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Important Update - Invesco Fair Fund Distribution Process

As a courtesy, this update is to inform you that the distribution process is anticipated to close soon and you should act immediately if you have a payment(s) you wish to have re-issued and/or negotiate.

  1. September 17, 2010: Last date a check will be re-issued or replaced
    To ensure your check re-issuance request is completed on time please submit all necessary documentation immediately. Checks cannot be re-issued for documentation that is received after September 17th or where the information provided is incomplete. Distribution checks will not be re-issued after September 17, 2010.

  2. October 22, 2010: Last date a check will be honored for payment
    If you are currently in possession of a check that does not require further changes please negotiate your payment immediately. The Fair Fund distribution account will continue to honor checks for payment, regardless of the void date on your check, through October 22, 2010. Any check presented after October 22, 2010 will not be honored.

The Invesco Fair Fund, the Independent Distribution Consultant, Invesco and the Fund Administrator are not responsible for any fees you may incur from your bank.

Please call us toll-free at 866-700-0255 if you have any questions regarding the above updates.

Frequently Asked Questions

1. What is this settlement about?
On October 8, 2004 Invesco Funds Group reached a settlement agreement with the Securities and Exchange Commission. The SEC alleged that Invesco Funds Group entered into agreements that allowed certain individuals and entities to make frequent trades in Invesco Funds that were inconsistent with the Fund prospectuses and potentially harmful to shareholders of Invesco Funds. These trades occurred during the period from January 1, 2000 through July 31, 2003.

2. What is market timing?
Market timing involves the frequent buying and selling of mutual fund shares in order to exploit inefficiencies in mutual fund pricing. While not illegal, it can harm other mutual fund shareholders because it can dilute the value of their shares, disrupt the management of the mutual fund’s investment portfolio, and cause the targeted mutual fund to incur trading costs to accommodate the frequent buying and selling of shares by the market timer.

3. What are the terms of the settlement?
Invesco Funds Group agreed to pay $325 million into a Fair Fund for the benefit of injured shareholders. Of the $325 million, $110 million represents a civil penalty and $215 million represents disgorgement.

4. Who is paying the cost associated with the settlement?
The funds for the settlement were paid entirely by AIM Advisors, the advisor to the mutual funds formerly advised by Invesco Funds Group during the period in question. In addition, all of the costs associated with the distribution of the settlement funds have been borne by AIM Advisors. Since the Invesco mutual funds did not pay these costs, the underlying fund shareholders were not affected by their payment.

5. What are the tax consequences from this settlement?
The SEC and the Tax Administrator have drafted a notice entitled “Invesco Funds Group Fair Fund Statement to Eligible Investors”. It is available to print and/or review on the Tax Information page of this website.

6. Who is eligible to receive a payment?
If you were an Invesco Funds Group account holder of record between January 2000 and July 2003 in one of the affected funds, you may be eligible for payment.

7. What if I didn’t receive a check but believe that I should receive one?
You may not have received a check due to one of the following reasons:

  1. If you held one of the affected funds between January 1, 2000 and July 31, 2003 and your account originated through a broker, plan administrator, plan sponsor, or other third party administrator, then any distribution you may be receiving may be coming directly to you from the account originator instead of the Administrator of the Distribution Plan. In this case, you will need to contact your broker or plan sponsor.
  2. Another possible reason for not receiving a check is the Independent Distribution Consultant, with approval of the Securities and Exchange Commission, determined that if the calculated payment to an account holder is below $10, the expense to distribute such payments would not be cost effective. Therefore, payments below $10 were not distributed to account holders.
  3. Finally, even though you held shares in the affected Invesco funds during the period that market timing occurred, not all shareholders’ accounts were negatively impacted by the market timing, nor are any losses that may have occurred over that time period necessarily due to market timing. The Independent Distribution Consultant, working closely with the Securities and Exchange Commission, created a distribution plan to compensate shareholders for harm caused by market timing to their mutual fund investments.

It is important to remember that this settlement is unrelated to fund performance and the inherent market and capital risk associated with investing.

8. I received a check made payable to my IRA custodian. What can I do with this check?
If your retirement account is still with the custodian listed on your check, you can forward the check along with a letter of instruction to your current custodian and the funds can be deposited into your retirement account. (Be sure to include your current account number with your letter of instruction.)

Please note that if the check is cashed and deposited into an account other than the account eligible to receive the check, it may be subject to a 10% penalty and taxed as ordinary income in the year of receipt.

If you have any questions, you should consult with your financial advisor or tax professional prior to cashing this check to determine the potential tax consequences and appropriate tax treatment for your particular situation.

9. Why is the check made payable to my IRA custodian and not me?
Your account is an individual retirement account that is held by your custodian for your benefit so it was necessary to make the check payable to them as well as yourself.

10. My IRA account is with a different custodian now. Can you change the IRA custodian listed on my check?
Yes, we can change the IRA custodian listed on your check to your new custodian. Return the check with the word “void” written across the front and include a letter of instruction indicating:

  • Your new custodian
  • Your current account number (if available)

Send the check and letter of instruction to the following address:

Invesco Fair Fund Settlement Administration
P.O. Box 859240
Braintree, MA 02185-9240

We will return the new check to you so you can forward it to your current custodian with a letter of instruction explaining that you would like the funds deposited into your current retirement account.

You should consult with your financial advisor or tax professional because the rules related to transfers and rollovers are complicated and failure to comply with those rules could subject the payment to income tax and a 10% penalty.

11. Can I request that my IRA check be made payable to myself?
If you wish to have this check made payable to yourself, you will need to do the following:

  • Return the check with the word “void” written across the front and a letter of instruction requesting it be made payable to you.
  • Be sure to include your date of birth in the letter of instruction.
  • Complete and return the appropriate reissue form (see Forms page)
  • All applicable federal taxes and penalties will be deducted from your check as well as any required state taxes. The W-4P form is completed and submitted with your request if you wish to forgo tax withholding. The W-9 form is used to certify your Social Security # or Tax ID.
  • Send this information to the following address. Please allow 30-45 days for completion of this process.

Invesco Fair Fund Settlement Administration
P.O. Box 859240
Braintree, MA 02185-9240

You should consult with your financial advisor or tax professional prior to cashing this check to determine the potential tax consequences and appropriate tax treatment for your particular situation.

12. My check has a Losses component as well as an Advisory Fee component. What are these components and are either of these considered taxable?
The Losses component of your payment represents your share of the impaired value of your Invesco Fund shares as a result of market timing activity. In this distribution, the Losses component is a non-reportable event. The payment is not income to you to the extent of your tax basis in your investment.

The Advisory Fee component of your payment is intended to reimburse you for advisory fees paid by the Invesco Funds during the period of market timing activity. This component is also a non-reportable event but may constitute ordinary income to you. Whether the advisory fee component is income to you depends on several factors including whether Invesco fund(s) made a dividend payment as ordinary income (as opposed to taxable as capital gain) in a year covered by this processing in which the Invesco Fund(s) paid improper advisory fees.

The Statement to Eligible Investors (SEI), located on the Tax Information page, has detailed information concerning the Losses and Advisory Fee components.

If you have any questions, you should consult with your financial advisor or tax professional prior to cashing the check to determine the potential tax consequences and appropriate tax treatment for your situation.

13. What happens if I do not negotiate the distribution check? What happens to any unclaimed funds?
The Plan of Distribution states that all uncashed distribution checks, returned distributions, distributions to accountholders who could not be identified, and the interest accrued on these amounts will be placed in a Residual Account at the settlement’s issuing bank. Under the IDC’s direction, the remaining balance will be credited back into the harmed mutual funds in proportion to the amount of harm originally calculated by the IDC.

14. I lost my distribution check. Is it possible to reissue me a new check?
Yes, please call the Invesco Fair Fund Settlement call center at 866-700-0229, Monday through Friday 9:00 AM to 6:00 PM EST, to request a replacement check.

15. Why is part of my check made up from the Bank of America distribution?
In February 2005 affiliates of Bank of America reached a settlement with the SEC. The SEC established a settlement fund for the benefit of shareholders who may have been affected by short-term or excessive trading activity from January 2000 to December 2003 in which such trading was found to have been facilitated by Banc of America Securities, LLC, a registered broker-dealer.

The Bank of America Distribution Plan was approved by the SEC on December 27, 2007. A copy of this plan and other important documents are available at the BOA settlement website: www.bankofamericafairfund.com

16. Why didn’t I receive a payment from the Bank of America settlement?
Not all Invesco funds were affected by the alleged market timing by Bank of America. See the website for details on what funds were affected: www.bankofamericafairfund.com

17. Why is part of my check made up from the Bear Stearns distribution?
On March 16, 2006 Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp. consented to the entry of an Order by the SEC without admitting to or denying the Order’s findings. The Order established the Bear Stearns Fair Fund for the benefit of shareholders who may have been affected by late trading and deceptive market timing between 1999 and 2003.

The Bear Stearns Distribution Plan was approved by the SEC on February 4, 2009. A copy of this plan and other important documents are available at the Bear Stearns settlement website: www.bearstearnsfairfundsettlement.com

18. Why didn’t I receive a payment from the Bear Stearns settlement?
Not all Invesco funds were affected by the alleged market timing by Bear, Stearns & Co., Inc. or Bear, Stearns Securities Corp. In some cases money from the settlement was paid directly to shareholders of the affected funds. In other cases money was paid directly to the asset base of the fund. These distributions were approved by the SEC. See the website for details on what funds were affected: www.bearstearnsfairfundsettlement.com

19. How was the Invesco Distribution Plan agreed to and calculated? Why is my check for this amount?
In accordance with the terms of the settlement, the pool of assets available for distribution consists of $325 million, plus earned interest, as well as settlement amounts contributed to the Fair Fund by other Distribution Plans. The methodology that the IDC followed in determining the distribution amounts is described in detail in the Distribution Plan.

In summary, the IDC calculated the harm caused by market timing during the designated period in the specific fund that the settlement covers. The IDC then allocated these settlement amounts to the investors who held shares in the affected funds during the period that market timing activity occurred.

20. What is the difference between “civil penalties” and “disgorgement”?
Individuals or companies that violate SEC regulations are typically required to pay both civil money penalties and disgorgement. Civil penalties are punitive while disgorgement is the return of profits made from those actions that violated securities regulations.

21. What funds are included in the IFG settlement?

  • Invesco Advantage Global Health Sciences Fund
  • Invesco Balanced Fund
  • Invesco Core Equity Fund
  • Invesco Dynamics Fund
  • Invesco Endeavor Fund
  • Invesco Energy Fund
  • Invesco European Fund
  • Invesco Financial Services Fund
  • Invesco Gold & Precious Metals Fund
  • Invesco Growth & Income Fund
  • Invesco Growth Fund
  • Invesco Health Sciences Fund
  • Invesco High Yield Fund
  • Invesco International Blue Chip Value Fund
  • Invesco Leisure Fund
  • Invesco Mid-Cap Growth Fund
  • Invesco Real Estate Opportunity Fund
  • Invesco S&P 500 Index Fund
  • Invesco Select Income Fund
  • Invesco Small Company Growth Fund
  • Invesco Tax-Free Bond Fund
  • Invesco Technology Fund
  • Invesco Telecommunications Fund
  • Invesco Total Return Fund
  • Invesco U.S. Government Securities Fund
  • Invesco Utilities Fund
  • Invesco Value Equity Fund

22. My investment is/was in a tax-qualified plan, what should I do with this check?
If the check was made payable to the plan administrator and mailed to you and you are:

  1. Still a participant in the tax qualified retirement plan, contact your retirement plan administrator to coordinate the deposit of the check to your retirement plan.
  2. No longer a participant in the tax-qualified plan and you are a participant in another tax-qualified retirement plan, then you may affect a “direct rollover” to another eligible plan. The distribution must be rolled over within 60 days after receipt to be tax-free. Contact your plan trustee or administrator to coordinate the rollover.
  3. No longer a participant in the tax-qualified plan and you are no longer a participant in another tax-qualified retirement plan and you wish to have this check made payable to yourself, you will need to do the following:
    • You will need to contact the Retirement Plan Administrator or Service Provider to negotiate the check you received. We are unable to reissue this check to you as it is considered Plan assets.
  4. If your plan is no longer active or has been abandoned, we will require the following documentation to comply with your request.
    • The original distribution check marked VOID (if not previously submitted)
    • A copy of the final IRS Form 5500 from your former tax-qualified retirement plan which may be found on www.freeerisa.com.
    • A signed affidavit, which can be found on the Tax Information page of this website or we can provide to you.
    • A completed IRS Form W-4P/W-9, which can be found on the Tax Information page of this website or we can provide to you. Send this information to the following address:

      Invesco Fair Fund Settlement Administration
      PO Box 859240
      Braintree, MA 02185-9240

23. How can I contact Invesco AIM regarding my current investments?
If you have questions related to your current Invesco AIM mutual fund account, please contact Invesco AIM directly at 1-800-959-4246, or access the www.invescoaim.com website.

Please note that Invesco AIM will not be able to answer your settlement questions. Please access the Contact Us page of this website if you have additional settlement questions.


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