bc8-21c1-451d-9c4d-af0d326864f8","block_type":"box","text":"If a Fund were to invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the Code, in lieu","page_number":184,"box":{"x":102,"y":559,"width":804,"height":11}},{"id":"8158fa90-f996-4703-8cfe-67248c42e7e3","block_type":"box","text":"of the foregoing requirements, the Fund would be required to include in income each year a portion of the ordinary","page_number":184,"box":{"x":69,"y":574,"width":816,"height":11}},{"id":"028c1d5e-3fab-4680-b5bf-cf62d2c43c97","block_type":"box","text":"earnings and net capital gains of the qualified electing fund, even if not distributed to the Fund, and such amounts","page_number":184,"box":{"x":69,"y":589,"width":816,"height":11}},{"id":"88deea1a-ed7a-4bc7-be10-501fe7c1129b","block_type":"box","text":"would be subject to the 90% and excise tax distribution requirements described above. In order to make this election,","page_number":184,"box":{"x":68,"y":604,"width":840,"height":11}},{"id":"0412584b-3145-464e-a5e1-e01ef4bee2bd","block_type":"box","text":"the Fund would be required to obtain certain annual information from the PFICs in which it invests, which may be","page_number":184,"box":{"x":68,"y":619,"width":804,"height":11}},{"id":"fcac6b52-62f2-4795-bf14-f432461b3b09","block_type":"box","text":"difficult or impossible to obtain.","page_number":184,"box":{"x":69,"y":634,"width":225,"height":11}},{"id":"05705388-c0c8-4b91-b9e5-6a6d24984006","block_type":"box","text":"In certain situations, a Fund may, for a taxable year, defer all or a portion of its net capital loss (or if there is no","page_number":184,"box":{"x":102,"y":657,"width":796,"height":11}},{"id":"f9c4fe91-2461-4172-83c3-3269ee3eb49c","block_type":"box","text":"net capital loss, any net long-term or short-term capital loss) realized after October and its late-year ordinary loss","page_number":184,"box":{"x":69,"y":672,"width":806,"height":11}},{"id":"df931569-de79-4cd8-aa5d-0b724cfc941c","block_type":"box","text":"(defined as the sum of the excess of post-October foreign currency and PFIC losses over post-October foreign","page_number":184,"box":{"x":69,"y":687,"width":778,"height":11}},{"id":"2df2311b-03b4-401d-8224-2fcbabe55670","block_type":"box","text":"currency and PFIC gains plus the excess of post-December ordinary losses over post-December ordinary income) until","page_number":184,"box":{"x":69,"y":702,"width":838,"height":12}},{"id":"0c3a00ec-ea13-4a25-a376-8e6934736810","block_type":"box","text":"the next taxable year in computing its investment company taxable income and net capital gain, which will defer the","page_number":184,"box":{"x":68,"y":717,"width":824,"height":12}},{"id":"c4073c65-430d-4b52-a400-a36995ffb5ec","block_type":"box","text":"recognition of such realized losses. Such deferrals and other rules regarding gains and losses realized after October","page_number":184,"box":{"x":69,"y":732,"width":830,"height":12}},{"id":"7e709625-1250-4cd0-9ea2-cf0923938878","block_type":"box","text":"(or December) may affect the tax character of shareholder distributions.","page_number":184,"box":{"x":69,"y":748,"width":511,"height":11}},{"id":"2e875431-7c34-4350-9e69-ec0656d61424","block_type":"box","text":"Municipal Funds","page_number":184,"box":{"x":102,"y":771,"width":115,"height":10}},{"id":"9bb43a8d-a871-42a2-9b3f-630520f6d07d","block_type":"box","text":"Each Municipal Fund intends to qualify to pay “exempt-interest dividends” as defined in Section 852(b)(5) of the","page_number":184,"box":{"x":102,"y":793,"width":798,"height":11}},{"id":"07ccefff-1499-477d-8b27-d2c79c88d395","block_type":"box","text":"Code. Under such section if, at the close of each quarter of a Fund’s taxable year, at least 50% of the value of the","page_number":184,"box":{"x":69,"y":808,"width":815,"height":11}},{"id":"0be4c273-66db-4e99-9eff-0618ea6491e5","block_type":"box","text":"Fund’s total assets consists of obligations exempt from U.S. federal income tax (“tax-exempt obligations”) under","page_number":184,"box":{"x":70,"y":823,"width":803,"height":12}},{"id":"febae658-9711-48f4-909b-57e27ed57657","block_type":"box","text":"Section 103(a) of the Code (relating generally to obligations of a state or local governmental unit), the Fund shall be","page_number":184,"box":{"x":69,"y":838,"width":826,"height":12}},{"id":"e8d56e12-d4cb-4df2-bad6-46c8a5b8e1b6","block_type":"box","text":"qualified to pay exempt-interest dividends to holders of all outstanding classes of its shares (together the","page_number":184,"box":{"x":69,"y":853,"width":752,"height":12}},{"id":"3abe53e8-8d08-426e-bc07-5a3526ec50ea","block_type":"box","text":"“shareholders”). Exempt-interest dividends are dividends or any part thereof paid by a Fund that are attributable to","page_number":184,"box":{"x":70,"y":869,"width":817,"height":11}},{"id":"57498b38-13c5-4054-8b50-7ed1e929d9ad","block_type":"box","text":"interest on tax-exempt obligations and reported by the Fund as exempt-interest dividends. A Fund will allocate","page_number":184,"box":{"x":70,"y":884,"width":780,"height":11}},{"id":"5b4eb0d7-8c21-41d5-91d0-61f2280de001","block_type":"box","text":"interest from tax-exempt obligations (as well as ordinary income, capital gains and tax preference items discussed","page_number":184,"box":{"x":70,"y":899,"width":815,"height":11}},{"id":"4dc9bd9c-2d7e-47de-b20f-84085bd4eea5","block_type":"box","text":"II-135","page_number":184,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"86c5d0c8-5611-424f-8664-a483103da201","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":184,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8c7f168b-229a-4d9c-a3f5-47f8ed01a650","block_type":"box","text":"below) among the Fund’s shareholders according to a method (that it believes is consistent with the Commission rule","page_number":185,"box":{"x":69,"y":45,"width":839,"height":11}},{"id":"3ff4519d-b133-4214-aa31-f339c883a35c","block_type":"box","text":"permitting the issuance and sale of multiple classes of shares) that is based upon the gross income that is allocable","page_number":185,"box":{"x":70,"y":60,"width":835,"height":11}},{"id":"4f5a616c-c6fd-4819-8393-3249a557f436","block_type":"box","text":"to each class of shareholders during the taxable year, or such other method as the IRS may prescribe.","page_number":185,"box":{"x":68,"y":75,"width":730,"height":11}},{"id":"8c718ada-3b3f-4eef-a1de-8f272dbcd7a2","block_type":"box","text":"Exempt-interest dividends will be excludable from a shareholder’s gross income for U.S. federal income tax","page_number":185,"box":{"x":102,"y":98,"width":763,"height":11}},{"id":"781ceaf3-7292-4d7d-8983-ef34aa279c7e","block_type":"box","text":"purposes. Exempt-interest dividends are included, however, in determining the portion, if any, of a person’s social","page_number":185,"box":{"x":70,"y":113,"width":809,"height":11}},{"id":"104a7e09-6fc2-4ebf-9147-b510df13d3c6","block_type":"box","text":"security and railroad retirement benefits subject to U.S. federal income taxes. Interest on indebtedness incurred or","page_number":185,"box":{"x":69,"y":128,"width":821,"height":11}},{"id":"a3f28d5e-7548-41b7-a097-5685fea25917","block_type":"box","text":"continued to purchase or carry shares of a regulated investment company paying exempt-interest dividends, such as","page_number":185,"box":{"x":69,"y":143,"width":831,"height":11}},{"id":"7050a060-3052-4b65-90ff-0464531fba76","block_type":"box","text":"the Fund, will not be deductible by the investor for U.S. federal income tax purposes to the extent attributable to","page_number":185,"box":{"x":68,"y":158,"width":800,"height":11}},{"id":"b91f1b6d-5ac4-4cab-b45d-c02953690674","block_type":"box","text":"exempt-interest dividends. Shareholders are advised to consult their tax advisors with respect to whether exempt","page_number":185,"box":{"x":69,"y":173,"width":810,"height":11}},{"id":"d3c41f0d-a0cb-417d-88ee-86ee5ecd2224","block_type":"box","text":"interest dividends retain the exclusion under Code Section 103(a) if a shareholder would be treated as a “substantial","page_number":185,"box":{"x":70,"y":188,"width":836,"height":11}},{"id":"f94e5262-0f11-4ef7-aee6-7bb00737291c","block_type":"box","text":"user” or “related person” under Code Section 147(a) with respect to property financed with the proceeds of an issue","page_number":185,"box":{"x":69,"y":203,"width":835,"height":12}},{"id":"95986b60-44fc-4eaa-bf43-1ede089ee34d","block_type":"box","text":"of PABs, if any, held by a Fund.","page_number":185,"box":{"x":69,"y":218,"width":217,"height":12}},{"id":"15c99762-b05c-4f66-b29d-e9d83b3739ec","block_type":"box","text":"Substitute payments received by a Fund representing interest paid on tax-exempt obligations loaned out by the","page_number":185,"box":{"x":102,"y":241,"width":788,"height":11}},{"id":"2555e9a3-0d47-46c2-8ab1-a04b556aeb02","block_type":"box","text":"Fund will not be considered exempt interest, and distributions by the Fund of such substitute payments will not","page_number":185,"box":{"x":70,"y":256,"width":790,"height":11}},{"id":"68ceb393-cbc4-4c45-8b69-5acd2dc9c928","block_type":"box","text":"constitute exempt-interest dividends.","page_number":185,"box":{"x":69,"y":272,"width":261,"height":10}},{"id":"bb92dbe7-8ede-44c4-a194-ed56f52ae332","block_type":"box","text":"Distributions in excess of a Fund’s earnings and profits will first reduce the adjusted tax basis of a holder’s","page_number":185,"box":{"x":102,"y":294,"width":765,"height":11}},{"id":"b322ad1e-ce66-4c77-8f8e-3c0b18fe16a4","block_type":"box","text":"shares and, after such adjusted tax basis is reduced to zero, will constitute capital gains to such holder (assuming","page_number":185,"box":{"x":69,"y":309,"width":819,"height":11}},{"id":"31281634-a106-432b-ba4b-bf90f8de3469","block_type":"box","text":"the shares are held as a capital asset). Any loss upon the sale or exchange of Fund shares held for six months or","page_number":185,"box":{"x":68,"y":324,"width":813,"height":12}},{"id":"93f33f17-d6e1-4c30-b71a-d8d704c75810","block_type":"box","text":"less will be disallowed to the extent of any exempt-interest dividends received by the shareholder. In addition, any","page_number":185,"box":{"x":70,"y":339,"width":809,"height":12}},{"id":"65473844-db30-4cf2-acde-9dfccf1ab831","block_type":"box","text":"such loss that is not disallowed under the rule stated above will be treated as long-term capital loss to the extent of","page_number":185,"box":{"x":69,"y":355,"width":829,"height":11}},{"id":"0765a7dc-0077-415c-8759-b819d5565274","block_type":"box","text":"any capital gain dividends received by the shareholder.","page_number":185,"box":{"x":69,"y":370,"width":388,"height":11}},{"id":"8e2d4a03-ba77-41bd-8403-c7124d5201e4","block_type":"box","text":"All or a portion of a Fund’s gains from the sale or redemption of tax-exempt obligations purchased at a market","page_number":185,"box":{"x":101,"y":392,"width":787,"height":12}},{"id":"56576d30-bdbd-421a-bc76-1296123c2058","block_type":"box","text":"discount will be treated as ordinary income rather than capital gain. This rule may increase the amount of ordinary","page_number":185,"box":{"x":69,"y":407,"width":817,"height":12}},{"id":"a6ba3701-39c3-413f-be0c-996ce7263725","block_type":"box","text":"income dividends received by shareholders.","page_number":185,"box":{"x":70,"y":423,"width":309,"height":11}},{"id":"9b435b16-481e-4fca-a8d5-f5b9abcf7d06","block_type":"box","text":"Any market discount recognized on a bond is taxable as ordinary income. A market discount bond is a bond","page_number":185,"box":{"x":101,"y":446,"width":766,"height":11}},{"id":"a67b7288-c061-4ebc-94d2-126f2d83f253","block_type":"box","text":"acquired in the secondary market at a price below redemption value or adjusted issue price if issued with original","page_number":185,"box":{"x":69,"y":460,"width":808,"height":12}},{"id":"95e31f63-da97-487f-ad34-c60111258bf7","block_type":"box","text":"issue discount. Absent an election by the Fund to include the market discount in income as it accrues, gain on the","page_number":185,"box":{"x":70,"y":476,"width":815,"height":11}},{"id":"2729e208-fa9b-4955-9f7d-5bbc11a2188e","block_type":"box","text":"Fund’s disposition of such an obligation will be treated as ordinary income rather than capital gain to the extent of","page_number":185,"box":{"x":70,"y":491,"width":815,"height":11}},{"id":"1b1abbfc-0a84-4ec1-9387-49998f0c39fd","block_type":"box","text":"the accrued market discount.","page_number":185,"box":{"x":68,"y":506,"width":208,"height":9}},{"id":"1e0d3a5a-21cc-4d96-ae18-99bd1a411df0","block_type":"box","text":"The Code subjects interest received on certain otherwise tax-exempt securities to a federal alternative minimum","page_number":185,"box":{"x":101,"y":528,"width":801,"height":12}},{"id":"552700e2-3c07-4c24-b289-562fd951a3e3","block_type":"box","text":"tax. The alternative minimum tax applies to interest received on certain “PABs” issued after August 7, 1986. PABs","page_number":185,"box":{"x":68,"y":543,"width":818,"height":12}},{"id":"6da65080-8332-4ff0-9bda-863ae241c012","block_type":"box","text":"are bonds that, although tax-exempt, are used for purposes other than those generally performed by governmental","page_number":185,"box":{"x":69,"y":559,"width":816,"height":11}},{"id":"a35d8671-c0b2-4ba2-a5d2-a79f8b9c8e37","block_type":"box","text":"units and that benefit non-governmental entities (","page_number":185,"box":{"x":69,"y":574,"width":351,"height":11}},{"id":"581aa5de-4c13-43fd-9043-a20f54cd836b","block_type":"box","text":"e.g.","page_number":185,"box":{"x":422,"y":575,"width":24,"height":10}},{"id":"25a98edc-3176-4dbc-b4fe-70e136de82d5","block_type":"box","text":", bonds used for industrial development or housing purposes).","page_number":185,"box":{"x":449,"y":574,"width":441,"height":11}},{"id":"711657bd-a5c4-4135-9ced-7f0be65b5463","block_type":"box","text":"Income received on such bonds is classified as an item of “tax preference,” which could subject certain investors in","page_number":185,"box":{"x":70,"y":589,"width":827,"height":11}},{"id":"ae3f415e-fd8e-4fea-9e36-fa4451a4b87b","block_type":"box","text":"such bonds, including shareholders of a Fund, to a federal alternative minimum tax. A Fund will purchase such","page_number":185,"box":{"x":69,"y":604,"width":786,"height":11}},{"id":"213b788e-4dcf-4b4a-8196-8b0ec5fa3450","block_type":"box","text":"“PABs” and will report to shareholders after the close of the calendar year the portion of the Fund’s dividends","page_number":185,"box":{"x":70,"y":619,"width":782,"height":11}},{"id":"7018ab8a-bee1-4408-8522-756bd9007590","block_type":"box","text":"declared during the year that constitute an item of tax preference for alternative minimum tax purposes.","page_number":185,"box":{"x":69,"y":634,"width":740,"height":12}},{"id":"5c41e703-f5b3-4cd8-a532-df8219cbf43f","block_type":"box","text":"Each Municipal Fund may engage in interest rate swap transactions. The U.S. federal income tax rules governing","page_number":185,"box":{"x":102,"y":657,"width":802,"height":11}},{"id":"47dd0095-c446-4c23-9edd-4ffeaeea89e6","block_type":"box","text":"the taxation of interest rate swaps are not entirely clear and may require a Fund to treat payments received under","page_number":185,"box":{"x":68,"y":672,"width":812,"height":11}},{"id":"41080df9-24a9-4fa0-92f8-5fb3552e0ff8","block_type":"box","text":"such arrangements as ordinary income and to amortize payments made under certain circumstances. Because","page_number":185,"box":{"x":69,"y":687,"width":794,"height":11}},{"id":"d1136192-7697-47ee-a93f-5084e704cd77","block_type":"box","text":"payments received by a Fund in connection with swap transactions will be taxable rather than tax-exempt and","page_number":185,"box":{"x":70,"y":703,"width":776,"height":10}},{"id":"1d12386f-a504-4e28-a7b7-994a436fc9f7","block_type":"box","text":"because swap payments made by a Fund will offset both taxable and tax-exempt gross income proportionately, they","page_number":185,"box":{"x":69,"y":717,"width":826,"height":12}},{"id":"a92aba02-d0f7-4eed-a8b5-46645e80bf86","block_type":"box","text":"may result in increased taxable distributions to shareholders.","page_number":185,"box":{"x":69,"y":733,"width":436,"height":11}},{"id":"fd605918-472d-4c96-aca7-d77e58b817cf","block_type":"box","text":"Please see Part I of your Fund’s SAI for certain state tax information relevant to an investment in BlackRock","page_number":185,"box":{"x":102,"y":755,"width":771,"height":11}},{"id":"6b476137-ffd4-4ad5-9aa4-8afe51e40a56","block_type":"box","text":"California Municipal Opportunities Fund, BlackRock New Jersey Municipal Bond Fund, BlackRock New York Municipal","page_number":185,"box":{"x":69,"y":770,"width":828,"height":11}},{"id":"12dd448f-8c77-490f-870e-39225dfe382b","block_type":"box","text":"Opportunities Fund and BlackRock Pennsylvania Municipal Bond Fund, as well as information on economic conditions","page_number":185,"box":{"x":69,"y":785,"width":836,"height":12}},{"id":"0b61d0fe-a0cf-4122-aa5a-d401a07c2c38","block_type":"box","text":"within each applicable state.","page_number":185,"box":{"x":68,"y":801,"width":203,"height":11}},{"id":"668c23df-a2d5-416a-8ef2-9bc8144b57c3","block_type":"box","text":"In the case of a Feeder Fund, such Fund is entitled to look to the underlying assets of the Master Portfolio in","page_number":185,"box":{"x":102,"y":823,"width":774,"height":12}},{"id":"9d168b9a-015a-4c5f-902e-039ab8df0fb2","block_type":"box","text":"which it has invested for purposes of satisfying various qualification requirements of the Code applicable to regulated","page_number":185,"box":{"x":68,"y":838,"width":837,"height":12}},{"id":"2b446322-82bc-4183-8fee-2a87e93095f0","block_type":"box","text":"investment companies. Each Master Portfolio is classified either as a partnership or a separate disregarded entity","page_number":185,"box":{"x":70,"y":853,"width":816,"height":12}},{"id":"ec5ecf56-7c54-42c6-aa63-9fec66be73fb","block_type":"box","text":"(depending on the particular Master Portfolio) for U.S. federal income tax purposes. If applicable tax provisions were","page_number":185,"box":{"x":69,"y":869,"width":830,"height":11}},{"id":"2bc14dc9-cc34-474d-9509-07b498958cfc","block_type":"box","text":"to change the classification of a Master Portfolio, then the Board of Directors of a Feeder Fund would determine, in","page_number":185,"box":{"x":68,"y":884,"width":822,"height":11}},{"id":"c40b1a9d-8ea2-48b6-bc6a-a47a09309e92","block_type":"box","text":"its discretion, the appropriate course of action for the Feeder Fund. One possible course of action would be to","page_number":185,"box":{"x":70,"y":899,"width":783,"height":11}},{"id":"ca2a8acd-231b-41e2-af81-f5ba82000452","block_type":"box","text":"II-136","page_number":185,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"4a76f47f-52a6-4539-8f52-dbb0f6408785","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":185,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f4ea288a-c675-420d-b3a4-493da79061cd","block_type":"box","text":"withdraw the Feeder Fund’s investments from the Master Portfolio and to retain an investment manager to manage","page_number":186,"box":{"x":68,"y":45,"width":822,"height":11}},{"id":"cfaf53d5-e869-428b-832b-4f168339ac0d","block_type":"box","text":"the Feeder Fund’s assets in accordance with the investment policies applicable to the Feeder Fund.","page_number":186,"box":{"x":68,"y":60,"width":710,"height":11}},{"id":"9d33533c-bb31-4c3a-80c1-f91cc0229c48","block_type":"box","text":"Ordinary income and capital gain dividends may also be subject to state and local taxes. Certain states exempt","page_number":186,"box":{"x":102,"y":83,"width":796,"height":11}},{"id":"52bcf664-50f2-472e-979f-473f5868f299","block_type":"box","text":"from state income taxation dividends paid by regulated investment companies that are derived from interest on U.S.","page_number":186,"box":{"x":68,"y":98,"width":828,"height":11}},{"id":"d2e65b68-f563-44bc-8340-38d6c354d46d","block_type":"box","text":"government obligations. State law varies as to whether dividend income attributable to U.S. government obligations is","page_number":186,"box":{"x":68,"y":113,"width":841,"height":11}},{"id":"b7c7a97c-adb2-4a02-bbff-a2644fef841b","block_type":"box","text":"exempt from state income tax.","page_number":186,"box":{"x":69,"y":128,"width":216,"height":11}},{"id":"3c4e3917-d50e-4dbf-ac7e-c6ae7163d9d3","block_type":"box","text":"Shareholders of each Fund are urged to consult their tax advisers regarding specific questions as to federal,","page_number":186,"box":{"x":102,"y":150,"width":771,"height":12}},{"id":"3b3169a7-8357-40d3-be1a-ad041ff82fbd","block_type":"box","text":"foreign, state or local taxes with respect to their Fund. Foreign investors should consider applicable foreign taxes in","page_number":186,"box":{"x":68,"y":166,"width":823,"height":11}},{"id":"15629030-4f00-4212-9073-1b114b5a2b2b","block_type":"box","text":"their evaluation of an investment in a Fund.","page_number":186,"box":{"x":68,"y":181,"width":309,"height":9}},{"id":"201de661-ac9d-42f4-964f-9ce5e274964e","block_type":"box","text":"The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the","page_number":186,"box":{"x":101,"y":203,"width":749,"height":12}},{"id":"7944e4cf-d635-42d6-91f6-143f6655bd9c","block_type":"box","text":"regulations issued thereunder as in effect on the date of this SAI. Future legislative or administrative changes or","page_number":186,"box":{"x":69,"y":218,"width":803,"height":12}},{"id":"a503707e-4a08-4c87-b9a4-ffecbed073f0","block_type":"box","text":"court decisions may significantly change the conclusions expressed in this discussion, and any such changes or","page_number":186,"box":{"x":69,"y":234,"width":801,"height":11}},{"id":"4d211937-018a-4ec7-8e1e-d84a2723096c","block_type":"box","text":"decisions may have a retroactive effect.","page_number":186,"box":{"x":69,"y":249,"width":283,"height":11}},{"id":"853bf624-832e-432d-8e48-cfeaeb32c5da","block_type":"box","text":"PERFORMANCE DATA","page_number":186,"box":{"x":403,"y":278,"width":173,"height":10}},{"id":"0d59079f-f80d-428a-9111-14519f4b9fa9","block_type":"box","text":"From time to time a Fund may include its average annual total return and other total return data, and, if","page_number":186,"box":{"x":102,"y":301,"width":738,"height":11}},{"id":"af274239-2d6e-43a0-95e3-710d86945b02","block_type":"box","text":"applicable, yield and tax-equivalent yield in advertisements or information furnished to present or prospective","page_number":186,"box":{"x":69,"y":316,"width":779,"height":11}},{"id":"b83aa992-5f49-4623-973f-74d2e1b56e5b","block_type":"box","text":"shareholders. Total return, yield and tax-equivalent yield each is based on a Fund’s historical performance and is not","page_number":186,"box":{"x":69,"y":331,"width":833,"height":11}},{"id":"0afd72c4-d82f-4a0f-bb48-6e0e5848ac7c","block_type":"box","text":"intended to indicate future performance. Average annual total return is determined separately for each class of","page_number":186,"box":{"x":70,"y":346,"width":792,"height":12}},{"id":"1eca7f62-32aa-4dc2-bfb3-b9bc5d4adce3","block_type":"box","text":"shares in accordance with a formula specified by the Commission.","page_number":186,"box":{"x":69,"y":361,"width":473,"height":12}},{"id":"7968c1a6-5a71-410f-8731-288166212845","block_type":"box","text":"Quotations of average annual total return, before tax, for the specified periods are computed by finding the","page_number":186,"box":{"x":102,"y":384,"width":761,"height":11}},{"id":"b504cec0-82db-41e5-9ec1-6887b8458405","block_type":"box","text":"average annual compounded rates of return (based on net investment income and any realized and unrealized capital","page_number":186,"box":{"x":69,"y":399,"width":836,"height":12}},{"id":"e450f83a-a9c5-40e7-a40c-709fda7890ab","block_type":"box","text":"gains or losses on portfolio investments over such periods) that would equate the initial amount invested to the","page_number":186,"box":{"x":68,"y":414,"width":798,"height":12}},{"id":"90041a55-9f14-4fd3-a32c-a7f625d34172","block_type":"box","text":"redeemable value of such investment at the end of each period. Average annual total return before taxes is","page_number":186,"box":{"x":69,"y":429,"width":765,"height":12}},{"id":"a928c39a-0c2e-4e6c-b82a-edf1fbe0ef5a","block_type":"box","text":"computed assuming all dividends are reinvested and taking into account all applicable recurring and nonrecurring","page_number":186,"box":{"x":69,"y":445,"width":808,"height":11}},{"id":"68f039fa-ee8d-4c26-aa6f-6231591a92fc","block_type":"box","text":"expenses, including the maximum sales charge, in the case of front-end load shares, and the CDSC that would be","page_number":186,"box":{"x":69,"y":460,"width":813,"height":11}},{"id":"4dd4fd47-82ac-46e1-85df-976345e79cd3","block_type":"box","text":"applicable to a complete redemption of the investment at the end of the specified period in the case of CDSC shares,","page_number":186,"box":{"x":69,"y":475,"width":839,"height":11}},{"id":"6bc3ede3-b91c-4490-9a59-f794b66bfc1e","block_type":"box","text":"but does not take into account taxes payable on dividends or on redemption.","page_number":186,"box":{"x":69,"y":490,"width":546,"height":11}},{"id":"57aa47b0-213b-4346-b1eb-8f33f7afcbc7","block_type":"box","text":"Quotations of average annual total return, after taxes, on dividends for the specified periods are computed by","page_number":186,"box":{"x":102,"y":513,"width":781,"height":11}},{"id":"98967d13-7fad-407a-a5b4-64c0ac614835","block_type":"box","text":"finding the average annual compounded rates of return that would equate the initial amount invested to the ending","page_number":186,"box":{"x":68,"y":528,"width":819,"height":11}},{"id":"6b2ec658-4f96-43f4-8d66-93e0969c21ba","block_type":"box","text":"value of such investment at the end of each period assuming payment of taxes on dividends received during such","page_number":186,"box":{"x":68,"y":543,"width":810,"height":11}},{"id":"69e40886-9ba4-4a7f-ae59-979010e8ed3a","block_type":"box","text":"period. Average annual total return after taxes on dividends is computed assuming all dividends, less the taxes due","page_number":186,"box":{"x":70,"y":558,"width":823,"height":11}},{"id":"cf3dec31-1d52-4737-b6c5-9b8b451ddc93","block_type":"box","text":"on such dividends, are reinvested and taking into account all applicable recurring and nonrecurring expenses,","page_number":186,"box":{"x":69,"y":573,"width":780,"height":11}},{"id":"50b7a757-0f31-4b69-a8ba-4f7c026235d3","block_type":"box","text":"including the maximum sales charge, in the case of front-end load shares and the CDSC that would be applicable to","page_number":186,"box":{"x":70,"y":588,"width":825,"height":12}},{"id":"4da708e8-a18d-45f8-9d18-8bfa95e703a2","block_type":"box","text":"a complete redemption of the investment at the end of the specified period in the case of CDSC shares. The taxes","page_number":186,"box":{"x":69,"y":603,"width":817,"height":11}},{"id":"0ee4afe0-b3e1-4630-9720-c46f4dba32e4","block_type":"box","text":"due on dividends are calculated by applying to each dividend the highest applicable marginal U.S. federal individual","page_number":186,"box":{"x":69,"y":618,"width":820,"height":12}},{"id":"7265a57c-6587-40ba-93b9-93254924eb74","block_type":"box","text":"income tax rates in effect on the reinvestment date for that dividend. The rates used correspond to the tax character","page_number":186,"box":{"x":70,"y":634,"width":833,"height":11}},{"id":"c321fd52-14d9-4f4e-ab62-db47733f70f3","block_type":"box","text":"(including eligibility for the maximum 20% tax rate applicable to qualified dividend income) of each dividend. The","page_number":186,"box":{"x":69,"y":649,"width":797,"height":11}},{"id":"3511719c-45dc-44c5-8b21-f9b3c340ec1c","block_type":"box","text":"taxable amount and tax character of each dividend are specified by each Fund on the dividend declaration date, but","page_number":186,"box":{"x":68,"y":664,"width":824,"height":11}},{"id":"402e4754-5a18-43e6-a56b-f5f7c22fa8e1","block_type":"box","text":"may be adjusted to reflect subsequent recharacterizations of distributions. The applicable tax rates may vary over the","page_number":186,"box":{"x":69,"y":679,"width":837,"height":11}},{"id":"c650ebd3-092b-4aa3-932d-8b0e952d2eed","block_type":"box","text":"measurement period. The effects of state and local taxes are not reflected. Applicable tax credits, such as foreign","page_number":186,"box":{"x":69,"y":694,"width":814,"height":11}},{"id":"b7eab3e3-83d5-4d56-8bb8-9191bbd6a780","block_type":"box","text":"credits, are taken into account according to U.S. federal tax law. The ending value is determined assuming complete","page_number":186,"box":{"x":69,"y":709,"width":830,"height":11}},{"id":"32b2604d-1856-4059-8e38-e0943f4dbcb4","block_type":"box","text":"redemption at the end of the applicable periods with no tax consequences associated with such redemption.","page_number":186,"box":{"x":69,"y":724,"width":774,"height":11}},{"id":"4ff45799-7735-4398-bdda-63975d3af8f5","block_type":"box","text":"Quotations of average annual total return, after taxes, on both dividends and redemption for the specified","page_number":186,"box":{"x":102,"y":747,"width":752,"height":11}},{"id":"22bb62d8-64aa-4e88-a3b4-87b81e7d85b3","block_type":"box","text":"periods are computed by finding the average annual compounded rates of return that would equate the initial amount","page_number":186,"box":{"x":70,"y":762,"width":835,"height":11}},{"id":"2766bdc3-bac7-4617-a08d-e1c79a0f6fce","block_type":"box","text":"invested to the ending value of such investment at the end of each period assuming payment of taxes on dividends","page_number":186,"box":{"x":70,"y":777,"width":820,"height":12}},{"id":"43f0dd91-0746-4618-8831-ef1d109194e3","block_type":"box","text":"received during such period as well as on complete redemption. Average annual total return after taxes on","page_number":186,"box":{"x":69,"y":792,"width":756,"height":12}},{"id":"7991c8e9-b2e0-46a0-a194-659483719e7a","block_type":"box","text":"distributions and redemption is computed assuming all dividends, less the taxes due on such dividends, are","page_number":186,"box":{"x":69,"y":808,"width":772,"height":11}},{"id":"a58b2324-9b83-4992-bba8-c8f0474eee16","block_type":"box","text":"reinvested and taking into account all applicable recurring and nonrecurring expenses, including the maximum sales","page_number":186,"box":{"x":69,"y":823,"width":827,"height":11}},{"id":"fba8032a-9121-4cae-befb-34a98a02007b","block_type":"box","text":"charge in the case of front-end load shares and the CDSC that would be applicable to a complete redemption of the","page_number":186,"box":{"x":69,"y":838,"width":825,"height":11}},{"id":"9f632daf-5d21-4e9b-86b0-936a270a6797","block_type":"box","text":"investment at the end of the specified period in the case of CDSC shares and assuming, for all classes of shares,","page_number":186,"box":{"x":70,"y":853,"width":812,"height":11}},{"id":"809c2561-8051-4d7d-b4ae-f5258224a545","block_type":"box","text":"complete redemption and payment of taxes due on such redemption. The ending value is determined assuming","page_number":186,"box":{"x":69,"y":868,"width":795,"height":11}},{"id":"dc3deef4-7e7a-48b2-85ae-3d63f58e36f2","block_type":"box","text":"complete redemption at the end of the applicable periods, subtracting capital gains taxes resulting from the","page_number":186,"box":{"x":69,"y":883,"width":768,"height":11}},{"id":"87f8ef20-d360-42ea-9e63-aec438569b4f","block_type":"box","text":"redemption and adding the presumed tax benefit from capital losses resulting from redemption. The taxes due on","page_number":186,"box":{"x":69,"y":898,"width":810,"height":11}},{"id":"26cc21a8-9bde-40ca-8ece-6994a12bce4a","block_type":"box","text":"II-137","page_number":186,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"4ded4a35-8759-4cde-9aa5-e1d151449b80","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":186,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2dbd12d9-63ab-467b-828e-2d554eb985be","block_type":"box","text":"dividends and on the deemed redemption are calculated by applying the highest applicable marginal U.S. federal","page_number":187,"box":{"x":69,"y":45,"width":802,"height":11}},{"id":"e9508c71-875f-4d01-946a-70479d4fba33","block_type":"box","text":"individual income tax rates in effect on the reinvestment and/or the redemption date. The rates used correspond to","page_number":187,"box":{"x":70,"y":60,"width":825,"height":11}},{"id":"81fef297-cccc-46df-ae97-bb0bcf26484c","block_type":"box","text":"the tax character (including eligibility for the maximum 20% tax rate applicable to qualified dividend income) of each","page_number":187,"box":{"x":68,"y":75,"width":823,"height":11}},{"id":"91b2b83f-e0e5-4144-98cd-9bc9dbd084f0","block_type":"box","text":"component of each dividend and/or the redemption payment. The applicable tax rates may vary over the","page_number":187,"box":{"x":69,"y":90,"width":743,"height":11}},{"id":"814d0483-4d78-469a-b104-c461d4ed124e","block_type":"box","text":"measurement period. The effects of state and local taxes are not reflected. Applicable tax credits, such as foreign","page_number":187,"box":{"x":69,"y":105,"width":814,"height":11}},{"id":"faec6fa0-78b4-43f9-b12b-186af1343eca","block_type":"box","text":"tax credits, are taken into account according to federal law.","page_number":187,"box":{"x":68,"y":120,"width":422,"height":12}},{"id":"0dac62f6-e7a6-40a3-befc-e423d7089bdb","block_type":"box","text":"A Fund also may quote annual, average annual and annualized total return and aggregate total return","page_number":187,"box":{"x":101,"y":143,"width":720,"height":11}},{"id":"58412647-86ab-4b39-8f9a-029b3690634f","block_type":"box","text":"performance data, both as a percentage and as a dollar amount based on a hypothetical investment of $1,000 or","page_number":187,"box":{"x":70,"y":157,"width":813,"height":12}},{"id":"c8e2066d-7071-4e25-83d3-f97367871f1a","block_type":"box","text":"some other amount, for various periods other than those noted in Part I of each Fund’s SAI. Such data will be","page_number":187,"box":{"x":69,"y":173,"width":781,"height":11}},{"id":"c7eb0f4c-9955-4cf6-a803-aca652df12de","block_type":"box","text":"computed as described above, except that (1) as required by the periods of the quotations, actual annual, annualized","page_number":187,"box":{"x":69,"y":188,"width":837,"height":11}},{"id":"c6e763d9-ce34-4ce8-a551-ab13c9708e61","block_type":"box","text":"or aggregate data, rather than average annual data, may be quoted and (2) the maximum applicable sales charges","page_number":187,"box":{"x":69,"y":203,"width":817,"height":12}},{"id":"0fb6f203-79a4-40e4-8f9a-f092ffaa7ddc","block_type":"box","text":"will not be included with respect to annual or annualized rates of return calculations. Aside from the impact on the","page_number":187,"box":{"x":68,"y":218,"width":815,"height":11}},{"id":"c67089b5-202c-4b81-9faa-6befc2f33cf6","block_type":"box","text":"performance data calculations of including or excluding the maximum applicable sales charges, actual annual or","page_number":187,"box":{"x":70,"y":234,"width":801,"height":11}},{"id":"0b7ee336-f51b-43ce-957d-abf1a3692502","block_type":"box","text":"annualized total return data generally will be lower than average annual total return data since the average rates of","page_number":187,"box":{"x":69,"y":249,"width":819,"height":11}},{"id":"99dd8e12-729a-4bb6-a5e0-cf70e7a6e914","block_type":"box","text":"return reflect compounding of return; aggregate total return data generally will be higher than average annual total","page_number":187,"box":{"x":69,"y":264,"width":811,"height":11}},{"id":"25773788-a299-42fa-971e-b8be4cd78d1d","block_type":"box","text":"return data since the aggregate rates of return reflect compounding over a longer period of time.","page_number":187,"box":{"x":69,"y":279,"width":686,"height":11}},{"id":"95ab0f7a-c476-4fd8-bbdc-d1b36147b49a","block_type":"box","text":"Yield quotations will be computed based on a 30-day period by dividing (a) the net income based on the yield of","page_number":187,"box":{"x":101,"y":302,"width":796,"height":11}},{"id":"a046488c-3362-4e16-a8b5-27ee4e5d593b","block_type":"box","text":"each security earned during the period by (b) the average daily number of shares outstanding during the period that","page_number":187,"box":{"x":69,"y":317,"width":821,"height":11}},{"id":"a81fc1c2-66e3-4937-ae04-42fbbdbc0577","block_type":"box","text":"were entitled to receive dividends multiplied by the maximum offering price per share on the last day of the period.","page_number":187,"box":{"x":68,"y":332,"width":817,"height":11}},{"id":"69e4b1e5-e7ff-4244-815f-6788c5e4c4b2","block_type":"box","text":"Tax equivalent yield quotations will be computed by dividing (a) the part of a Fund’s yield that is tax-exempt by (b) one","page_number":187,"box":{"x":68,"y":347,"width":837,"height":11}},{"id":"bdc0d6dd-3b67-42ae-9c4c-b85a5efd4e48","block_type":"box","text":"minus a stated tax rate and adding the result to that part, if any, of the Fund’s yield that is not tax-exempt.","page_number":187,"box":{"x":69,"y":362,"width":759,"height":11}},{"id":"80c8be07-be42-4f07-abde-f763445d05a8","block_type":"box","text":"A Fund’s total return will vary depending on market conditions, the securities comprising a Fund’s portfolio, a","page_number":187,"box":{"x":101,"y":385,"width":779,"height":11}},{"id":"72a7422c-2b68-4cd1-a637-1d098da78b9b","block_type":"box","text":"Fund’s operating expenses and the amount of realized and unrealized net capital gains or losses during the period.","page_number":187,"box":{"x":70,"y":400,"width":819,"height":11}},{"id":"badf2fbc-da74-4e11-b3a0-2836c827bfbe","block_type":"box","text":"The value of an investment in a Fund will fluctuate and an investor’s shares, when redeemed, may be worth more or","page_number":187,"box":{"x":68,"y":415,"width":830,"height":11}},{"id":"15ea0511-b4d9-4898-aa36-4a0825a9f757","block_type":"box","text":"less than their original cost.","page_number":187,"box":{"x":70,"y":430,"width":196,"height":11}},{"id":"90249044-3d53-4aff-9ca8-cee4294ca888","block_type":"box","text":"In order to reflect the reduced sales charges in the case of front-end load shares or the waiver of the CDSC in","page_number":187,"box":{"x":102,"y":453,"width":782,"height":11}},{"id":"786d6c47-ffda-4c09-8017-5922280a6ea3","block_type":"box","text":"the case of CDSC shares applicable to certain investors, as described under “Purchase of Shares” and “Redemption","page_number":187,"box":{"x":68,"y":468,"width":836,"height":11}},{"id":"4ef6e102-4dcb-4f31-8fca-3acd9873eb88","block_type":"box","text":"of Shares,” respectively, the total return data quoted by a Fund in advertisements directed to such investors may","page_number":187,"box":{"x":69,"y":483,"width":807,"height":11}},{"id":"098d8a65-1edb-40b7-9877-b45c6294051c","block_type":"box","text":"take into account the reduced, and not the maximum, sales charge or may take into account the CDSC waiver and,","page_number":187,"box":{"x":68,"y":498,"width":820,"height":11}},{"id":"0f258f1b-4987-444b-b847-bcba43e8f51b","block_type":"box","text":"therefore, may reflect greater total return since, due to the reduced sales charges or the waiver of sales charges, a","page_number":187,"box":{"x":68,"y":513,"width":824,"height":12}},{"id":"47147380-1f30-479e-b89d-290aaebfd6a4","block_type":"box","text":"lower amount of expenses is deducted.","page_number":187,"box":{"x":70,"y":528,"width":278,"height":11}},{"id":"dd95a16d-736d-489e-b7ed-f3e4b8cfc65f","block_type":"box","text":"On occasion, a Fund may compare its performance to, among other things, the Fund’s benchmark index","page_number":187,"box":{"x":102,"y":551,"width":741,"height":11}},{"id":"2b82f020-634f-44ef-a52b-876d005c1ff3","block_type":"box","text":"indicated in the Prospectus, the Value Line Composite Index, the Dow Jones Industrial Average, or to other published","page_number":187,"box":{"x":70,"y":566,"width":830,"height":11}},{"id":"067af87c-6546-4ef6-a156-8542920bd3b3","block_type":"box","text":"indices, or to performance data published by Lipper Inc., Morningstar, Inc. (“Morningstar”),","page_number":187,"box":{"x":70,"y":581,"width":646,"height":12}},{"id":"498fad9d-43fe-4787-9889-7012fa978bc4","block_type":"box","text":"Money Magazine, U.S.","page_number":187,"box":{"x":724,"y":581,"width":156,"height":12}},{"id":"516bd691-77ab-4c40-acc8-25a11cc67c8b","block_type":"box","text":"News & World Repor t, BusinessWeek, Forbes Magazine, For tune Magazine","page_number":187,"box":{"x":70,"y":597,"width":533,"height":11}},{"id":"e4936c1b-4699-4c4e-9be9-0ebd4681b550","block_type":"box","text":"or other industry publications. When","page_number":187,"box":{"x":608,"y":597,"width":257,"height":11}},{"id":"5122af9c-95ee-48f2-ab2e-ab6580be6e3a","block_type":"box","text":"comparing its performance to a market index, a Fund may refer to various statistical measures derived from the","page_number":187,"box":{"x":69,"y":612,"width":797,"height":11}},{"id":"a34b6b0d-b8b9-461b-9c3d-c916ffefaafd","block_type":"box","text":"historical performance of a Fund and the index, such as standard deviation and beta. As with other performance","page_number":187,"box":{"x":69,"y":627,"width":803,"height":11}},{"id":"f78c09a1-c869-440e-96f4-00d597bad07b","block_type":"box","text":"data, performance comparisons should not be considered indicative of a Fund’s relative performance for any future","page_number":187,"box":{"x":69,"y":642,"width":824,"height":11}},{"id":"74feeef5-d3ee-4214-9fcf-41168f67742d","block_type":"box","text":"period. In addition, from time to time a Fund may include the Fund’s Morningstar risk-adjusted performance ratings","page_number":187,"box":{"x":70,"y":657,"width":818,"height":11}},{"id":"6dced101-c8ab-4451-afc1-00bee9b3017f","block_type":"box","text":"assigned by Morningstar in advertising or supplemental sales literature. From time to time a Fund may quote in","page_number":187,"box":{"x":69,"y":672,"width":793,"height":11}},{"id":"eaa27f1c-3d28-4fc4-b313-f8307a2e6fd9","block_type":"box","text":"advertisements or other materials other applicable measures of Fund performance and may also make reference to","page_number":187,"box":{"x":69,"y":687,"width":826,"height":11}},{"id":"fda959d3-1928-46d8-a4cc-57c25e476964","block_type":"box","text":"awards that may be given to the Manager. Certain Funds may also compare their performance to composite indices","page_number":187,"box":{"x":69,"y":702,"width":825,"height":12}},{"id":"95c66a35-80b6-4462-82d8-d211976191c3","block_type":"box","text":"developed by Fund management.","page_number":187,"box":{"x":69,"y":718,"width":233,"height":11}},{"id":"fa67bc39-024c-4248-b8ee-e643478f822b","block_type":"box","text":"A Fund may provide information designed to help investors understand how the Fund is seeking to achieve its","page_number":187,"box":{"x":101,"y":740,"width":780,"height":11}},{"id":"8d3c29a1-04d9-464f-a169-a983b405cad9","block_type":"box","text":"investment objectives. This may include information about past, current or possible economic, market, political or","page_number":187,"box":{"x":70,"y":755,"width":810,"height":11}},{"id":"6d767787-0023-496a-8bea-86ff678238b1","block_type":"box","text":"other conditions, descriptive information or general principles of investing such as asset allocation, diversification","page_number":187,"box":{"x":69,"y":770,"width":810,"height":12}},{"id":"568efcc6-1a04-4311-bf80-dd3453f5486a","block_type":"box","text":"and risk tolerance, discussion of a Fund’s portfolio composition, investment philosophy, strategy or investment","page_number":187,"box":{"x":69,"y":785,"width":792,"height":12}},{"id":"2ec64800-dc8c-4f67-a40a-07b315ae3cfa","block_type":"box","text":"techniques, comparisons of the Fund’s performance or portfolio composition to that of other funds or types of","page_number":187,"box":{"x":68,"y":801,"width":788,"height":11}},{"id":"752cec32-96ac-4a48-a889-82bcbee3015a","block_type":"box","text":"investments, indices relevant to the comparison being made, or to a hypothetical or model portfolio. A Fund may also","page_number":187,"box":{"x":70,"y":816,"width":835,"height":11}},{"id":"db98ad1b-407a-4e5c-8c40-27a741a982ae","block_type":"box","text":"quote various measures of volatility and benchmark correlation in advertising and other materials, and may compare","page_number":187,"box":{"x":69,"y":831,"width":830,"height":11}},{"id":"7943b745-8656-4a71-9d13-aa03e73ec073","block_type":"box","text":"these measures to those of other funds or types of investments.","page_number":187,"box":{"x":68,"y":846,"width":461,"height":11}},{"id":"6aaf4a7e-fd75-4307-b1c6-829421736802","block_type":"box","text":"II-138","page_number":187,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"3c7d32f6-209a-49b5-abcb-417e60c04f87","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":187,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"333d176c-094a-4fbd-96f4-e9e8850be458","block_type":"box","text":"PROXY VOTING POLICIES AND PROCEDURES","page_number":188,"box":{"x":308,"y":45,"width":362,"height":10}},{"id":"2fbf3490-f656-4331-a21b-556e87884e55","block_type":"box","text":"The Board of Directors of the Funds has delegated the voting of proxies for the Funds’ securities to the Manager","page_number":188,"box":{"x":101,"y":68,"width":802,"height":11}},{"id":"7af7f18e-17b5-4e09-a141-08a90fa24808","block_type":"box","text":"pursuant to (i) the Open-End Active and Fixed Income Index Fund Proxy Voting Policy (the “Active Fund Proxy Voting","page_number":188,"box":{"x":70,"y":83,"width":809,"height":11}},{"id":"25cdd357-cbd2-4494-9910-369e6f4dc6bb","block_type":"box","text":"Policy”), with respect to certain Funds, and (ii) the Index Equity Fund Proxy Voting Policy, with respect to certain other","page_number":188,"box":{"x":69,"y":98,"width":833,"height":11}},{"id":"ff5eecb2-4dea-4104-b4f4-028c2e166760","block_type":"box","text":"Funds, as applicable. Please refer to Part I of this SAI, which discloses the policy applicable to each Fund.","page_number":188,"box":{"x":70,"y":113,"width":755,"height":11}},{"id":"f7dd7552-2095-4d1f-8605-31363f643b1d","block_type":"box","text":"With respect to Funds covered by the Active Fund Proxy Voting Policy, the Manager has adopted the BlackRock","page_number":188,"box":{"x":101,"y":136,"width":785,"height":11}},{"id":"5e080b87-32d0-401c-a643-2d87ed8889e8","block_type":"box","text":"Active Investment Stewardship—Global Engagement and Voting Guidelines (the “BAIS Guidelines”). Certain of such","page_number":188,"box":{"x":68,"y":151,"width":822,"height":11}},{"id":"940ac09f-3a0a-4645-aa72-6b677e6c39d3","block_type":"box","text":"Funds, as listed within the Active Fund Proxy Voting Policy and as disclosed in Part I of this SAI, follow supplemental","page_number":188,"box":{"x":70,"y":166,"width":824,"height":11}},{"id":"bd83e0ed-19da-44ba-8390-eafc222046f3","block_type":"box","text":"guidelines within the BAIS Guidelines that are applicable to certain climate and decarbonization issues (the “BAIS","page_number":188,"box":{"x":68,"y":181,"width":812,"height":12}},{"id":"f058d617-d288-42eb-a34e-592a86e85966","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines”).","page_number":188,"box":{"x":69,"y":197,"width":392,"height":10}},{"id":"555cc921-c7fe-41c8-ab9d-bab875e00610","block_type":"box","text":"With respect to Funds covered by the Index Equity Fund Proxy Voting Policy, the Manager has adopted the","page_number":188,"box":{"x":101,"y":219,"width":749,"height":11}},{"id":"b2eb88e8-ef20-4252-8366-d1b7f48329ad","block_type":"box","text":"BlackRock Investment Stewardship (“BIS”) Global Benchmark Policy, comprised of the Global Principles for","page_number":188,"box":{"x":70,"y":234,"width":759,"height":11}},{"id":"f09f0116-3f93-4506-b1e3-49083915996c","block_type":"box","text":"Benchmark Policies, regional voting guidelines, and engagement priorities, which are each available upon request. In","page_number":188,"box":{"x":70,"y":250,"width":830,"height":11}},{"id":"ea266946-1024-40a0-8783-0bdf1e3598c3","block_type":"box","text":"addition, certain of such Funds, as listed within the Index Equity Fund Proxy Voting Policy and as disclosed in Part I of","page_number":188,"box":{"x":69,"y":264,"width":838,"height":12}},{"id":"e6c9a732-0bac-4fdc-ba9b-33fc9c3d9a8b","block_type":"box","text":"this SAI, follow supplemental guidelines that are applicable to certain climate and decarbonization issues (the “BIS","page_number":188,"box":{"x":68,"y":280,"width":822,"height":11}},{"id":"eb23b826-112b-4b74-83dc-0c2f7b69c398","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines”).","page_number":188,"box":{"x":69,"y":295,"width":392,"height":11}},{"id":"3b79487d-ccb1-404e-ba56-e9b3c808ce5e","block_type":"box","text":"If a Fund invests in an underlying fund managed by BlackRock, the Fund will use its proxy voting policy when","page_number":188,"box":{"x":102,"y":317,"width":767,"height":12}},{"id":"3ecade4f-713e-4903-ae8e-9f0f94c4b86b","block_type":"box","text":"voting on proxies for the underlying fund while the underlying fund will use its proxy voting policy when voting proxies","page_number":188,"box":{"x":68,"y":332,"width":827,"height":12}},{"id":"db074f96-ca10-4746-a16c-0bd7bd4a47bc","block_type":"box","text":"on investments the underlying fund holds. Therefore, the Fund may use the Active Fund Proxy Voting Policy while an","page_number":188,"box":{"x":69,"y":348,"width":819,"height":11}},{"id":"59cea614-85e1-421a-96ff-5d2a8bcb1ea6","block_type":"box","text":"underlying fund may use the Index Equity Fund Proxy Voting Policy, and the opposite is also true.","page_number":188,"box":{"x":69,"y":363,"width":684,"height":11}},{"id":"dec9d098-c543-4adb-a432-bd7834d44845","block_type":"box","text":"Copies of the Active Fund Proxy Voting Policy, Index Equity Fund Proxy Voting Policy, the BAIS Guidelines, the","page_number":188,"box":{"x":102,"y":385,"width":766,"height":12}},{"id":"c2ab3c61-ad3e-4a8a-88d7-3a324c35adbb","block_type":"box","text":"Global Principles for Benchmark Policies and the BIS Climate and Decarbonization Stewardship Guidelines are","page_number":188,"box":{"x":69,"y":401,"width":784,"height":11}},{"id":"44a93771-ffe4-4c4e-b749-bc3ba7099552","block_type":"box","text":"attached as Appendix B to this SAI. Only those guidelines that are applicable to a particular Fund pursuant to the","page_number":188,"box":{"x":69,"y":416,"width":805,"height":11}},{"id":"0aa8b005-ea8f-42b6-bb15-ad0934e68be1","block_type":"box","text":"Active Fund Proxy Voting Policy or the Index Equity Fund Proxy Voting Policy are considered to form a part of the","page_number":188,"box":{"x":68,"y":431,"width":790,"height":11}},{"id":"57e9e6bf-3d53-49d9-8d07-23af375ce94d","block_type":"box","text":"Fund’s SAI. Information on how each Fund voted proxies relating to portfolio securities during the most recent 12-","page_number":188,"box":{"x":70,"y":446,"width":810,"height":11}},{"id":"5b19784d-3151-428a-a750-d832cdff4baf","block_type":"box","text":"month period ended June 30 is available without charge, (i) at www.blackrock.com/proxyrecords and (ii) on the","page_number":188,"box":{"x":69,"y":461,"width":788,"height":11}},{"id":"98fbf17b-7f48-447b-aee4-68814c774f35","block_type":"box","text":"Commission’s website at http://www.sec.gov.","page_number":188,"box":{"x":69,"y":476,"width":327,"height":11}},{"id":"3902fff5-d8a3-4b81-b9b1-0ac0b05d31ec","block_type":"box","text":"GENERAL INFORMATION","page_number":188,"box":{"x":391,"y":506,"width":195,"height":9}},{"id":"b53118f6-fa46-4b87-97f1-31f356ca809b","block_type":"box","text":"Description of Shares","page_number":188,"box":{"x":69,"y":536,"width":156,"height":11}},{"id":"8e395fad-5f6b-4d8e-b5ef-4c9d8e9f649e","block_type":"box","text":"Shareholders of a Fund are entitled to one vote for each full share held and fractional votes for fractional shares","page_number":188,"box":{"x":102,"y":559,"width":800,"height":9}},{"id":"f028c2a5-d56d-4238-bac4-ea37a644c0a3","block_type":"box","text":"held in the election of Directors and generally on other matters submitted to the vote of shareholders of the Fund.","page_number":188,"box":{"x":69,"y":574,"width":811,"height":11}},{"id":"fe6a8eb0-4ade-44bf-b480-7a4828006d21","block_type":"box","text":"Shareholders of a class that bears distribution and/or service expenses have exclusive voting rights with respect to","page_number":188,"box":{"x":69,"y":589,"width":825,"height":11}},{"id":"c677eeb1-aa00-489d-bd4a-c9bf3f746787","block_type":"box","text":"matters relating to such distribution and service expenditures. Voting rights are not cumulative, so that the holders of","page_number":188,"box":{"x":69,"y":604,"width":838,"height":11}},{"id":"fcd0f609-573e-4199-84ae-82d2e1645c61","block_type":"box","text":"more than 50% of the shares voting in the election of Directors can, if they choose to do so, elect all the Directors of","page_number":188,"box":{"x":69,"y":619,"width":835,"height":11}},{"id":"09abfb0a-6da2-4672-810a-58f5022048d6","block_type":"box","text":"a Fund, in which event the holders of the remaining shares would be unable to elect any person as a Director.","page_number":188,"box":{"x":69,"y":634,"width":781,"height":12}},{"id":"eb566e8d-1ea1-4aed-960b-d250a6cb0647","block_type":"box","text":"No Fund intends to hold annual meetings of shareholders in any year in which the Investment Company Act does","page_number":188,"box":{"x":102,"y":657,"width":801,"height":11}},{"id":"2c78103e-a973-45a2-ac97-4e168882423c","block_type":"box","text":"not require shareholders to act upon any of the following matters: (i) election of Directors; (ii) approval of a","page_number":188,"box":{"x":69,"y":672,"width":760,"height":11}},{"id":"a9756855-beca-4752-a8f6-18331251d8a0","block_type":"box","text":"management agreement; (iii) approval of a distribution agreement; and (iv) ratification of selection of independent","page_number":188,"box":{"x":69,"y":687,"width":810,"height":11}},{"id":"595861b6-656c-4124-a269-1a42bb19cafd","block_type":"box","text":"accountants. Shares issued are fully paid and non-assessable and have no preemptive rights. Redemption and","page_number":188,"box":{"x":69,"y":702,"width":790,"height":12}},{"id":"5f9d42cc-a1dc-4d13-9dab-8aeecab3a4f3","block_type":"box","text":"conversion rights are discussed elsewhere herein and in each Fund’s Prospectus. Each share of each class of","page_number":188,"box":{"x":69,"y":717,"width":787,"height":12}},{"id":"593a5ff5-21b3-4dc9-bf23-a4a20f12956a","block_type":"box","text":"Common Stock is entitled to participate equally in dividends and distributions declared by a Fund and in the net","page_number":188,"box":{"x":69,"y":733,"width":797,"height":11}},{"id":"445fb1c8-6bfc-4f91-8cb8-d808860280fe","block_type":"box","text":"assets of the Fund upon liquidation or dissolution after satisfaction of outstanding liabilities.","page_number":188,"box":{"x":69,"y":748,"width":658,"height":11}},{"id":"dba31fcc-5216-4d88-a8b0-cdefe3f2e199","block_type":"box","text":"For Funds organized as Maryland corporations, the by-laws of the Fund require that a special meeting of","page_number":188,"box":{"x":102,"y":770,"width":741,"height":12}},{"id":"778dd854-d114-45d3-8805-17ce7da277c8","block_type":"box","text":"shareholders be held upon the written request of a minimum percentage of the outstanding shares of the Fund","page_number":188,"box":{"x":69,"y":785,"width":790,"height":12}},{"id":"a38fd422-c825-4de4-8fbb-88d3d6e109fe","block_type":"box","text":"entitled to vote at such meeting, if they comply with applicable Maryland law.","page_number":188,"box":{"x":69,"y":801,"width":546,"height":11}},{"id":"653cd2a0-2d8d-4b6c-83ab-149f02df5c1f","block_type":"box","text":"Certain of the Funds are organized as “Massachusetts business trusts.” Under Massachusetts law,","page_number":188,"box":{"x":102,"y":823,"width":712,"height":12}},{"id":"577427a8-fb2e-4370-b0d2-d39c38bd0f76","block_type":"box","text":"shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its","page_number":188,"box":{"x":69,"y":838,"width":765,"height":11}},{"id":"2de90234-57fb-4bf0-bf21-3ce67a058dbf","block_type":"box","text":"obligations. However, the Declaration of Trust establishing a trust, a copy of which for each applicable Fund, together","page_number":188,"box":{"x":69,"y":853,"width":834,"height":12}},{"id":"6e30f4e2-d8bc-4ee3-a170-07d83071e5f6","block_type":"box","text":"with all amendments thereto (the “Declaration of Trust”), is on file in the office of the Secretary of the","page_number":188,"box":{"x":68,"y":869,"width":729,"height":11}},{"id":"18af5d05-f5e1-4197-b4d6-128f9e3ceeb4","block_type":"box","text":"Commonwealth of Massachusetts, contains an express disclaimer of shareholder liability for acts or obligations of","page_number":188,"box":{"x":69,"y":884,"width":815,"height":11}},{"id":"00690c14-929a-4670-ad62-dfa607e15c7c","block_type":"box","text":"the trust and provides for indemnification and reimbursement of expenses out of the trust property for any","page_number":188,"box":{"x":68,"y":899,"width":761,"height":11}},{"id":"08471d0e-b596-4142-9073-1ecc6a93fc54","block_type":"box","text":"II-139","page_number":188,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"5a82e877-9aa5-4ddb-93be-936ac158881a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":188,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"502a7483-595a-49cf-b5c0-dec9042b4f6f","block_type":"box","text":"shareholder held personally liable for the obligations of the trust. The Declaration of Trust also provides that a trust","page_number":189,"box":{"x":69,"y":45,"width":824,"height":11}},{"id":"9d3db59a-fe46-472a-80c4-7c3f7de6a108","block_type":"box","text":"may maintain appropriate insurance (for example, fidelity bond and errors and omissions insurance) for the protection","page_number":189,"box":{"x":69,"y":60,"width":839,"height":11}},{"id":"92659254-2ca6-4cd2-9e53-d8d8d3e421da","block_type":"box","text":"of the trust, its shareholders, trustees, officers, employees and agents covering possible tort and other liabilities.","page_number":189,"box":{"x":69,"y":75,"width":813,"height":11}},{"id":"f42fce6d-15ee-411a-a901-48d5fb9e611b","block_type":"box","text":"Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances","page_number":189,"box":{"x":68,"y":90,"width":827,"height":11}},{"id":"f1f46650-78c9-4204-ab32-c2eef6677273","block_type":"box","text":"in which both inadequate insurance existed and the trust itself was unable to meet its obligations.","page_number":189,"box":{"x":70,"y":105,"width":699,"height":11}},{"id":"fe959aef-cdb4-43d3-932f-3758332cc0af","block_type":"box","text":"Certain Funds are organized as Delaware statutory trusts.","page_number":189,"box":{"x":102,"y":128,"width":413,"height":11}},{"id":"6ea9d7fe-e416-433a-a2eb-86ba7e44286d","block_type":"box","text":"Additional Information","page_number":189,"box":{"x":68,"y":158,"width":161,"height":9}},{"id":"980bea96-c03f-45bf-8218-1012554d7ada","block_type":"box","text":"Under a separate agreement, BlackRock has granted certain Funds the right to use the “BlackRock” name and","page_number":189,"box":{"x":102,"y":181,"width":789,"height":11}},{"id":"61bb639d-1601-488e-b541-5a2d1ebe27f5","block_type":"box","text":"has reserved the right to (i) withdraw its consent to the use of such name by a Fund if the Fund ceases to retain","page_number":189,"box":{"x":69,"y":196,"width":799,"height":11}},{"id":"aaa9eb6f-72c2-4216-8bdb-00d76db5c65b","block_type":"box","text":"BlackRock Advisors, LLC or BlackRock Fund Advisors, as applicable, as investment adviser and (ii) to grant the use of","page_number":189,"box":{"x":70,"y":211,"width":837,"height":11}},{"id":"e5fe5be6-c974-4376-a2f1-71ff0e8b7b66","block_type":"box","text":"such name to any other company.","page_number":189,"box":{"x":69,"y":226,"width":238,"height":11}},{"id":"4cf456e8-f7ce-4cf1-a711-6531896caa44","block_type":"box","text":"II-140","page_number":189,"box":{"x":468,"y":943,"width":42,"height":9}},{"id":"cd2fa0b6-88cf-469c-b76e-7fdcddcec989","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":189,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"aaadafac-8ed7-470a-8a65-d5029e7e3c7a","block_type":"box","text":"APPENDIX A","page_number":190,"box":{"x":438,"y":45,"width":101,"height":10}},{"id":"4c94db84-02e9-4134-bc9e-dc11576c48b9","block_type":"box","text":"Description of Bond Ratings","page_number":190,"box":{"x":377,"y":68,"width":224,"height":13}},{"id":"13e97d56-c699-4ac6-a00d-a65d085a20af","block_type":"box","text":"A rating is generally assigned to a fixed-income security at the time of issuance by a credit rating agency","page_number":190,"box":{"x":101,"y":91,"width":743,"height":12}},{"id":"4970ae89-661b-45aa-963a-64b66d508a91","block_type":"box","text":"designated as a nationally recognized statistical rating organization (“NRSRO”) by the Securities and Exchange","page_number":190,"box":{"x":69,"y":106,"width":787,"height":12}},{"id":"0b6b4e24-c57a-457c-a43d-d53da5a928c8","block_type":"box","text":"Commission (“SEC”). While NRSROs may from time to time revise such ratings, they undertake no obligation to do","page_number":190,"box":{"x":69,"y":121,"width":817,"height":12}},{"id":"5869302e-a600-43a6-904a-32d42b2ffb70","block_type":"box","text":"so, and the ratings given to securities at issuance do not necessarily represent ratings which would be given to these","page_number":190,"box":{"x":69,"y":137,"width":837,"height":11}},{"id":"ae391a67-d9f8-410f-9230-593825647ba8","block_type":"box","text":"securities on a particular subsequent date.","page_number":190,"box":{"x":69,"y":152,"width":306,"height":11}},{"id":"ce02d26f-0a89-4982-b0d3-1bada8db2226","block_type":"box","text":"NRSROs may rate specific investments (","page_number":190,"box":{"x":102,"y":174,"width":286,"height":12}},{"id":"c3a23e8c-582c-4069-adef-94b39b2ffbe0","block_type":"box","text":"e.g.","page_number":190,"box":{"x":390,"y":176,"width":25,"height":10}},{"id":"4b4f873f-f5c0-4fcb-b0bd-562fd546b9e8","block_type":"box","text":", bonds), issuers (","page_number":190,"box":{"x":417,"y":175,"width":128,"height":10}},{"id":"1d79521f-9a44-42a0-8840-e002414f782d","block_type":"box","text":"e.g.","page_number":190,"box":{"x":547,"y":176,"width":25,"height":10}},{"id":"b6886f75-414d-472a-88f6-ff40130db997","block_type":"box","text":", corporations, governments and financial","page_number":190,"box":{"x":574,"y":174,"width":293,"height":12}},{"id":"138c2aee-b68d-4f6c-ba01-56df5fb4cf97","block_type":"box","text":"institutions) and/or programs (","page_number":190,"box":{"x":70,"y":190,"width":217,"height":11}},{"id":"674fa3d0-6bde-45e2-8271-9e0b55850afd","block_type":"box","text":"e.g.","page_number":190,"box":{"x":289,"y":191,"width":25,"height":10}},{"id":"7921d33b-97d1-4e84-937b-1e7009cf9aa0","block_type":"box","text":", commercial paper programs). However, certain types of investments may not be","page_number":190,"box":{"x":317,"y":189,"width":578,"height":12}},{"id":"9fb45b9c-6b58-4fbb-ace6-6c7ebaad6dac","block_type":"box","text":"rated by NRSROs, such as certain government/sovereign obligations, US agency securities, commercial paper, time","page_number":190,"box":{"x":69,"y":205,"width":826,"height":11}},{"id":"0a878011-430f-44d3-8a08-4f90f8e6b1bf","block_type":"box","text":"deposits at financial institutions, and derivative instruments such as credit default swaps. For these types of","page_number":190,"box":{"x":69,"y":220,"width":777,"height":11}},{"id":"a963107c-6b0d-43cf-913b-8c5e59e35612","block_type":"box","text":"investments, as well as US Treasury securities (some of which are not rated), where an NRSRO has not rated the","page_number":190,"box":{"x":70,"y":235,"width":807,"height":11}},{"id":"0255ebb9-b0b9-4d74-9d76-ac00690f400a","block_type":"box","text":"specific investment but has rated the investment’s issuer, program, financial institution or underlying reference","page_number":190,"box":{"x":69,"y":250,"width":791,"height":11}},{"id":"b49f5560-d703-4602-a4bd-3a877a75dfac","block_type":"box","text":"asset, BlackRock Advisors, LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider","page_number":190,"box":{"x":69,"y":265,"width":816,"height":11}},{"id":"897c7ecd-3088-4eb8-af34-bc268f495de2","block_type":"box","text":"the investment to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":190,"box":{"x":68,"y":280,"width":812,"height":12}},{"id":"0e5fe038-adf4-447f-8980-8d93c8de0da9","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings for the same","page_number":190,"box":{"x":69,"y":295,"width":815,"height":12}},{"id":"2dd59ea7-f26e-437d-abb8-0cc77c0bcb03","block_type":"box","text":"security (","page_number":190,"box":{"x":69,"y":311,"width":63,"height":11}},{"id":"ec67759b-1ea6-426a-b7ce-3bd70e43e553","block_type":"box","text":"e.g.","page_number":190,"box":{"x":134,"y":312,"width":25,"height":10}},{"id":"a52ee70f-29fe-4a8b-b449-fe2a4529eb0c","block_type":"box","text":", “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider the security to have the","page_number":190,"box":{"x":161,"y":311,"width":730,"height":11}},{"id":"9b4c0747-3816-4f60-b4aa-c08d68414e0d","block_type":"box","text":"highest of the multiple ratings.","page_number":190,"box":{"x":69,"y":326,"width":216,"height":11}},{"id":"2e7cca9b-0d47-480c-a25f-672133b99437","block_type":"box","text":"New issue securities (regardless of type) may not be rated by an NRSRO at the time of their initial offering.","page_number":190,"box":{"x":102,"y":348,"width":760,"height":12}},{"id":"2b08b95c-e490-49a5-ba9e-601ef13171d8","block_type":"box","text":"Preliminary prospectuses or term sheets for new issue securities may include an expected rating for the security (as","page_number":190,"box":{"x":69,"y":363,"width":830,"height":12}},{"id":"cd566052-2f8d-4010-82de-02202b64b97a","block_type":"box","text":"determined by the underwriter and/or issuer) or an NRSRO rating for the issuer of the security. If applicable, when","page_number":190,"box":{"x":69,"y":378,"width":812,"height":12}},{"id":"a95764b2-5f18-44d0-841b-55ec317ebad3","block_type":"box","text":"deciding whether to purchase a new issue security that has not yet been rated by an NRSRO, BlackRock may","page_number":190,"box":{"x":69,"y":394,"width":776,"height":11}},{"id":"f878e87b-a4d6-441c-a82d-86e4f23aedb0","block_type":"box","text":"attribute an expected rating to the security based on: (i) the expected rating of the security set forth in the","page_number":190,"box":{"x":69,"y":409,"width":756,"height":11}},{"id":"61d054e7-896c-46a6-9225-f02126a1a903","block_type":"box","text":"preliminary prospectus or term sheet for the security; (ii) the NRSRO’s rating for the issuer of the security set forth in","page_number":190,"box":{"x":70,"y":424,"width":835,"height":11}},{"id":"a707dd4b-243e-4efd-ac2b-f1a8c5facd38","block_type":"box","text":"the preliminary prospectus or term sheet for the security; or (iii) with respect to asset-backed securities, the rating of","page_number":190,"box":{"x":68,"y":439,"width":836,"height":11}},{"id":"96d9a81b-970e-4a8f-9804-f31792db396c","block_type":"box","text":"a prior issuance having a similar structure or the same sponsor.","page_number":190,"box":{"x":69,"y":454,"width":456,"height":11}},{"id":"11485a7c-c04d-4581-8fa5-b5e9cd63a0d1","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit ratings","page_number":190,"box":{"x":101,"y":477,"width":771,"height":11}},{"id":"ef355ba1-6590-4267-8e53-798606b33352","block_type":"box","text":"eligibility criteria as part of its index methodology, the fund may purchase any security within the index, such security","page_number":190,"box":{"x":69,"y":492,"width":832,"height":11}},{"id":"d8bfa01d-9dbb-4fff-9c6b-8e90d50694b4","block_type":"box","text":"having been determined by the index provider as meeting its credit ratings eligibility criteria. The credit ratings","page_number":190,"box":{"x":69,"y":507,"width":782,"height":11}},{"id":"38f127b3-c7d6-4597-a685-87f93ada5e8c","block_type":"box","text":"practices of an index provider may differ from BlackRock’s practices, as described above. Further, the fund may","page_number":190,"box":{"x":70,"y":522,"width":796,"height":11}},{"id":"0257ae95-5bba-4ebf-8cf2-886478e87be5","block_type":"box","text":"invest, directly or indirectly, in securities that are not rated by a rating agency or securities with a credit rating that","page_number":190,"box":{"x":70,"y":537,"width":811,"height":12}},{"id":"353b7257-d4ff-4564-96e5-dedb039522b6","block_type":"box","text":"differs from the credit rating specified in its index methodology in various circumstances, including where a security is","page_number":190,"box":{"x":69,"y":552,"width":840,"height":12}},{"id":"cbf8d567-8a84-4867-8aaf-ac1711ecc5fc","block_type":"box","text":"downgraded but not yet removed from an index, following the removal of a security from an index prior to its sale by","page_number":190,"box":{"x":69,"y":567,"width":824,"height":12}},{"id":"94944dc8-925b-47ee-a851-cc66c8107370","block_type":"box","text":"the fund or as a result of a corporate action or restructuring affecting an issuer of a security held by the fund.","page_number":190,"box":{"x":68,"y":583,"width":781,"height":11}},{"id":"3019e977-b93b-44a7-b77e-11b7b51caa8a","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to pay","page_number":190,"box":{"x":102,"y":606,"width":756,"height":10}},{"id":"00abdb9d-73f1-4cb7-8274-21db0b0f7451","block_type":"box","text":"interest or repay principal which are similar to the risks of lower-rated speculative bonds (although BlackRock may","page_number":190,"box":{"x":70,"y":620,"width":811,"height":12}},{"id":"3be67094-af65-40be-bd12-6858b84145d7","block_type":"box","text":"deem such unrated securities to be of higher quality). Evaluation of these securities is dependent on BlackRock’s","page_number":190,"box":{"x":69,"y":635,"width":809,"height":12}},{"id":"03bf8015-4a6e-4dc4-852f-a8fba86feded","block_type":"box","text":"judgment, analysis and experience in the evaluation of such securities.","page_number":190,"box":{"x":67,"y":651,"width":506,"height":11}},{"id":"5ff198ea-b7cf-4503-bd86-1e828d61bf32","block_type":"box","text":"Investors should note that the assignment of a rating to a security by an NRSRO may not reflect the effect of","page_number":190,"box":{"x":102,"y":673,"width":776,"height":12}},{"id":"edc7c297-7e2f-4357-b6f4-02bcd4e2a5bb","block_type":"box","text":"recent developments on the issuer’s ability to make interest and principal payments or on the likelihood of default.","page_number":190,"box":{"x":69,"y":688,"width":818,"height":12}},{"id":"a2867dca-c2ad-4e79-8552-0bfc1ba240db","block_type":"box","text":"Securities deemed to be high yield are rated below Baa3 by Moody’s and below BBB- by S&P Global Ratings and","page_number":190,"box":{"x":102,"y":711,"width":799,"height":11}},{"id":"e8ef1103-b5d0-4fae-9152-76cef6de0fba","block_type":"box","text":"Fitch. Other terms used to describe such securities include “lower rated bonds,” “non-investment grade bonds,”","page_number":190,"box":{"x":70,"y":726,"width":798,"height":11}},{"id":"d9d65e5d-ef04-40f3-8653-b4b1ccc5ba85","block_type":"box","text":"“below investment grade bonds,” and “junk bonds.”","page_number":190,"box":{"x":70,"y":742,"width":368,"height":11}},{"id":"91cbc0c4-c465-4219-9374-1392c744a8e9","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":190,"box":{"x":101,"y":764,"width":643,"height":11}},{"id":"c08c915c-057d-4eb6-a6e5-8602ece4a5a3","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":190,"box":{"x":68,"y":794,"width":616,"height":11}},{"id":"b6ed7c49-31f1-4040-a8f3-11bb6ac748fd","block_type":"box","text":"Credit ratings are assigned on Moody’s global long-term and short-term rating scales and are forward-looking","page_number":190,"box":{"x":102,"y":817,"width":777,"height":11}},{"id":"6a04a9ef-7ba6-4017-a328-d383f2a9bc98","block_type":"box","text":"opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions,","page_number":190,"box":{"x":69,"y":832,"width":818,"height":11}},{"id":"49360bf3-0d87-4727-a2dd-8cb0418d16c6","block_type":"box","text":"structured finance vehicles, project finance vehicles, and public sector entities. Moody’s defines credit risk as the","page_number":190,"box":{"x":69,"y":847,"width":812,"height":11}},{"id":"367a948d-307d-4585-b349-98d7f243f711","block_type":"box","text":"risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial","page_number":190,"box":{"x":69,"y":862,"width":812,"height":12}},{"id":"7b5f940a-77ee-4626-8404-90012d3f3991","block_type":"box","text":"loss in the event of default or impairment. The contractual financial obligations addressed by Moody’s ratings are","page_number":190,"box":{"x":70,"y":877,"width":807,"height":12}},{"id":"316b9a72-9b1c-4f82-a15e-253bb13fa5b9","block_type":"box","text":"those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based","page_number":190,"box":{"x":68,"y":892,"width":821,"height":12}},{"id":"0855d948-fa68-4fca-a495-3ca07227d176","block_type":"box","text":"upon standard sources of variation (","page_number":190,"box":{"x":69,"y":908,"width":257,"height":11}},{"id":"1b20dc56-f053-47b1-9029-bc98fdf9beb5","block_type":"box","text":"e.g.","page_number":190,"box":{"x":328,"y":909,"width":25,"height":10}},{"id":"927b95d0-8533-470d-a969-453c1309e8e7","block_type":"box","text":", floating interest rates), by an ascertainable date. Moody’s rating addresses","page_number":190,"box":{"x":355,"y":908,"width":548,"height":11}},{"id":"b8a97adb-2e07-4ce5-93fb-c86714232e3e","block_type":"box","text":"A-1","page_number":190,"box":{"x":477,"y":943,"width":24,"height":9}},{"id":"36f5044b-1220-4703-91a6-48b55d6d5f99","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":190,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"eba14636-6771-422e-a543-167445f24728","block_type":"box","text":"the issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s ratings do","page_number":191,"box":{"x":68,"y":45,"width":821,"height":11}},{"id":"73c1d88f-ea40-47ce-9720-2fa24f809c95","block_type":"box","text":"not address non-standard sources of variation in the amount of the principal obligation (","page_number":191,"box":{"x":69,"y":60,"width":627,"height":11}},{"id":"e9afb859-605b-4493-b444-1791ee6e8b1b","block_type":"box","text":"e.g.","page_number":191,"box":{"x":697,"y":61,"width":25,"height":10}},{"id":"648530bf-b4a3-4d16-ab11-e6c8275c00b5","block_type":"box","text":", equity indexed), absent","page_number":191,"box":{"x":725,"y":60,"width":174,"height":11}},{"id":"89eca831-4a2e-474f-b99e-89d22f53d590","block_type":"box","text":"an express statement to the contrary in a press release accompanying an initial rating. Long-term ratings are","page_number":191,"box":{"x":69,"y":75,"width":777,"height":11}},{"id":"c8ae9167-4994-4bcb-9f4c-bf3d91745386","block_type":"box","text":"assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the","page_number":191,"box":{"x":69,"y":90,"width":771,"height":11}},{"id":"24782f9c-e140-456a-a184-9254c473c53a","block_type":"box","text":"likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in","page_number":191,"box":{"x":70,"y":105,"width":819,"height":11}},{"id":"2a4d03ff-d55a-4e00-a9e7-3dcc2b9e969b","block_type":"box","text":"the event of default or impairment. Short-term ratings are assigned for obligations with an original maturity of thirteen","page_number":191,"box":{"x":68,"y":120,"width":840,"height":12}},{"id":"1ab2d18d-2dba-4e36-befa-847b4a06e064","block_type":"box","text":"months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and","page_number":191,"box":{"x":69,"y":135,"width":822,"height":12}},{"id":"2d7b8925-41e4-4b77-8739-47d555f41050","block_type":"box","text":"the expected financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":191,"box":{"x":68,"y":150,"width":829,"height":12}},{"id":"eb171286-95af-4198-b627-5b7f0528c1de","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made publicly","page_number":191,"box":{"x":69,"y":166,"width":784,"height":11}},{"id":"e965db13-3774-494f-ad7c-4089c0b5f630","block_type":"box","text":"available although private and unpublished ratings may also be assigned.","page_number":191,"box":{"x":69,"y":181,"width":521,"height":11}},{"id":"94ae7cf1-a490-4269-b4c9-f622bfd8725e","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (","page_number":191,"box":{"x":102,"y":203,"width":542,"height":12}},{"id":"6e17415a-eb13-4405-8e39-bd1baa9eae6d","block_type":"box","text":"i.e.","page_number":191,"box":{"x":646,"y":204,"width":20,"height":8}},{"id":"b5b2406b-58f6-4f46-98b4-c231bfea583d","block_type":"box","text":", ratings on nonfinancial","page_number":191,"box":{"x":669,"y":203,"width":169,"height":12}},{"id":"b7998277-1f49-4239-b875-205f1f63d18d","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to all structured","page_number":191,"box":{"x":69,"y":218,"width":837,"height":12}},{"id":"46190933-4861-47a1-978c-20a1b6f6f720","block_type":"box","text":"finance ratings. The addition of (sf) to structured finance ratings should eliminate any presumption that such ratings","page_number":191,"box":{"x":68,"y":234,"width":828,"height":11}},{"id":"1141ca91-eede-4fe8-b386-349810db0fbd","block_type":"box","text":"and fundamental ratings at the same letter grade level will behave the same. The (sf) indicator for structured finance","page_number":191,"box":{"x":69,"y":249,"width":832,"height":11}},{"id":"54319ac2-d729-4a6f-ac6c-eba485ba6792","block_type":"box","text":"security ratings indicates that otherwise similarly rated structured finance and fundamental securities may have","page_number":191,"box":{"x":69,"y":264,"width":797,"height":11}},{"id":"8e310538-d8da-4eda-8dc0-7c7baccfed78","block_type":"box","text":"different risk characteristics. Through its current methodologies, however, Moody’s aspires to achieve broad","page_number":191,"box":{"x":69,"y":279,"width":771,"height":11}},{"id":"ff51dd56-b2f7-43f8-b09b-7b82bb8769c3","block_type":"box","text":"expected equivalence in structured finance and fundamental rating performance when measured over a long period","page_number":191,"box":{"x":69,"y":294,"width":821,"height":11}},{"id":"e246c9c2-7648-4f1b-a406-b1f95db2a038","block_type":"box","text":"of time.","page_number":191,"box":{"x":69,"y":309,"width":53,"height":9}},{"id":"7a3b57d8-022b-404c-a836-d5b84b8d717a","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":191,"box":{"x":69,"y":339,"width":395,"height":12}},{"id":"8e81a084-df2a-4b21-8fef-c89e77b41776","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit","page_number":191,"box":{"x":68,"y":367,"width":815,"height":11}},{"id":"f5f527bb-eb12-4752-8a37-ece5dae09e31","block_type":"box","text":"risk.","page_number":191,"box":{"x":197,"y":383,"width":28,"height":8}},{"id":"79046be8-789f-43f6-8241-fe5c872195d2","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.","page_number":191,"box":{"x":68,"y":402,"width":773,"height":12}},{"id":"eca4d3b1-ac4b-4920-8ab9-ff14443b5816","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.","page_number":191,"box":{"x":68,"y":423,"width":776,"height":11}},{"id":"3836aa98-ebb8-48ec-b122-1ddc864ff459","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as","page_number":191,"box":{"x":70,"y":443,"width":813,"height":11}},{"id":"ddf233b0-292a-4424-84ae-10812ab44306","block_type":"box","text":"such may possess certain speculative characteristics.","page_number":191,"box":{"x":196,"y":458,"width":385,"height":11}},{"id":"b5006597-380a-4f3e-8c27-2afc060e0eb2","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.","page_number":191,"box":{"x":70,"y":478,"width":775,"height":11}},{"id":"418aba94-cb5f-4be5-9bd8-9ea57bf1491a","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":191,"box":{"x":70,"y":498,"width":707,"height":11}},{"id":"1aafaed3-b4f6-409b-a604-224c8fd95fff","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to very high","page_number":191,"box":{"x":69,"y":518,"width":810,"height":12}},{"id":"a27e131b-139b-4d63-9586-788ddf9e73fd","block_type":"box","text":"credit risk.","page_number":191,"box":{"x":196,"y":534,"width":74,"height":8}},{"id":"acde5632-f91c-4046-b68f-1162e47473ab","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with some","page_number":191,"box":{"x":69,"y":554,"width":783,"height":11}},{"id":"14f49c14-818b-4647-858c-3a5f2b5308a1","block_type":"box","text":"prospect of recovery of principal and interest.","page_number":191,"box":{"x":197,"y":569,"width":322,"height":11}},{"id":"835f16d3-c5f9-47f5-b1a1-316acdb783e7","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery","page_number":191,"box":{"x":69,"y":589,"width":834,"height":11}},{"id":"c710eeab-eb4b-4f13-8bbc-103232d3d284","block_type":"box","text":"of principal or interest.","page_number":191,"box":{"x":196,"y":604,"width":160,"height":11}},{"id":"dd4d70c4-7c72-4381-bc00-f7295110e8fc","block_type":"box","text":"Note:","page_number":191,"box":{"x":102,"y":624,"width":37,"height":9}},{"id":"d159b5fc-cd57-44fc-ac70-003d5ab756e7","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through","page_number":191,"box":{"x":146,"y":624,"width":731,"height":11}},{"id":"f1971206-a31d-4b64-a6c1-4db482821acc","block_type":"box","text":"Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2","page_number":191,"box":{"x":69,"y":639,"width":831,"height":12}},{"id":"78a3f774-d986-4239-91aa-c839116fcef9","block_type":"box","text":"indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.","page_number":191,"box":{"x":70,"y":654,"width":829,"height":12}},{"id":"3d566d12-de45-4b49-8c6e-f75c87b23cf0","block_type":"box","text":"Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance","page_number":191,"box":{"x":68,"y":669,"width":795,"height":12}},{"id":"ed020ebd-8cd3-4a0b-9798-ecf4b8a615eb","block_type":"box","text":"companies, and securities firms.","page_number":191,"box":{"x":69,"y":685,"width":232,"height":11}},{"id":"81660efd-7cef-4ea5-8050-db5b1c35c435","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments,","page_number":191,"box":{"x":102,"y":707,"width":787,"height":11}},{"id":"5271d7d2-f6d1-40e7-990c-374b201135cf","block_type":"box","text":"which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to","page_number":191,"box":{"x":68,"y":722,"width":788,"height":12}},{"id":"4c55af7d-3cd0-4a84-b31a-1662eeac4540","block_type":"box","text":"contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the","page_number":191,"box":{"x":69,"y":738,"width":833,"height":11}},{"id":"85857d9c-9376-43d2-8a08-d69c880099e2","block_type":"box","text":"long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with","page_number":191,"box":{"x":70,"y":753,"width":809,"height":11}},{"id":"6ae64236-c038-4735-9db3-901057728222","block_type":"box","text":"that security.","page_number":191,"box":{"x":68,"y":768,"width":91,"height":11}},{"id":"00738d09-ecf3-448f-b2a0-2d3523400378","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":191,"box":{"x":69,"y":798,"width":400,"height":11}},{"id":"7183af03-1d22-4595-b720-d9cc9819ec98","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":191,"box":{"x":69,"y":826,"width":658,"height":11}},{"id":"6245b25b-c192-4c92-afe0-ca1b2a12182d","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":191,"box":{"x":69,"y":846,"width":645,"height":11}},{"id":"816861cb-e244-4717-9367-9ffca967bbdc","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":191,"box":{"x":69,"y":866,"width":686,"height":11}},{"id":"7201fa23-d2ba-4698-9886-abb6e9e31b72","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating","page_number":191,"box":{"x":70,"y":886,"width":778,"height":12}},{"id":"7b414e9e-02a8-426a-95ef-3c27c1f18968","block_type":"box","text":"categories.","page_number":191,"box":{"x":196,"y":902,"width":77,"height":11}},{"id":"3e918270-3535-4131-b230-75fe1a2c7c3c","block_type":"box","text":"A-2","page_number":191,"box":{"x":477,"y":943,"width":23,"height":9}},{"id":"223464fc-7c56-42b4-9b6b-707e859d5885","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":191,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b4f449da-6614-4202-8550-3b3f4aad4562","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":192,"box":{"x":69,"y":45,"width":637,"height":11}},{"id":"d62b8baa-5e6f-4974-b13a-6557f5f7d6a6","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S. municipalities and","page_number":192,"box":{"x":102,"y":67,"width":784,"height":12}},{"id":"570c5746-dfd7-45a6-bde5-a42100809db1","block_type":"box","text":"nonprofits. These commercial paper programs may be backed by external letters of credit or liquidity facilities, or by","page_number":192,"box":{"x":69,"y":82,"width":824,"height":12}},{"id":"4ff990e9-824f-4ce6-b253-63e24dd6a9d9","block_type":"box","text":"an issuer’s self-liquidity.","page_number":192,"box":{"x":69,"y":98,"width":170,"height":11}},{"id":"08d86fc0-6140-497e-82dd-3f0493af24ab","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":192,"box":{"x":102,"y":120,"width":736,"height":12}},{"id":"a3af8b78-e3ff-4683-ac95-7ee5891de80f","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales discussed below.","page_number":192,"box":{"x":70,"y":135,"width":796,"height":11}},{"id":"80371920-d6b1-4f6a-9af7-e4553911a638","block_type":"box","text":"MIG Ratings","page_number":192,"box":{"x":102,"y":158,"width":85,"height":11}},{"id":"61c1ee30-b7e6-482c-8070-d5ca666b25dd","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain other short","page_number":192,"box":{"x":102,"y":181,"width":803,"height":11}},{"id":"747345a5-82a7-442f-b7a1-b1bb6d2fdb9f","block_type":"box","text":"term obligations, which typically mature in three years or less. Under certain circumstances, Moody’s uses the MIG","page_number":192,"box":{"x":68,"y":196,"width":823,"height":11}},{"id":"0cce414b-7cef-41f1-8b65-4f34d25dea0b","block_type":"box","text":"scale for bond anticipation notes with maturities of up to five years.","page_number":192,"box":{"x":69,"y":211,"width":480,"height":11}},{"id":"8ecee10f-62fe-4d7b-b291-1308c24a07ce","block_type":"box","text":"MIG Scale","page_number":192,"box":{"x":102,"y":234,"width":71,"height":9}},{"id":"27097684-a541-4956-819d-1fe13753103d","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by established","page_number":192,"box":{"x":70,"y":261,"width":802,"height":12}},{"id":"040f43b9-ace1-4eff-9026-31b0fa49c48b","block_type":"box","text":"cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for","page_number":192,"box":{"x":196,"y":276,"width":703,"height":12}},{"id":"a32524ac-d843-47ec-9f69-4e8a54dcb2d7","block_type":"box","text":"refinancing.","page_number":192,"box":{"x":197,"y":292,"width":80,"height":11}},{"id":"d43e167f-ac2e-4b65-8c73-10121f4432ee","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although not as","page_number":192,"box":{"x":70,"y":312,"width":809,"height":11}},{"id":"bd540c21-f391-4c22-839f-9262cedc1395","block_type":"box","text":"large as in the preceding group.","page_number":192,"box":{"x":197,"y":327,"width":224,"height":11}},{"id":"3e24d1c4-a3df-4f71-9e9b-8b928923c02f","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be","page_number":192,"box":{"x":70,"y":347,"width":785,"height":11}},{"id":"da402aac-b71a-42eb-8223-2e90ef0215d4","block_type":"box","text":"narrow, and market access for refinancing is likely to be less well-established.","page_number":192,"box":{"x":197,"y":362,"width":554,"height":11}},{"id":"bdd2756f-de32-4c19-9455-985b22a9b052","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this category may","page_number":192,"box":{"x":69,"y":382,"width":813,"height":12}},{"id":"794d0851-bf43-4b1c-a980-31c3e2896fa0","block_type":"box","text":"lack sufficient margins of protection.","page_number":192,"box":{"x":197,"y":397,"width":259,"height":12}},{"id":"8b782637-abbb-4203-bd95-213644ce81a0","block_type":"box","text":"VMIG Ratings","page_number":192,"box":{"x":68,"y":425,"width":100,"height":11}},{"id":"e401b69d-f5e3-4412-9907-3e3eff0fb12d","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The components","page_number":192,"box":{"x":102,"y":448,"width":804,"height":11}},{"id":"6d70cff5-627e-4683-b0ae-464dfd55f90b","block_type":"box","text":"are a long-term rating and a short-term payment obligation rating. The long-term rating addresses the issuer’s ability","page_number":192,"box":{"x":69,"y":463,"width":829,"height":11}},{"id":"a2f44493-c046-49d7-8d6a-85bb00a560e1","block_type":"box","text":"to meet scheduled principal and interest payments. The short-term payment obligation rating addresses the ability of","page_number":192,"box":{"x":68,"y":478,"width":836,"height":11}},{"id":"bf387c31-f537-4bf1-a3da-3df97dec6543","block_type":"box","text":"the issuer or the liquidity provider meet any purchase-price payment obligation resulting from optional tenders (“on","page_number":192,"box":{"x":68,"y":493,"width":817,"height":11}},{"id":"7fc1c2d2-e12c-4200-8627-d4fe8fc8f00e","block_type":"box","text":"demand”) and/or mandatory tenders of the VRDO. The short-term demand obligation rating uses the VMIG scale.","page_number":192,"box":{"x":69,"y":508,"width":807,"height":12}},{"id":"480c2b86-9b04-4dd2-a8a2-62a998588a07","block_type":"box","text":"VMIG ratings with liquidity support use as an input the short-term Counterparty Risk Assessment of the support","page_number":192,"box":{"x":68,"y":523,"width":800,"height":12}},{"id":"572225be-d503-4cee-9ea0-5695d819879b","block_type":"box","text":"provider, or the long-term rating of the underlying obligor in the absence of third party liquidity support. Transitions of","page_number":192,"box":{"x":70,"y":538,"width":832,"height":12}},{"id":"cd69586e-65ec-4d53-8657-d20af8972b88","block_type":"box","text":"VMIG ratings of demand obligations with conditional liquidity support differ from transitions on the Prime scale to","page_number":192,"box":{"x":68,"y":554,"width":807,"height":11}},{"id":"ba9297e3-798e-4459-8c7b-f0b08f227b81","block_type":"box","text":"reflect the risk that external liquidity support will terminate if the issuer’s long-term rating drops below investment","page_number":192,"box":{"x":69,"y":569,"width":812,"height":11}},{"id":"0b8e99aa-20e7-4cf0-b73c-e1150797ff11","block_type":"box","text":"grade.","page_number":192,"box":{"x":68,"y":584,"width":43,"height":11}},{"id":"70663d88-d4b1-4967-bf15-b07a17d7705e","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand feature is","page_number":192,"box":{"x":102,"y":606,"width":807,"height":12}},{"id":"fcdb9d00-1c38-4fc2-addf-fc72cc207686","block_type":"box","text":"less than every three years. If the frequency of the demand feature is less than three years but the purchase price is","page_number":192,"box":{"x":70,"y":622,"width":833,"height":11}},{"id":"f2b47627-1977-4665-9da0-76d7de9508d3","block_type":"box","text":"payable only with remarketing proceeds, the short-term demand obligation rating is “NR”.","page_number":192,"box":{"x":70,"y":637,"width":635,"height":11}},{"id":"0a75ebfc-a235-4b11-a1c0-ad0944401fe3","block_type":"box","text":"Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that reflects","page_number":192,"box":{"x":102,"y":659,"width":778,"height":12}},{"id":"30bae8b8-2d03-4622-9fe7-9058c8308079","block_type":"box","text":"Moody’s view of the relative likelihood of default and loss. In these cases, liquidity assessment is based on the","page_number":192,"box":{"x":70,"y":675,"width":795,"height":11}},{"id":"94ae77d2-1d7b-44d0-92a1-a275a8339233","block_type":"box","text":"liquidity of the corporate obligor.","page_number":192,"box":{"x":70,"y":690,"width":226,"height":11}},{"id":"30aadbd0-20b6-425a-a2e3-4d436350e1af","block_type":"box","text":"VMIG Scale","page_number":192,"box":{"x":101,"y":712,"width":81,"height":9}},{"id":"9353787b-2a6d-487d-9a14-562dd46c177a","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the superior","page_number":192,"box":{"x":68,"y":740,"width":808,"height":11}},{"id":"3caecdd8-fb81-46b8-a74d-2bf8aefab282","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections.","page_number":192,"box":{"x":196,"y":755,"width":613,"height":11}},{"id":"449e0aa3-1b83-4f8e-807d-47adca3b1e9d","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong short-term","page_number":192,"box":{"x":68,"y":775,"width":834,"height":12}},{"id":"fe1c43e9-7ac1-4101-91b2-61ae5ae16150","block_type":"box","text":"credit strength of the liquidity provider and structural and legal protections.","page_number":192,"box":{"x":196,"y":790,"width":533,"height":12}},{"id":"92f36f74-0a4b-4a19-9e03-c8781a6375ad","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by the","page_number":192,"box":{"x":68,"y":811,"width":768,"height":11}},{"id":"d11ef6c8-4085-4b26-a7a2-bacac971a47a","block_type":"box","text":"satisfactory short-term credit strength of the liquidity provider and structural and legal protections.","page_number":192,"box":{"x":196,"y":826,"width":701,"height":11}},{"id":"2f21a5d5-d8c3-499d-9e0e-4a2b7d1128dc","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this category","page_number":192,"box":{"x":69,"y":846,"width":820,"height":11}},{"id":"ba08fb46-358d-40eb-a958-03ef04778e5f","block_type":"box","text":"may be supported by a liquidity provider that does not have a sufficiently strong short-term rating or","page_number":192,"box":{"x":197,"y":861,"width":711,"height":11}},{"id":"2d171551-143f-421f-8010-62bb5995d804","block_type":"box","text":"may lack the structural or legal protections.","page_number":192,"box":{"x":197,"y":876,"width":308,"height":11}},{"id":"a2929588-ef2d-4978-bef3-8e83db712f10","block_type":"box","text":"A-3","page_number":192,"box":{"x":477,"y":943,"width":23,"height":9}},{"id":"1f6c971e-1b97-4dc9-a941-8cdf9f2355ae","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":192,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"dd648c52-dae4-4451-b601-cabc1bca5157","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":193,"box":{"x":69,"y":45,"width":691,"height":11}},{"id":"942791d3-c575-4c6e-9e03-c80b20182499","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a","page_number":193,"box":{"x":101,"y":67,"width":801,"height":12}},{"id":"9ab91d2d-3607-4f50-a325-825d50854aa4","block_type":"box","text":"specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings","page_number":193,"box":{"x":69,"y":82,"width":829,"height":12}},{"id":"6ce66863-59a4-4bf5-aa0c-a472f6672fce","block_type":"box","text":"on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of","page_number":193,"box":{"x":69,"y":98,"width":831,"height":11}},{"id":"c7aaeffa-c6c7-4a7e-b172-55fda897214e","block_type":"box","text":"guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in","page_number":193,"box":{"x":68,"y":113,"width":823,"height":11}},{"id":"4d578368-ab53-4252-8f3e-c87f4cbe6664","block_type":"box","text":"which the obligation is denominated. The opinion reflects S&P’s view of the obligor’s capacity and willingness to meet","page_number":193,"box":{"x":68,"y":128,"width":841,"height":11}},{"id":"1f2cde19-6065-4efc-a068-ea5bf08ae6b1","block_type":"box","text":"its financial commitments as they come due, and this opinion may assess terms, such as collateral security and","page_number":193,"box":{"x":70,"y":143,"width":801,"height":11}},{"id":"2cf8c862-2e26-4103-aac7-b38512b61b47","block_type":"box","text":"subordination, which could affect ultimate payment in the event of default.","page_number":193,"box":{"x":69,"y":158,"width":530,"height":11}},{"id":"04e64f80-ed6e-49f8-b551-8e5f9c4e555c","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally assigned","page_number":193,"box":{"x":102,"y":181,"width":796,"height":11}},{"id":"0677cd0b-8370-4c5c-b1d8-45150320290e","block_type":"box","text":"to those obligations considered short-term in the relevant market, typically with an original maturity of no more than","page_number":193,"box":{"x":68,"y":196,"width":825,"height":11}},{"id":"e226d9cd-a53b-4c24-89a1-dd73e603ba57","block_type":"box","text":"365 days. Short-term issue credit ratings are also used to indicate the creditworthiness of an obligor with respect to","page_number":193,"box":{"x":69,"y":211,"width":832,"height":11}},{"id":"5e3fa817-0c19-40f1-ad2c-130367a51c7d","block_type":"box","text":"put features on long-term obligations. S&P would typically assign a long-term issue credit rating to an obligation with","page_number":193,"box":{"x":70,"y":226,"width":826,"height":11}},{"id":"08a09df3-5859-437b-9b0e-dff98deea4a5","block_type":"box","text":"an original maturity of greater than 365 days. However, the ratings S&P assigns to certain instruments may diverge","page_number":193,"box":{"x":69,"y":241,"width":823,"height":11}},{"id":"f2d35ec3-acc7-46fc-b249-76c668cf7799","block_type":"box","text":"from these guidelines based on market practices.","page_number":193,"box":{"x":68,"y":256,"width":354,"height":12}},{"id":"b664b6b3-4412-4527-8f5b-754d20eb46cb","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":193,"box":{"x":102,"y":279,"width":718,"height":11}},{"id":"67854958-9c57-417d-ad82-ffcf2df6a400","block_type":"box","text":"•","page_number":193,"box":{"x":69,"y":302,"width":6,"height":5}},{"id":"5a31e8a5-cc72-41ce-b98b-f81fdf0818a5","block_type":"box","text":"The likelihood of payment—the capacity and willingness of the obligor to meet its financial commitments on an","page_number":193,"box":{"x":101,"y":299,"width":790,"height":11}},{"id":"34a01b09-86df-4486-a76c-4244e321c634","block_type":"box","text":"obligation in accordance with the terms of the obligation;","page_number":193,"box":{"x":102,"y":314,"width":404,"height":12}},{"id":"d9a0f25a-adf3-4005-b6dd-1380550fb72b","block_type":"box","text":"•","page_number":193,"box":{"x":69,"y":337,"width":6,"height":5}},{"id":"74b3e42f-1fab-45ce-8acc-fb8b9421eb92","block_type":"box","text":"The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":193,"box":{"x":101,"y":334,"width":629,"height":12}},{"id":"bf0884ec-a43b-4837-aaa4-2f4d60460004","block_type":"box","text":"•","page_number":193,"box":{"x":69,"y":357,"width":6,"height":5}},{"id":"6ecaf918-cc47-4951-80c5-c1f810cdfb31","block_type":"box","text":"The protection afforded by, and relative position of, the financial obligation in the event of a bankruptcy,","page_number":193,"box":{"x":101,"y":355,"width":738,"height":11}},{"id":"43fbe223-0a42-40fa-bc36-68598dfaf1b0","block_type":"box","text":"reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.","page_number":193,"box":{"x":102,"y":370,"width":770,"height":11}},{"id":"7b7fb163-e373-498e-a1fa-db45438a0e8b","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority or","page_number":193,"box":{"x":101,"y":392,"width":763,"height":12}},{"id":"327e0037-4e54-4bb2-a87a-645e51ef81d4","block_type":"box","text":"ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect","page_number":193,"box":{"x":69,"y":407,"width":833,"height":12}},{"id":"e8732d0d-c41e-48e5-93cd-36dc4eb5d85c","block_type":"box","text":"lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and","page_number":193,"box":{"x":70,"y":423,"width":794,"height":11}},{"id":"8b60a733-c4ab-49cd-973b-94c31e3c2613","block_type":"box","text":"subordinated obligations, secured and unsecured obligations, or operating company and holding company","page_number":193,"box":{"x":69,"y":438,"width":754,"height":11}},{"id":"73c82ebb-79c0-4dc7-a0fb-51be97a0b0ee","block_type":"box","text":"obligations.)","page_number":193,"box":{"x":69,"y":453,"width":86,"height":11}},{"id":"9d45cbee-7dec-489f-98c0-e1cf7dfe3f13","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":193,"box":{"x":69,"y":483,"width":236,"height":11}},{"id":"ff590345-fb10-4510-ac97-b02c4f8dd5eb","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its","page_number":193,"box":{"x":68,"y":511,"width":833,"height":11}},{"id":"132fd1ec-b417-46d7-bb67-2ccc15d9340d","block_type":"box","text":"financial commitments on the obligation is extremely strong.","page_number":193,"box":{"x":196,"y":526,"width":429,"height":11}},{"id":"9cca20a1-9d31-43fb-a4b3-ad7906d3ec2a","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The","page_number":193,"box":{"x":68,"y":546,"width":788,"height":11}},{"id":"ca04739f-7afd-4357-afe5-b9822990301f","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":193,"box":{"x":196,"y":561,"width":602,"height":11}},{"id":"3392ef44-2436-4be4-9c04-00db7f61515d","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in","page_number":193,"box":{"x":68,"y":581,"width":770,"height":12}},{"id":"1aeca266-ff23-400f-9009-6b35a33e1339","block_type":"box","text":"circumstances and economic conditions than obligations in higher-rated categories. However, the","page_number":193,"box":{"x":196,"y":597,"width":692,"height":11}},{"id":"34cfbf31-f2cd-4fe6-a3b7-2eeb4d7c9328","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation is still strong.","page_number":193,"box":{"x":196,"y":612,"width":598,"height":11}},{"id":"3171d615-30b4-47b5-9507-46c64a7657e4","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic","page_number":193,"box":{"x":70,"y":632,"width":806,"height":11}},{"id":"99d0636f-271e-41df-ad8f-c9ced8c89396","block_type":"box","text":"conditions or changing circumstances are more likely to weaken the obligor’s capacity to meet its","page_number":193,"box":{"x":196,"y":647,"width":694,"height":11}},{"id":"76d35d15-fbf1-4fb9-b855-0c8885af4d59","block_type":"box","text":"financial commitments on the obligation.","page_number":193,"box":{"x":196,"y":662,"width":289,"height":11}},{"id":"13574a88-faf0-4a40-bfe1-2e86a66de78f","block_type":"box","text":"BB,","page_number":193,"box":{"x":70,"y":682,"width":22,"height":11}},{"id":"b6410f2b-4b31-41db-8c42-656b502fdf2c","block_type":"box","text":"B,","page_number":193,"box":{"x":70,"y":697,"width":12,"height":11}},{"id":"fb2aaf91-b2d4-4231-8fe1-c43e0fb9a428","block_type":"box","text":"CCC,","page_number":193,"box":{"x":69,"y":712,"width":33,"height":11}},{"id":"98469390-4bb7-4fe4-aaca-ddfd1245ecfa","block_type":"box","text":"CC,","page_number":193,"box":{"x":69,"y":728,"width":23,"height":10}},{"id":"ca33036d-0a95-45a0-a13e-0a1c8dd36531","block_type":"box","text":"and C","page_number":193,"box":{"x":69,"y":743,"width":40,"height":9}},{"id":"eaafa28a-b963-4bc7-8fcb-f3b253186c1f","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative","page_number":193,"box":{"x":196,"y":682,"width":667,"height":11}},{"id":"a2464f4d-def0-4335-a116-e93ae4d3e872","block_type":"box","text":"characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such","page_number":193,"box":{"x":196,"y":697,"width":667,"height":12}},{"id":"65dd79dd-d0c6-4240-82a0-27e5c83d5464","block_type":"box","text":"obligations will likely have some quality and protective characteristics, these may be outweighed by","page_number":193,"box":{"x":196,"y":713,"width":707,"height":11}},{"id":"5ebcddca-9342-452f-95db-dc8a4e598bf7","block_type":"box","text":"large uncertainties or major exposure to adverse conditions.","page_number":193,"box":{"x":197,"y":728,"width":428,"height":11}},{"id":"9fbf9043-519c-42f0-b05b-55ea9e762052","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it","page_number":193,"box":{"x":70,"y":763,"width":838,"height":11}},{"id":"dd30d886-082b-44eb-b1cd-92b56af99601","block_type":"box","text":"faces major ongoing uncertainties or exposure to adverse business, financial, or economic","page_number":193,"box":{"x":196,"y":778,"width":646,"height":11}},{"id":"016d15dc-9f17-494a-af5d-87d8d4240876","block_type":"box","text":"conditions that could lead to the obligor’s inadequate capacity to meet its financial commitments","page_number":193,"box":{"x":196,"y":793,"width":692,"height":11}},{"id":"753f22f0-9f5e-4f1d-bcfd-f0f35f8d7f01","block_type":"box","text":"on the obligation.","page_number":193,"box":{"x":196,"y":808,"width":122,"height":11}},{"id":"bc7f7c65-f104-4c1a-b8d1-17f9f8ef196a","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor","page_number":193,"box":{"x":70,"y":828,"width":840,"height":12}},{"id":"36fa7a26-f8e8-463f-9444-414adacfd4bb","block_type":"box","text":"currently has the capacity to meet its financial commitments on the obligation. Adverse business,","page_number":193,"box":{"x":196,"y":843,"width":695,"height":12}},{"id":"117c3095-7735-42ee-af2d-6895f3ece0f5","block_type":"box","text":"financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its","page_number":193,"box":{"x":196,"y":858,"width":691,"height":12}},{"id":"c0019ea9-73ea-41e9-8d3a-a8fb6e3ae6cb","block_type":"box","text":"financial commitments on the obligation.","page_number":193,"box":{"x":196,"y":874,"width":289,"height":11}},{"id":"bb7781cc-c938-4440-b985-0143fd610c81","block_type":"box","text":"A-4","page_number":193,"box":{"x":477,"y":943,"width":24,"height":9}},{"id":"60866a7b-46df-470b-a2b5-f574219a25d8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":193,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"927acd36-3af9-4551-a8cf-50b8709fbdea","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon favorable","page_number":194,"box":{"x":69,"y":48,"width":816,"height":12}},{"id":"0ecd5480-64c1-4126-bce6-76cbeff21ec5","block_type":"box","text":"business, financial, and economic conditions for the obligor to meet its financial commitments on","page_number":194,"box":{"x":196,"y":63,"width":695,"height":12}},{"id":"d3f0fa19-d479-48be-a826-cf0ef32c294c","block_type":"box","text":"the obligation. In the event of adverse business, financial, or economic conditions, the obligor is","page_number":194,"box":{"x":195,"y":79,"width":687,"height":11}},{"id":"9d62cbb5-5194-4244-b400-1d4bb442d062","block_type":"box","text":"not likely to have the capacity to meet its financial commitments on the obligation.","page_number":194,"box":{"x":197,"y":94,"width":586,"height":11}},{"id":"90ca5e9a-7268-47fe-b21b-9a1dc4951139","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is used when","page_number":194,"box":{"x":69,"y":114,"width":826,"height":11}},{"id":"bef319a9-3c1e-47c5-b731-3cf03fc875b5","block_type":"box","text":"a default has not yet occurred but S&P expects default to be a virtual certainty, regardless of the","page_number":194,"box":{"x":196,"y":129,"width":692,"height":11}},{"id":"e7d94110-9daa-497a-93a0-bb17b1a1cf71","block_type":"box","text":"anticipated time to default.","page_number":194,"box":{"x":196,"y":144,"width":191,"height":11}},{"id":"d35ab390-50d3-44a7-aceb-c1ac0b30f555","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is expected","page_number":194,"box":{"x":69,"y":164,"width":826,"height":12}},{"id":"202b17df-27a1-463c-a5e2-d11efc4cb23a","block_type":"box","text":"to have lower relative seniority or lower ultimate recovery compared with obligations that are rated","page_number":194,"box":{"x":195,"y":180,"width":700,"height":11}},{"id":"7d2600c5-9ea7-466e-85c6-6b9bac3cbc91","block_type":"box","text":"higher.","page_number":194,"box":{"x":197,"y":195,"width":45,"height":11}},{"id":"3fc2f5b5-cb53-476e-99d1-47d569bd626b","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital","page_number":194,"box":{"x":70,"y":215,"width":789,"height":11}},{"id":"ae259781-992a-4d28-8cbc-e2277ecec4c9","block_type":"box","text":"instruments, the ‘D’ rating category is used when payments on an obligation are not made on the","page_number":194,"box":{"x":197,"y":230,"width":695,"height":11}},{"id":"c5d57d24-5fd6-43e9-bc84-674176e498d1","block_type":"box","text":"date due, unless S&P believes that such payments will be made within five business days in the","page_number":194,"box":{"x":196,"y":245,"width":686,"height":11}},{"id":"9b73c9ec-0798-45f3-8bb8-cffb6d9af6c8","block_type":"box","text":"absence of a stated grace period or within the earlier of the stated grace period or 30 calendar","page_number":194,"box":{"x":196,"y":260,"width":676,"height":11}},{"id":"fea31c17-39ba-419b-9868-714c278ecebb","block_type":"box","text":"days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar","page_number":194,"box":{"x":196,"y":275,"width":708,"height":11}},{"id":"0d66f49d-a727-4ce0-98e4-f8b2e1c67323","block_type":"box","text":"action and where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":194,"box":{"x":196,"y":290,"width":694,"height":12}},{"id":"60250a36-3b0d-4618-a31d-1e32feb7a892","block_type":"box","text":"provisions. A rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt","page_number":194,"box":{"x":197,"y":305,"width":626,"height":12}},{"id":"507fddfe-1f72-4e47-9431-9e8f8ee6f645","block_type":"box","text":"restructuring.","page_number":194,"box":{"x":197,"y":321,"width":92,"height":11}},{"id":"d8940cc4-5534-4fb9-b891-90dcad81ca7b","block_type":"box","text":"*Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative","page_number":194,"box":{"x":103,"y":341,"width":756,"height":11}},{"id":"3e24344a-e154-4184-be7a-d63fb2101926","block_type":"box","text":"standing within the rating categories.","page_number":194,"box":{"x":69,"y":356,"width":262,"height":11}},{"id":"d2b8eed7-67c7-44e4-8f6a-890a666ca19e","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":194,"box":{"x":68,"y":386,"width":233,"height":11}},{"id":"0ba0bdf6-be4b-4d09-9a83-7b5d2c98ac4e","block_type":"box","text":"A-1 A short-term obligation rated ‘A-1’ is rated in the highest category by S&P. The obligor’s capacity to","page_number":194,"box":{"x":68,"y":414,"width":833,"height":11}},{"id":"bf255d13-7ceb-4f3f-86d5-479f1ba1615f","block_type":"box","text":"meet its financial commitments on the obligation is strong. Within this category, certain obligations","page_number":194,"box":{"x":197,"y":429,"width":707,"height":11}},{"id":"0ee07cff-3475-45bb-b519-c5944abf4918","block_type":"box","text":"are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial","page_number":194,"box":{"x":196,"y":444,"width":691,"height":11}},{"id":"6a190305-3904-4942-abfb-b6df97c460e7","block_type":"box","text":"commitments on these obligations is extremely strong.","page_number":194,"box":{"x":196,"y":459,"width":390,"height":11}},{"id":"800664a4-9511-4f35-a0d6-732a7d8e0926","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes","page_number":194,"box":{"x":68,"y":479,"width":837,"height":12}},{"id":"e90c41d5-78dc-40f0-93ee-98772ec6f527","block_type":"box","text":"in circumstances and economic conditions than obligations in higher rating categories. However,","page_number":194,"box":{"x":197,"y":495,"width":684,"height":11}},{"id":"358e5c2b-b175-4e99-a3f2-c5607cec43f1","block_type":"box","text":"the obligor’s capacity to meet its financial commitments on the obligation is satisfactory.","page_number":194,"box":{"x":195,"y":509,"width":634,"height":12}},{"id":"5a54fa5f-8a87-4497-bb1a-307e9e3f8a08","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse","page_number":194,"box":{"x":68,"y":530,"width":798,"height":11}},{"id":"c3383628-b20f-47b7-b52e-1915143f9f7f","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken an obligor’s capacity to","page_number":194,"box":{"x":196,"y":545,"width":699,"height":11}},{"id":"13f3d5da-1508-42b3-aeca-7322952c2276","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":194,"box":{"x":197,"y":560,"width":351,"height":11}},{"id":"334f2a18-ce5a-4210-9c36-6802b278478c","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant speculative","page_number":194,"box":{"x":70,"y":580,"width":765,"height":11}},{"id":"5e98551e-5c52-4102-b8e1-9880505e4f7e","block_type":"box","text":"characteristics. The obligor currently has the capacity to meet its financial commitments; however,","page_number":194,"box":{"x":196,"y":595,"width":700,"height":11}},{"id":"df550d97-e7d1-4b99-bfd6-a8cdca553ebc","block_type":"box","text":"it faces major ongoing uncertainties that could lead to the obligor’s inadequate capacity to meet its","page_number":194,"box":{"x":197,"y":610,"width":708,"height":12}},{"id":"1cd5883c-2257-4935-bd0c-d2d4d92e9f5a","block_type":"box","text":"financial commitments.","page_number":194,"box":{"x":196,"y":625,"width":165,"height":9}},{"id":"dbe1eb82-455d-437c-8fd2-d182663714e1","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon","page_number":194,"box":{"x":69,"y":646,"width":796,"height":11}},{"id":"77817b08-0b35-4450-9bfb-01bccb3dff7d","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its financial","page_number":194,"box":{"x":196,"y":661,"width":641,"height":11}},{"id":"0eb19366-9e8b-4934-bd13-c5cb1c6640fd","block_type":"box","text":"commitments on the obligation.","page_number":194,"box":{"x":196,"y":676,"width":224,"height":11}},{"id":"d9c3c220-5e9d-46e8-a627-77cea9c0b4fd","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":194,"box":{"x":70,"y":696,"width":808,"height":11}},{"id":"31272071-e464-4d49-a06d-e45930d0e796","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are not made","page_number":194,"box":{"x":196,"y":711,"width":698,"height":11}},{"id":"a8e29d05-4d7b-4f8f-85bb-7abb4a4d986c","block_type":"box","text":"on the date due, unless S&P believes that such payments will be made within any stated grace","page_number":194,"box":{"x":196,"y":726,"width":678,"height":12}},{"id":"189ff106-6081-4874-8765-5137b82d060e","block_type":"box","text":"period. However, any stated grace period longer than five business days will be treated as five","page_number":194,"box":{"x":197,"y":741,"width":669,"height":12}},{"id":"db8462c7-2346-4196-bb6b-c8bb0da0828b","block_type":"box","text":"business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking","page_number":194,"box":{"x":196,"y":756,"width":707,"height":12}},{"id":"66c80bfa-c65d-4410-af2c-5b9de3d23f45","block_type":"box","text":"of a similar action and where default on an obligation is a virtual certainty, for example due to","page_number":194,"box":{"x":196,"y":772,"width":669,"height":11}},{"id":"d6eae41b-868d-4606-a5c5-04da386ae63d","block_type":"box","text":"automatic stay provisions. A rating on an obligation is lowered to ‘D’ if it is subject to a distressed","page_number":194,"box":{"x":196,"y":787,"width":700,"height":11}},{"id":"c86adb21-16c9-4cdd-91e0-7bf905e8f1b2","block_type":"box","text":"debt restructuring.","page_number":194,"box":{"x":196,"y":802,"width":130,"height":11}},{"id":"c18bea0f-89d2-4770-ac48-70727422b150","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":194,"box":{"x":69,"y":830,"width":411,"height":11}},{"id":"59c0d3aa-dd7b-4e34-8851-e906651771b4","block_type":"box","text":"An S&P U.S. municipal note rating reflects S&P’s opinion about the liquidity factors and market access risks","page_number":194,"box":{"x":101,"y":852,"width":772,"height":11}},{"id":"8ea949ad-71cc-452f-a67b-32657c50a788","block_type":"box","text":"unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity","page_number":194,"box":{"x":69,"y":868,"width":823,"height":11}},{"id":"ede635f9-21bc-47b3-ac0b-dedb9f9d0b29","block_type":"box","text":"of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to","page_number":194,"box":{"x":69,"y":882,"width":832,"height":12}},{"id":"a95b2f0b-ba13-4253-a975-c4ee29b888f1","block_type":"box","text":"assign, S&P’s analysis will review the following considerations:","page_number":194,"box":{"x":69,"y":898,"width":447,"height":11}},{"id":"de847617-4e9e-490c-8392-1259c867ff12","block_type":"box","text":"A-5","page_number":194,"box":{"x":477,"y":943,"width":24,"height":9}},{"id":"f8f05a69-2315-49f1-a40d-cdfd11df012d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":194,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"90c47425-ae9d-4566-be4a-0bbcb7e7faf6","block_type":"box","text":"•","page_number":195,"box":{"x":69,"y":48,"width":6,"height":4}},{"id":"5d2869d3-00ca-4554-b29a-0ee62cb11018","block_type":"box","text":"Amortization schedule—the larger the final maturity relative to other maturities, the more likely it will be treated","page_number":195,"box":{"x":101,"y":45,"width":796,"height":11}},{"id":"9aecbcdb-38c8-4974-935e-e6efbf2462ec","block_type":"box","text":"as a note; and","page_number":195,"box":{"x":102,"y":60,"width":101,"height":10}},{"id":"19e6928f-5038-4733-bbb6-0cb637430ccb","block_type":"box","text":"•","page_number":195,"box":{"x":69,"y":83,"width":6,"height":4}},{"id":"72a049f4-0102-44a9-870d-4e3ed396bf8b","block_type":"box","text":"Source of payment—the more dependent the issue is on the market for its refinancing, the more likely it will be","page_number":195,"box":{"x":102,"y":80,"width":794,"height":11}},{"id":"1dabcdb8-90d4-41ed-866a-3c35f8536d5e","block_type":"box","text":"treated as a note.","page_number":195,"box":{"x":101,"y":95,"width":127,"height":9}},{"id":"4f158083-7dcb-491d-9e2c-46b230a46f2f","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":195,"box":{"x":102,"y":118,"width":448,"height":11}},{"id":"2b0ad5d1-194a-42f2-a74d-5318a65fe93c","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very strong","page_number":195,"box":{"x":69,"y":146,"width":779,"height":11}},{"id":"33f19ceb-fc37-4480-80e9-412892f34a7d","block_type":"box","text":"capacity to pay debt service is given a plus (+) designation.","page_number":195,"box":{"x":196,"y":161,"width":422,"height":11}},{"id":"f1522d52-1a2e-438f-b105-0cd3da15e47a","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and","page_number":195,"box":{"x":69,"y":181,"width":825,"height":11}},{"id":"111a5da7-a269-4c32-b9ab-b9a7a49e5aea","block_type":"box","text":"economic changes over the term of the notes.","page_number":195,"box":{"x":196,"y":196,"width":327,"height":11}},{"id":"49c067ac-dc54-4763-ad42-e6d2ecf41429","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":195,"box":{"x":69,"y":216,"width":479,"height":11}},{"id":"45493638-2ae2-43db-aec5-1ff9eaa4c1b0","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":195,"box":{"x":70,"y":236,"width":745,"height":11}},{"id":"c50935f1-85ec-4a5e-b18c-aef8c1299075","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default","page_number":195,"box":{"x":197,"y":251,"width":699,"height":12}},{"id":"d5ef7d8d-b0ca-4280-94d2-4b55f5609724","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions.","page_number":195,"box":{"x":196,"y":266,"width":594,"height":12}},{"id":"9530d940-3e47-48a0-962c-b2f1d536d957","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch”) Credit Ratings Scales","page_number":195,"box":{"x":69,"y":294,"width":442,"height":11}},{"id":"29931793-82f1-4da1-86c3-133f3f9a3972","block_type":"box","text":"Fitch publishes credit ratings that are forward-looking opinions on the relative ability of an entity or obligation to","page_number":195,"box":{"x":102,"y":317,"width":793,"height":11}},{"id":"d316b608-9cd7-470c-9f8b-a7c573393e89","block_type":"box","text":"meet financial commitments. Issuer default ratings (IDRs) are assigned to corporations, sovereign entities, financial","page_number":195,"box":{"x":69,"y":332,"width":826,"height":11}},{"id":"4ead2337-1502-40a9-b308-c4261159aa9c","block_type":"box","text":"institutions such as banks, leasing companies and insurers, and public finance entities (local and regional","page_number":195,"box":{"x":70,"y":347,"width":756,"height":11}},{"id":"4201dcaf-adab-49b2-ab71-3a2aae3b3ff5","block_type":"box","text":"governments). Issue level ratings are also assigned, often include an expectation of recovery and may be notched","page_number":195,"box":{"x":68,"y":362,"width":813,"height":11}},{"id":"85e6cb53-d830-49ba-b5ba-0375657f53ab","block_type":"box","text":"above or below the issuer level rating. Issue ratings are assigned to secured and unsecured debt securities, loans,","page_number":195,"box":{"x":69,"y":377,"width":819,"height":12}},{"id":"a8f1da89-4197-40f0-9146-b521aceb236b","block_type":"box","text":"preferred stock and other instruments, Structured finance ratings are issue ratings to securities backed by","page_number":195,"box":{"x":70,"y":392,"width":760,"height":12}},{"id":"2c88a2c6-9d60-463f-850b-982ff16720b8","block_type":"box","text":"receivables or other financial assets that consider the obligations’ relative vulnerability to default.","page_number":195,"box":{"x":69,"y":407,"width":694,"height":12}},{"id":"5742c3e4-7e25-42c9-93c6-46f304ef591d","block_type":"box","text":"Fitch’s credit ratings relating to issuers are an opinion on the relative ability of an entity to meet financial","page_number":195,"box":{"x":102,"y":430,"width":747,"height":11}},{"id":"e1adfdd5-2a92-49d8-9f78-a5e26cca3423","block_type":"box","text":"commitments, such as interest, preferred dividends, repayment of principal, insurance claims or counterparty","page_number":195,"box":{"x":69,"y":445,"width":782,"height":11}},{"id":"f6ab3172-f232-4d70-8423-2f156032c029","block_type":"box","text":"obligations. Credit ratings relating to securities and obligations of an issuer can include a recovery expectation.","page_number":195,"box":{"x":69,"y":460,"width":793,"height":12}},{"id":"4d609a74-e42f-469c-b401-dbb785429cf8","block_type":"box","text":"Credit ratings are used by investors as indications of the likelihood of receiving the money owed to them in","page_number":195,"box":{"x":69,"y":475,"width":761,"height":12}},{"id":"a57aebef-751a-4098-bbcb-29c694516351","block_type":"box","text":"accordance with the terms on which they invested. The agency’s credit ratings cover the global spectrum of","page_number":195,"box":{"x":69,"y":491,"width":766,"height":11}},{"id":"23c8a460-f700-4fa9-8bf4-a1a4aca04306","block_type":"box","text":"corporate, sovereign financial, bank, insurance, and public finance entities (including supranational and sub-national","page_number":195,"box":{"x":69,"y":506,"width":827,"height":11}},{"id":"404810d1-8fb2-46f0-afcf-9cbffaa0904f","block_type":"box","text":"entities) and the securities or other obligations they issue, as well as structured finance securities backed by","page_number":195,"box":{"x":69,"y":521,"width":779,"height":11}},{"id":"7935dd7b-f927-4c72-b880-c12d231ab058","block_type":"box","text":"receivables or other financial assets.","page_number":195,"box":{"x":69,"y":536,"width":262,"height":9}},{"id":"63fb69a9-2c0c-4c4b-8e46-026ff2024304","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as shorthand to","page_number":195,"box":{"x":101,"y":559,"width":794,"height":11}},{"id":"58a21425-5888-427c-abbc-a440cd8b8b01","block_type":"box","text":"describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative grade). The terms investment","page_number":195,"box":{"x":69,"y":574,"width":826,"height":11}},{"id":"b6b18453-c2eb-48af-afeb-08cd2b0e797a","block_type":"box","text":"grade and speculative grade are market conventions and do not imply any recommendation or endorsement of a","page_number":195,"box":{"x":68,"y":589,"width":800,"height":11}},{"id":"7d768a4f-4b2f-4f6c-9fc2-bfff8c8900a1","block_type":"box","text":"specific security for investment purposes. Investment grade categories indicate relatively low to moderate credit risk,","page_number":195,"box":{"x":69,"y":604,"width":832,"height":11}},{"id":"284f5498-e17e-4541-9291-30534b905cbf","block_type":"box","text":"while ratings in the speculative categories either signal a higher level of credit risk or that a default has already","page_number":195,"box":{"x":68,"y":619,"width":793,"height":11}},{"id":"ad2cbdfb-8e50-45b2-9aaa-f59a9293947b","block_type":"box","text":"occurred.","page_number":195,"box":{"x":69,"y":634,"width":65,"height":9}},{"id":"e076c33e-c44a-40ad-a21e-607ea9cfde7a","block_type":"box","text":"Fitch may also include issues relating to a rated issuer that are not and have not been rated on its web page.","page_number":195,"box":{"x":102,"y":657,"width":779,"height":11}},{"id":"be278bf1-9e51-43ad-8fe8-770335c15c82","block_type":"box","text":"Such issues are also denoted as ‘NR’.","page_number":195,"box":{"x":69,"y":672,"width":274,"height":9}},{"id":"419abdc7-69e5-4733-b71a-4ea8c2f7367a","block_type":"box","text":"Credit ratings express risk in relative rank order, which is to say they are ordinal measures of credit risk and are","page_number":195,"box":{"x":102,"y":695,"width":797,"height":11}},{"id":"5757379a-537b-4d9a-a6b2-1991c8d5e99d","block_type":"box","text":"not predictive of a specific frequency of default or loss.","page_number":195,"box":{"x":69,"y":710,"width":391,"height":11}},{"id":"ae7e7beb-e8d8-479e-ab41-d349cf562aff","block_type":"box","text":"Fitch’s credit ratings do not directly address any risk other than credit risk. In particular, ratings do not deal with","page_number":195,"box":{"x":102,"y":733,"width":798,"height":11}},{"id":"edd9e840-c2b0-4170-aeea-c546455375f0","block_type":"box","text":"the risk of a market value loss on a rated security due to changes in interest rates, liquidity and other market","page_number":195,"box":{"x":68,"y":748,"width":780,"height":11}},{"id":"a369c4e8-987a-4411-a475-8836e98cb475","block_type":"box","text":"considerations. However, in terms of payment obligation on the rated liability, market risk may be considered to the","page_number":195,"box":{"x":69,"y":763,"width":821,"height":11}},{"id":"89d45186-6425-4323-acb5-6738d8e0ef92","block_type":"box","text":"extent that it influences the ability of an issuer to pay upon a commitment.","page_number":195,"box":{"x":69,"y":778,"width":531,"height":11}},{"id":"a2937009-642f-4537-a6e2-ec8023b2e056","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other conditionality of","page_number":195,"box":{"x":102,"y":801,"width":801,"height":11}},{"id":"1cc18fa8-34d5-4813-91a4-94e4f2aeedf8","block_type":"box","text":"the obligation to pay upon a commitment (for example, in the case of index-linked bonds).","page_number":195,"box":{"x":68,"y":816,"width":639,"height":11}},{"id":"32f07fef-3082-4892-a502-4d2ad2869f62","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency typically rates","page_number":195,"box":{"x":102,"y":838,"width":799,"height":12}},{"id":"1fc4bceb-8260-4383-a204-ded90688e86c","block_type":"box","text":"to the likelihood of non-payment or default in accordance with the terms of that instrument’s documentation. In","page_number":195,"box":{"x":68,"y":853,"width":794,"height":12}},{"id":"ab7274bd-7b58-4753-9210-4edd63831155","block_type":"box","text":"limited cases, Fitch may include additional considerations (","page_number":195,"box":{"x":70,"y":869,"width":420,"height":11}},{"id":"56b5f206-dcdd-4010-934a-fb29454e4441","block_type":"box","text":"i.e.","page_number":195,"box":{"x":492,"y":869,"width":20,"height":9}},{"id":"04b268d1-d7d2-4e01-b2d8-114432d3ad0c","block_type":"box","text":"rate to a higher or lower standard than that implied in","page_number":195,"box":{"x":519,"y":869,"width":380,"height":11}},{"id":"26ac722f-e7d5-4501-abfe-d189edec3f36","block_type":"box","text":"the obligation’s documentation).","page_number":195,"box":{"x":68,"y":884,"width":230,"height":11}},{"id":"d106b8db-83f8-4ebb-a0f4-d21d0ad1866f","block_type":"box","text":"A-6","page_number":195,"box":{"x":477,"y":943,"width":23,"height":9}},{"id":"e5a45e48-7975-40a2-8988-51cf6829d759","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":195,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1e5d48a5-b196-4996-a839-68b6a95053e8","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or certain note","page_number":196,"box":{"x":101,"y":45,"width":779,"height":11}},{"id":"6dcaa084-2622-40d4-8148-51492ba5c9e1","block_type":"box","text":"issuance programs or for private ratings. In this case the rating is not published, but only provided to the issuer or its","page_number":196,"box":{"x":70,"y":60,"width":835,"height":11}},{"id":"4b484fc9-0ce6-48e4-bf31-65252f808545","block_type":"box","text":"agents in the form of a rating letter.","page_number":196,"box":{"x":69,"y":75,"width":253,"height":11}},{"id":"054e4d04-c371-496a-83f0-b95bb679b76a","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope, including interest","page_number":196,"box":{"x":101,"y":98,"width":797,"height":11}},{"id":"3eed1d41-1ea8-498f-8b38-2ffc336f6db9","block_type":"box","text":"strips and return of principal or in other forms of opinions such as credit opinions or rating assessment services.","page_number":196,"box":{"x":69,"y":113,"width":806,"height":11}},{"id":"6ffed80c-1389-4a5c-a301-65aa590e82d3","block_type":"box","text":"Credit opinions are either a notch- or category-specific view using the primary rating scale and omit one or more","page_number":196,"box":{"x":69,"y":128,"width":796,"height":11}},{"id":"743dc70c-8a70-4fa8-9eda-32da6481c294","block_type":"box","text":"characteristics of a full rating or meet them to a different standard. Credit opinions will be indicated using a lower","page_number":196,"box":{"x":69,"y":143,"width":811,"height":11}},{"id":"bd5f7a0d-0886-4277-8b44-730e1e510ffc","block_type":"box","text":"case letter symbol combined with either an ‘*’ (","page_number":196,"box":{"x":69,"y":158,"width":340,"height":11}},{"id":"e0d84e47-31d1-4742-bbed-6fffb3251413","block_type":"box","text":"e.g.","page_number":196,"box":{"x":410,"y":160,"width":25,"height":9}},{"id":"d7e0a60e-2be3-4ea3-a5de-81ae7d229dd5","block_type":"box","text":"‘bbb+*’) or (cat) suffix to denote the opinion status. Credit","page_number":196,"box":{"x":443,"y":158,"width":418,"height":11}},{"id":"93bf4b1a-21c7-464c-b648-15818012230f","block_type":"box","text":"opinions will be point-in-time typically but may be monitored if the analytical group believes information will be","page_number":196,"box":{"x":69,"y":173,"width":780,"height":11}},{"id":"7db073ac-2a2b-4ea5-964a-5221d1aa2a86","block_type":"box","text":"sufficiently available. Rating assessment services are a notch-specific view using the primary rating scale of how an","page_number":196,"box":{"x":69,"y":188,"width":827,"height":12}},{"id":"8173dfd7-97b0-494f-898c-aa57ea364d9f","block_type":"box","text":"existing or potential rating may be changed by a given set of hypothetical circumstances. While credit opinions and","page_number":196,"box":{"x":69,"y":203,"width":816,"height":12}},{"id":"a54fcdf1-3451-4d07-8f67-b6a530d0257d","block_type":"box","text":"rating assessment services are point-in-time and are not monitored, they may have a directional watch or outlook","page_number":196,"box":{"x":69,"y":219,"width":808,"height":11}},{"id":"274fd01c-59cc-4281-9ba0-7f8fb11e3d20","block_type":"box","text":"assigned, which can signify the trajectory of the credit profile.","page_number":196,"box":{"x":69,"y":234,"width":437,"height":11}},{"id":"f679b2c4-cd68-4e5a-aa77-1664e0333a84","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":196,"box":{"x":69,"y":264,"width":567,"height":11}},{"id":"c44db4c4-c7cd-470d-8c47-b553a9c7247d","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative vulnerability to","page_number":196,"box":{"x":102,"y":286,"width":763,"height":12}},{"id":"5b4aa924-f6ee-4156-a07a-06f7e0bbe129","block_type":"box","text":"default on an ordinal scale. In addition, for financial obligations in corporate finance, a measure of recovery given","page_number":196,"box":{"x":69,"y":302,"width":807,"height":11}},{"id":"40bfb844-bc57-4d15-bc19-3a4436db34d6","block_type":"box","text":"default on that liability is also included in the rating assessment. This notably applies to covered bonds ratings, which","page_number":196,"box":{"x":69,"y":317,"width":840,"height":11}},{"id":"1b6be958-4fa1-4e24-b55b-83af88e5dc62","block_type":"box","text":"incorporate both an indication of the probability of default and of the recovery given a default of this debt instrument.","page_number":196,"box":{"x":70,"y":332,"width":833,"height":11}},{"id":"39b98b6e-2a06-4be7-90e2-f832a3dbc785","block_type":"box","text":"On the contrary, Ratings of debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":196,"box":{"x":69,"y":347,"width":807,"height":11}},{"id":"3654b6b9-b8ad-4a9d-a4c1-d84dedfcad0d","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average recovery.","page_number":196,"box":{"x":101,"y":370,"width":784,"height":11}},{"id":"6ed100ef-5bf4-40d0-af69-439f8bbc50c0","block_type":"box","text":"Individual obligations can be assigned ratings higher, lower, or the same as that entity’s issuer rating or issuer","page_number":196,"box":{"x":70,"y":385,"width":787,"height":11}},{"id":"2910a8c3-4171-4a56-ae36-44479ed2520e","block_type":"box","text":"default rating (“IDR”), based on their relative ranking, relative vulnerability to default or based on explicit Recovery","page_number":196,"box":{"x":69,"y":400,"width":813,"height":11}},{"id":"dfca8da5-052f-4a8b-a981-874ab25ce0c2","block_type":"box","text":"Ratings.","page_number":196,"box":{"x":70,"y":415,"width":55,"height":11}},{"id":"27d5aa19-e0fd-4ad4-81dc-9b4bed689820","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower, or the","page_number":196,"box":{"x":101,"y":438,"width":772,"height":11}},{"id":"65bacb11-be3b-4d97-8909-12f980450940","block_type":"box","text":"same as that entity’s issuer rating or IDR, except DIP obligation ratings that are not based off an IDR. At the lower","page_number":196,"box":{"x":69,"y":453,"width":815,"height":11}},{"id":"8cbb1270-69df-4ae3-8fed-36630a489ea7","block_type":"box","text":"end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to complement issuer and","page_number":196,"box":{"x":69,"y":468,"width":766,"height":11}},{"id":"b946b487-0dd7-4d40-94a1-5de1c60218c7","block_type":"box","text":"obligation ratings.","page_number":196,"box":{"x":69,"y":483,"width":125,"height":11}},{"id":"0399ff66-e7e2-4585-91c6-e41d7c8e3613","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":196,"box":{"x":102,"y":506,"width":390,"height":11}},{"id":"04cfca36-87b1-42f8-8923-5bb596ae263a","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of default risk. They are","page_number":196,"box":{"x":68,"y":533,"width":774,"height":12}},{"id":"9663615b-15e3-45ac-8749-c1b2d0c0bb37","block_type":"box","text":"assigned only in cases of exceptionally strong capacity for payment of financial commitments. This","page_number":196,"box":{"x":196,"y":549,"width":703,"height":11}},{"id":"d35a4e93-4a95-4d9a-8d07-77c985d89966","block_type":"box","text":"capacity is highly unlikely to be adversely affected by foreseeable events.","page_number":196,"box":{"x":196,"y":564,"width":521,"height":11}},{"id":"a532f147-2b2b-4c15-8d11-3959c90e9aec","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very","page_number":196,"box":{"x":68,"y":584,"width":838,"height":11}},{"id":"2113daca-7e19-4979-a2a5-6f81009fee75","block_type":"box","text":"strong capacity for payment of financial commitments. This capacity is not significantly vulnerable","page_number":196,"box":{"x":196,"y":599,"width":694,"height":11}},{"id":"a34c46ad-7b21-41b7-a569-380ff1cc729d","block_type":"box","text":"to foreseeable events.","page_number":196,"box":{"x":195,"y":614,"width":159,"height":9}},{"id":"1fbc4a90-771c-453e-87a9-2136ffc8a320","block_type":"box","text":"A High Credit Quality. ‘A’ ratings denote expectations of low default risk. The capacity for payment of","page_number":196,"box":{"x":68,"y":634,"width":828,"height":12}},{"id":"71a8ca5d-10f1-40a2-b3a9-dcd3bc05f9d5","block_type":"box","text":"financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable","page_number":196,"box":{"x":196,"y":649,"width":695,"height":12}},{"id":"851be55b-2cf1-412a-8adf-3e85cfd5adc7","block_type":"box","text":"to adverse business or economic conditions than is the case for higher ratings.","page_number":196,"box":{"x":195,"y":664,"width":565,"height":12}},{"id":"0c29f818-299f-4d08-ae78-e129249fb38c","block_type":"box","text":"BBB Good Credit Quality. ‘BBB’ ratings indicate that expectations of default risk are currently low. The","page_number":196,"box":{"x":70,"y":685,"width":814,"height":11}},{"id":"6e9ae201-dfdc-4a68-ae29-ff2bc5ff2eb9","block_type":"box","text":"capacity for payment of financial commitments is considered adequate, but adverse business or","page_number":196,"box":{"x":196,"y":700,"width":686,"height":11}},{"id":"71749f6c-da7f-46d6-a75e-29286d39189b","block_type":"box","text":"economic conditions are more likely to impair this capacity.","page_number":196,"box":{"x":196,"y":715,"width":420,"height":11}},{"id":"ac9b3a0a-0c76-49ce-a660-9f29a7c702ed","block_type":"box","text":"BB Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of","page_number":196,"box":{"x":70,"y":735,"width":839,"height":11}},{"id":"ce4d635c-32b8-4a2f-a48e-7494c10f08f4","block_type":"box","text":"adverse changes in business or economic conditions over time; however, business or financial","page_number":196,"box":{"x":196,"y":750,"width":672,"height":11}},{"id":"f8ab3f26-19a5-43e0-9179-6f9b080be733","block_type":"box","text":"flexibility exists that supports the servicing of financial commitments.","page_number":196,"box":{"x":196,"y":765,"width":495,"height":12}},{"id":"54918891-6e4a-41e5-b809-43d971d5c13f","block_type":"box","text":"B Highly Speculative. ‘B’ ratings indicate that material default risk is present, but a limited margin of","page_number":196,"box":{"x":70,"y":785,"width":828,"height":12}},{"id":"6c24b859-5fe0-4136-b274-a35dbd17e807","block_type":"box","text":"safety remains. Financial commitments are currently being met; however, capacity for continued","page_number":196,"box":{"x":196,"y":801,"width":682,"height":11}},{"id":"ceaf212f-3848-43dd-b426-490f0a5c04bb","block_type":"box","text":"payment is vulnerable to deterioration in the business and economic environment.","page_number":196,"box":{"x":197,"y":816,"width":584,"height":11}},{"id":"74f37523-05f5-400e-aea7-e9d713e9f414","block_type":"box","text":"CCC Substantial Credit Risk. ‘CCC’ ratings indicate very low margin for safety. Default is a real","page_number":196,"box":{"x":69,"y":836,"width":764,"height":11}},{"id":"7308d1eb-8517-4618-bddc-6ec82bb0eb83","block_type":"box","text":"possibility.","page_number":196,"box":{"x":197,"y":851,"width":72,"height":11}},{"id":"4631bf21-4d75-4998-895b-f42acb4f7f4c","block_type":"box","text":"CC Very High Levels of Credit Risk. ‘CC’ ratings indicate default of some kind appears probable.","page_number":196,"box":{"x":69,"y":871,"width":784,"height":11}},{"id":"50d470e2-9d65-4c43-bf5a-437b1f6326e6","block_type":"box","text":"C Exceptionally High Levels of Credit Risk. ‘C’ ratings indicate default or default-like process has","page_number":196,"box":{"x":69,"y":891,"width":798,"height":12}},{"id":"948acff6-4392-4901-bab1-a7a9311e8750","block_type":"box","text":"begun, or for a closed funding vehicle, payment capacity is irrevocably impaired.","page_number":196,"box":{"x":196,"y":906,"width":569,"height":12}},{"id":"1df0c0e0-80d2-4fcf-a903-68633c4f3dc2","block_type":"box","text":"A-7","page_number":196,"box":{"x":477,"y":943,"width":23,"height":9}},{"id":"1ac4c350-68d0-4d77-a312-73399db641ab","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":196,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a568dd1e-82ed-4e2e-a9f2-fb41d5429b4d","block_type":"box","text":"RD Restricted Default. ‘RD’ ratings indicate an issuer that in Fitch’s opinion has experienced an","page_number":197,"box":{"x":70,"y":48,"width":782,"height":12}},{"id":"3fcf868a-b032-4b75-9d47-14ac08d35547","block_type":"box","text":"uncured payment default or distressed debt exchange on a bond, loan or other material financial","page_number":197,"box":{"x":197,"y":63,"width":686,"height":12}},{"id":"210ee7f0-d637-4942-af2d-7959ab02f8c2","block_type":"box","text":"obligation, but has not entered into bankruptcy filings, administration, receivership, liquidation, or","page_number":197,"box":{"x":196,"y":79,"width":696,"height":11}},{"id":"d8b82a54-9ff3-4d78-a98c-a33ef706feaf","block_type":"box","text":"other formal winding-up procedure, and has not otherwise ceased operating.","page_number":197,"box":{"x":196,"y":94,"width":544,"height":11}},{"id":"1b65a168-bc87-4b5c-9b79-242e37611062","block_type":"box","text":"D Default. ‘D’ ratings indicate an issuer that in Fitch’s opinion has entered into bankruptcy filings,","page_number":197,"box":{"x":70,"y":114,"width":807,"height":11}},{"id":"ee11fb48-7d5e-4c1b-8ffa-d74b2de279a2","block_type":"box","text":"administration, receivership, liquidation or other formal winding-up procedure or that has otherwise","page_number":197,"box":{"x":196,"y":129,"width":705,"height":11}},{"id":"84df7e87-5a9b-4e95-89ae-ab58a939175e","block_type":"box","text":"ceased business and debt is still outstanding.","page_number":197,"box":{"x":196,"y":144,"width":328,"height":11}},{"id":"d40193b4-83aa-41ce-88cc-8dd05567c854","block_type":"box","text":"Within rating categories, Fitch may use modifiers. The modifiers “+” or “-” may be appended to a rating to denote","page_number":197,"box":{"x":101,"y":164,"width":808,"height":12}},{"id":"7771f8ce-fc92-48a2-a46d-3d474adfa329","block_type":"box","text":"relative status within major rating categories.","page_number":197,"box":{"x":69,"y":180,"width":320,"height":11}},{"id":"ad7bd9d0-bcd7-428b-86f6-d2c0ab6f23c9","block_type":"box","text":"For example, the rating category ‘AA’ has three notch-specific rating levels (‘AA+’; ‘AA’; ‘AA–’; each a rating","page_number":197,"box":{"x":102,"y":202,"width":761,"height":11}},{"id":"6629edca-a910-422c-b2e1-65ebbaa40cd8","block_type":"box","text":"level). Such suffixes are not added to ‘AAA’ ratings and ratings below the ‘CCC’ category. For the short-term rating","page_number":197,"box":{"x":70,"y":217,"width":813,"height":12}},{"id":"d7c94e4f-e5fd-4d25-ae32-e56d773d601e","block_type":"box","text":"category of ‘F1’, a ‘+’ may be appended.","page_number":197,"box":{"x":69,"y":232,"width":289,"height":12}},{"id":"9c832769-bca4-41e4-8a8f-de0d79a021ee","block_type":"box","text":"Description of Fitch’s Short-Term Ratings Assigned to Issuers and Obligations","page_number":197,"box":{"x":69,"y":263,"width":568,"height":11}},{"id":"b3815a88-1123-4202-a16a-63943434a7f7","block_type":"box","text":"A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated","page_number":197,"box":{"x":101,"y":285,"width":806,"height":12}},{"id":"156dcf14-5c63-43ec-a286-a393a10be330","block_type":"box","text":"entity and relates to the capacity to meet financial obligations in accordance with the documentation governing the","page_number":197,"box":{"x":69,"y":300,"width":817,"height":12}},{"id":"82d4fbc6-05ec-461b-a77d-09d91ed5fa7e","block_type":"box","text":"relevant obligation. Short-term deposit ratings may be adjusted for loss severity. Short-term ratings are assigned to","page_number":197,"box":{"x":69,"y":315,"width":822,"height":12}},{"id":"d3771ba9-ceba-4a56-8534-c24b38b52b51","block_type":"box","text":"obligations whose initial maturity is viewed as “short term” based on market convention. Typically, this means up to","page_number":197,"box":{"x":69,"y":331,"width":827,"height":11}},{"id":"8f952786-6cba-4fb3-a7f6-19df4c139a1a","block_type":"box","text":"13 months for corporate, sovereign, and structured obligations and up to 36 months for obligations in U.S. public","page_number":197,"box":{"x":70,"y":346,"width":808,"height":11}},{"id":"bb2babcd-0de2-4641-99cc-2b36932a64a2","block_type":"box","text":"finance markets.","page_number":197,"box":{"x":68,"y":361,"width":118,"height":9}},{"id":"3333a4c8-65cb-44d0-a060-f5e7390600fe","block_type":"box","text":"Fitch short-term ratings are as follows:","page_number":197,"box":{"x":102,"y":383,"width":273,"height":12}},{"id":"d1ba74fc-74ac-4467-8747-830b6aa64655","block_type":"box","text":"F1 Highest Short-Term Credit Quality. Indicates the strongest intrinsic capacity for timely payment of","page_number":197,"box":{"x":70,"y":411,"width":816,"height":12}},{"id":"b927d90d-0707-42b4-b1c8-969e9cd3984f","block_type":"box","text":"financial commitments; may have an added “+” to denote any exceptionally strong credit feature.","page_number":197,"box":{"x":196,"y":426,"width":692,"height":12}},{"id":"99cebdad-683f-41f1-a9ab-d4ed1695f143","block_type":"box","text":"F2 Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial","page_number":197,"box":{"x":70,"y":446,"width":734,"height":12}},{"id":"4994258b-9cc8-49f0-a4f5-b1c500d7712c","block_type":"box","text":"commitments.","page_number":197,"box":{"x":196,"y":462,"width":100,"height":9}},{"id":"a877b9a4-e5d0-4ae4-88ba-da345fd7f757","block_type":"box","text":"F3 Fair Short-Term Credit Quality. The intrinsic capacity for timely payment of financial commitments is","page_number":197,"box":{"x":70,"y":482,"width":831,"height":11}},{"id":"8bff9c0a-45de-40f7-ae13-8df014e9485b","block_type":"box","text":"adequate.","page_number":197,"box":{"x":196,"y":497,"width":70,"height":11}},{"id":"7e6a20b4-c8c9-4023-8a6f-7d559f7e4cf4","block_type":"box","text":"B Speculative Short-Term Credit Quality. Minimal capacity for timely payment of financial","page_number":197,"box":{"x":70,"y":517,"width":737,"height":11}},{"id":"bbef2817-b9ec-4af2-9ba4-b1f73703e3ff","block_type":"box","text":"commitments, plus heightened vulnerability to near term adverse changes in financial and","page_number":197,"box":{"x":196,"y":532,"width":641,"height":11}},{"id":"d3fcde53-6d72-4ea5-8257-6703b5493ca6","block_type":"box","text":"economic conditions.","page_number":197,"box":{"x":196,"y":548,"width":149,"height":8}},{"id":"29cfc287-8fec-405d-a068-e7f908bd775f","block_type":"box","text":"C High Short-Term Default Risk. Default is a real possibility.","page_number":197,"box":{"x":69,"y":567,"width":535,"height":12}},{"id":"b3ab7014-2492-4e92-a1ce-dae73ecb2cdd","block_type":"box","text":"RD Restricted Default. Indicates an entity that has defaulted on one or more of its financial","page_number":197,"box":{"x":70,"y":588,"width":749,"height":11}},{"id":"58681a54-3982-4dc9-9254-d6dec6f16aa2","block_type":"box","text":"commitments, although it continues to meet other financial obligations. Typically applicable to entity","page_number":197,"box":{"x":196,"y":603,"width":714,"height":11}},{"id":"39bdbcfe-1049-47e2-a515-38bb70f45c16","block_type":"box","text":"ratings only.","page_number":197,"box":{"x":197,"y":618,"width":83,"height":11}},{"id":"6342f7b0-f2ed-4783-b203-33790b7c13a0","block_type":"box","text":"D Default. Indicates a broad-based default event for an entity, or the default of a short-term","page_number":197,"box":{"x":70,"y":638,"width":761,"height":11}},{"id":"d7de0112-dc09-4532-b80c-86a1daad4999","block_type":"box","text":"obligation.","page_number":197,"box":{"x":196,"y":653,"width":72,"height":11}},{"id":"ea5cb75c-fe50-4bef-9ee8-9880e4107503","block_type":"box","text":"A-8","page_number":197,"box":{"x":477,"y":943,"width":24,"height":9}},{"id":"842e679d-17ec-4e2c-926b-2654e340fb21","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":197,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"53c501fa-1228-425a-9259-69715b0c2a63","block_type":"box","text":"APPENDIX B","page_number":198,"box":{"x":438,"y":76,"width":101,"height":9}},{"id":"3609bfe6-2f85-4e81-a31c-2d018dcc1c0c","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting 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The guidance informs the voting recommendations BAIS","page_number":202,"box":{"x":69,"y":143,"width":803,"height":11}},{"id":"c5782d19-0884-4485-9c4b-b9fb59947756","block_type":"box","text":"makes to BlackRock’s active portfolio managers. It applies to active equity holdings in BlackRock’s fundamental","page_number":202,"box":{"x":69,"y":158,"width":800,"height":11}},{"id":"02a5aa51-68e7-4e29-81aa-fcb9cb027f4a","block_type":"box","text":"equity, systematic equity and multi-asset solutions strategies. It also may apply to holdings in BlackRock’s index and","page_number":202,"box":{"x":69,"y":173,"width":831,"height":11}},{"id":"61f1ea73-e994-4036-a633-13e97c9fc0b0","block_type":"box","text":"active fixed income strategies, to the extent those strategies hold voting securities or conduct issuer engagements.","page_number":202,"box":{"x":69,"y":188,"width":823,"height":12}},{"id":"a0103d35-35ee-4a82-a47e-d0c3a36b110e","block_type":"box","text":"The guidelines are not prescriptive as active portfolio managers have discretion as to how they integrate these","page_number":202,"box":{"x":68,"y":203,"width":789,"height":12}},{"id":"1e49aee3-b13b-47d8-844f-4a949c483dda","block_type":"box","text":"guidelines within their investment processes in light of their clients’ or funds’ investment objectives. There are","page_number":202,"box":{"x":68,"y":218,"width":788,"height":12}},{"id":"98e49e4a-1fe9-4bca-bbca-0489803bc7cf","block_type":"box","text":"separate, independently developed principles and voting policies that are applied to BlackRock’s index equity","page_number":202,"box":{"x":69,"y":234,"width":778,"height":11}},{"id":"f03f0441-bc4d-4c24-8f4d-bf07a6a5b9b8","block_type":"box","text":"investments by a distinct and independent function, BlackRock Investment Stewardship.","page_number":202,"box":{"x":70,"y":249,"width":627,"height":11}},{"id":"3b5f395a-0d40-484c-8b08-ad19c9871fef","block_type":"box","text":"1","page_number":202,"box":{"x":69,"y":294,"width":4,"height":4}},{"id":"644b83d3-d998-4a27-a254-8b5df719a916","block_type":"box","text":"This document includes BAIS’ benchmark policy, which covers nearly all active equity holdings in BlackRock’s","page_number":202,"box":{"x":78,"y":293,"width":777,"height":11}},{"id":"81a01104-4e8f-4da6-b42d-0e4b8f3c923a","block_type":"box","text":"fundamental equity, systematic equity and multi-asset solutions strategies. The benchmark policy also may apply to","page_number":202,"box":{"x":68,"y":308,"width":823,"height":11}},{"id":"9f859251-d7dc-4d37-962b-d6e8a431704e","block_type":"box","text":"holdings in BlackRock’s index and active fixed income strategies, to the extent those strategies hold voting securities","page_number":202,"box":{"x":69,"y":323,"width":837,"height":12}},{"id":"f903e1c0-9873-4bae-adca-e57aa9be63ea","block_type":"box","text":"or conduct issuer engagements. This document also includes BAIS’ decarbonization policy, which covers holdings in","page_number":202,"box":{"x":69,"y":339,"width":824,"height":11}},{"id":"a5ed87aa-b960-481d-958a-bd7fb090ce2d","block_type":"box","text":"BlackRock active funds that have climate and decarbonization objectives in addition to financial objectives.","page_number":202,"box":{"x":70,"y":354,"width":759,"height":11}},{"id":"566d90ea-76c8-43c2-96e6-92f2c6b1bce4","block_type":"box","text":"2","page_number":202,"box":{"x":69,"y":372,"width":4,"height":4}},{"id":"3bdff517-1f3c-4b74-8208-8d06ca10f27d","block_type":"box","text":"BlackRock segmented active and index equity investment functions, including stewardship, in January 2025 as part","page_number":202,"box":{"x":79,"y":371,"width":825,"height":11}},{"id":"0b87d124-5617-4a67-bf9c-e05ba84a247f","block_type":"box","text":"of a strategic initiative to unlock the full breadth of the firm’s active and private markets capabilities for clients. As a","page_number":202,"box":{"x":69,"y":386,"width":830,"height":12}},{"id":"14e4fb89-7cca-4f49-878f-569969d7e25d","block_type":"box","text":"result, there are two stewardship teams, which operate independently of one another and have separate voting","page_number":202,"box":{"x":69,"y":401,"width":792,"height":12}},{"id":"8dc4e274-78ae-4751-a61b-aa0ba2489fec","block_type":"box","text":"policies.","page_number":202,"box":{"x":70,"y":417,"width":56,"height":11}},{"id":"ed36fe85-8652-4c13-82d9-d51f6d3dacbd","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":202,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"3f6a9a1b-5139-43b3-9189-4a0816c27a64","block_type":"box","text":"Global Engagement and Voting Guidelines | 3","page_number":202,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"ead75735-ca27-4017-8e60-890c0d2b98e0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":202,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a22e0de9-3c1f-4ff2-b7fb-3d96f011f3e4","block_type":"box","text":"INTRODUCTION TO BLACKROCK","page_number":203,"box":{"x":372,"y":45,"width":235,"height":9}},{"id":"27eb8eab-3fb4-4dff-9a67-ef59210337c3","block_type":"box","text":"BlackRock’s mission is to help more people invest better. The money BlackRock manages is not its own — it","page_number":203,"box":{"x":102,"y":64,"width":777,"height":11}},{"id":"1212f778-c3f8-4835-be5a-c744513f7d31","block_type":"box","text":"belongs to BlackRock’s clients, many of whom make their own asset allocation and portfolio construction decisions.","page_number":203,"box":{"x":69,"y":78,"width":828,"height":12}},{"id":"543e9a30-da0d-4cf6-9486-cc45bf949a59","block_type":"box","text":"As a fiduciary, BlackRock invests on clients’ behalf to help them meet their investment objectives. The firm does this","page_number":203,"box":{"x":68,"y":93,"width":835,"height":11}},{"id":"1f52c989-7ddf-4cb4-a0f9-f8fb68a2a785","block_type":"box","text":"by understanding clients’ long-term investment objectives and offering choice on how and where they wish to invest","page_number":203,"box":{"x":69,"y":108,"width":823,"height":11}},{"id":"9d2fe0ad-02c0-48c0-a0d8-5642d5a681f2","block_type":"box","text":"their money. BlackRock then helps clients seek the best risk-adjusted returns based on those choices, underpinning","page_number":203,"box":{"x":68,"y":123,"width":830,"height":11}},{"id":"dbf1dd14-ad33-470b-a4e4-ff11e33f37d8","block_type":"box","text":"this work with research, data and analytics.","page_number":203,"box":{"x":68,"y":138,"width":309,"height":11}},{"id":"3e2cee76-3556-4d00-ab59-66bdcf8fb7c2","block_type":"box","text":"At BlackRock, investment stewardship is core to our role as an asset manager and a fiduciary to our clients. As","page_number":203,"box":{"x":101,"y":156,"width":796,"height":12}},{"id":"b7981949-2c57-496b-8226-9c352dea7a42","block_type":"box","text":"stewards of our clients’ assets, we engage with companies to discuss the corporate governance and business","page_number":203,"box":{"x":69,"y":171,"width":787,"height":12}},{"id":"c49083e9-d24e-4a66-a8ad-802c15c06926","block_type":"box","text":"practices that, in our experience, support companies in delivering durable, risk-adjusted financial returns over time.","page_number":203,"box":{"x":70,"y":186,"width":820,"height":12}},{"id":"87586ac4-45f0-4882-94f1-7bd256140de0","block_type":"box","text":"We are committed to building strong relationships through constructive, ongoing dialogue with the boards and","page_number":203,"box":{"x":68,"y":201,"width":782,"height":11}},{"id":"8a5920b4-027e-43b4-8195-d826a8aa79f6","block_type":"box","text":"executive management of the companies in which our clients are invested.","page_number":203,"box":{"x":69,"y":216,"width":531,"height":11}},{"id":"c164441f-0c2d-436b-bbf6-b7d9e1c20462","block_type":"box","text":"ABOUT BLACKROCK ACTIVE INVESTMENT STEWARDSHIP","page_number":203,"box":{"x":277,"y":246,"width":424,"height":9}},{"id":"f7cf929d-d5e7-4914-9f12-f8c8b09d9d93","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management Group and","page_number":203,"box":{"x":102,"y":265,"width":804,"height":11}},{"id":"51161864-b5af-4b29-8393-c78806365b0d","block_type":"box","text":"manages BlackRock’s stewardship engagement and voting on behalf of clients invested in active strategies globally.","page_number":203,"box":{"x":69,"y":280,"width":826,"height":11}},{"id":"bc72e9fd-435f-4531-bb40-807b54058c71","block_type":"box","text":"BAIS is also responsible for engagement with issuers in index fixed income strategies, where appropriate. Our","page_number":203,"box":{"x":70,"y":295,"width":783,"height":11}},{"id":"a2e72803-a5fd-456b-b498-f4e300915eb7","block_type":"box","text":"activities are informed by these Global Engagement and Voting Guidelines (the “Guidelines”) and insights from active","page_number":203,"box":{"x":69,"y":309,"width":834,"height":12}},{"id":"08f66ab0-2250-4157-b876-58f920da5b32","block_type":"box","text":"investment analysts and portfolio managers, with whom we work closely in engaging companies and voting at","page_number":203,"box":{"x":70,"y":324,"width":779,"height":12}},{"id":"407b11e4-8866-4b1a-87bd-dbaa9d134a0f","block_type":"box","text":"shareholder meetings.","page_number":203,"box":{"x":69,"y":339,"width":158,"height":11}},{"id":"bd99534d-c704-43bd-9947-5bc3c6c8a437","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within fundamental active","page_number":203,"box":{"x":102,"y":358,"width":789,"height":11}},{"id":"f848eeef-96f2-4f84-87e5-a78b7881f9c9","block_type":"box","text":"investing.","page_number":203,"box":{"x":70,"y":373,"width":65,"height":11}},{"id":"2cb70d2a-02b0-4651-a3e9-4ed6ad2df9d6","block_type":"box","text":"3","page_number":203,"box":{"x":137,"y":373,"width":4,"height":5}},{"id":"a8735b6c-7cf6-4ea8-b0d7-b6b6074a4220","block_type":"box","text":"Through direct dialogue with company leadership, we seek to understand their businesses and how they","page_number":203,"box":{"x":146,"y":373,"width":744,"height":11}},{"id":"2bcd6059-f598-4c8e-8845-c48299271248","block_type":"box","text":"manage risks and opportunities to deliver durable, risk-adjusted financial returns. Portfolio managers and","page_number":203,"box":{"x":69,"y":387,"width":751,"height":12}},{"id":"6b3f2cce-9524-4840-be8a-da39e674097e","block_type":"box","text":"stewardship specialists may engage jointly or independently on material corporate governance matters. Our","page_number":203,"box":{"x":69,"y":402,"width":765,"height":12}},{"id":"42640eb5-0093-4b59-87ad-0e059eab3c85","block_type":"box","text":"discussions focus on topics relevant to a company’s success over time, including governance and leadership,","page_number":203,"box":{"x":69,"y":417,"width":782,"height":12}},{"id":"3f6cee34-ad50-4598-9f56-8823c48f811e","block_type":"box","text":"corporate strategy, capital structure and financial performance, operations and material sustainability-related risks,","page_number":203,"box":{"x":69,"y":432,"width":820,"height":11}},{"id":"87902ff3-7cfe-40d9-9a2f-5e05e4c0e9e5","block_type":"box","text":"as well as macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are generally","page_number":203,"box":{"x":69,"y":447,"width":828,"height":11}},{"id":"f0c11a71-6c79-4939-b688-38cf6bee5083","block_type":"box","text":"supportive of management teams that have a track record of financial value creation. We aim to build and maintain","page_number":203,"box":{"x":69,"y":462,"width":821,"height":11}},{"id":"3f89b7b6-d8e1-4028-a3e2-713ce6da7e47","block_type":"box","text":"strong relationships with company leadership based on open dialogue and mutual respect.","page_number":203,"box":{"x":69,"y":477,"width":645,"height":11}},{"id":"d535f121-8ee1-4f5f-bacc-34a3affc2f93","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the latitude","page_number":203,"box":{"x":102,"y":495,"width":780,"height":12}},{"id":"073f54da-aa2a-47fa-a273-2a4453aa72e3","block_type":"box","text":"each portfolio manager has to make independent voting decisions on their holdings. For example, BAIS will generally","page_number":203,"box":{"x":69,"y":510,"width":831,"height":11}},{"id":"ee6ea4df-f68f-4661-a7e1-d0397ee07910","block_type":"box","text":"vote the holdings in Systematic Active Equity portfolios in accordance with these guidelines. We provide voting","page_number":203,"box":{"x":68,"y":525,"width":787,"height":11}},{"id":"f74b68e0-0693-4da7-a0ff-4d7dee2504f8","block_type":"box","text":"recommendations to fundamental equity portfolio managers, who may determine to vote differently based on each","page_number":203,"box":{"x":69,"y":540,"width":816,"height":11}},{"id":"6cd25d9b-14c8-41e4-bef6-437560fcc3cd","block_type":"box","text":"portfolio’s investment objectives and strategy.","page_number":203,"box":{"x":70,"y":555,"width":327,"height":11}},{"id":"f06a0b46-082b-41af-871c-92f89afbae31","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":203,"box":{"x":101,"y":574,"width":711,"height":11}},{"id":"cadd24d1-ad5a-46ec-aaca-8865310c3a72","block_type":"box","text":"management teams and board directors","page_number":203,"box":{"x":69,"y":589,"width":285,"height":11}},{"id":"f27f67ef-4d0f-49c5-a187-d0b7426b89b1","block_type":"box","text":"4","page_number":203,"box":{"x":355,"y":589,"width":5,"height":4}},{"id":"3d8471f2-f88c-44f3-b7a2-8e2730119bb3","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We recognize that","page_number":203,"box":{"x":366,"y":589,"width":544,"height":11}},{"id":"52ed20b9-82f9-49db-ac49-ac9482f2ae99","block_type":"box","text":"accepted corporate governance norms can differ across markets, and believe these guidelines represent globally","page_number":203,"box":{"x":69,"y":603,"width":807,"height":11}},{"id":"5a633fd9-5c36-4ca8-bfff-114714d48262","block_type":"box","text":"applicable elements of governance that support a company’s ability to manage material risks and opportunities and","page_number":203,"box":{"x":69,"y":618,"width":827,"height":11}},{"id":"65c388c4-7bf9-4c9f-bc5e-9c4eb695d0a6","block_type":"box","text":"deliver financial returns to investors. Generally, we believe companies should observe accepted corporate governance","page_number":203,"box":{"x":69,"y":633,"width":840,"height":11}},{"id":"b8302b47-7f6a-436c-b3d0-f970e7919753","block_type":"box","text":"norms within their local markets or, particularly in markets without well-established norms, aspire to widely","page_number":203,"box":{"x":69,"y":648,"width":762,"height":11}},{"id":"b170954a-7e2d-4915-b7fe-e621e8ae4340","block_type":"box","text":"recognized international best practices. As one of many minority shareholders, BlackRock cannot – and does not try","page_number":203,"box":{"x":69,"y":663,"width":827,"height":11}},{"id":"6af4381b-2322-4159-a83c-69db6047e655","block_type":"box","text":"to – direct a company’s strategy or its implementation. We look to companies to provide disclosures that explain how","page_number":203,"box":{"x":68,"y":678,"width":837,"height":11}},{"id":"5e3b4c07-8913-414d-a6c6-4b8e10e6dc34","block_type":"box","text":"their approach to corporate governance best aligns with the financial interests of their investors.","page_number":203,"box":{"x":68,"y":692,"width":687,"height":12}},{"id":"cb782099-9245-4857-b849-e1470c220415","block_type":"box","text":"OUR APPROACH TO STEWARDSHIP WITHIN ACTIVE EQUITIES","page_number":203,"box":{"x":263,"y":722,"width":451,"height":11}},{"id":"f1ce7887-4ecd-4f2b-bc47-0a0724885e10","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of corporate","page_number":203,"box":{"x":101,"y":741,"width":753,"height":12}},{"id":"c9dcb34e-bd29-4795-bcf8-10e1b0b349d7","block_type":"box","text":"governance. The voting rights attached to clients’ holdings are an important mechanism for investors to express","page_number":203,"box":{"x":68,"y":756,"width":801,"height":11}},{"id":"c914eb53-f0e9-469f-b9b4-de2c7315c585","block_type":"box","text":"support for, or concern about, a company’s performance. As a fiduciary, BlackRock is legally required to make proxy","page_number":203,"box":{"x":69,"y":771,"width":829,"height":11}},{"id":"7cf2ee25-c248-43b4-907b-1bc6f2e3c328","block_type":"box","text":"voting determinations, on behalf of clients who have delegated voting authority to us, in a manner consistent with","page_number":203,"box":{"x":68,"y":786,"width":809,"height":11}},{"id":"1104aa43-cf00-46f4-94a1-e7be1a0344ba","block_type":"box","text":"BlackRock’s contractual arrangements with clients and funds.","page_number":203,"box":{"x":70,"y":801,"width":438,"height":11}},{"id":"893b939e-d64d-48db-b0b7-2079fae7c0bb","block_type":"box","text":"3","page_number":203,"box":{"x":69,"y":830,"width":4,"height":5}},{"id":"0d5addbc-0dfb-4c17-b458-50c96470c648","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":203,"box":{"x":79,"y":830,"width":790,"height":11}},{"id":"db47832b-bb89-4721-9d04-297713e6edbc","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":203,"box":{"x":69,"y":845,"width":836,"height":11}},{"id":"490cfa60-f690-4034-8e7c-d33b5fa850b6","block_type":"box","text":"We comply fully with these requirements and do not engage with portfolio companies for the purpose, or with the","page_number":203,"box":{"x":68,"y":860,"width":805,"height":11}},{"id":"d67142e2-920d-47a4-b0f9-f228fce7c814","block_type":"box","text":"effect, of changing or influencing control of the company.","page_number":203,"box":{"x":69,"y":875,"width":403,"height":12}},{"id":"9f104cda-ab22-404b-8bc4-840e48f46da4","block_type":"box","text":"4","page_number":203,"box":{"x":69,"y":893,"width":4,"height":5}},{"id":"c475c1cc-30d0-4bd6-bc40-6069ade99c72","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory","page_number":203,"box":{"x":79,"y":893,"width":801,"height":11}},{"id":"0b618ec6-c27e-4bfb-8124-99bdd98d1e29","block_type":"box","text":"boards and their members, where relevant.","page_number":203,"box":{"x":69,"y":908,"width":306,"height":11}},{"id":"91ccec18-aba2-4368-bdcf-11ec619aa5ba","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":203,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"13ba0909-546f-4224-a426-15b8ebd32504","block_type":"box","text":"Global Engagement and Voting Guidelines | 4","page_number":203,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"15a1634c-c9ed-4d5d-9ca5-3012db49dfa4","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":203,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e3cd0250-fa5f-426e-9375-386e05c7fd81","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As indicated","page_number":204,"box":{"x":102,"y":45,"width":778,"height":11}},{"id":"d196e40b-620b-4bf1-abc0-5d232274a555","block_type":"box","text":"below, we may vote against management recommendations when we have concerns about how companies are","page_number":204,"box":{"x":69,"y":60,"width":788,"height":11}},{"id":"884c89bb-5372-428a-b5a0-510dc5c89325","block_type":"box","text":"serving the financial interests of our clients as their shareholders. BAIS takes a globally consistent approach to","page_number":204,"box":{"x":69,"y":74,"width":795,"height":12}},{"id":"4cd9b975-bafe-499a-a55e-a1047eae3a26","block_type":"box","text":"voting but considers the different corporate governance regulations and norms across markets. Votes are determined","page_number":204,"box":{"x":68,"y":89,"width":839,"height":12}},{"id":"4265efe6-aa74-4afe-b8b9-35cc95c5f90a","block_type":"box","text":"on a case-by-case basis, in the context of a company’s situation and the investment mandate we have from clients.","page_number":204,"box":{"x":69,"y":104,"width":823,"height":11}},{"id":"86c2af28-e462-43a3-9053-aeb8e4d3585a","block_type":"box","text":"Please see page 19 for more information about how we fulfill and oversee our investment stewardship","page_number":204,"box":{"x":69,"y":119,"width":729,"height":11}},{"id":"e7afea17-e2a6-467f-a7a2-4832085cd35d","block_type":"box","text":"responsibilities for BlackRock’s non-index equity strategies.","page_number":204,"box":{"x":69,"y":134,"width":423,"height":11}},{"id":"dd402f5d-96e3-492d-a976-e110289f545e","block_type":"box","text":"5","page_number":204,"box":{"x":493,"y":134,"width":5,"height":5}},{"id":"6c28524b-dd90-495c-966f-3a51ad907f13","block_type":"box","text":"OUR APPROACH TO STEWARDSHIP WITHIN FIXED INCOME","page_number":204,"box":{"x":272,"y":164,"width":434,"height":9}},{"id":"6dd2d5e1-1e4a-4565-baff-1978aac808f1","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer engagement is a","page_number":204,"box":{"x":101,"y":183,"width":788,"height":11}},{"id":"d9722f95-591b-49ef-a586-7752570271cb","block_type":"box","text":"component of fixed income investment strategies at BlackRock, particularly for those with sustainability objectives in","page_number":204,"box":{"x":69,"y":198,"width":831,"height":11}},{"id":"54f19823-0e28-4673-8187-8ee03d0dbf13","block_type":"box","text":"addition to financial objectives. Most corporate governance-related fixed income engagements are undertaken in","page_number":204,"box":{"x":69,"y":212,"width":801,"height":12}},{"id":"9379c6fc-4b69-4051-83b1-ce0b1191b0e8","block_type":"box","text":"conjunction with the active investment stewardship team, and often active equity investors. In addition to the topics","page_number":204,"box":{"x":69,"y":227,"width":824,"height":11}},{"id":"3f9a1a00-15e4-41ba-a31a-fcbb91b5983e","block_type":"box","text":"listed below, engagement with fixed income investment teams may help inform an issuer’s approach to structuring","page_number":204,"box":{"x":70,"y":242,"width":816,"height":11}},{"id":"f08e67e8-03a6-427e-95a4-80ff60d8a6c8","block_type":"box","text":"specialist issuances and the standard terms and information in bond documentation.","page_number":204,"box":{"x":69,"y":257,"width":608,"height":11}},{"id":"05259880-533d-4c1b-b326-7ae0bdd4c04c","block_type":"box","text":"5","page_number":204,"box":{"x":69,"y":302,"width":4,"height":4}},{"id":"34852a45-a95f-4331-9407-73b33fb793d6","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":204,"box":{"x":79,"y":301,"width":820,"height":11}},{"id":"a5dc4e7d-7795-4588-b37b-6ab556410b14","block_type":"box","text":"multi-asset solutions strategies, as well as holdings in BlackRock’s index and active fixed income strategies, to the","page_number":204,"box":{"x":69,"y":316,"width":822,"height":12}},{"id":"befb2d42-889e-481a-b472-26b94df9e9b3","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":204,"box":{"x":69,"y":332,"width":554,"height":11}},{"id":"a9e27f68-2e9b-4b3f-b1a8-0c2d1700781d","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":204,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"4fe5edc6-6af5-4351-b7bf-84dbf40e048e","block_type":"box","text":"Global Engagement and Voting Guidelines | 5","page_number":204,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"adb2bfef-eef3-4ea6-a609-9d4ae54016c8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":204,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7a4771a5-9594-44c5-962d-0d1651e5b126","block_type":"box","text":"BOARDS OF DIRECTORS","page_number":205,"box":{"x":400,"y":45,"width":178,"height":9}},{"id":"e0fa680a-b72b-4b62-939b-24a9b88d869d","block_type":"box","text":"Roles and responsibilities","page_number":205,"box":{"x":69,"y":67,"width":186,"height":11}},{"id":"0e3913e0-fdf5-4e05-bdc1-cd5ef058d15e","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board of","page_number":205,"box":{"x":101,"y":86,"width":754,"height":11}},{"id":"8ae27c16-8951-4dc7-a1c4-85a2e16546cc","block_type":"box","text":"directors that is able to advise and supervise management in an independent and objective manner.","page_number":205,"box":{"x":69,"y":101,"width":715,"height":11}},{"id":"a1c4cb22-b142-4013-80b7-255ffe093876","block_type":"box","text":"6","page_number":205,"box":{"x":786,"y":101,"width":4,"height":5}},{"id":"ef743874-21f1-4115-8f5c-cf7e3eea29e0","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment and","page_number":205,"box":{"x":101,"y":119,"width":765,"height":12}},{"id":"33b8beb1-b5cf-477e-b7a9-d00110468e92","block_type":"box","text":"realization of a company’s strategy, purpose and culture. These constructs are interdependent and, when aligned,","page_number":205,"box":{"x":69,"y":134,"width":811,"height":12}},{"id":"895ac690-341c-4d04-86e4-fda6a34eb325","block_type":"box","text":"can better position a company to be resilient in the face of a changing business environment, help reduce the risks","page_number":205,"box":{"x":69,"y":149,"width":822,"height":11}},{"id":"6d0bde29-d19b-4957-9930-9ba03f12a078","block_type":"box","text":"of corporate or employee misconduct, and attract and retain the caliber of workers necessary to deliver financial","page_number":205,"box":{"x":69,"y":164,"width":799,"height":11}},{"id":"63c07d04-3d46-452b-bf9a-c8ab502edb12","block_type":"box","text":"performance over time.","page_number":205,"box":{"x":70,"y":179,"width":164,"height":11}},{"id":"fe3c8cab-7d01-4ebf-8a79-2b19de24033a","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies and","page_number":205,"box":{"x":102,"y":198,"width":750,"height":11}},{"id":"7ff124bd-cbb0-4c6e-9068-74def93192c6","block_type":"box","text":"procedures are in place to help management meet its strategic objectives within an agreed risk tolerance.","page_number":205,"box":{"x":70,"y":213,"width":753,"height":11}},{"id":"5d61bfd5-02fc-4799-84b8-0c7be89a5864","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the chief","page_number":205,"box":{"x":102,"y":231,"width":753,"height":11}},{"id":"9c91dd11-17d1-43e0-b44d-616fdaa4a7da","block_type":"box","text":"executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the performance of the CEO","page_number":205,"box":{"x":69,"y":246,"width":811,"height":11}},{"id":"a2db07b1-7871-4ff7-bf22-7f0015a71fcd","block_type":"box","text":"and other key executives, determining executive compensation, ensuring a rigorous audit, overseeing strategy","page_number":205,"box":{"x":69,"y":261,"width":783,"height":11}},{"id":"95474009-7812-4144-b94a-826350626687","block_type":"box","text":"execution and risk management and engaging with shareholders, and other stakeholders, as necessary.","page_number":205,"box":{"x":69,"y":276,"width":742,"height":11}},{"id":"1aa03ea8-721a-4f13-b5e3-fa2a4ab81019","block_type":"box","text":"Composition and effectiveness","page_number":205,"box":{"x":69,"y":298,"width":224,"height":11}},{"id":"136c0fe7-027e-4669-8e30-d62617f2b310","block_type":"box","text":"Appointment process","page_number":205,"box":{"x":68,"y":317,"width":152,"height":11}},{"id":"54e73505-a2bb-42d0-81bf-c47f537adb9c","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to ensuring the","page_number":205,"box":{"x":101,"y":335,"width":773,"height":12}},{"id":"7e5adba0-5761-47a6-a309-7e797c1367bc","block_type":"box","text":"board is composed of directors with the appropriate mix of skills and experience. Generally, the board or a sub","page_number":205,"box":{"x":69,"y":350,"width":792,"height":11}},{"id":"d095a511-6922-4e76-afa9-efd8272faec9","block_type":"box","text":"committee determines the general criteria given the company’s circumstances (","page_number":205,"box":{"x":69,"y":365,"width":568,"height":11}},{"id":"1af69e69-60da-4252-9791-5224c79b9246","block_type":"box","text":"e.g.","page_number":205,"box":{"x":638,"y":367,"width":25,"height":9}},{"id":"b2a3521b-92f4-4295-a93f-070aadf8b86e","block_type":"box","text":", sector, maturity, geographic","page_number":205,"box":{"x":666,"y":365,"width":204,"height":11}},{"id":"ef0f5796-ffff-4566-b1a4-640a34ad9321","block_type":"box","text":"footprint) and any additional criteria for a specific role being filled (","page_number":205,"box":{"x":68,"y":380,"width":474,"height":11}},{"id":"59c4d65f-1a81-4ba8-94ca-48a04b23193a","block_type":"box","text":"e.g.","page_number":205,"box":{"x":544,"y":381,"width":25,"height":10}},{"id":"36010ea9-1cd5-4770-980f-d1a995a39997","block_type":"box","text":", financial expertise, industry track record). To","page_number":205,"box":{"x":571,"y":380,"width":327,"height":11}},{"id":"23798074-a1b1-45f3-86f0-c8d889dc52ee","block_type":"box","text":"inform the process, we encourage companies to review the skills and experience of incumbent directors to identify","page_number":205,"box":{"x":70,"y":395,"width":815,"height":11}},{"id":"ddb5de51-e433-4daa-b79d-26e5ea3325a6","block_type":"box","text":"any gaps and whether the skills and experience of a director candidate would be additive. We welcome disclosures","page_number":205,"box":{"x":69,"y":410,"width":817,"height":11}},{"id":"8e0a37de-767a-4e94-a696-1e882ebb916d","block_type":"box","text":"that explain how the board considered different skills and experience to ensure that the directors collectively can be","page_number":205,"box":{"x":68,"y":425,"width":829,"height":11}},{"id":"1301a60b-44e5-4e22-b997-db34e0e586ea","block_type":"box","text":"effective in fulfilling their responsibilities. We assess a company’s board composition against that of its peer group","page_number":205,"box":{"x":69,"y":439,"width":821,"height":12}},{"id":"d7eeb2a4-6c84-4ad7-b415-c3717ed0f91a","block_type":"box","text":"and local market requirements.","page_number":205,"box":{"x":69,"y":455,"width":221,"height":10}},{"id":"11fe2bd1-bc49-4aaf-a2c5-ef34f4eb377a","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any particular board","page_number":205,"box":{"x":102,"y":473,"width":798,"height":11}},{"id":"787b0093-9509-43d2-9541-9905f42eee31","block_type":"box","text":"composition in our engagements or voting but seek to understand how well placed a board is to act in investors’","page_number":205,"box":{"x":69,"y":488,"width":800,"height":11}},{"id":"786d90ce-52d8-47c6-8b54-c61997e46b6b","block_type":"box","text":"interests. We may vote against the election of the most senior independent director, or the chair of the relevant","page_number":205,"box":{"x":70,"y":503,"width":794,"height":11}},{"id":"fc610c99-403f-4d60-83fa-f8b639f9cdc9","block_type":"box","text":"committee, where a company has not demonstrated it has an appointment process that results in a high functioning","page_number":205,"box":{"x":69,"y":517,"width":830,"height":12}},{"id":"3f732b3c-2618-4936-8146-d940d2140b93","block_type":"box","text":"board with the appropriate complement of skills and experience amongst the directors to support strong financial","page_number":205,"box":{"x":69,"y":532,"width":808,"height":12}},{"id":"c4b8a611-1304-40ca-bdba-1672a0583322","block_type":"box","text":"performance over time. We may vote against newly nominated directors who do not seem to have the appropriate","page_number":205,"box":{"x":70,"y":547,"width":808,"height":12}},{"id":"198a5a0b-9626-4167-9c59-a672e03eeba6","block_type":"box","text":"skills or experience to contribute to the board’s effectiveness.","page_number":205,"box":{"x":69,"y":562,"width":442,"height":11}},{"id":"8408f6e3-4816-4d4b-8ec4-a3ca9d246fb0","block_type":"box","text":"Independence","page_number":205,"box":{"x":70,"y":585,"width":99,"height":10}},{"id":"1b4220fb-b61c-47ae-a9ef-21eef9a5f409","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (","page_number":205,"box":{"x":102,"y":603,"width":642,"height":11}},{"id":"e3a1b46b-057c-423e-bba7-9e4a80c10b47","block_type":"box","text":"e.g.","page_number":205,"box":{"x":746,"y":605,"width":25,"height":9}},{"id":"059f624b-0314-49d0-81fc-d736472de545","block_type":"box","text":", government or","page_number":205,"box":{"x":773,"y":604,"width":111,"height":10}},{"id":"41aa8332-35d6-4c3b-96c4-e5a9fd88091d","block_type":"box","text":"employees) is of paramount importance to the protection of the interests of minority shareholders such as","page_number":205,"box":{"x":69,"y":618,"width":759,"height":11}},{"id":"eb383809-1194-4429-994d-711675b2c0b9","block_type":"box","text":"BlackRock’s clients. We consider it good practice for at least half the directors to be independent and free from","page_number":205,"box":{"x":70,"y":633,"width":793,"height":11}},{"id":"16f84d03-fea3-47d4-9822-f143c90b81a0","block_type":"box","text":"conflicts of interest or undue influence.","page_number":205,"box":{"x":69,"y":648,"width":278,"height":9}},{"id":"d56b89c1-9128-47f5-aec7-eec86760e45f","block_type":"box","text":"7","page_number":205,"box":{"x":349,"y":648,"width":4,"height":5}},{"id":"71bceabb-542d-492b-951e-cc20654b6361","block_type":"box","text":"This also helps to ensure that board committees are composed of a","page_number":205,"box":{"x":358,"y":648,"width":486,"height":11}},{"id":"de533f64-5b00-4a11-9d65-acb061023cc2","block_type":"box","text":"sufficient number of independent directors. Companies domiciled in markets with a higher threshold for board","page_number":205,"box":{"x":69,"y":663,"width":783,"height":11}},{"id":"ede0075d-f16c-48cf-88a9-c312fc19ae8b","block_type":"box","text":"independence should meet those local requirements.","page_number":205,"box":{"x":70,"y":678,"width":378,"height":10}},{"id":"a09341ab-c219-4393-9668-c0d3ddc88fc1","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient balance of","page_number":205,"box":{"x":101,"y":696,"width":803,"height":11}},{"id":"e3571209-05df-4a80-8374-8ff3b3f7a143","block_type":"box","text":"independence. We may also vote against the election of the chair of the committee responsible for board","page_number":205,"box":{"x":70,"y":711,"width":748,"height":11}},{"id":"f3c26325-b578-4aab-82ed-de2d7484c537","block_type":"box","text":"composition if this is a perennial issue.","page_number":205,"box":{"x":69,"y":726,"width":280,"height":11}},{"id":"21bd7400-828e-4563-9be3-4bd5ddfa1560","block_type":"box","text":"6","page_number":205,"box":{"x":69,"y":756,"width":4,"height":4}},{"id":"eb2f1979-3e7f-478d-a629-5caf68b68889","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance","page_number":205,"box":{"x":93,"y":755,"width":763,"height":11}},{"id":"d3074af3-81e6-413c-a704-2f21fe099021","block_type":"box","text":"principles of the US Business Roundtable as examples.","page_number":205,"box":{"x":94,"y":770,"width":394,"height":11}},{"id":"4ca2d60d-faea-41ed-883a-6f44d4d07731","block_type":"box","text":"7","page_number":205,"box":{"x":69,"y":788,"width":4,"height":5}},{"id":"5399288e-c539-48d5-9030-e84922f71222","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":205,"box":{"x":93,"y":788,"width":795,"height":11}},{"id":"97da9cd1-6211-4339-be9e-aaed11082a65","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":205,"box":{"x":93,"y":803,"width":793,"height":11}},{"id":"c84c1a38-20fe-45ce-bd47-3f451ddb5ca8","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which","page_number":205,"box":{"x":94,"y":818,"width":778,"height":11}},{"id":"05cdcef8-38c5-495e-9825-bd4944b9d3d1","block_type":"box","text":"could, or could reasonably be perceived to, materially interfere with a director’s ability to act in the best interests","page_number":205,"box":{"x":93,"y":833,"width":807,"height":11}},{"id":"14a7b31c-9a71-4ea8-bbfb-8a6a15afb10b","block_type":"box","text":"of the company and shareholders.","page_number":205,"box":{"x":93,"y":848,"width":242,"height":11}},{"id":"45fe9c69-8aff-4ecd-ae6f-586684507785","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":205,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"8d8d88c4-57f4-4293-85b0-2eea1630c322","block_type":"box","text":"Global Engagement and Voting Guidelines | 6","page_number":205,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"b9923387-ab4d-40fd-8806-635c73e4c7e4","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":205,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1e7cf22e-e7fe-4ebb-9a08-931891c554f1","block_type":"box","text":"Independent board leadership","page_number":206,"box":{"x":70,"y":45,"width":212,"height":11}},{"id":"1fa471ff-29e6-4895-91ef-d6c0622f8f4f","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to independent","page_number":206,"box":{"x":102,"y":63,"width":784,"height":11}},{"id":"44b02f18-2281-4745-a567-a8a3cc6a0138","block_type":"box","text":"board leadership. One is a non-executive, independent chair of the board who is responsible for leading the board in","page_number":206,"box":{"x":69,"y":78,"width":827,"height":11}},{"id":"0613efcd-0276-4731-b30a-41bf44a10268","block_type":"box","text":"the effective exercise of its duties. The other is a lead or senior independent director, who is responsible for","page_number":206,"box":{"x":68,"y":93,"width":774,"height":11}},{"id":"edc417e1-ca6c-401d-bf2c-59425e295eb1","block_type":"box","text":"coordinating with the other non-executive directors and working closely with the executive chair on the board agenda","page_number":206,"box":{"x":69,"y":108,"width":826,"height":11}},{"id":"ecd6cfe0-a0f7-4cfa-bb44-ecba6cf5c0e8","block_type":"box","text":"and other board procedures. In this case, the executive chair and the lead independent director work together to","page_number":206,"box":{"x":69,"y":123,"width":801,"height":11}},{"id":"6a952c14-cdd8-4d14-ac8f-4a631d7c5861","block_type":"box","text":"ensure the board is effectively fulfilling its responsibilities. In our view, the independent leader of the board, and/or","page_number":206,"box":{"x":69,"y":138,"width":823,"height":11}},{"id":"a4befc62-7841-4a92-93d1-2c30ab2f99b7","block_type":"box","text":"the chair of a relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":206,"box":{"x":68,"y":152,"width":793,"height":12}},{"id":"c8f5a83b-84cd-48cd-ac07-1491fd1fd2d6","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board leadership model and","page_number":206,"box":{"x":69,"y":167,"width":816,"height":11}},{"id":"db250c40-34b9-4602-b5a3-12b1f053f525","block_type":"box","text":"how it serves the interests of shareholders.","page_number":206,"box":{"x":69,"y":182,"width":311,"height":9}},{"id":"d7503d32-086b-4e1b-aedf-93c9a86790c4","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if there is not","page_number":206,"box":{"x":101,"y":201,"width":798,"height":11}},{"id":"3ff5b6fb-6d80-4d48-80b1-53ef3dc1a8a3","block_type":"box","text":"an identified independent leader of the board with clear responsibilities for board performance. We may vote against","page_number":206,"box":{"x":69,"y":216,"width":831,"height":11}},{"id":"bbaa0e2b-863b-4bd5-86a1-ed0c610b8ec0","block_type":"box","text":"the most senior independent director if the board has a policy of not engaging with shareholders.","page_number":206,"box":{"x":68,"y":231,"width":691,"height":11}},{"id":"47c987e2-78a3-41b9-a644-2af5255e4b62","block_type":"box","text":"Tenure and succession","page_number":206,"box":{"x":70,"y":253,"width":162,"height":9}},{"id":"540394c6-6228-4ab0-b3b7-b7ab54e01b2a","block_type":"box","text":"In our view, it is good practice for boards to establish the length of time a director would normally be expected to","page_number":206,"box":{"x":102,"y":272,"width":803,"height":11}},{"id":"b465e36c-23cf-4fe5-b2ed-4ee1c6176688","block_type":"box","text":"serve, in line with market norms where those exist. We find it helpful when companies disclose their approach to","page_number":206,"box":{"x":69,"y":286,"width":805,"height":11}},{"id":"92ff632a-802f-4201-908d-f003d37fc91b","block_type":"box","text":"director tenure particularly around the contributions of directors who have served for longer periods than typically","page_number":206,"box":{"x":69,"y":301,"width":806,"height":12}},{"id":"6e16a7ea-790d-473e-abf0-9ca2db7aa388","block_type":"box","text":"provided for under local practice. In our experience, long-serving directors could become less independent given their","page_number":206,"box":{"x":70,"y":316,"width":833,"height":12}},{"id":"f604a2de-aa5c-4ba7-93a9-60a1299b291b","block_type":"box","text":"long-term relationship with management and involvement in past board decisions.","page_number":206,"box":{"x":70,"y":331,"width":581,"height":11}},{"id":"bb40c94b-c514-40af-a926-e333dfb1b9d3","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances renewal","page_number":206,"box":{"x":102,"y":350,"width":779,"height":11}},{"id":"754b498a-59b2-4982-887f-ec9762e5ca4e","block_type":"box","text":"through the regular introduction of directors with fresh perspectives and expertise with continuity through the","page_number":206,"box":{"x":68,"y":365,"width":777,"height":11}},{"id":"03851a4c-b246-4d62-8e29-058253758f73","block_type":"box","text":"retention of directors with long-term knowledge of the board and company.","page_number":206,"box":{"x":69,"y":379,"width":528,"height":12}},{"id":"f92dc28a-0581-4715-9008-042aa5f8cc4b","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate governance best","page_number":206,"box":{"x":102,"y":398,"width":774,"height":11}},{"id":"82ff2375-f4b2-4c93-ab4b-39edd8f35a6f","block_type":"box","text":"practices, we may vote against the election of the chair of the committee responsible for board composition if a","page_number":206,"box":{"x":70,"y":413,"width":795,"height":11}},{"id":"e13d23cb-3ed1-4b9f-afc9-a80d710d8391","block_type":"box","text":"company does not clearly disclose its approach to director tenure and board renewal. We may vote against the","page_number":206,"box":{"x":69,"y":428,"width":788,"height":11}},{"id":"40c30bda-3447-4b25-927a-894d71ccee5e","block_type":"box","text":"election of directors who have served for more years than is typical in markets with specific guidance, where the case","page_number":206,"box":{"x":69,"y":443,"width":839,"height":11}},{"id":"74f8a40f-8c0b-438a-a845-96375e445f60","block_type":"box","text":"for their continued service is not evident.","page_number":206,"box":{"x":68,"y":458,"width":292,"height":9}},{"id":"45b497fe-edd0-4ccf-a358-8d72127fee04","block_type":"box","text":"Capacity","page_number":206,"box":{"x":70,"y":480,"width":60,"height":11}},{"id":"d98d4520-ad39-4ca5-916a-b1ebc16ddfd3","block_type":"box","text":"To be effective and engaged, directors need to have the time and energy to commit to the role. In our view, an","page_number":206,"box":{"x":101,"y":499,"width":784,"height":11}},{"id":"04386bce-d9a9-4e92-9e89-19827c77a3bc","block_type":"box","text":"effective board will assess the ability of its members to maintain an appropriate focus on board matters and the","page_number":206,"box":{"x":69,"y":513,"width":801,"height":12}},{"id":"db27a71b-9eab-4702-93a6-1eb87a240f55","block_type":"box","text":"company taking into consideration competing responsibilities. We recognize that board leadership roles vary across","page_number":206,"box":{"x":69,"y":529,"width":823,"height":11}},{"id":"63800834-cdd3-42f7-8fb9-7bcfe1fd5b1c","block_type":"box","text":"markets in responsibilities and required time commitment but note that they are generally more intensive than a","page_number":206,"box":{"x":69,"y":543,"width":800,"height":11}},{"id":"aedab7cd-e396-4a13-a74f-16ee33ca3649","block_type":"box","text":"standard directorship. We will take local norms and practices into consideration when making our voting","page_number":206,"box":{"x":69,"y":558,"width":741,"height":11}},{"id":"25848fe1-580a-4917-9aa3-6825b3432e73","block_type":"box","text":"determinations across markets.","page_number":206,"box":{"x":69,"y":573,"width":226,"height":9}},{"id":"6650ba15-097e-4b69-bc7f-c285a60f8aa5","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively fulfill","page_number":206,"box":{"x":101,"y":592,"width":776,"height":11}},{"id":"0b808350-f42c-4f1b-81df-11b41dd17b03","block_type":"box","text":"their duties to the board and company.","page_number":206,"box":{"x":68,"y":607,"width":275,"height":11}},{"id":"e8e1efca-c76b-4e49-995d-f291663c9aca","block_type":"box","text":"Director elections","page_number":206,"box":{"x":70,"y":629,"width":124,"height":9}},{"id":"4620a63f-cbf7-488a-812f-a6a3b5ebd382","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A classified board","page_number":206,"box":{"x":102,"y":647,"width":805,"height":12}},{"id":"b9f5035e-dfc9-4ba1-a327-4be56b99cf4f","block_type":"box","text":"structure","page_number":206,"box":{"x":69,"y":663,"width":63,"height":8}},{"id":"a7b97987-28c1-40c4-8b6d-e2e10137e4de","block_type":"box","text":"8","page_number":206,"box":{"x":133,"y":663,"width":4,"height":4}},{"id":"05b7f514-490a-4d5c-9ff7-8431f81041af","block_type":"box","text":"may be justified by a company when it needs consistency and stability during a time of transition, or on the","page_number":206,"box":{"x":144,"y":662,"width":761,"height":12}},{"id":"336f835c-9091-4ed4-a3df-e55d03973708","block_type":"box","text":"basis of its business model (","page_number":206,"box":{"x":69,"y":677,"width":206,"height":11}},{"id":"2120b153-29dd-4988-8c15-fbc508e440dc","block_type":"box","text":"e.g.","page_number":206,"box":{"x":277,"y":679,"width":24,"height":10}},{"id":"2140d103-249e-4a55-8b04-8f81596e2773","block_type":"box","text":", a non-operating company such as closed-end funds).","page_number":206,"box":{"x":304,"y":677,"width":382,"height":12}},{"id":"d2440025-8fde-4514-a00d-812c9bcb3607","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in bundled","page_number":206,"box":{"x":102,"y":696,"width":774,"height":11}},{"id":"218c716c-de33-448b-9e07-65571891fc87","block_type":"box","text":"slates. We look to companies to provide sufficient information on each director standing for election so that","page_number":206,"box":{"x":69,"y":711,"width":770,"height":11}},{"id":"2ee142cd-ed8b-44b7-b547-0d6140aeb560","block_type":"box","text":"shareholders can assess their capabilities and suitability. We will generally not support the election of directors","page_number":206,"box":{"x":69,"y":726,"width":794,"height":11}},{"id":"8cd03179-7a0f-432d-a847-3133b257fe0c","block_type":"box","text":"whose names and biographical details have not been disclosed sufficiently in advance of the shareholder meeting.","page_number":206,"box":{"x":68,"y":740,"width":818,"height":12}},{"id":"c7267fc5-9ead-42ce-bf34-d6a4daf0cf1f","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at the","page_number":206,"box":{"x":102,"y":759,"width":743,"height":11}},{"id":"8d3ba629-af03-43fd-a1b7-36c81591223e","block_type":"box","text":"shareholder meeting. Where a company’s practices differ, we look to the board to provide a detailed explanation as","page_number":206,"box":{"x":69,"y":774,"width":823,"height":11}},{"id":"c6ef509b-ceed-4821-9c3a-1f43b4bc4d8d","block_type":"box","text":"to how its approach best serves investors’ interests.","page_number":206,"box":{"x":68,"y":789,"width":377,"height":11}},{"id":"b62e6aec-e17c-4443-9eea-8c979bf309b0","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of directors and/or","page_number":206,"box":{"x":101,"y":807,"width":798,"height":12}},{"id":"7125101f-a12f-42d2-8a67-e7c6ef7e1574","block_type":"box","text":"a simple majority vote standard for director elections. We may vote against all the directors standing for election as","page_number":206,"box":{"x":69,"y":822,"width":822,"height":12}},{"id":"c89b6f2a-5a60-486f-b197-23669194c19e","block_type":"box","text":"part of a single slate if we have concerns about the profile or performance of an individual director.","page_number":206,"box":{"x":70,"y":837,"width":706,"height":12}},{"id":"67fd40b3-33a4-42b6-9758-8cf01c51b4eb","block_type":"box","text":"8","page_number":206,"box":{"x":69,"y":867,"width":4,"height":4}},{"id":"f745c4f8-5a24-459d-b166-9966d77ca647","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result, only one class of","page_number":206,"box":{"x":78,"y":866,"width":818,"height":12}},{"id":"645de791-f26c-4498-bba6-4d8833c4bc3f","block_type":"box","text":"directors stands for election in any one year.","page_number":206,"box":{"x":69,"y":882,"width":315,"height":11}},{"id":"159d7e59-0aa2-4b22-926c-2db968627b60","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":206,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"a0112c91-cf3b-480c-b840-128e22811933","block_type":"box","text":"Global Engagement and Voting Guidelines | 7","page_number":206,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"b17975e2-288d-4f48-8638-744d37457616","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":206,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"5cfafc3f-f87d-45a6-a0fa-a464430f0a08","block_type":"box","text":"Committees","page_number":207,"box":{"x":70,"y":45,"width":84,"height":9}},{"id":"13504382-5cab-4f53-b728-ad4f788c30a9","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and risk,","page_number":207,"box":{"x":102,"y":63,"width":766,"height":11}},{"id":"40db7c80-5033-427d-ba44-2c34280cde6a","block_type":"box","text":"governance and human capital, and executive compensation, amongst other matters. We do not prescribe to","page_number":207,"box":{"x":68,"y":78,"width":776,"height":11}},{"id":"e8ec39a8-5a19-4b09-bcaf-a03a3383ac64","block_type":"box","text":"companies what committees they should establish, but we seek to understand the board’s rationale for the","page_number":207,"box":{"x":69,"y":93,"width":766,"height":11}},{"id":"c54cb658-3787-4d4f-9e9e-cf1bfaddfd09","block_type":"box","text":"committee structure it determines is appropriate. We note that, in some markets, regulation requires such","page_number":207,"box":{"x":69,"y":108,"width":759,"height":11}},{"id":"ad96300c-1bca-484a-b6a9-865df8386c26","block_type":"box","text":"committees. The responsibilities of each committee should be clear, and the board should ensure that all critical","page_number":207,"box":{"x":69,"y":123,"width":804,"height":11}},{"id":"f40db6be-ddd8-4594-be28-ba0ffc4f1690","block_type":"box","text":"matters are assigned either to the full board or to one of the committees. It is helpful to investor understanding when","page_number":207,"box":{"x":69,"y":138,"width":837,"height":11}},{"id":"02b62c3c-aa33-4e22-839e-14b97df85394","block_type":"box","text":"the board discloses the structure, membership, proportion of independent directors, and responsibilities of each","page_number":207,"box":{"x":68,"y":152,"width":806,"height":11}},{"id":"b78b1b09-75ef-47c9-8fd6-e09da3e07ae7","block_type":"box","text":"committee. The responsibilities we typically see assigned to the three most common committees include:","page_number":207,"box":{"x":69,"y":168,"width":752,"height":11}},{"id":"c3c76916-3838-4823-8f98-98b620bf5000","block_type":"box","text":"•","page_number":207,"box":{"x":69,"y":188,"width":6,"height":4}},{"id":"48a865de-5a43-4b38-91dc-20b88cfd0eb7","block_type":"box","text":"Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management and","page_number":207,"box":{"x":101,"y":185,"width":722,"height":11}},{"id":"63a2b7f2-9e2a-467e-8d4b-da54ebec32fa","block_type":"box","text":"compliance with legal and regulatory requirements; may also play an oversight role in relation to the internal","page_number":207,"box":{"x":101,"y":200,"width":771,"height":11}},{"id":"df977f8e-7698-4fc6-9d8f-25114a9bc2ee","block_type":"box","text":"audit function and whistleblowing mechanisms.","page_number":207,"box":{"x":102,"y":214,"width":335,"height":12}},{"id":"fb55738a-96bc-42e4-ab40-ac22a41dfadb","block_type":"box","text":"•","page_number":207,"box":{"x":69,"y":235,"width":6,"height":4}},{"id":"ae8962bb-3a08-4255-980e-d7f0a18e7710","block_type":"box","text":"Nominating, governance and human capital – oversight responsibilities for corporate governance principles and","page_number":207,"box":{"x":102,"y":232,"width":790,"height":11}},{"id":"51f48210-57ce-4cd6-a992-5b5dc66c3d36","block_type":"box","text":"practices of the company, including the periodic review of board performance; responsibility for succession","page_number":207,"box":{"x":102,"y":247,"width":761,"height":11}},{"id":"c47cde50-1b05-4e94-8cbb-481e3dc92f4f","block_type":"box","text":"planning for CEO and key board roles, as well as the director appointment process; may also have oversight","page_number":207,"box":{"x":102,"y":262,"width":769,"height":11}},{"id":"d11d7869-df6a-419b-9048-19cde41816cb","block_type":"box","text":"responsibilities for human capital management strategies, including corporate culture and purpose.","page_number":207,"box":{"x":102,"y":276,"width":707,"height":12}},{"id":"eaba484e-9345-46b2-8b5c-21b0e56744d9","block_type":"box","text":"•","page_number":207,"box":{"x":69,"y":297,"width":6,"height":4}},{"id":"4413d7c6-d1dc-4c14-b483-dbf07df54370","block_type":"box","text":"Executive compensation – determines the compensation policies and programs for the CEO and other executive","page_number":207,"box":{"x":102,"y":294,"width":796,"height":11}},{"id":"596db9c2-8d9d-465f-b48b-fca5fef4e975","block_type":"box","text":"officers, approves annual awards and payments under the policies; may also have oversight responsibilities for","page_number":207,"box":{"x":102,"y":309,"width":793,"height":11}},{"id":"7af4aca6-cc9b-404c-b7bd-e428f8a5fda4","block_type":"box","text":"firm-wide compensation policies.","page_number":207,"box":{"x":101,"y":323,"width":232,"height":11}},{"id":"7a5c9672-49b7-42a1-9dc8-f85fec9128ab","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee members","page_number":207,"box":{"x":101,"y":342,"width":807,"height":11}},{"id":"10cc3bb2-c525-448a-9245-6280765aad66","block_type":"box","text":"to convey concerns about how a committee has undertaken its responsibilities. We may vote against the election of","page_number":207,"box":{"x":68,"y":357,"width":828,"height":11}},{"id":"5e5d333f-a992-4e2f-9f87-6d0d479a86ec","block_type":"box","text":"the most senior non-executive director if there is not a clearly disclosed approach to board committees.","page_number":207,"box":{"x":68,"y":372,"width":738,"height":11}},{"id":"841ed85c-f5dd-4ef9-92e0-727504374454","block_type":"box","text":"Board and director evaluation","page_number":207,"box":{"x":70,"y":395,"width":209,"height":8}},{"id":"8c0bb6db-0e32-4d2f-908f-826369f2e8ae","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the board, the","page_number":207,"box":{"x":101,"y":413,"width":776,"height":11}},{"id":"677248df-e087-434b-bd54-81eb9251a2a2","block_type":"box","text":"committees, the chair and individual directors. Periodically, this review could be undertaken by an independent third","page_number":207,"box":{"x":69,"y":428,"width":825,"height":11}},{"id":"fd425056-7db7-432b-9486-abe0c6675e8a","block_type":"box","text":"party able to bring objective perspectives to the board on governance and performance. We encourage companies to","page_number":207,"box":{"x":70,"y":443,"width":831,"height":11}},{"id":"0b3f1705-888d-4ffe-be38-a2092c48836e","block_type":"box","text":"disclose their approach to and the objectives of evaluations, including any changes made to the board’s approach as","page_number":207,"box":{"x":69,"y":458,"width":835,"height":11}},{"id":"fa773176-5a81-45bd-ac40-b75271876599","block_type":"box","text":"a result.","page_number":207,"box":{"x":69,"y":473,"width":57,"height":8}},{"id":"64678803-9a69-460d-8721-5d6e12bd599d","block_type":"box","text":"Access to independent advice","page_number":207,"box":{"x":68,"y":495,"width":214,"height":11}},{"id":"015b5a62-f7e9-4567-8c86-f479d5dfe5d7","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they should have","page_number":207,"box":{"x":101,"y":513,"width":786,"height":12}},{"id":"f539bcd9-648f-4f21-9a1f-c79b344a6163","block_type":"box","text":"access to independent advice. In certain circumstances, it may be helpful to boards to retain independent third","page_number":207,"box":{"x":69,"y":528,"width":793,"height":11}},{"id":"e8b4370f-2b9a-49b9-b04a-63ec657b7936","block_type":"box","text":"parties to advise on critical matters. These might include new industry developments such as emergent and","page_number":207,"box":{"x":70,"y":543,"width":770,"height":11}},{"id":"6001dbb7-f068-4ad6-9a54-1f65baca6ec6","block_type":"box","text":"disruptive technology, operating events with material consequences for the company’s reputation and/or","page_number":207,"box":{"x":69,"y":558,"width":746,"height":11}},{"id":"6d1abf48-d988-42f4-9699-2096e5129483","block_type":"box","text":"performance, or significant transactions. Board committees may similarly retain third parties to advise them on","page_number":207,"box":{"x":70,"y":573,"width":793,"height":11}},{"id":"21b3796e-8e03-4126-9ffd-ced1042dd45c","block_type":"box","text":"specialist matters such as audit, compensation and succession planning.","page_number":207,"box":{"x":69,"y":588,"width":524,"height":11}},{"id":"ddad66e3-9820-4cb2-9ceb-a500d9e037a2","block_type":"box","text":"EXECUTIVE COMPENSATION","page_number":207,"box":{"x":385,"y":618,"width":207,"height":9}},{"id":"16eef0c9-20d0-408a-bae6-3b7981974c8f","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to recruit,","page_number":207,"box":{"x":102,"y":637,"width":784,"height":11}},{"id":"a6eaa60c-22a5-49d4-84ae-ed314cdbca69","block_type":"box","text":"retain and reward the caliber of executive management necessary to lead and operate the company to deliver","page_number":207,"box":{"x":69,"y":652,"width":782,"height":11}},{"id":"f680488c-1d75-48b5-baab-e798d59bf93d","block_type":"box","text":"superior financial returns over time. We focus on alignment between variable pay and a company’s financial","page_number":207,"box":{"x":69,"y":666,"width":766,"height":12}},{"id":"dd803441-8f4c-41f5-809a-8b6c01a3fd42","block_type":"box","text":"performance.","page_number":207,"box":{"x":70,"y":681,"width":93,"height":11}},{"id":"7fb591fb-56ed-435a-bbdf-bf16107a8469","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus that rewards","page_number":207,"box":{"x":102,"y":700,"width":805,"height":11}},{"id":"a98f321c-c006-4d19-9ded-090567850068","block_type":"box","text":"performance against short-term metrics, incentives – most often share-based that reward performance against long","page_number":207,"box":{"x":70,"y":715,"width":831,"height":11}},{"id":"d54f735c-984c-41d6-b1c1-05e85866651f","block_type":"box","text":"term metrics, and pensions and benefits. In our observation, base salary, pensions and benefits are largely set","page_number":207,"box":{"x":68,"y":730,"width":798,"height":11}},{"id":"0c7d3e99-e09c-4c93-b01c-60582cd8faab","block_type":"box","text":"relative to market norms and benchmarks. The annual bonus and share-based incentive, or variable pay plans, tend","page_number":207,"box":{"x":69,"y":745,"width":824,"height":11}},{"id":"bf969d71-899b-41ec-91d2-19e446c94f5a","block_type":"box","text":"to be tailored to the company, its sector and long-term strategy, as well as the individuals the board is seeking to","page_number":207,"box":{"x":68,"y":760,"width":807,"height":11}},{"id":"93a625b7-d913-4988-990c-2d48b6b8ba39","block_type":"box","text":"recruit and motivate.","page_number":207,"box":{"x":69,"y":774,"width":146,"height":9}},{"id":"8bd86d54-f05a-4ca3-b8ab-c8a0fc83545d","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a company’s","page_number":207,"box":{"x":102,"y":793,"width":739,"height":11}},{"id":"86961305-fa00-4f35-9507-04126efe25c5","block_type":"box","text":"approach to executive compensation on a case-by-case basis. We rely on companies providing sufficient quantitative","page_number":207,"box":{"x":69,"y":808,"width":831,"height":11}},{"id":"7e2238f7-5a56-4833-bd8c-49d5e5c7922a","block_type":"box","text":"and qualitative information in their disclosures to enable shareholders to understand the compensation","page_number":207,"box":{"x":69,"y":823,"width":737,"height":11}},{"id":"c9fbdd80-44e7-4047-be16-eec91218d981","block_type":"box","text":"arrangements and assess the alignment with investors’ interests. Features we look for in compensation","page_number":207,"box":{"x":69,"y":837,"width":741,"height":12}},{"id":"724c8b94-63b6-4fd3-9a39-51125ce81017","block_type":"box","text":"arrangements include:","page_number":207,"box":{"x":69,"y":853,"width":157,"height":11}},{"id":"0c99b6cf-3607-47f2-aaea-8b2afb92c939","block_type":"box","text":"•","page_number":207,"box":{"x":69,"y":873,"width":6,"height":4}},{"id":"428741dd-bc25-4279-89a3-068b0b62b2b4","block_type":"box","text":"Fixed pay components, including base salary, benefits and prerequisites that are appropriate in the context of","page_number":207,"box":{"x":102,"y":870,"width":783,"height":11}},{"id":"1e957b23-23d3-4dcc-a07c-f846584d3022","block_type":"box","text":"the company’s size, sector and market.","page_number":207,"box":{"x":101,"y":885,"width":280,"height":11}},{"id":"775b5bb7-06e5-48e6-aa4d-831ba4232cd9","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":207,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"f01dfa89-c5cb-4793-b64c-bdaafc5e9d8a","block_type":"box","text":"Global Engagement and Voting Guidelines | 8","page_number":207,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"314fbf75-fff8-40f5-a680-72a489f680d9","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":207,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"1d92e4fb-68c6-49d6-ba6d-d06e2f3c43c4","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":48,"width":6,"height":4}},{"id":"770ce816-34e6-4706-a856-73e19e620396","block_type":"box","text":"Variable pay subject to performance metrics that are closely linked to the company’s short- and long-term","page_number":208,"box":{"x":101,"y":45,"width":752,"height":11}},{"id":"9d321ed5-4977-43d5-8627-271d211c0977","block_type":"box","text":"strategic objectives.","page_number":208,"box":{"x":102,"y":60,"width":140,"height":11}},{"id":"49d597e9-d869-4b64-9041-268a4b6dcf1b","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":80,"width":6,"height":4}},{"id":"6e58b094-f394-46af-9dcb-22de6a623887","block_type":"box","text":"Long-term incentives that motivate sustained performance across a multi-year period.","page_number":208,"box":{"x":102,"y":77,"width":609,"height":11}},{"id":"69b5ed88-c394-4e9b-962a-fe151fd3a9fb","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":97,"width":6,"height":5}},{"id":"eb6d3645-ba09-4f48-9986-c89509326b77","block_type":"box","text":"A balance between fixed and variable pay, short- and long-term incentives, and specific instruments (cash and","page_number":208,"box":{"x":101,"y":94,"width":784,"height":12}},{"id":"e7b9d895-9ee0-42d5-bae2-3700f0b45632","block_type":"box","text":"equity awards) that promotes pay program durability and seldom necessitates one-off, discretionary payments.","page_number":208,"box":{"x":101,"y":109,"width":790,"height":11}},{"id":"6e764a1e-d6e1-48d1-ac63-1d0a1d9fe4cd","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":129,"width":6,"height":5}},{"id":"3b1f8ab0-953e-46e6-9505-066e54c8c207","block_type":"box","text":"Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":208,"box":{"x":102,"y":127,"width":658,"height":11}},{"id":"37ce7670-d9d4-4bd1-af3a-fd3b9bfebf1a","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":147,"width":6,"height":4}},{"id":"b9c352e6-537a-4dbb-bbb0-6c0aa72ebcfa","block_type":"box","text":"Board discretion, if allowed within the variable pay arrangements, to be used sparingly, responsibly and","page_number":208,"box":{"x":102,"y":144,"width":735,"height":11}},{"id":"2ec69501-9908-49a5-97f0-74b69266ff2d","block_type":"box","text":"transparently.","page_number":208,"box":{"x":101,"y":159,"width":95,"height":11}},{"id":"eec91b57-3a93-4570-808e-2c77a5bcc53f","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":179,"width":6,"height":5}},{"id":"003a9831-fc35-4fb5-9eb9-0581792a496f","block_type":"box","text":"A requirement, that participants in long-term share-based incentive plans build a meaningful shareholding in the","page_number":208,"box":{"x":101,"y":176,"width":798,"height":11}},{"id":"2f19d826-e3ad-4f86-98e6-961f28a0455c","block_type":"box","text":"company within a defined time period, as determined by the board or relevant board committee.","page_number":208,"box":{"x":101,"y":191,"width":683,"height":11}},{"id":"80b6d9d9-acb8-4817-b04d-8fc325cba4f8","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":211,"width":6,"height":5}},{"id":"15867517-617f-420b-b350-187cbe8b6bc0","block_type":"box","text":"Change of control provisions that appropriately balance the interests of executives and shareholders.","page_number":208,"box":{"x":102,"y":208,"width":720,"height":12}},{"id":"e113ead6-bc98-44c8-8754-8b1ea0398d38","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":229,"width":6,"height":4}},{"id":"c39d304a-9315-4a16-b864-929c610a13cd","block_type":"box","text":"Clawback or malus provisions that allow the company to recoup or hold back variable compensation from","page_number":208,"box":{"x":102,"y":226,"width":747,"height":11}},{"id":"adf66395-14f6-4dcd-bdf4-fe3ce001b113","block_type":"box","text":"individuals whose awards were based on fraudulent activities, misstated financial reports, or executive","page_number":208,"box":{"x":102,"y":241,"width":733,"height":11}},{"id":"bd64a752-105d-4cff-b227-cb4097fcd756","block_type":"box","text":"misconduct.","page_number":208,"box":{"x":102,"y":256,"width":84,"height":8}},{"id":"59066825-6e08-48c5-968a-cb1522bd0ec1","block_type":"box","text":"•","page_number":208,"box":{"x":69,"y":276,"width":6,"height":4}},{"id":"76b976f1-ed21-4bd6-902e-04eab8d658ee","block_type":"box","text":"Severance arrangements that protect the company’s interests but do not cost more than is contractual.","page_number":208,"box":{"x":102,"y":273,"width":738,"height":11}},{"id":"66510648-933e-4012-a551-6c98159d0be9","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or plans, or","page_number":208,"box":{"x":101,"y":292,"width":787,"height":11}},{"id":"64aeabb2-af14-43cb-9b7c-0fab5815175f","block_type":"box","text":"approve the compensation report where we do not see alignment between executive compensation arrangements","page_number":208,"box":{"x":69,"y":307,"width":810,"height":11}},{"id":"e32b56fc-50d6-49af-8714-588e66eafe99","block_type":"box","text":"and our clients’ financial interests. When there is not an alternative, or where there have been multi-year issues with","page_number":208,"box":{"x":69,"y":321,"width":831,"height":11}},{"id":"410d3181-275e-423e-9eab-c2244cfabe52","block_type":"box","text":"compensation misaligned with performance, we may vote against the election of the chair of the responsible","page_number":208,"box":{"x":69,"y":336,"width":775,"height":11}},{"id":"04deb2de-17c0-4f11-9321-bb433a4de02d","block_type":"box","text":"committee, or the most senior independent director.","page_number":208,"box":{"x":69,"y":351,"width":371,"height":11}},{"id":"1a12bc31-09f5-4e7c-b822-808f486d9d45","block_type":"box","text":"NON-EXECUTIVE DIRECTOR COMPENSATION","page_number":208,"box":{"x":326,"y":381,"width":325,"height":9}},{"id":"77fd756b-3a2b-4958-b0f2-56092505231a","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a combination of","page_number":208,"box":{"x":102,"y":400,"width":785,"height":11}},{"id":"53ce4159-051e-49b5-90ab-a301e3ff8c91","block_type":"box","text":"the two. Some companies also pay additional fees for service on board committees or in board leadership roles. We","page_number":208,"box":{"x":68,"y":415,"width":831,"height":11}},{"id":"ab125660-3b7e-46f4-bab7-42bdf68e00bc","block_type":"box","text":"do not support non-executive directors participating in performance-based incentive plans as doing so may create a","page_number":208,"box":{"x":69,"y":430,"width":825,"height":11}},{"id":"a5df63f3-bc05-4d68-bbaf-7b66b7246492","block_type":"box","text":"conflict of interest and undermine their independence from management, whom they oversee.","page_number":208,"box":{"x":69,"y":444,"width":668,"height":12}},{"id":"2af2c24a-80d1-4280-a67a-a9ea412a63a6","block_type":"box","text":"CAPITAL STRUCTURE","page_number":208,"box":{"x":411,"y":475,"width":156,"height":8}},{"id":"c8ec5dc3-cbf6-4f27-a896-b6e3bf47debd","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that achieves","page_number":208,"box":{"x":102,"y":493,"width":800,"height":12}},{"id":"9eba6799-6d98-4e8b-8299-21fd6ea09e75","block_type":"box","text":"appropriate capital allocation in support of long-term financial resilience.","page_number":208,"box":{"x":69,"y":508,"width":516,"height":11}},{"id":"c4af578b-807c-469e-b10f-ec7461f3ab7a","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why they view","page_number":208,"box":{"x":101,"y":527,"width":776,"height":11}},{"id":"d5241227-d274-4547-96db-f3734acbce45","block_type":"box","text":"these practices to be aligned with shareholders’ interests. We may vote against management proposals seeking","page_number":208,"box":{"x":68,"y":542,"width":803,"height":11}},{"id":"d6f14ef4-1293-410f-bcb1-9b0afe90319e","block_type":"box","text":"capital-related authorities, or the election of the most senior independent director, if we have concerns about a","page_number":208,"box":{"x":69,"y":557,"width":790,"height":11}},{"id":"70fa1f50-ad35-42f0-ba37-bced2a325be3","block_type":"box","text":"company’s approach. We may also support a shareholder proposal seeking conversion of shares with differentiated","page_number":208,"box":{"x":69,"y":571,"width":825,"height":12}},{"id":"eea8aa57-08b0-4920-a769-29a398a5d769","block_type":"box","text":"voting rights to a one-share, one-vote standard.","page_number":208,"box":{"x":68,"y":587,"width":336,"height":11}},{"id":"554b17c9-9b53-4f85-974e-e5165ef1676f","block_type":"box","text":"Share issuance","page_number":208,"box":{"x":68,"y":609,"width":111,"height":9}},{"id":"8fc53612-4350-4289-a4bb-60a7333dfecb","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will generally","page_number":208,"box":{"x":101,"y":627,"width":776,"height":12}},{"id":"7c36a994-e072-407e-b704-155097bbe2fb","block_type":"box","text":"support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent pre-emptive rights. We","page_number":208,"box":{"x":69,"y":642,"width":832,"height":12}},{"id":"f2403cb7-2429-4193-b2e7-b5a5d56f5707","block_type":"box","text":"consider it good practice for companies to seek regular approval of these authorities to allow shareholders to take","page_number":208,"box":{"x":69,"y":657,"width":815,"height":11}},{"id":"f700ab7b-6069-4497-8f45-1cceeee3ea96","block_type":"box","text":"into consideration how prior authorities were used, as well as the current circumstances of the company and the","page_number":208,"box":{"x":70,"y":672,"width":802,"height":11}},{"id":"32a5131a-39a5-43d4-938b-fe618ecb448b","block_type":"box","text":"market environment.","page_number":208,"box":{"x":69,"y":687,"width":145,"height":9}},{"id":"233079ac-1fe2-492c-a1b1-a091494aed41","block_type":"box","text":"Share buybacks","page_number":208,"box":{"x":68,"y":709,"width":116,"height":11}},{"id":"d64fc25c-9fee-466d-80d4-3719cc8a0816","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management strategy and","page_number":208,"box":{"x":101,"y":728,"width":806,"height":11}},{"id":"f67e3d14-9cc3-4254-a937-5709ee0e8fe7","block_type":"box","text":"management’s determination of the appropriate balance between investment that supports the long-term growth of","page_number":208,"box":{"x":69,"y":743,"width":823,"height":11}},{"id":"fb9b3fa5-e76a-48eb-8bf2-a29eb69e9263","block_type":"box","text":"the company and returning cash to investors. We also take into consideration the effect of a buyback program on the","page_number":208,"box":{"x":68,"y":758,"width":836,"height":11}},{"id":"0ad52945-8d08-4f8c-ab7b-a894f68388e4","block_type":"box","text":"company’s balance sheet and executive compensation arrangements and the price at which shares are repurchased","page_number":208,"box":{"x":69,"y":773,"width":830,"height":11}},{"id":"4b903d37-7460-457d-8a30-c18ce4981c7e","block_type":"box","text":"relative to market price. We consider it good practice for companies to seek regular approval of these authorities to","page_number":208,"box":{"x":69,"y":787,"width":822,"height":12}},{"id":"2d6caba4-0bc5-4f72-9e09-c1e1844e0c7d","block_type":"box","text":"allow shareholders to take into consideration how prior authorities were used, as well as the current circumstances","page_number":208,"box":{"x":69,"y":802,"width":823,"height":11}},{"id":"556a0a14-91c3-4109-8a4e-d4a4531334cd","block_type":"box","text":"of the company and the market environment.","page_number":208,"box":{"x":69,"y":817,"width":319,"height":11}},{"id":"c41714b2-f98c-467b-94c5-f877df97b42f","block_type":"box","text":"Dividends","page_number":208,"box":{"x":69,"y":840,"width":69,"height":8}},{"id":"8b001d19-956c-4937-9935-71a99e7a1561","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further clarification","page_number":208,"box":{"x":101,"y":858,"width":799,"height":11}},{"id":"754a0064-8b17-49a5-b2aa-0d109d778b51","block_type":"box","text":"where a proposed dividend appears out of line with the company’s financial position.","page_number":208,"box":{"x":68,"y":873,"width":604,"height":11}},{"id":"bae5dfc5-26f0-456a-b009-521a4cf7887d","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":208,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"f5d23659-e25d-4c3f-8657-fe1f8faea6dd","block_type":"box","text":"Global Engagement and Voting Guidelines | 9","page_number":208,"box":{"x":590,"y":942,"width":319,"height":13}},{"id":"2424b1a4-fad3-4972-914c-d6ba61ef3055","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":208,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"16308316-5aad-4585-a53f-d0baf5482aac","block_type":"box","text":"Differentiated voting rights","page_number":209,"box":{"x":69,"y":45,"width":196,"height":11}},{"id":"06e74153-a88a-400b-a7d8-1ce65b48db52","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same economic","page_number":209,"box":{"x":101,"y":63,"width":750,"height":11}},{"id":"b2202761-e6df-444f-8689-747a09b1287c","block_type":"box","text":"exposure. Certain companies, particularly those new to public markets, could make the case to adopt a","page_number":209,"box":{"x":69,"y":78,"width":740,"height":11}},{"id":"e69e6a43-b09b-4a22-835e-29399d01491f","block_type":"box","text":"differentiated voting rights structure, or dual class stock. In those situations, we encourage companies to evaluate","page_number":209,"box":{"x":69,"y":93,"width":819,"height":11}},{"id":"abf6bb8c-a1b0-4a3d-87bf-f06d9ed07f77","block_type":"box","text":"and seek approval for their capital structure on a periodic basis.","page_number":209,"box":{"x":69,"y":108,"width":456,"height":11}},{"id":"a4b57ca7-3fad-48c0-88e7-267d7189de93","block_type":"box","text":"TRANSACTIONS AND SPECIAL SITUATIONS","page_number":209,"box":{"x":332,"y":138,"width":314,"height":9}},{"id":"3aa34151-65e3-47d3-840b-7309cafb2428","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own detailed","page_number":209,"box":{"x":101,"y":157,"width":743,"height":11}},{"id":"2739ff00-12cf-4f5b-9592-a62823cfca4e","block_type":"box","text":"analyses of proposals.","page_number":209,"box":{"x":69,"y":172,"width":159,"height":11}},{"id":"c9a812b8-7aab-4e85-b3cb-ea01fcae2ec5","block_type":"box","text":"Mergers and acquisitions","page_number":209,"box":{"x":69,"y":194,"width":184,"height":11}},{"id":"49d3fc25-ba47-4f70-99f9-720be926b510","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as minority","page_number":209,"box":{"x":101,"y":213,"width":775,"height":11}},{"id":"31781ddc-bda0-40cf-9362-c154ceae3721","block_type":"box","text":"shareholders. Management should provide an assessment of the proposed transaction’s strategic and financial","page_number":209,"box":{"x":69,"y":228,"width":797,"height":11}},{"id":"9576ee35-32b0-4bb8-a290-b2701b7a5df0","block_type":"box","text":"rationale, along with its execution and operational risks. We review each transaction independently based on these","page_number":209,"box":{"x":69,"y":243,"width":819,"height":11}},{"id":"05da5898-9cc5-471f-930e-24bf8827d663","block_type":"box","text":"factors and the degree to which the transaction enhances shareholder value. The board might consider establishing","page_number":209,"box":{"x":68,"y":257,"width":827,"height":12}},{"id":"150e1df6-1530-4307-86c5-3af1b961ea92","block_type":"box","text":"an ad hoc transaction committee to undertake an independent assessment of a significant merger or acquisition, in","page_number":209,"box":{"x":69,"y":272,"width":827,"height":11}},{"id":"ac21cef9-db63-4d48-b063-1173f48d9b64","block_type":"box","text":"advance of making its recommendation to shareholders.","page_number":209,"box":{"x":69,"y":287,"width":400,"height":11}},{"id":"d6c69250-cb4b-413d-828e-41b557cd7757","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial interests.","page_number":209,"box":{"x":101,"y":306,"width":749,"height":11}},{"id":"262b7eeb-8d09-45dc-a695-1c81eb5ef027","block_type":"box","text":"Anti-takeover defenses","page_number":209,"box":{"x":68,"y":328,"width":167,"height":9}},{"id":"c9ef485d-797b-4b1a-a1b1-b770c7b7b780","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":209,"box":{"x":102,"y":347,"width":727,"height":11}},{"id":"bea69718-6e02-436e-bb68-2d7601edffc3","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered long-term","page_number":209,"box":{"x":69,"y":362,"width":766,"height":11}},{"id":"20115c8a-847e-4d09-bcc1-099622fcb842","block_type":"box","text":"shareholder value. By exception, a poison pill may be supported if its purpose is to delay a takeover that is","page_number":209,"box":{"x":69,"y":376,"width":763,"height":12}},{"id":"0bf12bc9-d825-4912-8911-9494df2bfc7e","block_type":"box","text":"considered sub-optimal and enable management to seek an improved offer. Similarly, management could make the","page_number":209,"box":{"x":69,"y":391,"width":821,"height":12}},{"id":"86aee62d-05bd-4f0b-a37c-bb4dc0717e7f","block_type":"box","text":"case to use a poison pill to block a shareholder activism campaign that may be counter to the interests of other","page_number":209,"box":{"x":69,"y":406,"width":799,"height":11}},{"id":"180e3f29-c9cc-4097-a57d-2aacb2af2a4f","block_type":"box","text":"investors. Defense mechanisms introduced in these circumstances should be limited in term and threshold, and also","page_number":209,"box":{"x":70,"y":421,"width":836,"height":11}},{"id":"d45fd6c5-7d2d-4563-a90f-b4c4c90a2e1c","block_type":"box","text":"be closely monitored by the independent members of the board. We consider it good practice for companies to put to","page_number":209,"box":{"x":69,"y":436,"width":835,"height":11}},{"id":"e78d2ad0-125a-47ab-be60-93b237de5aea","block_type":"box","text":"a shareholder vote any mechanisms expected to be in place for more than 12 months.","page_number":209,"box":{"x":69,"y":451,"width":616,"height":11}},{"id":"2f77a810-ef86-4c07-a9f7-515d1108a88b","block_type":"box","text":"Shareholder activism","page_number":209,"box":{"x":68,"y":473,"width":153,"height":9}},{"id":"39027c4a-ee6a-48c7-8934-e9350077a8df","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to understand","page_number":209,"box":{"x":101,"y":492,"width":783,"height":11}},{"id":"7c931737-23a9-4110-8c5e-1ef019751102","block_type":"box","text":"their analysis and objectives, once they have publicly disclosed their campaign. We may also engage with company","page_number":209,"box":{"x":68,"y":507,"width":819,"height":11}},{"id":"7fd832d1-4f5c-43ff-9f51-90c2c172ab00","block_type":"box","text":"management and possibly board members, especially those the activist may be seeking to replace. In our","page_number":209,"box":{"x":69,"y":522,"width":755,"height":11}},{"id":"69b5d635-dc7f-4e15-8611-8a08c05f1b28","block_type":"box","text":"assessment, we evaluate various factors, including the concerns raised by the activist and the case for change; the","page_number":209,"box":{"x":69,"y":536,"width":824,"height":12}},{"id":"c7b87f0f-b1ad-41e2-8342-1f9758ef99c0","block_type":"box","text":"quality of both the activist’s and management’s plans; and the qualifications of each party’s candidates. We evaluate","page_number":209,"box":{"x":69,"y":551,"width":839,"height":12}},{"id":"17e08816-cbf9-4aea-88ed-394f4ceca24c","block_type":"box","text":"each contested situation by assessing the potential financial outcome for our clients as minority shareholders.","page_number":209,"box":{"x":69,"y":566,"width":788,"height":11}},{"id":"bce5e19b-4eb0-4e14-bfcb-8ff83f596651","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent judgment, or","page_number":209,"box":{"x":101,"y":585,"width":789,"height":11}},{"id":"490391ea-b32a-4f73-a68d-c09a9a114cce","block_type":"box","text":"the relevant portfolio manager has determined that there is a case for change to enhance shareholder value, or if the","page_number":209,"box":{"x":68,"y":600,"width":839,"height":11}},{"id":"d0c4a276-368b-47d0-b9d9-109b202511a9","block_type":"box","text":"incumbent board members do not demonstrate the relevant skills and expertise or have a poor track record of","page_number":209,"box":{"x":70,"y":614,"width":786,"height":11}},{"id":"2748c428-9d1d-4266-ae2d-f588759e7166","block_type":"box","text":"protecting shareholders’ interests.","page_number":209,"box":{"x":70,"y":630,"width":244,"height":11}},{"id":"35d95107-32bd-41e0-a850-616019541edc","block_type":"box","text":"Significant shareholders and related party transactions","page_number":209,"box":{"x":68,"y":652,"width":403,"height":11}},{"id":"c7c4033b-4fef-4bdd-813a-ee333212d06a","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":209,"box":{"x":102,"y":670,"width":740,"height":12}},{"id":"0b546165-ed68-4f54-81a7-d0f141000cb7","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":209,"box":{"x":70,"y":685,"width":511,"height":12}},{"id":"bb46f370-a847-432e-8297-6b150bf9de3f","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or companies","page_number":209,"box":{"x":101,"y":704,"width":805,"height":11}},{"id":"8a0007ae-6fea-4518-ae8a-72bffe103ede","block_type":"box","text":"affiliated with the public company, to be disclosed in detail and conducted on terms similar to what would objectively","page_number":209,"box":{"x":69,"y":719,"width":832,"height":11}},{"id":"789a8e45-9abe-4d96-8c25-671b2ac70ce2","block_type":"box","text":"have been agreed with a non-related party. In our view, such transactions should be reviewed and approved by the","page_number":209,"box":{"x":69,"y":734,"width":812,"height":11}},{"id":"2f88a06b-7221-4a0d-a01d-2b805de0bb34","block_type":"box","text":"independent members of the board, and if voted on, only disinterested shareholders should vote.","page_number":209,"box":{"x":70,"y":748,"width":692,"height":12}},{"id":"88e5b5e0-78ec-4865-a42d-a47046820bd7","block_type":"box","text":"CORPORATE REPORTING, RISK MANAGEMENT AND AUDIT","page_number":209,"box":{"x":274,"y":779,"width":430,"height":10}},{"id":"c00409f8-ca4e-49ec-a726-d53936e24d45","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s strategy, its","page_number":209,"box":{"x":102,"y":798,"width":796,"height":11}},{"id":"f23c95bf-7e17-403b-98c7-e1d8b2a65955","block_type":"box","text":"implementation and financial performance, as well as to assess the quality of management and operations and","page_number":209,"box":{"x":70,"y":812,"width":795,"height":12}},{"id":"b76fb61c-dcf8-4592-b98d-66b73630e21d","block_type":"box","text":"potential for the company to create shareholder value over time. We consider it good practice for the board to","page_number":209,"box":{"x":70,"y":827,"width":779,"height":11}},{"id":"057428c7-258e-4bb3-b902-d58930734e37","block_type":"box","text":"oversee corporate reporting and the policies and procedures underpinning the internal audit function and external","page_number":209,"box":{"x":69,"y":842,"width":809,"height":11}},{"id":"c184be12-507e-4795-b06a-7d00544de3e7","block_type":"box","text":"audit.","page_number":209,"box":{"x":69,"y":857,"width":38,"height":9}},{"id":"0aa183dc-1f8c-44d6-a5df-e5316568fcba","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other stakeholders,","page_number":209,"box":{"x":101,"y":875,"width":803,"height":12}},{"id":"6a2b4f3f-5ef6-4f91-9118-94f307cbb8f9","block_type":"box","text":"on its financial performance and position. It should provide an accurate and balanced assessment of the risks and","page_number":209,"box":{"x":69,"y":890,"width":819,"height":11}},{"id":"f8746554-743c-4396-b62d-d515a0d7de1e","block_type":"box","text":"opportunities the company faces in realizing its long-term strategy. Accordingly, the assumptions made by","page_number":209,"box":{"x":69,"y":905,"width":752,"height":12}},{"id":"05c84523-f248-462b-805a-e12bb82cc7e6","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":209,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"6a3dd3ca-791e-4084-834e-86e513c21d29","block_type":"box","text":"Global Engagement and Voting Guidelines | 10","page_number":209,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"c8f4dba2-3853-48fd-8fc9-16a893004e0c","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":209,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e2297834-1440-43d7-9b18-d2de261c2405","block_type":"box","text":"management and reviewed by the auditor in preparing the financial statements should be reasonable and justified.","page_number":210,"box":{"x":69,"y":45,"width":817,"height":11}},{"id":"c9aafe62-dea2-4e9c-96fc-5daaf4bf259f","block_type":"box","text":"Financial statements should be prepared in accordance with globally developed reporting standards and any","page_number":210,"box":{"x":70,"y":60,"width":771,"height":11}},{"id":"10948d7a-c4b2-47af-8cf2-942fb90daa1f","block_type":"box","text":"divergence from generally accepted accounting principles should be explained in detail and justified. Accounting","page_number":210,"box":{"x":69,"y":74,"width":796,"height":12}},{"id":"2959e443-7083-46ff-b3d1-a5302d036d12","block_type":"box","text":"restatements should be explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":210,"box":{"x":69,"y":89,"width":788,"height":11}},{"id":"820c2842-51e8-4a05-bcd5-abfd9c930ef3","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":210,"box":{"x":102,"y":108,"width":739,"height":11}},{"id":"87342739-43c0-488b-abff-2ea2a29e766e","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction, non-financial","page_number":210,"box":{"x":70,"y":123,"width":801,"height":11}},{"id":"c0dfd50f-27a5-4267-8734-5b8dba4a944f","block_type":"box","text":"information, internal control frameworks and Enterprise Risk Management systems. In our view, effective audit","page_number":210,"box":{"x":70,"y":138,"width":787,"height":11}},{"id":"bc0bed1b-5d17-444f-8b9d-65dcb955a6d0","block_type":"box","text":"committee oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":210,"box":{"x":69,"y":152,"width":795,"height":12}},{"id":"9ed8ca11-eb79-4ed6-b509-0ed7fac7e349","block_type":"box","text":"important level of reassurance to shareholders. Audit committees should have a procedure in place for assessing the","page_number":210,"box":{"x":70,"y":167,"width":838,"height":12}},{"id":"f2fb87f9-f553-4ef4-8df1-f66aab6ad6d9","block_type":"box","text":"independence of the auditor and the quality of the external audit process annually.","page_number":210,"box":{"x":70,"y":182,"width":585,"height":11}},{"id":"2a3a25fa-bd24-4e3b-a31d-1de7a9247ea6","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to how a","page_number":210,"box":{"x":102,"y":201,"width":784,"height":11}},{"id":"c9b8e294-d81d-4fd7-9147-6b2600aea405","block_type":"box","text":"company manages risks or generates revenue. BAIS finds it helpful to our understanding when companies provide","page_number":210,"box":{"x":69,"y":216,"width":812,"height":11}},{"id":"3d5e96ac-c570-49d7-977d-4c491b4d00f9","block_type":"box","text":"robust, standardized disclosures on their material sustainability-related risks and opportunities. The International","page_number":210,"box":{"x":69,"y":231,"width":806,"height":11}},{"id":"30ff0361-23d0-409e-96e5-ba0dcb6f935b","block_type":"box","text":"Sustainability Standards Board (ISSB) is one entity working to meet these objectives through its reporting standards,","page_number":210,"box":{"x":69,"y":246,"width":832,"height":11}},{"id":"19ed13f5-760d-46f2-92c0-d999bc527723","block_type":"box","text":"which may be helpful to companies in preparing such reports.","page_number":210,"box":{"x":68,"y":260,"width":440,"height":12}},{"id":"c8b1d583-567c-4855-8fa3-88a5812637c1","block_type":"box","text":"9","page_number":210,"box":{"x":509,"y":261,"width":5,"height":4}},{"id":"fb1877ee-6684-4c9a-816a-56a16c811296","block_type":"box","text":"However, we do not mandate any specific disclosure","page_number":210,"box":{"x":520,"y":260,"width":372,"height":11}},{"id":"befa8631-0273-4873-b21b-86c7f71692ad","block_type":"box","text":"framework, and note that companies in certain jurisdictions are subject to mandatory reporting requirements under","page_number":210,"box":{"x":68,"y":275,"width":824,"height":11}},{"id":"5b79f505-80cc-4ef7-b12b-fa77aa24ca5d","block_type":"box","text":"standards specified by policy makers.","page_number":210,"box":{"x":69,"y":290,"width":267,"height":11}},{"id":"e3dd8dd6-d8b2-4e24-b45f-e940dd5a5c5a","block_type":"box","text":"10","page_number":210,"box":{"x":338,"y":290,"width":9,"height":5}},{"id":"207d7796-e1b3-4044-b924-480d6d2ffced","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":210,"box":{"x":102,"y":309,"width":735,"height":11}},{"id":"8accb752-e36c-4eef-81c6-f66bc478a9b1","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for employees,","page_number":210,"box":{"x":69,"y":323,"width":810,"height":12}},{"id":"badb1904-282b-4c8d-95a5-90b56336606a","block_type":"box","text":"and potentially other stakeholders, can be a useful mechanism for ensuring that senior management and the board","page_number":210,"box":{"x":69,"y":338,"width":822,"height":12}},{"id":"cb39bccb-e2af-4cf9-9772-a272ada372ae","block_type":"box","text":"are aware of potential misconduct or breaches in risk management and internal control processes.","page_number":210,"box":{"x":69,"y":353,"width":704,"height":12}},{"id":"0a10c5a2-9a5b-4756-bdab-2e7cefd8db62","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in the quality","page_number":210,"box":{"x":101,"y":372,"width":794,"height":11}},{"id":"514d4d66-9799-4dab-92e6-358a36de6e25","block_type":"box","text":"of corporate reporting. It is helpful when the audit report gives some insight into the scope and focus of the audit, as","page_number":210,"box":{"x":69,"y":387,"width":836,"height":11}},{"id":"60dbedb4-d929-4808-a659-efd42b33aadb","block_type":"box","text":"well as any critical audit matters identified and how these were resolved. A comprehensive and effective audit is time","page_number":210,"box":{"x":68,"y":402,"width":838,"height":11}},{"id":"a2a499f1-0d36-461d-96d3-e13ad6ff9424","block_type":"box","text":"and resource intensive, and the audit fee should be commensurate. Fees paid to the audit firm for non-audit","page_number":210,"box":{"x":69,"y":416,"width":773,"height":11}},{"id":"23acdca4-6016-441a-aade-f49681b007db","block_type":"box","text":"consulting should not exceed the audit fee to a degree that may prompt concerns about the independence of the","page_number":210,"box":{"x":69,"y":431,"width":804,"height":12}},{"id":"f048ce4a-9d2a-4793-82f6-ba8c175595c1","block_type":"box","text":"audit. The audit committee should explain its position on auditor tenure and how it confirmed that the auditor","page_number":210,"box":{"x":69,"y":446,"width":780,"height":11}},{"id":"73e0bef9-a56e-4f26-ba35-f06e6a2f455a","block_type":"box","text":"remained independent.","page_number":210,"box":{"x":69,"y":461,"width":163,"height":11}},{"id":"22935413-f9c2-4529-b7c9-c90d903b7826","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or there are","page_number":210,"box":{"x":101,"y":480,"width":783,"height":11}},{"id":"f4b03410-29ae-4805-971d-4cb5c50844f0","block_type":"box","text":"material misstatements in financial reports. In markets where relevant, we may vote against a proposal to approve","page_number":210,"box":{"x":69,"y":495,"width":819,"height":11}},{"id":"c1130c47-bbf2-474d-b656-21c38f89de85","block_type":"box","text":"the financial statements or the discharge of the board when we are concerned about the quality of corporate","page_number":210,"box":{"x":68,"y":509,"width":774,"height":12}},{"id":"2879abc0-ba55-432f-aeaa-77ec0f7d6b0b","block_type":"box","text":"reporting or the audit. We may vote against proposals to appoint the auditor, ratify the audit report, or approve the","page_number":210,"box":{"x":69,"y":524,"width":816,"height":12}},{"id":"276e80fb-1c6e-425a-bb91-854237c8f544","block_type":"box","text":"audit fee if we are concerned about the auditor’s independence, the quality of the audit, or there are material","page_number":210,"box":{"x":69,"y":539,"width":779,"height":11}},{"id":"6023774d-c744-4e90-b13b-7f591d5c6111","block_type":"box","text":"misstatements in financial reports and the board has not established reasonable remediation plans.","page_number":210,"box":{"x":69,"y":554,"width":718,"height":11}},{"id":"b534eea3-042f-48fa-b63f-a1c566f1dd78","block_type":"box","text":"SHAREHOLDER RIGHTS AND PROTECTIONS","page_number":210,"box":{"x":329,"y":584,"width":319,"height":9}},{"id":"96d8583c-766d-468b-b77f-2251e3e4145c","block_type":"box","text":"General shareholder meetings","page_number":210,"box":{"x":69,"y":607,"width":217,"height":11}},{"id":"8b798739-d1f0-4bd1-98a7-cbd94767f9db","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine items of","page_number":210,"box":{"x":102,"y":625,"width":792,"height":12}},{"id":"67511749-efe5-4b73-9d42-f1de7b5245f7","block_type":"box","text":"business are discussed and voted on by shareholders in attendance or submitting proxy votes. Companies should","page_number":210,"box":{"x":69,"y":640,"width":812,"height":11}},{"id":"5b7e14bc-6954-4993-941a-eb29d8cb0b0b","block_type":"box","text":"disclose materials relevant to the shareholder meeting sufficiently in advance so that shareholders can take them","page_number":210,"box":{"x":69,"y":655,"width":813,"height":11}},{"id":"1ad2d762-4e58-4911-b894-7618b0d8f54a","block_type":"box","text":"into consideration in their voting decisions. Many companies offer shareholders the option of participating in the","page_number":210,"box":{"x":70,"y":670,"width":801,"height":11}},{"id":"5ebf3925-e242-4350-8496-057b51c48dc5","block_type":"box","text":"meeting virtually which, whilst welcome, should not limit the rights of shareholders to participate as they would during","page_number":210,"box":{"x":69,"y":685,"width":841,"height":11}},{"id":"3c085771-5503-42b0-850b-fe3151e14bf5","block_type":"box","text":"an in-person meeting.","page_number":210,"box":{"x":69,"y":700,"width":152,"height":11}},{"id":"1ae610a5-8962-40ee-bb9b-69ce0882093a","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are not","page_number":210,"box":{"x":101,"y":718,"width":752,"height":12}},{"id":"8900acbf-8fd6-4cac-941d-133355bb40f5","block_type":"box","text":"provided in a timely manner or do not provide sufficient information for us to make an informed voting decision. We","page_number":210,"box":{"x":70,"y":733,"width":821,"height":11}},{"id":"6c9be651-3a25-4503-8f7a-1074c325a63a","block_type":"box","text":"may vote against directors if the format of the shareholder meeting does not accommodate reasonable shareholder","page_number":210,"box":{"x":69,"y":748,"width":825,"height":11}},{"id":"ff3a4ec4-fa44-463c-889e-8f980e5dc862","block_type":"box","text":"participation.","page_number":210,"box":{"x":70,"y":763,"width":91,"height":11}},{"id":"d0095c20-3561-4104-86ad-b884c47aaadf","block_type":"box","text":"9","page_number":210,"box":{"x":69,"y":793,"width":4,"height":4}},{"id":"914d1b39-734c-4c37-b2d2-4e84aeed8647","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards","page_number":210,"box":{"x":93,"y":792,"width":744,"height":11}},{"id":"fea239d5-91e2-499f-8a9b-5f273fb27438","block_type":"box","text":"(IFRS) Foundation. Please refer to the IFRS website to learn more about the framework and standards S1","page_number":210,"box":{"x":94,"y":807,"width":748,"height":11}},{"id":"34996883-bde3-4617-aba2-1cdee6a19554","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":210,"box":{"x":94,"y":822,"width":778,"height":12}},{"id":"88270a06-91a1-4209-bc91-79eafad3db7b","block_type":"box","text":"Disclosures.”","page_number":210,"box":{"x":94,"y":838,"width":93,"height":8}},{"id":"45f594dd-73ea-417a-8608-363071f781be","block_type":"box","text":"10","page_number":210,"box":{"x":69,"y":856,"width":9,"height":4}},{"id":"7101adec-87f3-41e2-ba16-9a3b18e7682c","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional- profiles\r\nissbstandards/ and https//financeeceropae/capitalmarketsnionandfinancialmarkets/compan","page_number":210,"box":{"x":93,"y":858,"width":810,"height":11}},{"id":"a7b09bda-784d-4c52-a0b8-cd1f1a3c7aec","block_type":"box","text":"See, for examples, https://www.ifrs.org/newsandevents/news/2025/06/ifrsfoundationpublishesjurisdictional\r\nprofiles-issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/companyreporting\r\nandaditing/companreporting/corporatesstainabilitreportingen","page_number":210,"box":{"x":94,"y":866,"width":804,"height":12}},{"id":"3749a06f-3f68-4265-9d58-be4a0d79fffd","block_type":"box","text":"p/ p//p/p\r\nreporting-and-auditing/company-reporting/corporate-sustainability-reporting_en.","page_number":210,"box":{"x":94,"y":876,"width":564,"height":11}},{"id":"da9ef43d-04e6-4c60-bb8a-6ce51c786dd1","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":210,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"7e06e4ee-f9c4-47f9-a572-01e051a06904","block_type":"box","text":"Global Engagement and Voting Guidelines | 11","page_number":210,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"ec1a90e9-b139-420d-9328-ec443d4a0423","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":210,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"be52c9da-b62f-45ba-abbe-38f5d7239173","block_type":"box","text":"Bylaw amendments","page_number":211,"box":{"x":69,"y":45,"width":141,"height":11}},{"id":"4bd46b2d-2cd4-4868-b067-39581246b0d5","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally support","page_number":211,"box":{"x":101,"y":64,"width":766,"height":11}},{"id":"9f5f7d7f-d21b-426e-895b-f24a7af8fa1a","block_type":"box","text":"those that are aligned with the interests of minority shareholders. Any material changes to the bylaws should be","page_number":211,"box":{"x":68,"y":78,"width":800,"height":11}},{"id":"4b58b9dc-c817-4108-a305-5eb4966035ce","block_type":"box","text":"explained in detail and put to a shareholder vote.","page_number":211,"box":{"x":69,"y":93,"width":349,"height":11}},{"id":"22511436-6cad-4399-920d-a400fc542036","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce additional","page_number":211,"box":{"x":101,"y":112,"width":790,"height":11}},{"id":"11df749d-229e-4a7d-81c6-ba4b4b090d29","block_type":"box","text":"burdens. We may vote against directors if material changes are made to the bylaws without shareholder approval.","page_number":211,"box":{"x":69,"y":126,"width":810,"height":12}},{"id":"1cced3bb-c999-4d81-8f5b-c3022b3e330a","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders, individually or as a","page_number":211,"box":{"x":102,"y":145,"width":790,"height":11}},{"id":"04d688e9-29b1-4b6a-a3a3-8dfd1b06ad8a","block_type":"box","text":"group, with a meaningful shareholding, the right to call a special meeting of shareholders. The shareholding required","page_number":211,"box":{"x":68,"y":160,"width":831,"height":11}},{"id":"50a353a4-1148-4dbd-bed3-de5ddc6dbd47","block_type":"box","text":"to exercise this right should balance its utility with the cost to the company of holding special meetings.","page_number":211,"box":{"x":68,"y":175,"width":740,"height":11}},{"id":"8943a494-5708-4537-a28b-5c8b1284fdbb","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders, individually or as a","page_number":211,"box":{"x":102,"y":193,"width":790,"height":12}},{"id":"c81747ba-a539-48f5-9fff-63d9f98e823b","block_type":"box","text":"group, with a meaningful shareholding, the right to nominate directors to the company’s board. The threshold for this","page_number":211,"box":{"x":68,"y":208,"width":834,"height":12}},{"id":"65d8b3c3-29e2-40d2-99a9-ebd23532884f","block_type":"box","text":"right should be set so that shareholders can exercise it without being unduly disruptive to the board’s own","page_number":211,"box":{"x":69,"y":223,"width":758,"height":12}},{"id":"f843db39-67f0-4e4e-a0d6-222d1c963535","block_type":"box","text":"nomination process.","page_number":211,"box":{"x":69,"y":238,"width":143,"height":11}},{"id":"b757992a-0f7e-41e0-8f7e-153097d6ff55","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability mechanisms.","page_number":211,"box":{"x":101,"y":257,"width":799,"height":11}},{"id":"118c5739-1b18-408c-b4c6-83dc75853818","block_type":"box","text":"We may vote for a shareholder proposal seeking the addition of either of these provisions to a company’s bylaws.","page_number":211,"box":{"x":68,"y":272,"width":810,"height":11}},{"id":"5c86b643-fc58-41ab-87dd-089ea1f39ace","block_type":"box","text":"Change of domicile","page_number":211,"box":{"x":69,"y":294,"width":139,"height":11}},{"id":"6181098e-2dd4-443b-b974-f1c147706c64","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the rationale for","page_number":211,"box":{"x":101,"y":313,"width":778,"height":11}},{"id":"d742d8ed-e1df-42d5-90af-38ab1cd72221","block_type":"box","text":"doing so is consistent with the company’s long-term strategy and business model and the related costs are","page_number":211,"box":{"x":69,"y":328,"width":766,"height":11}},{"id":"396984db-5c3e-4aea-9d31-83173f0a8605","block_type":"box","text":"immaterial.","page_number":211,"box":{"x":70,"y":343,"width":77,"height":8}},{"id":"d079dfb1-a46d-40e9-a1b6-ec9a07b60582","block_type":"box","text":"We may vote against directors or a proposal to change a company’s domicile where it does not seem aligned","page_number":211,"box":{"x":101,"y":361,"width":777,"height":11}},{"id":"6adc94cf-99a9-4f6c-ad7e-2c659ea249d7","block_type":"box","text":"with our clients’ financial interests.","page_number":211,"box":{"x":68,"y":376,"width":249,"height":9}},{"id":"70e62856-b4b6-4bdd-b419-3ccd8f12c606","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":211,"box":{"x":69,"y":398,"width":452,"height":11}},{"id":"f86d7e14-b5bd-4d50-9dbc-a85679f46d69","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and explained","page_number":211,"box":{"x":102,"y":417,"width":803,"height":11}},{"id":"27a03b30-270e-4e90-b511-3f2eb282b3de","block_type":"box","text":"in the context of long-term strategy and business dynamics. Such changes may significantly alter an investor’s views","page_number":211,"box":{"x":70,"y":432,"width":829,"height":11}},{"id":"0bb24714-add7-4a4b-8134-ef922416187d","block_type":"box","text":"on the suitability of a company for their investment strategy or portfolio.","page_number":211,"box":{"x":69,"y":447,"width":511,"height":11}},{"id":"18c60b8c-7acc-4a0a-a4ad-441f0d3928b3","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its business if","page_number":211,"box":{"x":101,"y":465,"width":792,"height":12}},{"id":"d73c9c8e-a0fb-4f90-b25a-8b81257eca3b","block_type":"box","text":"the board has not provided a credible argument for change.","page_number":211,"box":{"x":68,"y":480,"width":424,"height":12}},{"id":"ca0b2e39-0821-4baa-b687-3e3cb6bf9785","block_type":"box","text":"SHAREHOLDER PROPOSALS","page_number":211,"box":{"x":385,"y":510,"width":207,"height":9}},{"id":"918687c3-bfe6-4721-a895-a1295899cd4f","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals to the","page_number":211,"box":{"x":102,"y":529,"width":772,"height":11}},{"id":"039efb7a-4a6e-4873-936e-9acaf602dab8","block_type":"box","text":"general shareholder meeting asking a company to take a particular course of action subject to the proposal being","page_number":211,"box":{"x":68,"y":544,"width":811,"height":11}},{"id":"2c7098f9-afdc-489d-8bb4-5b53c32d9598","block_type":"box","text":"supported by a majority of votes cast at the meeting. The topics raised can address a range of matters that may be","page_number":211,"box":{"x":69,"y":559,"width":824,"height":11}},{"id":"d48c18f7-d100-4b2f-9c58-dcb3d3f712a0","block_type":"box","text":"relevant to a company’s business.","page_number":211,"box":{"x":69,"y":574,"width":243,"height":11}},{"id":"1e4e0e88-7700-4602-b56c-35b15790d111","block_type":"box","text":"We vote on these proposals on a case-by-case basis. We assess the relevance of the topic raised to a","page_number":211,"box":{"x":101,"y":592,"width":730,"height":11}},{"id":"b8561d39-98e3-4a3b-8ad1-e8f5b0fd3010","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with shareholders’","page_number":211,"box":{"x":69,"y":607,"width":772,"height":11}},{"id":"158ba765-8c52-44bf-b8f9-e5e16c27cff8","block_type":"box","text":"interests, and what impact the proposal being acted upon might have on financial performance.","page_number":211,"box":{"x":70,"y":622,"width":681,"height":11}},{"id":"3cf51c05-1fc7-4a6a-9dd4-605846ff1e14","block_type":"box","text":"Our general approach where we have concerns about a company’s governance, disclosures or performance is to","page_number":211,"box":{"x":102,"y":641,"width":801,"height":11}},{"id":"a4d5fbec-dcca-41f1-beff-29347b5c5b3c","block_type":"box","text":"engage to understand the apparent difference in perspective. If we are concerned a company is not acting in","page_number":211,"box":{"x":69,"y":656,"width":774,"height":11}},{"id":"a4ffe27e-35f3-4231-9123-dcd1c58558d6","block_type":"box","text":"shareholders’ financial interests, we may vote against the election of directors. We may support a relevant","page_number":211,"box":{"x":69,"y":670,"width":761,"height":12}},{"id":"26921800-126f-4a35-a444-d8b73ebb8f39","block_type":"box","text":"shareholder proposal if doing so is aligned with our clients’ financial interests. We generally do not support","page_number":211,"box":{"x":69,"y":685,"width":764,"height":12}},{"id":"13defc26-deb1-4edd-a9a5-166e2a29ea6c","block_type":"box","text":"shareholder proposals that are legally binding on the company, seek to alter a company’s strategy or direct its","page_number":211,"box":{"x":69,"y":700,"width":785,"height":11}},{"id":"be66470c-2ab9-4a5c-b92e-26d996d0c609","block_type":"box","text":"operations, or are unrelated to how a company manages risk or generates financial returns.","page_number":211,"box":{"x":69,"y":715,"width":653,"height":11}},{"id":"89da684f-0c2f-439c-8d15-3da67381be6b","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place restrictions","page_number":211,"box":{"x":102,"y":734,"width":788,"height":11}},{"id":"0acfa4a3-1462-438e-a778-8899f31ca0fa","block_type":"box","text":"and limitations on how we can interact with the companies in which we invest on behalf of our clients, including our","page_number":211,"box":{"x":69,"y":748,"width":822,"height":12}},{"id":"e2c346e8-fe7f-42fc-9016-915afd57f09a","block_type":"box","text":"ability to submit shareholder proposals. We do not submit shareholder proposals but can vote, on behalf of clients","page_number":211,"box":{"x":69,"y":763,"width":817,"height":12}},{"id":"fc2ee916-fd2d-4d43-a3c7-6e9e51fda6d5","block_type":"box","text":"who authorize us to do so, on proposals put forth by others.","page_number":211,"box":{"x":68,"y":778,"width":428,"height":11}},{"id":"4e5739fe-1ee7-4b70-a905-d025f9d1cc2a","block_type":"box","text":"CORPORATE POLITICAL ACTIVITIES","page_number":211,"box":{"x":359,"y":808,"width":260,"height":9}},{"id":"06e4a56d-929d-4862-a271-0df4b524de18","block_type":"box","text":"A corporation’s ability to engage in the policy process is subject to rules and regulations set by the jurisdictions","page_number":211,"box":{"x":101,"y":827,"width":795,"height":11}},{"id":"76c21992-c6cb-4328-a393-05c952538c21","block_type":"box","text":"in which they engage. When a corporation reports material financial risk related to policy and or regulatory changes,","page_number":211,"box":{"x":70,"y":842,"width":824,"height":11}},{"id":"0a95f264-9fb0-4bf5-90c5-1611c7aaad2d","block_type":"box","text":"BAIS may seek to understand how it is addressing the material risk identified. We seek to understand how","page_number":211,"box":{"x":70,"y":857,"width":757,"height":11}},{"id":"5d6c6b1a-5a9f-41ce-8cfa-f829d38ba3f6","block_type":"box","text":"companies engage in corporate political activities and ensure that their participation is consistent with their public","page_number":211,"box":{"x":69,"y":872,"width":814,"height":11}},{"id":"0b73c41f-68b8-42c2-a380-392a9b8cddf7","block_type":"box","text":"statements on policy matters material to the company’s long-term strategy. The board should be aware of the","page_number":211,"box":{"x":69,"y":887,"width":780,"height":11}},{"id":"890a072d-ed9c-4e7b-8735-0e60fc4c2c4a","block_type":"box","text":"approach taken by management on corporate political activities as there can be reputational risks arising from","page_number":211,"box":{"x":69,"y":901,"width":786,"height":12}},{"id":"f562e1ac-61e7-49ec-b185-50a50ad99baf","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":211,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"ac4cb064-f232-49ba-ae2c-6bb914d9c61f","block_type":"box","text":"Global Engagement and Voting Guidelines | 12","page_number":211,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"d3e2940c-5c77-4bd9-bb07-bc32cada7cd8","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":211,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f20fbd0e-4ef1-4fc1-a5e3-a12876f35183","block_type":"box","text":"inconsistencies between a company’s policy engagement and stated policy positions. Companies should, as a","page_number":212,"box":{"x":70,"y":45,"width":786,"height":11}},{"id":"320703be-b48c-4a67-af80-4d09271aac7c","block_type":"box","text":"minimum, meet all regulatory disclosure requirements on political activities. We may engage a company where we","page_number":212,"box":{"x":69,"y":60,"width":812,"height":11}},{"id":"e49b85eb-a080-4be0-815e-bd33f4d3f7d1","block_type":"box","text":"would like to better understand its approach to policy engagement, where relevant.","page_number":212,"box":{"x":68,"y":75,"width":590,"height":11}},{"id":"3fa618bb-ed47-406a-94ee-af883f97ce1f","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their policy","page_number":212,"box":{"x":101,"y":93,"width":753,"height":11}},{"id":"ffd24a81-fa3c-4b7e-aca9-d15f32fb054f","block_type":"box","text":"priorities and the policy positions of the trade associations of which they are active members and any engagements","page_number":212,"box":{"x":70,"y":108,"width":823,"height":11}},{"id":"9ca19d53-a84a-4866-8941-ae6d8a7736d3","block_type":"box","text":"undertaken by trade associations on behalf of members.","page_number":212,"box":{"x":69,"y":123,"width":404,"height":11}},{"id":"96a26045-679f-4193-a4e1-6ed3f0803a9b","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s disclosures are","page_number":212,"box":{"x":101,"y":142,"width":793,"height":11}},{"id":"02a75ba1-7c8c-4000-9979-d01bb6edd62f","block_type":"box","text":"insufficient to address the material risk it has identified.","page_number":212,"box":{"x":70,"y":156,"width":400,"height":9}},{"id":"30ff3cd9-1d7d-49e7-a294-8accc646f7b8","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":212,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"c7e61e0d-b753-437d-be86-15f54475c6a4","block_type":"box","text":"Global Engagement and Voting Guidelines | 13","page_number":212,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"20c81930-7178-4de0-9910-4a2beeea0b12","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":212,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f379b0b1-b624-4a28-9095-7bad8b0d549f","block_type":"box","text":"MATERIAL SUSTAINABILITY- RELATED RISKS AND OPPORTUNITIES","page_number":213,"box":{"x":245,"y":45,"width":489,"height":9}},{"id":"753af887-3996-46ef-aa3a-6af1df5c5938","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their business","page_number":213,"box":{"x":101,"y":64,"width":790,"height":11}},{"id":"fa721efc-b722-4fa0-91a1-a1b188e295ea","block_type":"box","text":"operations. In our experience, sustainability-related factors","page_number":213,"box":{"x":69,"y":78,"width":418,"height":12}},{"id":"a89263ce-6995-4cb3-9a7c-a1e85aa6a7f0","block_type":"box","text":"11","page_number":213,"box":{"x":488,"y":79,"width":9,"height":4}},{"id":"55622c69-157e-4989-8893-1fbecd9b6847","block_type":"box","text":"that are relevant to a company’s business or material to","page_number":213,"box":{"x":502,"y":79,"width":402,"height":11}},{"id":"8ee1d9a3-a117-4cd2-8277-c439d387d73d","block_type":"box","text":"its financial performance, are generally operational considerations embedded into day-to-day management systems.","page_number":213,"box":{"x":70,"y":93,"width":824,"height":12}},{"id":"c3e96258-1021-4c7b-8cef-cbe1b031d492","block_type":"box","text":"Certain sustainability issues may also inform long-term strategic planning, for example, investing in product","page_number":213,"box":{"x":69,"y":108,"width":766,"height":11}},{"id":"8cee5a54-5a91-4366-815e-b55ae13abbbc","block_type":"box","text":"innovation in anticipation of changing consumer demand or adapting supply chains in response to changing","page_number":213,"box":{"x":70,"y":123,"width":764,"height":11}},{"id":"942a86a8-e3a8-4a6a-8cc7-97eebc3683a8","block_type":"box","text":"regulatory requirements.","page_number":213,"box":{"x":69,"y":138,"width":174,"height":11}},{"id":"f3e37632-8c30-42b0-810e-3f39de276036","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business relevant","page_number":213,"box":{"x":101,"y":156,"width":798,"height":12}},{"id":"fae4531a-9445-4d82-a064-903381f07971","block_type":"box","text":"will vary by company business model, sector, key markets, and time horizon, amongst other considerations. From","page_number":213,"box":{"x":68,"y":172,"width":809,"height":11}},{"id":"72b85cf7-6f15-4a99-a9ba-d847d1e1ff68","block_type":"box","text":"company disclosures and our engagement, we aim to understand how management is identifying, assessing and","page_number":213,"box":{"x":69,"y":186,"width":803,"height":12}},{"id":"8ce192ff-2390-48db-a0a8-bf89b12b6b6e","block_type":"box","text":"integrating material sustainability-related risks and opportunities into their business decision-making and practices.","page_number":213,"box":{"x":70,"y":201,"width":820,"height":11}},{"id":"5961cf21-450f-459a-bfaf-da3fdc41e3af","block_type":"box","text":"Doing so helps us undertake a more holistic assessment of a company’s potential financial performance and the","page_number":213,"box":{"x":70,"y":216,"width":808,"height":11}},{"id":"df9ad6e7-149b-4287-b60a-4c201a3f3f4a","block_type":"box","text":"likely risk-adjusted returns of an investment.","page_number":213,"box":{"x":70,"y":231,"width":313,"height":11}},{"id":"78580b1c-b865-44f0-966c-a62b41eaae54","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about how a","page_number":213,"box":{"x":101,"y":249,"width":764,"height":12}},{"id":"f9e3f1fe-5f89-442a-af90-d8ed4910e3e2","block_type":"box","text":"company is managing or disclosing its approach to material sustainability-related risks that may impact financial","page_number":213,"box":{"x":69,"y":264,"width":798,"height":12}},{"id":"16596d42-f68d-4416-8583-6caf95bf4bd3","block_type":"box","text":"returns.","page_number":213,"box":{"x":69,"y":280,"width":54,"height":8}},{"id":"9dab2840-267f-471f-b9dd-7f28e560bf9e","block_type":"box","text":"KEY STAKEHOLDERS","page_number":213,"box":{"x":414,"y":309,"width":151,"height":9}},{"id":"a04b6f9e-749d-41b3-aef7-f2b0459ced37","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various parties on","page_number":213,"box":{"x":102,"y":328,"width":774,"height":11}},{"id":"f2def2af-3aa1-410b-98c5-d990683dca67","block_type":"box","text":"whom they depend for their success over time. It is for each company to determine their key stakeholders based on","page_number":213,"box":{"x":68,"y":343,"width":826,"height":11}},{"id":"1091bd72-4871-4f5c-9b11-5462131d1fae","block_type":"box","text":"what is material to their business and long-term financial performance. For many companies, key stakeholders","page_number":213,"box":{"x":68,"y":358,"width":790,"height":11}},{"id":"b0005fb5-3028-47fc-bf8a-962fe4bedbe0","block_type":"box","text":"include employees, business partners (such as suppliers and distributors), clients and consumers, regulators, and","page_number":213,"box":{"x":70,"y":373,"width":817,"height":11}},{"id":"b93e88ec-ff43-42ef-bfc1-f38c3656282b","block_type":"box","text":"the communities in which they operate. Companies that appropriately balance the interests of investors and other","page_number":213,"box":{"x":68,"y":387,"width":813,"height":12}},{"id":"217ce0e8-477a-470b-a720-00f44973c64c","block_type":"box","text":"stakeholders are, in our experience, more likely to be financially resilient over time.","page_number":213,"box":{"x":69,"y":402,"width":592,"height":12}},{"id":"5f0fd9f0-039e-4c78-a458-43f5345fc534","block_type":"box","text":"CLIMATE AND DECARBONIZATION INVESTMENT OBJECTIVES","page_number":213,"box":{"x":265,"y":432,"width":448,"height":9}},{"id":"6bb62d40-9cd1-480e-81e2-04629d2b9e74","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial objectives.","page_number":213,"box":{"x":102,"y":451,"width":784,"height":11}},{"id":"8d0f7e3d-402c-45a7-b4c8-a3ff342482c3","block_type":"box","text":"Consistent with the objectives of those investment strategies, our stewardship activity in relation to the holdings in","page_number":213,"box":{"x":69,"y":466,"width":818,"height":11}},{"id":"d3b910bc-ecfa-4387-956f-5210a8f54954","block_type":"box","text":"those funds differs in some respects from BAIS’ benchmark guidelines, which are described above. Specifically, for","page_number":213,"box":{"x":68,"y":481,"width":823,"height":11}},{"id":"be811d5a-1f44-465c-92b6-532f0cbbee50","block_type":"box","text":"those funds’ holdings, we look to investee companies to demonstrate that they are aligned with a decarbonization","page_number":213,"box":{"x":68,"y":496,"width":814,"height":11}},{"id":"59112f82-4313-4e3e-b58c-e5451e59ef3c","block_type":"box","text":"pathway that means their business model would be viable in a low-carbon economy,","page_number":213,"box":{"x":70,"y":511,"width":594,"height":11}},{"id":"cde9e4a0-031a-4707-adbf-f6d3edc489fd","block_type":"box","text":"i.e.","page_number":213,"box":{"x":672,"y":511,"width":20,"height":9}},{"id":"3731835a-e881-443c-9153-1ae1f4f035b9","block_type":"box","text":", one in which global","page_number":213,"box":{"x":694,"y":511,"width":144,"height":11}},{"id":"b744bfd5-0ad8-4d7f-829a-761f8a3fe8a3","block_type":"box","text":"temperature rise is limited to 1.5°C above pre-industrial levels. In addition, clients in separately managed accounts","page_number":213,"box":{"x":68,"y":526,"width":821,"height":11}},{"id":"a04da77a-94f4-4da9-bb28-abb6f9d114c4","block_type":"box","text":"may instruct BlackRock to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":213,"box":{"x":69,"y":540,"width":839,"height":12}},{"id":"ebf48ed2-463d-42f8-8ede-5f17fb40c5a1","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable fund board or","page_number":213,"box":{"x":69,"y":555,"width":837,"height":12}},{"id":"65cc5b7e-5ac9-43c4-99ab-bf0773341a4b","block_type":"box","text":"client.","page_number":213,"box":{"x":69,"y":570,"width":41,"height":9}},{"id":"18580bbe-bc45-49a9-8f80-ae26ef6caaef","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services that","page_number":213,"box":{"x":101,"y":589,"width":761,"height":11}},{"id":"f9a4043f-1035-41bc-b53d-f82a77fd8730","block_type":"box","text":"contribute to real world decarbonization or have a carbon intensive business model and face outsized impacts from","page_number":213,"box":{"x":69,"y":604,"width":821,"height":11}},{"id":"49d9cd9f-9c3f-4b74-bfd8-c5f44b4f2201","block_type":"box","text":"the low carbon transition, based on reported and estimated scopes 1, 2, and 3 greenhouse gas emissions. These","page_number":213,"box":{"x":68,"y":619,"width":817,"height":11}},{"id":"c5fee13a-a39e-444a-8b2d-2dd5c94ebf95","block_type":"box","text":"companies should provide disclosures that set out their governance, strategy, risk management processes and","page_number":213,"box":{"x":69,"y":634,"width":792,"height":11}},{"id":"1aa2b7a3-074d-4457-9c42-be07a828a112","block_type":"box","text":"metrics and targets relevant to decarbonization. It is helpful to investors’ understanding when these disclosures","page_number":213,"box":{"x":69,"y":648,"width":799,"height":12}},{"id":"ddfd3d77-c1f4-4e9c-80a1-7bff6596bc97","block_type":"box","text":"include an explanation of the decarbonization scenarios a company is using in its near- and long-term planning, as","page_number":213,"box":{"x":70,"y":663,"width":812,"height":11}},{"id":"c62e870b-0a4e-42d5-9333-32907882a085","block_type":"box","text":"well as its scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for scope","page_number":213,"box":{"x":68,"y":678,"width":831,"height":11}},{"id":"86c80d09-2048-415f-8162-4e73724c2123","block_type":"box","text":"1 and 2 emissions.","page_number":213,"box":{"x":70,"y":693,"width":135,"height":9}},{"id":"bdbef3f9-4c60-4c02-a3cd-465889eadd55","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against directors or","page_number":213,"box":{"x":102,"y":711,"width":788,"height":12}},{"id":"eb659ee5-97d4-406b-84c6-cae0f2646507","block_type":"box","text":"support for a relevant shareholder proposal if a company does not appear to be adequately acting to address or","page_number":213,"box":{"x":69,"y":726,"width":800,"height":12}},{"id":"cee337c5-9974-4a37-8c51-99b13cdae028","block_type":"box","text":"disclosing material climate-related risks, consistent with the parameters set out in these climate-and decarbonization","page_number":213,"box":{"x":69,"y":741,"width":839,"height":12}},{"id":"8bd649ef-940d-4df5-8787-deceafd05648","block_type":"box","text":"specific guidelines. We may recommend supporting shareholder proposals seeking information relevant to a","page_number":213,"box":{"x":69,"y":756,"width":771,"height":11}},{"id":"153f3b89-badf-402a-bfb4-7fbf50e5a500","block_type":"box","text":"11","page_number":213,"box":{"x":69,"y":786,"width":9,"height":4}},{"id":"d4bf5699-a75b-4363-8f16-b9db974eaac2","block_type":"box","text":"By material sustainability-related risks and opportunities, we mean the drivers of risk and financial value creation in","page_number":213,"box":{"x":84,"y":785,"width":822,"height":11}},{"id":"33f6ead6-648e-4235-9b62-771151807b75","block_type":"box","text":"a company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":213,"box":{"x":69,"y":800,"width":835,"height":12}},{"id":"374bcd50-38c6-4a05-9d7e-67aaee30b474","block_type":"box","text":"issues include, but are not limited to, water use, land use, waste management, and climate risk. Examples of social","page_number":213,"box":{"x":70,"y":816,"width":827,"height":11}},{"id":"84cc1785-aff5-4db2-8160-e0cd130f9771","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":213,"box":{"x":70,"y":831,"width":826,"height":11}},{"id":"3d474517-d841-46a7-bd54-3defe36cd209","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will","page_number":213,"box":{"x":69,"y":846,"width":773,"height":11}},{"id":"707c5d5c-dad7-4308-ac85-466981029ed2","block_type":"box","text":"effectively evaluate and manage material sustainability-related risks and opportunities relevant to their businesses.","page_number":213,"box":{"x":69,"y":861,"width":823,"height":11}},{"id":"0f164f2c-f4ec-4722-a879-120cb9c80ce6","block_type":"box","text":"Governance is the core means by which boards can oversee the creation of durable financial value over time.","page_number":213,"box":{"x":69,"y":876,"width":777,"height":11}},{"id":"2c573ac0-4ab7-400c-9840-4d114daba130","block_type":"box","text":"Appropriate risk oversight of business-relevant and material sustainability-related considerations is a component of a","page_number":213,"box":{"x":68,"y":891,"width":833,"height":11}},{"id":"94b59534-91cc-46bf-a872-3bcbdb21f62f","block_type":"box","text":"sound governance framework.","page_number":213,"box":{"x":69,"y":906,"width":212,"height":12}},{"id":"581ad9e1-6e3f-49d5-82ea-82b1bb4f8f9c","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":213,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"18a2348c-b129-4dab-816f-866e4461be9a","block_type":"box","text":"Global Engagement and Voting Guidelines | 14","page_number":213,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"0fd7cc0c-844c-4c89-bab4-8abf216f165d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":213,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"fb9150c8-8647-4f5e-b7db-bb2f32da67f2","block_type":"box","text":"company’s stated low-carbon transition strategy or targets that the company does not currently provide and that","page_number":214,"box":{"x":69,"y":45,"width":798,"height":11}},{"id":"b4b767fa-d239-495f-8ac8-33a976228ea4","block_type":"box","text":"would be helpful to investment decision-making. We would not recommend support for shareholder proposals that","page_number":214,"box":{"x":68,"y":59,"width":814,"height":12}},{"id":"f68662b0-c240-48fd-9800-b85e68e42319","block_type":"box","text":"seek to constrain board or management decision-making or direct specific business or strategic decisions. As under","page_number":214,"box":{"x":69,"y":74,"width":828,"height":12}},{"id":"4ec3ff82-8d24-4825-b427-3cc2e5bf3a7b","block_type":"box","text":"the BAIS benchmark approach, the active portfolio managers are ultimately responsible for voting consistent with","page_number":214,"box":{"x":68,"y":89,"width":807,"height":12}},{"id":"2fd751a6-832e-4a2f-bdae-00399e9e2dc9","block_type":"box","text":"their investment mandate and fund objectives. For the funds and accounts in scope, voting on matters not related to","page_number":214,"box":{"x":68,"y":104,"width":832,"height":11}},{"id":"94046a56-cbaa-4311-8417-08f5e04b426c","block_type":"box","text":"climate risk and the energy transition is undertaken in line with BAIS’ benchmark guidelines.","page_number":214,"box":{"x":69,"y":119,"width":658,"height":11}},{"id":"45e6e775-1eae-4f86-8257-708f946a2240","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"f6677be8-fabe-44cf-9661-39a868616214","block_type":"box","text":"Global Engagement and Voting Guidelines | 15","page_number":214,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"ff2a7a3b-ca07-45f2-a0ee-ce22bb60c793","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":214,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4fb9f64e-443f-4017-90f7-c9eb1efeff99","block_type":"box","text":"APPENDIX 1: HOW WE FULFILL AND OVERSEE OUR INVESTMENT STEWARDSHIP RESPONSIBILITIES FOR NON","page_number":215,"box":{"x":83,"y":45,"width":812,"height":9}},{"id":"5906ebe7-5ec5-41e5-895c-e2dfcb5d10af","block_type":"box","text":"INDEX EQUITY INVESTMENT STRATEGIES","page_number":215,"box":{"x":338,"y":60,"width":302,"height":10}},{"id":"9d24baf0-e231-42e3-8e21-9518b7eb0bdc","block_type":"box","text":"Oversight","page_number":215,"box":{"x":69,"y":83,"width":68,"height":11}},{"id":"16084619-f667-419e-97f8-d7c5c8b9afb9","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including voting in","page_number":215,"box":{"x":101,"y":101,"width":793,"height":11}},{"id":"b9b239a1-fd17-48ad-88d5-2b198a960552","block_type":"box","text":"accordance with the BlackRock Active Investment Stewardship Global Engagement and Voting Guidelines (the","page_number":215,"box":{"x":69,"y":116,"width":778,"height":11}},{"id":"cc0c022b-8cb0-47dc-a380-2bd237fecf7c","block_type":"box","text":"“Guidelines”), which require the application of professional judgment and consideration of each company’s unique","page_number":215,"box":{"x":70,"y":131,"width":814,"height":11}},{"id":"cfd1574f-a4b3-44d9-9d1d-c2bde0a4b1d7","block_type":"box","text":"circumstances, as well as input from active investors. BAIS is independent from BlackRock Investment Stewardship","page_number":215,"box":{"x":69,"y":146,"width":825,"height":11}},{"id":"7967a954-7ccf-4e44-a4c7-789d0fb5cad8","block_type":"box","text":"in our engagement and voting activities, reporting lines, and oversight.","page_number":215,"box":{"x":70,"y":161,"width":500,"height":11}},{"id":"7b0d7d1c-552b-48bc-88b8-4f115e884cf2","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders in","page_number":215,"box":{"x":101,"y":179,"width":744,"height":11}},{"id":"70e444d4-b33e-4ec0-a084-3b8b285be37c","block_type":"box","text":"BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s approach to","page_number":215,"box":{"x":70,"y":194,"width":786,"height":11}},{"id":"40f2c3cd-e6b8-44b8-bf97-e84a702ec503","block_type":"box","text":"investment stewardship on non-index equity investment strategies. The Group may advise on and review amendments","page_number":215,"box":{"x":70,"y":209,"width":839,"height":11}},{"id":"7c5411b1-0332-40eb-a923-b61a9980a4fc","block_type":"box","text":"to BAIS’ policies and practices. It does not determine voting decisions, which are the responsibility of BAIS and the","page_number":215,"box":{"x":68,"y":224,"width":822,"height":11}},{"id":"d243d28b-9688-41b5-a665-aa888ce1bfe5","block_type":"box","text":"relevant active equity investors.","page_number":215,"box":{"x":69,"y":239,"width":223,"height":11}},{"id":"67bf674b-0bbc-4b1a-893a-bce39240a674","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues, executes proxy","page_number":215,"box":{"x":102,"y":257,"width":797,"height":12}},{"id":"3f98f306-d2a8-4b9f-8b13-95b06f3dc146","block_type":"box","text":"votes, and conducts vote operations (including maintaining records of votes cast) in a manner consistent with the","page_number":215,"box":{"x":68,"y":272,"width":810,"height":11}},{"id":"ca92fd50-ae15-4c34-ae67-35321cb9ade0","block_type":"box","text":"Guidelines. BAIS also conducts research on corporate governance issues and participates in industry discussions to","page_number":215,"box":{"x":69,"y":287,"width":832,"height":11}},{"id":"6fdae3a0-e499-4627-9114-1d89b75149e6","block_type":"box","text":"contribute to and keep abreast of important developments in the corporate governance field. BAIS may use third","page_number":215,"box":{"x":69,"y":302,"width":801,"height":11}},{"id":"27a26573-497d-4aa5-836b-4278e90931be","block_type":"box","text":"parties for certain of the foregoing activities and performs oversight of those third parties (see “Use and oversight of","page_number":215,"box":{"x":70,"y":317,"width":836,"height":11}},{"id":"289c135b-1b92-4627-b634-78e370a3ce99","block_type":"box","text":"third-party vote services providers” below).","page_number":215,"box":{"x":68,"y":332,"width":305,"height":11}},{"id":"8c9d3f96-9cdb-4562-b148-6599da4fd38d","block_type":"box","text":"Voting guidelines and vote execution","page_number":215,"box":{"x":68,"y":354,"width":269,"height":11}},{"id":"bec20e62-c749-4c3a-8842-aa428bd9ea12","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the voting items","page_number":215,"box":{"x":102,"y":373,"width":790,"height":11}},{"id":"1df66cea-fabe-4062-ae49-f2b1b355a1cd","block_type":"box","text":"submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have voting authority. BlackRock votes","page_number":215,"box":{"x":69,"y":387,"width":838,"height":12}},{"id":"cb35b8c6-6ec0-4c5b-9c01-53f611b453bf","block_type":"box","text":"(or refrains from voting) for each Fund for which we have voting authority based on our evaluation of the alignment of","page_number":215,"box":{"x":69,"y":402,"width":831,"height":12}},{"id":"a56b6d90-cf07-47d9-b45f-0c0f7bb4725e","block_type":"box","text":"the voting items with the long-term economic interests of our clients, in the exercise of our independent business","page_number":215,"box":{"x":68,"y":417,"width":809,"height":12}},{"id":"e57acf74-3406-4a64-bed2-d394d602db45","block_type":"box","text":"judgment, and without regard to the relationship of the issuer (or any shareholder proponent or dissident","page_number":215,"box":{"x":67,"y":432,"width":749,"height":11}},{"id":"d8f0c0b4-2fa0-49d8-b34a-017f93d30f74","block_type":"box","text":"shareholder) to the Fund, the Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees","page_number":215,"box":{"x":69,"y":447,"width":825,"height":11}},{"id":"bbd8a72e-8a14-48fc-ae21-0951cf68ea21","block_type":"box","text":"(see “Conflicts management policies and procedures,” below).","page_number":215,"box":{"x":69,"y":462,"width":445,"height":11}},{"id":"a8279d3a-c24a-4cf1-b645-bf6bc2d45a44","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the Guidelines,","page_number":215,"box":{"x":101,"y":480,"width":803,"height":12}},{"id":"b478b573-d735-4371-8913-ab6100f783be","block_type":"box","text":"although portfolio managers have the right to vote differently on their holdings if they determine doing so is more","page_number":215,"box":{"x":69,"y":495,"width":806,"height":12}},{"id":"4146ce0e-61b2-4f3a-8778-9d3b64b0d01e","block_type":"box","text":"aligned with the investment objective and financial interests of clients invested in the funds they manage.","page_number":215,"box":{"x":69,"y":510,"width":752,"height":11}},{"id":"b733f893-a410-42bf-b221-360e4ea71799","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case basis, in the","page_number":215,"box":{"x":101,"y":529,"width":782,"height":11}},{"id":"3e4a7ee5-e568-4b33-8701-274f91477c3d","block_type":"box","text":"context of the individual circumstances of each company and the specific issue under review. As such, the Guidelines","page_number":215,"box":{"x":69,"y":544,"width":837,"height":11}},{"id":"7fb94409-3825-49d6-ab1f-9f3df7103cf6","block_type":"box","text":"do not indicate how BAIS will vote in every instance. Rather, they reflect our view about corporate governance issues","page_number":215,"box":{"x":69,"y":559,"width":830,"height":11}},{"id":"6fee5362-bb14-4f74-a735-12bd470a19e5","block_type":"box","text":"generally, and provide insight into how we typically approach issues that are commonly put to a shareholder vote. The","page_number":215,"box":{"x":68,"y":574,"width":838,"height":11}},{"id":"39d1ac23-fa96-450d-a531-a8f64bb1bb6a","block_type":"box","text":"Guidelines are reviewed annually and updated as necessary to reflect changes in market practices, developments in","page_number":215,"box":{"x":69,"y":588,"width":829,"height":12}},{"id":"29d9e11d-087c-4012-9ce7-d3d7b4e3b2d3","block_type":"box","text":"corporate governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":215,"box":{"x":69,"y":603,"width":802,"height":11}},{"id":"4ced5c1f-fd2a-4279-88d5-e60234c2d6a9","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":215,"box":{"x":69,"y":618,"width":718,"height":11}},{"id":"31bc59a7-fbce-4797-be4e-7346db38f89b","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such proxies, as","page_number":215,"box":{"x":102,"y":637,"width":792,"height":11}},{"id":"454c21a5-002a-45e3-b674-ddf8a6624577","block_type":"box","text":"well as the desirability of voting such proxies. These issues include, but are not limited to: i) untimely notice of","page_number":215,"box":{"x":68,"y":652,"width":791,"height":11}},{"id":"5274a9fc-d214-4c3b-8601-484091cf71d7","block_type":"box","text":"shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii) requirements to vote proxies in","page_number":215,"box":{"x":69,"y":666,"width":805,"height":12}},{"id":"39e38c3d-c413-47b7-bd31-af0df4a92f4a","block_type":"box","text":"person; iv) “share-blocking” (requirements that investors who exercise their voting rights surrender the right to","page_number":215,"box":{"x":70,"y":682,"width":784,"height":11}},{"id":"49742eb9-9897-40d9-8152-fee84629d935","block_type":"box","text":"dispose of their holdings from the point at which votes are submitted until after the shareholder meeting has","page_number":215,"box":{"x":69,"y":696,"width":775,"height":11}},{"id":"929c69a3-b985-41b9-aef3-b40ab8e2313a","block_type":"box","text":"occurred); v) potential difficulties in translating the proxy; vi) regulatory constraints; and vii) requirements to provide","page_number":215,"box":{"x":69,"y":711,"width":824,"height":11}},{"id":"1a4ec074-90d3-40e0-8447-0441a693d5b2","block_type":"box","text":"local agents with powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":215,"box":{"x":70,"y":726,"width":806,"height":11}},{"id":"c034207e-dacb-4278-a49e-b907980c96ae","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":215,"box":{"x":69,"y":741,"width":704,"height":11}},{"id":"115bcb36-777d-4e4a-aa04-98f3a692d0a4","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine that it is","page_number":215,"box":{"x":102,"y":759,"width":796,"height":12}},{"id":"25d669b5-6b85-4a01-a063-daecc6d9bd9f","block_type":"box","text":"generally in the interests of BlackRock’s clients not to vote proxies (or not to vote our full allocation) if the costs","page_number":215,"box":{"x":68,"y":774,"width":799,"height":12}},{"id":"a00a6bc2-1860-42ec-8c57-65718f54ca86","block_type":"box","text":"(including but not limited to opportunity costs associated with share-blocking constraints) associated with exercising","page_number":215,"box":{"x":69,"y":789,"width":829,"height":11}},{"id":"ae092f32-e68c-421c-b110-303c4956c1dc","block_type":"box","text":"a vote are expected to outweigh the benefit the client would derive by voting on the proposal.","page_number":215,"box":{"x":69,"y":804,"width":661,"height":11}},{"id":"038a81a9-6b22-4d22-950e-5bfd4a9ba8df","block_type":"box","text":"Voting Choice","page_number":215,"box":{"x":68,"y":826,"width":101,"height":12}},{"id":"57e67a58-5e9e-400c-b710-087aa93c204e","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to participate in","page_number":215,"box":{"x":102,"y":845,"width":800,"height":11}},{"id":"859efa67-7e0e-4b19-8ce4-02afb42be5a6","block_type":"box","text":"the proxy voting process where legally and operationally viable.","page_number":215,"box":{"x":68,"y":860,"width":447,"height":11}},{"id":"3a47a4df-5e2a-4aa9-81ce-066110c95df5","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"a0ba7451-9fac-48a4-a78a-c671a446d67a","block_type":"box","text":"Global Engagement and Voting Guidelines | 16","page_number":215,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"b02e0452-bd2e-4114-88bb-1d1e13696e99","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":215,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"27cdcefa-3b2b-4aa3-9fc0-6b89c0383690","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in the U.S.,","page_number":216,"box":{"x":101,"y":45,"width":786,"height":11}},{"id":"ea8a3a23-9f7c-4609-91e2-d6f7a5b6c718","block_type":"box","text":"UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In addition, institutional clients in","page_number":216,"box":{"x":70,"y":60,"width":834,"height":11}},{"id":"26ae822a-e5c4-4a0a-a68a-ed1bfd2446f1","block_type":"box","text":"separately managed accounts (SMAs) are eligible for BlackRock Voting Choice regardless of their investment","page_number":216,"box":{"x":69,"y":74,"width":774,"height":12}},{"id":"7f458dd1-c46f-4ba5-9ce2-f22948891e72","block_type":"box","text":"strategies.","page_number":216,"box":{"x":69,"y":89,"width":74,"height":12}},{"id":"cced521f-3ef7-4d91-8195-c3f2c50eba7f","block_type":"box","text":"12","page_number":216,"box":{"x":145,"y":90,"width":9,"height":4}},{"id":"c7f1d3ac-8656-42b4-bab5-7bd7edba79f1","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently depending","page_number":216,"box":{"x":101,"y":108,"width":788,"height":11}},{"id":"a5bc7441-c9f9-449e-8574-e1b3886f369f","block_type":"box","text":"on whether our clients have authorized BAIS to vote on their behalf, have authorized BlackRock to vote in accordance","page_number":216,"box":{"x":69,"y":123,"width":834,"height":10}},{"id":"8ac4d592-cb85-4e70-aaab-a455215d7ef8","block_type":"box","text":"with a third-party policy, or have elected to vote shares in accordance with their own policy. 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BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":217,"box":{"x":102,"y":226,"width":797,"height":11}},{"id":"250139e2-133a-4b14-8284-dc8732386ba1","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":217,"box":{"x":102,"y":240,"width":584,"height":12}},{"id":"e79c5262-0719-44ba-a141-d8da561c1ab7","block_type":"box","text":"•","page_number":217,"box":{"x":102,"y":261,"width":6,"height":4}},{"id":"aa1ed22a-b45b-47ce-9b41-b3e8539946e4","block_type":"box","text":"public companies that include BlackRock employees on their boards of directors","page_number":217,"box":{"x":135,"y":258,"width":570,"height":11}},{"id":"f7aa585e-9b48-4ec3-857e-2c0a3465740e","block_type":"box","text":"•","page_number":217,"box":{"x":102,"y":278,"width":6,"height":5}},{"id":"cf6945b5-00f7-4dd5-bd47-ac76c0db9c73","block_type":"box","text":"public companies of which a BlackRock, Inc. board member serves as a senior executive or a member of","page_number":217,"box":{"x":135,"y":275,"width":748,"height":11}},{"id":"ad4008a3-cc83-453d-bd97-03d50d1a7798","block_type":"box","text":"the board of directors","page_number":217,"box":{"x":134,"y":290,"width":153,"height":9}},{"id":"777c89ff-6d26-40ea-8b7f-b0760717d5cf","block_type":"box","text":"•","page_number":217,"box":{"x":102,"y":310,"width":6,"height":5}},{"id":"8d064584-2a46-448b-857a-933128ffbb4d","block_type":"box","text":"public companies that are the subject of certain transactions involving BlackRock Funds","page_number":217,"box":{"x":135,"y":307,"width":626,"height":12}},{"id":"d890fa6a-31b0-4ad2-9b1e-613c882c688e","block_type":"box","text":"•","page_number":217,"box":{"x":102,"y":328,"width":6,"height":4}},{"id":"5c55bc36-4651-4304-9f78-0a997270eeb1","block_type":"box","text":"public companies that are joint venture partners with BlackRock, and","page_number":217,"box":{"x":135,"y":325,"width":490,"height":11}},{"id":"97153677-0b9a-44f7-a979-08e927597f57","block_type":"box","text":"•","page_number":217,"box":{"x":102,"y":345,"width":6,"height":5}},{"id":"2fb934f5-1ecb-4edd-881f-345ed9ff5bcd","block_type":"box","text":"public companies when legal or regulatory requirements compel BlackRock to use an independent third","page_number":217,"box":{"x":135,"y":342,"width":740,"height":11}},{"id":"5dd99958-85ff-4690-af08-3435bee8cfbb","block_type":"box","text":"party voting service provider","page_number":217,"box":{"x":135,"y":357,"width":200,"height":11}},{"id":"aebbdc35-2fa2-4656-8d58-4ed62ea9fa81","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics, including but","page_number":217,"box":{"x":102,"y":376,"width":790,"height":11}},{"id":"89083a77-a0e7-44be-890e-d75f09e5e4b3","block_type":"box","text":"not limited to: independence, an ability to analyze proxy issues and make recommendations in the economic interest","page_number":217,"box":{"x":69,"y":391,"width":834,"height":11}},{"id":"6cee95cd-a742-4b5a-a870-77b8494f1996","block_type":"box","text":"of our clients in accordance with the Guidelines, reputation for reliability and integrity, and operational capacity to","page_number":217,"box":{"x":69,"y":405,"width":806,"height":12}},{"id":"62ac2d16-bb7c-4823-9164-94be19c171a9","block_type":"box","text":"accurately deliver the assigned recommendations in a timely manner. We may engage more than one independent","page_number":217,"box":{"x":69,"y":420,"width":813,"height":12}},{"id":"e17bd457-56c4-465a-8c6e-7fd54ccb5480","block_type":"box","text":"third-party voting service provider, in part to mitigate potential or perceived conflicts of interest at a single voting","page_number":217,"box":{"x":68,"y":435,"width":804,"height":11}},{"id":"6da9f695-7721-41c9-909a-0aa5db47f880","block_type":"box","text":"service provider.","page_number":217,"box":{"x":69,"y":450,"width":115,"height":11}},{"id":"e09448b0-9765-4a72-967c-8b1e8d34e148","block_type":"box","text":"Securities lending","page_number":217,"box":{"x":68,"y":473,"width":131,"height":11}},{"id":"56f9cacc-1758-4ee3-9c1c-ad8b84b2dde4","block_type":"box","text":"If authorized, BlackRock acts as a securities lending agent on behalf of its clients. Securities lending is a well","page_number":217,"box":{"x":102,"y":491,"width":785,"height":11}},{"id":"29d448a8-c9b8-4ccc-b1cf-131504e09a7f","block_type":"box","text":"regulated practice that contributes to capital market efficiency. It also enables funds to generate additional returns","page_number":217,"box":{"x":69,"y":506,"width":819,"height":11}},{"id":"c3fd0f56-058b-4b2b-86b0-915ae4acdcc5","block_type":"box","text":"which in turn may allow fund providers to offset fund expenses.","page_number":217,"box":{"x":68,"y":521,"width":452,"height":11}},{"id":"d59f6386-a46e-4015-bcd3-5c36fbb4d7e5","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote shares on","page_number":217,"box":{"x":101,"y":540,"width":779,"height":11}},{"id":"8ab57dd8-44fb-44a8-ae67-c0ea27b6b677","block_type":"box","text":"loan and may determine to recall them to allow for voting. This decision is guided by our fiduciary duty as an asset","page_number":217,"box":{"x":70,"y":554,"width":816,"height":12}},{"id":"04defe5c-bf54-4f3b-902d-33241a696683","block_type":"box","text":"manager to our clients in helping them achieve their investment goals. While this has occurred in a limited number of","page_number":217,"box":{"x":69,"y":569,"width":836,"height":11}},{"id":"396bf9c2-4222-46f4-8a9d-58a43c1345f7","block_type":"box","text":"cases, the decision to recall securities on loan as part of BlackRock’s securities lending program in order to vote is","page_number":217,"box":{"x":69,"y":584,"width":824,"height":11}},{"id":"d66f90e9-ac3b-4b01-9b37-2a59ddd4cdd3","block_type":"box","text":"based on an evaluation of various factors that include, but are not limited to, assessing potential securities lending","page_number":217,"box":{"x":69,"y":599,"width":823,"height":11}},{"id":"5dc0fdbe-a1da-4f4a-bf20-342235e0344c","block_type":"box","text":"revenue alongside the potential long-term financial value to clients of voting those securities (based on the","page_number":217,"box":{"x":69,"y":614,"width":761,"height":11}},{"id":"d556fd1a-c406-4bce-b9fd-f1c9b9b5f96e","block_type":"box","text":"information available at the time of recall consideration). BAIS works with active portfolio managers, as well as","page_number":217,"box":{"x":70,"y":629,"width":789,"height":11}},{"id":"13241811-8563-44b4-9b67-8e3d38164247","block_type":"box","text":"colleagues in the Securities Lending team, to evaluate the costs and benefits to clients of recalling shares on loan.","page_number":217,"box":{"x":69,"y":643,"width":821,"height":12}},{"id":"6f9a550a-5bfd-4968-87f8-ffb19239d71f","block_type":"box","text":"In almost all instances, BlackRock anticipates that the potential long-term financial value to clients of voting","page_number":217,"box":{"x":102,"y":662,"width":770,"height":11}},{"id":"e37fcdd7-e119-487c-98bf-d4830edc570e","block_type":"box","text":"shares would not warrant recalling securities on loan. However, in certain instances, BlackRock may determine, in","page_number":217,"box":{"x":69,"y":677,"width":813,"height":11}},{"id":"112830a7-b237-4250-aa64-756ac19d9c64","block_type":"box","text":"our independent business judgment as a fiduciary, that the value of voting outweighs the securities lending revenue","page_number":217,"box":{"x":69,"y":692,"width":825,"height":11}},{"id":"ed0b0730-335b-4d0f-ad54-9b4b8f049ea3","block_type":"box","text":"loss to clients and would therefore recall shares to be voted in those instances.","page_number":217,"box":{"x":70,"y":707,"width":568,"height":9}},{"id":"926fae17-2c9e-4c6b-ae90-a5a4cae283ca","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote","page_number":217,"box":{"x":102,"y":725,"width":790,"height":12}},{"id":"d26f494f-78a7-4376-990b-dc2ebbe46609","block_type":"box","text":"and may modify it as necessary.","page_number":217,"box":{"x":69,"y":740,"width":228,"height":11}},{"id":"4a74624d-d657-4204-b4e6-463f4f4e7e9f","block_type":"box","text":"Reporting and vote transparency","page_number":217,"box":{"x":69,"y":763,"width":239,"height":11}},{"id":"20df8a3f-596d-4c2a-bee5-e9639311db46","block_type":"box","text":"BAIS is committed to transparency in the stewardship work we do on behalf of clients. We inform clients about","page_number":217,"box":{"x":102,"y":781,"width":788,"height":11}},{"id":"313f11cf-277f-4d5f-b884-43ddcda5fc4f","block_type":"box","text":"our engagement and voting policies and activities through direct communication and disclosure on our website.","page_number":217,"box":{"x":69,"y":796,"width":791,"height":11}},{"id":"a8bdaeb5-b8e8-4d2d-a117-cb2f6dd7dc2c","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"65d87ee6-3924-4ac3-86c7-fafe1b57fd4d","block_type":"box","text":"Global Engagement and Voting Guidelines | 18","page_number":217,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"37d3e0fe-1707-4ddc-b5cd-899fb3472c35","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":217,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a2e2f638-30dc-437c-95f4-ffca0d4fad62","block_type":"box","text":"Want to know more?","page_number":218,"box":{"x":68,"y":762,"width":152,"height":8}},{"id":"60172094-d3e2-484c-a3cb-702435667738","block_type":"box","text":"blackrock.com/stewardship | ContactActiveStewardship@blackrock.com","page_number":218,"box":{"x":69,"y":791,"width":510,"height":13}},{"id":"1657f93e-cf3f-405e-bff3-1341c0ac9659","block_type":"box","text":"The document is provided for information purposes only and is subject to change. Reliance upon this information is","page_number":218,"box":{"x":68,"y":822,"width":823,"height":11}},{"id":"0b0ee76d-69ee-4dc5-bd4d-cd5bc40318bf","block_type":"box","text":"at the sole discretion of the reader.","page_number":218,"box":{"x":69,"y":837,"width":250,"height":9}},{"id":"59cc7275-f03b-4015-a1b6-6075d2a733b7","block_type":"box","text":"Prepared by BlackRock, Inc.","page_number":218,"box":{"x":69,"y":868,"width":196,"height":10}},{"id":"8f0a0952-508a-41fa-a01a-3134fb661d47","block_type":"box","text":"©","page_number":218,"box":{"x":68,"y":898,"width":6,"height":4}},{"id":"a8230bea-9378-44bd-9173-09fe9ef02a4b","block_type":"box","text":"2025 BlackRock, Inc. All rights reserved. BLACKROCK is a trademark of BlackRock, Inc., or its subsidiaries in the","page_number":218,"box":{"x":75,"y":898,"width":809,"height":11}},{"id":"d246696b-4a13-465c-b938-90fbb6a1902f","block_type":"box","text":"United States and elsewhere. All other trademarks are those of their respective owners.","page_number":218,"box":{"x":70,"y":913,"width":624,"height":11}},{"id":"ddc4c45f-221e-4f81-8987-3cb7544b61c4","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":69,"y":943,"width":311,"height":11}},{"id":"e6c2207e-253b-4f40-8edf-8255cde17b53","block_type":"box","text":"Global Engagement and Voting Guidelines | 19","page_number":218,"box":{"x":580,"y":942,"width":329,"height":13}},{"id":"313291cc-2def-4a7e-821c-398f9da2855a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":218,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e3b207fa-2586-49ab-aabf-dc143fd93fdb","block_type":"box","text":"APPENDIX C","page_number":219,"box":{"x":438,"y":75,"width":101,"height":10}},{"id":"be8313ba-df6e-4a43-90c9-cca2b315fdd4","block_type":"box","text":"Economic and Financial Conditions in California","page_number":219,"box":{"x":299,"y":99,"width":380,"height":9}},{"id":"0806ffac-b5ae-4921-9170-8a4e168cb50e","block_type":"box","text":"Special Considerations Regarding Investments in California Municipal Securities","page_number":219,"box":{"x":166,"y":122,"width":646,"height":12}},{"id":"a59b6ea9-e565-4132-b32c-e0bf3bc8d689","block_type":"box","text":"Following is a brief summary of some of the factors that may affect the financial condition of the State of","page_number":219,"box":{"x":102,"y":145,"width":750,"height":11}},{"id":"84793b55-8a23-424b-acd7-a120d0e65631","block_type":"box","text":"California (referred to herein as the “State” or “California”) and its political subdivisions. The summary is neither a","page_number":219,"box":{"x":69,"y":160,"width":819,"height":11}},{"id":"b5028dfb-1443-4da9-b695-6ef76bb12ac0","block_type":"box","text":"complete nor a comprehensive description of these factors nor an analysis of financial conditions and may not be","page_number":219,"box":{"x":69,"y":175,"width":809,"height":11}},{"id":"92055327-5541-4bed-8d58-0ac84cb784e6","block_type":"box","text":"indicative of the financial condition of issuers of obligations or any particular projects financed with the proceeds of","page_number":219,"box":{"x":70,"y":190,"width":822,"height":11}},{"id":"b001f949-774a-4f7e-b2bc-3373609aebeb","block_type":"box","text":"such obligations. In addition to the factors discussed below, such as changes to local and national economies and","page_number":219,"box":{"x":69,"y":205,"width":817,"height":12}},{"id":"eb171023-0c62-489d-8b6a-74d78f7257d1","block_type":"box","text":"impacts on public agency funding needs, changes in federal policies related to trade, health care and immigration","page_number":219,"box":{"x":70,"y":220,"width":808,"height":12}},{"id":"fe209c7f-942f-40d2-b135-1fb672dc1917","block_type":"box","text":"(including the targeting of “sanctuary jurisdictions” by the federal government), social and environmental policies and","page_number":219,"box":{"x":69,"y":235,"width":836,"height":12}},{"id":"4d8ea67f-2cad-404a-b536-690bd0fa5685","block_type":"box","text":"conditions, the national and international markets for products produced in California and the impact of any tariff","page_number":219,"box":{"x":69,"y":251,"width":807,"height":11}},{"id":"cbdc9b4f-e945-4242-aad3-f201251836bb","block_type":"box","text":"regime, significant unfunded pension and other post-employment benefit liabilities, and the impact of climate change,","page_number":219,"box":{"x":69,"y":266,"width":837,"height":11}},{"id":"364db2b8-193e-4080-b2e6-3ecc4edb65e6","block_type":"box","text":"many other factors could have an adverse impact on the financial condition of the State and its political subdivisions.","page_number":219,"box":{"x":69,"y":281,"width":835,"height":11}},{"id":"ba9bbe01-db94-4b8f-955d-c343e3eeb895","block_type":"box","text":"The Fund is unable to predict whether or to what extent such factors or other factors may affect the issuers of the","page_number":219,"box":{"x":68,"y":296,"width":813,"height":11}},{"id":"4e80aed4-ed99-46bb-a011-16e6ba11f802","block_type":"box","text":"municipal securities, the market value or marketability of the municipal securities or the ability of the respective","page_number":219,"box":{"x":69,"y":311,"width":796,"height":11}},{"id":"57fafb93-eb62-4b0a-a19d-d132906eb56c","block_type":"box","text":"issuers of the municipal securities acquired by the Fund to pay interest on or principal of the municipal securities.","page_number":219,"box":{"x":70,"y":326,"width":809,"height":11}},{"id":"fcddba4c-33aa-4a42-8045-76284cb2337c","block_type":"box","text":"The Fund invests a high proportion of its assets in California municipal securities. The payment of interest on","page_number":219,"box":{"x":101,"y":349,"width":780,"height":11}},{"id":"327c38b5-c7cd-47c4-b6cf-0a5e808397d6","block_type":"box","text":"and preservation of principal in these securities are dependent upon the continuing ability of California issuers and/","page_number":219,"box":{"x":69,"y":364,"width":829,"height":11}},{"id":"3ce8df5a-7b1b-44cd-82c7-cffa73f52dc4","block_type":"box","text":"or obligors of State, municipal and public authority debt obligations to meet their obligations thereunder. In addition","page_number":219,"box":{"x":69,"y":379,"width":822,"height":11}},{"id":"4f8207a4-56fc-4d31-93fc-1346fbd8d61f","block_type":"box","text":"to general economic pressures, certain California constitutional amendments, legislative measures, executive orders,","page_number":219,"box":{"x":68,"y":394,"width":840,"height":12}},{"id":"287b3f8e-543c-45ba-9d6e-f261bfd31ac1","block_type":"box","text":"administrative regulations and voter initiatives could adversely affect a California issuer’s ability to raise revenues to","page_number":219,"box":{"x":69,"y":409,"width":831,"height":12}},{"id":"b1f77b91-4d5a-4762-81cf-4247d83d95f3","block_type":"box","text":"meet its financial obligations.","page_number":219,"box":{"x":69,"y":424,"width":208,"height":12}},{"id":"a1c8e2cc-c36f-422d-8f40-72810dcff04b","block_type":"box","text":"The following summary is based upon the most recent publicly available State budget documents, specifically,","page_number":219,"box":{"x":101,"y":447,"width":805,"height":11}},{"id":"77ac83ce-3441-4935-b9dc-b8bd398a84b6","block_type":"box","text":"the 2026-27 Budget (the “2026-27 Budget”), which was signed by the Governor of the State (the “Governor”) on","page_number":219,"box":{"x":68,"y":462,"width":830,"height":11}},{"id":"b5a3c746-bf95-41b5-81a2-52c9c62fc07f","block_type":"box","text":"June 29, 2026; the State Legislative Analyst’s Office (“LAO”) reports; as well as offering statements relating to","page_number":219,"box":{"x":69,"y":477,"width":820,"height":12}},{"id":"33e036ed-5839-4c08-9cf6-74eaf198c1a8","block_type":"box","text":"public debt offerings of the State. This summary has not been updated nor will it be updated during the year.","page_number":219,"box":{"x":69,"y":493,"width":792,"height":11}},{"id":"203c00cf-d5bf-45ed-8a5c-5a608f35354d","block_type":"box","text":"Neither the Fund nor its legal counsel has independently verified this information. The information provided below","page_number":219,"box":{"x":69,"y":508,"width":827,"height":11}},{"id":"751efeb0-8dd4-442b-85b8-2eb4f60334da","block_type":"box","text":"is intended only as a general summary and is subject to change rapidly, substantially, and without notice, and the","page_number":219,"box":{"x":69,"y":523,"width":830,"height":11}},{"id":"1452bcd7-0e8d-4b2f-aa6a-2132cd661536","block_type":"box","text":"inclusion of such information herein shall not create any implication that there has been no change in the affairs","page_number":219,"box":{"x":69,"y":538,"width":822,"height":11}},{"id":"1ebcdf80-0117-44d2-bbd5-9900e5a2942e","block_type":"box","text":"of the State or issuers therein since the date of its preparation.","page_number":219,"box":{"x":69,"y":553,"width":463,"height":11}},{"id":"a24ceb8d-0f49-435b-b966-bc09003c94a1","block_type":"box","text":"Certain statements included in this summary constitute “forward-looking statements.” Such statements are","page_number":219,"box":{"x":101,"y":576,"width":793,"height":11}},{"id":"779c4b44-6dea-4e9d-bce8-411b13f0995e","block_type":"box","text":"generally identifiable by the terminology used such as “plan,” “estimate,” “expect,” “budget” or similar words.","page_number":219,"box":{"x":68,"y":591,"width":812,"height":11}},{"id":"2005e163-cf50-45c5-9501-3c809da1b234","block_type":"box","text":"The achievement of certain results or other expectations contained in such forward-looking statements involve","page_number":219,"box":{"x":68,"y":606,"width":813,"height":11}},{"id":"24192829-1ef5-4370-8057-ff4ee9893f04","block_type":"box","text":"known or unknown risks, uncertainties and other factors that may cause actual results, performance or","page_number":219,"box":{"x":69,"y":621,"width":758,"height":11}},{"id":"1c7b32f7-19a0-4b52-91c1-e892a1c70e64","block_type":"box","text":"achievements attained to be materially different from any future results, performances or achievements expressed","page_number":219,"box":{"x":69,"y":636,"width":838,"height":11}},{"id":"acb2eae6-36bb-4601-9cc6-6260655490cb","block_type":"box","text":"or implied by such forward-looking statements.","page_number":219,"box":{"x":69,"y":651,"width":341,"height":11}},{"id":"925a6297-1626-46ed-a182-4c659b6673d0","block_type":"box","text":"Overview of Economic and Demographic Factors","page_number":219,"box":{"x":101,"y":674,"width":352,"height":11}},{"id":"168e72fd-208d-4e89-bcda-2d435354d3cc","block_type":"box","text":"California is the most populous state in the nation; indeed, California is about 20% larger than the second most","page_number":219,"box":{"x":102,"y":697,"width":802,"height":11}},{"id":"c3b6216e-79f9-4de5-a2b2-1cae6ae0c685","block_type":"box","text":"populous state. California’s population was an estimated 39.5 million as of July 2025, up 0.05% from the previous","page_number":219,"box":{"x":70,"y":712,"width":821,"height":11}},{"id":"5b2c08f8-c780-4d3d-8151-6af957100df2","block_type":"box","text":"year. In long-term projections, California’s population growth has slowed and is projected to a peak of 41.1 million in","page_number":219,"box":{"x":68,"y":727,"width":832,"height":11}},{"id":"ce08c6d2-f443-40e9-88e9-fa9bd9a93ede","block_type":"box","text":"2049 after which it declines slowly to 39.9 million by 2070. With population aging, deaths are expected to increase","page_number":219,"box":{"x":69,"y":742,"width":824,"height":11}},{"id":"e7ed637a-4de8-4273-ad34-4fea4093ef4f","block_type":"box","text":"more than births, lessening the State’s population growth over time.","page_number":219,"box":{"x":69,"y":757,"width":487,"height":11}},{"id":"dec4bea1-49ad-4d4f-8a88-9544d3e5b4b5","block_type":"box","text":"California’s economy, the largest among the 50 states, has major components in technology, trade,","page_number":219,"box":{"x":102,"y":780,"width":709,"height":11}},{"id":"2c9e39de-51df-49c2-90e6-d6a9dc3ea8f2","block_type":"box","text":"entertainment, manufacturing, government, tourism, construction and services. The relative proportion of the various","page_number":219,"box":{"x":69,"y":795,"width":836,"height":11}},{"id":"ef8437ea-7f5b-4d88-9ecb-37e4891f57c1","block_type":"box","text":"components of the California economy closely resembles the make-up of the national economy. California’s economy","page_number":219,"box":{"x":69,"y":810,"width":834,"height":11}},{"id":"6cf6033f-e1d1-4910-a64d-dd5a28c4b642","block_type":"box","text":"accounted for 13.8% of the U.S. gross domestic product (“GDP”) in calendar year 2025 (the last year for which data","page_number":219,"box":{"x":69,"y":825,"width":827,"height":11}},{"id":"1c8870b1-7797-416f-a0ba-7a6d800d9e2d","block_type":"box","text":"was available). In 2025, California was the fifth largest economy in the world, with a GDP of $4.3 trillion.","page_number":219,"box":{"x":68,"y":840,"width":746,"height":12}},{"id":"d7be8fa1-644d-4c54-a664-9843d88a194f","block_type":"box","text":"California’s civilian labor force (including people who are employed or actively looking for employment) increased","page_number":219,"box":{"x":102,"y":863,"width":799,"height":11}},{"id":"5425b58e-2c74-4d46-9c02-1f6c8765c64e","block_type":"box","text":"by 0.7% in 2025 and is projected to remain about flat in 2026. California’s unemployment rate averaged 5.3% and","page_number":219,"box":{"x":69,"y":878,"width":818,"height":11}},{"id":"65d4b08d-3181-4ed6-9f74-4f75574c9a7c","block_type":"box","text":"5.5% in 2024 and 2025, respectively. The State’s unemployment rate is projected to peak at 5.6% in 2026 before","page_number":219,"box":{"x":69,"y":893,"width":817,"height":11}},{"id":"2908de12-839c-47d1-9a04-9810941eff04","block_type":"box","text":"gradually dropping to 5.1% by 2030.","page_number":219,"box":{"x":68,"y":908,"width":258,"height":12}},{"id":"fa4e6dc0-1120-42b8-9cc2-0976c115390b","block_type":"box","text":"Public Page 1 of 33","page_number":219,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"e2632f32-aeb3-4c08-a1fd-57591e4a3fef","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":219,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4104984a-c9c8-4d9e-a218-038911b98e0c","block_type":"box","text":"In 2025, California’s median price for existing single-family home sales was $867,974, compared to $414,300","page_number":220,"box":{"x":102,"y":74,"width":795,"height":12}},{"id":"8911c310-919e-4ca9-952e-e070e4810180","block_type":"box","text":"for the United States. California residential housing units authorized by building permits was approximately 103,856","page_number":220,"box":{"x":68,"y":90,"width":830,"height":11}},{"id":"35244dcd-e911-407c-8032-b8c012702db9","block_type":"box","text":"in 2025, up from 101,545 in 2024. Multi-family units permitted were up by 14.1% in 2025 relative to 2024, and","page_number":220,"box":{"x":70,"y":105,"width":803,"height":11}},{"id":"a1b3df5b-c622-4f32-b579-4eb03a0e58b0","block_type":"box","text":"single-family units were down by 5.6%. California’s high cost of living, including high housing costs, remains an","page_number":220,"box":{"x":69,"y":120,"width":789,"height":12}},{"id":"65f2a4f7-7fbd-4c31-93a7-c6c3622185e5","block_type":"box","text":"ongoing public policy challenge.","page_number":220,"box":{"x":69,"y":136,"width":223,"height":11}},{"id":"44b2fd39-3df3-415c-8c9c-d3d2eb0b354c","block_type":"box","text":"Discussion of State Finances","page_number":220,"box":{"x":102,"y":158,"width":211,"height":9}},{"id":"a6a5bb48-0a18-47c8-b6f2-402c654d3577","block_type":"box","text":"State Budget Process.","page_number":220,"box":{"x":101,"y":181,"width":165,"height":11}},{"id":"320d8077-0907-44eb-bbfa-a9e646f9e954","block_type":"box","text":"The State’s fiscal year begins on July 1 and ends on June 30 of the following year. The","page_number":220,"box":{"x":271,"y":181,"width":617,"height":11}},{"id":"da0804fa-9ab2-4882-b900-fcda0fb82d94","block_type":"box","text":"annual State budget is proposed by the Governor by January 10 of each year for the next fiscal year (the “Governor’s","page_number":220,"box":{"x":69,"y":196,"width":832,"height":11}},{"id":"4bf83afe-b126-4236-b1b4-047146f71782","block_type":"box","text":"Budget”). The Governor released his initial budget proposal for fiscal year 2026-27 on January 9, 2026 (the “2026-","page_number":220,"box":{"x":70,"y":211,"width":823,"height":11}},{"id":"a01bd65e-79e0-47a6-b0b7-32bbe28c5cd2","block_type":"box","text":"27 Governor’s Budget”). State law also requires the Governor to update the Governor’s Budget projections and","page_number":220,"box":{"x":69,"y":226,"width":791,"height":11}},{"id":"7e523eb8-3696-4d88-a86e-24161ce4e6c9","block_type":"box","text":"budgetary proposals by May 14 of each year (the “May Revision”). The May Revision is generally the basis for final","page_number":220,"box":{"x":69,"y":241,"width":816,"height":11}},{"id":"90b88c13-1199-4844-8b83-d4d061ab3f6b","block_type":"box","text":"negotiations between the Governor and the State Legislature to reach agreement on appropriations and other","page_number":220,"box":{"x":69,"y":256,"width":782,"height":12}},{"id":"b2c841b0-d9cd-4c77-ab15-bcd1d1b03fce","block_type":"box","text":"legislation to fund State government and thus finalize the State Budget for the upcoming fiscal year. The LAO","page_number":220,"box":{"x":70,"y":271,"width":774,"height":12}},{"id":"ca476f15-6c06-4030-bc93-471c8d2429e0","block_type":"box","text":"releases analyses of the Governor’s various budget proposals throughout the year. The budget must be approved by","page_number":220,"box":{"x":69,"y":286,"width":828,"height":12}},{"id":"81840d11-41f9-4cc0-a629-8f8943871b06","block_type":"box","text":"a majority of each house of the State Legislature. The Governor is required to sign the budget by the start of the","page_number":220,"box":{"x":69,"y":302,"width":801,"height":11}},{"id":"c72e26a6-1fd2-4ea4-b907-0da89cf78c20","block_type":"box","text":"fiscal year on July 1. The Governor signed the fiscal year 2026-27 budget (the “2026-27 Budget”) on June 29, 2026.","page_number":220,"box":{"x":68,"y":317,"width":834,"height":11}},{"id":"a7323e6b-c4dd-4868-9a44-f68195ad2de0","block_type":"box","text":"Pursuant to State law, the budget must be balanced.","page_number":220,"box":{"x":69,"y":332,"width":374,"height":11}},{"id":"3fe26655-3554-4355-b8db-739d7442d469","block_type":"box","text":"As discussed below, a series of State constitutional amendments approved by State voters have affected the","page_number":220,"box":{"x":101,"y":355,"width":780,"height":11}},{"id":"546de611-68df-4562-a4bd-d7434c5cecd8","block_type":"box","text":"budget process. See “Constitutional Limitations on Budgeting, Appropriations, Taxes, Other Charges and General","page_number":220,"box":{"x":69,"y":370,"width":805,"height":11}},{"id":"8c2fa090-087f-4f8c-b372-0b22665df158","block_type":"box","text":"Fund Revenues” below.","page_number":220,"box":{"x":70,"y":385,"width":163,"height":9}},{"id":"aaec3e05-df4c-48b9-ab6b-79417a8b066d","block_type":"box","text":"Summary of 2026-27 Budget and General Fund Condition.","page_number":220,"box":{"x":101,"y":408,"width":422,"height":11}},{"id":"c1be509d-df82-4f87-b78c-486f5710da42","block_type":"box","text":"Estimated 2025-26 General Fund revenues are","page_number":220,"box":{"x":530,"y":408,"width":334,"height":8}},{"id":"1923b510-a546-4787-98c3-c91e02d3763e","block_type":"box","text":"estimated to exceed the 2025-26 Budget projection by $30 billion, about a 14.4% increase. The 2026-27 Budget","page_number":220,"box":{"x":69,"y":422,"width":809,"height":12}},{"id":"b7fee211-08a9-4f6f-9895-d8f53893664a","block_type":"box","text":"projects General Fund revenues and transfers for fiscal year 2026-27 to decline by 7.7% from the prior fiscal year","page_number":220,"box":{"x":70,"y":438,"width":808,"height":11}},{"id":"c8904db6-9279-44a8-895d-5619788e4262","block_type":"box","text":"(from $246 billion to $227 billion), while expenditures are expected to increase by 2.5% (from $245 billion to","page_number":220,"box":{"x":69,"y":452,"width":780,"height":12}},{"id":"9fcc3f9d-49b9-428b-a771-76830d0bc7b7","block_type":"box","text":"$251 billion). The 2026-27 Budget projects a balanced budget in each of fiscal years 2026-27 and 2027-28 and","page_number":220,"box":{"x":69,"y":467,"width":803,"height":12}},{"id":"ef180a08-d191-4859-9cb3-c0eb5dccadc6","block_type":"box","text":"budget deficits of $8 billion in the 2028-29 fiscal year and $17 billion in the 2029-30 fiscal year. The 2026-27","page_number":220,"box":{"x":69,"y":482,"width":787,"height":12}},{"id":"345204ff-1c54-4579-b89e-11427da5f8b6","block_type":"box","text":"Budget and the projection for fiscal year 2027-28 rely on reserves to meet the needs of the General Fund.","page_number":220,"box":{"x":70,"y":498,"width":755,"height":11}},{"id":"304e0801-d2e7-4969-8c1f-3c7bfaf61b4f","block_type":"box","text":"The 2026-27 Budget projects that the Budget Stabilization Account (the “BSA”) balance will increase from","page_number":220,"box":{"x":101,"y":521,"width":755,"height":11}},{"id":"554f23bd-f1c2-4d06-b8ea-e5357b728e46","block_type":"box","text":"$11.5 billion (on June 30, 2026) to $15.1 billion by the end of fiscal year 2026-27. However, the SFEU balance will","page_number":220,"box":{"x":69,"y":535,"width":822,"height":12}},{"id":"b9b61a12-925d-476c-a505-3ced8ccf2777","block_type":"box","text":"decline from $29.2 billion (on June 30, 2026) to $4.5 billion by the end of fiscal year 2026-27. Projected 2026-27","page_number":220,"box":{"x":69,"y":550,"width":817,"height":12}},{"id":"f31666f4-3333-4875-9c53-9e2d64b72844","block_type":"box","text":"fiscal year end reserves also include $9.2 billion in the Public School System Stabilization Account (a “rainy day”","page_number":220,"box":{"x":68,"y":566,"width":805,"height":11}},{"id":"b3bd0b07-efa7-409c-b06a-7ab654b348f7","block_type":"box","text":"reserve for K-14 schools).","page_number":220,"box":{"x":69,"y":581,"width":184,"height":11}},{"id":"e8edc20d-e3f7-4d6f-bf92-0c6b285d5048","block_type":"box","text":"A summary of the condition of the State’s General Fund, as revised by the 2026-27 Budget, is set forth below.","page_number":220,"box":{"x":101,"y":604,"width":789,"height":11}},{"id":"8fa9bf0f-5728-4c52-b119-fede1d359a8b","block_type":"box","text":"General Fund Condition","page_number":220,"box":{"x":404,"y":627,"width":169,"height":9}},{"id":"b728f5cf-21e0-44b3-b673-e3356381f5ed","block_type":"box","text":"(Dollars in millions)","page_number":220,"box":{"x":416,"y":642,"width":136,"height":11}},{"id":"cc8ac2d4-f100-4155-93f1-063c932453bb","block_type":"box","text":"(1)","page_number":220,"box":{"x":553,"y":642,"width":9,"height":6}},{"id":"d28b0dab-fd37-4b72-9997-e72662142465","block_type":"box","text":"Revised","page_number":220,"box":{"x":600,"y":670,"width":44,"height":7}},{"id":"cf348fd9-0135-4a7e-91bc-2c27cf258f0f","block_type":"box","text":"2025-26","page_number":220,"box":{"x":593,"y":680,"width":49,"height":7}},{"id":"d5727d52-6dfe-42d0-8a36-5e0a437e5480","block_type":"box","text":"(2)","page_number":220,"box":{"x":643,"y":680,"width":8,"height":5}},{"id":"3d3d2050-9b53-4f46-8115-6e89b3cc0dc1","block_type":"box","text":"2026-27 Budget Percent Change","page_number":220,"box":{"x":691,"y":680,"width":218,"height":9}},{"id":"a6157044-a7fc-40cb-b753-fc8a3246a143","block_type":"box","text":"Prior-year General Fund balance","page_number":220,"box":{"x":69,"y":698,"width":224,"height":11}},{"id":"cc6446c1-6981-4b1f-bc49-e0a355a70606","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56,707 $ 57,221 0.9%","page_number":220,"box":{"x":298,"y":697,"width":590,"height":11}},{"id":"8ac27154-47e4-456e-a6ce-ececf1ba845a","block_type":"box","text":"Revenues and transfers","page_number":220,"box":{"x":70,"y":713,"width":167,"height":9}},{"id":"fb672528-ddc9-4f30-bcae-d3cdfd540728","block_type":"box","text":".......................................","page_number":220,"box":{"x":240,"y":720,"width":312,"height":2}},{"id":"371cba90-e752-475b-93d0-e3c262dbf442","block_type":"box","text":"245,817 226,754 (7.8)%","page_number":220,"box":{"x":598,"y":713,"width":295,"height":11}},{"id":"73cc8eaf-5f3a-4e38-a2c9-716bbb022ea8","block_type":"box","text":"Expenditures","page_number":220,"box":{"x":70,"y":728,"width":90,"height":11}},{"id":"167e3b39-e38b-4a1f-8401-511eb68b93b1","block_type":"box","text":"................................................ (","page_number":220,"box":{"x":167,"y":728,"width":430,"height":11}},{"id":"61bf2137-77e2-4a7e-afaa-398ee6fb436e","block_type":"box","text":"245,303) (251,477) 2.5%","page_number":220,"box":{"x":598,"y":728,"width":290,"height":11}},{"id":"a0219294-dbc3-4993-a5aa-cd61bc311588","block_type":"box","text":"Ending General Fund Balance. . . . . . . .","page_number":220,"box":{"x":79,"y":748,"width":269,"height":11}},{"id":"d1ebbec5-98e8-44f5-a52c-be4b9be38b9f","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . $ 57,221 $ 32,498","page_number":220,"box":{"x":355,"y":747,"width":422,"height":11}},{"id":"179673f4-6e5e-4afb-8502-7cdb792dce61","block_type":"box","text":"Encumbrances","page_number":220,"box":{"x":70,"y":763,"width":102,"height":9}},{"id":"4bad6b8e-7e29-46d7-ac68-ddc4ccf3a583","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,","page_number":220,"box":{"x":175,"y":763,"width":455,"height":11}},{"id":"6845e4ce-1843-405a-9678-5e9c65e7dfcb","block_type":"box","text":"998) (27,998)","page_number":220,"box":{"x":632,"y":763,"width":150,"height":11}},{"id":"441ebe00-9ab1-4eac-93ec-44d5913f7917","block_type":"box","text":"SFEU balance","page_number":220,"box":{"x":69,"y":782,"width":97,"height":9}},{"id":"c1555f0d-c9be-4247-9a7d-2ce4df542c05","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,223 $ 4,500","page_number":220,"box":{"x":175,"y":782,"width":602,"height":11}},{"id":"591007c2-9894-49b9-be91-17f6c7c0f6c4","block_type":"box","text":"BSA balance . .","page_number":220,"box":{"x":70,"y":798,"width":107,"height":8}},{"id":"434ffdd6-3ae1-466c-90ad-4b49d7bf250d","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,496 $ 15,070","page_number":220,"box":{"x":183,"y":797,"width":594,"height":11}},{"id":"9baa631a-93f0-42f4-a7ec-b8e98df4b58d","block_type":"box","text":"Safety Net Reserve . . .","page_number":220,"box":{"x":69,"y":812,"width":165,"height":12}},{"id":"fac9997c-0126-4c08-b08f-e4ef08f9b1da","block_type":"box","text":"....................................... $ - $ -","page_number":220,"box":{"x":240,"y":812,"width":537,"height":10}},{"id":"9801bab2-e800-4c3f-be40-b2612b80d32a","block_type":"box","text":"Public School System Stabilization Account . . . . . . . . . . . . . . . . .","page_number":220,"box":{"x":69,"y":828,"width":442,"height":11}},{"id":"6e06c159-c6c8-4e4e-a162-bfe2e6f5500e","block_type":"box","text":". . . . . $ 9,195 $ 9,195","page_number":220,"box":{"x":518,"y":827,"width":259,"height":11}},{"id":"97d15bab-2fa1-4707-a744-e856767d2007","block_type":"box","text":"(1)","page_number":220,"box":{"x":69,"y":857,"width":7,"height":4}},{"id":"135e138e-95fd-4b99-aa2f-ca19b752cb21","block_type":"box","text":"Totals may not add-up due to rounding.","page_number":220,"box":{"x":93,"y":857,"width":221,"height":9}},{"id":"7d841d3e-f9eb-468d-b8ae-3627ba90a023","block_type":"box","text":"(2)","page_number":220,"box":{"x":69,"y":869,"width":7,"height":5}},{"id":"d8da34a1-6512-4fcd-8d09-f6859d6146d3","block_type":"box","text":"From the 2026-27 Budget.","page_number":220,"box":{"x":94,"y":869,"width":150,"height":9}},{"id":"f46cb6ba-fe18-464d-88d9-d3bd94cd6e62","block_type":"box","text":"To assist the state in balancing its 2027-28 budget, the 2026-27 Budget includes a transfer from the General","page_number":220,"box":{"x":101,"y":890,"width":783,"height":11}},{"id":"32f0c699-7d33-4f14-8c7f-404b6f5528f5","block_type":"box","text":"Fund of $6.4 billion into a holding account (“Surplus Holding Account”) in fiscal year 2026-27. The budgeted transfer","page_number":220,"box":{"x":70,"y":904,"width":832,"height":12}},{"id":"3f34f19a-53e7-4c71-ade9-d21d48c421d3","block_type":"box","text":"Public Page 2 of 33","page_number":220,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"95d87d14-4d1d-4934-afb8-d4318896a4aa","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":220,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f8cf83fb-a941-4204-a3de-a819fd75bbe4","block_type":"box","text":"to the Surplus Holding Account would set aside a portion of anticipated surplus funds from fiscal year 2026-27 for","page_number":221,"box":{"x":68,"y":75,"width":817,"height":11}},{"id":"d26a52df-b12a-4786-b569-b7e3c5d37500","block_type":"box","text":"allocation in a subsequent fiscal year. The revenues and transfers in the table above reflect a reduction by such","page_number":221,"box":{"x":69,"y":90,"width":796,"height":11}},{"id":"b242d732-173e-47fc-b50e-ed1fc4f318ce","block_type":"box","text":"amount.","page_number":221,"box":{"x":69,"y":106,"width":56,"height":8}},{"id":"be46160a-2d7f-4305-890c-0611f3bc8c9a","block_type":"box","text":"Accounting for the expected balances in the Surplus Holding Account, the SFEU, the BSA and the Public School","page_number":221,"box":{"x":101,"y":128,"width":791,"height":11}},{"id":"070b0b8f-0813-4400-bdd4-9abf66a9d339","block_type":"box","text":"System Stabilization Account, the 2026-27 Budget estimates approximately $35.2 billion of reserves available for","page_number":221,"box":{"x":69,"y":142,"width":813,"height":12}},{"id":"813cd562-88a9-4504-96dd-d689832001fc","block_type":"box","text":"future funding obligations.","page_number":221,"box":{"x":68,"y":158,"width":185,"height":11}},{"id":"fe2311b8-3042-449c-8dc0-aa633799147d","block_type":"box","text":"Much of the revenue surge since the 2025-26 Budget is attributable to a relatively small number of technology","page_number":221,"box":{"x":102,"y":181,"width":788,"height":11}},{"id":"c3fbed6d-853f-4337-bcd5-89f52f983e61","block_type":"box","text":"companies that have experienced a substantial increase in their share prices due to investor enthusiasm in artificial","page_number":221,"box":{"x":69,"y":196,"width":829,"height":11}},{"id":"6ab8f064-9e22-4720-ba3b-104f487d2351","block_type":"box","text":"intelligence. As such, a significant risk to the State budget is stock market and asset price declines—shocks that","page_number":221,"box":{"x":70,"y":211,"width":810,"height":11}},{"id":"ce5b78f6-f4f6-4bc7-bfd6-d397eec15c96","block_type":"box","text":"disproportionately impact high-income earners. See “Volatility of State Revenue Resources” below.","page_number":221,"box":{"x":69,"y":226,"width":703,"height":11}},{"id":"e9f905c6-60db-4a54-b578-56e2e82d622b","block_type":"box","text":"Volatility of State Revenue Resources.","page_number":221,"box":{"x":103,"y":249,"width":278,"height":11}},{"id":"d965d946-9e58-4184-a85f-27dfd50d60bf","block_type":"box","text":"Historically, the principal sources of the State Treasury General Fund (the","page_number":221,"box":{"x":388,"y":249,"width":521,"height":11}},{"id":"47551413-0c9a-4e67-8b77-cae9ce1b0f56","block_type":"box","text":"“General Fund”) revenues are personal income tax, sales and use tax and corporation tax. The State’s personal","page_number":221,"box":{"x":70,"y":264,"width":796,"height":11}},{"id":"a97be360-4e69-4719-9651-5663efec7ea8","block_type":"box","text":"income tax structure is highly progressive, with rates ranging from 1% to 12.3%. For example, for the 2020 tax year,","page_number":221,"box":{"x":70,"y":279,"width":825,"height":11}},{"id":"6f73aea8-609a-4cae-af4d-4b93e80c67a8","block_type":"box","text":"the top one percent of income earners paid over 49% of personal income taxes. This percentage has been greater","page_number":221,"box":{"x":68,"y":294,"width":816,"height":11}},{"id":"59a9533f-aec2-4d7f-acd1-66e346d5cec9","block_type":"box","text":"than 40% in every year since 2004, except for 2009. The personal income tax was made even more progressive with","page_number":221,"box":{"x":68,"y":309,"width":836,"height":11}},{"id":"f8964bdf-217b-45bf-8c85-796afe9a4d35","block_type":"box","text":"the passage of Proposition 30 (described below), which imposed additional taxes on earnings over $250,000,","page_number":221,"box":{"x":68,"y":324,"width":786,"height":12}},{"id":"08b59f9d-94f3-4fd7-91d0-7167919177ce","block_type":"box","text":"resulting in an income tax rate of 12.3% on earnings over $1 million. In November 2016, the voters in the State","page_number":221,"box":{"x":69,"y":339,"width":797,"height":12}},{"id":"8ff21e57-c730-47b7-9536-49728f1ff9a4","block_type":"box","text":"approved an extension of this portion of Proposition 30 through the end of calendar year 2030.","page_number":221,"box":{"x":69,"y":355,"width":679,"height":11}},{"id":"edc54315-02d9-4da1-9889-0764144b3299","block_type":"box","text":"A large portion of personal income tax receipts is derived from capital gains realizations and stock option","page_number":221,"box":{"x":101,"y":377,"width":751,"height":12}},{"id":"9f17e5c5-8aa3-4ffb-8039-60a60707f25e","block_type":"box","text":"income. These revenue sources can be particularly volatile. For example, during the Great Recession (lasting from","page_number":221,"box":{"x":70,"y":392,"width":811,"height":12}},{"id":"fbe93500-e393-419a-9855-34042e1760a9","block_type":"box","text":"late-2007 to mid-2009), capital gains tax receipts dropped from nearly $9 billion in fiscal year 2007-08 to just under","page_number":221,"box":{"x":70,"y":407,"width":830,"height":12}},{"id":"e78440d5-ed54-40f1-8afb-c9592947939e","block_type":"box","text":"$3 billion in fiscal year 2009-10, a 67% decline. California does not have a lower rate for capital gains. All capital","page_number":221,"box":{"x":69,"y":422,"width":807,"height":12}},{"id":"8da5f3f5-f589-45ac-bf31-49b2c2d0585b","block_type":"box","text":"gains are taxed as ordinary income. Personal income, sales and use, and corporate income taxes are projected to","page_number":221,"box":{"x":68,"y":438,"width":816,"height":11}},{"id":"7ed29ed7-2cf0-4340-912f-cdf774d7fd67","block_type":"box","text":"constitute approximately 99.8% of General Fund revenues and transfers in fiscal year 2026-27. The treatment of","page_number":221,"box":{"x":69,"y":453,"width":803,"height":11}},{"id":"0d3480d3-ee0f-45f9-8cb1-ea699d7a7c55","block_type":"box","text":"capital gains, as well as the progressive nature of the personal income tax provides an incentive for some wealthy","page_number":221,"box":{"x":69,"y":468,"width":814,"height":11}},{"id":"aedc5d33-3689-445c-92a0-6217c2875fd9","block_type":"box","text":"individuals to relocate from the State.","page_number":221,"box":{"x":70,"y":483,"width":267,"height":9}},{"id":"8c9202f4-7c6c-48bd-a80a-a3d324e19c1d","block_type":"box","text":"The table below shows General Fund revenues and transfers for fiscal years 2022-23 through 2026-27 (including","page_number":221,"box":{"x":101,"y":506,"width":807,"height":11}},{"id":"a3848ab3-b8e7-4936-aff4-6185f5646f8d","block_type":"box","text":"percentage of total State revenues and transfers) (dollars in millions).","page_number":221,"box":{"x":70,"y":521,"width":495,"height":11}},{"id":"3a996bbd-0f3b-4c6b-aabd-197be7b5ea61","block_type":"box","text":"Fiscal Year Personal Income Tax","page_number":221,"box":{"x":69,"y":559,"width":437,"height":7}},{"id":"f813d8ad-fb6f-45d5-8b74-a4bf00d40456","block_type":"box","text":"(1)","page_number":221,"box":{"x":506,"y":559,"width":9,"height":5}},{"id":"28816afd-2868-4b0d-a09d-79be5016e11d","block_type":"box","text":"Sales & Use Tax Corporate Income Tax","page_number":221,"box":{"x":534,"y":559,"width":201,"height":9}},{"id":"7a49979b-126e-470e-80b6-86b153bc7aeb","block_type":"box","text":"Other Revenues","page_number":221,"box":{"x":756,"y":549,"width":74,"height":7}},{"id":"f32fe985-1570-4e3a-90ed-c8cd38727757","block_type":"box","text":"and Transfers","page_number":221,"box":{"x":757,"y":559,"width":63,"height":7}},{"id":"125c8a88-a92c-43e5-b9c7-6a5c9711f63a","block_type":"box","text":"(2)","page_number":221,"box":{"x":821,"y":559,"width":8,"height":5}},{"id":"6f083ff3-e35f-487a-b422-cf1778e7bdb8","block_type":"box","text":"Total","page_number":221,"box":{"x":869,"y":559,"width":22,"height":7}},{"id":"3b1b264e-7788-4576-bb17-804238c39598","block_type":"box","text":"2022-23 . . . . . . . .","page_number":221,"box":{"x":69,"y":578,"width":112,"height":7}},{"id":"7601fcc3-a0ec-4837-b8b8-21ddb5871021","block_type":"box","text":"...........................","page_number":221,"box":{"x":188,"y":583,"width":214,"height":2}},{"id":"7e15c910-6d3e-490e-8b52-ec7439099375","block_type":"box","text":"$100,451 56.3% $33,324 18.7% $36,337 20.4% $ 8,446 4.7% $178,557","page_number":221,"box":{"x":412,"y":577,"width":497,"height":9}},{"id":"b2a5d6fa-6535-4002-a7cf-04ca5ebeb047","block_type":"box","text":"2023-24 . . . . . . . .","page_number":221,"box":{"x":69,"y":591,"width":112,"height":7}},{"id":"0481f3ec-069a-412e-8b8c-cb6ef45778d3","block_type":"box","text":"...........................","page_number":221,"box":{"x":188,"y":597,"width":214,"height":1}},{"id":"f010e4a3-a43e-4fa1-9cff-847ce382e51b","block_type":"box","text":"115,166 58.8 33,339 17.0 35,456 18.1 11,917 6.1 195,879","page_number":221,"box":{"x":420,"y":591,"width":489,"height":9}},{"id":"fd61f998-5d75-445b-b1e4-9d81373306aa","block_type":"box","text":"2024-25","page_number":221,"box":{"x":69,"y":605,"width":48,"height":7}},{"id":"24e7153c-b852-4c0e-aebb-4f6820facaff","block_type":"box","text":"(3)","page_number":221,"box":{"x":118,"y":605,"width":8,"height":5}},{"id":"b9753e7d-6310-452c-9087-63b5442c162e","block_type":"box","text":"..................................","page_number":221,"box":{"x":131,"y":611,"width":271,"height":1}},{"id":"c9b906b7-fd50-41e8-a1c4-9d62d06f6fa5","block_type":"box","text":"131,328 56.2 33,596 14.4 41,757 17.9 26,958 11.5 233,639","page_number":221,"box":{"x":420,"y":605,"width":489,"height":9}},{"id":"d7da8e09-862e-4abd-bb7f-fc5ceacacd92","block_type":"box","text":"2025-26","page_number":221,"box":{"x":69,"y":619,"width":48,"height":7}},{"id":"3c4bf38c-a62e-420f-a9b4-1b10850818a5","block_type":"box","text":"(3)","page_number":221,"box":{"x":118,"y":619,"width":8,"height":5}},{"id":"e125221a-1f61-4ef1-93a5-9383515fcf76","block_type":"box","text":"..................................","page_number":221,"box":{"x":131,"y":625,"width":271,"height":1}},{"id":"44a421fc-4238-49a0-baa1-03f9139eecc1","block_type":"box","text":"146,847 59.7 34,588 14.1 43,662 17.8 20,719 8.4 245,817","page_number":221,"box":{"x":420,"y":619,"width":489,"height":8}},{"id":"602f7dfd-b5c1-4b7a-9bfe-eb39e4511996","block_type":"box","text":"2026-27","page_number":221,"box":{"x":69,"y":633,"width":48,"height":7}},{"id":"21da4980-92ee-48d9-b4ac-343024a81119","block_type":"box","text":"(3)","page_number":221,"box":{"x":118,"y":633,"width":8,"height":4}},{"id":"e24c1acc-9668-42fc-bdab-8a14396b5642","block_type":"box","text":"..................................","page_number":221,"box":{"x":131,"y":639,"width":271,"height":1}},{"id":"531e3a41-acdc-418a-97dc-8a24af46fb79","block_type":"box","text":"145,609 64.2 35,598 15.7 45,167 19.9 381 0.2 226,754","page_number":221,"box":{"x":420,"y":633,"width":489,"height":8}},{"id":"ff806175-d2b7-482b-b8af-3518c05a09c3","block_type":"box","text":"(1)","page_number":221,"box":{"x":69,"y":656,"width":7,"height":4}},{"id":"7818683d-f22f-4569-9622-ec1422037efa","block_type":"box","text":"Capital gains tax revenues as a percentage of total General Fund revenues and transfers are estimated to be 8.2% in fiscal year 2022-23,","page_number":221,"box":{"x":93,"y":656,"width":788,"height":9}},{"id":"8c708369-e517-49e8-9c21-b17f97723c1b","block_type":"box","text":"7.7% in fiscal year 2023-24, 9.8% in fiscal year 2024-25,11.2% in fiscal year 2025-26 and 10.9% in fiscal year 2026-27.","page_number":221,"box":{"x":94,"y":666,"width":691,"height":9}},{"id":"ef592175-3212-4729-96e0-fe643669ad67","block_type":"box","text":"(2)","page_number":221,"box":{"x":69,"y":678,"width":7,"height":5}},{"id":"28ad8b30-577c-4309-bff0-3026830ec9cc","block_type":"box","text":"Includes, among other things, transfers between the General Fund and the Budget Stabilization Account, the General Fund and the Safety Net","page_number":221,"box":{"x":94,"y":678,"width":806,"height":9}},{"id":"3121b521-572d-4def-bbb1-a5f8e5873bf4","block_type":"box","text":"Reserve and the General Fund and the Special Surplus Account, federal reimbursement of expenses related to the COVID-19 pandemic, and","page_number":221,"box":{"x":94,"y":688,"width":799,"height":9}},{"id":"20eb5386-3d1b-4152-93b9-923b04834d1d","block_type":"box","text":"loan and loan repayments between the General Fund and special funds.","page_number":221,"box":{"x":94,"y":698,"width":408,"height":9}},{"id":"e0b6d522-a21a-4d61-898b-6f1819503e4b","block_type":"box","text":"(3)","page_number":221,"box":{"x":69,"y":711,"width":7,"height":4}},{"id":"bd1fc099-fea8-4caa-8ebc-e191982ac541","block_type":"box","text":"Projected as of August 2026.","page_number":221,"box":{"x":94,"y":711,"width":165,"height":9}},{"id":"2aca19cd-1920-4970-970c-6f81cd7fb2c8","block_type":"box","text":"Constitutional Limitations on Budgeting, Appropriations, Taxes, Other Charges and General Fund Revenues","page_number":221,"box":{"x":101,"y":732,"width":781,"height":11}},{"id":"8a2d938e-5214-4c3a-8476-d5ef3834861b","block_type":"box","text":"Over the years, a number of constitutional amendments have been enacted, often through voter initiatives, that","page_number":221,"box":{"x":102,"y":755,"width":794,"height":11}},{"id":"0fb7640d-6a6a-4d0b-8c51-07c4cc593d9f","block_type":"box","text":"have imposed budgeting processes and increased the difficulty of raising State taxes or restricted the use of General","page_number":221,"box":{"x":69,"y":770,"width":835,"height":11}},{"id":"2b295439-8a74-4625-9d72-37b91e285942","block_type":"box","text":"Fund revenues. Some of the most significant of these approved constitutional amendments are described below.","page_number":221,"box":{"x":70,"y":785,"width":802,"height":11}},{"id":"33e87f83-5f10-4e26-8172-3810e129b234","block_type":"box","text":"Because of the complex nature of these initiatives and the ambiguities and possible inconsistencies in their terms, it","page_number":221,"box":{"x":70,"y":800,"width":835,"height":11}},{"id":"77593c19-1430-4da0-b002-71cf18662d3f","block_type":"box","text":"is not possible to predict with certainty the impact on California debt obligations or on the ability of the State or local","page_number":221,"box":{"x":70,"y":815,"width":831,"height":11}},{"id":"b2a99393-a37c-4bee-ac7f-59b9e8188332","block_type":"box","text":"governments to pay debt service on such California debt obligations. Further initiatives or legislative changes in laws","page_number":221,"box":{"x":68,"y":830,"width":834,"height":11}},{"id":"30aaa591-5849-4440-a8b9-2b92e5b543e6","block_type":"box","text":"or the California Constitution may also affect the ability of the State or local governments to repay their obligations.","page_number":221,"box":{"x":69,"y":845,"width":822,"height":12}},{"id":"14dfd979-4fcd-420d-87ec-a8bf30dbe811","block_type":"box","text":"Balanced Budget Amendment (Proposition 58 and Proposition 2).","page_number":221,"box":{"x":102,"y":868,"width":479,"height":11}},{"id":"d9ce774f-da1b-427c-b6c6-9a1e2959262c","block_type":"box","text":"Proposition 58.","page_number":221,"box":{"x":102,"y":891,"width":107,"height":11}},{"id":"1c5e4d10-7511-45df-9403-0b71222be748","block_type":"box","text":"In 2004, voters approved Proposition 58, a constitutional amendment called the “Balanced","page_number":221,"box":{"x":217,"y":891,"width":650,"height":11}},{"id":"bf3687ce-6fc2-4557-8ea4-9ae794c0f3c1","block_type":"box","text":"Budget Amendment,” which requires the State to enact a balanced budget and establish a special reserve and","page_number":221,"box":{"x":70,"y":906,"width":789,"height":11}},{"id":"44aab01d-456f-4994-9f71-db56926ceb7d","block_type":"box","text":"Public Page 3 of 33","page_number":221,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"0f032eae-b903-4d22-b0d0-41e07517b03b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":221,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"28fc113c-49f3-4e8a-ad57-dcbc130cf781","block_type":"box","text":"restricts future borrowing to cover fiscal year-end deficits. As a result of the provisions requiring the enactment of a","page_number":222,"box":{"x":69,"y":75,"width":822,"height":11}},{"id":"67806087-1ab6-4e25-aabc-8f6c44975a91","block_type":"box","text":"balanced budget and restricting borrowing, the State would in some cases have to take more immediate actions to","page_number":222,"box":{"x":69,"y":90,"width":819,"height":11}},{"id":"9e6b31cb-23b3-4ef5-baed-948caba97c08","block_type":"box","text":"correct budgetary shortfalls. Proposition 58 requires the State Legislature to pass a balanced budget and provides","page_number":222,"box":{"x":69,"y":105,"width":820,"height":11}},{"id":"53215a1e-7ad4-40ea-86d6-efab154efa1a","block_type":"box","text":"for mid-year adjustments in the event that the budget falls out of balance and the Governor calls a special legislative","page_number":222,"box":{"x":68,"y":120,"width":832,"height":12}},{"id":"ed6ac5cb-7667-4946-9408-a5247270c3b4","block_type":"box","text":"session to address the shortfall. The balanced budget determination is made by subtracting expenditures from all","page_number":222,"box":{"x":69,"y":135,"width":812,"height":12}},{"id":"9e9b5dd6-a330-4d59-897d-4473d295767a","block_type":"box","text":"available resources, including prior-year balances.","page_number":222,"box":{"x":69,"y":151,"width":353,"height":11}},{"id":"9225af9a-409a-4bed-9abb-ccda51115624","block_type":"box","text":"Under Proposition 58, if the Governor determines that the State is facing substantial revenue shortfalls or","page_number":222,"box":{"x":102,"y":173,"width":757,"height":11}},{"id":"825a3006-308b-4519-8238-b3c9c7318b05","block_type":"box","text":"spending increases, the Governor is authorized to declare a fiscal emergency. The Governor would then be required","page_number":222,"box":{"x":69,"y":188,"width":821,"height":12}},{"id":"3a6358aa-fe03-4184-b1c4-979a73bc99e2","block_type":"box","text":"to propose legislation to address the emergency and call the State Legislature into special session for that purpose.","page_number":222,"box":{"x":68,"y":203,"width":831,"height":12}},{"id":"09bac3f7-d694-4983-b50e-c6d21f7e4fce","block_type":"box","text":"If the State Legislature fails to pass and send to the Governor legislation to address the fiscal emergency within 45","page_number":222,"box":{"x":70,"y":218,"width":823,"height":12}},{"id":"fad26ebc-fa21-42e9-93ee-be598ccadcd1","block_type":"box","text":"days, the State Legislature would be prohibited from acting on any other bills or adjourning in joint recess until such","page_number":222,"box":{"x":69,"y":234,"width":825,"height":11}},{"id":"71b37fe3-9853-4b13-8532-a2ee351834f2","block_type":"box","text":"legislation is passed.","page_number":222,"box":{"x":70,"y":249,"width":149,"height":11}},{"id":"2fcb6c2c-dcbf-413f-9dbc-7207cfc0d51a","block_type":"box","text":"Proposition 58 also prohibits certain future borrowing to cover fiscal year-end deficits. This restriction applies to","page_number":222,"box":{"x":102,"y":271,"width":797,"height":12}},{"id":"9da371b1-553a-47fb-b3ec-8d1af88ab528","block_type":"box","text":"general obligation bonds, revenue bonds, and certain other forms of long-term borrowing. The restriction does not","page_number":222,"box":{"x":68,"y":286,"width":813,"height":12}},{"id":"a8582e7c-07fa-44b6-9415-37cf3bffc308","block_type":"box","text":"apply to certain other types of borrowing, such as short-term borrowing to cover cash shortfalls in the General Fund","page_number":222,"box":{"x":69,"y":302,"width":824,"height":11}},{"id":"fe5efe9c-cbcd-49fb-98ad-9a49105b1e53","block_type":"box","text":"(including revenue anticipation notes or revenue anticipation warrants currently used by the State), or inter-fund","page_number":222,"box":{"x":69,"y":317,"width":793,"height":11}},{"id":"7478c245-eb93-4844-b1b4-dd03d03954d4","block_type":"box","text":"borrowings. See “Cash Management” above.","page_number":222,"box":{"x":69,"y":332,"width":319,"height":11}},{"id":"4e441f62-6024-4367-b35a-4449e8d08190","block_type":"box","text":"Proposition 2.","page_number":222,"box":{"x":102,"y":355,"width":97,"height":11}},{"id":"928e5e74-9527-4344-90c6-ac2c0b41d472","block_type":"box","text":"Certain provisions of Proposition 58 were replaced by the provisions of Proposition 2 (“Proposition","page_number":222,"box":{"x":206,"y":355,"width":702,"height":11}},{"id":"2a803b97-40a6-4b7c-b865-7d2435f0dd0e","block_type":"box","text":"2”). The BSA is a special reserve account funded by annual transfers of specified amounts from the General Fund,","page_number":222,"box":{"x":69,"y":370,"width":816,"height":11}},{"id":"5e42e5d1-03c3-4c14-aa8a-d0dd9069843c","block_type":"box","text":"unless suspended or reduced by the Governor or until a specified maximum amount has been deposited. Until the","page_number":222,"box":{"x":69,"y":385,"width":813,"height":11}},{"id":"f6827c34-f785-4db0-8ba6-166c3e7033d9","block_type":"box","text":"2014-15 Budget, the Governor had suspended the annual transfer of money from the General Fund to the BSA every","page_number":222,"box":{"x":69,"y":400,"width":832,"height":11}},{"id":"8f5facc2-1d95-4f95-8d29-7dcb79652024","block_type":"box","text":"year since 2007. Proposition 2 intended to strengthen the BSA by, among other things, basing deposits on when","page_number":222,"box":{"x":68,"y":415,"width":804,"height":11}},{"id":"6026f05f-23fb-4dfa-afcc-b95edb5b8e2d","block_type":"box","text":"capital gains revenues rise above 8%, creating a Proposition 98 reserve and doubling the maximum size of the BSA","page_number":222,"box":{"x":69,"y":430,"width":824,"height":11}},{"id":"61e2c9aa-189b-4939-a290-782a792f99c3","block_type":"box","text":"from 5% to 10% of General Fund revenues.","page_number":222,"box":{"x":68,"y":445,"width":305,"height":9}},{"id":"b8fc73b0-07ae-4e19-9599-9300c9fe9bd3","block_type":"box","text":"In addition to the provisions described above, other provisions of Proposition 58 relating to the BSA were","page_number":222,"box":{"x":102,"y":468,"width":749,"height":11}},{"id":"7a7c942e-4d5c-4989-8360-2d434e1d75b9","block_type":"box","text":"replaced by the provisions of Proposition 2. Proposition 2 requires that 1.5% of annual General Fund revenues be","page_number":222,"box":{"x":69,"y":483,"width":809,"height":11}},{"id":"d9370997-c59c-4ced-8cdf-7c2b25eae142","block_type":"box","text":"deposited each year into the BSA until the BSA balance reaches an amount equal to 10% of General Fund revenues.","page_number":222,"box":{"x":69,"y":498,"width":828,"height":11}},{"id":"f45bc515-74bb-4cc2-bb27-f8e421cbf693","block_type":"box","text":"Proposition 2 also requires that half of the revenues that otherwise would have been deposited into the BSA through","page_number":222,"box":{"x":69,"y":513,"width":832,"height":12}},{"id":"40689f06-293f-4560-8054-f517774aff10","block_type":"box","text":"fiscal year 2030-31 be used for supplemental payments to pay down long-term liabilities. After fiscal year 2030-31,","page_number":222,"box":{"x":68,"y":528,"width":822,"height":12}},{"id":"e667cd8e-5705-48ed-8ef7-c002777e7814","block_type":"box","text":"the revenues that otherwise would have been deposited into the BSA may be used for either supplemental debt","page_number":222,"box":{"x":68,"y":543,"width":798,"height":12}},{"id":"abd9d2c0-0de6-44dc-bdad-61946b0fd7f2","block_type":"box","text":"payments or savings. Proposition 2 further requires that withdrawal of funds from the BSA be only for a disaster or if","page_number":222,"box":{"x":70,"y":559,"width":831,"height":11}},{"id":"56d26de1-938b-4419-b26b-9a83542f1f86","block_type":"box","text":"spending remains at or below the highest level of spending from the prior three years. Proposition 2 limits the","page_number":222,"box":{"x":69,"y":574,"width":783,"height":11}},{"id":"99967972-835a-4be2-9252-fa69226201b8","block_type":"box","text":"maximum amount that could be withdrawn in the first year of a recession to half of the BSA’s balance. It also","page_number":222,"box":{"x":69,"y":589,"width":778,"height":11}},{"id":"f9815707-7d14-480b-89f7-0ed0e12ca04a","block_type":"box","text":"requires the State to provide a multiyear budget forecast to help better manage the State’s longer-term finances and","page_number":222,"box":{"x":69,"y":604,"width":832,"height":11}},{"id":"30052fe4-650f-4b17-9948-321edfc2ee29","block_type":"box","text":"to create a Proposition 98 reserve, whereby spikes in funding are to be saved for future years to smooth school","page_number":222,"box":{"x":68,"y":619,"width":798,"height":11}},{"id":"75a1ac00-64bd-49b1-b393-dd1d354b66c4","block_type":"box","text":"spending and minimize future cuts.","page_number":222,"box":{"x":69,"y":634,"width":248,"height":12}},{"id":"eb38784c-271e-4663-99e2-1e6affdbf0d3","block_type":"box","text":"Appropriations Limits.","page_number":222,"box":{"x":101,"y":657,"width":160,"height":11}},{"id":"89682a83-86be-4257-a60f-71ab669687e6","block_type":"box","text":"The State and its local governments are subject to an annual “appropriations limit”","page_number":222,"box":{"x":266,"y":657,"width":592,"height":11}},{"id":"84af1bde-c846-492c-b935-ff0c9ad8b512","block_type":"box","text":"imposed by Article XIIIB of the California Constitution (“Article XIIIB”), enacted by the voters in 1979 and significantly","page_number":222,"box":{"x":70,"y":672,"width":833,"height":11}},{"id":"e372bb5a-6ccc-49de-a42b-4166924d25e9","block_type":"box","text":"amended by Propositions 98 and 111 in 1988 and 1990, respectively. Article XIIIB prohibits the State or any covered","page_number":222,"box":{"x":69,"y":687,"width":836,"height":11}},{"id":"3d24b103-7cfe-4b7d-b259-a1bcad2189d1","block_type":"box","text":"local government from spending “appropriations subject to limitation” in excess of the appropriations limit imposed.","page_number":222,"box":{"x":70,"y":702,"width":826,"height":12}},{"id":"1eb85f96-a163-48c5-8234-a7572d3e658b","block_type":"box","text":"“Appropriations subject to limitation” are authorizations to spend “proceeds of taxes,” which consist of tax revenues","page_number":222,"box":{"x":70,"y":717,"width":831,"height":12}},{"id":"66e7da4e-165e-4ba4-8729-4d9d4de2fe48","block_type":"box","text":"and certain other funds, including proceeds from regulatory licenses, user charges or other fees, to the extent that","page_number":222,"box":{"x":69,"y":732,"width":820,"height":12}},{"id":"35fa6d17-f01c-4f27-96f5-d7187524cd88","block_type":"box","text":"such proceeds exceed the cost of providing the product or service, but “proceeds of taxes” exclude most State","page_number":222,"box":{"x":69,"y":748,"width":793,"height":11}},{"id":"a1225df3-784f-496d-b569-1e48c9dfc7d8","block_type":"box","text":"subventions to local governments. No limit is imposed on appropriations of funds that are not “proceeds of taxes,”","page_number":222,"box":{"x":69,"y":763,"width":820,"height":11}},{"id":"3dad3238-ae95-4edd-9c66-b515a69d29cf","block_type":"box","text":"such as reasonable user charges or fees and certain other non-tax funds, including bond proceeds.","page_number":222,"box":{"x":69,"y":778,"width":708,"height":11}},{"id":"18751321-5143-4c37-9ff4-f5933c380eb8","block_type":"box","text":"Among the expenditures not included in the Article XIIIB appropriations limit are (i) the debt service cost of","page_number":222,"box":{"x":101,"y":801,"width":761,"height":11}},{"id":"b4c975a1-a5e7-4498-9a17-dccd665471b6","block_type":"box","text":"bonds issued or authorized prior to January 1, 1979, or subsequently authorized by the voters, (ii) appropriations to","page_number":222,"box":{"x":69,"y":816,"width":825,"height":11}},{"id":"b7f1095b-483c-4d44-93f4-f0c431062fc0","block_type":"box","text":"comply with mandates of courts or the federal government, (iii) appropriations for certain capital outlay projects,","page_number":222,"box":{"x":69,"y":831,"width":799,"height":11}},{"id":"6a3e392e-b818-475a-9222-6848e045ed75","block_type":"box","text":"(iv) appropriations for tax refunds, (v) appropriations by the State of post-1989 increases in gasoline taxes and","page_number":222,"box":{"x":69,"y":846,"width":789,"height":11}},{"id":"4fa26bfd-26e0-41ea-bc22-a16cd65d09dc","block_type":"box","text":"vehicle weight fees, (vi) appropriation of certain special taxes imposed by initiative (e.g., cigarette and tobacco taxes)","page_number":222,"box":{"x":68,"y":861,"width":837,"height":11}},{"id":"0ea8e925-ec1e-4ebd-8123-cd919a630393","block_type":"box","text":"and (vii) appropriations made in certain cases of emergency.","page_number":222,"box":{"x":69,"y":876,"width":430,"height":11}},{"id":"a42d4ed8-f278-43f8-82a1-d077828794dc","block_type":"box","text":"Public Page 4 of 33","page_number":222,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"a28663c1-0af0-402b-a125-040e46e0b550","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":222,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9a80f2d6-9875-4fb8-b59e-67f87a24925d","block_type":"box","text":"The appropriations limit for each year is adjusted annually to reflect changes in cost of living and population and","page_number":223,"box":{"x":101,"y":75,"width":799,"height":11}},{"id":"d086e41c-06f9-47a1-8245-ea9d312113a0","block_type":"box","text":"any transfers of service responsibilities between government units. “Excess” revenues are measured over a two-year","page_number":223,"box":{"x":69,"y":90,"width":835,"height":11}},{"id":"790a7fc2-d588-49db-b345-a72aca462966","block_type":"box","text":"cycle. Local governments must return any excess to taxpayers by rate reductions. The State must refund 50% of any","page_number":223,"box":{"x":69,"y":105,"width":830,"height":11}},{"id":"746dd6fb-b7f1-4e6c-8bfd-31913d03b2e8","block_type":"box","text":"excess to taxpayers, with the other 50% paid to schools and community colleges. With more liberal annual","page_number":223,"box":{"x":69,"y":120,"width":758,"height":12}},{"id":"2407f3c1-e9f8-42b8-a082-149eeb754bba","block_type":"box","text":"adjustment factors since 1988, few local governments have been operating near their spending limits, but this","page_number":223,"box":{"x":69,"y":135,"width":789,"height":12}},{"id":"a7b54c83-b10a-4a4e-9963-82c8c3207476","block_type":"box","text":"condition may change over time. Local governments may by majority voter approval exceed their spending limits for","page_number":223,"box":{"x":69,"y":150,"width":819,"height":12}},{"id":"6dccf7a5-8f6f-4035-950d-bcb7b1c9ac1a","block_type":"box","text":"up to four years.","page_number":223,"box":{"x":69,"y":166,"width":115,"height":11}},{"id":"2cd47f81-23fa-4402-91c6-3f4eb8da75a1","block_type":"box","text":"The State has rarely exceeded its appropriations limit. In recent years, however, State appropriations have","page_number":223,"box":{"x":101,"y":188,"width":758,"height":11}},{"id":"e2b93a2b-e606-48e5-81dc-170c16eb69fd","block_type":"box","text":"trended closer to the limit. Strong revenue growth, coupled with more moderate growth in the appropriations limit,","page_number":223,"box":{"x":68,"y":203,"width":811,"height":12}},{"id":"f79fbbca-b307-41c4-90a0-a67e67d95d1e","block_type":"box","text":"served to reduce the room under the limit. Two of the three growth factors, the change in civilian population and the","page_number":223,"box":{"x":69,"y":218,"width":827,"height":12}},{"id":"3c1797fd-6f48-47e9-a107-33f1eb5575cc","block_type":"box","text":"change in K-14 average daily attendance, have dropped to less than 1% and have been negative, respectively, in a","page_number":223,"box":{"x":69,"y":234,"width":814,"height":11}},{"id":"9a9427c6-75fb-4acb-9d21-5c4cb09cdb43","block_type":"box","text":"number of recent years. The 2026-27 Budget estimates that the State will remain under the limit through fiscal year","page_number":223,"box":{"x":69,"y":249,"width":828,"height":11}},{"id":"c5880ee2-24d9-4f45-b727-1c649c60fbd8","block_type":"box","text":"2026-27.","page_number":223,"box":{"x":69,"y":264,"width":65,"height":9}},{"id":"cbda7d41-5cdf-4840-b52c-d24dc25070d9","block_type":"box","text":"Proposition 35, approved by voters in November 2024, includes a provision to temporarily increase the state’s","page_number":223,"box":{"x":102,"y":287,"width":788,"height":11}},{"id":"10b668a1-0d29-4c01-a1c0-034ed5356503","block_type":"box","text":"appropriations limit for four years by the amount of revenues generated by a managed care health plan tax under the","page_number":223,"box":{"x":69,"y":302,"width":832,"height":11}},{"id":"1537f24f-2df0-4b8e-8bed-a2ccf06903c0","block_type":"box","text":"initiative proposition.","page_number":223,"box":{"x":70,"y":317,"width":146,"height":11}},{"id":"ea2cd4c8-5801-444f-a4c2-43d267a34b49","block_type":"box","text":"Limitation on Property Taxes (Proposition 13).","page_number":223,"box":{"x":102,"y":340,"width":338,"height":11}},{"id":"a1700875-c0ba-4b0f-901b-9f702ced7c65","block_type":"box","text":"Certain California debt obligations may be obligations of local","page_number":223,"box":{"x":446,"y":339,"width":438,"height":12}},{"id":"0c67c49e-f47d-402c-beff-68cb5aad6310","block_type":"box","text":"government issuers that rely in whole or in part, directly or indirectly, on","page_number":223,"box":{"x":68,"y":355,"width":511,"height":11}},{"id":"d3190f11-c12f-4719-bc4d-3242e0fd9138","block_type":"box","text":"ad valorem","page_number":223,"box":{"x":586,"y":355,"width":78,"height":9}},{"id":"392835d9-06e1-4a88-82a4-63e5947a6ad4","block_type":"box","text":"property taxes as a source of","page_number":223,"box":{"x":670,"y":355,"width":210,"height":11}},{"id":"eb94abca-0102-45c3-8627-b2d4e09d6988","block_type":"box","text":"revenue. The taxing powers of California local governments are limited by Article XIIIA of the California Constitution","page_number":223,"box":{"x":69,"y":370,"width":816,"height":11}},{"id":"18926b54-bfd5-42d1-9734-16183d527183","block_type":"box","text":"(“Article XIIIA”), enacted by the voters in 1978 and commonly known as “Proposition 13.” Briefly, Article XIIIA limits","page_number":223,"box":{"x":69,"y":385,"width":821,"height":11}},{"id":"8da5273b-308f-46dc-87fa-10c5ddc550e7","block_type":"box","text":"the rate of","page_number":223,"box":{"x":68,"y":400,"width":75,"height":9}},{"id":"abd5efeb-51a8-4d6a-931d-7a988293f399","block_type":"box","text":"ad valorem","page_number":223,"box":{"x":149,"y":400,"width":78,"height":9}},{"id":"000cdc2e-fd37-42af-b507-3a354ee9040a","block_type":"box","text":"property taxes to 1% of the full cash value of real property and generally restricts the","page_number":223,"box":{"x":232,"y":400,"width":606,"height":11}},{"id":"4ed15133-d32b-4fbc-b484-cc721e59e54b","block_type":"box","text":"reassessment of property to 2% per year, except upon new construction or change of ownership (subject to a number","page_number":223,"box":{"x":69,"y":415,"width":837,"height":11}},{"id":"3e0f9982-f3eb-4bcc-bb0f-e3ccbd2c349b","block_type":"box","text":"of exemptions). Local government taxing entities, however, may raise","page_number":223,"box":{"x":69,"y":430,"width":491,"height":11}},{"id":"a7b7900c-efc7-46b7-94c9-705875cd2f35","block_type":"box","text":"ad valorem","page_number":223,"box":{"x":567,"y":430,"width":78,"height":9}},{"id":"09303611-f219-4786-b6c7-6dd3386dd3e0","block_type":"box","text":"taxes above the 1% limit to pay debt","page_number":223,"box":{"x":650,"y":430,"width":259,"height":11}},{"id":"f0e7b180-bfba-4bce-9354-8d2f7141f233","block_type":"box","text":"service on voter-approved bonded indebtedness. See “Obligations of Other Issuers” herein.","page_number":223,"box":{"x":69,"y":445,"width":651,"height":12}},{"id":"84019dad-8bba-4175-b999-3d48d7418d7f","block_type":"box","text":"Under Article XIIIA, the basic 1%","page_number":223,"box":{"x":102,"y":468,"width":228,"height":10}},{"id":"339d702b-26b8-49e0-ac3f-e16e1b7376dc","block_type":"box","text":"ad valorem","page_number":223,"box":{"x":336,"y":468,"width":78,"height":9}},{"id":"de759cdf-5479-49b5-baae-5633dfe7264a","block_type":"box","text":"tax levy is applied against the assessed value of property as of the","page_number":223,"box":{"x":419,"y":468,"width":479,"height":11}},{"id":"0f3a06cb-2304-4fbc-ad29-b036a87952fe","block_type":"box","text":"owner’s date of acquisition (or as of March 1, 1975, if acquired earlier), subject to certain adjustments. This system","page_number":223,"box":{"x":69,"y":483,"width":831,"height":11}},{"id":"2283816d-be8f-448d-9f28-dfe876f9e3b8","block_type":"box","text":"has resulted in widely varying amounts of tax on similarly situated properties.","page_number":223,"box":{"x":69,"y":498,"width":552,"height":11}},{"id":"ef19d634-dc48-4428-8a36-e236375e5a59","block_type":"box","text":"For further discussion on Proposition 13, see “Local Governments — Constitutional and Statutory Limitations on","page_number":223,"box":{"x":102,"y":521,"width":804,"height":11}},{"id":"97ce142b-73d4-4566-a7fc-f7c7a4231738","block_type":"box","text":"Local Government” below. For further discussion on voter approval requirements under Article XIIIA, see “Voter","page_number":223,"box":{"x":70,"y":536,"width":789,"height":11}},{"id":"fa4c7c6f-d512-4e9f-af93-5e8286a70182","block_type":"box","text":"Requirements for Taxes and Fees” below.","page_number":223,"box":{"x":70,"y":551,"width":292,"height":11}},{"id":"8e4e0d4d-cbd8-4234-9c28-311bfbb64475","block_type":"box","text":"Limitations on Other Taxes, Fees and Charges (Proposition 218 and Proposition 26).","page_number":223,"box":{"x":102,"y":574,"width":617,"height":11}},{"id":"99e2af25-2361-4032-9612-80d45e2f2d64","block_type":"box","text":"In 1996, the voters of the","page_number":223,"box":{"x":726,"y":574,"width":183,"height":10}},{"id":"4c9163a6-202b-43be-a907-de418603d06a","block_type":"box","text":"State approved Proposition 218, called the “Right to Vote on Taxes Act.” Proposition 218 added Article XIIIC (“Article","page_number":223,"box":{"x":69,"y":589,"width":834,"height":11}},{"id":"9ecf9bf8-b8f1-4f4c-b3b2-193ad50081f7","block_type":"box","text":"XIIIC”) and Article XIIID (“Article XIIID”) to the State Constitution, each of which contains a number of provisions","page_number":223,"box":{"x":68,"y":604,"width":797,"height":11}},{"id":"5a22237a-0a0a-4d8a-9d0a-e6de9d30b7ec","block_type":"box","text":"affecting the ability of local governments to levy and collect both existing and future taxes, assessments, fees and","page_number":223,"box":{"x":69,"y":619,"width":817,"height":11}},{"id":"4aee8951-d8e5-4953-a11d-ae01425d98ba","block_type":"box","text":"charges.","page_number":223,"box":{"x":69,"y":634,"width":59,"height":12}},{"id":"c7b5c15c-a3bb-4794-ae0f-d2736bb172ab","block_type":"box","text":"Article XIIIC requires that all new or increased local taxes be submitted to the voters before they become","page_number":223,"box":{"x":101,"y":657,"width":748,"height":11}},{"id":"898f3aff-4959-45a3-9d7b-ad3ecc17a3c8","block_type":"box","text":"effective. Proposition 26, known as the “Supermajority Vote to Pass New Taxes and Fees Act” and approved by State","page_number":223,"box":{"x":69,"y":672,"width":834,"height":11}},{"id":"fa14f95f-c206-4d96-919a-8161eb0a3864","block_type":"box","text":"voters in 2010, further amended provisions of Article XIIIA and Article XIIIC governing the imposition of taxes.","page_number":223,"box":{"x":68,"y":687,"width":780,"height":11}},{"id":"bdfac528-b0f4-4edc-884c-2c5adeb47fce","block_type":"box","text":"Proposition 26 requires a two-thirds supermajority vote in the California State Legislature prior to the imposition of","page_number":223,"box":{"x":69,"y":702,"width":817,"height":12}},{"id":"e9a0a62f-e789-40ed-8b31-188061eea726","block_type":"box","text":"any change in State statute that results in any taxpayer paying a higher tax. Furthermore, any increase in a fee","page_number":223,"box":{"x":69,"y":717,"width":789,"height":12}},{"id":"b49c8d72-dbcd-4775-b5fc-1ab255cd68c6","block_type":"box","text":"beyond the amount needed to provide the specific service or benefit is deemed a “tax” under Proposition 26, and","page_number":223,"box":{"x":69,"y":732,"width":811,"height":12}},{"id":"c23f9128-106d-4357-82bc-b4ea0278dda5","block_type":"box","text":"thus would require two-thirds vote of any governmental units for passage. Proposition 26 also requires taxes for","page_number":223,"box":{"x":68,"y":748,"width":799,"height":11}},{"id":"a06404fe-6fc3-48dd-ad29-4a2e4bf06d07","block_type":"box","text":"general governmental purposes to be approved by a majority vote and taxes for specific purposes to be approved by a","page_number":223,"box":{"x":68,"y":763,"width":841,"height":11}},{"id":"96e38848-b499-4a61-aa4f-a75275f2c380","block_type":"box","text":"two-thirds vote. Proposition 26 applied retroactively to any measures passed on or after January 1, 2010.","page_number":223,"box":{"x":68,"y":778,"width":754,"height":11}},{"id":"2bc55b55-eaaa-43e3-8e38-363a7b262bd0","block_type":"box","text":"Article XIIID contains several provisions making it generally more difficult for local governments to levy and","page_number":223,"box":{"x":101,"y":801,"width":759,"height":11}},{"id":"62165c9d-ddb2-4dd4-b135-8b533821e138","block_type":"box","text":"maintain “assessments” for municipal services and programs. Article XIIID also contains several provisions affecting","page_number":223,"box":{"x":69,"y":816,"width":836,"height":11}},{"id":"d37dfb2d-da57-4761-a40b-b06aa9638a4e","block_type":"box","text":"“fees” and “charges,” defined for purposes of Article XIIID to mean “any levy other than an","page_number":223,"box":{"x":70,"y":831,"width":647,"height":11}},{"id":"109bd791-f16b-494b-be7c-d8ab41bb9cd8","block_type":"box","text":"ad valorem","page_number":223,"box":{"x":724,"y":831,"width":78,"height":9}},{"id":"1c9cdf7e-5c72-417b-8202-bcf0e709e28a","block_type":"box","text":"tax, a special","page_number":223,"box":{"x":807,"y":831,"width":94,"height":11}},{"id":"fe03096e-467f-4bc2-93aa-0a45eee93a80","block_type":"box","text":"tax, or an assessment, imposed by a [local government] upon a parcel or upon a person as an incident of property","page_number":223,"box":{"x":68,"y":846,"width":819,"height":11}},{"id":"d02afe17-e5a1-4b86-94d1-146aebb13d2d","block_type":"box","text":"ownership, including a user fee or charge for a property related service.” All new and existing property-related fees","page_number":223,"box":{"x":69,"y":861,"width":818,"height":11}},{"id":"30f04474-70e4-42aa-817b-dff5e67dabc3","block_type":"box","text":"and charges must conform to requirements prohibiting, among other things, fees and charges that generate","page_number":223,"box":{"x":69,"y":876,"width":770,"height":11}},{"id":"7bce1795-c800-4dad-82b4-27282ae034e9","block_type":"box","text":"revenues exceeding the funds that are required to provide the property-related service or are used for unrelated","page_number":223,"box":{"x":69,"y":891,"width":796,"height":12}},{"id":"4a4c79c2-ebf3-4433-b563-4a6311368568","block_type":"box","text":"purposes. Article XIIID imposes notice, hearing and protest procedures for levying or increasing property-related fees","page_number":223,"box":{"x":70,"y":906,"width":831,"height":12}},{"id":"473406dd-2719-466f-8f0b-e6acf9bcc661","block_type":"box","text":"Public Page 5 of 33","page_number":223,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"71faf52a-4569-4dec-bab0-b92c4c30527a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":223,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"4daf01c5-92a0-4abe-9026-2c5d9f02bf95","block_type":"box","text":"and charges, and, except for fees or charges for sewer, water and refuse collection services (or fees for electrical","page_number":224,"box":{"x":69,"y":75,"width":809,"height":11}},{"id":"4dde5f25-570f-4037-8bc6-083cef92431e","block_type":"box","text":"and gas service, which are not treated as “property related” for purposes of Article XIIID), no property-related fee or","page_number":224,"box":{"x":69,"y":90,"width":828,"height":11}},{"id":"ed4405ef-7a3f-40db-aecf-2ea025176ab4","block_type":"box","text":"charge may be imposed or increased without majority approval by the property owners subject to the fee or charge or,","page_number":224,"box":{"x":69,"y":105,"width":838,"height":11}},{"id":"226c9e82-f30d-46cd-8ffb-1ef635f2e40e","block_type":"box","text":"at the option of the local government, two-thirds voter approval by the electorate residing in the affected area.","page_number":224,"box":{"x":69,"y":120,"width":783,"height":12}},{"id":"ac53fe16-0f0f-42bd-9fcb-113a23217917","block_type":"box","text":"In addition to the provisions described above, Article XIIIC removes limitations on the initiative power in matters","page_number":224,"box":{"x":102,"y":143,"width":795,"height":11}},{"id":"2e79bcd8-f6e3-4a2e-8bd7-46113c67c753","block_type":"box","text":"of local taxes, assessments, fees and charges. Consequently, local voters, by future initiative, could repeal, reduce","page_number":224,"box":{"x":69,"y":158,"width":822,"height":11}},{"id":"6485f81a-f88e-4b92-b1aa-0f6497e67cd9","block_type":"box","text":"or prohibit the future imposition or increase of any local tax, assessment, fee or charge. It is unclear how this right of","page_number":224,"box":{"x":69,"y":173,"width":837,"height":11}},{"id":"1f77116e-8f7e-4960-9966-c14c69ba770a","block_type":"box","text":"local initiative may be used in cases where taxes or charges have been or will be specifically pledged to secure debt","page_number":224,"box":{"x":70,"y":188,"width":828,"height":12}},{"id":"561e7001-587d-481f-9473-dab013d00185","block_type":"box","text":"issues.","page_number":224,"box":{"x":70,"y":204,"width":49,"height":8}},{"id":"fda24c2b-882f-43e7-a6df-4dfcf604a934","block_type":"box","text":"State-Local Fiscal Relations (Proposition 1A and Proposition 22).","page_number":224,"box":{"x":101,"y":226,"width":477,"height":11}},{"id":"d5579083-3f30-448f-88a0-bbb2b2dc14b2","block_type":"box","text":"The enactment of Proposition 1A in","page_number":224,"box":{"x":583,"y":226,"width":250,"height":11}},{"id":"c50e23b5-4e3e-47b0-8aab-5ecb19ea8680","block_type":"box","text":"November 2004 (“Proposition 1A of 2004”) and Proposition 22, or the “Local Taxpayer, Public Safety, and","page_number":224,"box":{"x":70,"y":241,"width":753,"height":11}},{"id":"5ff8ba76-1fe3-4193-b118-93b8abbf5584","block_type":"box","text":"Transportation Protection Act of 2010”, in November 2010 (“Proposition 22”), significantly changed the fiscal","page_number":224,"box":{"x":68,"y":256,"width":783,"height":12}},{"id":"3b5a6671-f1f3-44a7-b03a-27688378d23b","block_type":"box","text":"relationship between the State and local governments by severely limiting the State’s access to local funding","page_number":224,"box":{"x":69,"y":271,"width":778,"height":12}},{"id":"2443ccbe-82ec-47b0-a465-db5c914ac8ee","block_type":"box","text":"sources.","page_number":224,"box":{"x":69,"y":289,"width":59,"height":7}},{"id":"fa1f2a23-1388-47f8-beee-62d03b67b053","block_type":"box","text":"Specifically, Proposition 1A of 2004 amended the State Constitution to, among other things, reduce the State’s","page_number":224,"box":{"x":102,"y":309,"width":795,"height":11}},{"id":"0991f690-3c86-4c0f-b112-cccd667339c4","block_type":"box","text":"access to property tax, sales tax and vehicle license fee revenues raised by local governments. Proposition 1A of","page_number":224,"box":{"x":69,"y":324,"width":809,"height":12}},{"id":"22da0925-cf6d-4d2e-aaa0-0b0f5334f484","block_type":"box","text":"2004 also prohibits the State from mandating activities on cities, counties or special districts without providing","page_number":224,"box":{"x":69,"y":339,"width":794,"height":12}},{"id":"7eddc38a-1130-47d2-8a46-b4f7cd5a6267","block_type":"box","text":"funding to comply with the mandates. If the State does not provide funding for the mandated activity, the requirement","page_number":224,"box":{"x":68,"y":355,"width":838,"height":11}},{"id":"a8011dcb-bfb7-40c7-8e7d-4af6a1dbe227","block_type":"box","text":"to abide by the mandate is suspended.","page_number":224,"box":{"x":68,"y":370,"width":278,"height":11}},{"id":"767efcf0-7eaf-4a92-b87c-52247728573e","block_type":"box","text":"In addition, Proposition 22 prohibits the State Legislature from, among other things, (i) taking or reallocating","page_number":224,"box":{"x":102,"y":392,"width":772,"height":12}},{"id":"e4ff0aa4-accd-4516-a3f9-b02875da82ee","block_type":"box","text":"money raised by local governments for local purposes, (ii) making changes in the allocation of property taxes among","page_number":224,"box":{"x":69,"y":407,"width":829,"height":12}},{"id":"5b96a3f5-8077-40e1-ae34-81c24e884204","block_type":"box","text":"local governments designed to aid State finances, (iii) using State fuel tax revenues to pay debt service on State","page_number":224,"box":{"x":70,"y":423,"width":802,"height":11}},{"id":"8e7bb1c8-b043-4668-ae08-2115e40d3a56","block_type":"box","text":"transportation bonds, (iv) borrowing or changing the distribution of State fuel tax revenues, and (v) using vehicle","page_number":224,"box":{"x":68,"y":438,"width":798,"height":11}},{"id":"9f8e63f2-e29f-4c54-9da3-a4eda58f9ce9","block_type":"box","text":"licensing fee revenues to reimburse local governments for State-mandated costs. The inability of the State to borrow","page_number":224,"box":{"x":70,"y":453,"width":830,"height":11}},{"id":"545dfe69-d2cd-49b1-87f5-1fa84a03f7c4","block_type":"box","text":"or redirect funds from these sources, as it did during the Great Recession in fiscal years 2008-09 and 2009-10, will","page_number":224,"box":{"x":69,"y":468,"width":828,"height":11}},{"id":"838d3fef-e761-448d-88af-238334a0f3bd","block_type":"box","text":"reduce the State’s flexibility in reaching budget solutions in the future. On the other hand, both Proposition 1A of","page_number":224,"box":{"x":69,"y":483,"width":805,"height":11}},{"id":"68a21b5e-20ec-467c-8f19-447dbe2eb983","block_type":"box","text":"2004 and Proposition 22 made the allocation of revenues to local jurisdictions more predictable.","page_number":224,"box":{"x":69,"y":498,"width":690,"height":11}},{"id":"f235d2b1-ba4b-4993-b86d-bd79348a628f","block_type":"box","text":"Dedication of General Fund Revenues to Schools.","page_number":224,"box":{"x":102,"y":521,"width":358,"height":9}},{"id":"798e23b9-cef5-4b5b-bf3c-7263470d8290","block_type":"box","text":"The single largest portion of the State budget is support for","page_number":224,"box":{"x":466,"y":521,"width":427,"height":11}},{"id":"8dce33a3-d409-4a5f-a815-acbac0a1b034","block_type":"box","text":"K-14 schools. In 1988, the voters of the State approved Proposition 98, a combined initiative constitutional","page_number":224,"box":{"x":70,"y":536,"width":766,"height":11}},{"id":"8c76d3f2-e293-49a9-a82e-2f8b51670d52","block_type":"box","text":"amendment and statute, which (subject to suspension by a two-thirds vote of the State Legislature and the Governor)","page_number":224,"box":{"x":69,"y":551,"width":836,"height":11}},{"id":"0637ba8d-9d96-4d3c-995a-bdd2e6de827c","block_type":"box","text":"guarantees local school districts and community college districts a minimum share of General Fund revenues (the","page_number":224,"box":{"x":68,"y":566,"width":811,"height":11}},{"id":"06443e0b-0ba3-4f85-ba79-6d1981b2d9a0","block_type":"box","text":"“Proposition 98 Guarantee”) with the balance of school funding provided by a share of local property taxes.","page_number":224,"box":{"x":70,"y":581,"width":763,"height":12}},{"id":"7fa51283-c161-4914-866b-13b9ca3670f8","block_type":"box","text":"Proposition 98 is extremely complex and results in significant fiscal problems when General Fund revenues fall short","page_number":224,"box":{"x":69,"y":596,"width":833,"height":12}},{"id":"ab12bf3a-74e0-4449-9933-a312e97422fe","block_type":"box","text":"of the projections on which the original appropriations to schools were made. For further discussion regarding","page_number":224,"box":{"x":69,"y":612,"width":783,"height":11}},{"id":"ed34393e-85ba-4a99-923c-15fc6e3dbe94","block_type":"box","text":"Proposition 98, see “Proposition 98 and K-14 Funding” below.","page_number":224,"box":{"x":69,"y":627,"width":442,"height":11}},{"id":"0c11a22b-b4d4-46e8-9024-b4bd3a4023a2","block_type":"box","text":"Proposition 30 and Proposition 55.","page_number":224,"box":{"x":102,"y":649,"width":254,"height":11}},{"id":"573eb99b-33e1-4148-9124-3e9a48f28cea","block_type":"box","text":"In 2012, voters approved “The Schools and Local Public Safety Protection","page_number":224,"box":{"x":363,"y":649,"width":525,"height":12}},{"id":"837b7d33-75d5-4ddf-983f-049661f980ff","block_type":"box","text":"Act of 2012” (“Proposition 30”), which provided temporary increases in personal income tax rates for high-income","page_number":224,"box":{"x":68,"y":664,"width":815,"height":12}},{"id":"8bf47af7-3f26-4809-a8e2-806c0325e8fc","block_type":"box","text":"taxpayers and a temporary increase in the State’s sales tax rate. The sales tax portion of Proposition 30 expired on","page_number":224,"box":{"x":68,"y":680,"width":828,"height":11}},{"id":"eb640249-9eea-41f8-bae0-1e2d8d02bc42","block_type":"box","text":"December 31, 2016. In November 2016, voters approved Proposition 55 (“Proposition 55”), which extended the","page_number":224,"box":{"x":70,"y":695,"width":802,"height":11}},{"id":"0511cc20-8d14-4e1c-a30c-22327c414394","block_type":"box","text":"personal income tax portion of Proposition 30 until December 31, 2030.","page_number":224,"box":{"x":70,"y":710,"width":516,"height":11}},{"id":"4cfddb34-9bce-486e-982a-fefd07d627a4","block_type":"box","text":"Future initiatives and measures.","page_number":224,"box":{"x":102,"y":733,"width":234,"height":9}},{"id":"204a5b65-2875-4892-b3f2-0c94faa844a1","block_type":"box","text":"Voters, by future initiatives or other statewide measures, could make it more","page_number":224,"box":{"x":342,"y":732,"width":546,"height":12}},{"id":"dc6efd4a-7220-4655-a772-5b8463135cf3","block_type":"box","text":"difficult for the State or local governments to raise revenues, restrict the use of general funds or special fund","page_number":224,"box":{"x":69,"y":748,"width":779,"height":11}},{"id":"06223ae7-3f6b-4d09-8bfe-a2ee118c4836","block_type":"box","text":"revenues, or limit legislative discretion in enacting budget.","page_number":224,"box":{"x":69,"y":763,"width":414,"height":11}},{"id":"3aa42520-e046-4cec-84d1-a4d453c824ea","block_type":"box","text":"The Legislature passed Assembly Constitutional Amendment 20, which places a measure on the","page_number":224,"box":{"x":101,"y":786,"width":689,"height":11}},{"id":"56aa0c7b-d75d-49b8-ad13-f085d6c67604","block_type":"box","text":"November 3, 2026 ballot that, if passed by voters, is designed to strengthen the BSA and provide the State with","page_number":224,"box":{"x":70,"y":801,"width":801,"height":11}},{"id":"089d5ce6-c676-44a5-af02-38806c34e464","block_type":"box","text":"tools to better manage revenue volatility in the future. Specifically, the cap on required deposits into the BSA would","page_number":224,"box":{"x":68,"y":816,"width":821,"height":11}},{"id":"0dc26dde-a11c-4aba-8781-2c03787b8826","block_type":"box","text":"rise from 10 percent to 20 percent, additional deposits would be required when revenue from capital gains as a","page_number":224,"box":{"x":69,"y":831,"width":798,"height":11}},{"id":"550ead2d-9785-4aa5-ace7-02941c3dfc0e","block_type":"box","text":"percent of General Fund revenue is above 10 percent, and withdrawals from the BSA and the Surplus Holding","page_number":224,"box":{"x":70,"y":846,"width":779,"height":11}},{"id":"f6392fb9-01ab-4b1e-b0dc-78858b35136f","block_type":"box","text":"Account would count against the Gann limit (the State spending limit) instead of deposits, which will allow the State","page_number":224,"box":{"x":68,"y":861,"width":825,"height":11}},{"id":"4a5b1bcf-c2e8-4ffb-8355-38e74fb709ba","block_type":"box","text":"to set aside more money during times of significant revenue growth. Provisions requiring certain funds to be used to","page_number":224,"box":{"x":68,"y":876,"width":830,"height":11}},{"id":"ce6eff36-5025-42dc-9275-de728235411a","block_type":"box","text":"pay down State debts would be updated to allow for payments against debts, such as the federal unemployment","page_number":224,"box":{"x":70,"y":891,"width":801,"height":12}},{"id":"3a914ef7-6c9c-4497-a820-131dc566630d","block_type":"box","text":"insurance loan to the State.","page_number":224,"box":{"x":70,"y":906,"width":196,"height":9}},{"id":"6f86c629-5c73-4cf5-aa24-53a102f67e4a","block_type":"box","text":"Public Page 6 of 33","page_number":224,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"b3460537-4f54-4b22-b613-8bcf817f8516","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":224,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a422ee43-2789-4b0d-be1d-55595adcd8d1","block_type":"box","text":"An initiative measure designated Proposition 3 on the November 3, 2026 ballot, if enacted, would make","page_number":225,"box":{"x":101,"y":75,"width":742,"height":11}},{"id":"dd39419a-be08-4dde-9d09-318a66a8f5e3","block_type":"box","text":"permanent the personal income tax rates on high-income taxpayers enacted in Proposition 30 described above.","page_number":225,"box":{"x":70,"y":90,"width":793,"height":11}},{"id":"5307f880-776c-4ea4-8261-efe232fb51b5","block_type":"box","text":"An initiative measure designated Proposition 40 on the November 3, 2026 ballot, sometimes referred to as “The","page_number":225,"box":{"x":101,"y":113,"width":807,"height":11}},{"id":"5df76509-2e84-49ca-a036-678078c5524a","block_type":"box","text":"Billionaire Tax Act,” if enacted, would impose a one-time 5 percent tax on the worldwide net worth of individuals with","page_number":225,"box":{"x":70,"y":128,"width":828,"height":11}},{"id":"ca3963f9-a82a-419e-86be-24157ef36847","block_type":"box","text":"over $1 billion in assets who were State residents as of January 1, 2026.","page_number":225,"box":{"x":69,"y":142,"width":526,"height":12}},{"id":"3c349649-a130-4719-b095-570836c693f0","block_type":"box","text":"While the impacts of Proposition 3 and 40 are difficult to predict because of the difficulty in predicting actions by","page_number":225,"box":{"x":101,"y":166,"width":807,"height":11}},{"id":"47fc0acc-c278-41d7-99d2-96bda6542d47","block_type":"box","text":"impacted taxpayers, ballot materials prepared by the State Department of Finance and the Legislative Analyst’s","page_number":225,"box":{"x":70,"y":181,"width":794,"height":11}},{"id":"fafe36ac-dffd-4ec3-844c-9c41b58d2fc8","block_type":"box","text":"Office estimate that passage of Proposition 3 would maintain $5 billion to $15 billion of annual state income taxes","page_number":225,"box":{"x":69,"y":195,"width":821,"height":12}},{"id":"a90ea5ed-abdf-4ff2-84a2-8a550c95c3e9","block_type":"box","text":"and Proposition 40 could potentially result in an ongoing decrease in revenue in the hundreds of millions of dollars","page_number":225,"box":{"x":69,"y":211,"width":818,"height":11}},{"id":"0467f7f0-9058-4ab3-99a9-a5ff0a10550b","block_type":"box","text":"per year if impacted taxpayers relocate from the State.","page_number":225,"box":{"x":70,"y":226,"width":387,"height":11}},{"id":"1b22ed6f-cef9-4811-ba58-746e2c069bcc","block_type":"box","text":"Other propositions (Proposition 41, 42 and 43) seek to restrict new state taxes that exclude their revenues from","page_number":225,"box":{"x":102,"y":249,"width":801,"height":11}},{"id":"53a4b538-f849-4b69-a821-2c948d70197f","block_type":"box","text":"the appropriations limit (which may invalidate Proposition 40, even if approved by voters), prohibit certain new State","page_number":225,"box":{"x":68,"y":264,"width":828,"height":11}},{"id":"65e3466f-d242-4998-a520-f77856a23ec0","block_type":"box","text":"personal property and retroactive taxes, and increase voter approval thresholds required for certain new and","page_number":225,"box":{"x":70,"y":279,"width":773,"height":11}},{"id":"87ba3448-6420-4718-b674-95538ec57632","block_type":"box","text":"increased local agency special taxes.","page_number":225,"box":{"x":70,"y":294,"width":262,"height":11}},{"id":"171d306a-bfd5-46c7-ac63-40237f15609b","block_type":"box","text":"Obligations of the State","page_number":225,"box":{"x":101,"y":317,"width":174,"height":11}},{"id":"1598db90-6eec-4a43-a324-de181e2d8714","block_type":"box","text":"The State has always paid when due the principal of and interest on its general obligation bonds, general","page_number":225,"box":{"x":101,"y":339,"width":749,"height":12}},{"id":"06a5ec05-6c0e-4dae-b09f-6e4953042878","block_type":"box","text":"obligation commercial paper notes, lease revenue obligations and short-term obligations, including revenue","page_number":225,"box":{"x":69,"y":355,"width":765,"height":11}},{"id":"f10a699c-ebf3-4e87-adc7-494c6db30895","block_type":"box","text":"anticipation notes and revenue anticipation warrants. The State Constitution prohibits the creation of general","page_number":225,"box":{"x":69,"y":370,"width":776,"height":11}},{"id":"3b3b4d1a-c948-4db2-aa58-a2a4bb269331","block_type":"box","text":"obligation indebtedness of the State unless a bond measure is approved by a majority of the electorate voting at a","page_number":225,"box":{"x":69,"y":385,"width":816,"height":11}},{"id":"182a7787-a0d1-4baf-8c3a-b8616ed0b364","block_type":"box","text":"general election or a direct primary.","page_number":225,"box":{"x":68,"y":400,"width":252,"height":11}},{"id":"ba30db0f-f845-4db6-a3ac-f77da3d0ae4c","block_type":"box","text":"Capital Facilities Financing.","page_number":225,"box":{"x":102,"y":423,"width":202,"height":11}},{"id":"53bd4372-feaf-481c-8a05-379bb492ae6b","block_type":"box","text":"The State builds and acquires capital facilities primarily through the use of general","page_number":225,"box":{"x":309,"y":423,"width":588,"height":11}},{"id":"a41465d8-986a-4c96-8009-17218bf8749a","block_type":"box","text":"obligation bonds and lease-purchase borrowing. Under the State Constitution, debt service on outstanding general","page_number":225,"box":{"x":69,"y":438,"width":814,"height":11}},{"id":"95458820-46c0-457d-9e58-5e33e9627055","block_type":"box","text":"obligation bonds is the second charge to the General Fund after support of the public school system and public","page_number":225,"box":{"x":69,"y":453,"width":794,"height":11}},{"id":"48f5c0f6-9f7d-4b7f-ac3b-f8c3f0706e00","block_type":"box","text":"institutions of higher education. New general obligation bonds, lease revenue bonds and other General Fund","page_number":225,"box":{"x":70,"y":468,"width":774,"height":11}},{"id":"b348e170-e886-4f8c-9d61-42e590f08918","block_type":"box","text":"supported debt are authorized by the voters and/or the State Legislature with lease revenue bonds generally","page_number":225,"box":{"x":69,"y":483,"width":776,"height":11}},{"id":"0b58e0e2-f64c-4c2d-a547-b09c840bd8cd","block_type":"box","text":"authorized by the State Legislature. As of August 1, 2026, the State had approximately $72.5 billion of outstanding","page_number":225,"box":{"x":69,"y":498,"width":825,"height":11}},{"id":"c816d7c6-6d98-44d3-83ea-222e464729b8","block_type":"box","text":"general obligation bonds and commercial paper payable principally from the State’s General Fund and approximately","page_number":225,"box":{"x":68,"y":513,"width":830,"height":12}},{"id":"c063e00d-9609-419a-8244-b2206b849699","block_type":"box","text":"$37.8 billion of authorized and unissued General Fund-supported general obligation bonds. As of August 1, 2026, the","page_number":225,"box":{"x":69,"y":528,"width":840,"height":12}},{"id":"2c2fcbb2-6a75-41ab-a4b5-9600c85a880b","block_type":"box","text":"State had approximately $9.6 billion in outstanding lease revenue bonds payable from lease payments paid from the","page_number":225,"box":{"x":69,"y":543,"width":833,"height":12}},{"id":"36e7a1a3-655a-4f76-b819-4741b1f4e1ef","block_type":"box","text":"operating budget of the respective lessees, the operating budgets of which are primarily, but not exclusively, derived","page_number":225,"box":{"x":69,"y":559,"width":826,"height":11}},{"id":"1fe7a663-1a7f-4f73-8a64-46dd06bb29f5","block_type":"box","text":"from the General Fund. As of January 1, 2026, the State had $5.4 billion of authorized but unissued lease revenue","page_number":225,"box":{"x":68,"y":573,"width":822,"height":12}},{"id":"617d8be5-3d1d-4c20-a412-6ee2a52cd0bc","block_type":"box","text":"bonds.","page_number":225,"box":{"x":69,"y":589,"width":46,"height":9}},{"id":"690283d8-1c3c-4c74-a446-28923c47d044","block_type":"box","text":"As of August 2026, debt service on General Fund-supported general obligation bonds and lease revenue debt","page_number":225,"box":{"x":101,"y":612,"width":783,"height":11}},{"id":"14bcf4b6-1eff-4369-8e20-e81190634b10","block_type":"box","text":"was projected to equal approximately 3.83% of General Fund revenues and transfers in fiscal year 2026-27 and","page_number":225,"box":{"x":68,"y":627,"width":796,"height":11}},{"id":"5f60ef2b-1674-454b-aec6-dc48019eca1c","block_type":"box","text":"3.85% of General Fund revenues and transfers in fiscal year 2027-28. This debt service cost is calculated based on","page_number":225,"box":{"x":69,"y":642,"width":827,"height":11}},{"id":"789d393e-37cf-48a0-89ff-988aab20fc23","block_type":"box","text":"the amount of debt service to be paid without adjusting for reimbursement from various special funds and subsidy","page_number":225,"box":{"x":68,"y":657,"width":816,"height":11}},{"id":"8e111815-ecd6-4333-891e-b0e712c9df20","block_type":"box","text":"payments from the federal government for taxable “Build America Bonds.” Including those projected offsets would","page_number":225,"box":{"x":70,"y":672,"width":812,"height":11}},{"id":"2b1d6e4c-514c-47ae-a684-535576063106","block_type":"box","text":"reduce debt service on General Fund-supported general obligation bonds and lease revenue debt to approximately","page_number":225,"box":{"x":69,"y":687,"width":815,"height":11}},{"id":"f7dc5b61-a3d7-4c74-9f73-70f870def9b1","block_type":"box","text":"3.09% of General Fund revenues in fiscal year 2026-27 and 3.14% in fiscal year 2027-28.","page_number":225,"box":{"x":69,"y":702,"width":642,"height":11}},{"id":"125dd097-7159-4504-98a3-43ca527f28dc","block_type":"box","text":"As of August 2026, the following ratings for the State’s general obligation bonds have been received from","page_number":225,"box":{"x":101,"y":725,"width":754,"height":11}},{"id":"74614c17-88d7-4737-982e-409b90aea933","block_type":"box","text":"Moody’s Ratings (“Moody’s”), S&P Global Ratings (“S&P”), and Fitch, Inc. (“Fitch”):","page_number":225,"box":{"x":70,"y":740,"width":592,"height":11}},{"id":"2a519104-eacb-4cbb-bf04-0758657d761a","block_type":"box","text":"Moody’s S&P Fitch","page_number":225,"box":{"x":265,"y":768,"width":448,"height":9}},{"id":"39803d08-ee06-423c-92db-91f05e2e1ff8","block_type":"box","text":"Aa2 AA- AA","page_number":225,"box":{"x":275,"y":786,"width":433,"height":9}},{"id":"82085584-9012-45cd-8077-94677777b00c","block_type":"box","text":"These ratings apply only to the State’s general obligation bonds and are not indicative of the ratings assigned to","page_number":225,"box":{"x":101,"y":810,"width":801,"height":11}},{"id":"874484d5-1a2b-4e11-b475-da99b57c759e","block_type":"box","text":"bonds issued by local governments, such as counties, cities, school districts and other local governments of the","page_number":225,"box":{"x":69,"y":825,"width":802,"height":11}},{"id":"2b7080b4-df1e-420c-82ed-4cd58f7b3758","block_type":"box","text":"State.","page_number":225,"box":{"x":69,"y":840,"width":41,"height":9}},{"id":"7a6e0b9d-d2de-4db5-b9a1-e56aa976288b","block_type":"box","text":"Any explanation of the significance of such ratings may be obtained only from the rating agency furnishing such","page_number":225,"box":{"x":101,"y":863,"width":791,"height":11}},{"id":"44ec2c7e-653b-40d6-9572-1ea2fa331786","block_type":"box","text":"ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be","page_number":225,"box":{"x":69,"y":878,"width":797,"height":11}},{"id":"b73d1e1f-abdd-46e5-8ef1-b5a6bba1ff54","block_type":"box","text":"revised downward or withdrawn entirely if, in the judgment of the particular rating agency, circumstances so warrant.","page_number":225,"box":{"x":69,"y":893,"width":827,"height":11}},{"id":"edd9af58-96a5-4159-af3c-a059dabf2b5e","block_type":"box","text":"Public Page 7 of 33","page_number":225,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"22ce2429-2fd9-4067-9033-09d35dc13635","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":225,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"7ef455f0-9df4-4590-a782-f70802d37185","block_type":"box","text":"Future Bond Issuance Plans.","page_number":226,"box":{"x":102,"y":75,"width":207,"height":9}},{"id":"21f30947-96e0-4d0f-80bf-642a75cb4c7f","block_type":"box","text":"The amount of outstanding General Fund-supported debt, primarily general","page_number":226,"box":{"x":315,"y":75,"width":530,"height":11}},{"id":"824c44f8-337f-4484-8e2c-1dece2659a76","block_type":"box","text":"obligation bonds, may increase in coming years given the amount of authorized and unissued General Fund-supported","page_number":226,"box":{"x":69,"y":90,"width":839,"height":11}},{"id":"e1811cf3-56c2-4fda-b432-9d9bbc693bea","block_type":"box","text":"bonds the State can issue. See “— Capital Facilities Financing” above. Based on estimates from the Department of","page_number":226,"box":{"x":69,"y":105,"width":830,"height":11}},{"id":"aa084ad6-9e66-4ea4-ba7a-73453d6eb763","block_type":"box","text":"Finance in August 2026, approximately $6.4 billion and $7.9 billion of new money general obligation bonds (some of","page_number":226,"box":{"x":70,"y":120,"width":832,"height":12}},{"id":"0c262a10-6d40-4694-a8c3-43eb72327e25","block_type":"box","text":"which may initially be in the form of commercial paper notes) and approximately $1.8 billion and $766 million in new","page_number":226,"box":{"x":68,"y":135,"width":837,"height":11}},{"id":"2dec6140-e5b8-4c6a-844a-e1b3cd51ce41","block_type":"box","text":"money lease revenue bonds are expected to be issued in fiscal year 2026-27 and fiscal year 2027-28, respectively.","page_number":226,"box":{"x":69,"y":150,"width":824,"height":12}},{"id":"828c1350-07a9-4742-bd91-802f46127894","block_type":"box","text":"However, the exact amount that may be issued will depend on overall budget constraints, market conditions and","page_number":226,"box":{"x":70,"y":166,"width":798,"height":11}},{"id":"12880cb2-c144-4a7b-9c81-e390dc37b23a","block_type":"box","text":"other factors including updated information provided to the Department of Finance by other departments in the State","page_number":226,"box":{"x":69,"y":181,"width":834,"height":11}},{"id":"3217c59b-bd6c-42d1-b611-8e9e3cb74442","block_type":"box","text":"regarding funding needs and actual spending. The State also issues refunding bonds as market conditions warrant.","page_number":226,"box":{"x":69,"y":196,"width":822,"height":11}},{"id":"15433f53-96eb-4af2-a64a-4d38981c9136","block_type":"box","text":"Cash Management.","page_number":226,"box":{"x":102,"y":219,"width":140,"height":11}},{"id":"cf37afd3-a424-49b7-850d-ca9f7d3b8c29","block_type":"box","text":"As part of its cash management program, prior to fiscal year 2015-16, the State has","page_number":226,"box":{"x":248,"y":218,"width":604,"height":12}},{"id":"033fe7af-a3bb-4910-bd9f-4604fb3c25ac","block_type":"box","text":"regularly issued short-term obligations to meet cash flow needs. External borrowings were typically done with revenue","page_number":226,"box":{"x":69,"y":234,"width":838,"height":11}},{"id":"b0d06a1b-2a02-46c5-b8de-e8c9e7069f8d","block_type":"box","text":"anticipation notes that are payable later in the fiscal year in which they are issued. In August 2026, the State","page_number":226,"box":{"x":69,"y":249,"width":780,"height":11}},{"id":"c8ae7633-842a-4d27-8694-fc756e2ab00f","block_type":"box","text":"observed that, based on then current cash projections, the State is not expected to issue revenue anticipation notes","page_number":226,"box":{"x":69,"y":264,"width":834,"height":11}},{"id":"af68a5ef-8a90-4d88-a6fa-5a2ffeee7856","block_type":"box","text":"through fiscal year 2026-27. In August 2026, the lowest projected amount of unused available internal borrowable","page_number":226,"box":{"x":68,"y":279,"width":818,"height":11}},{"id":"230e6b1e-d496-4bd7-88f0-d4a7093c4ca8","block_type":"box","text":"resources in fiscal year 2026-27 is approximately $83 billion.","page_number":226,"box":{"x":69,"y":293,"width":438,"height":12}},{"id":"2eb3b6ef-9821-4839-8a8f-93f239d9c872","block_type":"box","text":"The State is also authorized under certain circumstances to issue revenue anticipation warrants that are payable","page_number":226,"box":{"x":101,"y":317,"width":807,"height":11}},{"id":"fc2c6901-b7a8-4356-b6b8-4a44722f92e1","block_type":"box","text":"in the succeeding fiscal year, as well as registered refunding warrants issued to refund revenue anticipation warrants.","page_number":226,"box":{"x":70,"y":332,"width":838,"height":11}},{"id":"8ca8a406-75b6-4f01-a91e-41db1fd525ef","block_type":"box","text":"The State has issued revenue anticipation warrants to bridge short-term cash flow shortages in five years since","page_number":226,"box":{"x":68,"y":347,"width":797,"height":11}},{"id":"aa8f5811-30fe-41b1-b48c-9cd908897064","block_type":"box","text":"1992. From time to time, the State Legislature has deferred various payments due under State statute in order to","page_number":226,"box":{"x":70,"y":362,"width":812,"height":11}},{"id":"e0f78698-76bc-46d3-a7ab-dbd8c6c8c2ab","block_type":"box","text":"more closely align the State’s revenues with its expenditures. This technique has been used in past budgets in order","page_number":226,"box":{"x":69,"y":377,"width":835,"height":12}},{"id":"bd579065-6a27-4474-b557-7ab668d5757f","block_type":"box","text":"to reduce the State’s need for external borrowing to bridge any cash flow deficit. Further, State law gives the State","page_number":226,"box":{"x":68,"y":392,"width":817,"height":12}},{"id":"23e4468f-09c6-4907-a4f5-fd5162a3444b","block_type":"box","text":"Controller some flexibility to delay payments to various payees, including State vendors, when the State Controller","page_number":226,"box":{"x":69,"y":407,"width":813,"height":12}},{"id":"23228bbe-94f7-4277-b1ca-580df644c49f","block_type":"box","text":"foresees a relatively short-term cash flow shortage. In addition, the State issued IOUs in lieu of cash payments in","page_number":226,"box":{"x":68,"y":423,"width":812,"height":11}},{"id":"c1629795-76b0-4b00-931b-28f0f9654b20","block_type":"box","text":"July and August 2009, the second such issuance since the 1930s.","page_number":226,"box":{"x":69,"y":438,"width":477,"height":11}},{"id":"e658b335-b070-4292-901b-8736928cc39b","block_type":"box","text":"Obligations of State Agencies","page_number":226,"box":{"x":101,"y":460,"width":217,"height":12}},{"id":"ca0a73bb-7672-4c90-94ce-9e707ba7adae","block_type":"box","text":"A number of State agencies and authorities issue obligations secured or payable from specified revenue","page_number":226,"box":{"x":101,"y":483,"width":744,"height":11}},{"id":"cc606226-79f4-4b04-890c-bdf8e7c738e0","block_type":"box","text":"streams. These obligations are not payable from the General Fund and carry different ratings than the State’s","page_number":226,"box":{"x":69,"y":498,"width":784,"height":11}},{"id":"e61b9590-b485-469f-a758-884dd0e2dd6d","block_type":"box","text":"general obligation bonds. None of these revenue bonds are backed by the State’s faith and credit or taxing power.","page_number":226,"box":{"x":68,"y":513,"width":813,"height":12}},{"id":"4bfa9345-a631-45c9-9b34-fcdcd032c90d","block_type":"box","text":"The Regents of the University of California has been one of the largest issuers of revenue bonds in recent years.","page_number":226,"box":{"x":68,"y":528,"width":803,"height":12}},{"id":"cf436cc6-0458-46f2-9998-18fbb5dda8eb","block_type":"box","text":"Other State agencies and authorities with significant bond programs include the California State University system,","page_number":226,"box":{"x":69,"y":543,"width":817,"height":12}},{"id":"a3fc97e7-cc60-4ec2-8394-5459da9e92b7","block_type":"box","text":"with revenue bonds secured by certain revenues of the California State University; the State Department of Water","page_number":226,"box":{"x":68,"y":559,"width":812,"height":11}},{"id":"7b49dfcc-e6e3-4b29-b9a8-21cc0bea95b9","block_type":"box","text":"Resources, with revenue bonds secured by power and water users; the California Health Facilities Financing Authority,","page_number":226,"box":{"x":70,"y":574,"width":837,"height":11}},{"id":"0e0200f2-20f2-427e-bf5f-995d61442d2c","block_type":"box","text":"revenue bonds secured primarily by revenues of various health facilities; and the California Education Facilities","page_number":226,"box":{"x":69,"y":589,"width":788,"height":11}},{"id":"b21fad7c-2c1a-453a-bb84-b0f35b23b476","block_type":"box","text":"Authority, with revenue bonds secured primarily by revenues of various educational facilities.","page_number":226,"box":{"x":68,"y":604,"width":657,"height":11}},{"id":"138ef8b5-03f6-4f4b-9828-5a77be75d1c3","block_type":"box","text":"Proposition 98 and K-14 Funding","page_number":226,"box":{"x":102,"y":627,"width":238,"height":11}},{"id":"4f945d22-5a39-4e4f-8c79-9bfc990b6029","block_type":"box","text":"Throughout the 1980s, State spending increased rapidly as the State population and economy also grew rapidly.","page_number":226,"box":{"x":101,"y":649,"width":801,"height":12}},{"id":"1867ad94-3b78-4358-b22a-f43cbe7b924d","block_type":"box","text":"Such spending included increased spending for many assistance programs to local governments, which were","page_number":226,"box":{"x":69,"y":664,"width":776,"height":12}},{"id":"a956fe40-821e-4eed-afd4-473de0ebc6a7","block_type":"box","text":"constrained by Proposition 13 and other laws. The largest State assistance program is to local public school","page_number":226,"box":{"x":69,"y":680,"width":773,"height":11}},{"id":"8f6c1d88-3295-408c-b9f7-743fd33d6bd0","block_type":"box","text":"districts. In 1988, the voters of the State approved Proposition 98, a combined initiative constitutional amendment","page_number":226,"box":{"x":69,"y":695,"width":822,"height":11}},{"id":"a3c596b3-6fbd-43c9-8c85-95611336248c","block_type":"box","text":"and statute, which provides for the Proposition 98 Guarantee (a guarantee of State funding for public schools). The","page_number":226,"box":{"x":69,"y":710,"width":820,"height":11}},{"id":"30e2df36-d778-4a12-bfa0-b5438c7917d8","block_type":"box","text":"Proposition 98 Guarantee is calculated each fiscal year using one of three tests that apply under varying fiscal and","page_number":226,"box":{"x":69,"y":725,"width":819,"height":11}},{"id":"0aadde40-d5ec-42a5-9fee-4c76ce9a79b6","block_type":"box","text":"economic conditions. Test 1 earmarks a minimum portion of State revenue for K-14 education, and Test 2 and Test 3","page_number":226,"box":{"x":69,"y":740,"width":836,"height":11}},{"id":"46f1260a-2aea-4cc0-97f1-51401c3a588c","block_type":"box","text":"are based on prior-year Proposition 98 funding adjusted for key factors including changes in student enrollment, as","page_number":226,"box":{"x":69,"y":755,"width":819,"height":11}},{"id":"dc3d30b1-f513-4e0d-95b0-7e44f19f677b","block_type":"box","text":"measured by K-12 average daily attendance. Test 2 further adjusts for the change in inflation. The test that provides","page_number":226,"box":{"x":69,"y":770,"width":829,"height":12}},{"id":"5fac0aa1-8509-4c9f-9067-44ad1d39d375","block_type":"box","text":"the highest level of funding applies. Test 2 and Test 3 are generally used in times of economic distress although the","page_number":226,"box":{"x":68,"y":785,"width":829,"height":12}},{"id":"f00e5dc4-4660-41bb-aa1a-28479bd83df4","block_type":"box","text":"State also has the ability to suspend the Proposition 98 funding mechanism.","page_number":226,"box":{"x":69,"y":801,"width":547,"height":11}},{"id":"d51dcc31-05b9-4d87-8b55-94117316d67b","block_type":"box","text":"The 2026-27 Budget calculates the Proposition 98 guarantee for TK-14 schools to be $124.9 billion in fiscal","page_number":226,"box":{"x":101,"y":823,"width":774,"height":12}},{"id":"511d73ff-bb94-4ba5-a4e5-76d9732cf38b","block_type":"box","text":"year 2024-25, $125.3 billion in fiscal year 2025-26, and $128.1 billion in fiscal year 2026-27. For further","page_number":226,"box":{"x":68,"y":838,"width":759,"height":11}},{"id":"3fde8b16-ac2b-47fe-9520-a1ffa6f3c4a7","block_type":"box","text":"information on the limitations on General Fund revenues imposed by Proposition 98, see “Constitutional Limitations","page_number":226,"box":{"x":70,"y":853,"width":826,"height":12}},{"id":"1365981d-4927-4339-b027-47cefb468527","block_type":"box","text":"on Budgeting, Appropriations, Taxes, Other Charges and General Fund Revenues — Dedication of General Fund","page_number":226,"box":{"x":69,"y":869,"width":791,"height":11}},{"id":"290d1204-11be-4196-8b0a-6da6a151792e","block_type":"box","text":"Revenues to Schools” above.","page_number":226,"box":{"x":70,"y":884,"width":207,"height":9}},{"id":"686ec4bb-0610-4c79-9ade-aba9cb811d09","block_type":"box","text":"Public Page 8 of 33","page_number":226,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"232416ef-a2ed-424f-b19e-ad94c18b5752","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":226,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9276b398-0891-4990-a49d-ad036697499e","block_type":"box","text":"Health Care Services","page_number":227,"box":{"x":102,"y":75,"width":152,"height":9}},{"id":"5e78c067-b8ef-42b8-b56e-d20f2a6073e0","block_type":"box","text":"Medi-Cal, California’s Medicaid program, is a health care entitlement program for qualified low-income individuals","page_number":227,"box":{"x":102,"y":98,"width":806,"height":11}},{"id":"6daacf7e-ec15-4965-8ccd-f78440c76a60","block_type":"box","text":"and families who receive public assistance or otherwise lack health care coverage and is one of the State’s largest","page_number":227,"box":{"x":69,"y":113,"width":823,"height":11}},{"id":"94fbdf2e-ace9-4d9f-9dd3-f38f4462d6fc","block_type":"box","text":"expenditures. Medi-Cal is projected to cover approximately 13.9 million members in 2026-27, approximately one-third","page_number":227,"box":{"x":69,"y":128,"width":837,"height":11}},{"id":"708e531f-b4fa-48ce-9786-0dafb513d74f","block_type":"box","text":"of the state’s population.","page_number":227,"box":{"x":69,"y":143,"width":178,"height":11}},{"id":"4ce26a56-e7e7-47c7-a1eb-be47dc9f0a22","block_type":"box","text":"In the 2026-27 Budget, the Medi-Cal budget includes $219.7 billion ($46.9 billion General Fund) in 2026-27.","page_number":227,"box":{"x":102,"y":165,"width":777,"height":12}},{"id":"43b3c5fe-55ce-485b-8f75-6bcb5c6e8d81","block_type":"box","text":"The General Fund component represents approximately 18.6% of estimated total 2026-27 General Fund","page_number":227,"box":{"x":68,"y":181,"width":742,"height":11}},{"id":"b1cb944f-b407-432a-9264-5c205526daf5","block_type":"box","text":"expenditures. About $133.5 billion of the total Medi-Cal budget is attributable to federal funding sources, with the","page_number":227,"box":{"x":69,"y":195,"width":811,"height":12}},{"id":"a211326a-afca-4e69-bafc-0cc86fe9223b","block_type":"box","text":"remainder coming from other State funds.","page_number":227,"box":{"x":69,"y":211,"width":297,"height":11}},{"id":"dcb42db9-3b7e-4cd4-8876-0a8bec060ef8","block_type":"box","text":"The overall Medi-Cal budget may significantly change over time, including within a single fiscal year, due to its","page_number":227,"box":{"x":101,"y":234,"width":779,"height":11}},{"id":"5a1f48c9-808a-4cbf-a4dd-e9dac4977fc5","block_type":"box","text":"size, financial complexity, federal requirements, and the fact that Medi-Cal operates on a cash, rather than an","page_number":227,"box":{"x":69,"y":249,"width":781,"height":11}},{"id":"8ebe53ed-b5d3-4f1a-a35c-c20c9eeb7504","block_type":"box","text":"accrual, basis of accounting, which means that the timing of transactions can significantly disrupt fiscal year","page_number":227,"box":{"x":69,"y":264,"width":774,"height":11}},{"id":"b319338a-c9ed-4f09-a791-e4801889e3a3","block_type":"box","text":"budgetary estimates. In addition, the federal administration and leaders in Congress have enacted and continue to","page_number":227,"box":{"x":69,"y":279,"width":819,"height":11}},{"id":"d259735c-aaf0-4f6b-974f-692d674c41c6","block_type":"box","text":"consider and propose numerous changes to health and human services programs. Many of the changes could have","page_number":227,"box":{"x":69,"y":294,"width":824,"height":11}},{"id":"7c68219f-fee1-4f5d-954a-6d2b0a086cb7","block_type":"box","text":"far-reaching impacts on health care in California and significant impacts to Medicaid (Medi-Cal in California). See","page_number":227,"box":{"x":68,"y":309,"width":803,"height":11}},{"id":"b0a6283b-7084-4459-9cdc-61329f1cb2bd","block_type":"box","text":"“Other Factors — Federal Policy Changes” below.","page_number":227,"box":{"x":70,"y":324,"width":348,"height":12}},{"id":"e61b942e-91f5-457a-b928-d5a75e16f5c1","block_type":"box","text":"State and Local Pension and Post-Retirement Liabilities","page_number":227,"box":{"x":101,"y":347,"width":407,"height":9}},{"id":"b6ed72d1-e94f-48af-a04d-ce8288b474d9","block_type":"box","text":"State.","page_number":227,"box":{"x":101,"y":370,"width":44,"height":9}},{"id":"5b9e7f4b-d06d-4ffb-962a-ad245d4a0984","block_type":"box","text":"The financial condition of the State and its localities is also subject to pension and other post-retirement","page_number":227,"box":{"x":151,"y":370,"width":746,"height":11}},{"id":"dbe178ce-7c79-41c1-81a3-b9e104315ea1","block_type":"box","text":"benefit risks.","page_number":227,"box":{"x":69,"y":385,"width":91,"height":9}},{"id":"5ee0f221-c87a-43ba-ba5d-224e4e0bc293","block_type":"box","text":"Pension.","page_number":227,"box":{"x":102,"y":408,"width":59,"height":8}},{"id":"f5777e22-c649-4c1c-8644-59faae6e6826","block_type":"box","text":"The pension funds managed by the State’s retirement systems, the California Public Employees’","page_number":227,"box":{"x":168,"y":407,"width":687,"height":12}},{"id":"bf9526fa-89ae-46fe-9a48-41337bf5e962","block_type":"box","text":"Retirement System (“CalPERS”) and the California State Teachers’ Retirement System (“CalSTRS”), each have","page_number":227,"box":{"x":70,"y":423,"width":787,"height":11}},{"id":"0271bc7e-a5b5-4f2e-8edd-a2ddd7c178e8","block_type":"box","text":"unfunded liabilities in the tens of billions of dollars. These unfunded liabilities will require increased contributions","page_number":227,"box":{"x":69,"y":438,"width":808,"height":11}},{"id":"4a65f422-3e1a-4ffa-82d0-cf26432e26a6","block_type":"box","text":"from the General Fund in future years. The 2026-27 Budget included a $5.2 billion General Fund (or 2.1% of total","page_number":227,"box":{"x":68,"y":452,"width":807,"height":12}},{"id":"dd7b1c28-c172-4b15-840f-3f8a5f86be49","block_type":"box","text":"General Fund expenditures) contribution for the statutorily required annual State contribution to CalPERS for State","page_number":227,"box":{"x":69,"y":468,"width":811,"height":11}},{"id":"1e01f9d6-25b0-4e49-aa18-1477676c78c3","block_type":"box","text":"pension costs and a $4.8 billion General Fund (or 1.9% of total General Fund expenditures) contribution to CalSTRS.","page_number":227,"box":{"x":70,"y":482,"width":827,"height":12}},{"id":"45e6955e-b63b-46c8-a2bc-e2dbb763a7df","block_type":"box","text":"Since 2011, CalPERS and CalSTRS have incrementally reduced the assumed rate of return used to calculate","page_number":227,"box":{"x":102,"y":506,"width":775,"height":11}},{"id":"33b7ee5d-0b64-4764-b4fa-87dde9368fe7","block_type":"box","text":"their respective unfunded liabilities, from 7.75% (for both funds) to 6.8% for CalPERS and to 7.0% for CalSTRS. These","page_number":227,"box":{"x":68,"y":521,"width":841,"height":11}},{"id":"c3587626-bb53-4f01-9bb0-1905d57178f5","block_type":"box","text":"assumption changes have resulted in significant increases in unfunded liability and have increased required state","page_number":227,"box":{"x":69,"y":536,"width":810,"height":11}},{"id":"e060675e-9897-4e94-a0fb-520e388e79d4","block_type":"box","text":"and other employer contributions to these pension programs.","page_number":227,"box":{"x":69,"y":551,"width":435,"height":11}},{"id":"2e0925e0-a6d5-4351-80d1-1ff78e9f3b6e","block_type":"box","text":"CalPERS and CalSTRS generally report their investment returns for the prior fiscal year (ending June 30) in July","page_number":227,"box":{"x":102,"y":574,"width":789,"height":11}},{"id":"58c16634-d52d-4c26-a966-c8b754308897","block_type":"box","text":"of each year. On July 13, 2026, CalPERS reported 5-year, 10-year and 20-year time weighted average preliminary","page_number":227,"box":{"x":69,"y":589,"width":805,"height":11}},{"id":"840c070a-65d3-4f6a-967a-c6298433f7bf","block_type":"box","text":"returns of 6.8, 8.6 and 6.8%, respectively as of June 30, 2026. On August 4, 2026, CalSTRS reported 5-year, 10-","page_number":227,"box":{"x":69,"y":604,"width":814,"height":11}},{"id":"72b7288f-feb5-4fa1-9101-3d4b790b4833","block_type":"box","text":"year and 20-year preliminary returns of 7.0, 9.4 and 7.5%, respectively. Actual investment returns lower than the","page_number":227,"box":{"x":68,"y":619,"width":805,"height":11}},{"id":"ffabd017-c9c9-41f4-88c5-c1fa4c815225","block_type":"box","text":"actuarially assumed level will result in decreased funding status and increased actuarially required contribution.","page_number":227,"box":{"x":69,"y":634,"width":795,"height":12}},{"id":"22bc15cd-4547-43f8-beb1-9108aaf0312c","block_type":"box","text":"The CalPERS Board reported an unfunded accrued liability allocable to State employees (excluding judges and","page_number":227,"box":{"x":101,"y":657,"width":784,"height":11}},{"id":"ecca286d-a78e-4b82-97b8-d7222b111616","block_type":"box","text":"elected officials), as of June 30, 2025, of $56.1 billion on a market value of assets basis. As of June 30, 2024, this","page_number":227,"box":{"x":69,"y":671,"width":835,"height":12}},{"id":"fcd6a0b5-02a0-42b6-b3fe-3b734c6f7c05","block_type":"box","text":"represented a funded ratio of 79.2%.","page_number":227,"box":{"x":69,"y":687,"width":262,"height":11}},{"id":"c5afb185-467a-4065-b2af-32661effe8f4","block_type":"box","text":"The CalSTRS Board reported an unfunded accrued liability for its Defined Benefit Plan, as of June 30, 2025, of","page_number":227,"box":{"x":101,"y":710,"width":792,"height":11}},{"id":"45f73197-3ca9-4c91-a021-bee32d116904","block_type":"box","text":"$75.0 billion on a market value of assets basis. As of June 30, 2025, this represented a funded ratio of 81.0%.","page_number":227,"box":{"x":69,"y":724,"width":800,"height":12}},{"id":"776b28ef-f6fb-445f-9e0f-be68681be37e","block_type":"box","text":"OPEB.","page_number":227,"box":{"x":102,"y":748,"width":42,"height":9}},{"id":"a1e80cb2-cfa3-44d8-9615-8ef212b95389","block_type":"box","text":"The State also provides other post-employment health care and dental benefits to its employees and","page_number":227,"box":{"x":150,"y":748,"width":718,"height":11}},{"id":"348eeefd-24ae-4826-9e11-77b845f04c9e","block_type":"box","text":"certain of their spouses and dependents (hereinafter referred to as “OPEB”), which benefits utilize a “pay-as-you-go”","page_number":227,"box":{"x":69,"y":763,"width":829,"height":11}},{"id":"01da456b-e19c-4d34-b620-75144d18342c","block_type":"box","text":"funding policy. As of August 2026, General Fund contributions to OPEB were estimated to be approximately","page_number":227,"box":{"x":68,"y":778,"width":764,"height":11}},{"id":"d8bf48b9-c394-40aa-9718-767fcd0a339e","block_type":"box","text":"$3.4 billion (or 1.4% of total General Fund expenditures) for fiscal year 2025-26 and estimated at approximately","page_number":227,"box":{"x":69,"y":792,"width":800,"height":12}},{"id":"20a32d2e-b83b-4058-bfdf-63347f235687","block_type":"box","text":"$3.8 billion (or 1.5% of total General Fund expenditures) for fiscal year 2026-27.","page_number":227,"box":{"x":69,"y":807,"width":573,"height":12}},{"id":"d8dd9ebc-b69e-4f67-8bd6-d7e0423e69bd","block_type":"box","text":"The State’s most recent OPEB actuarial accrued liability report estimated approximately $98.4 billion of total","page_number":227,"box":{"x":101,"y":830,"width":777,"height":12}},{"id":"aed359e8-e035-4bd5-bc62-6e7b259c48de","block_type":"box","text":"OPEB actuarial accrued liability at June 30, 2025 (of which approximately $77.8 billion is unfunded). As reported in","page_number":227,"box":{"x":69,"y":845,"width":822,"height":12}},{"id":"3c453ae8-6fb0-4f5a-9add-69e6728a6e5e","block_type":"box","text":"August 2026, the State has set aside funds in a prefunding trust fund to pay for future retiree health benefits, and,","page_number":227,"box":{"x":68,"y":861,"width":823,"height":11}},{"id":"554a9241-008f-41ad-8a80-d1ce4934283d","block_type":"box","text":"as of the end of fiscal year 2025-26, the trust fund balance totaled $13.8 billion in assets.","page_number":227,"box":{"x":69,"y":875,"width":650,"height":12}},{"id":"debf56ea-3558-4b90-acf1-618402284eaa","block_type":"box","text":"Public Page 9 of 33","page_number":227,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"d679c234-29d1-45d2-9a2f-4ed7114eefeb","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":227,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c9e8cdbf-367c-4624-bc10-33c6b254ad16","block_type":"box","text":"Local.","page_number":228,"box":{"x":102,"y":75,"width":42,"height":9}},{"id":"c8ccfc2b-1405-4801-a735-d2704bcdc031","block_type":"box","text":"Many local governments in the State, many of which are current members of CalPERS, face similar and, in","page_number":228,"box":{"x":151,"y":75,"width":756,"height":11}},{"id":"2dd999df-58d2-4566-b9bb-0d0284da0092","block_type":"box","text":"many cases, more severe issues relating to unfunded pension and OPEB liabilities. The credit ratings, and even the","page_number":228,"box":{"x":69,"y":90,"width":824,"height":11}},{"id":"a0b647dc-333c-419a-817c-72efdc41c836","block_type":"box","text":"solvency, of these local governments may be at risk in the future if these liabilities are not appropriately addressed","page_number":228,"box":{"x":69,"y":105,"width":819,"height":11}},{"id":"622a8682-dbc8-47ea-a16f-bfeff1e2e430","block_type":"box","text":"through wage concessions and restructuring of benefits. Cities are particularly at risk because one of their primary","page_number":228,"box":{"x":68,"y":120,"width":819,"height":12}},{"id":"52bbdc92-6a85-4d08-bdda-846dc50ca44d","block_type":"box","text":"missions is safety, and safety personnel labor and retirement benefit costs are significantly greater than labor and","page_number":228,"box":{"x":69,"y":135,"width":814,"height":12}},{"id":"0f4dfc18-890c-452f-8747-f806a2c9af28","block_type":"box","text":"retirement costs of general municipal employees. Three cities – Vallejo, Stockton and San Bernardino – entered","page_number":228,"box":{"x":69,"y":150,"width":795,"height":12}},{"id":"836eb802-0353-4f76-be47-16963c33fc02","block_type":"box","text":"bankruptcy under Chapter 9 of the Federal bankruptcy code, largely as a result of escalating labor costs and","page_number":228,"box":{"x":69,"y":166,"width":771,"height":11}},{"id":"c41dc785-2863-4f27-9edf-44d9398347dd","block_type":"box","text":"unfunded pension and other post-retirement liabilities. All three of these cities have agreements with CalPERS to","page_number":228,"box":{"x":69,"y":181,"width":804,"height":11}},{"id":"a59d0147-7bc2-4c7c-8fd9-b5357d456ce8","block_type":"box","text":"administer their pension obligations, and their respective obligations to CalPERS were a significant reason for their","page_number":228,"box":{"x":69,"y":196,"width":819,"height":11}},{"id":"3428b7d3-2dd2-46dd-a653-4a8fd6ad3415","block_type":"box","text":"insolvency. Other cities (including some that contract with CalPERS) and counties have expressed public concerns","page_number":228,"box":{"x":70,"y":211,"width":809,"height":11}},{"id":"ea16e6be-22dc-466e-babc-194e199d8a08","block_type":"box","text":"about their ability to meet their unfunded pension and other post-retirement liabilities, and a willingness to entertain","page_number":228,"box":{"x":69,"y":226,"width":828,"height":11}},{"id":"666fc5a5-5d89-4f47-b178-be51d100c79b","block_type":"box","text":"bankruptcy as an option to resolve their fiscal problems. One federal bankruptcy judge stated that obligations to","page_number":228,"box":{"x":69,"y":241,"width":799,"height":11}},{"id":"6bde1732-b91e-452e-9bcb-6318d1c2ad0e","block_type":"box","text":"CalPERS could be adjusted in federal bankruptcy proceedings; however, the plan of adjustment in those proceedings","page_number":228,"box":{"x":69,"y":256,"width":830,"height":12}},{"id":"119d93fe-0387-4055-95c7-5f5161fe8968","block_type":"box","text":"was confirmed without reducing such obligations to CalPERS. Any definitive ruling that allowed obligations to CalPERS","page_number":228,"box":{"x":68,"y":271,"width":839,"height":12}},{"id":"a3a1d83e-6323-43d5-9b0f-43a7d5d9091e","block_type":"box","text":"to be adjusted downward might encourage other financially stressed municipalities to explore a Chapter 9 bankruptcy.","page_number":228,"box":{"x":68,"y":286,"width":840,"height":12}},{"id":"869977d7-b22c-4e60-98dc-7551f3cbac28","block_type":"box","text":"See “Obligations of Other Issuers.”","page_number":228,"box":{"x":69,"y":302,"width":249,"height":11}},{"id":"4de6c906-7ab9-439d-a35e-5a6a6d8067f3","block_type":"box","text":"School districts in the State are required to make contributions to CalSTRS for their teachers and staff. State","page_number":228,"box":{"x":102,"y":324,"width":779,"height":11}},{"id":"17f4c491-1460-4f81-972b-1f614dc1e7b6","block_type":"box","text":"law authorizes the CalSTRS Board to increase statutorily required contributions to CalSTRS from the State, school","page_number":228,"box":{"x":70,"y":339,"width":811,"height":12}},{"id":"50756e86-c2c1-447e-a254-58020d1e02a0","block_type":"box","text":"districts, and teachers in order to eliminate the current CalSTRS unfunded liability by 2045-46. Continued growth in","page_number":228,"box":{"x":69,"y":355,"width":821,"height":11}},{"id":"b65bb562-b155-4a54-bf53-ec1c7ecc9dab","block_type":"box","text":"school district pension contribution burdens could raise pressure on the State to expand support of schools or a","page_number":228,"box":{"x":69,"y":370,"width":803,"height":11}},{"id":"11f56587-d1f7-46d8-9e21-72d7ea105b64","block_type":"box","text":"general increased likelihood that the State will financially intervene in cases of local government stress.","page_number":228,"box":{"x":68,"y":385,"width":742,"height":11}},{"id":"7c4b3680-a468-42a1-9daa-07a94b89576a","block_type":"box","text":"Associated Risks for Pension and OPEB Liabilities.","page_number":228,"box":{"x":101,"y":408,"width":370,"height":8}},{"id":"a416c801-a4a3-4b6b-b970-418934fe7dfb","block_type":"box","text":"The State and its localities that participate in pension and","page_number":228,"box":{"x":476,"y":408,"width":415,"height":10}},{"id":"af641785-8356-4937-bce8-6b90a48ab486","block_type":"box","text":"other post-employment benefit programs could face increasing contribution rates if related pension or OPEB","page_number":228,"box":{"x":69,"y":423,"width":767,"height":11}},{"id":"8b26f0b9-0512-4ec5-9b4d-07f67b4a57ba","block_type":"box","text":"investment funds experience declining rates of return, plan assumptions change or actual experience departs from","page_number":228,"box":{"x":70,"y":438,"width":818,"height":11}},{"id":"b9d56c19-832f-406e-8de8-38930c945e0e","block_type":"box","text":"assumptions. Future increases in pension fund and post-retirement benefit contributions could reduce discretionary","page_number":228,"box":{"x":69,"y":453,"width":825,"height":11}},{"id":"97b5266f-22cd-42cf-9539-ae36420927c7","block_type":"box","text":"funds available for other governmental programs. In addition, the credit ratings of the State or locality may be","page_number":228,"box":{"x":68,"y":468,"width":780,"height":11}},{"id":"702d83f8-3175-4104-bbff-2762c8825217","block_type":"box","text":"adversely affected if the State or locality does not reduce or manage its unfunded liabilities. See “Bond Ratings”","page_number":228,"box":{"x":69,"y":483,"width":802,"height":11}},{"id":"71bbe56b-d7e6-4d0e-b736-cd6fa4d39b09","block_type":"box","text":"below.","page_number":228,"box":{"x":69,"y":498,"width":43,"height":9}},{"id":"e553d1a4-e3bf-45eb-885c-3bd899907643","block_type":"box","text":"In addition, California courts have been largely supportive of the vested or earned pension rights of State and","page_number":228,"box":{"x":102,"y":521,"width":782,"height":11}},{"id":"2d6c5d04-d188-4864-a091-dc73140ffc18","block_type":"box","text":"local employees. Thus, pension reform efforts have been focused largely on limitations on future benefits for new","page_number":228,"box":{"x":70,"y":536,"width":811,"height":11}},{"id":"0ffb75f7-709a-4d32-8d65-d31452432fb4","block_type":"box","text":"employees, bringing limited, if any, immediate financial relief. From time to time, both constitutional initiatives and","page_number":228,"box":{"x":69,"y":551,"width":814,"height":11}},{"id":"2cb06b40-83af-495a-9a4e-4d0f499cb54d","block_type":"box","text":"other State legislation have been circulated or proposed attempting to reform the State’s pension systems on a","page_number":228,"box":{"x":69,"y":566,"width":798,"height":11}},{"id":"61196f59-7037-44aa-8944-8fdbd4a9b6ab","block_type":"box","text":"State and local basis.","page_number":228,"box":{"x":69,"y":581,"width":154,"height":9}},{"id":"d15f279c-ec17-496e-830e-c4a1fe45c1e5","block_type":"box","text":"Additional Information","page_number":228,"box":{"x":101,"y":604,"width":161,"height":9}},{"id":"99acf6c8-363a-4331-b8cc-1639dec0f568","block_type":"box","text":"Information regarding the State’s financial condition is included in various public documents issued by the State,","page_number":228,"box":{"x":102,"y":627,"width":803,"height":11}},{"id":"0fba55f3-42ad-4934-b38c-abd0544ad19f","block_type":"box","text":"such as the official statements prepared in connection with the issuance of general obligation bonds of California.","page_number":228,"box":{"x":69,"y":642,"width":814,"height":11}},{"id":"ab47eace-14fb-458d-bf0f-cf67e1e9bf23","block_type":"box","text":"Such official statements may be obtained by contacting the State Treasurer’s Office at (800) 900-3873 or at","page_number":228,"box":{"x":69,"y":657,"width":777,"height":11}},{"id":"427770f1-3690-41ab-b946-d7665d17a8bf","block_type":"box","text":"www.buycaliforniabonds.com","page_number":228,"box":{"x":68,"y":672,"width":211,"height":11}},{"id":"f5477551-bc0d-4c5c-bf34-8cdc8489e61a","block_type":"box","text":".","page_number":228,"box":{"x":281,"y":679,"width":2,"height":2}},{"id":"fa5780e0-9b3b-45f2-b893-fe2cc3ef2f90","block_type":"box","text":"Periodic reports on revenues and/or expenditures during the fiscal year are issued by the Administration, the","page_number":228,"box":{"x":102,"y":695,"width":777,"height":11}},{"id":"fe49bb49-b901-4b09-a6d0-92a75d884e40","block_type":"box","text":"State Controller’s Office and the LAO. The Department of Finance issues a monthly bulletin, which reports the most","page_number":228,"box":{"x":69,"y":710,"width":826,"height":11}},{"id":"d9a20e93-56e9-447e-95e5-3ae4f0d0292e","block_type":"box","text":"recent revenue receipts as reported by State departments, comparing those receipts to budget projections. The","page_number":228,"box":{"x":69,"y":725,"width":798,"height":11}},{"id":"2c554a3e-1f67-4333-a673-64b0e5c32a58","block_type":"box","text":"State Controller issues a monthly report on General Fund cash receipts and disbursements. These reports are","page_number":228,"box":{"x":69,"y":740,"width":788,"height":11}},{"id":"39742cf8-97ae-48fa-80fe-64ba0592c3ff","block_type":"box","text":"normally released on the 10th day of every calendar month for the period ended on the last day of the prior month.","page_number":228,"box":{"x":69,"y":755,"width":819,"height":11}},{"id":"612b4455-cdec-4742-b1d3-605188ab2db3","block_type":"box","text":"The Administration also formally updates its budget projections three times during each fiscal year — in January, May","page_number":228,"box":{"x":68,"y":770,"width":840,"height":12}},{"id":"b1049cf3-22a4-41bf-9e40-5b7bf9b7f24f","block_type":"box","text":"and at the time of budget enactment. Currently, many of these bulletins and reports are available on the State’s","page_number":228,"box":{"x":69,"y":785,"width":800,"height":12}},{"id":"6629553f-8a9b-4d52-b575-cc5d55a2b8b7","block_type":"box","text":"investor relations website (","page_number":228,"box":{"x":70,"y":801,"width":190,"height":11}},{"id":"6f8cfbf7-da80-4526-8307-0c3dee415f67","block_type":"box","text":"www.buycaliforniabonds.com","page_number":228,"box":{"x":261,"y":801,"width":211,"height":11}},{"id":"c0bce2a4-43ed-4fd3-98d3-3040e808b8d6","block_type":"box","text":") or on websites maintained by the applicable agencies and","page_number":228,"box":{"x":474,"y":801,"width":422,"height":11}},{"id":"18d9df21-67ed-4ce0-9b74-54302ab7efab","block_type":"box","text":"by contacting the agencies at their offices in Sacramento, California. Investors are cautioned that interim financial","page_number":228,"box":{"x":69,"y":816,"width":812,"height":11}},{"id":"a59e54fb-fcba-4ef6-9728-26903233ed04","block_type":"box","text":"information is not necessarily indicative of results for a fiscal year.","page_number":228,"box":{"x":70,"y":831,"width":471,"height":11}},{"id":"e8e8afe0-a86e-4319-99ea-b4edd9de962e","block_type":"box","text":"Publications from the LAO can be read in full by accessing the LAO’s website (","page_number":228,"box":{"x":102,"y":853,"width":556,"height":12}},{"id":"0da925c1-bd4b-4ff9-96bd-3ce7c15b04fa","block_type":"box","text":"www.lao.ca.gov","page_number":228,"box":{"x":659,"y":854,"width":114,"height":11}},{"id":"cb5f8476-9943-41d1-8ae6-3b2f1c3ebe3c","block_type":"box","text":") or by contacting","page_number":228,"box":{"x":774,"y":854,"width":122,"height":11}},{"id":"e26074a7-741c-476e-a9d1-fc06af7db89f","block_type":"box","text":"the LAO at (916) 445-4656.","page_number":228,"box":{"x":68,"y":869,"width":199,"height":11}},{"id":"2088ebf5-5db7-4b2d-810e-756de989430e","block_type":"box","text":"Complete text of the State Budget for each fiscal year beginning 2007-08 through the current fiscal year may be","page_number":228,"box":{"x":102,"y":891,"width":798,"height":12}},{"id":"26a15422-6d93-4aa0-b882-75eb9e625994","block_type":"box","text":"found at the electronic budget website of the Department of Finance (","page_number":228,"box":{"x":68,"y":906,"width":498,"height":12}},{"id":"7eb54942-768f-4879-99be-e8c229923a68","block_type":"box","text":"www.ebudget.ca.gov","page_number":228,"box":{"x":567,"y":907,"width":152,"height":10}},{"id":"15478411-9beb-4a90-80dd-bfd72093303a","block_type":"box","text":").","page_number":228,"box":{"x":720,"y":907,"width":7,"height":10}},{"id":"fda05683-e839-4e00-8844-c216548d76a4","block_type":"box","text":"Public Page 10 of 33","page_number":228,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"9e869120-a855-4e3d-94b1-fc9506dc4cdb","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":228,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"080d258d-eb7c-4327-bc5b-c5bca0c976a7","block_type":"box","text":"Complete text of the State Controller’s monthly Summary Analysis may be accessed at the State Controller’s","page_number":229,"box":{"x":102,"y":75,"width":777,"height":11}},{"id":"1524f407-c62a-4906-b312-1e0e75376c5d","block_type":"box","text":"website (","page_number":229,"box":{"x":68,"y":90,"width":64,"height":11}},{"id":"77cdae80-b5fd-4c3c-a6a8-19a89afed391","block_type":"box","text":"www.sco.ca.gov","page_number":229,"box":{"x":133,"y":91,"width":118,"height":10}},{"id":"0d7b37af-dab7-4a3f-97d0-30d301e4315e","block_type":"box","text":").","page_number":229,"box":{"x":252,"y":90,"width":8,"height":11}},{"id":"84eb5350-e16c-4b4d-9882-bc66b782eae5","block_type":"box","text":"None of the information on the above websites is incorporated herein by reference.","page_number":229,"box":{"x":102,"y":113,"width":591,"height":11}},{"id":"5aa177b9-f5a9-4e8f-94e3-8d20bf5a04fb","block_type":"box","text":"Local Governments","page_number":229,"box":{"x":102,"y":135,"width":138,"height":9}},{"id":"1323c119-0250-4933-a272-e08ca23ed5f7","block_type":"box","text":"General.","page_number":229,"box":{"x":102,"y":158,"width":59,"height":9}},{"id":"d75c3518-0fe6-40a9-9cbc-a6b99b24250d","block_type":"box","text":"The primary units of local government in California are the 58 counties, which range in population from","page_number":229,"box":{"x":167,"y":158,"width":733,"height":11}},{"id":"ca965b3e-1747-4a53-832e-e23a97a9bb8a","block_type":"box","text":"less than 1,200 in Alpine County to almost 10 million in Los Angeles County. As of August 2026, there were 482","page_number":229,"box":{"x":70,"y":173,"width":805,"height":11}},{"id":"fb877edb-14c9-4a03-a135-a044ef8d562c","block_type":"box","text":"incorporated cities in California and thousands of special districts formed to provide various services and program.","page_number":229,"box":{"x":70,"y":188,"width":818,"height":12}},{"id":"3632a186-2973-486d-bbe7-60e5e5183018","block_type":"box","text":"Counties are responsible for the provision of many basic services, including indigent health care, welfare, jails, and","page_number":229,"box":{"x":69,"y":203,"width":822,"height":12}},{"id":"9e187456-0dcf-41f0-8d88-8fe56b8eb8a1","block_type":"box","text":"public safety in unincorporated areas. State transfers do not cover the entire cost of local services and programs.","page_number":229,"box":{"x":70,"y":218,"width":810,"height":12}},{"id":"b609f881-4d2f-419e-a68a-edc85e6fa9b7","block_type":"box","text":"To the extent the State is constrained by its obligation to schools under Proposition 98 or other fiscal","page_number":229,"box":{"x":101,"y":241,"width":721,"height":11}},{"id":"1459d7b0-a173-46d3-84fc-205d799c82c8","block_type":"box","text":"considerations, the absolute level (or the rate of growth) of State assistance to local governments may be affected.","page_number":229,"box":{"x":69,"y":256,"width":823,"height":12}},{"id":"e671d6ba-43c3-435e-b1ff-78808714129d","block_type":"box","text":"Any such reductions in State aid could compound the serious fiscal constraints already experienced by many local","page_number":229,"box":{"x":68,"y":271,"width":812,"height":12}},{"id":"6f86ffc2-aff0-4dcb-86f4-831f9e0570e4","block_type":"box","text":"governments, particularly counties and schools. See “Proposition 98 and K-14 Funding.” School districts generally","page_number":229,"box":{"x":68,"y":287,"width":817,"height":11}},{"id":"61f1ea47-3b64-402d-9b76-9a33b496ea5d","block_type":"box","text":"maintain some level of operating reserves; however, for certain school districts this may not be sufficient to address","page_number":229,"box":{"x":69,"y":302,"width":832,"height":11}},{"id":"d3ad17b7-5f8e-4f90-8bfd-cc04acf3f7b6","block_type":"box","text":"any drop in revenue available to schools due to reductions in the Proposition 98 Guarantee, other revenue losses","page_number":229,"box":{"x":69,"y":317,"width":809,"height":11}},{"id":"628c832d-5418-4263-aa23-34b6e9fa2487","block_type":"box","text":"and increased costs. See “Proposition 98 and K-14 Funding” above. For calendar years 2024 and 2025, debt","page_number":229,"box":{"x":69,"y":332,"width":784,"height":11}},{"id":"e6c70086-c857-40c5-a93a-2f30eb43c051","block_type":"box","text":"issuances (primarily general obligation bonds) by K-12 school districts in California averaged approximately","page_number":229,"box":{"x":70,"y":347,"width":761,"height":11}},{"id":"66679404-00c8-48f2-9760-00277879e0df","block_type":"box","text":"$14 billion annually, representing approximately 14% of total state and local public debt issuances in the State","page_number":229,"box":{"x":69,"y":361,"width":792,"height":12}},{"id":"24722c9a-a717-41ce-8499-2e0dbea1b5be","block_type":"box","text":"during that period.","page_number":229,"box":{"x":69,"y":377,"width":129,"height":12}},{"id":"7d340f96-57d4-43d0-aad1-0787637f281d","block_type":"box","text":"While it is impossible to describe in detail the impact on specific local bond issuances, many factors can have","page_number":229,"box":{"x":101,"y":400,"width":786,"height":11}},{"id":"80fd49ea-c8b7-4400-b2b1-8f4508d05962","block_type":"box","text":"economic effects and societal impacts that affect or impair the credit quality of a variety of local California","page_number":229,"box":{"x":69,"y":415,"width":758,"height":11}},{"id":"96d9a7cb-3d13-4d38-a163-f5896a7e5736","block_type":"box","text":"issuances. These factors may include, without limitation, real estate markets, homelessness rates, public health","page_number":229,"box":{"x":70,"y":430,"width":804,"height":11}},{"id":"4e921758-3c11-4fe8-8713-811cd83bafab","block_type":"box","text":"crises, general economic declines impacting budgets, increased pension liabilities, and climate change. See “Other","page_number":229,"box":{"x":69,"y":445,"width":824,"height":12}},{"id":"300b4be6-8a65-4d40-bfa2-4dacd05549a8","block_type":"box","text":"Factors” below.","page_number":229,"box":{"x":70,"y":461,"width":106,"height":8}},{"id":"f09209bc-4227-4b8f-b2ff-0132d21a9401","block_type":"box","text":"Constitutional and Statutory Limitations on Local Government.","page_number":229,"box":{"x":102,"y":483,"width":456,"height":11}},{"id":"b467847f-a63f-4bb6-bde9-1014266af9bf","block_type":"box","text":"The fiscal condition of local governments was","page_number":229,"box":{"x":564,"y":483,"width":323,"height":11}},{"id":"b9473931-8933-4b6b-889e-0dac3c5b1ac4","block_type":"box","text":"changed when Proposition 13, which added Article XIIIA to the State Constitution, was approved by California voters","page_number":229,"box":{"x":69,"y":498,"width":825,"height":11}},{"id":"0617b391-deba-40f8-adbe-9729150ceeac","block_type":"box","text":"in 1978. Proposition 13 reduced and limited the future growth of property taxes and limited the ability of local","page_number":229,"box":{"x":70,"y":513,"width":782,"height":12}},{"id":"163819b4-8256-4083-ad99-5ccd9bab6583","block_type":"box","text":"governments to impose “special taxes” (i.e., those devoted to a specific purpose) without two-thirds voter approval.","page_number":229,"box":{"x":68,"y":528,"width":824,"height":12}},{"id":"abb91bba-9cb6-4c6c-8d4d-cbe6833423d5","block_type":"box","text":"Although Proposition 13 limited property tax growth rates, it also has had a smoothing effect on property tax","page_number":229,"box":{"x":68,"y":543,"width":776,"height":12}},{"id":"98073363-e673-4079-a375-cc913a617548","block_type":"box","text":"revenues, ensuring greater stability in annual revenues than existed before Proposition 13 passed. For further","page_number":229,"box":{"x":69,"y":559,"width":785,"height":11}},{"id":"f90b3dc9-d638-48b0-b7ec-6fce3fc624e6","block_type":"box","text":"information on Proposition 13, see “Constitutional Limitations on Budgeting, Appropriations, Taxes, Other Charges","page_number":229,"box":{"x":70,"y":574,"width":814,"height":11}},{"id":"b12b6da3-bc92-4669-8c87-b7d3ec77507f","block_type":"box","text":"and General Fund Revenues — Limitation on Property Taxes (Proposition 13)” above.","page_number":229,"box":{"x":69,"y":589,"width":605,"height":11}},{"id":"0ab9ea17-8064-44bf-b6cb-3391f51a1dcb","block_type":"box","text":"Proposition 218, a constitutional amendment enacted by initiative in 1996, further limited the ability of local","page_number":229,"box":{"x":102,"y":612,"width":772,"height":11}},{"id":"cc669344-f58e-4154-9f34-aa97d420ca6a","block_type":"box","text":"governments to raise taxes, fees, and other exactions. See “Constitutional Limitations on Budgeting, Appropriations,","page_number":229,"box":{"x":68,"y":627,"width":833,"height":11}},{"id":"5cd4d680-77ca-48a1-9148-6de03b9eb6a6","block_type":"box","text":"Taxes, Other Charges and General Fund Revenues — Limitations on Other Taxes, Fees and Charges (Proposition 218","page_number":229,"box":{"x":68,"y":642,"width":836,"height":11}},{"id":"ffc83262-c226-4dce-a322-894400ecc3af","block_type":"box","text":"and Proposition 26)” above. Proposition 62, a statutory initiative adopted by the voters in 1986, includes limitations","page_number":229,"box":{"x":69,"y":657,"width":830,"height":11}},{"id":"254b7dbe-0a1e-4905-8d2b-11cec4d08099","block_type":"box","text":"on the ability of local governments to raise taxes that are similar to those included in the later constitutional","page_number":229,"box":{"x":69,"y":672,"width":771,"height":11}},{"id":"1a9ea8c7-03ed-46f3-a3ae-27d4b7fdea4c","block_type":"box","text":"amendments of Proposition 218.","page_number":229,"box":{"x":69,"y":687,"width":234,"height":11}},{"id":"ac89cce3-9d8a-4d6a-93f5-ebcde86b208a","block_type":"box","text":"In the aftermath of Proposition 13, the State provided aid to local governments from the General Fund to make","page_number":229,"box":{"x":102,"y":710,"width":790,"height":11}},{"id":"b325353a-f582-4e17-9d6a-206f1efb2377","block_type":"box","text":"up some of the loss of property tax moneys, including assuming principal responsibility for funding K-12 schools and","page_number":229,"box":{"x":69,"y":725,"width":831,"height":11}},{"id":"a605f9dc-4244-4e79-ad39-0eb3d8373c43","block_type":"box","text":"community colleges. During the recession of the early 1990s, the State Legislature reduced the post-Proposition 13","page_number":229,"box":{"x":69,"y":740,"width":827,"height":11}},{"id":"f46d6510-9cbc-48ed-82f1-9792b3e46cc8","block_type":"box","text":"aid to local government entities other than K-12 schools and community colleges by requiring cities and counties to","page_number":229,"box":{"x":69,"y":755,"width":823,"height":11}},{"id":"799bfb63-fde6-4c93-a4b3-301dfb03717d","block_type":"box","text":"transfer some of their property tax revenues to school districts. However, the State Legislature also provided","page_number":229,"box":{"x":68,"y":770,"width":776,"height":12}},{"id":"615583f8-18c6-48ed-91c4-9547e315745a","block_type":"box","text":"additional funding sources, such as sales taxes, and reduced certain mandates for local services funded by cities","page_number":229,"box":{"x":69,"y":785,"width":813,"height":12}},{"id":"5ef4e923-caaf-4979-b060-1bee6007e528","block_type":"box","text":"and counties.","page_number":229,"box":{"x":69,"y":801,"width":95,"height":9}},{"id":"107706c9-9c6e-4f4c-8273-da86801aca19","block_type":"box","text":"Beginning in 2000, and in part caused by the “internet bubble,” the State was faced with increasing financial","page_number":229,"box":{"x":102,"y":823,"width":778,"height":12}},{"id":"fc774abc-49b4-4705-adba-ed4ff6ec2f97","block_type":"box","text":"stress and began to divert local revenue resources, including sales tax, vehicle license fees and redevelopment","page_number":229,"box":{"x":69,"y":838,"width":798,"height":12}},{"id":"b4c9ee25-b420-4952-bf44-7be645f5fbc7","block_type":"box","text":"moneys, to the State coffers. The 2004-05 Budget, related legislation and the enactment of Proposition 1A of 2004","page_number":229,"box":{"x":69,"y":853,"width":828,"height":12}},{"id":"2e91801e-8be4-4652-b74e-7783e3eb5516","block_type":"box","text":"and Proposition 22 dramatically changed the State-local fiscal relationship.","page_number":229,"box":{"x":69,"y":869,"width":533,"height":11}},{"id":"9a5d2164-034d-47b0-9031-43aae5c65f30","block_type":"box","text":"Proposition 1A of 2004 amended the State Constitution to, among other things, reduce the State Legislature’s","page_number":229,"box":{"x":102,"y":891,"width":790,"height":12}},{"id":"64082d9e-07d1-4c5d-91db-c1c0f237701c","block_type":"box","text":"authority over local government revenue sources by placing restrictions on the State’s access to local governments’","page_number":229,"box":{"x":69,"y":906,"width":825,"height":12}},{"id":"9bb76af5-eec5-44c6-9acf-e45ce5cea026","block_type":"box","text":"Public Page 11 of 33","page_number":229,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"2d758ee5-28d2-41bd-b441-8ff625ba7bac","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":229,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"baeb6fb4-85f8-4fee-8d8b-9a0f626503b5","block_type":"box","text":"property, sales, and vehicle license fee revenues as of November 3, 2004. Proposition 22, which supersedes","page_number":230,"box":{"x":70,"y":75,"width":781,"height":11}},{"id":"97d04e77-3f1d-422c-9c17-2f5d94be7425","block_type":"box","text":"Proposition 1A of 2004, completely prohibits any future borrowing by the State from local government funds and","page_number":230,"box":{"x":69,"y":90,"width":799,"height":11}},{"id":"ece37e11-9e4d-4d86-9d77-95f77f46afe5","block_type":"box","text":"generally prohibits the State Legislature from making changes in local government funding sources. For further","page_number":230,"box":{"x":68,"y":105,"width":791,"height":11}},{"id":"0ad85411-5f8f-48ad-8480-2b49cf485eb3","block_type":"box","text":"discussion regarding Proposition 22 and Proposition 1A of 2004, see “The State Budget — Balanced Budget","page_number":230,"box":{"x":69,"y":120,"width":777,"height":12}},{"id":"ad256ad6-e381-4eda-8e2a-5a204f594186","block_type":"box","text":"Amendment (Proposition 58 and Proposition 2) — State-Local Fiscal Relations (Proposition 1A and Proposition 22)”","page_number":230,"box":{"x":68,"y":135,"width":824,"height":11}},{"id":"36c1ed92-3a0e-47c2-8990-b821284a55aa","block_type":"box","text":"above.","page_number":230,"box":{"x":69,"y":151,"width":45,"height":8}},{"id":"3cc1f832-a98f-4eee-8340-b5973be8d09a","block_type":"box","text":"Obligations of Other Issuers","page_number":230,"box":{"x":101,"y":173,"width":202,"height":11}},{"id":"ec429be4-bc14-4da5-a0f6-5b2215d4808f","block_type":"box","text":"Other Issuers of California Debt Obligations.","page_number":230,"box":{"x":102,"y":196,"width":320,"height":11}},{"id":"3167f560-6e83-4cfa-af43-e030a682c16c","block_type":"box","text":"There are a number of State agencies, instrumentalities and","page_number":230,"box":{"x":428,"y":196,"width":430,"height":11}},{"id":"dd4ea412-b79d-4b9d-b9cc-061c4adc7657","block_type":"box","text":"political subdivisions of the State that issue municipal obligations, some of which may be conduit revenue obligations","page_number":230,"box":{"x":70,"y":211,"width":837,"height":11}},{"id":"31316035-e4a1-4459-b811-008c34f2ae4c","block_type":"box","text":"payable from payments from private borrowers. These entities are subject to various economic risks and","page_number":230,"box":{"x":70,"y":226,"width":743,"height":11}},{"id":"205055cc-6890-4931-abbe-fd8031e0bb1b","block_type":"box","text":"uncertainties, and the credit quality of the securities issued by them may vary considerably from the credit quality of","page_number":230,"box":{"x":69,"y":241,"width":830,"height":11}},{"id":"6ffd4573-7e15-4201-941b-b6751c56a2fe","block_type":"box","text":"obligations backed by the full faith and credit of the State. See “Local Governments — General” above. For example,","page_number":230,"box":{"x":69,"y":256,"width":832,"height":12}},{"id":"2cf4aa47-6bae-4cc9-b572-87f6d185eb68","block_type":"box","text":"assessment bonds may be adversely affected by a general decline in real estate values or a slowdown in real estate","page_number":230,"box":{"x":69,"y":271,"width":831,"height":12}},{"id":"d587148c-31ba-49c5-911d-2d4105f2d86f","block_type":"box","text":"sales activity.","page_number":230,"box":{"x":69,"y":287,"width":94,"height":11}},{"id":"e1ca2472-42dd-41db-b05c-5a67fa38fcdb","block_type":"box","text":"California Long-Term Lease Obligations.","page_number":230,"box":{"x":102,"y":309,"width":286,"height":11}},{"id":"9070bb6a-affd-449a-ae63-77b09bd89731","block_type":"box","text":"Based on a series of court decisions, certain long-term lease","page_number":230,"box":{"x":395,"y":309,"width":436,"height":11}},{"id":"8c652af2-e2f9-41b6-882f-11c9db46a73e","block_type":"box","text":"obligations, though typically payable from the General Fund or a municipality, are not considered “indebtedness”","page_number":230,"box":{"x":69,"y":324,"width":799,"height":12}},{"id":"2ad8658f-a729-4bcc-8bdd-e77d98d173fa","block_type":"box","text":"requiring voter approval. Such leases, however, are subject to “abatement” in the event the facility being leased is","page_number":230,"box":{"x":69,"y":339,"width":816,"height":12}},{"id":"738093eb-3d85-4a8b-a76e-1736ed423505","block_type":"box","text":"unavailable for beneficial use and occupancy by the municipality during the term of the lease. Abatement is not a","page_number":230,"box":{"x":69,"y":355,"width":805,"height":11}},{"id":"469a9bd0-b2cf-47ca-8630-ea36f06531ad","block_type":"box","text":"default, and there may be no remedies available to the holders of the certificates evidencing the lease obligation in","page_number":230,"box":{"x":69,"y":370,"width":822,"height":11}},{"id":"b4c8353a-7419-4790-a056-2b5232d859db","block_type":"box","text":"the event abatement occurs. The most common cases of abatement are failure to complete construction of the","page_number":230,"box":{"x":68,"y":385,"width":795,"height":11}},{"id":"23f2bff5-1c64-4834-8789-14679db253cf","block_type":"box","text":"facility before the end of the period during which lease payments have been capitalized and uninsured casualty","page_number":230,"box":{"x":68,"y":400,"width":791,"height":11}},{"id":"4b9ae1f7-417d-487b-a98a-e6bc4d772335","block_type":"box","text":"losses to the facility (e.g., due to earthquake). In the event abatement occurs with respect to a lease obligation,","page_number":230,"box":{"x":70,"y":415,"width":798,"height":11}},{"id":"30c0e2c3-3b4e-4d0e-82c2-599c3a310e47","block_type":"box","text":"lease payments may be interrupted (if all available insurance proceeds and reserves are exhausted) and the","page_number":230,"box":{"x":70,"y":430,"width":773,"height":11}},{"id":"5f8b3d10-c2c6-4f30-9526-3db7a8da3eaa","block_type":"box","text":"certificates may not be paid when due. Further, lease obligations may represent executory contracts that could be","page_number":230,"box":{"x":69,"y":445,"width":814,"height":12}},{"id":"a0853d2e-2785-49b5-9ae5-7b0b8a6dddfb","block_type":"box","text":"rejected in a bankruptcy proceeding under Chapter 9 of the United States Bankruptcy Code. In bankruptcy","page_number":230,"box":{"x":69,"y":460,"width":754,"height":12}},{"id":"b9bb394b-ce64-4684-9601-44413ca39612","block_type":"box","text":"proceedings involving the City of Stockton, the confirmed plan of adjustment included the discharge of lease","page_number":230,"box":{"x":70,"y":475,"width":771,"height":12}},{"id":"114be2a8-53a5-4264-a99c-722ff3416ac9","block_type":"box","text":"obligations at significant discounts from their face value.","page_number":230,"box":{"x":69,"y":491,"width":403,"height":11}},{"id":"30967bfe-9abb-419f-857c-cd0b0991e2fd","block_type":"box","text":"Statutory Lien Securing General Obligation Bonds.","page_number":230,"box":{"x":101,"y":513,"width":366,"height":11}},{"id":"a48a5a02-1003-40c2-9e28-1d84f497eaad","block_type":"box","text":"Certain local governments, particularly school districts,","page_number":230,"box":{"x":473,"y":513,"width":393,"height":12}},{"id":"b1936074-61cc-4f14-a8f0-9100b460f8df","block_type":"box","text":"issue general obligation bonds secured by","page_number":230,"box":{"x":70,"y":529,"width":299,"height":11}},{"id":"bcc0c103-9354-4cd0-b6ad-d70ed2bbf9ac","block_type":"box","text":"ad valorem","page_number":230,"box":{"x":375,"y":529,"width":78,"height":8}},{"id":"3df7843d-4e5e-483c-9cec-0f5816048444","block_type":"box","text":"property taxes. Effective January 1, 2016, provisions were","page_number":230,"box":{"x":459,"y":528,"width":417,"height":12}},{"id":"fe2ce3d0-ae5e-434d-8644-b5ccdabda2c0","block_type":"box","text":"added to the California Education Code and the California Government Code to provide that general obligation bonds","page_number":230,"box":{"x":69,"y":543,"width":830,"height":12}},{"id":"e34d71b9-cab3-4f4a-b611-4d6beb093aa0","block_type":"box","text":"issued and sold by local governments in California are secured by a statutory lien on the","page_number":230,"box":{"x":70,"y":559,"width":630,"height":11}},{"id":"93f0f5a9-fc74-4c1d-aeae-a60352c2b504","block_type":"box","text":"ad valorem","page_number":230,"box":{"x":707,"y":559,"width":78,"height":9}},{"id":"d6b729a5-bad7-4cb9-8281-c7618f8680d1","block_type":"box","text":"property taxes","page_number":230,"box":{"x":791,"y":559,"width":101,"height":11}},{"id":"9368b337-a35b-459b-ad4c-7a2df20d3952","block_type":"box","text":"levied and collected to pay the principal and interest on such general obligation bonds. A statutory lien provides","page_number":230,"box":{"x":70,"y":574,"width":795,"height":11}},{"id":"4400fb4c-e116-477a-bceb-a38adf6c899e","block_type":"box","text":"bondholders with a security interest in","page_number":230,"box":{"x":69,"y":589,"width":271,"height":11}},{"id":"a5c9268d-47b8-4114-94ed-560c541ed274","block_type":"box","text":"ad valorem","page_number":230,"box":{"x":347,"y":589,"width":78,"height":9}},{"id":"ed48d31c-0d74-4767-b955-c1ab9ed2a4ca","block_type":"box","text":"property taxes intended to survive a bankruptcy of the local","page_number":230,"box":{"x":431,"y":589,"width":422,"height":11}},{"id":"f50ba7e7-308d-4d03-8f98-18a03ee73a12","block_type":"box","text":"government. It is unclear whether these provisions apply to bonds issued prior to the effective date.","page_number":230,"box":{"x":68,"y":604,"width":713,"height":11}},{"id":"2f6e4508-3d19-4707-834e-117ce3ceb928","block_type":"box","text":"Other Factors for an Investor to Consider","page_number":230,"box":{"x":101,"y":627,"width":299,"height":9}},{"id":"52633ca2-838f-43fb-a5b9-e5e9a4d39b40","block_type":"box","text":"Federal Policy Changes.","page_number":230,"box":{"x":102,"y":649,"width":174,"height":11}},{"id":"6999f309-df26-4789-8b5e-9768894f52da","block_type":"box","text":"House Resolution 1 (“H.R. 1”) of 2025, which was enacted by Congress, is anticipated","page_number":230,"box":{"x":283,"y":649,"width":619,"height":12}},{"id":"f4ac4edc-bc85-4484-956d-4e240303be38","block_type":"box","text":"to have significant fiscal and programmatic impacts on the State’s budget in fiscal year 2026-27 and in future fiscal","page_number":230,"box":{"x":68,"y":664,"width":828,"height":12}},{"id":"6e5d9b16-fe75-4e74-bb9e-385ca24b12c7","block_type":"box","text":"years. The State estimates H.R. 1 will result in reduction of federal funding to the State in the billions of dollars","page_number":230,"box":{"x":68,"y":680,"width":796,"height":11}},{"id":"13b1d637-8fbb-4095-b5b6-8659a188de89","block_type":"box","text":"annually, primarily related to estimated reductions in funding for the Medi-Cal program, with minor fiscal impacts from","page_number":230,"box":{"x":69,"y":695,"width":836,"height":11}},{"id":"6725cd81-0882-41bd-b0f1-1a1f151f6e4e","block_type":"box","text":"the food benefit provisions in H.R. 1. The 2026-27 Budget estimates the resulting additional costs to be $1.6 billion","page_number":230,"box":{"x":68,"y":709,"width":831,"height":12}},{"id":"0e0e3741-1fbb-4406-9267-453abc3da18a","block_type":"box","text":"General Fund in fiscal year 2026-27. Certain cuts under H.R. 1 would directly or indirectly impact counties, school","page_number":230,"box":{"x":69,"y":725,"width":811,"height":11}},{"id":"9d028911-d443-40fc-b61e-78fd16be2f0b","block_type":"box","text":"districts and other local agencies, as well private hospitals and other institutions operating federally-funded","page_number":230,"box":{"x":69,"y":740,"width":763,"height":11}},{"id":"0af85071-0fbb-44a0-a0b3-45f37baed894","block_type":"box","text":"programs. There can be no assurance that any budget solutions if enacted or otherwise implemented will materially","page_number":230,"box":{"x":70,"y":755,"width":824,"height":11}},{"id":"f5e4663a-8157-45f7-96ac-7ee8075a87f1","block_type":"box","text":"mitigate the fiscal impacts of H.R. 1 in fiscal year 2026-27 and future fiscal years.","page_number":230,"box":{"x":69,"y":770,"width":587,"height":12}},{"id":"14360484-fc31-4b03-a42a-d45c455cd41b","block_type":"box","text":"Tariffs and their impact of such tariffs on inflation and interest rates could have significant negative impacts on","page_number":230,"box":{"x":101,"y":793,"width":793,"height":11}},{"id":"943c7892-e1d9-4d33-827d-02c03754f013","block_type":"box","text":"investment and other economic activity within the State and its local jurisdictions, adversely impacting their revenues","page_number":230,"box":{"x":70,"y":808,"width":833,"height":11}},{"id":"8a245632-60d2-4cb8-afb6-ec7e646d0c41","block_type":"box","text":"and increasing their costs. Most recently, the United States and Canada imposed tariffs on certain of each other’s","page_number":230,"box":{"x":69,"y":823,"width":817,"height":12}},{"id":"3f6493ba-51f2-4ddb-a499-b3bd25765dcc","block_type":"box","text":"products following unsuccessful trade negotiations. California is especially vulnerable to tariffs as its ports and","page_number":230,"box":{"x":70,"y":838,"width":792,"height":12}},{"id":"32dd9849-3052-4e10-822e-5d6b1086732b","block_type":"box","text":"logistics industry depend mainly on foreign trade.","page_number":230,"box":{"x":70,"y":853,"width":349,"height":12}},{"id":"d6f87044-dc82-4226-8ce8-adcd174fd789","block_type":"box","text":"The federal administration may materially reduce or eliminate funding or programs previously provided by or","page_number":230,"box":{"x":101,"y":876,"width":766,"height":11}},{"id":"1c90d151-5736-45d6-afb7-439221233a92","block_type":"box","text":"otherwise agreed to by the federal government, such as funding related to Medicaid, unemployment insurance, high","page_number":230,"box":{"x":69,"y":891,"width":830,"height":12}},{"id":"f5d36c95-af6f-4b61-86db-d5cd3c9a5876","block_type":"box","text":"speed rail in the state, FEMA disaster assistance, grants to state and local health care organizations, and education","page_number":230,"box":{"x":69,"y":907,"width":830,"height":11}},{"id":"c135646e-e77b-41dd-b447-0fb55369b848","block_type":"box","text":"Public Page 12 of 33","page_number":230,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"7f257beb-d3ec-444d-8fdf-57ab4ef6830a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":230,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"bae6d542-940d-45ff-bb84-5f1e458197fe","block_type":"box","text":"funding. The federal administration has indicated it will take actions to address fraud in the federal government’s","page_number":231,"box":{"x":68,"y":75,"width":807,"height":11}},{"id":"44d2fd6b-96a5-4349-993d-2cb0b60c62cf","block_type":"box","text":"welfare programs, and the result of any such actions could materially adversely impact the State and local","page_number":231,"box":{"x":68,"y":90,"width":757,"height":11}},{"id":"4a6b29c0-0dff-4426-a1f4-6f2fdc16ea20","block_type":"box","text":"governments.","page_number":231,"box":{"x":68,"y":106,"width":96,"height":10}},{"id":"f1c6c0b6-753d-4cf9-adc7-bf3c2014571c","block_type":"box","text":"Restrictive federal immigration policies and recent increased deportations by federal immigration authorities of","page_number":231,"box":{"x":102,"y":128,"width":790,"height":11}},{"id":"271461ed-0190-4f41-a845-46c1febe871c","block_type":"box","text":"undocumented residents could restrict the labor supply and negatively impact the public revenues generated due to","page_number":231,"box":{"x":69,"y":143,"width":823,"height":11}},{"id":"aec2596e-9ee1-413c-82cf-31e25a21ec79","block_type":"box","text":"the economic activities of undocumented residents and their families.","page_number":231,"box":{"x":68,"y":158,"width":498,"height":9}},{"id":"9e9f4392-d6cb-48bd-b22a-ced42c94746e","block_type":"box","text":"Extended federal government shutdowns, even partial, have the potential to adversely affect the national and","page_number":231,"box":{"x":102,"y":181,"width":778,"height":11}},{"id":"9e6418b1-b823-4cdc-9844-1563d80cfb66","block_type":"box","text":"state economies by dampening economic activity by federal employees, contractors and federal agencies. Federal","page_number":231,"box":{"x":69,"y":196,"width":810,"height":11}},{"id":"e89b3130-06a3-43ed-847e-d5cf62f13dad","block_type":"box","text":"government shutdowns can reduce access to federally-generated economic and other data that inform State and local","page_number":231,"box":{"x":68,"y":211,"width":840,"height":11}},{"id":"9f516e5e-36aa-41c0-84b4-d6e8d03e0ec1","block_type":"box","text":"policymakers’ fiscal decisions.","page_number":231,"box":{"x":70,"y":226,"width":215,"height":11}},{"id":"e08ff086-aafe-4b2d-8c4d-3b819c90f227","block_type":"box","text":"Federal legislative proposals arise from time to time, and may currently be under consideration, which would limit","page_number":231,"box":{"x":102,"y":249,"width":807,"height":11}},{"id":"d20dfb08-426d-4ea9-a3e4-f4728ecc005e","block_type":"box","text":"the exclusion of gross income of interest on municipal securities that could significantly reduce the benefit thereof, or","page_number":231,"box":{"x":68,"y":264,"width":841,"height":11}},{"id":"28693024-4fb1-4b85-9166-42ea56574265","block_type":"box","text":"otherwise affect the exclusion of gross income of interest on municipal securities. The introduction or enactment of","page_number":231,"box":{"x":69,"y":279,"width":826,"height":11}},{"id":"1fea1a48-12f3-45e6-a6c3-c311e52bb060","block_type":"box","text":"any such legislative proposals, clarification of the Internal Revenue Code or court decisions may also affect, perhaps","page_number":231,"box":{"x":69,"y":294,"width":835,"height":11}},{"id":"9cfa0a79-2f22-4b3e-b2ec-544a0f1fa0e9","block_type":"box","text":"significantly, the market price for, or the marketability of, such municipal securities.","page_number":231,"box":{"x":69,"y":309,"width":592,"height":11}},{"id":"4de7b0c8-2952-4808-80ae-f62c86fcd604","block_type":"box","text":"Pandemics and Social and Economic Impacts.","page_number":231,"box":{"x":102,"y":332,"width":335,"height":11}},{"id":"32545533-173d-4a8a-aeb4-f40df70a9495","block_type":"box","text":"The long-term consequences of the COVID-19 pandemic are yet","page_number":231,"box":{"x":443,"y":332,"width":451,"height":11}},{"id":"511ba73b-8f7a-4d4e-8aa9-53672f4e9136","block_type":"box","text":"to be fully known. For instance, if there are broad, long-standing changes to where people chose to live and work, the","page_number":231,"box":{"x":68,"y":347,"width":836,"height":11}},{"id":"6f76e82d-765d-4e55-8e93-68988795d490","block_type":"box","text":"pandemic could, over time, change the key economic drivers of a community. As an example, some employers may","page_number":231,"box":{"x":70,"y":362,"width":818,"height":11}},{"id":"66be1ed1-9097-4854-bf87-0fe0ffc0fee9","block_type":"box","text":"continue to provide additional flexibility for their employee remote work policies instituted during the COVID 19","page_number":231,"box":{"x":69,"y":377,"width":785,"height":12}},{"id":"cb5c85bf-fc6b-4118-af01-c59701ba6f9a","block_type":"box","text":"emergency. These unknowns create an unprecedented degree of uncertainty about the economic outlook of local","page_number":231,"box":{"x":69,"y":392,"width":804,"height":12}},{"id":"cfc01f6f-bfb6-4bfa-97a7-fa10f4882c43","block_type":"box","text":"governments. These changes have already affected the value of commercial property creating a smaller tax base and","page_number":231,"box":{"x":68,"y":407,"width":838,"height":12}},{"id":"fb94f36e-f7cf-4d32-afcc-9043fe173e9b","block_type":"box","text":"reduced property tax and other revenue. Many of the largest cities in the State, including notably San Francisco, Los","page_number":231,"box":{"x":69,"y":423,"width":829,"height":11}},{"id":"82c3bb2e-fb21-48ab-94ee-fddae5483d3f","block_type":"box","text":"Angeles and Oakland, have experienced some of the highest office vacancy rates in the Country. This is in part due","page_number":231,"box":{"x":68,"y":438,"width":823,"height":11}},{"id":"52c6d98e-8e82-439c-8eb1-e1025e91f26b","block_type":"box","text":"to California’s outsized reliance on technology jobs (which are the most vulnerable to remote working), as well as the","page_number":231,"box":{"x":68,"y":453,"width":834,"height":11}},{"id":"55af87ac-76b7-4a60-9441-4ebb3e18e2c4","block_type":"box","text":"impact of homelessness and crime upon the attractiveness of certain commercial areas. Reduced tax revenue, as","page_number":231,"box":{"x":70,"y":468,"width":814,"height":11}},{"id":"2e4b7101-b0ce-4a2c-a4a0-1e1dd180bdd2","block_type":"box","text":"well as increased costs to address homelessness and crime could strain municipal budgets, potentially putting","page_number":231,"box":{"x":68,"y":483,"width":794,"height":11}},{"id":"cbfcb520-94fe-4b73-bbd2-6b36880b5aaf","block_type":"box","text":"pressure on their credit quality.","page_number":231,"box":{"x":70,"y":498,"width":219,"height":11}},{"id":"34189094-b0af-43dd-a5a7-1a8a2aa455e0","block_type":"box","text":"Global Relations and Trade.","page_number":231,"box":{"x":102,"y":521,"width":199,"height":9}},{"id":"983cdd68-f9e2-432e-8747-720bbf89e910","block_type":"box","text":"Given globalization and the interconnectedness of physical and financial world","page_number":231,"box":{"x":307,"y":521,"width":555,"height":11}},{"id":"a9bee4e7-3f7c-475d-99ec-9ac268ceff4c","block_type":"box","text":"markets, disruptions in large markets due to economic slowdowns in other countries or regions, geopolitical tensions","page_number":231,"box":{"x":69,"y":536,"width":836,"height":11}},{"id":"b12b3505-e8aa-4e02-8bd9-c496182411a1","block_type":"box","text":"and deteriorating international trade relations, may have significant negative impacts on the nation’s economy,","page_number":231,"box":{"x":69,"y":551,"width":787,"height":11}},{"id":"3498481f-780b-4786-9d43-b71e5e20de99","block_type":"box","text":"including on the State. There is significant uncertainty around how the U.S. and Israel’s military assault on Iran and","page_number":231,"box":{"x":70,"y":566,"width":823,"height":11}},{"id":"f9df9fa5-d7d2-44bf-b0ca-3d5dd22ec80e","block_type":"box","text":"Iran’s response, Russia’s invasion of Ukraine, Israeli’s military occupation of Gaza and invasion of portions of","page_number":231,"box":{"x":70,"y":581,"width":785,"height":11}},{"id":"76de2e60-3fad-4a0e-82e7-4049e0e1c659","block_type":"box","text":"Lebanon and increased tensions between China and Taiwan will evolve, as well as the potential economic impacts to","page_number":231,"box":{"x":70,"y":597,"width":831,"height":10}},{"id":"c6f6432d-74f2-4952-ab70-9a175e51a1b2","block_type":"box","text":"the U.S. and to California from these conflicts. Current global instabilities may disrupt the global economy. See also","page_number":231,"box":{"x":68,"y":612,"width":827,"height":11}},{"id":"5267b9d4-f228-4a56-8bd7-215513141154","block_type":"box","text":"“Federal Policy Changes” above.","page_number":231,"box":{"x":70,"y":627,"width":228,"height":11}},{"id":"a45402ff-fc21-4d46-a9d9-3501e1f28756","block_type":"box","text":"Potential trade disruptions could create or extend supply chain disruptions negatively impacting domestic","page_number":231,"box":{"x":102,"y":650,"width":749,"height":11}},{"id":"5a3ce0e8-ff3c-4e31-98a0-7b9f738dcba8","block_type":"box","text":"markets and reducing trade volumes for the nation and the State. In both the U.S. and California, the rise in oil prices","page_number":231,"box":{"x":69,"y":664,"width":839,"height":12}},{"id":"6f28addc-bdde-4bcb-a240-aa3af39c2b99","block_type":"box","text":"following the conflict in Iran is expected to affect a broad range of goods and services.","page_number":231,"box":{"x":68,"y":680,"width":618,"height":11}},{"id":"53d0424a-5c1d-43f6-af3f-b18c5af19408","block_type":"box","text":"Health Care Costs.","page_number":231,"box":{"x":102,"y":702,"width":137,"height":9}},{"id":"6f58e262-1ad4-41f0-a3d7-36867733ad87","block_type":"box","text":"Medi-Cal is one of the State’s largest expenditures. As stated, approximately one-third of the","page_number":231,"box":{"x":246,"y":702,"width":661,"height":12}},{"id":"ca7e61ac-e2c2-4750-865a-433a1bd6944c","block_type":"box","text":"State’s population receives Medi-Cal benefits. The State also provides health benefits to its own employees and","page_number":231,"box":{"x":69,"y":717,"width":800,"height":12}},{"id":"665345d7-cd08-4437-ab01-02d53d12327a","block_type":"box","text":"retirees. General Fund spending on health care costs is thus heavily dependent upon the rate of health care cost","page_number":231,"box":{"x":69,"y":732,"width":805,"height":12}},{"id":"e844bd36-10be-46b9-addb-70d3ad48ae79","block_type":"box","text":"inflation. If this inflation rises faster than expected, annual General Fund spending could quickly rise by hundreds","page_number":231,"box":{"x":70,"y":748,"width":804,"height":11}},{"id":"efcbacbb-640a-49d3-9e92-bef24897e480","block_type":"box","text":"of millions of dollars. See “The State Budget — Health Care Services” and “Federal Policy Changes” above.","page_number":231,"box":{"x":69,"y":763,"width":769,"height":11}},{"id":"c418631e-f9a8-47a5-9498-7eecec846d38","block_type":"box","text":"Housing Constraints; Homelessness.","page_number":231,"box":{"x":102,"y":786,"width":266,"height":11}},{"id":"d953af5a-5e0a-4a29-ae18-9c62248a4a21","block_type":"box","text":"The State continues to face a critical housing shortage. The California","page_number":231,"box":{"x":374,"y":785,"width":498,"height":12}},{"id":"d0a65467-ed0d-4518-9b1d-03e2da90ed03","block_type":"box","text":"housing market continues to be one of the most expensive in the nation. Low-income and moderate-income","page_number":231,"box":{"x":69,"y":801,"width":765,"height":11}},{"id":"b13b837a-3f41-4f0b-9bce-d0c4a55bb8ad","block_type":"box","text":"Californians face increasing affordability issues which may affect their decisions about where to live and work. Given","page_number":231,"box":{"x":69,"y":816,"width":831,"height":11}},{"id":"9862918b-ff17-46bf-9a76-b591e5b03541","block_type":"box","text":"the State’s structural housing supply constraints and shortage, low-income populations will be especially vulnerable","page_number":231,"box":{"x":68,"y":831,"width":827,"height":11}},{"id":"2f520d85-7497-4e42-9aca-1a9e7d3772e9","block_type":"box","text":"to housing cost increases both in the rental and ownership markets.","page_number":231,"box":{"x":68,"y":846,"width":487,"height":11}},{"id":"45855caa-4c83-48ee-ac18-9198997960b4","block_type":"box","text":"Furthermore, certain businesses may determine to leave California to the extent location decisions are","page_number":231,"box":{"x":102,"y":869,"width":735,"height":11}},{"id":"623ed2e2-f6aa-4234-9e3e-5d99f3686117","block_type":"box","text":"significantly influenced by the ability of their employees and customers to live nearby. In addition, in certain urban","page_number":231,"box":{"x":69,"y":884,"width":809,"height":11}},{"id":"cad655fd-9a74-4c59-a5d9-4d6d754990f3","block_type":"box","text":"areas in particular, the homeless population has grown in recent years, in some part due to a significant lack of","page_number":231,"box":{"x":69,"y":899,"width":799,"height":11}},{"id":"15af4307-2fb3-48ae-bd58-6fb2c9d8579c","block_type":"box","text":"Public Page 13 of 33","page_number":231,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"bed3da73-5fec-485c-86ae-2c5a8fd430be","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":231,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"084fa61e-8d15-40f5-b41e-a2aa7a8c903a","block_type":"box","text":"affordable housing. In certain urban centers, like San Francisco, the impact of homelessness, together with the","page_number":232,"box":{"x":69,"y":75,"width":796,"height":11}},{"id":"7c1bcc9b-c0c5-4b44-b4f8-21d3767d6d58","block_type":"box","text":"dramatic increase of related drug use and property crime, has caused major retailers to close their facilities,","page_number":232,"box":{"x":69,"y":90,"width":774,"height":11}},{"id":"bd89fda2-558a-43c3-b11d-0640cf0280b2","block_type":"box","text":"resulting in a significant loss of tax revenues. Further, homeless services programs may become a larger draw on","page_number":232,"box":{"x":69,"y":105,"width":810,"height":11}},{"id":"36a1ce7b-bf8d-4f10-a8cc-c2e391323045","block_type":"box","text":"local government funds and may otherwise impact economic activity.","page_number":232,"box":{"x":70,"y":120,"width":487,"height":12}},{"id":"c9681fb6-ef10-41fb-9f19-a6fb1bcc247b","block_type":"box","text":"Climate Change.","page_number":232,"box":{"x":102,"y":143,"width":119,"height":11}},{"id":"2a908b4d-8d31-4810-954e-bd996332f768","block_type":"box","text":"The State historically has been susceptible to wildfires and hydrologic variability. The State has","page_number":232,"box":{"x":227,"y":143,"width":677,"height":11}},{"id":"f3dafab7-a744-4e97-accd-8e05b7116d3e","block_type":"box","text":"increasingly experienced extreme weather events, such as droughts, wildfires, floods and heat waves, as well as","page_number":232,"box":{"x":70,"y":158,"width":802,"height":11}},{"id":"f613f258-1054-421d-9b99-6dd19ce2efed","block_type":"box","text":"rising sea levels along the coast of the State. The State has experienced both multi-year droughts and destructive","page_number":232,"box":{"x":69,"y":173,"width":811,"height":11}},{"id":"1ccc43eb-f565-4d69-85d7-1ceca3a04cc9","block_type":"box","text":"winter storms in recent years. Dry weather increases wildfire risk, and future drought conditions may impact future","page_number":232,"box":{"x":68,"y":188,"width":817,"height":12}},{"id":"5e181041-5e48-4a02-8ab1-55ba79454e64","block_type":"box","text":"economic forecasts. Federal actions could reduce access to shared water from the Colorado River, a major water","page_number":232,"box":{"x":69,"y":203,"width":805,"height":12}},{"id":"4b728ad0-f81c-4664-9146-7652ff1ac703","block_type":"box","text":"source for Southern California. Destruction of housing increases the demand for construction resources from","page_number":232,"box":{"x":69,"y":218,"width":778,"height":12}},{"id":"270e51e3-d98b-4a2d-954a-6c157876cda8","block_type":"box","text":"rebuilding and worsens the State’s housing imbalances for years following the incidents. The increasing frequency of","page_number":232,"box":{"x":69,"y":234,"width":832,"height":11}},{"id":"c23c8cad-b742-4ad4-9d67-c9b54c38fbbb","block_type":"box","text":"natural disasters within the State, particularly wildfires, has led to rising home insurance premiums, as well as","page_number":232,"box":{"x":69,"y":249,"width":789,"height":11}},{"id":"ed7b22e0-32ff-4798-96bd-8f50cde76776","block_type":"box","text":"resulted in some insurers either limiting or discontinuing issuance of policies, which could further weaken housing","page_number":232,"box":{"x":69,"y":264,"width":815,"height":11}},{"id":"e7894d13-50dc-4ebb-b15c-033c492abded","block_type":"box","text":"development in the State and exacerbate the ongoing housing shortage. Additional significant costs incurred by","page_number":232,"box":{"x":69,"y":279,"width":796,"height":11}},{"id":"6b148a54-6e9e-407b-a286-93b9d5be4758","block_type":"box","text":"insurance companies could likely get passed down to existing or prospective policyholders in the form of higher","page_number":232,"box":{"x":70,"y":294,"width":792,"height":11}},{"id":"87b366fc-2e2b-490c-9d12-7554263d0ed0","block_type":"box","text":"premiums, which may amplify the State’s lack of housing affordability. The future fiscal impact of climate change on","page_number":232,"box":{"x":70,"y":309,"width":824,"height":11}},{"id":"797aeaee-ba98-4fa3-9f61-fdb5d16f4ba1","block_type":"box","text":"the State budget is difficult to predict, but it could be significant. The State is in the process of implementing various","page_number":232,"box":{"x":68,"y":324,"width":835,"height":12}},{"id":"fedf8642-6722-4a82-bbbf-1f26dd5fe910","block_type":"box","text":"resilience measures to reduce the impacts of climate change, including significant investments in wildfire prevention","page_number":232,"box":{"x":69,"y":339,"width":830,"height":12}},{"id":"4622ada9-136c-4ac9-8e16-290246848c05","block_type":"box","text":"and water infrastructure projects and workforce development. However, there can be no assurances that the current","page_number":232,"box":{"x":69,"y":355,"width":828,"height":11}},{"id":"506d236f-10c7-4f17-9f19-29ce86c43be9","block_type":"box","text":"or any future resilience measures will be effective in materially mitigating the impact of climate change on the State.","page_number":232,"box":{"x":69,"y":370,"width":829,"height":11}},{"id":"f925c528-a7db-4713-ad7b-bbe70c223c24","block_type":"box","text":"Energy Costs and Risks.","page_number":232,"box":{"x":102,"y":392,"width":177,"height":11}},{"id":"45d6fb6f-952f-49ab-b3de-ece68fe8a23f","block_type":"box","text":"California has some of the highest gas prices in the United States, due to high gas","page_number":232,"box":{"x":285,"y":392,"width":591,"height":12}},{"id":"3009936d-63bd-4f3e-99ba-509455a4fe99","block_type":"box","text":"taxes and limited refinement capacity within the State. Global trade developments and international conflicts can","page_number":232,"box":{"x":68,"y":407,"width":805,"height":12}},{"id":"7d8e44b3-09ae-4261-bb11-ff9dcd24ab06","block_type":"box","text":"increase price volatility. High gas prices are particularly impactful on California’s lower income residents, potentially","page_number":232,"box":{"x":70,"y":423,"width":823,"height":11}},{"id":"ba6bf204-44c8-4485-ab57-f8a220b33b2b","block_type":"box","text":"exacerbating homelessness and demands for social services.","page_number":232,"box":{"x":69,"y":438,"width":439,"height":11}},{"id":"c920ba2f-890c-4e0f-b460-584269f7fb89","block_type":"box","text":"Additionally, extreme climate-induced weather events, including drought, extreme heat events and wildfires, have","page_number":232,"box":{"x":101,"y":460,"width":802,"height":12}},{"id":"1136c01d-85bc-4578-8b66-768502302045","block_type":"box","text":"placed stress on the State’s electrical system. The future fiscal impact of stresses to the energy grid caused by","page_number":232,"box":{"x":70,"y":475,"width":797,"height":12}},{"id":"a7f6ccf2-cdf2-4994-a17b-e3b5a7999862","block_type":"box","text":"climate is difficult for the State to predict but could be significant. In recent years, California has taken numerous","page_number":232,"box":{"x":69,"y":491,"width":809,"height":11}},{"id":"e396f7e8-2d71-4145-b554-a47d38f83516","block_type":"box","text":"steps to increase resiliency to be better prepared to meet the State’s electricity demands. This includes demand","page_number":232,"box":{"x":69,"y":506,"width":804,"height":11}},{"id":"457b0839-31db-4a11-8f13-1e04a44792bc","block_type":"box","text":"response programs and creating additional incentives to move large energy users to back-up power generation to","page_number":232,"box":{"x":69,"y":521,"width":805,"height":11}},{"id":"8d1b16dd-5348-42ef-b55b-47f7d21d0cb7","block_type":"box","text":"address reliability concerns and streamlining certain permitting requirements to allow greater energy production.","page_number":232,"box":{"x":69,"y":536,"width":801,"height":11}},{"id":"e0ac7481-2b77-469b-a9f9-c9b4d9ef1ee2","block_type":"box","text":"However, there can be no assurances that such programs will be effective in materially mitigating the risks to the","page_number":232,"box":{"x":70,"y":551,"width":806,"height":11}},{"id":"ed562cca-21af-4f33-951a-70fbd4e13acd","block_type":"box","text":"grid.","page_number":232,"box":{"x":68,"y":566,"width":30,"height":11}},{"id":"d32ecfb9-c834-45a3-9d62-6182fa71940f","block_type":"box","text":"Cybersecurity Risks.","page_number":232,"box":{"x":102,"y":589,"width":149,"height":11}},{"id":"a4d954df-9c83-4c1e-b2cf-e6c33529b8ed","block_type":"box","text":"The State and local governments like other large public and private entities, relies on a","page_number":232,"box":{"x":256,"y":589,"width":621,"height":11}},{"id":"e0b15cb2-4b3e-4f64-b3d2-68b9d0725ec1","block_type":"box","text":"large and complex technology environment to conduct its operations are subject to multiple cyber threats including,","page_number":232,"box":{"x":70,"y":604,"width":819,"height":11}},{"id":"b103158a-61e4-4018-a82a-3e8991679146","block_type":"box","text":"but not limited to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and","page_number":232,"box":{"x":69,"y":619,"width":830,"height":11}},{"id":"c366ca3e-7768-4991-8500-45ee189c5134","block_type":"box","text":"systems. The use of artificial intelligence to automate and enhance attacks may further increase the risk or potential","page_number":232,"box":{"x":69,"y":634,"width":834,"height":12}},{"id":"a20fc663-3719-469e-8d76-4a75e72d0929","block_type":"box","text":"severity of such incidents.","page_number":232,"box":{"x":69,"y":649,"width":184,"height":12}},{"id":"3be4296b-17d3-4fa2-9f07-4841b80bb9be","block_type":"box","text":"Entities or individuals may attempt to gain unauthorized access to the State’s digital systems for the purposes of","page_number":232,"box":{"x":102,"y":672,"width":808,"height":11}},{"id":"dd901e3b-dccc-41ae-9b39-7b69d90a05a0","block_type":"box","text":"misappropriating assets or information or causing operational disruption and damage. In 2017 the State established","page_number":232,"box":{"x":69,"y":687,"width":833,"height":11}},{"id":"b296b368-e81d-460e-bfb5-bd6b12c869f6","block_type":"box","text":"a statewide security operations center to protect against malicious activity targeting critical technology infrastructure.","page_number":232,"box":{"x":69,"y":702,"width":834,"height":12}},{"id":"c680fc32-d905-47b4-ad73-d3f9f5a9d262","block_type":"box","text":"Local governments in the State have experienced similar threats and taken similar measures; however, no","page_number":232,"box":{"x":70,"y":718,"width":757,"height":11}},{"id":"6ce0d369-1794-4fe3-bb1e-6948f47d1523","block_type":"box","text":"assurances can be given that the efforts to manage cyber threats and attacks will be successful or that any such","page_number":232,"box":{"x":69,"y":732,"width":808,"height":12}},{"id":"1c1db307-3c1b-475a-9570-20738633d2a9","block_type":"box","text":"attack will not materially impact the operations or finances of the State or its local governments.","page_number":232,"box":{"x":69,"y":748,"width":686,"height":11}},{"id":"4170eae9-301c-4402-a93f-4d5537f9ff9e","block_type":"box","text":"Earthquake Risk.","page_number":232,"box":{"x":102,"y":770,"width":124,"height":11}},{"id":"8d4d44da-f498-4c9d-9a5b-921f1db5cc1e","block_type":"box","text":"Substantially all of California is within an active geologic region subject to major seismic","page_number":232,"box":{"x":233,"y":770,"width":627,"height":12}},{"id":"e945f532-883d-437d-bb0a-ba0eaf137b5c","block_type":"box","text":"activity. Any obligation of the State or a local government in the State could be affected by an interruption of","page_number":232,"box":{"x":69,"y":785,"width":772,"height":12}},{"id":"c4d79706-a787-46c6-acc3-d0db3e589868","block_type":"box","text":"revenues because of damaged facilities or, consequently, income tax deductions for casualty losses or property tax","page_number":232,"box":{"x":69,"y":801,"width":823,"height":11}},{"id":"0dc135ce-c247-45f7-8bd0-e276cff2bae7","block_type":"box","text":"assessment reductions. Compensatory financial assistance could be constrained by the inability of (i) an issuer to","page_number":232,"box":{"x":69,"y":816,"width":815,"height":11}},{"id":"21586156-1177-4657-9b9e-3cea12799075","block_type":"box","text":"have obtained earthquake insurance coverage; (ii) an insurer to perform on its contracts of insurance in the event of","page_number":232,"box":{"x":69,"y":831,"width":831,"height":11}},{"id":"035d2424-0008-4445-ae1f-1d5b8c98d794","block_type":"box","text":"widespread losses; or (iii) the federal or State government to appropriate sufficient funds within their respective","page_number":232,"box":{"x":68,"y":846,"width":798,"height":11}},{"id":"bdb87d79-51c4-49f3-be85-64f03601623b","block_type":"box","text":"budget limitations.","page_number":232,"box":{"x":69,"y":861,"width":131,"height":11}},{"id":"75856ce7-7b20-407f-8066-7712135e7f74","block_type":"box","text":"Inflation.","page_number":232,"box":{"x":102,"y":884,"width":63,"height":9}},{"id":"a73fb739-a701-40ed-bde4-5f8249e1da6f","block_type":"box","text":"Historically, California inflation rates have been somewhat higher than the nation’s inflation rates due","page_number":232,"box":{"x":172,"y":884,"width":721,"height":11}},{"id":"ee7817c9-b456-470a-914d-170efe2c368e","block_type":"box","text":"to the state’s faster increases in housing and energy prices. As of August 2025, California headline inflation is","page_number":232,"box":{"x":68,"y":899,"width":792,"height":11}},{"id":"4846bc4c-ba06-4e10-b13d-942660f3b138","block_type":"box","text":"Public Page 14 of 33","page_number":232,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"6a12924a-8c01-48f9-9323-26b86c6bcf9a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":232,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e69f42fb-2bb2-4395-a8bd-50672bae04c3","block_type":"box","text":"projected to accelerate to 4.1% in 2026 before slowing to 3.1% in 2027 and then ticking up slightly to 3.2% every","page_number":233,"box":{"x":70,"y":75,"width":811,"height":11}},{"id":"1a1e5e69-f22f-485b-809c-135a22678027","block_type":"box","text":"year from 2028 to 2030. California inflation is projected to be 0.6% above U.S. inflation in 2026 and 0.9% higher","page_number":233,"box":{"x":68,"y":90,"width":811,"height":11}},{"id":"5b9c645a-92d9-4cba-a39e-4556af245975","block_type":"box","text":"beginning in 2027. Sustained high inflation can lead to price instability if businesses and consumers expect price","page_number":233,"box":{"x":69,"y":105,"width":809,"height":11}},{"id":"93ca54b0-c31b-4cf3-ab41-f61c4acd1472","block_type":"box","text":"increases to continue. Federal trade, tariff, monetary and immigration policies could impact inflation rates and affect","page_number":233,"box":{"x":70,"y":120,"width":833,"height":12}},{"id":"72d86b42-6962-4d14-a51c-3339942849bc","block_type":"box","text":"economic growth.","page_number":233,"box":{"x":69,"y":136,"width":123,"height":11}},{"id":"d9e68b23-eb94-42e1-b3e6-8c5f60be7ad8","block_type":"box","text":"ECONOMIC AND FINANCIAL CONDITIONS IN NEW JERSEY","page_number":233,"box":{"x":257,"y":159,"width":464,"height":9}},{"id":"fbbf2536-1212-4ef9-99be-dd5545de6e9d","block_type":"box","text":"The following information is a brief summary of factors affecting the economy of the State of New Jersey and","page_number":233,"box":{"x":101,"y":181,"width":776,"height":12}},{"id":"8af3de24-09e9-4388-8ca1-42d4f32d5ea4","block_type":"box","text":"does not purport to be a complete description of such factors. Other factors will affect economic and financial","page_number":233,"box":{"x":69,"y":196,"width":784,"height":11}},{"id":"fbe533d5-fdd0-4c9a-bd70-04bd2fd69b55","block_type":"box","text":"condition of the State of New Jersey. The summary is based upon publicly available offering statements relating to","page_number":233,"box":{"x":69,"y":212,"width":816,"height":11}},{"id":"34bdd071-456a-4711-be89-fe6651ffb847","block_type":"box","text":"debt offerings of the State of New Jersey and other demographic information; however, it will not be updated during","page_number":233,"box":{"x":69,"y":227,"width":822,"height":11}},{"id":"5032a2d1-49fd-4cc8-982e-0cb941478e1e","block_type":"box","text":"the year. The Trust has not independently verified this information.","page_number":233,"box":{"x":68,"y":242,"width":473,"height":11}},{"id":"c16bce72-72b7-4d89-9f52-64fe02e8a2b2","block_type":"box","text":"New Jersey (sometimes referred to herein as the “State”) operates on a fiscal year beginning July 1 and ending","page_number":233,"box":{"x":102,"y":264,"width":794,"height":12}},{"id":"05344b3c-ddc6-4d59-94d9-94e976acb850","block_type":"box","text":"June 30. For example, “Fiscal Year 2025” refers to the State’s fiscal year beginning July 1, 2024 and ending","page_number":233,"box":{"x":69,"y":280,"width":775,"height":11}},{"id":"339b22ba-1bbb-4b87-8c4a-8adc73a00a86","block_type":"box","text":"June 30, 2025.","page_number":233,"box":{"x":69,"y":295,"width":109,"height":10}},{"id":"847f09f1-2ea3-4591-a5ec-6141e27dbbd5","block_type":"box","text":"Governmental Funds","page_number":233,"box":{"x":102,"y":318,"width":145,"height":8}},{"id":"352a9b5e-92cd-49ee-a59a-031334b12017","block_type":"box","text":"Governmental Funds finance most Direct State Services, which support the normal operations of State","page_number":233,"box":{"x":102,"y":340,"width":733,"height":11}},{"id":"cedc8125-9a0c-4755-b012-2bbf5626f9eb","block_type":"box","text":"government. The governmental funds financial statements focus on current inflows and outflows of expendable","page_number":233,"box":{"x":68,"y":355,"width":792,"height":11}},{"id":"cee69496-6e84-47aa-a1af-979f35db8d13","block_type":"box","text":"resources and the unexpended balances at the end of a fiscal year that are available for future spending.","page_number":233,"box":{"x":69,"y":370,"width":749,"height":12}},{"id":"bf436050-c455-4b1a-a4c3-a7e54559b599","block_type":"box","text":"Governmental fund information helps determine whether or not there was an addition or a reduction in financial","page_number":233,"box":{"x":102,"y":393,"width":793,"height":11}},{"id":"432da819-6f5d-4f25-9aa2-e0d9ad8ce0a3","block_type":"box","text":"resources that can be spent in the near future to finance State programs.","page_number":233,"box":{"x":69,"y":408,"width":524,"height":11}},{"id":"36c8b93a-fb11-4bf3-9a9d-950bc588d1e7","block_type":"box","text":"The General Fund is the fund used to account for all State revenues not otherwise restricted by statute. The","page_number":233,"box":{"x":101,"y":431,"width":770,"height":11}},{"id":"31b9b239-9ea0-4431-b38a-00e35057b166","block_type":"box","text":"largest part of the total financial operations of the State is accounted for in the General Fund. Most revenues","page_number":233,"box":{"x":70,"y":446,"width":778,"height":11}},{"id":"01660ed6-4d70-41e8-a087-ef498e518d6c","block_type":"box","text":"received from taxes, federal sources, and certain miscellaneous revenue items are recorded in the General Fund. The","page_number":233,"box":{"x":69,"y":461,"width":840,"height":11}},{"id":"7f510cbc-3f68-4d9c-bb87-f1d0f0d10786","block_type":"box","text":"Appropriations Act enacted by the State Legislature provides the basic framework for the operation of the General","page_number":233,"box":{"x":68,"y":476,"width":810,"height":11}},{"id":"29bba36e-a2f9-4ca8-b2c1-95a4e840dca2","block_type":"box","text":"Fund.","page_number":233,"box":{"x":70,"y":491,"width":36,"height":9}},{"id":"a1c692ad-8dc6-4e11-b6f8-0089195da9ef","block_type":"box","text":"According to the 2025 Financial Report, the General Fund’s fiscal year end balance totaled $22.4 billion, of","page_number":233,"box":{"x":101,"y":513,"width":769,"height":12}},{"id":"a30f0226-a946-4798-8c8c-5820e9bf20d7","block_type":"box","text":"which $8.6 billion represented unassigned fund balance. During fiscal year 2025, the State’s unassigned fund","page_number":233,"box":{"x":68,"y":528,"width":789,"height":12}},{"id":"9525435d-70c6-4415-ab6f-1eb36adf24f9","block_type":"box","text":"balance decreased by $514.5 million, after restatements.","page_number":233,"box":{"x":69,"y":544,"width":412,"height":11}},{"id":"ab08d735-fa76-42a1-af7c-1293bd61db69","block_type":"box","text":"The Surplus Revenue Fund is an account within the State’s General Fund that is used as a “rainy day fund.”","page_number":233,"box":{"x":101,"y":567,"width":768,"height":11}},{"id":"bb83e234-ab53-47dd-9124-552435429ee0","block_type":"box","text":"Surplus revenue is defined as an amount equivalent to 50.0 percent of the excess between the General Fund","page_number":233,"box":{"x":69,"y":582,"width":779,"height":11}},{"id":"68b2e74f-74ec-4587-bb24-73fc831d636c","block_type":"box","text":"revenues certified by the Governor at the time of the approval of the annual Appropriations Act and the amount of","page_number":233,"box":{"x":69,"y":597,"width":811,"height":11}},{"id":"a1b91c50-e8fe-4af8-8eea-51621c3c496e","block_type":"box","text":"revenue reported from the annual financial report of the General Fund for the fiscal year, offset by the amount by","page_number":233,"box":{"x":69,"y":612,"width":806,"height":11}},{"id":"a5353523-0b21-40ed-af52-c5f6f0fa88a2","block_type":"box","text":"which revenue reported for the Property Tax Relief Fund is less than the amount certified by the Governor for that","page_number":233,"box":{"x":68,"y":627,"width":808,"height":11}},{"id":"fc583afc-0382-4fd1-93ab-d6c8a1fbff00","block_type":"box","text":"fund. The State made a deposit of $15.4 million in Fiscal Year 2025 to the Surplus Revenue Fund. As of","page_number":233,"box":{"x":68,"y":642,"width":745,"height":11}},{"id":"84dbd149-f60f-40fe-b201-22b65355f86c","block_type":"box","text":"June 30, 2025, the State’s Surplus Revenue Fund had a balance of $0.","page_number":233,"box":{"x":69,"y":657,"width":511,"height":12}},{"id":"036ccecc-ff31-496e-bad0-0851070918c1","block_type":"box","text":"Total expenditures and transfers were $1.6 billion lower than final budgeted expenditures. From a fiscal year","page_number":233,"box":{"x":101,"y":680,"width":773,"height":12}},{"id":"752c1b4e-216f-4334-af65-468762d344a0","block_type":"box","text":"2025 program perspective, under-spending transpired in economic planning, development, and security ($1.5 billion);","page_number":233,"box":{"x":69,"y":695,"width":836,"height":12}},{"id":"e7588b01-c402-4d07-a646-8740a4f4dab4","block_type":"box","text":"community development and environmental management ($1.0 billion); transportation programs ($1.0 billion);","page_number":233,"box":{"x":69,"y":710,"width":786,"height":12}},{"id":"e7ceb651-f077-4019-b01f-3c3f0b0f43cd","block_type":"box","text":"physical and mental health ($629.1 million); and special government services ($449.9 million); offset by over","page_number":233,"box":{"x":70,"y":725,"width":786,"height":12}},{"id":"48581355-a3b4-47f6-b7dc-00ef25d3fdbd","block_type":"box","text":"spending in government direction, management, and control ($326.9 million); and educational, cultural, and","page_number":233,"box":{"x":69,"y":740,"width":770,"height":12}},{"id":"ff4e4660-35aa-42db-bb73-7bf9b77355e6","block_type":"box","text":"intellectual development ($84.6 million). Additionally, transfers to other funds were $2.9 billion higher than original","page_number":233,"box":{"x":70,"y":755,"width":816,"height":12}},{"id":"ca383f8a-5860-41aa-bb9f-6669151ed7f3","block_type":"box","text":"plus supplemental appropriations. On a budgetary basis, the General Fund collected general revenues of","page_number":233,"box":{"x":70,"y":771,"width":746,"height":11}},{"id":"72087256-e72c-4901-bd7e-ddf0b5703ea8","block_type":"box","text":"$61.2 billion. These general revenues were $1.1 billion lower than final budgeted revenues and $0.1 billion lower","page_number":233,"box":{"x":69,"y":785,"width":810,"height":12}},{"id":"ba8d5e50-6992-40b8-aa6e-f31a6a7367d9","block_type":"box","text":"than originally anticipated, primarily due to decreases in federal and other grants. Major tax revenues were","page_number":233,"box":{"x":68,"y":801,"width":760,"height":11}},{"id":"63a528b3-9abd-488a-ac60-768fd90b5606","block_type":"box","text":"$535.0 million lower than originally anticipated, primarily due to lower collections than projected from the Corporation","page_number":233,"box":{"x":69,"y":816,"width":837,"height":12}},{"id":"ec779e05-282c-4aba-a8f6-233c0d65851f","block_type":"box","text":"Business Tax and Corporate Transit Fee.","page_number":233,"box":{"x":70,"y":832,"width":284,"height":10}},{"id":"73df6488-7091-4a43-932d-76356b91b5d5","block_type":"box","text":"Special Revenue Funds are used to account for resources legally restricted to expenditure for specified","page_number":233,"box":{"x":102,"y":854,"width":733,"height":11}},{"id":"2334abe9-1458-443c-9f8f-0161485b1872","block_type":"box","text":"purposes. Special Revenue Funds include Casino Control Fund, Casino Revenue Fund, Gubernatorial Elections Fund,","page_number":233,"box":{"x":70,"y":869,"width":827,"height":11}},{"id":"e103434d-9fd8-4d7e-80a4-d8239128ddbe","block_type":"box","text":"and Property Tax Relief Fund.","page_number":233,"box":{"x":69,"y":884,"width":206,"height":11}},{"id":"b84793ed-bdc8-40e1-9406-73a6f7009a4a","block_type":"box","text":"Public Page 15 of 33","page_number":233,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"b8af7831-3336-4370-8842-42a3eae17878","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":233,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"a61593b0-7cb8-4deb-96d0-a55c9eca8e4c","block_type":"box","text":"The Casino Revenue Fund is used to account for the tax imposed on the State’s casinos and other related","page_number":234,"box":{"x":101,"y":75,"width":758,"height":11}},{"id":"50247e60-2a81-4709-b7a4-df4eef51edc0","block_type":"box","text":"activities including internet gambling. Gross revenue refers to the total of all sums actually received by a licensee","page_number":234,"box":{"x":69,"y":90,"width":808,"height":11}},{"id":"9fba45fe-7552-452e-a4b0-1179676daae4","block_type":"box","text":"from gaming operations, less the total sums paid out as winnings to patrons. Appropriations from this fund must be","page_number":234,"box":{"x":68,"y":105,"width":827,"height":11}},{"id":"1dedaba0-939d-42a4-93db-220107246857","block_type":"box","text":"used for reductions in property taxes, utility charges and other specified expenses of eligible senior and disabled","page_number":234,"box":{"x":69,"y":120,"width":805,"height":12}},{"id":"fed3cf55-d39d-46b9-8a29-c9dfb58690b4","block_type":"box","text":"citizens.","page_number":234,"box":{"x":69,"y":136,"width":56,"height":8}},{"id":"febfd423-cad9-49c5-a49d-008a48ee4203","block_type":"box","text":"The Casino Control Fund is used to account for fees collected from the issuance and annual renewal of casino","page_number":234,"box":{"x":101,"y":158,"width":788,"height":9}},{"id":"751a39eb-2d29-44f0-9012-3c4565e9a033","block_type":"box","text":"licenses. Appropriations are made to fund the operations of the Casino Control Commission and the Division of","page_number":234,"box":{"x":70,"y":173,"width":794,"height":11}},{"id":"df4efa4e-db57-42d0-a820-d162e812de12","block_type":"box","text":"Gaming Enforcement.","page_number":234,"box":{"x":69,"y":188,"width":151,"height":12}},{"id":"5e0c7c5a-7a47-43b4-a442-5f8b65dac3ce","block_type":"box","text":"The Gubernatorial Elections Fund is used to account for receipts from the one dollar designations on State Gross","page_number":234,"box":{"x":101,"y":211,"width":807,"height":11}},{"id":"7b13a2e2-31f5-4435-a8bf-e14b5a621d83","block_type":"box","text":"Income Tax returns. When indicated by the taxpayer on a State gross income tax return, one dollar of the tax is taken","page_number":234,"box":{"x":70,"y":226,"width":833,"height":11}},{"id":"00ab94c7-d92e-47c1-a5b1-66215ad3256c","block_type":"box","text":"from the individual’s New Jersey Gross Income Tax revenues and credited to the Gubernatorial Elections Fund. Such","page_number":234,"box":{"x":68,"y":241,"width":826,"height":11}},{"id":"f8da04d3-5569-487a-847d-725ef4b45b0e","block_type":"box","text":"funds are available for appropriations pursuant to the New Jersey Campaign Contributions and Expenditures","page_number":234,"box":{"x":68,"y":256,"width":769,"height":12}},{"id":"2cb43a9b-8bf7-4d3f-9699-ae2060f91a5c","block_type":"box","text":"Reporting Act, as amended.","page_number":234,"box":{"x":70,"y":272,"width":196,"height":11}},{"id":"1deb18a5-835f-48ee-91fb-f0df9f74fedb","block_type":"box","text":"The Property Tax Relief Fund is used to account for revenues from the New Jersey Gross Income Tax and for","page_number":234,"box":{"x":101,"y":294,"width":769,"height":11}},{"id":"08ad4709-01d3-4c8d-8366-0bf2918cc4c1","block_type":"box","text":"revenues derived from a tax rate of 0.5% imposed under the Sales and Use Tax that is constitutionally dedicated","page_number":234,"box":{"x":69,"y":309,"width":802,"height":11}},{"id":"9249ed02-ed47-46a9-a9d2-1ce9f2d41374","block_type":"box","text":"toward property tax reform. Revenues realized from the Gross Income Tax and derived from a tax rate of 0.5%","page_number":234,"box":{"x":68,"y":324,"width":783,"height":11}},{"id":"fbc66e96-a582-4995-a49a-8e32fb6d08b5","block_type":"box","text":"imposed under the Sales and Use Tax are dedicated by the State Constitution. All receipts from taxes levied pursuant","page_number":234,"box":{"x":70,"y":339,"width":837,"height":12}},{"id":"c0cc8ada-59c5-44dd-982c-f0c03d1ef78c","block_type":"box","text":"to the New Jersey Gross Income Tax on personal income of individuals, estates, and trusts must be appropriated","page_number":234,"box":{"x":68,"y":355,"width":806,"height":11}},{"id":"c4b544c4-525a-4a1b-b89d-755c11473b29","block_type":"box","text":"exclusively for the purpose of reducing or offsetting property taxes. Annual appropriations are made from the Fund,","page_number":234,"box":{"x":69,"y":370,"width":819,"height":11}},{"id":"1c65f898-8e17-47ca-945a-9f44b628546b","block_type":"box","text":"pursuant to formulas established by the State Legislature, to counties, municipalities and school districts.","page_number":234,"box":{"x":70,"y":385,"width":756,"height":11}},{"id":"1d3c69ff-9f34-4c36-88bf-c9011394c6e3","block_type":"box","text":"Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of","page_number":234,"box":{"x":102,"y":407,"width":808,"height":12}},{"id":"88772dda-ba0f-4fff-8643-3cb0e31f2d59","block_type":"box","text":"major State capital facilities. The Capital Projects Funds includes the Special Transportation Fund which is used to","page_number":234,"box":{"x":69,"y":423,"width":816,"height":11}},{"id":"8348b0f3-9f07-4af0-a545-ff05579a1427","block_type":"box","text":"account for financial resources for State transportation projects.","page_number":234,"box":{"x":69,"y":438,"width":458,"height":11}},{"id":"4cbcdbad-6158-42f2-8411-605ac34a8c21","block_type":"box","text":"Proprietary Funds are used to account for State business-type activities. Since these funds charge fees to","page_number":234,"box":{"x":102,"y":460,"width":756,"height":12}},{"id":"c234c997-d7cd-40f0-80a8-7bfe4e997d41","block_type":"box","text":"external users, they are known as enterprise funds.","page_number":234,"box":{"x":69,"y":475,"width":366,"height":12}},{"id":"c5d633bd-bf86-4b26-868c-72665386eb9a","block_type":"box","text":"Fiduciary Funds, which include the State’s Pension Plans, are used to account for resources held by the State","page_number":234,"box":{"x":102,"y":498,"width":783,"height":11}},{"id":"16f198a9-3163-413d-9bd7-f07360deda6e","block_type":"box","text":"for the benefit of parties outside of State government. Unlike other government funds, fiduciary funds are reported","page_number":234,"box":{"x":68,"y":513,"width":820,"height":12}},{"id":"cf3ca6e9-7bc4-4aaa-9e99-cfaabfa194a2","block_type":"box","text":"using the accrual basis of accounting.","page_number":234,"box":{"x":69,"y":528,"width":269,"height":12}},{"id":"9af5c4dd-264e-4768-a686-97a9f3d3bd3a","block_type":"box","text":"Component Units-Authorities account for operations where the intent of the State is that the cost of providing","page_number":234,"box":{"x":102,"y":551,"width":778,"height":11}},{"id":"5fe19e44-2339-4cd8-b632-769b593265a6","block_type":"box","text":"goods or services to the general public on a continuing basis be financed or recovered primarily through user","page_number":234,"box":{"x":68,"y":566,"width":778,"height":11}},{"id":"e80a007c-5801-4f5f-b627-2d6318f17a71","block_type":"box","text":"charges, or where periodic measurement of the results of operations is appropriate for capital maintenance, public","page_number":234,"box":{"x":69,"y":581,"width":819,"height":12}},{"id":"800781e4-b040-4619-b091-4231c826f090","block_type":"box","text":"policy, management control or accountability. Component Units-Colleges and Universities account for the operations","page_number":234,"box":{"x":70,"y":596,"width":823,"height":12}},{"id":"0f6dc118-cde7-4afc-91a4-a556d3fc9116","block_type":"box","text":"of the eleven State colleges and universities including their foundations and associations.","page_number":234,"box":{"x":69,"y":612,"width":640,"height":11}},{"id":"0f664d78-e1a7-494f-8624-b30fe699be54","block_type":"box","text":"New Jersey experienced stable but slowing economic growth in 2025. The State’s Gross Domestic Product","page_number":234,"box":{"x":102,"y":634,"width":760,"height":12}},{"id":"8d8fbb34-01b1-410d-b17f-ddf8f9fc68e0","block_type":"box","text":"(“GDP”) – a broad measure of economic output – showed moderate growth overall, while employment levels rose","page_number":234,"box":{"x":69,"y":649,"width":805,"height":12}},{"id":"9c6cc411-b799-471a-827c-7eb098c896fd","block_type":"box","text":"slightly. Price inflation continued to decline over the course of the year. Higher interest rates, which were intended to","page_number":234,"box":{"x":69,"y":664,"width":829,"height":12}},{"id":"6128d5c6-ae2e-44d9-8e24-8ef011022a96","block_type":"box","text":"slow economic activity in order to tame inflation, eased slightly over the second half of 2025. However, despite this","page_number":234,"box":{"x":69,"y":680,"width":823,"height":11}},{"id":"253d7959-101f-4fba-82ee-5f8cc58f8fec","block_type":"box","text":"modest retreat, borrowing costs remained elevated enough to restrain activity in certain sectors, particularly the","page_number":234,"box":{"x":69,"y":695,"width":800,"height":11}},{"id":"81fc77aa-3a14-420e-90a5-766d6d375f85","block_type":"box","text":"housing market. As 2026 begins, the economic outlook for both New Jersey and the nation points to continued slow","page_number":234,"box":{"x":69,"y":710,"width":828,"height":11}},{"id":"aed9c43b-3c80-40ee-9bd9-55055daed702","block_type":"box","text":"growth. The Federal Open Market Committee (“FOMC”) lowered interest rates at the end of 2025 to encourage","page_number":234,"box":{"x":68,"y":725,"width":790,"height":11}},{"id":"1e22d859-c534-41a5-9d5a-df3fb9793001","block_type":"box","text":"spending and investment, but additional rate cuts in 2026 remain uncertain and may depend on the upcoming","page_number":234,"box":{"x":69,"y":740,"width":789,"height":11}},{"id":"6f2c7ae8-a2a5-4a9b-9074-5a8d13493869","block_type":"box","text":"change in leadership.","page_number":234,"box":{"x":69,"y":755,"width":151,"height":11}},{"id":"084d3d40-e8cf-4aa1-8760-3fa529618688","block_type":"box","text":"The State’s economic growth over the first three quarters of 2025 slightly lagged behind the U.S. as a whole.","page_number":234,"box":{"x":101,"y":778,"width":779,"height":11}},{"id":"a4430efc-1a8a-4981-942a-a9f1c37d3cd3","block_type":"box","text":"Over the first three quarters of 2025, New Jersey’s rate of real GDP growth (2.2 percent) was outpaced by New York","page_number":234,"box":{"x":69,"y":793,"width":827,"height":11}},{"id":"3071b6aa-5edf-40be-8d20-1ce3e37f124d","block_type":"box","text":"(3.5 percent) and Pennsylvania (2.8 percent), and ranked 25th out of the fifty states. The State’s unemployment rate","page_number":234,"box":{"x":69,"y":808,"width":835,"height":11}},{"id":"682abe3b-610d-40ec-beab-b9265d25a629","block_type":"box","text":"increased 0.8 percentage points over the course of the year, ending 2025 at 5.4 percent. This was 1.0 percentage","page_number":234,"box":{"x":70,"y":823,"width":819,"height":12}},{"id":"39d75be5-54b8-491a-be88-06d7ec9bf348","block_type":"box","text":"point higher than the national rate (4.4 percent). It was also higher than the unemployment rate of New York (4.6","page_number":234,"box":{"x":70,"y":838,"width":803,"height":12}},{"id":"ea20ec31-82d7-486a-ad6d-331b0a786d9d","block_type":"box","text":"percent), Pennsylvania (4.2 percent), and Connecticut (4.2 percent), and ranked second highest in the United States.","page_number":234,"box":{"x":70,"y":854,"width":834,"height":11}},{"id":"568a8480-2c17-4565-a0f7-b9c4258670df","block_type":"box","text":"New Jersey’s labor market has slowed in recent years. Following gains of 115,400 jobs in 2022, 64,200 jobs in","page_number":234,"box":{"x":102,"y":876,"width":798,"height":11}},{"id":"8c5d2f81-acf3-4f50-8c68-a8e3ad1efb98","block_type":"box","text":"2023, and 39,200 jobs in 2024, preliminary estimates indicate only 9,000 jobs were added in 2025. Employment","page_number":234,"box":{"x":69,"y":891,"width":818,"height":11}},{"id":"ab076663-9743-42fc-9d9c-bc17e33724c1","block_type":"box","text":"increased modestly in six of the year’s twelve months. Payroll employment fell by an average of 2,600 jobs per month","page_number":234,"box":{"x":70,"y":906,"width":838,"height":12}},{"id":"dd04662d-9258-41da-acfb-635a15de90fe","block_type":"box","text":"Public Page 16 of 33","page_number":234,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"04147769-1b4b-4efb-b93b-4407a6cf73df","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":234,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"27e5a7d8-30f9-485e-9131-c1e118b9c656","block_type":"box","text":"during the first half of 2025 but grew by an average of 4,100 jobs per month in the second half of the year,","page_number":235,"box":{"x":69,"y":75,"width":763,"height":11}},{"id":"b62acd45-6c8a-4673-a823-79d1c4d5b405","block_type":"box","text":"suggesting the potential for a rebound in momentum.","page_number":235,"box":{"x":69,"y":90,"width":378,"height":11}},{"id":"155f225d-466d-457d-954a-4cf4a370b2b5","block_type":"box","text":"Job growth in 2025 was largely concentrated in the Educational & Health Services sector, while most other","page_number":235,"box":{"x":101,"y":113,"width":763,"height":11}},{"id":"1e0e7281-ffee-49ed-a0c6-bed271ceaaa2","block_type":"box","text":"sectors saw minimal growth or declines. Only two sectors added more than 500 jobs over the year: Educational &","page_number":235,"box":{"x":69,"y":128,"width":809,"height":11}},{"id":"0ac49995-5988-4b7e-8925-5e9482d9d140","block_type":"box","text":"Health Services (+28,400 jobs) and Professional & Business Services (+8,900). Construction lost 10,200 jobs,","page_number":235,"box":{"x":70,"y":143,"width":799,"height":11}},{"id":"2b717800-0a3c-4c19-ab1e-1d8b0b3843d9","block_type":"box","text":"Trade, Transportation & Utilities declined by 9,800 jobs, and the Information sector lost 3,400 jobs. Employment in","page_number":235,"box":{"x":68,"y":158,"width":824,"height":11}},{"id":"105bc5a8-35d0-4054-95c4-281e9772659f","block_type":"box","text":"most sectors remained above pre-pandemic levels at the end of 2025. The only sectors still below their pre-pandemic","page_number":235,"box":{"x":69,"y":173,"width":839,"height":11}},{"id":"3427f87a-9bca-4583-83d3-e80bf4a7882d","block_type":"box","text":"employment levels were Construction (-8,300 jobs), Government (-2,100 jobs), and Other Services (-1,100 jobs).","page_number":235,"box":{"x":69,"y":188,"width":803,"height":11}},{"id":"dc6ce0ad-5729-4fc8-88a5-83eb4f79478c","block_type":"box","text":"New Jersey wages and salaries rose 4.3 percent over the first three quarters of 2025, with personal income","page_number":235,"box":{"x":102,"y":211,"width":772,"height":11}},{"id":"16b784f3-826f-47a0-b57a-85db08ee6e1e","block_type":"box","text":"growing by 4.5 percent. Weaker growth in many industries caused New Jersey wage and salary growth to lag behind","page_number":235,"box":{"x":68,"y":226,"width":824,"height":11}},{"id":"51bbaec9-cd9e-4c7f-9047-8629cef7f701","block_type":"box","text":"its regional peers. Stock markets have just completed three years of strong gains, likely boosting non-wage income","page_number":235,"box":{"x":70,"y":241,"width":819,"height":11}},{"id":"afbbee9e-68a1-4f11-83aa-e2a271b950ee","block_type":"box","text":"sources. From the end of 2022 to the end of 2025, the S&P 500 grew 78.3 percent, and the Dow Jones Industrial","page_number":235,"box":{"x":69,"y":256,"width":816,"height":12}},{"id":"8544659b-8faf-468e-a8d7-8ef73ece2f0a","block_type":"box","text":"Average increased 45.0 percent over the same period. New Jersey wage and salary growth was faster than New York","page_number":235,"box":{"x":68,"y":271,"width":833,"height":12}},{"id":"cbf144eb-b35a-4e4d-84fc-6d0632d8d815","block_type":"box","text":"(3.4 percent), Connecticut (3.2 percent), and Pennsylvania (4.2 percent). When it comes to personal income growth,","page_number":235,"box":{"x":69,"y":287,"width":828,"height":11}},{"id":"63819116-6567-46e9-ae67-c17ce3b4664a","block_type":"box","text":"New Jersey ranked second among its regional peers, behind Pennsylvania (5.4 percent) and ahead of New York (4.4","page_number":235,"box":{"x":70,"y":302,"width":825,"height":11}},{"id":"22d58d67-ad04-4454-9fb9-97864d48dfac","block_type":"box","text":"percent) and Connecticut (4.1 percent).","page_number":235,"box":{"x":70,"y":317,"width":279,"height":11}},{"id":"d4e1e412-ef0c-4b12-b50a-58e26c45cc75","block_type":"box","text":"U.S. price inflation edged lower in 2025, as the national consumer price index (“CPI”) rose 2.4 percent year-over","page_number":235,"box":{"x":102,"y":339,"width":806,"height":12}},{"id":"15ca3ca8-979c-4c0a-b2f5-722ab61efeaf","block_type":"box","text":"year in January 2026, representing a decline of 0.6 percentage points from January 2025’s level of 3.0 percent.","page_number":235,"box":{"x":68,"y":355,"width":804,"height":11}},{"id":"08bfc8db-26d5-4222-bdb9-730eb320c6e4","block_type":"box","text":"Core Consumer Price Index (“Core CPI”), which excludes food and energy items, rose 2.5 percent year-over-year in","page_number":235,"box":{"x":69,"y":370,"width":812,"height":11}},{"id":"7cc15d13-584e-43d1-b539-0aab2830391d","block_type":"box","text":"January. Regional year-over-year CPI in the metropolitan area containing much of northern and central New Jersey","page_number":235,"box":{"x":69,"y":385,"width":807,"height":11}},{"id":"90fdbf0e-794a-46a6-b428-40e5f1e4bdb3","block_type":"box","text":"grew 2.9 percent, and regional Core CPI was up 2.8 percent in January 2026.","page_number":235,"box":{"x":68,"y":400,"width":554,"height":11}},{"id":"87c681cd-ca38-4257-a409-c0321876ccb3","block_type":"box","text":"The U.S. housing market was relatively flat in 2025, as elevated mortgage rates and home prices continued to","page_number":235,"box":{"x":101,"y":423,"width":789,"height":11}},{"id":"4a03e265-b04d-40eb-b0c3-a07d29e10000","block_type":"box","text":"constrain activity. The average U.S. 30-year fixed rate mortgage softened in the second half of 2025 and now hovers","page_number":235,"box":{"x":69,"y":438,"width":830,"height":11}},{"id":"83fa104e-380b-4477-9be3-86cdca4fdf17","block_type":"box","text":"just above 6.1 percent in January to begin 2026. The median sales price for a single-family home in New Jersey","page_number":235,"box":{"x":67,"y":453,"width":799,"height":11}},{"id":"1f80b62d-34ae-4dd4-83d8-fc6c7d486f0d","block_type":"box","text":"reached $575,000 in January 2026, rising 1.8 percent from January 2025.","page_number":235,"box":{"x":69,"y":467,"width":538,"height":12}},{"id":"2314c062-350f-42e3-a514-699d87242c8b","block_type":"box","text":"Looking ahead, economic forecasters generally expect moderate growth will continue for both New Jersey and","page_number":235,"box":{"x":102,"y":491,"width":779,"height":11}},{"id":"4b237bca-4ee5-455c-aa73-fb4ea6b43f2a","block_type":"box","text":"the United States in 2026 and 2027, despite several lingering uncertainties. International trade could face additional","page_number":235,"box":{"x":68,"y":506,"width":837,"height":11}},{"id":"1f9077d3-6d36-467f-8453-d686a92587b5","block_type":"box","text":"rounds of tariff adjustments, and while interest rates are more likely than not to decline further, inflation remains","page_number":235,"box":{"x":69,"y":521,"width":807,"height":11}},{"id":"87b0c49d-2e2e-4da8-8003-1adf1991169c","block_type":"box","text":"above the 2.0 percent target. Recent, significant escalations in the Middle East have introduced substantial shocks","page_number":235,"box":{"x":69,"y":536,"width":825,"height":11}},{"id":"dfaff369-9951-4f58-8fdb-bebdacb34c64","block_type":"box","text":"to global markets and unknown outcomes. According to the FOMC’s December 2025 projection, real (inflation","page_number":235,"box":{"x":68,"y":551,"width":787,"height":11}},{"id":"7418ade2-14b7-4b49-8dcb-cc55ca7a8d78","block_type":"box","text":"adjusted) GDP in the U.S. is expected to grow 2.3 percent in 2026, following a modest performance in 2025.","page_number":235,"box":{"x":69,"y":566,"width":780,"height":11}},{"id":"77087293-a69d-4f96-b522-777d63297dd1","block_type":"box","text":"Economists surveyed by the Wall Street Journal in January 2026 forecasted real GDP growth of 2.2 percent for the","page_number":235,"box":{"x":70,"y":581,"width":817,"height":12}},{"id":"578a0c8b-8046-4620-90eb-a17f7b06ad4b","block_type":"box","text":"nation in 2026.","page_number":235,"box":{"x":69,"y":597,"width":109,"height":8}},{"id":"50d4ae7f-6e93-4c2c-bc28-47a77112a4c4","block_type":"box","text":"Risk of Climate Events","page_number":235,"box":{"x":69,"y":627,"width":165,"height":9}},{"id":"9a6660e0-3e1b-4d03-abd5-69c430a05bfb","block_type":"box","text":"The State of New Jersey’s location on the eastern seaboard of the United States exposes it to a variety of","page_number":235,"box":{"x":101,"y":649,"width":757,"height":12}},{"id":"5518dfef-0e8e-42e4-b679-a3cd82ed166d","block_type":"box","text":"climate risks, such as severe storms and hurricanes, which can damage the State’s infrastructure. In addition, much","page_number":235,"box":{"x":69,"y":664,"width":834,"height":12}},{"id":"f3dc86d4-d677-48e5-ac2c-76a2e1cc8ddb","block_type":"box","text":"of the State’s coastal areas may be vulnerable to sea level rise and other impacts of climate change. These climate","page_number":235,"box":{"x":69,"y":680,"width":827,"height":11}},{"id":"9f22c30f-daa5-41f7-95d9-0755a50bc3ab","block_type":"box","text":"events may damage significant portions of the State’s infrastructure and may require the State to construct","page_number":235,"box":{"x":69,"y":695,"width":769,"height":11}},{"id":"38fe7c21-5109-440e-85a1-201f258d3ebf","block_type":"box","text":"additional infrastructure. Further, these climate events may negatively impact the economy of the State. However, the","page_number":235,"box":{"x":69,"y":710,"width":838,"height":11}},{"id":"49ee89c6-8b54-458b-b628-e399682bdbf5","block_type":"box","text":"State cannot predict the impact that these climate events may have on its financial condition.","page_number":235,"box":{"x":69,"y":725,"width":667,"height":11}},{"id":"3447c6ab-062d-4371-a435-57131d9f74cc","block_type":"box","text":"The State’s Department of Environmental Protection (“DEP”) is responsible for developing studies and strategies","page_number":235,"box":{"x":101,"y":748,"width":806,"height":11}},{"id":"f9146e1e-26b0-4438-9b54-ba2d732a116a","block_type":"box","text":"to assist the State to reduce and respond to climate change within the State. In 2020, the Department of","page_number":235,"box":{"x":68,"y":763,"width":757,"height":11}},{"id":"c3c74324-ebf9-47e2-ab9d-56e82848f89a","block_type":"box","text":"Environmental Protection developed a scientific study regarding climate change within the State of New Jersey.","page_number":235,"box":{"x":70,"y":778,"width":786,"height":11}},{"id":"d578c78e-80f8-4793-86e3-13f5f1734431","block_type":"box","text":"In 2021, the NJDEP released new data regarding the risk of extreme precipitation throughout the state. As a","page_number":235,"box":{"x":102,"y":801,"width":771,"height":11}},{"id":"28cb08af-fc41-4d9b-8e3d-28f06eb18112","block_type":"box","text":"matter of practice, the NJDEP will incorporate this and other appropriate new data into the State’s climate science","page_number":235,"box":{"x":69,"y":816,"width":814,"height":11}},{"id":"2f1d73e7-ba2b-4798-83f2-4383f8aa4b01","block_type":"box","text":"report. The NJDEP also has developed short- and long-term strategies to make the State more resilient to the","page_number":235,"box":{"x":69,"y":831,"width":781,"height":11}},{"id":"16953e4e-0897-4828-8e2e-295c67cc6df3","block_type":"box","text":"impacts of climate change, including through regulatory requirements aimed at better protecting public and private","page_number":235,"box":{"x":70,"y":846,"width":814,"height":11}},{"id":"acd2fe83-7363-4384-bea0-d9a5faca5910","block_type":"box","text":"assets from risks associated with extreme weather, sea-level rise, and flooding. The NJDEP has also established a","page_number":235,"box":{"x":69,"y":861,"width":817,"height":11}},{"id":"23efb69d-5d9c-43ea-a3a7-e4c1e1177610","block_type":"box","text":"resilience planning program to provide technical and planning assistance to local governments. In 2023, the Resilient","page_number":235,"box":{"x":69,"y":876,"width":839,"height":11}},{"id":"a03458ca-c791-49c4-af6c-7f95eb73e5ed","block_type":"box","text":"NJ program will provide support to more than 40 local governments to identify and enact appropriate measures to","page_number":235,"box":{"x":70,"y":891,"width":811,"height":12}},{"id":"0f38bc2a-cca9-4211-9879-7ee003ac2152","block_type":"box","text":"address climate impacts in coordination with State and federal agencies. The State does not develop any of its","page_number":235,"box":{"x":69,"y":906,"width":792,"height":12}},{"id":"2422ef32-c71f-4f0e-835c-177f03e18bfc","block_type":"box","text":"Public Page 17 of 33","page_number":235,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"1652d102-4e7f-4320-89c2-bb36cc21176e","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":235,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b79b3662-79c3-4367-90ea-e6d9ba67b8d0","block_type":"box","text":"climate change reports or strategies for purposes of investors making investment decisions and none of the NJDEP","page_number":236,"box":{"x":69,"y":75,"width":823,"height":11}},{"id":"0d76ce04-c5f9-4979-a8e8-6a0e39475a00","block_type":"box","text":"reports or strategies are incorporated by reference into this Appendix.","page_number":236,"box":{"x":69,"y":90,"width":497,"height":11}},{"id":"521b5319-a7b3-49ce-b1dd-d023047d5baf","block_type":"box","text":"Cybersecurity","page_number":236,"box":{"x":69,"y":120,"width":99,"height":11}},{"id":"b81fb0e9-6c41-4109-ac50-0314881dadae","block_type":"box","text":"The New Jersey Office of Information Technology (“NJOIT”) serves as the State’s centralized infrastructure","page_number":236,"box":{"x":101,"y":143,"width":757,"height":11}},{"id":"d9f1df55-6ac2-43bc-a6e2-6bdb5956cf43","block_type":"box","text":"technology provider. NJOIT has enhanced existing technologies, and put in place multiple additional measures to","page_number":236,"box":{"x":68,"y":158,"width":802,"height":11}},{"id":"89892e02-989d-428d-8302-9dcf5e8d4cfb","block_type":"box","text":"minimize cyber threats over the past 24 months. These measures include working in conjunction with the New Jersey","page_number":236,"box":{"x":69,"y":173,"width":835,"height":11}},{"id":"6039508e-3e2e-408a-8be2-eb2deaee0c63","block_type":"box","text":"Office of Homeland Security and Preparedness’ cybersecurity arm, the New Jersey Cybersecurity & Communications","page_number":236,"box":{"x":69,"y":188,"width":825,"height":11}},{"id":"e90aad46-43cb-48c4-8811-96475e8cca04","block_type":"box","text":"Integration Cell (“NJCCIC”). This separation of accountability for cyber protection has served to substantially increase","page_number":236,"box":{"x":70,"y":203,"width":834,"height":12}},{"id":"a5c7b553-ce60-4b68-8740-b911729f4dbe","block_type":"box","text":"effectiveness due to focused skillsets, budgets, and technology platforms. These measures are recognized as","page_number":236,"box":{"x":69,"y":218,"width":787,"height":12}},{"id":"ef4ac700-2685-4027-82e3-ac4c377ecbe1","block_type":"box","text":"industry-leading modern cyber protection mechanisms and serve to reduce the risk of successful cyber-attacks upon","page_number":236,"box":{"x":70,"y":234,"width":828,"height":11}},{"id":"73d8bd9f-734c-40e3-9965-b90e42a986d7","block_type":"box","text":"the State’s information technology assets. However, despite these measures, it is recognized in the cybersecurity","page_number":236,"box":{"x":68,"y":249,"width":812,"height":11}},{"id":"f9cc14c2-8bbf-4116-9f0c-5d6f0332ae9e","block_type":"box","text":"industry that no amount of preventative countermeasures and security features successfully prevent 100% of all","page_number":236,"box":{"x":70,"y":264,"width":800,"height":11}},{"id":"e60acd5d-f9c3-42ed-a4be-6783182c18e8","block_type":"box","text":"cyber-attacks. In addition, the State has purchased cyber breach insurance that covers professional services","page_number":236,"box":{"x":69,"y":279,"width":775,"height":11}},{"id":"93e45ad4-1831-4b24-8367-8db7835d935b","block_type":"box","text":"necessary to respond to a cybersecurity breach. To further manage risk, the State maintains cyber liability insurance","page_number":236,"box":{"x":69,"y":294,"width":830,"height":11}},{"id":"65b2ebd5-1f78-4f59-bb07-4d5117921454","block_type":"box","text":"coverage.","page_number":236,"box":{"x":69,"y":311,"width":66,"height":9}},{"id":"d7971b8c-b41b-4fc6-b341-b75496882092","block_type":"box","text":"Revenues","page_number":236,"box":{"x":69,"y":340,"width":69,"height":8}},{"id":"70d19f1a-138b-451c-a269-073667ef2c4d","block_type":"box","text":"Fiscal Year 2025 Revenue Collections Increased From Fiscal Year 2024","page_number":236,"box":{"x":102,"y":362,"width":509,"height":9}},{"id":"dbe6c74a-498e-448d-a8c5-f23653272ff4","block_type":"box","text":"The State reported Fiscal Year 2025 revenue collections of $55.5 billion, an increase of approximately 4.5","page_number":236,"box":{"x":101,"y":384,"width":761,"height":12}},{"id":"dde21439-f957-4ea6-8e85-7d98b64fd2c5","block_type":"box","text":"percent from Fiscal Year 2024 revenue collections of $53.1 billion. On a government-wide basis, general taxes","page_number":236,"box":{"x":70,"y":399,"width":787,"height":12}},{"id":"b5012aed-6e2e-4c69-8a37-6639897e3ba5","block_type":"box","text":"totaled $51.9 billion for Fiscal Year 2025, an increase of $4.0 billion when compared to Fiscal Year 2024. The","page_number":236,"box":{"x":68,"y":414,"width":788,"height":12}},{"id":"67700533-12b6-430d-bc06-4e6d52217ec1","block_type":"box","text":"State’s Gross Income Tax (“GIT”) totaled $21.0 billion, the Sales and Use Tax (“SUT”) totaled $14.0 billion, and the","page_number":236,"box":{"x":69,"y":429,"width":826,"height":12}},{"id":"9da11418-6dbc-4324-a99b-00474766daf7","block_type":"box","text":"Corporation Business Tax (“CBT”) totaled $4.8 billion, together comprising 76.7 percent of total general taxes","page_number":236,"box":{"x":69,"y":445,"width":783,"height":12}},{"id":"33dcf326-9025-40d7-9abf-036d33c5c83f","block_type":"box","text":"collected during Fiscal Year 2025.","page_number":236,"box":{"x":69,"y":460,"width":240,"height":12}},{"id":"ddcf99b6-ceb9-43e8-ab16-2a7c535a8192","block_type":"box","text":"Fiscal Year 2026 Revenues Projected to Increase","page_number":236,"box":{"x":102,"y":483,"width":350,"height":11}},{"id":"d9455061-4913-49a2-b6c7-bd27be261639","block_type":"box","text":"Revenue estimates for Fiscal Year 2026 were projected to be $57.5 billion when last updated on","page_number":236,"box":{"x":102,"y":505,"width":689,"height":12}},{"id":"759d2e83-846d-48ea-bfef-c4d2a72965ac","block_type":"box","text":"March 10, 2026 as part of the Governor’s Fiscal Year 2026 Budget Message. Gross Income Tax collections","page_number":236,"box":{"x":70,"y":521,"width":767,"height":11}},{"id":"59204865-47d4-44fe-b457-5cc02077c7bd","block_type":"box","text":"dedicated to the Property Tax Relief Fund are expected to increase by $1.5 billion when compared to Fiscal Year","page_number":236,"box":{"x":69,"y":535,"width":798,"height":12}},{"id":"4ca08232-6097-489e-8d44-d41acae7e0b4","block_type":"box","text":"2025 and by $1.0 billion when compared to amounts originally anticipated. Looking forward to Fiscal Year 2026,","page_number":236,"box":{"x":69,"y":550,"width":802,"height":12}},{"id":"714bb494-eb3a-46f3-99e4-d2a31718bef8","block_type":"box","text":"General Fund unassigned fund balances are projected to decrease by an additional $1.4 billion, primarily due to","page_number":236,"box":{"x":69,"y":566,"width":797,"height":11}},{"id":"3dd978f7-f522-4f47-b860-4d459352e9df","block_type":"box","text":"major tax revenues projected to be $0.8 billion lower than originally anticipated and original and supplemental","page_number":236,"box":{"x":69,"y":581,"width":783,"height":12}},{"id":"3e87d23f-deb8-4acb-86c7-521ff2736fb1","block_type":"box","text":"appropriations projected to increase by $0.8 billion when compared to the Appropriations Act.","page_number":236,"box":{"x":69,"y":596,"width":667,"height":12}},{"id":"2c6bf56c-debb-4a28-b608-7c41dcd13646","block_type":"box","text":"Federal Aid","page_number":236,"box":{"x":69,"y":627,"width":81,"height":9}},{"id":"08b6fc6e-144d-4e6c-a3c9-6838f30ce289","block_type":"box","text":"Federal Aid Receipts","page_number":236,"box":{"x":102,"y":650,"width":145,"height":10}},{"id":"541eb366-4b25-4553-9e04-a5d4f987ec21","block_type":"box","text":"In general, federal aid receipts in the General Fund and Special Transportation Fund of the State do not have a","page_number":236,"box":{"x":102,"y":672,"width":789,"height":11}},{"id":"f0b6d0c1-e3bb-42a1-909f-1b461c1b488a","block_type":"box","text":"material impact on the financial condition of the General Fund of the State because federal aid receipts are required","page_number":236,"box":{"x":69,"y":687,"width":828,"height":11}},{"id":"b16f807c-968a-4484-a4c7-c7582a32c405","block_type":"box","text":"to be applied to specific designated expenditures, and the amount of federal aid receipts matches the amount of","page_number":236,"box":{"x":68,"y":702,"width":807,"height":12}},{"id":"819f54f4-e53f-42d4-a4a3-16449cf2f976","block_type":"box","text":"such expenditures. In some circumstances, federal aid receipts do impact the General Fund because they offset","page_number":236,"box":{"x":69,"y":717,"width":802,"height":12}},{"id":"a85de2a9-3bcb-40c3-8831-df05db6f1d93","block_type":"box","text":"expenditures that the State would otherwise be required to make. In addition, with respect to many of the programs","page_number":236,"box":{"x":69,"y":732,"width":826,"height":12}},{"id":"a1278512-0592-4c25-a036-4e4b4f735cc6","block_type":"box","text":"pursuant to which the State receives federal aid, the State is subject to audits of the expenditures to ensure that the","page_number":236,"box":{"x":70,"y":748,"width":834,"height":11}},{"id":"e56ddc2a-5bc3-4b1e-94a6-0157b1c68cfd","block_type":"box","text":"State complied with the program requirements. In instances in which the State makes expenditures in violation of","page_number":236,"box":{"x":69,"y":763,"width":811,"height":11}},{"id":"a7eb4c62-b83a-4b99-bc36-c655ab4b4b4b","block_type":"box","text":"program requirements, the State may be obligated to repay the federal government the amounts of such","page_number":236,"box":{"x":70,"y":778,"width":743,"height":11}},{"id":"058fbf88-c802-4a7e-b786-a6556f4c672f","block_type":"box","text":"expenditures and other associated amounts.","page_number":236,"box":{"x":69,"y":793,"width":318,"height":11}},{"id":"62bcf7b7-1a83-4757-97c1-4400df1e8e54","block_type":"box","text":"Actual federal aid receipts in the General Fund and Special Transportation Fund for Fiscal Years 2020 through","page_number":236,"box":{"x":101,"y":816,"width":782,"height":11}},{"id":"c91b4010-ad2c-45d3-b92d-6cf7f7e9acfa","block_type":"box","text":"2022, which are non-budgeted revenues, amounted to $16,414.2 million, $20,348.0 million and $24,103.9 million,","page_number":236,"box":{"x":69,"y":830,"width":831,"height":12}},{"id":"09dd8fe4-a973-424b-ad8a-8ff55cabebae","block_type":"box","text":"respectively. Federal receipts in the General Fund and the Special Transportation Fund for Fiscal Year 2023 and for","page_number":236,"box":{"x":69,"y":846,"width":818,"height":11}},{"id":"444d81b2-63b9-4626-bd4d-914ba18b9f1e","block_type":"box","text":"Fiscal Year 2024 are estimated to be $23,299.1 million and $23,310.5 million respectively. Such federal aid","page_number":236,"box":{"x":70,"y":860,"width":777,"height":12}},{"id":"e1b00ed0-4479-4bfd-b2cd-38ab7d0548d9","block_type":"box","text":"receipts for Fiscal Year 2024 are composed of $14,683.4 million for health-related family programs under Titles XIX","page_number":236,"box":{"x":69,"y":875,"width":825,"height":12}},{"id":"925cdd90-4f5c-4e95-b656-6f991ea276b1","block_type":"box","text":"and XXI, $1,457.5 million for other human services, $1,571.1 million for Title I and other education, $553.7 million","page_number":236,"box":{"x":69,"y":891,"width":826,"height":11}},{"id":"fbe5299c-93d3-4e8f-9cca-d605857ed8f9","block_type":"box","text":"for labor, $1,586.4 million for transportation, and the remainder for all other federal aid programs.","page_number":236,"box":{"x":68,"y":906,"width":703,"height":12}},{"id":"9d28bc2b-66fa-4755-8953-b592a88515f5","block_type":"box","text":"Public Page 18 of 33","page_number":236,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"c2b2d2f2-d335-4e01-b8db-0e6090756e25","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":236,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"0c76a979-e87a-4342-b6d1-9b597e1ca35b","block_type":"box","text":"Federal Coronavirus Relief Aid","page_number":237,"box":{"x":102,"y":75,"width":214,"height":9}},{"id":"d28e3936-c074-4b77-a52f-4b615c055735","block_type":"box","text":"The federal government has provided substantial relief to States to help recover from, and mitigate the financial","page_number":237,"box":{"x":101,"y":98,"width":798,"height":11}},{"id":"d31a839d-ac4f-4aa5-bd33-faac0ea1a3ea","block_type":"box","text":"pressures of, the COVID-19 Pandemic. These stimulus packages have not only largely offset the need for the State to","page_number":237,"box":{"x":70,"y":113,"width":838,"height":11}},{"id":"81559fba-b84f-46ef-8c78-441ccf236317","block_type":"box","text":"incur costs related to the public health emergency, but also have provided opportunities for the State to offset","page_number":237,"box":{"x":70,"y":128,"width":787,"height":11}},{"id":"7e6848a8-c5b3-4cc4-a698-2e0daa29e451","block_type":"box","text":"current expenditures and potentially replace lost revenues. The major stimulus packages have included the CARES","page_number":237,"box":{"x":69,"y":143,"width":817,"height":11}},{"id":"c0345ceb-2511-4b4c-a839-c437bd4b358d","block_type":"box","text":"Act, which established the $150 billion Coronavirus Relief Fund (“CRF”); the CRRSA, which amended and","page_number":237,"box":{"x":68,"y":157,"width":749,"height":12}},{"id":"34fe7fef-0914-469c-beee-9d778baee78d","block_type":"box","text":"supplemented the CARES Act, and the ARP, which established a $350 billion State and Local Fiscal Recovery Fund","page_number":237,"box":{"x":69,"y":172,"width":817,"height":12}},{"id":"598a3a1b-8e4a-451f-8af4-6615a0498ea7","block_type":"box","text":"(“SLFRF”). The CRF and the SLFRF are only two of the many grants made available by the federal government to help","page_number":237,"box":{"x":69,"y":188,"width":831,"height":12}},{"id":"498c280c-f69b-4b13-8090-f61066ef17d8","block_type":"box","text":"mitigate the financial pressures of the COVID-19 Pandemic.","page_number":237,"box":{"x":69,"y":203,"width":422,"height":12}},{"id":"bcd6280b-97a1-4a89-936d-253d745b49b7","block_type":"box","text":"The American Rescue Plan Act of 2021 established the Coronavirus State and Local Fiscal Recovery Funds","page_number":237,"box":{"x":101,"y":226,"width":764,"height":11}},{"id":"88a63ee2-0ae3-4509-bfa8-7fc5fa2d306c","block_type":"box","text":"(“SLFRF”) program, which delivered $6,244.5 million to the State to support a response to and recovery from the","page_number":237,"box":{"x":69,"y":241,"width":810,"height":11}},{"id":"50e0cccf-66d4-4261-9dc4-e1fb333b5762","block_type":"box","text":"COVID-19 Pandemic. SLFRF funds may be used for eligible expenditures incurred between March 3, 2021 and","page_number":237,"box":{"x":69,"y":256,"width":783,"height":12}},{"id":"d38ba126-78ae-4353-9fb2-b4e39228f172","block_type":"box","text":"December 31, 2024, and must be expended by December 31, 2026. As of June 30, 2025, the State had incurred","page_number":237,"box":{"x":70,"y":271,"width":814,"height":12}},{"id":"4a65921c-5d68-4502-a9d3-39007da40fe9","block_type":"box","text":"expenditures of $4,077.8 million of SLFRF funds meeting the eligibility requirements of this financial assistance; the","page_number":237,"box":{"x":69,"y":286,"width":831,"height":12}},{"id":"7f534502-e5c0-4592-9118-01b06ce73b03","block_type":"box","text":"residual $2,166.7 million of unearned revenue is reflected as a liability.","page_number":237,"box":{"x":69,"y":301,"width":510,"height":12}},{"id":"facb2ea2-dcd4-4d0b-ab99-4a5925738b17","block_type":"box","text":"Expenditures","page_number":237,"box":{"x":69,"y":332,"width":94,"height":11}},{"id":"5655c7ae-4a95-4a0b-b4e5-a66c5c8b388f","block_type":"box","text":"As used herein, the term “expenditures” refers to a fiscal year’s net disbursements plus amounts obligated for","page_number":237,"box":{"x":101,"y":355,"width":793,"height":11}},{"id":"d80fff88-95dc-4a01-ba9a-26787e8d94a2","block_type":"box","text":"payment in a subsequent fiscal year for budgeted, non-budgeted and federal funds.","page_number":237,"box":{"x":70,"y":370,"width":591,"height":11}},{"id":"2e5e95ef-7629-4d6b-9661-4e872ce847cb","block_type":"box","text":"Expenditures exceed the dollar amounts enumerated in the appropriations acts by reason of and only to the","page_number":237,"box":{"x":102,"y":392,"width":767,"height":12}},{"id":"2a4084fb-3dac-41cf-85ae-2769f1ced378","block_type":"box","text":"extent of specific provisions in the authorizing acts which appropriate (or permit the expenditure of) unexpended","page_number":237,"box":{"x":69,"y":407,"width":797,"height":12}},{"id":"17050168-3f89-41e5-b484-b6192316e5b7","block_type":"box","text":"balances of prior appropriations, certain cash receipts (such as student service fees and extension fees at State","page_number":237,"box":{"x":69,"y":423,"width":807,"height":11}},{"id":"ba73e862-cbc5-41b1-a312-27f695f57c73","block_type":"box","text":"colleges) and most federal aid. Such unexpended balances, cash receipts and federal aid are not included in the","page_number":237,"box":{"x":69,"y":438,"width":804,"height":11}},{"id":"e050852b-8395-4e44-95c5-58a273d8c468","block_type":"box","text":"tables of appropriations or revenues previously presented herein.","page_number":237,"box":{"x":68,"y":453,"width":465,"height":11}},{"id":"01571991-ff84-49e2-98a7-08d0e09d9946","block_type":"box","text":"LITIGATION","page_number":237,"box":{"x":69,"y":483,"width":80,"height":9}},{"id":"dbf38bdc-76cd-4ea0-98bd-27c7be1469d4","block_type":"box","text":"The following are cases presently pending or threatened in which the State has the potential for either a","page_number":237,"box":{"x":101,"y":506,"width":742,"height":11}},{"id":"e11cef44-e583-4ba6-9f7d-d3c5a66b99bf","block_type":"box","text":"significant loss of revenue or a significant unanticipated expenditure.","page_number":237,"box":{"x":69,"y":521,"width":490,"height":11}},{"id":"faafc93e-7a5d-48fe-bf58-0049ab398559","block_type":"box","text":"Abbott v. Burke (Motion in Aid of Litigants’ Rights)","page_number":237,"box":{"x":101,"y":543,"width":355,"height":12}},{"id":"4058f5b9-a065-4084-a4ce-8a3b372e579b","block_type":"box","text":"On January 28, 2021, the State Defendants (consisting of the Commissioner of Education and the Schools","page_number":237,"box":{"x":102,"y":566,"width":764,"height":11}},{"id":"19f96799-b793-4c05-8332-5da8001c9ba3","block_type":"box","text":"Development Authority (“SDA”) received a motion in aid of litigants’ rights filed by the Education Law Center (the","page_number":237,"box":{"x":70,"y":581,"width":798,"height":12}},{"id":"536b77c9-3519-4759-b088-97e085d98d30","block_type":"box","text":"“ELC”) seeking an order from the New Jersey Supreme Court to compel the State Defendants to seek and secure by","page_number":237,"box":{"x":70,"y":596,"width":830,"height":12}},{"id":"d06fc671-51f8-4ab0-af33-72779b52f3ac","block_type":"box","text":"June 30, 2021, from the Legislature, school construction funding as is needed and required to manage, undertake,","page_number":237,"box":{"x":69,"y":612,"width":824,"height":11}},{"id":"f6edde14-994e-4a42-9609-6c64891f4746","block_type":"box","text":"and complete the school facilities projects in the SDA 2019 Statewide Strategic Plan. The motion also seeks for the","page_number":237,"box":{"x":69,"y":627,"width":828,"height":11}},{"id":"55bead55-0fa0-4953-8a97-5eb7bd2a9da5","block_type":"box","text":"State Defendants to seek and secure funds from the Legislature by June 30, 2021, for health and safety projects,","page_number":237,"box":{"x":69,"y":642,"width":814,"height":11}},{"id":"08ba316e-e728-45e6-9c4b-fde6b4a4c781","block_type":"box","text":"including those necessary to ensure the safe reopening and operation of school buildings in SDA Districts during the","page_number":237,"box":{"x":70,"y":657,"width":830,"height":11}},{"id":"5a39d0e8-545a-4666-9b4f-fce7649df73d","block_type":"box","text":"ongoing pandemic. The ELC is seeking to enforce the school facilities construction funding mandate set forth in","page_number":237,"box":{"x":69,"y":672,"width":796,"height":11}},{"id":"d1a22e5d-3327-4167-8d5a-759f4937d038","block_type":"box","text":"Abbott v. Burke, 153 N.J. 480 (1998) and Abbott v. Burke, 164 N.J. 84 (2000). State Defendants filed its opposition","page_number":237,"box":{"x":68,"y":687,"width":831,"height":11}},{"id":"eb15852f-72f9-4bdd-81d5-b9f057f83ea8","block_type":"box","text":"to the motion on March 22, 2021. The New Jersey Supreme Court requested additional briefing from the parties on","page_number":237,"box":{"x":68,"y":702,"width":826,"height":12}},{"id":"8f6a464a-22f7-4ef2-8e9e-b11d7f7f5d49","block_type":"box","text":"the effect, if any, of the enactment of the Fiscal Year 2022 Appropriations Act. The State Defendants filed its brief on","page_number":237,"box":{"x":68,"y":717,"width":836,"height":12}},{"id":"2469f2ce-3a1e-4d06-a2d4-1a7150a51bd4","block_type":"box","text":"August 6, 2021. The New Jersey Supreme Court requested that the State provide cost estimates for: (1) the priority","page_number":237,"box":{"x":68,"y":732,"width":828,"height":12}},{"id":"25bba9b5-d87e-471e-9818-e8aa791fa8e1","block_type":"box","text":"projects listed in the 2019 Statewide Strategic Plan; and (2) the emergent projects in the SDA Districts. The State","page_number":237,"box":{"x":70,"y":748,"width":812,"height":11}},{"id":"5c924ab0-4c5c-4aad-bd3d-3a9c4a59d0bc","block_type":"box","text":"provided this information to the New Jersey Supreme Court on November 8, 2021. On December 15, 2021, the New","page_number":237,"box":{"x":70,"y":763,"width":831,"height":11}},{"id":"e21e7a84-2b39-479e-926c-117f498c4f57","block_type":"box","text":"Jersey Supreme Court issued an order appointing a Special Master to conduct an analysis of: (1) the status of the","page_number":237,"box":{"x":69,"y":778,"width":815,"height":11}},{"id":"5ab7051f-bf29-4fba-b5f0-92cbeabbfd94","block_type":"box","text":"cost estimates at issue, including any outstanding steps required to finalize the State’s cost estimates for the","page_number":237,"box":{"x":69,"y":793,"width":787,"height":11}},{"id":"35f7fb67-6844-4fc6-b664-c595185d1d42","block_type":"box","text":"emergent projects needed in SDA Districts; (2) the areas in which data is available and those in which information is","page_number":237,"box":{"x":69,"y":808,"width":831,"height":11}},{"id":"b96cee76-b153-4b95-afa9-fb5c4fbecb9c","block_type":"box","text":"unavailable or yet undeveloped, and, where the information is not available or has not been developed, a recitation of","page_number":237,"box":{"x":69,"y":823,"width":839,"height":11}},{"id":"61ca8e4e-d9dd-4da2-8154-4331f5a2efcb","block_type":"box","text":"the steps taken to obtain the information, the steps required to complete that task, and a realistic projection of when","page_number":237,"box":{"x":68,"y":838,"width":839,"height":11}},{"id":"4e5430c8-475c-4f68-90d8-d3cb0a69f5ce","block_type":"box","text":"the data will become available, if possible, with respect to the cost estimates; and (3) any other information as is","page_number":237,"box":{"x":68,"y":853,"width":811,"height":12}},{"id":"85a2694a-ec01-463e-80a0-49815cba79ae","block_type":"box","text":"relevant to the motion in aid of litigants’ rights. The Supreme Court closed the record on January 30, 2023. The","page_number":237,"box":{"x":69,"y":869,"width":799,"height":11}},{"id":"7ce765f7-a752-46e4-8fb0-18d3661f5313","block_type":"box","text":"Special Master’s report was issued on March 29, 2023. The State is vigorously defending this matter.","page_number":237,"box":{"x":69,"y":884,"width":730,"height":11}},{"id":"ccc1f99a-1b42-401c-831b-da5b1dea71c3","block_type":"box","text":"NL Industries, Inc. v. State of New Jersey","page_number":237,"box":{"x":102,"y":906,"width":293,"height":12}},{"id":"ce4a15ae-1df2-4575-ad19-de4a467643ea","block_type":"box","text":"Public Page 19 of 33","page_number":237,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"c9bad037-7228-4c2e-a8de-11962f43a07b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":237,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3a1ae4cd-b14f-4c9d-980c-31c720ad35fc","block_type":"box","text":"The Raritan Bay Slag Superfund Site (the “Site”) is approximately 47 acres of real property located in the","page_number":238,"box":{"x":101,"y":75,"width":752,"height":11}},{"id":"920f7e0e-4d1d-486d-9b15-04eb87e2e097","block_type":"box","text":"Laurence Harbor section of Old Bridge Township and Sayreville. Portions of the Site are located on State riparian","page_number":238,"box":{"x":70,"y":90,"width":801,"height":11}},{"id":"501fc93e-bbba-4170-bbd3-ab4804e5df9e","block_type":"box","text":"lands. In 2012, the United States Environmental Protection Agency (“EPA”) informed NL Industries, Inc. (“NL”) that","page_number":238,"box":{"x":70,"y":105,"width":816,"height":11}},{"id":"8b42e10b-1899-4e6a-9699-cfe5bece3204","block_type":"box","text":"EPA believed that slag was generated, in part or in whole, by NL’s (then National Lead Industries) lead-smelting","page_number":238,"box":{"x":70,"y":120,"width":792,"height":12}},{"id":"ff62c73f-d56a-40ea-a959-526c24927d33","block_type":"box","text":"facility in Perth Amboy. EPA selected a remediation remedy and named NL as the potentially responsible party subject","page_number":238,"box":{"x":68,"y":135,"width":841,"height":11}},{"id":"5b5fe5b0-d4fc-49f2-9594-11c7fbacbc71","block_type":"box","text":"to enforcement. On March 19, 2014, NL filed an initial complaint for contribution against the State in the Superior","page_number":238,"box":{"x":68,"y":150,"width":815,"height":12}},{"id":"9ee40704-864c-4b5d-a518-0911ced496c3","block_type":"box","text":"Court, Law Division for the costs to remediate the Site. On August 16, 2017, NL filed an amended complaint alleging","page_number":238,"box":{"x":69,"y":166,"width":836,"height":11}},{"id":"2d61d810-d002-4974-8f96-228fa42f0c42","block_type":"box","text":"that in the 1980s the State dredged areas that were impacted by hazardous substances, transported the","page_number":238,"box":{"x":68,"y":181,"width":754,"height":11}},{"id":"af644e87-8588-4932-8061-fa3d0dd26143","block_type":"box","text":"contaminated sediments and discharged the hazardous substances on areas of the Site, and that the State had","page_number":238,"box":{"x":69,"y":196,"width":801,"height":11}},{"id":"eead37dd-3e8a-4101-88c3-316ad61eb20a","block_type":"box","text":"caused, or contributed to, the discharge by virtue of the State’s failure, as owner of a portion of the Site, to remove","page_number":238,"box":{"x":69,"y":211,"width":826,"height":11}},{"id":"bd581afe-afe8-4370-ba31-eb4f9d42f86b","block_type":"box","text":"the slag after the enactment of the Spill Compensation and Control Act (“Spill Act”), N.J.S.4. 58:10-23.11 et seq., in","page_number":238,"box":{"x":68,"y":226,"width":834,"height":11}},{"id":"b50f5d7d-969b-40df-8064-d62307fa927c","block_type":"box","text":"1977. In the amended complaint, NL. sought declaratory relief as to the State’s liability for cleanup and removal","page_number":238,"box":{"x":70,"y":241,"width":800,"height":11}},{"id":"5cfdb5f1-c058-440f-b9d8-c158c1b97097","block_type":"box","text":"costs, including future costs or damages. The State filed its answer denying liability and asserting defenses under","page_number":238,"box":{"x":69,"y":256,"width":815,"height":12}},{"id":"4caff027-8589-4b8a-8a30-3527987dcd4d","block_type":"box","text":"the New Jersey Tort Claims Act, NJ.S.4. 59:1-1 ef seq. The State also filed a counterclaim asserting claims under the","page_number":238,"box":{"x":68,"y":271,"width":839,"height":12}},{"id":"9b878ddf-ea33-4f21-a733-45d3a52d9de9","block_type":"box","text":"Spill Act seeking the State’s past and future remediation costs, and natural resource damages. Mediation of this","page_number":238,"box":{"x":69,"y":286,"width":806,"height":12}},{"id":"a1f4c8d9-47cb-42d0-bccb-e0d160d43afe","block_type":"box","text":"matter began in 2018 and, as a result, NL. withdrew its complaint and the State withdrew its counterclaim, both","page_number":238,"box":{"x":69,"y":302,"width":800,"height":11}},{"id":"e256467b-d6dc-4afd-9d58-0638804afdc4","block_type":"box","text":"without prejudice. The State continues to mediate this matter with all involved parties. The State is vigorously","page_number":238,"box":{"x":68,"y":317,"width":783,"height":11}},{"id":"e29d52fb-7cc6-4cb3-99c1-889a9d1cafe9","block_type":"box","text":"defending this matter.","page_number":238,"box":{"x":69,"y":332,"width":155,"height":11}},{"id":"bba5acfb-87ce-4e23-8576-e9896c3b9da8","block_type":"box","text":"Eric R. Perkins, Chapter 7 Trustee for Richard Bernardi, Marilyn Bernardi & Strategic Environmental Par tners v.","page_number":238,"box":{"x":102,"y":355,"width":785,"height":11}},{"id":"56015c28-a6de-4826-a4c0-d6241bf48396","block_type":"box","text":"New Jersey Depar tment of Environmental Protection","page_number":238,"box":{"x":70,"y":370,"width":370,"height":11}},{"id":"dd5dc536-fc80-4966-9995-0dbfa354f3f6","block_type":"box","text":"Richard Bernardi, Marilyn Bernardi, and Strategic Environmental Partners (collectively, “Debtors”) are Chapter 7","page_number":238,"box":{"x":102,"y":392,"width":793,"height":12}},{"id":"f10266cb-fd5c-4ae2-9b9c-822d5f2daba2","block_type":"box","text":"Debtors in Federal Bankruptcy Court, Trenton. The Debtors are the owners/operators of the former I-65 “Fenimore","page_number":238,"box":{"x":70,"y":407,"width":813,"height":12}},{"id":"ad06baa8-729d-4b5f-82ba-90e983a6df9a","block_type":"box","text":"Landfill” in Roxbury Township, Morris County. In February 2011, Debtors purchased the landfill property with the","page_number":238,"box":{"x":70,"y":423,"width":799,"height":11}},{"id":"b787d64c-0e55-4a37-a6b1-16fc78a53183","block_type":"box","text":"stated purpose of closing the landfill and redeveloping it as a solar farm. In conjunction with closure of the landfill,","page_number":238,"box":{"x":69,"y":438,"width":815,"height":11}},{"id":"bee78d84-087b-441f-a4b0-162fb921162c","block_type":"box","text":"Debtors were authorized to import certain solid waste material. Between November 2012 and June 26, 2013, the","page_number":238,"box":{"x":70,"y":453,"width":812,"height":11}},{"id":"11697428-9e76-4d6c-b177-9971bacaf05a","block_type":"box","text":"DEP investigated over 2500 complaints of noxious hydrogen sulfide gas (“H2S”) odors emitting from the landfill. On","page_number":238,"box":{"x":70,"y":468,"width":823,"height":11}},{"id":"5d9953d0-2ff6-47ab-98f5-29d5464b80d4","block_type":"box","text":"June 26, 2013, following enactment of the “Legacy Landfill Law,” N.J.S.A. 13:1E-125.1 et seq., DEP issued an","page_number":238,"box":{"x":69,"y":483,"width":789,"height":11}},{"id":"9371feca-28d7-4207-b684-e30b1d67b3dc","block_type":"box","text":"emergency order authorizing DEP to enter the landfill property to take measures to abate the H2S odors, which the","page_number":238,"box":{"x":69,"y":498,"width":819,"height":11}},{"id":"aa75fa2f-7846-46b2-bc3c-1c4075761158","block_type":"box","text":"Debtors had failed to control. DEP entered the property and eventually installed a gas collection system, thermal","page_number":238,"box":{"x":70,"y":513,"width":801,"height":12}},{"id":"8bc9b0ff-687a-4cf4-a4f4-8b81cc4872e0","block_type":"box","text":"oxidizer and scrubber to capture and destroy the H2S. DEP continues to occupy a portion of the property in order to","page_number":238,"box":{"x":69,"y":528,"width":825,"height":12}},{"id":"70d2dee3-a395-4a5b-a6da-ffd4b5047714","block_type":"box","text":"operate the H2S treatment systems and is designing a replacement treatment system for the site.","page_number":238,"box":{"x":69,"y":543,"width":701,"height":12}},{"id":"f38fc72b-6e83-43cd-a31b-c1156de2e3f7","block_type":"box","text":"In June 2016, the Debtors filed separate bankruptcy petitions under Chapter 11 of the Bankruptcy Code and a","page_number":238,"box":{"x":102,"y":566,"width":787,"height":11}},{"id":"960edc3a-d6ee-406a-88df-6a27684be5aa","block_type":"box","text":"trustee was appointed (the “Trustee”). In July 2017 the matters were consolidated and converted to Chapter 7","page_number":238,"box":{"x":68,"y":581,"width":791,"height":11}},{"id":"ed6ae34e-bd82-424b-9b27-8ad83ad70ba3","block_type":"box","text":"bankruptcy. In December 2017, the Trustee’s counsel advised DEP that they were preparing an adversary complaint","page_number":238,"box":{"x":69,"y":597,"width":827,"height":11}},{"id":"71785ac9-818e-47c0-995e-8792767c1176","block_type":"box","text":"in Bankruptcy Court against the DEP seeking damages for DEP’s take-over. After brief settlement discussions, on","page_number":238,"box":{"x":70,"y":612,"width":805,"height":11}},{"id":"c971a5c7-cd93-4bbe-bd3c-ccd29e0fae66","block_type":"box","text":"June 14, 2018, the Trustee filed the adversary complaint for unspecified damages, alleging, inter alia, a taking of","page_number":238,"box":{"x":69,"y":627,"width":811,"height":11}},{"id":"dcb1157f-34a1-4ae8-8757-8736496a3bca","block_type":"box","text":"Debtors’ property without just compensation. DEP filed counter-claims seeking costs incurred to date by DEP abating","page_number":238,"box":{"x":70,"y":642,"width":832,"height":11}},{"id":"925593a6-9a03-47db-89f3-59535c50e387","block_type":"box","text":"the H2S emissions. The parties agreed to a discovery extension to August 31, 2023. Trial is scheduled for","page_number":238,"box":{"x":68,"y":657,"width":764,"height":11}},{"id":"b2cba4de-9104-4470-a515-88a63b92dbb6","block_type":"box","text":"November 29, 2023. The State is vigorously defending this matter.","page_number":238,"box":{"x":70,"y":672,"width":475,"height":11}},{"id":"3ecdc47a-d14f-4969-97ac-35661b44d0d4","block_type":"box","text":"Public Service Electric & Gas Company, Inc. v. Director, Division of Taxation","page_number":238,"box":{"x":102,"y":695,"width":533,"height":11}},{"id":"a491571a-3f43-4c31-b385-d5ef342e0f60","block_type":"box","text":"For tax years 2006 through 2014, Public Service Electric & Gas Company, Inc. (“PSE&G”) filed CBT returns and","page_number":238,"box":{"x":102,"y":717,"width":792,"height":12}},{"id":"6cb25503-ced7-466e-b9cb-9489922765d9","block_type":"box","text":"included its transitional energy facility assessment (“TEFA”) in its CBT base, in accordance with N.J.S.4. 54:10A-4.1.","page_number":238,"box":{"x":70,"y":732,"width":831,"height":12}},{"id":"8140a321-3aca-4a41-9543-e1add5363120","block_type":"box","text":"Thereafter, PSE&G recalculated its CBT liability, removed the TEFA from the tax base and sought a CBT refund.","page_number":238,"box":{"x":68,"y":748,"width":787,"height":11}},{"id":"b958e801-0c91-4789-9833-cc66b736c30e","block_type":"box","text":"Notably, the Appellate Division recently concluded that TEFA payments are included in the CBT base and denied a","page_number":238,"box":{"x":70,"y":763,"width":806,"height":11}},{"id":"6b6bcf9e-08fd-490e-b149-501030f93914","block_type":"box","text":"similar refund claim. Rockland Elec. Co. v. Director, Div. of Taxation, 30 N.J. Tax 448 (Tax 2018), aff’d., A-4522-17T2","page_number":238,"box":{"x":69,"y":778,"width":831,"height":11}},{"id":"a5cc0e1b-f201-4fb9-8793-ab3ce92928ae","block_type":"box","text":"(App. Div. June 24, 2019), cert. denied. Rockland Electric Co. is now final and binding upon the Tax Court. The","page_number":238,"box":{"x":69,"y":793,"width":787,"height":11}},{"id":"e925aab6-5c80-442d-b8a5-b8bfb6b630c7","block_type":"box","text":"Division denied PSE&G’s refund claim. On or about May 28, 2019, PSE&G filed a Complaint in the Tax Court of New","page_number":238,"box":{"x":70,"y":808,"width":826,"height":11}},{"id":"66487752-83bf-4ee4-84c2-565a9f29fe2f","block_type":"box","text":"Jersey, contesting the CBT refund denial. The Division filed its answer to the complaint. The State is vigorously","page_number":238,"box":{"x":69,"y":823,"width":788,"height":12}},{"id":"1977fd35-7ab0-401c-b47d-542a69dd6913","block_type":"box","text":"defending this matter.","page_number":238,"box":{"x":69,"y":838,"width":155,"height":12}},{"id":"67dbb161-3862-43fa-8207-53121881601d","block_type":"box","text":"Stanislaus Food Products Co. v. Director, Division of Taxation","page_number":238,"box":{"x":102,"y":861,"width":433,"height":11}},{"id":"26a53639-da2d-490a-bbb1-f7ecda9f58e3","block_type":"box","text":"On or about July 31, 2017, Stanislaus Foods filed a complaint in the Tax Court contesting the constitutionality of","page_number":238,"box":{"x":102,"y":884,"width":803,"height":11}},{"id":"313f26c7-8fa4-4c4c-9f34-ba4e6aab642e","block_type":"box","text":"the Corporation Business Tax’s Alternative Minimum Assessment (“AMA”) component. For periods after","page_number":238,"box":{"x":68,"y":899,"width":738,"height":11}},{"id":"b346d755-0035-407d-8e77-7c0ca32f7690","block_type":"box","text":"Public Page 20 of 33","page_number":238,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"6abc2227-6e18-4979-8f9e-4874f9f842ba","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":238,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"b799d9dc-8528-474d-8fe0-4abeb5e7c4ed","block_type":"box","text":"June 30, 2006, the AMA is $0, except for foreign corporations protected from income tax by the Interstate Income","page_number":239,"box":{"x":69,"y":74,"width":814,"height":12}},{"id":"65804348-0b59-43f1-a3cc-39836e0331bf","block_type":"box","text":"Act of 1959, P.L. 86-272. Stanislaus Foods alleges the AMA discriminates against foreign corporations in violation of","page_number":239,"box":{"x":68,"y":90,"width":836,"height":11}},{"id":"c2f8d110-14b0-44d1-9f65-256460597b41","block_type":"box","text":"the federal constitution’s Dormant Commerce Clause and Supremacy Clause. The parties filed partial cross-motions","page_number":239,"box":{"x":68,"y":105,"width":831,"height":11}},{"id":"7435972a-e60a-4140-b5b4-433eb609473c","block_type":"box","text":"for summary judgment. On June 28, 2019, the Tax Court concluded that the AMA, for periods after June 30, 2016,","page_number":239,"box":{"x":68,"y":120,"width":819,"height":12}},{"id":"49dd4aa5-c8df-4caa-92b1-7e4d93fb06d1","block_type":"box","text":"conflicts with the mandates of P.L. 86-272, and thus, violates the federal Supremacy Clause. The Division filed a","page_number":239,"box":{"x":69,"y":135,"width":804,"height":11}},{"id":"598d3d73-caff-4764-903a-5fa2199ce915","block_type":"box","text":"motion for reconsideration on March 2, 2020, and the Tax Court heard oral argument on June 19, 2020. On","page_number":239,"box":{"x":69,"y":150,"width":770,"height":12}},{"id":"b99a91b4-9797-4d49-a498-f70de2095bea","block_type":"box","text":"April 22, 2021, the Tax Court denied the Divisions motion for reconsideration. The remainder of the case continues","page_number":239,"box":{"x":68,"y":166,"width":823,"height":11}},{"id":"3e3c01aa-4266-4482-b30f-6f6743bb294a","block_type":"box","text":"to proceed in the Tax Court to address the remaining non-constitutional arguments. The State is vigorously defending","page_number":239,"box":{"x":68,"y":181,"width":836,"height":11}},{"id":"5198d1dd-7439-469b-8483-828698043d35","block_type":"box","text":"this matter.","page_number":239,"box":{"x":68,"y":196,"width":81,"height":9}},{"id":"60ec882f-0f72-4ade-abfa-8f219822ed61","block_type":"box","text":"Cargill Meat Solutions Corporation. v. Director, Division of Taxation","page_number":239,"box":{"x":102,"y":218,"width":472,"height":12}},{"id":"e96832cc-47b4-4f28-854f-fd796a0b0194","block_type":"box","text":"Plaintiff, based out of Kansas, sells meat products and services throughout the United States. Plaintiff does not","page_number":239,"box":{"x":102,"y":241,"width":803,"height":11}},{"id":"14f4dc1b-1727-43ae-99cc-159d013be253","block_type":"box","text":"engage in meat processing or packaging in New Jersey. Rather, its operations in New Jersey are limited to storage","page_number":239,"box":{"x":69,"y":257,"width":812,"height":11}},{"id":"46d3f2d3-6611-4b1d-84f7-7862bc537f37","block_type":"box","text":"and distribution, as it arranges for delivery of its products to a 180-mile radius market covering portions of","page_number":239,"box":{"x":69,"y":271,"width":762,"height":12}},{"id":"f00e8bb1-dd2d-4f90-a02b-8ba06dbc799e","block_type":"box","text":"Pennsylvania, New Jersey, New York and Maryland. In calculating its New Jersey Litter Control Fee liabilities, Plaintiff","page_number":239,"box":{"x":69,"y":286,"width":829,"height":12}},{"id":"8689fc91-cd9a-430a-8135-31d7d710ddaf","block_type":"box","text":"took a $465 million deduction in 2014 and $509 million deduction in 2015, claiming its sales to wholesalers are not","page_number":239,"box":{"x":68,"y":301,"width":838,"height":12}},{"id":"024694d3-5908-43f9-a2a5-a51776b2f0a8","block_type":"box","text":"subject to the Litter Control Fee under N.J.S.A. 13:1E-216(a), the wholesaler-to-wholesaler exception. The Division","page_number":239,"box":{"x":69,"y":317,"width":811,"height":11}},{"id":"3a8879c4-8288-4de8-ad2c-b55c3fa01ef5","block_type":"box","text":"disallowed these deductions, finding that the Plaintiff was not entitled to the wholesaler-to-wholesaler exception","page_number":239,"box":{"x":69,"y":332,"width":796,"height":11}},{"id":"a49bc9a2-2086-43de-a294-844b9a995d2c","block_type":"box","text":"because even though Plaintiff’s sales were all to wholesalers, the Plaintiff is a manufacturer and, thus, not entitled","page_number":239,"box":{"x":69,"y":347,"width":822,"height":11}},{"id":"b7530f11-42d2-43d3-8dd6-a35c2b6ad9ff","block_type":"box","text":"to a wholesaler-to-wholesaler exemption. The Division imposed an additional Litter Control Fee to comport with the","page_number":239,"box":{"x":68,"y":362,"width":816,"height":11}},{"id":"a0589ef8-c70d-44f6-8cb6-dada1f125877","block_type":"box","text":"disallowance of the deductions. Plaintiff filed a complaint with the Tax Court contesting the denial of the 1-66","page_number":239,"box":{"x":69,"y":377,"width":779,"height":12}},{"id":"65d6093a-10f6-4ff2-bbe8-22b1feb84483","block_type":"box","text":"deduction and, to invalidate the additional Litter Control Fee assessment by challenging the facial constitutionality of","page_number":239,"box":{"x":69,"y":392,"width":832,"height":12}},{"id":"3c661055-7dba-4a71-bfe6-4cda81262b26","block_type":"box","text":"the Litter Control Fee statute. The Division filed an answer on July 16, 2018, and on June 14, 2019, filed a motion to","page_number":239,"box":{"x":68,"y":407,"width":838,"height":12}},{"id":"81556960-fb18-4600-8f21-89bede476fa8","block_type":"box","text":"dismiss the facial constitutional challenge to the Litter Control Fee. On March 12, 2020, the court granted the","page_number":239,"box":{"x":69,"y":423,"width":786,"height":11}},{"id":"14721c30-d907-4af7-9428-f6fdd8223e54","block_type":"box","text":"Division’s motion and dismissed that count of the complaint. The parties cross-moved for summary judgment on the","page_number":239,"box":{"x":70,"y":438,"width":829,"height":11}},{"id":"71ac768b-6b39-4f7d-8380-bc73ebefa8a9","block_type":"box","text":"remaining counts of the complaint and the Tax Court heard oral argument on April 16, 2021. On December 15, 2021,","page_number":239,"box":{"x":69,"y":453,"width":839,"height":11}},{"id":"b5ad70c9-38ca-452f-a6ab-c055525d826d","block_type":"box","text":"the Tax Court issued a decision denying the Plaintiff’s motion for summary judgment and granting the Division’s","page_number":239,"box":{"x":68,"y":468,"width":798,"height":11}},{"id":"70191709-a8be-4dff-a9c4-743920e954e4","block_type":"box","text":"motion for summary judgment, determining that the Plaintiff is a manufacturer for purposes of the Litter Control Fee","page_number":239,"box":{"x":69,"y":483,"width":827,"height":11}},{"id":"fc617ed9-dbcd-4465-a601-049768aff4f5","block_type":"box","text":"and not entitled to the wholesaler-to-wholesaler exception. On January 27, 2022, Plaintiff filed an appeal of the Tax","page_number":239,"box":{"x":69,"y":498,"width":822,"height":11}},{"id":"0509b275-bb67-4172-8f35-ae0b871f08fd","block_type":"box","text":"Court’s March 2020 order and December 2021 decision. Plaintiff filed its brief on May 19, 2022. The Division filed","page_number":239,"box":{"x":69,"y":513,"width":823,"height":11}},{"id":"e23c459a-e02b-4ce8-85fc-58c44dfdc38d","block_type":"box","text":"its brief on September 21, 2022. On August 22, 2022, the Tax Court granted the New Jersey Business and Industry","page_number":239,"box":{"x":70,"y":528,"width":828,"height":12}},{"id":"ab3cf963-48ca-439b-a9f5-21720966d168","block_type":"box","text":"Association’s motion to appear as amicus curiae in support of Plaintiff. The State is vigorously defending this matter.","page_number":239,"box":{"x":68,"y":543,"width":837,"height":12}},{"id":"2eab8f77-89e2-4bea-95f1-449fdd9c32d6","block_type":"box","text":"Gomez v. DCPP et al.","page_number":239,"box":{"x":102,"y":566,"width":148,"height":9}},{"id":"a83e2cc3-6985-4998-8371-e7befed1f1c5","block_type":"box","text":"On March 12, 2012, the Plaintiff child was allegedly assaulted by her biological father, suffering severe injuries.","page_number":239,"box":{"x":102,"y":589,"width":797,"height":11}},{"id":"f60b4852-4d4c-4041-893b-398d082c1640","block_type":"box","text":"Plaintiff alleged that the New Jersey Department of Children Protection and Permanency (“DCPP”) knew that the","page_number":239,"box":{"x":69,"y":604,"width":798,"height":11}},{"id":"1dcf6f40-61fb-4854-97b5-ea24478a62ff","block_type":"box","text":"Plaintiff’s parents had a history of drug and alcohol abuse, psychiatric problems and were unemployed. The biological","page_number":239,"box":{"x":69,"y":619,"width":839,"height":11}},{"id":"910787e4-1bdb-42ce-aa5c-fe9e4e9eb876","block_type":"box","text":"mother had two other children removed from her care and was in a methadone program when the Plaintiff was born.","page_number":239,"box":{"x":69,"y":634,"width":827,"height":12}},{"id":"7739282c-144a-4b7b-a07e-aca607f3230e","block_type":"box","text":"The biological father also had an extensive criminal history of domestic violence. Plaintiff claims DCPP failed to","page_number":239,"box":{"x":68,"y":649,"width":793,"height":12}},{"id":"e826dd3a-d7ce-44a6-8b4f-9d4a23888aaa","block_type":"box","text":"comply with its own policy and procedure, failed to remove the Plaintiff from the home, negligent training, violation of","page_number":239,"box":{"x":69,"y":664,"width":833,"height":12}},{"id":"6fbd779b-b157-4fe6-aa45-dcc7ddc25f44","block_type":"box","text":"the New Jersey Child Placement Bill of Rights, and Section 1983 claims. The complaint was filed in State court on","page_number":239,"box":{"x":68,"y":680,"width":815,"height":11}},{"id":"80d39b7c-0aa1-4180-9a94-968054874430","block_type":"box","text":"February 12, 2015. On March 11, 2015, DCPP removed the case to the U.S. District Court for the District of New","page_number":239,"box":{"x":70,"y":695,"width":810,"height":11}},{"id":"4859fae5-f187-420b-b025-b547bc85a859","block_type":"box","text":"Jersey and filed a motion to dismiss the complaint. The State’s motion to dismiss the complaint was denied without","page_number":239,"box":{"x":69,"y":710,"width":828,"height":11}},{"id":"12a6d453-462a-42bc-a346-560501286951","block_type":"box","text":"prejudice on May 8, 2015. The Plaintiff agreed to withdraw the federal claims and the matter was remanded to State","page_number":239,"box":{"x":70,"y":725,"width":832,"height":11}},{"id":"ea93a96a-75df-4685-9375-f51df095b864","block_type":"box","text":"court. Discovery is ongoing. The State is vigorously defending this matter.","page_number":239,"box":{"x":69,"y":740,"width":525,"height":11}},{"id":"297a2559-ed07-4dc7-b03b-670971251057","block_type":"box","text":"In the Matter of Application by Horizon Healthcare Services, Inc., to Form a Mutual Holding Company Pursuant to","page_number":239,"box":{"x":102,"y":763,"width":803,"height":11}},{"id":"d1067b95-3937-4b85-ac65-2bc3daaeac6b","block_type":"box","text":"NJ.S.A. 17:48E-46.1.","page_number":239,"box":{"x":70,"y":778,"width":149,"height":9}},{"id":"10ddcbfd-e000-4f2a-a7c2-7d2464205729","block_type":"box","text":"On December 12, 2022, New Jersey Citizen Action and Health Professionals and Allied Employees (collectively,","page_number":239,"box":{"x":102,"y":801,"width":790,"height":11}},{"id":"16554967-09ff-4612-9457-83d7ce0ddd24","block_type":"box","text":"the “Appellants”), filed a Notice of Appeal in Superior Court, Appellate Division challenging the Department of","page_number":239,"box":{"x":68,"y":816,"width":783,"height":11}},{"id":"a24aaffc-d983-4124-823c-fbd03546ecc0","block_type":"box","text":"Banking and Insurance’s November 1, 2022 order (the “DOBI Order”) approving the reorganization application of","page_number":239,"box":{"x":70,"y":831,"width":802,"height":11}},{"id":"5e9f6656-d3a4-40f7-95ea-f2e5bd05301a","block_type":"box","text":"Horizon Healthcare Services, Inc. (“Horizon”) from a health services corporation to a mutual holding company. The","page_number":239,"box":{"x":70,"y":846,"width":814,"height":11}},{"id":"84021386-f1d9-4f7b-9e73-98d85e74a83b","block_type":"box","text":"Appellants are challenging the DOBI Order which was issued after review of the application submitted by Horizon","page_number":239,"box":{"x":68,"y":861,"width":800,"height":11}},{"id":"f9ecfda2-6cfb-410b-b5d6-0633cbc0e023","block_type":"box","text":"under N.J.S.A. 17:48E-46.1 to 46.16. The Appellants claim that DOBI rushed its review of Horizon’s application and","page_number":239,"box":{"x":69,"y":876,"width":825,"height":11}},{"id":"bfe06196-3831-42d7-9774-941808a24463","block_type":"box","text":"did not follow the Act’s requirements in reviewing the application. Appellants further contend that the DOBI Order","page_number":239,"box":{"x":69,"y":891,"width":806,"height":12}},{"id":"9feb2684-d0b1-4d2f-ac71-29ad0010fc90","block_type":"box","text":"Public Page 21 of 33","page_number":239,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"07d6bf16-3cf2-4b36-95fd-c0582fa7515d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":239,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"6dc6120a-84ae-4177-be04-50eea048509d","block_type":"box","text":"failed to follow the statutory mandate that Horizon’s plan be found to benefit its policyholders, not treat them","page_number":240,"box":{"x":68,"y":75,"width":780,"height":11}},{"id":"5dd47cb5-e985-4bec-b0b3-0098ea398789","block_type":"box","text":"inequitably, and not be detrimental to the insurers’ safety or soundness. The State is vigorously defending this","page_number":240,"box":{"x":70,"y":90,"width":787,"height":11}},{"id":"38ee44f3-4175-4b18-8fb5-3d5af8c7600b","block_type":"box","text":"matter.","page_number":240,"box":{"x":69,"y":106,"width":49,"height":8}},{"id":"60be4590-28ec-4aa5-9ec6-d1c26b107e13","block_type":"box","text":"J.A. et al v. New Jersey Depar tment of Education, et al","page_number":240,"box":{"x":101,"y":128,"width":388,"height":11}},{"id":"591b81ce-1f48-44d3-b0b3-54ed8c14d55d","block_type":"box","text":"On May 23, 2018, Plaintiff J.A., individually and on behalf of her minor child J.A., filed a complaint in the U.S.","page_number":240,"box":{"x":102,"y":150,"width":778,"height":12}},{"id":"b80717e8-3dc1-4592-a239-9a22b030e567","block_type":"box","text":"District Court for the District of New Jersey against the New Jersey Department of Education, New Jersey Office of","page_number":240,"box":{"x":70,"y":166,"width":813,"height":11}},{"id":"b8c017d5-a365-4f6d-8d87-488221a23cff","block_type":"box","text":"Administrative Law, Commissioner of Education, and Administrative Law Judge (“ALJ”) Jeffrey R. Wilson (collectively","page_number":240,"box":{"x":68,"y":181,"width":823,"height":11}},{"id":"312780f3-1752-4f00-967a-7d392ba79a75","block_type":"box","text":"“State Defendants”), as well as the Monroe Township Board of Education, which has since been dismissed from the","page_number":240,"box":{"x":70,"y":196,"width":828,"height":11}},{"id":"be442cd6-9b9c-4c35-a30b-65ddc6e044e9","block_type":"box","text":"case. An amended complaint was filed adding additional plaintiffs and “DOEs 1-250 similarly situated ALJs” as","page_number":240,"box":{"x":69,"y":211,"width":792,"height":11}},{"id":"9c879cae-2a7f-4c95-a320-704669b519e9","block_type":"box","text":"defendants. Plaintiffs purport to bring class action claims against State Defendants under the Individuals with","page_number":240,"box":{"x":69,"y":226,"width":783,"height":11}},{"id":"8e83285d-1a04-4b68-9b52-7f051e2409fc","block_type":"box","text":"Disabilities Education Act (“IDEA”) P.L. 101-476, “Federal Preemption” and 42 U.S.C. § 1983, and alleging two","page_number":240,"box":{"x":70,"y":241,"width":792,"height":11}},{"id":"c243104c-882a-4723-bcfc-1f6286443b13","block_type":"box","text":"separate systemic violations of the IDEA. Plaintiffs also sought to bring a class action declaratory judgment claim","page_number":240,"box":{"x":69,"y":256,"width":808,"height":12}},{"id":"5d42b75f-4df7-4cff-9353-10aae4bd8186","block_type":"box","text":"against State Defendants and to appeal three separate interlocutory orders of the ALJ. Among other things, Plaintiffs","page_number":240,"box":{"x":69,"y":271,"width":834,"height":12}},{"id":"f79227fe-7c0a-4a1c-9ad6-d35b768b572c","block_type":"box","text":"seek the following relief: (1) a trust fund to provide educational services to all class members for the denial of a Free","page_number":240,"box":{"x":69,"y":286,"width":836,"height":12}},{"id":"22020b85-ec9e-4794-ae0e-d12f8bb61325","block_type":"box","text":"and Appropriate Public Education (“FAPE”) as such term is defined in IDEA; (2) a trust fund to reimburse class","page_number":240,"box":{"x":69,"y":302,"width":784,"height":11}},{"id":"8ce80248-f14b-476e-ac4d-f2247eade711","block_type":"box","text":"members for the denial of a FAPE; (3) punitive damages; and (4) attorneys’ fees and costs. 1-67 State Defendants","page_number":240,"box":{"x":69,"y":317,"width":817,"height":11}},{"id":"551e2fae-c1a7-4966-b81e-93f0d3febf2a","block_type":"box","text":"filed a motion to dismiss and Plaintiffs opposed that motion. On June 17, 2020, the U.S. District Court ordered the","page_number":240,"box":{"x":68,"y":332,"width":825,"height":11}},{"id":"636d6ac6-359c-4d8c-ba1f-81541ba55113","block_type":"box","text":"parties to show cause as to why this matter should not be consolidated with the C.P., et al. v. NJDOE, et al., 1:19-cv","page_number":240,"box":{"x":70,"y":347,"width":832,"height":11}},{"id":"3f05d810-1878-4057-8fcd-19b78f58864c","block_type":"box","text":"12807 (NLH/MIS) (“C.P.”). (C.P. is a related matter with similar claims, but only seeks injunctive and declaratory","page_number":240,"box":{"x":70,"y":362,"width":803,"height":11}},{"id":"e60f85dd-0c9e-447a-9565-99271a02395c","block_type":"box","text":"relief). The court has not issued a formal order or decision on consolidation with the C.P. matter. On","page_number":240,"box":{"x":69,"y":377,"width":713,"height":11}},{"id":"c7ea547d-8886-4b2c-890d-a169cf6018af","block_type":"box","text":"March 25, 2021, the Plaintiffs sought to consolidate this matter (“J.A. I”) with three other matters, JA. v. MTBOE, et","page_number":240,"box":{"x":70,"y":392,"width":826,"height":12}},{"id":"caf4e151-b68b-4189-a25d-bf846e1298da","block_type":"box","text":"al., 1-20-¢cv-09498 (NLH/MIS) (“J.A. 11”), Joanna A., et al. v. MTBOE, et al., 1:21-¢v-06283 (NLH/MIS) (“JA TIT),","page_number":240,"box":{"x":69,"y":407,"width":809,"height":11}},{"id":"666f9342-ae13-43c8-8af3-31cdaf0a1f0e","block_type":"box","text":"and M.D. et al. v. Vineland City Bd. of Ed. et al., 1:19-cv-12154 (NLH/MIS) (“M.D.”). The districts and the State","page_number":240,"box":{"x":69,"y":423,"width":793,"height":11}},{"id":"7b0c985d-76a4-435c-9d08-dbdc1dd1a7a1","block_type":"box","text":"Defendants opposed consolidation. On March 22, 2022, the U.S. District Court denied consolidation of this matter.","page_number":240,"box":{"x":70,"y":438,"width":823,"height":11}},{"id":"d24209fa-2087-4502-bbcd-236d780dbb01","block_type":"box","text":"The State is vigorously defending this matter.","page_number":240,"box":{"x":68,"y":453,"width":322,"height":11}},{"id":"4c10692b-cf6c-4f3f-a56e-e52c8a6f888d","block_type":"box","text":"J.A. et al. v. Monroe Township Board of Education, et al. and J.A. v. New Jersey Depar tment of Education et al.","page_number":240,"box":{"x":101,"y":475,"width":785,"height":12}},{"id":"97c9686c-d42d-4e75-ae45-0784ebdb5d5a","block_type":"box","text":"On July 28, 2020, Plaintiff J.A., individually and on behalf of her minor child J.A., filed a complaint in the U.S.","page_number":240,"box":{"x":102,"y":498,"width":775,"height":11}},{"id":"455163c6-c040-4e19-b2e7-dd7026968813","block_type":"box","text":"District Court for the District of New Jersey against the New Jersey Department of Education (“NJDOE”), New Jersey","page_number":240,"box":{"x":70,"y":513,"width":824,"height":12}},{"id":"f4f5b3db-f09b-4c9a-bb07-90dbfb74cd59","block_type":"box","text":"Office of Administrative Law (“NJOAL”), the Interim Commissioner of Education, two named Administrative Law","page_number":240,"box":{"x":69,"y":528,"width":787,"height":11}},{"id":"823ed071-d15b-4172-a693-5c6e0f3e87c7","block_type":"box","text":"Judges (“ALJ”) and NJDOEs 1-250 Similarly Situated ALIJs (collectively, “State Defendants”), as well as the Monroe","page_number":240,"box":{"x":69,"y":543,"width":821,"height":12}},{"id":"7efe8d77-c5e0-4361-85d2-25b51ac2f947","block_type":"box","text":"Township Board of Education (“MTBOE”). On March 23, 2021, Plaintiff Johanna A., individually and on behalf of her","page_number":240,"box":{"x":68,"y":559,"width":823,"height":11}},{"id":"2dad0c7e-07ca-4d61-8f8a-736802de3e50","block_type":"box","text":"minor child J.A., filed a complaint in the United States District Court for the District of New Jersey against the NJDOE,","page_number":240,"box":{"x":69,"y":574,"width":835,"height":11}},{"id":"d958509d-d4f9-42df-a98e-1d3ae5ae96de","block_type":"box","text":"NJOAL, Interim Commissioner of Education, four named ALJs and NJDOEs 1-250 Similarly Situated ALJs (collectively,","page_number":240,"box":{"x":70,"y":589,"width":828,"height":11}},{"id":"087db02b-29e1-40e4-8e4a-9bd6c34c9c08","block_type":"box","text":"the “State Defendants”), as well as MTBOE. Both complaints seek to appeal the final decision and order of an ALJ in","page_number":240,"box":{"x":68,"y":604,"width":834,"height":11}},{"id":"37dda0eb-a2c0-462c-83db-4d6f648abe22","block_type":"box","text":"the underlying special education due process dispute. They also allege various systemic violations of the IDEA and","page_number":240,"box":{"x":68,"y":619,"width":817,"height":11}},{"id":"62fc2ead-bbcb-475c-82df-8a76890fe616","block_type":"box","text":"42 U.S.C. § 1983; a claim of discrimination under the Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et","page_number":240,"box":{"x":69,"y":634,"width":834,"height":11}},{"id":"9b82dd44-4a81-41cd-bd56-24a26ad68dc3","block_type":"box","text":"seq.; and a claim of retaliation, pursuant to Section 504 of the Rehabilitation Act of 1973, 29 U.S.C §701 et seq.","page_number":240,"box":{"x":69,"y":649,"width":813,"height":12}},{"id":"765d7f96-b51c-4cba-86dd-de4d9b21bfe0","block_type":"box","text":"Plaintiffs seek declaratory and injunctive relief, as well as monetary relief in the form of damages, punitive damages,","page_number":240,"box":{"x":69,"y":664,"width":835,"height":12}},{"id":"5df3a204-8720-4ab1-8d94-20a4360c2281","block_type":"box","text":"compensatory education, and attorneys’ fees and costs. The State Defendants filed motions to dismiss in both","page_number":240,"box":{"x":69,"y":680,"width":794,"height":11}},{"id":"c7b511aa-9223-4e10-a2ff-5414f91d7865","block_type":"box","text":"matters. On March 25, 2021, the Plaintiffs filed a motion to consolidate the three J.A. matters and the M.D. matter.","page_number":240,"box":{"x":69,"y":695,"width":828,"height":10}},{"id":"b750b428-9ade-4625-a84e-49514ff68585","block_type":"box","text":"The districts and the State Defendants filed oppositions. On March 22, 2022, the court granted consolidation of the","page_number":240,"box":{"x":68,"y":710,"width":831,"height":11}},{"id":"62a6fccc-7dd3-4a22-ad65-84c7b0198e15","block_type":"box","text":"JA. TI and the J.A. III matters and denied consolidation with J.A. I or M.D. On March 31, 2022, the court granted in","page_number":240,"box":{"x":69,"y":725,"width":816,"height":11}},{"id":"b2293a82-94e2-4caa-9faa-b17c6306c533","block_type":"box","text":"part and denied in part the State Defendants motion to dismiss. Discovery is currently ongoing. Plaintiffs filed a","page_number":240,"box":{"x":70,"y":740,"width":799,"height":11}},{"id":"53eaa68e-bbe3-4c52-bf96-d139f86f1b3f","block_type":"box","text":"motion for summary judgment on March 31, 2023. The State is vigorously defending this matter.","page_number":240,"box":{"x":69,"y":755,"width":690,"height":11}},{"id":"cc3fe7a9-7369-4033-9319-c9216e60aedb","block_type":"box","text":"Jersey City Board of Education and E.H., a minor, by his guardian ad litem, Shamma C. Givens v. State of New","page_number":240,"box":{"x":101,"y":778,"width":785,"height":11}},{"id":"2ad92f09-0d05-43a9-9fd0-0b7d620d9681","block_type":"box","text":"Jersey","page_number":240,"box":{"x":69,"y":793,"width":46,"height":11}},{"id":"fe0681e6-f7eb-4795-bb00-d67aa755257e","block_type":"box","text":"On April 29, 2019, the Jersey City Board of Education (“JCBOE”) and E.H., a minor, by his guardian ad litem,","page_number":240,"box":{"x":102,"y":816,"width":770,"height":11}},{"id":"a7368f92-33f0-4a78-94be-7f6eb37ed5f7","block_type":"box","text":"Shanna C. Givens (“Plaintiffs”) filed a complaint against the State and various State officials (collectively, the “State","page_number":240,"box":{"x":69,"y":831,"width":830,"height":11}},{"id":"15b10dc3-76d7-40d2-95d6-8c0f4e17f864","block_type":"box","text":"Defendants”) alleging that the recent amendments to the School Funding Reform Act, N.J.S.4. 18A:7F-43 to - 63 (the","page_number":240,"box":{"x":70,"y":846,"width":834,"height":11}},{"id":"ae804105-4af2-4043-9b5e-f77016528f14","block_type":"box","text":"“Amendments”), as applied to JCBOE, and the State Defendants failure to fully fund JCBOE’s long range facilities","page_number":240,"box":{"x":70,"y":861,"width":806,"height":11}},{"id":"b225aefa-6478-44f2-808f-e72d55fc02fa","block_type":"box","text":"plan (“LRFP”), violate the State’s constitutional requirement to “provide for the maintenance and support of a","page_number":240,"box":{"x":70,"y":876,"width":781,"height":11}},{"id":"926fbada-f781-4fc4-80ff-b9297645c67d","block_type":"box","text":"thorough and efficient system of free public schools...”. N.J. Const. art. VIII, § 4. The Amendments at issue slowly","page_number":240,"box":{"x":68,"y":891,"width":818,"height":12}},{"id":"5c709016-ba09-4f52-8d1d-ec92b0615f6e","block_type":"box","text":"phase out certain additional State aid previously granted to SDA Districts. The phase out of this additional State aid","page_number":240,"box":{"x":70,"y":906,"width":826,"height":12}},{"id":"46c8ba65-e03a-4634-9adf-7d6f21f54aa3","block_type":"box","text":"Public Page 22 of 33","page_number":240,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"7bc71b5d-4d3c-4f24-bb4b-8bc8620653eb","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":240,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"741fe2f8-6856-4f60-a96c-e2b4b0c2dabf","block_type":"box","text":"is to occur over a six-year period beginning in the 2019-2020 school year. Plaintiffs allege that the reduction in State","page_number":241,"box":{"x":70,"y":75,"width":831,"height":11}},{"id":"6e17ba45-05c3-440d-970e-76bf76445e03","block_type":"box","text":"aid to JCBOE will jeopardize JCBOE’s ability to provide the level of funding necessary to meet the legal standard of a","page_number":241,"box":{"x":69,"y":90,"width":828,"height":11}},{"id":"0487b9c1-5c80-4a6a-bbc9-939f9b7d9903","block_type":"box","text":"“thorough and efficient” education (“T&E”). The Plaintiffs seek, among other things, a preliminary and permanent","page_number":241,"box":{"x":70,"y":105,"width":810,"height":11}},{"id":"bb1911a4-e507-453b-95b3-9f2ce56979ee","block_type":"box","text":"injunction enjoining the State Defendants from reducing funding to JCBOE and an order requiring the State","page_number":241,"box":{"x":70,"y":120,"width":756,"height":12}},{"id":"3430a0e7-186c-4429-9737-d52549aca1a1","block_type":"box","text":"Defendants to fully fund JCBOE’s LRFP. On July 23, 2019, Plaintiffs filed a first amended complaint, which continues","page_number":241,"box":{"x":70,"y":135,"width":829,"height":11}},{"id":"bab5a625-ad5f-433b-a28a-8b3d6148cd8d","block_type":"box","text":"to allege that the reduction in State aid to JCBOE as a result of the Amendments will jeopardize JCBOE’s ability to","page_number":241,"box":{"x":68,"y":150,"width":812,"height":12}},{"id":"8f40b91c-d8d4-44da-aa1c-3be7ca0f3abf","block_type":"box","text":"provide T&E. The State Defendants filed a motion to dismiss the first amended complaint, which was denied by the","page_number":241,"box":{"x":70,"y":166,"width":820,"height":11}},{"id":"7305ef27-5917-4a6e-9d3f-fdc36b52f4f5","block_type":"box","text":"trial court on January 17, 2020. Discovery is complete. Oral argument was held on March 2, 2023 and a decision is","page_number":241,"box":{"x":68,"y":181,"width":833,"height":11}},{"id":"0fc1ff4b-e1d5-4052-975c-46aef1377924","block_type":"box","text":"pending on the parties’ motion for summary judgment. The State is vigorously defending this matter.","page_number":241,"box":{"x":70,"y":196,"width":716,"height":11}},{"id":"3678c07b-d067-4d7b-b67d-e211111e8172","block_type":"box","text":"1-68Lorillard Tobacco Co. v. Director, Division of Taxation","page_number":241,"box":{"x":102,"y":218,"width":404,"height":11}},{"id":"ad127536-ed50-4c42-a642-6d0365ebc6ff","block_type":"box","text":"This case involves constitutional challenges to the Division’s regulation, N.J. A.C. 18:7-5.18(b), the Division’s","page_number":241,"box":{"x":101,"y":241,"width":781,"height":11}},{"id":"ad4e4599-a5d3-474d-b51b-93a0583c6149","block_type":"box","text":"interpretation of the unreasonableness exception to the State’s corporate royalty addback statute, N.J.S.A. 54:10A","page_number":241,"box":{"x":70,"y":256,"width":824,"height":11}},{"id":"d5297e55-4fde-4cec-82ea-3c80b6c07a00","block_type":"box","text":"4.4(c)(1)(b), and Division’s Schedule G-2, which implements the calculation of the unreasonable exception based on","page_number":241,"box":{"x":69,"y":271,"width":828,"height":11}},{"id":"f0437c28-5783-4e78-96e9-77eb605d47ea","block_type":"box","text":"Taxation’s interpretation of its regulation. In 2006, the Division assessed Corporation Business Tax (“CBT”) on a","page_number":241,"box":{"x":68,"y":286,"width":802,"height":12}},{"id":"a31c7c88-2dd7-4ed4-b9f0-49b70239840c","block_type":"box","text":"subsidiary of Lorillard Tobacco Co. (“Lorillard”) for tax years 1999-2004 based on royalty payments the subsidiary","page_number":241,"box":{"x":69,"y":302,"width":813,"height":11}},{"id":"057309b5-91be-4353-bbdc-5c2612423810","block_type":"box","text":"had received from Lorillard. The subsidiary was a non-filer in New Jersey and contested the assessment in the New","page_number":241,"box":{"x":69,"y":317,"width":822,"height":11}},{"id":"c3259d65-26a6-4a13-8c11-de1da7af24a7","block_type":"box","text":"Jersey Tax Court claiming, among other things, that it did not have physical presence in the State so it lacked","page_number":241,"box":{"x":69,"y":332,"width":779,"height":11}},{"id":"7ceae625-ea51-4e9d-9d1e-80f9cb849b00","block_type":"box","text":"substantial nexus to permit it to be subject to CBT. While the subsidiary’s case was pending in the Tax Court,","page_number":241,"box":{"x":69,"y":347,"width":780,"height":11}},{"id":"3466ed4e-c8d0-43ff-8008-151bdd6d3dab","block_type":"box","text":"Lorillard filed refund claims for 2002-2005 by filing amended CBT returns, claiming it would be improper,","page_number":241,"box":{"x":70,"y":362,"width":744,"height":11}},{"id":"46054f2f-1f57-4e57-a214-50ec99f98727","block_type":"box","text":"unreasonable, and unconstitutional to deny it a deduction for the royalty payments if, at the same time, the Division","page_number":241,"box":{"x":69,"y":377,"width":825,"height":11}},{"id":"dc219b79-5ec2-4193-9660-d583993f140e","block_type":"box","text":"subjected its subsidiary to tax on such amounts. Taxation denied the claims as “protective” and Lorillard filed a","page_number":241,"box":{"x":69,"y":392,"width":796,"height":12}},{"id":"a0914358-cea2-4bbc-a855-eb019d82197c","block_type":"box","text":"complaint with the Tax Court in 2007. The subsidiary ultimately conceded nexus, filed CBT returns and paid taxes","page_number":241,"box":{"x":69,"y":407,"width":810,"height":12}},{"id":"d01bfa27-c579-49a0-8a28-1393969aed68","block_type":"box","text":"under the State’s 2009 Tax Amnesty program, after the U.S. Supreme Court denied certiorari regarding the New","page_number":241,"box":{"x":69,"y":423,"width":800,"height":11}},{"id":"220f5328-4fb3-410b-9694-4a731927d7b7","block_type":"box","text":"Jersey Supreme Court decision in Larnco v. Dir., Div. of Taxation, 188 N.J. 380 (2006). In Lanco, the Court held that","page_number":241,"box":{"x":69,"y":438,"width":828,"height":11}},{"id":"f8a3487b-1cab-4668-90f4-b3f4e7da46ee","block_type":"box","text":"the State could subject a taxpayer to CBT even though it lacked physical presence in the State. Thereafter, Lorillard","page_number":241,"box":{"x":68,"y":453,"width":822,"height":11}},{"id":"94d2935c-7da4-44dd-9f88-d03a2edf1fcb","block_type":"box","text":"sought an expedited payment of the CBT refund based on the Division’s Schedule G-2 calculation, which limited","page_number":241,"box":{"x":69,"y":468,"width":795,"height":11}},{"id":"d008244e-a75a-4c3e-bcd0-54f6632aad09","block_type":"box","text":"Lorillard’s deduction due to its subsidiary’s lower allocation factor. Lorillard reserved its challenge to the remainder","page_number":241,"box":{"x":70,"y":483,"width":822,"height":11}},{"id":"484ce430-f841-45f4-b56c-5b11fe5c83ca","block_type":"box","text":"of the exemption. In 2012, Lorillard filed another complaint with the Tax Court challenging the Division’s partial","page_number":241,"box":{"x":69,"y":498,"width":791,"height":11}},{"id":"9eb367f8-accc-4a17-a01d-a6a0e1144522","block_type":"box","text":"refund denial for tax years 2008-2010 on the same basis as the 2007 complaint.","page_number":241,"box":{"x":69,"y":513,"width":582,"height":11}},{"id":"876fd81f-3482-46b4-b64d-d4c4ba95d459","block_type":"box","text":"Lorillard claims that the Division improperly and unconstitutionally granted only a partial deduction of royalty","page_number":241,"box":{"x":102,"y":536,"width":769,"height":11}},{"id":"c272ea1c-5d4a-4762-8155-d25ed3ce7a9d","block_type":"box","text":"payments that Lorillard made to its subsidiary. In February 2019, the Tax Court issued a decision granting Lorillard","page_number":241,"box":{"x":70,"y":551,"width":817,"height":11}},{"id":"ab2ea027-6afc-4ea0-ac15-c38a4b70acf6","block_type":"box","text":"summary judgment, and holding that the Division’s denial of a deduction for the full amount of royalties Lorillard paid","page_number":241,"box":{"x":69,"y":566,"width":834,"height":11}},{"id":"5dbfc52f-597c-438f-8b52-7dfacb24bc9b","block_type":"box","text":"was not a reasonable exercise of the Division’s discretion. The Tax Court found it unnecessary to address Lorillard’s","page_number":241,"box":{"x":68,"y":581,"width":832,"height":11}},{"id":"288435a5-4ea7-4482-a1fc-c8f34183528d","block_type":"box","text":"constitutional attacks.","page_number":241,"box":{"x":69,"y":597,"width":157,"height":8}},{"id":"686b7ab7-ad2a-424b-a814-28ab4d3ea21e","block_type":"box","text":"The Division appealed to the Appellate Division, and Lorillard filed a cross-appeal, re-asserting its constitutional","page_number":241,"box":{"x":101,"y":619,"width":795,"height":11}},{"id":"1ad15ebc-29aa-4f90-bdd6-245791d5e672","block_type":"box","text":"challenges. The Tax Court issued a final judgment on Lorillard’s 2012 complaint based on its reasoning regarding the","page_number":241,"box":{"x":69,"y":634,"width":838,"height":12}},{"id":"d7d658e2-be77-450c-8897-f689e42f6460","block_type":"box","text":"2007 complaint. Both parties again appealed and the matters were consolidated by the Appellate Division. Oral","page_number":241,"box":{"x":69,"y":649,"width":796,"height":12}},{"id":"e80f0d2e-eef8-4d5f-9155-22a0f79e9fdd","block_type":"box","text":"argument was held on December 14, 2020. On September 21, 2021, the Appellate Division reversed the Tax Court’s","page_number":241,"box":{"x":69,"y":665,"width":837,"height":11}},{"id":"14205f29-b993-4be4-aff9-f8ef72458f90","block_type":"box","text":"decision granting Lorillard summary judgment and remanded the matter back to the Tax Court for consideration of the","page_number":241,"box":{"x":69,"y":680,"width":839,"height":11}},{"id":"62def64f-15cd-4995-8fea-f399239dc765","block_type":"box","text":"constitutional issues. Lorillard filed its supplemental brief with the Tax Court addressing the constitutional issues on","page_number":241,"box":{"x":69,"y":695,"width":829,"height":11}},{"id":"7a15a267-0642-4731-8920-44877cb3aa13","block_type":"box","text":"February 24, 2022. The Division filed its brief on May 6, 2022. Oral argument was held on September 13, 2022. On","page_number":241,"box":{"x":70,"y":710,"width":831,"height":11}},{"id":"07dd8da9-e5fd-4e60-9aaf-ffa9675dcfb1","block_type":"box","text":"October 14, 2022, the Tax Court requested additional supplemental briefing. Simultaneous briefs were submitted","page_number":241,"box":{"x":69,"y":725,"width":810,"height":11}},{"id":"6314d500-20b6-4bbf-afa2-2663e05ae4b3","block_type":"box","text":"November 28, 2022. The State is vigorously defending this matter.","page_number":241,"box":{"x":70,"y":740,"width":475,"height":11}},{"id":"27898410-46a6-4ece-a314-d16c1453a67d","block_type":"box","text":"Lisa Salvato, on behalf of herself and other persons similarly situated v. Steven Harris, in his official capacity as","page_number":241,"box":{"x":102,"y":763,"width":800,"height":11}},{"id":"99f9dced-ddcd-4865-a309-4368321942ae","block_type":"box","text":"Administrator of the State of New Jersey","page_number":241,"box":{"x":68,"y":778,"width":290,"height":11}},{"id":"de796c1f-de70-4610-9b43-199c09c685cd","block_type":"box","text":"On July 14, 2021, Plaintiff filed a corrected complaint in the United States District Court for the District of New","page_number":241,"box":{"x":102,"y":801,"width":791,"height":11}},{"id":"eb0ad2f9-8401-4692-a7d5-d0bc3810e5cc","block_type":"box","text":"Jersey seeking declaratory and injunctive relief against the Administrator of the New Jersey Unclaimed Property","page_number":241,"box":{"x":69,"y":816,"width":792,"height":11}},{"id":"cee93625-a46e-4863-aefe-e83571b0ae57","block_type":"box","text":"Administration (the “Administrator”). Although the corrected complaint appeared to present a challenge to the","page_number":241,"box":{"x":68,"y":831,"width":783,"height":11}},{"id":"f4b5c26b-ad2c-44ba-8185-41754c043c15","block_type":"box","text":"constitutionality of the New Jersey Uniform Disposition of Unclaimed Property Act, N.J.S.A. 46:30B-1 to -109 (the","page_number":241,"box":{"x":69,"y":846,"width":805,"height":11}},{"id":"eff18d6d-7de3-410d-a74a-5bbbb82f1170","block_type":"box","text":"“Unclaimed Property Act”), Plaintiff has since disavowed that position. Rather, Plaintiff challenges the Administrator’s","page_number":241,"box":{"x":70,"y":861,"width":838,"height":11}},{"id":"08874ed8-9280-4eb6-ba74-5d9c3934e815","block_type":"box","text":"implementation of the Unclaimed Property Act, asserting that the Administrator’s actions under the Act violate the","page_number":241,"box":{"x":70,"y":876,"width":813,"height":11}},{"id":"4e8eee68-2fd9-44e0-93e2-723d4fae62de","block_type":"box","text":"federal constitution’s Due Process Clause and Takings Clause. Plaintiff seeks relief both individually and on behalf of","page_number":241,"box":{"x":68,"y":891,"width":837,"height":12}},{"id":"2bc3e52a-fa8a-4e5e-b28c-d3902644c07d","block_type":"box","text":"a class of similarly situated individuals, namely all individuals owning abandoned property transferred to the State","page_number":241,"box":{"x":69,"y":906,"width":813,"height":12}},{"id":"4b7e7f53-b8f6-4147-9260-251f62d87aaf","block_type":"box","text":"Public Page 23 of 33","page_number":241,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"296d7dde-e16b-42dd-a0df-629ca2a307a5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":241,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ad21d3bf-6d64-410e-94c2-36f6636de7ba","block_type":"box","text":"under the Unclaimed Property Act over the past ten years without notice to the owners. The State filed a motion to","page_number":242,"box":{"x":69,"y":75,"width":815,"height":11}},{"id":"3e0dd83c-c12b-4fce-8ac2-eb635e820e0f","block_type":"box","text":"dismiss the complaint, which was granted in part and denied in part, with leave to conduct limited expedited","page_number":242,"box":{"x":69,"y":90,"width":773,"height":11}},{"id":"6ae23dac-c4e9-40df-a683-867fa256ee98","block_type":"box","text":"discovery and file an amended complaint. Discovery is ongoing. Plaintiff filed a first amended complaint, which","page_number":242,"box":{"x":69,"y":105,"width":789,"height":11}},{"id":"fb1361d4-b79e-485f-b24e-4f53adae01f6","block_type":"box","text":"purported to add a new class plaintiff, Christine Kydd. On July 8, 2022, the State filed a motion to strike the first","page_number":242,"box":{"x":70,"y":120,"width":805,"height":11}},{"id":"18ec3eb3-d61a-4ad6-addf-88fd340b70b5","block_type":"box","text":"amended complaint as exceeding the court’s limited grant of authority to amend. The court granted the State’s","page_number":242,"box":{"x":69,"y":135,"width":792,"height":12}},{"id":"8fbcfeed-0b59-44ec-b65d-7d9596ddb192","block_type":"box","text":"motion removing Christine Kydd as a plaintiff, and struck certain allegations of the amended complaint. Plaintiff was","page_number":242,"box":{"x":69,"y":150,"width":831,"height":12}},{"id":"46fce15b-3daf-49b4-9b33-d199224a1aef","block_type":"box","text":"granted 1-69 leave to, and did, seek reconsideration of the order dismissing Plaintiffs’ Takings Clause claim. The","page_number":242,"box":{"x":68,"y":166,"width":807,"height":11}},{"id":"d975daec-e1a1-45f5-979b-b3a8cfbd71d7","block_type":"box","text":"State is vigorously defending this matter.","page_number":242,"box":{"x":69,"y":181,"width":290,"height":11}},{"id":"2fc75c70-4eee-4839-8ddf-70ebd72624be","block_type":"box","text":"Medicaid, Tor t, Contract, Workers’ Compensation and Other Claims","page_number":242,"box":{"x":102,"y":203,"width":479,"height":11}},{"id":"aeaf2237-1c66-460d-b89c-56cb3faa8a48","block_type":"box","text":"The Office of the Inspector General (“OIG”) of the U.S. Department of Health & Human Services (“HHS”) has","page_number":242,"box":{"x":101,"y":226,"width":777,"height":11}},{"id":"97aa49b0-e6db-4802-b0f8-dd2053a8841d","block_type":"box","text":"conducted and continues to conduct various audits of Medicaid claims for different programs administered by the","page_number":242,"box":{"x":69,"y":241,"width":809,"height":11}},{"id":"a9c13c5d-03b8-40ba-bfa2-dfb5d52647c7","block_type":"box","text":"State’s Department of Human Services (“DHS”). The OIG audits, which have primarily focused on claim","page_number":242,"box":{"x":69,"y":256,"width":737,"height":11}},{"id":"6fc6fa81-9fc8-4adb-8755-84cd3c9afdee","block_type":"box","text":"documentation and cost allocation methodologies, recommend that certain claims submitted by DHS be disallowed.","page_number":242,"box":{"x":69,"y":272,"width":827,"height":11}},{"id":"c5f02a73-9be6-45e6-aae5-75acb3614d65","block_type":"box","text":"OIG submits its recommendations on disallowances to the Centers for Medicare and Medicaid Services (“CMS”)","page_number":242,"box":{"x":69,"y":286,"width":801,"height":12}},{"id":"5fd13409-7041-4bd3-afa9-9dbcfe57cbaa","block_type":"box","text":"which may, in whole or in part, accept or disagree with the OIG’s recommendations. If the OIG’s recommendations","page_number":242,"box":{"x":68,"y":302,"width":816,"height":11}},{"id":"2cf0c663-ccfd-4765-a3ee-5a0bde29ab44","block_type":"box","text":"are not challenged by the State or are upheld by CMS, DHS will be required to refund the amount of any","page_number":242,"box":{"x":69,"y":317,"width":740,"height":11}},{"id":"29063c22-39b9-4e64-b65c-884576be598c","block_type":"box","text":"disallowances. Eighteen audits, which in the aggregate total nearly $1 billion, are currently in draft or final form but,","page_number":242,"box":{"x":69,"y":331,"width":823,"height":12}},{"id":"678c6661-e67a-4e6c-984b-9ad49cd98684","block_type":"box","text":"due to possible revisions or appeals, the final amounts are uncertain. Approximately one-third of the amount above","page_number":242,"box":{"x":69,"y":347,"width":821,"height":11}},{"id":"1a471849-b534-4745-8e9e-792bba1b9f68","block_type":"box","text":"relates to an audit of the State’s School-based Medicaid claiming. However, DHS is disputing the OIG’s audit","page_number":242,"box":{"x":69,"y":362,"width":776,"height":11}},{"id":"9e58ba0b-cbcc-429b-a0cc-3cf2ed9e4ef3","block_type":"box","text":"findings. Given that the State is currently disputing and appealing the OIG audit findings, it cannot estimate any final","page_number":242,"box":{"x":68,"y":377,"width":830,"height":12}},{"id":"65437541-a1a7-4ffb-b50d-8446708e1232","block_type":"box","text":"refund amounts or the timing of any refund payments that may be due to CMS. These current audits and any future","page_number":242,"box":{"x":69,"y":392,"width":821,"height":12}},{"id":"a26f9e23-773c-40d5-9f90-d0a158fc5cc4","block_type":"box","text":"audits of Medicaid claims submitted by DHS may result in claim disallowances which may be significant. The State is","page_number":242,"box":{"x":69,"y":407,"width":834,"height":12}},{"id":"c66cced4-059f-4f87-b9cd-cef5d91c1bac","block_type":"box","text":"unable to estimate its exposure for these claim disallowances.","page_number":242,"box":{"x":69,"y":423,"width":446,"height":11}},{"id":"146f04a9-ea5a-4d50-8973-db89de01e01a","block_type":"box","text":"The federal Disaster Relief Appropriations Act of 2013 (the “Disaster Relief Act”) appropriated approximately","page_number":242,"box":{"x":101,"y":445,"width":775,"height":11}},{"id":"c46ca5bd-d83f-4666-8871-1ce7b19ab56e","block_type":"box","text":"$50.38 billion (later reduced by sequestration to $47.9 billion) to various federal agencies to assist states and local","page_number":242,"box":{"x":69,"y":460,"width":830,"height":12}},{"id":"ed0d1f0b-31d4-43a6-90be-248a01f3bbf9","block_type":"box","text":"communities with the impacts of Superstorm Sandy, including funding provided directly to private homeowners and","page_number":242,"box":{"x":69,"y":475,"width":816,"height":12}},{"id":"f53d8b75-1070-4a7e-9e31-bc8b051cbd4f","block_type":"box","text":"businesses. The Disaster Relief Act allocated funding to OIG to conduct audits and investigations related to the","page_number":242,"box":{"x":69,"y":491,"width":794,"height":11}},{"id":"d628183f-533b-4d6f-9c36-ef41996a8174","block_type":"box","text":"expenditure of disaster relief aid. Audits are ongoing or have already been undertaken by the OIG from the U.S.","page_number":242,"box":{"x":69,"y":506,"width":791,"height":11}},{"id":"7ba717f9-4fed-4c15-a104-5aa65f450229","block_type":"box","text":"Department of Homeland Security, the U.S. Department of Housing and Urban Development, the U.S. Department of","page_number":242,"box":{"x":70,"y":521,"width":832,"height":11}},{"id":"e7955cf6-a616-4d87-8b02-f560dfd4e382","block_type":"box","text":"Transportation, and the HHS. The State anticipates that there will be continued audit activity throughout the duration","page_number":242,"box":{"x":68,"y":536,"width":832,"height":11}},{"id":"32c9f169-34c8-44c8-839d-a1da9d42a335","block_type":"box","text":"of the federally-funded Sandy programs. As with any federal OIG audit or investigation, there is the potential for an","page_number":242,"box":{"x":69,"y":551,"width":812,"height":11}},{"id":"d9b13eb7-a700-42ef-99d1-5e4683d3818c","block_type":"box","text":"OIG recommendation that the federal agency de-obligate funding in the event of non-compliance with federal statutes","page_number":242,"box":{"x":69,"y":566,"width":832,"height":11}},{"id":"537138a5-b89a-4f39-8ecd-05b030bdc28f","block_type":"box","text":"or regulations.","page_number":242,"box":{"x":69,"y":582,"width":101,"height":11}},{"id":"dfcaa252-89ad-4088-ac63-30bd9145e0eb","block_type":"box","text":"At any given time, there are various numbers of claims and cases pending against the State, State agencies and","page_number":242,"box":{"x":101,"y":604,"width":803,"height":11}},{"id":"176a274f-961f-499b-a010-65730697a82b","block_type":"box","text":"employees, seeking recovery of monetary damages that are primarily paid out of the fund created pursuant to the","page_number":242,"box":{"x":69,"y":619,"width":811,"height":11}},{"id":"d5ad4d15-acf5-44a6-9c89-fb4a1720b75b","block_type":"box","text":"New Jersey Tort Claims Act (N.J.S.A. 59:1-1 et seq.). The State does not formally estimate its reserve representing","page_number":242,"box":{"x":70,"y":634,"width":820,"height":12}},{"id":"739b53c0-e2d6-44f2-bc32-a4cb43604433","block_type":"box","text":"potential exposure for these claims and cases. The State is unable to estimate its exposure for these claims and","page_number":242,"box":{"x":70,"y":649,"width":807,"height":11}},{"id":"4ea34d8e-4985-49b3-b5bd-84b1c941bfa6","block_type":"box","text":"cases.","page_number":242,"box":{"x":69,"y":667,"width":45,"height":6}},{"id":"813a1b9f-4051-4309-a163-9f33139c7155","block_type":"box","text":"The State routinely receives notices of claim seeking substantial sums of money. The majority of those claims","page_number":242,"box":{"x":101,"y":687,"width":784,"height":11}},{"id":"0b67af81-38ed-4b30-8f02-cf99b996df06","block_type":"box","text":"have historically proven to be of substantially less value than the amount originally claimed. Under the New Jersey","page_number":242,"box":{"x":69,"y":702,"width":813,"height":12}},{"id":"e6cf5dce-2cf4-462c-8eb6-2dbda9ae0406","block_type":"box","text":"Tort Claims Act, any tort litigation against the State must be preceded by a notice of claim, which affords the State","page_number":242,"box":{"x":68,"y":717,"width":821,"height":12}},{"id":"6ca1563e-b842-4d66-ad4c-86443343ff16","block_type":"box","text":"the opportunity for a six-month investigation prior to the filing of any suit against it.","page_number":242,"box":{"x":68,"y":732,"width":590,"height":12}},{"id":"b5d234c0-d175-4d21-9227-98a54865fcd0","block_type":"box","text":"In addition, at any given time, there are various numbers of contract and other claims against the State and","page_number":242,"box":{"x":102,"y":755,"width":766,"height":11}},{"id":"074e9c2c-b60d-44cf-a6a8-33238376ad66","block_type":"box","text":"State agencies, including environmental claims asserted against the State, among other parties, arising from the","page_number":242,"box":{"x":69,"y":770,"width":809,"height":12}},{"id":"faacff1d-8ad4-4257-b0ee-7aa588137729","block_type":"box","text":"alleged disposal of hazardous waste. Claimants in such matters are seeking recovery of monetary damages or other","page_number":242,"box":{"x":69,"y":785,"width":832,"height":12}},{"id":"c0572fe8-473b-43c1-8a0e-df198559cf2d","block_type":"box","text":"relief which, if granted, would require the expenditure of funds. The State is unable to estimate its exposure for these","page_number":242,"box":{"x":69,"y":801,"width":838,"height":11}},{"id":"eecc00f1-b38a-4f16-9f60-213c28d37bfc","block_type":"box","text":"claims.","page_number":242,"box":{"x":69,"y":816,"width":49,"height":9}},{"id":"ba0171bf-41f8-4f44-a10a-624df051f213","block_type":"box","text":"At any given time, there are various numbers of claims by employees against the State and State agencies","page_number":242,"box":{"x":101,"y":838,"width":761,"height":12}},{"id":"bace05a4-5f0a-4726-94ef-9d8e2c875575","block_type":"box","text":"seeking recovery for workers’ compensation claims that are primarily paid out of the fund created pursuant to the","page_number":242,"box":{"x":69,"y":853,"width":809,"height":12}},{"id":"dc742e11-bfe2-4d09-aabe-008b9b686baa","block_type":"box","text":"New Jersey Workers” Compensation Law (N.J.S.A. 35:15-1 ef seq.). Claimants in such matters are seeking recovery","page_number":242,"box":{"x":70,"y":869,"width":827,"height":11}},{"id":"874b9e68-f536-42b9-acfb-3788a40e0e01","block_type":"box","text":"for personal injuries suffered by a claimant by accident arising out of and in the course of the claimant’s employment","page_number":242,"box":{"x":68,"y":884,"width":837,"height":11}},{"id":"d603cfc1-9460-4875-ac6c-a3a72f9cd812","block_type":"box","text":"due to the employer’s negligence. The State is unable to estimate its exposure for these claims.","page_number":242,"box":{"x":69,"y":899,"width":687,"height":11}},{"id":"6d5d73de-d3fa-458d-b644-238f4f07a442","block_type":"box","text":"Public Page 24 of 33","page_number":242,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"8cd0d41b-5a10-4752-86ed-fe5ca11703d5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":242,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"dc0463ad-75df-4676-8f38-85e336c86e68","block_type":"box","text":"Prior to July 1, 2013, there were various numbers of claims and cases pending against the University of","page_number":243,"box":{"x":102,"y":75,"width":740,"height":11}},{"id":"90107f5e-14a3-4aa3-8792-271229ae57ad","block_type":"box","text":"Medicine and Dentistry of New Jersey (“UMDNJ”) and its employees, seeking recovery of monetary damages that","page_number":243,"box":{"x":70,"y":90,"width":808,"height":11}},{"id":"f25fc9a0-fd35-4b20-b862-e6df4ea63bd1","block_type":"box","text":"were primarily paid out of the UMDNJ Self Insurance Reserve Fund created pursuant to the New Jersey Tort Claims","page_number":243,"box":{"x":68,"y":105,"width":818,"height":11}},{"id":"76c824ce-8495-4e73-8cc6-fd2c12290f1d","block_type":"box","text":"Act (NJ.S.A.59:1-1 et seq.). As a result of the enactment of the New Jersey Medical and Health Sciences Education","page_number":243,"box":{"x":68,"y":120,"width":821,"height":11}},{"id":"804cd713-9e60-49ba-b953-95d67f3373ec","block_type":"box","text":"1-70 Restructuring Act, L. 2012, ¢. 45 (the “Restructuring Act”), all of UMDNJ was transferred to Rutgers, The State","page_number":243,"box":{"x":70,"y":135,"width":829,"height":12}},{"id":"1e6d4c94-6339-48d0-9500-6205b183103f","block_type":"box","text":"University (“Rutgers”), with the exception of the School of Osteopathic Medicine which was transferred to Rowan","page_number":243,"box":{"x":70,"y":150,"width":800,"height":12}},{"id":"e6459e01-27dd-42ce-a2ec-1757580d5fa1","block_type":"box","text":"University (“Rowan”), and University Hospital in Newark, New Jersey, which now exists as a separate instrumentality","page_number":243,"box":{"x":70,"y":166,"width":826,"height":11}},{"id":"53534a8b-935e-4e2e-89ec-1f828f07f8b6","block_type":"box","text":"of the State. All claims and liabilities of UMDNJ associated with the transferred facilities have been transferred to","page_number":243,"box":{"x":69,"y":181,"width":810,"height":9}},{"id":"2863d082-8960-491c-8254-bb151e6a2956","block_type":"box","text":"Rutgers, Rowan and University Hospital, as applicable. Pursuant to the Restructuring Act, Rutgers and Rowan each","page_number":243,"box":{"x":70,"y":196,"width":816,"height":11}},{"id":"541aa1fe-894b-447b-b4a0-a63d8ef4ba22","block_type":"box","text":"entered into a memorandum of understanding with the State Treasurer pursuant to which the State shall pay from a","page_number":243,"box":{"x":69,"y":211,"width":825,"height":11}},{"id":"4e0ec2d7-7e13-4c7c-885f-e58d437c968c","block_type":"box","text":"self-insurance reserve fund established for each entity medical malpractice claims occurring prior to and post the","page_number":243,"box":{"x":69,"y":226,"width":807,"height":11}},{"id":"479be586-0bb0-488f-9614-a288e7b4f5e1","block_type":"box","text":"effective date of the transfers, which was July 1, 2013. The Restructuring Act also provides for University Hospitals","page_number":243,"box":{"x":69,"y":241,"width":821,"height":11}},{"id":"9dc2d96c-b395-492a-a2fb-b5b70bf5afe2","block_type":"box","text":"medical malpractice claims to be covered by a self-insurance reserve fund established by the State Treasurer.","page_number":243,"box":{"x":69,"y":256,"width":783,"height":11}},{"id":"16d78ac8-0e79-4b75-a07f-c27a208c3595","block_type":"box","text":"University Hospital entered into a memorandum of understanding with the State Treasurer for such claims. All claims,","page_number":243,"box":{"x":70,"y":271,"width":835,"height":12}},{"id":"bd14adec-c02a-4fcf-adae-d57c0f3c4d18","block_type":"box","text":"other than medical malpractice claims, incurred by UMDNJ with respect to the UMDNJ facilities transferred to Rutgers","page_number":243,"box":{"x":69,"y":286,"width":838,"height":12}},{"id":"9e54cc89-8d54-4918-b3b4-40079f1d1196","block_type":"box","text":"will be paid for by Rutgers out of its own funds. All claims, other than medical malpractice claims, incurred by Rowan","page_number":243,"box":{"x":68,"y":302,"width":831,"height":11}},{"id":"9ec19b9b-b8e3-4994-893c-dfa75f367fc5","block_type":"box","text":"will be paid from the Tort Claims Fund. The State is unable to estimate its exposure for these claims.","page_number":243,"box":{"x":68,"y":317,"width":722,"height":11}},{"id":"bd387595-9700-4dad-a7cf-cb8f5d042ff4","block_type":"box","text":"Approximately two dozen hospitals have challenged in the Office of Administrative Law and the Appellate Division","page_number":243,"box":{"x":101,"y":339,"width":805,"height":12}},{"id":"e5cfb630-05f7-4202-9734-6d98d8c957e5","block_type":"box","text":"the Medicaid reimbursement rates paid to these hospitals alleging that there were calculation errors or that the","page_number":243,"box":{"x":68,"y":355,"width":796,"height":11}},{"id":"790f4d26-3102-44b2-b384-fcfd67d1c228","block_type":"box","text":"methodology used to calculate the rates is incorrect. Additionally, a group of hospitals have challenged the","page_number":243,"box":{"x":69,"y":370,"width":760,"height":11}},{"id":"160380cf-0ce4-490f-a88d-36f383606a06","block_type":"box","text":"constitutionality of the charity care statute and the inpatient Medicaid rate reimbursement framework. This group of","page_number":243,"box":{"x":69,"y":385,"width":824,"height":11}},{"id":"e8f9991a-7baa-470d-a665-40820011cc33","block_type":"box","text":"hospitals allege the losses incurred in treatment of the charity care and Medicaid patients is an unconstitutional","page_number":243,"box":{"x":69,"y":400,"width":801,"height":11}},{"id":"1ee1e304-0ce0-48c7-bc61-67ec58c55e67","block_type":"box","text":"taking of the hospitals’ property. These challenges date back to 2002. The State is vigorously defending this matter.","page_number":243,"box":{"x":68,"y":415,"width":831,"height":11}},{"id":"4c2be004-d0d7-4b10-a004-d50d6ba8fe73","block_type":"box","text":"To date, there have been no findings against the State. In the event the hospitals are successful, State’s Department","page_number":243,"box":{"x":68,"y":430,"width":841,"height":11}},{"id":"cf3783eb-b935-4b50-b784-2facca01bbf0","block_type":"box","text":"of Health (“DOH”) and DHS have advised that they may possibly need to refund millions of dollars to the hospitals","page_number":243,"box":{"x":69,"y":445,"width":813,"height":11}},{"id":"16106782-fa37-49e7-9ac3-550bfd336649","block_type":"box","text":"over the various relevant years. The State is unable to estimate its exposure for these claims.","page_number":243,"box":{"x":69,"y":460,"width":669,"height":12}},{"id":"9dd1a82e-2b08-4f9e-9a92-e1f19765ad1d","block_type":"box","text":"Affirmative Litigation","page_number":243,"box":{"x":101,"y":483,"width":147,"height":11}},{"id":"c178f16d-ddbb-4472-8acc-dd56c7d85114","block_type":"box","text":"From time to time, the State initiates litigation against various entities to enforce State laws, contractual and","page_number":243,"box":{"x":102,"y":506,"width":776,"height":11}},{"id":"b74fc974-6fa1-4838-b444-65f7e464f72b","block_type":"box","text":"other rights, pursue cost recoveries and natural resource damages in the environmental arena and prosecute entities","page_number":243,"box":{"x":69,"y":521,"width":837,"height":11}},{"id":"7b668cc0-588c-4b87-8ecf-87180bd57b9d","block_type":"box","text":"who have engaged in alleged fraudulent, negligent or other wrongful conduct. The State is unable to estimate the","page_number":243,"box":{"x":68,"y":536,"width":806,"height":11}},{"id":"47b748ff-9309-4fb1-9e44-f82a43e9719c","block_type":"box","text":"amount of any monetary recoveries from such affirmative litigation. In addition, depending on which State","page_number":243,"box":{"x":69,"y":551,"width":753,"height":11}},{"id":"6d3aee85-154b-4535-b5ba-488efb46b2de","block_type":"box","text":"department, division or agency is the plaintiff, any monetary recoveries may already be included in such State","page_number":243,"box":{"x":69,"y":566,"width":784,"height":11}},{"id":"1df3a286-fa59-4e45-a85a-2e3589f9731d","block_type":"box","text":"department, division or agency’s revenue estimates for the current fiscal year.","page_number":243,"box":{"x":69,"y":581,"width":557,"height":12}},{"id":"5ae2614d-e2a6-42f3-aa48-699b12c9d080","block_type":"box","text":"ECONOMIC AND FINANCIAL CONDITIONS IN PENNSYLVANIA","page_number":243,"box":{"x":248,"y":605,"width":483,"height":9}},{"id":"6da93476-9a71-4467-a498-4b3483b4a47f","block_type":"box","text":"Because the Pennsylvania Fund (the “Fund”) invests in Pennsylvania (referred to herein as the “Commonwealth,”","page_number":243,"box":{"x":102,"y":627,"width":804,"height":11}},{"id":"206a0c40-1678-4434-baf7-9deb45b2348f","block_type":"box","text":"the “state” or “Pennsylvania”) municipal securities, the Fund is susceptible to political, economic, regulatory or other","page_number":243,"box":{"x":68,"y":643,"width":837,"height":11}},{"id":"b3490c4b-6af9-46a2-b6c1-96e0db0ebf04","block_type":"box","text":"factors affecting issuers of Pennsylvania municipal securities. Without intending to be complete, the information set","page_number":243,"box":{"x":68,"y":658,"width":829,"height":11}},{"id":"199b81e2-0f7e-46fe-a703-94268ab0d4f2","block_type":"box","text":"forth below briefly summarizes some of the factors affecting the financial situation in Pennsylvania. Such information","page_number":243,"box":{"x":68,"y":673,"width":835,"height":11}},{"id":"ccbc5417-2194-4c4c-af99-2878bd88d2a5","block_type":"box","text":"is derived from official statements utilized in connection with the issuance of Pennsylvania municipal securities, as","page_number":243,"box":{"x":70,"y":688,"width":818,"height":11}},{"id":"142cfe3c-c44e-4cc3-af11-5e5282fbd943","block_type":"box","text":"well as from other publicly available documents. Such information has not been independently verified by the","page_number":243,"box":{"x":68,"y":703,"width":776,"height":11}},{"id":"276b0a57-87c3-4c12-b108-5d8050711ad2","block_type":"box","text":"BlackRock Multi-State Municipal Series Trust (the “Trust”) or the Fund and neither the Trust nor the Fund assume","page_number":243,"box":{"x":70,"y":718,"width":806,"height":11}},{"id":"a9074851-cd74-4408-a393-725b945ca946","block_type":"box","text":"responsibility for the completeness or accuracy of such information. In addition, the information provided is updated","page_number":243,"box":{"x":69,"y":733,"width":827,"height":11}},{"id":"bef99804-f9fc-4189-8930-d54f1b90aeb2","block_type":"box","text":"only through the date of this Statement of Additional Information. The information and risks set forth below could","page_number":243,"box":{"x":69,"y":748,"width":806,"height":12}},{"id":"67bbacfc-624c-470e-bfb4-69e1ccfbc43b","block_type":"box","text":"change quickly and without notice due to additional information available, market or economic changes or other","page_number":243,"box":{"x":69,"y":763,"width":795,"height":12}},{"id":"1e571d8d-c6e1-461e-9f05-cf365478126b","block_type":"box","text":"unforeseen events, among other things.","page_number":243,"box":{"x":69,"y":778,"width":283,"height":12}},{"id":"f9597e42-a231-4046-81c8-5a33340c77b7","block_type":"box","text":"The summary below does not include all of the information pertaining to the economy, budget, receipts and","page_number":243,"box":{"x":101,"y":801,"width":766,"height":11}},{"id":"7085e728-9c66-4551-90cb-cf9f2c3417f9","block_type":"box","text":"disbursements of the state that would ordinarily be included in various public documents, such as an official","page_number":243,"box":{"x":69,"y":816,"width":773,"height":11}},{"id":"4b551d59-bfa0-4e9d-af9a-a70067ed74ef","block_type":"box","text":"statement prepared in connection with the issuance of general obligation bonds of the state. The information is","page_number":243,"box":{"x":69,"y":831,"width":795,"height":12}},{"id":"700ac4a1-3de7-4bac-a8d0-2171dfa9f5d8","block_type":"box","text":"intended to give a recent historical description and is not intended to indicate future or continuing trends in the","page_number":243,"box":{"x":70,"y":846,"width":791,"height":12}},{"id":"72b57dfb-54af-431d-b6ef-40642ca2479e","block_type":"box","text":"financial or other positions of the Commonwealth. Additionally, many factors, including national, economic, social and","page_number":243,"box":{"x":68,"y":862,"width":837,"height":11}},{"id":"2e4af134-7378-41ea-848a-a05969d83c49","block_type":"box","text":"environmental policies and conditions, which are not within the control of such issuers, could have an adverse impact","page_number":243,"box":{"x":69,"y":877,"width":839,"height":11}},{"id":"10a837d7-ecae-41bb-a544-c913ad5cdc32","block_type":"box","text":"on the financial condition of such issuers. The creditworthiness of obligations issued by local Pennsylvania issuers","page_number":243,"box":{"x":69,"y":892,"width":818,"height":11}},{"id":"18716101-52c1-42ed-84d0-4c30ce7a8530","block_type":"box","text":"may be unrelated to the creditworthiness of obligations issued by the Commonwealth, and there is generally no","page_number":243,"box":{"x":69,"y":907,"width":795,"height":11}},{"id":"57df62e7-530c-41bd-b7cf-5775d79a4464","block_type":"box","text":"Public Page 25 of 33","page_number":243,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"d2cf67d8-4537-4a27-9a3d-1a0f071174f6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":243,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"f5632aa4-fc2f-4ac6-bb4a-cf705274c781","block_type":"box","text":"obligation on the part of the Commonwealth to make payments on such local obligations. There may be specific","page_number":244,"box":{"x":69,"y":75,"width":798,"height":11}},{"id":"8c0df164-f23b-4656-963b-68cd4d92e16d","block_type":"box","text":"factors that are applicable to obligations of particular issuers located within Pennsylvania, and it is possible the Fund","page_number":244,"box":{"x":68,"y":90,"width":836,"height":11}},{"id":"6db3117b-64d2-4db1-b71c-15f54fcd6106","block_type":"box","text":"will invest in obligations of particular issuers as to which such specific factors are applicable. The information set","page_number":244,"box":{"x":68,"y":105,"width":811,"height":11}},{"id":"53c5e0af-7a7e-4e72-9e42-15071ba67b40","block_type":"box","text":"forth below is intended only as a general summary and not as a discussion of any specific factors that may affect","page_number":244,"box":{"x":68,"y":120,"width":813,"height":12}},{"id":"091f05ca-df21-4cba-be3f-2c1c9f369816","block_type":"box","text":"any particular issuer of Pennsylvania municipal securities.","page_number":244,"box":{"x":69,"y":135,"width":412,"height":11}},{"id":"cfd6cf3b-8ea4-4dbe-874b-ddf0d7165018","block_type":"box","text":"There can be no assurance that the Commonwealth or a political subdivision thereof will not experience a decline","page_number":244,"box":{"x":101,"y":158,"width":808,"height":11}},{"id":"511c7640-28c6-461c-bb8c-aac95d101669","block_type":"box","text":"in economic conditions, or that portions of the Pennsylvania municipal securities purchased by the Fund will not be","page_number":244,"box":{"x":70,"y":173,"width":818,"height":11}},{"id":"2fc9fbfe-1ce5-4050-bcfb-87639cad0839","block_type":"box","text":"affected by such a decline.","page_number":244,"box":{"x":69,"y":188,"width":191,"height":11}},{"id":"12ade902-b2c2-4bae-bf28-e05de8eb2fc6","block_type":"box","text":"State Economy","page_number":244,"box":{"x":68,"y":219,"width":111,"height":11}},{"id":"0a74430a-8e47-4592-94a7-6dcb73644876","block_type":"box","text":"General.","page_number":244,"box":{"x":102,"y":241,"width":59,"height":9}},{"id":"e8cc183e-e1a0-45ed-a003-d067226e914a","block_type":"box","text":"Many factors affect the financial condition of the Commonwealth of Pennsylvania and its political","page_number":244,"box":{"x":168,"y":241,"width":688,"height":11}},{"id":"9cbb44a8-cb54-4272-985c-fdf2365c594e","block_type":"box","text":"subdivisions, such as social, environmental and economic conditions, many of which are not within the control of","page_number":244,"box":{"x":69,"y":256,"width":807,"height":11}},{"id":"f12054ba-7cf9-4fa7-949e-2a25730455c0","block_type":"box","text":"such entities. Pennsylvania and certain of its counties, cities and school districts and public bodies have from time to","page_number":244,"box":{"x":69,"y":271,"width":840,"height":12}},{"id":"6ae2c4b0-a2ee-4ac5-8c2c-e9db513433f7","block_type":"box","text":"time encountered financial difficulties which have adversely affected their respective credit standings. Such","page_number":244,"box":{"x":68,"y":286,"width":767,"height":12}},{"id":"d934b028-b102-46db-8978-ba6090b37a95","block_type":"box","text":"difficulties could affect outstanding obligations of such entities, including obligations held by the Fund. Other factors","page_number":244,"box":{"x":69,"y":302,"width":830,"height":11}},{"id":"267f7be2-6091-4a80-a258-9ffa3eccc307","block_type":"box","text":"that may negatively affect economic conditions in Pennsylvania include adverse changes in employment rates, federal","page_number":244,"box":{"x":68,"y":317,"width":840,"height":11}},{"id":"a5e99d22-9501-41c4-9037-2d6613b2dee8","block_type":"box","text":"revenue sharing or laws with respect to tax-exempt financing.","page_number":244,"box":{"x":69,"y":332,"width":434,"height":11}},{"id":"4a46ec69-e56a-4fa4-ac36-f4bd0914ae3c","block_type":"box","text":"Pennsylvania is one of the most populous states, ranking fifth behind California, Texas, Florida, and New York.","page_number":244,"box":{"x":102,"y":355,"width":783,"height":11}},{"id":"c04421cb-e922-4497-87a0-e589437e2e98","block_type":"box","text":"Pennsylvania stakes claim to a diverse economy and many thriving industries. At different times throughout its","page_number":244,"box":{"x":69,"y":370,"width":787,"height":11}},{"id":"736bce91-fe5d-4eb3-a817-d4c31e094079","block_type":"box","text":"history, the Commonwealth has been the nation’s principal producer of ships, iron, chemicals, lumber, oil, textiles,","page_number":244,"box":{"x":69,"y":385,"width":817,"height":11}},{"id":"a0147faa-1525-4680-83dd-a5f352cfd5e0","block_type":"box","text":"glass, coal and steel. This led Pennsylvania to be identified historically as a heavy industrial state. That reputation","page_number":244,"box":{"x":68,"y":400,"width":815,"height":11}},{"id":"2ef96ec4-f6ab-4c33-916e-6ac822316a10","block_type":"box","text":"has changed over the last several decades as the coal, steel and railroad industries declined and Pennsylvania’s","page_number":244,"box":{"x":69,"y":415,"width":805,"height":11}},{"id":"10068aea-9b0e-46b6-a5a0-d8bd715e0835","block_type":"box","text":"business environment readjusted to a more diversified economic base.","page_number":244,"box":{"x":69,"y":430,"width":505,"height":11}},{"id":"6cbd510f-7798-4835-8389-c214336dfdbd","block_type":"box","text":"The combined education and healthcare industry is a vital part of the state economy. The state’s education","page_number":244,"box":{"x":101,"y":453,"width":766,"height":11}},{"id":"c9027cb6-5234-48ff-89e7-da24101626a8","block_type":"box","text":"providers, especially its notable research universities, not only provide jobs on campus but also help to nurture new","page_number":244,"box":{"x":70,"y":468,"width":826,"height":11}},{"id":"a45780cd-bfe2-44e6-9df7-fa23f952d73e","block_type":"box","text":"businesses. The Pittsburgh region has seen rapid growth in high-tech fields such as software development and","page_number":244,"box":{"x":69,"y":483,"width":789,"height":11}},{"id":"4179851f-a961-4c50-8077-f803cfd7cc01","block_type":"box","text":"robotics, thanks in part to the presence of its universities and the graduates they produce. Philadelphia’s universities","page_number":244,"box":{"x":69,"y":498,"width":838,"height":11}},{"id":"4757590a-e2cd-477a-901d-bfe818fbdf00","block_type":"box","text":"continue to support regional health systems and spawn startups in the life sciences that are a major economic driver","page_number":244,"box":{"x":69,"y":513,"width":838,"height":12}},{"id":"ad14c80e-6445-4455-b6a5-1341c2bd1dfb","block_type":"box","text":"in the region. The state’s share of manufacturing employment remains above the national average. Output of","page_number":244,"box":{"x":70,"y":528,"width":776,"height":12}},{"id":"a94aaebd-8f57-4f08-963d-5e4249a0e1a3","block_type":"box","text":"pharmaceuticals remains an engine of growth, while the rapid increase in the state’s production of natural gas liquids","page_number":244,"box":{"x":70,"y":543,"width":838,"height":12}},{"id":"5d882722-6aec-4bcd-997b-28708c8aa131","block_type":"box","text":"provides the basis for gains in production of chemicals and plastics.","page_number":244,"box":{"x":70,"y":559,"width":484,"height":11}},{"id":"6211d82e-efa5-4e28-b70a-2c93650d82df","block_type":"box","text":"Pennsylvania exported $52.2 billion in goods to foreign markets in 2025. Chemicals remain Pennsylvania’s top","page_number":244,"box":{"x":102,"y":581,"width":793,"height":12}},{"id":"6275f514-409f-459c-84a2-41f466c2cfbb","block_type":"box","text":"export category, accounting for $13.3 billion of Pennsylvania’s total goods exported in 2025. This category includes","page_number":244,"box":{"x":69,"y":596,"width":828,"height":12}},{"id":"c7e98f78-daea-47c1-bba5-9c8729dd5729","block_type":"box","text":"pharmaceuticals, a key output of the state economy. Canada remained the state’s primary export destination,","page_number":244,"box":{"x":70,"y":612,"width":784,"height":11}},{"id":"93ce6ab3-e1be-481e-a4cd-3c75dd302729","block_type":"box","text":"receiving $13.9 billion in exported goods in 2025. Technology firms are steadily gaining a significant presence in the","page_number":244,"box":{"x":69,"y":626,"width":831,"height":12}},{"id":"d0fbda3f-4b40-4899-b7b2-d011b5541d51","block_type":"box","text":"Pittsburgh region due to the young and talented workforce emerging from schools like Carnegie Mellon and the","page_number":244,"box":{"x":69,"y":642,"width":789,"height":11}},{"id":"fb5870bf-be1f-4975-843a-81ef42044ee9","block_type":"box","text":"University of Pittsburgh. Tech giants Google have moved into the area, while Westinghouse is in the process of","page_number":244,"box":{"x":70,"y":657,"width":788,"height":11}},{"id":"f9067f2b-7d8e-4c9e-ad58-4e1773add1f0","block_type":"box","text":"expanding its corporate offices in the region. Investment by Westinghouse in nuclear engineering and research will","page_number":244,"box":{"x":69,"y":672,"width":815,"height":11}},{"id":"3540bf6f-fe23-4d28-b2f3-11344e81b1c5","block_type":"box","text":"propel this sector through the next several years.","page_number":244,"box":{"x":70,"y":687,"width":347,"height":11}},{"id":"fd103a50-f210-461c-a441-ced8ed0a6da1","block_type":"box","text":"Pennsylvania’s transportation and warehousing sector continues to benefit from its location in the midst of tens","page_number":244,"box":{"x":102,"y":710,"width":798,"height":11}},{"id":"608c1df7-c78b-4f11-ae57-4225ba6be4c7","block_type":"box","text":"of millions of people along the Northeast Corridor, and access via interstate highways, railroads, ocean and river","page_number":244,"box":{"x":69,"y":725,"width":803,"height":11}},{"id":"a674d2f4-52e6-4aa3-a114-55c6b30ec99a","block_type":"box","text":"ports, and air cargo hubs. The northeastern part of the state in particular provides a lower-cost distribution hub for","page_number":244,"box":{"x":70,"y":740,"width":820,"height":11}},{"id":"b3d307ac-c030-4ec8-93f8-5a777ab8eb44","block_type":"box","text":"cargo coming through the ports around New York City.","page_number":244,"box":{"x":69,"y":755,"width":381,"height":11}},{"id":"b6f1cffc-8565-4160-8bd8-2c7508c8482e","block_type":"box","text":"Unemployment.","page_number":244,"box":{"x":102,"y":778,"width":112,"height":11}},{"id":"0fbb831a-bfeb-4acb-a6a0-9e4dda007f29","block_type":"box","text":"As of July 2026, Pennsylvania has an unemployment rate of 3.9%. Pennsylvania’s","page_number":244,"box":{"x":219,"y":778,"width":583,"height":11}},{"id":"ca6820eb-4315-4bdd-8586-815fc6cc9b7d","block_type":"box","text":"unemployment rate dropped significantly since 2020, when the unemployment rate was 9.1% due to the COVID-19","page_number":244,"box":{"x":69,"y":793,"width":816,"height":11}},{"id":"c5ba5897-57a9-4278-aba8-0decdd34150b","block_type":"box","text":"pandemic.","page_number":244,"box":{"x":70,"y":808,"width":71,"height":11}},{"id":"773c9341-e479-4028-9053-9793d0150773","block_type":"box","text":"Description of Funds","page_number":244,"box":{"x":69,"y":838,"width":149,"height":11}},{"id":"ff3a4439-6717-4c07-aa64-7b8e52b7ada0","block_type":"box","text":"The Commonwealth utilizes the fund method of accounting. Over 150 funds have been established and currently","page_number":244,"box":{"x":101,"y":861,"width":803,"height":11}},{"id":"51d0d529-0fcc-4dc4-b04f-2e94c159d79d","block_type":"box","text":"exist for the purpose of recording the receipt and disbursement of moneys received by the Commonwealth. Annual","page_number":244,"box":{"x":69,"y":876,"width":814,"height":11}},{"id":"03e94559-6ac5-483d-87e4-0ecde2df6289","block_type":"box","text":"budgets are adopted each fiscal year for the principal operating funds of the Commonwealth and several other","page_number":244,"box":{"x":69,"y":891,"width":786,"height":12}},{"id":"78f0acfb-e14f-4c3b-9355-e3213ef2266a","block_type":"box","text":"Public Page 26 of 33","page_number":244,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"d75a0d9b-dad2-411a-8ea7-a5289bfa39bc","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":244,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9f8d0337-7264-44f1-9ae1-5df7d61d85dd","block_type":"box","text":"special revenue funds. Expenditures and encumbrances against these funds may be made only pursuant to","page_number":245,"box":{"x":69,"y":75,"width":766,"height":11}},{"id":"0cab63af-d2b6-40bf-9520-61e3b338d636","block_type":"box","text":"appropriation measures enacted by the General Assembly and approved by the Governor.","page_number":245,"box":{"x":69,"y":90,"width":634,"height":11}},{"id":"c00dbf45-b03f-4145-b71e-c56b213f8891","block_type":"box","text":"The General Fund, the Commonwealth’s largest operating fund, receives all tax revenues, non-tax revenues and","page_number":245,"box":{"x":101,"y":113,"width":795,"height":11}},{"id":"0843f3cd-50a9-4ba7-9a3b-2f798c81cc7a","block_type":"box","text":"federal grants and entitlements that are not specified by law to be deposited elsewhere. Most of the","page_number":245,"box":{"x":68,"y":128,"width":717,"height":11}},{"id":"cea5e54d-8ac2-4245-b6c2-d840052759ef","block_type":"box","text":"Commonwealth’s operating and administrative expenses are payable from the General Fund. Debt service on all bond","page_number":245,"box":{"x":69,"y":143,"width":838,"height":11}},{"id":"357952ab-16e8-4e83-b43c-4033a712f621","block_type":"box","text":"indebtedness of the Commonwealth, except that issued for highway purposes or for the benefit of other special","page_number":245,"box":{"x":70,"y":158,"width":792,"height":11}},{"id":"f4888f1a-e5b2-442d-8657-b027ed17b701","block_type":"box","text":"revenue funds, is payable from the General Fund.","page_number":245,"box":{"x":69,"y":173,"width":350,"height":11}},{"id":"d5ff5704-0982-40f3-b962-1b8abb297acc","block_type":"box","text":"Tax revenues constituted approximately 96.9 percent of Commonwealth revenues in the General Fund for the","page_number":245,"box":{"x":101,"y":196,"width":777,"height":11}},{"id":"15f3ae0f-93ea-4571-84d3-dbf8c19205ad","block_type":"box","text":"fiscal year 2025. The major tax sources for the General Fund of the Commonwealth are the personal income tax, the","page_number":245,"box":{"x":68,"y":211,"width":833,"height":11}},{"id":"00f10d04-f875-45e6-90d1-7005482d393c","block_type":"box","text":"sales and use tax, the corporate net income tax, the gross receipts tax, and the cigarette tax.","page_number":245,"box":{"x":69,"y":226,"width":667,"height":11}},{"id":"a9225708-13d6-4e9d-a6f6-5d163d1c3312","block_type":"box","text":"The Motor License Fund receives all tax and fee revenues relating to motor fuels and vehicles. All revenues","page_number":245,"box":{"x":101,"y":249,"width":764,"height":11}},{"id":"3dc30f44-9da5-4c6b-93a9-abbeab06c400","block_type":"box","text":"relating to motor fuels and vehicles are required by the Pennsylvania Constitution to be used only for highway","page_number":245,"box":{"x":69,"y":264,"width":779,"height":11}},{"id":"5543fdda-cdf1-4adb-a509-812996288aa3","block_type":"box","text":"purposes. Most federal aid revenues designated for transportation programs and tax revenues relating to aviation","page_number":245,"box":{"x":70,"y":279,"width":810,"height":11}},{"id":"e697a45d-609a-4411-8f17-61b967d75b70","block_type":"box","text":"fuels are also deposited in the Motor License Fund. Operating and administrative costs for the Department of","page_number":245,"box":{"x":68,"y":294,"width":783,"height":11}},{"id":"4751b5d8-84d9-4584-80f7-e7c2d61a74ae","block_type":"box","text":"Transportation and other Commonwealth departments conducting transportation related programs, including the","page_number":245,"box":{"x":68,"y":309,"width":803,"height":11}},{"id":"7b6bfa6c-1b0a-46c5-8f5f-2b115af65a6c","block_type":"box","text":"highway patrol activities of the Pennsylvania State Police, are also paid from the Motor License Fund. Debt service on","page_number":245,"box":{"x":69,"y":324,"width":838,"height":12}},{"id":"358f1164-a0b8-4e5d-afb3-67bb8e8003be","block_type":"box","text":"certain bonds issued by the Commonwealth for highway purposes is payable from the Motor License Fund.","page_number":245,"box":{"x":69,"y":339,"width":759,"height":12}},{"id":"09e39f6c-ee91-49fe-8492-156ddc2c3be8","block_type":"box","text":"Other special revenue funds have been established by law to receive specified revenues that are designated for","page_number":245,"box":{"x":102,"y":362,"width":796,"height":11}},{"id":"c96b3b2f-20e6-4475-9cb3-0d8eb9fe97ba","block_type":"box","text":"departments, boards and/or commissions for payment of their operating and administrative costs. Such funds","page_number":245,"box":{"x":69,"y":377,"width":789,"height":12}},{"id":"2326ac4f-2a09-4bf8-bce6-0db6a140b797","block_type":"box","text":"include the Game, Fish, Boat, Banking Department, Milk Marketing, State Farm Products Show, Environmental","page_number":245,"box":{"x":70,"y":392,"width":784,"height":12}},{"id":"16ed42cb-fb9c-4f06-858f-1c7578d1916b","block_type":"box","text":"Stewardship, State Racing, and Tobacco Settlement Funds. Some of these special revenue funds are required to","page_number":245,"box":{"x":69,"y":407,"width":803,"height":12}},{"id":"dd610ac6-70f1-4cc0-a65c-5d14e5adeb1e","block_type":"box","text":"transfer excess revenues to the General Fund, and some receive funding, in addition to their specified revenues,","page_number":245,"box":{"x":68,"y":423,"width":802,"height":11}},{"id":"fe150c71-6180-42bf-b467-d4eff58c317d","block_type":"box","text":"through appropriations from the General Fund.","page_number":245,"box":{"x":68,"y":438,"width":329,"height":11}},{"id":"cb452d82-3b13-40be-8b1d-142fd6a4c1d4","block_type":"box","text":"The Tobacco Settlement Fund is a special revenue fund established to receive tobacco litigation settlement","page_number":245,"box":{"x":101,"y":460,"width":765,"height":12}},{"id":"2d3bb066-3bda-4623-bc45-1f34f2fa9b19","block_type":"box","text":"payments paid to the Commonwealth. The Commonwealth is one of forty-six states that settled certain smoking","page_number":245,"box":{"x":70,"y":475,"width":801,"height":12}},{"id":"6299822b-42dc-4f35-9620-2f7fb722c0b3","block_type":"box","text":"related litigation in a November 1998 master settlement agreement with participating tobacco product manufacturers","page_number":245,"box":{"x":69,"y":491,"width":838,"height":11}},{"id":"4134ddfd-df7f-4d3a-b184-da1f8816c4bb","block_type":"box","text":"(the “Tobacco MSA”). Under the Tobacco MSA, the Commonwealth is entitled to receive a portion of payments made","page_number":245,"box":{"x":69,"y":506,"width":830,"height":11}},{"id":"4f234c54-449d-4174-a59f-2136ba616db7","block_type":"box","text":"pursuant to the Tobacco MSA by tobacco product manufacturers participating in the Tobacco MSA. Most revenues","page_number":245,"box":{"x":70,"y":521,"width":810,"height":11}},{"id":"53c68d75-0cce-499d-a509-4974b96ee5b3","block_type":"box","text":"deposited to the Tobacco Settlement Fund are subject to annual appropriation by the General Assembly and approval","page_number":245,"box":{"x":69,"y":536,"width":833,"height":11}},{"id":"266fd7d8-9895-481f-a091-ecafff3f3900","block_type":"box","text":"by the Governor.","page_number":245,"box":{"x":69,"y":551,"width":114,"height":11}},{"id":"aca6338a-cf24-4931-a478-7655181342b2","block_type":"box","text":"The Budget Stabilization Reserve Fund is a special revenue fund designated to receive a statutorily determined","page_number":245,"box":{"x":101,"y":574,"width":791,"height":11}},{"id":"b4a1cf63-3756-46e5-8d82-ff1f118acc67","block_type":"box","text":"portion of the budgetary basis fiscal year-end surplus of the General Fund, as was its predecessor fund, the Tax","page_number":245,"box":{"x":70,"y":589,"width":797,"height":11}},{"id":"50a6bbe6-cc2f-42e6-b261-05f6033f4af6","block_type":"box","text":"Stabilization Reserve Fund. The Budget Stabilization Reserve Fund was established in July 2002 after the Tax","page_number":245,"box":{"x":69,"y":604,"width":781,"height":11}},{"id":"5333e478-8222-4726-80bd-961986da630d","block_type":"box","text":"Stabilization Reserve Fund was abolished and its balance transferred to the General Fund for the 2002 fiscal year","page_number":245,"box":{"x":69,"y":619,"width":813,"height":11}},{"id":"fc814856-6694-4c38-a242-d7e71d290294","block_type":"box","text":"budget.","page_number":245,"box":{"x":69,"y":634,"width":51,"height":12}},{"id":"59d3fe23-b80b-4be2-a2da-f7be9148a3b9","block_type":"box","text":"The Budget Stabilization Reserve Fund is used for emergencies threatening the health, safety or welfare of","page_number":245,"box":{"x":101,"y":657,"width":762,"height":11}},{"id":"6b2eab35-b8b3-4162-931e-c659afae9278","block_type":"box","text":"citizens or during downturns in the economy that result in significant unanticipated revenue shortfalls not able to be","page_number":245,"box":{"x":69,"y":672,"width":826,"height":11}},{"id":"d65740d8-bb4a-409b-b437-bb06bc36b2c3","block_type":"box","text":"addressed through the normal budget process. Assets of the Budget Stabilization Reserve Fund may be used upon","page_number":245,"box":{"x":69,"y":687,"width":820,"height":11}},{"id":"8671fecf-215d-4caa-8557-ac8b1dfbf48f","block_type":"box","text":"recommendation by the Governor and an approving vote by two-thirds of the members of each chamber of the","page_number":245,"box":{"x":69,"y":702,"width":781,"height":12}},{"id":"1b7c9e1b-30c8-4f18-b4dd-1faff7a9d22c","block_type":"box","text":"General Assembly. For US GAAP reporting purposes, the Budget Stabilization Reserve Fund (previously designated","page_number":245,"box":{"x":69,"y":718,"width":812,"height":11}},{"id":"db43755a-2040-40ad-b4f5-2385c186b5be","block_type":"box","text":"the Tax Stabilization Reserve Fund) has been reported as a fund balance reservation in the General Fund","page_number":245,"box":{"x":68,"y":732,"width":750,"height":12}},{"id":"67db1a86-42a2-4518-9984-c25f0e77efd4","block_type":"box","text":"(governmental fund category) since fiscal year 1999. Prior to that fiscal year, the Tax Stabilization Reserve Fund was","page_number":245,"box":{"x":69,"y":748,"width":829,"height":11}},{"id":"e8d2a28b-fdd3-4087-b885-f0e39cfac2a7","block_type":"box","text":"reported on a US GAAP basis, as a designation of the General Fund unreserved fund balance.","page_number":245,"box":{"x":69,"y":763,"width":668,"height":11}},{"id":"b72a5ba1-105e-4cbd-94a1-060848af546b","block_type":"box","text":"The Commonwealth maintains trust and agency funds that are used to administer funds received pursuant to a","page_number":245,"box":{"x":101,"y":785,"width":792,"height":12}},{"id":"1d789657-1c3f-450e-9923-599e37eddd0c","block_type":"box","text":"specific bequest or as an agent for other governmental units or individuals. Enterprise funds are maintained for","page_number":245,"box":{"x":69,"y":801,"width":793,"height":11}},{"id":"e29e3a5d-8952-45c4-8625-9cb9bea4e655","block_type":"box","text":"departments or programs operated like private enterprises. Two of the largest of such funds are the State Stores","page_number":245,"box":{"x":69,"y":816,"width":808,"height":11}},{"id":"a74ec963-ab82-4b79-8c3b-a7bec87f9813","block_type":"box","text":"Fund and the State Lottery Fund. The State Stores Fund is used for the receipts and disbursements of the","page_number":245,"box":{"x":70,"y":831,"width":756,"height":11}},{"id":"88f4d63e-de23-4efa-8bf7-8515b5330a85","block_type":"box","text":"Commonwealth’s liquor store system. Sale and distribution of all liquor within Pennsylvania is a government","page_number":245,"box":{"x":69,"y":846,"width":769,"height":11}},{"id":"33d44378-324f-48a5-8155-df281156f44e","block_type":"box","text":"enterprise. The State Lottery Fund is also an enterprise fund for the receipt of all revenues from lottery ticket sales","page_number":245,"box":{"x":69,"y":861,"width":821,"height":11}},{"id":"83903d3e-5ffa-45bd-b898-ca65a7c16f76","block_type":"box","text":"and lottery licenses and fees. Its revenues, after payment of prizes and all other costs, are dedicated to paying the","page_number":245,"box":{"x":69,"y":876,"width":821,"height":11}},{"id":"963552a7-c618-4770-b432-6953a094f06a","block_type":"box","text":"costs of programs benefiting the elderly and handicapped in Pennsylvania.","page_number":245,"box":{"x":69,"y":891,"width":528,"height":12}},{"id":"e294cd5e-5903-4977-9f2b-58a608564b79","block_type":"box","text":"Public Page 27 of 33","page_number":245,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"9a3cbd68-a26b-4449-a606-337847f0e810","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":245,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"ad04143f-a98e-429f-b3d7-5999e79863ea","block_type":"box","text":"In addition, the Commonwealth maintains funds classified as working capital, bond, and sinking funds for other","page_number":246,"box":{"x":102,"y":75,"width":793,"height":11}},{"id":"49a6ade6-aa29-438d-8f92-3266b90437f6","block_type":"box","text":"specified purposes.","page_number":246,"box":{"x":69,"y":90,"width":138,"height":11}},{"id":"365731ca-6478-4613-99c0-461af20efbe2","block_type":"box","text":"Accounting Practices","page_number":246,"box":{"x":68,"y":120,"width":157,"height":11}},{"id":"ea4df1c7-309b-42ab-9b54-aa1524ada19c","block_type":"box","text":"Financial information for the principal operating funds of the Commonwealth is maintained on a budgetary basis","page_number":246,"box":{"x":102,"y":143,"width":797,"height":11}},{"id":"7ac79c10-599e-423f-b43c-c25bb0e54087","block_type":"box","text":"of accounting. The Commonwealth also prepares annual financial statements in accordance with generally accepted","page_number":246,"box":{"x":69,"y":158,"width":826,"height":11}},{"id":"22b60b3d-0e2a-4972-a2ec-edc87fdf4aef","block_type":"box","text":"accounting principles (“GAAP”). Annual financial statements prepared in accordance with GAAP are audited jointly by","page_number":246,"box":{"x":69,"y":173,"width":828,"height":11}},{"id":"293d7feb-58a6-4e77-bfca-2f8a09106476","block_type":"box","text":"the Department of the Auditor General and an independent public accounting firm.","page_number":246,"box":{"x":68,"y":188,"width":586,"height":12}},{"id":"f3c8add4-10a0-42f7-90da-81e7d753e052","block_type":"box","text":"Budgetary Basis.","page_number":246,"box":{"x":102,"y":211,"width":123,"height":11}},{"id":"56865759-3177-4932-9b02-6ae44ecfe82f","block_type":"box","text":"A budgetary basis of accounting is used for ensuring compliance with the enacted operating","page_number":246,"box":{"x":231,"y":211,"width":656,"height":11}},{"id":"ed7f96ab-4d7b-4dc4-8646-b380209230f0","block_type":"box","text":"budget and is governed by applicable statutes of the Commonwealth and by administrative procedures. The","page_number":246,"box":{"x":69,"y":226,"width":766,"height":11}},{"id":"708ee813-f944-4602-828b-a829f82e7da0","block_type":"box","text":"Pennsylvania Constitution provides that operating budget appropriations shall not exceed the actual and estimated","page_number":246,"box":{"x":69,"y":241,"width":817,"height":11}},{"id":"b7c0a66d-5433-40cf-9832-03603d34290f","block_type":"box","text":"revenues and unappropriated surplus available in the fiscal year for which funds are appropriated. Annual budgets are","page_number":246,"box":{"x":69,"y":256,"width":840,"height":12}},{"id":"e8a0fbc1-30c2-42b8-b32f-14139a91060d","block_type":"box","text":"enacted for the General Fund and certain special revenue funds that together represent most expenditures of the","page_number":246,"box":{"x":69,"y":271,"width":808,"height":12}},{"id":"dc1485c4-a009-4d44-9df1-1545d199555d","block_type":"box","text":"Commonwealth. The annual budget classifies fund revenues as Commonwealth revenues, augmentations, federal","page_number":246,"box":{"x":69,"y":286,"width":809,"height":12}},{"id":"5793ea6d-6b53-4056-ade7-831c4ca9dcab","block_type":"box","text":"revenues, or restricted receipts and revenues.","page_number":246,"box":{"x":69,"y":302,"width":328,"height":11}},{"id":"d7dc987b-5c5d-4959-b152-a9da47c48b84","block_type":"box","text":"Commonwealth revenues are revenues from taxes and from non-tax sources such as license and fee charges,","page_number":246,"box":{"x":102,"y":324,"width":784,"height":12}},{"id":"d10e19fa-e53e-4414-8179-fa5591f65bfb","block_type":"box","text":"penalties, interest, investment income and other miscellaneous sources. Augmentations consist of departmental and","page_number":246,"box":{"x":70,"y":339,"width":837,"height":12}},{"id":"6b83194f-58d8-4413-a900-1102b1d1b620","block_type":"box","text":"institutional billings that supplement an appropriation of Commonwealth revenues, thereby increasing authorized","page_number":246,"box":{"x":70,"y":355,"width":801,"height":11}},{"id":"ed7a060b-9354-439c-a34d-c713d6e9c3de","block_type":"box","text":"spending. For example, patient billings for services at Commonwealth-owned institutions are augmentations that","page_number":246,"box":{"x":69,"y":370,"width":802,"height":11}},{"id":"0b9ec364-bfbc-49a1-96d4-bc9d9861d372","block_type":"box","text":"supplement Commonwealth revenues appropriated to each institution for operating costs. Federal revenues are those","page_number":246,"box":{"x":69,"y":385,"width":840,"height":11}},{"id":"24f2989b-6ee4-462e-adcf-37057a0d94ce","block_type":"box","text":"federal aid receipts that pay for or reimburse the Commonwealth for funds disbursed for federally assisted programs.","page_number":246,"box":{"x":68,"y":400,"width":835,"height":11}},{"id":"e61ef240-9926-4dbb-ac97-986c7003092b","block_type":"box","text":"Restricted receipts and revenues are funds that are restricted to a specific use or uses by state law, administrative","page_number":246,"box":{"x":70,"y":415,"width":820,"height":11}},{"id":"0786f6e7-dd50-4719-8198-a2aa9c58be02","block_type":"box","text":"decision, or the provider of the funds. Only Commonwealth revenues and expenditures from these revenues are","page_number":246,"box":{"x":69,"y":430,"width":795,"height":11}},{"id":"f7f920cc-d9ac-4a0f-83db-c6d9fb3ba4ad","block_type":"box","text":"included in the computation made to determine whether an enacted budget is constitutionally balanced. Augmenting","page_number":246,"box":{"x":70,"y":446,"width":828,"height":11}},{"id":"0599994a-6f02-431b-b003-2322588bd535","block_type":"box","text":"revenues and federal revenues are considered self-balancing with expenditures from their respective revenue","page_number":246,"box":{"x":69,"y":460,"width":777,"height":12}},{"id":"4ee9bca3-4348-429b-b0cf-09e7fe2d0404","block_type":"box","text":"sources.","page_number":246,"box":{"x":69,"y":478,"width":59,"height":6}},{"id":"d20ff34d-17b1-40d8-bfba-4ea3729708ba","block_type":"box","text":"The Commonwealth’s budgetary basis financial reports for its governmental funds are based on a modified cash","page_number":246,"box":{"x":101,"y":498,"width":803,"height":11}},{"id":"195fb5ff-2883-4a94-9259-4423bc116f93","block_type":"box","text":"basis of accounting, as opposed to the modified accrual basis prescribed by GAAP. Under the Commonwealth’s","page_number":246,"box":{"x":69,"y":513,"width":793,"height":12}},{"id":"756ab6d8-c86a-442f-890c-2ed15f1c636b","block_type":"box","text":"budgetary basis of accounting, tax receipts, non-tax revenues, augmentations and all other receipts are recorded at","page_number":246,"box":{"x":69,"y":528,"width":825,"height":12}},{"id":"a5a74d0d-18d5-4984-8d8b-1bd0d88aa331","block_type":"box","text":"the time cash is received. An adjustment is made at fiscal year-end to include accrued unrealized revenue, that is,","page_number":246,"box":{"x":68,"y":543,"width":815,"height":12}},{"id":"d2c5577b-ccdc-4d0f-950e-04e66822e186","block_type":"box","text":"revenues earned but not collected. Revenues accrued include estimated receipts from (i) sales and use, personal","page_number":246,"box":{"x":69,"y":559,"width":810,"height":11}},{"id":"a17dbc51-3f12-4e0a-a79a-439c96dfe79d","block_type":"box","text":"income, realty transfer, inheritance, cigarette, liquor, liquid fuel, fuels, and oil company franchise taxes, and interest","page_number":246,"box":{"x":70,"y":574,"width":826,"height":11}},{"id":"fb3895cc-0cd0-42e2-a105-70a19a89dbb2","block_type":"box","text":"earnings, and (ii) federal government commitments to the Commonwealth. Expenditures are recorded at the time","page_number":246,"box":{"x":69,"y":589,"width":805,"height":11}},{"id":"32186190-02e3-45e4-bafd-1f7a0b00a3d9","block_type":"box","text":"payment requisitions and invoices are submitted to the Treasury Department for payment. Appropriated amounts are","page_number":246,"box":{"x":70,"y":604,"width":832,"height":11}},{"id":"e06398c5-dd55-4218-94e7-16313189be1c","block_type":"box","text":"reserved for payment of contracts for the delivery of goods or services to the Commonwealth through an","page_number":246,"box":{"x":69,"y":619,"width":745,"height":11}},{"id":"0c2c2264-9c4e-43f7-8457-2e023187e2e8","block_type":"box","text":"encumbrance process. Unencumbered appropriated funds are automatically lapsed at fiscal year-end and are","page_number":246,"box":{"x":69,"y":634,"width":778,"height":11}},{"id":"7b99c4c8-27d9-40b5-bf43-aece338ba9d1","block_type":"box","text":"available for re-appropriation. Estimated encumbrances are established at fiscal year-end to pay certain direct","page_number":246,"box":{"x":69,"y":649,"width":783,"height":12}},{"id":"9d55a60c-dbf2-4071-b172-1bef7c99fa77","block_type":"box","text":"expenditures for salaries, wages, travel and utility costs payable against current year appropriations but disbursed in","page_number":246,"box":{"x":69,"y":664,"width":831,"height":12}},{"id":"25a7a6ca-6659-4ec1-bb7c-0a0ad662b409","block_type":"box","text":"the subsequent fiscal year. Recording of the applicable expenditure liquidates the encumbered amount.","page_number":246,"box":{"x":68,"y":680,"width":738,"height":11}},{"id":"cbee4f30-dee2-4dba-843d-ce4a99f595fc","block_type":"box","text":"Overestimates of fiscal year-end encumbrances are lapsed in the subsequent fiscal year and under-estimates are","page_number":246,"box":{"x":69,"y":695,"width":808,"height":11}},{"id":"ed246bea-806e-4297-bd85-2b4969d0e67d","block_type":"box","text":"charged to a subsequent fiscal year appropriation. Appropriation encumbrances are shown on the Commonwealth’s","page_number":246,"box":{"x":69,"y":710,"width":823,"height":11}},{"id":"139c5ec3-edce-4d72-838d-31b2b89e83f6","block_type":"box","text":"balance sheet as a reservation of fund balance.","page_number":246,"box":{"x":69,"y":725,"width":341,"height":9}},{"id":"ab8f680f-e650-4bbe-bd16-8204fd93a263","block_type":"box","text":"Other reservations of fund balance include (i) the unexpended balance of continuing appropriations (that is,","page_number":246,"box":{"x":102,"y":748,"width":764,"height":11}},{"id":"bcd80f08-eed1-423c-9f90-45d25e9976af","block_type":"box","text":"appropriations that do not lapse at fiscal year-end), and (ii) requested appropriation supplements and deficiency","page_number":246,"box":{"x":69,"y":763,"width":798,"height":11}},{"id":"2e25fef3-4dd4-4056-848c-2bb10a53e46a","block_type":"box","text":"appropriations. Revenues dedicated for specific purposes and remaining unexpended at fiscal year-end are likewise","page_number":246,"box":{"x":69,"y":778,"width":823,"height":11}},{"id":"2c79095e-9415-44b4-abb2-141e70021c8e","block_type":"box","text":"reserved.","page_number":246,"box":{"x":69,"y":793,"width":66,"height":9}},{"id":"8c6c748f-1547-4274-b507-4f8737caa7e2","block_type":"box","text":"GAAP Financial Reporting.","page_number":246,"box":{"x":102,"y":816,"width":192,"height":11}},{"id":"ccf8a5d3-9ce3-4617-ba43-e4f4e6396666","block_type":"box","text":"At fiscal year-end, budgetary basis financial information, both revenues and","page_number":246,"box":{"x":300,"y":816,"width":538,"height":11}},{"id":"e314cc7f-da42-4668-90ac-8d42b348b544","block_type":"box","text":"expenditures, is adjusted to reflect appropriate accruals for financial reporting in conformity with GAAP. The","page_number":246,"box":{"x":69,"y":831,"width":764,"height":11}},{"id":"808f7d17-78d9-46fc-a37b-05f5fa166808","block_type":"box","text":"Commonwealth is not required to prepare GAAP financial statements and does not prepare them on an interim basis.","page_number":246,"box":{"x":69,"y":846,"width":836,"height":11}},{"id":"c329782f-c797-4b7d-9d4c-bdf888e3fee5","block_type":"box","text":"GAAP financial reporting requires a modified accrual basis of accounting for governmental funds, while proprietary","page_number":246,"box":{"x":69,"y":861,"width":813,"height":11}},{"id":"450e8250-80df-465c-b917-c5d6128f58fd","block_type":"box","text":"and fiduciary funds are reported on the accrual basis of accounting.","page_number":246,"box":{"x":69,"y":876,"width":484,"height":11}},{"id":"fe7056d6-fac5-42ab-9685-29d679e74fed","block_type":"box","text":"Public Page 28 of 33","page_number":246,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"34a42a9a-0516-4d85-a0b3-4c17367ff1f5","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":246,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"9c71a2d3-3c12-49a6-83ac-a85295f4a9b1","block_type":"box","text":"Financial statements of the Commonwealth’s government funds prepared under GAAP differ from those","page_number":247,"box":{"x":102,"y":75,"width":736,"height":11}},{"id":"5bfad06e-b603-413b-9d48-e1dbedff26d1","block_type":"box","text":"traditionally prepared on a budgetary basis for several reasons. Among other differences, the GAAP financial","page_number":247,"box":{"x":68,"y":90,"width":773,"height":11}},{"id":"339f970a-46bc-42a6-934e-47ad88e493c1","block_type":"box","text":"statements for government funds (i) generally recognize revenues when they become measurable and available rather","page_number":247,"box":{"x":69,"y":105,"width":839,"height":11}},{"id":"3278ea33-c559-4be1-8f69-5df600715601","block_type":"box","text":"than when cash is received, (ii) report expenditures when goods and services are received and a liability incurred","page_number":247,"box":{"x":68,"y":120,"width":807,"height":12}},{"id":"fc7c7ffc-9db1-4967-92d6-3504c11ef6a1","block_type":"box","text":"rather than when cash is disbursed, (iii) include a combined balance sheet for the Commonwealth presented by GAAP","page_number":247,"box":{"x":69,"y":135,"width":837,"height":11}},{"id":"7bc84ab3-489e-4eb2-b428-f39127289205","block_type":"box","text":"fund type rather than by Commonwealth fund, and (iv) include activities of all funds in the reporting entity, including","page_number":247,"box":{"x":68,"y":150,"width":822,"height":12}},{"id":"51b8de95-a5dd-405d-b877-a9e20fef466c","block_type":"box","text":"agencies and authorities usually considered as independent of the Commonwealth for budgetary purposes.","page_number":247,"box":{"x":69,"y":166,"width":763,"height":11}},{"id":"9eab7ae1-f3c9-48eb-a3bf-025d730eef7a","block_type":"box","text":"Adjustments to budgetary basis revenues and expenditures required to conform to GAAP accounting generally require","page_number":247,"box":{"x":68,"y":181,"width":837,"height":11}},{"id":"0d16d443-4e14-4e5b-83fb-c4c7b8596322","block_type":"box","text":"including (i) corporation, sales, and personal income tax accruals, (ii) tax refunds payable and tax credits, and","page_number":247,"box":{"x":70,"y":196,"width":781,"height":11}},{"id":"22ae2ce9-9ab2-43ad-9fca-e6dd4bf6aa89","block_type":"box","text":"(iii) expenditures incurred but not yet posted as expenditures or not covered by appropriations.","page_number":247,"box":{"x":69,"y":211,"width":673,"height":11}},{"id":"cda08180-1bce-4e9b-9de6-e6ce4bab1aee","block_type":"box","text":"Commonwealth Financial Performance","page_number":247,"box":{"x":69,"y":241,"width":280,"height":9}},{"id":"58210dca-8e90-42c3-a415-49fe1801eb57","block_type":"box","text":"Fiscal Year 2026 Budget.","page_number":247,"box":{"x":102,"y":264,"width":184,"height":11}},{"id":"8682aafd-8cc4-4ccc-bc25-c1b9f6ffb483","block_type":"box","text":"The Governor proposed a fiscal year budget on June 30, 2026. The total budget is","page_number":247,"box":{"x":291,"y":264,"width":587,"height":11}},{"id":"63a49855-f96f-48ba-9f4e-64352139c26c","block_type":"box","text":"approximately $50.8 billion, with little increase over the 2025-2026 budget. The budget level-funds education at all","page_number":247,"box":{"x":69,"y":278,"width":820,"height":12}},{"id":"7a81e01b-6c25-4b87-8121-0e63d45882ec","block_type":"box","text":"levels and preserves funding for core state government functions and services.","page_number":247,"box":{"x":70,"y":294,"width":564,"height":11}},{"id":"86bad6c3-b4d2-478a-9159-5163ed94fb07","block_type":"box","text":"The 2026-2027 official revenue estimate (as reported by the Independent Fiscal Office) is $49.75 billion, an","page_number":247,"box":{"x":101,"y":316,"width":776,"height":12}},{"id":"f60b6d29-e578-4ca8-8ead-863089de9ac7","block_type":"box","text":"increase of $923 million from the 2025-2026 fiscal year. The achievement of budgeted results may be adversely","page_number":247,"box":{"x":70,"y":331,"width":804,"height":12}},{"id":"051e6782-8870-4b1a-ac9a-a4e5d408574a","block_type":"box","text":"affected by a number of trends or events, including developments in the national and state economies.","page_number":247,"box":{"x":69,"y":347,"width":735,"height":11}},{"id":"c6c42bfd-5746-4ebc-8ada-8c9a8858fdaa","block_type":"box","text":"According to the Monthly Revenue Report issued by the Pennsylvania Department of Revenue, the General Fund","page_number":247,"box":{"x":101,"y":370,"width":799,"height":11}},{"id":"3bbd2c08-e911-49e5-94f8-aab65e162d53","block_type":"box","text":"collections for the month of July were $3.4 billion. Pennsylvania ended the 2025-2026 fiscal year with $48.9 billion","page_number":247,"box":{"x":69,"y":384,"width":822,"height":12}},{"id":"68569998-9f78-40a2-9d88-0aed61c6b08c","block_type":"box","text":"in General Fund collections. That total was $1.1 billion (2.4%) above estimate.","page_number":247,"box":{"x":70,"y":399,"width":557,"height":12}},{"id":"4df501b3-aa51-4c3e-b490-30bfea7998f0","block_type":"box","text":"Financial Results for Fiscal Year 2025.","page_number":247,"box":{"x":102,"y":423,"width":281,"height":9}},{"id":"14dd251d-3f67-4819-8a12-d454dec25f75","block_type":"box","text":"General Fund revenues of the commonwealth were above estimate by","page_number":247,"box":{"x":389,"y":423,"width":496,"height":11}},{"id":"98ea67d7-41f7-44b3-8b94-97940cc1a561","block_type":"box","text":"$1.1 billion or 2.4 percent during fiscal year 2025. Final commonwealth General Fund revenues for the fiscal year","page_number":247,"box":{"x":69,"y":437,"width":810,"height":12}},{"id":"04abcc66-d8e6-4e8e-ba85-4057ab914355","block_type":"box","text":"totaled $48.9 billion. The commonwealth ended fiscal year 2025 with a positive balance of $11 billion.","page_number":247,"box":{"x":68,"y":452,"width":735,"height":12}},{"id":"ffd9aec2-ee42-46d6-a758-d994634d87c0","block_type":"box","text":"Outstanding Indebtedness of the Commonwealth","page_number":247,"box":{"x":69,"y":483,"width":355,"height":11}},{"id":"a0c8dab4-515e-4042-b4f2-2cfabd5ecad8","block_type":"box","text":"General.","page_number":247,"box":{"x":102,"y":506,"width":59,"height":9}},{"id":"1486d790-d3bd-4ad3-9512-76f7c2ae0015","block_type":"box","text":"The Commonwealth is permitted by its Constitution to incur the following types of debt: (i) debt to","page_number":247,"box":{"x":167,"y":506,"width":694,"height":11}},{"id":"1d7b40ac-7f99-40ac-b65b-82b69487e9fd","block_type":"box","text":"suppress insurrection or rehabilitate areas affected by disaster; (ii) electorate approved debt; (iii) debt for capital","page_number":247,"box":{"x":69,"y":521,"width":805,"height":11}},{"id":"5b7cf036-0604-4e37-95b6-551124b29843","block_type":"box","text":"projects subject to the Commonwealth’s “Constitutional Debt Limit”; and (iv) tax anticipation notes payable in the","page_number":247,"box":{"x":70,"y":536,"width":808,"height":11}},{"id":"6fe0fd02-6d3b-4bc1-850d-98d30a4192a5","block_type":"box","text":"fiscal year of issuance. All debt, except debt incurred through the issuance of tax anticipation notes, must be","page_number":247,"box":{"x":68,"y":551,"width":780,"height":11}},{"id":"9a1b099c-d69a-47ad-b481-9f2ada6e26a4","block_type":"box","text":"amortized in substantial and regular amounts.","page_number":247,"box":{"x":69,"y":566,"width":328,"height":11}},{"id":"0b33b0b7-fb51-45ee-886f-9ef21bc2fdd5","block_type":"box","text":"Debt service on Commonwealth general obligation debt is paid from appropriations out of the General Fund","page_number":247,"box":{"x":102,"y":589,"width":763,"height":11}},{"id":"f8cb6024-fa14-447a-8a2f-1c8b031c137f","block_type":"box","text":"except for debt issued for highway purposes, which is paid from Motor License Fund appropriations. General","page_number":247,"box":{"x":69,"y":604,"width":770,"height":11}},{"id":"02b36d4b-8f0d-4ea1-942c-5e2d077274fe","block_type":"box","text":"obligation debt of $10,254.8 million was outstanding on June 30, 2025. Outstanding debt for these purposes","page_number":247,"box":{"x":69,"y":618,"width":785,"height":12}},{"id":"cd6cd721-bb37-4cca-9ee6-fd4cf28fde96","block_type":"box","text":"increased by a net $512.7 million since June 30, 2024. For the period ending June 30, 2025, the 10-year and 5-year","page_number":247,"box":{"x":70,"y":634,"width":836,"height":12}},{"id":"e5a5a5b7-701e-440b-9a88-d0b2c556ecbd","block_type":"box","text":"average annual compound growth rate for total outstanding debt for non-highway purposes has been -0.9 percent and","page_number":247,"box":{"x":69,"y":649,"width":836,"height":12}},{"id":"4736dd9a-b60d-4ff9-9cff-ab15e2806111","block_type":"box","text":"-1.0 percent, respectively. As of September 8, 2026, Pennsylvania general obligation bonds have been assigned a","page_number":247,"box":{"x":68,"y":664,"width":815,"height":12}},{"id":"ddf79b1d-3b0d-4e4e-bcf0-efbcccdb54dc","block_type":"box","text":"credit rating of Aa2 by Moody’s Investor Services, Inc. and AA by Fitch Ratings.","page_number":247,"box":{"x":69,"y":680,"width":560,"height":11}},{"id":"f36a4563-4db1-4d8a-bd46-09db0f25c17b","block_type":"box","text":"Government Authorities and Other Organizations.","page_number":247,"box":{"x":102,"y":702,"width":357,"height":11}},{"id":"6c93e212-3beb-41fd-9a33-bbf7f8935a7b","block_type":"box","text":"Certain state-created organizations have statutory","page_number":247,"box":{"x":465,"y":702,"width":358,"height":12}},{"id":"70dde912-1ce6-4271-9cc0-4cf69eeded93","block_type":"box","text":"authorization to issue debt for which state appropriations to pay debt service thereon are not required. The debt of","page_number":247,"box":{"x":69,"y":717,"width":819,"height":12}},{"id":"09692009-50f6-4a09-b39f-17ce9cd8d95c","block_type":"box","text":"these organizations is funded by assets of, or revenues derived from, the various projects financed and is not a","page_number":247,"box":{"x":68,"y":732,"width":797,"height":12}},{"id":"4c4fe8c8-5fcb-49d8-aaf2-036ce5b6c7a9","block_type":"box","text":"statutory or moral obligation of the Commonwealth. However, some of these organizations are indirectly dependent","page_number":247,"box":{"x":69,"y":748,"width":821,"height":11}},{"id":"527e9e3f-6e1b-44b9-80c3-5d7950f5433f","block_type":"box","text":"upon Commonwealth operating appropriations. In addition, the Commonwealth may choose to take action to","page_number":247,"box":{"x":69,"y":763,"width":771,"height":11}},{"id":"31cc4daa-ff8e-4a8e-8f50-8df0689258be","block_type":"box","text":"financially assist these organizations.","page_number":247,"box":{"x":68,"y":778,"width":267,"height":11}},{"id":"a93be2f5-f0b3-415c-8947-f27f26349e1d","block_type":"box","text":"Pennsylvania Housing Finance Agency (“PHFA”).","page_number":247,"box":{"x":102,"y":801,"width":355,"height":11}},{"id":"3598680e-131d-40b5-8d8c-612789eb3328","block_type":"box","text":"The PHFA is a State-created agency that provides financing for","page_number":247,"box":{"x":462,"y":801,"width":444,"height":11}},{"id":"7ca4d6dc-dbb2-49f4-82e7-763a807b2606","block_type":"box","text":"housing for low and moderate-income families, and people with special housing needs in the Commonwealth. The","page_number":247,"box":{"x":69,"y":816,"width":809,"height":11}},{"id":"e358eaa0-b887-446c-9459-918635b94599","block_type":"box","text":"bonds, but not the notes, of the PHFA are partially secured by a capital reserve fund required to be maintained by the","page_number":247,"box":{"x":69,"y":831,"width":839,"height":11}},{"id":"35d95f06-2e9c-481b-9e45-30299bb44e4a","block_type":"box","text":"PHFA in an amount equal to the minimum capital reserve fund required for such fund. If there is a potential deficiency","page_number":247,"box":{"x":69,"y":846,"width":840,"height":11}},{"id":"c23a3ff8-ad02-4ba4-960d-84cf4269cdcd","block_type":"box","text":"in the capital reserve fund or if funds are necessary to avoid default on interest, principal or sinking fund payments","page_number":247,"box":{"x":70,"y":861,"width":821,"height":11}},{"id":"99a6b418-6205-4db1-868d-b6d735d5bc62","block_type":"box","text":"on bonds or notes of PHFA, the statute creating PHFA directs the Governor, upon notification from PHFA, to include in","page_number":247,"box":{"x":69,"y":876,"width":834,"height":11}},{"id":"12152776-d11d-4049-8ea4-039ca468922e","block_type":"box","text":"the proposed executive budget of the Commonwealth for the next succeeding year an amount sufficient to fund such","page_number":247,"box":{"x":68,"y":891,"width":832,"height":12}},{"id":"639062d0-1f10-4ec5-9f3b-4cf8912a8c92","block_type":"box","text":"deficiency to avoid such default. The budget as passed by the General Assembly may or may not include the amount","page_number":247,"box":{"x":69,"y":906,"width":830,"height":12}},{"id":"12a040ce-ecb2-40c1-a45d-668b51221e6f","block_type":"box","text":"Public Page 29 of 33","page_number":247,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"a7733f1b-9b4e-4318-bf31-2574fba8a40f","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":247,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"70cd9356-6171-4dce-87f8-79508ee038b5","block_type":"box","text":"so requested by the Governor. PHFA is not permitted to borrow additional funds so long as any deficiency exists in","page_number":248,"box":{"x":69,"y":75,"width":813,"height":11}},{"id":"f08bdffe-2a47-4789-8633-222ec1ee46dc","block_type":"box","text":"the capital reserve fund. No deficiency exists currently. As of December 31, 2025, PHFA reported having","page_number":248,"box":{"x":68,"y":90,"width":747,"height":11}},{"id":"d0ce478f-29b1-4717-ac97-6ce3244e29f1","block_type":"box","text":"$7,417.5 million of revenue bonds outstanding.","page_number":248,"box":{"x":69,"y":104,"width":340,"height":12}},{"id":"8e1e4266-6494-44c9-9433-9e79c921167c","block_type":"box","text":"Lease Financing.","page_number":248,"box":{"x":102,"y":128,"width":119,"height":11}},{"id":"2cd9e6b0-5d63-4a9f-bbdb-912c1d9d3892","block_type":"box","text":"g. The Commonwealth, through several of its departments and agencies, leases various real","page_number":248,"box":{"x":221,"y":128,"width":649,"height":11}},{"id":"d34de7a0-3ad0-4e73-9500-45f915135ac7","block_type":"box","text":"property and equipment. Some leases and the lease payments thereunder are, with the Commonwealth’s approval,","page_number":248,"box":{"x":70,"y":143,"width":822,"height":11}},{"id":"521a2fc4-6a8c-4b5f-a08b-d11eac32986f","block_type":"box","text":"pledged as security for debt obligations issued by certain public authorities or other entities within the state. All lease","page_number":248,"box":{"x":70,"y":158,"width":839,"height":11}},{"id":"b6949e8e-b7cb-4352-a9ef-01d6b44f824d","block_type":"box","text":"payments payable by Commonwealth departments and agencies are subject to and dependent upon an annual","page_number":248,"box":{"x":70,"y":173,"width":788,"height":11}},{"id":"da42ad56-0261-4353-a315-1973a2aedf09","block_type":"box","text":"spending authorization being approved by the legislature through the Commonwealth’s annual budget process. The","page_number":248,"box":{"x":69,"y":188,"width":819,"height":12}},{"id":"3530e00c-3892-4800-a9ca-a21d6097a684","block_type":"box","text":"Commonwealth is not required by law to appropriate or otherwise provide moneys to pay lease payments. The","page_number":248,"box":{"x":69,"y":203,"width":783,"height":12}},{"id":"edb45dc0-9f7f-4a09-a2fb-ecfebc0f0549","block_type":"box","text":"obligations to be paid from such lease payments do not constitute bonded debt of the Commonwealth.","page_number":248,"box":{"x":69,"y":218,"width":732,"height":12}},{"id":"b039f44b-dc0d-4351-803e-f2ba224813b1","block_type":"box","text":"Commonwealth Financing Authority (“CFA”).","page_number":248,"box":{"x":102,"y":241,"width":325,"height":11}},{"id":"2f0081bc-168f-44be-b556-c7b65750d209","block_type":"box","text":"The CFA was established in April 2004 with the enactment of","page_number":248,"box":{"x":433,"y":241,"width":436,"height":11}},{"id":"55c06800-3bac-45a2-8e23-ad0d1408a2b6","block_type":"box","text":"legislation establishing the CFA as an independent authority and an instrumentality of the Commonwealth. The CFA is","page_number":248,"box":{"x":70,"y":256,"width":835,"height":12}},{"id":"9b01ac26-3099-488c-a83f-54b59b06e4e4","block_type":"box","text":"authorized to issue limited obligation revenue bonds and other types of limited obligation revenue financing for the","page_number":248,"box":{"x":69,"y":271,"width":815,"height":12}},{"id":"f84123e1-7027-4cf0-aa1f-6ee427b5755d","block_type":"box","text":"purposes of promoting the health, safety, employment, business opportunities, economic activity and general welfare","page_number":248,"box":{"x":70,"y":286,"width":835,"height":12}},{"id":"d8c29708-4078-4da7-b268-cef50e31b73c","block_type":"box","text":"of the Commonwealth and its citizens through loans, grants, guarantees, leases, lines and letters of credit and other","page_number":248,"box":{"x":69,"y":302,"width":833,"height":11}},{"id":"c0b72d01-610d-45a5-a831-b121f9efc6f3","block_type":"box","text":"financing arrangements to benefit both for-profit and non-profit entities. The CFA’s bonds and financings are to be","page_number":248,"box":{"x":68,"y":317,"width":809,"height":11}},{"id":"e1cabe4a-96c6-43e0-8202-836dd40c2eec","block_type":"box","text":"secured by revenues and accounts of the CFA, including funds appropriated to CFA from general and other revenues","page_number":248,"box":{"x":69,"y":332,"width":826,"height":11}},{"id":"59b981f5-1e6a-48a7-93dc-e00ba4979a5a","block_type":"box","text":"of the Commonwealth for repayment of CFA obligations. The obligations of the CFA do not constitute a debt or liability","page_number":248,"box":{"x":69,"y":347,"width":837,"height":11}},{"id":"d58fa2a3-2244-4a3f-adfe-8ca3f9f3fc0b","block_type":"box","text":"of the Commonwealth.","page_number":248,"box":{"x":69,"y":362,"width":159,"height":9}},{"id":"a3ceb28a-bcb7-4a1a-a3e2-57ebbc062de6","block_type":"box","text":"In Act 85 of 2016 (“Act 85”), the General Assembly enacted a new Section 1753.1-E of the Fiscal Code that","page_number":248,"box":{"x":102,"y":385,"width":772,"height":11}},{"id":"92792939-3389-46d0-b3ff-fb097f7734c2","block_type":"box","text":"obligates the State Treasurer, in consultation with the Commonwealth’s Secretary of the Budget, to transfer the","page_number":248,"box":{"x":69,"y":400,"width":796,"height":11}},{"id":"4d0bcd68-74b5-42e5-9ac9-a9255e061f78","block_type":"box","text":"monies necessary for payment of CFA’s debt service each fiscal year, beginning July 1, 2016 from sales tax receipts","page_number":248,"box":{"x":69,"y":415,"width":832,"height":11}},{"id":"f5a7f924-8774-4835-abb1-34217caacd0e","block_type":"box","text":"deposited in the General Fund to a restricted revenue account within the General Fund which may only be used to pay","page_number":248,"box":{"x":69,"y":430,"width":838,"height":11}},{"id":"310c253a-0dae-4c1e-93f8-686a7843a144","block_type":"box","text":"that debt service.","page_number":248,"box":{"x":68,"y":446,"width":125,"height":8}},{"id":"68195b31-d9ef-458e-9d11-1c915920eaa5","block_type":"box","text":"Since November 2005, the CFA has completed multiple bond issues to fund programs established by its original","page_number":248,"box":{"x":102,"y":468,"width":800,"height":11}},{"id":"8385ee24-da9a-4b94-9da9-bcef7c658120","block_type":"box","text":"economic stimulus mission of April 2004. Currently, there are no plans to issue additional debt for such programs.","page_number":248,"box":{"x":69,"y":483,"width":817,"height":11}},{"id":"413a15ba-0702-48de-9230-209bb1ea0246","block_type":"box","text":"As part of the enactment process for the fiscal year 2009 budget, the General Assembly enacted and on","page_number":248,"box":{"x":101,"y":506,"width":746,"height":11}},{"id":"f382cc42-b02b-4f59-b4c4-1d65e8b8dd34","block_type":"box","text":"July 9, 2008, the Governor signed into law Act 63 of 2008 (“Act 63”) and Act 1 of Special Session 1 of 2008 (“Act","page_number":248,"box":{"x":69,"y":521,"width":820,"height":11}},{"id":"79ebe815-931a-4684-b6ef-cab28505c0c3","block_type":"box","text":"1”). Combined, these two acts provided the CFA with additional bond issuance authority of up to an additional","page_number":248,"box":{"x":70,"y":536,"width":781,"height":11}},{"id":"eb363c8e-48b9-4869-b500-65d2ccd0c026","block_type":"box","text":"$1,300 million. Act 63 provides the CFA with authority to issue up to $800 million in limited obligation revenue bonds","page_number":248,"box":{"x":69,"y":550,"width":839,"height":12}},{"id":"d61cc566-f3c7-4a8d-87aa-eaad5667acde","block_type":"box","text":"in order to fund water or sewer projects, storm water projects, flood control projects and high hazard unsafe dam","page_number":248,"box":{"x":70,"y":566,"width":804,"height":11}},{"id":"4daf70af-74ec-4a31-adae-a6fb20e613ff","block_type":"box","text":"projects. Act 63 also provides for the use of Pennsylvania Gaming and Economic Development and Tourism Fund","page_number":248,"box":{"x":70,"y":581,"width":801,"height":12}},{"id":"02e19cdd-65fb-4f66-b4f0-7a3f71c7077b","block_type":"box","text":"revenues to support debt service costs associated with the $800 million in additional CFA debt authority. Act 1","page_number":248,"box":{"x":69,"y":596,"width":792,"height":12}},{"id":"c2837b5f-c73e-40cc-a143-f5cd52bda2f0","block_type":"box","text":"provides the CFA with authority to issue up to $500 million in limited obligation revenue bonds to fund the","page_number":248,"box":{"x":70,"y":611,"width":754,"height":12}},{"id":"68c0e47f-de69-4aa6-bc94-bbfdf7b8a727","block_type":"box","text":"development of alternative sources of energy. As of December 31, 2025, the CFA has issued $473 million in limited","page_number":248,"box":{"x":69,"y":626,"width":829,"height":12}},{"id":"0d0d34b7-e2c2-4722-ba85-4ee8645a93d9","block_type":"box","text":"obligation revenue bonds authorized by Act 1 and $757 million in limited obligation revenue bonds authorized by Act","page_number":248,"box":{"x":69,"y":641,"width":827,"height":12}},{"id":"2aa067d5-9e69-4513-97f5-8b03516916ab","block_type":"box","text":"63. Other than bonds for refunding purposes, there currently are no plans to issue additional debt for these","page_number":248,"box":{"x":69,"y":657,"width":768,"height":11}},{"id":"4a868e7f-25db-4f32-862f-f9fc1f5f3efb","block_type":"box","text":"programs.","page_number":248,"box":{"x":70,"y":674,"width":69,"height":9}},{"id":"6215f682-d45e-4d9b-abe4-b83cb517109c","block_type":"box","text":"As of December 31, 2025, the CFA had $3,906.1 million in outstanding bond debt (including Tobacco Bonds).","page_number":248,"box":{"x":101,"y":694,"width":784,"height":12}},{"id":"2eda798f-8a59-4053-a6a2-7dece1f9f9e1","block_type":"box","text":"With respect thereto, the restricted revenue account established pursuant to Act 85 is funded annually through a","page_number":248,"box":{"x":68,"y":710,"width":806,"height":11}},{"id":"756055fe-b4d6-4482-ba85-19608f52700d","block_type":"box","text":"Sales and Use Tax Transfer as the source used to service approximately $3,381.5 million of outstanding debt and","page_number":248,"box":{"x":69,"y":724,"width":814,"height":12}},{"id":"f2e594a5-cc9b-4cfb-a980-ec308e13f3c1","block_type":"box","text":"the Pennsylvania Gaming and Economic Development and Tourism Fund has been the source used to service","page_number":248,"box":{"x":68,"y":740,"width":779,"height":11}},{"id":"f8e8e331-e232-473d-b9d9-65a12aec2fc5","block_type":"box","text":"approximately $524.6 million of such outstanding debt.","page_number":248,"box":{"x":69,"y":755,"width":394,"height":11}},{"id":"1f968abe-28ff-4095-a74f-05a25cfb4d9b","block_type":"box","text":"Pursuant to Act 25 of 2016, the CFA is authorized to issue debt related to the Commonwealth’s share of school","page_number":248,"box":{"x":102,"y":778,"width":798,"height":10}},{"id":"efca2988-e565-4781-92f4-74f367a42ad5","block_type":"box","text":"district construction costs referred to as the PlanCon process. Act 25 established a new funding mechanism to pay","page_number":248,"box":{"x":69,"y":793,"width":824,"height":11}},{"id":"58d300bd-ed85-4e17-9957-cff5d7aad299","block_type":"box","text":"school districts for construction reimbursements due to them and to fund capital grants to school districts as part of","page_number":248,"box":{"x":69,"y":808,"width":833,"height":11}},{"id":"49fc2ff0-dddc-493d-87a1-d4b469c5924c","block_type":"box","text":"the PlanCon process. The CFA is authorized to issue up to $2,500 million in appropriation backed debt in connection","page_number":248,"box":{"x":68,"y":823,"width":833,"height":11}},{"id":"69801a31-40f4-4a81-8ae6-4206e00419a1","block_type":"box","text":"with the Commonwealth’s share of school construction costs; debt in excess of $2,500 million may be incurred by","page_number":248,"box":{"x":68,"y":838,"width":819,"height":11}},{"id":"a280fe4e-2a5c-434b-a4d3-b5f3fdeb3145","block_type":"box","text":"CFA for this purpose if CFA and the Department of Education determine that $2,500 million is insufficient to carry","page_number":248,"box":{"x":69,"y":853,"width":814,"height":12}},{"id":"04c5a682-0967-459a-ab02-b70c0acba572","block_type":"box","text":"out the purposes of Act 25 and if the Secretary of the Budget approves such determination. Under the statute, CFA","page_number":248,"box":{"x":69,"y":869,"width":822,"height":11}},{"id":"33602d07-22f8-48a4-a3cd-b17651681d3b","block_type":"box","text":"may issue bonds through fiscal year 2025. As of June 30, 2025, the CFA has issued $1,903.1 million for","page_number":248,"box":{"x":69,"y":883,"width":754,"height":12}},{"id":"4bacb3c5-d573-4497-b688-cad8c187ce4b","block_type":"box","text":"construction reimbursement purposes under Act 25.","page_number":248,"box":{"x":69,"y":899,"width":372,"height":11}},{"id":"883fc04c-cb13-4bcf-af40-c8f2d63c954f","block_type":"box","text":"Public Page 30 of 33","page_number":248,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"65a3f0e7-7609-418d-8451-93dfcbdb9650","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":248,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"db5d7ca7-1fda-4182-aa6e-632f3c64c4a4","block_type":"box","text":"In addition, the CFA pursuant to Article XXVIII of the Pennsylvania Tax Reform Code, added by the Act of","page_number":249,"box":{"x":102,"y":75,"width":737,"height":11}},{"id":"4cdd0756-1629-48d1-adb1-db270249d6fa","block_type":"box","text":"October 30, 2017, No. 43 (“Act 43”), issued Tobacco Master Settlement Payment Revenue Bonds, (the “Tobacco","page_number":249,"box":{"x":69,"y":90,"width":810,"height":11}},{"id":"12a88a74-0fdd-446f-8940-8538aa537543","block_type":"box","text":"Bonds”) on February 13, 2018, in a principal amount necessary to fund a deposit of $1,500 million in the General","page_number":249,"box":{"x":70,"y":104,"width":816,"height":12}},{"id":"29ee7c31-7e70-4cf4-9221-6e245ae188f4","block_type":"box","text":"Fund to provide General Fund budgetary relief. Currently, there are no plans to issue additional Tobacco Bonds (other","page_number":249,"box":{"x":70,"y":120,"width":833,"height":12}},{"id":"5bafa117-c52c-431d-b397-0360e7aa1009","block_type":"box","text":"than for refunding purposes).","page_number":249,"box":{"x":68,"y":135,"width":206,"height":12}},{"id":"c1c05cf0-b262-47f4-9d29-f6a54c95e5b1","block_type":"box","text":"Lease for Pittsburgh Penguins Arena.","page_number":249,"box":{"x":102,"y":158,"width":270,"height":11}},{"id":"63dd48b8-1fc2-4c33-b80c-6799e82686c9","block_type":"box","text":"In October 2007, the Commonwealth and the Sports and Exhibition","page_number":249,"box":{"x":379,"y":158,"width":479,"height":11}},{"id":"2b6223c0-b9d6-4f6f-bff3-c97e9b2c9671","block_type":"box","text":"Authority of Pittsburgh and Allegheny County (the “SEA”) entered into a lease agreement (the “Arena Lease”) that,","page_number":249,"box":{"x":68,"y":173,"width":813,"height":11}},{"id":"391d626e-9e66-45c0-97a3-cd4b449421f8","block_type":"box","text":"while not creating indebtedness of the Commonwealth, creates a “subject to appropriation” obligation of the","page_number":249,"box":{"x":68,"y":188,"width":774,"height":12}},{"id":"8a5a4223-c075-4fcb-8b44-ca8f5282fa7d","block_type":"box","text":"Commonwealth. The SEA, a joint public benefit authority, issued in October 2007 its $313.3 million Commonwealth","page_number":249,"box":{"x":69,"y":203,"width":823,"height":12}},{"id":"dca4b777-7c7f-4888-84b8-01adba3188bb","block_type":"box","text":"Lease Revenue Bonds (the “Arena Bonds”) to finance a multi-purpose arena (the “Arena”), to serve as the home of","page_number":249,"box":{"x":70,"y":218,"width":823,"height":12}},{"id":"c3e1b0c8-a00a-4877-bfe9-971ee7a41fe9","block_type":"box","text":"the Pittsburgh Penguins (the “Penguins”), a hockey team in the National Hockey League. The Arena Bonds are not","page_number":249,"box":{"x":68,"y":234,"width":815,"height":11}},{"id":"ea968f13-81aa-42d8-9c03-c6b93535c637","block_type":"box","text":"debt of the Commonwealth but are limited obligations of the SEA payable solely from the Special Revenues pledged","page_number":249,"box":{"x":69,"y":249,"width":824,"height":11}},{"id":"4304166a-e7e0-4f38-bd44-4383b0012766","block_type":"box","text":"therefor. These special revenues include annually (1) $4.1 million from a lease with the Penguins, (2) not less than","page_number":249,"box":{"x":68,"y":263,"width":821,"height":12}},{"id":"e94b4276-b140-4f23-88d8-a8a24dda5b4f","block_type":"box","text":"$7.5 million from the operator of a casino located in the City of Pittsburgh, and (3) $7.5 million from the","page_number":249,"box":{"x":69,"y":278,"width":743,"height":12}},{"id":"76ccdebe-df9d-4cb5-a81e-b3d4a1858a84","block_type":"box","text":"commonwealth’s Economic Development and Tourism Fund (the “Development and Tourism Fund”). The Development","page_number":249,"box":{"x":69,"y":294,"width":837,"height":11}},{"id":"492d72ef-a277-452d-b411-adaa2bdffa5e","block_type":"box","text":"and Tourism Fund is funded with an assessment of five percent of the gross terminal revenue of all total wagers","page_number":249,"box":{"x":69,"y":309,"width":799,"height":11}},{"id":"0a54cf80-798f-44ec-b391-62d4cdf9c088","block_type":"box","text":"received by all slot machines in the commonwealth less cash payments. While the special revenues were projected","page_number":249,"box":{"x":69,"y":325,"width":821,"height":10}},{"id":"b20bc0fc-7601-4cc2-a113-6f86b1428304","block_type":"box","text":"to be adequate to pay all debt service on the Arena Bonds, the revenues have not been able to fully cover the debt","page_number":249,"box":{"x":68,"y":339,"width":820,"height":12}},{"id":"a2eef3a6-9008-42a0-b960-d45a581686c6","block_type":"box","text":"service. To the extent such revenues are in any year inadequate to cover debt service, the Commonwealth is","page_number":249,"box":{"x":69,"y":355,"width":774,"height":11}},{"id":"f2d882ee-765b-4c5c-88d3-0d1cc1cdd518","block_type":"box","text":"obligated under the Arena Lease to fund such deficiency, subject in all cases to appropriation by the General","page_number":249,"box":{"x":69,"y":370,"width":772,"height":11}},{"id":"64a1d50f-08d9-415d-a24e-03f520ea9b8d","block_type":"box","text":"Assembly. The maximum annual amount payable by the Commonwealth under the Arena Lease is $18.6 million. In","page_number":249,"box":{"x":68,"y":384,"width":816,"height":12}},{"id":"a7dde3e0-dec7-43f5-a559-c18303fc5ca4","block_type":"box","text":"December 2009, the Commonwealth was notified by the SEA that an additional $2.8 million would be required in","page_number":249,"box":{"x":70,"y":399,"width":804,"height":12}},{"id":"97d154ce-6dfa-4d99-82f0-a1338406a044","block_type":"box","text":"fiscal year 2010 to support debt service. In compliance with its obligations under the Arena Lease, the","page_number":249,"box":{"x":68,"y":415,"width":735,"height":11}},{"id":"1c2c5fce-c78d-4246-bdd7-fb4b1f289601","block_type":"box","text":"Commonwealth included an appropriation request for $2.8 million from the Pennsylvania Gaming and Economic","page_number":249,"box":{"x":69,"y":429,"width":794,"height":12}},{"id":"72b5fe21-8fa2-47b9-8647-18ad7e9416c7","block_type":"box","text":"Development Tourism Fund in its fiscal year 2010 budget. Subsequent to the fiscal year 2010 budget, the","page_number":249,"box":{"x":70,"y":445,"width":754,"height":12}},{"id":"bb24a7c2-8475-4abe-a18d-26a83f773405","block_type":"box","text":"Commonwealth has been annually notified by the SEA that additional funds are required to support debt service. In","page_number":249,"box":{"x":69,"y":460,"width":821,"height":12}},{"id":"3dbfe38f-4602-466b-b1bb-173bf13e8780","block_type":"box","text":"each subsequent year, the Commonwealth included the appropriation request in the appropriate fiscal year budget.","page_number":249,"box":{"x":69,"y":475,"width":819,"height":12}},{"id":"e5151514-2c13-4554-b443-821cc56729d8","block_type":"box","text":"The Commonwealth’s debt service payments for each of the last five fiscal years were $783,144.78 in fiscal year","page_number":249,"box":{"x":68,"y":490,"width":813,"height":12}},{"id":"c2c60039-f968-44b6-bd45-4397b22d196f","block_type":"box","text":"2021, $262,764.24 in fiscal year 2022, $243,753.68 in fiscal year 2023, $191,346.38 in fiscal year 2024, and","page_number":249,"box":{"x":69,"y":505,"width":813,"height":12}},{"id":"5c38ee39-5e04-438c-b63b-7c03da0feafa","block_type":"box","text":"$207,351.50 in fiscal year 2025.","page_number":249,"box":{"x":69,"y":520,"width":239,"height":12}},{"id":"4101a5fd-1dc8-45f5-9852-b598635b62f1","block_type":"box","text":"In April 2010, the SEA issued $17.4 million in additional Commonwealth Lease Revenue Bonds (the","page_number":249,"box":{"x":102,"y":543,"width":713,"height":12}},{"id":"8687bd14-9773-458f-8a92-d038e48a2969","block_type":"box","text":"“Supplemental Arena Bonds”) to complete the Arena. The Supplemental Arena Bonds do not constitute debt of the","page_number":249,"box":{"x":70,"y":559,"width":818,"height":11}},{"id":"8aaf672a-7c0b-47c4-9450-0b053588bf73","block_type":"box","text":"Commonwealth but are limited obligations of the SEA payable solely from the special revenues pledged therefor. As","page_number":249,"box":{"x":69,"y":574,"width":823,"height":11}},{"id":"acf54bdd-8694-4aa0-9430-010a89b9e9ba","block_type":"box","text":"with the Arena Bonds, the Commonwealth is obligated under the Arena Lease, as amended, to fund any deficiency in","page_number":249,"box":{"x":68,"y":589,"width":833,"height":11}},{"id":"99b12978-4db9-4612-909a-d72d9c86d3f1","block_type":"box","text":"special revenues necessary to pay debt service on the Supplemental Arena Bonds, subject in all cases to","page_number":249,"box":{"x":69,"y":604,"width":755,"height":11}},{"id":"baf329fd-250b-421d-8d54-ee1e6c291b20","block_type":"box","text":"appropriation by the General Assembly.","page_number":249,"box":{"x":69,"y":619,"width":277,"height":11}},{"id":"636fdc3f-6c97-4d88-a73a-801aa065d780","block_type":"box","text":"Pennsylvania Convention Center.","page_number":249,"box":{"x":102,"y":642,"width":237,"height":11}},{"id":"5dacd2ab-5465-425c-8ef9-f277ddb8e36c","block_type":"box","text":"In April 2010, the Commonwealth acquired (through ownership and a long-term","page_number":249,"box":{"x":346,"y":642,"width":561,"height":11}},{"id":"23c0c045-9757-4b1a-b329-211e1b20287a","block_type":"box","text":"leasehold interest) the Pennsylvania Convention Center located in Philadelphia, Pennsylvania and the expansion","page_number":249,"box":{"x":70,"y":657,"width":796,"height":11}},{"id":"8627b98d-498d-47ed-8f7a-14edb201e164","block_type":"box","text":"thereto in 2011. Such acquisition was financed through the issuance by the Pennsylvania Economic Development","page_number":249,"box":{"x":68,"y":672,"width":811,"height":11}},{"id":"cd663c34-e5cb-4078-8933-fd5aa97a22eb","block_type":"box","text":"Financing Authority (“PEDFA”) of $281.1 million of revenue bonds (the “Convention Center Bonds”) in 2010. The","page_number":249,"box":{"x":70,"y":687,"width":800,"height":11}},{"id":"be6c4bc3-ad2a-4804-9dbf-b9c7a75160ef","block_type":"box","text":"Commonwealth, the City of Philadelphia (the “City”) and the Pennsylvania Convention Center Authority (the","page_number":249,"box":{"x":69,"y":702,"width":757,"height":11}},{"id":"b6e1dd7d-010a-4554-bc7f-2f1c09e8c24b","block_type":"box","text":"“Convention Center Authority”) entered into an Operating Agreement (the “Operating Agreement”) in connection with","page_number":249,"box":{"x":70,"y":718,"width":824,"height":11}},{"id":"27e46375-3062-45f0-8fa7-6f002fa8a623","block_type":"box","text":"the issuance of the Convention Center Bonds and the acquisition of the Pennsylvania Convention Center which","page_number":249,"box":{"x":68,"y":732,"width":789,"height":12}},{"id":"4ba84541-4279-478b-acde-77115197c0e4","block_type":"box","text":"provides for the operation of the Pennsylvania Convention Center by the Convention Center Authority (which also","page_number":249,"box":{"x":70,"y":748,"width":797,"height":11}},{"id":"e77b8d00-65c0-492c-a809-46ab472d8446","block_type":"box","text":"leases the facility), for the City to make an annual payment of $15 million plus a percentage of its Hotel Room Rental","page_number":249,"box":{"x":70,"y":762,"width":836,"height":12}},{"id":"44d19b34-8bbf-4bbb-b674-0889b1cce607","block_type":"box","text":"Tax and Hospitality Promotion Tax revenues to support operations of the Pennsylvania Convention Center and for the","page_number":249,"box":{"x":68,"y":778,"width":830,"height":11}},{"id":"03b63328-b66d-474b-9157-3dc1c571f2cb","block_type":"box","text":"Commonwealth to make payments to finance operating deficits and operating and capital reserve deposits of the","page_number":249,"box":{"x":69,"y":793,"width":807,"height":11}},{"id":"3c5395b3-fdc6-4307-9b82-063302eae17d","block_type":"box","text":"Pennsylvania Convention Center and to pay debt service on the Convention Center Bonds. The Commonwealth also","page_number":249,"box":{"x":69,"y":808,"width":820,"height":11}},{"id":"363e9da2-2165-401c-b83f-b23a676585e9","block_type":"box","text":"entered into a Grant Agreement (the “Grant Agreement”) with PEDFA and U.S. Bank National Association, as trustee","page_number":249,"box":{"x":69,"y":823,"width":827,"height":12}},{"id":"41de6f63-89a4-4396-a0f6-db829a936bd7","block_type":"box","text":"for the Convention Center Bonds, with respect to the obligations of the Commonwealth to make the payments","page_number":249,"box":{"x":68,"y":838,"width":783,"height":12}},{"id":"fd09d2cc-2067-4a8b-97c9-02af22ca134c","block_type":"box","text":"required under the Operating Agreement and related amounts due with respect to the Pennsylvania Convention","page_number":249,"box":{"x":69,"y":854,"width":789,"height":11}},{"id":"f5b721b0-fe72-477a-8781-15b2e5f96fa8","block_type":"box","text":"Center and the Convention Center Bonds.","page_number":249,"box":{"x":69,"y":869,"width":295,"height":9}},{"id":"55d0a3ea-f204-49d1-aba7-aafdd8b74e36","block_type":"box","text":"The obligations of the Commonwealth under the Operating Agreement and the Grant Agreement do not create","page_number":249,"box":{"x":101,"y":891,"width":780,"height":12}},{"id":"380a9d3b-1955-43d7-822e-22687f705161","block_type":"box","text":"indebtedness of the Commonwealth but are payable from (1) funds available in the Gaming Economic Development","page_number":249,"box":{"x":70,"y":906,"width":821,"height":12}},{"id":"ff638920-4bd3-4e99-9a34-2eb95995ff70","block_type":"box","text":"Public Page 31 of 33","page_number":249,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"c8a0dfe6-6f4a-4b4a-a386-8a3aafdd9201","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":249,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8dd9ccb5-b816-461d-8661-a5cb6380aa2d","block_type":"box","text":"and Tourism Fund and (2) other funds of the Commonwealth, subject to annual appropriation by the State legislature.","page_number":250,"box":{"x":69,"y":75,"width":834,"height":11}},{"id":"27c27476-810a-438b-85ab-48f59d72562e","block_type":"box","text":"Payments from the Gaming Economic Development and Tourism Fund of up to $64 million per year for up to 30 years","page_number":250,"box":{"x":69,"y":89,"width":835,"height":12}},{"id":"fad19add-576f-4269-b060-3dd2736b9fd5","block_type":"box","text":"(but not exceeding $880 million in the aggregate) have been appropriated by the General Assembly (by Act 53 of","page_number":250,"box":{"x":69,"y":104,"width":802,"height":12}},{"id":"90eb76ae-c4f1-47ee-81aa-d1280c9b5aab","block_type":"box","text":"2007, (“Act 53”)) for the payment of debt issued with regard to the Pennsylvania Convention Center and for operating","page_number":250,"box":{"x":69,"y":120,"width":839,"height":12}},{"id":"d2326103-edba-4182-8b69-4a0cbb29cb55","block_type":"box","text":"expenses of the Pennsylvania Convention Center; however, there is no requirement in Act 53 or otherwise that funds","page_number":250,"box":{"x":69,"y":135,"width":832,"height":11}},{"id":"2eb1e311-4b14-4666-a0e2-d6c386bcc875","block_type":"box","text":"in the Gaming Economic Development and Tourism Fund be so applied. Moneys in the Gaming Economic","page_number":250,"box":{"x":70,"y":151,"width":743,"height":11}},{"id":"ab3c6a69-b81d-4b98-b857-ee3fc528df21","block_type":"box","text":"Development and Tourism Fund have also been appropriated by the General Assembly to several other projects and","page_number":250,"box":{"x":70,"y":166,"width":821,"height":11}},{"id":"88fef5ae-e7e1-4003-abed-f77d0c074bfa","block_type":"box","text":"could be appropriated to additional projects in the future. The Gaming Economic Development and Tourism Fund is","page_number":250,"box":{"x":69,"y":181,"width":816,"height":11}},{"id":"578322ef-4cad-42da-9a6b-2cf7972e633f","block_type":"box","text":"funded with an assessment of five percent of the gross terminal revenue of all total wagers received by all slot","page_number":250,"box":{"x":68,"y":196,"width":790,"height":11}},{"id":"4cdbb6e7-3582-4c19-afaa-5e357a0ed33c","block_type":"box","text":"machines in the Commonwealth less cash payments. While the Gaming Economic Development and Tourism Fund is","page_number":250,"box":{"x":69,"y":211,"width":829,"height":11}},{"id":"5c7cb73a-3b13-4412-8ebc-14e990ef365c","block_type":"box","text":"projected to continue to have sufficient revenues to pay its current appropriated obligations, there can be no","page_number":250,"box":{"x":70,"y":226,"width":774,"height":11}},{"id":"c54792d1-4152-42e0-96ad-384dacbe1d63","block_type":"box","text":"absolute assurance that the Gaming Economic Development and Tourism Fund in any future fiscal year will receive","page_number":250,"box":{"x":69,"y":241,"width":815,"height":11}},{"id":"accc0bce-3ac9-4558-8da3-a97b3b6bebfd","block_type":"box","text":"sufficient receipts to pay its appropriated obligations.","page_number":250,"box":{"x":69,"y":256,"width":380,"height":12}},{"id":"8daea8ce-62bc-4e63-9fbf-b107df0f7c53","block_type":"box","text":"Any payments due from the Commonwealth under the Operating Agreement and the Grant Agreement and which","page_number":250,"box":{"x":101,"y":279,"width":797,"height":11}},{"id":"b8fbc7bf-9d1d-465c-a8a5-ccd68145e0d3","block_type":"box","text":"are not paid from the Gaming Economic Development and Tourism Fund are subject to annual appropriation by the","page_number":250,"box":{"x":69,"y":294,"width":814,"height":11}},{"id":"5a07f75e-f775-4a92-af1e-41594ba4ba83","block_type":"box","text":"General Assembly. The Commonwealth currently projects that payments materially in excess of the aggregate","page_number":250,"box":{"x":69,"y":309,"width":778,"height":11}},{"id":"df9e5cd2-46ef-4b95-9a68-da30d4be40db","block_type":"box","text":"$880 million appropriated from the Gaming Economic Development and Tourism Fund will be required to be paid by it","page_number":250,"box":{"x":69,"y":324,"width":836,"height":12}},{"id":"0bbfb5f7-2341-419e-a755-8dd0b9d09a17","block_type":"box","text":"to satisfy the Commonwealth’s obligations under the Operating Agreement and the Grant Agreement over the terms","page_number":250,"box":{"x":68,"y":339,"width":824,"height":12}},{"id":"c08b326f-1f11-4669-b6f6-920afcf01f4a","block_type":"box","text":"of such agreements.","page_number":250,"box":{"x":69,"y":355,"width":145,"height":11}},{"id":"61d0997f-e366-4dac-aa7a-31355deb6eae","block_type":"box","text":"Pension and Retirement Systems.","page_number":250,"box":{"x":102,"y":377,"width":246,"height":11}},{"id":"2fb624a2-ba23-4730-8006-604691d9044b","block_type":"box","text":"The Commonwealth maintains contributory benefit pension plans covering all","page_number":250,"box":{"x":354,"y":377,"width":547,"height":12}},{"id":"34e53cc9-d9d2-4961-ac2c-abc7820ab180","block_type":"box","text":"state employees, public school employees and employees of certain state-related organizations. State employees","page_number":250,"box":{"x":69,"y":392,"width":812,"height":12}},{"id":"ee8867a3-1aad-4c32-9e5d-75f00e51002f","block_type":"box","text":"and employees of certain state related organizations are members of the Pennsylvania State Employees’ Retirement","page_number":250,"box":{"x":69,"y":407,"width":833,"height":12}},{"id":"d102f9f2-2a9f-43dd-be91-9d238a983fcb","block_type":"box","text":"System (“SERS”). Public school employees are members of the Public School Employees’ Retirement System","page_number":250,"box":{"x":69,"y":423,"width":780,"height":11}},{"id":"ff118079-d649-457d-95e5-88a71ff83eff","block_type":"box","text":"(“PSERS”). With certain exceptions, membership in the applicable retirement system is mandatory for covered","page_number":250,"box":{"x":69,"y":438,"width":787,"height":11}},{"id":"94b7ca09-a8bc-44ce-bdd1-f76fbb59ade5","block_type":"box","text":"employees.","page_number":250,"box":{"x":69,"y":453,"width":79,"height":11}},{"id":"d4781e56-b455-484e-9d41-ad12534225be","block_type":"box","text":"On June 12, 2017, the Governor signed Act 5 of 2017 into law (“Act 5”) which established three new pension","page_number":250,"box":{"x":102,"y":475,"width":782,"height":12}},{"id":"10a5fd1f-324b-4baf-899a-7a6a0033fd6d","block_type":"box","text":"plan design options for most state employees hired on or after January 1, 2019 and for most school employees hired","page_number":250,"box":{"x":70,"y":491,"width":838,"height":11}},{"id":"b1437021-1c8b-4c30-a9c9-a6a1614ec9ae","block_type":"box","text":"on or after July 1, 2019. The new plan design options include two hybrid options, which have both a defined benefit","page_number":250,"box":{"x":69,"y":506,"width":822,"height":11}},{"id":"c9c86e03-1ae2-4628-8a78-3e2966d2fde5","block_type":"box","text":"(DB) component and a defined contribution (DC) component, as well as a stand-alone DC plan option.","page_number":250,"box":{"x":69,"y":521,"width":722,"height":11}},{"id":"dbc4a214-56fe-4099-9d56-d9c9c44703c5","block_type":"box","text":"In addition to a defined benefit pension plan for State employees and employees of certain State-related","page_number":250,"box":{"x":102,"y":543,"width":745,"height":12}},{"id":"8e4987ee-2d84-4206-bb5c-44fc3e7c2f3f","block_type":"box","text":"organizations, the commonwealth also provides health care plans for its eligible retirees and their qualifying","page_number":250,"box":{"x":69,"y":559,"width":769,"height":11}},{"id":"76047d77-0c2b-4d0b-8a05-0e50be43e83d","block_type":"box","text":"dependents. These and similar plans are commonly referred to as “other post-employment benefits” or “OPEBs.” The","page_number":250,"box":{"x":69,"y":574,"width":838,"height":11}},{"id":"0fa35b66-f659-4a56-adae-c7a0c3b858dd","block_type":"box","text":"commonwealth provides OPEBs under two plans. The Retired Pennsylvania State Police Program (RPSPP) provides","page_number":250,"box":{"x":69,"y":589,"width":812,"height":11}},{"id":"e4c133bc-43fb-4da6-9eba-5fba4a254db1","block_type":"box","text":"collectively bargained benefits to retired State enlisted members and their dependents. The Retired Employee Health","page_number":250,"box":{"x":69,"y":604,"width":833,"height":11}},{"id":"ef55ea64-3222-49c9-b623-6c03840efbe4","block_type":"box","text":"Program (REHP) provides commonwealth-determined benefits to other retired State employees and their dependents.","page_number":250,"box":{"x":69,"y":619,"width":834,"height":11}},{"id":"4e23743d-89dc-4cd2-9ad4-0a162bdb342f","block_type":"box","text":"The General Assembly, based upon the Governor’s request, annually appropriates funds to meet the obligation to","page_number":250,"box":{"x":101,"y":642,"width":808,"height":11}},{"id":"ddfcd955-f9a9-4e59-aa39-fd57d8da749f","block_type":"box","text":"pay current retiree health care benefits on a “pay-as-you-go” basis. Retiree health care expenditures are currently","page_number":250,"box":{"x":70,"y":657,"width":808,"height":11}},{"id":"4c0bf65f-146c-41dd-8060-72d1eded880f","block_type":"box","text":"funded by the Commonwealth’s General Fund (approximately 72 percent for fiscal year 2025), and by Federal, Other","page_number":250,"box":{"x":68,"y":672,"width":828,"height":11}},{"id":"bb48ea85-01bf-4364-9a49-ed519882abf0","block_type":"box","text":"and Special Funds, commonwealth costs for such benefits totaled $410 million in 2021, $372 million in 2022,","page_number":250,"box":{"x":69,"y":687,"width":793,"height":11}},{"id":"289f518a-f93b-47c4-8a18-20dae651931d","block_type":"box","text":"$448 million in 2023, $682 million in fiscal year 2024, and $663 million in fiscal year 2025.","page_number":250,"box":{"x":69,"y":702,"width":665,"height":11}},{"id":"e63c5c9e-10bc-466f-ba30-d9be8fede006","block_type":"box","text":"City of Philadelphia - PICA","page_number":250,"box":{"x":69,"y":733,"width":190,"height":11}},{"id":"50834de1-5a89-40bf-8556-ba8bd45cd1c9","block_type":"box","text":"The Pennsylvania Intergovernmental Cooperation Authority (“PICA”) was created by Commonwealth legislation in","page_number":250,"box":{"x":101,"y":755,"width":797,"height":11}},{"id":"1ab295ac-818f-4959-ac15-22d7c60257c4","block_type":"box","text":"1991 to assist the City of Philadelphia, the Commonwealth’s largest city, in remedying its fiscal emergencies. PICA is","page_number":250,"box":{"x":70,"y":770,"width":836,"height":12}},{"id":"b59fb60f-d3b8-48fe-848e-090cbf55cc01","block_type":"box","text":"authorized to provide assistance through the issuance of debt and to make factual findings and recommendations to","page_number":250,"box":{"x":69,"y":785,"width":832,"height":12}},{"id":"9f08c9c7-cb31-468a-9105-86a5ecefbfb1","block_type":"box","text":"Philadelphia concerning its budgetary and fiscal affairs. This financial assistance has included grants used by the","page_number":250,"box":{"x":69,"y":801,"width":810,"height":11}},{"id":"9657db66-ee93-48c6-9840-adc465f42bac","block_type":"box","text":"City for defeasance of certain City general obligation bonds, funding of capital projects, and the liquidation of the","page_number":250,"box":{"x":69,"y":816,"width":804,"height":11}},{"id":"12bee0c4-0f40-4125-8af5-09674800b29e","block_type":"box","text":"cumulative general fund deficit of the City of Philadelphia, as of June 30, 1992, of $224.9 million. Currently the City","page_number":250,"box":{"x":69,"y":830,"width":828,"height":12}},{"id":"e85e92fd-1bc4-4334-b742-cf58a58c79c0","block_type":"box","text":"is operating under a five-year financial plan that covers fiscal years 2025 through 2029 which was approved by PICA.","page_number":250,"box":{"x":70,"y":846,"width":830,"height":11}},{"id":"9f628fcc-b891-434e-9797-4771a1a0e1bc","block_type":"box","text":"Over the years, the City has expressed a desire to retain the financial oversight and reporting requirements of","page_number":250,"box":{"x":102,"y":869,"width":783,"height":11}},{"id":"10e3826c-ccf4-4432-8c37-942ccbaa6508","block_type":"box","text":"the PICA act beyond the expiration of the PICA bonds. Act 36 of 2022 amended the PICA act to, among other things,","page_number":250,"box":{"x":68,"y":884,"width":830,"height":11}},{"id":"865451af-66d1-45ab-9287-01fe69e6f607","block_type":"box","text":"(i) extend the term of PICA’s existence until the later of (A) January 2, 2047 or (B) one year after all its liabilities are","page_number":250,"box":{"x":69,"y":899,"width":826,"height":11}},{"id":"ce17c2c5-8c96-463a-98a9-c28233a30e84","block_type":"box","text":"Public Page 32 of 33","page_number":250,"box":{"x":469,"y":943,"width":440,"height":11}},{"id":"85825eaf-5b68-4a7e-b21b-c73b49c2d3e0","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":250,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"716a1400-0662-4910-be67-e09c9546ccc3","block_type":"box","text":"met or, in the case of PICA bonds, one year after provision for such payment shall have been made or provided for in","page_number":251,"box":{"x":69,"y":75,"width":831,"height":11}},{"id":"8450134e-8494-46bd-b01e-83ae60f0abf2","block_type":"box","text":"the applicable bond indenture; (ii) continue all of the financial oversight and reporting requirements of the PICA act","page_number":251,"box":{"x":68,"y":90,"width":819,"height":11}},{"id":"d59d2103-bb04-4ace-b269-d2f222526aba","block_type":"box","text":"for the life of PICA (regardless of whether PICA bonds are outstanding); (iii) permit on a limited basis, at the request","page_number":251,"box":{"x":68,"y":105,"width":827,"height":11}},{"id":"13a71cd7-c94a-4834-91c0-ad6010b4ed72","block_type":"box","text":"of the City, the issuance of PICA bonds for capital projects of the City; and (iv) continue the authorization and","page_number":251,"box":{"x":69,"y":120,"width":774,"height":11}},{"id":"d5a0bd88-15d3-4578-828d-5928c2aa25ae","block_type":"box","text":"dedication of the PICA Tax for so long as PICA remains in existence (regardless of whether any PICA bonds are","page_number":251,"box":{"x":69,"y":135,"width":785,"height":12}},{"id":"0d5614fa-e89f-483f-823e-efcce514de39","block_type":"box","text":"outstanding).","page_number":251,"box":{"x":69,"y":151,"width":91,"height":11}},{"id":"45435e99-723b-486f-a117-7aa43241785f","block_type":"box","text":"Neither the taxing power nor the credit of the Commonwealth is pledged to pay debt service on the PICA bonds.","page_number":251,"box":{"x":102,"y":173,"width":793,"height":11}},{"id":"3edcddec-ea3f-4fd5-96b9-fc87a99de0a7","block_type":"box","text":"All PICA bonds were retired on June 30, 2023 and presently, there are no PICA bonds outstanding.","page_number":251,"box":{"x":68,"y":188,"width":703,"height":12}},{"id":"3cd2bbab-3533-4880-8cd1-be44d8629c7e","block_type":"box","text":"Litigation","page_number":251,"box":{"x":69,"y":219,"width":67,"height":11}},{"id":"257b409e-f891-4ddd-b25c-b6c5fb27642b","block_type":"box","text":"The Commonwealth is a party to numerous lawsuits in which an adverse final decision could materially affect the","page_number":251,"box":{"x":101,"y":241,"width":806,"height":11}},{"id":"b1a4ea59-de50-443f-ba62-bbf7d1696a74","block_type":"box","text":"Commonwealth’s governmental operations and consequently its ability to pay debt service on its obligations. In","page_number":251,"box":{"x":69,"y":256,"width":793,"height":12}},{"id":"a0a1a956-4c5c-4565-854f-2d3ab8a644ad","block_type":"box","text":"1978, the General Assembly approved a limited waiver of sovereign immunity with respect to lawsuits against the","page_number":251,"box":{"x":70,"y":271,"width":808,"height":12}},{"id":"87919ad9-1b1e-4154-8154-fbdb3d21e76b","block_type":"box","text":"Commonwealth. This cap does not apply to tax appeals. Damages for any loss are limited to $250,000 for each","page_number":251,"box":{"x":69,"y":286,"width":799,"height":12}},{"id":"748ce0d6-982f-4d9a-9139-67d2bed3251b","block_type":"box","text":"person and $1 million for each accident. The Supreme Court of Pennsylvania has held that this limitation is","page_number":251,"box":{"x":70,"y":301,"width":765,"height":12}},{"id":"ce506cef-ec6c-4730-ba5e-ad583426122d","block_type":"box","text":"constitutional. Tort claim payments for the departments and agencies, other than the Department of Transportation,","page_number":251,"box":{"x":69,"y":317,"width":830,"height":11}},{"id":"d6f6bf16-7c81-4d67-a271-450b04084fb4","block_type":"box","text":"are paid from departmental and agency operating and program appropriations. Tort claim payments for the","page_number":251,"box":{"x":69,"y":332,"width":760,"height":11}},{"id":"40811c6b-ef84-4b76-8bf6-616c18d52d93","block_type":"box","text":"Department of Transportation are paid from an appropriation from the Motor License Fund. The Commonwealth also","page_number":251,"box":{"x":70,"y":347,"width":827,"height":11}},{"id":"6b2d4c27-2edf-4076-bd00-a88be33f848c","block_type":"box","text":"represents and indemnifies employees who have been sued under Federal civil rights statutes for actions taken in","page_number":251,"box":{"x":69,"y":362,"width":812,"height":11}},{"id":"bbfc5daa-f32b-4b78-8eff-c18ab1d95429","block_type":"box","text":"good faith in carrying out their employment responsibilities. There are no caps on damages in civil rights actions. The","page_number":251,"box":{"x":68,"y":377,"width":837,"height":12}},{"id":"5b58dfc4-e807-4a4a-842d-a2860b885d77","block_type":"box","text":"Commonwealth’s self-insurance program covers damages in these civil cases up to $250,000 per incident. 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Engagements provide companies with the","page_number":254,"box":{"x":69,"y":753,"width":829,"height":11}},{"id":"5c5add1a-10c2-42d3-b250-acf2785e8a25","block_type":"box","text":"opportunity to share their perspectives on topics that, in BIS’ experience, impact the long-term financial returns","page_number":254,"box":{"x":69,"y":768,"width":795,"height":11}},{"id":"cb0b8018-0b93-454b-b76c-ddd800bb275e","block_type":"box","text":"BlackRock’s clients depend on to meet their financial goals.","page_number":254,"box":{"x":70,"y":783,"width":425,"height":11}},{"id":"1120011a-baa1-47f1-b300-b5f5e2115c1f","block_type":"box","text":"1","page_number":254,"box":{"x":69,"y":813,"width":4,"height":4}},{"id":"9b63cc8b-0625-428f-91f1-680e00dd7250","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":254,"box":{"x":79,"y":812,"width":790,"height":11}},{"id":"93e195e2-6cba-405f-a6b6-28e7e7d5a268","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":254,"box":{"x":69,"y":827,"width":836,"height":12}},{"id":"5674dc29-6856-4bc0-8548-5cfc87128095","block_type":"box","text":"We comply fully with these requirements and do not engage with portfolio companies for the purpose, or with the","page_number":254,"box":{"x":68,"y":842,"width":805,"height":12}},{"id":"196c5c9d-5642-46ac-9e98-945ba4966c96","block_type":"box","text":"effect, of changing or influencing control of any company.","page_number":254,"box":{"x":69,"y":857,"width":405,"height":12}},{"id":"dbd3c2cb-19c5-42cd-8bcf-e822c9ed810b","block_type":"box","text":"2","page_number":254,"box":{"x":69,"y":876,"width":4,"height":4}},{"id":"b7baa5f5-a972-4c66-acb0-46866f54ee58","block_type":"box","text":"Alongside the Global Principles and regional voting guidelines, BIS publishes Engagement Priorities which reflect the","page_number":254,"box":{"x":78,"y":875,"width":827,"height":11}},{"id":"eccaa304-0ade-4e7f-9e86-b707c4579846","block_type":"box","text":"five themes on which we most frequently engage companies, where they are relevant, as these can be a source of","page_number":254,"box":{"x":68,"y":890,"width":818,"height":12}},{"id":"aabfefd7-16cf-4c4f-866e-fbdf8d7a7bc5","block_type":"box","text":"material business risk or opportunity.","page_number":254,"box":{"x":69,"y":906,"width":264,"height":11}},{"id":"78324650-c2cf-401f-bfac-4a9c994e1aa0","block_type":"box","text":"BlackRock Investment Stewardship","page_number":254,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"0b0fe09e-3a70-4439-9a71-b71ce21cbbec","block_type":"box","text":"Global Principles | 3","page_number":254,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"2dd07e3d-fd86-47d2-818d-24c8d195cafc","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":254,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"c1fe6b69-a6c2-4e10-aba1-7062ccbac0c6","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of corporate","page_number":255,"box":{"x":101,"y":45,"width":753,"height":11}},{"id":"bde4d11e-df45-47fe-93e6-ab2d864eb970","block_type":"box","text":"governance. As a fiduciary, BlackRock is legally required to make proxy voting determinations in a manner that is","page_number":255,"box":{"x":68,"y":60,"width":805,"height":11}},{"id":"b34519fd-a829-4b38-87a4-d7e634078a6f","block_type":"box","text":"consistent with the investment objectives of clients who have delegated voting authority to us. BIS’ Benchmark","page_number":255,"box":{"x":69,"y":75,"width":790,"height":11}},{"id":"fe3ebb73-9ecb-4fdf-aa98-d3f31a034c2e","block_type":"box","text":"Policies, and the vote decisions made consistent with those policies, reflect our reasonable and independent","page_number":255,"box":{"x":69,"y":90,"width":779,"height":11}},{"id":"f2878088-dd8c-4a99-b1ab-e6bcef60e019","block_type":"box","text":"judgment of what is in the long-term financial interests of clients. Our vote decisions are often informed by several","page_number":255,"box":{"x":67,"y":105,"width":816,"height":11}},{"id":"bf3a0846-7f2a-4785-b68d-0f27e18cdf5e","block_type":"box","text":"factors, including in-depth analysis of company disclosures, comparisons against industry peers, third-party research,","page_number":255,"box":{"x":68,"y":120,"width":839,"height":12}},{"id":"730873b6-8c82-4761-a2be-3964e57fe2cd","block_type":"box","text":"and, where appropriate, engagement with companies.","page_number":255,"box":{"x":69,"y":136,"width":381,"height":11}},{"id":"7bacb720-573f-4720-b45e-7ebd7f2d17f7","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at companies","page_number":255,"box":{"x":102,"y":158,"width":770,"height":11}},{"id":"f7b4629f-efc5-448f-8dbc-be31230da06d","block_type":"box","text":"which have sound corporate governance and deliver strong financial returns over time. When we determine it is in our","page_number":255,"box":{"x":68,"y":173,"width":838,"height":11}},{"id":"3abd3cf3-5052-40db-b056-c2e494d5fe3a","block_type":"box","text":"clients’ financial interests to convey concern to companies through voting, we may do so in two forms: we might not","page_number":255,"box":{"x":69,"y":188,"width":827,"height":12}},{"id":"f999584d-b282-410b-b506-8979d86f0b12","block_type":"box","text":"support the election of directors or other management proposals, or we might not support management’s voting","page_number":255,"box":{"x":69,"y":203,"width":802,"height":12}},{"id":"7b13fe8a-10dc-4eaa-9850-9cf9351bfe60","block_type":"box","text":"recommendation on a shareholder proposal.","page_number":255,"box":{"x":69,"y":219,"width":315,"height":10}},{"id":"2e753674-1898-4cae-9a57-510790aa6726","block_type":"box","text":"SHAREHOLDER RIGHTS","page_number":255,"box":{"x":403,"y":249,"width":172,"height":9}},{"id":"dbda734a-b887-4583-80bc-0a8989422dec","block_type":"box","text":"BlackRock’s global approach as a shareholder on behalf of our clients is underpinned by certain rights attached","page_number":255,"box":{"x":102,"y":271,"width":796,"height":12}},{"id":"c172e976-e65c-4041-8176-b790f145f3d1","block_type":"box","text":"to shareholding in most markets, as established by corporate laws, regulations, and listing rules.","page_number":255,"box":{"x":68,"y":287,"width":693,"height":11}},{"id":"ecc9e69b-337b-4ba1-8ab6-9fadb494ff7a","block_type":"box","text":"3","page_number":255,"box":{"x":763,"y":287,"width":4,"height":4}},{"id":"4044f1ab-ef95-4db8-b86d-a15ffec8bd9c","block_type":"box","text":"For example, in","page_number":255,"box":{"x":774,"y":287,"width":106,"height":10}},{"id":"7604c28e-a8dc-4bbb-9963-395d7cbaba8c","block_type":"box","text":"most markets, shareholders have the right to:","page_number":255,"box":{"x":69,"y":302,"width":326,"height":11}},{"id":"f8a359c2-6d39-486b-b399-e2fca1a89e82","block_type":"box","text":"•","page_number":255,"box":{"x":69,"y":325,"width":6,"height":4}},{"id":"cd521611-dad3-445e-adb8-cae3cefe07c6","block_type":"box","text":"Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and amend the corporate","page_number":255,"box":{"x":101,"y":322,"width":804,"height":11}},{"id":"04f0d81c-bd6f-465c-a4a9-a7650858006a","block_type":"box","text":"charter or bylaws.","page_number":255,"box":{"x":101,"y":337,"width":126,"height":11}},{"id":"474955e5-b809-45be-9671-952fae159efb","block_type":"box","text":"•","page_number":255,"box":{"x":69,"y":360,"width":6,"height":5}},{"id":"c44954f9-2af3-4441-b22c-2da57de5ce42","block_type":"box","text":"Vote on key board decisions that are material to the protection of their investment, including but not limited to,","page_number":255,"box":{"x":101,"y":357,"width":789,"height":11}},{"id":"ed1c357f-d139-45ba-9fd2-9a1b223ebfb3","block_type":"box","text":"changes to the purpose of the business, dilution levels, and pre-emptive rights.","page_number":255,"box":{"x":101,"y":372,"width":564,"height":11}},{"id":"3274b23e-ffc4-4390-a13d-b7f686ab506e","block_type":"box","text":"•","page_number":255,"box":{"x":69,"y":395,"width":6,"height":5}},{"id":"6dede195-fd05-4d99-b93b-1f930142d4b4","block_type":"box","text":"Access sufficient and timely information on governance, strategic, and business matters — where such matters","page_number":255,"box":{"x":101,"y":392,"width":799,"height":12}},{"id":"f67a0c07-4705-4fa7-92d8-70942063763f","block_type":"box","text":"are material — to make informed decisions.","page_number":255,"box":{"x":102,"y":407,"width":313,"height":9}},{"id":"4def782d-9451-4458-b526-62042afb2db0","block_type":"box","text":"KEY GOVERNANCE TOPICS","page_number":255,"box":{"x":391,"y":438,"width":196,"height":9}},{"id":"a02ffb38-0609-4574-8b78-3199f3aea75f","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that contribute to a","page_number":255,"box":{"x":102,"y":460,"width":776,"height":12}},{"id":"d2dc0496-d3be-44f0-983d-7ec5ab1e4fde","block_type":"box","text":"company’s ability to create long-term financial value for shareholders. These are topics that shareholders may have","page_number":255,"box":{"x":69,"y":475,"width":822,"height":12}},{"id":"308bbc8d-92fa-405f-8d6d-be6b4f30ec0f","block_type":"box","text":"the ability to vote on at shareholder meetings. 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Our regional voting guidelines explain how the BIS Global","page_number":255,"box":{"x":69,"y":717,"width":781,"height":12}},{"id":"2a5b87b9-8681-4623-9f8b-fcb7ae749cf9","block_type":"box","text":"Principles inform our voting decisions in relation to common ballot items for shareholder meetings in those markets.","page_number":255,"box":{"x":69,"y":732,"width":829,"height":12}},{"id":"ef0eae45-c23a-4855-9be5-e6ff2cf7fd6b","block_type":"box","text":"4","page_number":255,"box":{"x":899,"y":733,"width":5,"height":4}},{"id":"80546633-2c9f-4f72-a699-c5c980725872","block_type":"box","text":"3","page_number":255,"box":{"x":69,"y":762,"width":4,"height":5}},{"id":"714666b7-b6b7-4cdc-b7b9-ac9e1e222af6","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":255,"box":{"x":79,"y":762,"width":816,"height":11}},{"id":"928cddf0-de91-4c9e-b21f-bce78d8df806","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":255,"box":{"x":70,"y":777,"width":784,"height":11}},{"id":"bbca4c3c-a00c-4b19-b9fb-43ee8c84551d","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":255,"box":{"x":69,"y":792,"width":650,"height":11}},{"id":"1c97392d-41a3-46d0-9e85-268eb8a48347","block_type":"box","text":"4","page_number":255,"box":{"x":69,"y":810,"width":4,"height":4}},{"id":"626893d8-a24a-4868-9c55-9da0cc3e9e73","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market,","page_number":255,"box":{"x":79,"y":810,"width":776,"height":11}},{"id":"cc04b3b9-1837-4dcb-aadc-e7772636f6e2","block_type":"box","text":"generally accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives,","page_number":255,"box":{"x":68,"y":825,"width":821,"height":11}},{"id":"3f49c547-b71a-4e3b-9b35-d760bc4d7cd6","block_type":"box","text":"amongst other factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote","page_number":255,"box":{"x":69,"y":840,"width":780,"height":11}},{"id":"5f21ae1a-fc61-440c-8492-249fa0ae16b7","block_type":"box","text":"operations (including maintaining records of votes cast) in a manner consistent with the relevant regional voting","page_number":255,"box":{"x":69,"y":855,"width":796,"height":11}},{"id":"b1cc05bf-2542-4968-b648-b543549d2ca7","block_type":"box","text":"guidelines.","page_number":255,"box":{"x":68,"y":870,"width":76,"height":11}},{"id":"5069988d-8c8b-4dbf-9a94-f91b5bafb5cf","block_type":"box","text":"BlackRock Investment Stewardship","page_number":255,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"95822e79-f10f-4481-a5ed-e8b6db31782e","block_type":"box","text":"Global Principles | 4","page_number":255,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"764df255-6e9e-45d2-9174-f19110443d2a","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":255,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"91f21627-73cc-4bbd-bad3-800435718e32","block_type":"box","text":"BOARDS AND DIRECTORS","page_number":256,"box":{"x":394,"y":45,"width":190,"height":9}},{"id":"4d4ed96f-650a-4b53-92e9-dab3d514d3c5","block_type":"box","text":"Oversight role of the board","page_number":256,"box":{"x":69,"y":75,"width":194,"height":11}},{"id":"e108e46e-986a-4740-a2a1-b8d9d47ddc9c","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with professional","page_number":256,"box":{"x":102,"y":98,"width":734,"height":11}},{"id":"63036257-0a82-4786-9a18-4bc827cc3064","block_type":"box","text":"characteristics relevant to a company’s business enhance the board’s ability to add long-term financial value and","page_number":256,"box":{"x":69,"y":113,"width":806,"height":11}},{"id":"91cbdaf9-a130-490e-9dcd-564b9f7b58b4","block_type":"box","text":"serve as the voice of shareholders in board discussions. In our view, a strong board gives a company a competitive","page_number":256,"box":{"x":69,"y":128,"width":822,"height":11}},{"id":"8ddc5ddd-1373-4abc-ae46-06b6ec95f021","block_type":"box","text":"advantage, providing valuable oversight and contributing to the most important management decisions that support","page_number":256,"box":{"x":69,"y":143,"width":825,"height":11}},{"id":"c21dd7c4-1227-4318-8564-74bd87a44028","block_type":"box","text":"long-term financial performance.","page_number":256,"box":{"x":70,"y":158,"width":229,"height":11}},{"id":"079156ad-3cd3-4ee8-b1ff-806daf915e4b","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors. We","page_number":256,"box":{"x":102,"y":181,"width":771,"height":11}},{"id":"63a866ef-d3a1-4d9a-8773-542c67bae728","block_type":"box","text":"engage, as necessary, with members of the board’s nominating and/or governance committee to assess whether","page_number":256,"box":{"x":69,"y":196,"width":811,"height":11}},{"id":"05a86c02-7b9b-4425-81b4-7d9b41a476e5","block_type":"box","text":"governance practices and board composition are effective given a company’s business model, sector, market, and","page_number":256,"box":{"x":68,"y":211,"width":817,"height":11}},{"id":"fe874fc5-f9f9-4202-9b32-2cb1009d6c11","block_type":"box","text":"the business environment in which a company is operating.","page_number":256,"box":{"x":68,"y":226,"width":422,"height":11}},{"id":"91d53158-203a-4856-8474-bbb35155ef36","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and effective","page_number":256,"box":{"x":101,"y":249,"width":770,"height":11}},{"id":"063d680c-05e7-4151-b9f0-888c67799105","block_type":"box","text":"governance mechanisms that supports its oversight of the company’s strategy and operations, consistent with the","page_number":256,"box":{"x":68,"y":264,"width":817,"height":11}},{"id":"3ea23cfa-b4cb-4db1-8fe2-fad591415b17","block_type":"box","text":"long-term financial interests of investors. This includes having clear descriptions of the role of the board and the","page_number":256,"box":{"x":70,"y":279,"width":799,"height":11}},{"id":"3d5b03da-47b1-4cf1-9fb7-4fe591e932e2","block_type":"box","text":"committees of the board and how directors engage with and oversee management, as well as disclosure of material","page_number":256,"box":{"x":69,"y":294,"width":827,"height":11}},{"id":"bc307e41-b55f-49e0-9e23-a24a413d7217","block_type":"box","text":"risks that may affect a company’s long-term strategy and how management is effectively identifying, managing, and","page_number":256,"box":{"x":69,"y":309,"width":822,"height":11}},{"id":"77a0a99a-5f28-4026-a978-22b111b02b87","block_type":"box","text":"mitigating such risks.","page_number":256,"box":{"x":69,"y":325,"width":150,"height":11}},{"id":"a316b11e-50f3-4537-bf15-aff396fb8323","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should assess its","page_number":256,"box":{"x":102,"y":347,"width":791,"height":11}},{"id":"35f2b6ed-ede8-4396-a118-fa30e5b36eec","block_type":"box","text":"implementation is central to our approach. If any strategic targets are significantly missed or materially restated, we","page_number":256,"box":{"x":70,"y":362,"width":826,"height":11}},{"id":"cb7a0ed4-2307-4cce-8cab-ae229fc14db2","block_type":"box","text":"find it helpful when company disclosures provide a detailed explanation of the changes and an indication of the","page_number":256,"box":{"x":68,"y":377,"width":793,"height":12}},{"id":"5845cb22-b72f-4340-b9ba-a10c3e57de6b","block_type":"box","text":"board’s role in reviewing the revised targets. We look to the board to articulate the effectiveness of these","page_number":256,"box":{"x":69,"y":392,"width":755,"height":12}},{"id":"c6b73b60-f069-454e-9a06-e4188f8a593b","block_type":"box","text":"mechanisms in overseeing the management of business risks and opportunities and the fulfillment of the company’s","page_number":256,"box":{"x":69,"y":407,"width":835,"height":12}},{"id":"34b5a631-a7ff-4c9e-a076-c9bb67ce560a","block_type":"box","text":"strategy.","page_number":256,"box":{"x":69,"y":423,"width":58,"height":11}},{"id":"a7be4399-fa22-4655-add5-0baa5fffe4ab","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these corporate","page_number":256,"box":{"x":101,"y":445,"width":769,"height":11}},{"id":"dd3926a9-832b-4eb9-aa38-547846f7f8b3","block_type":"box","text":"governance and risk oversight responsibilities, we may consider not supporting the election of directors who, in our","page_number":256,"box":{"x":68,"y":460,"width":823,"height":12}},{"id":"50b5ef8b-c824-4af0-b6e5-2bede243f0f0","block_type":"box","text":"assessment, have particular responsibility for the issues.","page_number":256,"box":{"x":69,"y":475,"width":409,"height":12}},{"id":"411fc723-5ae5-4537-9072-6c123d60f006","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that speak to","page_number":256,"box":{"x":101,"y":498,"width":791,"height":11}},{"id":"b2d4ace8-dc7f-4f94-94a2-bc8ae4433f5a","block_type":"box","text":"the board’s effectiveness as a group include the relevance of individual directors’ qualifications and skillsets, as well","page_number":256,"box":{"x":68,"y":513,"width":836,"height":12}},{"id":"fb478d35-6c4f-45c6-b495-079a5bbe382b","block_type":"box","text":"as directors’ capacity and other time commitments, and how these factors may contribute to the company’s financial","page_number":256,"box":{"x":69,"y":528,"width":833,"height":12}},{"id":"529804e4-3f18-4a52-a7d8-5e0dbf8e0067","block_type":"box","text":"performance. We look to boards to establish formal and transparent processes for nominating directors that reflect","page_number":256,"box":{"x":70,"y":543,"width":823,"height":12}},{"id":"a47f556f-170d-4290-be05-f6f6efd623c8","block_type":"box","text":"the company’s long-term strategy and business model.","page_number":256,"box":{"x":68,"y":559,"width":390,"height":11}},{"id":"b8a70797-36d3-4a4a-acc8-dddbb8ab71d3","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our approach to board","page_number":256,"box":{"x":102,"y":581,"width":807,"height":11}},{"id":"a684de66-2ef2-4b49-9383-4b66ee73647c","block_type":"box","text":"composition and how it underpins board effectiveness and long-term financial value creation.","page_number":256,"box":{"x":69,"y":596,"width":662,"height":12}},{"id":"362c40c7-0775-41fa-9fe2-ead5a6db478b","block_type":"box","text":"Regular accountability through director elections","page_number":256,"box":{"x":69,"y":627,"width":358,"height":11}},{"id":"45c103fe-a9c7-4b3e-91f2-eae34e68ffc2","block_type":"box","text":"The election of directors to the board is a right of shareholders and an important signal of support for, or","page_number":256,"box":{"x":101,"y":649,"width":750,"height":12}},{"id":"3a40da23-6c91-4de9-8df5-298d3d65d7ea","block_type":"box","text":"concern about, the performance of the board in overseeing and advising management. To ensure accountability for","page_number":256,"box":{"x":69,"y":664,"width":819,"height":12}},{"id":"e86b480c-2123-4ed9-8aa8-2f7eb8cfaea7","block_type":"box","text":"their decisions on behalf of shareholders, directors should stand for election on a regular basis, ideally annually.","page_number":256,"box":{"x":68,"y":680,"width":802,"height":11}},{"id":"7223634f-9ac7-4f32-aea8-55a8451a5cf4","block_type":"box","text":"5","page_number":256,"box":{"x":872,"y":680,"width":4,"height":4}},{"id":"7168f637-030e-4767-8a87-dfece3cbed68","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support for, or concerns about, board members’","page_number":256,"box":{"x":68,"y":695,"width":782,"height":11}},{"id":"1a928f08-f3c0-483d-b579-55e856a994b0","block_type":"box","text":"decisions in a timely manner. When board members are not elected annually, we consider it good practice for boards","page_number":256,"box":{"x":69,"y":710,"width":832,"height":11}},{"id":"33f5e03d-c4c4-4c6d-9e24-49ec244f7ced","block_type":"box","text":"to have a rotation policy to ensure that, through a board cycle, all directors have had their appointment re-confirmed,","page_number":256,"box":{"x":68,"y":725,"width":832,"height":11}},{"id":"04809a2b-7ddc-4cbd-ac08-845b87a5b57a","block_type":"box","text":"with a proportion of directors being put forward for election at each shareholder meeting.","page_number":256,"box":{"x":68,"y":740,"width":636,"height":11}},{"id":"e99da9b1-4738-4f4f-bc0b-47a1fafa0090","block_type":"box","text":"BOARD QUALITY AND EFFECTIVENESS","page_number":256,"box":{"x":348,"y":770,"width":282,"height":11}},{"id":"4913d352-0a18-4818-acc8-558fe0db01c8","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way to reflect","page_number":256,"box":{"x":102,"y":793,"width":805,"height":11}},{"id":"fe48ddc0-74b9-4701-92bc-273bb7570049","block_type":"box","text":"developments in the company’s strategy and the market environment. In our view, it is beneficial for new directors to","page_number":256,"box":{"x":69,"y":808,"width":831,"height":11}},{"id":"38c9d1a5-dba2-4aca-b5a9-cc4a665eb117","block_type":"box","text":"be brought onto the board periodically to refresh the group’s thinking, while supporting both continuity and","page_number":256,"box":{"x":69,"y":823,"width":758,"height":12}},{"id":"dfd6e679-ba17-4442-912b-6319f442a134","block_type":"box","text":"5","page_number":256,"box":{"x":69,"y":853,"width":4,"height":4}},{"id":"7a0e9682-dc09-467c-add4-6642408cbe11","block_type":"box","text":"In most markets, directors stand for re-election on an annual or triennial basis, as determined by corporate law,","page_number":256,"box":{"x":79,"y":852,"width":795,"height":12}},{"id":"88ded166-a4f1-4f60-b129-e8abdeb0def3","block_type":"box","text":"market regulation or voluntary best practice.","page_number":256,"box":{"x":69,"y":868,"width":314,"height":11}},{"id":"9e8a52b4-bcac-4f25-b339-7679607ad61a","block_type":"box","text":"BlackRock Investment Stewardship","page_number":256,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"102ee140-4547-4a30-b9f2-d273aefe7fcf","block_type":"box","text":"Global Principles | 5","page_number":256,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"d6e6d55c-9f68-4f37-9a2d-0f567eac2e14","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":256,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"3b12d418-ea2d-4239-932a-1e2689b78ca6","block_type":"box","text":"appropriate succession planning. We consider the average overall tenure of the board and seek a balance between","page_number":257,"box":{"x":69,"y":45,"width":819,"height":11}},{"id":"f72a6137-198e-487b-bd5a-be39d390d850","block_type":"box","text":"the knowledge and experience of longer-serving directors and the fresh perspectives of directors who joined more","page_number":257,"box":{"x":68,"y":60,"width":809,"height":11}},{"id":"f68c2d7b-ee2d-4420-95e5-8a1374722e1c","block_type":"box","text":"recently.","page_number":257,"box":{"x":69,"y":75,"width":57,"height":11}},{"id":"72215529-9b96-4207-ab82-7cd8365c5fe9","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election contribute to","page_number":257,"box":{"x":101,"y":98,"width":789,"height":11}},{"id":"20eb3b56-3c3f-49b8-bad5-d0e310c2223f","block_type":"box","text":"the effectiveness of the board. In our view, the company’s assessment should consider a number of factors,","page_number":257,"box":{"x":68,"y":113,"width":774,"height":11}},{"id":"d0638157-9e12-4bb3-8186-c48802f6e134","block_type":"box","text":"including each director’s independence and time commitments, as well as the breadth and relevance of director","page_number":257,"box":{"x":70,"y":128,"width":798,"height":11}},{"id":"3161e4d6-97d4-43c6-9c21-2f464ed84c4b","block_type":"box","text":"experiences and skillsets, and how these collectively contribute to the board’s effectiveness in advising and","page_number":257,"box":{"x":69,"y":143,"width":770,"height":11}},{"id":"56e49e99-f06a-46d0-82cb-d30ca2a44583","block_type":"box","text":"overseeing management in delivering long-term financial returns.","page_number":257,"box":{"x":69,"y":158,"width":459,"height":11}},{"id":"45b23d66-851d-4114-886d-e762ac710621","block_type":"box","text":"Director independence","page_number":257,"box":{"x":69,"y":188,"width":164,"height":11}},{"id":"ca0a02bb-3829-4c1b-ac6a-b1671fe7c2b6","block_type":"box","text":"Director independence — from management, significant shareholders, or other related parties — is a central","page_number":257,"box":{"x":102,"y":211,"width":777,"height":11}},{"id":"6447080f-3b07-4779-8a50-a8e089c4b04f","block_type":"box","text":"tenet of sound corporate governance across markets.","page_number":257,"box":{"x":68,"y":226,"width":382,"height":11}},{"id":"34545cc3-b8a5-489b-b122-d9d6b200b177","block_type":"box","text":"6","page_number":257,"box":{"x":452,"y":226,"width":4,"height":5}},{"id":"d169072d-e06b-4c76-80d3-66fd8782d3e7","block_type":"box","text":"We look to boards to have a sufficient number of independent","page_number":257,"box":{"x":462,"y":226,"width":442,"height":11}},{"id":"0adfadc1-9bfe-420a-bd84-fbfdbaace578","block_type":"box","text":"directors, free from conflicts of interest or undue influence, to ensure objectivity in the decision-making of the board","page_number":257,"box":{"x":69,"y":241,"width":825,"height":11}},{"id":"347eed9f-8525-42a9-ac51-70c6d2cd0fde","block_type":"box","text":"and its ability to oversee management. We generally consider it good practice for independent directors to make a","page_number":257,"box":{"x":69,"y":256,"width":813,"height":12}},{"id":"d8de6c4f-5d9c-4299-82ff-5f5bfd2b1867","block_type":"box","text":"majority of the board, or in the case of controlled companies, at least one-third.","page_number":257,"box":{"x":69,"y":271,"width":566,"height":12}},{"id":"12094640-0f3e-4da3-8150-fac057e6fb49","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":257,"box":{"x":102,"y":294,"width":531,"height":11}},{"id":"2fe381b1-44cf-4033-8ace-1337d242b3e6","block_type":"box","text":"•","page_number":257,"box":{"x":69,"y":317,"width":6,"height":5}},{"id":"cfcf4c42-06ce-412f-a413-61701a75f875","block_type":"box","text":"Current or recent employment at the company or a subsidiary","page_number":257,"box":{"x":102,"y":314,"width":438,"height":11}},{"id":"95a308fc-94a3-4d34-8844-5eeb17ca02c7","block_type":"box","text":"•","page_number":257,"box":{"x":69,"y":337,"width":6,"height":5}},{"id":"a980a1be-5218-4c63-8d18-5fa40e865849","block_type":"box","text":"Being, or representing, a shareholder with a substantial shareholding in the company","page_number":257,"box":{"x":102,"y":335,"width":606,"height":11}},{"id":"ee3c7ddb-10cd-4266-bca9-ad35e362af32","block_type":"box","text":"•","page_number":257,"box":{"x":69,"y":357,"width":6,"height":5}},{"id":"229bc6b5-c713-4d84-90a0-ec3fc0df8c14","block_type":"box","text":"Interlocking directorates","page_number":257,"box":{"x":102,"y":355,"width":170,"height":11}},{"id":"3e303d80-5caa-4f58-93ec-0d46f204eddb","block_type":"box","text":"•","page_number":257,"box":{"x":69,"y":378,"width":6,"height":4}},{"id":"6af6fd35-a249-4b94-8b96-3305b7ddfc24","block_type":"box","text":"Having any other interest, business, or other relationship which could, or could reasonably be perceived to,","page_number":257,"box":{"x":102,"y":375,"width":761,"height":11}},{"id":"4852a5ab-6fb0-48a5-b6ee-855e4f8b47e1","block_type":"box","text":"materially interfere with a director’s ability to act in the best interests of the company and shareholders","page_number":257,"box":{"x":102,"y":390,"width":738,"height":11}},{"id":"f0ccb437-e1bf-4d21-aa4b-e3d5aea428c3","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a senior,","page_number":257,"box":{"x":102,"y":412,"width":775,"height":12}},{"id":"348d3a9e-e89f-4e1b-998f-b34e8ce04022","block_type":"box","text":"independent board leader. This director may chair the board, or, where the chair is also the CEO (or is otherwise not","page_number":257,"box":{"x":70,"y":428,"width":827,"height":11}},{"id":"99727ddf-e84a-43ba-bfc6-83bbb67ebeac","block_type":"box","text":"independent), be designated as a lead independent director. The role of this director is to support independent board","page_number":257,"box":{"x":70,"y":443,"width":835,"height":11}},{"id":"e0198d04-f718-4f2c-86c3-2a915bc065dd","block_type":"box","text":"members in fulfilling their oversight responsibilities effectively by shaping the agenda, ensuring adequate information","page_number":257,"box":{"x":69,"y":458,"width":834,"height":11}},{"id":"686561f8-e8bf-44ac-a2de-7cb866570edd","block_type":"box","text":"is provided to the board, and encouraging independent director participation in board deliberations. We appreciate","page_number":257,"box":{"x":70,"y":473,"width":813,"height":11}},{"id":"39a14f5c-71d0-4465-b2a3-3ad0a2619c9f","block_type":"box","text":"when the lead independent director or another appropriate director is available to meet with shareholders to explain","page_number":257,"box":{"x":68,"y":488,"width":826,"height":11}},{"id":"a0520f65-e412-4143-9881-7ff78e6db529","block_type":"box","text":"and contextualize a company’s approach as a situation warrants.","page_number":257,"box":{"x":69,"y":503,"width":463,"height":11}},{"id":"c4d21c57-3558-485c-be22-74351af947c6","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or that","page_number":257,"box":{"x":102,"y":526,"width":765,"height":11}},{"id":"e2ee4d49-1a55-4444-843b-99163e8295ff","block_type":"box","text":"require additional focus. It is our view that objective oversight of such matters is best achieved when the board forms","page_number":257,"box":{"x":69,"y":541,"width":837,"height":11}},{"id":"8133346b-3a7e-420e-a43e-6cb55a9a6c3d","block_type":"box","text":"committees with a majority of independent directors, depending on market norms and a company’s ownership","page_number":257,"box":{"x":69,"y":556,"width":784,"height":11}},{"id":"a270c2d6-dece-4273-8395-4e2c7473311c","block_type":"box","text":"structure. In many markets, these committees of the board specialize in audit, director nominations, and","page_number":257,"box":{"x":69,"y":571,"width":747,"height":11}},{"id":"0971fda3-5ce8-4a22-a716-61d5b71d9804","block_type":"box","text":"compensation matters, among others. An ad hoc committee might also be formed to decide on a special transaction,","page_number":257,"box":{"x":69,"y":586,"width":836,"height":12}},{"id":"e0339216-9024-4bb5-9696-4170be72bc4b","block_type":"box","text":"particularly one involving a related party, or to investigate a significant adverse event.","page_number":257,"box":{"x":70,"y":601,"width":607,"height":12}},{"id":"5b368329-6c3d-4cca-a41b-5d41e6f48405","block_type":"box","text":"Sufficient capacity","page_number":257,"box":{"x":68,"y":632,"width":137,"height":11}},{"id":"61e7b63e-9872-4675-8b11-52c197a11f8d","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to commit an","page_number":257,"box":{"x":101,"y":654,"width":763,"height":12}},{"id":"b21eaa3b-b03e-464d-b728-291af120620b","block_type":"box","text":"appropriate amount of time to board and committee matters. It is important that directors have the capacity to meet","page_number":257,"box":{"x":69,"y":669,"width":830,"height":12}},{"id":"499fcc8b-b23c-4db1-92c8-beb80bce5b5c","block_type":"box","text":"all of their responsibilities — including when there are unforeseen events — and therefore, we consider it best","page_number":257,"box":{"x":69,"y":685,"width":791,"height":11}},{"id":"896463ba-b1b3-4085-9a13-6d5065eb5af0","block_type":"box","text":"practice when they don’t take on an excessive number of roles that would impair their ability to fulfill their duties.","page_number":257,"box":{"x":70,"y":700,"width":804,"height":11}},{"id":"48b24cb0-5e6d-4850-a7f7-6d094d5cb814","block_type":"box","text":"Board composition","page_number":257,"box":{"x":69,"y":730,"width":135,"height":11}},{"id":"df913a3d-5151-4f00-9bf6-087ab1a361d7","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model, strategy, market","page_number":257,"box":{"x":102,"y":753,"width":806,"height":11}},{"id":"4f8a6373-7f38-4bcf-a4ff-6899cd60191a","block_type":"box","text":"capitalization, and ownership structure, as well as the market in which the company operates. We find it helpful when","page_number":257,"box":{"x":69,"y":768,"width":836,"height":11}},{"id":"b89263d1-676a-4a06-bd04-ad3cb7e6fba1","block_type":"box","text":"companies explain how their approach to board composition supports the company’s governance practices.","page_number":257,"box":{"x":69,"y":783,"width":767,"height":11}},{"id":"2c52226b-da79-4161-b573-d415c132f65c","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the individual","page_number":257,"box":{"x":101,"y":806,"width":802,"height":11}},{"id":"7f4aef31-eb35-4756-8361-a28508c96bd6","block_type":"box","text":"candidates so that shareholders can assess the capabilities and suitability of each individual nominee and their fit","page_number":257,"box":{"x":69,"y":821,"width":818,"height":11}},{"id":"20ad7619-a97f-43fe-bdbd-4e1af19d5ce6","block_type":"box","text":"within overall board composition. These disclosures should explain how the collective experience and expertise of the","page_number":257,"box":{"x":68,"y":836,"width":840,"height":11}},{"id":"1af99b53-e32a-4429-ad62-fd8636e771f2","block_type":"box","text":"board, as well as the particular skillsets of individual directors, aligns with the company’s long-term strategy. Highly","page_number":257,"box":{"x":69,"y":851,"width":823,"height":11}},{"id":"096a080f-09d0-4bcc-97fd-91d45453b6d4","block_type":"box","text":"6","page_number":257,"box":{"x":69,"y":881,"width":4,"height":4}},{"id":"cf8ae2fa-c20b-4ec1-bf2a-005da20dbd46","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":257,"box":{"x":79,"y":880,"width":813,"height":11}},{"id":"90edf773-298e-46ed-9f9d-ed47cb44fece","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":257,"box":{"x":70,"y":895,"width":704,"height":12}},{"id":"26fa5941-a6cc-4892-a9e2-8400f4b70014","block_type":"box","text":"BlackRock Investment Stewardship","page_number":257,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"c2cabe1e-c439-47b6-8d9a-336ca0eb00b1","block_type":"box","text":"Global Principles | 6","page_number":257,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"2610370b-ae15-46e5-b4d0-b998c5993230","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":257,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8305eb7d-5acd-4b5b-921f-f70dc08a4935","block_type":"box","text":"qualified, engaged directors with professional characteristics relevant to a company’s business and strategy enhance","page_number":258,"box":{"x":69,"y":45,"width":836,"height":11}},{"id":"a03f86b7-0972-4457-ac52-cc61587739ef","block_type":"box","text":"the ability of the board to add value and be the voice of shareholders in board discussions.","page_number":258,"box":{"x":68,"y":60,"width":650,"height":11}},{"id":"597d4a82-4b3c-478d-b901-00e71ef27588","block_type":"box","text":"It is in this context that we are interested in a variety of experiences, perspectives, and skillsets in the board","page_number":258,"box":{"x":102,"y":82,"width":775,"height":12}},{"id":"5e1cbbab-baf5-490f-ac43-0df5305cab2d","block_type":"box","text":"room. We see it as a means of avoiding “group think” in the board’s exercise of its responsibilities to advise and","page_number":258,"box":{"x":69,"y":98,"width":806,"height":11}},{"id":"ec25a9c8-3d7d-4538-ae4c-361f4c6c8daf","block_type":"box","text":"oversee management. We note that in many markets, policymakers have set board gender diversity goals which we","page_number":258,"box":{"x":69,"y":113,"width":820,"height":11}},{"id":"90fbd775-d292-4de3-8339-80e317542c12","block_type":"box","text":"may discuss with companies, particularly if there is a risk their board composition may be misaligned.","page_number":258,"box":{"x":69,"y":128,"width":726,"height":11}},{"id":"79571bac-bf7d-4cf0-ba9f-b97b66cf7cfc","block_type":"box","text":"AUDITORS AND AUDIT-RELATED ISSUES","page_number":258,"box":{"x":342,"y":158,"width":293,"height":9}},{"id":"a14a6643-2dff-4490-acde-78e697ce963c","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate portrayal of a","page_number":258,"box":{"x":102,"y":181,"width":795,"height":11}},{"id":"3c709fc7-af59-4281-853f-af112cc4bd2b","block_type":"box","text":"company’s financial condition. Accordingly, we look for the assumptions made by management, and reviewed by the","page_number":258,"box":{"x":69,"y":196,"width":825,"height":11}},{"id":"ca0d9201-2dd2-44f2-b805-0e0c284ba83f","block_type":"box","text":"auditor in preparing the financial statements, to be reasonable and justified.","page_number":258,"box":{"x":69,"y":211,"width":543,"height":11}},{"id":"b11fd84b-1623-4f38-b479-53fc5bc6beb7","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":258,"box":{"x":101,"y":234,"width":722,"height":11}},{"id":"80af8f81-b397-4738-80de-557f7cd029af","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important role in a","page_number":258,"box":{"x":70,"y":249,"width":778,"height":11}},{"id":"2f5cd9c8-d3ca-4332-a707-d2c88a6a2f1e","block_type":"box","text":"company’s financial reporting system by providing independent oversight of the accounts, material financial, and,","page_number":258,"box":{"x":69,"y":264,"width":806,"height":11}},{"id":"e64ee987-d055-4339-8b62-73041203d6f7","block_type":"box","text":"where appropriate to the jurisdiction, non-financial information and internal control frameworks. Moreover, in the","page_number":258,"box":{"x":68,"y":279,"width":799,"height":11}},{"id":"ae00a1b9-3bae-4a1b-937a-02e4e6e36292","block_type":"box","text":"absence of a dedicated risk committee, these committees can provide oversight of Enterprise Risk Management","page_number":258,"box":{"x":69,"y":294,"width":801,"height":11}},{"id":"10c97a4c-85ed-4d37-905b-beb7469ce621","block_type":"box","text":"systems.","page_number":258,"box":{"x":69,"y":310,"width":62,"height":10}},{"id":"a9d40641-6ddd-451c-9b45-8c2581131452","block_type":"box","text":"7","page_number":258,"box":{"x":133,"y":310,"width":4,"height":4}},{"id":"ec83a86f-76f9-4fa2-be3b-47f4684691f6","block_type":"box","text":"In our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":258,"box":{"x":144,"y":309,"width":717,"height":11}},{"id":"da3087b5-544a-404f-8184-4d6450d8247c","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders.","page_number":258,"box":{"x":68,"y":324,"width":609,"height":11}},{"id":"d710408f-452c-4f83-8a37-ff4a050de791","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":258,"box":{"x":101,"y":347,"width":727,"height":11}},{"id":"195558f9-0b74-4bd9-950a-9e552a6da68f","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership and introduce","page_number":258,"box":{"x":69,"y":362,"width":835,"height":11}},{"id":"8f6cfb4f-f003-49cc-a251-423c64cced94","block_type":"box","text":"new perspectives. We recognize that audit committees will rely on management, internal audit, and the independent","page_number":258,"box":{"x":69,"y":377,"width":827,"height":12}},{"id":"f7534f25-7b5b-433e-b89c-037510c0b55e","block_type":"box","text":"auditor to fulfill their responsibilities. However, we look to committee members to demonstrate they have relevant","page_number":258,"box":{"x":69,"y":392,"width":810,"height":12}},{"id":"cd4fc19c-e0b0-4636-8737-7eb80b211a9e","block_type":"box","text":"expertise to monitor and oversee the audit process and related activities.","page_number":258,"box":{"x":69,"y":408,"width":523,"height":10}},{"id":"ff6b75bb-bce0-4792-b9d4-bebb10307766","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant financial","page_number":258,"box":{"x":101,"y":430,"width":780,"height":11}},{"id":"9463f509-c8b4-468a-83a6-b1108c973b26","block_type":"box","text":"restatements, or ad hoc notifications of material financial weakness. In this respect, we look to audit committees to","page_number":258,"box":{"x":69,"y":445,"width":828,"height":11}},{"id":"2d1f3cdc-e1ca-4062-8b6c-419ccf1b4cc0","block_type":"box","text":"provide timely disclosure on the remediation of key and critical audit matters identified either by the external auditor","page_number":258,"box":{"x":70,"y":460,"width":827,"height":12}},{"id":"ad7071f1-e356-4817-9f50-64305d03ee2e","block_type":"box","text":"or internal audit function.","page_number":258,"box":{"x":69,"y":475,"width":178,"height":9}},{"id":"c72b9ea9-371b-4854-9e81-d1e2659c64f7","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":258,"box":{"x":101,"y":498,"width":723,"height":11}},{"id":"e831884a-6820-4674-aa47-a1f15bce9efb","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that auditors are,","page_number":258,"box":{"x":69,"y":513,"width":825,"height":12}},{"id":"ec4714fc-8253-45f6-8245-420555c1b116","block_type":"box","text":"and are seen to be, independent. Where an audit firm provides services to the company in addition to the audit, we","page_number":258,"box":{"x":69,"y":528,"width":824,"height":12}},{"id":"83ab9bef-81c6-4e94-85ff-a484b35a91ff","block_type":"box","text":"look for the fees earned to be disclosed and explained. We look for audit committees to have in place a procedure for","page_number":258,"box":{"x":70,"y":543,"width":839,"height":11}},{"id":"17f59923-53f3-445e-a98c-25231cb83f5f","block_type":"box","text":"assessing the independence of the auditor and the quality of the external audit process on an annual basis.","page_number":258,"box":{"x":69,"y":559,"width":770,"height":11}},{"id":"ce103e59-a095-452c-b0e6-9075d2bd4f25","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term operational risk","page_number":258,"box":{"x":102,"y":581,"width":799,"height":12}},{"id":"511aff69-5a8b-450f-bd45-12bd1d3d4373","block_type":"box","text":"management practices and, more broadly, the quality of the board’s oversight. We look to the audit or risk committee","page_number":258,"box":{"x":69,"y":596,"width":836,"height":12}},{"id":"14291407-c1fe-4f38-ad7b-26d93b1e207f","block_type":"box","text":"to periodically review the company’s risk assessment and risk management policies and the significant risks and","page_number":258,"box":{"x":68,"y":612,"width":806,"height":11}},{"id":"162376e0-6be9-464c-b1c7-ad55082cb44e","block_type":"box","text":"exposures identified by management, the internal auditors or the independent auditors, and management’s steps to","page_number":258,"box":{"x":69,"y":627,"width":829,"height":11}},{"id":"5635dd58-0f2e-431a-9ee4-1862c0878033","block_type":"box","text":"address them. In the absence of detailed disclosures, we may conclude that companies are not adequately managing","page_number":258,"box":{"x":69,"y":642,"width":840,"height":11}},{"id":"fc92f4a2-25ac-4298-af98-26255f7b4f6f","block_type":"box","text":"risk.","page_number":258,"box":{"x":69,"y":657,"width":28,"height":9}},{"id":"96d60189-c33a-4917-a6ff-f47953271488","block_type":"box","text":"CAPITAL STRUCTURE, MERGERS, ACQUISITIONS, ASSET SALES, AND OTHER SPECIAL SITUATIONS","page_number":258,"box":{"x":125,"y":687,"width":728,"height":11}},{"id":"97417646-c81c-48c4-b83d-11f3a71299bf","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment and the","page_number":258,"box":{"x":101,"y":710,"width":798,"height":11}},{"id":"8c6f1d46-d454-42ed-b67e-4a34da0c123f","block_type":"box","text":"priority of their interest in the company relative to that of other equity or debt investors. Pre-emptive rights are a key","page_number":258,"box":{"x":70,"y":725,"width":824,"height":11}},{"id":"01808b9b-8fd0-46c4-bf19-dd54263de79e","block_type":"box","text":"protection for shareholders against the dilution of their interests.","page_number":258,"box":{"x":70,"y":740,"width":460,"height":11}},{"id":"9db70daa-fc08-4a0c-af85-1aa0ac952e3a","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure and","page_number":258,"box":{"x":102,"y":763,"width":743,"height":11}},{"id":"4a250023-b9d6-4189-880f-0f9c75c944e6","block_type":"box","text":"differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce the adoption of","page_number":258,"box":{"x":69,"y":778,"width":805,"height":11}},{"id":"46d3fae8-2e2e-4492-99f0-e0ff86cdbec5","block_type":"box","text":"“one share, one vote” for registered shareholders.","page_number":258,"box":{"x":70,"y":793,"width":358,"height":11}},{"id":"4dde96e3-3bec-4f19-9b50-217f44530742","block_type":"box","text":"7","page_number":258,"box":{"x":69,"y":823,"width":4,"height":4}},{"id":"ce6045d3-7e42-42ca-be05-deb03fa845f0","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":258,"box":{"x":79,"y":822,"width":784,"height":12}},{"id":"eb636231-a0a3-411d-8b7e-07a52323ec87","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect","page_number":258,"box":{"x":70,"y":837,"width":834,"height":12}},{"id":"8f88e822-2c08-4e3a-b439-3dfd24f3c800","block_type":"box","text":"the entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement","page_number":258,"box":{"x":68,"y":853,"width":841,"height":11}},{"id":"1eb706fc-2e2b-477a-b277-be9d670c67c3","block_type":"box","text":"of objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO),","page_number":258,"box":{"x":69,"y":868,"width":771,"height":11}},{"id":"85e484f4-6f6f-4005-bd5a-a12d1ab405de","block_type":"box","text":"“Enterprise Risk Management,” 2023, accessed in December 2025.","page_number":258,"box":{"x":70,"y":883,"width":488,"height":11}},{"id":"1da7552a-13a2-44c4-bcae-2559fdf29601","block_type":"box","text":"BlackRock Investment Stewardship","page_number":258,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"16be429d-d845-4bb2-bf2b-5df6531192e3","block_type":"box","text":"Global Principles | 7","page_number":258,"box":{"x":768,"y":942,"width":140,"height":13}},{"id":"cb679a89-9504-4142-80ee-0e6be3adef59","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":258,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"bdf1df81-a334-40fb-9984-3c8b136f202c","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a valid reason","page_number":259,"box":{"x":102,"y":45,"width":798,"height":11}},{"id":"c4f451ca-e7db-429f-b3db-8fe724a9186c","block_type":"box","text":"for listing dual classes of shares with differentiated voting rights. In our view, such companies should review these","page_number":259,"box":{"x":68,"y":60,"width":818,"height":11}},{"id":"ad4053e1-7a6d-4c99-b709-dc07bd7d37db","block_type":"box","text":"share class structures on a regular basis or as company circumstances change. Additionally, they should seek","page_number":259,"box":{"x":69,"y":75,"width":788,"height":11}},{"id":"6c155129-b196-42ae-9579-43f0faf26ab4","block_type":"box","text":"shareholder approval of their capital structure on a periodic basis via a management proposal at the company’s","page_number":259,"box":{"x":69,"y":90,"width":797,"height":11}},{"id":"705d749f-ba08-470f-90c5-fb03e78e49be","block_type":"box","text":"shareholder meeting. The proposal should give unaffiliated shareholders the opportunity to affirm the current","page_number":259,"box":{"x":69,"y":105,"width":780,"height":11}},{"id":"37f33dd6-3da7-4291-b473-ec090e74ec24","block_type":"box","text":"structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while","page_number":259,"box":{"x":69,"y":120,"width":764,"height":12}},{"id":"d5474034-d893-433a-a833-e31e7edc1555","block_type":"box","text":"minimizing costs to shareholders.","page_number":259,"box":{"x":69,"y":136,"width":238,"height":11}},{"id":"1602d167-56ff-4b0f-a71a-c2d1eaca5e14","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long-term","page_number":259,"box":{"x":102,"y":158,"width":756,"height":11}},{"id":"f6d90cb9-f10c-4524-bc77-fe23d6e28f45","block_type":"box","text":"financial interests of our clients as shareholders, and so we will review any proposed transaction with that objective","page_number":259,"box":{"x":68,"y":173,"width":826,"height":11}},{"id":"64383d1a-4e5b-4ed8-988a-ecd8070e38a9","block_type":"box","text":"in mind. Typically, we review factors such as whether the proposed transaction has the unanimous support of the","page_number":259,"box":{"x":70,"y":188,"width":806,"height":11}},{"id":"2d687d94-7d0f-410d-93a4-6cf142806a4f","block_type":"box","text":"board and has been negotiated at arm’s length, and whether the board or management has clearly explained its","page_number":259,"box":{"x":69,"y":204,"width":799,"height":11}},{"id":"785d1a86-ee77-4f48-ad89-1a854bf6ae2c","block_type":"box","text":"economic and strategic rationale. We may also seek reassurance from the board that the financial interests of","page_number":259,"box":{"x":69,"y":218,"width":788,"height":12}},{"id":"bdb063c3-0288-41f2-a108-c60f06cbc6cd","block_type":"box","text":"executives and/or board members in a given transaction have not adversely affected their ability to place","page_number":259,"box":{"x":69,"y":234,"width":750,"height":11}},{"id":"a5d2f566-86a8-4568-a722-50d71542fc4c","block_type":"box","text":"shareholders’ interests before their own. Where the transaction involves related parties, the recommendation to","page_number":259,"box":{"x":69,"y":249,"width":801,"height":11}},{"id":"46cdfec1-2a51-48ee-bdae-8733cf8656ce","block_type":"box","text":"support should come from the independent directors, a best practice in most markets, and ideally, the terms should","page_number":259,"box":{"x":69,"y":264,"width":830,"height":11}},{"id":"c913790f-5c85-4e61-92a1-154f15e86a71","block_type":"box","text":"have been assessed through an independent appraisal process. In addition, it is good practice that it be approved by","page_number":259,"box":{"x":69,"y":279,"width":836,"height":11}},{"id":"53dd5887-116b-43df-ba83-09392f67d03b","block_type":"box","text":"a separate vote of the non-conflicted parties.","page_number":259,"box":{"x":69,"y":294,"width":320,"height":11}},{"id":"df3fbe6d-e406-493f-a522-c876795a8759","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company shares in the","page_number":259,"box":{"x":101,"y":317,"width":806,"height":11}},{"id":"6c69a831-9f56-41cf-bdc1-c24744418946","block_type":"box","text":"open market without unnecessary restriction. In our view, corporate mechanisms designed to limit shareholders’","page_number":259,"box":{"x":69,"y":332,"width":801,"height":11}},{"id":"ed7f641d-80da-45ad-81b6-d8664935ebb2","block_type":"box","text":"ability to sell their shares are contrary to basic property rights. Such mechanisms can serve to protect and entrench","page_number":259,"box":{"x":69,"y":347,"width":829,"height":11}},{"id":"fe76b001-8739-41ee-bf91-d8176f93a248","block_type":"box","text":"interests other than those of the shareholders. In our view, shareholders are broadly capable of making decisions in","page_number":259,"box":{"x":70,"y":362,"width":826,"height":11}},{"id":"3d06d2bf-3ae4-45ac-8cd3-e245ace42879","block_type":"box","text":"their own best interests. We encourage any shareholder rights plans proposed by a board to be subject to","page_number":259,"box":{"x":68,"y":377,"width":755,"height":12}},{"id":"070fc30e-d4f6-416e-a2d9-124b3a55ea7a","block_type":"box","text":"shareholder approval upon introduction and periodically thereafter.","page_number":259,"box":{"x":69,"y":392,"width":472,"height":12}},{"id":"927528ea-42b3-4459-a754-76e89091563d","block_type":"box","text":"EXECUTIVE COMPENSATION AND BENEFITS","page_number":259,"box":{"x":328,"y":423,"width":322,"height":9}},{"id":"621df7db-1a72-4482-8e57-5c347934251d","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value creation. A","page_number":259,"box":{"x":102,"y":445,"width":799,"height":12}},{"id":"c8464cdd-3990-4f30-8e81-eb911c56b148","block_type":"box","text":"well-structured compensation policy rewards the successful delivery of strategic, operational, and/or financial goals;","page_number":259,"box":{"x":68,"y":460,"width":830,"height":12}},{"id":"885fb2ef-d371-4ea8-bd56-e22334184c61","block_type":"box","text":"encourages an appropriate risk appetite; and aligns the interests of shareholders and executives through equity","page_number":259,"box":{"x":69,"y":475,"width":797,"height":12}},{"id":"5bd4ce22-7a6c-443e-822c-b946c53ded6b","block_type":"box","text":"ownership.","page_number":259,"box":{"x":69,"y":491,"width":75,"height":11}},{"id":"11b5c37f-3d70-44ce-b49a-4dbdd642d223","block_type":"box","text":"8","page_number":259,"box":{"x":146,"y":491,"width":4,"height":4}},{"id":"f03ed82a-85f9-4059-878a-0f91b23015f5","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support sustained","page_number":259,"box":{"x":101,"y":513,"width":793,"height":11}},{"id":"6841b631-d9a1-4c9a-b2b5-8073ba4ebfe8","block_type":"box","text":"financial value creation for our clients as shareholders. We appreciate when performance targets incorporate","page_number":259,"box":{"x":68,"y":528,"width":778,"height":12}},{"id":"5910a6e5-8a94-4f46-bb03-b8914b491b5a","block_type":"box","text":"ambitious objectives, and the corresponding metrics are aligned with the company’s strategy and business model.","page_number":259,"box":{"x":69,"y":544,"width":815,"height":11}},{"id":"1f102c01-6cfd-4920-97db-928832d03581","block_type":"box","text":"BIS does not have a position on whether companies choose to use sustainability-related criteria in compensation","page_number":259,"box":{"x":70,"y":559,"width":804,"height":11}},{"id":"1ef2d223-f01f-46ba-86ab-2c97984ff994","block_type":"box","text":"structures, but, where they are included, we look to companies to be as rigorous as they would be in setting other","page_number":259,"box":{"x":69,"y":574,"width":814,"height":11}},{"id":"6a4abef4-6b0c-40c5-a437-73cc65e5250f","block_type":"box","text":"financial or operational targets. We appreciate when long-term incentive plans encompass timeframes that: 1) are","page_number":259,"box":{"x":68,"y":589,"width":813,"height":11}},{"id":"a83e1845-82b6-4150-bba5-3ea829ae4d30","block_type":"box","text":"distinct from annual executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":259,"box":{"x":69,"y":604,"width":839,"height":11}},{"id":"a836f3d5-4027-404e-a386-b4e3585676d2","block_type":"box","text":"results over a period of years.","page_number":259,"box":{"x":69,"y":619,"width":211,"height":11}},{"id":"c21ba5c7-9bc2-492f-9338-6c0902e00ae4","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":259,"box":{"x":101,"y":642,"width":718,"height":11}},{"id":"9a1f39b7-f839-485e-9575-9f64b19e5929","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may include the","page_number":259,"box":{"x":69,"y":657,"width":770,"height":11}},{"id":"0f6637d2-7180-47de-970c-fe90509cc9a1","block_type":"box","text":"company’s risk profile, the environment it operates in, and the individuals the board is trying to attract and retain. We","page_number":259,"box":{"x":69,"y":672,"width":838,"height":11}},{"id":"4e060b57-21c6-4c77-aa48-feb0116031ad","block_type":"box","text":"look to the compensation committees to guard against contractual arrangements that would entitle executives to","page_number":259,"box":{"x":70,"y":687,"width":804,"height":11}},{"id":"73fc79d7-afa1-4026-8af7-c9750e763ea2","block_type":"box","text":"material compensation for early termination of their employment. Finally, we look for pension contributions and other","page_number":259,"box":{"x":69,"y":702,"width":831,"height":11}},{"id":"78dff176-edcc-48c3-898a-259bebe32303","block_type":"box","text":"deferred compensation arrangements to be reasonable in light of market practices or the company’s business and","page_number":259,"box":{"x":69,"y":717,"width":817,"height":12}},{"id":"b17d2a5d-cc4f-47c2-902f-e3a21ab81a38","block_type":"box","text":"executive compensation strategies.","page_number":259,"box":{"x":69,"y":733,"width":250,"height":11}},{"id":"84deafa4-02ff-4782-bf43-0195659e9045","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance. Where","page_number":259,"box":{"x":101,"y":755,"width":772,"height":11}},{"id":"c880d185-d8c6-4cd6-a5b0-87ed77adf613","block_type":"box","text":"discretion has been used by the compensation committee, or its equivalent, we appreciate disclosure relating to how","page_number":259,"box":{"x":69,"y":771,"width":836,"height":11}},{"id":"c62389ba-308e-4fdf-b577-6a537d15bd06","block_type":"box","text":"and why the discretion was used, and how the adjusted outcome is aligned with the interests of shareholders. In","page_number":259,"box":{"x":69,"y":785,"width":803,"height":12}},{"id":"cd677844-272d-4ad0-8dd6-8ba54bcb9209","block_type":"box","text":"addition, we acknowledge that the use of peer group evaluation by compensation committees can help ensure","page_number":259,"box":{"x":69,"y":801,"width":785,"height":11}},{"id":"e3962e3a-1815-4585-883d-6d56f1d67a26","block_type":"box","text":"competitive pay. However, we encourage companies to clearly explain how compensation outcomes have rewarded","page_number":259,"box":{"x":69,"y":816,"width":815,"height":11}},{"id":"413a355e-70e8-44c1-bc5b-358f5349f070","block_type":"box","text":"performance rather than solely base increases in total compensation on peer benchmarking.","page_number":259,"box":{"x":70,"y":831,"width":659,"height":11}},{"id":"feed59e5-67ca-4b5a-b5a0-27319b2aaddb","block_type":"box","text":"8","page_number":259,"box":{"x":69,"y":860,"width":4,"height":5}},{"id":"0bc67da1-15bf-4a5d-81a3-12b3f9f15c21","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":259,"box":{"x":78,"y":860,"width":811,"height":11}},{"id":"a1b389a6-42e8-48f8-a5c0-a220109054f6","block_type":"box","text":"different markets.","page_number":259,"box":{"x":69,"y":875,"width":126,"height":9}},{"id":"47e24ba9-5119-4628-85f2-286a8846ec3b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":259,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"a21c1d66-6089-447c-ad6c-c988ae3493ee","block_type":"box","text":"Global Principles | 8","page_number":259,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"3c6f9a98-fc22-477e-9f77-03218dc92371","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":259,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"dc038dc8-4b14-4ec0-8a37-94f72f22bb2b","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such provisions","page_number":260,"box":{"x":101,"y":45,"width":797,"height":11}},{"id":"eca520dd-55ef-4c38-b77a-592890610197","block_type":"box","text":"could require executives to forgo awards when compensation was based on faulty financial statements or deceptive","page_number":260,"box":{"x":69,"y":60,"width":825,"height":11}},{"id":"f64db1c0-d3d1-4919-b0f5-7029e13b9484","block_type":"box","text":"business practices, or when their behavior caused material financial harm to shareholders, material reputational risk","page_number":260,"box":{"x":69,"y":75,"width":833,"height":11}},{"id":"b6b91910-3527-4f73-a606-7297879864fd","block_type":"box","text":"to the company, or resulted in a criminal investigation.","page_number":260,"box":{"x":68,"y":90,"width":386,"height":11}},{"id":"3c8d6a27-7203-4467-9cf5-2746bf6d6ad5","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with the time and","page_number":260,"box":{"x":102,"y":113,"width":803,"height":11}},{"id":"7ca189c4-acc7-4e51-959f-bcb3034333ed","block_type":"box","text":"effort expended in fulfilling their professional responsibilities. Additionally, these compensation arrangements should","page_number":260,"box":{"x":69,"y":128,"width":834,"height":11}},{"id":"b1403644-4e92-4dc6-a15f-27a8c23a7498","block_type":"box","text":"not risk compromising directors’ independence or aligning their interests too closely with those of the management,","page_number":260,"box":{"x":69,"y":143,"width":825,"height":11}},{"id":"7a99f536-58b7-4ecd-9e3b-ecbbd779f95d","block_type":"box","text":"whom they are charged with overseeing.","page_number":260,"box":{"x":68,"y":158,"width":285,"height":11}},{"id":"baa5e1d6-7e80-4696-9d3d-b4a4ff02f14b","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether the board’s","page_number":260,"box":{"x":101,"y":181,"width":807,"height":11}},{"id":"0a1eeb83-45d0-4fe4-9bb0-dccde2194f9d","block_type":"box","text":"approach to executive compensation is rigorous in light of the company’s stated long-term corporate strategy and","page_number":260,"box":{"x":69,"y":196,"width":807,"height":11}},{"id":"a432805f-71db-4923-9a28-5798d51a1e95","block_type":"box","text":"specific circumstances, as well as local market and policy developments.","page_number":260,"box":{"x":69,"y":211,"width":521,"height":11}},{"id":"4f682279-1ae7-475c-a420-9c0337a4cf9e","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance, BIS may not","page_number":260,"box":{"x":101,"y":234,"width":802,"height":11}},{"id":"8e23998b-6fae-4253-a75f-d281f4bc1229","block_type":"box","text":"support management’s proposals to approve compensation, where they are on the agenda. We may also not support","page_number":260,"box":{"x":69,"y":249,"width":838,"height":11}},{"id":"aad8e262-ddc1-45ba-9e92-5043a8b7ba4d","block_type":"box","text":"members of the compensation committee or equivalent board members for poor compensation practices or","page_number":260,"box":{"x":69,"y":264,"width":766,"height":11}},{"id":"f8125065-cb2f-4e70-bb57-f671220d9907","block_type":"box","text":"structures.","page_number":260,"box":{"x":69,"y":280,"width":76,"height":8}},{"id":"67150e1c-4e2d-4cb0-81a5-a703a451aecb","block_type":"box","text":"SHAREHOLDER PROTECTIONS AND OTHER CORPORATE GOVERNANCE MATTERS","page_number":260,"box":{"x":191,"y":309,"width":595,"height":9}},{"id":"37332208-eb84-4b92-94d5-14591066dd5b","block_type":"box","text":"Corporate form","page_number":260,"box":{"x":69,"y":339,"width":108,"height":11}},{"id":"99c160eb-1d19-4d92-94d1-6b543ba4431d","block_type":"box","text":"In our view, it is the responsibility of the board to determine the corporate form that is most appropriate given","page_number":260,"box":{"x":102,"y":362,"width":781,"height":11}},{"id":"4d72b6be-ebc1-4b3e-8fb8-f60a8b1c1098","block_type":"box","text":"the company’s purpose and business model.","page_number":260,"box":{"x":68,"y":377,"width":320,"height":11}},{"id":"249e4c6c-3f70-48fd-a4a7-9ee57a84fd30","block_type":"box","text":"9","page_number":260,"box":{"x":390,"y":378,"width":4,"height":4}},{"id":"b6ecb8eb-396e-4017-adf2-325cf38bca00","block_type":"box","text":"We look to companies proposing to change their corporate form to a","page_number":260,"box":{"x":399,"y":377,"width":487,"height":12}},{"id":"5d006df7-8b8b-487e-b42c-927a6e5cddb8","block_type":"box","text":"public benefit corporation, or similar entity, to put it to a shareholder vote if not already required to do so under","page_number":260,"box":{"x":70,"y":392,"width":791,"height":12}},{"id":"8c98d797-7c94-4db6-9263-d1d2c91c2757","block_type":"box","text":"applicable law. We appreciate when supporting documentation from companies or shareholders proposing to alter the","page_number":260,"box":{"x":69,"y":407,"width":839,"height":12}},{"id":"3d3d6cc9-a9a5-40c9-b8ac-5c92234b501d","block_type":"box","text":"corporate form clearly explains how the interests of shareholders and different stakeholders would be impacted as","page_number":260,"box":{"x":69,"y":423,"width":818,"height":11}},{"id":"4a2fb8a7-227c-4467-8a70-5e1ca7ab8caa","block_type":"box","text":"well as the accountability and voting mechanisms that would be available to shareholders. We generally support","page_number":260,"box":{"x":68,"y":438,"width":800,"height":11}},{"id":"7e004cc8-fb5e-430d-94b3-f74be9a54e92","block_type":"box","text":"management proposals if our analysis indicates that shareholders’ financial interests are adequately protected.","page_number":260,"box":{"x":69,"y":453,"width":796,"height":11}},{"id":"06b09e5d-93ca-47e5-bf42-508e3c646cda","block_type":"box","text":"Corporate form shareholder proposals are evaluated on a case-by-case basis.","page_number":260,"box":{"x":69,"y":468,"width":552,"height":11}},{"id":"a3855e53-5c98-4d6f-bbc6-c30404b59b2b","block_type":"box","text":"SHAREHOLDER PROPOSALS","page_number":260,"box":{"x":385,"y":498,"width":207,"height":9}},{"id":"83c2b2fb-bc45-4345-a23e-34109ab331e8","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder meeting, as","page_number":260,"box":{"x":102,"y":521,"width":777,"height":11}},{"id":"72bd6b01-c733-44d5-91d5-69bfd732fca5","block_type":"box","text":"long as certain requirements are met. Shareholder proposals span a wide range of topics, including governance","page_number":260,"box":{"x":70,"y":536,"width":796,"height":11}},{"id":"54c82e9e-9c58-4ad7-91cb-ad1fafd24b18","block_type":"box","text":"reforms, capital management, and changes in the management or disclosure of sustainability-related risks. These","page_number":260,"box":{"x":69,"y":551,"width":813,"height":11}},{"id":"97e67de3-bc40-4640-a682-8bedf90f8830","block_type":"box","text":"proposals have a varying degree of relevance for companies across sectors, locations, and business models.","page_number":260,"box":{"x":70,"y":566,"width":779,"height":11}},{"id":"eedc17c6-1013-4372-a4be-57598f40fe11","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus on the","page_number":260,"box":{"x":102,"y":589,"width":775,"height":11}},{"id":"47de1573-fa75-4dc0-a066-a11fd97182fd","block_type":"box","text":"proposal’s implications for long-term financial value creation for shareholders. Our analysis considers whether a","page_number":260,"box":{"x":70,"y":604,"width":796,"height":11}},{"id":"76c2a962-b083-4c7b-8ab3-b670c8eef533","block_type":"box","text":"shareholder proposal addresses a material risk that may impact a company’s long-term financial performance. BIS","page_number":260,"box":{"x":69,"y":619,"width":818,"height":11}},{"id":"4cce574b-af45-4a8d-87f1-eb403bcdbfca","block_type":"box","text":"may support shareholder proposals that request disclosures that help us, as long-term investors on behalf of our","page_number":260,"box":{"x":69,"y":634,"width":809,"height":12}},{"id":"62dcb6be-20a1-4961-b22b-54c5355791f5","block_type":"box","text":"clients, better understand the material risks and opportunities companies face and how they are managing them,","page_number":260,"box":{"x":69,"y":649,"width":807,"height":12}},{"id":"e6307c07-044f-4007-930b-413e4762c9db","block_type":"box","text":"especially where this information is additive given the company’s existing disclosures. We look for consistency","page_number":260,"box":{"x":69,"y":664,"width":787,"height":12}},{"id":"19ac5315-82d2-4842-bba3-76bb281bfe8a","block_type":"box","text":"between the specific request formally made in the proposal, the supporting documentation, and the proponents’","page_number":260,"box":{"x":69,"y":680,"width":801,"height":11}},{"id":"4017cfe2-6977-4a68-988a-08097c487fe2","block_type":"box","text":"other communications on the issues. We also assess the company’s practices and disclosures and the costs and","page_number":260,"box":{"x":69,"y":695,"width":813,"height":11}},{"id":"0fb46374-4c23-46f3-b07f-0bc381f5d98c","block_type":"box","text":"benefits to the company of meeting the request made in the proposal. We take into consideration a company’s","page_number":260,"box":{"x":69,"y":710,"width":791,"height":11}},{"id":"cce7d039-dff6-4068-baf7-fdd001c0db98","block_type":"box","text":"governance practices and disclosures against those of their peers.","page_number":260,"box":{"x":68,"y":725,"width":475,"height":11}},{"id":"f99a8d59-89b9-44a3-9ee4-c8204dc90db3","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value or that","page_number":260,"box":{"x":102,"y":748,"width":787,"height":11}},{"id":"f6c853a3-6db3-4586-892d-b3dc22e8261f","block_type":"box","text":"seek to micromanage companies. We take into consideration the legal effect of the proposal, as shareholder","page_number":260,"box":{"x":69,"y":763,"width":778,"height":11}},{"id":"070dd053-c582-4685-b228-447abcbbdad4","block_type":"box","text":"proposals may be advisory or legally binding depending on the jurisdiction, while others may make requests that","page_number":260,"box":{"x":70,"y":778,"width":799,"height":11}},{"id":"20d9b319-83da-4455-bd5d-a5d2c62463ec","block_type":"box","text":"would be deemed illegal in a given jurisdiction.","page_number":260,"box":{"x":68,"y":793,"width":331,"height":11}},{"id":"8927b13a-fd31-42a4-83d8-7038008867ec","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization that has","page_number":260,"box":{"x":102,"y":816,"width":777,"height":11}},{"id":"66bbea64-c118-4fd8-bb2e-54f948e24a5a","block_type":"box","text":"submitted or advised on the proposal. We recognize that some shareholder proposals bundle topics and/or specific","page_number":260,"box":{"x":69,"y":831,"width":825,"height":11}},{"id":"dbdd462a-8a86-456a-87bc-ac47685786ca","block_type":"box","text":"requests. Further, the proponent’s supporting statement may refer to topics that are not directly related to the","page_number":260,"box":{"x":69,"y":846,"width":788,"height":11}},{"id":"6e0798cc-8ee9-45df-a6a5-b57932981589","block_type":"box","text":"request made in the proposal. In voting on behalf of clients, we must vote yes or no on the proposal as phrased by","page_number":260,"box":{"x":69,"y":861,"width":820,"height":11}},{"id":"35f04c1d-fac9-41b3-99d3-509d0e543501","block_type":"box","text":"the proponent. Therefore, when we vote in support of a proposal, we are not necessarily endorsing every element of","page_number":260,"box":{"x":68,"y":876,"width":831,"height":11}},{"id":"16928ed9-6b25-413d-8755-28fdd3561753","block_type":"box","text":"9","page_number":260,"box":{"x":69,"y":906,"width":4,"height":4}},{"id":"f0fcbfb5-a25f-434a-803b-2752c98ed5d0","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":260,"box":{"x":79,"y":905,"width":550,"height":12}},{"id":"f8227847-cb35-428e-b3ab-ce34c6cf0d2c","block_type":"box","text":"BlackRock Investment Stewardship","page_number":260,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"17352ddb-8746-48b3-b7aa-304c028a3f07","block_type":"box","text":"Global Principles | 9","page_number":260,"box":{"x":768,"y":942,"width":141,"height":13}},{"id":"231ea930-e238-4277-87de-0ee1e0326554","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":260,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"2bc2968d-42fb-452f-a22f-4d0ec7cc66bd","block_type":"box","text":"the proposal or the reasoning, objectives, or supporting statement of the proponent. We may support a proposal for","page_number":261,"box":{"x":68,"y":45,"width":829,"height":11}},{"id":"1030288b-2737-481d-a764-92798e9662ab","block_type":"box","text":"different reasons than those put forth by the proponent, when we believe that overall it may advance our clients’","page_number":261,"box":{"x":69,"y":60,"width":802,"height":11}},{"id":"b182b092-0b86-4349-ba2f-610aafbc1078","block_type":"box","text":"long-term financial interests.","page_number":261,"box":{"x":70,"y":75,"width":201,"height":11}},{"id":"c06c1ace-148f-481f-99ae-acdf403e8531","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that place","page_number":261,"box":{"x":102,"y":98,"width":763,"height":11}},{"id":"ba9672ad-6d1f-498b-8746-4f88cb5ec460","block_type":"box","text":"restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our","page_number":261,"box":{"x":69,"y":113,"width":809,"height":11}},{"id":"e3ff83f2-452b-450b-a7d4-a16f5561b048","block_type":"box","text":"clients. BlackRock does not nominate directors for board elections or submit shareholder proposals to companies.","page_number":261,"box":{"x":69,"y":128,"width":817,"height":11}},{"id":"fa51cd72-d685-4022-be1c-531665d83131","block_type":"box","text":"Non-compliance with these requirements could adversely affect BlackRock’s ability to serve its clients’ interests.","page_number":261,"box":{"x":70,"y":143,"width":803,"height":11}},{"id":"db503d87-11e0-4764-8825-009bf1c78581","block_type":"box","text":"MATERIAL SUSTAINABILITY-RELATED RISKS AND OPPORTUNITIES","page_number":261,"box":{"x":247,"y":173,"width":484,"height":9}},{"id":"69244644-8a28-487e-851b-0620497203ad","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks and","page_number":261,"box":{"x":101,"y":196,"width":760,"height":11}},{"id":"14ed4049-f929-4e2e-aa9c-e02bcd99a2c4","block_type":"box","text":"opportunities, is an important component of having an effective governance framework that supports durable, long","page_number":261,"box":{"x":69,"y":211,"width":824,"height":11}},{"id":"2a5766c0-1119-4c94-9650-89b1ffeb3a75","block_type":"box","text":"term financial value creation.","page_number":261,"box":{"x":68,"y":226,"width":206,"height":9}},{"id":"fb4a1fae-5190-4def-8f8c-f6cb543f609f","block_type":"box","text":"10","page_number":261,"box":{"x":276,"y":226,"width":9,"height":5}},{"id":"60f8b6b1-8052-4f5f-8863-5c7919df5ee1","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate companies’","page_number":261,"box":{"x":101,"y":249,"width":761,"height":11}},{"id":"3976ad1e-6380-4b5f-97f2-faf106b64505","block_type":"box","text":"strategy and business practices related to material sustainability-related risks and opportunities. We find it helpful","page_number":261,"box":{"x":69,"y":264,"width":814,"height":11}},{"id":"e848c715-8b59-4c70-8844-0a71de0f7a28","block_type":"box","text":"when companies’ disclosures demonstrate that they have a resilient business model that integrates material","page_number":261,"box":{"x":68,"y":279,"width":777,"height":11}},{"id":"fac398fe-7291-4e6b-b416-834547188712","block_type":"box","text":"sustainability-related risks and opportunities into their strategy, risk management, and metrics and targets, including","page_number":261,"box":{"x":69,"y":294,"width":833,"height":11}},{"id":"8496c6df-f4b3-4fc6-a9d3-9bcc0260d6d6","block_type":"box","text":"industry-specific metrics.","page_number":261,"box":{"x":70,"y":309,"width":175,"height":11}},{"id":"43084124-21be-439a-91ca-8e88df67fb19","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions. The","page_number":261,"box":{"x":102,"y":332,"width":765,"height":11}},{"id":"f5784e7d-3ffe-4836-a60f-4f504aceb293","block_type":"box","text":"International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one such approach to","page_number":261,"box":{"x":70,"y":347,"width":800,"height":11}},{"id":"5b21c936-d6aa-4956-8849-7b60f1f5aed3","block_type":"box","text":"standardization that we find useful in our analysis.","page_number":261,"box":{"x":69,"y":362,"width":358,"height":11}},{"id":"120ac5e0-1fc3-468d-bda2-97013482f8c2","block_type":"box","text":"11","page_number":261,"box":{"x":429,"y":363,"width":9,"height":4}},{"id":"83b74ef2-15e2-46bb-b2eb-cee32865c1f1","block_type":"box","text":"However, we do not mandate any specific disclosure framework","page_number":261,"box":{"x":444,"y":362,"width":451,"height":11}},{"id":"05449c28-1959-4010-b1ca-9c5870efaed9","block_type":"box","text":"companies should use, and recognize that companies may report using different standards, some of which may be","page_number":261,"box":{"x":69,"y":377,"width":821,"height":12}},{"id":"1df255e6-c7bb-46d2-a2cc-2f8413540a44","block_type":"box","text":"required by regulation. In such cases, we ask that companies highlight the metrics that are industry- or company","page_number":261,"box":{"x":69,"y":393,"width":806,"height":11}},{"id":"357f14c1-f1e1-4f1a-89ae-cb3d2ec37655","block_type":"box","text":"specific.","page_number":261,"box":{"x":69,"y":407,"width":57,"height":11}},{"id":"228a9b60-609b-4259-9964-7295489f333e","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not prescribe timelines","page_number":261,"box":{"x":101,"y":430,"width":805,"height":11}},{"id":"bc26ac70-f6b6-4703-a61d-40dd7f7b0611","block_type":"box","text":"regarding when companies should make sustainability-related disclosures but appreciate it when companies produce","page_number":261,"box":{"x":69,"y":446,"width":833,"height":11}},{"id":"31bd0573-222f-4bb6-890f-1a2b29b2364e","block_type":"box","text":"them sufficiently in advance of their shareholder meeting, to the best of their abilities, to provide investors with time","page_number":261,"box":{"x":68,"y":460,"width":830,"height":12}},{"id":"ef103626-4f8b-4477-88f6-924989351e68","block_type":"box","text":"to assess the data and make informed voting decisions.","page_number":261,"box":{"x":68,"y":475,"width":401,"height":12}},{"id":"766ed71a-2b00-41cf-bbb8-7742b15c88f7","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to companies on","page_number":261,"box":{"x":102,"y":498,"width":775,"height":11}},{"id":"9b4036fe-abb0-48e6-86d5-0cd0b45d78b1","block_type":"box","text":"best practices and disclosures. While not a voting item, we find it helpful to our understanding of investment risk","page_number":261,"box":{"x":69,"y":513,"width":804,"height":12}},{"id":"f58ca4cf-2ff4-4dea-8b27-432f3287886e","block_type":"box","text":"when companies disclose any relevant global sustainability-related standards adopted, the industry initiatives in","page_number":261,"box":{"x":68,"y":529,"width":799,"height":11}},{"id":"b814c852-3ec6-4d8b-94ba-072a83ef8556","block_type":"box","text":"which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors","page_number":261,"box":{"x":68,"y":544,"width":810,"height":11}},{"id":"28613fab-dbd0-474e-a2fa-8a2d7e3084a0","block_type":"box","text":"understand their approach to sustainable and responsible business practices.","page_number":261,"box":{"x":69,"y":559,"width":556,"height":11}},{"id":"ead32d8a-1bba-4a0f-8ae0-89f2fd58c623","block_type":"box","text":"10","page_number":261,"box":{"x":69,"y":603,"width":9,"height":5}},{"id":"041c435a-14fb-4411-bf0a-be6e1b77cd7d","block_type":"box","text":"By material sustainability-related risks and opportunities, we mean the drivers of risk and financial value creation in","page_number":261,"box":{"x":84,"y":603,"width":822,"height":11}},{"id":"cb487df8-34ed-493d-b924-e3f27a992be4","block_type":"box","text":"a company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":261,"box":{"x":69,"y":618,"width":835,"height":11}},{"id":"770caf60-972c-4c24-a366-bc1d1f87abd0","block_type":"box","text":"issues include, but are not limited to, water use, land use, waste management, and climate risk. Examples of social","page_number":261,"box":{"x":70,"y":633,"width":827,"height":12}},{"id":"78a28b9c-7961-4162-9339-3bdc664e8b14","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":261,"box":{"x":70,"y":649,"width":826,"height":11}},{"id":"ac7b9a5f-6686-4dbc-8fc4-7c97687fd7d4","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":261,"box":{"x":69,"y":664,"width":433,"height":11}},{"id":"23b59c73-3ff7-4829-b4b9-7a3ccbc0a4d0","block_type":"box","text":"11","page_number":261,"box":{"x":69,"y":682,"width":9,"height":4}},{"id":"93bed30d-ca46-4ca2-864d-6363b094eb80","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards","page_number":261,"box":{"x":83,"y":681,"width":744,"height":11}},{"id":"3d685933-04e3-4c8c-b584-3fa18ee98574","block_type":"box","text":"(IFRS) Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework","page_number":261,"box":{"x":69,"y":696,"width":828,"height":11}},{"id":"e9601188-cb73-4e47-a676-ce9690b1a263","block_type":"box","text":"and the standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":261,"box":{"x":69,"y":711,"width":830,"height":12}},{"id":"052ca58f-7b32-4f99-adea-ec73a6be1f9c","block_type":"box","text":"converged under the ISSB. Please refer to the IFRS website to learn more about the framework and standards S1","page_number":261,"box":{"x":69,"y":726,"width":809,"height":12}},{"id":"7ab289fc-1b9c-4cea-9dc6-bee19d6880d6","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":261,"box":{"x":70,"y":742,"width":778,"height":11}},{"id":"e01de28b-6d98-4713-a6cc-9b9b75d0768f","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":261,"box":{"x":70,"y":757,"width":380,"height":9}},{"id":"27927570-5178-4a47-beaf-63314945a02a","block_type":"box","text":"BlackRock Investment Stewardship","page_number":261,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"8c2c0355-c755-4e7f-9017-95ae3bb1ea53","block_type":"box","text":"Global Principles | 10","page_number":261,"box":{"x":758,"y":942,"width":151,"height":13}},{"id":"a06101ed-2c45-422b-bd4b-a8d67c21d69d","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":261,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"54fd2eca-3f45-454a-b5e0-c1459fe03093","block_type":"box","text":"CLIMATE AND NATURE-RELATED RISK","page_number":262,"box":{"x":351,"y":45,"width":277,"height":9}},{"id":"c40425ac-dd21-4c82-904f-d397fe48ce4b","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term financial","page_number":262,"box":{"x":102,"y":67,"width":769,"height":12}},{"id":"d9163150-f3a9-4cdb-b368-6802c58fdb47","block_type":"box","text":"value to investors. For companies facing material climate-related risks, we find it helpful when they publicly disclose,","page_number":262,"box":{"x":68,"y":82,"width":829,"height":12}},{"id":"e8f1fe97-8301-4530-8966-ee7f14c200e9","block_type":"box","text":"consistent with their business model and sector, how they intend to deliver long-term financial performance through","page_number":262,"box":{"x":69,"y":98,"width":824,"height":11}},{"id":"6bcc099d-eb5f-4c6c-9b1e-e9c013cf8d9d","block_type":"box","text":"the low-carbon transition, including where available, their transition plan.","page_number":262,"box":{"x":68,"y":113,"width":514,"height":11}},{"id":"5f580680-31dd-4c3e-bf2d-d632c4270238","block_type":"box","text":"12, 13","page_number":262,"box":{"x":584,"y":113,"width":26,"height":5}},{"id":"85a32476-9246-4875-b98d-7acfd38db38e","block_type":"box","text":"From company disclosures and","page_number":262,"box":{"x":617,"y":113,"width":218,"height":11}},{"id":"ea4fd124-0480-4239-8f8a-337d779de1fd","block_type":"box","text":"engagement, we seek to understand the strategies companies have in place to manage material risks to, and","page_number":262,"box":{"x":69,"y":128,"width":782,"height":11}},{"id":"79bbc350-f751-43ba-9106-d37bba2777df","block_type":"box","text":"opportunities for, their long-term business model associated with a range of climate-related scenarios.","page_number":262,"box":{"x":69,"y":143,"width":729,"height":11}},{"id":"894e5f00-309a-4999-baff-038f9365c125","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate large","page_number":262,"box":{"x":102,"y":166,"width":740,"height":11}},{"id":"dafceeaf-5b94-47bc-9081-072e8b5aa417","block_type":"box","text":"companies to disclose such climate-related financial information, while in other jurisdictions these disclosures are","page_number":262,"box":{"x":69,"y":181,"width":814,"height":11}},{"id":"74e0c57b-7a5d-457f-83f9-fc4ede756675","block_type":"box","text":"viewed as best practice in the market.","page_number":262,"box":{"x":68,"y":196,"width":271,"height":11}},{"id":"ac6392c0-9339-498f-95c4-2ad2a2a09d18","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company-specific","page_number":262,"box":{"x":101,"y":218,"width":749,"height":12}},{"id":"fcd101e8-82a1-4721-b4da-4f281e8e6079","block_type":"box","text":"climate-related risks and opportunities, and informing investment decisions. Such disclosures also provide investors","page_number":262,"box":{"x":69,"y":234,"width":831,"height":11}},{"id":"69350eae-c453-455f-a713-94ec73973985","block_type":"box","text":"with insights into how companies are managing the risks associated with a transition to a low-carbon economy by","page_number":262,"box":{"x":68,"y":249,"width":809,"height":11}},{"id":"47721c84-105c-4581-acfb-1fe6c1445110","block_type":"box","text":"managing their own carbon emissions or emissions intensities to the extent financially practicable.","page_number":262,"box":{"x":69,"y":264,"width":702,"height":11}},{"id":"564ff7a5-5f8b-441c-8ef6-4ae3e749e441","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-, medium- and","page_number":262,"box":{"x":101,"y":286,"width":786,"height":12}},{"id":"66ee323a-2385-4454-a210-bf253a895560","block_type":"box","text":"long-term targets, ideally science-based where these are available for their sector, for scope 1 and 2 greenhouse gas","page_number":262,"box":{"x":70,"y":302,"width":834,"height":11}},{"id":"76b53690-14db-4291-a756-1abbdae82b99","block_type":"box","text":"emissions (GHG) reductions and to demonstrate how their targets are consistent with the long-term financial","page_number":262,"box":{"x":69,"y":317,"width":773,"height":11}},{"id":"dce82fed-7a4e-4047-8c3c-ade997deb9d9","block_type":"box","text":"interests of their investors.","page_number":262,"box":{"x":70,"y":332,"width":190,"height":9}},{"id":"077efb4c-04a9-4c65-a5d1-26e000dec7d2","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this stage,","page_number":262,"box":{"x":101,"y":355,"width":784,"height":11}},{"id":"8afec2ec-3435-4de4-8abf-6e03bafae813","block_type":"box","text":"we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity, regulatory uncertainty,","page_number":262,"box":{"x":68,"y":370,"width":832,"height":11}},{"id":"9eab290b-01d6-4bb5-a783-473b26f7a3ad","block_type":"box","text":"concerns about double-counting, and lack of direct control by companies. We welcome disclosures and commitments","page_number":262,"box":{"x":69,"y":385,"width":834,"height":11}},{"id":"3c2849a6-5483-4164-8cfb-7293b7fedbf1","block_type":"box","text":"that companies choose to make regarding material scope 3 emissions and recognize that these are provided on a","page_number":262,"box":{"x":68,"y":400,"width":815,"height":11}},{"id":"070372df-a0f9-4529-9691-dba57b4b7c94","block_type":"box","text":"good-faith basis as methodology develops.","page_number":262,"box":{"x":68,"y":415,"width":303,"height":11}},{"id":"c9947dbd-89af-4bab-bb1d-2c4c3cbd9504","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or supply","page_number":262,"box":{"x":102,"y":438,"width":766,"height":11}},{"id":"ed219ab3-7f8b-4c79-970e-58b4feee82d8","block_type":"box","text":"chains are materially reliant on natural capital, nature-related risks and opportunities may affect their ability to","page_number":262,"box":{"x":69,"y":453,"width":788,"height":11}},{"id":"a310b608-c4d5-49a8-9554-2fad003667fb","block_type":"box","text":"generate long-term financial returns.","page_number":262,"box":{"x":68,"y":468,"width":258,"height":11}},{"id":"3d9d59d1-636e-4653-853c-34a844730fed","block_type":"box","text":"14","page_number":262,"box":{"x":328,"y":468,"width":9,"height":5}},{"id":"c7cf2187-c6ef-4126-a84e-53be4b6cfad1","block_type":"box","text":"For these companies, we rely on disclosures to understand how their","page_number":262,"box":{"x":344,"y":468,"width":490,"height":11}},{"id":"d97e87c4-afb9-490f-8a3b-2b0a564705dd","block_type":"box","text":"strategies consider nature-related impacts and dependencies and to assess how the board oversees these risks.","page_number":262,"box":{"x":69,"y":483,"width":807,"height":11}},{"id":"c89544bd-3c9c-4bb3-b580-c7a5efa79455","block_type":"box","text":"15","page_number":262,"box":{"x":878,"y":484,"width":9,"height":4}},{"id":"5c312413-4f7b-4f60-a98a-c0fec6cf2311","block_type":"box","text":"COMPANIES’ IMPACT ON THEIR WORKFORCE, SUPPLY CHAINS, AND COMMUNITIES","page_number":262,"box":{"x":179,"y":513,"width":620,"height":11}},{"id":"e4d6a446-8634-4d91-8fc5-56dec2318085","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term financial","page_number":262,"box":{"x":102,"y":536,"width":799,"height":11}},{"id":"75f3d18e-9159-4940-a66d-bb5d1a547867","block_type":"box","text":"performance. For many companies, key stakeholders include employees, business supply chains, clients and","page_number":262,"box":{"x":70,"y":551,"width":778,"height":11}},{"id":"402e3d88-1a4c-4b4b-9aee-cb6273085233","block_type":"box","text":"consumers, regulators, and the communities in which they operate.","page_number":262,"box":{"x":69,"y":566,"width":479,"height":11}},{"id":"228fc705-ba1d-48ac-96d2-10a492a23c2c","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives are","page_number":262,"box":{"x":102,"y":589,"width":770,"height":11}},{"id":"08d367ec-2113-405f-94e8-29901d118767","block_type":"box","text":"more likely to deliver durable, long-term financial performance. By contrast, we have found that poor relationships","page_number":262,"box":{"x":69,"y":604,"width":810,"height":11}},{"id":"1c28a89a-fbfa-4687-aee1-c2fd1f0bb3cb","block_type":"box","text":"12","page_number":262,"box":{"x":69,"y":634,"width":9,"height":4}},{"id":"dd169287-4632-4d17-b00f-f63453d1381b","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":262,"box":{"x":83,"y":633,"width":823,"height":12}},{"id":"2cf707f3-070e-4293-a0ac-aa2b291de22e","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":262,"box":{"x":69,"y":649,"width":808,"height":11}},{"id":"4369f3de-b642-4324-99cf-8f1d3afac1cd","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":262,"box":{"x":70,"y":663,"width":827,"height":11}},{"id":"45597fc5-8628-4234-bceb-65acba9149eb","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition,","page_number":262,"box":{"x":69,"y":679,"width":774,"height":11}},{"id":"1efbd56d-3d95-4682-9355-8d280f307205","block_type":"box","text":"objectives, and actions to create financial value through the global transition towards a low-carbon economy. Across","page_number":262,"box":{"x":69,"y":694,"width":825,"height":11}},{"id":"c149b2d0-3c0f-470a-ad8b-80deda822a8b","block_type":"box","text":"the landscape there remains divergence on the objectives of such plans and the details they should contain. While","page_number":262,"box":{"x":68,"y":709,"width":819,"height":11}},{"id":"b0bbfcc7-216e-421d-ac98-68094a9bc0e3","block_type":"box","text":"transition plans can be helpful disclosure, BIS does not make the preparation and production of transition plans a","page_number":262,"box":{"x":68,"y":724,"width":813,"height":11}},{"id":"fd2a251a-a190-4c8c-b6ff-69059840ccd7","block_type":"box","text":"voting issue. BIS may engage companies that have chosen to publish a transition plan to understand their planned","page_number":262,"box":{"x":68,"y":739,"width":819,"height":11}},{"id":"35de5584-b8bb-49eb-bb49-a832fe919785","block_type":"box","text":"actions and resource implications. Website accessed in December 2025.","page_number":262,"box":{"x":69,"y":754,"width":522,"height":11}},{"id":"03deefc0-4c91-4e39-b54a-caf23ad4c222","block_type":"box","text":"13","page_number":262,"box":{"x":69,"y":772,"width":9,"height":5}},{"id":"3acb63e0-c6df-4bb9-82b6-75d7143b7fb5","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December","page_number":262,"box":{"x":84,"y":772,"width":804,"height":11}},{"id":"9c949526-75f1-4df9-860d-ad9d7b9e1bdb","block_type":"box","text":"2025.","page_number":262,"box":{"x":69,"y":787,"width":42,"height":9}},{"id":"2f2fec2e-327a-4c29-956a-df34e2a94389","block_type":"box","text":"14","page_number":262,"box":{"x":69,"y":805,"width":9,"height":4}},{"id":"6fe2bb65-a8b8-4916-bfd3-02434ca8ac14","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December","page_number":262,"box":{"x":84,"y":805,"width":796,"height":11}},{"id":"9b8cd734-aaf9-4f7b-8ff6-fe9b84bd667e","block_type":"box","text":"2025.","page_number":262,"box":{"x":69,"y":820,"width":42,"height":9}},{"id":"462720f2-9086-44d1-b762-11a7f4f5ecf0","block_type":"box","text":"15","page_number":262,"box":{"x":69,"y":838,"width":9,"height":4}},{"id":"2fd51048-9651-4f3d-849e-877e420a4a8d","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":262,"box":{"x":84,"y":837,"width":797,"height":12}},{"id":"bead4679-d59c-4b3d-9faa-4b133a22d024","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of","page_number":262,"box":{"x":69,"y":852,"width":820,"height":12}},{"id":"91158ad4-dbe8-40a6-8601-85181bc96a5e","block_type":"box","text":"the Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":262,"box":{"x":68,"y":868,"width":842,"height":11}},{"id":"cddfdf18-438a-4fea-a85f-990ece929513","block_type":"box","text":"some companies may report using different standards, which may be required by regulation, or one of a number of","page_number":262,"box":{"x":69,"y":883,"width":820,"height":11}},{"id":"de030c46-4c1a-4da1-b81a-fd51b62f3fc3","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":262,"box":{"x":69,"y":898,"width":817,"height":11}},{"id":"50c898de-27e9-4244-b1c1-8e69a262b3e1","block_type":"box","text":"BlackRock Investment Stewardship","page_number":262,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"303df7bd-6c77-4511-964c-e927643b0209","block_type":"box","text":"Global Principles | 11","page_number":262,"box":{"x":758,"y":942,"width":151,"height":13}},{"id":"08051341-2e1c-4d08-99a3-6259742ba1b6","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":262,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"076e8353-b312-4a80-9c4e-948708705bb1","block_type":"box","text":"may create adverse impacts that could expose companies to legal, regulatory, operational, and reputational risks.","page_number":263,"box":{"x":69,"y":45,"width":811,"height":11}},{"id":"2f85be67-4691-4fc2-ae2d-787052c0feda","block_type":"box","text":"This is particularly relevant to a company’s workforce, which is central to long-term financial value creation.","page_number":263,"box":{"x":68,"y":60,"width":764,"height":11}},{"id":"1183d45d-71d7-41e6-b20b-c2d0f1735c9f","block_type":"box","text":"16","page_number":263,"box":{"x":834,"y":60,"width":9,"height":5}},{"id":"208f2404-3865-47fa-97a7-b28b618e4ec6","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how they have","page_number":263,"box":{"x":101,"y":82,"width":783,"height":12}},{"id":"509175bf-4a64-427b-a484-48975c4697e5","block_type":"box","text":"identified their key stakeholders and considered their interests in business decision-making. In addition to","page_number":263,"box":{"x":70,"y":98,"width":755,"height":11}},{"id":"f74b461f-ca26-4d82-a63c-86557fdf0c48","block_type":"box","text":"understanding broader stakeholder relationships, BIS finds it helpful when companies discuss how they consider the","page_number":263,"box":{"x":69,"y":113,"width":831,"height":11}},{"id":"9f6f7dc2-9c1a-42d9-a704-b35ff5c87246","block_type":"box","text":"needs of their workforce today, and the skills required for their future business strategy. We are also interested in","page_number":263,"box":{"x":69,"y":128,"width":809,"height":11}},{"id":"6a0eb6e3-5cb8-4ec6-a227-e5a509a5de9a","block_type":"box","text":"understanding how the board monitors and engages on these matters, given it is well positioned to ensure that the","page_number":263,"box":{"x":69,"y":143,"width":821,"height":11}},{"id":"859f2fbd-11ad-4b2a-a5dd-e347cb07feff","block_type":"box","text":"approach taken by management is informed by and aligns with the company’s strategy. BIS does not direct a","page_number":263,"box":{"x":69,"y":158,"width":775,"height":11}},{"id":"21004e37-3298-469e-8049-af09f04f2717","block_type":"box","text":"company’s policies or practices, which are the responsibility of management and the board.","page_number":263,"box":{"x":69,"y":173,"width":653,"height":11}},{"id":"89600d26-91a9-48b9-8c38-fcbe01d3b19c","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse impacts","page_number":263,"box":{"x":102,"y":196,"width":784,"height":11}},{"id":"b4811826-0061-4837-b06d-b3ef71754f42","block_type":"box","text":"that could arise from their business practices and affect critical relationships with their stakeholders. We encourage","page_number":263,"box":{"x":68,"y":211,"width":829,"height":11}},{"id":"9383b55f-2ce5-4350-8aa4-39d1feb22edc","block_type":"box","text":"companies to implement, to the extent appropriate, monitoring processes (often referred to as due diligence) to","page_number":263,"box":{"x":69,"y":226,"width":797,"height":11}},{"id":"2185f87b-d7ba-4899-a858-fd4c7ed0eaf1","block_type":"box","text":"identify and mitigate potential adverse impacts and grievance mechanisms to remediate any actual adverse material","page_number":263,"box":{"x":70,"y":241,"width":828,"height":11}},{"id":"ef70f6ca-5725-427d-894a-ff9a2012b8fc","block_type":"box","text":"impacts.","page_number":263,"box":{"x":70,"y":257,"width":58,"height":10}},{"id":"cf909fab-4ef3-45c2-bf94-9fab356fd851","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key stakeholders","page_number":263,"box":{"x":101,"y":279,"width":794,"height":11}},{"id":"6b51fe67-abba-4af5-9773-ecbddc49d077","block_type":"box","text":"and may convey concerns about board oversight in our voting on director elections or supporting a business relevant","page_number":263,"box":{"x":69,"y":294,"width":831,"height":11}},{"id":"c151ade9-2c39-4d93-866c-b67346f05096","block_type":"box","text":"shareholder proposal when, in our assessment, the board is not acting in shareholders’ long-term financial interests.","page_number":263,"box":{"x":69,"y":309,"width":834,"height":11}},{"id":"74e61cf9-244d-4480-8110-1cd892dfb910","block_type":"box","text":"BLACKROCK’S OVERSIGHT OF ITS INVESTMENT STEWARDSHIP ACTIVITIES","page_number":263,"box":{"x":213,"y":340,"width":553,"height":8}},{"id":"0d719cfb-28d6-4007-b4a6-ef90c4a88e4f","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on behalf of","page_number":263,"box":{"x":102,"y":362,"width":778,"height":11}},{"id":"a01447ef-8d8d-4f1c-a676-02b0b95744e7","block_type":"box","text":"clients at the global and regional level.","page_number":263,"box":{"x":69,"y":377,"width":274,"height":12}},{"id":"ba687437-5143-46ff-b9bd-7bd4b983c599","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the Committee)","page_number":263,"box":{"x":101,"y":400,"width":751,"height":11}},{"id":"b9449d83-4bdf-47f4-8374-46294afecf68","block_type":"box","text":"supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to policies and procedures as","page_number":263,"box":{"x":69,"y":415,"width":840,"height":11}},{"id":"4a364658-0fad-4ead-92d3-3fc863d69370","block_type":"box","text":"well as market-level stewardship requirements. The Committee reviews and approves amendments to the Global","page_number":263,"box":{"x":68,"y":430,"width":802,"height":11}},{"id":"af12ebad-6fc1-4ed3-9b85-0090665ad4f2","block_type":"box","text":"Principles and regional voting guidelines. The Committee also reviews periodic reports regarding the votes cast by","page_number":263,"box":{"x":69,"y":445,"width":813,"height":12}},{"id":"2532b5ee-c37f-4310-afe0-92b43cfd0b4c","block_type":"box","text":"BIS on behalf of clients, as well as updates on material process issues, procedural changes, and other risk oversight","page_number":263,"box":{"x":70,"y":460,"width":835,"height":12}},{"id":"1f6b723b-7989-44f6-a9c8-b0b2f4396d85","block_type":"box","text":"considerations. The Committee is chaired by the Global Heads of the Investment Stewardship function and its","page_number":263,"box":{"x":69,"y":475,"width":783,"height":12}},{"id":"cad93af3-414e-49c8-be96-af2140b4cb03","block_type":"box","text":"members include senior BlackRock executives with legal, risk, and other experience relevant to team oversight who","page_number":263,"box":{"x":69,"y":491,"width":820,"height":11}},{"id":"0d22cec3-86cc-493e-a13a-3a4d87925739","block_type":"box","text":"are independent from the investment stewardship function.","page_number":263,"box":{"x":69,"y":506,"width":421,"height":11}},{"id":"6a658b1b-6928-4663-94a7-7e07d4b03b3e","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with the Global","page_number":263,"box":{"x":101,"y":528,"width":804,"height":12}},{"id":"74c37029-4231-400f-a843-ba8689db8953","block_type":"box","text":"Principles and regional voting guidelines. At the regional level, three regional Heads for the Americas, APAC, and","page_number":263,"box":{"x":69,"y":543,"width":798,"height":12}},{"id":"70273d89-0ad9-4055-9b56-56f1431f4b18","block_type":"box","text":"EMEA oversee BIS’ activities for their specific markets.","page_number":263,"box":{"x":70,"y":559,"width":389,"height":11}},{"id":"496372fb-fd2a-4f42-8398-a08cdf7a2742","block_type":"box","text":"VOTE EXECUTION","page_number":263,"box":{"x":424,"y":589,"width":129,"height":9}},{"id":"3dfa09ce-7d71-4c48-957b-961615b6095b","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We have","page_number":263,"box":{"x":102,"y":612,"width":739,"height":11}},{"id":"70ae984f-d30a-4dad-b737-d1b122911ac5","block_type":"box","text":"processes in place to consider all proxies for which we have voting authority, and submit voting decisions, or refrain","page_number":263,"box":{"x":70,"y":627,"width":822,"height":11}},{"id":"38cc4bc5-dbdd-4c01-97ec-d523ee0f49c6","block_type":"box","text":"from voting when logistical issues arise (see below). The BIS Benchmark Policies – and the vote decisions made","page_number":263,"box":{"x":68,"y":642,"width":801,"height":11}},{"id":"0e439895-daa7-44f9-b8d7-8a53d3fe23c9","block_type":"box","text":"consistent with those policies – reflect our reasonable and independent judgment and are made without regard to the","page_number":263,"box":{"x":69,"y":657,"width":838,"height":11}},{"id":"86af6603-6d01-4d75-bebc-07bbd1e20d82","block_type":"box","text":"relationship between the issuer of the proxy (or any shareholder proponent or dissident shareholder) and the Fund,","page_number":263,"box":{"x":69,"y":672,"width":817,"height":11}},{"id":"10fd04e2-5193-441f-b16c-c6df0f2e4757","block_type":"box","text":"the Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":263,"box":{"x":68,"y":687,"width":751,"height":11}},{"id":"391b89ba-25f2-40df-be3c-3e5550d813b1","block_type":"box","text":"management policies and procedures,” below).","page_number":263,"box":{"x":69,"y":703,"width":334,"height":11}},{"id":"305ce295-6ab8-4a66-922d-48eb3df59112","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well as the cost","page_number":263,"box":{"x":102,"y":725,"width":806,"height":11}},{"id":"04feb983-efe3-4709-bb7c-25cf9da70eb3","block_type":"box","text":"of voting such proxies on behalf of our clients. These issues include, but are not limited to: 1) untimely notice of","page_number":263,"box":{"x":69,"y":740,"width":801,"height":11}},{"id":"e9ce9bd6-3e17-40c8-b40e-c6bead6681aa","block_type":"box","text":"shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3) requirements to vote proxies in","page_number":263,"box":{"x":69,"y":755,"width":805,"height":11}},{"id":"76cef65d-c59b-49ae-9a1e-1d7b3f5678cc","block_type":"box","text":"person; 4) “share-blocking” (requirements that investors who exercise their voting rights surrender the right to","page_number":263,"box":{"x":70,"y":771,"width":783,"height":11}},{"id":"b1d26556-cee8-49be-91b7-1f3f42f57ed0","block_type":"box","text":"dispose of their holdings from the point at which votes are submitted until after the after the shareholder meeting","page_number":263,"box":{"x":69,"y":785,"width":811,"height":12}},{"id":"c71f8b62-6e29-4089-af1b-4b1e0bb61c56","block_type":"box","text":"has occurred); 5) potential difficulties in translating the proxy; 6) regulatory constraints; and 7) requirements to","page_number":263,"box":{"x":69,"y":801,"width":795,"height":11}},{"id":"0309879f-dc92-4ea7-ad24-906e90dcb609","block_type":"box","text":"provide local agents with powers of attorney to facilitate voting instructions. We are not supportive of impediments to","page_number":263,"box":{"x":70,"y":816,"width":835,"height":11}},{"id":"0b3c9a61-3cf2-4b6b-b982-780d8cd14842","block_type":"box","text":"the exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":263,"box":{"x":68,"y":831,"width":732,"height":11}},{"id":"3fe05c8c-a0f3-46a5-9941-f642c66ed5cb","block_type":"box","text":"16","page_number":263,"box":{"x":69,"y":860,"width":9,"height":5}},{"id":"e5417140-a545-4b3e-b982-786fac2fc33c","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":263,"box":{"x":84,"y":860,"width":814,"height":11}},{"id":"99432bf5-95bf-4c8a-9466-98d7aed9d824","block_type":"box","text":"December 2025.","page_number":263,"box":{"x":70,"y":875,"width":118,"height":9}},{"id":"b404d427-6446-431f-9745-fb6299ad23bf","block_type":"box","text":"BlackRock Investment Stewardship","page_number":263,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"a5407f4b-f919-41e1-988e-f18bb84a4b0c","block_type":"box","text":"Global Principles | 12","page_number":263,"box":{"x":758,"y":942,"width":151,"height":13}},{"id":"be295fdd-bc64-48fe-b129-2af824f71e69","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":263,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"21685d46-584a-436f-a30d-ab4701cbb82d","block_type":"box","text":"BIS votes proxies in these situations on a “best-efforts” basis. In addition, BIS may determine that it is generally","page_number":264,"box":{"x":102,"y":45,"width":807,"height":11}},{"id":"c448f9a8-b696-4b22-a8cf-c0ce6e41224d","block_type":"box","text":"in the interests of BlackRock’s clients not to vote proxies (or not to vote our full allocation) if the costs (including but","page_number":264,"box":{"x":70,"y":60,"width":830,"height":11}},{"id":"d0ce9f59-9031-4adb-81ef-9e5579ce7070","block_type":"box","text":"not limited to opportunity costs associated with share-blocking constraints) associated with exercising a vote are","page_number":264,"box":{"x":69,"y":75,"width":805,"height":11}},{"id":"59ac3e20-6df0-4631-8b16-f632ad27b029","block_type":"box","text":"expected to outweigh the benefit the client would derive by voting on the proposal.","page_number":264,"box":{"x":69,"y":90,"width":585,"height":11}},{"id":"df2e1bfe-ae6f-48f8-99a1-a62eb42327c1","block_type":"box","text":"CONFLICTS MANAGEMENT POLICIES AND PROCEDURES","page_number":264,"box":{"x":281,"y":120,"width":416,"height":9}},{"id":"c8ae4015-0120-4f9f-9f48-a44a959bd3e2","block_type":"box","text":"BIS is a dedicated function whose responsibilities are separate from BlackRock’s sales, business partnership or","page_number":264,"box":{"x":102,"y":143,"width":804,"height":11}},{"id":"048e19f4-fd3e-4e88-b51d-cf23a7aca934","block_type":"box","text":"enterprise-level vendor management activities.","page_number":264,"box":{"x":69,"y":158,"width":329,"height":11}},{"id":"005e8b00-c9fc-4170-ac64-c041bb0bc5a8","block_type":"box","text":"BlackRock maintains policies and procedures that are designed to prevent undue influence on BIS’ proxy voting","page_number":264,"box":{"x":102,"y":181,"width":794,"height":11}},{"id":"10e19bd9-ff7a-45e6-a0ee-962f3deabff4","block_type":"box","text":"activity. Such influence might stem from any relationship between the investee company (or any shareholder","page_number":264,"box":{"x":69,"y":196,"width":771,"height":11}},{"id":"e7874d83-039c-4919-b587-d9d79e94c1a4","block_type":"box","text":"proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a Fund’s affiliates, or","page_number":264,"box":{"x":70,"y":211,"width":763,"height":11}},{"id":"68fb13dd-f7e7-446d-8bb9-6b86ea7f513c","block_type":"box","text":"BlackRock employees.","page_number":264,"box":{"x":70,"y":226,"width":157,"height":11}},{"id":"ec901e92-7389-43af-a8e1-f4b8c41430a0","block_type":"box","text":"For information on how BIS manages conflicts of interest, please see our disclosure.","page_number":264,"box":{"x":102,"y":249,"width":602,"height":11}},{"id":"719413a4-8f1a-4438-a0e3-e177dc38d2eb","block_type":"box","text":"SECURITIES LENDING","page_number":264,"box":{"x":409,"y":279,"width":159,"height":9}},{"id":"7e958c3f-cd0b-4d25-a66a-60a3f072a1f2","block_type":"box","text":"When authorized, BlackRock acts as a securities lending agent on behalf of its clients. Lending securities","page_number":264,"box":{"x":101,"y":302,"width":751,"height":11}},{"id":"016419cf-2fd7-47c1-b3d6-e4576284265a","block_type":"box","text":"enables BlackRock to increase the returns in clients’ portfolios, and BlackRock’s lending agreements allow it to","page_number":264,"box":{"x":69,"y":317,"width":797,"height":11}},{"id":"8abc7698-8ba1-4f8e-9747-52697ff0ca2e","block_type":"box","text":"recall securities out on loan at any time. BlackRock (or any other lender) does not retain voting rights for securities","page_number":264,"box":{"x":69,"y":332,"width":817,"height":11}},{"id":"3b8b8c64-c385-4359-923d-6d4e7c518786","block_type":"box","text":"out on loan. Entitlements associated with the lent securities (dividends, coupons, etc.), while on loan are paid back","page_number":264,"box":{"x":69,"y":347,"width":823,"height":11}},{"id":"c9d4a0cc-cfa6-4d08-9b4f-7158e97c2281","block_type":"box","text":"to the lender of the security as stipulated in industry standard legal agreements.","page_number":264,"box":{"x":68,"y":362,"width":575,"height":11}},{"id":"0cf9c2a0-f337-448e-8374-b644c2f36123","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote shares on","page_number":264,"box":{"x":101,"y":385,"width":779,"height":11}},{"id":"f9190e85-ab9e-409e-8844-1d9d7c97c6a9","block_type":"box","text":"loan and may determine to recall them for voting, as guided by our fiduciary duty as an asset manager to our clients","page_number":264,"box":{"x":70,"y":400,"width":827,"height":11}},{"id":"4a8c6700-47ef-43f8-a02f-044f37c9975b","block_type":"box","text":"in helping them achieve their investment goals. While this has occurred in a limited number of cases, the decision to","page_number":264,"box":{"x":70,"y":415,"width":832,"height":11}},{"id":"190203cc-826f-4391-bcd5-73f661193312","block_type":"box","text":"recall securities on loan as part of BlackRock’s securities lending program in order to vote is based on an evaluation","page_number":264,"box":{"x":69,"y":430,"width":832,"height":11}},{"id":"dbd6573a-49dd-4c2d-8e7b-d5aad29cc1a7","block_type":"box","text":"of various factors that include, but are not limited to, assessing potential securities lending revenue alongside the","page_number":264,"box":{"x":69,"y":445,"width":814,"height":12}},{"id":"c57519e8-5a99-46fd-9696-5a9ddb6c6848","block_type":"box","text":"potential long-term financial value to clients of voting those securities (based on the information available at the time","page_number":264,"box":{"x":70,"y":460,"width":834,"height":12}},{"id":"de2398a3-ee8f-4f79-8fbf-0208098ed0c4","block_type":"box","text":"of recall consideration).","page_number":264,"box":{"x":69,"y":475,"width":166,"height":12}},{"id":"3d6c5517-019a-43ae-a135-47094f95816d","block_type":"box","text":"17","page_number":264,"box":{"x":237,"y":476,"width":9,"height":4}},{"id":"99e60cab-2910-417c-82b7-6d81bb47ae50","block_type":"box","text":"BIS works with colleagues in the Securities Lending and Risk and Quantitative Analysis","page_number":264,"box":{"x":252,"y":476,"width":617,"height":11}},{"id":"db983bc5-7250-4986-9853-a7aa9de03db2","block_type":"box","text":"teams to evaluate the costs and benefits to clients of recalling shares on loan.","page_number":264,"box":{"x":68,"y":491,"width":563,"height":11}},{"id":"a57aab7c-b3b2-47ce-9884-cb0028262d24","block_type":"box","text":"In almost all instances, BlackRock anticipates that the potential long-term financial value to clients of voting","page_number":264,"box":{"x":102,"y":513,"width":770,"height":12}},{"id":"d0f11656-4a1c-4b27-9c27-cb803f7119ab","block_type":"box","text":"shares would be less than the potential revenue the loan may provide clients. However, in certain instances,","page_number":264,"box":{"x":69,"y":529,"width":774,"height":11}},{"id":"cbee0a3a-fb59-4c73-94de-d8209cddc3a7","block_type":"box","text":"BlackRock may determine, in our independent business judgment as a fiduciary, that the value of voting outweighs","page_number":264,"box":{"x":70,"y":543,"width":816,"height":12}},{"id":"69aa39fd-0737-4399-9dfa-e0b3c639ebaa","block_type":"box","text":"the securities lending revenue loss to clients and would therefore recall shares to be voted in those instances. It is","page_number":264,"box":{"x":68,"y":559,"width":822,"height":11}},{"id":"8aa9fc1d-ae3c-48c8-ae03-51c4f9fd8eb2","block_type":"box","text":"important to note that the majority of lendable assets in the market at any given time are not out on loan.","page_number":264,"box":{"x":70,"y":574,"width":752,"height":11}},{"id":"fc2763e6-9239-49f0-baf3-10b8de7f3d59","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote","page_number":264,"box":{"x":102,"y":596,"width":790,"height":12}},{"id":"81cf2a1e-5e64-4d39-a04e-c07ecf710ef9","block_type":"box","text":"and may modify it as necessary.","page_number":264,"box":{"x":69,"y":612,"width":228,"height":11}},{"id":"26076b65-f072-47db-955f-e2ccf20271e3","block_type":"box","text":"VOTING CHOICE","page_number":264,"box":{"x":430,"y":642,"width":117,"height":9}},{"id":"64f46b68-5450-4613-ab15-f9ebde82ea1e","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to participate in","page_number":264,"box":{"x":102,"y":664,"width":800,"height":12}},{"id":"f5b705e4-5bcf-49ff-807f-b983be826406","block_type":"box","text":"the proxy voting process, where legally and operationally viable.","page_number":264,"box":{"x":68,"y":680,"width":452,"height":11}},{"id":"2b23d13b-a037-473e-b3fe-bb9cfcb1cd58","block_type":"box","text":"18","page_number":264,"box":{"x":522,"y":680,"width":9,"height":4}},{"id":"c27c440b-ee91-4533-9877-fbe3a3457ccc","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in the U.S.,","page_number":264,"box":{"x":101,"y":702,"width":786,"height":12}},{"id":"ba1d231d-8c69-448f-b2c4-b6a128a2a9ea","block_type":"box","text":"UK, Ireland, Canada, and Switzerland that utilize index equity investment strategies, as well as eligible clients in","page_number":264,"box":{"x":70,"y":718,"width":797,"height":11}},{"id":"bc006b24-756c-4ef2-a44e-8e0d5eef8a65","block_type":"box","text":"17","page_number":264,"box":{"x":69,"y":747,"width":8,"height":4}},{"id":"4488b40b-bacd-4dac-9841-4fb9a6147e71","block_type":"box","text":"Recalling securities on loan can be impacted by the timing of record dates. In the U.S., for example, the record","page_number":264,"box":{"x":84,"y":747,"width":789,"height":11}},{"id":"027f234e-fc9b-4c8f-acdb-fed381a7efba","block_type":"box","text":"date of a shareholder meeting typically falls before the proxy statements are released. Accordingly, it is not","page_number":264,"box":{"x":69,"y":762,"width":763,"height":11}},{"id":"b51a18fd-642d-470f-ade6-9d757bc092bc","block_type":"box","text":"practicable to evaluate a proxy statement, determine that a vote has a material impact on a fund and recall any","page_number":264,"box":{"x":70,"y":777,"width":794,"height":11}},{"id":"bacf913d-7f91-438c-a924-c96037a57f0c","block_type":"box","text":"shares on loan in advance of the record date for the annual meeting. 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Under the Guidelines, the dedicated team","page_number":271,"box":{"x":102,"y":176,"width":805,"height":11}},{"id":"abf8fa9f-d2a0-4c8b-bb3e-7a2b267ef16e","block_type":"box","text":"makes decisions on how to engage companies and vote proxies independently, based on its professional","page_number":271,"box":{"x":102,"y":191,"width":748,"height":11}},{"id":"29dd5dfc-f992-4174-8636-adbf8b390881","block_type":"box","text":"judgment of the priorities and outcomes most aligned with participating clients’ investment objectives.","page_number":271,"box":{"x":100,"y":206,"width":730,"height":11}},{"id":"9972e1f4-2179-4717-8ae6-e60229edbb88","block_type":"box","text":"Voting approach under the Guidelines","page_number":271,"box":{"x":68,"y":236,"width":273,"height":11}},{"id":"5af70471-c9ac-4687-8797-5f5d4234e45c","block_type":"box","text":"12","page_number":271,"box":{"x":342,"y":237,"width":9,"height":4}},{"id":"780bd740-9a0b-413f-b2a4-995a51acf1fc","block_type":"box","text":"When evaluating each voting item across management or shareholder proposals, the dedicated team applies a","page_number":271,"box":{"x":101,"y":259,"width":791,"height":11}},{"id":"9ace8799-4289-4fd2-996c-1c039e4aa503","block_type":"box","text":"case-by-case approach that reflects the uneven pace of the low-carbon transition across sectors and markets, and","page_number":271,"box":{"x":69,"y":274,"width":813,"height":11}},{"id":"56f17507-2f27-43f8-8c50-69534eda5b55","block_type":"box","text":"acknowledges the distinction between what company management can influence and what lies beyond its control. As","page_number":271,"box":{"x":69,"y":289,"width":833,"height":11}},{"id":"e7262fc2-3ce1-4a08-ad72-aee208fa126d","block_type":"box","text":"a result, voting decisions — on behalf of in-scope funds and SMAs — on similar proposals included on different","page_number":271,"box":{"x":69,"y":304,"width":799,"height":11}},{"id":"5f44abd2-f7ad-4ac4-9b55-9ffa4a21fc21","block_type":"box","text":"companies’ shareholder meeting agendas may vary depending on company, sector, or market-specific circumstances.","page_number":271,"box":{"x":69,"y":319,"width":837,"height":12}},{"id":"4a5025ec-dd84-4428-821e-3252c8295f91","block_type":"box","text":"Consistent with the investment objective of each fund or account that has selected these Guidelines, the","page_number":271,"box":{"x":102,"y":342,"width":748,"height":11}},{"id":"dc3fff39-c75e-4483-87ac-b1e0925b8d17","block_type":"box","text":"dedicated team will look to the companies to demonstrate the following:","page_number":271,"box":{"x":69,"y":357,"width":513,"height":11}},{"id":"eee045c3-f5ed-45b5-a2b4-258234865968","block_type":"box","text":"Corporate Disclosures","page_number":271,"box":{"x":69,"y":387,"width":160,"height":11}},{"id":"176bf9f0-567e-44ea-9ab5-4b0988a43b74","block_type":"box","text":"13","page_number":271,"box":{"x":230,"y":388,"width":9,"height":4}},{"id":"bebb740e-336c-419c-8d03-2d81754f29e1","block_type":"box","text":"In the context of these Guidelines, the dedicated team looks for companies to provide sufficient disclosure to","page_number":271,"box":{"x":102,"y":410,"width":781,"height":11}},{"id":"c4e6f2aa-2a01-49f6-a086-635cb98040f6","block_type":"box","text":"assess whether the company’s strategy is aligned with the low-carbon transition. 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The Guidelines are applied by the dedicated","page_number":271,"box":{"x":69,"y":661,"width":833,"height":11}},{"id":"e6d5c4da-f97e-4360-9e54-2036864cbaf0","block_type":"box","text":"team with discretion, on a case-by-case basis, taking into consideration the range of issues and facts specific to the","page_number":271,"box":{"x":68,"y":676,"width":830,"height":11}},{"id":"9b3a52d4-bfdc-49e9-88ff-a412c6ff065d","block_type":"box","text":"company, as well as individual ballot items at shareholder meetings.","page_number":271,"box":{"x":69,"y":691,"width":486,"height":11}},{"id":"b84243a6-57fb-43be-a475-deed636705d2","block_type":"box","text":"13","page_number":271,"box":{"x":69,"y":709,"width":9,"height":5}},{"id":"1ed67938-bc02-438a-9409-090a3766d172","block_type":"box","text":"Given data and measurement limitations, companies may need to provide estimated GHG emissions where","page_number":271,"box":{"x":84,"y":709,"width":764,"height":11}},{"id":"82c43277-2aaf-41fa-9056-64a311b08557","block_type":"box","text":"reporting methodologies are nascent. In addition, certain disclosures related to a company’s plans for adapting their","page_number":271,"box":{"x":69,"y":724,"width":834,"height":11}},{"id":"fa19616a-2952-4b25-8c75-3cb5a0949ee5","block_type":"box","text":"business models through the low-carbon transition may require forward-looking statements.","page_number":271,"box":{"x":69,"y":739,"width":651,"height":11}},{"id":"bb47742d-79c3-43ee-b551-db6fae1181e0","block_type":"box","text":"14","page_number":271,"box":{"x":69,"y":757,"width":9,"height":4}},{"id":"9b9c63a5-9f55-4a32-933f-b4d09bb514ea","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards","page_number":271,"box":{"x":83,"y":757,"width":744,"height":11}},{"id":"559953a5-6226-4169-ad5d-dae3512254e8","block_type":"box","text":"(IFRS) Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework","page_number":271,"box":{"x":69,"y":772,"width":828,"height":11}},{"id":"646b3ea1-c456-434e-b036-57fbf39c5536","block_type":"box","text":"and the standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":271,"box":{"x":69,"y":787,"width":830,"height":11}},{"id":"bfe261d2-1632-4413-82d2-1a0b808ca013","block_type":"box","text":"converged under the ISSB. Please refer to the IFRS website to learn more about the framework and standards S1","page_number":271,"box":{"x":69,"y":802,"width":809,"height":11}},{"id":"869a6469-3659-450f-a4e3-29fbe23bf253","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":271,"box":{"x":70,"y":817,"width":778,"height":11}},{"id":"437f6a47-1fd3-4b84-a441-944756e48720","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":271,"box":{"x":70,"y":832,"width":380,"height":9}},{"id":"417953b5-062a-4c9a-a38a-19be09dd3de0","block_type":"box","text":"15","page_number":271,"box":{"x":69,"y":850,"width":9,"height":5}},{"id":"687f5761-8afe-4036-a6e6-e677d64c7f5b","block_type":"box","text":"A number of jurisdictions are consulting on adopting the standards issued to date or have already committed to","page_number":271,"box":{"x":83,"y":850,"width":795,"height":11}},{"id":"132f132c-00fa-4166-833c-f7c5ea9ba141","block_type":"box","text":"doing so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":271,"box":{"x":69,"y":865,"width":826,"height":11}},{"id":"a526899a-1622-4755-8c23-60cb11e124f2","block_type":"box","text":"companies may report using different standards, some of which may be required by regulation. In such cases, we","page_number":271,"box":{"x":69,"y":880,"width":811,"height":11}},{"id":"f31cbffb-ecc9-4cc3-a395-cbf783241a19","block_type":"box","text":"ask that companies highlight the metrics that are industry- or company-specific. We also recognize that companies","page_number":271,"box":{"x":69,"y":895,"width":816,"height":12}},{"id":"8119e25d-58b7-4e85-9506-0ed21039396c","block_type":"box","text":"may be phasing in reporting over several years. We do not prescribe timelines regarding when companies should","page_number":271,"box":{"x":69,"y":911,"width":803,"height":11}},{"id":"022714e6-b230-4c41-a565-7c58b78dcb8f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":271,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"6b427ef7-0214-443a-92bf-875f46ec2340","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines | 5","page_number":271,"box":{"x":509,"y":942,"width":400,"height":13}},{"id":"3d3e5af4-ed9f-4653-91c1-82523778114b","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":271,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"22d2ec99-b603-4e40-a3d8-95d0762dfff9","block_type":"box","text":"(3) scope 1 and scope 2, and most significant scope 3 GHG emissions","page_number":272,"box":{"x":69,"y":45,"width":513,"height":11}},{"id":"bc5d85e2-d875-4cf2-a237-15ea50e57608","block_type":"box","text":"16, 17","page_number":272,"box":{"x":583,"y":45,"width":26,"height":5}},{"id":"2e6b8c11-a4a5-4ec7-a2de-f65c69a1e222","block_type":"box","text":"In addition, the dedicated team looks to","page_number":272,"box":{"x":615,"y":45,"width":283,"height":10}},{"id":"b52012dd-a173-4081-b4d9-02902a8e0f18","block_type":"box","text":"companies to disclose their emissions reduction targets for scope 1 and 2 emissions, science-based where","page_number":272,"box":{"x":101,"y":60,"width":770,"height":11}},{"id":"21120759-0977-421c-aa95-7f6b6a13d006","block_type":"box","text":"possible. The team welcomes disclosure of targets or indicative goals, where companies have set them, for","page_number":272,"box":{"x":102,"y":75,"width":768,"height":11}},{"id":"3ac82ad4-31e2-4662-93a9-8171195ca99f","block_type":"box","text":"scope 3 emissions reductions. Scope 3 information, including how a company is working with its value chain to","page_number":272,"box":{"x":102,"y":90,"width":792,"height":11}},{"id":"086dba65-ac7d-46b1-be1f-99623691226f","block_type":"box","text":"accelerate reductions in GHG intensity, provides useful insight to investors focused on investing in the low","page_number":272,"box":{"x":102,"y":105,"width":760,"height":11}},{"id":"4f5a9a06-8361-4311-9dcf-e0dca06c29fe","block_type":"box","text":"carbon transition and understanding the impact of their investments on their decarbonization goals.","page_number":272,"box":{"x":101,"y":120,"width":709,"height":12}},{"id":"ec9f4fc4-4295-4223-a25a-5eb7615ee484","block_type":"box","text":"18","page_number":272,"box":{"x":812,"y":121,"width":9,"height":4}},{"id":"6eb80e7d-400c-475e-abac-eb1fd8bb3208","block_type":"box","text":"However,","page_number":272,"box":{"x":827,"y":120,"width":62,"height":11}},{"id":"1b375dd6-10b1-4fde-85a4-ed2e34dbb6a2","block_type":"box","text":"the team recognizes that companies have varying ability to influence the emissions across the different parts of","page_number":272,"box":{"x":101,"y":135,"width":802,"height":12}},{"id":"55facdf7-76dd-4d8a-80a3-5f69d71ad434","block_type":"box","text":"their value chain and, therefore, it is helpful when disclosures explain the implications for the achievement of","page_number":272,"box":{"x":101,"y":150,"width":780,"height":11}},{"id":"043ab5bb-a913-4222-8a91-fc967cfa0e29","block_type":"box","text":"their decarbonization targets. For some companies that play an important role in the low-carbon transition, scope","page_number":272,"box":{"x":101,"y":166,"width":807,"height":11}},{"id":"c3280e87-ee74-417f-b1b3-01492563a631","block_type":"box","text":"3 may represent their only significant source of GHG emissions in the value chain. While we do not believe","page_number":272,"box":{"x":102,"y":181,"width":759,"height":11}},{"id":"9f6d4850-2af7-44c8-93e7-fbf4ccce5aae","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control, where relevant, we","page_number":272,"box":{"x":101,"y":196,"width":808,"height":11}},{"id":"80425edb-f7f4-4fa1-8728-155f91f16890","block_type":"box","text":"look for disclosures on how the company approaches the low-carbon transition in these cases. This may include","page_number":272,"box":{"x":102,"y":211,"width":797,"height":11}},{"id":"f02a496a-7fda-4884-9057-c873a321e08e","block_type":"box","text":"plans and targets to grow businesses that contribute to real world decarbonization, forward-looking capital or","page_number":272,"box":{"x":102,"y":226,"width":777,"height":11}},{"id":"9f2d51bb-9ede-4d04-ba99-e4579f992f8a","block_type":"box","text":"procurement allocation plans to net-zero aligned activities or suppliers, and strategies to mitigate material","page_number":272,"box":{"x":102,"y":241,"width":755,"height":11}},{"id":"aeb98e2f-c54f-4e18-9b7e-ee15efc70345","block_type":"box","text":"transition risks.","page_number":272,"box":{"x":101,"y":257,"width":110,"height":8}},{"id":"e382fd6e-cf73-4a58-b692-1922b6164061","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical risks—such as","page_number":272,"box":{"x":69,"y":277,"width":808,"height":11}},{"id":"d3809e53-3459-4762-acec-b6edc4845ccd","block_type":"box","text":"acute risks from extreme weather events or chronic risks from long-term shifts in climate patterns—and how","page_number":272,"box":{"x":102,"y":292,"width":773,"height":11}},{"id":"7e91e439-ccc0-468d-8298-5f68473cb385","block_type":"box","text":"these risks could reasonably be expected to affect the company’s operations, assets, or supply chains.","page_number":272,"box":{"x":101,"y":307,"width":739,"height":11}},{"id":"38091e4f-4a14-4e62-90f7-bdd5b01ef075","block_type":"box","text":"Transition plans","page_number":272,"box":{"x":68,"y":337,"width":115,"height":11}},{"id":"547f73ac-66b9-4013-a149-a6d6a5f33b39","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their low-carbon","page_number":272,"box":{"x":102,"y":360,"width":748,"height":11}},{"id":"a4475803-8e15-4d33-853b-1e801fce3c68","block_type":"box","text":"transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s targets, actions or resources for","page_number":272,"box":{"x":68,"y":375,"width":831,"height":11}},{"id":"40d979d0-77d6-4b17-bfb0-6b5dd08ca8d0","block_type":"box","text":"its transition towards a lower-carbon economy, including actions such as reducing its greenhouse gas emissions”","page_number":272,"box":{"x":70,"y":390,"width":805,"height":11}},{"id":"9b5eb758-5a2b-42c1-8be8-5bc94fda7bfc","block_type":"box","text":"(see Appendix 1).","page_number":272,"box":{"x":69,"y":405,"width":122,"height":11}},{"id":"570c5ee5-113d-4f5f-a56d-07fb4eb41d28","block_type":"box","text":"19","page_number":272,"box":{"x":193,"y":405,"width":9,"height":5}},{"id":"bcb821cf-f1c2-42fe-95e2-66c1be8bfe5e","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a market to corporate","page_number":272,"box":{"x":101,"y":428,"width":800,"height":11}},{"id":"39af4bd9-b192-4f3e-b65a-584791ac0ef6","block_type":"box","text":"transition plans.","page_number":272,"box":{"x":68,"y":443,"width":115,"height":11}},{"id":"f10af66b-c4c9-404e-a8d6-c7e31cb90d0f","block_type":"box","text":"20","page_number":272,"box":{"x":184,"y":443,"width":9,"height":5}},{"id":"78009c5c-8a8d-4b43-97b0-cdc4486597f0","block_type":"box","text":"Recent guidance from the ISSB on disclosures about transition plans highlights the convergence of","page_number":272,"box":{"x":200,"y":443,"width":706,"height":11}},{"id":"a7e2ec3f-87fc-483e-b47a-1e6566f79731","block_type":"box","text":"reporting approaches.","page_number":272,"box":{"x":69,"y":458,"width":156,"height":11}},{"id":"c243c798-e636-4de4-9c40-077e518bbf75","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these disclosures","page_number":272,"box":{"x":101,"y":481,"width":762,"height":11}},{"id":"4f04f137-853a-447d-b25a-5f4213008673","block_type":"box","text":"typically provide valuable insights that inform the dedicated team’s approach to engaging and voting on matters","page_number":272,"box":{"x":68,"y":496,"width":796,"height":11}},{"id":"23855217-170c-4fa1-ae98-b67f3707463d","block_type":"box","text":"related to climate and transition risks on behalf of in-scope funds and accounts.","page_number":272,"box":{"x":69,"y":511,"width":570,"height":11}},{"id":"0e6560ca-2a94-46f3-8d7f-29ad6524cc5b","block_type":"box","text":"make sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of","page_number":272,"box":{"x":69,"y":537,"width":810,"height":12}},{"id":"b24b2885-e6cf-4677-b8dc-c42a151db108","block_type":"box","text":"their shareholder meeting, to the best of their abilities, to provide investors with time to assess the data and make","page_number":272,"box":{"x":68,"y":553,"width":822,"height":11}},{"id":"c1f785f9-11f7-4cab-93d1-e3e76cb7b040","block_type":"box","text":"informed voting decisions.","page_number":272,"box":{"x":70,"y":568,"width":184,"height":11}},{"id":"df7b4447-a446-4e9c-a3cd-b746de6118a6","block_type":"box","text":"16","page_number":272,"box":{"x":69,"y":586,"width":9,"height":4}},{"id":"9068a205-2cc5-44ee-a20e-39d7b0abc88d","block_type":"box","text":"FTSE Russell address the materiality of different categories of scope 3 GHG emissions by sector in a January 2024","page_number":272,"box":{"x":84,"y":585,"width":825,"height":12}},{"id":"c469e769-9e37-4bef-9ab6-2f639a3a015d","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in","page_number":272,"box":{"x":70,"y":600,"width":768,"height":12}},{"id":"b9acdccc-9293-4797-ba92-c3371259db64","block_type":"box","text":"December 2025.","page_number":272,"box":{"x":70,"y":616,"width":118,"height":9}},{"id":"cba5d06d-7bc3-459d-b932-fdb995ce88bc","block_type":"box","text":"17","page_number":272,"box":{"x":69,"y":634,"width":8,"height":4}},{"id":"5632e7bd-582d-465f-a267-919ac74f1cef","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":272,"box":{"x":84,"y":633,"width":815,"height":12}},{"id":"4f2d372e-4f60-476f-83f0-77c862746d06","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":272,"box":{"x":69,"y":648,"width":838,"height":12}},{"id":"9a804af9-fe02-4fed-bb67-74035a432f1f","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":272,"box":{"x":70,"y":663,"width":816,"height":12}},{"id":"d7cb239a-cb8d-415e-8892-19b41e9a9ae9","block_type":"box","text":"science-based and net-zero targets in line with the global 1.5°C goal.” Websites accessed in December 2025.","page_number":272,"box":{"x":69,"y":679,"width":784,"height":11}},{"id":"766e2baa-6dd1-43aa-b0fd-c9aa643bacf5","block_type":"box","text":"18","page_number":272,"box":{"x":69,"y":697,"width":9,"height":4}},{"id":"a703b719-378e-4060-822c-8f084cf0aecd","block_type":"box","text":"The dedicated team does not believe the purpose of scope 3 disclosure requirements should be to push publicly","page_number":272,"box":{"x":83,"y":696,"width":804,"height":11}},{"id":"c27d0acf-fc32-4d2e-b89c-800a89363f19","block_type":"box","text":"traded companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":272,"box":{"x":68,"y":711,"width":832,"height":12}},{"id":"054cb880-b5ae-49f8-bbfb-e69e5d197ed7","block_type":"box","text":"complexity for scope 3 emissions and the lack of direct control by companies over the requisite data, we find it most","page_number":272,"box":{"x":69,"y":726,"width":832,"height":12}},{"id":"82353ede-42b5-49dd-bc57-363c08b89adc","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":272,"box":{"x":69,"y":742,"width":800,"height":11}},{"id":"07ecf607-5bbe-4fc5-be37-2f9848a2b8ec","block_type":"box","text":"material to their business models.","page_number":272,"box":{"x":69,"y":757,"width":243,"height":9}},{"id":"48162df4-df9d-48d4-9e63-b74c48298ea4","block_type":"box","text":"19","page_number":272,"box":{"x":69,"y":775,"width":9,"height":4}},{"id":"6eb56328-c903-40ec-bcbd-981212a5e8c8","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in","page_number":272,"box":{"x":84,"y":774,"width":777,"height":12}},{"id":"bd7cd471-d3a0-471b-b973-c202f6a27266","block_type":"box","text":"December 2025.","page_number":272,"box":{"x":70,"y":790,"width":118,"height":8}},{"id":"0618f91f-f627-4ff8-b427-5c3c8504b8ec","block_type":"box","text":"20","page_number":272,"box":{"x":69,"y":807,"width":9,"height":5}},{"id":"6fea9300-001b-4470-b3f4-610dbb36f565","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their","page_number":272,"box":{"x":84,"y":807,"width":758,"height":11}},{"id":"900ecbfd-742b-43a6-8b63-4a336a543bd7","block_type":"box","text":"intentions to require them or already have requirements in place, such as Australia, Brazil, and the European Union","page_number":272,"box":{"x":70,"y":822,"width":820,"height":11}},{"id":"e7b55e96-98e0-4b27-b6ae-792e47e41e97","block_type":"box","text":"(please see the International Transition Plan Network for information). BlackRock views transition plans as a method","page_number":272,"box":{"x":69,"y":837,"width":829,"height":11}},{"id":"17ba7fbc-971b-461f-98e2-658d25202861","block_type":"box","text":"for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives, and","page_number":272,"box":{"x":68,"y":852,"width":829,"height":12}},{"id":"4aed02b2-5b24-4a9e-b2cf-8b0588d6be69","block_type":"box","text":"actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":272,"box":{"x":69,"y":868,"width":818,"height":11}},{"id":"867083e6-08a2-4242-9e8d-c4646f895b56","block_type":"box","text":"there remains divergence on the objectives of such plans and the details they should contain. 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Under the Guidelines, the team may support","page_number":274,"box":{"x":69,"y":423,"width":754,"height":11}},{"id":"901f5693-d408-4b2f-bc5b-27565002b950","block_type":"box","text":"shareholder proposals that, for example, ask a company to:","page_number":274,"box":{"x":69,"y":438,"width":425,"height":11}},{"id":"dd4e4ab7-ffe7-4a61-a984-30df12b7645d","block_type":"box","text":"•","page_number":274,"box":{"x":69,"y":461,"width":6,"height":4}},{"id":"95f432c5-91d1-431b-b5e9-85dedd20c724","block_type":"box","text":"Publish a business plan, and related disclosures, consistent with the ambition to limit average global","page_number":274,"box":{"x":102,"y":458,"width":719,"height":11}},{"id":"2919b4a0-4da3-42bc-a2f2-ef24299b873a","block_type":"box","text":"temperature rise to no more than 1.5°C above pre-industrial levels","page_number":274,"box":{"x":101,"y":473,"width":474,"height":11}},{"id":"c1ae758f-4c7c-4a2d-824c-df114d9b19e8","block_type":"box","text":"•","page_number":274,"box":{"x":69,"y":496,"width":6,"height":5}},{"id":"e295764e-afd6-4ae5-9d4a-3efc8c31e143","block_type":"box","text":"Align scope 1 and 2 GHG emissions reduction targets to, and/or discuss how their targets align with, a long-term","page_number":274,"box":{"x":101,"y":493,"width":807,"height":11}},{"id":"68a62302-b565-46f4-b08f-704ea03c26b9","block_type":"box","text":"goal of the company achieving net zero GHG emissions by 2050","page_number":274,"box":{"x":101,"y":508,"width":457,"height":12}},{"id":"4da05b54-a0d8-4e62-b620-07f12183904b","block_type":"box","text":"•","page_number":274,"box":{"x":69,"y":531,"width":6,"height":5}},{"id":"39c78377-1b2b-4ced-b255-47cbea390f57","block_type":"box","text":"Disclose the categories of scope 3 GHG emissions most significant to a company’s business model","page_number":274,"box":{"x":102,"y":528,"width":712,"height":12}},{"id":"596d86fa-23c9-491e-a445-f68dd79c9d30","block_type":"box","text":"•","page_number":274,"box":{"x":69,"y":551,"width":6,"height":5}},{"id":"dd4c2949-c0b9-4116-8c05-d4810e561144","block_type":"box","text":"Improve voluntary disclosures on the alignment of a company’s climate-related corporate political activities with","page_number":274,"box":{"x":102,"y":549,"width":794,"height":11}},{"id":"21d5e3d9-d1c3-421a-897a-c8fd66f3a630","block_type":"box","text":"its strategic policy positions, where existing disclosure is insufficient","page_number":274,"box":{"x":102,"y":564,"width":489,"height":11}},{"id":"0e0d6742-99fa-4ea7-ba44-699053abeaa3","block_type":"box","text":"25","page_number":274,"box":{"x":592,"y":564,"width":9,"height":5}},{"id":"8ed97c36-6d2e-4be3-a6df-61d8dca99cc8","block_type":"box","text":"The dedicated team does not support shareholder proposals that seek to constrain board or management","page_number":274,"box":{"x":101,"y":587,"width":758,"height":11}},{"id":"ccbccfc5-c2e3-4e04-95d4-811a0c9b5aae","block_type":"box","text":"decision-making or direct specific business or strategic decisions.","page_number":274,"box":{"x":69,"y":601,"width":468,"height":12}},{"id":"3cdc6421-4ddf-4f7b-90e4-8785811635cb","block_type":"box","text":"RELATED MATTERS","page_number":274,"box":{"x":419,"y":632,"width":140,"height":9}},{"id":"56291e6a-f4e7-43e0-bdd3-1b77d4e914b8","block_type":"box","text":"There are other business items not covered above that may be put to a shareholder vote that could address","page_number":274,"box":{"x":101,"y":655,"width":771,"height":11}},{"id":"92722391-5dbd-4e66-be1b-db82c7e8690b","block_type":"box","text":"matters relevant to the transition to a low-carbon economy. Under these Guidelines, the dedicated team engages,","page_number":274,"box":{"x":69,"y":670,"width":808,"height":11}},{"id":"5638d3f7-40e1-4fe4-b2dc-a8382ab37038","block_type":"box","text":"where appropriate, to enhance its understanding of a company’s approach. Generally, voting on these matters would","page_number":274,"box":{"x":68,"y":685,"width":831,"height":11}},{"id":"07aab71e-d4b6-4f79-aa3e-2d03760e9823","block_type":"box","text":"be covered by BIS’ Benchmark Policies.","page_number":274,"box":{"x":69,"y":700,"width":280,"height":11}},{"id":"a5b15276-9a45-4be2-a87d-385e640d3dc0","block_type":"box","text":"Executive compensation","page_number":274,"box":{"x":69,"y":730,"width":177,"height":11}},{"id":"5c596085-1092-4ca9-b03f-87dcc1b39e8d","block_type":"box","text":"The dedicated team looks to company boards to put in place a compensation structure that incentivizes and","page_number":274,"box":{"x":101,"y":753,"width":772,"height":11}},{"id":"3329b392-98c0-4b64-84b2-070d9a49cf2e","block_type":"box","text":"rewards executives appropriately. Some companies, in light of their long-term strategy, may decide to include relevant","page_number":274,"box":{"x":69,"y":768,"width":837,"height":11}},{"id":"d7761e08-c2a3-475b-8e09-8a7bcfa2dac2","block_type":"box","text":"GHG emissions reduction targets or low-carbon transition-related metrics in their incentive plans. In such cases, the","page_number":274,"box":{"x":69,"y":783,"width":826,"height":11}},{"id":"55faa65b-0a70-4791-825f-84706742af42","block_type":"box","text":"dedicated team would engage to understand the alignment between those metrics and the company’s stated climate","page_number":274,"box":{"x":69,"y":798,"width":834,"height":11}},{"id":"7b947f16-30ec-43fd-927b-2066460eaceb","block_type":"box","text":"24","page_number":274,"box":{"x":69,"y":828,"width":9,"height":4}},{"id":"86d94773-f3db-4e93-a763-159261e6b527","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally","page_number":274,"box":{"x":83,"y":827,"width":787,"height":12}},{"id":"18881f4e-8d7e-495c-b100-dadcf6a74dba","block_type":"box","text":"director elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using","page_number":274,"box":{"x":69,"y":842,"width":832,"height":12}},{"id":"256daf01-8c31-43be-86f7-b2d9cf3715ca","block_type":"box","text":"the media to amplify concerns as appropriate courses of action. The dedicated team will continue to take a","page_number":274,"box":{"x":68,"y":857,"width":765,"height":12}},{"id":"3156d1e8-caa2-48bc-9ab9-d47f7d46e3f7","block_type":"box","text":"constructive, long-term focused approach, to engagement and voting on behalf of clients under these Guidelines.","page_number":274,"box":{"x":69,"y":873,"width":805,"height":11}},{"id":"c96f24d6-c82b-478d-b27e-989122fa0d42","block_type":"box","text":"25","page_number":274,"box":{"x":69,"y":891,"width":9,"height":4}},{"id":"55278550-9881-47b7-b1fd-6a68e968bd14","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including","page_number":274,"box":{"x":84,"y":890,"width":787,"height":12}},{"id":"4181fbdf-b240-4b15-a3db-03f87db870ae","block_type":"box","text":"trade association memberships), and corporate political contributions.","page_number":274,"box":{"x":68,"y":906,"width":500,"height":10}},{"id":"aa0abc22-14bc-4704-9a50-d3fcd47db971","block_type":"box","text":"BlackRock Investment Stewardship","page_number":274,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"69b13c57-0431-4aee-9da5-cf87fcc769d4","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines | 8","page_number":274,"box":{"x":509,"y":942,"width":400,"height":13}},{"id":"84fc3970-5e5d-4405-a2f7-8727a8b19735","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":274,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"8fb6ba23-2e2f-4437-8966-823784acab01","block_type":"box","text":"strategy. Clear disclosure also helps investors assess whether pay structures are consistent with long-term climate","page_number":275,"box":{"x":69,"y":45,"width":821,"height":11}},{"id":"fd5c78b2-4d7f-43f9-8e45-900afad23904","block_type":"box","text":"strategy and risk management.","page_number":275,"box":{"x":69,"y":60,"width":219,"height":11}},{"id":"2f10509a-715b-4404-b055-1a99f7f31b44","block_type":"box","text":"Auditors and audit-related issues","page_number":275,"box":{"x":68,"y":90,"width":240,"height":9}},{"id":"806bc1dc-7cd9-4d84-b0c7-a6330640edd5","block_type":"box","text":"For companies with material climate or transition risks or opportunities in their business models, the dedicated","page_number":275,"box":{"x":102,"y":113,"width":793,"height":11}},{"id":"8d8cf7cc-c343-47c0-9c7e-7572a60b5927","block_type":"box","text":"team is interested in understanding whether the company considers and, if relevant, quantifies, and accounts for","page_number":275,"box":{"x":68,"y":128,"width":807,"height":11}},{"id":"93fb12d4-bd98-45af-904c-c59fd51dba86","block_type":"box","text":"material climate-related risks in its financial statements, including if the company explains such risks within the","page_number":275,"box":{"x":69,"y":143,"width":794,"height":11}},{"id":"9f416648-a0d0-470c-baf4-ca6a2607dd5e","block_type":"box","text":"context of its audit report. The team notes that assurance of corporate disclosures related to climate risk and the","page_number":275,"box":{"x":69,"y":158,"width":812,"height":11}},{"id":"e299a565-9464-43f1-a218-0e01715c9de0","block_type":"box","text":"transition to a low-carbon economy is still nascent.","page_number":275,"box":{"x":68,"y":173,"width":361,"height":11}},{"id":"0955b6e2-1f01-4cf4-87f2-6c162f417514","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":275,"box":{"x":69,"y":203,"width":463,"height":11}},{"id":"aebb8f06-dd38-4c1c-a71d-8d27d83633ea","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on climate","page_number":275,"box":{"x":102,"y":226,"width":783,"height":11}},{"id":"b4cfecda-5601-4b3a-83f4-fe0272c09731","block_type":"box","text":"related factors under these Guidelines where a transaction may significantly alter a company’s climate strategy or a","page_number":275,"box":{"x":69,"y":241,"width":824,"height":11}},{"id":"3277994c-df73-4786-ab0b-cc9a1d7b2502","block_type":"box","text":"shareholder activist has proposed governance, strategic or operational changes that may impact its climate strategy.","page_number":275,"box":{"x":69,"y":257,"width":831,"height":11}},{"id":"312c0f94-ece5-4fd0-b1ae-da0e06c44d61","block_type":"box","text":"The dedicated team does not promote changes in corporate control or engage in shareholder activism.","page_number":275,"box":{"x":68,"y":272,"width":731,"height":11}},{"id":"3bcf92b3-934c-433f-aebc-ec745ddc8859","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":275,"box":{"x":69,"y":302,"width":503,"height":11}},{"id":"794c6bc6-116f-4591-b2a5-470266e2247a","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other material","page_number":275,"box":{"x":102,"y":324,"width":762,"height":11}},{"id":"9c863efb-e366-48b7-afda-481e0442c616","block_type":"box","text":"sustainability-related risks and opportunities that may be relevant to a company’s business model and long-term","page_number":275,"box":{"x":69,"y":340,"width":802,"height":11}},{"id":"cdfc28c0-e187-4fdf-880f-9554972ce012","block_type":"box","text":"financial performance. These include a company’s impacts or dependencies on natural capital and key","page_number":275,"box":{"x":68,"y":355,"width":734,"height":11}},{"id":"21d0ea81-1410-424a-b2b7-8f088fded304","block_type":"box","text":"stakeholders.","page_number":275,"box":{"x":69,"y":370,"width":95,"height":9}},{"id":"b45f1f52-a55f-4ce9-b2d7-c30cbb522d98","block_type":"box","text":"26","page_number":275,"box":{"x":166,"y":370,"width":9,"height":5}},{"id":"373f2cd9-72cc-42de-9024-6a7f47a3e16e","block_type":"box","text":"In the context of these Guidelines, the dedicated team may engage companies to better understand","page_number":275,"box":{"x":182,"y":370,"width":710,"height":11}},{"id":"d7262297-c34b-4d1d-a838-46957dd0c925","block_type":"box","text":"how they are managing the impact on people (e.g., employees, suppliers, customers and communities) of any","page_number":275,"box":{"x":69,"y":385,"width":783,"height":11}},{"id":"014cbd8c-3b8d-4ffa-95ca-8be00b59df6a","block_type":"box","text":"strategic or operational changes they are making in relation to their transition to a low-carbon economy. Similarly, the","page_number":275,"box":{"x":69,"y":400,"width":832,"height":11}},{"id":"2bc04839-87ba-4ab1-9d9c-38af1ed1a446","block_type":"box","text":"team may engage companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":275,"box":{"x":68,"y":415,"width":838,"height":11}},{"id":"7e858b35-ff79-4296-8b53-0f9d0de6c722","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":275,"box":{"x":68,"y":430,"width":690,"height":11}},{"id":"943a5009-1b1b-4ef8-bf7f-13f77fd8d45e","block_type":"box","text":"26","page_number":275,"box":{"x":69,"y":475,"width":9,"height":4}},{"id":"2eccd2eb-5383-426a-bab7-c4f0a1d9f706","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":275,"box":{"x":84,"y":474,"width":807,"height":12}},{"id":"e614883f-fab2-4cc5-88f3-90ffffe250cd","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":275,"box":{"x":69,"y":490,"width":468,"height":11}},{"id":"8971b5e6-c1cb-4a78-bff3-824c247a01d2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":275,"box":{"x":69,"y":943,"width":260,"height":11}},{"id":"e2f7fdc6-f526-499b-9eb3-b2ce87e36b7b","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines | 9","page_number":275,"box":{"x":509,"y":942,"width":400,"height":13}},{"id":"67fbebab-19df-43c5-b234-6f4d8df0baa3","block_type":"box","text":"BNM1026U-6032633-19203492","page_number":275,"box":{"x":647,"y":981,"width":171,"height":7}},{"id":"e0215c45-cfd9-4f3e-a282-e15776ae1f89","block_type":"box","text":"Appendix 1","page_number":276,"box":{"x":68,"y":45,"width":82,"height":11}},{"id":"671452a4-4f5d-4626-9f81-85efebb1d29e","block_type":"box","text":"Terminology","page_number":276,"box":{"x":68,"y":75,"width":87,"height":11}},{"id":"cf297dde-1224-4edb-8aa8-77a84a14c389","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":276,"box":{"x":101,"y":98,"width":565,"height":11}},{"id":"ebb39fb6-3c0e-46b7-96b2-85d07dfec92d","block_type":"box","text":"Climate risk:","page_number":276,"box":{"x":101,"y":120,"width":92,"height":9}},{"id":"3fdac7c2-f09d-487f-b5e7-425a9a85d32b","block_type":"box","text":"Includes physical risk, the increased risk to companies’ assets and activities caused by the direct","page_number":276,"box":{"x":200,"y":120,"width":698,"height":11}},{"id":"006111a4-0300-4005-95c7-c3122fe45127","block_type":"box","text":"impact of changing weather patterns and natural catastrophes, and transition risk, the impact of the transition to a","page_number":276,"box":{"x":70,"y":135,"width":818,"height":12}},{"id":"8e420d4a-fd8a-4876-bbf3-a0aaf6de017f","block_type":"box","text":"low-carbon economy on a company’s long-term profitability.","page_number":276,"box":{"x":70,"y":150,"width":416,"height":12}},{"id":"0fa4440a-a47e-4bfa-9cca-43b74a02a9fa","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”):","page_number":276,"box":{"x":101,"y":173,"width":449,"height":11}},{"id":"b6e00ac4-b049-4dab-a720-3edd7a6282cf","block_type":"box","text":"The global economic shift toward lower","page_number":276,"box":{"x":556,"y":173,"width":278,"height":11}},{"id":"0faef9da-b7b9-4211-aa7c-dd1975a60393","block_type":"box","text":"emissions across many sectors and business models. The economic transformation is being driven by changes in","page_number":276,"box":{"x":69,"y":188,"width":811,"height":12}},{"id":"6f128955-98e4-46ba-8556-b7596d3fd930","block_type":"box","text":"government policy, technology, and consumer and investor preferences, as well as the physical effects of climate","page_number":276,"box":{"x":68,"y":203,"width":807,"height":12}},{"id":"f7e4354a-2420-4fc2-ab95-6e239c51c088","block_type":"box","text":"change (e.g., extreme weather), and can potentially have a material impact on clients’ investments and portfolios.","page_number":276,"box":{"x":69,"y":218,"width":812,"height":12}},{"id":"74982ad2-2796-4bd6-95f8-50511ff4d03b","block_type":"box","text":"Decarbonization:","page_number":276,"box":{"x":102,"y":241,"width":120,"height":9}},{"id":"9652caf8-72a7-453a-a371-85ca51fe61d1","block_type":"box","text":"the process of reducing or eliminating emissions of carbon dioxide (CO2) from human activity","page_number":276,"box":{"x":228,"y":241,"width":664,"height":11}},{"id":"b4bc05fa-4de1-4b0e-831e-c8fbcc2baf6c","block_type":"box","text":"and removing carbon currently in the atmosphere. This can be carried out by countries, companies and even","page_number":276,"box":{"x":69,"y":257,"width":771,"height":11}},{"id":"52ccc444-c723-4a76-b74a-b5ca6e0a4dfe","block_type":"box","text":"individual consumers. 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