Prospectus

• Section А. Information on the Issuer
• Section B. Characteristics of the Unit Investment Fund
• Section C. Information on the Fund’s Chairmen and the Supervisory Board
• Section D. Fund’s Regulations
  Investment declaration
• Section E. Information on the Declared Issue of Fund’s Investment Sertificates
• Section F. Asset Management Company Fee
• Section G. Information on Expenses Compensated From the Fund's Assets
• Section H. List and Results of Previous Issues
• Section I. Risk factors
• Section J. Information on the Registrar
• Section K. List of Stock Exchanges and OTC Markets, Where Fund’s Investment Sertificates are Placed
• Section L. Information on the Securities Trader Involved into Fund’s Investment Sertificates Placement and Redemption
• Section M. Information on the Custodian
• Section N. Information on the Auditor

11. Joint Stock Company “Ukrainian Innovation Bank” is the founder of the Open-end Open Joint Stock Company “КІNТО” (“The Company”). The share of the “Ukrainian Innovation Bank” in the statutory capital of “KINTO” is 1,11%.

12. List of the related to the Company entities:

12.1. Legal entities:

- “Profit” Ltd., Registration code (ЄДРПОУ) – 21465022;

- Joint Stock Company “АBС-3”, Registration code (ЄДРПОУ) – 21561062;

- “Alternatyva-Invest” Ltd., Registration code (ЄДРПОУ) – 21509009;

- “КІNTO-Halychyna” Ltd., Registration code (ЄДРПОУ) – 19399683;

- “КІNТО-Donbass” Ltd., Registration code (ЄДРПОУ) – 20347527;

- “КІNTO-Mykolayiv” Ltd., Registration code (ЄДРПОУ) – 20867385;

- “КІNTO-Poltava”, Ltd., Registration code (ЄДРПОУ) – 13954824;

- “КІNТО-Prydniprovya” Ltd., Registration code (ЄДРПОУ) – 21281078;

- “KINTO Invest” Ltd., Registration code (ЄДРПОУ) – 32915716;

- Open Joint Stock Company “PRATO”, Registration code (ЄДРПОУ) – 19259321.

12.2. Individual Entities:

- Oksanych Sergiy Mykhailovych, passport number СО №873577, issued by Pechersk Regional Administration of the Ministry of Internal Affairs of Ukraine in Kyiv on 11.12.01;

- Daniel Goldsheider, passport series P, AUT, number #H 05195520, issued by Austrian embassy in Zurich on 08.05.01.

13. List of investment funds under Company’s management:

- Interval Diversified Unit Investment Fund “Dostatok”;

- Open-end Diversified Unit Investment Fund “Classical”;

- Open Joint Stock Company “Closed Non-Diversified Corporate Investment Fund “Synergy”;

- Closed-end Non-Diversified Corporate Investment Fund “KINTO Kapital”;

- Closed-end Non-Diversified Corporate Investment Fund “Synergy Bond”;

- Open Joint Stock Company “Closed Non-Diversified Corporate Investment Fund “Synergy-2”;

- Open Joint Stock Company “Closed Non-Diversified Corporate Investment Fund “Synergy-3”;

- Closed-end Non-Diversified Corporate Investment Fund “Synergy Real Estate".

Section B. Characteristics of the Unit Investment Fund

1. Name – Interval Diversified Unit Investment Fund “Narodny” (“The Fund”).

2. Registration code (ЄДРІСІ) – 221396.

3. Date and the Number of the Certificate on receiving registration code (ЄДРІСІ) – June 27, 2006, №396.

4. Redemption term of the securities – specified by the Fund’s Regulations.

Section С. Information on the Fund’s Chairmen and the Supervisory Board

Position	Name	Passport details	Date of birth	Education	Qualification	Years of work experience	Years of experience at the Ukrainian stock market
Head of the Supervisory Board	Vasylyuk Maksym Volodymyrovych	Passport # KA 576067, Issued in Lviv Region on 15/09/1997	1972	Higher	Economist	4	-
Member of the Supervisory Board	Vnukov Oleksandr Vadymovych	Passport # MM 991868, Issued in Harkiv Region on 06/06/2001	1984	Higher	Engineer	-	-
Member of the Supervisory Board	Lashkarev Vadym Georgiyovych	Passport # CH 952225, Issued in Kyiv Region on 29/10/1998	1979	Higher	Engineer	6	-

Section D. Fund’s Regulations

The Regulations for the Interval Diversified Unit Investment Fund “Narodny” of the Open Joint Stock Company “KINTO” (“Regulations”) are based on the following Ukrainian laws: “On Collective Investment Institutions (unit and corporate investment funds)”, “On the National Depositary System and Electronic Transactions With Securities in Ukraine” and Rulings by the State Securities and Stock Market Commission (“Commission”). These Regulations aim to regulate creation and functioning of the Interval Diversified Unit Investment Fund “Narodny” of the Open Joint Stock Company “KINTO” (“the Fund”).

1. Information on the Unit Investment Fund:

1.1. Name of the Fund:

1.1.1. Full– Interval Diversified Unit Investment Fund “Narodny”

1.1.2. Short – IDUIF “Narodny”.

1.2. Type of the Fund - interval.

1.3. Type of the Fund - diversified.

1.4.

2. Information on the asset management company:

2.1. Full name – Open Joint Stock Company “KINTO” (“the Company”)

2.2. Registration Code (ЄДРПОУ) – 16461855

2.3. Location - 26 Lesya Ukrainka Blvd., Kyiv, Ukraine

2.4. Series, number and date of the License to engage in the professional activities on the stock market and asset management: АB №020507 as of January 27, 2006

2.5. President – Oksanych Sergiy Mykhailovych

2.6. Tel: (044) 246-73-50

2.7. Fax: (044)235-58-75

2.8. E-mail: kіnto@kіnto.com.

3. Procedure for Establishing, Responsibilities, Activities and Composition of the Fund’s Supervisory Board

3.1. The Fund’s Supervisory Board (“Supervisory Board”) is composed of 3 (three) members elected from the number of Fund’s investors (“Investors”). The Supervisory Board’s objective is to supervise the Fund’s investment declaration implementation, safekeeping of the Fund’s assets, registration of the nominal securities Investors, Fund’s audit and Fund’s assets valuation.

3.2. Any Fund’s investor could be elected as a member of the Supervisory Board in case he (she) owns not less than 100 (one hundred) securities of the Fund.

3.3. Among those, who meet the criteria mentioned in paragraph 3.2 of these Regulations, the priority-driven right to become members of the Supervisory Board have those Investors, who own the largest number of the Fund’s securities.

3.4. The Supervisory Board is elected annually.

3.5. The Company on the date of January 20 decides on the Investors, who, according to the paragraph 3.2. of these Regulations have the right to enter the Fund’s Supervisory Board, and within 5 (five) working days from the mentioned date sends to these Investors by the recommended letter a proposal to become member of the Fund’s Supervisory Board.

3.6. The answers on proposal to enter the Supervisory Board are accepted by the Company during 15 (fifteen) working days from the date dispatched of this proposal, mentioned in paragraph 3.5. of these Regulations.

3.7. The Company within five working days (starting from the expiry date of accepting answers on proposals to enter the Supervisory Board) sends by registered letter to those, from whom the answers were received (on the date specified in item 3.6 of the Regulations):

- Notification that the Investor has become a member of the Supervisory Board;

- Notification that according to the paragraph 3.1. and 3.3. of these Regulations the Investor has not become a member of the Supervisory Board.

3.8. The Company sends invitations not later than 10 (ten) working days before the Board’s meeting to be held.

3.9. An article on elections of the Fund Supervisory Board’s Head and a Secretary is required to be on the first Fund Supervisory Board meeting’s agenda. An article on elections of the Head of the Supervisory Board is required to be the first point on the Board meeting’s agenda.

3.10. All Supervisory Board’s members present at the meeting elect the Head of the Fund’s Supervisory Board though a majority. The Head of the Supervisory Board could be re-elected anytime.

3.11. The Head of the Supervisory Board organizes Board’s work, calls meetings of the Supervisory Board, presides over Board’s meetings and keeps minutes. If the Head of the Supervisory Board could not participate at the Board’s meeting, another Supervisory Board’s member acts on behalf of the Head according to the decision taken by the members of the Board.

3.12. Meeting of the Fund’s Supervisory Board could also be called on the request of a member of the Supervisory Board, an auditor (auditing company), Fund’s custodian or the Company itself. An initiator, who called the Fund Supervisory Board’s meeting, is required to inform members of the Board by a written letter specifying date, time, location and agenda of the Board’s meeting in not less than 10 (ten) working days.

3.13. The Fund Supervisory Board is authorized to take decisions on the agenda issues only if two thirds of Board’s members are present at the meeting.

3.14. Fund Supervisory Board’s terms of reference include:

- Elections of the Head and Secretary of the Supervisory Board;

- Ratification of amendments suggested by the authorized Company’s body to the Fund’s Regulations and Investment Declaration.

- Ratification of amendments to the Fund’s securities issue prospectus;

- Approval of decision on discontinuing agreements with the custodian, registrar and auditor (auditing company);

3.15. Each Fund Supervisory Board’s member has one vote during the Board’s meeting.

3.16. Majority present at the meeting makes Fund Supervisory Board’s decisions. The vote of the Head of the Fund’s Supervisory Board or his representative is conclusive.

3.17. Minutes of the Fund Supervisory Board’s meeting should be finalized in no more than 5 (five) working days after the meeting was held. Minutes should include the following information about the meeting:

- Location and date;

- List of attendees;

- Agenda;

- Issues to be voted on, vote results and decisions taken. The Head and a Secretary of the Board sign the Fund Supervisory Board’s Minutes.

3.18. The Fund’s investor could participate at the Supervisory Board directly or act through a representative, authority of whom should be confirmed in accordance with the current legislative norms.

3.19. If, as a result of alienation of the Supervisory Board’s member’s Fund’s securities, the number of his/her securities has become less than the number mentioned in the paragraph 3.2 of these Regulations, such a member of the Fund Supervisory Board loses his/her membership. At the same time, the number of Board’s members is less than required in the item 3.1 of these Regulations, so the Fund Supervisory Board’s meeting could not be held until the minimum required number of members of the Supervisory Board is reached. The Company’s Supervisory Board temporarily acts as the Fund’s Supervisory Board until the Fund’s Supervisory Board is formed.

4. The Procedure of the Net Asset Value and Securities Placement (Redemption) Price Determination.

4.1. The Fund's net asset value is determined according to the procedure stipulated by the "Regulations" on determination of collective investment institutions net asset value" (unit and corporate investment funds) approved by the Decision of the State Securities and Stock Market Commission as of 2 July 2002, No. 201 ("Regulations"). In case the changes are made to these Regulations or in case the regulative acts on changes in the procedure of net assets value determination are approved, the net value of the Fund's assets is determined according to the requirements of legislature in force and corresponding regulative documents.

4.2. The Fund's net asset value does not include the value of securities, the issuance registration of which has been cancelled in accordance with the procedure established by legislature.

4.3. Securities, the circulation of which has been terminated, are included in the Fund's net asset value calculation at the rate of 75% of their book value.

4.4. In calculating the Fund's net asset ordinary value, equity is valued by the Company:

4.4.1. At the price of the last market transaction, if it simultaneously complies with the following requirements:

4.4.1.1. Total sum of the transaction was not less than UAH 5,000 (five thousand);

4.4.1.2. The transaction was accomplished in no more than 30 (thirty) calendar days before the valuation was made;

4.4.1.3. The total volume of market transactions for 30 (thirty) calendar days that precede the day of the transaction completion was not less than UAH 10,000 (ten thousand);

4.4.2. At the last book value - in all other cases.

4.5. When calculating the net asset value of the Fund’s assets, the valuation of fixed-income securities is made by the Company:

4.5.1. At the price of the last market transaction, if it simultaneously meets the following requirements:

4.5.1.1. The transaction was completed at the day when the valuation was made;

4.5.1.2. The transaction amount is not less than UAH 10,000 (the thousand);

4.5.1.3. Total amount of market transactions during 30 (thirty) calendar days which precede the day of the transaction completion was not less than UAH 100,000 (a hundred thousand);

4.5.2. In all other cases – by the formula:

where:

V- Calculated value of the security;
С_j- Payment (coupon, dividend, depreciation etc) in period j;
N- Nominal or depreciated value of the security;
d_j- Number of days until the 1st, 2nd….k payment, from the date of calculation;
d_n- Number of days until the maturity (redemption) of the security;
y_M- Yield to maturity, or offer (issuer’s offer for redemption of bonds before maturity), if such offer exists. Such yield is calculated at the day of market transaction or accounting such security to the Fund’s assets (in case of absence of market transactions or if those do not meet the requirements mentioned in pp. 4.5.1.2. and 4.5.1.3. of this Regulation) by the formula:

where:

P – last market transaction price (if this transaction meets the requirements stipulated in items 4.5.1.2. and 4.5.1.3. of the Regulation) or the price of purchase of the security (in case of absence of market transactions or if those do not meet the mentioned requirements);

C_i – payment (coupon, dividend, depreciation etc) in period i;

d_i – number of days until the 1st, 2nd….n payment, from the date of calculation.

4.6. In calculating the Fund's net asset value calculated value of the Stock market’s instruments by the formula:

, where:

V – calculated value of the security;

P – price of purchase of the security;

R – price of the maturity (redemption) of the security;

d_i – number of days from the date of purchase of the security until the date of calculation;

d – number of days from the date of purchase of the security until the maturity (redemption) of the security.

4.7. Market transaction is the transaction realized on the organized exchange and the price for which at the moment of its execution is between the highest bid and lowest ask.

4.8. The company calculates the net asset value of the Fund:

- before the decision of the Commission about recognition the Fund as such, that satisfies the demands about the minimum amount of assets – at the end of the last working day of the quarter and for presenting a report to Commission about the results of the placement of ICI securities;

- after the decision of the Commission about recognition the Fund as such, that satisfies the demands about the minimum amount of assets – at the end of the working day prior to the day of receiving applications for placement and redemption of the Fund’s securities (at the end of the last working day) in case the Company is changed and when the Fund is liquidated.

4.9. Before the Commission recognizes the Fund as such that meets the minimum asset requirements the Company places the Fund’s securities at their nominal value.

4.10. After the Commission recognizes the Fund as such that meets the minimum assets requirements the Company places and redeems the Fund’s securities at their calculated value.

4.11. The calculated value of the securities is determined as the ratio of the Fund’s total net asset value to the number of the Fund’s securities outstanding on the date of calculation.

4.12. The value of the Fund's securities acquired by the investor (except for the case stipulated by item 5.8 of the Regulations) is determined by calculated value of the Fund's securities on the day the Investor submits application for acquiring the Fund' securities).

5. The Procedure of Determination of Company's Fee and Covering the Expenses Incurred by the Fund

5.1. Company’s fee is determined depending on the net asset value of the Fund.

5.2. The Company's fee is accrued and is paid out monthly by transferring the corresponding amount.

5.3. Determination of the net asset value for calculation of the Company’s fee is made on the basis of information on average monthly net asset value of the Fund as of the end of the last working day of the corresponding month.

5.4. Finalization of the Company’s annual fee is made on the basis of the average annual net asset value calculation taking into account average monthly net asset value estimates.

5.5. Company’s fee may not exceed 5 (five) percent of annual average Fund's net asset value.

5.6. Other fees and expenses paid from the Fund's assets:

- Fee to the Fund's custodian;

- Fee to the Fund's registrar;

- Fee to the Fund's auditor;

- Fee to securities traders;

- Operating expenses incurred in connection to the functioning of the Fund, including:

- Registration services (state duties and other similar services);

- Manufacturing of forms for the Fund's securities;

- Payment for bank servicing;

- Notary services;

- Payment for publications of the required information on the Fund's activities;

- Informational services (payment for acquiring information regarding the issuers in the securities of which the Fund has allocated or plans to allocate its assets; payment for other information required for collective investment);

- Advertising services associated with circulation of the Fund's securities;

- Expenses for servicing the Fund's participants and circulation of securities, including expenses on the interest payments for loans, received by the Company to purchase securities (taking into consideration limitations set up by the current Ukrainian legislature).

5.7. Expenses specified in item 5.6 of the Regulations may not exceed 5 (five) percent of annual average Fund's net asset value during the fiscal year.

5.8. In case the Company in its own account pays expenses related to the redemption of securities when the Fund is incapable to do this. The associated with the redemption costs should be covered at the expense of the Fund’s assets later.

5.9. The Company at its own account pays for other expenses and expenses exceeding the amount specified by legislation.

6. Procedure and Terms of the Securities Redemption by the Company

6.1. The requirement of the Fund’s securities Investor (“The Investor ”) to sell Fund’s securities is submitted in a form of the Application on the sale of the Fund’s securities (“Application”).

6.2. Application is submitted by the Investor directly to the Company or securities trader - an agent on the placement and redemption of the Fund securities (“the Agent”) – list of which could be found at the Fund’s prospectus. The Agent acts on behalf, on account and in the interests of the Company.

6.3. Application is irrevocable.

6.4. The application for sale is accepted on the 5-th, 15-th and 25-th day of each month from 1 p.m. till 6 p.m. In case, the day of accepting application coincides with a holiday, the application for sale is accepted on the 1-st working day after the dates mentioned above. The application for sale is accepted after the decision of the Commission about recognition the Fund as such, that satisfies the demands about the minimum amount of assets.

6.5. The agreement on the redemption of securities is concluded with the Investor simultaneously with the acceptation of the Application.

6.6. Settlement with the Investor is made during 7 (seven) working days from the day when the specified in item 6.5 of the Regulations agreement was concluded.

6.7. Settlements with Investor are made through the bank transfer on the Investor’s bank account or through the transfer from the Agent’s cash desk. In case the Investor during the term mentioned in p.6.6. of these Regulations does not contact the Company to receive the payment in the mentioned timeframe, payment will be deposited with the notary’s office (private notary) at the Investor’s expense by the time when the notary will transfer payment to the Investor.

6.8. Redemption of Fund’s investment certificates is made at the same price for all investors. The price is determined for the day when the Investor submitted the Application compliant with the net asset value.

6.9. The redemption price is decreased by the amount equalling agent’s commission specified in the Prospectus. If the settlement with the Investor is made through the Agent’s cash desk, Agent’s commission will increase by the amount of the bank’s fee for the cash withdrawal.

7. Investment targets.
Investment targets are determined in the Fund's Investment Declaration, which is a constituent part to the Regulations (See: Investment Declaration, Attachment 1 to the Regulations).

Attachement 1
to the Regulations
of the Interval Diversified
Unit Investment Fund “Narodny”
of the Open Joint Stock Company “КІNTO”