Execution of Purchase Orders. a. To effect the purchase of a Creation Unit of a Fund, the Participant shall deliver a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by the Trust or the investment advisor to the Trust (the “Advisor”) in accordance with the Fund Documents and may be changed from time to time in accordance with this Agreement. i. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall be payable to the Fund depending on the net asset value of Fund Shares determined after the Purchase Order has been placed. ii. A Fund may permit or require the substitution of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “cash in lieu”). iii. A Fund may (in its sole discretion) accept collateral up to 105% of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (as disclosed in the Prospectus from time to time) and may use such cash or collateral to purchase Deposit Securities. The Participant shall be required to deposit an additional amount of cash with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities. iv. The Participant shall be responsible for any and all customary brokerage expenses and related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the Participant, including expenses arising from the use of cash in lieu or collateral. b. With respect to any Purchase Order, each Fund shall return to the Participant any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such Participant. c. The Participant shall make available or transfer funds for each purchase of Fund Shares of a Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified (the “Cash Amount”). Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook. d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the Participant shall make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Fund in accordance with the procedures set forth in the AP Handbook. e. Either the Trust or the Distributor may reject any Purchase Order that is not submitted in proper form. In addition, the Distributor (on behalf of each Fund) may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust or obtained by the Distributor, as the case may be), if: i. the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own 80% or more of the outstanding Fund Shares of such particular Fund; ii. the Fund Deposit delivered does not contain the securities that the Advisor specified, and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio; iii. the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “Code”), for federal tax purposes; iv. the acceptance of the Fund Deposit would (in the opinion of counsel) be unlawful, as in the case of a purchaser who was banned from trading in securities; v. the acceptance of the Fund Deposit would otherwise (in the discretion of the Trust or the Advisor) have an adverse effect on the Trust, the particular Fund, or on the rights of such Fund’s shareholders, including but not limited to the “beneficial owner” (as such term is defined in Rule 16a-1(a)(2) of the 1934 Act, “Beneficial Owner”) of the Fund Shares; vi. the value of the Creation Units to be created for the Cash Amount (or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) exceeds a purchase authorization limit afforded to the Participant by the Custodian, and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or vii. there exist circumstances outside the control of the Trust or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.
Appears in 5 contracts
Samples: Authorized Participant Agreement (Manager Directed Portfolios), Authorized Participant Agreement (Listed Funds Trust), Authorized Participant Agreement (Manager Directed Portfolios)
Execution of Purchase Orders. a. To effect the purchase of a Creation Unit of a Fund, the Participant shall (on behalf of itself and any Participant Client) deliver a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by (and in the sole discretion of) the Trust or the investment advisor to the Trust (the “Advisor”) in accordance with the Fund Documents and may be changed from time to time in accordance with this Agreementtime.
i. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall be payable to the Fund depending on the net asset value of Fund Shares determined after the Purchase Order has been placed.
ii. A Fund may permit or require the substitution of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “cash in lieu”).
iii. A Fund may (in its sole discretion) accept collateral up to 105% of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (as disclosed in the Prospectus from time to time) and may use such cash or collateral to purchase Deposit Securities. The Participant shall be required to deposit an additional amount of cash with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities.
iv. The Participant shall be responsible for any and all customary brokerage expenses and related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the ParticipantOrders, including expenses arising from the use of cash in lieu or collateral...
b. With respect to any Purchase Order, each Fund shall return to the Participant (or any Participant Client) any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such ParticipantParticipant (or any Participant Client).
c. The Participant shall make available or transfer funds for each purchase of Fund Shares of a Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified (the “Cash Amount”). Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook.
d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the Participant shall make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Fund in accordance with the procedures set forth in the AP Handbook.
e. Either the Trust or the Distributor may reject any Purchase Order that is not submitted in proper formform by 3:00 p.m., Eastern Time (or 4:00 p.m. through the Order System or via the U.S. Postal Service), as applicable. In addition, the Distributor (on behalf of each Fund) may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust or obtained by the Distributor, as the case may be), if:
i. the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own eighty percent (80% %) or more of the outstanding Fund Shares of such particular Fund;
ii. the Fund Deposit delivered does not contain the securities that the Advisor specified, and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio;
iii. the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “Code”), for federal tax purposes;
iv. the acceptance of the Fund Deposit would (in the opinion of counsel) be unlawful, as in the case of a purchaser who was banned from trading in securities;
v. the acceptance of the Fund Deposit would otherwise (in the discretion of the Trust or the Advisor) have an adverse effect on the Trust, the particular Fund, or on the rights of such Fund’s shareholders, including but not limited to the “beneficial owner” (as such term is defined in Rule 16a-1(a)(2) of the 1934 Act, “Beneficial Owner”) of the Fund Shares;
vi. the value of the Creation Units to be created for the Cash Amount (or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) exceeds a purchase authorization limit afforded to the Participant by the Custodian, and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or
vii. there exist circumstances outside the control of the Trust or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.
Appears in 2 contracts
Samples: Authorized Participant Agreement (FactorShares Trust), Authorized Participant Agreement (ETF Series Solutions)
Execution of Purchase Orders. a. (a) To effect the purchase of a Creation Unit of a particular Fund that attempts to provide investment results that correlate positively to the return of a benchmark or index (each, a “Bull Fund”), the Participant shall agrees on behalf of itself, and any Participant Client, to deliver to a Fund a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by the Trust Trust, or the investment advisor to the Trust (the “Advisor”) ), in accordance with the Fund Documents its sole discretion and may be changed from time to time in accordance with this Agreement.
i. time. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall will be payable to or receivable by the Fund depending on the net asset value of Fund Shares of the Fund next determined after the Purchase Order has been placed.
ii. A Fund may permit or require the substitution substitu tion of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “cash in lieu”).
iii. A Fund may (may, in its sole discretion) , accept collateral up to 105% [115%/125%] of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (Securities, as disclosed in the Prospectus from time to time) , and the Fund may use such cash or collateral to purchase Deposit Securities. The Participant An additional amount of cash shall be required to deposit an additional amount of cash be deposited with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% [115%/125%] of the daily marked to market value of the missing Deposit Securities.
iv. The Participant shall be responsible for any and all customary brokerage expenses and related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the ParticipantOrders, including expenses arising from the use of “cash in lieu lieu” or collateral.
b. (b) To effect the purchase of a Creation Unit of a particular Fund that attempts to provide investment results that correlate negatively to a benchmark or index (each, a “Bear Fund”), the Participant agrees on behalf of itself, and any Participant Client, to deliver to the Fund an amount in cash equal to the net asset value per Share of a Bear Fund multiplied by the number of Fund Shares constituting a Creation Unit of such Fund multiplied by the number of Creation Units of such Bear Fund being purchased or redeemed in a particular Order (an “All-Cash Payment”) plus a purchase transaction fee, as described in the Fund Documents. The amount of such purchase transaction fee shall be determined by the Trust, or the investment advisor to the Trust, in its sole discretion and may be changed from time to time.
(c) With respect to any Purchase Order, each Fund shall acknowledges and agrees to return to the Participant or any party for which it is acting any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such Participantthe Participant or any party for which it is acting.
c. (d) The Participant shall hereby agrees that it will make available or transfer funds for each purchase of Fund Shares of a Bull Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified specified, other than with respect to Purchase Orders for the Bear Funds) (the “Cash Amount”). Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall hereby agrees to ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook.
d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the (e) The Participant shall hereby agrees that it will make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Bear Fund an amount sufficient to pay the All-Cash Payment plus a purchase transaction fee. The Participant hereby agrees to ensure that the Cash Amount is provided in accordance with the procedures set forth in the AP Handbook.
e. Either the (f) Trust or the Distributor may reject any Purchase Order that is not submitted in proper formform by 3:00 p.m., Eastern Time (or 4:00 p.m. through the Order System or via the U.S. Postal Service), as applicable. In addition, the Distributor (on behalf of each Fund) Fund may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust or obtained by the Distributor, as the case may be), if:
i. (1) the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own eighty percent (80% %) or more of the outstanding Fund Shares of such particular Fund;
ii. (2) the Fund Deposit delivered does not contain the securities that the Advisor specified, specified and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio;
iii. (3) the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “Code”), for federal tax purposes;
iv. (4) the acceptance of the Fund Deposit would (would, in the opinion of counsel) , be unlawful, as in the case of a purchaser who was banned from trading in securities;
v. (5) the acceptance of the Fund Deposit would otherwise (otherwise, in the discretion of the Trust or the Advisor) , have an adverse effect on the Trust, Trust or the particular Fund, Fund or on the rights of such Fund’s the shareholders, including but not limited to the “beneficial owner” (owner as such that term is defined in Rule 16a-1(a)(2) of the Securities Exchange Act of 1934 Act, (“Beneficial Owner”) of the Fund Shares;
vi. (6) the value of the Creation Units to be created for the an All-Cash Amount (Payment, or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) , exceeds a purchase authorization limit afforded to the Participant by the Custodian, Custodian and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or
vii. (7) there exist circumstances outside the control of the Trust or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.
Appears in 1 contract
Samples: Authorized Participant Agreement (Direxion Shares ETF Trust)
Execution of Purchase Orders. a. To effect the purchase of a Creation Unit of a Fund, the Participant shall deliver a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by the Trust Company or the investment advisor to the Trust (the “Advisor”) an Advisor in accordance with the Fund Documents and may be changed from time to time in accordance with this Agreement.
i. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall be payable to the Fund depending on the net asset value of Fund Shares determined after the Purchase Order has been placed.
ii. A Fund may permit and, upon the notice from the Participant that it is subject to a statutory or policy restriction with respect to particular Deposit Securities, the Fund shall require the substitution of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “"cash in lieu”").
iii. A Fund may (in its sole discretion) accept collateral up to 105% of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (as disclosed in the Prospectus from time to time) and may use such cash or collateral to purchase replacement Deposit SecuritiesSecurities if such Deposit Securities are not delivered and the Fund elects to close out the pledge of collateral and buy-in the missing securities. The Participant shall be required to deposit an additional amount of cash with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities. The Fund will notify Participant daily of all additional amounts required to be posted in respect of the missing Deposit Securities.
iv. The Participant shall be responsible for any and all customary brokerage expenses and reasonably related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the Participant, including expenses arising from the use of cash in lieu or collateral, but excluding general operating costs of the Funds, such custodial fees and fees charged by DTC, or expenses incurred as a result of the gross negligence or willful misconduct by the Funds, the Distributor or any other service provider to the Fund other than the Participant ("Excluded Costs").
b. With respect to any Purchase Order, each Fund shall return to the Participant any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such Participant. With respect to any Purchase Order, each Fund also acknowledges and agrees that the Participant is entitled to reduce the amount of money or other proceeds due to the Fund by an amount equal to any dividend, distribution or other corporate action to be paid to the Fund in respect of any Deposit Security that is transferred to the Fund and that, based on the valuation of such Deposit Security at the time of transfer, should, in accordance with the terms of the instrument or corporate action and industry custom in the applicable market, have been paid to the Participant and, if the Participant so reduces the amount of money or other proceeds due to the Fund, then the Fund is entitled, in tum, to retain such dividend, distribution or other corporate action.
c. The Participant shall make available or transfer funds for each purchase of Fund Shares of a Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified (the “"Cash Amount”"). The Distributor shall use reasonable efforts to cause the Company or the Advisor to provide prior notice of any change to the purchase transaction fee to Participant. Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook.
d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the Participant shall make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Fund in accordance with the procedures set forth in the AP Handbook.
e. Either the Trust Company or the Distributor may reject any Purchase Order that is not submitted in proper form. In addition, the Distributor (on behalf of each Fund) may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust Company or obtained by the Distributor, as the case may be), if:
i. the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own 80% or more of the outstanding Fund Shares of such particular Fund but only if such Order was effected on an in-kind basis and the Participant does not act as market maker for any of the Deposit Securities so that such exchange of Deposit Securities will result in a carry-over basis for U.S. federal income tax purposes for the applicable Fund;
ii. the Fund Deposit delivered does not contain the securities that the Advisor specified, and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio; provided however that in the event that the Participant is unable to deliver the specified securities because the Participant is subject to a restriction relating to the securities or otherwise for policy or legal reasons is unable to deliver one or more of the securities, the Participant will not be in breach of this Clause 4(e)(ii) if the Participant has delivered cash in lieu of such securities;
iii. the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “"Code”"), for federal tax purposes;
iv. the acceptance of the Fund Deposit would (in the opinion of counsel) be unlawful, as in the case of a purchaser who was banned from trading in securities;
v. the acceptance of the Fund Deposit would otherwise (in the discretion of the Trust Company or the Advisor) have an adverse effect on the TrustCompany, the particular Fund, or on the rights of such Fund’s 's shareholders, including but not limited to the “"beneficial owner” owners" (as such term is defined in Rule 16a-1(a)(216a-l(a)(2) of the 1934 Act, “"Beneficial Owner”") of the Fund Shares;
vi. the value of the Creation Units to be created for the Cash Amount (or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) exceeds a purchase authorization limit afforded to the Participant by the Custodian, and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or
vii. there exist circumstances outside the control of the Trust Company or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the TrustCompany, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.
f. The Distributor will promptly return to the Participant upon rejection of an Order all consideration, including Fund Shares, Deposit Securities, cash, and, if applicable, U.S. Treasury securities, tendered by the Participant, including any transaction fees, in respect of such rejected Order or in respect of any revoked Order.
g. Upon the satisfaction of the requirements applicable to the issuance of a Creation Unit, the Distributor represents that it will use reasonable efforts on behalf of the applicable Fund to issue the Creation Unit within the normal business settlement cycle or as otherwise required by applicable Law
Appears in 1 contract
Execution of Purchase Orders. a. To effect the purchase of a Creation Unit of a Fund, the Participant shall (on behalf of itself and any Participant Client) deliver a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by (and in the sole discretion of) the Trust or the investment advisor to the Trust (the “Advisor”) in accordance with the Fund Documents and may be changed from time to time in accordance with this Agreementtime.
i. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall be payable to the Fund depending on the net asset value of Fund Shares determined after the Purchase Order has been placed.
ii. A Fund may permit or require the substitution of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “cash in lieu”).
iii. A Fund may (in its sole discretion) accept collateral up to 105% of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (as disclosed in the Prospectus from time to time) and may use such cash or collateral to purchase Deposit Securities. The Participant shall be required to deposit an additional amount of cash with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities.
iv. The Participant shall be responsible for any and all customary brokerage expenses and related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the ParticipantOrders, including expenses arising from the use of cash in lieu or collateral...
b. With respect to any Purchase Order, each Fund shall return to the Participant (or any Participant Client) any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such ParticipantParticipant (or any Participant Client).
c. The Participant shall make available or transfer funds for each purchase of Fund Shares of a Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified (the “Cash Amount”). Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook.
d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the Participant shall make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Fund in accordance with the procedures set forth in the AP Handbook.
e. Either the Trust or the Distributor may reject any Purchase Order that is not submitted in proper formform by 3:00 p.m., Eastern Time (or 4:00 p.m. through the Order System or via the U.S. Postal Service), as applicable. In addition, the Distributor (on behalf of each Fund) may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust or obtained by the Distributor, as the case may be), if:
i. the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own eighty percent (80% %) or more of the outstanding Fund Shares of such particular Fund;
ii. the Fund Deposit delivered does not contain the securities that the Advisor specified, and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio;
iii. the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “Code”), for federal tax purposes;
iv. the acceptance of the Fund Deposit would (in the opinion of counsel) be unlawful, as in the case of a purchaser who was banned from trading in securities;
v. the acceptance of the Fund Deposit would otherwise (in the discretion of the Trust or the Advisor) have an adverse effect on the Trust, the particular Fund, or on the rights of such Fund’s shareholders, including but not limited to the “beneficial owner” (as such term is defined in Rule 16a-1(a)(2) of the 1934 Act, “Beneficial Owner”) of the Fund Shares;
vi. the value of the Creation Units to be created for the Cash Amount (or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) exceeds a purchase authorization limit afforded to the Participant by the Custodian, and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or
vii. there exist circumstances outside the control of the Trust or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.RIC
Appears in 1 contract
Samples: Authorized Participant Agreement (TrimTabs ETF Trust)
Execution of Purchase Orders. a. To effect the purchase of a Creation Unit of a Fund, the Participant shall deliver a Fund Deposit plus a purchase transaction fee (as described in the Fund Documents) to the relevant Fund. The amount of such purchase transaction fee shall be determined by the Trust or the investment advisor to the Trust (the “Advisor”) in accordance with the Fund Documents and may be changed from time to time in accordance with this Agreement.
i. The Fund Deposit shall consist of the requisite Deposit Securities plus or minus a Balancing Amount. The Balancing Amount shall be payable to the Fund depending on the net asset value of Fund Shares determined after the Purchase Order has been placed.
ii. A Fund may permit or require the substitution of an amount of cash to be added to the Balancing Amount to replace any Deposit Securities (i.e. “cash in lieu”).
iii. A Fund may (in its sole discretion) accept collateral up to 105% of the value of the Deposit Securities in anticipation of delivery of all or a portion of the requisite Deposit Securities (as disclosed in the Prospectus from time to time) and may use such cash or collateral to purchase Deposit Securities. The Participant shall be required to deposit an additional amount of cash with the Fund pending delivery of the missing Deposit Securities to the extent necessary to maintain cash collateral in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities.
iv. The Participant shall be responsible for any and all customary brokerage expenses and related costs and transfer taxes incurred by the Fund in connection with Purchase Orders submitted by the Participant, including expenses arising from the use of cash in lieu or collateral.
b. With respect to any Purchase Order, each Fund shall return to the Participant any dividend, distribution, or other corporate action paid to the Fund in respect of any Deposit Security that is transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to such Participant.
c. The Participant shall make available or transfer funds for each purchase of Fund Shares of a Fund an amount sufficient to pay the Balancing Amount plus the purchase transaction fee and the additional variable charge for cash purchases (when, in the sole discretion of the Fund, cash purchases are available or specified (the “Cash Amount”). Computation of the Cash Amount shall exclude any taxes, duties or other fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant. Computation of the Cash Amount shall exclude any stamp duty and other similar fees and expenses payable upon the transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Participant and not of the Fund. The Participant shall ensure that the Cash Amount is provided in accordance with the procedures set forth in AP Handbook.
d. If a Fund exercises its right to issue Creation Units for an All-Cash Payment, the Participant shall make available or transfer the Cash Amount plus a purchase transaction fee for each purchase of Fund Shares of a Fund in accordance with the procedures set forth in the AP Handbook.
e. Either the Trust or the Distributor may reject any Purchase Order that is not submitted in proper form. In addition, subject to Section 3(d) of this Agreement, the Distributor (on behalf of each Fund) may reject any Purchase Order (based on information provided by the Index Receipt Agent, the Advisor or the Trust or obtained by the Distributor, as the case may be), if:
i. the purchaser or purchasers, upon obtaining the Creation Units so ordered, would own eighty percent (80% %) or more of the outstanding Fund Shares of such particular Fund;
ii. the Fund Deposit delivered does not contain the securities that the Advisor specified, and the Advisor has not consented to acceptance of an in-kind deposit that varies from the designated portfolio;
iii. the acceptance of the Fund Deposit would have certain adverse tax consequences, such as causing the particular Fund to no longer meet RIC status under the Internal Revenue Code of 1986, as amended (the “Code”), for federal tax purposes;
iv. the acceptance of the Fund Deposit would (in the opinion of counsel) be unlawful, as in the case of a purchaser who was banned from trading in securities;
v. the acceptance of the Fund Deposit would otherwise (in the discretion of the Trust or the Advisor) have an adverse effect on the Trust, the particular Fund, or on the rights of such Fund’s shareholders, including but not limited to the “beneficial owner” (as such term is defined in Rule 16a-1(a)(2) of the 1934 Act, “Beneficial Owner”) of the Fund Shares;
vi. the value of the Creation Units to be created for the Cash Amount (or the amount of the Balancing Amount to accompany an in-kind payment of Deposit Securities) exceeds a purchase authorization limit afforded to the Participant by the Custodian, and the Participant has not deposited an amount in excess of such purchase authorization with the Custodian prior to 3:00 p.m., Eastern Time, on the transmittal date; or
vii. there exist circumstances outside the control of the Trust or the Distributor that make it impossible to process purchases of Fund Shares for all practical purposes. Examples of such circumstances include: acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Advisor, any sub-Advisor(s), the Index Receipt Agent, the Custodian, the Distributor, DTC, NSCC or any other participant in the purchase process, and similar extraordinary events.
Appears in 1 contract
Samples: Authorized Participant Agreement (Compass EMP Funds Trust)
