Investment and Operating Restrictions. The investment activities of the Trust are intended to be conducted in accordance with, among other things, the following investment and operating restrictions and they provide that the Trust: (a) will invest in and hold a minimum of 80% of the total net assets of the Trust in physical gold in the form of Gold Coins and hold no more than 20% of the total net assets of the Trust in cash (such as interest-bearing accounts and short-term certificates of deposit) or any “US Government Security” except during the 90-day period following the closing of the Trust’s initial public offering or additional offerings or prior to the distribution of assets of the Trust, at which times it may hold more than 20% of the Net Asset Value of the Trust in cash (such as interest-bearing accounts and short-term certificates of deposit) and US Government Securities. As used herein, US Government Security means any direct obligations of or obligations guaranteed as to principal or interest by the United States, or securities issued or guaranteed by corporations in which the United States has a direct or indirect interest which shall have been designated by the Secretary of the Treasury, pursuant to section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities for the purposes of that Act; (b) will store all physical gold owned by the Trust at the Custodian or Gold Custodian or in the treasury vaults of a Schedule I Canadian chartered bank or an Affiliate or division thereof on a fully allocated basis. Physical gold with a value equal to at least 60% of the Net Asset Value of the Trust will at all times be stored in Canada; (c) will not purchase, sell or hold derivatives; (d) will not issue Units following the completion of the Trust’s initial public offering (i) unless the per Unit offering price, after deducting underwriting fees, commissions and offering expenses, will not yield proceeds less than the Net Asset Value per Unit, as determined on the Business Day prior to the pricing of the Units to be sold in the offering; or (ii) except by way of Unit distribution in connection with an income distribution; (e) will ensure that no part of the stored physical gold may be delivered out of safekeeping by the Custodian or Gold Custodian or, if the physical gold is held by another custodian, that custodian, without receipt of an instruction from the Manager in the form specified by the Custodian or Gold Custodian or such other custodian indicating the purpose of the delivery and giving direction with respect to the specific amount; (f) will ensure that no director or officer of the Manager or the Manager’s shareholder, or representative of the Trust or the Manager will be authorized to enter into the physical gold storage vaults without being accompanied by at least one representative of the Custodian or Gold Custodian or, if the physical gold is held by another custodian, that custodian, as the case may be; (g) will ensure that the physical gold remains unencumbered; (h) will inspect or cause to be inspected the stored physical gold periodically; (i) will not guarantee the securities or obligations of any Person other than the Manager, and then only in respect of the activities of the Trust; (j) in connection with requirements of the Tax Act, will not make or hold any investment or engage in any activity that would result in the Trust failing to qualify as a “mutual fund trust” within the meaning of the Tax Act; (k) in connection with requirements of the Tax Act, will not invest in any security that would be a tax shelter investment within the meaning of section 143.2 of the Tax Act; (l) in connection with requirements of the Tax Act, will not acquire or hold an interest in a non-resident trust (or in any partnership that holds an interest in a non-resident trust), if the Trust (or the partnership) would be required to include amounts in its income pursuant to sections 91, 94 or 94.1 of the Tax Act (and any proposed amendments to these provisions as set forth in draft legislation released on August 27, 2010 or any successor provisions thereto), or in accordance with proposed section 94.2 of the Tax Act as set forth in draft legislation released on August 27, 2010 (or amendments to such proposals or provisions as enacted into the law or successor provisions thereto); (m) in connection with requirements of the Tax Act, will not invest in any security of an issuer that would be foreign affiliate of the Trust for purposes of the Tax Act; (n) in connection with requirements of the Tax Act, will not carry on any business or make or hold any investments that would result in the Trust itself being subject to the tax for SIFT trusts as provided for in section 122 of the Tax Act; and (o) in connection with the requirements of the Tax Act, will not hold any “taxable Canadian property” for purposes of the Tax Act, or any property that otherwise qualifies as “specified property” within the meaning of proposed amendments to the Tax Act announced on September 16, 2004 or amendments to such proposals, provisions enacted into law or successor provisions thereto.
Appears in 5 contracts
Samples: Trust Agreement (APMEX Physical - 1 Oz. Gold Redeemable Trust), Trust Agreement (APMEX Physical - 1 Oz. Gold Redeemable Trust), Trust Agreement (APMEX Physical - 1 Oz. Gold Redeemable Trust)
Investment and Operating Restrictions. The investment activities of the Trust are intended to be conducted in accordance with, among other things, the following investment and operating restrictions and they provide that the Trust:
: (a) will invest in and hold a minimum of 8090% of the total net assets of the Trust in physical gold bullion in the London Good Delivery bar form of Gold Coins and hold no more than 2010% of the total net assets of the Trust Trust, at the discretion of the Manager, in cash physical gold bullion (such as in London Good Delivery Bar form or otherwise), gold coins, debt obligations of or guaranteed by the Government of Canada or a province of Canada or by the Government of the United States of America or a state thereof, short-term commercial paper obligations of a corporation or other person whose short-term commercial paper is rated R-1 (or its equivalent, or higher) by Dominion Bond Rating Service Limited or its successors or assigns or F1 (or its equivalent, or higher) by Fitch Ratings or its successors or assigns or A-1 (or its equivalent, or higher) by Standard & Poor’s or its successors or assigns or P-1 (or its equivalent, or higher) by Xxxxx’x Investor Service or its successors or assigns, interest-bearing accounts and short-term certificates of deposit) deposit issued or any guaranteed by a Canadian chartered bank or trust company, money market mutual funds, short-term government debt or short-term investment grade corporate debt, or other short-term debt obligations approved by the Manager from time to time (for the purpose of this paragraph, the term “US Government Securityshort-term” means having a date of maturity or call for payment not more than 182 days from the date on which the investment is made), except during the 9060-day period following the closing of the Trust’s initial public offering or additional offerings or prior to the distribution of the assets of the Trust, at which times it may hold more than 20% of the Net Asset Value of the Trust in cash (such as interest-bearing accounts and short-term certificates of deposit) and US Government Securities. As used herein, US Government Security means any direct obligations of or obligations guaranteed as to principal or interest by the United States, or securities issued or guaranteed by corporations in which the United States has a direct or indirect interest which shall have been designated by the Secretary of the Treasury, pursuant to section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities for the purposes of that Act;
; (b) will store all physical gold bullion owned by the Trust at the Custodian or Gold Custodian or in the treasury vaults of a Schedule I Canadian chartered bank or an Affiliate or division thereof in Canada on a fully allocated basis. Physical , provided that the physical gold bullion held in London Good Delivery bar form may be stored with a value equal to at least 60% custodian only if the physical gold bullion will remain London Good Delivery while with that custodian; (c) will not hold any “taxable Canadian Property” within the meaning of the Net Asset Value of the Trust will at all times be stored in Canada;
Tax Act; (cd) will not purchase, sell or hold derivatives;
; (de) will not issue Units following the completion of the Trust’s initial public offering except (i) unless if the net proceeds per Unit offering price, after deducting underwriting fees, commissions and offering expenses, will to be received by the Trust are not yield proceeds less than 100% of the most recently calculated Net Asset Value per UnitUnit prior to, as determined on or upon, the Business Day prior to determination of the pricing of the Units to be sold in the offering; such issuance or (ii) except by way of Unit distribution in connection with an income distribution;
; (ef) will ensure that no part of the stored physical gold bullion may be delivered out of safekeeping by the Custodian or Gold Custodian or, if the physical gold bullion is held by another custodian, that custodian, without receipt of an instruction from the Manager in the form specified by the Custodian or Gold Custodian or such other custodian indicating the purpose of the delivery and giving direction with respect to the specific amount;
; (fg) will ensure that no director or officer of the Manager or the Manager’s shareholdergeneral partner, or representative of the Trust or the Manager will be authorized to enter into the physical gold bullion storage vaults without being accompanied by at least one representative of the Custodian or Gold Custodian or, if the physical gold bullion is held by another custodian, that custodian, as the case may be;
; (gh) will ensure that the physical gold bullion remains unencumbered;
; (hi) will inspect or cause to be inspected the stored physical gold periodically;
(i) will not guarantee the securities or obligations of any Person other than the Managerbullion periodically on a spot inspection basis and, and then only in respect together with a representative of the activities of Auditors, physically audit each bar annually to confirm the Trustbar number;
(j) in connection with requirements of the Tax Act, will not make or hold any investment or engage in any activity that would result in the Trust failing to qualify as a “mutual fund trust” within the meaning of the Tax Act;
(k) in connection with requirements of the Tax Act, will not invest in any security that would be a tax shelter investment within the meaning of section 143.2 of the Tax Act;
(l) in connection with requirements of the Tax Act, will not acquire or hold an interest in a non-resident trust (or in any partnership that holds an interest in a non-resident trust), if the Trust (or the partnership) would be required to include amounts in its income pursuant to sections 91, 94 or 94.1 of the Tax Act (and any proposed amendments to these provisions as set forth in draft legislation released on August 27, 2010 or any successor provisions thereto), or in accordance with proposed section 94.2 of the Tax Act as set forth in draft legislation released on August 27, 2010 (or amendments to such proposals or provisions as enacted into the law or successor provisions thereto);
(m) in connection with requirements of the Tax Act, will not invest in any security of an issuer that would be foreign affiliate of the Trust for purposes of the Tax Act;
(n) in connection with requirements of the Tax Act, will not carry on any business or make or hold any investments that would result in the Trust itself being subject to the tax for SIFT trusts as provided for in section 122 of the Tax Act; and
(o) in connection with the requirements of the Tax Act, will not hold any “taxable Canadian property” for purposes of the Tax Act, or any property that otherwise qualifies as “specified property” within the meaning of proposed amendments to the Tax Act announced on September 16, 2004 or amendments to such proposals, provisions enacted into law or successor provisions thereto.
Appears in 1 contract