Prospectus dated November 27, 2013 First Metro Philippine Equity Exchange Traded Fund, Inc. An Open-End Investment Company Registration and offer of up to 30,000,000 Common Shares to be listed and traded on the ETF Board of The Philippine Stock Exchange, Inc. First Metro Asset Management, Inc. First Metro Investment Corporation Fund Manager and Principal Distributor Fund Sponsor First Metro Securities Brokerage Corporation Authorized Participant and Market Maker IGC Securities, Inc. Authorized Participant First Metro Philippine Equity Exchange Traded Fund, Inc. has been incorporated and registered with the Securities and Exchange Commission (“SEC”) in accordance with the requirements of Republic Act No. 2629, otherwise known as the Investment Company Act, and SEC Memorandum Circular No. 10, Series of 2012, otherwise known as the SEC Rules and Regulations on Exchange Traded Funds. First Metro Philippine Equity Exchange Traded Fund, Inc. KEY PRODUCT INFORMATION First Metro Philippine Equity Exchange Traded Fund, Inc. This is an exchange traded fund. This statement provides you with the relevant information about the product. This statement is part of the Prospectus. You should not invest in this product based on this statement alone. This summary should be read as an introduction to this prospectus (“Prospectus”) and any decision to invest in the shares (“Shares”) of First Metro Philippine Equity Exchange Traded Fund, Inc. (“First Metro ETF”, the “Fund,” or the “Issuer”) should be based upon consideration of the Prospectus as a whole. QUICK FACTS: Name of Issuer First Metro Philippine Equity Exchange Traded Fund, Inc. Security Code FMETF No. of ETF shares to be registered 30,000,000 common shares No. of ETF shares to be offered Up to 30,000,000 common shares Total number of shares in a Creation Unit The total number of shares in a Creation Unit is 200,000 shares. /Trading Lot Size The trading lot size of the shares of the Fund on The Philippine Stock Exchange (the “PSE”) shall be in accordance with the board lot table of the PSE. Net Asset Value Per Share The Shares may be subscribed to in Creation Unit/s based on the Fund’s Net Asset Value Per Share (“NAVps”) on the date a Creation Order/s is made. The NAVps is computed by dividing the net assets of the Fund (the market value of the1 underlying securities, including any cash in the portfolio, interest receivables, dividend receivables, less liabilities such as taxes, accrued fees and expenses) by the total number of its outstanding Shares. The NAV and NAVps of the Fund will be published on the websites of the Fund and of the PSE at 6:30 p.m. of each Trading Day. Shares of the Fund may also be purchased in the secondary market at the current market price of the Shares in the PSE. Continuous Offering The Shares are offered in Creation Units, through the Authorized Participants, on a continuous basis in accordance with the Creation Method in the Prospectus. Shares of the Fund may also be purchased in the secondary market at the current market price of the Shares in the PSE. Fund Sponsor First Metro Investment Corporation (“FMIC”) Fund Manager and Principal Distributor First Metro Asset Management, Inc. (“FAMI”) Market Maker First Metro Securities Brokerage Corporation (“FMSBC”) i First Metro Philippine Equity Exchange Traded Fund, Inc. Authorized Participants FMSBC and IGC Securities, Inc. (“IGC”) INAV Calculator Interactive Data Corporation Index Provider The Philippine Stock Exchange, Inc. (“PSE”) Custodian HSBC Securities Services Stock and Transfer Agent Metropolitan Bank & Trust Company – Trust Banking Group Total Expense Ratio Not more than 2.00% Underlying Index A basket of securities selected based on an index replication strategy that aims to track the PSEi. For more information, please refer to “Underlying Index” section on p. 6. Base Currency Philippine Pesos Dividend Policy The Board of Directors of the Fund may decide to declare dividends from the unrestricted retained earnings of the Fund at a time and percentage as the same Board may deem proper and in accordance with law. As provided for in the Fund's By-Laws, the Board of Directors may make arrangements with its stockholders whereby the amount of unrestricted retained earnings not declared as cash dividends and/or other distributions may be reinvested in the Fund's basket of securities in lieu of cash dividends to be paid to the stockholders. The arrangement with shareholders shall be such that the aforementioned amount of unrestricted retained earnings dividends to be reinvested in the Fund’s basket of securities shall be declared as stock dividends in accordance with law and valued at the NAVps of the Fund at the time said stock dividends are paid. The Board of Directors of the Fund intends to declare, as cash dividends, a minimum of ten percent (10%) of the amount of the unrestricted retained earnings derived from the cash dividend income of the portfolio of the Fund based on the latest audited financial statements of the Fund; Provided, that the Board shall pass the appropriate Board resolution covering any dividend declaration, and such dividend declaration shall be disclosed to the SEC, the PSE and the Fund’s website. Foreign Ownership Limitations There are limitations on foreign ownership of the Fund’s Shares arising from the fact that the Fund will be investing in Component Securities, the ownership of which may be limited to Philippine Nationals. The term ‘‘Philippine National’’ as defined under the Republic Act No. 7042, as amended, shall mean a citizen of the Philippines, or a domestic partnership or association wholly-owned by citizens of the Philippines, or a corporation organized under the laws of the Philippines of which at least 60% of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines, or a corporation organized abroad and registered to do business in the Philippines under the Philippine Corporation Code, of which 100% of the capital stock outstanding and entitled to vote is wholly-owned by Filipinos or a trustee of funds for pension or other employee retirement or separation benefits, where the trustee is ii First Metro Philippine Equity Exchange Traded Fund, Inc. a Philippine national and at least 60% of the fund will accrue to the benefit of Philippine nationals. The Fund is thus constrained to keep the foreign equity interest in it below the 40% threshold and any sale or transfer of shares in excess of this threshold shall not be recorded in the Fund’s stock and transfer book. Address and Telephone Number of the 18/F PSBank Center, Paseo de Roxas corner Sedeño St., Issuer’s Principal Address Makati City 1227, Philippines +632 891-2860 ETF Website www.firstmetroetf.com.ph Before you invest, you may want to review the Fund’s entire Prospectus, which contains more information about the Fund and its risks. You can find the Fund’s Prospectus and other information about the Fund online at www.firstmetroetf.com.ph. You can also get this information at no cost by sending an email request to Mr. Edwin B. Valeroso, the Investor Relations Officer of the Fund, at [email protected], or calling him at 891-2860. iii First Metro Philippine Equity Exchange Traded Fund, Inc. This Prospectus relates to the registration and offer, on a continuous basis, of up to 30,000,000 Shares (the “Offer”). The Shares of the Fund are offered in Creation Unit/s on a continuous basis in accordance with the Creation Method as set forth in this Prospectus. Immediately prior to the Offer, the Fund will have a total of 7,500,000 issued and outstanding Shares, which have been subscribed by the Fund Sponsor, First Metro Investment Corporation (“FMIC”). During the Offer, the total number of issued and outstanding Shares of the Fund may eventually reach up to 30,000,000 Shares. The Offer consists of (1) the original subscription of the Fund Sponsor to 7,500,000 issued Shares, and (2) 22,500,000 unissued Shares to be issued in Creation Units. The unissued Shares shall be issued in Creation Units, in exchange for a basket of equity securities included in the main index (“PSEi”) of the PSE. The original subscription of the Fund Sponsor in the Fund, as of the date of this Prospectus, for 7,500,000 issued Shares is PhP750,000,000.00. The unissued Shares to be issued in Creation Units will depend on the number of orders for the creation of Shares in Creation Units and the NAVps of the Fund on the day when a Creation Order is made. For a more detailed discussion, please see “Use of Offer Proceeds” beginning on p. 17 and “Creation Method” beginning on p. 26 of this Prospectus. The Fund is a domestic corporation, incorporated on January 15, 2013, with principal business office address at 18th Floor, PSBank Center, Paseo de Roxas corner Sedeño St., 1227 Makati City, Philippines, and telephone number: (632) 891-2860. As of the date of this Prospectus, the Fund has an authorized capital stock of Three Billion Pesos (PhP3,000,000,000.00) divided into Thirty Million (30,000,000) Shares with a par value of One Hundred Pesos (PhP100.00) per Share, and a total of 7,500,000 issued and outstanding Shares. It was registered on January 15, 2013 with the Securities and Exchange Commission (“SEC”) as an Open-end Investment Company under Republic Act No. 2629, otherwise known as the Investment Company Act and as an “Exchange Traded Fund” (“ETF”) under SEC Memorandum Circular No. 10, Series of 2012 otherwise known as the SEC Rules and Regulations on Exchange Traded Funds (the “SEC ETF Rules”).