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

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 25
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 exposure and therefore can produce significant gains or losses in excess of their cost. This
use of embedded leverage allows the Fund to increase its market value exposure relative to its net assets and can substantially increase
the volatility of the Fund’s performance.

Additional associated risks from investing in
derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Fund. Typically, the
associated risks are not the risks that the Fund is attempting to increase or decrease exposure to, per its investment objective, but
are the additional risks from investing in derivatives. The use of derivatives is a highly specialized activity that involves investment
techniques and risks different from those associated with investments in more traditional securities and instruments.

Examples of these associated risks are liquidity
risk, which is the risk that the Fund will not be able to sell the derivative in the open market in a timely manner, and counterparty
credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. The use of derivatives is also subject
to operational and legal risks. Operational risks generally refer to risks related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human error. Legal risks generally refer to risks of loss resulting
from insufficient documentation, insufficient capacity or authority of counterparty, or legality or enforceability of a contract.

In the ordinary course of business, the Fund may
enter into transactions subject to enforceable International Swaps and Derivatives Association, Inc. master agreements or other similar
arrangements (“netting agreements”). Generally, the right to offset in netting agreements allows the Fund to offset certain
securities and derivatives with a specific counterparty, when applicable, as well as any collateral received or delivered to that counterparty
based on the terms of the agreements.

RiverNorth Flexible Municipal Income Fund II, Inc.

Futures

The Fund may invest in futures contracts in accordance
with its investment objectives. The Fund does so for a variety of reasons including for cash management, hedging or non-hedging purposes
in an attempt to achieve the Fund’s investment objective. A futures contract provides for the future sale by one party and purchase
by another party of a specified quantity of the security or other financial instrument at a specified price and time. A futures contract
on an index is an agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to the difference
between the value of the index at the close of the last trading day