Company: RFMZ
Filing Date: 2025-09-05
Form Type: N-CSR
Source: 0001398344-25-017693
Chunk: 16

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 16
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 the Fund, including assets attributable
to leverage, minus liabilities (other than debt representing leverage and any preferred stock that may be outstanding).

As a result of Section 619 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act and the rules thereunder (collectively, the “Volcker Rule”), banking entities are
generally prohibited from sponsoring the TOB Issuer, and instead the Fund may serve as the sponsor of a TOB issuer (“Fund-sponsored
TOB”) and establish, structure and “sponsor” a TOB Issuer in which it holds TOB Residuals. In connection with Fund-sponsored
TOBs, the Fund may contract with a third-party to perform some or all of the Fund’s duties as sponsor. The Fund’s role under
the Fund-sponsored TOB structure may increase its operational and regulatory risk. If the third-party is unable to perform its obligations
as an administrative agent, the Fund itself would be subject to such obligations or would need to secure a replacement agent. The obligations
that the Fund may be required to undertake could include reporting and recordkeeping obligations under the IRC and federal securities
laws and contractual obligations with other TOB service providers.

RiverNorth Flexible Municipal Income Fund II, Inc.

Under the Fund-sponsored TOB structure, the TOB
Issuer receives Underlying Securities from the Fund through (or as) the sponsor and then issues TOB Floaters to third party investors
and TOB Residuals to the Fund. The Fund is paid the cash (less transaction expenses, which are borne by the Fund) received by the TOB
Issuer from the sale of TOB Floaters and typically will invest the cash in additional municipal bonds or other investments permitted by
its investment policies. TOB Floaters may have first priority on the cash flow from the securities held by the TOB Issuer and are enhanced
with a liquidity support arrangement from a bank or an affiliate of the sponsor (the “liquidity provider”), which allows holders
to tender their position back to the TOB Issuer at par (plus accrued interest). The Fund, in addition to receiving cash from the sale
of TOB Floaters, also receives TOB Residuals. TOB Residuals provide the Fund with the right to (1) cause the holders of TOB Floaters to
tender their notes to the TOB Issuer at par (plus accrued interest), and (2) acquire the Underlying Securities from the TOB Issuer. In
addition, all