AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 2018
Registration No. 333-221842
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
SPDR
®
Gold MiniShares Trust
a series of
WORLD GOLD
TRUST
SPONSORED BY WGC USA ASSET MANAGEMENT COMPANY, LLC
(Exact name of Registrant as specified in its charter)
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Delaware
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6221
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61-6588857
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(State or other jurisdiction of
Incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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c/o WGC USA Asset Management
Company, LLC
685 Third
Avenue, 27th Floor
New York, New York 10017
(212) 317-3800
(Address,
including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
WGC USA Asset
Management Company, LLC
685 Third Avenue, 27th Floor
New York, New York 10017
(212) 317-3800
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Christopher D. Menconi, Esq.
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
(202)
739-3000
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David A. Sirignano, Esq.
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
(202)
739-3000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement
becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
The Registrant hereby amends
this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in
accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and the Sponsor and the Trust are not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
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PRELIMINARY PROSPECTUS
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Subject to Completion
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May 4, 2018
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SPDR
®
Gold MiniShares Trust —
80,000,000 SPDR
®
Gold MiniShares
SPDR
®
GOLD MINISHARES TRUST, A SERIES OF WORLD GOLD TRUST
The World Gold Trust (the
“Trust”) is organized as a Delaware statutory trust with multiple series. Each series of the Trust issues shares of beneficial interest, which represent units of fractional undivided beneficial interest in and ownership of such series
only. A single series of the Trust, the SPDR
®
Gold MiniShares Trust (also referred to as “GLDM”), is offered pursuant to this Prospectus. GLDM issues SPDR
®
Gold MiniShares, which are referred to as “Shares” in this Prospectus, unless the context otherwise requires. References to “Series” refer to GLDM and/or the other Series of
the Trust, as applicable. The investment objective of GLDM is for the Shares to reflect the performance of the price of gold bullion, less GLDM’s expenses. The assets of GLDM include only gold bullion, gold bullion receivables and cash, if any.
GLDM intends to issue Shares on a continuous basis. The Shares may be purchased from GLDM only in one or more blocks of 100,000 Shares (a block of
100,000 Shares is called a “Creation Unit”). GLDM will issue Shares in Creation Units to institutional investors referred to as “Authorized Participants” on an ongoing basis as described in “Plan of Distribution.”
Creation Units will be offered continuously at the net asset value (“NAV”) for 100,000 Shares on the day that an order to create a Creation Unit is accepted by GLDM. GLDM Shares will be listed on NYSE Arca under the symbol
“GLDM.”
GLDM is not a commodity pool for purposes of the Commodity Exchange Act of 1936, as amended, and its sponsor is not subject to
regulation by the Commodity Futures Trading Commission as a commodity pool operator with respect to GLDM or a commodity trading advisor with respect to GLDM.
WGC USA Asset Management Company, LLC is the Sponsor of the Trust (the “Sponsor”). The Trust was formed pursuant to an Agreement and Declaration of
Trust dated as of August 27, 2014, as amended and restated on June 30, 2016 and further amended and restated on September 13, 2016, January 6, 2017 and April 16, 2018, between the Sponsor and the Trustee (referred to herein
as the “Declaration of Trust”).
BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or “BNYM,” is the
Administrator (the “Administrator”) and Transfer Agent (the “Transfer Agent”) of the Trust. BNYM also serves as the custodian of the Trust’s cash, if any. The Sponsor shall appoint ICBC Standard Bank Plc as the custodian
(the “Custodian”) of the Trust’s Gold Bullion, as defined below. Delaware Trust Company is the trustee of the Trust (the “Trustee”). State Street Global Advisors Funds Distributors, LLC is the marketing agent of the Trust
(the “Marketing Agent”).
The Trust is an “emerging growth company” subject to reduced public company reporting requirements
under U.S. federal securities laws.
Investing in the Shares involves significant risks. See “
Risk Factors
”
starting on page 8.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the
securities offered in this Prospectus, or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
GLDM will issue and redeem Shares from time to time in Creation Units only to Authorized Participants in exchange for the delivery to GLDM, or the
distribution by GLDM, of the amount of Gold Bullion represented by the Creation Units being created or redeemed. This amount is based on the combined NAV of the number of Shares included in the Creation Units being created or redeemed, as
applicable, determined on the day the order to create or redeem Creation Units is accepted, as described in “Creation and Redemption of Shares.” The Shares will be sold to the public at varying prices to be determined by reference to,
among other considerations, the price of gold and the trading price of the Shares on NYSE Arca at the time of each sale.
The Shares are neither
interests in nor obligations of the Sponsor, the Trustee, the Administrator, the Transfer Agent, the Custodian, the Marketing Agent or their respective affiliates.
GLDM is offering up to
$[XX] in Shares (the “Seed Creation Units”) through [XX], an affiliate of the Sponsor (also called the “Seed Capital Investor”), as underwriter. [The Seed Capital Investor and the Sponsor are under the common control of World
Gold Council, an Association.] On [Date], the Seed Capital Investor, subject to conditions, purchased the Seed Creation Units at a per-Share price equal to [1/100th] of an ounce of gold, as described in “Seed Capital Investor” and
“Plan of Distribution.” The price of gold was determined using the LBMA Gold Price PM on [Date]. The price per-Share and the LBMA Gold Price PM on [Date] were $[XX] and $[XX], respectively. Total proceeds to GLDM from the sale of the Seed
Creation Units were [XX] ounces of gold. Delivery of the Seed Creation Units was made on [Date].
The price of the Seed Creation Units was determined as
described above and such Shares could be sold at different prices if sold by the Seed Capital Investor at different times. Prior to this offering, there was no public market for the Shares.
The date of this Prospectus is [Date].
This Prospectus contains information you should consider when making an investment decision about the
Shares. You may rely on the information contained in this Prospectus. The Trust and the Sponsor have not authorized any person to provide you with different information and, if anyone provides you with different or inconsistent information, you
should not rely on it. This Prospectus is not an offer to sell the Shares in any jurisdiction where the offer or sale of the Shares is not permitted.
The
Shares are not registered for public sale in any jurisdiction other than the United States.
TABLE OF CONTENTS
Until [XX], 2018 (25 days after the date of this Prospectus), all dealers effecting transactions in the Shares, whether or not participating in this
distribution, may be required to deliver a prospectus. This requirement is in addition to the obligations of dealers to deliver a Prospectus when acting as underwriters and with respect to unsold allotments or subscriptions. The Sponsor first
intends to use this Prospectus on [XX].
Authorized Participants may be required to deliver a prospectus when making transactions in the Shares.
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The information contained in the section captioned “Overview of The Gold Industry” is based on
information obtained from sources that the Sponsor believes are reliable. This Prospectus summarizes certain documents and other information in a manner the Sponsor believes to be accurate. In making an investment decision, you must rely on your own
examination of the Trust, the gold industry, the operation of the Gold Bullion market, and the terms of the offering and the Shares, including the merits and risks involved. Although the Sponsor believes this information to be reliable, the accuracy
and completeness of this information is not guaranteed and has not been independently verified.
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Statement Regarding Forward-looking Statements
This Prospectus includes “forward-looking statements” which generally relate to future events or future performance. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “it is
likely” or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this Prospectus that address activities, events or developments that may occur in the future,
including such matters as changes in commodity prices and market conditions (for gold and the Shares), the Trust’s operations, the Sponsor’s plans and references to GLDM’s future success and other similar matters are forward-looking
statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor made based on its perception of historical trends, current conditions and
expected future developments, as well as other factors appropriate in the circumstances. Whether actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and
uncertainties, including the special considerations discussed in this Prospectus; general economic, market and business conditions; changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory
bodies; and other world economic and political developments. See “
Risk Factors
” starting on page 8. Consequently, all the forward-looking statements made in this Prospectus are qualified by these cautionary
statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on,
GLDM’s operations or the value of the Shares. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Except as required under Item 512 of Regulation S-K or
other applicable securities laws, none of the Trust, the Sponsor or the Marketing Agent is under a duty to update any of the forward-looking statements to conform such statements to actual results or to reflect a change in the Sponsor’s
expectations or predictions.
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Prospectus Summary
This is only a summary of the Prospectus and, while it contains material information about GLDM and the Shares, it does not contain or summarize all of the
information about GLDM and the Shares contained in this Prospectus which is material and/or which may be important to you. You should read this entire Prospectus, including “
Risk Factors
” beginning on page 8,
before making an investment decision about the Shares.
Definitions used in this Prospectus can be found in the Glossary of Defined Terms in
Appendix A.
TRUST STRUCTURE
The Trust
World Gold Trust, or the Trust, was formed as a Delaware statutory trust on August 27, 2014. The Trust consists of multiple series (each, a
“Series”). Each Series issues common units of beneficial interest, or Shares, which represent units of fractional undivided beneficial interest in and ownership of such Series. The term of the Trust and each Series is perpetual (unless
terminated earlier in certain circumstances). The Trust was organized in separate series as a Delaware statutory trust rather than as separate statutory trusts in order to achieve certain administrative and other efficiencies. Delaware Trust Company
is the sole Trustee of the Trust. The material terms of the Trust Declaration of Trust are discussed in greater detail under the section “The Declaration of Trust.”
GLDM
The Series offered pursuant to this Prospectus is
the SPDR
®
Gold MiniShares Trust, which is sometimes referred to herein as “GLDM.” The investment objective of GLDM is for the Shares to reflect the performance of the price of gold
bullion, less GLDM’s expenses. GLDM’s only ordinary recurring expense is the Sponsor’s annual fee of % of the NAV of GLDM. The Sponsor believes that, for many investors, the Shares represent a cost-effective
investment in gold. The Shares of GLDM represent units of fractional undivided beneficial interest in and ownership of GLDM and will be offered on a continuous basis. GLDM will issue and redeem Shares from time to time in Creation Units only to
Authorized Participants. GLDM Shares will trade under the ticker symbol GLDM on NYSE Arca and other securities exchanges. Authorized Participants and other investors will buy and sell Shares in the secondary market, largely in response to changing
demand for GLDM Shares. The principal offices of the Trust and GLDM are located at c/o WGC USA Asset Management Company, LLC, 685 Third Avenue, 27th Floor, New York, New York 10017.
The Sponsor
The Sponsor of the Trust and GLDM is WGC
USA Asset Management Company, LLC, or “WGC AM.” The Sponsor is a Delaware limited liability company and was formed on August 1, 2014. Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, WGC
(US) Holdings, Inc. (“WGCUS”), the sole member of the Sponsor, is not responsible for the debts, obligations and liabilities of the Sponsor solely by reason of being the sole member of the Sponsor. WGC AM is wholly-owned by WGCUS, a
corporation registered under Delaware law.
The Sponsor is responsible for establishing GLDM and for the registration of the Shares. The Sponsor will
generally oversee the performance of GLDM’s principal service providers, but will not exercise day-to-day oversight over such service providers. The Sponsor will maintain a public website on behalf of GLDM, containing information about GLDM and
the Shares. The Internet address of GLDM’s website will be http://www.spdrgoldshares.com. This Internet address is only provided here as a convenience to you, and the
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information contained on or connected to GLDM’s website is not considered part of this Prospectus. The general role and responsibilities of the Sponsor, as well as the principals and key
personnel of the Sponsor, are discussed in greater detail under the section “The Declaration of Trust — The Sponsor.”
The
Administrator
The Administrator of GLDM is BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or “BNYM”. The
Administrator is generally responsible for the day-to-day administration and operation of GLDM, including the calculation of the NAV of GLDM and the NAV per Share. The general role and responsibilities of the Administrator are discussed in greater
detail under the section “Description of Key Service Providers — The Administrator.”
The Transfer Agent
The Transfer Agent is BNYM. The Transfer Agent serves as GLDM’s transfer agent in connection with Creation and Redemption transactions of Shares and acts
as GLDM’s distribution disbursing agent. The Transfer Agent receives and processes orders from Authorized Participants to create and redeem Creation Units and coordinates the processing of such orders with the Custodian and The Depository Trust
Company, or “DTC.” The general role and responsibilities of the Transfer Agent are discussed in greater detail under the section “Description of Key Service Providers — The Transfer Agent.”
The Custodian (Cash Only)
The custodian of
GLDM’s cash, if any, is BNYM. BNYM is generally responsible for establishing and maintaining one or more cash accounts for GLDM. BNYM also maintains books and records segregating the assets of GLDM from the assets of any other series of the
Trust. The general role and responsibilities of BNYM as custodian of GLDM’s cash are discussed in greater detail under the section “Description of Key Service Providers — The Custodian (Cash Only).”
The Custodian
The Sponsor shall appoint ICBC
Standard Bank Plc as the Custodian of GLDM. The Custodian is responsible for the safekeeping of the Gold Bullion bars delivered to GLDM in connection with the creation of Creation Units by Authorized Participants. The Custodian also facilitates the
transfer of Gold Bullion into and out of GLDM through Gold Bullion accounts it maintains for Authorized Participants and GLDM. The Custodian is a market maker, clearer and approved weigher under the rules of the London Bullion Market Association, or
“LBMA.” In addition, the Custodian has agreed under the Allocated Gold Account Agreement to maintain insurance in connection with the storage of GLDM’s precious metal on such terms and conditions as it considers appropriate, which may
not cover the full amount of gold. There can be no guarantee such insurance will be sufficient to cover all potential loss of gold deposits. The general role, responsibilities and regulation of the Custodian are further described in section
“Description of Key Service Providers — The Custodian.”
The Marketing Agent
The Marketing Agent is State Street Global Advisors Funds Distributors, LLC. The Sponsor has entered into the Marketing Agent Agreement with the Marketing
Agent to assist the Sponsor in marketing the Shares. The Marketing Agent is a registered broker-dealer with the SEC and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
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The Trust Is an Emerging Growth Company
The Trust is an “emerging growth company” subject to reduced public company reporting requirements under U.S. federal securities laws. The Trust has
not elected to make use of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Jumpstart Our Business Startups Act of 2012, as amended, or the “JOBS Act.” This
election is irrevocable. However, under the JOBS Act, emerging growth companies like the Trust are subject to reduced public company reporting requirements, as more fully described in the section “Risk Factors.”
The Trust will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year on which the fifth anniversary of
its initial public offering of Shares occurs, (ii) the last day of the fiscal year on which the Trust has annual gross revenues of $1.07 billion or more and (iii) the Trust becoming a “large accelerated filer” within the meaning
of the Exchange Act. Other conditions that may trigger a loss of “emerging growth company” status, such as certain issuances of non-convertible debt, are not expected to apply to the Trust due to the limited nature of its operations.
GLDM’S OBJECTIVE
The investment objective of GLDM
is for the Shares to reflect the performance of the price of gold bullion, less the expenses of GLDM’s operations. GLDM’s only ordinary recurring expense is the Sponsor’s annual fee of % of the NAV of GLDM. The
Shares are designed for investors who want a cost-effective and convenient way to invest in gold. Advantages of investing in the Shares include:
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Ease and Flexibility of Investment.
The Shares trade on the NYSE Arca and provide institutional and retail investors with indirect access to the gold bullion market. The Shares may be bought and sold on the NYSE
Arca like any other exchange-listed securities, and the Shares regularly trade until 4:00 p.m. New York time.
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Expenses.
The Sponsor expects that, for many investors, costs associated with buying and selling the Shares in the secondary market and the payment of GLDM’s ongoing expenses will be lower than the costs
associated with buying and selling gold bullion and storing and insuring gold bullion in a traditional allocated gold bullion account.
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Investing in the Shares does not insulate the investor from certain risks, including price volatility. See “Risk Factors.”
PRINCIPAL OFFICES
GLDM’s office is located at
685 Third Avenue, 27th Floor, New York, New York 10017 and its telephone number is 212-317-3800. The Sponsor’s office is located at 685 Third Avenue, 27th Floor, New York, New York 10017 and its telephone number is 212-317-3800. The
Trustee’s office is located at 2711 Centerville Rd, Suite 400, Wilmington, Delaware 19808. The Administrator’s office is located at 2 Hanson Place, Brooklyn, New York 11217. The Transfer Agent’s office is located at 2 Hanson
Place, Brooklyn, New York 11217. The Custodian’s office is located at 20 Gresham Street, London, EC2V 7JE, United Kingdom. The Marketing Agent’s office is located at One Iron Street, Boston, Massachusetts 02210.
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The Offering
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Offering
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The Shares represent units of fractional undivided beneficial interest in and ownership of GLDM.
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Use of Proceeds
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Proceeds received by GLDM from the issuance and sale of Creation Units, including the Creation Units issued to the Seed Capital Investor, will consist of Gold Bullion deposits. During the life of GLDM such proceeds will only be (1) held by GLDM,
(2) disbursed or sold as needed to pay GLDM’s ongoing expenses and (3) distributed to Authorized Participants in connection with the redemption of Creation Units.
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Creation and Redemption
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GLDM expects to issue and redeem the Shares from time to time, but only in large aggregations of Shares (as of the date of this Prospectus, 100,000 Shares) referred to as Creation Units. Creation Units may be created or redeemed only by
Authorized Participants. The creation and redemption of Creation Units require the delivery to GLDM or the distribution by GLDM of the amount of Gold Bullion represented by the Creation Units being created or redeemed. The dollar amount of a
Creation Unit is a function of the NAV of the number of Shares included in the Creation Unit. The initial amount of Gold Bullion required for deposit with GLDM to create Shares is 1,000 ounces per Creation Unit. The number of ounces of Gold Bullion
required to create a Creation Unit or to be delivered upon the redemption of a Creation Unit gradually decreases over time, due to the accrual of GLDM’s expenses and the sale of GLDM’s Gold Bullion to pay GLDM’s expenses. Authorized
Participants will pay a transaction fee for each order to create or redeem Creation Units. Authorized Participants may sell the Shares included in the Creation Units they create to other investors. See the section “Creation and Redemption of
Shares” for more details.
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Net Asset Value
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The NAV of GLDM is the aggregate value of GLDM’s assets less its liabilities (which include estimated accrued but unpaid fees and expenses). The
NAV of GLDM is calculated based on the price of gold per ounce applied against the number of ounces of gold owned by GLDM. For purposes of calculating NAV, the number of ounces of gold owned by GLDM reflects the amount of gold delivered into (or out
of) GLDM on a daily basis by Authorized Participants creating and redeeming Shares. Except as otherwise described herein, in determining the NAV of GLDM, the Administrator generally will value the Gold Bullion held by GLDM on the basis of the LBMA
Gold Price PM. If no LBMA Gold Price PM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 p.m. New York time on a particular evaluation
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day, the next most recent LBMA Gold Price (AM or PM) is used in the determination of the NAV of GLDM, unless the Sponsor determines that such price is inappropriate to use as the basis for such
determination. If the Sponsor determines that such price is inappropriate to use, it shall identify an alternate basis for evaluation of the Gold Bullion held by GLDM.
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The Administrator will also determine the NAV per Share, which equals the NAV of GLDM, divided by the number of outstanding Shares.
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Purchases and Sales in the Secondary Market
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The Shares of GLDM will be listed on NYSE Arca and traded on NYSE Arca and other national securities exchanges.
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Creation Units of Shares in GLDM may be created or redeemed only by Authorized Participants. It is expected that Creation Units in GLDM will be created when there is sufficient demand for Shares in GLDM as when, for
example, the market price per Share is at a premium to the NAV per Share. Authorized Participants are expected to sell such Shares to the public at prices that are expected to reflect, among other factors, the intra-day value of gold and the supply
of and demand for Shares at the time of sale. Similarly, it is expected that Creation Units in GLDM will be redeemed when the market price per Share of GLDM is at a discount to the NAV per Share. Retail investors seeking to purchase or sell Shares
on any day are expected to effect such transactions in the secondary market, on NYSE Arca or other national securities exchanges, at the market price per Share, rather than in connection with the creation or redemption of Creation Units.
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The market price of the Shares of GLDM is not identical to the end-of-day NAV per Share. However, the market price per Share is expected to be close to the intra-day value of GLDM, which will be provided on GLDM’s
website at http://www.spdrgoldshares.com. Investors are able to use the indicative intra-day value per Share as a reference to help determine if they want to purchase or sell Shares in the secondary market. The indicative intra-day value per Share
of GLDM is based on the prior day’s final NAV, adjusted four times per minute throughout the trading day to reflect the continuous estimated price changes of GLDM’s investments in gold to provide a continuously updated estimated NAV per
Share. Retail investors may purchase and sell Shares through traditional brokerage accounts or other intermediaries. Purchases or sales of Shares may be subject to customary brokerage commissions and other transaction charges. Investors are
encouraged to review the terms of their brokerage accounts for applicable charges.
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GLDM Expenses
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GLDM’s only ordinary recurring expense is the Sponsor’s annual fee of % of the NAV of GLDM. The Sponsor’s annual
fee accrues
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daily and is payable by GLDM monthly in arrears. GLDM’s expenses will reduce the NAV of GLDM.
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Sponsor Fees
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The Sponsor will receive an annual fee equal to % of the daily NAV of GLDM. The Sponsor’s compensation is paid in consideration of the Sponsor’s (i) services under the Sponsor Agreement and the Declaration
of Trust and (ii) the payment by the Sponsor of the ordinary fees and expenses of GLDM, including but not limited to, the fees charged by the Administrator, the Custodian, the Marketing Agent and the Trustee. The Sponsor shall not be required
to pay any extraordinary expenses not incurred in the ordinary course of GLDM’s business. Extraordinary expenses are fees and expenses which are unexpected or unusual in nature, such as legal claims and liabilities and litigation costs or
indemnification or other unanticipated expenses. Extraordinary fees and expenses also include material expenses which are not currently anticipated obligations of GLDM. Routine operational, administrative and other ordinary expenses are not deemed
extraordinary expenses.
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Voting Rights
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Shareholders have no voting rights except as the Sponsor may consider desirable and so authorize in its sole discretion.
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Termination Events
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The Sponsor may terminate and liquidate GLDM or the Trust for any reason in its sole discretion. The Sponsor would likely terminate and liquidate GLDM if one of the following events occurs:
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DTC, the securities depository for the Shares, is unwilling or unable to continue as the securities depository for the Shares and the Sponsor determines that no suitable replacement is available;
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The Shares are de-listed from NYSE Arca and are not listed for trading on another U.S. national securities exchange within five Business Days from the date the Shares are de-listed; or
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The Trust fails to qualify for treatment, or ceases to be treated, for U.S. federal income tax purposes, as a grantor trust.
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For additional information relating to resignation of the Custodian, see “Risk Factors — Risks Relating to GLDM’s Operations — Risks Related to the Custodian — Resignation of the Custodian would
likely lead to the termination of GLDM if no successor is appointed.”
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Upon the termination of GLDM, the Sponsor will, within a reasonable time after the termination of GLDM, sell all of the Gold Bullion not already distributed to Authorized Participants redeeming Creation Units, if any,
and, after paying or making provision for GLDM’s liabilities, distribute the proceeds to the Shareholders. See “The Declaration of Trust — Termination of the Trust.”
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Authorized Participants
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Creation Units may be created or redeemed only by Authorized Participants. Each Authorized Participant must (1) be a registered
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broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions,
(2) be a DTC Participant, and (3) have entered into an agreement to create and redeem GLDM Shares, referred to as a “Participant Agreement.” The Participant Agreement provides the procedures for the creation and redemption of
Creation Units and for the delivery of Gold Bullion required for such creations or redemptions. A list of the current Authorized Participants can be obtained from the Administrator or the Sponsor. See “Creation and Redemption of Shares”
for more details.
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Clearance and Settlement
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The Shares will be evidenced by global certificates that the Trust issues to DTC. The Shares are available only in book-entry form. Shareholders may hold their Shares through DTC, if they are DTC Participants, or indirectly through entities that
are DTC Participants.
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SUMMARY OF FINANCIAL CONDITION
As of the date of this Prospectus, GLDM has not commenced operations and has no assets or liabilities.
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Risk Factors
You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in
this Prospectus, including GLDM’s financial statements and the related notes.
RISKS RELATED TO AN INVESTMENT IN SHARES
RISKS RELATED TO GOLD
The value of the
Shares is expected to relate directly to the value of the Gold Bullion held by GLDM and fluctuations in the price of gold could materially adversely affect an investment in the Shares.
The Shares are designed to mirror as closely as possible the performance of the price of gold, and the value of the Shares is expected to relate directly to
the value of the gold held by GLDM, less GLDM’s liabilities (including estimated accrued expenses). The price of gold has fluctuated widely over the past several years.
Several factors may affect the price of gold, including:
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Global gold supply and demand, which is influenced by such factors as gold’s uses in jewelry, technology and industrial applications, purchases made by investors in the form of bars, coins and other gold products,
forward selling by gold producers, purchases made by gold producers to unwind gold hedge positions, central bank purchases and sales, and production and cost levels in major gold-producing countries such as China, South Africa, the United States and
Australia;
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A significant change in the attitude of speculators and investors toward gold. Should the speculative community take a negative view toward gold, it could cause a decline in world gold prices, negatively impacting the
price of the Shares.
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Global or regional political, economic or financial events and situations, especially those unexpected in nature;
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Investors’ expectations with respect to the rate of inflation;
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Investment and trading activities of hedge funds and commodity funds;
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Other economic variables such as income growth, economic output, and monetary policies; and
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The Shares may experience significant price fluctuations. If gold markets continue to be
subject to sharp fluctuations, this may result in potential losses if you need to sell your Shares at a time when the price of gold is lower than it was when you made your investment. Even if you are able to hold Shares for the long-term, you may
never experience a profit, since gold markets have historically experienced extended periods of flat or declining prices, in addition to sharp fluctuations.
In addition, investors should be aware that while gold is used to preserve wealth by investors around the world, there is no assurance that gold will maintain
its long-term value in terms of future purchasing power. In the event that the price of gold declines, the Sponsor expects the value of an investment in the Shares to decline proportionately.
Furthermore, although gold has been used as a portfolio diversifier due to its historically low-to-negative correlation with stocks and bonds, diversification
does not ensure against risk of loss. See “Objective of GLDM — The Case for Investing in Gold” for more information about gold’s ability to serve as a potential portfolio diversifier.
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The sale of GLDM’s Gold Bullion to pay expenses at a time of low gold prices could adversely
affect the value of the Shares.
The Sponsor will sell Gold Bullion held by GLDM to pay GLDM expenses on an as-needed basis irrespective of
then-current gold prices. GLDM is not actively managed and no attempt will be made to buy or sell Gold Bullion to protect against or to take advantage of fluctuations in the price of gold. Consequently, GLDM’s Gold Bullion may be sold at a time
when the gold price is low, resulting in a negative effect on the value of the Shares.
An adverse development may lead to a decrease in Gold
Bullion trading prices.
An adverse development with respect to one or more factors such as global gold supply and demand, investors’
inflation expectations, exchange rate volatility and interest rate volatility may lead to a decrease in Gold Bullion trading prices. A decline in prices of gold would have a negative impact on the net asset value of GLDM.
Substantial sales of gold by the official sector could adversely affect an investment in the Shares.
The official sector consists of central banks, other governmental agencies and international organizations that buy, sell and hold gold as part of their
reserve assets. The official sector holds a significant amount of gold, most of which is static, meaning that it is held in vaults and is not bought, sold, leased or swapped or otherwise mobilized in the open market. A number of central banks have
sold portions of their gold over the past 10 years, with the result that the official sector, taken as a whole, has been a net supplier to the open market. Since 1999, most sales have been made in a coordinated manner under the terms of the Central
Bank Gold Agreement, as amended, or “CBGA,” under which 21 of the world’s major central banks (including the European Central Bank) agree to limit the level of their gold sales and lending to the market. In the event that future
economic, political or social conditions or pressures require members of the official sector to liquidate their gold assets all at once or in an uncoordinated manner, the demand for gold might not be sufficient to accommodate the sudden increase in
the supply of gold to the market. Consequently, the price of gold could decline significantly, which would adversely affect an investment in the Shares.
Crises may motivate large-scale sales of gold which could decrease the price of gold and adversely affect an investment in the Shares.
The possibility of large-scale distress sales of gold in times of crisis may have a short-term negative impact on the price of gold and adversely affect an
investment in the Shares. For example, the 2008 financial credit crisis resulted in significant sales of gold by individuals which depressed the price of gold due to forced sales and deleveraging by institutional investors such as hedge funds and
pension funds. Crises in the future may impair gold’s price performance which would, in turn, adversely affect an investment in the Shares.
Purchasing activity in the gold market associated with the delivery of Gold Bullion to GLDM in exchange for Creation Units may cause a temporary increase
in the price of gold. This increase may adversely affect an investment in the Shares.
Purchasing activity associated with acquiring the Gold Bullion
required for deposit into GLDM in connection with the creation of Creation Units may temporarily increase the market price of gold, which would likely result in higher prices for the Shares. Temporary increases in the market price of gold may also
occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of gold that may result from increased purchasing activity of gold connected with the
issuance of Creation Units. Consequently, the market price of gold may decline immediately after Creation Units are created. If the price of gold declines, it will have a negative impact on the value of the Shares.
The price of gold may be affected by the sale of gold by ETFs or other exchange traded vehicles tracking gold markets.
To the extent existing exchange traded funds, or “ETFs,” or other exchange traded vehicles tracking gold markets represent a significant proportion
of demand for physical Gold Bullion, large redemptions of the securities of
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these ETFs or other exchange traded vehicles could negatively affect physical Gold Bullion prices and the price and NAV of the Shares.
The value of the Gold Bullion held by GLDM is determined using the LBMA Gold Price PM. Potential discrepancies in the calculation of the LBMA Gold Price
PM, as well as any future changes to the LBMA Gold Price PM, could impact the value of the Gold Bullion held by GLDM and could have an adverse effect on the value of an investment in the Shares.
The LBMA Gold Price is determined twice each business day (10:30 a.m. and 3:00 p.m. London time) by the participants in a physically settled, electronic and
tradable auction administered by the IBA using a bidding process that determines the price of gold by matching buy and sell orders submitted by the participants for the applicable auction time. The net asset value of GLDM is determined each day
GLDM’s principal market, the NYSE Arca, is open for regular trading, using the LBMA Gold Price PM. If the LBMA Gold Price PM has not been announced by 12:00 p.m. New York time on a particular evaluation day, the next most recent LBMA Gold Price
(AM or PM) is used in the determination of the net asset value of GLDM. GLDM, the Sponsor, and the Trustee do not participate in establishing the LBMA Gold Price. Other trusts backed by physical gold also use the LBMA Gold Price to determine their
asset value. The LBMA Gold Price replaced the London Gold Fix on March 20, 2015 and has become a widely used benchmark for daily gold prices.
In the
event that the LBMA Gold Price PM does not prove to be an accurate benchmark, and the LBMA Gold Price PM varies materially from the price determined by other mechanisms, the Net Asset Value of GLDM and the value of an investment in the Shares could
be adversely impacted. Any future developments in the benchmark, to the extent they have a material impact on the LBMA Gold Price PM, could adversely impact the Net Asset Value of the Trust and the value of an investment in the Shares. Further, the
calculation of the LBMA Gold Price PM is not an exact process. Rather it is based upon a procedure of matching orders from participants in the auction process and their customers to sell gold with orders from participants in the auction process and
their customers to buy gold at particular prices. The LBMA Gold Price PM does not therefore purport to reflect each buyer or seller of gold in the market, nor does it purport to set a definitive price for gold at which all orders for sale or
purchase will take place on that particular day or time. All orders placed into the auction process by the participants will be executed on the basis of the price determined pursuant to the LBMA Gold Price PM auction process (provided that orders
may be cancelled, increased or decreased while the auction is in progress). It is possible that electronic failures or other unanticipated events may occur that could result in delays in the announcement of, or the inability of the system to
produce, an LBMA Gold Price PM on any given date.
If concerns about the integrity or reliability of the LBMA Gold Price PM arise, even if
eventually shown to be without merit, such concerns could adversely affect investor interest in gold and therefore adversely affect the price of gold and the value of an investment in the Shares.
Because the net asset value of GLDM is determined using the LBMA Gold Price PM, discrepancies in, or manipulation of the calculation of the LBMA Gold Price PM
could have an adverse impact on the value of an investment in the Shares. Furthermore, any concern about the integrity or reliability of the pricing mechanism could disrupt trading in gold and products using the LBMA Gold Price PM, such as the
Shares. In addition, these concerns could potentially lead to changes in the manner in which the LBMA Gold Price PM is calculated and/or the discontinuance of the LBMA Gold Price PM altogether. Each of these factors could lead to less liquidity or
greater price volatility for gold and products using the LBMA Gold Price PM, such as the Shares, or otherwise could have an adverse impact on the trading price of the Shares.
Because GLDM invests only in gold, an investment in GLDM may be more volatile than an investment in a more broadly diversified portfolio.
GLDM invests only in gold. As a result, GLDM’s holdings are not diversified. Accordingly, GLDM’s net asset value may be more volatile than another
investment vehicle with a more broadly diversified portfolio and may
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fluctuate substantially over short or long periods of time. Fluctuations in the price of gold are expected to have a direct impact on the value of the shares.
An investment in GLDM may be deemed speculative and is not intended as a complete investment program. An investment in Shares should be considered only by
persons financially able to maintain their investment and who can bear the risk of loss associated with an investment in GLDM. Investors should review closely the objective and strategy and redemption provisions of GLDM, as discussed herein, and
familiarize themselves with the risks associated with an investment in GLDM.
An investment in the Shares may be adversely affected by competition
from other methods of investing in gold.
GLDM competes with other financial vehicles, including traditional debt and equity securities issued by
companies in the gold industry and other securities backed by or linked to gold, direct investments in gold and investment vehicles similar to GLDM. Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it
more attractive to invest in other financial vehicles or to invest in gold directly, which could limit the market for the Shares and reduce the liquidity of the Shares.
RISKS RELATED TO GLDM
GLDM is a passive
investment vehicle. This means that the value of the Shares may be adversely affected by GLDM losses that, if GLDM had been actively managed, it might have been possible to avoid.
GLDM is not actively managed. This means that GLDM does not sell Gold Bullion at times when its price is high, or acquire Gold Bullion at low prices in the
expectation of future price increases. It also means that GLDM does not make use of any of the hedging techniques available to professional gold investors to attempt to reduce the risks of losses resulting from price decreases. Any losses sustained
by GLDM will adversely affect the value of the Shares.
The costs inherent in buying or selling GLDM shares may detract significantly from investment
results.
Buying or selling GLDM shares on an exchange involves two types of costs that apply to all securities transactions effectuated on an
exchange. When buying or selling shares of GLDM through a broker or other intermediary, you will likely incur a brokerage commission or other charges imposed by that broker or intermediary. In addition, you may incur the cost of the
“spread,” that is, the difference between what investors or market makers are willing to pay for GLDM shares (the “bid” price) and the price at which they are willing to sell GLDM shares (the “ask” price). Because of
the costs inherent in buying or selling GLDM shares, frequent trading may detract significantly from investment results and an investment in GLDM shares may not be advisable for investors who anticipate regularly making small investments.
The lack of an active trading market or a halt in trading of the Shares may result in losses on investment at the time of disposition of the Shares.
Although Shares are listed for trading on NYSE Arca, there can be no assurance that an active trading market for the Shares will be maintained. If an
investor needs to sell Shares at a time when no active market for Shares exists, or there is a halt in trading of securities generally or of the Shares, this will most likely adversely affect the price the investor receives for the Shares (assuming
the investor is able to sell them).
The Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the
trading price relative to the NAV per Share may widen as a result of non-concurrent trading hours between the COMEX division of the New York Mercantile Exchange, or the COMEX, and the NYSE Arca.
The Shares may trade at, above or below the NAV per Share. The NAV per Share fluctuates with changes in the market value of GLDM’s assets. The trading
price of the Shares fluctuates in accordance with changes in the
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NAV per Share as well as market supply and demand. The amount of the discount or premium in the trading price relative to the NAV per Share may be influenced by non-concurrent trading hours
between the COMEX and the NYSE Arca. While the Shares trade on the NYSE Arca until 4:00 p.m. New York time, liquidity in the global gold market may be reduced after the close of the COMEX at 1:30 p.m. New York time. As a result, during this time,
trading spreads on the Shares, and the resulting premium or discount, may widen.
While the creation/redemption feature is designed to make it more likely
that GLDM’s shares normally will trade on stock exchanges at prices close to GLDM’s next calculated NAV (because shares can be created and redeemed in Creation Units at NAV unlike shares of many closed-end funds, which frequently trade at
appreciable discounts from, and sometimes at premiums to, their NAVs), exchange prices are not expected to correlate exactly with GLDM’s NAV due to timing reasons, supply and demand imbalances and other factors. In addition, disruptions to
creations and redemptions, including disruptions at market makers or Authorized Participants, or to market participants or during periods of significant market volatility, may result in trading prices for shares of GLDM that differ significantly
from its NAV.
If the process of creation and redemption of Creation Units encounters any unanticipated difficulties, the possibility for
arbitrage transactions intended to keep the price of the Shares closely linked to the price of gold may not exist and, as a result, the price of the Shares may fall.
If the process for the creation and redemption of shares by Authorized Participants (which depends on, among other things, timely transfers of Gold Bullion to
and by the Custodian) encounters any unanticipated difficulties, potential market participants who would otherwise be willing to purchase or redeem Creation Units to take advantage of arbitrage opportunities may not do so. If this is the case, the
liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the price of gold and may fall.
The amount of gold
represented by the Shares will continue to be reduced during the life of GLDM due to the sales of Gold Bullion necessary to pay GLDM’s expenses irrespective of whether the trading price of the Shares rises or falls in response to changes in the
price of gold.
Each outstanding Share represents a fractional, undivided interest in the Gold Bullion held by GLDM. GLDM does not generate any income
and regularly sells Gold Bullion to pay for its ongoing expenses. Therefore, the amount of Gold Bullion represented by each Share will gradually decline over time. This is also true with respect to Shares that are issued in exchange for additional
deposits of Gold Bullion into GLDM, as the amount of Gold Bullion required to create Shares proportionately reflects the amount of Gold Bullion represented by the Shares outstanding at the time of creation. Assuming a constant gold price, the
trading price of the Shares is expected to gradually decline relative to the price of gold as the amount of Gold Bullion represented by the Shares gradually declines.
Investors should be aware that the gradual decline in the amount of Gold Bullion represented by the Shares will occur regardless of whether the trading price
of the Shares rises or falls in response to changes in the price of gold. The estimated ordinary operating expenses of GLDM, which accrue daily commencing after the first day of trading of the Shares, will be described in GLDM’s Annual Report
on Form 10-K, when available.
Market disruption events or extraordinary events could cause a disruption in the operation of GLDM and its secondary
market.
From time to time, unexpected events may disrupt the operations of GLDM. These events are expected to be relatively rare, although there can
be no assurance they will not occur. These events are referred to as either “Market Disruption Events” or “Extraordinary Events” depending largely on their significance and potential impact on GLDM. The occurrence of any Market
Disruption Event or Extraordinary Event could have a material adverse impact on GLDM, the trading of Shares, and the value of an investment in the Shares. Examples of Market Disruption Events or Extraordinary Events include disruptions in the
trading of gold, as well as delays or
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disruptions in the publication of the LBMA Gold Price. The occurrence of a Market Disruption Event or Extraordinary Event may result in, among other things (i) a disruption or change in the
calculation of the LBMA Gold Price, (ii) the suspension or cancellation of creation and redemption transactions, and/or (iii) disruptions or halts in secondary market trading. Market Disruption Events and Extraordinary Events could also
cause secondary market trading of Shares to be disrupted or halted for short or event long periods of time. To the extent trading continues during a Market Disruption Event or Extraordinary Event, it is expected that trading would be more volatile
and that Shares would trade at wider discounts or premiums to net asset value. The occurrence of any Market Disruption Event or Extraordinary Event could have a material adverse impact on GLDM or its performance.
RISKS RELATED TO GLDM’S OPERATIONS
RISKS
RELATED TO GLDM
GLDM is exposed to various operational risks.
GLDM is exposed to various operational risks, including human error, information technology failures and failure to comply with formal procedures intended to
mitigate these risks, and is particularly dependent on electronic means of communicating, recordkeeping and otherwise conducting business. In addition, GLDM generally exculpates, and in some cases indemnifies its service providers with respect to
losses arising from unforeseen circumstances and events, which may include the interruption, suspension or restriction of trading on, or the closure of NYSE Arca, power or other mechanical or technological failures or interruptions, computer
viruses, communications disruptions, work stoppages, natural disasters, fire, war, terrorism, riots, rebellions or other circumstances beyond its or its service providers’ control. Accordingly, GLDM generally bears the risk of loss with respect
to these unforeseen circumstances and events to the extent relating to GLDM or the Shares.
Although it is expected that GLDM’s service providers
will generally have disaster recovery or similar programs or safeguards in place to mitigate the effect of such unforeseen circumstances and events, these safeguards may not be in place for all parties whose activities may affect the performance of
GLDM, and these safeguards, even if implemented, may not be successful in preventing losses associated with such unforeseen circumstances and events. Moreover, the systems and applications on which GLDM relies may not continue to operate as
intended. In addition to potentially causing performance failures at, or direct losses to, GLDM, any such unforeseen circumstances and events or operational failures may further distract the service providers or personnel on which GLDM relies,
reducing their ability to conduct the activities on which GLDM is dependent. These risks cannot be fully mitigated or prevented, and further efforts or expenditures to do so may not be cost effective, whether due to reduced benefits from
implementing additional or redundant safeguards or due to increases in associated maintenance requirements and other expenses that may make it more costly for GLDM to operate in more typical circumstances.
GLDM relies on the information and technology systems of the Administrator and Transfer Agent, the Custodian, the Marketing Agent and, to a lesser degree,
the Sponsor, which could be adversely affected by information systems interruptions, cybersecurity attacks or other disruptions which could have a material adverse effect on our record keeping and operations.
The Custodian, the Administrator and Transfer Agent, the Marketing Agent and, to a lesser degree, the Sponsor, depend upon information technology
infrastructure, including network, hardware and software systems to conduct their business as it relates to GLDM. A cybersecurity incident, or a failure to protect their computer systems, networks and information against cybersecurity threats, could
result in loss or unintended disclosure of information or loss or theft of GLDM assets, and could adversely impact the ability of GLDM’s service providers to conduct their business, including their business on behalf of GLDM. Despite
implementation of network and other cybersecurity measures, these security measures may not be adequate to protect against all cybersecurity threats.
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GLDM may be required to terminate and liquidate at a time that is disadvantageous to Shareholders.
If GLDM is required to terminate and liquidate, such termination and liquidation could occur at a time which is disadvantageous to Shareholders, such
as when gold prices are lower than the gold prices at the time when Shareholders purchased their Shares. In such a case, when GLDM’s Gold Bullion is sold as part of GLDM’s liquidation, the resulting proceeds distributed to Shareholders
will be less than if gold prices were higher at the time of sale.
Redemption orders may be subject to postponement, suspension or rejection under
certain circumstances.
GLDM has the right, but not the obligation, to reject any Redemption Order if (i) the order is not in proper form as
described in the Participant Agreement, (ii) the fulfillment of the order, in the opinion of its counsel, might be unlawful, (iii) if GLDM determines that acceptance of the order from an Authorized Participant would expose GLDM to credit
risk, or (iv) circumstances outside the control of the Administrator, the Sponsor or the Custodian make the redemption, for all practical purposes, not feasible to process.
GLDM may, in its discretion, and will when directed by the Sponsor, suspend the right of redemption, or postpone the redemption settlement date: (1) for
any period during which NYSE Arca is closed other than customary weekend or holiday closings, or trading on NYSE Arca is suspended or restricted, (2) for any period during which an emergency exists as a result of which delivery, disposal or
evaluation of Gold Bullion is not reasonably practicable, or (3) for such other period as the Sponsor determines to be necessary for the protection of the Shareholders.
Any such postponement, suspension or rejection could adversely affect redeeming Shareholders. For example, the resulting delay may adversely affect the value
of a Shareholder’s redemption distribution if the price of the Shares declines during the period of the delay.
The Sponsor will not be liable to any
person or liable in any way for any loss or damages that may result from any such rejection, suspension or postponement.
RISKS RELATED TO THE
SHARES
The liquidity of the Shares may be affected by the withdrawal of Authorized Participants and substantial redemptions by Authorized
Participants.
In the event that one or more Authorized Participants which has substantial interests in the Shares withdraws from participation, the
liquidity of the Shares will likely decrease, which could adversely affect the market price of the Shares. The liquidity of the Shares also may be affected by substantial redemptions by Authorized Participants related to or independent of the
withdrawal from participation of Authorized Participants. In the event that there are substantial redemptions of Shares or one or more Authorized Participants with a substantial interest in the Shares withdraws from participation, the liquidity of
the Shares will likely decrease which could adversely affect the market price of the Shares and result in your incurring a loss on your investment.
Shareholders do not have the rights enjoyed by investors in certain other vehicles.
As interests in an investment trust, the Shares have none of the statutory rights normally associated with the ownership of shares of a corporation (including,
for example, the right to bring “oppression” or “derivative” actions). In addition, the Shares have limited voting and distribution rights (for example, Shareholders do not have the right to elect directors and will not receive
dividends). See “Description of the Shares” for a description of the limited rights of holders of Shares.
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RISKS RELATED TO GOLD
GLDM’s Gold Bullion may be subject to loss, damage, theft or restriction on access.
There is a risk that some or all of GLDM’s Gold Bullion bars held by the Custodian or any subcustodian on behalf of GLDM could be lost, damaged or stolen.
Access to GLDM’s Gold Bullion bars could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of GLDM and, consequently, an
investment in the Shares.
GLDM may not have adequate sources of recovery if its Gold Bullion is lost, damaged, stolen or destroyed and recovery may be
limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered.
Shareholders’ recourse against GLDM,
the Administrator, the Trustee and the Sponsor under Delaware law, the Custodian under English law, and any subcustodians under the law governing their custody operations is limited. GLDM does not insure its gold. The Custodian has agreed to
maintain insurance in connection with the storage of GLDM’s precious metal under the Allocated Gold Account Agreement, including covering any loss of gold, on such terms and conditions as it considers appropriate which may not cover the full
amount of gold. The Custodian will provide the Trust with evidence of the Custodian’s insurance at GLDM’s request within 10 business days following the end of the calendar year. GLDM is not a beneficiary of any such insurance and does not
have the ability to dictate the nature or amount of coverage. Therefore, Shareholders cannot be assured that the Custodian will maintain adequate insurance or any insurance with respect to the gold held by the Custodian on behalf of GLDM. In
addition, the Custodian and the Trust do not require any subcustodians to be insured or bonded with respect to their custodial activities or in respect of the Gold Bullion held by them on behalf of GLDM. Consequently, a loss may be suffered with
respect to GLDM’s gold which is not covered by insurance and for which no person is liable in damages.
The liability of the Custodian is limited
under the Custody Agreements. Under the Custody Agreements, the Custodian is only liable for losses that are the direct result of its own negligence, fraud or willful default in the performance of its duties. Any such liability is further limited to
the market value of the Gold Bullion bars held in the Fund Allocated Account and the amount of gold credited to the Fund Unallocated Account at the time such negligence, fraud or willful default either is discovered by or notified to the Custodian.
The Custodian is only liable for losses suffered by an Authorized Participant that are the direct result of its own gross negligence, fraud or willful default in the performance of its duties under such agreement, and in no event will its liability
exceed the market value of the balance in an Authorized Participant’s unallocated gold account at the time such gross negligence, fraud or willful default is discovered by the Custodian.
In addition, the Custodian will not be liable for any delay in performance or any non-performance of any of its obligations under the Custody Agreements by
reason of any cause beyond its reasonable control, including acts of God, war or terrorism. As a result, the recourse of the Administrator or the investor, under English law, is limited. Furthermore, under English common law, the Custodian or any
subcustodian will not be liable for any delay in the performance or any non-performance of its custodial obligations by reason of any cause beyond its reasonable control.
Gold Bullion bars may be held by one or more subcustodians appointed by the Custodian until it is transported to the Custodian’s vault premises. Under
the Allocated Gold Account Agreement, except for an obligation on the part of the Custodian to use commercially reasonable efforts to obtain delivery of GLDM’s gold bars from any subcustodians appointed by the Custodian, the Custodian is not
liable for the acts or omissions, or for the solvency, of its subcustodians unless the selection of such subcustodians was made by the Custodian fraudulently, negligently or in bad faith. There are expected to be no written contractual arrangements
between subcustodians that hold GLDM’s gold bars and the Trust or the Custodian, because traditionally such arrangements are based on the LBMA’s rules and on the customs and practices of the London bullion market. In the event of a legal
dispute with respect to or arising from such arrangements, it may be difficult to define such
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customs and practices. The LBMA’s rules may be subject to change outside the control of GLDM. Under English law, neither the Trust, nor the Custodian would have a supportable breach of
contract claim against a subcustodian for losses relating to the safekeeping of gold. If GLDM’s Gold Bullion bars are lost or damaged while in the custody of a subcustodian, GLDM has only limited rights, and depending on the circumstances, may
have no right to recover damages from the Custodian or the subcustodian.
The obligations of the Custodian under the Allocated Gold Account Agreement and
the Unallocated Gold Account Agreement are governed by English law. The Custodian may enter into arrangements with English subcustodians, which arrangements may also be governed by English law. The Trust is a Delaware statutory trust. Any United
States, Delaware or other court situated in the United States may have difficulty interpreting English law (which, insofar as it relates to custody arrangements, is largely derived from court rulings rather than statute), LBMA rules or the customs
and practices in the London custody market. It may be difficult or impossible for GLDM to sue a subcustodian in a United States, Delaware or other court situated in the United States. In addition, it may be difficult, time consuming and/or expensive
for the Trust to enforce in a foreign court a judgment rendered by a United States, Delaware or other court situated in the United States.
If GLDM’s
Gold Bullion bars are lost, damaged, stolen or destroyed under circumstances rendering a party liable to GLDM, the responsible party may not have the financial resources sufficient to satisfy GLDM’s claim. For example, as to a particular event
of loss, the only source of recovery for GLDM might be limited to the Custodian, as currently it is the sole custodian holding all of GLDM’s gold; or one or more subcustodians, if appointed; or, to the extent identifiable, other responsible
third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim of GLDM.
Neither the Shareholders nor any Authorized Participant has a right under the Custody Agreements to assert a claim of the Trust against the Custodian or any
subcustodian; claims under the Custody Agreements may only be asserted by the Trust on behalf of GLDM.
Gold Bullion allocated to GLDM in connection
with the creation of a Creation Unit may not meet the London Good Delivery Standards and, if a Creation Unit is issued against such Gold Bullion, GLDM may suffer a loss.
Neither the Administrator nor the Custodian independently confirms the fineness of the gold allocated to GLDM in connection with the creation of a Creation
Unit. The Gold Bullion allocated to GLDM by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for Gold Bullion bars delivered in settlement of a gold trade (London Good Delivery Standards), the
standards required by GLDM. If the Administrator nevertheless issues a Creation Unit against such gold, and if the Custodian fails to satisfy its obligation to credit GLDM the amount of any deficiency, GLDM may suffer a loss. The London Good
Delivery Standards are described in “The Gold Industry — The London Bullion Market.” The Custodian’s responsibility for the allocation to GLDM of gold meeting LBMA standards is described in “Custody Agreements —
Transfers from the Fund Unallocated Account.”
RISKS RELATED TO THE CUSTODIAN
GLDM will rely on the Custodian for the safekeeping of essentially all of GLDM’s Gold Bullion. As a result, failure by the Custodian to exercise due
care in the safekeeping of GLDM’s Gold Bullion could result in a loss to GLDM.
GLDM will be reliant on the Custodian for the safekeeping of
essentially all of GLDM’s Gold Bullion. The Administrator is not liable for the acts or omissions of the Custodian. The Administrator has no obligation to monitor the activities of the Custodian other than to receive and review reports prepared
by the Custodian pursuant to the Custody Agreements. In addition, the ability to monitor the performance of the Custodian may be limited because under the Custody Agreements the Trust and the Sponsor and any accountants or other inspectors
16
selected by the Sponsor have only limited rights to visit the premises of the Custodian for the purpose of examining GLDM’s Gold Bullion and certain related records maintained by the
Custodian. As a result of the above, any failure by the Custodian to exercise due care in the safekeeping of GLDM’s gold may not be detectable or controllable by the Administrator and could result in a loss to GLDM.
Failure by the subcustodians to exercise due care in the safekeeping of GLDM’s Gold Bullion bars could result in a loss to GLDM.
Under the Allocated Gold Account Agreement, the Custodian agreed that it will hold all of GLDM’s Gold Bullion bars in its own vault premises except when
the Gold Bullion bars have been allocated in a vault other than the Custodian’s vault premises, and in such cases the Custodian agreed that it will use commercially reasonable efforts promptly to transport the Gold Bullion bars to the
Custodian’s vault, at the Custodian’s cost and risk. Nevertheless, there will be periods of time when some portion of GLDM’s Gold Bullion bars will be held by one or more subcustodians appointed by the Custodian. The Allocated Gold
Account Agreement is described in “Custody Agreements.”
The Custodian is required under the Allocated Gold Account Agreement to use reasonable
care in appointing its subcustodians and will monitor the conduct of each subcustodian, and, where it is legally permissible for the Custodian to do so, promptly advise the Trust of any difficulties or problems existing with respect to such
subcustodian of which the Custodian is aware. However, the Gold Bullion held by a subcustodian is held in the name of the Custodian, and not in the name of GLDM, and the account with each subcustodian is only subject to the Custodian’s
instructions. In the event a subcustodian fails to exercise due care in the safekeeping of the fund’s Gold Bullion, there could be a resulting loss to the fund, and the fund may have limited, or no ability, to pursue any action against the
subcustodian. See “Description of Key Service Providers — Custody Agreements” for more information about subcustodians that may hold GLDM’s Gold Bullion.
The ability of the Administrator and the Custodian to take legal action against subcustodians may be limited, which increases the possibility that GLDM may
suffer a loss if a subcustodian does not use due care in the safekeeping of GLDM’s Gold Bullion bars.
If any subcustodian which holds Gold
Bullion on a temporary basis does not exercise due care in the safekeeping of GLDM’s Gold Bullion bars, the ability of the Trust or the Custodian to recover damages against such subcustodian may be limited to only such recourse, if any, as may
be available under applicable English law or, if the subcustodian is not located in England, under other applicable law. This is because there are expected to be no written contractual arrangements between subcustodians who may hold GLDM’s Gold
Bullion bars and the Trust or the Custodian, as the case may be. If the Trust’s or the Custodian’s recourse against the subcustodian is so limited, GLDM may not be adequately compensated for the loss. For more information on the
Trust’s and the Custodian’s ability to seek recovery against subcustodians and the subcustodian’s duty to safekeep GLDM’s Gold Bullion bars, see “Description of Key Service Providers — Custody Agreements.”
Gold Bullion held in GLDM’s unallocated Gold Bullion account and any Authorized Participant’s unallocated Gold Bullion account will not be
segregated from the Custodian’s assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by GLDM or any Authorized Participant. In addition, in the event of the Custodian’s insolvency, there may be a
delay and costs incurred in identifying the Gold Bullion bars held in GLDM’s allocated Gold Bullion account.
Gold Bullion which is part of a
deposit for a purchase order or part of a redemption distribution will be held for a time in the Fund Unallocated Account and in the case of creations and redemptions, previously or subsequently, in the unallocated gold account of the purchasing or
redeeming Authorized Participant. During those times, GLDM and the Authorized Participant, as the case may be, will have no proprietary rights to any specific bars of Gold Bullion held by the Custodian and will each be an unsecured creditor of the
Custodian with respect to the amount of Gold Bullion held in such unallocated accounts. In addition, if the Custodian fails to allocate GLDM’s
17
Gold Bullion in a timely manner, in the proper amounts or otherwise in accordance with the terms of the Unallocated Gold Account Agreement, or if a subcustodian fails to so segregate Gold Bullion
held by it on behalf of GLDM, unallocated Gold Bullion will not be segregated from the Custodian’s assets, and GLDM will be an unsecured creditor of the Custodian with respect to the amount so held in the event of the insolvency of the
Custodian. In the event the Custodian becomes insolvent, the Custodian’s assets might not be adequate to satisfy a claim by GLDM or the Authorized Participant for the amount of Gold Bullion held in their respective unallocated Gold Bullion
accounts.
In the event of the insolvency of the Custodian, a liquidator may seek to freeze access to the Gold Bullion held in all of the accounts held by
the Custodian, including the Fund Allocated Account. Although GLDM would retain legal title to the allocated Gold Bullion bars, GLDM could incur expenses in connection with obtaining control of the allocated Gold Bullion bars, and the assertion of a
claim by such liquidator for unpaid fees due to the Custodian could delay creations and redemptions of Creation Units.
The lack of diversification of
warehouse locations for the physical Gold Bullion held by the Custodian could result in significant losses to GLDM if the Gold Bullion warehoused at such locations is lost, damaged, stolen or inaccessible.
Unless otherwise agreed between GLDM and the Custodian, custody of the Gold Bullion deposited with and held for the account of GLDM is provided by the
Custodian at its London, England vault or, when Gold Bullion has been allocated in a vault other than the Custodian’s London vault premises, by or for any subcustodian employed by the Custodian for the temporary custody and safekeeping of Gold
Bullion until it can be transported to the Custodian’s London vault premises. The lack of diversification of warehouse locations could result in significant losses to GLDM if GLDM’s Gold Bullion bars held by the Custodian or any
subcustodian on behalf of GLDM at any single location are lost, damaged, or stolen. The lack of diversification of warehouse locations could also result in significant losses if the Gold Bullion warehoused at a single location becomes inaccessible
for a substantial period of time due to natural events (such as an earthquake) or human actions (such as a terrorist attack).
The Custodian is authorized
to appoint from time to time one or more subcustodians to hold GLDM’s Gold Bullion until it can be transported to the Custodian’s vault.
Resignation of the Custodian would likely lead to the termination of GLDM if no successor is appointed.
GLDM and the Custodian may each terminate any Custody Agreement. The Sponsor would likely terminate and liquidate GLDM if the Custody Agreements are terminated
and no successor custodian is appointed by the Sponsor. No assurance can be given that the Sponsor would be able to find an acceptable replacement custodian.
RISKS RELATED TO THE SERVICE PROVIDERS
The
service providers engaged by GLDM may not carry adequate insurance to cover claims against them by GLDM, which could adversely affect the value of net assets of GLDM.
The Administrator, the Custodian and other service providers engaged by GLDM maintain such insurance as they deem adequate with respect to their respective
businesses. Investors cannot be assured that any of the aforementioned parties will maintain any insurance with respect to GLDM’s assets held or the services that such parties provide to GLDM and, if they maintain insurance, that such insurance
is sufficient to satisfy any losses incurred by them in respect of their relationship with GLDM. Accordingly, GLDM will have to rely on the efforts of the service provider to recover from their insurer compensation for any losses incurred by GLDM in
connection with such arrangements.
18
GLDM’s obligation to indemnify certain of its service providers could adversely affect an
investment in the Shares.
GLDM has agreed to indemnify certain of its service providers, including the Custodian, the Sponsor and the Trustee, for
certain liabilities incurred by such parties in connection with their respective agreements to provide services for GLDM. In the event GLDM is required to indemnify any of its service providers, GLDM may be required to sell Gold Bullion to cover
such expenses and GLDM’s NAV would be reduced accordingly, thus adversely affecting an investment in the Shares.
Potential conflicts of interest
may arise among the Sponsor or its affiliates and GLDM.
The Sponsor will manage the business and affairs of GLDM. Conflicts of interest may arise
among the Sponsor and its affiliates, on the one hand, and GLDM and its Shareholders, on the other hand. As a result of these conflicts, the Sponsor may favor its own interests and the interests of its affiliates over GLDM and its Shareholders.
These potential conflicts include, among others, the following:
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The Trust has agreed to indemnify the Sponsor and its affiliates pursuant to the terms of the Declaration of Trust;
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The Sponsor, its affiliates and their officers and employees are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with GLDM; and
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•
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The Sponsor decides whether to retain separate counsel, accountants or others to perform services for GLDM.
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REGULATORY RISKS
Shareholders do not have the
protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the Commodity Exchange Act of 1936.
The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Consequently,
Shareholders do not have the regulatory protections provided to investors in registered investment companies. The Trust will not hold or trade in commodity futures contracts regulated by the CEA as administered by the CFTC. Furthermore, GLDM is not
a commodity pool for purposes of the CEA, and none of the Sponsor, the Trustee, or the Marketing Agent is subject to regulation by the CFTC as a commodity pool operator in connection with the Shares or a commodity trading advisor in connection with
the Shares. Consequently, Shareholders do not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools.
The Gold Bullion custody operations of the Custodian are not subject to specific governmental regulatory supervision.
The Custodian is responsible for the safekeeping of GLDM’s Gold Bullion and also facilitates the transfer of Gold Bullion into and out of GLDM. Although
the Custodian is a market maker, clearer and approved weigher under the rules of the LBMA (which sets out good practices for participants in the bullion market), the LBMA is not an official or governmental regulatory body. Furthermore, although the
Custodian is generally regulated in the UK by the Prudential Regulatory Authority and the Financial Conduct Authority, such regulations do not directly cover the Custodian’s Gold Bullion custody operations in the UK. Accordingly, GLDM is
dependent on the Custodian to comply with the best practices of the LBMA and to implement satisfactory internal controls for its Gold Bullion custody operations in order to keep GLDM’s Gold Bullion secure.
The Listing Exchange may halt trading in the Shares, which would adversely impact your ability to sell your Shares.
The Shares will be listed for trading on NYSE Arca under the symbol “GLDM.” Trading in the Shares may be halted due to market conditions or for other
reasons. For example, trading of the Shares may be halted by NYSE
19
Arca in accordance with NYSE Arca rules and procedures, for reasons that, in the view of NYSE Arca, make trading in the Shares inadvisable. Trading may also be halted by NYSE Arca in the event
certain information about the value of the Shares or the NAV is not made available as required by such rules and procedures.
In addition, shares of
GLDM may trade in the secondary market at times when GLDM does not accept orders to purchase or redeem shares. At such times, shares may trade in the secondary market with more significant premiums or discounts than might be experienced at times
when GLDM accepts purchase and redemption orders.
Also, trading generally on NYSE Arca is subject to trading halts caused by extraordinary market
volatility pursuant to “circuit breaker” rules that require trading to be halted for a specified period based on a specified market decline. There can be no assurance that the requirements necessary to maintain the listing of the Shares
will continue to be met or will remain unchanged. GLDM will be dissolved if the Shares are delisted from NYSE Arca and are not approved for listing on another national securities exchange within five Business Days of their delisting.
The Trust is an emerging growth company subject to reduced public company reporting requirements.
The Trust is an “emerging growth company” as defined in the JOBS Act. The Trust has not elected to make use of the extended transition period for
complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, which election is irrevocable. However, for so long as the Trust remains an emerging growth company, it will be subject to reduced public company
reporting requirements. Among other things, emerging growth companies are exempt from the auditor attestation requirements under Section 404(b) of the Sarbanes-Oxley Act, are exempt from certain “say on pay” provisions of the
Dodd-Frank Act, and are subject to reduced disclosure requirements relating to executive compensation and audited financial statements. The Trust may take advantage of the exemptions and scaled requirements applicable to emerging growth companies.
TAX RISKS
If a U.S. investor who or that
is an individual, estate or trust (each referred to in this paragraph and the next paragraph as an “individual”) sells or exchanges shares held for more than a year, any gain recognized on the sale or exchange generally will be subject to
federal income tax at a maximum rate of 28% rather than the lower maximum rates applicable to most other long-term capital gains an individual recognizes.
Gains recognized by an individual from the sale of “collectibles,” which term includes gold held for more than one year, are subject to federal
income tax at a maximum rate of 28% rather than the lower maximum rates applicable to most other long-term capital gains individuals recognize (currently a maximum of 20% for individuals). For these purposes, gain an individual recognizes on the
sale of an interest in a “grantor trust” that holds collectibles (such as the Trust) is treated as gain recognized on the sale of the collectibles, to the extent the gain is attributable to unrealized appreciation in value of the
collectibles. Therefore, any gain recognized by an individual U.S. investor attributable to a sale or exchange of shares held for more than one year, or attributable to GLDM’s sale of any gold that the investor is treated (through its ownership
of shares) as having held for more than one year, generally will be subject to federal income tax at a maximum rate of 28%. The tax rates for capital gains recognized on the sale of assets held by an individual U.S. investor for one year or less, or
by a taxpayer other than an individual, are generally the same as those at which ordinary income is taxed.
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Use of Proceeds
Proceeds received by GLDM from the issuance and sale of Creation Units will consist of Gold Bullion deposits. During the life of GLDM, such proceeds will only
be (1) held by GLDM, (2) disbursed or sold as needed to pay GLDM’s ongoing expenses and (3) distributed to Authorized Participants in connection with the redemption of Creation Units.
21
Overview of the Gold Industry
THE MARKET FOR GOLD
As the market for gold and movements
in the price of gold are expected to directly affect the price of the Shares, investors should have some understanding of gold markets and historical gold prices. Of course, investors should also be aware that prior market conditions and historical
movements in the price of gold are not indicators of future market conditions or future gold prices.
The following chart provides historical
background on the price of gold. The chart illustrates movements in the price of gold in USDs per ounce over the period from January 2, 2008 to December 31, 2017. The price of gold in the chart is based on the London PM Gold Fix and the LBMA
Gold Price PM. The LBMA Gold Price replaced the previously established London Gold Fix on March 20, 2015.
22
GOLD SUPPLY AND DEMAND
Gold is a physical asset that is accumulated, rather than consumed. As a result, virtually all the gold that has ever been mined still exists today in one form
or another.
Metals Focus Gold Focus 2018,
published by Metals Focus, a precious metals research consultancy based in London, estimates that existing above-ground stocks of gold amounted to approximately 187,000 tonnes (approximately 5.8
billion ounces) at the end of 2017.
1
The following table sets forth a summary of the world gold
supply and demand for the last 5 years. It is based on information reported in the
Metals Focus Gold Focus 2018.
World Gold
Supply and Demand, 2013–2017
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Tonnes
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2013
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2014
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2015
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2016
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2017
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SUPPLY
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Mine Production
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3,075
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3,150
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3,216
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3,275
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3,292
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Recycling
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1,255
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1,194
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1,129
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1,291
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1,167
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Net Hedging Supply
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—
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105
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13
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33
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—
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Total Supply
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4,330
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4,448
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4,358
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4,599
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4,458
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DEMAND
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Jewellery Fabrication
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2,749
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2,526
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2,460
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1,999
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2,143
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Industrial Demand
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350
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349
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332
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323
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333
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Net Physical Investment
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1,717
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1,058
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1,072
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1,063
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1,035
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Net Hedging Demand
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25
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—
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—
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—
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26
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Net Central Bank Buying
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646
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584
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577
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390
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374
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Total Demand
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5,487
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4,517
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4,440
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3,775
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3,911
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Market Balance
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-1,157
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-68
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-83
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824
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548
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Net Investments in ETFs
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-912
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-184
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-125
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547
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203
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Market Balance less ETFs
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-245
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116
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42
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277
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345
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Nominal Gold Price (US$/oz, PM fix)
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1,411
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1,266
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1,160
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1,251
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1,257
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Source: Metals Focus Gold Focus 2018
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1
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Gold Focus 2018
is published by Metals Focus, Ltd. which is a precious metals research consultancy based in London. Metals Focus Data Ltd., an affiliate of the Sponsor, provides the supply and demand data to
Metals Focus, Ltd. When used in this Prospectus, “tonne” refers to one metric ton, which is equivalent to 1,000 kilograms or 32,151 troy ounces.
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SOURCES OF GOLD SUPPLY
Based on data from
Metals
Focus Gold Focus 2018
,
gold supply averaged 4,439 tonnes (t) per year between 2013 and 2017. Sources of gold supply include both mine production and recycled above-ground stocks and, to a lesser extent, producer net hedging. The
largest portion of gold supplied to the market is from mine production, which averaged approximately 3202t per year from 2013 through 2017. The second largest source of annual gold supply is recycled gold, which is gold that has been recovered from
jewelry and other fabricated products and converted back into marketable gold. Recycled gold averaged approximately 1,207t annually between 2013 through 2017.
SOURCES OF GOLD DEMAND
Based on data from
Metals
Focus Gold Focus 2018
, gold demand averaged 4,426t per year between 2013 and 2017. Gold demand generally comes from four sources: jewelry, industry (including medical applications),
23
investment and the official sector (including central banks and supranational organizations). The largest source of demand comes from jewelry fabrication, which accounted for approximately 54% of
the identifiable demand from 2013 through 2017 followed by net physical investment, which represents identifiable investment demand, which accounted for approximately 27%.
Gold demand is widely dispersed throughout the world with significant contributions from India and China. While in many countries there are seasonal
fluctuations in the levels of demand for gold — especially jewelry — variations in the timing of seasons throughout the world mean that seasonal fluctuations in demand do not appear to have a significant impact on the global gold price.
Having been a source of gold supply for many years, the official sector became a source of net demand in 2010. Between 2013 and 2017, according to
Metals Focus Gold Focus 2018
, central bank purchases averaged 514t. The prominence given by market commentators to this activity, coupled with the total amount of gold held by the official sector, has resulted in this area being one of the
more visible shifts in the gold market.
OPERATION OF THE GOLD BULLION MARKET
The global trade in gold consists of over-the-counter, or OTC, transactions in spot, forwards, and options and other derivatives, together with exchange-traded
futures and options.
GLOBAL OVER-THE-COUNTER MARKET FOR GOLD
The OTC market trades on a continuous basis and accounts for most global gold trading. Market makers and participants in the OTC market trade with each other
and their clients on a principal-to-principal basis. All risks and issues of credit are between the parties directly involved in a specific transaction. The three products relevant to the LBMA are spot (S) contracts, forward (F) contracts
and options (O) contracts (
see
http://www.lbma.org.uk/membership
)
. A “spot contract” is a contract to buy or sell gold typically on or before two Business Days following the date of the execution of the contract. A
“forward contract” is an agreement to buy or sell gold at a future date beyond the Spot Date at a price set at the time of the contract. An “option contract” is an agreement that conveys to the purchaser the right, but not the
obligation, to buy or sell a quantity of gold at a predetermined rate during a period or at a time in the future. There are thirteen LBMA Market Makers who provide the service in one, two or all three products. Of the thirteen LBMA Market Makers,
there are five Full Market Makers and eight Market Makers. The five Full Market Makers quoting prices in all three products are: Citibank N A, Goldman Sachs, HSBC Bank, JP Morgan Chase Bank and UBS. The eight LBMA Market Makers who provide two-way
pricing in either one or two products are: ICBC Standard Bank (S), Merrill Lynch International (S, O), Morgan Stanley & Co International (S, O), Societe Generale (S), Standard Chartered Bank (S, O), Bank of Nova Scotia -ScotiaMocatta (S,
F), Toronto-Dominion Bank (F) and BNP Paribas SA (F).
The OTC market provides a relatively flexible market in terms of quotes, price, size,
destinations for delivery and other factors. Bullion dealers customize transactions to meet their clients’ requirements. The OTC market has no formal structure and no open-outcry meeting place.
The main centers of the OTC market are London, New York and Zurich. Mining companies, central banks, manufacturers of jewelry and industrial products,
together with investors and speculators, tend to transact their business through one of these centers. Centers such as Dubai and several cities in the Far East also transact substantial OTC market business. Bullion dealers have offices around the
world and most of the world’s major bullion dealers are either members or associate members of the LBMA.
In the OTC market, the standard size of
gold trades ranges between 5,000 and 10,000 ounces. Bid-offer spreads are typically $0.50 per ounce. Transaction costs in the OTC market are negotiable between the parties and therefore vary widely, with some dealers willing to offer clients
competitive prices for larger volumes, although this will vary according to the dealer, the client and market conditions. Cost indicators can be obtained from various information service providers as well as dealers.
24
Liquidity in the OTC market can vary from time to time during the course of the 24-hour trading day.
Fluctuations in liquidity are reflected in adjustments to dealing spreads — the difference between a dealer’s “buy” and “sell” prices. The period of greatest liquidity in the gold market generally occurs at the time of
day when trading in the European time zones overlaps with trading in the United States, which is when OTC market trading in London, New York and other centers coincides with futures and options trading on the COMEX.
THE LONDON GOLD BULLION MARKET
Although the market for
physical gold is global, most OTC market trades are cleared through London. In addition to coordinating market activities, the LBMA acts as the principal point of contact between the market and its regulators. A primary function of the LBMA is its
involvement in the promotion of refining standards by maintenance of the “London Good Delivery Lists,” which are the lists of LBMA accredited melters and assayers of gold. The LBMA also coordinates market clearing and vaulting, promotes
good trading practices and develops standard documentation.
The term “loco London” refers to gold bars physically held in London that meet the
specifications for weight, dimensions, fineness (or purity), identifying marks (including the assay stamp of an LBMA acceptable refiner) and appearance set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the LBMA.
Gold bars meeting these requirements are known as “London Good Delivery Bars.” All of the Gold Bullion will be London Good Delivery Bars meeting the requirements of London Good Delivery Standards.
The unit of trade in London is the troy ounce, whose conversion between grams is: 1,000 grams = 32.1507465 troy ounces and 1 troy ounce = 31.1034768 grams. A
London Good Delivery Bar is acceptable for delivery in settlement of a transaction on the OTC market. Typically referred to as 400-ounce bars, a London Good Delivery Bar must contain between 350 and 430 fine troy ounces of gold, with a minimum
fineness (or purity) of 995 parts per 1,000 (99.5%), be of good appearance and be easy to handle and stack. The fine gold content of a gold bar is calculated by multiplying the gross weight of the bar (expressed in units of 0.025 troy ounces) by the
fineness of the bar.
THE LBMA GOLD PRICE
The LBMA
Gold Price is determined twice each Business Day (10:30 a.m. and 3:00 p.m. London time) through an auction which provides reference gold prices for that day’s trading. The auction that determines the LBMA Gold Price is a physically settled,
electronic and tradeable auction, with the ability to settle trades in U.S. dollars, euros or British pounds. The IBA provides the auction platform and methodology as well as the overall administration and governance for the LBMA Gold Price. Many
long-term contracts are expected to be priced on the basis of either the morning (AM) or afternoon (PM) LBMA Gold Price, and many market participants are expected to refer to one or the other of these prices when looking for a basis for valuations.
Participants in the IBA auction process submit anonymous bids and offers which are published on screen and in real-time. Throughout the auction process,
aggregated gold bids and offers are updated in real-time with the imbalance calculated and the price updated every 45 seconds until the buy and sell orders are matched. When the net volume of all participants falls within a pre-determined tolerance,
the auction is deemed complete and the applicable LBMA Gold Price is published. Information about the auction process (such as aggregated bid and offer volumes) will be immediately available after the auction on the IBA’s website.
The Financial Conduct Authority, or FCA, in the U.K. regulates the LBMA Gold Price.
FUTURES EXCHANGES
Although GLDM will not invest in
gold futures, information about the gold futures market is relevant as such markets are a source of liquidity for the overall market for gold and impact the price of gold.
25
The most significant gold futures exchange is COMEX, operated by Commodities Exchange, Inc., a
subsidiary of New York Mercantile Exchange, Inc., and a subsidiary of the Chicago Mercantile Exchange Group (the “CME Group”). It began to offer trading in gold futures contracts in 1974 and for most of the period since that date, it has
been the largest exchange in the world for trading precious metals futures and options. TOCOM (Tokyo Commodity Exchange) is another significant futures exchange and has been trading gold since 1982. Trading on these exchanges is based on fixed
delivery dates and transaction sizes for the futures and options contracts traded. Trading costs are negotiable. As a matter of practice, only a small percentage of the futures market turnover ever comes to physical delivery of the gold represented
by the contracts traded. Both exchanges permit trading on margin. Margin trading can add to the speculative risk involved given the potential for margin calls if the price moves against the contract holder. Both COMEX and TOCOM operate through a
central clearance system and in each case, the exchange acts as a counterparty for each member for clearing purposes. Other commodity exchanges include, the Multi Commodity Exchange of India (“MCX”), the Shanghai Futures Exchange, the
Shanghai Gold Exchange, ICE Futures US (the “ICE”), and the Dubai Gold & Commodities Exchange. The ICE and CME Group are members of the Intermarket Surveillance Group (“ISG”).
MARKET REGULATION
The global gold markets are overseen
and regulated by both governmental and self-regulatory organizations. In addition, certain trade associations have established rules and protocols for market practices and participants.
26
Objective of GLDM
OVERVIEW
The investment objective of GLDM is for the
Shares to reflect the performance of the price of Gold Bullion, less GLDM’s expenses. GLDM’s only ordinary recurring expense is the Sponsor’s annual fee of % of the NAV of GLDM. The Sponsor believes that, for
many investors, the Shares will represent a cost-effective investment relative to traditional means of investing in gold. As the value of the Shares is tied to the value of the Gold Bullion held by GLDM, it is important in understanding the
investment attributes of the Shares to first understand the investment attributes of gold.
THE CASE FOR INVESTING IN GOLD
Gold has unique properties as an asset class. Gold can be used in portfolios to help protect global purchasing power, reduce portfolio volatility and minimize
losses during periods of market shock. It has historically been perceived as a high-quality liquid asset to be used when selling other assets would cause losses. Investors have traditionally made use of gold’s lack of correlation with other
assets to diversify their portfolios and hedge against stock market, bond, currency and other risks.
Gold’s ability to serve as a potential
portfolio diversifier is due to its historically low-to-negative correlation with stocks and bonds. The economic forces that determine the price of gold are different from the forces that determine the prices of most financial assets. For example,
the price of a stock often depends on the earnings or growth potential of the issuing company or the confidence investors have in its management. The price of a bond depends primarily on its credit rating, its yield and the yields of competing fixed
income investments. The price of gold, however, depends on different factors, including the supply and demand for gold, the strength or weakness of the USD, the rate of inflation and interest rates and the political environment. Gold does not depend
on a promise to pay on the part of any government or corporation, as is the case with investments in money market instruments as well as in the corporate and government bond markets. Gold cannot be repudiated, as is the case with paper assets. Gold
is not subject to the risk of default or bankruptcy. Gold cannot be created at will as can paper-backed assets.
Some of gold’s investment attributes
are shared with traditional portfolio diversifiers, which include non-U.S. equities, emerging markets securities, real estate investment trusts, and domestic and foreign bonds. However, gold historically has had little correlation with these
traditional diversifiers and low-to-negative correlation with the Standard & Poor’s 500 Index, which is widely regarded as the standard for measuring the stock market performance of large capitalized U.S. companies. In the search for
effective diversification, investors have begun to turn to a variety of non-traditional diversifiers. These non-traditional diversifiers include hedge and private equity funds, commodities, timber and forestry, fine art and collectibles. Gold has
historically been perceived as having one or more of the following advantages over each of these non-traditional diversifiers: greater liquidity, lower risk and lower management and holding costs.
All forms of investment carry some degree of risk. In addition, the Shares have certain unique risks, as described in “Risk Factors” starting on
page 8. Holding gold directly also has risks.
STRATEGY BEHIND THE SHARES
The Shares are intended to offer investors an opportunity to participate in the gold market through an investment in securities. Historically, the logistics of
buying, storing and insuring gold have constituted a barrier to entry for some institutional and retail investors alike. The offering of the Shares is intended to overcome these barriers to entry. The logistics of storing and insuring gold are dealt
with by the Custodian and the related expenses are built into the price of the Shares. Therefore, an investor does not have any additional tasks or costs over and above those associated with dealing in any other publicly traded security.
27
The Shares are intended for investors who want a simple and cost-efficient means of gaining investment
benefits similar to those of holding gold bullion. The Shares offer an investment that is:
|
•
|
|
Easily Accessible
. Investors can access the gold market through a traditional brokerage account. The Sponsor believes that investors will be able to more effectively implement strategic and tactical asset
allocation strategies that use gold by using the Shares instead of using the traditional means of purchasing, trading and holding gold.
|
|
•
|
|
Relatively Cost Efficient
. The Sponsor believes that, for many investors, transaction costs related to the Shares will be lower than those associated with the purchase, storage and insurance of physical gold.
|
|
•
|
|
Exchange Traded
. The Shares will trade on the NYSE Arca, providing investors with an efficient means to implement various investment strategies.
|
|
•
|
|
Transparent
. The Shares will be backed by the assets of GLDM and GLDM will not hold or employ any derivative securities. Further, the value of GLDM’s holdings will be reported on GLDM’s website daily.
|
28
GLDM Expenses
GLDM’s only ordinary recurring expense is the fee paid to the Sponsor at an annual rate of % of the daily net asset value of
GLDM, so that GLDM’s total annual expense ratio is expected to be equal to %.
In exchange for the Sponsor’s fee, the
Sponsor has agreed to assume the ordinary fees and expenses incurred by GLDM, including but not limited to the following: fees charged by the Administrator, the Custodian, Marketing Agent and the Trustee, NYSE Arca listing fees, typical maintenance
and transaction fees of the DTC, SEC registration fees, printing and mailing costs, audit fees and expenses, up to $100,000 per annum in legal fees and expenses and applicable license fees. The Sponsor shall bear expenses in connection with the
issuance and distribution of the securities being registered, which are estimated to be in the amount of $[ ]. The Sponsor shall not be required to pay any extraordinary expenses not incurred in the
ordinary course of GLDM’s business. Extraordinary expenses are fees and expenses which are unexpected or unusual in nature, such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses.
Extraordinary fees and expenses also include material expenses which are not currently anticipated obligations of GLDM. GLDM will be responsible for the payment of such expenses to the extent any such expenses are incurred. Routine operational,
administrative and other ordinary expenses are not deemed extraordinary expenses. GLDM will sell Gold on an as-needed basis to pay the Sponsor’s fee.
In certain exceptional cases GLDM will pay for certain expenses. These exceptions include expenses not assumed by the Sponsor (described in the immediately
preceding paragraph), taxes and governmental charges, expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of GLDM or action taken by the Trustee or the Sponsor to protect GLDM or the interests of
Shareholders, indemnification of the Sponsor under the Declaration of Trust, and legal expenses in excess of $100,000 per year. GLDM’s organizational and offering costs are borne by the Sponsor and, as such, are the sole responsibility of the
Sponsor. The Sponsor will not seek reimbursement or otherwise require GLDM, the Trust, the Trustee or any Shareholder to assume any liability, duty or obligation in connection with any such organizational and offering costs.
Shareholders do not have the option of choosing to pay their proportionate share of GLDM’s expenses in lieu of having their share of expenses paid by the
sale of GLDM’s Gold. Each sale of Gold by GLDM will be a taxable event to Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.”
SALES OF GOLD
The Sponsor will sell GLDM’s Gold
Bullion as necessary to pay GLDM’s expenses. When selling Gold Bullion to pay expenses, the Sponsor will endeavor to sell the smallest amounts of Gold Bullion needed to pay expenses in order to minimize GLDM’s holdings of assets other than
Gold Bullion and will endeavor to sell at the LBMA Gold Price PM. The Sponsor will place orders with Gold Bullion dealers (which may include the Custodian) through which the Sponsor expects to receive the most favorable price and execution of
orders. The Sponsor shall not be liable for depreciation or loss incurred by reason of any sale. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders” for information on the tax treatment of Gold Bullion sales.
The Sponsor will sell GLDM’s Gold Bullion if that sale is required by applicable law or regulation or in connection with the termination and
liquidation of GLDM.
Any property received by GLDM other than Gold Bullion, cash or an amount receivable in cash (such as, for example, an insurance
claim) will be promptly sold or otherwise disposed of by the Sponsor and the resulting proceeds will be credited to GLDM’s cash account and/or converted into Gold Bullion.
29
CASH ACCOUNT AND RESERVE ACCOUNT
The Sponsor will cause GLDM to maintain a cash account in which proceeds of Gold Bullion sales and other cash received by GLDM may be held. The Sponsor may
withdraw funds from the cash account to establish a reserve account for any taxes, other governmental charges and contingent or future liabilities.
HYPOTHETICAL EXPENSE EXAMPLE
The following table,
prepared by the Sponsor, illustrates the anticipated impact of the deliveries and sales of Gold Bullion discussed above on the fractional amount of Gold Bullion represented by each outstanding Share for three years. It assumes that the only
dispositions of Gold Bullion will be those sales needed to pay the Sponsor’s Fee and that the price of gold and the number of Shares remain constant during the three-year period covered. The table does not show the impact of any extraordinary
expenses GLDM may incur. Any such extraordinary expenses, if and when incurred, will accelerate the decrease in the fractional amount of gold represented by each Share. In addition, the table does not show the effect of any waivers of the
Sponsor’s Fee that may be in effect from time to time.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
Hypothetical gold price per ounce
|
|
$
|
1,300.00
|
|
|
$
|
1,300.00
|
|
|
$
|
1,300.00
|
|
|
Sponsor’s Fee
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
Shares of GLDM, beginning
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
Ounces of gold in GLDM, beginning
|
|
|
10,000.00
|
|
|
|
—
|
|
|
|
|
|
|
Beginning adjusted net asset value of GLDM
|
|
$
|
13,000,000.00
|
|
|
$
|
|
|
|
$
|
|
|
|
Ounces of gold to be delivered to cover the Sponsor’s Fee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ounces of gold in GLDM, ending
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending adjusted net asset value of GLDM
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Ending NAV per share
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
30
Description of the Trust
The Trust is organized as a Delaware statutory trust consisting of multiple separate Series. Delaware Trust Company, a Delaware trust company with trust
powers, is the sole Trustee of the Trust. Each Series issues common units of beneficial interest, or Shares, which represent units of fractional undivided beneficial interest in and ownership of such Series. The Trust was organized into separate
series as a Delaware statutory trust rather than as multiple separate trusts in order to achieve certain administrative efficiencies. As of the date of this Prospectus, the Trust has established six Series. One of the Series, the SPDR
®
Gold MiniShares Trust, is offered pursuant to this Prospectus. One of the Series of the Trust is offered pursuant to a separate Prospectus, and the other series of the Trust have not commenced
operations and have no assets or liabilities. The assets of GLDM include only Gold Bullion, Gold Bullion receivables and cash, if any.
The Trust was
formed and is operated in a manner such that each Series is liable only for obligations attributable to such Series. This means that Shareholders of GLDM are not subject to the losses or liabilities of any other Series and Shareholders of the other
Series are not subject to the losses or liabilities of GLDM. Accordingly, the debts, liabilities, obligations and expenses, or collectively, Claims, incurred, contracted for or otherwise existing solely with respect to GLDM or a Series are
enforceable only against the assets of GLDM or such Series, as applicable, and not against any other Series or the Trust generally. This limitation on liability is referred to as the “Inter-Series Limitation on Liability.” The Inter-Series
Limitation on Liability is expressly provided for under the Delaware Statutory Trust Act, which provides that if certain conditions are met, then the debts of any particular series will be enforceable only against the assets of such series and not
against the assets of any other series or the Trust generally. For the avoidance of doubt, the Inter-Series Limitation on Liability applies to all series of the Trust, including both GLDM and any other Series.
GLDM holds Gold Bullion and is expected from time to time to issue Creation Units in exchange for deposits of Gold Bullion and to distribute Gold Bullion in
connection with redemptions of Creation Units. The investment objective of GLDM is for the Shares to reflect the performance of the price of gold bullion, less GLDM’s expenses. GLDM’s only ordinary recurring expense is the Sponsor’s
annual fee of % of the NAV of GLDM. The Sponsor believes that, for many investors, the Shares will represent a cost-effective investment relative to traditional means of investing in gold. The material terms of the Trust
Declaration of Trust are discussed in greater detail under the section “The Declaration of Trust.” The Shares represent units of fractional undivided beneficial interest in and ownership of GLDM. GLDM is not managed like a corporation or
an active investment vehicle. The Gold Bullion held by GLDM will only be sold (1) on an as-needed basis to pay GLDM’s expenses, (2) in the event the Trust terminates and liquidates its assets, or (3) as otherwise required by law
or regulation. The sale of Gold Bullion by GLDM is a taxable event to Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.”
The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. The Trust will
not hold or trade in commodity futures contracts regulated by the CEA, as administered by the CFTC. The Trust is not a commodity pool for purposes of the CEA, and none of the Sponsor, the Trustee or the Marketing Agent is subject to regulation as a
commodity pool operator in connection with the Shares or a commodity trading adviser in connection with the Shares.
The Trust does not have a board of
directors or an audit committee but is operated and managed by the Board of Directors of the Sponsor, whose members serve in a substantially similar capacity with respect to the Trust. See “Description of Key Service Providers — The
Sponsor — Executive Officers and Directors of the Sponsor.”
GLDM expects to create and redeem Shares from time to time but only in Creation
Units (a Creation Unit equals a block of 100,000 Shares). The number of outstanding Shares is expected to increase and decrease from time to time as a result of the creation and redemption of Creation Units. The creation and redemption of Creation
Units requires the delivery to GLDM or the distribution by GLDM of the amount of Gold Bullion represented by the Creation Units being created or redeemed. The total amount of Gold Bullion required for the creation of Creation
31
Units will be based on the combined NAV of the number of Creation Units being created or redeemed. The initial amount of Gold Bullion required for deposit with GLDM to create Shares is 1,000
ounces per Creation Unit. The number of ounces of Gold Bullion required to create a Creation Unit or to be delivered upon the redemption of a Creation Unit gradually decreases over time, due to the accrual of GLDM’s expenses and the sale of
GLDM’s Gold Bullion to pay GLDM’s expenses. This is because the Shares comprising a Creation Unit will represent a decreasing amount of Gold Bullion due to the sale of GLDM’s Gold Bullion to pay GLDM’s expenses. Creation Units
may be created or redeemed only by Authorized Participants, who will pay a transaction fee of $500 for each order to create or redeem Creation Units. Authorized Participants may sell to other investors all or part of the Shares included in the
Creation Units they purchase from GLDM. See “Plan of Distribution.” The number of Shares in a Creation Unit, and the transaction fee associated with such Creation Units, may be changed by the Sponsor at any time in its sole discretion. In
addition, the Sponsor may waive the transaction fee on the creation or redemption of Creation Units for one or more Authorized Participants from time to time in its sole discretion.
Investors may obtain on a 24-hour basis gold pricing information based on the spot price for an ounce of gold from various financial information service
providers. Current spot prices are also generally available with bid/ask spreads from Gold Bullion dealers. In addition, GLDM’s website at http://www.spdrgoldshares.com will provide ongoing pricing information for gold spot prices and the
Shares. Market prices for the Shares will be available from a variety of sources including brokerage firms, information websites and other information service providers. The NAV of GLDM as calculated each Business Day by the Administrator will be
posted on GLDM’s website. GLDM has no fixed termination date and the Sponsor may terminate GLDM for any reason in its sole discretion. See “The Declaration of Trust — Termination of the Trust.”
32
Description of Key Service Providers
THE SPONSOR
The Sponsor is a Delaware limited
liability company formed on August 1, 2014. The Sponsor is responsible for establishing the Trust and for the registration of the Shares. The Sponsor generally oversees the performance of GLDM’s principal service providers, but does not
exercise day-to-day oversight over such service providers. The Sponsor, with assistance and support from the Administrator, is responsible for preparing and filing periodic reports on behalf of GLDM with the SEC and will provide any required
certification for such reports. The Sponsor will designate the independent registered public accounting firm of GLDM and may from time to time employ legal counsel for GLDM. The Sponsor is an affiliate of World Gold Trust Services LLC, the sponsor
of the SPDR
®
Gold Trust. To assist the Sponsor in marketing the Shares, the Sponsor has entered into the Marketing Agent Agreement with the Marketing Agent and GLDM. See “—The
Marketing Agent” for more information about the Marketing Agent. The Sponsor maintains a public website on behalf of GLDM (http://www.spdrgoldshares.com), which contains information about GLDM and the Shares.
Executive Officers and Directors of the Sponsor
The Trust does not have any directors, officers or employees. The following persons, in their respective capacities as directors or executive
officers of the Sponsor, a Delaware limited liability company, perform certain functions with respect to the Trust that, if the Trust had directors or executive officers, would typically be performed by them.
Joseph R. Cavatoni is the Principal Executive Officer of the Sponsor, Laura S. Melman is the Chief Financial Officer and Treasurer of the
Sponsor
,
and Gregory S. Collett is the Vice President of the Sponsor. The Board of Directors of the Sponsor consists of four individuals, of whom three serve on its Audit Committee. The Audit Committee has the responsibility for overseeing
the financial reporting process of the Trust, including the risks and controls of that process and such other oversight functions as are typically performed by an audit committee of a public company.
Joseph R. Cavatoni
, age 50, is the Principal Executive Officer and President of the Sponsor. He joined the World Gold Council as
Managing Director USA and ETFs in September, 2016. From October 2016 to the present, he has served as Principal Executive Officer of World Gold Trust Services, LLC, sponsor of the SPDR
®
Gold
Trust and an affiliate of the Sponsor. Prior to that, from April 2009 to December 2015 he served with BlackRock Investments, LLC, as part of BlackRock, Inc., a publicly traded investment management firm, first as the head of iShares Capital Markets
in Asia Pacific (2009) and as Head of iShares Capital Markets and Product Development in the same region (2009-2011). From November 2011 to December 2015, Mr. Cavatoni served as a BlackRock Managing Director and Head of iShares Capital
Markets, Americas. From August 2003 to April 2009, Mr. Cavatoni served with UBS Securities Asia Limited, first as Executive Director, Head of Swaps, Asia (2003-2006) and then as Managing Director, Head of Equity Finance APAC (2006-2009). Prior
to that, he served with Merrill Lynch & Company, Inc. from June 1994 to May 2003 as Senior Credit Analyst, Credit and Risk Management Team in New York (1994-1995), Vice President, Credit and Risk Management Team, Hong Kong (1995-2000) and
Director, Head of Prime Brokerage Asia, Japan and Australia (2000-2003). Mr. Cavatoni received his Bachelor of Business Administration degree from The George Washington University and his Master of Business Administration degree from
Northwestern University and the Hong Kong University of Science and Technology.
Laura S. Melman
, age 51, is the Chief
Financial Officer and Treasurer of the Sponsor. She has served as the Treasurer and Chief Operating Officer of WGC USA, Inc., an affiliate of the Sponsor, since January 22, 2018. Ms. Melman was previously employed by PIMCO LLC (“PIMCO”),
from June 2012 until January 2018. During her tenure at PIMCO, Ms. Melman was Senior Vice President responsible for taxation, accounting and analytics for PIMCO’s funds and ETFs worldwide. Ms. Melman’s responsibilities included
complex product development,
33
accounting, and taxation of financial instruments and investment strategies. Ms. Melman also served as officer for PIMCO’s open-end, closed-end funds and ETFs. Prior to PIMCO,
Ms. Melman served as Executive Director and Tax Director at J.P. Morgan Asset Management (“J.P. Morgan”), managing tax, accounting and compliance issues for J.P. Morgan’s registered and unregistered fund products from August 2006
to June 2012. She has also served as Vice President of product development at BNY Mellon (September 2000-August 2006), where she helped to develop and launch the first exchange-traded gold trusts. Ms. Melman is listed as co-inventor of the
business method patents that support the structure of exchange-traded commodity trusts. Prior to working within product development, Ms. Melman served with BNY Mellon as Vice President of taxation and fund accounting (September 1992-September
2000). Ms. Melman has also worked at PricewaterhouseCoopers as a tax consultant (September 1989- September 1992) within the firm’s financial services practice. Ms. Melman earned her Bachelor of Science degree from Rutgers University
and received her Master of Business Administration in Accounting from the Rutgers Graduate School of Management. She is a Certified Public Accountant.
Gregory Collett,
age 46, is the Vice President of the Sponsor. He joined the World Gold Council in April 2014 and currently serves as
Director of Investment Products for WGC USA, Inc., a wholly-owned, indirect subsidiary of the World Gold Council. In that capacity, his responsibilities include overseeing the SPDR
®
Gold Trust
(Symbol: GLD
®
), the largest exchange-traded fund in the world backed by physical gold, and the SPDR
®
Long Dollar Gold Trust (Symbol:
GLDW
®
), the initial series of the Trust. From January 2010 to March 2014, Mr. Collett was a partner with the law firm of Collett Clark LLP, where he primarily handled financial industry
transactions and disputes involving commodity futures. Prior to founding a law firm in January 2010, Mr. Collett pursued personal endeavors after voluntarily departing Deutsche Bank in June 2008. From October 2002 through June 2008,
Mr. Collett worked for Deutsche Bank where he launched the Powershares DB line of commodity and currency ETFs and ETNs. In that capacity, Mr. Collett held the title of Director and Chief Operating Officer of DB Commodity Services LLC,
which was the managing owner and commodity pool operator of the ETFs. Mr. Collett became a registered Associated Person of Deutsche Bank Securities Inc. on December 22, 2006 and a Listed Principal of DB Commodity Services LLC on
June 12, 2006. He withdrew his registration as an Associated Person of Deutsche Bank Securities Inc. and Listed Principal of DB Commodity Services LLC on June 20, 2008. Before joining Deutsche Bank, Mr. Collett was an associate with
the law firm of Sidley Austin LLP from March 2000 to October 2002 and an attorney-advisor for the Commodity Futures Trading Commission. Mr. Collett received his J.D. from George Washington University Law School in 1997 and his B.A. from Colgate
University in 1993.
William J. Shea
, age 70, is Chairman of the Board of Directors of the Sponsor, a member of the Board’s
Audit Committee and a principal of the CPO since January 2017. He was appointed to the Board when it was formed in January 2017. In January 2013, he was appointed to the Board of Directors of World Gold Trust Services, LLC (“WGTS LLC”),
the sponsor of the largest exchange-traded fund in the world backed by physical gold and an affiliate of the Sponsor. He serves as Chairman of WGTS LLC’s Board of Directors and is a member of its Audit Committee. He has more than 35 years of
experience in the financial services industry and in business restructurings. He was elected to the Board of Directors of Caliber ID, Inc. in 2001 and was appointed Chairman in December 2010. Prior to his appointment to the Board of Caliber ID, he
served as Executive Chairman of Royal & Sun Alliance (RSA), USA from January 2005 to December 2006, and oversaw its divestiture from RSA, a large public insurance company headquartered in the United Kingdom. From 2001 to 2004, he was Chief
Executive Officer of Conseco, Inc., a publicly held diversified insurance and financial services firm that he guided through the federal bankruptcy and restructuring process. From January 1997 to February 2001, he oversaw the turnaround of
Centennial Technologies, Inc., a high technology manufacturing company in the flash memory business. Mr. Shea served as Vice Chairman of BankBoston Corporation from January 1993 to August 1998. He was the Vice Chairman and a Senior Partner of
Coopers & Lybrand (now PricewaterhouseCoopers), an international public accounting firm, for whom he worked from June 1974 to December 1992. Mr. Shea sits on the boards of AIG SunAmerica, a mutual funds company, and is Chairman of the
Board of Demoulas Supermarkets, Inc., a privately held retail grocery store chain in New England. He was a board member of Boston Private Financial Holdings, a public bank holding company, and its related bank from June 2004 to May 2014.
Mr. Shea has served on the boards of the Boston Children’s Hospital, Northeastern
34
University, NASDAQ OMXBX, and the Boston Stock Exchange. Mr. Shea holds both a Bachelor of Arts degree and a Master of Arts degree in Economics.
The Sponsor has concluded that Mr. Shea should serve as Director because of the knowledge and extensive experience he gained in a variety
of leadership roles with different financial institutions and an international public accounting firm, his extensive experience in business restructurings, and the experience he has gained serving as a director of WGTS, LLC.
Aram Shishmanian
, age 66, is a Director on the Board of Directors of the Sponsor and a principal of the CPO since January 2017. He was
appointed to the Board when it was formed in January 2017. In January 2013, he was appointed to the Board of Directors of WGTS, LLC, the sponsor of the largest exchange-traded fund in the world backed by physical gold and an affiliate of the
Sponsor. He has served as Chief Executive Officer of the World Gold Council, the ultimate parent of the Sponsor, since January 2009. Mr. Shishmanian was previously employed by Accenture plc, a multinational management consulting, technology
services and outsourcing company. During his 27 years at Accenture and its predecessor companies from 1975 to 2003, Mr. Shishmanian held a number of leadership roles, including Global Managing Partner of the financial markets industry practice,
before becoming a senior partner. He previously served as a Non-Executive Director of Resolution plc, the Senior Non-Executive Director of Victoria plc, a Non-Executive Director of a Swiss based asset-management company and several other companies.
Prior to joining the World Gold Council, from 2005 to 2010, he was an independent member of the International Executive of Hogan Lovells LLP, one of the leading global law firms. He holds a Bachelor of Arts degree in Economics and a Master of
Business Administration degree.
The Sponsor has concluded that Mr. Shishmanian should serve as Director because of the knowledge and
extensive experience he gained in a variety of leadership roles with different financial institutions, his extensive experience as a management consultant and as a director on other boards, and the experience he has gained serving as a director of
WGTS, LLC.
Rocco Maggiotto
, age 67, is a Director on the Board of Directors of the Sponsor, Chairman of the Board’s Audit
Committee and a principal of the CPO since January 2017. He was appointed to the Board when it was formed in January 2017. In January 2013, he was appointed to the Board of Directors of WGTS, LLC, the sponsor of the largest exchange-traded fund in
the world backed by physical gold and an affiliate of the Sponsor. He also serves as Chairman of the Audit Committee of WGTS LLC’s Board of Directors. Mr. Maggiotto is the Chief Executive Officer and Co-Founder of PWRCierge, LLC, an
independent power company providing Cogeneration solutions and other energy management solutions for Continuing Care Retirement Communities and other non-profit institutions. From June 2006 to 2011, Mr. Maggiotto was Executive Vice President
and Global Head of Customer and Distribution Management for Zurich Financial Services’ $35 billion General Insurance Business. He was responsible for the development and implementation of Zurich’s customer and distribution management
strategies, its global industry practices and its relationships with the global broker organizations and served as Chairman of General Insurance’s Growth Agenda. Prior to joining Zurich, from 2005 to 2006, he was a Senior Executive Advisor in
Booz Allen Hamilton’s Management Consulting practice, and continues to consult with financial institutions through the Manchester Consulting Group which he founded in 2012. Mr. Maggiotto’ s previous career has included roles as
Chairman of Client Development for the Parent Company of Marsh & McLennan Companies, Inc. from 2002 to 2005, as well as a Senior Partner for PricewaterhouseCoopers, where he was a member of their Global Leadership Team and was Global
Markets Leader upon retiring in 2002. Mr. Maggiotto was also a Vice Chairman for the former Coopers & Lybrand, Managing Partner of their New York region and Chairman of its financial services industry practice worldwide. He also
developed and managed their US Financial Services Industry Management Consulting business. Before that, he was a Partner with KPMG Management Consulting Practice in New York. Prior to joining KPMG, for sixteen years, Mr. Maggiotto held
management positions with Marine Midland Bank and with HSBC covering finance, operations, management information systems and corporate services. Mr. Maggiotto serves on the boards of the Ronald McDonald House of New York, The Weston Playhouse
Theatre Company, Canisius
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College, Canisius High School, the Council of Governing Bodies of New York State’s private colleges and universities, and is President of the Board of The Green Mountain Academy for Life
Long Learning Manchester, VT. He is also a member of the Board of Directors for Lucid Inc., a publicly traded medical device company which does business as Caliber I. D. providing medical equipment supporting imaging and diagnosis at the cellular
level in the treatment of skin cancer and other diseases. Mr. Maggiotto holds a Bachelor of Arts degree in Political Science and a Master of Business Administration degree in Finance.
The Sponsor has concluded that Mr. Maggiotto should serve as Director because of the knowledge and extensive experience he gained in a
variety of leadership roles with different financial institutions and international public accounting firms, his extensive experience as a director on other boards, and the experience he has gained serving as a director of WGTS, LLC.
Neal Wolkoff
, age 62, is a Director on the Board of Directors of the Sponsor, a member of the Board’s Audit Committee and a
principal of the CPO since January 2017. He was appointed to the Board when it was formed in January 2017. In January 2013, he was appointed to the Board of Directors of WGTS, LLC, the sponsor of the largest exchange-traded fund in the world backed
by physical gold and an affiliate of the Sponsor. He also serves as a member of the Audit Committee of WGTS LLC’s Board of Directors. Mr. Wolkoff is the founder and CEO of Wolkoff Consulting Services, LLC. Previously, from October 2008 to
February 2012 he served as the Chief Executive Officer of ELX Futures, L.P., founded by major dealer banks and trading firms to compete in the area of interest rate futures. From April 2005 to October 2008 Mr. Wolkoff served as Chairman and
Chief Executive Officer of the American Stock Exchange (AMEX). Prior to the AMEX, for over 20 years, Mr. Wolkoff held several senior level officer positions at the New York Mercantile Exchange (NYMEX) including Acting President, Executive Vice
President and Chief Operating Officer, and Senior Vice President for Regulation and Clearing, in which position Mr. Wolkoff was the exchange’s chief regulatory officer. Mr. Wolkoff started his career as an Honors Program Trial
Attorney in the Division of Enforcement of the Commodity Futures Trading Commission. Mr. Wolkoff is a member of the Federal Reserve Bank of Chicago Working Group on Financial Markets. He was appointed to the Board of OTC Markets Group in
September 2012 and in November 2013 became the non-executive Chairman of that board. Mr. Wolkoff has also served on the Board of Directors and Executive Committee of the National Futures Association. Mr. Wolkoff was Vice Chairman of the
Board and a member of the Executive Committee of the Golda Och Academy (a Solomon Schechter School) in West Orange, NJ. He received a Bachelor of Arts degree and a Juris Doctor degree and is a member of the Bar of the State of New York.
The Sponsor has concluded that Mr. Wolkoff should serve as Director because of the knowledge and extensive experience he gained in a
variety of leadership roles at a major stock exchange and futures exchange, the experience he gained as a trial attorney, his extensive experience as a director on other boards, and the experience he has gained serving as a director of WGTS, LLC.
THE TRUSTEE
Delaware Trust Company, a Delaware
trust company, is the sole Trustee of the Trust and GLDM. The Trustee’s principal offices are located at 2711 Centerville Rd, Suite 400, Wilmington, DE 19808. The Trustee’s duties and liabilities with respect to the offering of the Shares
and the management of the Trust and GLDM are limited to its express obligations under the Certificate of Trust and the Declaration of Trust. The rights and duties of the Trustee and the Shareholders are governed by the provisions of the Delaware
Statutory Trust Act and by the Declaration of Trust.
The Trustee accepts service of legal process on behalf of the Trust and GLDM in the State of
Delaware and will make certain filings under the Delaware Statutory Trust Act. The Trustee does not owe any other duties to the Trust or the Shareholders. The Declaration of Trust provides that the Trustee is compensated by the Sponsor. The Sponsor
has the discretion to replace the Trustee.
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The Trustee has not signed the registration statement of which this Prospectus is a part, and only the
assets of GLDM are subject to issuer liability under the federal securities laws for the information contained in this Prospectus and under federal securities laws with respect to the issuance and sale of the Shares. Under such laws, neither the
Trustee, either in its capacity as Trustee or in its individual capacity, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or controlling person of the issuer of the
Shares. The Trustee’s liability in connection with the issuance and sale of the Shares is limited solely to the express obligations of the Trustee set forth in the Declaration of Trust.
The Trustee has no duty or liability to supervise or monitor the performance of the service providers to GLDM, nor does the Trustee have any liability for the
acts or omissions of such service providers. The Shareholders have no voice in the day-to-day management of the business and operations of GLDM and the Trust.
THE ADMINISTRATOR
The Trust, on behalf of GLDM, has
appointed BNYM as the Administrator of GLDM and has entered into an Administration Agreement in connection therewith (the “Administration Agreement”). BNYM, a banking corporation organized under the laws of the State of New York with trust
powers, has an office at 2 Hanson Place, Brooklyn, New York 11217. BNYM is subject to supervision by the New York State Banking Department and the Board of Governors of the Federal Reserve System.
Pursuant to the Administration Agreement, the Administrator performs or supervises the performance of services necessary for the operation and administration
of GLDM. These services include receiving and processing orders from Authorized Participants to create and redeem Creation Units, net asset value calculations, accounting and other fund administrative services. The Administrator retains, separately
for GLDM, certain financial books and records, including Creation Unit creation and redemption books and records; GLDM accounting; ledgers with respect to assets, liabilities, capital, income and expenses; the registrar; transfer journals; and
related details and trading and related documents received from custodians.
The term of the Administration Agreement is one year from its effective date
and will automatically renew for additional one-year terms unless any party provides written notice of termination (with respect to GLDM) at least 90 days prior to the end of any one-year term or unless earlier terminated as provided below:
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Either party terminates prior to the expiration of the initial term in the event that (i) the other party breaches any material provision of the Administration Agreement, provided that the non-breaching party gives
written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice; (ii) a party commences as debtor any case or proceeding under any bankruptcy, insolvency or
similar law, or there is commenced against such party any such case or proceeding; (iii) a party commences as debtor any case or proceeding seeking the appointment of a receiver, conservator, trustee, custodian or similar official for such
party or any substantial part of its property or there is commenced against the party any such case or proceeding; (iv) a party makes a general assignment for the benefit of creditors; or (v) a party states in any medium, written,
electronic or otherwise, any public communication or in any other public manner its inability to pay debts as they come due.
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The Trust may terminate the Administration Agreement prior to the expiration of the initial term upon 90 days’ prior written notice in the event that the Sponsor determines to liquidate the Trust and terminate its
registration with the SEC.
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The Administrator’s monthly fees are paid by the Sponsor. The Administrator and any of its affiliates may
from time to time purchase or sell Shares for their own accounts, as agents for their customers and for accounts over which they exercise investment discretion. The Administrator and any successor administrator must be a participant in DTC or such
other securities depository as shall then be acting.
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THE TRANSFER AGENT
The Trust, on behalf of GLDM, has appointed BNYM as the Transfer Agent of GLDM and has entered into a Transfer Agency and Service Agreement in connection
therewith (the “Transfer Agency and Service Agreement”).
Pursuant to the Transfer Agency and Service Agreement, the Transfer Agent serves as
GLDM’s transfer agent, dividend or distribution disbursing agent, and agent in connection with certain other activities as provided under the Transfer Agency and Service Agreement. The Transfer Agent receives a transaction processing fee in
connection with orders from Authorized Participants to create or redeem Creation Units in the amount of $500 per order. These transaction processing fees are paid directly by the Authorized Participants and not by GLDM.
The term of the Transfer Agency and Service Agreement is one year from its effective date and will automatically renew for additional one-year terms unless
any party provides written notice of termination (with respect to GLDM) at least 90 days prior to the end of any one-year term or unless earlier terminated as provided below:
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Either party terminates prior to the expiration of the initial term in the event that (i) the other party breaches any material provision of the Transfer Agency and Service Agreement, provided that the
non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice; (ii) a party commences as debtor any case or proceeding under any
bankruptcy, insolvency or similar law, or there is commenced against such party any such case or proceeding; (iii) a party commences as debtor any case or proceeding seeking the appointment of a receiver, conservator, trustee, custodian or
similar official for such party or any substantial part of its property or there is commenced against the party any such case or proceeding; (iv) a party makes a general assignment for the benefit of creditors; or (v) a party states in any
medium, written, electronic or otherwise, any public communication or in any other public manner its inability to pay debts as they come due.
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GLDM may terminate the Transfer Agency and Service Agreement prior to the expiration of the initial term upon 90 days’ prior written notice in the event that the Sponsor determines to liquidate the Trust or GLDM
and terminate its registration with the SEC other than in connection with a merger or acquisition of the Trust.
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THE CUSTODIAN (CASH
ONLY)
The Trust, on behalf of GLDM, has appointed BNYM to serve as the custodian of GLDM’s cash, if any, and has entered into a Custody
Agreement in connection therewith (the “BNYM Custody Agreement”).
Pursuant to the BNYM Custody Agreement, BNYM has agreed to establish and
maintain one or more cash accounts for GLDM. BNYM shall also maintain books and records segregating the assets of GLDM from the assets of any other series of the Trust. With respect to all cash held pursuant to the BNYM Custody Agreement, BNYM
shall, unless otherwise instructed to the contrary, (a) receive all income and other payments and advise GLDM as promptly as practicable of any such amounts due but not paid; and (b) endorse for collection checks, drafts or other
negotiable instruments.
The term of the BNYM Custody Agreement is one year from its effective date and will automatically renew for additional one-year
terms unless any party provides written notice of termination (with respect to GLDM) at least 90 days prior to the end of any one-year term or unless earlier terminated as provided below:
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Either party terminates prior to the expiration of the initial term in the event that (i) the other party
breaches any material provision of the BNYM Custody Agreement, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such
notice; (ii) a party commences as debtor any case or proceeding under any bankruptcy, insolvency or similar law, or there is commenced against such party any such case or
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proceeding; (iii) a party commences as debtor any case or proceeding seeking the appointment of a receiver, conservator, trustee, custodian or similar official for such party or any
substantial part of its property or there is commenced against the party any such case or proceeding; (iv) a party makes a general assignment for the benefit of creditors; or (v) a party states in any medium, written, electronic or
otherwise, any public communication or in any other public manner its inability to pay debts as they come due.
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The Trust may terminate the BNYM Custody Agreement prior to the expiration of the initial term upon 90 days’ prior written notice in the event that Sponsor determines to liquidate the Trust or GLDM and terminate
its registration with the SEC.
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THE CUSTODIAN
The Sponsor shall appoint ICBC Standard Bank Plc as the Custodian of GLDM’s Gold Bullion. ICBC Standard Bank Plc is a public limited company incorporated
under the laws of England and Wales. Its London office is located at 20 Gresham Street, London, EC2V 7JE, United Kingdom. While the UK operations of the Custodian are regulated by the FCA in the United Kingdom, the custodial services provided by the
Custodian are presently not a regulated activity subject to the rules of the FCA.
The Custodian is responsible for safekeeping GLDM’s Gold Bullion.
The Custodian facilitates the transfer of Gold Bullion into and out of GLDM through the unallocated Gold Bullion accounts it may maintain for each Authorized Participant or unallocated gold accounts that may be maintained for an Authorized
Participant by another LPMCL clearing bank, and through the unallocated and allocated Gold Bullion accounts it maintains for GLDM. The Custodian is responsible for allocating specific bars of Gold Bullion to the Fund Allocated Account. The Custodian
provides GLDM with regular reports detailing the Gold Bullion transfers into and out of the Fund Unallocated Account and the Fund Allocated Account and identifying the Gold Bullion bars held in the Fund Allocated Account.
The Custodian and its affiliates may from time to time purchase or sell Gold Bullion or Shares for their own accounts, as agents for their customers and for
accounts over which they exercise investment discretion.
Unless otherwise agreed by GLDM, the Custodian will hold the Gold Bullion deposited with and
held for the account of GLDM at its London, England vault, except when the Gold Bullion has been allocated in the vault of a subcustodian solely for temporary custody and safekeeping. If held by a subcustodian, the Custodian has agreed that it will
use commercially reasonable efforts promptly to transport the Gold Bullion from the subcustodian’s vault to the Custodian’s vault, at the Custodian’s cost and risk. The Custodian is a market maker, clearer and approved weigher of gold
under the rules of the LBMA.
The Custodian, as instructed by the Sponsor or GLDM, is authorized to accept, on behalf of GLDM, deposits of Gold Bullion in
unallocated form. Acting on standing instructions given by the Sponsor or GLDM, the Custodian allocates Gold Bullion deposited in unallocated form with GLDM by selecting bars of Gold Bullion for deposit to the Fund Allocated Account from unallocated
bars which the Custodian holds or by instructing a subcustodian to allocate bars from unallocated bars held by the subcustodian. All Gold Bullion allocated to GLDM must conform to the rules, regulations, practices and customs of the LBMA, and the
Custodian must replace any non-conforming Gold Bullion with conforming Gold Bullion as soon as practical.
The Gold Bullion bars in an allocated Gold
Bullion account are specific to that account and are identified by a list which shows, for each Gold Bullion bar, the refiner, assay or fineness, serial number and gross and fine weight. Gold Bullion held in GLDM’s allocated account is the
property of GLDM and is not traded, leased or loaned under any circumstances.
The Gold Bullion bars held in an unallocated account are not
segregated from the Custodian’s assets. The account holder therefore has no ownership interest in any specific bars of Gold Bullion that the unallocated
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account’s bullion dealer holds or owns. The account holder is an unsecured creditor of the bullion dealer, and credits to an unallocated account are at risk of the bullion dealer’s
insolvency, in which event it may not be possible for a liquidator to identify any Gold Bullion held in an unallocated account as belonging to the account holder rather than to the bullion dealer.
The Trust, on behalf of GLDM, and the Custodian have entered into Custody Agreements which establish the Fund Unallocated Account and the Fund Allocated
Account. The Fund Unallocated Account is used for several purposes. It is used to facilitate the transfer of Gold Bullion deposits and Gold Bullion redemption distributions between Authorized Participants and GLDM in connection with the creation and
redemption of Creation Units. It is also used for sales of Gold Bullion to pay GLDM Expenses, and when Gold Bullion is transferred into and out of GLDM. The Custodian is instructed to allocate all Gold Bullion deposited with GLDM to the Fund
Allocated Account by the close of business on each Business Day.
The Custodian is authorized to appoint from time to time one or more subcustodians to
hold GLDM’s Gold Bullion until it can be transported to the Custodian’s vault. In accordance with LBMA practices and customs, the Custodian does not have written custody agreements with the subcustodians it selects. This could affect the
recourse of GLDM and the Custodian against any subcustodian in the event a subcustodian does not use due care in the safekeeping of GLDM’s Gold Bullion. See “Risk Factors — The ability of the Administrator and the Custodian to take
legal action against subcustodians may be limited.”
The Custodian is required to use reasonable care in selecting subcustodians and will monitor the
conduct of each subcustodian, and, where it is legally permissible to do so, promptly advise the Trust of any difficulties or problems existing with respect to such subcustodian of which the Custodian is aware. The Custodian is obliged under the
Allocated Gold Account Agreement to use commercially reasonable efforts to obtain delivery of Gold Bullion from those subcustodians appointed by it. Under the Allocated Gold Account Agreement, except for an obligation on the part of the Custodian to
use commercially reasonable efforts to obtain delivery of GLDM’s Gold Bullion bars from any subcustodians appointed by the Custodian, the Custodian is not liable for the acts or omissions, or for the solvency, of its subcustodians unless the
selection of such subcustodians was made by the Custodian fraudulently, negligently or in bad faith.
Under the customs and practices of the London
bullion market, allocated Gold Bullion is held by custodians and, on their behalf, by subcustodians under arrangements that permit each entity for which Gold Bullion is being held: (1) to request from the entity’s custodian (and a
custodian or subcustodian to request from its subcustodian) a list identifying each Gold Bullion bar being held and the identity of the particular custodian or subcustodian holding the Gold Bullion bar and (2) to request the entity’s
custodian to release the entity’s gold within two business days following demand for release. Each custodian or subcustodian is obligated under the customs and practices of the London bullion market to provide the bar list and the
identification of custodians and subcustodians referred to in (1) above, and each custodian is obligated to release gold as requested. Under English law, unless otherwise provided in any applicable custody agreement, a custodian generally is
liable to its customer for failing to take reasonable care of the customer’s gold and for failing to release the customer’s gold upon demand.
The Custodian does not require any subcustodians to be insured or bonded with respect to their custodial activities. The Custodian has agreed to maintain
insurance in connection with the storage of GLDM’s precious metal under the Custody Agreements, including covering any loss of gold, on such terms and conditions as it considers appropriate, which may not cover the full amount of gold. The
Sponsor (so long as the Sponsor is WGC AM) and GLDM may, subject to confidentiality restrictions, review this insurance coverage, and the Custodian will provide the Trust with evidence of the Custodian’s insurance at GLDM’s request within
10 business days following the end of the calendar year. GLDM will not be a beneficiary of any such insurance and does not have the ability to dictate the nature or amount of the coverage. Therefore, Shareholders cannot be assured that the
Custodian maintains adequate insurance or any insurance with respect to the Gold Bullion held by the Custodian on behalf of GLDM.
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The Custodian has agreed to permit, and to procure that any subcustodian permit, the Sponsor and the
Trust and their designated representatives
,
independent public accountants and bullion auditors access
to
the Custodian’s premises upon reasonable notice during normal business hours (but without limitation on the frequency of
access to such premises), to examine on the Custodian’s premises the Gold Bullion held by the Custodian and such records as they may reasonably require to perform their respective duties with regard to investors in GLDM’s Shares. The
Sponsor’s officers and/or properly designated representatives will verify GLDM’s holdings at least annually and may confirm the holdings more than once per annum. The independent public accountants endeavor to examine the Gold Bullion held
by the Custodian in person at least annually, but are under no legal obligation to do so.
Custody Agreements
The Allocated Gold Account Agreement and the Unallocated Gold Account Agreement between the Trust, on behalf of GLDM, and the Custodian establishes the Fund
Allocated Account and the Fund Unallocated Account, respectively. These agreements are sometimes referred to together as the “Custody Agreements.” The following is a description of the material terms of the Custody Agreements. As the
Custody Agreements are similar in form, they are discussed together, with material distinctions between the agreements noted.
Transfers into the
Fund Unallocated Account
The Custodian credits to the Fund Unallocated Account the amount of Gold Bullion it receives from the Fund Allocated Account,
an Authorized Participant’s unallocated gold account, or from other third-party unallocated accounts representing the right to receive Gold Bullion. Unless otherwise agreed by the Custodian in writing, the only Gold Bullion the Custodian will
accept in physical form for credit to the Fund Unallocated Account is Gold Bullion transferred from the Fund Allocated Account. No interest will be paid by the Custodian on any credit balance to the Fund Unallocated Account.
Transfers from the Fund Unallocated Account
The
Custodian transfers Gold Bullion from the Fund Unallocated Account only in accordance with the Trust’s instructions to the Custodian. A transfer of Gold Bullion from the Fund Unallocated Account may only be made, (1) by transferring Gold
Bullion to an Authorized Participant’s unallocated account, (2) by transferring Gold Bullion to the Fund Allocated Account, (3) by making Gold Bullion available for collection at the Custodian’s vault premises or at such other
location as the Custodian may specify, (4) by delivering the Gold Bullion to such location as the Trust directs at GLDM’s expense and risk, or (5) by transferring to an account maintained by the Custodian or by a third party on an
unallocated basis in connection with the sale of Gold or other permitted transfers. Any Gold Bullion made available in physical form will be in a form which complies with the rules, regulations, practices and customs of the LBMA, the Bank of England
or any applicable regulatory body, or Custody Rules, or in such other form as may be agreed between the Administrator and the Custodian, and in all cases will comprise one or more whole Gold Bullion bars selected by the Custodian.
The Custody Agreements provide for the full allocation of all Gold Bullion received from the Authorized Participants or other third parties and credited to
the Fund Unallocated Account at the end of each Business Day. The Sponsor may establish an overdraft facility with the Custodian under which the Custodian may make available to the Fund Unallocated Account up to 430 fine ounces of Gold Bullion in
order to allow the Custodian to fully allocate all Gold Bullion credited to the Fund Unallocated Account to the Fund Allocated Account at the end of each Business Day.
Transfers into the Fund Allocated Account
With
respect to Gold Bullion delivered by Authorized Participants, the Custodian receives transfers of Gold Bullion into the Fund Allocated Account only at the Trust’s instructions by debiting Gold Bullion from the Fund Unallocated Account and
crediting such Gold Bullion to the Fund Allocated Account.
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Transfers from the Fund Allocated Account
The Custodian transfers Gold Bullion from the Fund Allocated Account only in accordance with the Trust’s instructions. Generally, the Custodian transfers
Gold Bullion from the Fund Allocated Account only by debiting Gold Bullion from the Fund Allocated Account and crediting the Gold Bullion to the Fund Unallocated Account.
Withdrawals of Gold Directly from the Fund Allocated Account
Upon the Trust’s instruction, the Custodian debits Gold Bullion from the Fund Allocated Account and makes the Gold Bullion available for collection by the
Trust or, if separately agreed, for delivery by the Custodian in accordance with its usual practices at GLDM’s expense and risk. The Trust and the Custodian expect that the Trust will withdraw Gold Bullion physically from the Fund Allocated
Account (rather than by crediting it to the Fund Unallocated Account and instructing a further transfer from that account) only in exceptional circumstances, such as if, for some unforeseen reason, it was not possible to transfer Gold Bullion in
unallocated form. The Custodian is not obliged to effect any requested delivery if, in its reasonable opinion, (1) this would cause the Custodian or its agents to be in breach of the Custody Rules or other applicable law, court order or
regulation, (2) the costs incurred would be excessive or (3) delivery is impracticable for any reason. When Gold Bullion is physically withdrawn from the Fund Allocated Account pursuant to the Trust’s instruction, all right, title,
risk and interest in and to the Gold Bullion withdrawn shall pass to the person to whom or for whose account such Gold Bullion is transferred, delivered or collected at the time the recipient or its agent acknowledges in writing its receipt of Gold
Bullion. Unless the Trust specifies the bars of Gold Bullion to be debited from the Fund Allocated Account, the Custodian is entitled to select the Gold Bullion bars.
Exclusion of Liability
The Custodian will use
reasonable care in the performance of its duties under the Custody Agreements and is only responsible for any loss or damage suffered by GLDM as a direct result of any negligence, fraud, or willful default on the part of the Custodian in the
performance of the duties under the Custody Agreements. The Custodian’s liability is further limited to the market value of the Gold Bullion held in the Fund Allocated Account and the amount of the Gold Bullion credited to the Fund Unallocated
Account at the time such negligence, fraud, or willful default is either discovered by or notified to the Custodian, provided that the Custodian notifies the Sponsor and the Trust promptly after any discovery. Furthermore, the Custodian has no duty
to make or take or to require any subcustodian selected by it to make or take any special arrangements or precautions beyond those required by the Custody Rules or as specifically set forth in the Custody Agreements.
In the event of a loss caused by the failure of the Custodian or a subcustodian to exercise reasonable care, the Trust, on behalf of GLDM, has the right to
seek recovery from the Custodian in breach. The Custodian is not liable for any delay in performance or any non-performance of any of its obligations under the Custody Agreements by reason of any cause beyond the Custodian’s reasonable control,
including any act of God or war or terrorism, any breakdown, malfunction or failure of, or in connection with, any communication, computer, transmission, clearing or settlement facilities, industrial action, acts, rules and regulations of any
governmental or supra national bodies or authorities or relevant regulatory or self-regulatory organizations.
Indemnity
Solely out of GLDM’s assets, GLDM will indemnify the Custodian against all costs and expenses, damages, liabilities and losses (other than Value Added Tax
and the expenses assumed by the Sponsor under its Agreement with the Custodian) which the Custodian may suffer or incur, directly or indirectly, in connection with services provided to GLDM under the Custody Agreements, except to the extent that
such sums are due directly to the Custodian’s negligence, willful default or fraud.
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Termination
GLDM and the Custodian may each terminate any Custody Agreement upon 90 Business Days’ prior written notice. GLDM and the Custodian each may terminate any
Custody Agreement immediately by written notice in the event it becomes unlawful for the Custodian or the Trust to be a party to the Agreement or for the Custodian to offer its services to the Trust or for the Trust to receive such services. GLDM
and the Custodian each may terminate any Custody Agreement immediately by written notice in the event either party determines in its commercially reasonable opinion the existence of the presentation of a winding-up order, bankruptcy or analogous
event in relation to the other party. If either the Allocated Gold Account Agreement or the Unallocated Gold Account Agreement is terminated, the other agreement automatically terminates.
THE MARKETING AGENT
The Sponsor has appointed State
Street Global Advisors Funds Distributors, LLC as the Marketing Agent of the Trust and has entered into the Marketing Agent Agreement in connection therewith. State Street Global Advisors Funds Distributors, LLC, a Delaware limited liability company
and an indirect wholly-owned subsidiary of State Street Corporation, has an office at State Street Financial Center, One Iron Street, Boston, Massachusetts 02210.
The Marketing Agent and its affiliates may from time to time become Authorized Participants or purchase or sell gold or Shares for their own account, as agent
for their customers and for accounts over which they exercise investment discretion.
Pursuant to the Marketing Agent Agreement, the Marketing Agent
is responsible for marketing GLDM and the Shares on a continuous basis. Among other things, the Marketing Agent will assist the Sponsor in: (1) developing a marketing plan for GLDM on an ongoing basis; (2) preparing marketing materials
regarding the Shares, including the content on GLDM’s website; (3) executing the marketing plan for GLDM; (4) conducting public relations activities related to the marketing of Shares; and (5) incorporating gold into its
strategic and tactical exchange-traded fund research.
The Sponsor has agreed to indemnify the Marketing Agent, its partners, stockholders, members,
directors, officers and employees and any affiliate of the foregoing, and their successors and assigns, against any loss, damage, expense, liability or claim that may be incurred by the Marketing Agent in connection with (1) any untrue
statement or alleged untrue statement of a material fact contained in the registration statement of which this prospectus forms a part or any omission or alleged omission to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (2) any untrue statement or alleged untrue statement of a material fact made by the Sponsor with respect to any representations and warranties or any covenants under the Marketing Agent Agreement, or
failure of the Sponsor to perform any agreement or covenant therein, (3) any untrue statement or alleged untrue statement of a material fact contained in any materials used in connection with the marketing of the Shares, (4) circumstances
surrounding the third party allegations relating to patent and contract disputes, or (5) the Marketing Agent’s performance of its duties under the Marketing Agent Agreement, except in the case of this clause (5), for any loss, damage,
expense, liability or claim resulting from the gross negligence or willful misconduct of the Marketing Agent.
The Marketing Agent Agreement will
continue in effect until July 16, 2022 unless earlier terminated in accordance with the terms of the Marketing Agent Agreement. The Marketing Agent’s monthly fees are paid by the Sponsor.
43
Description of the Shares
GENERAL
The beneficial interest in the Trust will be
divided into one or more Series.
GLDM
is one such Series. Each Share of a Series of the Trust shall represent an equal beneficial interest in the net assets of such Series, and each holder of Shares of a Series shall be entitled to
receive such holder’s pro rata share of distributions of income and capital gains, if any, made with respect to such Series. Upon redemption of the Shares of any Series, the applicable Shareholder shall be paid solely out of the funds and
property of such Series of the Trust. All Shares are fully paid and non-assessable.
SHARE SPLITS
If the Sponsor believes that the per Share price in the secondary market for Shares has fallen outside a desirable trading price range, the Sponsor may cause
GLDM
to declare a split or reverse split in the number of Shares outstanding and to make a corresponding change in the number of Shares constituting a Creation Unit.
DISTRIBUTIONS
No Share shall have any priority or
preference over any other Share of the same Series with respect to dividends or distributions of the Trust or otherwise. All dividends and distributions shall be made ratably among all Shareholders of a Series from the assets held with respect to
such Series according to the number of Shares of such Series held of record by such Shareholders on the record date for any dividend or distribution or on the date of termination of the Trust, as the case may be.
VOTING AND APPROVALS
Under the Declaration of Trust,
Shareholders have no voting rights except as the Sponsor may consider desirable and so authorize in its sole discretion.
44
The Securities Depository; Book-Entry-Only System; Global Security
DTC will act as securities depository for the Shares. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of
the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was
created to hold securities of DTC Participants and to facilitate the clearance and settlement of transactions in such securities among the DTC Participants through electronic book-entry changes. This eliminates the need for physical movement of
securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also
available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly. DTC is expected to agree with and represent to the DTC
Participants that it will administer its Book-Entry System in accordance with its rules and bylaws and the requirements of law.
Individual
certificates will not be issued for the Shares. Instead, one or more global certificates will be signed by the Administrator and the Sponsor on behalf of
GLDM
, registered in the name of Cede & Co., as nominee for DTC, and
deposited with the Administrator on behalf of DTC. The global certificates will evidence all of the Shares outstanding at any time. The representations, undertakings and agreements made on the part of
GLDM
in the global certificates
are made and intended for the purpose of binding only
GLDM
and not the Administrator or the Sponsor individually.
Upon the settlement
date of any creation, transfer or redemption of Shares, DTC will credit or debit, on its book-entry registration and transfer system, the amount of the Shares so created, transferred or redeemed to the accounts of the appropriate DTC Participants.
The Administrator and the Authorized Participants will designate the accounts to be credited and charged in the case of creation or redemption of Shares.
Beneficial ownership of the Shares will be limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and
Indirect Participants. Owners of beneficial interests in the Shares will be shown on, and the transfer of ownership will be effected only through, records maintained by DTC (with respect to DTC Participants), the records of DTC Participants (with
respect to Indirect Participants), and the records of Indirect Participants (with respect to Shareholders that are not DTC Participants or Indirect Participants). Shareholders are expected to receive from or through the DTC Participant maintaining
the account through which the Shareholder has purchased their Shares a written confirmation relating to such purchase.
Shareholders that are not DTC
Participants may transfer the Shares through DTC by instructing the DTC Participant or Indirect Participant through which the Shareholders hold their Shares to transfer the Shares. Shareholders that are DTC Participants may transfer the Shares by
instructing DTC in accordance with the rules of DTC. Transfers will be made in accordance with standard securities industry practice.
DTC may decide
to discontinue providing its service with respect to Creation Units and/or the Shares by giving notice to the Administrator and the Sponsor. Under such circumstances, the Administrator and the Sponsor will either find a replacement for DTC to
perform its functions at a comparable cost or, if a replacement is unavailable, terminate
GLDM
.
The rights of the Shareholders
generally must be exercised by DTC Participants acting on their behalf in accordance with the rules and procedures of DTC. Because the Shares can only be held in book-entry form through DTC and DTC Participants, investors must rely on DTC, DTC
Participants and any other financial intermediary through which they hold the Shares to receive the benefits and exercise the rights described in this section. Investors should consult with their broker or financial institution to find out about
procedures and requirements for securities held in book-entry form through DTC.
45
Determination of NAV
The Administrator will determine the NAV of Shares of
GLDM
on each Business Day. The NAV of Shares of
GLDM
is the aggregate value
of
GLDM
’s assets (which include gold payable, but not yet delivered, to
GLDM
) less its liabilities (which include accrued but unpaid fees and expenses). The NAV of
GLDM
is calculated based on the price
of gold per ounce applied against the number of ounces of Gold Bullion owned by
GLDM
. For purposes of calculating NAV, the number of ounces of Gold Bullion reflects the amount of Gold Bullion delivered into (or out of)
GLDM
on a daily basis by Authorized Participants creating and redeeming Shares. The number of ounces of Gold Bullion held by
GLDM
is adjusted downward by the Sponsor’s fee.
In determining
GLDM
’s NAV, the Administrator generally will value the Gold Bullion based on the LBMA Gold Price PM for an ounce of gold. If
no LBMA Gold Price PM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 p.m. New York time on a particular evaluation day, the next most recent LBMA Gold Price (AM or PM
)
generally will be
used in the determination of the NAV of
GLDM
, unless the Sponsor determines that such price is inappropriate to use as the basis for such determination. If the Sponsor determines that such price is inappropriate to use, it shall
identify an alternate basis for evaluation of the Gold Bullion held by
GLDM
. In such case, the Sponsor would, for example, look to the current trading price of gold from other reported sources, such as dealer quotes, broker quotes or
electronic trading data, to value
GLDM
’s Shares.
The NAV generally will be calculated as of 12:00 p.m. New York time on any
Business Day. The Administrator will also determine the NAV per Share. The general role, responsibilities and regulation of the Administrator are further described in “Description of Key Service Providers — The Administrator.”
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Creation and Redemption of Shares
GLDM
creates and redeems Shares from time to time, but only in one or more Creation Units (a Creation Unit equals a block of
100,000
Shares). The creation and redemption of Creation Units is only made in exchange for the delivery to
GLDM
or the distribution by
GLDM
of the amount of Gold Bullion represented by the Creation Units
being created or redeemed. The amount of Gold Bullion required to be delivered to
GLDM
in connection with any creation, or paid out upon redemption, is based on the combined NAV of the number of Shares included in the Creation Units
being created or redeemed as determined on the day the order to create or redeem Creation Units is properly received and accepted. The standard settlement cycle for most broker-dealer securities transactions is two business days, T+2 (the trade date
plus two business days).
Authorized Participants are the only persons that may place orders to create and redeem Creation Units. To become an Authorized
Participant, a person must enter into a Participant Agreement with the Administrator. The Participant Agreement and the related procedures attached thereto may be amended by the Administrator and the Sponsor without the consent of any Shareholder or
Authorized Participant. Authorized Participants who make deposits with
GLDM
in exchange for Creation Units receive no fees, commissions or other form of compensation or inducement of any kind from either the Sponsor or
GLDM
, and no such person has any obligation or responsibility to the Sponsor or
GLDM
to effect any sale or resale of Shares.
The Seed Capital Investor will be deemed to be a statutory underwriter. Authorized Participants are cautioned that some of their activities will result in
their being deemed participants in a distribution in a manner which would render them statutory underwriters and subject them to the prospectus-delivery and liability provisions of the Securities Act, as described in the section “Plan of
Distribution.”
Prior to initiating any creation or redemption order, an Authorized Participant must have an existing unallocated account with an
LPMCL clearing bank identified by the Authorized Participant to the Custodian and the Sponsor, or an agreement with the Custodian itself establishing an unallocated account in London. An unallocated account is an account with a bullion dealer, which
may also be a bank, to which a fine weight amount of Gold Bullion is credited. Transfers to or from an unallocated account are made by crediting or debiting the number of ounces of Gold Bullion being deposited or withdrawn. The account holder is
entitled to direct the bullion dealer to deliver an amount of physical Gold Bullion equal to the amount of Gold Bullion standing to the credit of the unallocated account holder. Gold Bullion held in an unallocated account is not segregated from the
Custodian’s assets. The account holder therefore has no ownership interest in any specific bars of Gold Bullion that the bullion dealer holds or owns. The account holder is an unsecured creditor of the bullion dealer, and credits to an
unallocated account are at risk of the bullion dealer’s insolvency, in which event it may not be possible for a liquidator to identify any Gold Bullion held in an unallocated account as belonging to the account holder rather than to the bullion
dealer.
Certain Authorized Participants are able to participate directly in the Gold Bullion market and the gold futures market. In some cases, an
Authorized Participant may from time to time acquire gold from or sell gold to its affiliated gold trading desk, which may profit in these instances. The Sponsor believes that the size and operation of the Gold Bullion market make it unlikely that
an Authorized Participant’s direct activities in the gold or securities markets will impact the price of gold or the price of the Shares. Authorized Participants must be DTC Participants and must be registered as broker-dealers under the
Exchange Act, and regulated by FINRA, or must be exempt from being or otherwise must not be required to be so regulated or registered, and must be qualified to act as brokers or dealers in the states or other jurisdictions where the nature of their
business so requires. Each Authorized Participant will have its own set of rules and procedures, internal controls and information barriers as it determines is appropriate in light of its own regulatory regime.
Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants that wish to
create or redeem Creation Units. An order for one or more Creation Units may be placed by an Authorized Participant on behalf of multiple clients. Persons interested in purchasing
47
Creation Units should contact the Sponsor or the Administrator to obtain the contact information for the Authorized Participants. Shareholders who are not Authorized Participants will only be
able to redeem their Shares through an Authorized Participant.
All Gold Bullion must be delivered by Authorized Participants to GLDM and distributed
by GLDM in unallocated form through credits and debits between Authorized Participants’ unallocated accounts and the Fund Unallocated Account.
All Gold Bullion must be of at least a minimum fineness (or purity) of 995 parts per 1,000 (99.5%) and otherwise conform to the rules, regulations,
practices and customs of the LBMA, including the specifications for a London Good Delivery Bar.
Under the Participant Agreement with respect to each
Authorized Participant, the Sponsor has agreed to indemnify the Authorized Participants against certain liabilities, including liabilities under the Securities Act, and to contribute to the payments the Authorized Participants may be required to
make in respect of those liabilities.
The following description of the procedures for the creation and redemption of Creation Units is only a summary and
investors should review the description of the procedures for the creation and redemption of Creation Units set forth in the Declaration of Trust, the Administration Agreement and the form of Participant Agreement, each of which has been filed as an
exhibit to this registration statement of which this Prospectus is a part.
CREATION PROCEDURES
On any Business Day, an Authorized Participant may place an order with the Administrator to create one or more Creation Units. Purchase orders must be placed
with the Administrator no later than 3:59:59 p.m. New York time. The day on which the Administrator receives a valid purchase order is the purchase order date. By placing a purchase order, an Authorized Participant agrees to deposit Gold Bullion
with GLDM, as described below. Prior to the delivery of Creation Units for a purchase order, the Authorized Participant must also have wired to the Administrator the non-refundable transaction fee due for the purchase order.
DETERMINATION OF REQUIRED DEPOSITS
The total deposit
required to create each Creation Unit, or a Creation Unit Gold Delivery Amount, is an amount of gold and cash, if any, that is in the same proportion to the total assets of GLDM (net of estimated accrued expenses and other liabilities) on the date
the order to purchase is properly received as the number of Shares to be created under the purchase order is in proportion to the total number of Shares outstanding on the date the order is received.
DELIVERY OF REQUIRED DEPOSITS
An Authorized
Participant who places a purchase order is responsible for transferring the required Gold Bullion deposit amount to the Fund Unallocated Account on the second Business Day in London following the purchase order date. Upon receipt of the Gold Bullion
deposit amount, the Administrator will direct DTC to credit the number of Creation Units ordered to the Authorized Participant’s DTC account. The expense and risk of delivery, ownership and safekeeping of Gold Bullion until such Gold Bullion
has been received by GLDM will be borne solely by the Authorized Participant. If Gold Bullion is to be delivered other than as described above, the Sponsor is authorized to establish such procedures and to appoint such custodians and establish such
custody accounts as the Sponsor determines to be desirable.
Acting on standing instructions given by the Administrator, the Custodian will transfer
the Gold Bullion deposit amount from the Fund Unallocated Account to the Fund Allocated Account by allocating to the Fund Allocated Account specific bars of Gold Bullion which the Custodian holds or instructing a subcustodian to allocate
48
specific bars of Gold Bullion held by or for the subcustodian. The Gold Bullion bars in an allocated Gold Bullion account are specific to that account and are identified by a list which shows,
for each Gold Bullion bar, the refiner, assay or fineness, serial number and gross and fine weight. Gold Bullion held in GLDM’s allocated account is the property of GLDM and is not traded, leased or loaned under any circumstances.
The Custodian will use commercially reasonable efforts to complete the transfer of Gold Bullion to the Fund Allocated Account prior to the time by which the
Administrator is to credit the Creation Unit to the Authorized Participant’s DTC account; if, however, such transfers have not been completed by such time, the number of Creation Units ordered will be delivered against receipt of the Gold
Bullion deposit amount in the Fund Unallocated Account, and all Shareholders will be exposed to the risks of unallocated Gold Bullion to the extent of that Gold Bullion deposit amount until the Custodian completes the allocation process. See
“Risk Factors — Gold Bullion held in GLDM’s unallocated Gold Bullion account and any Authorized Participant’s unallocated Gold Bullion account will not be segregated from the Custodian’s assets.”
REJECTION OF PURCHASE ORDERS
GLDM has the right, but
not the obligation, to reject a purchase order if (i) the order is not in proper form as described in the Participant Agreement, (ii) the fulfillment of the order, in the opinion of its counsel, might be unlawful, (iii) if GLDM
determines that acceptance of the order from an Authorized Participant would expose GLDM to credit risk; or (iv) circumstances outside the control of the Administrator, the Sponsor or the Custodian make the purchase, for all practical purposes,
not feasible to process.
REDEMPTION PROCEDURES
The procedures by which an Authorized Participant can redeem one or more Creation Units mirror the procedures for the creation of Creation Units. On any
Business Day, an Authorized Participant may place an order with the Administrator to redeem one or more Creation Units. Redemption orders must be placed with the Administrator no later than 3:59:59 p.m. New York time. A redemption order so received
is effective on the date it is received in satisfactory form by the Administrator. The day on which the Administrator receives a valid redemption order is the redemption order date.
DETERMINATION OF REDEMPTION DISTRIBUTION
The
redemption distribution from GLDM consists of a credit to the redeeming Authorized Participant’s unallocated account in the amount of the Creation Unit Gold Delivery Amount. The Creation Unit Gold Delivery Amount for redemptions is the number
of ounces of Gold Bullion held by GLDM to be paid out upon redemption of a Creation Unit. The Sponsor anticipates that in the ordinary course of GLDM’s operations there will be no cash distributions made to Authorized Participants upon
redemptions.
DELIVERY OF REDEMPTION DISTRIBUTION
The redemption distribution due from GLDM is delivered to the Authorized Participant on the second Business Day following the redemption order date if, by
10:00 A.M. New York time on such second Business Day, the Administrator’s DTC account has been credited with the Creation Units to be redeemed.
The
Custodian transfers the redemption Gold Bullion amount from the Fund Allocated Account to the Fund Unallocated Account and, thereafter, to the redeeming Authorized Participant’s unallocated account. The Authorized Participant and GLDM are each
at risk in respect of Gold Bullion credited to their respective unallocated accounts in the event of the Custodian’s insolvency. See “Risk Factors — Gold held in GLDM’s unallocated Gold account and any Authorized
Participant’s unallocated Gold account will not be segregated from the Custodian’s assets.”
49
SUSPENSION OR REJECTION OF REDEMPTION ORDERS
GLDM may, in its discretion, and will when directed by the Sponsor, suspend the right of redemption, or postpone the redemption settlement date: (1) for
any period during which NYSE Arca is closed other than customary weekend or holiday closings, or trading on NYSE Arca is suspended or restricted, (2) for any period during which an emergency exists as a result of which delivery, disposal or
evaluation of Gold Bullion is not reasonably practicable, or (3) for such other period as the Sponsor determines to be necessary for the protection of the Shareholders.
GLDM has the right, but not the obligation, to reject a redemption order if (i) the order is not in proper form as described in the Participant
Agreement, (ii) the fulfillment of the order, in the opinion of its counsel, might be unlawful, (iii) if GLDM determines that acceptance of the order from an Authorized Participant would expose GLDM to credit risk, or
(iv) circumstances outside the control of the Administrator, the Sponsor or the Custodian make the redemption, for all practical purposes, not feasible to process.
The Sponsor will not be liable to any person or liable in any way for any loss or damages that may result from any such suspension, postponement or rejection.
CREATION AND REDEMPTION TRANSACTION FEE
An
Authorized Participant is required to pay a transaction fee of $500 per order to create or redeem Creation Units. An order may include multiple Creation Units. The transaction fee may be changed from time to time at the sole discretion of the
Sponsor and upon written notice to the Authorized Participant, which notice may be provided by disclosure in GLDM’s prospectus. In addition, the Sponsor may waive the transaction fee on the creation or redemption of Creation Units for one or
more Authorized Participants from time to time in its sole discretion.
TAX RESPONSIBILITY
Authorized Participants are responsible for any transfer tax, sales or use tax, recording tax, value added tax or similar tax or governmental charge applicable
to the creation or redemption of Creation Units, regardless of whether such tax or charge is imposed directly on the Authorized Participants, and agree to indemnify the Sponsor, the Administrator and GLDM if they are required by law to pay any such
tax, together with any applicable penalties, additions to tax or interest thereon.
LIABILITY
No Shareholder of GLDM shall be subject in such capacity to any personal liability whatsoever to any person in connection with GLDM’s property or the
acts, obligations or affairs of GLDM. Shareholders shall have the same limitation of personal liability as is extended to stockholders of a private corporation for profit incorporated under the Delaware General Corporation Law.
50
Trading of GLDM Shares
GLDM Shares will be listed on NYSE Arca under the ticker symbol GLDM. GLDM Shares may be bought and sold in the secondary market throughout the trading day
like other publicly traded securities. While GLDM’s Shares are issued in Creation Units at NAV, Shares traded in the secondary market may trade at prices that are lower or higher than their NAV per Share. The amount of the discount or premium
in the trading price relative to the NAV per Share is a function of supply and demand, among other things, and may be influenced by non-concurrent trading hours between NYSE Arca and the COMEX, London, Zurich and Singapore. While the Shares will
trade on NYSE Arca until 4:00 p.m. New York time, liquidity in the global gold market will be reduced after the close of the COMEX at 1:30 p.m. New York time. As a result, after 1:30 p.m. New York time, trading spreads, and the resulting premium or
discount, on the Shares may widen.
Most retail investors purchase and sell Shares through traditional brokerage or other intermediary accounts. Purchases
or sales of Shares in the secondary market, which will not involve GLDM, may be subject to customary brokerage commissions. Investors are encouraged to review the terms of their brokerage accounts for applicable charges.
The Sponsor or Marketing Agent, or an affiliate of the Sponsor or Marketing Agent, may directly or indirectly make cash payments to certain broker-dealers for
participating in activities that are designed to make registered representatives and other professionals more knowledgeable about exchange traded products, including GLDM, or for other activities, such as participation in marketing activities and
presentations, educational training programs, conferences, the development of technology platforms and reporting systems. In addition, the Sponsor and/or Marketing Agent may enter into arrangements with certain financial intermediaries pursuant to
which such intermediaries will agree to promote certain ETFs/exchange traded products (“ETPs”) to their customers and agree not to charge certain of their customers any commissions when those customers purchase or sell shares of
participating ETFs/ETPs. Payments to a broker-dealer or intermediary may create potential conflicts of interest between the broker-dealer or intermediary and its clients. These amounts, which may be significant, are paid by the Sponsor and/or
Marketing Agent from their own resources and not from the assets of GLDM. In addition, the Sponsor or Marketing Agent, or an affiliate of the Sponsor or Marketing Agent, may also reimburse expenses or make payments from their own assets to other
persons in consideration of services or other activities that they believe may benefit the Marketing Agent’s business or facilitate investment in GLDM.
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United States Federal Tax Consequences
The following discussion of the material United States federal income tax consequences that generally apply to the purchase, ownership and disposition of
Shares by a “U.S. Shareholder” (as defined below), and certain United States federal income, gift and estate tax consequences that may apply to an investment in Shares by a “Non-U.S. Shareholder” (as defined below). The following
discussion represents, insofar as it describes conclusions as to U.S. federal tax law and subject to the limitations and qualifications described therein, the opinion of Morgan, Lewis & Bockius LLP, special federal income tax counsel to the
Sponsor. The discussion below is based on the United States Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated under the Code and judicial and administrative interpretations of the Code, all as in
effect on the date of this Prospectus; no assurance can be given that future legislation, regulations, court decisions and/or administrative pronouncements will not significantly change applicable law and materially affect the conclusions expressed
herein, and any such change, even though made after a Shareholder has invested in GLDM, could be applied retroactively.
The tax treatment of
Shareholders may vary depending upon their own particular circumstances. Certain Shareholders — including banks, thrift institutions and certain other financial institutions, insurance companies, tax-exempt organizations, brokers and dealers in
securities or currencies, certain securities traders, persons holding Shares as a position in a “hedging,” “straddle,” “conversion” or “constructive sale” transaction (as those terms are defined in the
authorities mentioned above), qualified pension and profit-sharing plans, individual retirement accounts (IRAs), certain other tax-deferred accounts, U.S. expatriates, persons whose “functional currency” is not the U.S. dollar, persons
subject to the federal alternative minimum tax, non-U.S. Shareholders (except as specifically provided under “Income Taxation of Non-U.S. Shareholders” and “Estate and Gift Tax Considerations for Non-U.S. Shareholders” below) and
other Shareholders with special circumstances — may be subject to special rules not discussed below. In addition, the following discussion applies only to investors who hold Shares as “capital assets” within the meaning of Code
section 1221. This discussion does not purport to be complete or to deal with all aspects of federal income taxation that may be relevant to an investor in light of its particular circumstances.
Moreover, the discussion below does not address
the effect of any state, local or foreign tax law on an owner of Shares. Purchasers of Shares are urged to consult their own tax advisors with respect to all federal, state, local and foreign tax law considerations potentially applicable to their
investment in Shares.
For purposes of this discussion, a “U.S. Shareholder” is a Shareholder that is:
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An individual who is treated as a citizen or resident of the United States for U.S. federal income tax purposes;
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A business entity treated as a corporation or partnership (or other entity treated as such for those purposes) for U.S. federal income tax purposes that is created or organized in or under the laws of the United States
or any political subdivision thereof;
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An estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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A trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the
trust.
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A Shareholder that is not a U.S. Shareholder as defined above is generally considered a “Non-U.S. Shareholder” for
purposes of this discussion. For United States federal income tax purposes, the treatment of any beneficial owner of an interest in a partnership, including any entity treated as a partnership for United States federal income tax purposes, will
generally depend upon the status of the partner and upon the activities of the partnership. Partnerships and partners in partnerships are urged to consult their tax advisors about the United States federal income tax consequences of purchasing,
owning and disposing of Shares.
52
TAXATION OF THE FUND
GLDM will be treated as a “grantor trust” for federal income tax purposes. There can be no assurance that the Internal Revenue Service
(“IRS”) will agree with that treatment, and it is possible that the IRS or another tax authority could assert a position contrary thereto and that a court could sustain that contrary position. If GLDM were found not to be taxable as a
“grantor trust,” the Sponsor would likely terminate and liquidate GLDM. The balance of this disclosure assumes that GLDM will be treated as a “grantor trust” for U.S. federal income tax purposes.
As a “grantor trust” for U.S. federal income tax purposes, neither the Trust nor GLDM itself will pay U.S. federal income tax. Instead, the income
and expenses of GLDM “flow through” to GLDM’s Shareholders, and the Administrator will report GLDM’s income, gains, losses and deductions to the IRS on that basis.
TAXATION OF U.S. SHAREHOLDERS
Shareholders generally
will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in GLDM. Shareholders also will be treated as if they directly received their respective pro rata shares of GLDM’s
income, if any, regardless of whether they receive any distributions from GLDM. Shareholders will also be treated as if they directly incurred their respective pro rata shares of GLDM’s expenses. In the case of a Shareholder that purchases
Shares for cash, its initial tax basis in its pro rata share of the assets held in GLDM at the time it acquires its Shares will be equal to its cost of acquiring the Shares. In the case of a Shareholder that acquires its Shares by delivering Gold
Bullion to GLDM, the delivery of Gold Bullion to GLDM in exchange for the underlying Gold Bullion represented by the Shares will not be a taxable event to the Shareholder, and the Shareholder’s tax basis and holding period for the
Shareholder’s pro rata share of the Gold Bullion held in GLDM will be the same as its tax basis and holding period for the Gold Bullion delivered in exchange therefor. For purposes of this discussion, it is assumed that all of a
Shareholder’s Shares are acquired on the same date, at the same price per Share and, except where otherwise noted, that the sole asset of GLDM is Gold Bullion.
When GLDM sells Gold Bullion, for example to pay expenses, a Shareholder generally will recognize gain or loss in an amount equal to the difference between
(1) the Shareholder’s pro rata share of the amount realized by GLDM upon the sale and (2) the Shareholder’s tax basis for its pro rata share of the Gold Bullion that was sold, which gain or loss will generally be long-term or
short-term capital gain or loss, depending upon whether the Shareholder is treated as having held its share of the Gold Bullion that was sold for more than one year. A Shareholder’s tax basis for its share of any Gold Bullion sold by GLDM
generally will be determined by multiplying the Shareholder’s total basis for its share of all of the Gold Bullion held in GLDM immediately prior to the sale by a fraction, the numerator of which is the amount of Gold Bullion sold and the
denominator of which is the total amount of the Gold Bullion held in GLDM immediately prior to the sale. After any such sale, a Shareholder’s tax basis for its pro rata share of the Gold Bullion remaining in GLDM will be equal to its tax basis
for its share of the total amount of the Gold Bullion held in GLDM immediately prior to the sale, less the portion of such basis allocable to its share of the Gold Bullion that was sold.
Upon a Shareholder’s sale of some or all of its Shares, the Shareholder will be treated as having sold the portion of its pro rata share of the Gold
Bullion held in GLDM at the time of the sale that is attributable to the Shares sold. Accordingly, the Shareholder generally will recognize gain or loss on the sale in an amount equal to the difference between (1) the amount realized pursuant
to the sale of the Shares, and (2) the Shareholder’s tax basis for the portion of its pro rata share of the Gold Bullion held in GLDM at the time of sale that is attributable to the Shares sold, as determined in the manner described in the
preceding paragraph.
A redemption of some or all of a Shareholder’s Shares in exchange for the underlying Gold Bullion represented by the
Shares redeemed generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the Gold Bullion received in the redemption generally will be the same as the Shareholder’s tax basis for the
53
portion of its pro rata share of the Gold Bullion held in GLDM immediately prior to the redemption that is attributable to the Shares redeemed. The Shareholder’s holding period with respect
to the Gold Bullion received should include the period during which the Shareholder held the Shares redeemed. A subsequent sale of the Gold Bullion received by the Shareholder will be a taxable event, unless a nonrecognition provision of the Code
applies to such sale.
After any sale or redemption of less than all of a Shareholder’s Shares, the Shareholder’s tax basis for its pro rata
share of the Gold Bullion held in GLDM immediately after such sale or redemption generally will be equal to its tax basis for its share of the total amount of the Gold Bullion held in GLDM immediately prior to the sale or redemption, less the
portion of such basis which is taken into account in determining the amount of gain or loss recognized by the Shareholder upon such sale or, in the case of a redemption, which is treated as the basis of the Gold Bullion received by the Shareholder
in the redemption.
As noted above, the foregoing discussion assumes that all of a Shareholder’s Shares were acquired on the same date and at the
same price per Share. If a Shareholder owns multiple lots of Shares (
i.e.
, Shares acquired on different dates and/or at different prices), it is uncertain whether the Shareholder may use the “specific identification” rules that
apply under Treas. Reg. § 1.1012-1(c) in the case of sales of shares of stock, in determining the amount, and the long-term or short-term character, of any gain or loss recognized by the Shareholder upon the sale of Gold Bullion by GLDM, upon
the sale of any Shares by the Shareholder, or upon the sale by the Shareholder of any Gold Bullion received by it upon the redemption of any of its Shares. The IRS could take the position that a Shareholder has a blended tax basis and holding period
for its pro rata share of the underlying Gold Bullion in GLDM. Shareholders that hold multiple lots of Shares, or that are contemplating acquiring multiple lots of Shares, are urged to consult their own tax advisors as to the determination of the
tax basis and holding period for the underlying Gold Bullion related to such Shares.
MAXIMUM 28% LONG-TERM CAPITAL GAINS TAX RATE FOR
NON-CORPORATE U.S. SHAREHOLDERS
Under current federal income tax law, gains recognized by non-corporate U.S. Shareholders from the sale of
“collectibles,” including Gold Bullion, held for more than one year are taxed at a maximum rate of 28%, rather than the 20% rate applicable to most other long-term capital gains. For these purposes, gain recognized by a non-corporate U.S.
Shareholder upon the sale of an interest in a trust that holds collectibles is treated as gain recognized on the sale of collectibles, to the extent that the gain is attributable to unrealized appreciation in value of the collectibles held by the
trust. Therefore, any gain recognized by a non-corporate U.S. Shareholder attributable to a sale of Shares held for more than one year, or attributable to GLDM’s sale of any Gold Bullion which the Shareholder is treated (through its ownership
of Shares) as having held for more than one year, generally will be taxed at a maximum federal income tax rate of 28%. The tax rates for capital gains recognized upon the sale of assets held by a non-corporate U.S. Shareholder for one year or less
or by a U.S. Shareholder are generally the same as those at which ordinary income is taxed.
3.8% TAX ON NET INVESTMENT INCOME
Certain U.S. Shareholders who are individuals are required to pay a 3.8% tax on the lesser of the excess of their modified adjusted gross income over a
threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers) or their “net investment income,” which generally includes dividends, interest, and net gains from the disposition of investment property.
This tax is in addition to any regular income taxes due on such investment income. A similar tax will apply to certain shareholders that are estates or trusts. U.S. Shareholders are urged to consult their tax advisors regarding the effect, if any,
this law may have on an investment in the Shares.
54
BROKERAGE FEES AND GLDM EXPENSES
Any brokerage or other transaction fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the
underlying assets of GLDM. Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect to the sale.
Shareholders will be required to recognize gain or loss upon a sale of Gold Bullion by GLDM (as discussed above), even though some or all of the proceeds of
such sale are used by the Administrator to pay GLDM’s expenses. Shareholders may deduct their respective pro rata shares of each expense incurred by GLDM to the same extent as if they directly incurred the expense. Shareholders who are
individuals, estates or trusts, however, may be required to treat some or all of the expenses of GLDM as miscellaneous itemized deductions. Individuals may not deduct miscellaneous itemized deductions for tax years beginning after December 31,
2017 and before January 1, 2026. For tax years beginning before January 1, 2018 and after December 31, 2025, individuals may deduct certain miscellaneous itemized deductions only to the extent they exceed 2% of adjusted gross income.
In addition, such deductions may be subject to phase-outs and other limitations under applicable provisions of the Code.
INVESTMENT BY U.S.
TAX-EXEMPT SHAREHOLDERS
U.S. Tax-Exempt Shareholders are subject to United States federal income tax only on their unrelated business taxable income
(“UBTI”). Unless they incur debt in order to purchase Shares, it is expected that U.S. Tax-Exempt Shareholders should not realize UBTI in respect of income or gains from the Shares. U.S. Tax-Exempt Shareholders are urged to consult their
own independent tax advisors regarding the United States federal income tax consequences of holding Shares in light of their particular circumstances.
INVESTMENT BY REGULATED INVESTMENT COMPANIES
Mutual
funds and other investment vehicles which are taxed as “regulated investment companies” within the meaning of section 851 of the Code are strongly urged to consult with their tax advisors concerning the likelihood that an investment in
Shares will affect their qualification as a “regulated investment company.”
INVESTMENT BY CERTAIN RETIREMENT PLANS
Code section 408(m) provides that the acquisition of a “collectible” by an IRA, or a participant-directed account maintained under any plan that is
tax-qualified under Code section 401(a), is treated as a taxable distribution from the account to the owner of the IRA, or to the participant for whom the plan account is maintained, of an amount equal to the cost to the account of acquiring the
collectible. The IRS has issued private letter rulings to taxpayers, including an affiliate of the Sponsor, concluding that the purchase of shares in trusts similar to GLDM by an IRA owner or plan participant will not constitute the acquisition of a
collectible or be treated as resulting in a taxable distribution to the IRA owner or plan participant under section 408(m). However, if any of the shares so purchased are distributed from an IRA or plan account to the IRA owner or plan participant,
or if any gold received by such IRA or plan account upon the redemption of any of shares purchased by it is distributed (or treated as distributed under Code section 408(m)) to the IRA owner or plan participant, the shares or gold so distributed
will be subject to federal income tax in the year of distribution, to the extent provided under the applicable provisions of Code section 408(d), 408(m) or 402. Private letter rulings are only binding on the IRS with respect to the taxpayer to which
they are issued. GLDM has neither requested nor obtained such a private letter ruling. IRA owners and plan participants are strongly urged to consult with their tax advisors before directing any such accounts to invest in the Shares since the
acquisition of Shares may be considered a taxable distribution from the IRA. See also “ERISA and Related Considerations.”
55
U.S. INFORMATION REPORTING AND BACKUP WITHHOLDING FOR U.S. AND NON-U.S. SHAREHOLDERS
The Administrator will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with GLDM. The
Administrator will make information available that will enable brokers and custodians through which investors hold Shares to prepare and, if required, to file certain information returns (e.g., Form 1099) with the IRS. To the extent required by
applicable regulations, each Shareholder will be provided with information regarding its allocable portion of GLDM’s annual income, expenses, gains and losses (if any).
A Shareholder may be subject to U.S. backup withholding tax in certain circumstances unless it provides its taxpayer identification number and complies with
certain certification procedures. Non-U.S. Shareholders may have to comply with certification procedures to establish that they are not U.S. persons, and some Non-U.S. Shareholders will be required to meet certain information reporting or
certification requirements imposed by the Foreign Account Tax Compliance Act (“FATCA”), in order to avoid certain information reporting and backup withholding tax requirements.
The amount of any backup withholding will be allowed as a credit against a Shareholder’s U.S. federal income tax liability and may entitle such a
Shareholder to a refund, provided that the required information is furnished to the IRS.
ESTATE AND GIFT TAX CONSIDERATIONS FOR NON-U.S. SHAREHOLDERS
Under the U.S. federal tax law, individuals who are neither citizens nor residents (as determined for federal estate and gift tax purposes) of the
United States are subject to estate tax on all property that has a U.S. “situs.” Shares may well be considered to have a U.S. situs for these purposes. If they are, then Shares would be includible in the U.S. gross estate of a non-resident
alien Shareholder. Currently, U.S. estate tax is imposed at rates of up to 40% of the fair market value of the taxable estate. The U.S. estate tax rate is subject to change in future years. In addition, the U.S. federal “generation-skipping
transfer tax” may apply in certain circumstances. The estate of a non-resident alien Shareholder who was resident in a country that has an estate tax treaty with the United States may be entitled to benefit from such treaty.
For non-citizens and non-residents of the United States, the U.S. federal gift tax generally applies only to gifts of tangible personal property or real
property having a U.S. situs. Tangible personal property (including gold) has a U.S. situs if it is physically located in the United States. Although the matter is not settled, it appears that ownership of Shares should not be considered ownership
of the underlying gold for this purpose, even to the extent that gold was held in custody in the United States. Instead, Shares should be considered intangible property, and therefore they should not be subject to U.S. gift tax if transferred during
the holder’s lifetime. Such Shareholders are urged to consult their tax advisors regarding the possible application of U.S. estate, gift and generation-skipping transfer taxes in their particular circumstances.
TAXATION IN JURISDICTIONS OTHER THAN THE UNITED STATES
Prospective purchasers of Shares that are based in or acting out of a jurisdiction other than the United States are advised to consult their tax advisors as to
the tax consequences, under the laws of such jurisdiction (or any other jurisdiction not being the United States to which they are subject), of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to
whether any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other dealing.
56
ERISA and Related Considerations
IN GENERAL
The Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), and Code section 4975 impose certain requirements on employee benefit plans and certain other plans and arrangements, including individual retirement accounts and annuities, Keogh plans, and entities that are
subject to ERISA or the Code section 4975 in which such plans or arrangements are invested, including certain collective investment funds or insurance company general or separate accounts (collectively, the “Plans”), and on persons who are
fiduciaries with respect to the investment of assets treated as “plan assets” of a Plan. Government plans and some church plans are not subject to the fiduciary responsibility provisions of ERISA or the provisions of Code section 4975, but
may be subject to substantially similar rules under state or other federal law.
In contemplating an investment of a portion of Plan assets in Shares, the
Plan fiduciary responsible for making such investment should carefully consider, taking into account the facts and circumstances of the Plan, the “Risk Factors” discussed above and whether such investment is consistent with its fiduciary
responsibilities, including, but not limited to (1) whether the fiduciary has the authority to make the investment under the appropriate governing plan instrument; (2) whether the investment would constitute a direct or indirect non-exempt
“prohibited transaction” with a “party in interest” or “disqualified person,” as described in ERISA section 406 of ERISA or Code section 4975, as applicable; (3) the Plan’s funding objectives; and
(4) whether under the general fiduciary standards of investment prudence and diversification such investment is appropriate for the Plan, taking into account the overall investment policy of the Plan, the composition of the Plan’s
investment portfolio and the Plan’s need for sufficient liquidity to pay benefits when due.
The Shares constitute “publicly-offered
securities” as defined in Department of Labor Regulations
§ 2510.3-101(b)(2).
Accordingly, Shares purchased by a Plan, and not an interest in the underlying Gold Bullion held in GLDM represented
by the Shares, should be treated as assets of the Plan, for purposes of applying the “fiduciary responsibility” and “prohibited transaction” rules of ERISA and the Code.
“PLAN ASSETS”
ERISA and a regulation issued
thereunder by the U.S. Department of Labor (collectively, the “Plan Asset Rules”) contain rules for determining when an investment by a Plan in an equity interest of an entity will result in the underlying assets of such entity being
considered to constitute assets of the Plan for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and/or Section 4975 of the Code (i.e., “plan assets”). These Plan Asset Rules provide that assets
of an entity will not be considered assets of a Plan which purchases an equity interest in the entity if one or more exceptions apply, including an exception applicable if the equity interest purchased is a “publicly-offered security” (the
“Publicly-Offered Security Exception”).
The Publicly-Offered Security Exception applies if the equity interest is a security that is
(1) “freely transferable,” (2) part of a class of securities that is “widely held” and (3) either (a) part of a class of securities registered under Section 12(b) or 12(g) of the Exchange Act, or
(b) sold to the Plan as part of a public offering pursuant to an effective registration statement under the Securities Act and the class of which such security is a part is registered under the Exchange Act within 120 days (or such later time
as may be allowed by the SEC) after the end of the fiscal year of the issuer in which the offering of such security occurred. The Trust expects that the Publicly-Offered Security Exception should apply with respect to the Shares of GLDM, so that the
assets of GLDM, including the Gold Bullion, should not be considered the plan assets of a Plan investing in Shares.
PROHIBITED TRANSACTIONS
Without regard to whether the assets of GLDM are considered to be the “plan assets” of investing Plans, the acquisition of Shares by a
Plan from an Authorized Participant, or the sale or exchange of Shares between a Plan
57
and another investor, if such Authorized Participant or other investor or their affiliate is a “party in interest” as defined in ERISA section 3(14) or a “disqualified person”
as defined in Code section 4975 with respect to the Plan could cause a prohibited transaction under ERISA section 406 and Code section 4975. There are certain exemptions (“prohibited transaction class exemptions” or “PTCEs” from
the prohibited transaction rules that could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire Shares. Included among these exemptions are: PTCE 84-14 (relating to
transactions effected by a “qualified professional asset manager”); PTCE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTCE 91-38 (relating to transactions involving bank collective investment
funds); PTCE 95-60 (relating to transactions involving insurance company general accounts); and PTCE 96-23 (relating to transactions effected by an “in-house asset manager”). There is also a statutory exemption that may be available under
ERISA section 408(b)(17) and Code section 4975(d)(20) to a party in interest that is a service provider to a Plan investing in the Shares for adequate consideration, provided such service provider is not (i) the fiduciary with respect to the
Plan’s assets used to acquire the Shares or an affiliate of such fiduciary or (ii) an affiliate of the employer sponsoring the Plan. There can be no assurance that any of these exemptions, or any other exemption, will be available with
respect to any particular transaction involving the Shares.
In addition, Shares generally should not be purchased with the assets of a Plan if the
Sponsor, the Administrator, the Transfer Agent, the Custodian, the Trustee or any of their respective affiliates, any of their respective employees or any employees of their respective affiliates: (1) has investment discretion with respect to
the investment of such plan assets; (2) has authority or responsibility to give or regularly gives investment advice with respect to such plan assets, for a fee, and pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to such plan assets and that such advice will be based on the particular investment needs of the Plan; or (3) is an employer maintaining or contributing to such Plan. A party that is described
in clause (1) or (2) of the preceding sentence would be a fiduciary under ERISA and the Code with respect to the Plan, and unless an exemption applies, any such purchase might result in a “prohibited transaction” under ERISA and
the Code.
Except as otherwise set forth, the foregoing statements regarding the consequences under ERISA and the Code of an investment in Shares of
GLDM are based on the provisions of the Code and ERISA as currently in effect, and the existing administrative and judicial interpretations thereunder. No assurance can be given that administrative, judicial or legislative changes will not occur
that will not make the foregoing statements incorrect or incomplete.
THE PERSON WITH INVESTMENT DISCRETION ACTING ON BEHALF OF A PLAN SHOULD CONSULT
WITH HIS OR HER ATTORNEY AND FINANCIAL ADVISERS AS TO THE PROPRIETY OF AN INVESTMENT IN SHARES IN LIGHT OF THE CIRCUMSTANCES OF THE PARTICULAR PLAN AND CURRENT TAX LAW. SEE ALSO “UNITED STATES FEDERAL TAX CONSEQUENCES — INVESTMENT BY
CERTAIN RETIREMENT PLANS.”
58
The Declaration of Trust
The Trust operates under the terms of the Declaration of Trust, dated as of August 27, 2014, as amended and restated on June 30, 2016 and further
amended and restated on September 13, 2016, January 6, 2017 and April 16, 2018, between the Sponsor and the Trustee. A copy of the Declaration of Trust is available for inspection at the Trustee’s office. The following is a
description of the material terms of the Declaration of Trust.
THE SPONSOR
This section summarizes some of the important provisions of the Declaration of Trust which apply to the Sponsor. For a general description of the
Sponsor’s role concerning the Trust, see the section “Prospectus Summary — The Sponsor.”
Liability of the Sponsor and
indemnification
The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking
any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any Gold Bullion or other assets of GLDM or the Trust. However, the preceding liability exclusion will not protect the Sponsor against
any liability resulting from its own gross negligence, bad faith, or willful misconduct.
The Sponsor and each of its shareholders, members,
directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross
negligence, bad faith, or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly
executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or
obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust. Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any indemnified claim or
liability under the Declaration of Trust.
THE TRUSTEE
This section summarizes some of the important provisions of the Declaration of Trust which apply to the Trustee. For a general description of the
Trustee’s role concerning the Trust, see the section “Prospectus Summary — The Trustee.”
Liability of the Trustee and
indemnification
The Trustee will not be liable or accountable to the Trust or any other person or under any agreement to which the Trust or
any series of the Trust is a party, except for the Trustee’s breach of its obligations pursuant to the Declaration of Trust or its own willful misconduct, bad faith or gross negligence. The Trustee and each of its officers, affiliates,
directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution,
delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that the indemnified party acted without willful misconduct, bad faith or gross negligence.
Duties
The Trustee will have none of the duties
or liabilities of the Sponsor. The duties of the Trustee shall be limited to (i) accepting legal process served on the Trust in the State of Delaware, (ii) the execution of any certificates
59
required to be filed with the Secretary of State of the State of Delaware which the Delaware Trustee is required to execute under Section 3811 of the Delaware Statutory Trust Act, and
(iii) any other duties specifically allocated to the Trustee in the Declaration of Trust or agreed in writing with the Sponsor from time to time.
Resignation, discharge or removal of Trustee; successor trustees
The Trustee may resign at any time by giving at least 60 days advance written notice to the Trust, provided that such resignation will not become effective
until such time as a successor Trustee has accepted appointment as Trustee of the Trust. The Sponsor may remove the Trustee at any time by giving at least 60 days advance written notice to the Trustee, provided that such removal will not become
effective until such time as a successor Trustee has accepted appointment as Trustee of the Trust. Upon effective resignation or removal, the Trustee will be discharged of its duties and obligations.
STATEMENTS, FILINGS AND REPORTS
Proper books of
account for GLDM shall be kept and shall be audited annually by an independent certified public accounting firm selected by the Sponsor in its sole discretion, and there shall be entered therein all transactions, matters and things relating to each
fund’s business as are required by the Securities Act, as amended, and all other applicable rules and regulations, and as are usually entered into books of account kept by persons engaged in a business of like character. The books of account
shall be kept at the principal office of the Trust.
FISCAL YEAR
The fiscal year of GLDM will initially be the period ending September 30th of each year. The Sponsor has the continuing right to select an alternate
fiscal year.
TERMINATION OF THE TRUST OR GLDM
The
Sponsor may terminate the Trust or GLDM in its sole discretion. The Sponsor will give written notice of the termination of the Trust or GLDM, specifying the date of termination, to Shareholders of the Trust or GLDM, as applicable, at least 30 days
prior to the termination of the Trust or GLDM. The Sponsor will, within a reasonable time after such termination, sell all of the Gold Bullion not already distributed to Authorized Participants redeeming Creation Units, if any, in such a manner so
as to effectuate orderly sales and a minimal market impact. The Sponsor shall not be liable for or responsible in any way for depreciation or loss incurred by reason of any sale or sales made in accordance with the provisions of the Declaration of
Trust. The Sponsor may suspend its sales of the Gold Bullion upon the occurrence of unusual or unforeseen circumstances, including, but not limited to, a suspension in trading of gold.
AMENDMENTS TO DECLARATION OF TRUST
The Declaration of
Trust can be amended by the Sponsor in its sole discretion and without the Shareholders’ consent by making an amendment, a Declaration of Trust supplemental thereto, or an amended and restated declaration of trust. Any such restatement,
amendment and/or supplement hereto shall be effective on such date as designated by Sponsor in its sole discretion.
GOVERNING LAW
The Declaration of Trust and the rights of the Sponsor, the Trustee, DTC (as registered owner of the Trust’s global certificates for Shares) and the
Shareholders under the Declaration of Trust are governed by the laws of the State of Delaware.
60
Seed Capital Investor
The Seed Capital Investor, on [Date], agreed to purchase $[XX] in Shares on [Date], and on [Date] took delivery of, [XX] Shares at a per-Share price of $[XX]
(the “Seed Creation Units”). The per-Share price on [Date] was equal to [1/100th] of an ounce of gold determined using the LBMA Gold Price PM. The LBMA Gold Price PM on [Date] was $[XX]. As of the date of this Prospectus, these [XX] Shares
represent all of the outstanding Shares, other than the [XX] shares issued on the initial capitalization date in return for a contribution of $[XX] and prior to the delivery of Creation Units purchased by Authorized Participants on [Date] at the
same per-Share price at which the Seed Capital Investor purchased the Seed Creation Units. The Seed Capital Investor expects to offer all of the Shares comprising the Seed Creation Units to the public pursuant to this Prospectus. Pursuant to the
Seed Capital Investor Agreement, dated [Date], with the Sponsor and GLDM, the Seed Capital Investor may not sell any shares comprising the Seed Creation Units without the consent of the Sponsor.
The Seed Capital Investor intends to make a public offering of the Seed Creation Units at a price per Share that will depend, among other factors, on the net
asset value per Share and the trading price of Shares on NYSE Arca at the time of the offer. Shares offered by the Seed Capital Investor at different times may have different offering prices. The Seed Capital Investor will not receive from GLDM, the
Sponsor or any of their affiliates any fee or other compensation in connection with the sale of the Seed Creation Units. The Seed Capital Investor will be acting as underwriter with respect to the Seed Creation Units.
The Sponsor has agreed to indemnify the Seed Capital Investor against certain liabilities, including liabilities under the Securities Act, and to contribute
to payments that the Seed Capital Investor may be required to make in respect thereof.
61
Plan of Distribution
In addition to the purchase of the Seed Creation Units by the Seed Capital Investor (described above), GLDM expects to issue Shares in Creation Units to
Authorized Participants from time to time in exchange for deposits of the amount of Gold Bullion represented by the Creation Units being created. Because new Shares can be created and issued on an ongoing basis, at any point during the life of GLDM,
a “distribution,” as such term is used in the Securities Act, will be occurring.
The Seed Capital Investor will be deemed to be a statutory
underwriter. Authorized Participants, other broker-dealers and other persons are cautioned that some of their activities will result in their being deemed participants in a distribution in a manner which would render them statutory underwriters and
subject them to the prospectus-delivery and liability provisions of the Securities Act. For example, an Authorized Participant, other broker-dealer firm or its client will be deemed a statutory underwriter if it purchases a Creation Unit from GLDM,
breaks the Creation Unit down into the constituent Shares and sells the Shares to its customers, or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for
the Shares. A determination of whether one is an underwriter must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not
be considered a complete description of all the activities that would lead to categorization as an underwriter.
Investors who purchase Shares
through a commission/fee-based brokerage account may pay commissions/fees charged by the brokerage account. Investors are encouraged to review the terms of their brokerage accounts for details on applicable charges.
Dealers who are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus
dealing with Shares that are part of an “unsold allotment” within the meaning of section 4(a)(3)(C) of the Securities Act, would be unable to take advantage of the prospectus-delivery exemption provided by section 4(a)(3) of the Securities
Act.
The Sponsor intends to qualify the Shares in states selected by the Sponsor and through broker-dealers who are members of FINRA. Investors intending
to create or redeem Creation Units through Authorized Participants in transactions not involving a broker-dealer registered in an investor’s state of domicile or residence should consult their legal advisors regarding applicable broker-dealer
or securities regulatory requirements under the state securities laws prior to such creation or redemption.
The Sponsor has agreed to indemnify
certain parties against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that such parties may be required to make in respect of those liabilities. The Administrator has agreed to reimburse such
parties, solely from and to the extent of GLDM’s assets, for indemnification and contribution amounts due from the Sponsor in respect of such liabilities to the extent the Sponsor has not paid such amounts when due. In addition, WGC AM has
agreed to indemnify certain parties against certain liabilities.
The Seed Capital Investor will not act as an Authorized Participant with respect to the
Seed Creation Units, and its activities with respect to the Seed Creation Units will be distinct from those of an Authorized Participant. Unlike most Authorized Participants, the Seed Capital Investor is not in the business of purchasing and selling
securities for its own account or the accounts of others. The Seed Capital Investor will not act as an Authorized Participant to purchase (or redeem) Creation Units in the future.
The Shares will trade on NYSE Arca under the symbol “GLDM.”
The Marketing Agent is assisting the Sponsor in, among other things: (1) developing a marketing plan for GLDM on an ongoing basis; (2) preparing
marketing materials regarding the Shares, including the content on GLDM’s website; (3) executing the marketing plan for GLDM; (4) conducting public relations activities related to the marketing of Shares; and (5) incorporating
gold into its strategic and tactical exchange-traded fund research.
62
Legal Proceedings
None.
63
Legal Matters
The validity of the Shares will be passed upon for the Sponsor by Morgan, Lewis & Bockius LLP, which, as U.S. tax counsel to GLDM, will also render
an opinion regarding the material federal income tax consequences relating to the Shares.
64
Experts
The financial statements included in this Prospectus and included elsewhere in the registration statement have been audited by KPMG LLP, an independent
registered public accounting firm, as stated in their report appearing herein and elsewhere in the registration statement, and is included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
65
Where You Can Find More Information
The Sponsor has filed on behalf of GLDM a registration statement on Form S-1 with the SEC under the Securities Act. This Prospectus does not contain all of
the information set forth in the registration statement (including the exhibits to the registration statement), parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information about GLDM or the
Shares, please refer to the registration statement, which you may inspect, without charge, at the public reference facilities of the SEC at the below address or online at www.sec.gov, or obtain at prescribed rates from the public reference
facilities of the SEC at the below address. Information about GLDM and the Shares can also be obtained from GLDM’s website. The Internet address of GLDM’s website is http://www.spdrgoldshares.com. This Internet address is only provided
here as a convenience to you to allow you to access GLDM’s website, and the information contained on or connected to GLDM’s website is not part of this Prospectus or the registration statement of which this Prospectus is a part.
GLDM is subject to the informational requirements of the Exchange Act, and the Sponsor, on behalf of GLDM, will file quarterly and annual reports and other
information with the SEC. The Sponsor will file an updated prospectus annually for GLDM pursuant to the Securities Act. The reports and other information can be inspected at the public reference facilities of the SEC located at 100 F Street, N.E.,
Washington, D.C. 20549 and online at www.sec.gov. You may also obtain copies of such material from the public reference facilities of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. You may obtain more information
concerning the operation of the public reference facilities of the SEC by calling the SEC at 1-800-SEC-0330 or visiting online at
www.sec.gov
.
66
Financial Statements
WORLD GOLD TRUST
INDEX TO FINANCIAL STATEMENTS
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Documents
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Page
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Combined Statements of Financial Condition at March
31, 2018 (unaudited) and September 30, 2017 for World Gold Trust
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F-3
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Combined Schedules of Investments at March
31, 2018 (unaudited) and September 30, 2017 for World Gold Trust
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F-4
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Unaudited Combined Statements of Operations for the three and six months ended
March 31, 2018 and 2017 for World Gold Trust
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F-5
|
|
|
|
|
|
Unaudited Combined Statements of Cash Flows for the three and six months ended
March 31, 2018 and 2017 for World Gold Trust
|
|
|
F-6
|
|
|
|
|
|
Combined Statements of Changes in Net Assets for the six months ended March 31,
2018 (unaudited) and fiscal period ended September 30, 2017 for World Gold Trust
|
|
|
F-7
|
|
|
|
|
|
Statements of Financial Condition at March
31, 2018 (unaudited) and September 30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-8
|
|
|
|
|
|
Schedule of Investments at March
31, 2018 (unaudited) and September 30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-9
|
|
|
|
|
|
Unaudited Statements of Operations for the three and six months ended March 31,
2018 and 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-10
|
|
|
|
|
|
Unaudited Statements of Cash Flows for the three and six months ended March 31,
2018 and 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-11
|
|
|
|
|
|
Statements of Changes in Net Assets for the six months ended March
31, 2018 (unaudited) and fiscal period ended September 30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-12
|
|
|
|
|
|
Notes to the Financial Statements
|
|
|
F-13
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
F-23
|
|
|
|
|
|
Combined Statement of Financial Condition at September 30, 2017 for World Currency
Gold Trust (n/k/a World Gold Trust)
|
|
|
F-24
|
|
F-1
|
|
|
|
|
|
|
Documents
|
|
Page
|
|
|
|
|
|
Combined Schedule of Investments at September
30, 2017 for World Currency Gold Trust (n/k/a World Gold Trust)
|
|
|
F-25
|
|
|
|
|
|
Combined Statement of Operations for the fiscal period ended September 30,
2017 for World Currency Gold Trust (n/k/a World Gold Trust)
|
|
|
F-26
|
|
|
|
|
|
Combined Statement of Cash Flows for the fiscal period ended September 30,
2017 for World Currency Gold Trust (n/k/a World Gold Trust)
|
|
|
F-27
|
|
|
|
|
|
Combined Statement of Changes in Net Assets for the fiscal period ended September 30,
2017 for World Currency Gold Trust (n/k/a World Gold Trust)
|
|
|
F-28
|
|
|
|
|
|
Statement of Financial Condition at September
30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-29
|
|
|
|
|
|
Schedule of Investments at September
30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-30
|
|
|
|
|
|
Statement of Operations for the fiscal period ended September
30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-31
|
|
|
|
|
|
Statement of Cash Flows for the fiscal period ended September
30, 2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-32
|
|
|
|
|
|
Statement of Changes in Net Assets for the fiscal period ended September 30,
2017 for SPDR® Long Dollar Gold Trust
|
|
|
F-33
|
|
|
|
|
|
Notes to the Financial Statements
|
|
|
F-34
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
F-44
|
|
|
|
|
|
Statement of Financial Condition at September
30, 2017 for The Gold Trust (n/k/a SPDR® Gold MiniShares Trust)
|
|
|
F-45
|
|
|
|
|
|
Notes to the Financial Statements
|
|
|
F-46
|
|
F-2
World Gold Trust
Combined Statements of Financial Condition
at March 31, 2018 (unaudited) and September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$ except for share and per share data)
|
|
Mar-31, 2018
|
|
|
Sep-30, 2017
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Investment in Gold, at fair value (cost $15,617 and $13,592 at March 31, 2018 and
September 30, 2017, respectively)
|
|
$
|
16,666
|
|
|
$
|
14,406
|
|
|
Gold Delivery Agreement receivable
|
|
|
170
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
16,836
|
|
|
$
|
14,427
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts payable to Sponsor
|
|
$
|
5
|
|
|
$
|
4
|
|
|
Gold Delivery Agreement payable
|
|
|
—
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
5
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
16,831
|
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
(1)
|
|
|
140,000
|
|
|
|
120,000
|
|
|
Net asset value per Share
|
|
$
|
120.22
|
|
|
$
|
119.77
|
|
|
(1)
|
Authorized share capital is unlimited and the par value of the Shares is $0.00.
|
See notes to the unaudited financial statements.
F-3
World Gold Trust
Combined Schedules of Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
12.6
|
|
|
$
|
15,617
|
|
|
$
|
16,666
|
|
|
|
99.02
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
12.6
|
|
|
$
|
15,617
|
|
|
$
|
16,666
|
|
|
|
99.02
|
%
|
|
Assets in excess of liabilities
|
|
|
|
|
|
|
|
|
|
|
165
|
|
|
|
0.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
16,831
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at March 31, 2018 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
Merrill Lynch
International
|
|
$
|
16,666
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Liabilities in excess of other assets
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
|
(0.23
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
14,373
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
Merrill Lynch
International
|
|
$
|
14,406
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
See notes to the unaudited financial statements.
F-4
World Gold Trust
Unaudited Combined Statements of Operations
For the three and six months ended March 31, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$, except per share data)
|
|
Three Months
Ended
Mar-31,
2018
|
|
|
Three Months
Ended
Mar-31,
2017
(1)
|
|
|
Six Months
Ended
Mar-31,
2018
|
|
|
Six Months
Ended
Mar-31,
2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sponsor fees
|
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
30
|
|
|
$
|
13
|
|
|
Gold Delivery Provider fees
|
|
|
8
|
|
|
|
7
|
|
|
|
15
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
23
|
|
|
|
20
|
|
|
|
45
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(23
|
)
|
|
|
(20
|
)
|
|
|
(45
|
)
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
1
|
|
|
Net realized gain/(loss) on Gold Delivery Agreement
|
|
|
(415
|
)
|
|
|
(86
|
)
|
|
|
(533
|
)
|
|
|
(86
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold
Delivery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provider fees
|
|
|
168
|
|
|
|
39
|
|
|
|
229
|
|
|
|
39
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
149
|
|
|
|
—
|
|
|
|
149
|
|
|
|
—
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
98
|
|
|
|
812
|
|
|
|
235
|
|
|
|
812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
1
|
|
|
|
766
|
|
|
|
82
|
|
|
|
766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
$
|
(22
|
)
|
|
$
|
746
|
|
|
$
|
37
|
|
|
$
|
746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share
|
|
$
|
(0.15
|
)
|
|
$
|
3.85
|
|
|
$
|
0.25
|
|
|
$
|
3.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (in 000’s)
|
|
|
150
|
|
|
|
194
|
|
|
|
149
|
|
|
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Fund commenced operations on January 27, 2017. See Note 1.
|
See notes to the unaudited financial statements.
F-5
World Gold Trust
Unaudited Combined Statements of Cash Flows
For the
three and six months ended March 31, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Three Months
Ended
Mar-31, 2018
|
|
|
Three Months
Ended
Mar-31, 2017
(1)
|
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Six Months
Ended
Mar-31, 2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
INCREASE/DECREASE IN CASH FROM OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds received from sales of gold
|
|
$
|
15
|
|
|
$
|
12
|
|
|
$
|
29
|
|
|
$
|
12
|
|
|
Cash expenses paid
|
|
|
(15
|
)
|
|
|
(12
|
)
|
|
|
(29
|
)
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from issuance of stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Cash paid for repurchase of stock
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from financing activities
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of gold received for creation of shares—net of gold receivable
|
|
$
|
—
|
|
|
$
|
26,550
|
|
|
$
|
4,814
|
|
|
$
|
26,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of gold distributed for redemption of shares—net of gold payable
|
|
$
|
(2,393
|
)
|
|
$
|
—
|
|
|
$
|
(2,393
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement inflows—net of Gold Delivery Agreement
receivable
|
|
$
|
1,645
|
|
|
$
|
1,440
|
|
|
$
|
3,005
|
|
|
$
|
1,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement outflows—net of Gold Delivery Agreement
payable
|
|
$
|
(2,365
|
)
|
|
$
|
(1,686
|
)
|
|
$
|
(3,710
|
)
|
|
$
|
(1,686
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Three Months
Ended
Mar-31, 2018
|
|
|
Three Months
Ended
Mar-31, 2017
(1)
|
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Six Months
Ended
Mar-31, 2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
$
|
(22
|
)
|
|
$
|
746
|
|
|
$
|
37
|
|
|
$
|
746
|
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales of gold to pay expenses
|
|
|
23
|
|
|
|
12
|
|
|
|
44
|
|
|
|
12
|
|
|
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
Net realized (gain)/loss from Gold Delivery Agreement
|
|
|
415
|
|
|
|
86
|
|
|
|
533
|
|
|
|
86
|
|
|
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
(168
|
)
|
|
|
(39
|
)
|
|
|
(229
|
)
|
|
|
(39
|
)
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
(149
|
)
|
|
|
—
|
|
|
|
(149
|
)
|
|
|
—
|
|
|
Net change in unrealized (appreciation)/depreciation on investment in gold
|
|
|
(98
|
)
|
|
|
(812
|
)
|
|
|
(235
|
)
|
|
|
(812
|
)
|
|
Increase/(Decrease) in accounts payable to Sponsor
|
|
|
—
|
|
|
|
8
|
|
|
|
1
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Fund commenced operations on January 27, 2017. See Note 1.
|
See notes to the unaudited financial
statements
F-6
World Gold Trust
Combined Statements of Changes in Net Assets
For the six months ended March 31, 2018 (unaudited) and Fiscal Period ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Six Months
Ended
Mar-31,
2018
|
|
|
Fiscal Period
Ended
Sep-30,
2017
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
Net Assets—Opening Balance
|
|
$
|
14,373
|
|
|
$
|
—
|
|
|
Creations
|
|
|
4,814
|
|
|
|
26,550
|
|
|
Redemptions
|
|
|
(2,393
|
)
|
|
|
(11,840
|
)
|
|
Repurchase of stock
|
|
|
—
|
|
|
|
(1
|
)
|
|
Issuance of stock
|
|
|
—
|
|
|
|
1
|
|
|
Net investment loss
|
|
|
(45
|
)
|
|
|
(77
|
)
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
2
|
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(533
|
)
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
229
|
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
149
|
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
235
|
|
|
|
814
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets—Closing Balance
|
|
$
|
16,831
|
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
|
|
|
See notes to the unaudited financial statements.
F-7
SPDR
®
Long Dollar Gold Trust
Statements of Financial Condition
at March 31, 2018 (unaudited) and September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$ except for share and per share data)
|
|
Mar-31,
2018
|
|
|
Sep-30,
2017
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Investment in Gold, at fair value (cost $15,617 and $13,592 at March 31, 2018 and
September 30, 2017, respectively)
|
|
$
|
16,666
|
|
|
$
|
14,406
|
|
|
Gold Delivery Agreement receivable
|
|
|
170
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
16,836
|
|
|
$
|
14,427
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts payable to Sponsor
|
|
$
|
5
|
|
|
$
|
4
|
|
|
Gold Delivery Agreement payable
|
|
|
—
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
5
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
16,831
|
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
(1)
|
|
|
140,000
|
|
|
|
120,000
|
|
|
Net asset value per Share
|
|
$
|
120.22
|
|
|
$
|
119.77
|
|
|
(1)
|
Authorized share capital is unlimited and the par value of the Shares is $0.00.
|
See notes to the
unaudited financial statements.
F-8
SPDR
®
Long Dollar Gold Trust
Schedules of Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
12.6
|
|
|
$
|
15,617
|
|
|
$
|
16,666
|
|
|
|
99.02
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
12.6
|
|
|
$
|
15,617
|
|
|
$
|
16,666
|
|
|
|
99.02
|
%
|
|
Assets in excess of liabilities
|
|
|
|
|
|
|
|
|
|
|
165
|
|
|
|
0.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
16,831
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at March 31, 2018 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
Merrill Lynch International
|
|
$
|
16,666
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Liabilities in excess of other assets
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
|
(0.23
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
14,373
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
Merrill Lynch International
|
|
$
|
14,406
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
See notes to the unaudited financial statements.
F-9
SPDR
®
Long Dollar Gold Trust
Unaudited Statements of Operations
For the three and six
months ended March 31, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$, except per share data)
|
|
Three Months
Ended
Mar-31,
2018
|
|
|
Three Months
Ended
Mar-31,
2017
(1)
|
|
|
Six Months
Ended
Mar-31,
2018
|
|
|
Six Months
Ended
Mar-31,
2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sponsor fees
|
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
30
|
|
|
$
|
13
|
|
|
Gold Delivery Provider fees
|
|
|
8
|
|
|
|
7
|
|
|
|
15
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
23
|
|
|
|
20
|
|
|
|
45
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(23
|
)
|
|
|
(20
|
)
|
|
|
(45
|
)
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
1
|
|
|
Net realized gain/(loss) on Gold Delivery Agreement
|
|
|
(415
|
)
|
|
|
(86
|
)
|
|
|
(533
|
)
|
|
|
(86
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
168
|
|
|
|
39
|
|
|
|
229
|
|
|
|
39
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
149
|
|
|
|
—
|
|
|
|
149
|
|
|
|
—
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
98
|
|
|
|
812
|
|
|
|
235
|
|
|
|
812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
1
|
|
|
|
766
|
|
|
|
82
|
|
|
|
766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
$
|
(22
|
)
|
|
$
|
746
|
|
|
$
|
37
|
|
|
$
|
746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share
|
|
$
|
(0.15
|
)
|
|
$
|
3.85
|
|
|
$
|
0.25
|
|
|
$
|
3.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (in 000’s)
|
|
|
150
|
|
|
|
194
|
|
|
|
149
|
|
|
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Fund commenced operations on January 27, 2017. See Note 1.
|
See notes to the unaudited financial
statements.
F-10
SPDR
®
Long Dollar Gold Trust
Unaudited Statements of Cash Flows
For the three and six months ended March 31, 2018 and 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Three Months
Ended
Mar-31, 2018
|
|
|
Three Months
Ended
Mar-31, 2017
(1)
|
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Six Months
Ended
Mar-31, 2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
INCREASE/DECREASE IN CASH FROM OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds received from sales of gold
|
|
$
|
15
|
|
|
$
|
12
|
|
|
$
|
29
|
|
|
$
|
12
|
|
|
Cash expenses paid
|
|
|
(15
|
)
|
|
|
(12
|
)
|
|
|
(29
|
)
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from issuance of stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
Cash paid for repurchase of stock
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from financing activities
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of gold received for creation of shares—net of gold receivable
|
|
$
|
—
|
|
|
$
|
26,550
|
|
|
$
|
4,814
|
|
|
$
|
26,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of gold distributed for redemption of shares—net of gold payable
|
|
$
|
(2,393
|
)
|
|
$
|
—
|
|
|
$
|
(2,393
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement inflows—net of Gold Delivery Agreement
receivable
|
|
$
|
1,645
|
|
|
$
|
1,440
|
|
|
$
|
3,005
|
|
|
$
|
1,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement outflows—net of Gold Delivery Agreement
payable
|
|
$
|
(2,365
|
)
|
|
$
|
(1,686
|
)
|
|
$
|
(3,710
|
)
|
|
$
|
(1,686
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Three Months
Ended
Mar-31, 2018
|
|
|
Three Months
Ended
Mar-31,2017
(1)
|
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Six Months
Ended
Mar-31, 2017
(1)
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
$
|
(22
|
)
|
|
$
|
746
|
|
|
$
|
37
|
|
|
$
|
746
|
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales of gold to pay expenses
|
|
|
23
|
|
|
|
12
|
|
|
|
44
|
|
|
|
12
|
|
|
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
Net realized (gain)/loss from Gold Delivery Agreement
|
|
|
415
|
|
|
|
86
|
|
|
|
533
|
|
|
|
86
|
|
|
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
(168
|
)
|
|
|
(39
|
)
|
|
|
(229
|
)
|
|
|
(39
|
)
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
(149
|
)
|
|
|
—
|
|
|
|
(149
|
)
|
|
|
—
|
|
|
Net change in unrealized (appreciation)/depreciation on investment in gold
|
|
|
(98
|
)
|
|
|
(812
|
)
|
|
|
(235
|
)
|
|
|
(812
|
)
|
|
Increase/(Decrease) in accounts payable to Sponsor
|
|
|
—
|
|
|
|
8
|
|
|
|
1
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Fund commenced operations on January 27, 2017. See Note 1.
|
See notes to the unaudited financial
statements.
F-11
SPDR
®
Long Dollar Gold Trust
Statements of Changes in Net Assets
For the six months ended March 31, 2018 (unaudited) and Fiscal Period ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Six Months
Ended
Mar-31,
2018
|
|
|
Fiscal Period
Ended
Sep-30,
2017
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
Net Assets—Opening Balance
|
|
$
|
14,373
|
|
|
$
|
—
|
|
|
Creations
|
|
|
4,814
|
|
|
|
26,550
|
|
|
Redemptions
|
|
|
(2,393
|
)
|
|
|
(11,840
|
)
|
|
Repurchase of stock
|
|
|
—
|
|
|
|
(1
|
)
|
|
Issuance of stock
|
|
|
—
|
|
|
|
1
|
|
|
Net investment loss
|
|
|
(45
|
)
|
|
|
(77
|
)
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
2
|
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(533
|
)
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
229
|
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
149
|
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
235
|
|
|
|
814
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets—Closing Balance
|
|
$
|
16,831
|
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
|
|
|
See notes to the unaudited financial statements.
F-12
Notes to the Unaudited Financial Statements
1. Organization
World Gold Trust
(the “Trust”) was organized as a Delaware statutory trust on August 27, 2014 and is governed by the Fourth Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”), dated as of April 16, 2018,
between WGC USA Asset Management Company, LLC (the “Sponsor”) and the Delaware Trust Company (the “Trustee”). The Trust is authorized to issue an unlimited number of shares of beneficial interest (“Shares”). The
beneficial interest in the Trust may be divided into one or more series. The Trust has established six separate series. The accompanying financial statements relate to the Trust and SPDR® Long Dollar Gold Trust (the “Fund”), currently
the only operational series of the Trust, which commenced operations on January 27, 2017. The fiscal year-end of both the Trust and the Fund is September 30.
On November 30, 2017, the Sponsor filed a Form S-1 with the Securities and Exchange Commission for The Gold Trust, a series of the Trust (the “New
Fund”), which included an independent registered public accounting firm’s audit report on the statement of financial condition as of September 30, 2017 of the New Fund. As of and for the six months ended March 31, 2018, the New
Fund has not commenced operations and as a result, the New Fund continues to not have any Shares outstanding, assets or liabilities, revenue or expenses. Accordingly, no statements have been provided for the New Fund within this quarterly report as
there are no balances or relevant footnotes to present.
The investment objective of the Fund is to track the performance of the Solactive GLD® Long
USD Gold Index (the “Index”), less Fund expenses. The Index seeks to track the daily performance of a long position in physical gold, as represented by the London Bullion Market Association (“LBMA”) Gold Price AM, and a short
position in a basket of specific non-U.S. currencies (i.e., a long U.S. dollar (“USD”) exposure versus the basket). Those non-U.S. currencies, which are weighted according to the Index, consist of the Euro, Japanese Yen, British
Pound Sterling, Canadian Dollar, Swedish Krona, and Swiss Franc (each, a “Reference Currency” and together, the “Reference Currencies”).
BNY Mellon Asset Servicing, a division of The Bank of New York Mellon (“BNYM”), is the Administrator and Transfer Agent of the Fund. BNYM also serves
as the custodian of the Fund’s cash, if any. HSBC Bank plc (the “Custodian”) is responsible for custody of the Fund’s gold bullion. Merrill Lynch International is the Gold Delivery Provider to the Fund. State Street Global
Advisors Funds Distributors, LLC is the marketing agent of the Fund. Solactive AG (the “Index Provider”) has licensed the Index to the Sponsor for use with the Fund.
The statement of financial condition and schedule of investments at March 31, 2018, the statements of operations and of cash flows for the three and six
months ended March 31, 2018 and 2017, and the statement of changes in net assets for the six months ended March 31, 2018 have been prepared on behalf of the Trust and the Fund without audit. In the opinion of management of the Sponsor, all
adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the three and six months ended March 31, 2018 and for all periods presented have
been made. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on
Form 10-K
for the fiscal year ended September 30,
2017. The results of operations for the three and six months ended March 31, 2018 are not necessarily indicative of the operating results for the full fiscal year.
Capitalized terms used but not defined herein have the meaning as set forth in the Declaration of Trust.
The Trust had no operations with respect to the Fund’s Shares prior to January 27, 2017 other than matters relating to its organization, the
registration of the Fund’s Shares under the Securities Act of 1933, as amended, and the sale and issuance by the Fund to WGC (US) Holdings, Inc. of 10 Shares of the Fund for an aggregate purchase price of $1,000.
F-13
Notes to the Unaudited Financial Statements
2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting
policies followed by the Fund and Trust.
2.1. Basis of Accounting
These financial statements present the financial condition, results of operations and cash flows of the Fund and the Fund and Trust combined. For the periods
presented, there were no balances or activity for the Trust apart from those from the Fund when combined, and the footnotes accordingly relate to the Fund, unless stated otherwise.
The Fund is an investment company within the scope of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 946,
Financial Services—Investment Companies
, and therefore applies the specialized accounting and reporting guidance therein. The Fund is not registered as an investment company under the Investment Company Act of 1940, as amended.
2.2. Basis of Presentation
The
financial statements are presented for the Trust, as the SEC registrant, combined with the Fund and for the Fund individually. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Fund
shall be enforceable only against the assets of the Fund and not against the assets of the Trust generally or any other fund that the Trust may establish in the future.
2.3. Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments of sufficient credit quality with original maturity of three months or less.
2.4. Solactive GLD
®
Long USD Gold Index—Gold Delivery Agreement
Pursuant to the terms of the Gold Delivery Agreement, the Fund has entered into a transaction to deliver gold bullion to, or receive gold bullion from, Merrill
Lynch International, as Gold Delivery Provider, each Business Day. The amount of gold bullion transferred essentially will be equivalent to the Fund’s profit or loss as if the Fund had exchanged the Reference Currencies comprising the Index
(“FX Basket”), in the proportion in which they are reflected in the Index, for USDs in an amount equal to the Fund’s holdings of gold bullion on such day. In general, if there is a currency gain (i.e., the value of the USD against the
Reference Currencies comprising the FX Basket increases), the Fund will receive gold bullion. In general, if there is a currency loss (i.e., the value of the USD against the Reference Currencies comprising the FX Basket decreases), the Fund will
deliver gold bullion. In this manner, the amount of gold bullion held by the Fund will be adjusted to reflect the daily change in the value of the Reference Currencies comprising the FX Basket against the USD. The Gold Delivery Agreement requires
gold bullion ounces calculated pursuant to formulas contained in the Gold Delivery Agreement to be delivered to the custody account of the Fund or Gold Delivery Provider, as applicable. The fee that the Fund pays the Gold Delivery Provider for its
services under the Gold Delivery Agreement is accrued daily and reflected in the calculation of the amount of gold bullion to be delivered pursuant to the Gold Delivery Agreement. The realized gain/loss from the Gold Delivery Agreement is disclosed
on the Statement of Operations and the Statement of Changes in Net Assets. The realized gain/loss is only shown on the Statement of Financial Condition to the extent not received/paid.
F-14
Notes to the Unaudited Financial Statements
2.4. Solactive GLD
®
Long USD Gold Index—Gold Delivery Agreement — (continued)
The Index is designed to represent the daily performance of a long position in physical gold, as
represented by the LBMA Gold Price AM, and a short position in the basket of Reference Currencies with weightings determined by the FX Basket. The Reference Currencies and their respective weightings in the Index are as follows: Euro (EUR/USD)
(57.6%), Japanese Yen (USD/JPY) (13.6%), British Pound Sterling (GBP/USD) (11.9%), Canadian Dollar (USD/CAD) (9.1%), Swedish Krona (USD/SEK) (4.2%), and Swiss Franc (USD/CHF) (3.6%).
2.5. Fair Value Measurement
U.S.
GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund’s policy is to value its investments at fair
value.
Various inputs are used in determining the fair value of the Fund’s assets or liabilities. Inputs may be based on independent market data
(“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value
determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows:
|
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
|
|
|
Level 2 –
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by
observable market data by correlation or other means; and
|
|
|
Level 3 –
|
Inputs that are unobservable for the asset and liability, including the Fund’s assumptions (if any) used in determining the fair value of investments.
|
The following table summarizes the Fund’s investments at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
March 31, 2018
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Investment in Gold
|
|
$
|
16,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
16,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
September 30, 2017
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Investment in Gold
|
|
$
|
14,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
14,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Level 1 and other Levels for the six months ended March 31, 2018 and fiscal
period ended September 30, 2017.
F-15
Notes to the Unaudited Financial Statements
2.5. Fair Value Measurement — (continued)
The Administrator values the gold held by the Fund on the basis of the price of an ounce of gold as
determined by ICE Benchmark Administration Limited (“IBA”), a benchmark administrator, which provides an independently administered auction process, as well as the overall administration and governance for the LBMA Gold Price. In
determining the net asset value (“NAV”) of the Fund, the Administrator values the gold held by the Fund on the basis of the price of an ounce of gold determined by the IBA 10:30 AM auction process (“LBMA Gold Price AM”), which is
an electronic auction, with the imbalance calculated and the price adjusted in rounds (45 seconds in duration). The auction runs twice daily at 10:30 AM and 3:00 PM London time. The Administrator calculates the NAV of the Trust on each day the NYSE
Arca is open for regular trading, generally as of 12:00 PM New York time. If no LBMA Gold Price AM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 PM New York time on a particular evaluation day,
the next most recent LBMA Gold Price AM is used in the determination of the NAV of the Fund, unless the Administrator, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such determination.
2.6. Custody of Gold
Gold bullion
is held by HSBC Bank plc (the “Custodian”) on behalf of the Fund. During the six-month period ended March 31, 2018, no gold was held by a subcustodian. During the fiscal period ended September 30, 2017, no gold was held by a
subcustodian.
2.7. Gold Delivery Agreement Receivable
Gold Delivery Agreement receivable represents the quantity of gold due to be received under the Gold Delivery Agreement. The gold is transferred to the
Fund’s allocated gold bullion account at the Custodian two business days after the valuation date.
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Mar-31,
2018
|
|
|
Sep-30,
2017
|
|
|
Gold Delivery Agreement receivable
|
|
$
|
170
|
|
|
$
|
21
|
|
2.8. Gold Delivery Agreement Payable
Gold Delivery Agreement payable represents the quantity of gold due to be delivered under the Gold Delivery Agreement. The gold is transferred from the
Fund’s allocated gold bullion account at the Custodian two business days after the valuation date.
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Mar-31,
2018
|
|
|
Sep-30,
2017
|
|
|
Gold Delivery Agreement payable
|
|
$
|
—
|
|
|
$
|
50
|
|
2.9. Creations and Redemptions of Shares
The Fund creates and redeems Shares from time to time, but only in one or more Creation Units (a Creation Unit equals a block of 10,000 Shares). The Fund
issues Shares in Creation Units to certain authorized participants (“Authorized Participants”) on an ongoing basis. The creation and redemption of Creation Units is only made in exchange for the delivery to the Fund or the distribution by
the Fund of the amount of gold and any cash represented by the Creation Units being created or redeemed, the amount of which will be based on the combined net asset value of the number of Shares included in the
F-16
Notes to the Unaudited Financial Statements
2.9. Creations and Redemptions of Shares — (continued)
Creation Units being created or redeemed determined on the day the order to create or redeem Creation Units is properly received.
The Fund commenced trading shares in January 2017. As the Shares of the Fund are redeemable at the option of the Authorized Participants, the Fund has
classified the Shares as Net Assets. Changes in the Shares for the six months ended March 31, 2018 and fiscal period ended September 30, 2017 are as follows:
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s)
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Fiscal Period
Ended
Sep-30, 2017
|
|
|
Activity in Number of Shares Issued and Outstanding:
|
|
|
|
|
|
|
|
|
|
Creations
|
|
|
40
|
|
|
|
220
|
|
|
Redemptions
|
|
|
(20
|
)
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in number of Shares Issued and Outstanding
|
|
|
20
|
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Six Months
Ended
Mar-31, 2018
|
|
|
Fiscal Period
Ended
Sep-30, 2017
|
|
|
Activity in Value of Shares Issued and Outstanding:
|
|
|
|
|
|
|
|
|
|
Creations
|
|
$
|
4,814
|
|
|
$
|
26,500
|
|
|
Redemptions
|
|
|
(2,393
|
)
|
|
|
(11,840
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in value of Shares Issued and Outstanding
|
|
$
|
2,421
|
|
|
$
|
14,710
|
|
|
|
|
|
|
|
|
|
|
|
2.10. Revenue Recognition Policy
The Administrator will, at the direction of the Sponsor, sell the Fund’s gold as necessary to pay the Fund’s expenses. When selling gold to pay
expenses, the Administrator will endeavor to sell the smallest amount of gold needed to pay expenses in order to minimize the Fund’s holdings of assets other than gold. Unless otherwise directed by the Sponsor, to meet expenses the
Administrator will give a sell order and sell gold to the Custodian at the next LBMA Gold Price AM following the sale order. A gain or loss is recognized based on the difference between the selling price and the average cost of the gold sold, and
such amounts are reported as net realized gain/(loss) from investment in gold sold to pay expenses on the Statement of Operations.
The Fund’s net
realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement for the six-month period ended March 31, 2018 of $82 is made up of a realized gain of $2 from the sale of gold to pay Sponsor fees, a realized loss
of ($533) from the Gold Delivery Agreement, a realized gain of $229 from gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees, a realized gain of $149 from gold distributed for the redemption of shares, and a change in
unrealized appreciation of $235 on investment in gold.
The Fund’s net realized and change in unrealized gain/(loss) on investment in gold and Gold
Delivery Agreement for the six-month period ended March 31, 2017 of $766 is made up of a realized gain of $1 from the sale of gold to pay Sponsor fees, a realized loss of ($86) from the Gold Delivery Agreement, a realized gain of $39 from gold
transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees, and a change in unrealized appreciation of $812 on investment in gold.
F-17
Notes to the Unaudited Financial Statements
2.11. Income Taxes
The Fund is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Fund is not subject to U.S. federal income tax.
Instead, the Fund’s income and expenses “flow through” to the Shareholders, and the Administrator will report the Fund’s proceeds, income, deductions, gains and losses to the Internal Revenue Service on that basis.
The Sponsor has evaluated whether there are uncertain tax positions that require financial statement recognition and has determined that no reserves for
uncertain tax positions are required as of March 31, 2018. There are no open tax years or examinations in progress at period end.
3. Related Parties - Sponsor
The
Sponsor receives an annual fee equal to 0.33% of NAV of the Fund, calculated on a daily basis.
The Sponsor is responsible for the payment of all ordinary
fees and expenses of the Fund, including but not limited to the following: fees charged by the Fund’s administrator, custodian, index provider, marketing agent and trustee; exchange listing fees; typical maintenance and transaction fees of The
Depository Trust Company; SEC registration fees; printing and mailing costs; audit fees and expenses; and legal fees not in excess of $100,000 per annum and expenses and applicable license fees. The Sponsor is not, however, required to pay any
extraordinary expenses incurred in the ordinary course of the Fund’s business as outlined in the Sponsor’s agreement with the Trust.
4. Fund Expenses
The Fund’s
only ordinary recurring operating expenses are expected to be the Sponsor’s annual fee of 0.33% of the NAV of the Fund and the Gold Delivery Provider’s annual fee of 0.17% of the NAV of the Fund, each of which accrue daily. The
Sponsor’s fee is payable by the Fund monthly in arrears, while the Gold Delivery Provider’s fee is paid daily with gold bullion in-kind, so that the Fund’s total annual expense ratio is expected to equal to 0.50% of daily net assets.
Expenses payable by the Fund will reduce the NAV of the Fund.
5. Concentration of Risk
The Fund’s primary business activities are the investment in gold bullion, the gold delivery agreement, and the issuance and sale of Shares. Various
factors could affect the price of gold including: (i) global gold supply and demand, which is influenced by such factors as forward selling by gold producers, purchases made by gold producers to unwind gold hedge positions, central bank
purchases and sales, and production and cost levels in major gold-producing countries such as China, Australia, South Africa and the United States; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency
exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance that
gold will maintain its long-term value in terms of purchasing power in the future. In the event that the price of gold declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have
a material effect on the Fund’s financial position and results of operations.
6. Foreign Currency Risk
The Fund does not hold foreign currency, but it is exposed to foreign currency risk as a result of its transactions under the Gold Delivery Agreement. Foreign
currency exchange rates may fluctuate
F-18
Notes to the Unaudited Financial Statements
6. Foreign Currency Risk — (continued)
significantly over short periods of time and can be unpredictably affected by political developments or government intervention. The value of the Reference Currencies included in the FX Basket
may be affected by several factors, including: monetary policies of central banks within the relevant foreign countries or markets; global or regional economic, political or financial events; inflation or interest rates of the relevant foreign
countries and investor expectations concerning inflation or interest rates; and debt levels and trade deficits of the relevant foreign countries.
Currency
exchange rates are influenced by the factors identified above and may also be influenced by, among other things: changing supply and demand for a particular currency; monetary policies of governments (including exchange control programs,
restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries); changes in balances of payments and trade; trade restrictions; and currency devaluations
and revaluations. Also, governments from time to time intervene in the currency markets, and by regulation, in order to influence rates directly. These events and actions are unpredictable. The resulting volatility in the Reference Currency exchange
rates relative to the USD could materially and adversely affect the value of the Shares.
7. Counterparty Risk
If the Gold Delivery Provider fails to deliver gold pursuant to its obligations under the Gold Delivery Agreement, such failure would have an adverse effect on
the Fund in meeting its investment objective. Moreover, to the extent that the Gold Delivery Provider is unable to honor its obligations under the Agreement, such as due to bankruptcy or default under the Agreement or for any other reason, the Fund
would need to find a new entity to act in the same capacity as the Gold Delivery Provider. If the Fund could not quickly find a new entity to act in that capacity, the Fund may not be able to meet its investment objective. The transactions under the
Gold Delivery Agreement will terminate on June 28, 2019, unless the parties can agree on extension terms. If the parties cannot agree on extension terms and the Fund is unable to find a new entity to act as Gold Delivery Provider, the Fund may
not be able to meet its investment objective.
8. Derivative Contract Information
For the three and six months ended March 31, 2018, the effect of derivative contracts on the Fund’s Statement of Operations was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk exposure
derivative type
|
|
Location of Gain or Loss on
Derivatives Recognized in Income
|
|
Three months
ended
Mar-31, 2018
|
|
|
Three months
ended
Mar-31, 2017
|
|
|
Six months
ended
Mar-31, 2018
|
|
|
Six months
ended
Mar-31, 2017
|
|
|
(Amounts in 000’s of US$)
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Risk
|
|
Net Realized gain/(loss) on Gold Delivery Agreement
|
|
$
|
(415
|
)
|
|
$
|
(86
|
)
|
|
$
|
(533
|
)
|
|
$
|
(86
|
)
|
The table below summarizes the average daily notional value of derivative contracts outstanding during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
Mar-31,
2018
|
|
|
Fiscal period
ended
Sep-30, 2017
|
|
|
(Amounts in 000’s of US$)
|
|
|
|
|
|
|
|
Average notional
|
|
$
|
18,106
|
|
|
$
|
22,963
|
|
F-19
Notes to the Unaudited Financial Statements
8. Derivative Contract Information — (continued)
The notional of the contract varies daily based on the value of gold held at the Custodian.
At March 31, 2018, as well as the fiscal period ended September 30, 2017, the Fund’s over-the-counter (“OTC”) derivative assets and
liabilities are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts of Assets and Liabilities
Presented in the Statement of Financial
Condition
|
|
|
|
|
Assets
a
|
|
|
Liabilities
a
|
|
|
Derivatives
|
|
|
|
|
|
|
|
|
|
Gold Delivery Agreement
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
a
|
Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset on the Statement of Financial Condition.
|
At March 31, 2018, as well as the fiscal period ended September 30, 2017, the Fund’s OTC derivative assets, which may offset against the
Fund’s OTC derivative liabilities and collateral received from the counterparty, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in the Statement of
Financial Condition
|
|
|
|
|
|
|
|
Gross Amounts of Assets
Presented in the Statement
of Financial Condition
|
|
|
Financial Instruments
Available for Offset
|
|
|
Financial
Instruments
Collateral
Received
|
|
|
Cash
Collateral
Received
|
|
|
Net
Amount
|
|
|
Counterparty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Lynch International
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
At March 31, 2018, as well as the fiscal period ended September 30, 2017, the Fund’s OTC derivative
liabilities, which may offset against the Fund’s OTC derivative assets and collateral pledged from the counterparty, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in the Statement of
Financial Condition
|
|
|
|
|
|
|
|
Gross Amounts of
Liabilities Presented in the
Statement of Financial
Condition
|
|
|
Financial Instruments
Available for Offset
|
|
|
Financial
Instruments
Collateral
Pledged
|
|
|
Cash
Collateral
Pledged
|
|
|
Net
Amount
|
|
|
Counterparty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Lynch International
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
9. Indemnification
The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held
harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice,
list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters
arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have
F-20
Notes to the Unaudited Financial Statements
9. Indemnification — (continued)
assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust. Such indemnity includes payment from
the Trust of the costs of expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.
The Trustee and each
of its officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination
of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that the indemnified party acted without willful misconduct, bad faith or gross negligence. The Sponsor will not be
liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any gold bullion or other assets
held in trust under Declaration of Trust. However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful misconduct.
F-21
Notes to the Unaudited Financial Statements
10. Financial Highlights
The following presentation includes financial highlights related to investment performance and operations of a Share outstanding for the three and six-month
period ended March 31, 2018 and 2017. The net investment loss and total expense ratios have been annualized. The total return at net asset value is based on the change in net asset value of a Share during the period and the total return at
market value is based on the change in market value of a Share on NYSE Arca during the period. An individual investor’s return and ratios may vary based on the timing of capital transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
Mar-31,
2018
|
|
|
Three Months
Ended
Mar-31,
2017
|
|
|
Six Months
Ended
Mar-31,
2018
|
|
|
Six Months
Ended
Mar-31,
2017
|
|
|
Net Asset Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per Share, beginning of period
|
|
$
|
120.29
|
|
|
$
|
118.42
|
|
|
$
|
119.77
|
|
|
$
|
118.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income/(loss)
|
|
|
(0.15
|
)
|
|
|
(0.10
|
)
|
|
|
(0.30
|
)
|
|
|
(0.10
|
)
|
|
Net Realized and Change in Unrealized Gain (Loss)
|
|
|
0.08
|
|
|
|
5.75
|
|
|
|
0.75
|
|
|
|
5.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
|
(0.07
|
)
|
|
|
5.65
|
|
|
|
0.45
|
|
|
|
5.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per Share, end of period
|
|
$
|
120.22
|
|
|
$
|
124.07
|
|
|
$
|
120.22
|
|
|
$
|
124.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value per Share, beginning of period
|
|
$
|
120.87
|
|
|
$
|
119.53
|
|
|
$
|
118.89
|
|
|
$
|
119.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value per Share, end of period
|
|
$
|
120.92
|
|
|
$
|
124.39
|
|
|
$
|
120.92
|
|
|
$
|
124.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment loss
(1)
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
|
|
(0.50
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
(1)
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
(1)
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at net asset value
(2)
|
|
|
(0.06
|
)%
|
|
|
4.77
|
%
(3)
|
|
|
0.38
|
%
|
|
|
4.77
|
%
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return, at market value
(2)
|
|
|
0.04
|
%
|
|
|
4.07
|
%
(3)
|
|
|
1.71
|
%
|
|
|
4.07
|
%
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Percentages are annualized.
|
|
(2)
|
Percentages are not annualized.
|
|
(3)
|
Shares began publicly trading on January 30, 2017; therefore the Total Return, at net asset value and Total Return, at market value are based on the period of January 30, 2017 to March 31, 2017.
|
11. Subsequent Events
The Trust changed names from World Currency Gold Trust to World Gold Trust effective April 16, 2018.
F-22
Report of Independent Registered Public Accounting Firm
The Sponsor and Trustee of
World Currency Gold Trust
and Shareholders of SPDR® Long Dollar Gold Trust:
We have audited the accompanying statements of financial condition of World Currency Gold Trust
(the “Trust”) and SPDR® Long Dollar Gold Trust (the “Fund”), a series of the Trust, including the schedules of investments, combined in total and for the Fund, as of September 30, 2017, and the related statements of
operations, cash flows, and changes in net assets, combined in total and for the Fund, for the period January 27, 2017 (commencement of operations) to September 30, 2017. These financial statements are the responsibility of the
Trust’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion,
the financial statements referred to above present fairly, in all material respects, the financial position of World Currency Gold Trust and SPDR® Long Dollar Gold Trust as of September 30, 2017, and the results of their operations and
their cash flows for the period January 27, 2017 (commencement of operations) to September 30, 2017 in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
November 29, 2017
F-23
World Currency Gold Trust
Combined Statement of Financial Condition
at September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$ except for share and per share data)
|
|
Sept-30, 2017
|
|
|
ASSETS
|
|
|
|
|
|
Investment in Gold, at fair value (cost $13,592 at September 30, 2017)
|
|
$
|
14,406
|
|
|
Gold Delivery Agreement receivable
|
|
|
21
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
14,427
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Accounts payable to Sponsor
|
|
$
|
4
|
|
|
Gold Delivery Agreement payable
|
|
|
50
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
54
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
(2)
|
|
|
120,000
|
|
|
Net asset value per Share
|
|
$
|
119.77
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
|
(2)
|
Authorized share capital is unlimited and the par value of the Shares is $0.00.
|
See notes to the
financial statements
F-24
World Currency Gold Trust
Combined Schedule of Investments
at September 30, 2017
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Liabilities in excess of other assets
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
|
(0.23
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
14,373
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
|
Merrill Lynch
International
|
|
|
$
|
14,406
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-25
World Currency Gold Trust
Combined Statement of Operations
For the fiscal period ended September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$, except per share data)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
EXPENSES
|
|
|
|
|
|
Sponsor fees
|
|
$
|
51
|
|
|
Gold Delivery Provider fees
|
|
|
26
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
77
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(77
|
)
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
|
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of Shares
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
814
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
(260
|
)
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(337
|
)
|
|
|
|
|
|
|
|
Net Income/(loss) per share
|
|
$
|
(1.80
|
)
|
|
|
|
|
|
|
|
Weighted average number of shares (in 000’s)
|
|
|
187
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-26
World Currency Gold Trust
Combined Statement of Cash Flows
For the fiscal period ended September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
INCREASE/DECREASE IN CASH FROM OPERATIONS:
|
|
|
|
|
|
Cash proceeds received from sales of gold
|
|
$
|
47
|
|
|
Cash expenses paid
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from operations
|
|
|
—
|
|
|
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Cash proceeds from issuance of stock
|
|
|
1
|
|
|
Cash paid for repurchase of stock
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from financing activities
|
|
|
—
|
|
|
Cash and cash equivalents at beginning of fiscal period
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of fiscal period
|
|
$
|
—
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
Value of gold received for creation of shares—net of gold receivable
|
|
$
|
26,550
|
|
|
|
|
|
|
|
|
Value of gold distributed for redemption of shares—net of gold payable
|
|
$
|
(11,840
|
)
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:
|
|
|
|
|
|
Value of Gold Delivery Agreement inflows—net of Gold Delivery Agreement
receivable
|
|
$
|
4,635
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement outflows—net of Gold Delivery Agreement
payable
|
|
$
|
(6,439
|
)
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
Net Loss
|
|
$
|
(337
|
)
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
Proceeds from sales of gold to pay expenses
|
|
|
73
|
|
|
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees
|
|
|
(3
|
)
|
|
Net realized (gain)/loss from Gold Delivery Agreement
|
|
|
1,833
|
|
|
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
(270
|
)
|
|
Net realized (gain)/loss from gold distributed for the redemption of Shares
|
|
|
(486
|
)
|
|
Net change in unrealized (appreciation)/depreciation on investment in gold
|
|
|
(814
|
)
|
|
Increase/(Decrease) in accounts payable to Sponsor
|
|
|
4
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
—
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-27
World Currency Gold Trust
Combined Statement of Changes in Net Assets
For the fiscal period ended September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
Net Assets—Opening Balance
|
|
$
|
—
|
|
|
Creations
|
|
|
26,550
|
|
|
Redemptions
|
|
|
(11,840
|
)
|
|
Repurchase of stock
|
|
|
(1
|
)
|
|
Issuance of stock
|
|
|
1
|
|
|
Net investment loss
|
|
|
(77
|
)
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of Shares
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
814
|
|
|
|
|
|
|
|
|
Net Assets—Closing Balance
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-28
SPDR
®
Long Dollar Gold Trust
Statement of Financial Condition
at September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$ except for share and per share data)
|
|
Sept-30,
2017
|
|
|
ASSETS
|
|
|
|
|
|
Investment in Gold, at fair value (cost $13,592 at September 30, 2017)
|
|
$
|
14,406
|
|
|
Gold Delivery Agreement receivable
|
|
|
21
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
14,427
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Accounts payable to Sponsor
|
|
$
|
4
|
|
|
Gold Delivery Agreement payable
|
|
|
50
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
54
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
(2)
|
|
|
120,000
|
|
|
Net asset value per Share
|
|
$
|
119.77
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
|
(2)
|
Authorized share capital is unlimited and the par value of the Shares is $0.00.
|
See notes to the
financial statements
F-29
SPDR
®
Long Dollar Gold Trust
Schedule of Investments
at
September 30, 2017
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(All balances in 000’s except percentages)
|
|
Ounces of
gold
|
|
|
Cost
|
|
|
Fair
Value
|
|
|
% of
Net Assets
|
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Gold
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
11.2
|
|
|
$
|
13,592
|
|
|
$
|
14,406
|
|
|
|
100.23
|
%
|
|
Liabilities in excess of other assets
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
|
(0.23
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
$
|
14,373
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Contract
at
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Instrument
|
|
Counter-Party
|
|
Notional
Value
|
|
|
Expiration
Date
|
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Gold Delivery Agreement
|
|
Merrill Lynch
International
|
|
$
|
14,406
|
|
|
|
6/28/19
|
|
|
$
|
—
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-30
SPDR
®
Long Dollar Gold Trust
Statement of Operations
For the fiscal period ended
September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$, except per share data)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
EXPENSES
|
|
|
|
|
|
Sponsor fees
|
|
$
|
51
|
|
|
Gold Delivery Provider fees
|
|
|
26
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
77
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(77
|
)
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
|
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of Shares
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
814
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
(260
|
)
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(337
|
)
|
|
|
|
|
|
|
|
Net Income/(loss) per share
|
|
$
|
(1.80
|
)
|
|
|
|
|
|
|
|
Weighted average number of shares (in 000’s)
|
|
|
187
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes to the financial statements
F-31
SPDR
®
Long Dollar Gold Trust
Statement of Cash Flows
For the fiscal period ended
September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
INCREASE/DECREASE IN CASH FROM OPERATIONS:
|
|
|
|
|
|
Cash proceeds received from sales of gold
|
|
$
|
47
|
|
|
Cash expenses paid
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from operations
|
|
|
—
|
|
|
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Cash proceeds from issuance of stock
|
|
|
1
|
|
|
Cash paid for repurchase of stock
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash resulting from financing activities
|
|
|
—
|
|
|
Cash and cash equivalents at beginning of fiscal period
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of fiscal period
|
|
$
|
—
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
|
|
|
|
|
|
Value of gold received for creation of shares—net of gold receivable
|
|
$
|
26,550
|
|
|
|
|
|
|
|
|
Value of gold distributed for redemption of shares—net of gold payable
|
|
$
|
(11,840
|
)
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES:
|
|
|
|
|
|
Value of Gold Delivery Agreement inflows—net of Gold Delivery Agreement
receivable
|
|
$
|
4,635
|
|
|
|
|
|
|
|
|
Value of Gold Delivery Agreement outflows—net of Gold Delivery Agreement
payable
|
|
$
|
(6,439
|
)
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
Net Loss
|
|
$
|
(337
|
)
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
Proceeds from sales of gold to pay expenses
|
|
|
73
|
|
|
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees
|
|
|
(3
|
)
|
|
Net realized (gain)/loss from Gold Delivery Agreement
|
|
|
1,833
|
|
|
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
(270
|
)
|
|
Net realized (gain)/loss from gold distributed for the redemption of Shares
|
|
|
(486
|
)
|
|
Net change in unrealized (appreciation)/depreciation on investment in gold
|
|
|
(814
|
)
|
|
Increase/(Decrease) in accounts payable to Sponsor
|
|
|
4
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
—
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes
to the financial statements
F-32
SPDR
®
Long Dollar Gold Trust
Statement of Changes in Net Assets
For the fiscal period
ended September 30, 2017
(1)
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
Net Assets—Opening Balance
|
|
$
|
—
|
|
|
Creations
|
|
|
26,550
|
|
|
Redemptions
|
|
|
(11,840
|
)
|
|
Repurchase of stock
|
|
|
(1
|
)
|
|
Issuance of stock
|
|
|
1
|
|
|
Net investment loss
|
|
|
(77
|
)
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of Shares
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) on investment in gold
|
|
|
814
|
|
|
|
|
|
|
|
|
Net Assets—Closing Balance
|
|
$
|
14,373
|
|
|
|
|
|
|
|
|
(1)
|
No comparative has been provided as operations commenced on January 27, 2017. See Note 1.
|
See notes to the financial statements
F-33
Notes to the Financial Statements
1. Organization
World Currency
Gold Trust (the “Trust”) was organized as a Delaware statutory trust on August 27, 2014 and is governed by the Third Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”), dated as of
January 6, 2017, between WGC USA Asset Management Company, LLC (the “Sponsor”) and the Delaware Trust Company (the “Trustee”). The Trust is authorized to issue an unlimited number of shares of beneficial interest
(“Shares”). The beneficial interest in the Trust may be divided into one or more series. The Trust has established five separate series. The accompanying financial statements relate to the Trust and SPDR® Long Dollar Gold Trust (the
“Fund”), currently the only operational series of the Trust, which commenced operations January 27, 2017. The fiscal year end of both the Trust and the Fund is September 30.
The investment objective of the Fund is to seek to track the performance of the Solactive GLD® Long USD Gold Index (the “Index”), less Fund
expenses. The Index seeks to track the daily performance of a long position in physical gold, as represented by the London Bullion Market Association (“LBMA”) Gold Price AM, and a short position in a basket of specific non-U.S. currencies
(
i.e.
, a long U.S. dollar (“USD”) exposure versus the basket). Those non-U.S. currencies, which are weighted according to the Index, consist of the following: Euro, Japanese Yen, British Pound Sterling, Canadian Dollar, Swedish
Krona, and Swiss Franc (each, a “Reference Currency” and together the “Reference Currencies”).
BNY Mellon Asset Servicing, a division
of The Bank of New York Mellon (“BNYM”) is the Administrator and Transfer Agent of the Fund. BNYM also serves as the custodian of the Fund’s cash, if any. HSBC Bank plc (the “Custodian”) is responsible for custody of the
Fund’s gold bullion. Merrill Lynch International is the Gold Delivery Provider to the Fund. State Street Global Advisors Funds Distributors, LLC is the marketing agent of the Fund. Solactive AG (“Index Provider”) has licensed the
Index to the Sponsor for use with the Fund.
Capitalized terms used but not defined herein have the meaning as set forth in the Declaration of Trust.
The Trust had no operations with respect to the Fund’s Shares prior to January 27, 2017 other than matters relating to its organization, the
registration of the Fund’s Shares under the Securities Act of 1933, as amended, and the sale and issuance by the Fund to WGC (US) Holdings, Inc. of 10 Shares of the Fund for an aggregate purchase price of $1,000.
2. Significant Accounting Policies
The following is a summary of significant accounting policies.
2.1. Basis of Accounting
The
accompanying audited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported
amounts and disclosures in the audited financial statements. Actual results could differ from those estimates.
These financial statements present the
financial condition, results of operations and cash flows of the Fund and the Fund and Trust combined. For the periods presented, there were no balances or activity for the Trust apart from those from the Fund when combined, and the footnotes
accordingly relate to the Fund, unless stated otherwise.
F-34
Notes to the Financial Statements
2.2. Basis of Presentation
The financial statements are presented for the Trust, as the SEC registrant, combined with the Fund and for the Fund individually. The debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with respect to the Fund shall be enforceable only against the assets of the Fund and not against the assets of the Trust generally or any other fund that the Trust may
establish in the future.
2.3. Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments of sufficient credit quality with original maturity of three months or less.
2.4. Investment Company Status
The Fund is an investment company in accordance with U.S. GAAP and follows the accounting and reporting guidance according to Accounting Standards Codification
Topic 946.
2.5. Solactive GLD
®
Long USD Gold Index—Gold Delivery Agreement
Pursuant to the terms of the Gold Delivery Agreement, the Fund will enter into a transaction to deliver gold bullion to, or receive gold bullion from, Merrill
Lynch International, as Gold Delivery Provider, each Business Day. The amount of gold bullion transferred essentially will be equivalent to the Fund’s profit or loss as if the Fund had exchanged the Reference Currencies comprising the Index
(“FX Basket”), in the proportion in which they are reflected in the Index, for USDs in an amount equal to the Fund’s holdings of gold bullion on such day. In general, if there is a currency gain (
i.e.,
the value of the USD
against the Reference Currencies comprising the FX Basket increases), the Fund will receive gold bullion. In general, if there is a currency loss (
i.e.,
the value of the USD against the Reference Currencies comprising the FX Basket
decreases), the Fund will deliver gold bullion. In this manner, the amount of gold bullion held by the Fund will be adjusted to reflect the daily change in the value of the Reference Currencies comprising the FX Basket against the USD. The Gold
Delivery Agreement requires gold bullion ounces calculated pursuant to formulas contained in the Gold Delivery Agreement to be delivered to the custody account of the Fund or Gold Delivery Provider, as applicable. The fee that the Fund pays the Gold
Delivery Provider for its services under the Gold Delivery Agreement is accrued daily and reflected in the calculation of the amount of gold bullion to be delivered pursuant to the Gold Delivery Agreement. The realized gain/loss from the Gold
Delivery Agreement is disclosed on the Statement of Operations and the Statement of Changes in Net Assets. The realized gain/loss is only shown on the Statement of Financial Condition to the extent not received/paid.
The Index is designed to represent the daily performance of a long position in physical gold, as represented by the LBMA Gold Price AM, and a short position
in the basket of Reference Currencies with weightings determined by the FX Basket. The Reference Currencies and their respective weightings in the Index are as follows: Euro (EUR/USD) (57.6%), Japanese Yen (USD/JPY) (13.6%), British
Pound Sterling (GBP/USD) (11.9%), Canadian Dollar (USD/CAD) (9.1%), Swedish Krona (USD/SEK) (4.2%), and Swiss Franc (USD/CHF) (3.6%).
2.6. Fair Value Measurement
U.S.
GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund’s policy is to value its investments at fair
value.
F-35
Notes to the Financial Statements
2.6. Fair Value Measurement — (continued)
Various inputs are used in determining the fair value of the Fund’s assets or liabilities. Inputs may be
based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting
purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value
hierarchy are as follows:
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Level 1 –
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
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Level 2 –
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by
observable market data by correlation or other means; and
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Level 3 –
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Inputs that are unobservable for the asset and liability, including the Fund’s assumptions (if any) used in determining the fair value of investments.
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The following table summarizes the Fund’s investments at fair value:
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|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
September 30, 2017
|
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Level 1
|
|
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Level 2
|
|
|
Level 3
|
|
|
Investment in Gold
|
|
$
|
14,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gold Delivery Agreement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
14,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no transfers between Level 1 and other Levels for the fiscal period ended September 30, 2017.
The Administrator values the gold held by the Fund on the basis of the price of an ounce of gold as determined by ICE Benchmark Administration Limited
(“IBA”), a benchmark administrator, which provides an independently administered auction process, as well as the overall administration and governance for the LBMA Gold Price. In determining the net asset value (“NAV”) of the
Fund, the Administrator values the gold held by the Fund on the basis of the price of an ounce of gold determined by the IBA 10:30 a.m. auction process (“LBMA Gold Price AM”), which is an electronic auction, with the imbalance calculated
and the price adjusted in rounds (45 seconds in duration). The auction runs twice daily at 10:30 a.m. and 3:00 p.m. London time. The Administrator calculates the NAV of the Fund on each day the NYSE Arca is open for regular trading, generally as of
12:00 p.m. New York time. If no LBMA Gold Price AM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 p.m. New York time on a particular evaluation day, the next most recent LBMA Gold Price AM is used
in the determination of the NAV of the Fund, unless the Administrator, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such determination.
2.7. Custody of Gold
Gold bullion
is held by HSBC Bank plc on behalf of the Fund. During the fiscal period ended September 30, 2017, no gold was held by a subcustodian.
F-36
Notes to the Financial Statements
2.8. Gold Delivery Agreement Receivable
Gold Delivery Agreement receivable represents the quantity of gold due to be received under the Gold Delivery Agreement. The gold is transferred to the
Fund’s allocated gold bullion account at the Custodian two business days after the valuation date.
|
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|
|
|
|
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(Amounts in 000’s of US$)
|
|
Sept-30,
2017
|
|
|
Gold Delivery Agreement receivable
|
|
$
|
21
|
|
2.9. Gold Delivery Agreement Payable
Gold Delivery Agreement payable represents the quantity of gold due to be delivered under the Gold Delivery Agreement. The gold is transferred from the
Fund’s allocated gold bullion account at the Custodian two business days after the valuation date.
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Sept-30,
2017
|
|
|
Gold Delivery Agreement payable
|
|
$
|
50
|
|
2.10. Creations and Redemptions of Shares
The Fund creates and redeems Shares from time to time, but only in one or more Creation Units (a Creation Unit equals a block of 10,000 Shares). The Fund
issues Shares in Creation Units to certain authorized participants (“Authorized Participants”) on an ongoing basis. The creation and redemption of Creation Units is only made in exchange for the delivery to the Fund or the distribution by
the Fund of the amount of gold and any cash represented by the Creation Units being created or redeemed, the amount of which will be based on the combined net asset value of the number of Shares included in the Creation Units being created or
redeemed determined on the day the order to create or redeem Creation Units is properly received.
The Fund commenced trading shares in January 2017. As
the Shares of the Fund are redeemable in Creation Units at the option of the Authorized Participants, the Fund has classified the Shares as Net Assets. Changes in the Shares for the fiscal period ended September 30, 2017 are as follows:
|
|
|
|
|
|
|
(Amounts in 000’s)
|
|
Fiscal Period
Ended
Sept-30, 2017
|
|
|
Activity in Number of Shares Issued and Outstanding:
|
|
|
|
|
|
Creations
|
|
|
220
|
|
|
Redemptions
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
Net change in number of Shares Issued and Outstanding
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in 000’s of US$)
|
|
Fiscal Period
Ended
Sept-30, 2017
|
|
|
Activity in Value of Shares Issued and Outstanding:
|
|
|
|
|
|
Creations
|
|
$
|
26,550
|
|
|
Redemptions
|
|
|
(11,840
|
)
|
|
|
|
|
|
|
|
Net change in value of Shares Issued and Outstanding
|
|
$
|
14,710
|
|
|
|
|
|
|
|
F-37
Notes to the Financial Statements
2.11. Revenue Recognition Policy
The Administrator will, at the direction of the Sponsor, sell the Fund’s gold as necessary to pay the Fund’s expenses. When selling gold to pay
expenses, the Administrator will endeavor to sell the smallest amount of gold needed to pay expenses in order to minimize the Fund’s holdings of assets other than gold. Unless otherwise directed by the Sponsor, to meet expenses the
Administrator will give a sell order and sell gold to the Custodian at the next LBMA Gold Price AM following the sale order. A gain or loss is recognized based on the difference between the selling price and the average cost of the gold sold, and
such amounts are reported as net realized gain/(loss) from investment in gold sold to pay expenses on the Statement of Operations.
The Fund’s net
realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement for the fiscal period ended September 30, 2017 of ($260) is made up of a realized gain of $3 from the sale of gold to pay Sponsor fees, a realized
loss of ($1,833) from the Gold Delivery Agreement, a realized gain of $270 on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees, a realized gain of $486 from gold distributed for the redemption of Shares, and a change
in unrealized appreciation of $814 on investment in gold.
2.12. Income Taxes
The Fund is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Fund is not subject to U.S. federal income tax.
Instead, the Fund’s income and expenses “flow through” to the Shareholders, and the Administrator will report the Fund’s proceeds, income, deductions, gains and losses to the Internal Revenue Service on that basis.
The Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for
uncertain tax positions are required as of September 30, 2017. There are no tax years open for examination.
F-38
Notes to the Financial Statements
3. Quarterly Statements of Operations
Fiscal Period Ended September 30, 2017
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|
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Three Months Ended (unaudited)
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|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
(Amounts in 000’s of US$, except per share data)
|
|
Mar-31,
2017
|
|
|
Jun-30,
2017
|
|
|
Sept-30,
2017
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sponsor fees
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
16
|
|
|
$
|
51
|
|
|
Gold Delivery Provider fees
|
|
|
7
|
|
|
|
11
|
|
|
|
8
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
20
|
|
|
|
33
|
|
|
|
24
|
|
|
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(20
|
)
|
|
|
(33
|
)
|
|
|
(24
|
)
|
|
|
(77
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery
Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
Net realized gain/(loss) from Gold Delivery Agreement
|
|
|
(86
|
)
|
|
|
(1,227
|
)
|
|
|
(520
|
)
|
|
|
(1,833
|
)
|
|
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery
Provider fees
|
|
|
39
|
|
|
|
115
|
|
|
|
116
|
|
|
|
270
|
|
|
Net realized gain/(loss) from gold distributed for the redemption of shares
|
|
|
—
|
|
|
|
—
|
|
|
|
486
|
|
|
|
486
|
|
|
Net change in unrealized appreciation/(depreciation) from investment in gold
|
|
|
812
|
|
|
|
(62
|
)
|
|
|
64
|
|
|
|
814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and change in unrealized gain/(loss) from investment in gold and Gold Delivery
Agreement
|
|
|
766
|
|
|
|
(1,173
|
)
|
|
|
147
|
|
|
|
(260
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
746
|
|
|
$
|
(1,206
|
)
|
|
$
|
123
|
|
|
$
|
(337
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share
|
|
$
|
3.85
|
|
|
$
|
(5.48
|
)
|
|
$
|
0.80
|
|
|
$
|
(1.80
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (in 000’s)
|
|
|
194
|
|
|
|
220
|
|
|
|
153
|
|
|
|
187
|
|
|
|
|
|
|
|
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|
|
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4. Related Parties - Sponsor
The Sponsor will receive an annual fee equal to 0.33% of NAV of the Fund, calculated on a daily basis.
The Sponsor is responsible for the payment of all ordinary fees and expenses of the Fund, including but not limited to the following: fees charged by the
Fund’s administrator, custodian, index provider, marketing agent and trustee; exchange listing fees; typical maintenance and transaction fees of The Depository Trust Company; SEC registration fees; printing and mailing costs; audit fees and
expenses; and legal fees not in excess of $100,000 per annum and expenses and applicable license fees. The Sponsor is not, however, required to pay any extraordinary expenses incurred in the ordinary course of the Fund’s business as outlined in
the Sponsor’s agreement with the Trust.
F-39
Notes to the Financial Statements
5. Fund Expenses
The Fund’s only ordinary recurring operating expenses are expected to be the Sponsor’s annual fee of 0.33% of the NAV of the Fund and the Gold
Delivery Provider’s annual fee of 0.17% of the NAV of the Fund, each of which accrue daily. The Sponsor’s fee is payable by the Fund monthly in arrears, while the Gold Delivery Provider’s fee is paid daily with gold bullion in-kind,
so that the Fund’s total annual expense ratio is expected to equal to 0.50% of daily net assets. Expenses payable by the Fund will reduce the NAV of the Fund.
6. Concentration of Risk
The
Fund’s primary business activities are the investment in gold bullion, the gold delivery agreement, and the issuance and sale of Shares. Various factors could affect the price of gold, including: (i) global gold supply and demand, which is
influenced by such factors as forward selling by gold producers, purchases made by gold producers to unwind gold hedge positions, central bank purchases and sales, and production and cost levels in major gold-producing countries such as China,
Australia, South Africa and the United States; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and
commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance that gold will maintain its long-term value in terms of purchasing power in the future. In the event that
the price of gold declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Fund’s financial position and results of operations.
7. Foreign Currency Risk
The Fund
does not hold foreign currency, but it is exposed to foreign currency risk as a result of its transactions under the Gold Delivery Agreement. Foreign currency exchange rates may fluctuate significantly over short periods of time and can be
unpredictably affected by political developments or government intervention. The value of the Reference Currencies included in the FX Basket may be affected by several factors, including: monetary policies of central banks within the relevant
foreign countries or markets; global or regional economic, political or financial events; inflation or interest rates of the relevant foreign countries and investor expectations concerning inflation or interest rates; and debt levels and trade
deficits of the relevant foreign countries.
Currency exchange rates are influenced by the factors identified above and may also be influenced by, among
other things: changing supply and demand for a particular currency; monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment
by residents of a country in other countries); changes in balances of payments and trade; trade restrictions; and currency devaluations and revaluations. Also, governments from time to time intervene in the currency markets, and by regulation, in
order to influence rates directly. These events and actions are unpredictable. The resulting volatility in the Reference Currency exchange rates relative to the USD could materially and adversely affect the value of the Shares.
8. Counterparty Risk
If the Gold
Delivery Provider fails to deliver gold pursuant to its obligations under the Gold Delivery Agreement, such failure would have an adverse effect on the Fund in meeting its investment objective. Moreover, to the extent that the Gold Delivery Provider
is unable to honor its obligations under the Agreement, such as due to bankruptcy or default under the Agreement or for any other reason, the Fund
F-40
Notes to the Financial Statements
8. Counterparty Risk — (continued)
would need to find a new entity to act in the same capacity as the Gold Delivery Provider. If the Fund could not quickly find a new entity to act in that capacity, the Fund may not be able to
meet its investment objective. The transactions under the Gold Delivery Agreement will terminate on June 28, 2019, unless the parties can agree on extension terms. If the parties cannot agree on extension terms and the Fund is unable to find a
new entity to act as Gold Delivery Provider, the Fund may not be able to meet its investment objective.
9. Derivative Contract
Information
For the fiscal period ended September 30, 2017, the effect of derivative contracts in the Fund’s Statement of Operations was as
follows:
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|
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|
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|
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Risk exposure
derivative type
|
|
Location of Gain or Loss on
Derivatives Recognized in Income
|
|
Fiscal Period
Ended
Sept-30, 2017
|
|
|
(Amounts in 000’s of US$)
|
|
|
|
|
|
|
Currency Risk
|
|
Net Realized gain/(loss) on Gold Delivery Agreement
|
|
$
|
(1,833
|
)
|
The table below summarizes the average daily notional value of derivative contracts outstanding during the period:
|
|
|
|
|
|
|
|
|
Fiscal Period
Ended
Sept-30, 2017
|
|
|
(Amounts in 000’s of US$)
|
|
|
|
|
Average notional
|
|
$
|
22,963
|
|
The notional of the contract varies daily based on the amount of gold held at the Custodian.
At September 30, 2017, the Fund’s over-the-counter (“OTC”) derivative assets and liabilities were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts of Assets and Liabilities
Presented in the Statement of Financial
Condition
|
|
|
|
|
Assets
a
|
|
|
Liabilities
a
|
|
|
Derivatives
|
|
|
|
|
|
|
|
|
|
Gold Delivery Agreement
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
a
|
Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Financial Condition.
|
At September 30, 2017, the Fund’s OTC derivative assets, which may offset against the Fund’s OTC derivative liabilities and collateral received
from the counterparty, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in the Statement of
Financial Condition
|
|
|
|
|
|
|
|
Gross Amounts of Assets
Presented in the Statement
of Financial Condition
|
|
|
Financial Instruments
Available for Offset
|
|
|
Financial
Instruments
Collateral
Received
|
|
|
Cash
Collateral
Received
|
|
|
Net
Amount
|
|
|
Counterparty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Lynch International
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
F-41
Notes to the Financial Statements
9. Derivative Contract Information — (continued)
At September 30, 2017, the Fund’s OTC derivative liabilities, which may offset against the
Fund’s OTC derivative assets and collateral pledged from the counterparty, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in the Statement of
Financial Condition
|
|
|
|
|
Gross Amounts of
Liabilities Presented in the
Statement of Financial
Condition
|
|
|
Financial Instruments
Available for Offset
|
|
|
Financial
Instruments
Collateral
Pledged
|
|
|
Cash
Collateral
Pledged
|
|
|
Net
Amount
|
|
|
|
|
|
|
|
|
|
Counterparty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Lynch International
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
10. Indemnification
The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held
harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice,
list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters
arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust.
Such indemnity includes payment from the Trust of the costs of expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.
The Trustee and each of its officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes,
damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that
the indemnified party acted without willful misconduct, bad faith or gross negligence. The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for
errors in judgment or for depreciation or loss incurred by reason of the sale of any gold bullion or other assets held in trust under Declaration of Trust. However, the preceding liability exclusion will not protect the Sponsor against any liability
resulting from its own gross negligence, bad faith, or willful misconduct.
F-42
Notes to the Financial Statements
11. Financial Highlights
The following presentation includes financial highlights related to investment performance and operations of a Share outstanding for the fiscal period ended
September 30, 2017. The net investment loss and total expense ratios have been annualized. The total return at net asset value is based on the change in net asset value of a Share during the year and the total return at market value is based on
the change in market value of a Share on NYSE Arca during the period. An individual investor’s return and ratios may vary based on the timing of capital transactions.
|
|
|
|
|
|
|
|
|
Fiscal Period
Ended
Sept-30,
2017
|
|
|
Net Asset Value
|
|
|
|
|
|
Net asset value per Share, beginning of period
|
|
$
|
118.42
|
|
|
|
|
|
|
|
|
Net investment income/(loss)
|
|
|
(0.41
|
)
|
|
Net Realized and Change in Unrealized Gain (Loss)
|
|
|
1.76
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
|
1.35
|
|
|
|
|
|
|
|
|
Net asset value per Share, end of period
|
|
$
|
119.77
|
|
|
|
|
|
|
|
|
Market value per Share, beginning of
period
(1)
|
|
$
|
119.53
|
|
|
|
|
|
|
|
|
Market value per Share, end of period
|
|
$
|
118.89
|
|
|
|
|
|
|
|
|
|
|
|
Ratio to average net assets
|
|
|
|
|
|
Net Investment loss
(1)
|
|
|
(0.50
|
)%
|
|
|
|
|
|
|
|
Gross expenses
(1)
|
|
|
0.50
|
%
|
|
|
|
|
|
|
|
Net expenses
(1)
|
|
|
0.50
|
%
|
|
|
|
|
|
|
|
Total Return, at net asset
value
(2)(3)
|
|
|
1.14
|
%
|
|
|
|
|
|
|
|
Total Return, at market value
(2)(3)
|
|
|
(0.54
|
)%
|
|
|
|
|
|
|
|
(1)
|
Percentages are annualized.
|
|
(2)
|
Shares began publicly trading on January 30, 2017; therefore, the Total Return, at net asset value and Total Return, at market value are based on the period of January 30, 2017 to September 30, 2017.
|
|
(3)
|
Percentages are not annualized.
|
No comparative has been provided as the Fund commenced operations on
January 27, 2017
12. Subsequent Events
The Sponsor has evaluated events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
F-43
Report of Independent Registered Public Accounting Firm
The Sponsor and Trustee of
The Gold Trust:
We have audited the accompanying statement of financial condition of The Gold Trust, a series of World Currency Gold Trust, as of September 30, 2017. The
financial statement is the responsibility of The Gold Trust’s management. Our responsibility is to express an opinion on the financial statement based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of financial condition referred to above presents fairly, in all material respects, the financial position of The Gold
Trust, as of September 30, 2017, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
November 30, 2017
F-44
THE GOLD TRUST
Statement of Financial Condition
at September 30,
2017
(1)
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
|
ASSETS
|
|
|
|
|
|
Cash
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Net Assets
(applicable to no Shares outstanding)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
(1)
|
As of September 30, 2017, The Gold Trust had not commenced operations.
|
See notes to the statement of
financial condition.
F-45
THE GOLD TRUST
Notes to the Statement of Financial Condition
1. Organization
The Gold
Trust (the “Fund”) is a series of World Currency Gold Trust (“Trust”). The Trust was organized as a Delaware statutory trust on August 27, 2014 and is governed by a Third Amended and Restated Agreement and Declaration of
Trust (“Declaration of Trust”) dated as of January 6, 2017, between WGC USA Asset Management Company, LLC (the “Sponsor”) and the Delaware Trust Company (the “Trustee”). The Trust is authorized to issue an
unlimited number of shares of beneficial interest. The beneficial interest in the Trust may be divided into one or more series. The Trust has established six separate series, only one of which to date (the SPDR® Long Dollar Gold Trust) has
commenced operations. The accompanying statement of financial condition relates only to the Fund. The fiscal year end of the Fund is September 30. The Fund will issue shares of beneficial interest (“Shares”), which represent units of
fractional undivided beneficial interest in and ownership of only that Fund. The Fund has had no operations to date other than matters relating to its establishment as a series of the Trust and the registration of the offering of its Shares under
the Securities Act of 1933. The proposed investment objective of the Fund is for the Shares to reflect the performance of the price of gold bullion, less the expenses of the Fund’s operations.
BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or “BNYM”, will serve as the administrator and transfer agent of the Fund.
BNYM will also serve as the custodian of the Fund’s cash, if any. The Sponsor shall appoint a custodian which will hold the Fund’s Gold Bullion.
Capitalized terms used but not defined herein shall have the meaning as set forth in the Declaration of Trust.
2. Significant Accounting Policies
2.1. Basis of Accounting
The
accompanying statement of financial condition has been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported
amounts and disclosures in the statement of financial condition. Actual results could differ from those estimates.
2.2. Basis
of Presentation
The statement of financial condition is presented for the Fund individually. The debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to the Fund will be enforceable only against the assets of the Fund and not against the assets of the Trust generally or any other series of the Trust now existing or that may be
established in the future.
2.3. Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments of sufficient credit quality with original maturity of three months or less.
2.4. Investment Company Status
The Fund is an investment company in accordance with U.S. GAAP and follows the accounting and reporting guidance according to Accounting Standards Codification
Topic 946.
F-46
Notes to the Statement of Financial Condition — (continued)
2.5. Fair Value Measurement
U.S. GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market
participants at the measurement date. The Fund’s policy is to value its investments at fair value.
Various inputs are used in determining the fair
value of the Fund’s assets or liabilities. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure
hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value
measurement in its entirety. The three levels of the fair value hierarchy are as follows:
Level 1 – Unadjusted quoted prices in
active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be
active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and
Level 3 – Inputs that are unobservable for the asset and liability, including the Fund’s assumptions (if any) used in determining the
fair value of investments.
The Fund had no assets or liabilities as of September 30, 2017.
After the commencement of operations, the Fund expects to invest its assets in allocated Gold Bullion and, from time to time, cash, which will be used to pay
expenses.
The Administrator will value any Gold Bullion held by the Fund on the basis of the price of an ounce of gold as determined by the ICE Benchmark
Administration Limited (“IBA”), a benchmark administrator, which provides an independently administered auction process as well as the overall administration and governance for the London Bullion Market Association (“LBMA”) Gold
Price. In determining the net asset value (“NAV”) of the Fund, the Administrator will value the Gold Bullion held by the Fund on the basis of the price of an ounce of gold determined by the IBA 3:00 PM auction process (“LBMA Gold
Price PM”), which is an electronic auction, with the imbalance calculated, and the price adjusted in rounds (45 seconds in duration). The auction runs twice daily at 10:30 AM and 3:00 PM London time. The Administrator will calculate the NAV of
the Fund on each day the NYSE Arca is open for regular trading, at the earlier LBMA Gold Price PM for the day or 12:00 PM New York time. If no LBMA Gold Price PM is made on a particular evaluation day or if the LBMA Gold Price PM has not been
announced by 12:00 PM New York time on a particular evaluation day, the next most recent LBMA Gold Price PM will be used in the determination of the NAV of the Fund, unless the Sponsor determines that such price is inappropriate to use as the basis
for such determination.
2.6. Creations and Redemptions of Shares
The Fund will create and redeem Shares from time to time, but only in one or more Creation Units (a Creation Unit is an aggregation of a large number of
Shares). The Fund will issue Shares in Creation Units to certain authorized participants (“Authorized Participants”) on an ongoing basis. The creation and redemption of Creation Units will only be made in exchange for the delivery to the
Fund or the distribution by the Fund of the amount of gold and any cash represented by the Creation Units being
F-47
Notes to the Statement of Financial Condition — (continued)
2.6. Creations and Redemptions of Shares — (continued)
created or redeemed, the amount of which will be based on the NAV of the number of Shares included in the Creation Units being created or redeemed determined on the day the order to create or
redeem Creation Units is properly received.
2.7. Income Taxes
The Fund is expected to be classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Fund will not be subject to U.S.
federal income tax. Instead, the Fund’s income and expenses will “flow through” to the Shareholders, and the Administrator will report the Fund’s proceeds, income, deductions, gains and losses to the Internal Revenue Service on
that basis.
No uncertain tax positions exist at the date of the statement of financial condition.
3. Organizational and Offering Costs
The Fund’s organizational and offering costs are borne by the Sponsor and, as such, are the sole responsibility of the Sponsor. The Sponsor will not seek
reimbursement or otherwise require the Fund, the Trust, the Trustee or any Shareholder to assume any liability, duty or obligation in connection with any such organizational and offering costs.
4. Related Parties—Sponsor
The Sponsor will be entitled to an annual fee expressed as a percentage of the average daily net assets of the Fund. The amount of the fee has not yet been
determined.
Except for the fees payable to the Sponsor, which will be paid by the Fund, the Sponsor is responsible for the payment of all ordinary fees
and expenses of the Fund, including but not limited to the following: fees charged by the Fund’s administrator, custodian, marketing agent and trustee, exchange listing fees, typical maintenance and transaction fees of The Depository Trust
Company, registration fees of the Securities and Exchange Commission, printing and mailing costs, audit fees and expenses, legal fees not in excess of $100,000 per annum and applicable license fees. The Sponsor is not, however, required to pay any
extraordinary expenses not incurred in the ordinary course of the Fund’s business. The Fund’s organizational and offering costs are borne by the Sponsor and, as such, are the sole responsibility of the Sponsor. The Sponsor will not seek
reimbursement or otherwise require the Fund, the Trust, the Trustee or any Shareholder to assume any liability, duty or obligation in connection with any such organizational and offering costs.
5. Fund Expenses
The Fund’s
only ordinary recurring operating expenses are expected to be the Sponsor’s annual fee when determined, which will be expressed as a percentage of the Fund’s average daily net assets, will accrue daily, and will be paid monthly in arrears.
The Fund is not expected to have any ordinary recurring operating expenses so the Fund’s total annual expense ratio is expected to equal to the Sponsor’s annual fee. Expenses payable by the Fund will reduce the NAV of the Fund.
6. Indemnification
The Sponsor
and each of its shareholders, members, directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses
F-48
Notes to the Statement of Financial Condition — (continued)
6. Indemnification — (continued)
incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice,
list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters
arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust.
Such indemnity includes payment from the Fund of the costs of expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.
The Trustee and each of its officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims,
taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided
that the indemnified party acted without willful misconduct, bad faith or gross negligence. The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or
for errors in judgment or for depreciation or loss incurred by reason of the sale of any Gold Bullion or other assets of the Fund. However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own
gross negligence, bad faith, or willful misconduct.
7. Financial Highlights
At the date of the statement of financial condition, per Share, total return, and expense ratio data are not considered meaningful to investors because the
Fund had not commenced operations.
8. Subsequent Events
The Sponsor has evaluated events through the issuance of the statement of financial condition and determined that no events have occurred that require
disclosure.
F-49
APPENDIX A
GLOSSARY OF DEFINED TERMS
In this
Prospectus, each of the following quoted terms has the meaning set forth after such term:
“Administrator” — BNYM, a banking corporation
organized under the laws of the State of New York.
“Allocated Gold Account Agreement” — The agreement between the Trust and the
Custodian which establishes the Fund Allocated Account. The Allocated Gold Account Agreement and the Unallocated Gold Account Agreement are sometimes referred to together as the “Custody Agreements.”
“Authorized Participant” — A person who (1) is a registered broker-dealer or other securities market participant such as a bank or other
financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) is a participant in DTC, (3) has entered into a Participant Agreement with the Administrator and (4) has established
an unallocated account with the Custodian or another LPMCL clearing bank. Only Authorized Participants may place orders to create or redeem one or more Creation Units.
“BNYM” — BNYM is the Administrator and Transfer Agent of the Trust. BNYM also serves as the custodian of the Trust’s cash, if any.
“Book-Entry System” — The Federal Reserve Treasury Book-Entry System for United States and federal agency securities.
“Business Day” — Any day GLDM’s Listing Exchange is open for business.
“CEA” — The Commodity Exchange Act, as amended.
“CFTC” — The Commodity Futures Trading Commission, established under the CEA. The CFTC is an independent agency of the United States Government
with the mandate to regulate commodity interests, including commodity futures and option and swap markets in the United States.
“Code” —
The United States Internal Revenue Code of 1986, as amended.
“Creation Unit” — A block of 100,000 Shares or more or such other amount
as established from time to time by the Sponsor. Multiple blocks are called “Creation Units.”
“Creation Unit Gold Delivery Amount”
— The total deposit of Gold Bullion required to create a Creation Unit. The Creation Unit Gold Delivery Amount is the number of ounces of Gold Bullion required to be delivered to GLDM by an Authorized Participant in connection with a creation
order for a single Creation Unit. The Creation Unit Gold Delivery Amount also refers to the amount of Gold Bullion to be paid out by GLDM in connection with the redemption of a Creation Unit.
“Custodian” — ICBC Standard Bank Plc
“Custody Agreements” — The Allocated Gold Account Agreement together with the Unallocated Gold Account Agreement.
“Custody Rules” — The rules, regulations, practices and customs of the LBMA, the Bank of England or any applicable regulatory body that apply
to gold made available in physical form by the Custodian.
“Declaration of Trust” — The agreement and declaration of trust entered into by
the Sponsor and the Trustee under which the Trust is formed and which sets forth the rights and duties of the Sponsor and the Trustee, as such agreement and declaration of trust may be amended or restated from time to time.
A-1
“DTC” — The Depository Trust Company. DTC is a limited purpose trust company organized under
New York law, a member of the U.S. Federal Reserve System and a clearing agency registered with the SEC pursuant to the provisions of Section 17A of the Exchange Act. DTC will act as the securities depository for the Shares.
“DTC Participant” — A participant in DTC, such as a bank, broker, dealer or trust company.
“Exchange Act” — The Securities Exchange Act of 1934, as amended.
“FCA” — The Financial Conduct Authority, an independent non-governmental body which exercises statutory regulatory power under the FS Act and
which regulates the major participating members of the LBMA in the United Kingdom.
“FS Act” — The Financial Services Act 2012.
“Fund Allocated Account” — The allocated Gold Bullion account of the Trust established with the Custodian on behalf of GLDM by the Allocated
Gold Account Agreement. The Fund Allocated Account will be used to hold the Gold Bullion that is transferred from the Fund Unallocated Account to be held by GLDM in allocated form (i.e., as individually identified bars of Gold Bullion).
“Fund Unallocated Account” — The unallocated Gold Bullion account of the Trust established with the Custodian on behalf of GLDM by the
Unallocated Gold Account Agreement. The Fund Unallocated Account will be used to facilitate the transfer of Gold Bullion in and out of GLDM. Specifically, it will be used to transfer Gold Bullion deposits and Gold Bullion redemption distributions
between Authorized Participants and GLDM in connection with the creation and redemption of Creation Units and in connection with sales of Gold Bullion for GLDM.
“Gold Bullion” — (a) Gold Bullion meeting the requirements of London Good Delivery Standards or (b) credit to an Unallocated Account
representing the right to receive Gold Bullion meeting the requirements of London Good Delivery Standards.
“Gold Price” — Generally the
LBMA Gold Price PM.
“IBA” — The ICE Benchmark Administration Limited, an independent specialist benchmark administrator who provides the
price platform, methodology and overall administration and governance for the LBMA Gold Price.
“Indirect Participants” — Those banks,
brokers, dealers, trust companies and others who maintain, either directly or indirectly, a custodial relationship with a DTC Participant.
“LBMA” — The London Bullion Market Association. The LBMA is the trade association that acts as the coordinator for activities conducted on
behalf of its members and other participants in the London bullion market. In addition to coordinating market activities, the LBMA acts as the principal point of contact between the market and its regulators. A primary function of the LBMA is its
involvement in the promotion of refining standards by maintenance of the “London Good Delivery Lists,” which are the lists of LBMA accredited melters and assayers of gold. Further, the LBMA coordinates market clearing and vaulting,
promotes good trading practices and develops standard documentation. The major participating members of the LBMA are regulated by the FSA in the United Kingdom under the FS Act.
“LBMA Gold Price” — The price per troy ounce of Gold Bullion for delivery in London through a member of the LBMA stated in USDs and set via an
electronic auction process run twice daily at 10:30 a.m. and 3:00 p.m. London time each Business Day as calculated and administered by the IBA.
“LBMA Gold Price PM” — The 3:00 p.m. London time LBMA Gold Price.
A-2
“Listing Exchange” — The NYSE Arca or other primary U.S. national securities exchange on
which Shares are listed.
“London Good Delivery Bar” — A bar of Gold Bullion meeting the London Good Delivery Standards.
“London Good Delivery Standards” — The specifications for weight, dimensions, fineness (or purity), identifying marks and appearance of gold
bars as set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the LBMA. The London Good Delivery Standards are described in “The Gold Industry — The London Bullion Market.”
“London PM Fix” — The afternoon gold fixing price per troy ounce of gold for delivery in London through a member of the LBMA authorized to
effect such delivery, stated in USDs. The London PM Fix was discontinued as of March 20, 2015 and is no longer calculated. The London PM Fix was replaced by the LBMA Gold Price PM.
“LPMCL” — The London Precious Metals Clearing Limited.
“Marketing Agent Agreement” — The agreement between the Sponsor and the Marketing Agent under which, among other things, the Marketing Agent
will assist the Sponsor with certain marketing activities.
“Marketing Agent” — State Street Global Advisors Funds Distributors, LLC, a
Delaware limited liability company and an indirect wholly-owned subsidiary of State Street Corporation.
“NAV” — The net asset value of
GLDM or a Share of GLDM. See “Prospectus Summary — The Offering — Net Asset Value” for a description of how the NAV of GLDM and the NAV per Share are calculated.
“OTC” — The global Over-the-Counter market for the trading of gold which consists of transactions in spot, forwards, options and other
derivatives.
“Participant Agreement” — An agreement entered into by each Authorized Participant with respect to GLDM which provides
the procedures for the creation and redemption of Creation Units and for the delivery of the Gold Bullion required for such creations and redemptions.
“SEC” — The U.S. Securities and Exchange Commission.
“Securities Act” — The Securities Act of 1933, as amended.
“Seed Capital Investor” — the purchaser of the Seed Creation Units, as described on the front page of this Prospectus.
“Seed Creation Units” — The Creation Units issued to the Seed Capital Investor in exchange for the deposit into GLDM of ounces of Gold Bullion
in connection with the initial operation of GLDM.
“Shareholders” — Owners of beneficial interests in the Shares.
“Shares” — Units of fractional undivided beneficial interest in and ownership of GLDM which are issued by the Trust.
“Sponsor” — WGC USA Asset Management Company, LLC, a Delaware limited liability company wholly-owned by WGC (US) Holdings, Inc.
“Sponsor Agreement” — The agreement between the Trust and the Sponsor setting forth, among other things, the Sponsor’s compensation for
its services as Sponsor of the Trust.
A-3
“tonne” — One metric tonne which is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
“Transfer Agent” — BNYM.
“Trust”
— The World Gold Trust, a statutory trust formed on August 27, 2014 under Delaware statutory law as set forth in the Declaration of Trust.
“Trustee” — Delaware Trust Company, a Delaware trust company.
“Unallocated Gold Account Agreement” — The agreement between the Trust and the Custodian which establishes the Fund Unallocated Account. The
Allocated Gold Account Agreement and the Unallocated Gold Account Agreement are sometimes referred to together as the “Custody Agreements.”
“U.S. Shareholder” — A Shareholder that is (1) an individual who is treated as a citizen or resident of the United States for U.S.
federal income tax purposes; (2) a business entity treated as a corporation for U.S. federal income tax purposes that is created or organized in or under the laws of the United States or any political subdivision thereof; (3) an estate,
the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or (4) a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more U.S. persons have the authority to control all substantial decisions of the trust.
“WGCUS” — WGC (US) Holdings, Inc.,
corporation registered under Delaware law and the sole member of the Sponsor.
“Weekday” — each calendar day other than a Saturday or
Sunday.
“WGC AM” — WGC USA Asset Management Company, LLC, a Delaware limited liability company wholly-owned by WGCUS. WGC AM is the
Sponsor of the Trust.
A-4
PART TWO
STATEMENT OF ADDITIONAL INFORMATION
SPDR
®
Gold MiniShares Trust,
a series of
WORLD GOLD
TRUST
SPONSORED BY WGC USA ASSET MANAGEMENT COMPANY, LLC
80,000,000 Shares of Beneficial Interest
The Shares are speculative securities which involve the risk of loss.
Past performance is not necessarily indicative of future results.
See “Risk Factors” beginning at page 5 in Part One.
THIS PROSPECTUS IS IN TWO PARTS: A DISCLOSURE DOCUMENT
AND A STATEMENT OF ADDITIONAL INFORMATION. THESE
PARTS ARE BOUND TOGETHER, AND BOTH CONTAIN
IMPORTANT INFORMATION. YOU MUST READ THE
STATEMENT OF ADDITIONAL INFORMATION
IN CONJUNCTION WITH THE
DISCLOSURE DOCUMENT,
DATED
PRIVACY POLICY
SPDR
®
Gold MiniShares Trust (“GLDM”), a single series of the World Gold Trust (the
“Trust”), and WGC USA Asset Management Company, LLC, the Sponsor of the Trust (the “Sponsor”), may collect or have access to certain nonpublic personal information about current and former investors. Nonpublic personal
information may include information received from investors, such as an investor’s name, social security number and address, as well as information received from brokerage firms about investor holdings and transactions in shares of GLDM.
GLDM, the Trust and the Sponsor do not disclose nonpublic personal information except as required by law or as described in their Privacy Policy. In general,
GLDM, the Trust and the Sponsor restrict access to the nonpublic personal information they collect about investors to those of their and their affiliates’ employees and service providers who need access to such information to provide products
and services to investors.
GLDM, the Trust and the Sponsor maintain safeguards that comply with federal law to protect investors’ nonpublic personal
information. These safeguards are reasonably designed to (1) ensure the security and confidentiality of investors’ records and information, (2) protect against any anticipated threats or hazards to the security or integrity of
investors’ records and information, and (3) protect against unauthorized access to or use of investors’ records or information that could result in substantial harm or inconvenience to any investor. Third-party service providers with
whom GLDM, the Trust and the Sponsor share nonpublic personal information about investors must agree to follow appropriate standards of security and confidentiality, which includes safeguarding such nonpublic personal information physically,
electronically and procedurally.
A copy of GLDM’s, the Trust’s and the Sponsor’s current Privacy Policy is provided to investors annually
and is also available upon request.
TWO-3
EXHIBIT A
PRIVACY NOTICE
The importance of protecting an investor’s privacy is recognized by SPDR
®
Gold
MiniShares Trust (“GLDM”), a series of the World Gold Trust (the “Trust”), and WGC USA Asset Management Company, LLC, the Sponsor of the Trust (the “Sponsor”). The Trust, GLDM and the Sponsor protect personal
information they collect about you by maintaining physical, electronic and procedural safeguards to maintain the confidentiality and security of such information.
Categories Of Information Collected
. In the normal course of business, the Trust, GLDM and the Sponsor may collect the following types
of information concerning investors in GLDM who are natural persons:
Information provided through GLDM’s website, (including name,
address, social security number, income and other financial-related information); and
Data about investor transactions (such as the
types of investments the investors have made).
How the Collected Information is Used.
Any and all nonpublic personal
information received by the Trust, GLDM or the Sponsor with respect to the investors who are natural persons, will not be shared with nonaffiliated third parties which are not service providers to the Trust, GLDM or the Sponsor without prior notice
to such investors. Such service providers include but are not limited to the Administrators, Transfer Agent, auditors and the legal advisers of the Trust, GLDM and the Sponsor. Additionally, the Trust, GLDM and/or the Sponsor may disclose such
nonpublic personal information as required by applicable laws, statutes, rules and regulations of any government, governmental agency or self-regulatory organization or a court order.
For questions about the privacy policy, please contact the Sponsor.
TWO-4
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
|
Item 13.
|
Other Expenses of Issuance and Distribution*
|
GLDM shall not bear any expenses in connection with
the issuance and distribution of the securities being registered. These expenses shall be paid by the Sponsor. Except for the registration fee payable to the Securities and Exchange Commission and the NYSE Arca Listing Fee, all such expenses are
estimated:
|
|
|
|
|
|
|
Securities and Exchange Commission Registration Fee
|
|
$
|
133,000
|
|
|
NYSE Arca Listing Fee
|
|
$
|
7,500
|
|
|
Printing and engraving expenses
|
|
$
|
150,000
|
|
|
Legal fees and expenses
|
|
$
|
280,000
|
|
|
Insurance
|
|
$
|
0
|
|
|
Accounting fees and expenses
|
|
$
|
25,000
|
|
|
Miscellaneous
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
620,500
|
|
|
|
|
|
|
|
|
*
|
Subject to revision upon completion of the offering.
|
|
Item 14.
|
Indemnification of Directors and Officers.
|
Section 18-108 of the Delaware Limited Liability
Company Act provides that a limited liability company may indemnify and hold harmless any member, manager or other person against any and all claims and demands whatsoever, subject to any standards and restrictions set forth in the limited liability
company agreement of the limited liability company.
Section 4.05 of the Declaration of Trust provides that the Sponsor and its directors,
shareholders, members, officers, employees, affiliates and subsidiaries shall be indemnified from GLDM and held harmless against any loss, liability or expense incurred by an indemnified party without (1) gross negligence, bad faith, willful
misconduct or willful malfeasance on the part of the indemnified party arising out of or in connection with the performance of its obligations under the Declaration of Trust or any actions taken in accordance with the provisions of the Declaration
of Trust or (2) the indemnified party’s reckless disregard of its obligations and duties under the Declaration of Trust. The indemnity shall include payment from GLDM of the indemnified party’s costs and expenses of defending itself
against any such indemnified claim or liability.
In addition, WGC AM has entered into separate indemnification agreements with certain officers of
the Sponsor which require WGC AM, among other things, to indemnify the officers against certain liabilities which may arise by reason of their status as officers of the Sponsor. The Sponsor or WGC AM also intends to maintain director and officer
liability insurance for the Sponsor, if available on reasonable terms.
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
None.
II-1
|
Item 16.
|
Exhibits and Financial Statement Schedules.
|
(a) Exhibits
Exhibit Index
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
1.1
|
|
Form of Seed Capital Investor
|
|
|
|
|
3.1
|
|
Certificate of Trust
(2)
|
|
|
|
|
3.2
|
|
Certificate of Amendment to Certificate of Trust
(3)
|
|
|
|
|
3.3
|
|
Second Certificate of Amendment to Certificate of Trust
|
|
|
|
|
4.1
|
|
Third Amended and Restated Agreement and Declaration of Trust
(4)
|
|
|
|
|
4.2
|
|
Fourth Amended and Restated Agreement and Declaration of Trust
|
|
|
|
|
4.3
|
|
Form of Participant Agreement
|
|
|
|
|
5.1
|
|
Form of Opinion of Morgan, Lewis & Bockius LLP as to legality
|
|
|
|
|
8.1
|
|
Form of Opinion of Morgan, Lewis & Bockius LLP as to tax matters
|
|
|
|
|
10.1
|
|
Form of Custody Agreement — Allocated Gold Account Agreement
|
|
|
|
|
10.2
|
|
Form of Custody Agreement — Unallocated Gold Account Agreement
|
|
|
|
|
10.3
|
|
Fund Administration and Accounting Agreement
(4)
|
|
|
|
|
10.4
|
|
Form of Amendment to Fund Administration and Accounting Agreement
|
|
|
|
|
10.5
|
|
Transfer Agency and Service Agreement
(4)
|
|
|
|
|
10.6
|
|
Form of Amendment to Transfer Agency and Service Agreement
|
|
|
|
|
10.7
|
|
Amended and Restated Sponsor Agreement
(4)
|
|
|
|
|
10.8
|
|
Amendment to Amended and Restated Sponsor Agreement
(5)
|
|
|
|
|
10.9
|
|
Form of Second Amendment to Amended and Restated Sponsor Agreement
|
|
|
|
|
10.10
|
|
Custody Agreement (Cash Only)
(4)
|
|
|
|
|
10.11
|
|
Form of Amendment to Custody Agreement (Cash Only)
|
|
|
|
|
10.12
|
|
Marketing Agent Agreement
(1)
|
|
|
|
|
23.1
|
|
Consent of KPMG LLP relating to World Gold Trust, SPDR
®
Long Dollar Gold Trust and SPDR
®
Gold MiniShares
Trust
|
|
|
|
|
23.2
|
|
Form of Consents of Morgan, Lewis & Bockius LLP are included in Exhibits 5.1 and 8.1
|
|
|
|
|
24.1
|
|
Power of attorney
(6)
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
(1)
|
To be filed by amendment.
|
|
(2)
|
Incorporated by reference to the Trust’s Registration Statement, filed on August 28, 2015.
|
II-2
|
(3)
|
Incorporated by reference to the Trust’s Registration Statement, filed on August 30, 2016.
|
|
(4)
|
Incorporated by reference to the Trust’s Registration Statement, filed on January 9, 2017.
|
|
(5)
|
Incorporated by reference to the Trust’s Annual Report on Form 10-K, filed on November 29, 2017.
|
|
(6)
|
Incorporated by reference to the Trust’s Registration Statement, filed on November 30, 2017.
|
(b) Financial Statement Schedules
Not applicable.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
|
|
(ii)
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
|
|
|
(iii)
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
|
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such
purchaser:
|
|
(i)
|
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
|
|
|
(ii)
|
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
|
|
(iii)
|
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
|
(iv)
|
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
II-3
(5) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in
the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(7) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
(8) For the purpose of determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
Exhibit Index
|
(1)
|
To be filed by amendment.
|
|
(2)
|
Incorporated by reference to the Trust’s Registration Statement, filed on August 28, 2015.
|
|
(3)
|
Incorporated by reference to the Trust’s Registration Statement, filed on August 30, 2016.
|
|
(4)
|
Incorporated by reference to the Trust’s Registration Statement, filed on January 9, 2017.
|
|
(5)
|
Incorporated by reference to the Trust’s Annual Report on Form 10-K, filed on November 29, 2017.
|
|
(6)
|
Incorporated by reference to the Trust’s Registration Statement, filed on November 30, 2017.
|
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, New York, on May 4, 2018.
|
|
|
|
|
|
|
|
|
World Gold Trust
|
|
|
|
|
|
|
|
By:
|
|
WGC USA Asset Management Company, LLC,
its Sponsor
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Joseph R. Cavatoni
|
|
|
|
|
|
|
|
Joseph R. Cavatoni,
Principal Executive Officer
and President
|
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on May
4, 2018 by the following persons on behalf of the World Gold Trust in the capacities* indicated.
|
|
|
|
|
Signature
|
|
Capacity
|
|
|
|
|
By: /s/ Joseph R. Cavatoni
Joseph R. Cavatoni
|
|
Principal Executive Officer
|
|
|
|
|
By: /s/ Laura S. Melman
Laura S. Melman
|
|
Principal Financial Officer
|
|
|
|
|
By: /s/ Laura S. Melman
Laura S. Melman
|
|
Principal Accounting Officer
|
|
|
|
|
By: **
Aram
Shishmanian
|
|
Director
|
|
|
|
|
By: **
William J. Shea
|
|
Director
|
|
|
|
|
By: **
Rocco Maggiotto
|
|
Director
|
|
|
|
|
By: **
Neal
Wolkoff
|
|
Director
|
|
|
|
Signature
|
|
**By: /s/ Joseph R. Cavatoni
|
|
Joseph R. Cavatoni, Attorney-in-fact
|
|
*
|
The Registrant is a trust and the persons are signing in their capacities as officers or directors of WGC USA Asset Management Company, LLC, the sponsor of the Registrant.
|
Exhibit 1.1
FORM OF
SEED CAPITAL
INVESTOR AGREEMENT
for
SPDR
®
Gold MiniShares Trust
a series of
World Gold
Trust
Sponsored by WGC USA Asset Management Company, LLC
[•], 2018
WGC USA ASSET MANAGEMENT
COMPANY, LLC
, a Delaware limited liability company (the “Sponsor”), has sponsored the formation of
WORLD GOLD TRUST
(the “Trust”), a Delaware statutory trust, for which the Delaware Trust Company, a Delaware banking
corporation, acts as the sole trustee (the “Trustee”). The Trust has established and designated a series of the Trust, the
SPDR
®
Gold MiniShares Trust (
the
“Fund”).
Upon the basis of the representations and warranties set forth in Section 1 hereof and subject to the applicable terms and
conditions set forth herein, on the date hereof the Trust agrees to issue and sell to [ • ] (the “Seed Capital Investor”), and the Seed Capital Investor agrees to purchase the aggregate
number of common units of fractional undivided beneficial interest in and ownership of the Fund (the “Shares”) as are set forth in Schedule A hereto (such units of the Fund being referred to herein as the “Seed Creation Units”)
in consideration of the payment of the amount for the Shares (the “Purchase Price”) set forth in Schedule A. The Seed Capital Investor agrees to purchase the Seed Creation Units and agrees not to redeem, transfer or otherwise dispose of
such Seed Creation Units except as contemplated under Section 2(b) hereto.
1. The Sponsor, on its own behalf and in its capacity as Sponsor of the
Trust and the Fund, represents and warrants to, and agrees with, the Seed Capital Investor that:
(a) A registration statement on Form
S-1
(File Nos. 333-221842) (the “Initial Registration Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission (the “Commission”); at the time of payment of
the Purchase Price by the Seed Capital Investor (the “Closing Time”), the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to the Seed Capital Investor, shall have been declared
effective by the Commission in such form; as of the Closing Time, except as set forth in this Section 1, no other document with respect to the Initial Registration Statement shall have been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement or any post-effective amendment thereto shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of
1
1933, as amended (the “Act”), is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial Registration Statement, including all exhibits thereto and
including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 3(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective, are hereinafter collectively called the “Registration Statement”; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “Prospectus”);
(b) As of
the Closing Time, no order preventing or suspending the use of any Preliminary Prospectus shall have been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Sponsor by the Seed Capital Investor expressly for use therein;
(c) As of the Closing Time, the Registration
Statement, the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects, to the requirements of the Act and the rules and regulations of the Commission thereunder and
will not, as of the applicable effective date as to the Registration Statement and any amendment thereto, and as of the Closing Time or the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in writing to the Sponsor by the Seed Capital Investor expressly for use therein;
(d) Each of the Shares comprising the Seed Creation Units shall be duly and validly authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued and fully paid and
non-assessable
and as of the Closing Time will conform in all material respects to the description of the Shares comprising the
Seed Creation Units contained in the Prospectus;
2
(e) The issue and sale of the Shares comprising the Seed Creation Units by the Trust with respect
to the Fund and the compliance by the Sponsor and the Trust (on its own behalf and on behalf of the Fund) with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Sponsor or the Trust is a party or by which the Sponsor, or
the Trust is bound or to which any of the property or assets of the Sponsor or the Trust is subject, except where such conflict, breach or violation, as the case may be, would not have a material adverse effect on the ability of the Sponsor or the
Trust to perform its obligations under this Agreement, nor will such action result in any violation of the provisions of the constitutive documents of the Sponsor, the Trust, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Sponsor, or the Trust or any of their respective properties, except where such violation would not have a material adverse effect on the ability of the Sponsor to perform its obligations under
this Agreement; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Shares comprising the Seed Creation Units hereunder or
the consummation by the Sponsor or the Trust of the transactions contemplated by this Agreement, except the registration under the Act of the Shares comprising the Seed Creation Units and such consents, approvals, authorizations, registrations or
qualifications as may be required under the rules of the Financial Industry Regulatory Authority (“FINRA”), state securities or Blue Sky laws in connection with the purchase and distribution by the Seed Capital Investor of the Shares
comprising the Seed Creation Units;
2. The Seed Capital Investor represents and warrants to, and agrees with, the Sponsor, on its own behalf and in its
capacity as Sponsor of the Trust and the Fund, that:
(a) On the date of this Agreement, the Seed Capital Investor shall pay the Purchase
Price as set forth on Schedule A, attached hereto, and the Trust shall cause the Shares comprising the Seed Creation Units to be delivered to the Seed Capital Investor or its designee through the facilities of The Depository Trust Company
(“DTC”) for the account of the Seed Capital Investor or its designee.
(b) The Seed Capital Investor agrees that any sales of any
shares comprising the Seed Creation Units will be effected in a manner consistent with the Plan of Distribution contained in the Prospectus and that it shall deliver a Prospectus with any such sales when required by law.
3
3. The Sponsor agrees with the Seed Capital Investor:
(a) To prepare the Prospectus and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of
business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 424(b) or Rule 430A(a)(3) under the Act; to advise the Seed Capital Investor, promptly after
it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Seed Capital Investor, upon
written request, with copies thereof; to advise the Seed Capital Investor, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus
or prospectus, of the suspension of the qualification of the Shares comprising the Seed Creation Units for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification, promptly to use its reasonable best efforts to obtain the withdrawal of such order;
(b) To use its reasonable best efforts to list, subject to notice of issuance, the Shares on the NYSE Arca (the “Exchange”);
(c) To file promptly all reports and any information statement required to be filed by the Fund with the Commission in order to comply with the
Securities Exchange Act of 1934, as amended, subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Shares; and
(d) To maintain an orderly procedure for the transfer and register of the Shares comprising the Seed Creation Units.
(e) To cause the Shares comprising the Seed Creation Units to be delivered to the Seed Capital Investor or its designee through the facilities
of The Depository Trust Company (“DTC”) as of the date of this Agreement, subject to the payment by the Seed Capital Investor of the Purchase Price.
4. In accordance with Section 2.06 of the Fourth Amended and Restated Agreement and Declaration of Trust of the Trust (“Declaration or Trust”),
the Seed Capital Investor acknowledges that it may look solely to the assets (the “Fund Assets”) of the Fund or to the Sponsor and its assets for payment in respect of any claim against or obligation of such Fund. The Fund Assets include
only those funds and other assets that are paid, held or distributed to the Trust on account of and for the benefit of that particular Fund, including, without limitation, funds delivered to the Trust for the purchase of Shares in such Fund. The
Seed Capital Investor further acknowledges that (i) any debts, liabilities, obligations, indebtedness, expenses and claims of any nature and of all kinds and descriptions of the Fund incurred, contracted for or otherwise existing and
(ii) the Shares of such Fund shall be subject to the following limitations:
4
(a) the assets of the Trust held with respect to each particular series of the Trust, including
the Fund (each, a “Series”), shall be charged against the liabilities of the Trust held with respect to that Series and all expenses, costs, charges and reserves attributable to that Series, and any general liabilities of the Trust which
are not readily identifiable as being held with respect to any particular Series shall be allocated and charged by the Sponsor to and among any one or more of the Series in such manner and on such basis as the Sponsor, in its sole discretion, deems
fair and equitable. The liabilities, expenses, costs, charges, and reserves so charged to a Series are herein referred to as “liabilities held with respect to” that Series;
(b) any liabilities, debts, obligations, expenses, costs, charges and reserves of the Trust that are not readily identifiable as being
liabilities held with respect to any particular Series (collectively “General Liabilities”) shall be allocated and charged by the Sponsor to and among any one or more of the Series in such manner and on such basis as the Sponsor, in its
sole discretion, deems fair and equitable;
(c) each allocation of liabilities, expenses, costs, charges and reserves by the Sponsor shall
be conclusive and binding upon the shareholders of all Series for all purposes;
(d) all persons who have extended credit which has been
allocated to a particular Series, or who have a claim or contract which has been allocated to any particular Series, shall look, and shall be required by contract to look, exclusively to the assets of that particular Series for payment of such
credit, claim, or contract, and not any other Series or the Trust as a whole. In the absence of an express contractual agreement so limiting the claims of such creditors, claimants and contract providers, each creditor, claimant and contract
provider will be deemed nevertheless to have impliedly agreed to such limitation;
(e) subject to the right of the Sponsor in its
discretion to allocate General Liabilities as provided herein, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series, whether such Series is now authorized and existing
pursuant to the Declaration of Trust or is hereafter authorized and existing pursuant to the Declaration of Trust, shall be enforceable against the assets held with respect to such particular Series only, and not against the assets of any other
Series or the General Assets of the Trust and none of the General Liabilities of the Trust or the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to any other Series thereof shall be
enforceable against the assets held with respect to such particular Series; and
5
(f) notice of this limitation on liabilities between and among Series is set forth in the
Trust’s Certificate of Trust, and by giving such notice in the Certificate of Trust, the statutory provisions of Section 3804 of the Delaware Statutory Trust Act relating to limitations on liabilities between and among Series (and the
statutory effect under Section 3804 of setting forth such notice in the Certificate of Trust) are applicable to the Trust and each Series.
5.
Indemnification and Contribution
(a) The Sponsor and the Fund will jointly and severally indemnify and hold harmless the Seed Capital
Investor against any losses, claims, damages or liabilities, joint or several, to which the Seed Capital Investor may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse
the Seed Capital Investor for any legal or other expenses reasonably incurred by the Seed Capital Investor in connection with investigating or defending any such action or claim as such expenses are incurred;
provided, however
, that neither
the Sponsor nor the Fund shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Sponsor by the Seed Capital Investor expressly for use therein.
(b) The Seed Capital Investor will indemnify and hold harmless the Sponsor and the Fund against any losses, claims, damages or liabilities
to which the Sponsor or the Fund may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein, in the light of the
circumstances under which they were made, a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Sponsor
by the Seed Capital Investor expressly for use therein; and will reimburse the Sponsor and the Fund for any legal or other expenses reasonably incurred by the Sponsor in connection with investigating or defending any such action or claim as such
expenses are incurred.
6
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Sponsor and the Fund on the one hand and the Seed
Capital Investor on the other from the offering of the Shares in controversy comprising the Seed Creation Units. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount
7
paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Sponsor and the Fund on the one hand
and the Seed Capital Investor on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Sponsor or
the Fund on the one hand or the Seed Capital Investor on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Sponsor, the Fund and the Seed Capital
Investor agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by
pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Seed Capital Investor
shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares in controversy comprising the Seed Creation Units purchased by it and distributed to the public were offered to the public exceeds
the amount of any damages which the Seed Capital Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Sponsor under this Section 5 shall be in addition to any liability which the Sponsor may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls the Seed Capital Investor within the meaning of the Act; and the obligations of the Seed Capital Investor under this Section 5 shall be in addition to any
liability which the Seed Capital Investor may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Sponsor and to each person, if any, who controls the Sponsor within the meaning of the Act.
6. The respective indemnities, agreements, representations, warranties and other statements of the Sponsor and the Seed Capital Investor, as set forth in this
Agreement or made by them pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Seed Capital Investor or any controlling person of
the Seed Capital Investor, or the Sponsor, or any officer or director or controlling person of the Sponsor, and shall survive delivery of and payment for the Shares comprising the Seed Creation Units.
8
7. If the Shares comprising the Seed Creation Units are not delivered by or on behalf of the Sponsor or the Fund
as provided herein, the Sponsor and the Fund will reimburse the Seed Capital Investor for all
out-of-pocket
expenses, including fees and disbursements of counsel,
reasonably incurred by the Seed Capital Investor in making preparations for the purchase, sale and delivery of the Shares comprising the Seed Creation Units, but the Sponsor and the Fund shall then be under no further liability to the Seed Capital
Investor except as provided in Section 5 hereof.
8. All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Seed Capital Investor shall be delivered or sent by mail, telex or facsimile transmission to the Seed Capital Investor at [•] and if to the Sponsor or the Fund shall be delivered or sent by mail to the address of the Sponsor set forth in the
Registration Statement, Attention: [ • ]. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
9. This
Agreement shall be binding upon, and inure solely to the benefit of, the Seed Capital Investor, the Sponsor, the Fund and, to the extent provided in Sections 5 and 6 hereof, the officers and directors of the Sponsor and the Fund and each person who
controls the Sponsor or the Seed Capital Investor, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the
Shares comprising the Seed Creation Units from the Seed Capital Investor shall be deemed a successor or assign by reason merely of such purchase.
10. As
used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
11. This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, except with respect to Section 4, which shall be governed by and construed in accordance with the laws of the State of Delaware.
12. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
13. The Sponsor and the Fund are authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transaction, and all materials of any kind (including tax opinions and other
tax analyses) related to those benefits, without the Seed Capital Investor imposing any limitation of any kind.
Remainder of page left
blank intentionally. Signature page follows.
9
If the foregoing is in accordance with the Seed Capital Investor’s understanding, please sign and return to
us four counterparts hereof, and upon the acceptance hereof by the Seed Capital Investor, this letter and such acceptance hereof shall constitute a binding agreement between the Seed Capital Investor and the Sponsor.
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Very truly yours,
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WORLD GOLD TRUST,
with respect to SPDR
®
Gold MiniShares Trust, a series of the Trust
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By:
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WGC USA ASSET MANAGEMENT COMPANY, LLC, as Sponsor
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By:
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Name:
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Title:
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WGC USA ASSET MANAGEMENT
COMPANY, LLC
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By:
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Name:
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Title:
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SCHEDULE A
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SPDR
®
Gold MiniShares
Trust
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Units of Beneficial Interest
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shares
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Purchase Price
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$
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11
Exhibit 3.3
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF TRUST
Pursuant to Title 12, Section 3810(b) of the Delaware Statutory Trust Act, the undersigned Trust executed the following Certificate of
Amendment:
1. Name of Statutory Trust: World Currency Gold Trust
2. The Certificate of Amendment to the Certificate of Trust is hereby amended as follows:
FIRST: That the name of the Trust is changed from “World Currency Gold Trust” to “World Gold Trust”.
3. This certificate of Amendment shall be effective April 16, 2018.
IN WITNESS WHEREOF,
the undersigned has executed this Certificate on the 16th day of April, 2018.
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WORLD CURRENCY GOLD TRUST
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By:
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DELAWARE TRUST COMPANY, as Trustee
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By:
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/s/ Alan R. Halpern
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Name:
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Alan R. Halpern
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Title:
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Vice President
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Exhibit 4.2
FOURTH AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
WORLD GOLD TRUST
(formerly known as World Currency Gold Trust)
DATED AS OF APRIL 16, 2018
TABLE OF CONTENTS
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Page
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ARTICLE I
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NAME, PURPOSE AND DEFINITIONS
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2
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Section 1.01
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Name
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2
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Section 1.02
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Purpose
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2
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Section 1.03
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Definitions
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2
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Section 1.04
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Grantor Trust
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6
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ARTICLE II
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SERIES AND SHARES
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6
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Section 2.01
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Division of Beneficial Interest; Establishment of Series
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6
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Section 2.02
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Ownership of Shares
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7
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Section 2.03
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Transfer of Shares
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7
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Section 2.04
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Investments in a Series
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7
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Section 2.05
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Status of Shares and Limitation of Personal Liability
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8
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Section 2.06
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Designation and Rights of Shares
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8
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Section 2.07
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Fixing of Record Date
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10
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Section 2.08
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Creations and Issuance of Creation Baskets
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11
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Section 2.09
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Requirements for Deposits of Gold
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11
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Section 2.10
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Redemption of Creation Baskets
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12
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ARTICLE III
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TRUSTEE
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13
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Section 3.01
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Term; Resignation
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13
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Section 3.02
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Duties
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13
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Section 3.03
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Compensation and Expenses of the Trustee
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13
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Section 3.04
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Liability of Trustee
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14
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Section 3.05
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Indemnification
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15
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Section 3.06
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Successor Trustee
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15
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ARTICLE IV
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THE SPONSOR
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16
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Section 4.01
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Management of the Trust
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16
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Section 4.02
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Authority of Sponsor
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16
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Section 4.03
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Obligations of Sponsor
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17
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Section 4.04
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Compensation of the Sponsor
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18
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Section 4.05
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Liability of Sponsor and Indemnification
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18
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ARTICLE V
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BOOKS OF ACCOUNT AND CERTIFICATE OF TRUST
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19
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Section 5.01
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Books of Account
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19
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Section 5.02
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Certificate of Trust
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i
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ARTICLE VI
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AMENDMENT OF DECLARATION OF TRUST
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ARTICLE VII
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TERM
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20
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ARTICLE VIII
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TERMINATION/REORGANIZATION
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20
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Section 8.01
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Termination of the Trust or any Series
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20
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Section 8.02
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Merger and Consolidation
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21
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Section 8.03
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Dissolution of Sponsor Not to Terminate Trust
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21
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ARTICLE IX
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MISCELLANEOUS PROVISIONS
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21
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Section 9.01
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Certain Matters Relating to Shareholders
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21
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Section 9.02
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Delaware Law to Govern
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23
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Section 9.03
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Provisions in Conflict with Law or Regulations
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23
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Section 9.04
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Notices
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24
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Section 9.05
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Headings
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25
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Section 9.06
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Counterparts
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25
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ii
WORLD GOLD TRUST
FOURTH AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
WHEREAS, THIS FOURTH AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST is made and entered into as of April 16, 2018, by WGC USA
ASSET MANAGEMENT COMPANY, LLC, as sponsor, and DELAWARE TRUST COMPANY, as trustee, for the purpose of continuing a Delaware statutory trust in accordance with the provisions hereinafter set forth;
WHEREAS, WGC USA Asset Management Company, LLC and Delaware Trust Company (formerly known as CSC Trust Company of Delaware) have heretofore
created a Delaware statutory trust under the name “Global Currency Gold Trust” pursuant to the Delaware Act (as hereinafter defined) by entering into an agreement and declaration of trust, dated as of August 27, 2014 (the
“Original Agreement and Declaration of Trust”), and by executing and filing with the Secretary of State of the State of Delaware the Certificate of Trust;
WHEREAS, the Original Agreement and Declaration of Trust was amended and restated as of June 30, 2016 (the “Amended and Restated
Agreement and Declaration of Trust”);
WHEREAS, a Certificate of Amendment to the Certificate of Trust was executed and filed with
the Secretary of State of the State of Delaware on August 22, 2016 to change the name of the Trust from “Global Currency Gold Trust” to “World Currency Gold Trust”;
WHEREAS, the Amended and Restated Agreement and Declaration of Trust was further amended and restated as of September 13, 2016 (the
“Second Amended and Restated Agreement and Declaration of Trust”) to reflect the Trust’s name change and make certain other changes as set forth therein;
WHEREAS, the Second Amended and Restated Agreement and Declaration of Trust was further amended and restated as of January 6, 2017 (the
“Third Amended and Restated Agreement and Declaration of Trust”);
WHEREAS, a Certificate of Amendment to the Certificate of
Trust was executed and filed with the Secretary of State of the State of Delaware on May [ ], 2018 to change the name of the Trust from “World Currency Gold Trust” to “World Gold Trust”; and
WHEREAS, the parties hereto desire to amend and restate the Third Amended and Restated Agreement and Declaration of Trust in its entirety to
reflect the Trust’s name change and make certain other changes as set forth herein.
NOW, THEREFORE, in consideration of the
agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each party, hereby amends and restates the Third Amended and Restated Agreement and Declaration
of Trust in its entirety and agrees as follows:
1
ARTICLE I
NAME, PURPOSE AND DEFINITIONS
Section 1.01
Name
. This trust shall be known as the “World Gold Trust.” The Sponsor and the Trustee shall conduct the
business of the Trust under this name or any other name as the Sponsor may from time to time determine in its sole discretion. Any name change shall become effective on the execution by the Sponsor of an instrument setting forth the new name and the
filing of a certificate of amendment pursuant to Section 3810(b)(1) of the Delaware Act. Any such instrument shall not require the approval of the Shareholders but shall have the status of an amendment to this Declaration of Trust.
Section 1.02
Purpose
. The purpose of the Trust is to provide Shareholders of each Series with direct or indirect exposure
to commodities and/or commodity interests, including Series that provide the economic effect of holding physical Gold in terms of one or more
non-U.S.
currencies. The Sponsor intends for each Series to be
operated and treated for U.S. federal income tax purposes as an “‘investment’ trust” as defined in Treasury Regulation
§ 301.7701-4(c)(1)
and to be treated as a “grantor
trust” described in sections
671-679
of the Code. All provisions in this Declaration of Trust are intended to be construed such that the Trust or any Series thereof does not lose its status as an
“‘investment’ trust” treated as a “grantor trust”. It is not the intention of the Sponsor to create a general partnership, limited partnership, limited liability company, joint stock association, corporation,
bailment or any form of legal relationship other than a Delaware Statutory Trust. The Trust shall be entitled to exercise all of the powers and privileges granted to a statutory trust formed under the laws of the State of Delaware, now or
hereafter in force.
Section 1.03
Definitions
. Whenever used herein, unless otherwise required by the context or
specifically provided:
(a) “Administrator”
means any Person from time to time engaged to perform administration services
for the Trust and each Series pursuant to authority delegated by the Sponsor.
(b) “Affiliate” shall mean, with respect to any
Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
(c) “Business Day” shall mean any day the Exchange is open for business and the Trust accepts creation and redemption orders for
Creation Baskets.
(d)
“By-Laws”
shall mean the
By-Laws
of the Trust, if any, as amended from time to time which
By-Laws
are expressly herein incorporated by reference as part of the “governing instrument”
within the meaning of the Delaware Act (defined herein).
2
(e) “Certificate of Trust” means the Certificate of Trust of the Trust in the form
filed with the Secretary of State of the State of Delaware pursuant to Section 3810 of the Delaware Act as amended or restated from time to time.
(f) “Code” means the Internal Revenue Code of 1986, as amended.
(g) “Control” and/or “Controlled” mean that the specified party, directly or indirectly, has the power to direct or cause
the direction of the management and policies of an entity through the ownership of voting securities, by contract or otherwise.
(h)
“Commodity Pool Operator” means the Sponsor or any Person who is registered as a commodity pool operator with the Commodity Futures Trading Commission and engaged by the Trust or the Sponsor to serve as a commodity pool operator of the
Trust and each Series.
(i) “Creation Basket” shall mean a block of 10,000 Shares or more or such other amount as established
from time to time by the Sponsor. Multiple blocks are called “Creation Baskets.”
(j) “Creation Basket Gold Delivery
Amount” means the total deposit of Gold required to create a Creation Basket. The Creation Basket Gold Delivery Amount is the number of ounces of Gold required to be delivered to a Series by a Participant in connection with a creation order for
a single Creation Basket. The Creation Basket Gold Delivery Amount also refers to the amount of gold to be paid out by a Series in connection with the redemption of a Creation Basket.
(k) “Custodian” means, with respect to any Series, an entity designated to act as custodian of the assets of such Series pursuant to
a written agreement with the Trust or Sponsor on behalf of such Series.
(l) “Custody Agreement” means a written agreement
entered into by the Trust or Sponsor with a Custodian providing for the deposit, safekeeping or delivery of Gold held by a Series and related services.
(m) “Declaration of Trust” shall mean this Fourth Amended and Restated Agreement and Declaration of Trust, as amended or restated
from time to time.
(n) “Delaware Act” shall mean the Delaware Statutory Trust Act (12
Del
.
C
. § 3801
et
seq
.), as such statute may be amended or interpreted from time to time, and any legislative enactment which may replace or supersede such Act.
(o) “DTC” shall mean the Depository Trust Company. DTC is a limited purpose trust company organized under New York law, a member
of the U.S. Federal Reserve System and a clearing agency registered with the SEC registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC will act as the securities depository for the Shares.
3
(p) “DTC Participant” shall mean a Participant in DTC, such as a bank, broker, dealer
or trust company.
(q) “Exchange” means the primary exchange or other securities market on which the Shares of a Series are
listed for trading.
(r) “Expenses” shall have the meaning assigned to such term in Section 3.05 herein.
(s) “General Assets” shall have the meaning assigned to such term in Section 2.06(a) herein.
(t) “Gold” means gold bullion meeting the London Good Delivery Standards.
(u) “Indemnified Person” shall have the meaning assigned to such term in Section 3.05 herein.
(v) “LBMA” means the London Bullion Market Association.
(w) “London Good Delivery” shall have the meaning assigned to such term in the Good Delivery Rules for Gold and Silver Bars contained
in the rules promulgated by the LBMA.
(x) “LPMCL” means the London Precious Metals Clearing Limited.
(y) “Participant” means a person who (1) is a registered broker-dealer or other securities market participant such as a bank or
other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) is a participant in DTC, (3) has entered into a Participant Agreement and (4) has established a Participant
Unallocated Account with the Custodian or another LPMCL clearing bank. Only Participants may place orders to create or redeem one or more Creation Baskets.
(z) “Participant Agreement” shall mean an agreement entered into by each Participant with respect to a Series which provides the
procedures for the creation and redemption of Creation Baskets and for the delivery of the Gold and cash, if any, required for such creations and redemptions.
(aa) “Participant Unallocated Account” means the account maintained on an unallocated basis by the Custodian or another LPMCL
clearing bank for a Participant.
(bb) “Person” means and includes individuals, corporations, partnerships, trusts, associations,
joint ventures, estates and other entities, whether or not legal entities, and governments and agencies and political subdivisions thereof, whether domestic or foreign.
(cc) “Prospectus” shall have the meaning assigned to such term in Section 4.02(d) herein.
4
(dd) “Redemption Order” shall have the meaning assigned to such term in
Section 2.10(a) herein.
(ee) “Registration Statement” means the registration statement of the Trust with respect to a
Series as filed with the SEC and declared effective thereby, or becoming automatically effective, as applicable, as the same may at any time and from time to time be amended or supplemented.
(ff) “SEC” means the U.S. Securities and Exchange Commission.
(gg) “Series” refers to each Series of Shares established and designated under or in accordance with the provisions of
Article II.
(hh) “Series Allocated Account” means the allocated Gold account of the Trust established with the Custodian on
behalf of a Series. The Series Allocated Account will be used to hold the physical Gold that is transferred from a Series Unallocated Account to be held by that Series in allocated form (
i.e.
, as individually identified bars of Gold).
(ii) “Series Unallocated Account” means the unallocated Gold account of the Trust established with the Custodian on behalf of a
Series. The Series Unallocated Account will be used to facilitate the transfer of Gold in and out of that Series. Specifically, it will be used to transfer Gold deposits and Gold redemption distributions between Participants and the Series in
connection with the creation and redemption of Creation Baskets, in connection with the transfers of Gold to or from the gold delivery provider of the Series, and in connection with sales of Gold for the Series.
(jj) “Shareholder” means a record owner of at least one outstanding Share.
(kk) “Share” shall mean an equal proportionate unit of beneficial interest into which the beneficial interest of each Series shall be
divided. “Shares” includes fractions of Shares as well as whole Shares.
(ll) “Sponsor” means WGC USA Asset Management
Company, LLC, or any entity into which it may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which it shall be a party, or any entity succeeding to all or substantially all of its business
as sponsor of the Trust, or any successor Sponsor designated as such by operation of law or any successor Sponsor appointed as herein provided.
(mm) “Sponsor Agreement” means an agreement between the Trust and the Sponsor setting forth, among other things, the Sponsor’s
compensation for its services as Sponsor of the Trust.
(nn) “Sponsor Indemnified Party” shall have the meaning assigned to such
term in Section 4.05(c) herein.
(oo) “Trust” refers to the Delaware statutory trust established under the Delaware Act by
the filing of the Certificate of Trust in the Office of the Secretary of State of the State of Delaware on August 27, 2014, inclusive of each and every Series established as part of the Trust hereunder now or in the future.
5
(pp) “Trust Property” means the property of the Trust and, specifically, the Gold owned
or held by or for the account of the Trust or any Series.
(qq) “Trustee” refers to Delaware Trust Company or any successor
Trustee designated as such by operation of law or appointed as herein, acting not in its individual capacity but solely as trustee of the Trust.
Section 1.04
Grantor Trust
. Nothing in this Declaration of Trust, any Custody Agreement, the Sponsor Agreement or otherwise
shall be construed to give the Trustee or Sponsor the power to vary the investment of the Shareholders (within the meaning of Treasury Regulation section
301.7701-4(c)
under the Code or any similar or
successor provision of the regulations under the Code), nor shall the Sponsor give the Trustee any direction that would vary the investment of the Shareholders. Neither the Trustee nor the Sponsor shall be liable to any Person for any failure of the
Trust or Series thereof to qualify as a “grantor trust” under the Code or any comparable provision of the laws of any State or other jurisdiction where that treatment is sought, except that this sentence shall not limit the Trustee’s
or Sponsor’s responsibility for the administration of the Trust in accordance with this Declaration of Trust.
ARTICLE II
SERIES AND SHARES
Section 2.01
Division of Beneficial Interest; Establishment of Series
. The beneficial interest in the Trust shall be divided into
one or more Series. Each Share of a Series of the Trust shall represent an equal beneficial interest in the net assets of such Series, and each holder of Shares of a Series shall be entitled to receive such holder’s pro rata share of
distributions of income and capital gains, if any, made with respect to such Series. Upon redemption of the Shares of any Series, the applicable Shareholder shall be paid solely out of the Series and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed to be Shares of any or all Series, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of the Trust, except as the context otherwise requires.
All
Shares issued hereunder shall be fully paid and
non-assessable.
No Share shall have any priority or preference over any other Share of the same Series with respect to assets of such Series. All distributions,
if any, shall be made ratably among all Shareholders of a Series from the assets held with respect to such Series according to the number of Shares of such Series held of record by such Shareholders on the record date for any distribution or on the
date of termination of the Trust, as the case may be. Except as otherwise provided by the Sponsor Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust. Every Shareholder,
by virtue of having purchased or acquired a Share, shall have expressly consented and agreed to be bound by the terms of this Declaration of Trust.
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The Sponsor shall have full power and authority, in its sole discretion, without seeking the
approval of the Trustee or the Shareholders of any Series (i) to establish and designate and to change in any manner any Series and to fix such preferences, voting powers, rights, duties and privileges of each Series as the Sponsor may from
time to time determine, which preferences, voting powers, rights, duties and privileges may be senior or subordinate to any existing Series and may be limited to specified property or obligations of the Trust or gains and losses associated with
specified property or obligations of the Trust, (ii) to divide the beneficial interest in each Series into an unlimited amount of Shares, with or without par value, as the Sponsor shall determine, (iii) to issue Shares without limitation
as to number (including fractional Shares), to such Persons and for such amount of consideration, subject to any restriction set forth in the
By-Laws,
if any, at such time or times and on such terms as the
Sponsor may deem appropriate, (iv) to divide or combine the Shares or any Series into a greater or lesser number without thereby materially changing the proportionate beneficial interest of the Shares of such Series in the assets held with
respect to that Series, (v) to classify or reclassify any issued Shares of any Series into shares of one or more Series, and (vi) to take such other action with respect to the Shares as the Sponsor may deem desirable.
Section 2.02
Ownership of Shares
. The ownership of Shares shall be recorded on the books of the Trust or a transfer or
similar agent for the Trust, which books shall be maintained separately for the Shares of each Series. No certificates certifying the ownership of Shares shall be issued except as the Sponsor may otherwise determine from time to time. The Sponsor
may make such rules as it considers appropriate for the issuance of Share certificates, transfer of Shares of each Series and similar matters. The record books of the Trust as kept by the Trust, or any transfer or similar agent, as the case may be,
shall be conclusive as to the identity of the Shareholders of each Series and as to the number of Shares of each Series held from time to time by each.
Section 2.03
Transfer of Shares
. Except as otherwise provided by the Sponsor, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon delivery to the Sponsor, the Trust’s transfer or similar agent or other Person designated by the Sponsor of a duly executed instrument of transfer, together with a
Share certificate if one is outstanding, and such evidence of the genuineness of each such execution and authorization and of such other matters as may be required by the Sponsor. Upon such delivery, and subject to any further requirements specified
by the Sponsor or contained in the
By-Laws,
the transfer shall be recorded on the books of the Trust. Until a transfer is so recorded, the Shareholder of record of Shares shall be deemed to be the holder of
such Shares for all purposes hereunder.
Section 2.04
Investments in a Series
. Investments in each Series may be
accepted by the Trust from such Persons, at such times and on such terms as the Sponsor from time to time may authorize. Each investment shall be credited to the Shareholder’s account in the form of full and fractional Shares of the Trust, in
such Series as the purchaser shall select, at the net asset value per Share next determined for such Series after receipt of the investment; provided, however, that the Sponsor may, in its sole discretion, impose a sales charge, transaction fee or
other charges upon investments in a Series or place such other restrictions on investments in a Series as the Sponsor, in its sole discretion, deems appropriate.
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Section 2.05
Status of Shares and Limitation of Personal Liability
. The ownership
of the Trust Property and the right to conduct the business of the Trust and each Series described herein are vested exclusively in the Sponsor and the Trustee. The Shareholders of a Series shall have no interest therein other than the beneficial
interest in such Series conferred by their Shares, and they shall have no right to call for any partition or division of any Trust Property, rights or interests of the Trust or a Series, nor can they be called upon to share or assume any losses of
the Trust or, subject to the right of the Sponsor to charge certain expenses directly to Shareholders, suffer an assessment of any kind by virtue of their ownership of Shares. Every Shareholder, by virtue of having purchased a Share, shall become a
Shareholder of the Series whose Share or Shares it has purchased and shall be held to have expressly assented and agreed to be bound by the terms hereof and to have become a party hereto. The death, incapacity, dissolution, termination or bankruptcy
of a Shareholder during the existence of the Trust or a Series shall not operate to terminate the Trust or such Series, nor entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against
the Trust or such Series, the Sponsor or the Trustee, but entitles such representative only to the rights of such Shareholder under this Declaration of Trust. Ownership of Shares shall not constitute the Shareholders as partners. The Shares shall
not entitle the holder to preference, preemptive, appraisal, conversion or exchange rights (except as specified in this Declaration of Trust or as specified by the Trust or the Sponsor when creating the Shares). No Shareholder of a Series shall be
subject in such capacity to any personal liability whatsoever to any Person in connection with Trust Property or the acts, obligations or affairs of the Trust. Shareholders shall have the same limitation of personal liability as is extended to
stockholders of a private corporation for profit incorporated under the Delaware General Corporation Law.
Section 2.06
Designation and Rights of Shares
. Each Series shall be separate and distinct from any other Series. Separate and distinct records on the books of the Trust shall be maintained for each Series. The assets and liabilities belonging to any such
Series shall be held and accounted for separately from the assets and liabilities of the Trust or any other Series. Shares of each Series, unless otherwise provided in the resolution establishing such Series, shall have the following relative rights
and preferences:
(a)
Assets Held with Respect to a Particular Series
. All consideration received by the Trust for the issue or
sale
of Shares of a particular Series, including distributions paid by, and reinvested in such Series together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds derived from the sale, exchange or liquidation of such assets, and any Series or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only to the rights of creditors of such Series, and shall be so recorded upon the books of account of the Trust. Such consideration, assets, income, earnings, profits and
proceeds thereof, from whatever source derived, including, without limitation, any proceeds
8
derived from the sale, exchange or liquidation of such assets, and any Series or payments derived from
any reinvestment of such proceeds, in whatever form the same may be, are herein
referred to as “assets held with respect to” that Series. In the event that there are any assets, income, earnings, profits and proceeds thereof, Series or payments which are not readily identifiable as assets held with respect to any
particular Series (collectively “General Assets”), the Sponsor shall allocate such General Assets to, between or among any one or more of the Series in such manner and on such basis as the Sponsor, in its sole discretion, deems fair and
equitable, and any General Assets as allocated to a particular Series shall be held with respect to that Series. Each such allocation by the Sponsor shall be conclusive and binding upon the Shareholders of all Series for all purposes. Separate and
distinct records shall be maintained for each Series and the assets held with respect to each Series shall be held and accounted for separately from the assets held with respect to all other Series and General Assets of the Trust not allocated to
such Series.
(b)
Liabilities Held with Respect to a Particular Series
. The assets of the Trust held with respect to each particular
Series shall be charged against the liabilities of the Trust held with respect to that Series and all expenses, costs, charges and reserves attributable to that Series, and any general liabilities of the Trust which are not readily identifiable as
being held with respect to any particular Series shall be allocated and charged by the Sponsor to and among any one or more of the Series in such manner and on such basis as the Sponsor, in its sole discretion, deems fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are herein referred to as “liabilities held with respect to” that Series. Any liabilities, debts, obligations, expenses, costs, charges and reserves of the Trust
that are not readily identifiable as being liabilities held with respect to any particular Series (collectively “General Liabilities”) shall be allocated and charged by the Sponsor to and among any one or more of the Series in such manner
and on such basis as the Sponsor, in its sole discretion, deems fair and equitable. Each allocation of liabilities, expenses, costs, charges and reserves by the Sponsor shall be conclusive and binding upon the Shareholders of all Series for all
purposes. All Persons who have extended credit which has been allocated to a particular Series, or who have a claim or contract which has been allocated to any particular Series, shall look, and shall be required by contract to look, exclusively to
the assets of that particular Series for payment of such credit, claim, or contract, and not any other Series or the Trust as a whole. In the absence of an express contractual agreement so limiting the claims of such creditors, claimants and
contract providers, each creditor, claimant and contract provider will be deemed nevertheless to have impliedly agreed to such limitation.
Subject to the right of the Sponsor in its discretion to allocate General Liabilities as provided herein, the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with respect to a particular Series, whether such Series is now authorized and existing pursuant to this Declaration of Trust or is hereafter authorized and existing pursuant to this
Declaration of Trust, shall be enforceable against the assets held with respect to such particular Series only, and not against the assets of any other Series or the General Assets of the Trust and none of the General Liabilities of the Trust or the
debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to any other Series thereof shall be enforceable against the assets held with respect to such particular Series. Notice of this limitation on
liabilities between and among Series is set forth in the Certificate of Trust, and by giving such notice in the Certificate of Trust, the statutory provisions of Section 3804 of the Delaware Act relating to limitations on liabilities between
and among Series (and the statutory effect under Section 3804 of setting forth such notice in the Certificate of Trust) are applicable to the Trust and each Series.
9
(c)
Dividends,
Distributions,
Redemptions,
and
Repurchases
. Notwithstanding any other provisions of this Declaration of Trust, no distribution including, without
limitation, any distribution paid upon termination of the Trust or paid on or in respect to any Series, nor any redemption or repurchase of the Shares of any Series, shall be effected by the Trust other than from the assets held with respect to such
Series, nor, except as specifically provided in Section 2.06, shall any Shareholder of any particular Series, otherwise have any right or claim against the assets held with respect to any other Series except to the extent that such Shareholder
has such a right or claim hereunder as a Shareholder of such other Series. The Sponsor shall have full discretion, to the extent not inconsistent with applicable law, to determine which items shall be treated as income and which items as capital;
and each such determination and allocation shall be conclusive and binding upon the Shareholders.
(d)
Voting
. All Shares of the
Trust entitled to vote on a matter shall vote without differentiation between the separate Series on a one vote per each Share (including fractional votes for fractional shares) basis; provided, however, if a matter to be voted on affects only the
interests of some but not all Series of Shareholders or as otherwise required by applicable law, then only the Shareholders of such affected Series shall be entitled to vote on the matter, separately by Series and on the same one vote per each Share
(including fractional votes for fractional shares) basis.
(e)
Equality
. All the Shares of each particular Series shall represent an
equal proportionate undivided interest in the assets held with respect to that Series (subject to the liabilities held with respect to that Series), and each Share of any particular Series shall be equal to each other Share of that Series.
(f)
Fractions
. Any fractional Share of a Series shall carry proportionately all the rights and obligations of a whole Share of that
Series, including rights with respect to voting, receipt of dividends and distributions, redemption of Shares and termination of the Trust.
(g)
Exchange Privilege
. The Sponsor shall have the authority to provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares, in accordance with such requirements and procedures as may be established by the Sponsor.
Section 2.07
Fixing of Record Date
. Whenever any distribution will be made, or whenever the Trust receives notice of any
solicitation of proxies or consents from Shareholders, or whenever for any reason there is a split, reverse split or other change in the outstanding Shares, or whenever the Sponsor shall find it necessary or convenient in respect of any matter, the
Sponsor shall fix a record date for the determination of the Shareholders who shall be (i) entitled to receive such distribution or the net proceeds of the sale thereof, (ii) entitled to give such proxies or consents in respect of any such
solicitation, (iii) entitled to receive Shares of a Series as a result of any such split, reverse split or other change and (iv) entitled to act in respect of any other matter for which the record date was set. Subject to applicable law
and this Declaration of Trust, Sponsor shall have sole discretion to fix such record date.
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Section 2.08
Creations and Issuance of Creation Baskets
.
(a) The following procedures, except to the extent otherwise provided in the Participant Agreement for each Participant, which may be amended
from time to time in accordance with the provisions of such Participant Agreement (and any such amendment will not constitute an amendment of this Declaration of Trust), apply to the creation and issuance of Creation Baskets. Subject to the
limitations upon and requirements for issuance of Creation Baskets stated herein and in such procedures, the number of Creation Baskets which may be issued by the Trust is unlimited.
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(i)
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On any Business Day, a Participant may submit a request to create one or more Creation Baskets (such request by a Participant, a “Purchase Order”) in the manner provided in the Participant Agreement. Purchase
Orders will be processed only from Participants with respect to which a Participant Agreement is in full force and effect.
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(ii)
|
Any Purchase Order is subject to rejection by the Sponsor at its sole discretion as set forth in the Participant Agreement.
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(b) After accepting a Participant’s Purchase Order, the Sponsor will issue and deliver Creation Baskets to fill a Participant’s
Purchase Order in the manner provided in the Participant Agreement, but only if the Sponsor has received (A) the
non-refundable
transaction fee due for such Purchase Order, (B) for the account of the
Trust on behalf of a Series cash, if any, required for such Purchase Order and (C) notice from the Custodian that the Custodian has allocated to the Series Allocated Account the requisite amount of physical Gold based on the number of Creation
Baskets associated with the Participant’s Purchase Order. The Custodian will allocate Gold to the Series Allocated Account from the Series Unallocated Account after the requisite amount of Gold has been transferred from
the Participant Unallocated Account to the Series Unallocated Account. Upon issuing a Creation Basket pursuant to a Purchase Order of a Participant, the Sponsor will deposit the Creation Basket with DTC in accordance with DTC’s customary
procedures, for credit to the account of the Participant that placed the Purchase Order.
(c) The procedures set forth in this
Section 2.08 may be changed from
time-to-time
at the sole discretion of the Sponsor.
Section 2.09
Requirements for Deposits of Gold
.
(a) Except as provided in paragraph (b) of this Section, Gold may be delivered for deposit to the Trust on behalf of a Series only by
transfer to the Series Unallocated Account maintained by the Custodian on behalf of that Series from a Participant Unallocated Account pursuant to the procedures specified in the Participant Agreement. The expense and risk of delivery, ownership and
safekeeping of Gold until such Gold has been received by the Trust on behalf of a Series shall be borne solely by the depositor.
11
(b) The Sponsor shall accept delivery of Gold by such other means as the Sponsor, from time to
time, may determine to be acceptable for the Trust on behalf of a Series. If Gold is to be delivered other than as described in Section 2.09(a), the Sponsor is authorized to establish such procedures and to appoint such custodians and establish
such custody accounts in addition to those described herein, as the Sponsor determines in its sole discretion.
Section 2.10
Redemption of Creation Baskets
.
(a) The following procedures, except to the extent otherwise provided in the Participant Agreement
for each Participant, which may be amended from time to time in accordance with the provisions of such Participant Agreement (and any such amendment will not constitute an amendment of this Declaration of Trust), apply to the redemption of Creation
Baskets.
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(i)
|
On any Business Day, a Participant may submit a request to redeem one or more Creation Baskets standing to the credit of the Participant on the records of DTC in kind (such request, a “Redemption Order”) in
the manner provided in the Participant Agreement. Redemption Orders will be processed only from Participants with respect to which a Participant Agreement is in full force and effect.
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(ii)
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Any Redemption Order is subject to rejection by the Sponsor at its sole discretion as set forth in the Participant Agreement.
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(iii)
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After accepting a Participant’s Redemption Order, the Sponsor will deliver the redemption distribution to fill a Participant’s Redemption Order in the manner provided in the Participant Agreement, but only if
the Sponsor has received (A) the
non-refundable
transaction fee due for such Redemption Order and (B) notice that the Sponsor’s account at DTC has been credited with all Shares comprising the
Creation Baskets being tendered for redemption.
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(b) The procedures set forth in this Section 2.10 may be changed from
time-to-time
at the sole discretion of the Sponsor.
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ARTICLE III
TRUSTEE
Section 3.01
Term; Resignation
.
(a) The Trustee shall be appointed by the Sponsor and shall serve for the duration of the Trust or until the earlier of (i) the effective
date of the Trustee’s resignation, or (ii) the effective date of the removal of the Trustee by the Sponsor.
(b) The Trustee may
resign at any time by giving sixty (60) days’ written notice to the Sponsor; provided, however, that said resignation of the Trustee shall not be effective until such time as a successor Trustee has accepted appointment as Trustee of the
Trust. The Trustee may be removed at any time by the Sponsor upon sixty (60) days’ written notice to the Trustee; provided, however, such removal shall not be effective until such time as a successor Trustee has accepted such appointment.
Section 3.02
Duties
. The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the
purpose of satisfying the requirement of Section 3807(a) of the Delaware Trust Statute that the Trust have at least one trustee with a principal place of business in Delaware. It is understood and agreed by the parties hereto that the Trustee
shall have none of the duties or liabilities of the Sponsor. The duties of the Trustee shall be limited to (i) accepting legal process served on the Trust in the State of Delaware, (ii) the execution of any certificates required to be
filed with the Secretary of State of the State of Delaware which the Delaware Trustee is required to execute under Section 3811 of the Delaware Trust Statute, (iii) taking such action under this Declaration of Trust as it may be directed
in writing by the Sponsor from time to time; provided, however, that the Trustee shall not be required to take any such action if it shall have determined, or shall have been advised by counsel, that such performance is likely to involve the Trustee
in personal liability or is contrary to the terms of this Declaration of Trust or of any document contemplated hereby to which the Trust or the Trustee is a party or is otherwise contrary to law, and (iv) any other duties specifically allocated
to the Trustee in this Declaration of Trust or agreed in writing with the Sponsor from time to time.
Section 3.03
Compensation and Expenses of the Trustee
. The Trustee (or any successor Trustee) shall be entitled to receive compensation from the Sponsor or from the Trust for its services in accordance with such schedules as shall have been separately
agreed to from time to time in writing by the Trustee and the Sponsor or the Trust. Subject to prior written notification and approval of the Sponsor, which shall not be unreasonably withheld, the Trustee may consult with counsel (who may be counsel
for the Sponsor or for the Trustee). The reasonable legal fees incurred in connection with such consultation shall be reimbursed to the Trustee pursuant to this Section 3.03,
provided
that no such fees shall be payable to the extent that
they are incurred as a result of the Trustee’s gross negligence, bad faith or willful misconduct.
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Section 3.04
Liability of Trustee
. The Trustee shall not be liable for the
acts or omissions of the Sponsor, nor shall the Trustee be liable for supervising or monitoring the performance and the duties and obligations of the Sponsor or the Trust under this Declaration of Trust, except as otherwise set forth herein. The
Trustee shall not be liable under any circumstances, except for a breach of its obligations pursuant to this Declaration of Trust or its own willful misconduct, bad faith or gross negligence. In particular, but not by way of limitation:
(i) the Trustee shall not be liable for any error of judgment made in good faith, except to the extent such error of judgment constitutes
gross negligence on its part;
(ii) no provision in this Declaration of Trust shall require the Trustee to expend or risk its personal
funds or otherwise incur any financial liability in the performance of its rights or powers hereunder, if the Trustee shall have reasonable grounds for believing that the payment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(iii) under no circumstances shall the Trustee be liable for any representation, warranty,
covenant, agreement, or indebtedness of the Trust;
(iv) the Trustee shall not be personally responsible for or in respect of the validity
or sufficiency of this Declaration of Trust or for the due execution hereof by the Sponsor;
(v) the Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties. The Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein, the Trustee may for all purposes hereof rely on a certificate, signed by the Sponsor, as to such fact or matter,
and such certificate shall constitute full protection to the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon;
(vi) in the exercise or administration of the trust hereunder, the Trustee (a) may act directly or through agents or attorneys pursuant
to agreements entered into with any of them, and the Trustee shall not be liable for the default or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Trustee in good faith and with due care; and
(b) may consult with counsel, accountants and other skilled persons to be selected by it in good faith and with due care and employed by it, and it shall not be liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled persons;
14
(vii) except as expressly provided in this Section 3.04, in accepting and performing the
Trust hereby created, the Trustee acts solely as Trustee hereunder and not in its individual capacity, and all persons having any claim against the Trustee by reason of the transactions contemplated by this Declaration of Trust shall look only to
the Trust’s property for payment or satisfaction thereof;
(viii) the Trustee shall not be liable for punitive, exemplary,
consequential, special or other similar damages for a breach of this Declaration of Trust under any circumstances;
(ix) the Trustee shall
not be obligated to give any bond or other security for the performance of any of its duties hereunder.
Section 3.05
Indemnification
. The Trustee or any officer, Affiliate, director, employee, or agent of the Trustee (each an “Indemnified Person”) shall be entitled to indemnification from the Trust, to the fullest extent permitted by law, from and
against any and all losses, claims, taxes, damages, reasonable expenses, and liabilities (including liabilities under state or federal securities laws) of any kind and nature whatsoever (collectively, “Expenses”), to the extent that such
Expenses arise out of or are imposed upon or asserted against such Indemnified Persons with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of this Declaration of Trust or the transactions
contemplated hereby;
provided
,
however
, that the Trust shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of such Indemnified Person.
The obligations of the Trust to indemnify the Indemnified Persons as provided herein shall survive the termination of this Declaration of Trust.
Section 3.06
Successor Trustee
. Upon the resignation or removal of the Trustee, the Sponsor shall appoint a successor
Trustee by delivering a written instrument to the outgoing Trustee. Any successor Trustee must satisfy the requirements of Section 3807 of the Delaware Trust Statute. Any resignation or removal of the Trustee and appointment of a successor
Trustee shall not become effective until a written acceptance of appointment is delivered by the successor Trustee to the outgoing Trustee and the Sponsor and any fees and expenses due to the outgoing Trustee are paid or waived by the outgoing
Trustee. Following compliance with the preceding sentence, the successor shall become fully vested with the rights, powers, duties and obligations of the outgoing Trustee under this Declaration of Trust, with like effect as if originally named as
Trustee, and the outgoing Trustee shall be discharged of its duties and obligations herein. If no successor Trustee shall have been appointed and shall have accepted such appointment within sixty (60) days after the giving of such notice of
resignation or removal, the Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
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ARTICLE IV
THE SPONSOR
Section 4.01
Management of the Trust
. Pursuant to Sections 3806(a) and 3806(b)(7) of the Delaware Trust Statute, the
Trust shall be managed by the Sponsor and the conduct of the Trust’s business shall be controlled and conducted solely by the Sponsor in its sole discretion in accordance with this Declaration of Trust. Any determination as to what is in the
interests of the Trust made by the Sponsor in good faith shall be conclusive. In construing the provisions of this Declaration of Trust, the presumption shall be in favor of a grant of power to the Sponsor except as limited, restricted or prohibited
by the express provisions of this Declaration of Trust (e.g., see Section 1.04). The enumeration of any specific power in this Declaration of Trust shall not be construed as limiting the aforesaid or any other power.
Section 4.02
Authority of Sponsor
. In addition to and not in limitation of any rights and powers conferred by law or other
provisions of this Declaration of Trust, and except as limited, restricted or prohibited by the express provisions of this Declaration of Trust (e.g., see Sections 1.02 and 1.04) or the Delaware Act, the Sponsor shall have and may exercise on behalf
of the Trust and each Series, all powers and rights the Sponsor, in its sole discretion, deems necessary, proper, convenient or advisable to effectuate and carry out the purposes, activities and objectives of the Trust and each Series, which shall
include, without limitation, the following:
(a) To enter into, execute, deliver and maintain, and to cause the Trust and each Series to
perform its obligations under, contracts, agreements and any or all other documents and instruments, and to do and perform all such things as may be in furtherance of Trust purposes or necessary or appropriate for the offer and sale of the Shares
and the conduct of Trust activities and administration, and the activities and administration of each Series, including, but not limited to contracts with third parties for services; provided, however, that such services may be performed by an
Affiliate or Affiliates of the Sponsor so long as the Sponsor has made a good faith determination that the terms and conditions of the agreement pursuant to which such Affiliate is to perform services for the Trust are commercially reasonable;
(b) To establish, maintain, deposit into, and/or otherwise draw upon accounts on behalf of the Trust or each Series with appropriate custodial,
banking or other institutions, and execute and/or accept any instrument or agreement incidental to the Trust’s or a Series’ business and in furtherance of its purposes, any such instrument or agreement so executed or accepted by the
Sponsor in the Sponsor‘s name shall be deemed executed and accepted on behalf of the Trust or a Series, as applicable, by the Sponsor;
(c) To deposit, withdraw, pay, retain and distribute Gold and Trust Property, or any portion thereof, in any manner consistent with the
provisions of this Declaration of Trust;
(d) To supervise the preparation and filing of the Registration Statement and the Trust’s
prospectus (the “Prospectus”) and to execute the Registration Statement on behalf of the Trust;
(e) To pay or authorize the
payment of distributions to the Shareholders and pay or authorize the payment of the expenses of the Trust and each Series;
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(f) To hold or dispose of Trust Property and to subscribe for, purchase or otherwise acquire,
own, hold, pledge, sell, assign, transfer, exchange, distribute, or otherwise deal in Trust Property, and to do any and all acts and things for the maintenance, preservation, and protection of Trust Property;
(g) To exercise powers and right of subscription or otherwise with respect to the ownership of Trust Property;
(h) To hold Gold or property in a form not indicating that it is Trust Property, whether in bearer, unregistered or other negotiable form, or
in its own name or in the name of a custodian or subcustodian or a nominee or nominees or otherwise or to authorize the custodian or a subcustodian or a nominee or nominees to deposit the same in a securities depository;
(i) To litigate, compromise, arbitrate, settle or otherwise adjust claims in favor of or against the Trust or a Series, or any matter in
controversy, including but not limited to claims for taxes; and
(j) To contract with any Person(s) appointing such Person(s), including
any Affiliate, to provide services to the Trust or any Series, including without limitation, accountants, administrators, auditors, gold delivery providers, index providers, transfer agents, shareholder servicing agents, marketing agents or other
agents for the Trust or any Series.
(k) To enter into the Sponsor Agreement on terms and conditions acceptable to the Sponsor.
(l) To serve as Commodity Pool Operator for the Funds or appoint any Person, including any Affiliate, to serve as Commodity Pool Operator for
the Funds.
(m) The agreement pursuant to which an Affiliate is to perform services for the Trust shall be terminable by the Trust without
penalty upon discovery of acts of fraud or willful malfeasance of the Affiliate in performing its duties thereunder.
Section 4.03
Obligations of Sponsor
. In addition to the obligations expressly provided by the Delaware Act or this
Declaration of Trust, the Sponsor shall:
(a) Execute, file, record and/or publish all certificates, statements and other documents and do
any and all other things as may be appropriate for the formation, qualification and operation of the Trust and for the conduct of its business in all appropriate jurisdictions;
(b) Retain independent public accountants to audit the accounts of the Trust;
(c) Employ attorneys to represent the Trust;
(d) Select the Trust’s or any Series’ Trustee, administrator, transfer agent, custodian, gold delivery provider(s), index provider,
marketing agent(s) and any other service provider(s) and cause the Trust or such Series to enter into contracts with such service provider(s); and
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(e) Oversee the operation of the service providers of the Trust and each Series in connection
with their dealings with the Trust and each Series.
The Sponsor shall be entitled to delegate its obligations under this Declaration of
Trust and applicable law to third parties, including any Affiliate, and shall not be liable for the actions of such third party to the extent the selection of such third party was made with reasonable care or, as applicable, the selection of such
Affiliate was made in accordance with Section 4.02(a).
Section 4.04
Compensation of the Sponsor
. The Sponsor
shall be entitled to compensation for its services as Sponsor of the Trust as set forth in the Sponsor Agreement. The Trustee shall have no liability or responsibility for amounts paid to the Sponsor pursuant to this Section 4.04. The Sponsor
may, at its sole discretion and from time to time, waive all or a portion of its fee payable under this Section 4.04. The Sponsor is under no obligation to waive its fees hereunder, and any such waiver shall create no obligation to waive fees
during any period not covered by the applicable waiver. Any fee waiver by the Sponsor shall not operate to reduce the Sponsor’s obligations hereunder.
Section 4.05
Liability of Sponsor and Indemnification
.
(a) The Sponsor shall not be under any liability to the Trust, the Trustee or any Shareholder for any action taken or for refraining from the
taking of any action in good faith pursuant to this Declaration of Trust, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any Gold or other assets held in trust hereunder; provided, however, that this
provision shall not protect the Sponsor against any liability to which it would otherwise be subject by reason of its own gross negligence, bad faith, or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list,
affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other Person for any matters arising
hereunder. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for herein.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between the Sponsor or any of its Affiliates, on the one hand, and the Trust, on the
other hand; or
(ii) whenever this Declaration of Trust or any other agreement contemplated herein or therein provides that the Sponsor
shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust, the Sponsor shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the
Sponsor, the resolution, action or terms so made, taken or provided by the Sponsor shall not constitute a breach of this Declaration of Trust or any other agreement contemplated herein or of any duty or obligation of the Sponsor at law or in equity
or otherwise.
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(c) The Sponsor and its shareholders, members, directors, officers, employees, Affiliates and
subsidiaries (each a “Sponsor Indemnified Party”) shall be indemnified by the Trust and held harmless against any loss, liability or expense incurred hereunder without gross negligence, bad faith, or willful misconduct on the part of such
Sponsor Indemnified Party arising out of or in connection with the performance of its obligations hereunder or any actions taken in accordance with the provisions of this Declaration of Trust. Any amounts payable to a Sponsor Indemnified Party under
this Section 4.05 may be payable in advance or shall be secured by a lien on the Trust. The Sponsor shall not be under any obligation to appear in, prosecute or defend any legal action which in its opinion may involve it in any expense or
liability; provided, however, that the Sponsor may, in its discretion, undertake any action which it may deem necessary or desirable in respect of this Declaration of Trust and the rights and duties of the parties hereto and the interests of the
Shareholders and, in such event, the legal expenses and costs of any such action shall be expenses and costs of the Trust and the Sponsor shall be entitled to be reimbursed therefor by the Trust. The obligations of the Trust to indemnify the Sponsor
Indemnified Parties as provided herein shall survive the termination of this Declaration of Trust.
ARTICLE V
BOOKS OF ACCOUNT AND CERTIFICATE OF TRUST
Section 5.01
Books of Account
. Proper books of account for each Series shall be kept and shall be audited annually by an
independent certified public accounting firm selected by the Sponsor in its sole discretion, and there shall be entered therein all transactions, matters and things relating to each Series’ business as are required by the Securities Act of
1933, as amended, and all other applicable rules and regulations, and as are usually entered into books of account kept by Persons engaged in a business of like character. The books of account shall be kept at the principal office of the Trust, the
Administrator or any other service provider engaged by the Sponsor to perform such service.
Section 5.02
Certificate of
Trust
. Except as otherwise provided in the Delaware Trust Statute or this Declaration of Trust, the Sponsor shall not be required to mail a copy of any Certificate of Trust filed with the Secretary of State of the State of Delaware to each
Shareholder; however, such certificates shall be maintained at the principal office of the Trust and shall be available for inspection and copying by the Shareholders in accordance with this Declaration of Trust.
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ARTICLE VI
AMENDMENT OF DECLARATION OF TRUST
Except as specifically provided herein, the Sponsor, in its sole discretion and without Shareholder consent, may amend or otherwise supplement
this Declaration of Trust by making an amendment, a Declaration of Trust supplemental hereto, or an amended and restated declaration of trust. Any such restatement, amendment and/or supplement hereto shall be effective on such date as designated by
Sponsor in its sole discretion.
ARTICLE VII
TERM
The term for which
the Trust and each Series shall exist shall be perpetual, unless terminated pursuant to the provisions of Article VIII hereof or as otherwise provided by law.
ARTICLE VIII
TERMINATION/REORGANIZATION
Section 8.01
Termination of the Trust or any Series
.
(a) The Sponsor may terminate the Trust or any Series at any time for any reason in its sole discretion, however, notwithstanding the
foregoing, if the Trust (or a Series as the case may be) fails to qualify for treatment or ceases to be treated as a “grantor trust” under the Code or any comparable provision of the laws of any State or other jurisdiction where that
treatment is sought, the Sponsor will evaluate whether it is advisable and the best interest of the Shareholders to terminate the Trust or any Series thereof as a result of such tax treatment or change in tax treatment, reorganize a Series into a
new Series of the Trust or continue the Trust and Series without further action.
(b) Written notice of termination with respect to the
Trust or a Series, specifying the anticipated date of termination and the anticipated period during which the assets of the Trust or such Series will be liquidated, generally shall be given by the Sponsor to Shareholders of the Trust or Series, as
applicable, at least thirty (30) days prior to termination of the Trust or such Series. Within a reasonable period of time after such termination the Sponsor shall, subject to any applicable provisions of law, sell all of the Gold not already
distributed to Participants redeeming Creation Baskets, as provided herein, if any, in such a manner so as to effectuate orderly sales and a minimal market impact, and may thereafter hold the net proceeds of any such sale, together with any other
cash then held by it under this Declaration of Trust, uninvested and without liability for interest, for the
pro rata
benefit of the beneficial owners of Shares that had not theretofore been redeemed. The Sponsor shall not be liable for or
responsible in any way for depreciation or loss incurred by reason of any sale or sales made in accordance with the provisions of this Section 8.01. The Sponsor may suspend its sales of the Gold upon the occurrence of unusual or unforeseen
circumstances, including, but not limited to, a suspension in trading of gold. Upon receipt of proceeds from the sale of the last Gold held hereunder, the Sponsor shall:
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(i) pay to itself individually from the Trust an amount equal to the sum of (1) any
compensation due it for extraordinary or other services, (2) any advances made but not yet repaid and (3) reimbursement of any other disbursements as provided herein;
(ii) deduct from the Trust any amounts which it, in its sole discretion, shall deem necessary or appropriate to pay on behalf of the Trust and
each Series any applicable taxes or other governmental charges that may be payable by the Trust or such Series and any other contingent or future liabilities of the Trust or a Series;
(iii) distribute each Shareholder’s interest in the remaining assets of the Trust; and
(iv) disseminate to each Shareholder a final statement as of the date of the computation of the amount distributable to the Shareholders.
(c) Upon termination of the Trust, following completion of winding up of its business, the Trustee, upon written directions of the Sponsor,
shall cause a certificate of cancellation of the Trust’s Certificate of Trust to be filed in accordance with the Delaware Trust Statute.
Section 8.02
Merger and Consolidation
. The Sponsor may cause (i) the Trust to be merged into or consolidated with,
converted to or to sell all or substantially all of its assets to, another trust or entity; (ii) a Series of the Trust to be consolidated with, or to sell all or substantially all of its assets to, another Series of the Trust or another series
of another trust or company; (iii) the Shares of a class of a Series to be converted into another class of the same Series; (iv) the Shares of the Trust or any Series to be converted into beneficial interests in another statutory trust (or
series thereof); or (v) the Shares of the Trust or any Series to be exchanged for shares in another trust or company under or pursuant to any state or federal statute to the extent permitted by law.
For the avoidance of doubt, the Sponsor, with written notice to the Shareholders, may approve and effect any of the transactions contemplated
under (i) — (v) above without any vote or other action of the Shareholders.
Section 8.03
Dissolution of Sponsor Not
to Terminate Trust
. The dissolution of the Sponsor, or its ceasing to exist as a legal entity from, or for, any cause, shall not operate to terminate this Declaration of Trust insofar as the duties and obligations of the Trustee are concerned.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01
Certain Matters Relating to Shareholders
.
(a) By the purchase and acceptance or other lawful delivery and acceptance of Shares, each Shareholder shall be deemed to be a beneficiary of
the Trust created by this Declaration of Trust and vested with beneficial undivided interest in the Trust to the extent of the Shares owned beneficially by such Shareholder, subject to the terms and conditions of this Declaration of Trust. Upon
issuance as provided herein, Shares shall be fully paid and
non-assessable.
(b) The death or
incapacity of any Shareholder shall not operate to terminate this Declaration of Trust or the Trust, nor entitle such Shareholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Each Shareholder expressly waives any right such Shareholder may have under any rule of law, or the provisions
of any statute, or otherwise, to require the Trust, Sponsor or the Trustee at any time to account, in any manner other than as expressly provided in this Declaration of Trust, in respect of the Gold or moneys from time to time received, held and
applied by the Sponsor hereunder.
(c) Except as required under applicable Federal law or under the rules or regulations of an Exchange,
Shareholders shall have no voting rights hereunder (including with respect to mergers, consolidations or conversions of the Trust or transfers to or domestication in any jurisdiction by the Trust or any other matters that under the Delaware Trust
Statute default voting rights are provided to holders of beneficial interests.) The Shareholders shall have the right to vote on other matters only as the Sponsor may consider desirable and so authorize in its sole discretion. To the extent that
federal or Delaware law is amended, modified or interpreted by rule, regulation, order, or
no-action
letter to (on a mandatory basis) expand, eliminate or limit Shareholders’ right to vote on any specific
matter, the Shareholders’ right to vote shall be deemed to be amended, modified or interpreted in accordance therewith without further approval by the Sponsor or the Shareholders. Nothing set forth in this Declaration of Trust shall be
construed so as to constitute the Shareholders from time to time as partners or members of an association; nor shall any Shareholder ever be liable to any third person by reason of any action taken by the parties to this Declaration of Trust, or for
any other cause whatsoever.
(d) Except as otherwise provided under Delaware law, the Shareholders shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of Delaware and no Shareholder shall be liable for claims against, or debts of the Trust or the applicable Series in excess
of his capital contribution and his share of the applicable Series property and undistributed profits, except in the event that the liability is founded upon misstatements or omissions contained in such Shareholder’s Participant Agreement
delivered in connection with his purchase of Shares. In addition, and subject to the exceptions set forth in the immediately preceding sentence, the Trust or the applicable Series shall not make a claim against a Shareholder with respect to amounts
distributed to such Shareholder or amounts received by such Shareholder upon redemption unless, under Delaware law, such Shareholder is liable to repay such amount.
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(e) The Trust or the applicable Series shall indemnify to the full extent permitted by law and
the other provisions of this Declaration of Trust, and to the extent of the applicable Series Property, each Shareholder against any claims of liability asserted against such Shareholder solely because he is a beneficial owner of one or more Shares
(other than for taxes for which such Shareholder is liable by reason of such Shareholder’s ownership of any Shares).
(f) Every
written note, bond, contract, instrument, certificate or undertaking made or issued by the Sponsor shall give notice to the effect that the same was executed or made by or on behalf of the Trust or the applicable Series and that the obligations of
such instrument are not binding upon any Shareholder individually but are binding only upon the assets and property of the applicable Series, and no resort shall be had to the Shareholders’ personal property for satisfaction of any obligation
or claim thereunder, and appropriate references may be made to this Declaration of Trust and may contain any further recital which the Sponsor deems appropriate, but the omission thereof shall not operate to bind any Shareholder individually or
otherwise invalidate any such note, bond, contract, instrument, certificate or undertaking. Nothing contained in this Section 9.01 shall diminish the limitation on the liability of the Trust to the extent set forth in Section 2.06 hereof.
Section 9.02
Delaware Law to Govern
. The validity and construction of this Declaration of Trust and all amendments
hereto shall be governed by the laws of the State of Delaware, and the rights of all parties hereto and the effect of every provision hereof shall be subject to and construed according to the laws of the State of Delaware without regard to the
conflict of laws provisions thereof;
provided
,
however
, that causes of action for violations of U.S. federal or state securities laws shall not be governed by this Section 9.02, and provided further, that the
parties hereto intend that the provisions hereof shall control over any contrary or limiting statutory or common law of the State of Delaware (other than the Delaware Act) and that, to the maximum extent permitted by applicable law, there shall not
be applicable to the Trust, the Series, the Trustee, the Sponsor, the Shareholders or this Declaration of Trust any provision of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) pertaining to trusts which relate
to or regulate in a manner inconsistent with the terms hereof: (a) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (b) affirmative requirements to post bonds for
trustees, officers, agents, or employees of a trust, (c) the necessity for obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (d) fees or other sums payable to
trustees, officers, agents or employees of a trust, (e) the allocation of receipts and expenditures to income or principal, (f) restrictions or limitations on the permissible nature, amount or concentration of trust investments or
requirements relating to the titling, storage or other manner of holding of trust assets, or (g) the establishment of fiduciary or other standards or responsibilities or limitations on the acts or powers of trustees or managers that are
inconsistent with the limitations on liability or authorities and powers of the Trustee or the Sponsor set forth or referenced in this Declaration of Trust. Section 3540 of Title 12 of the Delaware Act shall not apply to the Trust. The
Trust shall be of the type commonly called a “statutory trust,” and without limiting the provisions hereof, the Trust may exercise all powers that are ordinarily exercised by such a statutory trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges afforded to statutory trusts and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
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Section 9.03
Provisions in Conflict with Law or Regulations
.
(a) The provisions of this Declaration of Trust are severable, and if the Sponsor shall determine, with the advice of counsel, that any of such
provisions is in conflict with the Code, the Delaware Act or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration of Trust; provided, however, that such
determination shall not affect any of the remaining provisions of this Declaration of Trust or render invalid or improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration of Trust shall be held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provision in any other jurisdiction or any other provision of this Declaration of Trust in any jurisdiction.
Section 9.04
Notices
.
All notices and other communications under this agreement shall be in writing in English, signed by the party giving it, and shall be deemed
given, if to the Trustee or the Sponsor, when delivered personally, on the next Business Day after delivery to a recognized overnight courier, or mailed first class (postage prepaid), or when sent by facsimile to the parties (which facsimile copy
shall be followed, in the case of notices or other communications sent to the Trustee or the Sponsor, by delivery of the original), or when sent by electronic transmission (including
e-mail
or such other
electronic transmission as the parties may from time to time agree), at the following addresses or numbers (or to such other address or number as a party may have specified by notice given to the other parties pursuant to this provision):
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If to the Sponsor, to:
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WGC USA Asset Management Company, LLC
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Attn: General Counsel
685 Third
Avenue
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Suite 2702
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New York, NY 10017
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Facsimile:
212-688-0410
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Email: reba.beeson@gold.org
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If to the Trustee, to:
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Delaware Trust Company
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Attn: Trust Administration
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251 Little Falls Drive
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Wilmington, DE 19808
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Facsimile:
302-636-8666
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Email: trust@delawaretrust.com
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Any notice to be given to a Shareholder shall be duly given if mailed or delivered to DTC Participants designated
by DTC for delivery to Shareholders.
Section 9.05
Headings
. The headings used in this Declaration of Trust have been
inserted for convenience and shall not modify, define, limit or expand the express provisions of this Declaration of Trust.
Section 9.06
Counterparts
. This Declaration of Trust may be simultaneously executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amended and Restated Agreement and
Declaration of Trust to be duly executed and delivered as of April 16, 2018.
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WGC USA Asset Management Company, LLC,
as
Sponsor
By:
/s/ Laura S.
Melman
Title: Chief Financial Officer and Treasurer
Name: Laura S. Melman
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Delaware Trust Company,
as Trustee
By:
/s/ Alan R.
Halpern
Title: Vice President
Name: Alan
R. Halpern
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Signature Page – Fourth Amended and Restated Agreement and Declaration of Trust of World Gold Trust
Exhibit 4.3
FORM OF
WORLD GOLD TRUST
AUTHORIZED PARTICIPANT AGREEMENT
This Authorized Participant Agreement (“Agreement”), dated as of
, is entered into by and between
(the “Authorized Participant”), WGC USA Asset Management Company, LLC, as sponsor (the
“Sponsor”) of the World Gold Trust (the “Trust”) and each series of the Trust listed on Annex A hereto (each, a “Fund” and together, the “Funds”), and BNY Mellon Asset Servicing, a division of The Bank of New
York Mellon (the “Administrator”), as administrator of the Trust and each Fund.
SUMMARY
As provided in the Agreement and Declaration of Trust, as amended and restated (the “Declaration of Trust”), as currently in effect
and described in the Prospectus (defined below), units of fractional undivided beneficial interest in and ownership of a Fund may be created or redeemed in aggregations of shares (“Shares”) (each such aggregation, a “Creation
Unit”). Creation Units of a Fund are offered only pursuant to a registration statement of the Trust on Form
S-1,
as amended, as declared effective by the Securities and Exchange Commission
(“SEC”) and as the same may be amended from time to time thereafter or any successor registration statement in respect of Shares of any Fund of the Trust (collectively, the “Registration Statement”) together with the prospectus
of any Fund of the Trust (the “Prospectus”) included therein. Under the Declaration of Trust, each Fund may issue Creation Units to, and redeem Creation Units from, authorized participants, only through the facilities of the Depository
Trust Company (“DTC”), or a successor depository, and only in exchange for an amount of gold meeting the standards set forth in Section 6 below (“Gold”). This Agreement and the applicable Procedures for each Fund (as listed
on Annex A) set forth the specific procedures by which the Authorized Participant may create or redeem Creation Units for such Fund.
The
Authorized Participant understands and acknowledges that some activities on its part, depending on the circumstances and under certain possible interpretations of applicable law, could be interpreted as resulting in its being deemed a participant in
a distribution in a manner that would render it a statutory underwriter and subject it to the prospectus-delivery and liability provisions of the 1933 Act.
Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in the Prospectus or the applicable
Procedures for each Fund as listed on Annex A . To the extent there is a conflict between any provision of the Prospectus or this Agreement and the provisions of the applicable Procedures for a Fund, the Prospectus shall control. To the extent there
is a conflict between any provision of this Agreement and the provisions of the applicable Procedures for a Fund, this Agreement shall control. Nothing in this Agreement shall obligate the Authorized Participant to create or redeem one or more
Creation Units or to sell or offer to sell Shares.
To give effect to the foregoing premises and in consideration of the mutual covenants and
agreements set forth below, the parties hereto agree as follows:
Section 1.
Order Placement
. To place orders for the
Administrator to create or redeem one or more Creation Units, Authorized Participants must follow the procedures for creation and redemption referred to in Section 3 of this Agreement and the applicable procedures for each Fund as listed on
Annex A hereto (the “Procedures”), as each may be amended, modified or supplemented from time to time.
Section 2.
Status of Authorized Participant
. The Authorized Participant represents and warrants and covenants the following:
(a) [The
Authorized Participant is a participant of DTC (as such a participant, a “DTC Participant”). If the Authorized Participant ceases to be a DTC Participant, the Authorized Participant shall give immediate notice to the Administrator of such
event, and this Agreement shall terminate immediately as of the date the Authorized Participant ceased to be a DTC Participant.]
(b)
Unless Section 2(c) applies, the Authorized Participant either (i) is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (“1934 Act”), and is a member in good standing of the Financial Industry
Regulatory Authority, Inc. (“FINRA”), or (ii) is exempt from being, or otherwise is not required to be, licensed as a broker-dealer or a member of FINRA, and in either case is qualified to act as a broker or dealer in the states or
other jurisdictions where the nature of its obligations under this Agreement so requires. In connection with the purchase or redemption of Creation Units and any related offers or sales of Shares, the Authorized Participant will maintain any such
registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Authorized Participant will comply in all material aspects with all applicable United States federal laws, the laws
of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder and with the Constitution,
By-Laws
and Conduct Rules of FINRA, if it is a FINRA member, to the extent the
foregoing relates to and are applicable to the Authorized Participant’s transactions in and activities with respect to, Shares, and that it will not offer or sell Shares in any state or jurisdiction where they may not lawfully be offered and/or
sold.
(c) If the Authorized Participant is offering or selling Shares in jurisdictions outside the several states, territories and
possessions of the United States and is not otherwise required to be registered, qualified or a member of FINRA as set forth in Section 2(b) above, the Authorized Participant will, in connection with such offers and sales, (i) comply in
all material respects with the applicable laws of the jurisdiction in which such offer and/or sale is made, (ii) comply with the prospectus delivery requirements of the 1933 Act, and the regulations promulgated thereunder applicable to it, and
(iii) conduct its business in accordance with the FINRA Conduct Rules, to the extent the foregoing relates to and is applicable to the Authorized Participant’s transactions in, and activities with respect to, Shares.
(d) The Authorized Participant has policies, procedures, and internal controls in place that are reasonably designed to comply with applicable
anti-money laundering laws and regulations, including applicable provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and the
regulations promulgated thereunder, if the Authorized Participant is subject to the requirements of the USA PATRIOT Act.
2
(e) The Authorized Participant has the capability to send and receive communications via
authenticated telecommunication facility to and from the Administrator and a Fund’s custodian (“Custodian”). The Authorized Participant shall confirm such capability to the satisfaction of the Administrator and the applicable
Custodian by the end of the Business Day before placing its first order with the Administrator (whether such order is to create or to redeem Creation Units).
(f) The Authorized Participant acknowledges and agrees that it shall inform any party for which it is acting (whether such party is a customer
or otherwise) that a disclosure document satisfying the requirements under the Commodity Exchange Act is available on each Fund’s website and provide such party with the Fund’s website address.
Section 3.
Orders
. (a) All orders to create or redeem Creation Units for a Fund shall be made in accordance with the terms of
the Prospectus, this Agreement and the applicable Procedures for the Fund as listed on Annex A hereto. Each party will comply with such foregoing terms and procedures to the extent applicable to it. The Authorized Participant hereby consents to the
use of recorded telephone lines whether or not such use is reflected in the applicable Procedures. The Administrator and Sponsor may issue additional or other procedures from time to time relating to the manner of creating or redeeming Creation
Units which are not related to the applicable Procedures, and the Authorized Participant will comply with such procedures.
(b) The
Authorized Participant acknowledges and agrees on behalf of itself and any party for which it is acting (whether such party is a customer or otherwise) that each order to create a Creation Unit (a “Purchase Order”) and each order to redeem
a Creation Unit (a “Redemption Order”, and each Purchase Order and Redemption Order, an “Order”) may not be revoked by the Authorized Participant upon its delivery to the Administrator. A form of Purchase/Redemption Order is
attached hereto as Exhibit B.
(c) The Administrator shall have the absolute right, but shall have no obligation, to reject any Purchase
Order or Redemption Order (i) determined by the Administrator not to be in proper form as described herein; (ii) the fulfillment of which would, in the opinion of counsel to the Administrator or the Trust, be unlawful; (iii) if the
Administrator determines that acceptance of an Order from an Authorized Participant would expose a Fund to credit risk; or (iv) if circumstances outside the control of the Custodian, the Administrator or the Sponsor make it for all practical
purposes not feasible to process creations or redemptions, as applicable, of Creation Units. Neither the Administrator nor the Sponsor shall be liable to any person by reason of the rejection of any Purchase Order or Redemption Order.
(d) The Administrator may, in its discretion, and will when so directed by the Sponsor, suspend the right of redemption, or postpone the
applicable redemption settlement date, (i) for any period during which the Exchange is closed other than for customary weekend or holiday closings, or trading is suspended or restricted; (ii) for any period during which an
3
emergency exists as a result of which delivery, disposal or evaluation of the Gold or any swap or other instrument held by a Fund is not reasonably practicable; or (iii) for such other
period as the Sponsor determines to be necessary for the protection of the Beneficial Owners. Neither the Administrator nor the Sponsor shall be liable to any person or in any way for any loss or damages that may result from any such suspension or
postponement.
Section 4.
Gold Transfers with respect to
the
SPDR
®
Long Dollar Gold Trust
. (a) With
respect to
the
SPDR
®
Long Dollar Gold
Trust,
with respect to the transfers of Gold contemplated by this Agreement, the Authorized Participant shall establish with the Fund’s Custodian in London or at such other location as the Sponsor and the Administrator agree an account in
relation to Gold which shall be maintained on an Unallocated Basis (the “Participant Unallocated Account”), which shall be used only to effect transactions between the Authorized Participant and the Trust and which shall be in addition to
any separate Gold account maintained for the Authorized Participant on an Unallocated Basis by the applicable Custodian. The Participant Unallocated Account shall be established and maintained pursuant to a Participant Unallocated Bullion Account
Agreement with the applicable Custodian in the form attached to this Agreement as Attachment B, as the same may be amended from time to time. In addition, if the Authorized Participant does not already have a Gold account maintained for it on an
Unallocated Basis by the applicable Custodian (separate from the Participant Unallocated Account), the Authorized Participant must establish such an account, which shall be established and maintained pursuant to such agreement as it and the
Custodian shall agree.
(b) Any Gold to be transferred in connection with any Order for the SPDR
®
Long Dollar Gold Trust shall be transferred between the Participant Unallocated Account and the Fund Unallocated Account and between the Fund Unallocated Account and the Fund Allocated Account in
accordance with the applicable Procedures. The Authorized Participant shall be responsible for all costs and expenses relating to or connected with any transfer of Gold between its Participant Unallocated Account and the Fund Unallocated Account.
(c) Each of the Trust, the SPDR
®
Long Dollar Gold Trust, the Sponsor and the
Administrator will have no liability for loss or damages suffered by an Authorized Participant in respect of the Authorized Participant’s Participant Unallocated Account. The liability of the applicable Custodian with respect to any such loss
or damage will be governed by the terms of the Participant Unallocated Bullion Account Agreement attached hereto as Attachment B. The Authorized Participant acknowledges that it is an unsecured creditor of the applicable Custodian with respect to
the Gold held in the Authorized Participant’s Participant Unallocated Account and that such Gold is at risk in the event of the applicable Custodian’s insolvency.
Section 5.
Gold Transfers with respect to
the SPDR
®
Gold MiniShares
Trust. (a) With respect to the SPDR
®
Gold MiniShares Trust, with respect to
transfers of Gold contemplated by this Agreement, the Authorized Participant shall establish with the
Fund’s Custodian or another Gold clearing bank of the London Precious Metals Clearing Limited (LPMCL)) a Participant Unallocated Account.
(b) Any Gold to be transferred in connection with any Order for the SPDR
®
Gold
MiniShares Trust shall be transferred between the Participant Unallocated Account and the Fund Unallocated Account and between the Fund Unallocated Account and the Fund Allocated Account in accordance with the applicable Procedures. The Authorized
Participant shall be responsible for all costs and expenses relating to or connected with any transfer of Gold between its Participant Unallocated Account and the Fund Unallocated Account.
4
(c) Each of the Trust, the SPDR
®
Gold
MiniShares Trust, the Sponsor and the Administrator will have no liability for loss or damages suffered by an Authorized Participant in respect of the Authorized Participant’s Participant Unallocated Account. The liability of the Gold clearing
bank with respect to any such loss or damage will be governed by the terms of any Participant Unallocated Bullion Account Agreement entered into by such clearing bank and the Authorized Participant. The Authorized Participant acknowledges that it is
an unsecured creditor of such clearing bank with respect to the Gold held in the Authorized Participant’s Participant Unallocated Account and that such Gold is at risk in the event of such clearing bank’s insolvency.
Section 6.
Gold Standards
. All Gold to be transferred between the Trust, on behalf of a Fund, and the Authorized Participant in
connection with any Order shall meet the applicable requirements of the Good Delivery Rules for Gold and Silver Bars (the “Good Delivery Rules”) promulgated by the London Bullion Market Association (the “LBMA”), which include
standards for fineness. As provided in the Authorized Participant’s Participant Unallocated Bullion Account Agreement and in the Trust’s Unallocated Bullion Account Agreement, amounts of Gold standing to the credit of an Authorized
Participant’s Participant Unallocated Account or the Fund Unallocated Account, as the case may be, are held on an Unallocated Basis, which, as provided by those agreements, means only that each of the Authorized Participant or the Trust, as the
case may be, is entitled to call on the applicable Custodian to deliver in accordance with the Good Delivery Rules an amount of Gold equal to the amount of Gold standing to the credit of the Authorized Participant’s or the Trust’s relevant
unallocated bullion account, as the case may be. The Sponsor and the Administrator may, from time to time, pursuant to the Declaration of Trust and as disclosed in the Prospectus, specify other gold bullion to be held by the Trust and which
therefore may be transferred between the Trust and an Authorized Participant in connection with any Order, provided that such other gold bullion meets the standard of fineness specified under the Good Delivery Rules. A copy of the Good Delivery
Rules may be obtained from the LBMA.
Section 7.
Fees
. In connection with each Order by an Authorized Participant to create or
redeem one or more Creation Units, the Administrator shall charge, and the Authorized Participant shall pay to the Administrator, a transaction processing fee in the amount of $500 per Order. This amount may be changed from time to time at the sole
discretion of the Sponsor and upon written notice to the Authorized Participant, which notice may be provided by disclosure in the Funds’ prospectus. These transaction processing fees are paid directly by the Authorized Participants and not by
a Fund or the Trust.
Section 8.
Authorized Persons
. Concurrently with the execution of this Agreement and from time to time
thereafter, the Authorized Participant shall deliver to the Administrator notarized and duly certified as appropriate by its secretary or other duly authorized official, a certificate in the form of Exhibit A setting forth the names and signatures
of all persons authorized to give instructions relating to activity contemplated hereby or by any other notice, request or instruction given on behalf of the Authorized Participant (each, an “Authorized
5
Person”). The Administrator may accept and rely upon such certificate as conclusive evidence of the facts set forth therein and shall consider such certificate to be in full force and effect
until the Administrator receives a superseding certificate bearing a subsequent date and duly certified as described above or other written notice, including electronic mail, from the Authorized Participant that one or more individuals should be
added or removed from the certificate. Upon the termination or revocation of authority of any Authorized Person by the Authorized Participant, the Authorized Participant shall give immediate written notice, including, but not limited to, electronic
mail, of such fact to the Administrator and such notice shall be effective upon receipt by the Administrator. The Administrator shall thereafter revoke access of such Authorized Person to the electronic entry systems through which Orders are
submitted and, from that time, no longer accept Orders submitted by such person on behalf of the Authorized Participant. The Administrator shall issue to each Authorized Person a unique personal identification number (the “PIN Number”) by
which such Authorized Person shall be identified and by which instructions issued by the Authorized Participant hereunder shall be authenticated. The PIN Number shall be kept confidential by the Authorized Participant and shall only be provided to
the Authorized Person. If, after issuance, the Authorized Person’s PIN Number is changed, the new PIN Number shall become effective on a date mutually agreed upon by the Authorized Participant and the Administrator.
Section 9.
Redemption
. The Authorized Participant represents and warrants that it will not obtain an Order Number (as described in
the Procedures applicable to each Fund) from the Administrator for the purpose of redeeming a Creation Unit unless it first ascertains that (i) it or its customer, as the case may be, owns outright or has full legal authority and legal and
beneficial right to tender for redemption the Creation Units to be redeemed and to receive the entire proceeds of the redemption, and (ii) such Creation Units have not been loaned or pledged to another party and are not the subject of a
repurchase agreement, securities lending agreement or any other arrangement which would preclude the delivery of such Creation Units to the Administrator the second Business Day following the Redemption Order Date.
Section 10.
Role of Authorized Participant
. (a) The Authorized Participant acknowledges that, for all purposes of this
Agreement, the Authorized Participant is and shall be deemed to be an independent contractor and has and shall have no authority to act as agent for the Trust, the Funds, the Sponsor, the Administrator or the Custodian in any matter or in any
respect.
(b) The Authorized Participant will make itself and its employees available, upon request, during normal business hours to
consult with the Sponsor, the Administrator and the Custodian or their designees concerning the performance of the Authorized Participant’s responsibilities under this Agreement.
(c) With respect to any creation or redemption transaction made by the Authorized Participant pursuant to this Agreement for the benefit of any
customer or any other DTC Participant or Indirect Participant, or any other Beneficial Owner, the Authorized Participant shall extend to any such party all of the rights, and shall be bound by all of the obligations, of a DTC Participant in addition
to any obligations that it undertakes hereunder or in accordance with the Declaration of Trust.
6
(d) The Authorized Participant will maintain records of all sales of Shares made by or through it
and will furnish copies of such records to the Sponsor upon the reasonable request of the Sponsor.
Section 11.
Indemnification
.
(a) The Authorized Participant hereby indemnifies and holds harmless the Custodian, the Trust, each Fund, the
Administrator, the Sponsor, their respective direct or indirect affiliates (as defined below) and their respective directors, officers, employees and agents (each, an “AP Indemnified Party”) from and against any losses, liabilities,
damages, costs and expenses (including attorney’s fees and the reasonable cost of investigation) incurred by such AP Indemnified Party as a result of or in connection with: (i) any breach by the Authorized Participant of any provisions of
this Agreement, including its representations, warranties and covenants; (ii) any failure on the part of the Authorized Participant to perform any of its obligations set forth in this Agreement; (iii) any failure by the Authorized
Participant to comply with applicable laws and the rules and regulations of self-regulatory organizations; (iv) any actions of such AP Indemnified Party in reliance upon any instructions issued in accordance with the applicable Fund’s
Procedures believed by the AP Indemnified Party to be genuine and to have been given by the Authorized Participant; or (v) (A) any representation by the Authorized Participant, its employees or its agents or other representatives about the
Shares, any AP Indemnified Party or the Trust that is not consistent with the Trust’s then-current Prospectus made in connection with the offer or the solicitation of an offer to buy or sell Shares and (B) any untrue statement or alleged
untrue statement of a material fact contained in any research reports, marketing material and sales literature described in Section 15(b) or any alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent that such statement or omission relates to the Shares, any AP Indemnified Party or the Trust, unless, in either case, such representation, statement or omission was made or included by the
Authorized Participant at the written direction of the Sponsor or is based upon any omission or alleged omission by the Sponsor to state a material fact in connection with such representation, statement or omission necessary to make such
representation, statement or omission not misleading. The Authorized Participant shall not be liable under its indemnity agreement contained in this paragraph with respect to any claim made against any AP Indemnified Party unless the AP Indemnified
Party shall have notified the Authorized Participant in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon the AP Indemnified
Party (or after the AP Indemnified Party shall have received notice of service on any designated agent). However, failure to notify the Authorized Participant of any claim shall not relieve the Authorized Participant from any liability which it may
have to any AP Indemnified Party against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph and shall only release it from such liability under this paragraph to the extent it has been
materially prejudiced by such failure to give notice.
(b) The Sponsor hereby agrees to indemnify and hold harmless the Authorized
Participant, its respective subsidiaries, affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each, a “Sponsor Indemnified Party”)
from and against any losses, liabilities, damages, costs and expenses (including attorneys’ fees and the reasonable cost of investigation) incurred by
7
such Sponsor Indemnified Party as a result of (i) any breach by the Sponsor of any provision of this Agreement that relates to the Sponsor; (ii) any failure on the part of the Sponsor
to perform any obligation of the Sponsor set forth in this Agreement; (iii) any failure by the Sponsor to comply with applicable laws; or (iv) any untrue statement or alleged untrue statement of a material fact contained in the
registration statement of the Trust as originally filed with the SEC or in any amendment thereof, or in any prospectus, or in any amendment thereof or supplement thereto, or arising out of or based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except those statements in the Registration Statement or the Prospectus based on information furnished in writing by or on behalf of
the Authorized Participant expressly for use in the Registration Statement or the Prospectus. The Sponsor shall not be liable under its indemnity agreement contained in this paragraph with respect to any claim made against any Sponsor Indemnified
Party unless the Sponsor Indemnified Party shall have notified the Sponsor in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served
upon the Sponsor Indemnified Party (or after the Sponsor Indemnified Party shall have received notice of service on any designated agent). However, failure to notify the Sponsor of any claim shall not relieve the Sponsor from any liability which it
may have to any Sponsor Indemnified Party against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph and shall only release it from such liability under this paragraph to the extent it has
been materially prejudiced by such failure to give notice.
(c) The Sponsor and the Authorized Participant each agrees promptly to notify
each other of the commencement of any proceedings or litigation against it, in connection with the issuance and sale of the Shares or in connection with the Registration Statement or the Prospectus.
(d) The indemnifying party in each of Section 11(a) and 11(b) above shall be entitled, at its option, to exercise sole control and
authority over the defense and settlement of such action. The indemnifying party is not authorized to accept any settlement that does not provide the applicable indemnified party with a complete release or that imposes liability not covered by these
indemnifications or places restrictions on the indemnified party or causes reputational harm to the indemnified party, in each case, without the prior written consent of the indemnified party.
(e) This Section 11 shall not apply to the extent any such losses, liabilities, damages, costs and expenses are incurred as a result or in
connection with any negligence, bad faith or willful misconduct on the part of the AP Indemnified Party or the Sponsor Indemnified Party, as the case may be. The term “affiliate” in this Section 11 shall include, with respect to any
person, entity or organization, any other person, entity or organization which directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, entity or organization.
(f) The indemnity and contribution agreements contained in this Section 11 shall remain in full force and effect and shall survive any
termination of this Agreement.
8
Section 12. (a)
Limitation of Liability
. In the absence of negligence, bad faith or
willful misconduct, none of the Sponsor, the Administrator, nor the Authorized Participant shall be liable to each other or to any other person, including any party claiming by, through or on behalf of the Authorized Participant, for any losses,
liabilities, damages, costs or expenses arising out of any error in data or other information provided to any of them by each other or any other person or out of any interruption or delay in the electronic means of communications used by them.
(b)
Tax Liability
. The Authorized Participant shall be responsible for the payment of any transfer tax, sales or use tax, stamp tax,
recording tax, value added tax and any other similar tax or government charge applicable to the creation or redemption of any Creation Unit made pursuant to this Agreement, regardless of whether or not such tax or charge is imposed directly on the
Authorized Participant. To the extent the Administrator, the Sponsor or the Trust is required by law to pay any such tax or charge, the Authorized Participant agrees to promptly indemnify such party for any such payment, together with any applicable
penalties, additions to tax or interest thereon.
Section 13.
Acknowledgment
. The Authorized Participant acknowledges receipt
of a (i) copy of the Declaration of Trust and (ii) the current Prospectus of the Trust and represents that it has reviewed and understands such documents.
Section 14.
Effectiveness and Termination
. Upon the execution of this Agreement by the parties hereto, this Agreement shall become
effective in this form as of the date first set forth above, and may be terminated at any time by any party with respect to a Fund or the Trust as a whole upon thirty (30) days prior written notice to the other parties unless earlier
terminated: (i) in accordance with Section 2(a); (ii) upon notice to the Authorized Participant by the Administrator in the event of a breach by the Authorized Participant of this Agreement or the procedures described or incorporated
herein; (iii) immediately in the circumstances described in Section 21(j); or (iv) at such time as the Trust or a Fund is terminated pursuant to the Declaration of Trust.
Section 15.
Marketing Materials; Representations Regarding Shares; Identification in Registration Statement
.
(a) The Authorized Participant represents, warrants and covenants that, without the written consent of the Sponsor, (i) it will not, in
connection with any sale or solicitation of a sale of Shares, make, or permit any of its representatives to make, any representations concerning the Shares or any AP Indemnified Party other than representations not inconsistent with (A) the
then-current Prospectus of the Trust, (B) printed information approved by the Sponsor as information supplemental to such Prospectus or (C) any promotional materials or sales literature furnished to the Authorized Participant by the
Sponsor, and (ii) it will not furnish or cause to be furnished to any person or display or publish any information or material relating to the Shares or any AP Indemnified Party or the Trust that is not consistent with the Prospectus (but not
including any materials prepared and used for the Authorized Participant’s internal use only and not communicated or shared with potential or actual investors, brokerage communications prepared by the Authorized Participant in the normal course
of its business or research reports) that have not been approved by the Sponsor.
9
(b) Notwithstanding the foregoing or anything to the contrary in this Agreement, the Authorized
Participant and its affiliates may without the written approval of the Sponsor or the Trust prepare and circulate in the regular course of their businesses research, reports, and other similar materials that include information, opinions or
recommendations relating to the Shares for public dissemination and for internal use by the Authorized Participant, provided that such research, reports and other similar materials: (i) comply with applicable FINRA rules; and (ii) are
consistent with the Trust’s prospectus and do not otherwise contain an untrue statement of a material fact or omission to state therein a material fact required to be stated therein or necessary to make the research reports and other similar
materials not misleading.
(c) The Authorized Participant and its affiliates may prepare and circulate in the regular course of their
businesses, without having to refer to the Shares or the Trust’s then-current Prospectus, data and information relating to the price of gold or currencies referenced in a Fund’s underlying index.
(d) The Authorized Participant hereby agrees that for the term of this Agreement the Sponsor, or its designee, may deliver the then-current
Prospectus, and any revisions, supplements or amendments thereto or recirculation thereof, to the Authorized Participant in Portable Document Format (“PDF”) via electronic mail to such address as shall be provided by the Authorized
Participant from time to time in lieu of delivering the Prospectus in paper form. The Authorized Participant may revoke the foregoing agreement at any time by delivering written notice to the Sponsor, or the Sponsor’s designee, and, whether or
not such agreement is in effect, the Authorized Participant may, at any time, request reasonable quantities of the Prospectus, and any revisions, supplements or amendments thereto or recirculation thereof, in paper form from the Sponsor or its
designee. The Authorized Participant acknowledges that it has the capability to access, view, save and print material provided to it in PDF and that it will incur no appreciable extra costs by receiving the Prospectus in PDF instead of in paper
form. The Sponsor will, when requested by the Authorized Participant, make available, or cause to be made available, at no cost the software and technical assistance necessary to allow the Authorized Participant to access, view and print the PDF
version of the Prospectus.
(e) For as long as this Agreement is effective, the Authorized Participant agrees to be identified solely as an
authorized participant of the Trust and each Fund, as applicable, (i) in any section of the Prospectus included within the Registration as may be required by the SEC or its Staff and (ii) on the Trust’s website. Upon the termination
of this Agreement, (i) during the period prior to when the Sponsor qualifies and in its sole discretion elects to file on Form
S-3,
the Sponsor will remove such identification from the Prospectus in the
amendment of the Registration Statement next occurring after the date of the termination of this Agreement and, during the period after when the Sponsor qualifies and in its sole discretion elects to file on Form
S-3,
the Sponsor will promptly file a current report on Form
8-K
indicating the withdrawal of the Authorized Participant as an authorized participant of the Trust and
(ii) the Sponsor will promptly update the Trust’s website to remove any identification of the Authorized Participant as an authorized participant of the Trust and the Funds.
10
Section 16.
Certain Covenants of the Sponsor
. The Sponsor, on its own behalf and as
sponsor of each Fund, covenants and agrees to notify the Authorized Participant promptly of the happening of any event during the term of this Agreement which could require the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading, and, during such time, to
prepare and furnish, at the expense of the Trust, to the Authorized Participant promptly such amendments or supplements to such Prospectus as may be necessary to reflect any such change at such time and in such numbers as necessary to enable the
Authorized Participant to comply with any obligation it may have to deliver such revised, supplemented or amended Prospectus to its customers.
Section 17.
Title To Gold
. The Authorized Participant represents and warrants on behalf of itself and any party for which it acts
that upon delivery of a Creation Unit Deposit to a Fund’s unallocated account in accordance with the terms of the Declaration of Trust and this Agreement, the applicable Fund will acquire good and unencumbered title to the Gold which is the
subject of such Creation Unit Deposit, free and clear of all pledges, security interests, liens, charges, taxes, assessments, encumbrances, equities, claims, options or limitations of any kind or nature, fixed or contingent, and not subject to any
adverse claims, including any restriction upon the sale or transfer of all or any part of such Gold which is imposed by any agreement or arrangement entered into by the Authorized Participant or any party for which it is acting in connection with a
Purchase Order.
Section 18.
Third Party Beneficiaries
. Each AP Indemnified Party, to the extent it is not a party to this
Agreement, is a third-party beneficiary of this Agreement (each, a “Third Party Beneficiary”) and may proceed directly against the Authorized Participant (including by bringing proceedings against the Authorized Participant in its own
name) to enforce any obligation of the Authorized Participant under this Agreement which directly or indirectly benefits such Third Party Beneficiary.
Section 19.
Force Majeure
. No party to this Agreement shall incur any liability for any delay in performance, or for the
non-performance,
of any of its obligations under this Agreement by reason of any cause beyond its reasonable control. This includes any act of God or war or terrorism, any breakdown, malfunction or failure of
transmission in connection with or other unavailability of any wire, communication or computer facilities, any transport, port, or airport disruption, industrial action, acts and regulations and rules of any governmental or supra national bodies or
authorities or regulatory or self-regulatory organization or failure of any such body, authority or organization for any reason, to perform its obligations.
Section 20.
Ambiguous Instructions
. If a Purchase Order Form or a Redemption Order Form otherwise in good form contains order
terms that differ from the information provided in the telephone call at the time of issuance of the applicable order number, the Administrator will attempt to contact one of the Authorized Persons of the Authorized Participant to request
confirmation of the terms of the Order. If an Authorized Person confirms the terms as they appear in the Order, then the Order will be accepted and processed. If an Authorized Person contradicts the Order terms, the Order will be deemed invalid, and
a corrected Order must be received by the Administrator, as the case may be, not later than the earlier of: (i) within 15
11
minutes of such contact with the Authorized Person; or (ii) 45 minutes after the Order
Cut-Off
Time (as described in the applicable Procedures). If the
Administrator is not able to contact an Authorized Person, then the Order shall be accepted and processed in accordance with its terms notwithstanding any inconsistency from the terms of the telephone information. In the event that an Order contains
terms that are illegible, the Order will be deemed invalid and the Administrator will attempt to contact one of the Authorized Persons of the Authorized Participant to request retransmission of the Order. A corrected Order must be received by the
Administrator not later than the earlier of (i) within 15 minutes of such contact with the Authorized Person or (ii) 45 minutes after the Order
Cut-Off
Time, as the case may be.
Section 21.
Miscellaneous
.
(a)
Amendment and Modification
. This Agreement may be amended, modified or supplemented only by a written instrument executed by all the
parties. The Procedures attached as Attachment A or Attachment D and the Exhibits hereto may be amended, modified or supplemented by the Trust, the Administrator and the Sponsor, without consent of the Authorized Participant from time to time by the
following procedure. After the proposed amendment, modification or supplement has been agreed to, the Administrator will mail or send via email a copy of the proposed amendment, modification or supplement to the Authorized Participant in accordance
with Section 21(c) below. For the purposes of this Agreement, mail will be deemed received by the recipient thereof on the third (3rd) day following the deposit of such mail into the United States postal system. Within fifteen
(15) calendar days after its deemed receipt, the amendment, modification or supplement will become part of this Agreement, the Attachments or the Exhibits, as the case may be, in accordance with its terms unless the Authorized Participant
objects to the proposed amendment, modification or supplement in writing, which shall include objection by electronic mail.
(b)
Waiver
of Compliance
. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such
waiver, but any such written waiver, or the failure to insist upon strict compliance with any obligation, covenant, agreement or condition herein, shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
(c)
Notices
. Except as otherwise specifically provided in this Agreement, all notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery, by postage prepaid registered or certified United States first class mail, return receipt requested, by nationally recognized overnight courier (delivery confirmation received)
or by electronic mail or telephonic facsimile or similar means of same day delivery (transmission confirmation received), with a confirming copy by regular mail, postage prepaid. Unless otherwise notified in writing, all notices to the Trust or any
Fund shall be given or sent to the Administrator. All notices shall be directed to the address or telephone or facsimile numbers or electronic mail addresses as follows:
if to the Sponsor, at:
WGC USA
Asset Management Company, LLC
12
685 Third Avenue, 27th Floor
New York, New York 10017, United States of America
if to the Administrator, at:
BNY Mellon Asset Servicing
2
Hanson Place
Brooklyn, New York 11217, United States of America
if to the Authorized Participant, at:
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Address:
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Telephone:
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Facsmile:
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E-mail:
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(d)
Successors and Assigns
. This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective successors and permitted assigns.
(e)
Assignment
. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other parties, except that any entity into which a party hereto may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion, or consolidation to which such party hereunder shall be a party, or any entity succeeding to all or substantially all of the business of the party, shall be the successor of the party
under this Agreement. The party resulting from any such merger, conversion, consolidation or succession shall notify the other parties hereto of the change. Any purported assignment in violation of the provisions hereof shall be null and void.
Notwithstanding the foregoing, this Agreement shall be automatically assigned to any successor Sponsor at such time such successor qualifies as a successor Sponsor under the terms of the Declaration of Trust.
(f)
Governing Law; Consent to Jurisdiction
. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware (regardless of the laws that might otherwise govern under applicable Delaware conflict of laws principles) as to all matters, including matters of validity, construction, effect, performance and remedies. Each party hereto irrevocably
consents to the jurisdiction of the courts of the State of Delaware and of any federal court located in such State in connection with any action, suit or other proceeding arising out of or relating to this Agreement or any action taken or omitted
hereunder, and waives any claim of forum non conveniens and any objections as to laying of venue. Each party further waives personal service of any summons, complaint or other process and agrees that service thereof may be made by certified or
registered mail directed to such party at such party’s address for purposes of notices hereunder.
13
(g)
Counterparts
. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement, and it shall not be necessary in making proof of this Agreement as to any party hereto to
produce or account for more than one such counterpart executed and delivered by such party.
(h)
Interpretation
. The article and
section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.
(i)
Entire Agreement
. This Agreement, along with any other agreement or instrument delivered pursuant to this Agreement, supersede all
prior agreements and understandings between the parties with respect to the subject matter hereof.
(j)
Severance
. If any provision
of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supra national body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it
shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity, legality or enforceability of the other provisions of this Agreement and this Agreement will be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein, unless the Sponsor determines in its discretion that the provision of this Agreement that was held invalid, illegal or unenforceable does affect the validity, legality or enforceability of one
or more other provisions of this Agreement, and that this Agreement should not be continued without the provision that was held invalid, illegal or unenforceable, and in that case, this Agreement shall immediately terminate and the Sponsor will so
notify the Authorized Participant immediately.
(k)
No Strict Construction
. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.
(l)
Survival
. Sections 11 (Indemnification) and 18 (Third Party Beneficiaries) hereof shall survive the termination of this Agreement.
(m)
Other Usages
. The following usages shall apply in interpreting this Agreement: (i) references to a governmental or
quasigovernmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of such agency, authority or instrumentality; and (ii) “including” means “including, but not limited to.”
[Signature Page Follows]
14
IN WITNESS WHEREOF, the Authorized Participant, the Sponsor and the Administrator have caused
this Agreement to be executed by their duly authorized representatives as of the date first set forth above.
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[Name of Authorized Participant]
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Name of Authorized Participant’s Participant Unallocated Account:
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WGC USA Asset Management Company, LLC
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Sponsor of the World Gold Trust
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BNY Mellon Asset Servicing, a division of
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The Bank of New York Mellon
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Administrator of the World Gold Trust
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15
ANNEX A
LIST OF SERIES TRUST(S) ESTABLISHED
BY THE WORLD GOLD TRUST
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Fund
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Relevant Exhibits
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Relevant Attachments
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1.
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SPDR
®
Long Dollar Gold Trust
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Exhibits A & B
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Attachment A, B & C
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2.
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SPDR
®
Gold MiniShares Trust
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Exhibits A & B
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Attachment D
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EXHIBIT A
WORLD GOLD TRUST
FORM OF
CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT
The following are the names, titles and signatures of all persons (each an
“Authorized Person”) authorized to give instructions relating to any activity contemplated by the Participant Agreement or any other notice, request or instruction on behalf of the Authorized Participant pursuant to the World Gold Trust
Participant Agreement.
Authorized Participant:
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Name:
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Name:
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Title:
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Title:
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Signature:
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Signature:
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Name:
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Name:
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Title:
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Title:
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Signature:
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Signature:
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The undersigned, [name], [title] of [company], does hereby certify that the persons listed above have been
duly elected to the offices set forth beneath their names, that they presently hold such offices, that they have been duly authorized to act as Authorized Persons pursuant to the World Gold Trust Participant Agreement by and between [Authorized
Participant] and the Sponsor and Administrator of the World Gold Trust, dated [date], and that their signatures set forth above are their own true and genuine signatures.
In Witness Whereof, the undersigned has hereby set his/her hand and the seal of [company] on the date set forth below.
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Subscribed and sworn to before me
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By:
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this day of
,
20
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Name:
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Title:
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Date:
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Notary Public
A-1
EXHIBIT B
THE BANK OF NEW YORK MELLON, ADMINISTRATOR
CREATION/REDEMPTION ORDER FORM
WORLD GOLD TRUST
CONTACT INFORMATION FOR ORDER
EXECUTION:
Telephone Order
Number:
718-315-7501
Fax Order Number:
732-667-9478
Participant must complete all items in Part 1. The
Administrator, in its discretion, may reject any order not submitted in complete form.
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I.
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TO BE COMPLETED BY PARTICIPANT:
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Name of Fund:
Date:
Time:
Broker Name:
Firm Name:
Participant Unallocated Account Name:
DTC Participant Number:
Telephone Number:
Fax Number:
Fund Ticker:
Type of order (Check Creation or Redemption please)
Participant intends to sell or otherwise dispose of the units being created as soon, as is reasonably practicable.
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Creation of Shares
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Redemption of Shares
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# Of Creation Units (CU) Transacted:
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Number:
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Order #
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Number written out:
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Please indicate Gold clearing agent:
Check
if HSBC Bank plc (required for SPDR
®
Long Dollar Gold Trust)
Check
if ICBC Standard Bank Plc
B-1
Other (please specify clearing agent):
This Order is subject to the terms and conditions of the Declaration of Trust of the World Gold Trust as currently in effect and the Authorized Participant
Agreement between the Authorized Participant, the Sponsor and the Administrator named therein. All representations and warranties of the Authorized Participant set forth in such Authorized Participant Agreement are incorporated herein by reference
and are true and accurate as of the date hereof.
The undersigned does hereby certify as of the date set forth below that he/she is an Authorized
Representative under the Authorized Participant Agreement and that he/she is authorized to deliver this Order to the Administrator on behalf of the Authorized Participant. The Authorized Participant enters into this agreement based on an estimated
Creation Unit disseminated the previous business day and recognizes the final Creation Unit ounces of Gold represented will be decreased based on the Trust’s daily accrual. When a Final NAV is calculated it will be disseminated to all
Authorized Participants, and the Creation Unit and or cash required for the creation/redemption order entered into on this day will be finalized and this Order Form will serve as a legally binding contract for settlement in two business days.
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Date
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Authorized Person’s Signature
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II.
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TO BE COMPLETED BY ADMINISTRATOR:
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This certifies that the above order has been:
Accepted by the Administrator
Declined-Reason:
Name of Fund:
Final # of Ounces:
Final # of Shares
Final Cash Due to BNY:
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Date
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Time
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Authorized Signature of Administrator
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B-2
FORM OF
WORLD GOLD TRUST
PARTICIPANT
AGREEMENT
ATTACHMENT A
SPDR
®
LONG DOLLAR GOLD TRUST PROCEDURES
CREATION AND REDEMPTION OF SPDR
®
LONG DOLLAR GOLD TRUST SHARES AND RELATED GOLD TRANSACTIONS
Scope of Procedures and Overview
These procedures (the “
Procedures
”) describe the processes by which one or more Creation Units of shares (the “
Shares
”) of
the SPDR
®
Long Dollar Gold Trust (the “
Fund
”), a series of World Gold Trust (the “
Trust
”), may be purchased or, once Shares have been issued, redeemed by an
Authorized Participant (a “
Participant
”). Shares may be created or redeemed only in blocks of 10,000 Shares (each such block, a “
Creation Unit
”). Because the issuance and redemption of Creation Units also involve
the transfer of Gold between the Participant and the Trust, certain processes relating to the underlying Gold transfers also are described.
Under these
Procedures, Creation Units may be issued only with respect to Gold transferred to and held in the Trust’s allocated and unallocated Gold accounts maintained in London, England by HSBC Bank plc, as custodian (the “
Custodian
”).
Capitalized terms used in these Procedures without further definition have the meanings assigned to them in the Participant Agreement entered into by each Participant with BNYM as Administrator (the “
Administrator
”) and WGC USA
Asset Management, LLC (the “
Sponsor
”).
For purposes of these Procedures, a “
Business Day
” is defined as any day other
than (i) a day on which the Exchange is closed for regular trading or (ii), if the transaction involves the receipt or delivery of Gold or confirmation thereof in the United Kingdom or in some other jurisdiction, (a) a day on which banking
institutions in the United Kingdom or in such other jurisdiction, as the case may be, are authorized by law to close or a day on which the London gold market is closed or (b) a day on which banking institutions in the United Kingdom or in such
other jurisdiction, as the case may be, are authorized to be open for less than a full business day or the London gold market is open for trading for less than a full business day and transaction procedures required to be executed or completed
before the close of the business day may not be so executed or completed.
Creation Units are issued pursuant to the Prospectus, which will be delivered
by the Sponsor to each Participant prior to its execution of the Participant Agreement, and are issued and redeemed in accordance with the Participant Agreement. Creation Units may be issued and redeemed on any Business Day by the Custodian in
exchange for Gold, which the Custodian receives from Participants or transfers to Participants, after receiving appropriate instructions from the Administrator, in each case on behalf of the Trust. Participants will be required to pay a
nonrefundable per order transaction fee of $500 to the Administrator (the “
Transaction Fee
”).
ATTACHMENT A-1
Participants and the Trust, on behalf of the Fund, transfer Gold between each other using the unallocated bullion
account system of the London bullion market. Transfers of Gold to and from the Trust, on behalf of the Fund, are effected pursuant to (i) the Allocated Bullion Account Agreement between the Trust and the Custodian (the “Allocated Bullion
Account Agreement”) establishing the Fund’s allocated account (the “
Fund Allocated Account
”) and the Unallocated Bullion Account Agreement between the Trust and the Custodian (the “Unallocated Bullion Account
Agreement”) establishing the Fund’s unallocated account (the “
Fund Unallocated Account
”; the Allocated Bullion Account Agreement and the Unallocated Bullion Account Agreement are collectively referred to as the
“
Custody Agreements
”); and (ii) the Participant Unallocated Bullion Account Agreement between the Participant and HSBC Bank plc (the “
Participant Unallocated Agreement
”) establishing the Participant’s
unallocated account (the “
Participant Unallocated Account
”).
Gold is transferred between the Fund and Participants through the Fund
Unallocated Account. When Gold is to be transferred to the Fund from a Participant (in exchange for the issuance of Creation Units), the Gold is transferred from the Participant Unallocated Account to the Fund Unallocated Account and then
transferred from there to the Fund Allocated Account. When Gold is to be transferred to a Participant (in connection with the redemption of Creation Units), the Gold is transferred from the Fund Allocated Account to the Fund Unallocated Account and
is transferred from there to the Participant Unallocated Account.
The Participant Unallocated Account is only to be used in connection with the creation
and redemption of Creation Units. Use of the Participant Unallocated Account for transferring Gold to the Fund does not require Participants to acquire Gold from HSBC Bank plc, or to maintain Gold in the Participant Unallocated Account longer than
the time required to create or redeem Creation Units as described in these Procedures. Each Participant is responsible for ensuring that the Gold it intends to transfer to the Fund in exchange for Creation Units is available for transfer to the Fund
in the manner and at the times described in these Procedures. In meeting this responsibility, the Participant may make such independent arrangements as it sees fit, including borrowing Gold, to ensure that the relevant amount of Gold is credited in
time.
Upon acceptance of the Participant Agreement by the Sponsor and the Administrator, the Administrator will assign a personal identification number
(a “
PIN number
”) to each Authorized Person authorized to act for the Participant. This will allow the Participant through its Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) for Creation Units.
Important Notes:
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Any Order is subject to rejection by the Administrator for the reasons set forth in the Participant Agreement.
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All Orders are subject to the provisions of the Custody Agreements and the Participant Agreement relating to unclear or ambiguous instructions.
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ATTACHMENT A-2
CREATION PROCESS
An order to purchase one or more Creation Units of the Fund placed by a Participant with the Administrator between 4:00 p.m. and 5:30 p.m. N.Y. time on a
Business Day (such day, “CREATION
T-1”)
results in the following taking place, in most instances, by 11:00 a.m. N.Y. time (usually 4:00 p.m. London time) on CREATION T+2:
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Transfer to the applicable Fund Allocated Account of Gold satisfying the Good Delivery Rules in the amount corresponding to the Creation Units to be issued; and
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Transfer to the Participant’s account at The Depository Trust Company (“DTC”) of Creation Units corresponding to the Gold the Participant has transferred to the Fund.
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CREATION PROCEDURES
CREATION
T-1
(PURCHASE ORDER SUBMISSION DATE)
The Participant submitting an order to create shall submit such
orders containing the information required to the Administrator by the
Cut-Off
time (5:30pm N.Y. Time) in the following manner: (a) through the BNYM ETF Center Interface electronic order entry system
portal), as such may be made available and constituted from time to time, the use of which shall be subject to the terms and conditions
of the Electronic Services Agreement incorporated herein by reference
, or (b) by telephone to the
BNYM ETF Order Desk Administrator, followed up with the faxed order form (within 15 minutes of the verbal phone order) according to the procedures set forth below.
The order so transmitted (either orally and in writing, or electronic form) is hereinafter referred to as the “Submission” or the
“Purchase Order” as applicable, and the Business Day on which a Submission is made is hereinafter referred to as the “Transmittal Date”.
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1.a
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Orders submitted through the BNYM ETF Center Interface:
an Authorized Person of the Participant logs on the BNYM ETF Center Interface and places a Purchase Order. Each Order is given an order number (an
“Order Number”).
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1.b
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Orders submitted by phone:
an Authorized Person of the Participant must telephone the BNYM ETF Order Desk Administrator at (718)
315-7501
or other number that BNYM
designates in writing to the Participant. Upon verifying the authenticity of the Participant (as determined by the use of the appropriate PIN Number), the Participant will need to provide the details of the intended Purchase Order. After the
Participant has placed the Purchase Order, the BNYM ETF Order Desk Administrator will read the Purchase Order back to the Participant and provide the system-generated order number. Any discrepancies between the order intended and the details read
back to the Participant need to be acknowledged during the call.
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ATTACHMENT A-3
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2.
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If the Administrator has not received the Purchase Order Form from the Participant within 15 minutes after the Administrator receives the phone call from the Participant referenced in item (1.b) above, the Administrator
places a phone call to the Participant to enquire about the status of the faxed order form. Any extensive additional delay of receipt of the Purchase Order Form may result in the rejection of the Purchase Order. The Administrator will then notify
the Participant that the Order has been cancelled via telephone call.
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3.
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If the Administrator has received the Participant’s Purchase Order Form on time in accordance with the preceding timing rules, the Participant will receive electronic
e-mail
notification that the order has been accepted. The next day, the Administrator returns to the Participant a copy of the Purchase Order Form submitted, marking it “Affirmed.”
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CREATION T (PURCHASE ORDER EXECUTION DATE)
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1.
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Based on the Purchase Orders placed with it on CREATION
T-1,
by 12:00 p.m. N.Y. Time the Administrator indicates to the Participant the amount of Gold and cash, if any, necessary
for the Creation Deposit, and provides details of the method of payment required for the Transaction Fee and the cash portion, if any, of the Creation Deposit.
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CREATION T (PURCHASE ORDER CONFIRMATION DATE)
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1.
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By 6:00 p.m. N.Y. time, based on the Purchase Orders placed with it on CREATION
T-1,
the Administrator sends an authenticated electronic message (Swift MT699) to the Custodian
indicating the total ounces of Gold for which the Administrator will require an allocation into the Fund Allocated Account on CREATION T+2. In addition, the authenticated electronic message (Swift MT699) will separately identify all expected
unallocated Gold receipts from each Participant. If the Administrator rejects a Purchase Order pursuant to the Participant Agreement after the foregoing messages are given to the Custodian, the Administrator will notify the Custodian of such
rejection, identifying the Participant whose Purchase Order was rejected and the number of ounces of Gold contained in the rejected Purchase Order.
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2.
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By the close of business (usually 6:00 p.m. N.Y. time), each Participant acquiring Creation Units on CREATION T+2 sends an authenticated electronic message (Swift MT604) to HSBC Bank plc, with a copy to the
Administrator, to transfer on CREATION T+2 from the Participant’s Participant Unallocated Account Gold in the relevant amount(s) to the Fund Unallocated Account. If the Participant’s instruction does not conform to the Administrator’s
instruction specified in the preceding item 1, the Administrator will either (i) send a correcting authenticated
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electronic message (Swift MT699) to the Custodian which specifies the delivery of an amount of Gold which conforms to the Participant’s Purchase Order and the Participant’s instruction or (ii) send the
Participant an email message notifying the Participant of the discrepancy.
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ATTACHMENT A-4
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3.
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By the close of business (usually 6:00 p.m. N.Y. time), each Participant acquiring Creation Units on CREATION T+2 sends an authenticated electronic message (Swift MT605) to HSBC Bank plc, identifying that
Participant’s Participant Unallocated Account into which Gold, in the relevant amount(s), is to be received on CREATION T+1.
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CREATION
T+1
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1.
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By the close of business in London (usually 4:00 p.m. London time; 11:00 a.m. N.Y. time), each Participant submitting a Purchase Order must ensure that Gold in the relevant amount(s) is credited to the
Participant’s Participant Unallocated Account.
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2.
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If by 4:00 p.m. (London time) either (i) unless otherwise resolved beforehand by a correcting authenticated electronic message from the Administrator (Swift MT699) or a correcting authenticated electronic message
from the Participant (Swift MT604) to the satisfaction of the Custodian, the amount of Gold specified in the Participant’s instruction given under item (2) of CREATION T (PURCHASE ORDER CONFIRMATION DATE) to transfer Gold from the
Participant’s Participant Unallocated Account to the Fund Unallocated Account is not the same as the amount of Gold specified in the advice given by the Administrator under item (1) of CREATION T (PURCHASE ORDER CONFIRMATION DATE) with
regard to the expected unallocated Gold receipts from each Participant or (ii) sufficient Gold to permit the Custodian to effect such Participant’s instruction is not credited to the Participant’s Participant Unallocated Account, such
Participant’s instruction shall be automatically postponed as of 4:00 p.m. London time and the Custodian will notify the Participant of such postponement.
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3.
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The Custodian will send the Administrator an email message by 5:00 p.m. London time (usually 12:00 noon N.Y. time) identifying each Participant’s instruction that has been postponed pursuant to the preceding item
2.
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CREATION T+2
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1.
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The Custodian transfers the relevant amount(s) of Gold from the Participant’s Participant Unallocated Account to the Fund Unallocated Account.
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2.
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As of 2:00 p.m. London time (usually 9:00 a.m. N.Y. time), the Custodian will notify the Administrator by email and fax of the status of the allocation process, including (i) the amount of Gold transferred to the
Fund Unallocated Account from each Participant’s Participant Unallocated Account, separately stated; (ii) the
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ATTACHMENT A-5
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amount of Gold that has been transferred into the Fund Allocated Account from the Fund Unallocated Account, and (iii) the amount of Gold, if any, remaining in the Fund Unallocated Account.
In the event there is any need for clarification of the status of the allocation process, the Administrator will telephone the Custodian to obtain such clarification. This notice does not reflect the official transfer record of the Custodian, which
is completed as of the conclusion of the Custodian’s Business Day.
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3.
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At 11:00 a.m. N.Y. time (usually 4:00 p.m. London time), following receipt of the notice from the Custodian of the status of the allocation process described in item (2) above, the Administrator authorizes the
creation and issuance of the Creation Units ordered by each Participant on CREATION T for which the Administrator has received confirmation from the Custodian of receipt of the relevant amount(s) of Gold. If the Custodian, despite using commercially
reasonable efforts, is unable to complete the allocation process by such time, the Administrator will issue Creation Units as soon as practical after the Custodian has notified the Administrator by email and fax that it has completed the allocation
of Gold to the Fund Unallocated Account in the relevant amount(s). The creation and issuance of Creation Units will occur through the DTC system known as “Deposit and Withdrawal at Custodian” or “DWAC”.]
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[Redemption Process Follows on Next Page]
ATTACHMENT A-6
REDEMPTION PROCESS
An order to redeem one or more Creation Units placed by a Participant with the Administrator between 4:00 and 5:30 p.m. N.Y. time on a
Business Day (such day, “REDEMPTION
T-1”)
results in the following taking place by 12:00 p.m. N.Y. time (usually 5:00 p.m. London time) on REDEMPTION T+2:
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Transfer to the Administrator’s account at DTC and the subsequent cancellation of the relevant number of the Participant’s Creation Units; and
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•
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Transfer to the Participant by credit to the Participant’s Participant Unallocated Account of Gold and cash, if any, in the relevant amount(s) corresponding to the Creation Units delivered for redemption (the
“Redemption Distribution”).
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REDEMPTION PROCEDURES
REDEMPTION
T-1
(REDEMPTION ORDER SUBMISSION DATE)
The Participant submitting an order to redeem shall submit such orders containing the information required to the Administrator by the
Cut-Off
time (5:30pm N.Y. Time) in the following manner: (a) through the BNYM ETF Center Interface (electronic order entry system portal), as such may be made available and constituted from time to time, the
use of which shall be subject to the terms and conditions
of the Electronic Services Agreement incorporated herein by reference
, or (b) by telephone to the BNYM ETF Order Desk Administrator, followed up with the faxed order form (within
15 minutes of the verbal phone order) according to the procedures set forth below.
The order so transmitted (either orally and in writing,
or electronic form) is hereinafter referred to as the “Submission” or the “Redemption Order” as applicable, and the Business Day on which a Submission is made is hereinafter referred to as the “Transmittal Date”.
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1.a
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Orders submitted through the BNYM ETF Center Interface:
an Authorized Person of the Participant logs on the BNYM ETF Center Interface and places a Redemption Order. Each Order is given an order number (an
“Order Number”).
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1.b
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Orders submitted by phone:
an Authorized Person of the Participant must telephone the BNYM ETF Order Desk Administrator at (718)
315-7500
or other number that BNYM
designates in writing to the Participant. This telephone call must be made by an Authorized Person of the Participant and answered by the BNYM ETF Order Desk before the established
cut-off
time of the
Fund(s)
(
Eastern Standard Time “Listing Exchange Closing Time or Order Cutoff Time,” as applicable). Upon verifying the authenticity of the Participant (as determined by the use of the appropriate PIN Number), the BNYM ETF Order
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ATTACHMENT A-7
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Desk Administrator will request that the Participant place the Redemption Order. To do so, the Participant must provide the appropriate ticker symbols when referring to the Fund. After the
Participant has placed the Redemption Order, the BNYM ETF Order Desk Administrator will read the Purchase Order back to the Participant. The Participant then must confirm that the Redemption Order has been taken correctly by the BNYM ETF Order Desk
Administrator. If the Participant confirms that the Redemption Order has been taken correctly, the BNYM ETF Order Desk Administrator will issue an order number (an “Order Number”) to the Participant.
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2.
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If the Administrator has not received the Redemption Order Form from the Participant within 15 minutes after the Administrator receives the phone call from the Participant referenced in item (1.b) above, the
Administrator places a phone call to the Participant to enquire about the status of the Order. If the Participant does not fax the Redemption Order Form to the Administrator within 15 minutes after the Administrator’s phone call, the
Participant’s Order is cancelled. The Administrator will then notify the Participant that the Order has been cancelled via telephone call.
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3.
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If the Administrator has received the Participant’s Purchase Order Form on time in accordance with the preceding timing rules, then by 6:30 p.m. N.Y. time the Administrator returns to the Participant a copy of the
Purchase Order Form submitted, marking it “Affirmed.”
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REDEMPTION T (REDEMPTION ORDER EXECUTION DATE)
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1.
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Based on the Redemption Orders placed with it on REDEMPTION
T-1,
by 12:00 p.m. N.Y. time, the Administrator indicates the amount of Gold and cash, if any, to be delivered in the
Redemption Distribution, and provides details of the method of payment required for the Transaction Fee and the cash portion, if any, of the Redemption Distribution.
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REDEMPTION T (REDEMPTION ORDER CONFIRMATION DATE)
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1.
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By the close of business (usually 6:00 p.m. N.Y. time), each Participant redeeming Creation Units on REDEMPTION T+2 sends an authenticated electronic message (Swift MT605) to HSBC Bank plc, identifying that
Participant’s Participant Unallocated Account into which Gold, in the relevant amount(s), is to be received on REDEMPTION T+2.
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ATTACHMENT A-8
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2.
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By 6:00 p.m. N.Y. time, the Administrator sends an authenticated electronic message (SWIFT MT699) containing instructions to the Custodian to transfer on REDEMPTION T+2 from the Fund Allocated Account to the Fund
Unallocated Account (“deallocate”) the total amount of Gold required to settle the Redemption Orders received by the Administrator on REDEMPTION T. If the Administrator rejects a Redemption Order pursuant to the Trust’s Declaration of
Trust or the Participant Agreement after the foregoing message is sent, the Administrator will notify the Custodian of such rejection, identifying the Participant whose Redemption Order was rejected and the number of ounces of Gold contained in the
rejected Redemption Order.
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REDEMPTION T+2
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1.
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Between 1:00 p.m. London time (usually 8:00 a.m. N.Y. time) and 5:00 p.m. London time (usually 12:00 p.m. N.Y. time), the Custodian deallocates Gold in the amount(s) specified in the Administrator’s instructions
sent on REDEMPTION T.
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2.
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By 10:00 a.m. N.Y. time, the Participant delivers free to the Administrator’s Participant account at DTC (#2209) the Creation Units to be redeemed.
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3.
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If the Administrator does not receive from a redeeming Participant all Shares comprising the Creation Units being redeemed by 10:00 a.m. N.Y. time, the Administrator will keep the Redemption Order open until 10 a.m.
N.Y. time on the following Business Day (REDEMPTION T+3). For each day (whether or not a Business Day) the Redemption Order is held open, the Participant will be charged by the Administrator the greater of $300 or $30 times the number of Creation
Units included in the Redemption Order.
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4.
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By 10:00 a.m. N.Y. time (usually 3:00 p.m. London time), the Administrator sends an authenticated electronic message (Swift MT699) to the Custodian directing the Custodian to transfer Gold in the relevant amount from
the Fund Unallocated Account to the Participant Unallocated Account. When London is, and New York is not, on daylight savings time, such message must be received by the Custodian no later than 3:30 p.m. London time. The Custodian will make
reasonable commercial efforts to allocate Gold remaining in the Fund Unallocated Account after this transfer to the Fund Allocated Account by the close of business in London, in accordance with the standing instruction in the Trust Custody
Agreements.
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* * * *
ATTACHMENT A-9
FORM OF
WORLD GOLD TRUST
PARTICIPANT
AGREEMENT
ATTACHMENT B
HSBC
BANK PLC
and
[NAME OF
PARTICIPANT]
WORLD GOLD TRUST
PARTICIPANT
UNALLOCATED BULLION ACCOUNT AGREEMENT
THIS AGREEMENT (“Agreement”) is made on [date] BETWEEN
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(1)
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HSBC BANK PLC, a company incorporated under the laws of England and Wales, whose principal place of business is at 8 Canada Square, London E14 5HQ (“WE” or “US”); and
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(2)
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[NAME OF PARTICIPANT] a company incorporated under the laws of [ ], whose [registered office][principal place of business] is at [ ] (“YOU”).
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INTRODUCTION
We have agreed to open and maintain for you an
Unallocated Account (defined below) in connection with your being a Participant with respect to the SPDR
®
Long Dollar Gold Trust (the “Fund”), a series of World Gold Trust (the
“Trust”), a Delaware statutory trust, and to provide other services to you in connection with the Unallocated Account. This agreement sets out the terms under which we will provide those services to you and the arrangements which will
apply in connection with those services.
IT IS AGREED AS FOLLOWS:
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1.1
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DEFINITIONS: In this agreement:
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ATTACHMENT B-1
“ACCOUNT BALANCE” means the balance from time to time standing to your credit in your
Unallocated Account.
“ADMINISTRATOR” means BNY Mellon Asset Servicing, a division of The Bank of New York Mellon.
“AVAILABILITY DATE” means the Business Day on which you wish to transfer Precious Metal to us for deposit into the Unallocated
Account.
“BULLION” means the Precious Metal standing to your credit in your Unallocated Account.
“BUSINESS DAY” means any day the Exchange is open for business and the Trust accepts creation and redemption orders for Creation
Baskets.
“CREATION BASKET” means a block of 10,000 Shares or more or such other amount as established from time to time by the
Sponsor.
“DTC” means the Depository Trust Company. DTC is a limited purpose trust company organized under New York law, a
member of the U.S. Federal Reserve System and a clearing agency registered with the SEC registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC will act as the securities depository for the
Shares.
“EXCHANGE” means the primary exchange or other securities market on which the Shares of the Fund are listed for trading.
“FUND UNALLOCATED ACCOUNT” means the unallocated Gold account of the Trust established by us on behalf of the Fund.
“GOLD” means gold bullion meeting the London Good Delivery Standards.
“LBMA GOLD PRICE” means the price per troy ounce of gold for delivery in London through a member of the LBMA stated in USDs and set
via an electronic auction process run twice daily at 10:30 a.m. and 3:00 p.m. London time each Business Day as calculated and administered by the ICE Benchmark Administration Limited (“IBA”), an independent specialist benchmark
administrator who provides the price platform, methodology and overall administration and governance for the LBMA Gold Price.
“LBMA
GOLD PRICE AM” means the price of an ounce of gold as fixed by the IBA on or about 10:30 a.m. London time.
“LBMA GOLD PRICE
PM” means the price of an ounce of gold as fixed by the IBA on or about 3:00 p.m. London time.
“LBMA” means The London
Bullion Market Association or its successors.
ATTACHMENT B-2
“LONDON GOOD DELIVERY” has the meaning assigned in the Good Delivery Rules for Gold and
Silver Bars contained in the rules promulgated by the LBMA.
“PARTICIPANT” means a person who (1) is a registered
broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) is a participant in DTC, (3) has entered into
a Participant Agreement and (4) has established a Participant Unallocated Account with us. Only Participants may place orders to create or redeem one or more Creation Units.
“PARTICIPANT AGREEMENT” means that certain Participant Agreement in effect from time to time between you,the Sponsor and the
Administrator with respect to the Fund which provides the procedures for the creation and redemption of Creation Baskets and for the delivery of the Gold and cash, if any, required for such creations and redemptions.
“POINT OF DELIVERY” means such date and time that the recipient or its agent acknowledges in written form its receipt of delivery of
Precious Metal.
“PRECIOUS METAL” means gold.
“RULES” means the rules, regulations, practices and customs of the LBMA (including the rules of the LBMA as to good delivery), the
Bank of England and such other regulatory authority or body as shall affect the activities contemplated by this agreement.
“SEC”
means the U.S. Securities and Exchange Commission.
“SHARE” means each unit of fractional undivided beneficial interest in and
ownership of the Fund which are issued by the World Gold Trust.
“SPONSOR” means WGC USA Asset Management, LLC.
“TRUSTEE” means Delaware Trust Company.
“UNALLOCATED ACCOUNT” means the account maintained by us in your name on an Unallocated Basis pursuant to this agreement.
“UNALLOCATED BASIS” means, with respect to a Precious Metal account maintained with us, that the person in whose name the account is
held is entitled to call on us to deliver in accordance with the Rules an amount of Precious Metal equal to the amount of Precious Metal standing to the credit of the person’s account but has no ownership interest in any Precious Metal that we
own or hold.
“VAT” means value added tax as provided for in the Value Added Tax Act 1994 (as amended or
re-enacted
from time to time) and legislation supplemental thereto and any other tax (whether imposed in the United Kingdom in substitution thereof or in addition thereto or elsewhere) of a similar fiscal nature.
ATTACHMENT B-3
“WITHDRAWAL DATE” means the Business Day on which you wish to withdraw Precious Metal
from your Unallocated Account.
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1.2
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HEADINGS: The headings in this agreement do not affect its interpretation.
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1.3
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SINGULAR AND PLURAL; OTHER USAGES: References to the singular include the plural and vice versa. A reference to “A or B” means “A or B or both A and B”. “Including” means “including
but not limited to”.
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2.1
|
OPENING UNALLOCATED ACCOUNT: We shall open and maintain an Unallocated Account for you under this Agreement solely in respect of Bullion to be transferred between you and the Funds or withdrawn in accordance with clause
4.
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2.2
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DENOMINATION OF UNALLOCATED ACCOUNT: The Unallocated Account shall evidence and record the amount of Bullion standing to your credit therein, and increases and decreases to that amount. The Unallocated Account shall be
denominated in fine ounces of gold to three decimal places.
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2.3
|
REPORTS: We will provide you with monthly statements of your Account Balance and debit and credit advices will be sent to you following each deposit into and withdrawal from the Unallocated Accounts.
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2.4
|
REVERSAL OF ENTRIES: We at all times reserve the right to reverse any provisional or erroneous entries to your Unallocated Account with effect back-valued to the date upon which the final or correct entry (or no entry)
should have been made.
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3.1
|
PROCEDURE: You may at any time notify us of your intention to deposit Precious Metal in your Unallocated Account. A deposit may be made (in the manner and accompanied by such documentation as we may require) only by
transfer from an account of yours relating to the same kind of Precious Metal and having the same denomination as that to which this Unallocated Account relates. We will not accept physical delivery of Precious Metal into this account.
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3.2
|
NOTICE REQUIREMENTS: Any notice relating to a deposit of Precious Metal must be in writing and:
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(a)
|
be received by us no later than 2:00 p.m. (London time) on the Availability Date unless otherwise agreed;
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(b)
|
specify the details of the account from which the Precious Metal will be transferred; and
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ATTACHMENT B-4
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(c)
|
specify the amount (in the appropriate denomination) of the Precious Metal to be credited to the Unallocated Account, the Availability Date and any other information which we may from time to time require.
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3.3
|
TIMING: A deposit of Precious Metal will not be credited to an Unallocated Account until an account of ours with any bank, broker or other firm has been credited with an amount of Precious Metal equal to the amount of
such deposit.
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3.4
|
RIGHT TO REFUSE PRECIOUS METAL OR AMEND PROCEDURE: We may refuse to accept Precious Metal, amend the procedure in relation to the deposit of Precious Metal or impose such additional procedures in relation to the deposit
of Precious Metal as we may from time to time consider appropriate. Any such refusal, amendment or additional procedures will be promptly notified to you.
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4.1
|
PROCEDURE: You may at any time notify us of your intention to withdraw Precious Metal standing to the credit of your Unallocated Account. We will transfer Bullion from your Unallocated Account only at such times and on
such terms as specified in your instructions to us. A withdrawal may be made (in the manner and accompanied by such documentation as we may require) by:
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(a)
|
transfer to an account of yours relating to the same kind of Precious Metal and having the same denomination as that to which the Unallocated Account relates; or
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(b)
|
the collection by you of Precious Metal from us at our vault premises, or as we may direct, at your expense and risk; or
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(c)
|
by delivery of Precious Metal to you at such location as you direct, at your expense and risk; or
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(d)
|
transfer to the Fund Unallocated Account.
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Any Precious Metal made available to you pursuant to
clause 4.1(b) or (c) will be in a form which complies with the Rules or in such other form as may be agreed between us. We are entitled to select the Precious Metal to be made available to you pursuant to clause 4.1(b) or (c) which in all
cases will comprise one or more whole bars selected by us (or other form as agreed), the combined fine weight of which will not exceed the number of fine ounces of Bullion you have instructed us to withdraw. In connection with any withdrawal
pursuant to clause 4.1(d) you must have sufficient Precious Metal in the Unallocated Account by 4:00 p.m. (London time) on the day before the Withdrawal Date to permit us to complete the withdrawal. Anything in this agreement to the contrary
notwithstanding, and without limiting your right to withdraw Bullion, we shall not be obliged to effect any requested delivery if, in our reasonable opinion, this would cause us or our
ATTACHMENT B-5
agents to be in breach of the Rules or other applicable law, court order or regulation, the costs incurred would be excessive or delivery is impracticable for any reason. When pursuant to your
instruction Bullion is physically withdrawn from your Unallocated Account, all right, title, risk and interest in and to the Bullion withdrawn shall pass to you at the Point of Delivery.
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4.2
|
NOTICE AND INSTRUCTION REQUIREMENTS: Any notice or instruction relating to a withdrawal of Precious Metal must be in writing and specify the amount (in the appropriate denomination) of the Precious Metal to be debited
to the Unallocated Account, the Withdrawal Date and any other information which we may from time to time require. The following rules determine when we must receive your notice or instruction to withdraw Precious Metal:
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(a)
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if the notice or instruction relates to a withdrawal pursuant to clause 4.1(d) to effect a transfer of Precious Metal to the Fund Unallocated Account in accordance with the Participant Agreement, it must received by us
no later than 9:00 a.m. (London time) not less than two Business Days prior to the Withdrawal Date and specify the details of the Fund Unallocated Account to which the Precious Metal is to be transferred;
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(b)
|
if the notice or instruction relates to a withdrawal pursuant to clause 4.1(a), it must be received by us no later than 2:00 p.m. (London time) on the Withdrawal Date unless otherwise agreed and must specify the details
of the account to which the Precious Metal is to be transferred; and
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(c)
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if the notice or instruction relates to a withdrawal pursuant to clause 4.1(b) or (c), it must be received by us no later than 11:30 a.m. (London time) not less than two Business Days prior to the Withdrawal Date unless
otherwise agreed and specify the name of the person or carrier that will collect the Precious Metal from us or the identity of the person to whom delivery is to be made, as the case may be.
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4.3
|
RIGHT TO AMEND PROCEDURE: We may amend the procedure for the withdrawal of Precious Metal from an Unallocated Account or impose such additional procedures as we may from time to time consider appropriate. Any such
amendments or additional procedures will be promptly notified to you.
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4.4
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DELIVERY OBLIGATIONS: Unless otherwise instructed, we shall make transportation and insurance arrangements in accordance with our usual practice. Where instructions are given, we shall use all reasonable efforts to
comply with the same. We shall not be obliged to effect any requested delivery if, in our reasonable opinion, this would cause us or our agents to be in breach of the Rules or other applicable law, court order or regulation; the costs incurred would
be excessive or delivery is impracticable for any reason. All insurance and transportation costs shall be for your account.
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ATTACHMENT B-6
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4.5
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PHYSICAL WITHDRAWAL OF ENTIRE UNALLOCATED ACCOUNT BALANCE: If, when you notify us in connection with a physical withdrawal of Bullion from your Unallocated Account under clause 4.4 that you are withdrawing the entire
balance in your Unallocated Account (or when a physical withdrawal under clause 4.4 would, in our determination, result in the entire balance in your Unallocated Account being withdrawn), the physical withdrawal instruction may not be effected by
our selection of one or more whole bars of Bullion the combined fine weight of which does not exceed the balance of your Unallocated Account that you are withdrawing, then we will make available to you in accordance with clause 4.4 the number of
whole bars that can be accommodated under your instruction. If you have another Unallocated Account with us relating to Precious Metal, we will transfer the remainder of the balance to that account, and if you do not have another Unallocated Account
with us, we will purchase for cash the remainder of the Bullion in your Unallocated Account based on the LBMA Gold Price AM on the date you are withdrawing the Bullion physically, or if there is no LBMA Gold Price AM for such date, then the LBMA
Gold Price AM for the next Business Day.
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5.1
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YOUR REPRESENTATIVES: You shall notify us promptly in writing of the names of the people who are authorised to give instructions on your behalf. Until we receive written notice to the contrary, we are entitled to assume
that any of those people have full and unrestricted power to give us instructions on your behalf. We are also entitled to rely on any instructions which are from, or which purport to emanate from, any person who appears to have such authority.
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5.2
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AMENDMENTS: Once given, instructions continue in full force and effect until they are cancelled, amended or superseded. We must receive an instruction cancelling, amending or superseding a prior instruction before the
time the prior instruction is acted upon. Any such instructions shall have effect only after actual receipt by us.
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5.3
|
UNCLEAR OR AMBIGUOUS INSTRUCTIONS: If, in our opinion, any instructions are unclear or ambiguous, we will use reasonable endeavours (taking into account any relevant time constraints) to obtain clarification of those
instructions but, failing that, we may in our absolute discretion and without any liability on our part, act upon what we believe in good faith such instructions to be or refuse to take any action or execute such instructions until any ambiguity or
conflict has been resolved to our satisfaction.
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5.4
|
REFUSAL TO EXECUTE: We reserve the right to refuse to execute instructions if in our opinion they are or may be contrary to the Rules or any applicable law.
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ATTACHMENT B-7
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5.5
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REVOCATION OF INSTRUCTIONS: If, in connection with an instruction to effect a withdrawal pursuant to clause 4.1(d), by 4:00 p.m. (London time) on the day before the Withdrawal Date either (i) the amount of Precious
Metal specified in your instruction does not agree with the amount of Precious Metal specified in the advice provided by the Administrator with regard to the receipt of Precious Metal in the Fund Unallocated Account or (ii) sufficient Precious
Metal to permit us to complete the withdrawal is not credited to your Unallocated Account, your instruction will be automatically revoked. We will notify you of the revocation of your instruction.
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6.1
|
DISCLOSURE TO OTHERS: Subject to clause 6.2, each party shall respect the confidentiality of information acquired under this agreement and neither will, without the consent of the other, disclose to any other person any
information acquired under this agreement.
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6.2
|
PERMITTED DISCLOSURES: Each party accepts that from time to time the other party may be required by law or the Rules, or requested by a government department or agency, fiscal body or regulatory authority, to disclose
information acquired under this agreement. In addition, the disclosure of such information may be required by a party’s auditors, by its legal or other advisors or by a company which is in the same group of companies as a party (eg. a
subsidiary or holding company of a party). Each party irrevocably authorises the other to make such disclosures without further reference to such party. In connection with a notice or instruction you give to us to effect to withdraw and transfer
Precious Metal to the Fund Unallocated Account in accordance with the Participant Agreement, you hereby authorize us to disclose to the Administrator of the Trust or its agents (i) such information about your Unallocated Account that the
Administrator or its agents may reasonably request, including information about your Account Balance and instructions you have given for the deposit or withdrawal of Precious Metal in relation to your Unallocated Account, and (ii) information
about any revocation of instructions under clause 5.5 above.
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7.1
|
YOUR REPRESENTATIONS: Upon execution of this agreement and with each notice or instruction that you give hereunder you represent and warrant and covenant to us that:
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(a)
|
you have all necessary authority, powers, consents, licences and authorisations and have taken all necessary action to enable you lawfully to enter into and perform your duties and obligations under this agreement;
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(b)
|
you are a Participant and are not in breach of the Participant Agreement;
|
ATTACHMENT B-8
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(c)
|
you are in compliance with the money laundering and related provisions of (i) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act)
|
Act of 2001 enacted by the United States of America, and the regulations promulgated thereunder, if you are subject to the
requirements of the USA PATRIOT Act, and (ii) such other laws to which you are subject;
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(d)
|
the persons entering into this agreement on your behalf have been duly authorised to do so; and
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(e)
|
this agreement and the obligations created under it are binding upon you and enforceable against you in accordance with its terms (subject to applicable principles of equity) and do not and will not violate the terms of
the Rules or any order, charge or agreement by which you are bound.
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8.1
|
FEES: You will pay us such fees as we from time to time determine and notify to you, but we will not charge you any fees in connection with your Unallocated Account pursuant to this Agreement while (i) this account
is used solely to effect transfers of Bullion between you and the Fund Unallocated Account and (ii) we (or another member of an affiliated group of which we are a member) are receiving compensation from the Trust for maintaining the Fund
Unallocated Account.
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8.2
|
EXPENSES: You must pay us on demand all costs, charges and expenses (including any relevant taxes, duties and legal fees) incurred by us in connection with the performance of our duties and obligations under this
agreement or otherwise in connection with your Unallocated Account (including delivery, collection and storage costs).
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8.3
|
CREDIT BALANCES: No interest or other amount will be paid by us on any credit balance on your Unallocated Account.
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8.4
|
DEBIT BALANCES: You are not entitled to overdraw your Unallocated Account except to the extent that we otherwise agree in writing. In the absence of such agreement, we shall not be obliged to carry out any instruction
of yours which will cause your Unallocated Account to be overdrawn. If for any reason your Unallocated Account is overdrawn, you will be required to pay us interest on the debit balance at the rate agreed between us or, if no such agreement exists,
at such rate as we determine to be appropriate. The amount of the overdraft and any accrued interest will be repayable by you on our demand. Your obligation to pay interest to us will continue until the overdraft is repaid by you in full. Our books
and records shall be conclusive as to the balance at any time standing to your credit in your Unallocated Account.
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8.5
|
DEFAULT INTEREST: If you fail to pay us any amount when it is due, we reserve the right to charge you interest (both before and after any judgement) on any such unpaid amount calculated at a rate equal to 1% above the
overnight London Interbank Offered Rate (LIBOR) for the currency in which the amount is
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ATTACHMENT B-9
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due. Both overdraft and default interest will accrue on a daily basis and will be due and payable by you as a separate debt. In the event of any inconsistency between this agreement and an
overdraft facility agreement between you and us, the terms of the overdraft facility shall govern.
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9.
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SCOPE OF RESPONSIBILITY
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9.1
|
EXCLUSION OF LIABILITY: We will use reasonable care in the performance of our duties under this agreement but will not be responsible in contract, tort or otherwise, for any direct or indirect or consequential damage,
loss or expense suffered or incurred by you arising directly or indirectly as a result of, or in connection with, this agreement (including, without limitation, economic loss, loss of profit, loss of anticipated savings or loss of goodwill) even if
advised of the likelihood of such losses arising, save for any loss or damage suffered by you as a direct result of any gross negligence, fraud or wilful default on our part in the performance of our duties under this agreement, and in which case,
our liability will not exceed the market value of the Account Balance at the time such gross negligence, fraud or wilful default is discovered by us. The value of the Account Balance shall be determined on any day using the LBMA Gold Price AM.
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9.2
|
NO DUTY OR OBLIGATION: We are under no duty or obligation to make or take any special arrangements or precautions beyond those required by the Rules or as specifically set forth in this agreement.
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9.3
|
FORCE MAJEURE: We shall not be liable to you for any delay in performance, or for the
non-performance
of any of our obligations under this agreement by reason of any cause beyond
our reasonable control. This includes any act of God or war or terrorism, any breakdown, malfunction or failure of transmission in connection with or other unavailability of any wire, communication or computer facilities, any transport, port, or
airport disruption, industrial action, acts and regulations and rules of any governmental or supra national bodies or authorities or regulatory or self-regulatory organisations or failure of any such body, authority, or organisation for any reason,
to perform its obligations.
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9.4
|
INDEMNITY: You shall indemnify and keep us and each of our directors, shareholders, officers, employees, agents, affiliates (as such term is defined in Regulation
S-X
adopted by
the United States Securities and Exchange Commission under the United States federal Securities Act of 1933, as amended) and subsidiaries (us and each such person a “Custodian Indemnified Person” for purposes of this clause 9.4)
indemnified (on an after tax basis) on demand against all costs and expenses, damages, liabilities and losses which any such Custodian Indemnified Person may suffer or incur, directly or indirectly in connection with this agreement except to the
extent that such sums are due directly to our gross negligence, wilful default or fraud or that of the Custodian Indemnified Person. The indemnity provided by this clause 9.4 shall survive termination of this agreement.
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ATTACHMENT B-10
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|
9.5
|
THIRD PARTIES: You are our sole customer under this agreement and we do not owe any duty or obligation or have any liability towards any person who is not a party to this agreement. This agreement does not confer a
benefit on any person who is not a party to it other than the persons named as a Custodian Indemnified Person. The parties to this agreement do not intend that any term of this agreement shall be enforceable by any person who is not a party to it
(except that each Custodian Indemnified Person may directly enforce the indemnity provision under clause 9.4) and do intend that except as so provided, the Contracts (Rights of Third Parties) 1999 Act (Eng.) shall not apply to this agreement.
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10.1
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METHOD: This agreement shall terminate immediately upon the earlier of (i) your termination as a Participant with respect to the Trust pursuant to the Participant Agreement or otherwise, or (ii) termination of
the Trust. In addition, either party may terminate this agreement by giving not less than 10 Business Days’ written notice to the other party. Any such notice given by you must specify:
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(a)
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the date on which the termination will take effect;
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(b)
|
the person to whom any Account Balance which is a credit balance is to be transferred; and
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|
|
(c)
|
all other necessary arrangements for the transfer or repayment, as the case may be, of the Account Balance.
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10.2
|
REDELIVERY ARRANGEMENTS: If you do not make arrangements acceptable to us for the transfer or repayment, as the case may be, of any Account Balance we may continue to maintain this Unallocated Account, in which case we
will continue to charge the fees and expenses payable under clause 8. If you have not made arrangements acceptable to us for the transfer or repayment of any Account Balance within six (6) months of the date specified in the termination notice
as the date on which the termination will take effect, we will be entitled to close the Unallocated Account and account to you for the proceeds after deducting any amounts due to us under this agreement.
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10.3
|
EXISTING RIGHTS: Termination shall not affect rights and obligations then outstanding under this agreement which shall continue to be governed by this agreement until all obligations have been fully performed.
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11.1
|
VAT EXCLUSIVE: All sums payable under this agreement by you to us shall be deemed to be exclusive of VAT.
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ATTACHMENT B-11
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11.2
|
SUPPLIES: Where pursuant to or in connection with this agreement, we make a supply to you for VAT purposes and VAT is or becomes chargeable on such supply, you shall on demand pay to us (in addition to any other
consideration for such supply) a sum equal to the amount of such VAT and we shall on receipt of such payment provide you with an invoice or receipt in such form and within such period as may be prescribed by applicable law.
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11.3
|
DEEMED SUPPLIES: Where, pursuant to or in connection with this agreement, we are deemed or treated by applicable law or the practice from time to time of the relevant fiscal authority to make a supply for VAT purposes
to any person by virtue of our or any custodian for us relinquishing physical control of any Precious Metal, and VAT is or becomes chargeable on such supply, you shall on demand pay to us a sum equal to the amount of such VAT and we shall on receipt
of such payment provide an invoice or receipt in such form and within such period as may be prescribed by applicable law to the person to which we are deemed or treated to make such supply.
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12.1
|
FORM: Subject to clause 12.5, any notice, notification, instruction or other communication under or in connection with this agreement shall be given in writing. References to writing include electronic transmissions
that are of the kind specified in clause 12.2.
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12.2
|
METHOD OF TRANSMISSION: With the exception of monthly statements in respect of the Unallocated Account, any notice, notification, instruction or other communication required to be in writing may be delivered personally
or sent by first class post,
pre-paid
recorded delivery (or air mail if overseas), authenticated electronic transmission (including tested telex and authenticated SWIFT) or such other electronic transmission
as the parties may from time to time agree, to the party due to receive the notice, instruction or communication, at its address, number or destination set out in this agreement or another address, number or destination specified by that party by
written notice to the other.
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12.3
|
DEEMED RECEIPT ON NOTICE: A notice, notification, instruction, or other communication under or in connection with this agreement will be deemed received only if actually received or delivered.
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12.4
|
RECORDING OF CALLS: We may record telephone conversations without use of a warning tone. Such recordings will be our sole property and, if acted upon by us, will be accepted by you as evidence of the orders or
instructions given.
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12.5
|
INSTRUCTIONS RELATING TO BULLION: All notices, notifications, instructions and other communications relating to the movement of Bullion in relation to your Unallocated Account shall be by way of authenticated electronic
transmission (including tested telex and authenticated SWIFT), and shall be addressed to:
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ATTACHMENT B-12
Precious Metals Operations
HSBC Bank plc
8 Canada Square
London E14 5HQ
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13.1
|
NO INTEREST IN THE TRUST OR THE FUND IS CONFERRED HEREBY: You acknowledge that you do not acquire any ownership of Shares or interest in the Trust, the Fund, or any Fund assets or its assets by establishing an
Unallocated Account pursuant to this Agreement, by delivering to the Unallocated Account established hereby an amount of Precious Metal, or by giving any instruction hereunder. You acknowledge that you will acquire ownership of Shares or an interest
in the Trust, the Fund, or any Fund assets only upon the issuance to you of Shares. Neither Sponsor nor the Administrator of the Trust shall, individually or as Sponsor or Administrator of the Trust, have any liability for loss or damages suffered
by you with respect to your Unallocated Account or any Bullion held for you pursuant to this Agreement.
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13.2
|
NO ADVICE: Our duties and obligations under this agreement do not include providing you with investment advice. In asking us to open and maintain the Unallocated Account, you do so in reliance upon your own judgement
and we do not and shall not owe to you any duty to exercise any judgement on your behalf as to the merits or suitability of any transaction you make in relation to the Unallocated Account or otherwise, including (i) any deposits into, or
withdrawals from, your Unallocated Account, (ii) any transactions to be effected in accordance with the Participant Agreement, or (iii) the acquisition or disposition of Precious Metal.
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13.3
|
RIGHTS AND REMEDIES: Our rights under this agreement are in addition to, and independent of, any other rights which we may have at any time in relation to your Unallocated Account and any lien or other rights we may
have to
set-off,
combine or consolidate any of your accounts.
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13.4
|
ASSIGNMENT: This agreement is for the benefit of and binding upon us both and our respective successors and assigns. You may not assign, transfer or encumber, or purport to assign, transfer or encumber, your right,
title or interest in relation to your Unallocated Account or any right or obligation under this agreement unless we otherwise agree in writing.
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13.5
|
AMENDMENTS: Any amendment to this agreement must be agreed in writing and be signed by us both. Unless otherwise agreed, an amendment will not affect any legal rights or obligations which may already have arisen.
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13.6
|
PARTIAL INVALIDITY: If any of the clauses (or part of a clause) of this agreement becomes invalid or unenforceable in any way under the Rules or any law, the validity of the remaining clauses (or part of a clause) will
not in any way be affected or impaired.
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ATTACHMENT B-13
|
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13.7
|
ENTIRE AGREEMENT: This document, with the exception of any representations made fraudulently, represents the entire agreement, and supersedes and replaces any previous agreement between us relating to the establishment
of a Gold account to be maintained on an Unallocated Basis for you as a Participant in connection with the Trust.
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13.8
|
JOINT AND SEVERAL LIABILITY: If there is more than one of you, your responsibilities under this agreement apply to each of you individually as well as jointly.
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13.9
|
COUNTERPARTS: This agreement may be executed in any number of counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same agreement.
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13.10
|
BUSINESS DAYS: If any obligation of either you or us falls due to be performed on a day which is not a Business Day in respect of the Unallocated Account in question, then the relevant obligations shall be performed on
the next succeeding Business Day applicable to such account.
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14.
|
GOVERNING LAW AND JURISDICTION
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14.1
|
GOVERNING LAW: [This agreement is governed by, and will be construed in accordance with, English law.]
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14.2
|
JURISDICTION: You agree the English courts are to have jurisdiction to settle any disputes or claims which may arise out of or in connection with this agreement, and for these purposes you irrevocably submit to the
non-exclusive
jurisdiction of the English courts.
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14.3
|
WAIVER OF IMMUNITY: To the extent that you may in any jurisdiction claim for yourself or your assets any immunity from suit, judgement, enforcement or otherwise howsoever, you agree not to claim and irrevocably waive
any such immunity to which you would otherwise be entitled (whether on grounds of sovereignty or otherwise) to the full extent permitted by the laws of such jurisdiction.
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14.4
|
SERVICE OF PROCESS: If you are situated outside England and Wales, process by which any proceedings in England are begun may be served on you by being delivered to the address specified below. This does not affect our
right to serve process in another manner permitted by law.
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Your address for service of process
[Participant]
[Address]
ATTACHMENT B-14
[City, State, Postal Code]
Attention: [ ]
EXECUTED by the parties as
follows
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
ATTACHMENT B-15
World Gold Trust
Participant Unallocated Bullion Account Agreement
EXECUTED by the parties
Signed on behalf of
HSBC BANK PLC
by
Signature
Name
Title
Signed on behalf of
[NAME OF PARTICIPANT]
by
Signature
Name
Title
ATTACHMENT B-16
FORM OF
World Gold Trust
PARTICIPANT
AGREEMENT
ATTACHMENT C
HSBC
Bank plc
Resolution Form - Telefax Instructions
To: HSBC Bank plc
ACCOUNT NAME:
We hereby request and authorize, pursuant to the powers delegated to us by a resolution of the Board of Directors of (the “Company”) (a certified
copy of which has been supplied to you), HSBC Bank plc (the “Bank”) to accept and to execute instructions and/or give effect to requests to the Bank to enter into contracts with or on behalf of the Company where such instructions and/or
requests are given by facsimile machine (“Telefax”) and purport to come from us acting on behalf of the Company and are honestly believed by the Bank to come from the Company. We agree to mark clearly on any confirmation of any
communications by Telefax the words “Confirmation only - Do not duplicate”.
We on behalf of the Company agree, that
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(a)
|
the Bank will be under no duty to challenge or make any enquiries concerning any communication by Telefax which it believes in good faith to be a genuine instruction from an authorized representative of the Company;
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(b)
|
the Company shall assume all risks involved in connection with any communications by Telefax, and in particular (but without prejudice to the generality of the foregoing) risks due to errors in transmission
misunderstandings or errors on the part of the Bank regarding the identity of the Company’s authorized representatives or otherwise and that the Bank be discharged from all responsibility in respect thereof;
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(c)
|
the Company shall indemnify the Bank and its directors, officers, employees or agents on demand and shall keep the Bank and its directors, officers, employees or agents on demand indemnified against any loss arising to
the Bank in consequence of acting in reliance on any such communication and any actions, proceedings, costs, claims and demands in respect thereof;
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(d)
|
that we will have no claim against the Bank or its directors, officers, employees or agents by reason or account of the Bank or its directors, officers, employees or agents either acting or declining or omitting to act
in accordance with any communication by Telefax; and
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(e)
|
the Company shall agree to perform and ratify any contracts entered into by the Bank and/or any action taken by the Bank as a result of such communications made or purporting to be made on behalf of the Company and
honestly believed by the Bank to have been made on behalf of the Company.
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ATTACHMENT C-1
Such assumption of risk, discharge, indemnity and agreement to perform and ratify shall extend to communications
made or purporting to be made by us and/or any other persons now or hereafter nominated from time to time by the Company, such nomination having been duly and properly advised to the Bank and honestly believed by the Bank to have been made on behalf
of the Company.
Notwithstanding the foregoing, the Bank may at any time and at its absolute discretion decline to execute any instruction or request
given or to accept any offer made by Telefax notwithstanding that at the time of such instruction or request or offer the employee of the Bank receiving such instruction or request may have indicated assent to the same.
This request and authority shall continue in force unless and until expressly revoked by fifteen days’ (or such lesser period as the Bank may accept)
written notice delivered to the Bank and signed in a manner complying with the Company’s current mandate.
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Signed
for and on behalf of
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Signed
for and on behalf of
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Date
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ATTACHMENT C-2
FORM OF
WORLD GOLD TRUST
PARTICIPANT
AGREEMENT
ATTACHMENT D
SPDR
®
GOLD MINISHARES TRUST PROCEDURES
CREATION AND REDEMPTION OF SPDR
®
GOLD MINISHARES AND RELATED GOLD TRANSACTIONS
Scope of Procedures and Overview
These procedures (the “
Procedures
”) describe the processes by which one or more Creation Units of shares (the “
Shares
”) of
the SPDR
®
Gold MiniShares Trust (the “
Fund
”), a series of World Gold Trust (the “
Trust
”), may be purchased or, once Shares have been issued, redeemed by an
Authorized Participant (a “
Participant
”). Shares may be created or redeemed only in blocks of 100,000 Shares (each such block, a “
Creation Unit
”). Because the issuance and redemption of Creation Units also involve
the transfer of Gold between the Participant and the Trust, certain processes relating to the underlying Gold transfers also are described.
Under these
Procedures, Creation Units may be issued only with respect to Gold transferred to and held in the Trust’s allocated and unallocated Gold accounts maintained in London, England by ICBC Standard Bank Plc, as custodian (the
“
Custodian
”). Capitalized terms used in these Procedures without further definition have the meanings assigned to them in the Participant Agreement entered into by each Participant with BNYM as Administrator (the
“
Administrator
”) and WGC USA Asset Management, LLC (the “
Sponsor
”).
For purposes of these Procedures, a
“
Business Day
” is defined as any day other than (i) a day on which the Exchange is closed for regular trading or (ii), if the transaction involves the receipt or delivery of Gold or confirmation thereof in the United Kingdom or
in some other jurisdiction, (a) a day on which banking institutions in the United Kingdom or in such other jurisdiction, as the case may be, are authorized by law to close or a day on which the London gold market is closed or (b) a day on
which banking institutions in the United Kingdom or in such other jurisdiction, as the case may be, are authorized to be open for less than a full business day or the London gold market is open for trading for less than a full business day and
transaction procedures required to be executed or completed before the close of the business day may not be so executed or completed.
Creation Units are
issued pursuant to the Prospectus, which will be delivered by the Sponsor to each Participant prior to its execution of the Participant Agreement, and are issued and redeemed in accordance with the Participant Agreement. Creation Units may be issued
and redeemed on any Business Day by the Custodian in exchange for Gold, which the Custodian receives from Participants or transfers to Participants, after receiving appropriate instructions from the Administrator, in each case on behalf of the
Trust. Participants will be required to pay a nonrefundable per order transaction fee of $500 to the Administrator (the “
Transaction Fee
”).
ATTACHMENT D-1
Participants and the Trust, on behalf of the Fund, transfer Gold between each other using the unallocated bullion
account system of the London bullion market. Transfers of Gold to and from the Trust, on behalf of the Fund, are effected pursuant to (i) the Allocated Bullion Account Agreement between the Trust and the Custodian (the “Allocated Bullion
Account Agreement”) establishing the Fund’s allocated account (the “
Fund Allocated Account
”) and the Unallocated Bullion Account Agreement between the Trust and the Custodian (the “Unallocated Bullion Account
Agreement”) establishing the Fund’s unallocated account (the “
Fund Unallocated Account
”; the Allocated Bullion Account Agreement and the Unallocated Bullion Account Agreement are collectively referred to as the
“
Custody Agreements
”); and (ii) a Participant Unallocated Bullion Account Agreement entered into between the Participant and ICBC Standard Bank Plc or another Gold clearing bank of the London Precious Metals Clearing Limited
(LPMCL) (the “
Participant Unallocated Agreement
”) establishing the Participant’s unallocated account (the “
Participant Unallocated Account
”).
Gold is transferred between the Fund and Participants through the Fund Unallocated Account. When Gold is to be transferred to the Fund from a Participant (in
exchange for the issuance of Creation Units), the Gold is transferred from the Participant Unallocated Account to the Fund Unallocated Account and then transferred from there to the Fund Allocated Account. When Gold is to be transferred to a
Participant (in connection with the redemption of Creation Units), the Gold is transferred from the Fund Allocated Account to the Fund Unallocated Account and is transferred from there to the Participant Unallocated Account.
Each Participant is responsible for ensuring that the Gold it intends to transfer to the Fund in exchange for Creation Units is available for transfer to the
Fund in the manner and at the times described in these Procedures. In meeting this responsibility, the Participant may make such independent arrangements as it sees fit, including borrowing Gold, to ensure that the relevant amount of Gold is
credited in time.
Upon acceptance of the Participant Agreement by the Sponsor and the Administrator, the Administrator will assign a personal
identification number (a “
PIN number
”) to each Authorized Person authorized to act for the Participant. This will allow the Participant through its Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) for Creation
Units.
Important Notes:
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•
|
|
Any Order is subject to rejection by the Administrator for the reasons set forth in the Participant Agreement.
|
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|
•
|
|
All Orders are subject to the provisions of the Custody Agreements and the Participant Agreement relating to unclear or ambiguous instructions.
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ATTACHMENT D-2
CREATION PROCESS
The issuance and delivery of Shares of the Fund shall take place only in integral numbers of Creation Units in compliance with the following rules:
|
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1.
|
Participants wishing to acquire one or more Creation Units shall place a Purchase Order with the Administrator no later than 3:59:59 p.m. (New York time) (the “Order Cutoff Time”) on any Business Day. Purchase
Orders received by the Administrator on or after the Order Cutoff Time on a Business Day will not be accepted.
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|
|
2.
|
For purposes of
Paragraph 1
above, a Purchase Order shall be deemed “received” by the Administrator only when either of the following has occurred no later than 3:59:59 p.m. (New York time):
|
|
|
a.
|
Telephone/fax Order — An Authorized Person shall have placed a telephone call to the telephone number designated by the Administrator and specified in
Exhibit B
to the Participant Agreement, or such other
number that the Administrator designates in writing to the Participant, and has received an order number from the Administrator for insertion in the Purchase Order (an “Order Number”), or
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|
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b.
|
Web-based
Order — An Authorized Person shall have accessed the Administrator’s online services (https://connect.bnymellon.com), the use of which shall be subject to the
Electronic Services Agreement incorporated herein by reference,
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in either case informing the Administrator that the
Participant wishes to place a Purchase Order for a specified number of Creation Units and, in the case of a telephone order, within 15 minutes following such telephone call, the Administrator shall have received a properly completed, irrevocable
Purchase Order in the form set out in
Exhibit B
to the Participant Agreement executed by an Authorized Person of such Participant, via facsimile at the number specified in such
Exhibit B
. The Business Day on which a Purchase Order
shall be deemed received by the Administrator is hereinafter referred to as the “Order Date.”
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3.
|
The Administrator shall provide a written summary to the Sponsor and the Custodian of all accepted Purchase Orders for such Order Date no later than 5:30 p.m. (New York time).
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|
4.
|
As soon as reasonably practicable following receipt of a properly completed Purchase Order but not later than 5:30 p.m. (New York time) on the Order Date for such Purchase Order, the Administrator shall send to the
Participant (with copy to the Custodian), via facsimile or electronic mail message, a copy of the corresponding Purchase Order endorsed “Accepted” by the Administrator and indicating the amount of Gold that the Authorized Participant shall
deliver to the Custodian in respect of each Creation Unit (the “Creation Unit Amount”). Prior to the transmission of the Administrator’s acceptance as specified above, a Purchase Order will only represent the Participant’s
unilateral offer to deposit Gold in exchange for Creation Units and will have no binding effect upon the
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ATTACHMENT D-3
|
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Trust, on behalf of the Fund, or any other party. Following the transmission of the Administrator’s acceptance as specified above, a Purchase Order will be a binding agreement among the
Trust, on behalf of the Fund, and the Authorized Participant for the creation and purchase of Creation Units and the deposit of Gold pursuant to the terms of the Purchase Order and these Procedures. If a Purchase Order is rejected, the Administrator
shall send to the Participant (with copy to the Custodian), via facsimile or electronic mail message, as soon as reasonably practicable, but not later than 5:30 p.m. (New York time) on the Order Date for such Purchase Order, a copy of the
corresponding Purchase Order endorsed “Declined” by the Administrator and indicating the reason. The preceding sentence notwithstanding, Purchase Orders not accepted by 5:30 p.m. (New York time) on the Order Date shall be deemed cancelled.
A Purchase Order which is not properly completed will be deemed invalid and rejected by the Administrator; the Participant may submit a corrected Purchase Order within fifteen (15) minutes of such contact with the Participant, provided that the
corrected Purchase Order is received by the Administrator prior to the Order Cutoff Time.
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|
|
5.
|
Each Purchase Order shall settle on the second Business Day following the Order Date. The Creation Unit Amount corresponding to each Creation Unit must be deposited in the Fund Unallocated Account no later than 10:00
a.m. (London time) on the second Business Day following the Order Date. The Participant shall bear all risk of any loss until the Gold is credited to the Fund Unallocated Account.
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|
6.
|
The Custodian shall advise the Administrator in writing of the deposits made to the Fund Allocated Account in connection with each Purchase Order. Upon receipt of such advice, the Administrator shall determine whether a
deposit of Gold required to be made pursuant to
Paragraph 5
above has not been noted as deposited in the Fund Unallocated Account. In such event, the Administrator shall, by the Administrator’s close of business on the second Business
Day following the Order Date, (i) send to the Custodian, via electronic mail message, a request that the Custodian confirm that the Custodian did not receive the anticipated deposit of Gold, and (ii) send to the Participant whose deposit
was not received, via facsimile at the facsimile number specified by the Participant in the Purchase Order, a concurrent copy of such request.
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|
|
7.
|
On the second Business Day following the Order Date corresponding to a Purchase Order, or on such earlier date and time as the Administrator in its absolute discretion may agree with the Participant, the Administrator
shall issue the aggregate number of Shares corresponding to the Creation Units ordered by the Participant and deliver them, by credit to the account at DTC which the Participant shall have identified for such purpose in its Purchase Order, provided
that, by 1:00 p.m. (New York time) on the date such issuance and delivery is to take place:
|
|
|
a.
|
the Custodian shall have reported in writing to the Administrator that the corresponding required amount of Gold has been deposited in the Fund Unallocated Account in compliance with the provisions of
Paragraph 5
above;
|
|
|
b.
|
the Custodian shall have reported in writing to the Administrator that the corresponding required amount of Gold has been allocated to the Fund Allocated Account (other than up to 430 Ounces of Gold) and the Custodian
is holding that Gold for the account of the Fund;
|
ATTACHMENT D-4
|
|
c.
|
the Administrator shall have received from the Participant the applicable Transaction Fee;
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|
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d.
|
the Participant shall have paid or agreed to pay, or reimbursed or agreed to reimburse the Custodian, the Administrator or the Fund for, the amount of any applicable taxes (including, without limitation, any VAT),
governmental charges and fees which are or become due in connection with the delivery of Gold to the Administrator and the issuance and delivery of Shares to the Participant; and
|
|
|
e.
|
any other conditions to the issuance of Shares under the Trust’s Declaration of Trust shall have been satisfied.
|
|
|
8.
|
In all other cases, the Administrator shall issue the aggregate number of Shares corresponding to the Creation Units ordered by the Participant and deliver them by credit to the account at DTC which the Participant
shall have identified for such purpose in its Purchase Order on the Business Day following the date on which all of the conditions set forth in clauses (a) – (e) of
Paragraph 7
above shall have been met. In the event that, by 10:00 a.m.
(New York time) on the second Business Day following the Order Date of a Purchase Order, the Fund Unallocated Account shall not have been credited with the required amount of Gold in compliance with the provisions of
Paragraph 5
above, the
Administrator shall send to the Participant and the Custodian via fax or electronic mail message notice of such fact and the Participant shall have two (2) Business Days following receipt of such notice to correct such failure. If such failure
is not cured within such two (2) Business Day period, the Administrator shall, unless the Sponsor shall otherwise direct, cancel such Purchase Order and will send via fax or electronic mail message notice of such cancellation to the Participant
and the Custodian, and the Participant will be solely responsible for all damages, losses, costs and expenses incurred by the Trust, the Fund, the Sponsor, the Administrator or the Custodian related to the cancelled Order.
|
|
|
9.
|
The foregoing provisions notwithstanding, neither the Administrator nor the Custodian shall be liable for any failure or delay in making delivery of Shares in respect of a Purchase Order arising from nuclear fission or
fusion, radioactivity, war, terrorist event, invasion, insurrection, civil commotion, riot, strike, act of government, public authority, public service or utility problems, power outages resulting in telephone, telecopy and computer failures, act of
God such as fires, floods or extreme weather conditions, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Fund, the Administrator, the Custodian or
sub-custodian
and similar extraordinary events beyond the Custodian’s or the Administrator’s reasonable control. In the event of any such delay, the time to complete delivery in respect of a Purchase Order
will be extended for a period equal to that during which the inability to perform continues as determined by the Administrator in its sole discretion.
|
ATTACHMENT D-5
|
|
10.
|
Except as provided in
Paragraphs 4, 6 and 8
and the Participant Agreement, none of the Administrator, the Sponsor or the Custodian is under any duty to give notification of any defects or irregularities in any
Purchase Order or the delivery of the Creation Unit Amount, and shall not incur any liability for the failure to give any such notification.
|
|
|
11.
|
The creation of Shares may be suspended or rejected under the circumstances specified in the Trust’s Declaration of Trust, these Procedures or the Participant Agreement.
|
[Redemption Process Follows on Next Page]
ATTACHMENT D-6
REDEMPTION PROCESS
The redemption of Shares of the Fund shall take place only in integral numbers of Creation Units in compliance with the following rules:
|
|
1.
|
Participants wishing to redeem one or more Creation Units shall place a Redemption Order with the Administrator no later than 3:59:59 p.m. (New York time) (the “Order Cutoff Time”) on any Business Day.
Redemption Orders received by the Administrator on or after the Order Cutoff Time on a Business Day will not be accepted.
|
|
|
2.
|
For purposes of
Paragraph 1
above, a Redemption Order shall be deemed “received” by the Administrator only when either of the following has occurred no later than 3:59:59 p.m. (New York time):
|
|
|
a.
|
Telephone/fax Order — An Authorized Person shall have placed a telephone call to the telephone number designated by the Administrator and specified in
Exhibit B
to the Participant Agreement, or such other
number that the Administrator designates in writing to the Participant, and has received an order number from the Administrator for insertion in the Redemption Order (an “Order Number”), or
|
|
|
b.
|
Web-based
Order — An Authorized Person shall have accessed the Administrator’s online services (https://connect.bnymellon.com), the use of which shall be subject to the
Electronic Services Agreement incorporated herein by reference,
|
in either case informing the Administrator that the
Participant wishes to place a Redemption Order for a specified number of Creation Units and, in the case of a telephone order, within 15 minutes following such telephone call, the Administrator shall have received a duly completed, irrevocable
Redemption Order in the form set out in
Exhibit B
to the Participant Agreement executed by an Authorized Person of such Participant, via facsimile at the number specified in such
Exhibit B
. The Business Day on which a Redemption Order
shall be deemed received by the Administrator is hereinafter referred to as the “Order Date.”
|
|
3.
|
The Administrator shall provide a written summary to the Sponsor and the Custodian of all accepted Redemption Orders for such Order Date no later than 5:30 p.m. (New York time).
|
|
|
4.
|
Upon receipt of a properly completed Redemption Order, the Administrator shall send to the Participant (with copy to the Custodian), via facsimile or electronic mail message, as soon as reasonably practicable, but not
later than 5:30 p.m. (New York time) on the Order Date for such Redemption Order a copy of the corresponding Redemption Order endorsed “Accepted” by the Administrator and indicating the amount of Gold that the Custodian shall deliver to
the Participant in respect of each Creation Unit being redeemed (the “Creation Unit Amount”). Prior to the transmission of the Administrator’s acceptance as specified above, a Redemption Order will only represent the
Participant’s unilateral offer to deposit Creation Units in exchange for a delivery of Gold and will have
|
ATTACHMENT D-7
|
|
no binding effect upon the Trust, on behalf of the Fund, or any other party. Following the transmission of the Administrator’s acceptance as specified above, a Redemption Order will be a
binding agreement among the Trust, on behalf of the Fund, and the Participant for the redemption of Creation Units and the delivery of Gold pursuant to the terms of the Redemption Order and these Procedures. If a Redemption Order is rejected, the
Administrator shall send to the Participant (with copy to the Custodian), via facsimile or electronic mail message, as soon as reasonably practicable, but not later than 5:30 p.m. (New York time) on the Order Date for such Redemption Order, a copy
of the corresponding Redemption Order endorsed “Declined” by the Administrator and indicating the reason. The preceding sentence notwithstanding, Redemption Orders not accepted by 5:30 p.m. (New York time) on the Order Date shall be deemed
cancelled. A Redemption Order which is not properly completed will be deemed invalid and rejected by the Administrator; the Participant may submit a corrected Redemption Order within fifteen (15) minutes of such contact with the Participant,
provided that the corrected Redemption Order is received by the Administrator prior to the Order Cutoff Time.
|
|
|
5.
|
The Administrator shall, by 10:00 a.m. (New York Time) on the second Business Day following the Order Date of a Redemption Order, confirm in writing to the Custodian whether each of the following has occurred:
|
|
|
a.
|
the Participant has delivered by 10:00 a.m. on the second Business Day following the Order Date to the Administrator’s account at DTC the total number of Shares to be redeemed by such Participant pursuant to such
Redemption Order;
|
|
|
b.
|
the Administrator shall have received from the Participant the applicable Transaction Fee;
|
|
|
c.
|
the Participant shall have paid or agreed to pay, or reimbursed or agreed to reimburse the Custodian, the Administrator or Fund for, the amount of any applicable taxes (including, without limitation, any VAT),
governmental charges and fees which are or become due in connection with the delivery of Shares to the Administrator and the delivery of Gold to the Participant, as well as any expense associated with the delivery of Gold to the Participant other
than by a credit to an account of the Participant maintained by the Custodian on an Unallocated Basis; and
|
|
|
d.
|
any other conditions to the redemption of Shares under the Trust’s Declaration of Trust shall have been satisfied.
|
Provided that the Custodian has received written confirmation from the Administrator that the conditions set forth in clauses (a)—(d) of
Paragraph 5
above have been satisfied, the Custodian shall, on such day, deliver Gold in the amounts specified in the communication sent in compliance with
Paragraph 4
above to the account indicated by the redeeming Participant in its
Redemption Order (which shall be an appropriate Bullion account in London with the Custodian or another LPMCL clearing bank). Having made such delivery, the Custodian shall send written confirmation thereof to the Administrator who shall then cancel
the Shares so redeemed. The Participant shall bear all risk of any loss from the time the Gold is transferred from the Fund Unallocated Account to the account of the Participant maintained on an Unallocated Basis.
ATTACHMENT D-8
|
|
6.
|
In all other cases, delivery must be completed by the Custodian as soon as, in the reasonable judgment of the Custodian, it is practicable following receipt of written confirmation from the Administrator that the
conditions set forth in clauses (a)—(d) of
Paragraph 5
above have been satisfied.
|
|
|
7.
|
The foregoing provisions notwithstanding, neither the Administrator nor the Custodian shall be liable for any failure or delay in making delivery of Gold in respect of a Redemption Order arising from nuclear fission or
fusion, radioactivity, war, terrorist event, invasion, insurrection, civil commotion, riot, strike, act of government, public authority, public service or utility problems, power outages resulting in telephone, telecopy and computer failures, act of
God such as fires, floods or extreme weather conditions, market conditions or activities causing trading halts, systems failures involving computer or other information systems affecting the Trust, the Fund, the Administrator, the Custodian or
sub-custodian
and similar extraordinary events beyond the Custodian’s or the Administrator’s reasonable control. In the event of any such delay, the time to complete delivery in respect of a Redemption
Order will be extended for a period equal to that during which the inability to perform continues as determined by the Administrator in its sole discretion.
|
|
|
8.
|
In the event that, by 10:00 a.m. (New York time) on the second Business Day following the Order Date of a Redemption Order, the Administrator’s account at DTC shall not have been credited with the total number of
Shares corresponding to the total number of Creation Units to be redeemed pursuant to such Redemption Order, the Administrator shall send to the Participant and the Custodian via fax or electronic mail message notice of such fact and the Participant
shall have one (1) Business Day following receipt of such notice to correct such failure. If such failure is not cured within such one (1) Business Day period, the Administrator (in consultation with the Sponsor) will cancel such
Redemption Order and will send via electronic mail message notice of such cancellation to the Participant and the Custodian. The Participant will be solely responsible for all damages, losses, costs and expenses incurred by the Trust, the Fund, the
Sponsor, the Administrator or the Custodian related to the cancelled Redemption Order.
|
|
|
9.
|
The redemption of Shares may be suspended or rejected under the circumstances specified in the Trust’s Declaration of Trust, these Procedures or the Participant Agreement.
|
|
|
10.
|
Except as provided in
Paragraphs 4 and 8
and the Participant Agreement, none of the Administrator, the Sponsor or the Custodian are under any duty to give notification of any defects or irregularities in any
Redemption Order or the delivery of the Shares, and shall not incur any liability for the failure to give any such notification.
|
* * * *
ATTACHMENT D-9
Exhibit 5.1
_______________, 2018
World Gold Trust
WGC USA Asset Management Company, LLC
685 Third Avenue, 27th
Floor
New York, New York 10017
Re: SPDR
®
Gold MiniShares Trust, a series of World Gold Trust
Registration Statement on Form
S-1
(Registration No.
333-221842)
Ladies and Gentlemen:
We have acted as counsel for World Gold Trust, a Delaware statutory trust (the “Trust”), and WGC USA Asset Management Company, LLC (the
“Sponsor”), in its capacity as the sponsor of SPDR
®
Gold MiniShares Trust (the “Fund”), a series of the Trust, in connection with the Trust’s filing on [•], 2018
with the Securities and Exchange Commission of its registration statement on Form
S-1
(as amended, the “Registration Statement”), including the prospectus included in Part I of the Registration
Statement (the “Prospectus”), under the Securities Act of 1933, as amended (the “1933 Act”) (No.
333-221842).
The Registration Statement relates to the proposed registration, issuance and
sale by the Trust, on behalf of the Fund, of [•] shares of fractional undivided beneficial interest in and ownership of the Fund (the “Shares”).
In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such instruments, documents
and records as we have deemed relevant and necessary to examine for the purpose of this opinion, including (a) the Registration Statement, (b) the Trust’s Fourth Amended and Restated Agreement and Declaration of Trust dated as of
April [ ], 2018 between the Sponsor, as sponsor, and Delaware Trust Company, as trustee (the “Trust Agreement”), (c) the pertinent provisions of the constitution and laws of the State of Delaware, and (d) such
other instruments, documents, statements and records of the Trust and others and other such statutes as we have deemed relevant and necessary to examine and rely upon for the purpose of this opinion.
In connection with this opinion, we have assumed the legal capacity of all natural persons, the accuracy and completeness of all documents and records that we
have reviewed, the genuineness of all signatures, the authenticity of the documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or reproduced copies.
We have, when relevant facts material to our opinion were not independently established by us, relied, to the extent we deemed such reliance proper, upon
written or oral statements of officers or other representatives of the Sponsor. We have not made or undertaken to make any independent investigation to establish or verify the accuracy or completeness of such factual representations, certifications
and other information.
_____________, 2018
Page 2
Based upon the foregoing and subject to the
qualifications set forth in this letter, we are of the opinion that the Shares of the Fund, when issued in accordance with the Trust Agreement, including receipt by the Fund of the consideration required for the issuance of the Fund’s Shares,
will be duly and legally issued and will be fully paid and
non-assessable.
This opinion is given as of the date
hereof and we assume no obligation to advise you of changes that may hereafter be brought to our attention. This opinion is limited to the Delaware statutory trust laws governing matters such as the authorization, issuance and non-assessability of
the Shares and the applicable provisions of the Delaware constitution, and we do not express any opinion concerning any other laws.
We hereby consent to
the filing of this opinion as an exhibit to the Registration Statement and to the use of our name where it may appear in the Registration Statement and the Prospectus. In giving such consent, however, we do not admit that we are within the category
of persons whose consent is required by Section 7 of the 1933 Act, as amended, and the rules and regulations thereunder.
|
|
|
Very truly yours,
|
|
/s/ Morgan, Lewis & Bockius LLP
|
2
Exhibit 8.1
|
|
|
|
|
Morgan, Lewis & Bockius LLP
1111
Pennsylvania Avenue, NW
Washington, DC 20004-2541
www.morganlewis.com
|
|
|
[Date]
SPDR
®
Gold MiniShares Trust
WGC USA Asset Management Company, LLC
685 Third Avenue, 27th Floor
New York, New York 10017
Re:
Discussion of Federal Income Tax Consequences
Ladies and Gentlemen:
We have acted as counsel for World Gold
Trust, a Delaware statutory trust (the “
Trust
”), and WGC USA Asset Management Company, LLC (the “
Sponsor
”), in its capacity as the sponsor of SPDR
®
Gold
MiniShares Trust (the “
Fund
”), a series of the Trust, in connection with the Trust’s filing on [Date] with the Securities and Exchange Commission (the “
Commission
”) of its first amendment to its registration
statement on Form
S-1
(as amended, the “
Registration Statement
”), including the prospectus included in Part I of the Registration Statement (the “
Prospectus
”), under the
Securities Act of 1933, as amended (the “
1933 Act
”) (No.
333-221842).
The Registration Statement relates to the proposed registration, issuance and sale by the Trust, on behalf of the Fund, of
[5,000,000] shares of fractional undivided beneficial interest in and ownership of the Fund (the “
Shares
”).
You have requested our
opinion in our capacity as special federal income tax counsel to the Sponsor, regarding the discussion relating to federal income tax matters under the heading “United States Federal Tax Consequences” in the Prospectus. In connection with
this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such instruments, documents and records as we have deemed relevant and necessary to examine for the purpose of this opinion, including but
not limited to (a) the Prospectus and the exhibits thereto, (b) the Trust’s Third Amended and Restated Agreement and Declaration of Trust dated January 6, 2017, between the Sponsor, as sponsor, and Delaware Trust Company (the
“
Trustee
”), as trustee (the “
Trust Agreement
”), (c) the Amended and Restated Sponsor Agreement dated October 14, 2016 as amended November 28, 2017, between the Sponsor and the Trust (the “
Sponsor
Agreement
”), (d) the officer’s certificate dated as of the date hereof, provided to us by the Sponsor (the “
Officer’s Certificate
”) and (e) such other instruments, documents, statements and records of the
Trust and others as we have deemed relevant and necessary to examine and rely upon for the purpose of this opinion (collectively, the “
Documents
”).
In our examination of the foregoing Documents, we have assumed with your consent that: (i) all Documents reviewed by us are original documents, or true
and accurate copies of original documents and have not been subsequently amended, (ii) the signatures of each original Document are genuine, (iii) each party who executed the Document had proper authority and
DATE, 2018
Page2
capacity, (iv) all representations and statements set forth in such Documents are true and correct, (v) all obligations imposed by any such Documents on the parties thereto have been
performed or satisfied in accordance with their terms, (vi) the accuracy of the representations contained in the Officer’s Certificate and that each representation contained in the Officer’s Certificate is accurate and complete
without regard to such qualification as to the best of the officer’s knowledge, (vii) the Documents present all the material and relevant facts relating to the subject matter hereof, (viii) the Trust and the Fund will operate in
accordance with the Documents (ix) the Sponsor, the Trustee, the Trust and the Fund, will not make or cause any amendments to the Documents, in particular the Trust Agreement, the Sponsor Agreement or any other Document after the date of this
opinion that is material to the Fund’s federal income tax classification, and (x) no action will be taken by the Sponsor, Trustee, the Trust, or the Fund, after the date hereof that would have the effect of altering the facts upon which
the opinion set forth below is based.
As to various matters of fact material to this opinion, we have relied, exclusively and without independent
verification (with your permission) upon written or oral statements of officers and other representatives of the Sponsor and any other information supplied to us by the Sponsor; we have no reason to believe that any of that information is
inaccurate, untrue, or incomplete, but, as noted, we have not attempted to independently verify any of it. Where the factual representations contained in the Officer’s Certificate involve matters of law, we have explained to the Sponsor’s
representatives the relevant and material sections of the Internal Revenue Code of 1986, as amended (the “
Code
”), the Treasury Regulations, published rulings of the Internal Revenue Service (“
IRS
”) and other
relevant authority to which such representations relate and are satisfied that the Sponsor’s representatives understand such provisions and are capable of making such representations. As of the date hereof, no facts have come to our attention,
which would lead us to believe that we are not justified in relying upon the Officer’s Certificate.
Based upon the foregoing and subject to the
qualifications set forth in this letter, we advise you that the discussion in the Prospectus as set forth in the section “United States Federal Tax Consequences”, to the extent that it constitutes matters of federal income tax law or legal
conclusions relating thereto, is correct and complete in all material respects.
The opinion set forth above represents our conclusion based upon the
Documents, facts, representations and assumptions referred to above. Any material amendments to such documents, changes in any significant facts or inaccuracy of such representations or assumptions could affect the opinions referred to herein.
The opinion set forth in this letter is based on relevant provisions of the Code, the Treasury Regulations promulgated thereunder, interpretations of the
foregoing as expressed in court decisions, legislative history, and existing administrative rulings and practices of the IRS (including its practices and policies in issuing private letter rulings, which are not binding on the IRS except with
respect to a taxpayer that receives such a ruling), all as of the date hereof. These provisions and interpretations are subject to change, which may or may not be retroactive in effect, and which may result in modifications of our opinion. Our
opinion does not foreclose the possibility of a contrary determination by the IRS or a court of competent jurisdiction or of a contrary determination by the IRS or the Treasury Department in regulations or rulings issued in the future. In this
regard, an opinion of counsel with respect to an issue represents counsel’s best professional judgment with respect to the outcome on the merits with respect to such issue, if such issue were to be litigated, but an opinion is not binding on
the IRS or the courts and is not a guarantee that the IRS will not assert a contrary position with respect to such issue or that a court will not sustain such a position asserted by the IRS.
2
DATE, 2018
Page2
This letter is limited to those matters expressly covered and no opinion is expressed in respect of any other
matter. This letter may not be relied upon by you for any other purpose, or furnished to, quoted in whole or in part or relied upon by any other person, firm or corporation, for any purpose, without our prior written consent.
The opinion set forth in this letter is rendered only to you, and are solely for your use in connection with the submission to the Commission as an exhibit to
the Prospectus. We hereby consent to the filing of this letter as an exhibit to the Prospectus and to the use of the name of our firm under the caption “United States Federal Tax Consequences” of the Prospectus. In giving this consent, we
do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder.
Very truly yours,
3
Exhibit 10.1
Dated:
ICBC STANDARD
BANK PLC
and
WORLD GOLD TRUST
on
behalf of its series set forth on Schedule A hereto
FORM OF
ALLOCATED GOLD ACCOUNT AGREEMENT
This
ALLOCATED GOLD ACCOUNT AGREEMENT
(this “
Agreement
”) is made as of the date set out
on the cover page of this Agreement
BETWEEN
|
(1)
|
ICBC Standard Bank Plc
,
a public limited company incorporated under the laws of England and Wales with its registered office at 20 Gresham Street, London, EC2V 7JE, United Kingdom (the
“
Custodian
”); and
|
|
(2)
|
World Gold Trust
,
a Delaware statutory trust organized in series having its principal office and place of business at 685 Third Avenue, 27
th
Floor, New
York, NY 10017 (the “
Trust
”).
|
INTRODUCTION
|
(1)
|
The Custodian has agreed to open and maintain an Allocated Account for each series of the Trust listed on Schedule A hereto (each, a “
Fund
” and collectively, the “
Funds
”) and to provide
other services to the Funds in connection with the Allocated Accounts.
|
|
(2)
|
Shares may be issued by a Fund against delivery of Gold made by way of payment for the issue of such Shares. The Trust has agreed that Gold delivered in connection with a subscription for Shares will be paid into the
Metal Accounts.
|
|
(3)
|
The Custodian has agreed to transfer Gold deposited into a Fund Unallocated Account to the corresponding Fund Allocated Account in connection with a subscription for Shares and to transfer Gold from the Fund Allocated
Account to the Fund Unallocated Account in connection with redemption of Shares.
|
|
(5)
|
The Trust has agreed that each Fund Allocated Account will be established for the account of the applicable Fund, and that the Trust will have the sole right to give instructions for the making of any payments into or
out of a Fund Allocated Account.
|
IT IS AGREED AS FOLLOWS
|
1.1
|
Definitions:
In this Agreement, unless there is anything in the subject or context inconsistent therewith, the following expressions shall have the following meanings.
|
“
Affiliate
”
means an entity that directly or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with the Custodian.
“
AURUM
” means the electronic matching and settlement system operated
by LPMCL.
“
Authorized Participant
” shall have the meaning assigned to such term in the Unallocated Gold Account
Agreement.
1
“
Authorised Representatives
” has the meaning given to that expression in
clause 5.1
.
“
Dispute
”
means for the purpose of
clause 16
any disagreement between the Trust and the
Custodian which has not been resolved amicably within a period of fourteen London Business Days after the Custodian has received from the Trust, or the Trust has received from the Custodian, written notification of the disagreement.
“
Fund Allocated Account
” means the loco London Gold account established in the name of a Fund and maintained for the benefit
of the Fund by the Custodian on an allocated basis pursuant to this Agreement.
“
Fund Unallocated Account
” means the loco
London Gold account established in the name of a Fund and maintained for the benefit of the Fund by the Custodian on an Unallocated Basis pursuant to the Unallocated Gold Account Agreement.
“
Gold
”
means (i) Physical Gold held by the Custodian or any
Sub-Custodian
under this Agreement and/or (ii) any credit to an account, including a Fund Unallocated Account, on an Unallocated Basis, as the context requires.
“
Indirect
Sub-Custodian
” has the meaning given to that expression in Clause 8.1(i).
“
LBMA
” means The London Bullion Market Association or its successors.
“
Loco London
” means with respect to an account holding Gold, the custody, trading or clearing of such Gold in London, United
Kingdom.
“
London Business Day
” means a day (excluding Saturdays, Sundays and public holidays) on which commercial banks
generally are open for business in London and on which the London gold bullion market is open for business.
“
LBMA Gold Price
PM
” means the price of a troy ounce of gold as determined by ICE Benchmark Administration, the third party administrator of the London gold price selected by the LBMA, or any successor administrator of the London gold price, at or about
3:00 p.m. London, England time.
“
London Good Delivery Standards
” means the specifications for “good delivery”
gold bars, including, without limitation, the specifications for weight, dimensions, fineness (or purity), identifying marks and appearance of gold bars, set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the
LBMA.
“
LPMCL
”
means London Precious Metals Clearing Limited or its successors.
2
“
Metal Accounts
” means a Fund Allocated Account and the corresponding Fund
Unallocated Account.
“
New York Business Day
” means a day other than a day on which a Fund’s listing exchange is
closed for regular trading.
“
Phoenix Portal
” means the Custodian’s electronic system which allows input of clearing
instructions and viewing of account balances, as it may be updated from time to time.
“
Physical Gold
”
means gold
bullion that meets the London Good Delivery Standards.
“
Point of Delivery
” means such date and
time that the recipient (or its agent) acknowledges in written form its receipt of delivery of Physical Gold;
“
Rules
”
means the rules, regulations, practices, procedures and customs of the LBMA, including the London Good Delivery Standards, the LPMCL, the Financial Conduct Authority, the Prudential Regulation Authority, the Bank of England and such other regulatory
authority or other body, applicable to the activities contemplated by this Agreement, including the activities of any
Sub-Custodian.
“
Shareholder
” means the beneficial owner of one or more Shares of a Fund.
“
Shares
” means the units of fractional undivided beneficial interest in a Fund which are issued by the Fund pursuant to its
Prospectus.
“
Sponsor
” means WGC USA Asset Management Company, LLC, its successors and assigns and any successor Sponsor.
“
Sub-Custodian
” means a
sub-custodian,
agent or depository (including an entity within our corporate group) appointed by the Custodian pursuant to
clause 8
.
“
Unallocated Basis
” means, with respect to the holding of gold, that the holder is entitled to receive delivery of Physical
Gold in the amount standing to the credit of the holder’s account, but the holder has no ownership interest in any particular gold that the custodian maintaining that account owns or holds.
“
Unallocated Gold Account Agreement
” means the Unallocated Account Agreement of even date herewith between the Trust and
the Custodian pursuant to which each Fund Unallocated Account is established and operated.
“
VAT
” means value added tax
as provided for in the Value Added Tax Act 1994 (as amended or
re-enacted
from time to time) and legislation supplemental thereto and any other tax (whether imposed in the United Kingdom in substitution
thereof or in addition thereto or elsewhere) of a similar fiscal nature.
3
|
1.2
|
Headings:
The headings in this Agreement do not affect its interpretation.
|
|
1.3
|
Singular and plural:
References to the singular include the plural and vice versa.
|
|
1.4
|
Construction:
The word “including” means “including without limitation”. The word “or” is not exclusive.
|
|
2.1
|
Opening Allocated Account:
The Custodian shall open and maintain the Fund Allocated Account for each Fund.
|
|
2.2
|
Deposits and Withdrawals:
A Fund Allocated Account shall evidence and record deposits and withdrawals of Physical Gold made pursuant to the terms of this Agreement.
|
|
2.3
|
Denomination of Allocated Accounts:
A Fund Allocated Account will hold deposits of Physical Gold and will be denominated in fine troy ounces (to three decimal places).
|
|
2.4
|
Allocated Account Reports:
The Custodian shall provide the Notices and Reports set forth on Schedule B hereto. Such reports also will be made available to the Trust by means of the Phoenix Portal, provided that,
if the Phoenix Portal is unavailable for any reason, the Trust and the Custodian will agree upon a temporary notification system for making such reports available to the Trust. Allocated holdings are available real time on the Custodian’s
Phoenix Portal and, for the avoidance of doubt, are not held on the Custodian’s balance sheet.
|
|
2.5
|
Reversal of Entries:
The Custodian shall reverse any provisional or erroneous entries to a Fund Allocated Account which it discovers or of which it is notified with effect back-valued to the date upon which the
final or correct entry (or no entry) should have been made and shall provide notice thereof in accordance with Schedule B.
|
|
2.6
|
Provision of Information:
Subject to
clause 7.3
, the Custodian agrees that it will forthwith notify the Trust in writing of any encumbrance of which it is aware is or is purported to have been created
over or in respect of a Fund Allocated Account or any of the amounts standing to the credit thereof.
|
|
2.7
|
Access
:
The Custodian will allow, and will procure that any
Sub-Custodian
that the Custodian appoints allows, the Sponsor and the Trust and their
identified representatives, independent public accountants and bullion auditors access to its premises, upon reasonable notice during normal business hours but without limitation on the frequency of access to such premises, to examine the Physical
Gold held in a Fund Allocated Account and such records as they may reasonably require to perform their respective duties with regard to investors in a Fund’s Shares. The Trust agrees that any such access shall be subject to execution of a
confidentiality agreement and agreement to the Custodian’s security procedures, and any such audit shall be at the applicable Fund’s expense.
|
4
|
2.8
|
Regulatory Reporting:
To the extent that the Custodian’s activities under this Agreement are relevant to the preparation of the filings required of the Trust under the securities laws of the United States or
any other jurisdiction, the Custodian will, to the extent permitted by applicable law, the Rules or applicable regulatory authority, cooperate with the Trust and the Sponsor and the Trust’s and the Sponsor’s representatives to provide such
information concerning the Custodian’s activities as may be necessary for such filings to be completed. Additionally, to the extent that the Custodian’s activities or controls in its capacity as custodian of the Trust’s assets are
relevant to the information presented in the financial statements of the Trust, the Custodian will cooperate with the Sponsor and the Trust to assist the Sponsor in providing the required written assurances regarding the reliability of the internal
controls used in the preparation of such financial statements, including by providing the Sponsor’s and the Trust’s external auditors with any necessary information and reports regarding the Custodian’s internal controls over
financial reporting as far as such reporting relates to the scope of the Custodian’s duties.
|
|
3.1
|
Procedure:
The Custodian shall receive deposits of Physical Gold into a Fund Allocated Account relating to the same kind of Physical Gold and having the same denomination as that to which the corresponding Fund
Unallocated Account relates only pursuant to transfers from the Fund Unallocated Account as provided in
clause 4.1(b)
of the Unallocated Gold Account Agreement or as otherwise agreed upon between Custodian and the Trust. The notice for any
deposit of Gold to be made into a Fund Allocated Account in connection with
clause 4.1(b)
of the Unallocated Gold Account Agreement shall be made in accordance with
clause 4.2(b)
of the Unallocated Gold Account Agreement.
|
|
3.2
|
Right to Amend Procedure:
The Custodian may amend the procedure in relation to the deposit of Gold to a Fund Allocated Account only where such amendment is caused by a change in the Rules, provided that the
Custodian shall, whenever practicable, notify the Trust and the Sponsor within a commercially reasonable time prior to the date on which the Custodian amends its procedures or imposes additional ones in relation to the transfer of Gold into a Fund
Allocated Account, and in doing so the Custodian will consider the Trust’s and the Sponsor’s needs to communicate any such change to Authorized Participants and others.
|
|
3.3
|
Allocation:
Subject always to
clause 5.3
of the Unallocated Gold Account Agreement, the Trust acknowledges that the process of allocation of Physical Gold to a Fund Allocated Account from the Fund
Unallocated Account may involve minimal adjustments to the weights of Physical Gold to be allocated to adjust such weight to the number of whole bars available.
|
5
|
4.1
|
Procedure: The Trust may at any time give instructions to the Custodian for the withdrawal of Physical Gold from a Fund Allocated Account as provided for in this Agreement, provided that
a
withdrawal may be made only by:
|
|
|
(a)
|
transfer to the corresponding Fund Unallocated Account or another account maintained on an Unallocated Basis or as otherwise permitted in connection with the transfers described in
clause 4.1(a)
of the
Unallocated Gold Account Agreement; or
|
|
|
(b)
|
transfer in the manner described in
clauses 4.1(c) and (d
) of the Unallocated Gold Account Agreement.
|
The Trust anticipates exercising its rights under
clauses 4.1(c) and (d
) of the Unallocated Gold Account Agreement on an
exceptional basis only. Any Gold made available to the relevant person (as instructed by the Trust) pursuant to
clauses 4.1(c) and (d
) will be in a form which complies with the Rules or in such other form as may be agreed between the
Trust and the Custodian the combined fine weight of which will not exceed the number of fine ounces of Gold the Trust has instructed the Custodian to debit.
|
4.2
|
Notice Requirements:
The notice for any withdrawal of Gold to be made from a Fund Allocated Account (i) in connection with
clause 4.1(a)
of the Unallocated Gold Account Agreement shall be made in
accordance with
clause 4.2(a)
of the Unallocated Gold Account Agreement and (ii) in connection with
clauses 4.1(c), (d) or (e
) (with respect to transfers other than for the sale of Gold) of the Unallocated Gold Account Agreement
shall be made in accordance with
clause 4.2(c
) of the Unallocated Gold Account Agreement.
|
|
4.3
|
Right to Amend Procedure:
The Custodian may amend the procedure for the withdrawal of Gold from a Fund Allocated Account only where such amendment is caused by a change in the Rules. Any such amendment will be
subject to the notification conditions of
clause 3.2
.
|
|
4.4
|
Specification of Physical Gold:
The Custodian may specify the serial numbers of the bars to be withdrawn once it receives instructions from the Trust to effect a withdrawal of Physical Gold pursuant to
clause
4.1
. The Custodian is entitled to select the Physical Gold to be made available for any such withdrawal, provided, however, that it will use commercially reasonable best efforts to select the smallest amount of Physical Gold necessary to satisfy
the withdrawal instruction. To the extent the Trust provides specific serial numbers of bars to be so selected (which the Trust undertakes to the Custodian it shall use its best efforts to do no more than once per calendar quarter), the Custodian
will select such Physical Gold as specified by the Trust.
|
|
4.5
|
Delivery Obligations:
Unless otherwise instructed by the Trust on behalf of a Fund or the relevant person,
the Custodian shall make any transportation and insurance arrangements in respect of delivery of Physical Gold in accordance with its usual practice. Where instructions are given, the Custodian shall use all reasonable efforts to
|
6
|
|
comply with the same. The Custodian shall not be obliged to effect any requested delivery if, in its commercially reasonable opinion, this would cause the Custodian or its agents to be in breach
of the Rules or other applicable law, court order or regulation, the costs incurred would be excessive or delivery is impracticable for any reason. All insurance and transportation costs shall be for the account of the applicable Fund.
|
|
4.6
|
De-allocation:
Following receipt by the Custodian of notice for the withdrawal of Physical Gold from a Fund Allocated Account pursuant to
clause 4.1
,
the Custodian shall
de-allocate
sufficient Physical Gold from the Fund Allocated Account to credit the corresponding Fund Unallocated Account in the amount required. The Trust acknowledges that the process of
de-allocation
of Physical Gold for withdrawal and/or credit to the Fund Unallocated Account may involve minimal adjustments to the weight of Physical Gold to be withdrawn to adjust such weight to the whole bars
available.
|
|
4.7
|
Risk:
Where there is a shipment from the Custodian of Physical Gold, all right, title and risk in and to such Physical Gold shall pass at the Point of Delivery to the relevant person for whose account the
Physical Gold is being delivered.
|
|
5.1
|
Giving of Instructions:
Only the Trust, on behalf of the applicable Fund, acting through its authorised representatives, shall have the right to give instructions in respect of a Fund Allocated Account. The
Trust shall notify the Custodian in writing of the names of the people who are authorised to give instructions on a Fund’s behalf (the “
Authorised Representatives
”). Until the Custodian receives written notice to the contrary,
the Custodian is entitled to assume that any of those people have full and unrestricted power to give instructions on a Fund’s behalf. The Custodian is also entitled to rely on any instructions which are from, or which purport to emanate from,
any person who appears to have such authority. The Custodian reserves the right to obtain further validation of any instructions.
|
|
5.2
|
Transfer Instructions:
All transfers into and out of a Fund Allocated Account shall be made upon receipt of, and in accordance with, instructions given by the Trust to the Custodian. Such instructions shall be
given through the Phoenix Portal or by authenticated SWIFT message or, if for any reason the SWIFT messaging system is not operational, by such other temporary means as the Trust and the Custodian may agree from time to time. Other information
(which shall not constitute an instruction) related to transfers into and out of a Fund Unallocated Account may be sent between the Trust and the Custodian by email or by such other means as the Trust and the Custodian may agree from time to time.
Any such communication shall be deemed to have been given, made or served upon actual receipt by the recipient.
|
|
5.3
|
Account Not to be Overdrawn:
Except as otherwise specifically provided herein, a Fund Allocated Account may not at any time have a debit balance thereon, and no instruction shall be valid to the extent that
the effect thereof would be for the Fund Allocated Account to have a debit balance thereon.
|
7
|
5.4
|
Amendments:
Once given, instructions continue in full force and effect until they are cancelled, amended or suspended. Any communication that cancels, amends or suspends as instruction shall be valid only after
actual receipt by the Custodian in accordance with
clause 5.2
.
|
|
5.5
|
Unclear or Ambiguous Instructions:
If, in the Custodian’s opinion, any instructions are unclear or ambiguous, the Custodian shall use reasonable endeavours (taking into account any relevant time constraints)
to obtain clarification of those instructions from the Trust and, failing that, the Custodian may in its absolute discretion and without any liability on its part, act upon what the Custodian believes in good faith such instructions to be or refuse
to take any action or execute such instructions until any ambiguity or conflict has been resolved to the Custodian’s reasonable satisfaction.
|
|
5.6
|
Refusal to Execute:
The Custodian may refuse to execute instructions if in its reasonable opinion they are or may be, or require action which is or may be, contrary to the Rules or any applicable law.
|
|
6.
|
CONFIDENTIALITY AND DATA SECURITY
|
|
6.1
|
Disclosure to Others:
Subject to
clause 6.2
, each party shall respect the confidentiality of information acquired under this Agreement and neither will, without the consent of the other party, disclose to
any other person any transaction or other information acquired about the other party, its business or the Trust under this Agreement, provided that such other party has made clear, at or before the time such information is provided, that such
information is being provided on a confidential basis (hereinafter referred to as “Confidential Information”). Notwithstanding anything to the contrary in this Agreement, to the extent required, a copy of this Agreement may be filed under
the securities laws of the United States or any other jurisdiction in connection with the registration of the public offering of Shares by the Trust.
|
|
6.2
|
Permitted Disclosures:
Each party accepts that from time to time the other party may be required by law or the Rules, or required or requested by a government department or agency, fiscal body or regulatory or
listing authority, required by the LPMCL (
e.g.,
in connection with AURUM), or required as otherwise may be necessary in conducting the Trust’s business, to disclose this Agreement or Confidential Information acquired under this
Agreement. In addition, the disclosure of such information may be required by a party’s auditors, by its legal or other advisors, by a company which is in the same group of companies as a party
(i.e.,
a subsidiary or holding company of a
party) or (in the case of the Trust) by the Sponsor, or any beneficiary of the Trust. Subject to the agreement of the party to which information is disclosed to maintain it in confidence in accordance with
clause 6.1
, each party irrevocably
authorizes such persons to make such disclosures without further reference to such party. The obligations of each party under
clause 6.1
will not apply to any Confidential Information that: (a) was known to the receiving party prior to
the date of this Agreement other than as a result of disclosure under any other agreement between the parties, (b) is or becomes generally available to the public through means other than an unauthorized disclosure by the receiving party,
(c) was or subsequently is disclosed to the receiving party by a third party having a bona fide right to disclose such Confidential Information without breaching any obligation to the disclosing party, or (d) is developed by the receiving
party independently of information disclosed by the disclosing party.
|
8
|
6.3
|
Permitted Disclosures to LPMCL and/or Other Clearing Members:
The Trust acknowledges that, the Custodian is a member of the LPMCL, and that from time to time in carrying out its duties and obligations under this
Agreement, it may be necessary for the Custodian to disclose to LPMCL and/or other clearing members, details of deposits and/or withdrawals undertaken or to be undertaken on the Trust’s behalf pursuant to the terms of this Agreement, the
Trust’s account details and certain other information in order to act in accordance with the Trust’s notices hereunder. Such disclosures may be made by the Custodian for the purposes set out in this
clause 6.3
.
|
|
6.4
|
Data Security:
The Custodian shall implement administrative, physical and technical safeguards to protect Confidential Information under this Agreement consistent with applicable industry standards. The Custodian
hereby confirms that the information technology resources used for administering the Allocated Account are located within the territory of the United Kingdom and that it shall seek the prior written consent of the Trust in the event that such
resources are located outside of the United Kingdom or the European Union.
|
|
7.1
|
Appointment:
The Trust hereby appoints the Custodian to act as custodian of the Physical Gold held in a Fund Allocated Account in accordance with this Agreement and any Rules which apply to the Custodian, and the
Custodian hereby accepts such appointment.
|
|
7.2
|
Segregation of Physical Gold:
The Custodian will be responsible for the safekeeping of
the Physical Gold on the terms and conditions of this Agreement. The Custodian will segregate the Physical Gold from
any Physical Gold which the Custodian owns or holds for others by making appropriate entries in its books and records and will require each
Sub-Custodian
to segregate the Physical Gold from any Physical Gold
which they own or hold for others by making appropriate entries in their books and records. Entries on the Custodian’s books and records to identify Physical Gold will refer to each bar of Physical Gold by refiner, assay, serial number and
gross and fine weight. Additionally, the Custodian will require each
Sub-Custodian
to identify on its books and records each bar of Physical Gold held by them by refiner, assay, serial number and gross and
fine weight and to provide such information to the Trust in accordance with Schedule B. Under current LBMA market practices, the weight lists provided to the Custodian by
Sub-Custodians
identify each bar of
Physical Gold held for the Custodian for the benefit of the Trust by refiner, assay, serial number and gross and fine weight and by any other marks required for the identification of a bar of Physical Gold under the Rules.
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9
|
7.3
|
Ownership of Physical Gold
: The Custodian will identify in its books and records that the Physical Gold is being held for the applicable Fund, and will require each
Sub-Custodian
to identify on its books and records that the Physical Gold is being held for the Custodian for the benefit of the applicable Fund. The Custodian shall ensure that the Physical Gold belonging to
a Fund shall at all times be free and clear of all liens and encumbrances and shall not be subject to any right, charge, security interest, lien or claim of any kind, whether arising by operation of law or otherwise, in favor of the Custodian, any
Sub-Custodian
or any creditor of any of them or any other person. The Custodian shall not loan, hypothecate, pledge or otherwise encumber any Physical Gold held in a Fund Allocated Account absent the Trust’s
written instructions to the contrary.
|
|
7.4
|
Location of Physical Gold:
Unless otherwise agreed between the parties, Physical Gold must be held by the Custodian at its London vault premises or, when Physical Gold has been allocated to a
Sub-Custodian
employed by the Custodian on a temporary basis pursuant to
clause 8.1,
in such
Sub-Custodian’s
London vault. The Custodian agrees that it shall use,
or where applicable procure any
Sub-Custodian
to use, commercially reasonable efforts promptly to transport any Physical Gold held for the Trust to its London vault premises at the Custodian’s cost and
risk. The Custodian agrees that all delivery and packing shall be in accordance with the Rules and LBMA good market practices.
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|
7.5
|
Replacement of Gold:
Upon a determination by the Custodian that any Physical Gold credited to a Fund Allocated Account does not comply with the Rules, the Custodian shall as soon as practical replace such
Physical Gold with Physical Gold which complies with the Rules by (i) debiting the Fund Allocated Account and crediting the Fund Unallocated Account with the requisite amount of Physical Gold to be replaced, (ii) providing replacement
Physical Gold which complies with the Rules and which is of an amount that approximates the amount of Physical Gold to be replaced as closely as practical and (iii) debiting the Fund Unallocated Account and crediting the Fund Allocated Account
with the requisite amount of replacement Physical Gold. The Custodian shall not start the foregoing replacement process on a particular London Business Day unless it is reasonably sure that such replacement process can be started and completed in
the same London Business Day. The Custodian shall notify the Trust in accordance with the requirements under Schedule B when (i) the Custodian has determined that Physical Gold credited to the Fund Allocated Account does not comply with the
Rules and will be replaced and (ii) when replacement Physical Gold has been credited to the Fund Allocated Account in accordance with the above instructions. The cost and risk of any such replacement shall be borne by the Custodian.
|
(i) The Custodian may employ
Sub-Custodians
solely for the temporary custody and safekeeping of Physical Gold until transported to the Custodian’s London vault premises as provided in
clause 7.4
. The
Sub-Custodians
the Custodian selects may themselves select
sub-custodians
to provide such temporary custody and safekeeping of Physical Gold (each an “
Indirect
Sub-Custodian
”), but such
sub-custodians
shall not by such selection or otherwise be, or be considered to be, a
Sub-Custodian
as such term is used herein.
10
(ii) The Custodian will use reasonable care in selecting any
Sub-Custodian
and will only use an LPMCL approved delivery location. In selecting any
Sub-Custodian
with reasonable care, the Custodian is to determine if such
Sub-Custodian
can reasonably be expected to operate in a reasonable and prudent manner and in compliance with the Rules and all other relevant laws, rules and regulations applicable to its services as a
sub-custodian
of Gold.
(iii) As of the date of this Agreement, the
Sub-Custodians
that the Custodian may use for the purposes of this Agreement are: Bank of England, Brink’s Limited, G4S Cash Solutions (UK) Limited, HSBC Bank plc, JP Morgan Chase, Malca-Amit Commodities
Ltd and Loomis International (UK) Ltd.
(iv) The Custodian will notify each of the Trust and the Sponsor within two Business Days
(i) of the name and address of any new
Sub-Custodian
(i.e. in addition to those referred to in (iii) above or previously notified pursuant to this
clause 8.1(iv
)) to be used by the Custodian
for the purposes of this Agreement, or (ii) if it terminates its relationship with any
Sub-Custodian
that it uses for the purposes of this Agreement. The Custodian will otherwise provide the reports set
forth on Schedule B with respect to
Sub-Custodians
and any Indirect
Sub-Custodians.
(v) The receipt of notice by each of the Trust and the Sponsor that the Custodian has selected a
Sub-Custodian
shall not be deemed to limit the Custodian’s responsibility in selecting such
Sub-Custodian.
|
8.2
|
Liability:
Except for the Custodian’s obligations under
clauses 2.7, 7.2
,
7.3
and
7.4
, the Custodian shall not be liable in contract, tort or otherwise for any loss, damage or expense
arising directly or indirectly from an act or omission, or insolvency, of any
Sub-Custodian
or any further delegate of such
Sub-Custodian
unless the appointment of that
Sub-Custodian
was made by the Custodian fraudulently, negligently or in bad faith.
|
|
8.3
|
Notice:
The Custodian will provide the Trust upon request with the name and address of any
Sub-Custodian
the Custodian selects and Indirect
Sub-Custodian
selected or used by such
Sub-Custodian,
along with any other information which the Trust may reasonably request concerning the appointment of such
Sub-Custodian
or such Indirect
Sub-Custodian.
|
|
8.4
|
Monitoring:
The Custodian shall monitor the conduct of each
Sub-Custodian
and, where it is legally permissible for it to do so, promptly advise the Trust of any
difficulties or problems (financial, operational, or otherwise) existing with respect to such
Sub-Custodian
of which it is aware and will take appropriate and lawful action to protect and safekeep the
Trust’s Physical Gold deposited with such
Sub-Custodian,
including to the extent feasible, the withdrawal of such Physical Gold from such
Sub-Custodian.
|
11
|
9.1
|
Each party represents and warrants to the other party, on the basis that each of its following representations and warranties is deemed repeated each time that a notice is given for the deposit or withdrawal of
Physical Gold under this Agreement, that:
|
|
|
(a)
|
it is duly constituted and validly existing under the laws of its jurisdiction of constitution;
|
|
|
(b)
|
it has all necessary authority, powers, consents, licences and authorizations and has taken all necessary action to enable it lawfully to enter into and perform its duties and obligations under this Agreement;
|
|
|
(c)
|
the person or persons entering into this Agreement on its behalf has or have been duly authorized to do so; and
|
|
|
(d)
|
this Agreement and the obligations created under it are binding upon it and enforceable against it in accordance with the terms of this Agreement (subject to applicable principles of equity) and do not and will not
violate the terms of the Rules, any applicable laws or any order, charge or agreement by which it is bound.
|
|
9.2
|
The Custodian represents and warrants to the Trust, on the basis that each of its following representations and warranties is deemed repeated each time that a notice is given for the deposit or withdrawal of
Physical Gold under this Agreement, that:
|
|
|
(a)
|
it is a bank, duly organized under the laws of its country of organization as set forth above, and is regulated as such by that country’s government or any agency thereof; and
|
|
|
(b)
|
it is a member of the LBMA.
|
|
10.1
|
Fees:
For the Custodian’s services under this Agreement, the Custodian and the Sponsor have entered into a separate agreement, to which the Custodian has agreed, under which the Sponsor shall pay the
Custodian’s fee for services under this Agreement.
|
|
10.2
|
Expenses:
Pursuant to a separate written agreement between the Sponsor and the Custodian, to which the
Custodian has agreed, the Sponsor shall pay to the Custodian on demand all costs, charges and expenses (excluding (i) any relevant taxes and VAT (if chargeable), duties and other governmental charges, (ii) fees for storage of the Physical
Gold and any fees and expenses of
Sub-Custodians,
which will be recovered under
clause 10.1
, and (iii) indemnification obligations of a Fund under
clause 11.5,
which will be paid pursuant to
the following sentence) incurred by the Custodian in connection with the performance of its duties and obligations under this Agreement or otherwise in connection with the Physical Gold. A Fund will procure payment on demand, solely from and to the
extent of the assets of the Fund, of any other costs,
|
12
|
|
charges and expenses not assumed by the Sponsor under its agreement with the Custodian referenced in this
clause 10.2
(including any relevant taxes (other than VAT, which is addressed in
clause 13.1
), duties, other governmental charges and indemnification claims of the Custodian payable by the Fund pursuant to
clause 11.5
, but excluding fees for storage of the Physical Gold and any fees and expenses of
Sub-Custodians,
which will be recovered under
clause 10.1
) incurred by the Custodian in connection with the Physical Gold.
|
|
10.3
|
Credit Balances:
No interest or other amount will be paid by the Custodian on any credit balance on a Fund Allocated Account.
|
|
10.4
|
No Recovery from a Fund:
Amounts payable pursuant to this
clause 10
(including
clause 10.5
) shall not be debited from a Fund Allocated Account, but shall be payable, as applicable, by the
Sponsor or by the Trust on behalf of the Fund, and the Custodian hereby acknowledges that it will have no recourse against Physical Gold standing to the credit of the Fund Allocated Account or to the Trust in respect of any such amounts.
|
|
10.5
|
Default Interest:
If the Trust or the Sponsor, as applicable, fails to procure payment to the Custodian of any amount when it is due, the Custodian reserves the right to charge the relevant party interest (both
before and after any judgment) on any such unpaid amount calculated at a rate equal to 1% above the overnight London Interbank Offered Rate (LIBOR) (or, if LIBOR is discontinued, an industry accepted replacement rate for LIBOR) for the currency in
which the amount is due. Interest will accrue on a daily basis and will be due and payable by the relevant party as a separate debt.
|
|
11.
|
SCOPE OF RESPONSIBILITY
|
|
11.1
|
Exclusion of Liability:
The Custodian will use reasonable care in the performance of its duties under this Agreement and will only be responsible for any loss or damage suffered by a Fund as a direct result of
any negligence, fraud or willful default on its part in the performance of its duties, and in which case its liability will not exceed the market value of the Gold credited to the Fund Unallocated Account and the Fund Allocated Account at the time
such negligence, fraud or willful default is either discovered by or notified to the Custodian (such market value calculated using the nearest available LBMA Gold Price PM following the occurrence of such negligence, fraud or willful default),
provided that, in the case of such discovery by or notification to the Custodian, the Custodian notifies the Sponsor and the Trust promptly after any discovery of such negligence, fraud or willful default. If the Custodian delivers from a Fund
Allocated Account Gold that is not of the fine weight the Custodian has represented to the Fund or that is not in accordance with the Rules, recovery by the Fund, to the extent such recovery is otherwise allowed, shall not be barred by any delay in
asserting a claim because of the failure to discover the corresponding loss or damage regardless of whether such loss or damage could or should have been discovered.
|
|
11.2
|
No Duty or Obligation:
The Custodian is under no duty or obligation to make or take, or require any
Sub-Custodian
to make or take, any special arrangements or precautions
beyond those required by the Rules or as specifically set forth in this Agreement.
|
13
|
11.3
|
Insurance:
The Custodian (or one of its Affiliates) shall make such insurance arrangements from time to time in connection with the storage of the Trust’s Precious Metal under this Agreement as the Custodian
considers appropriate and will be responsible for all costs, fees and expenses (including any relevant taxes) in relation to such insurance policy or policies. The Custodian shall provide the Trust with a evidence of the Custodian’s insurance
upon execution of this Agreement and, at the Trust’s request, within 10 Business Days following the end of the calendar year. Additionally, the Custodian will allow the Trust and the Sponsor, upon 10 Business Days’ prior written notice, to
review such insurance in connection with the preparation of any registration statement under the United States Securities Act of 1933, as amended, covering any Shares, or any amendment thereto. Any permission to review the Custodian’s insurance
is limited to the term of this Agreement and is conditioned on the reviewing party executing a form of confidentiality agreement provided by the Custodian, or if the confidentiality agreement is already in force, acknowledging that the review is
subject thereto. In the event of a reduction, cancellation or
non-renewal
of the Custodian’s insurance, or a change in the provider of the Custodian’s insurance, the Custodian will give the Trust and
the Sponsor written notice of any such event within no more than 10 Business Days after the date of any such event.
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|
11.4
|
Force Majeure:
The Custodian shall not be liable for any delay in performance, or for the
non-performance,
of any of its obligations under this Agreement by reason of any
cause beyond the Custodian’s reasonable control. This includes any act of God or war or terrorism, any breakdown, malfunction or failure of, or connected with, any communication, computer, transmission, clearing or settlement facilities,
industrial action, or acts, rules and regulations of any governmental or supra national bodies or authorities or any relevant regulatory or self-regulatory organization.
|
|
11.5
|
Indemnity:
Each Fund, solely from and to the extent of the assets of that Fund, shall indemnify and keep indemnified the Custodian (on an after tax basis) on demand against all costs and expenses, damages,
liabilities and losses (other than VAT, which is addressed in
clause 13.1
) and the expenses assumed by the Sponsor under its agreement with the Custodian referenced in
clause 10.2
) which the Custodian may suffer or incur, directly or
indirectly in connection with services provided to the Fund under this Agreement, except to the extent that such sums are due directly to the negligence, willful default or fraud of the Custodian. The foregoing indemnity shall also not apply to the
Custodians’ fees that are paid by the Sponsor pursuant to
clause 10.1
.
|
|
11.6
|
Trust Liability:
This Agreement is executed by or on behalf of the Trust with respect to each of the Funds and the obligations hereunder are not binding upon any of the trustees, officers or shareholders of the
Trust individually. Separate and distinct records are maintained for each Fund and the assets associated with any such Fund are held and accounted for separately from the other assets of the Trust, or any other Fund of the Trust. The Custodian
acknowledges that the Custodian is not entitled to use the assets of a particular Fund to discharge the debts, liabilities, obligations and expenses incurred, contracted for, or otherwise existing with respect to the Trust generally or any other
Fund, and none of the debts, liabilities, obligations and expenses incurred, contracted for, or otherwise existing with respect to the Trust generally or any such other Fund shall be enforceable against the assets of that particular Fund. The
Trust’s Declaration of Trust is on file with the Trust.
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14
|
11.7
|
Custodian’s Interests and Affiliates’ Interests:
The Custodian has the right, without notifying the Trustee, to act upon the Trust’s instructions or to take any other action permitted by the terms
of this Agreement where:
|
|
|
(a)
|
the Custodian, directly or indirectly, has a routine business interest in the consequences of such instruction or action;
|
|
|
(b)
|
except as otherwise provided in this Agreement, the Custodian processes the Trust’s instructions on an aggregated basis together with similar instructions from other clients; or
|
|
|
(c)
|
the Custodian, except as otherwise provided in this Agreement, has a relationship with another party which does or may create a conflict with its duty to a Fund or the Trust including (without prejudice) circumstances
where the Custodian or any of its associates may (i) act as financial adviser, banker or otherwise provide services to a contract counterparty of a Fund or the Trust; (ii) act in the same arrangement as agent for more than one client; or
(iii) earn profits from any of the activities listed herein.
|
The Custodian or any of its divisions, branches or
Affiliates may be in possession of information tending to show that the action required by a Fund’s instructions may not be in the Fund’s best interests, but shall not have any duty to disclose any such information.
|
12.1
|
Notice:
Any termination notice given by the Trust, on behalf of a Fund under
clause 12.2
must specify:
|
|
|
(a)
|
the date on which the termination will take effect;
|
|
|
(b)
|
the person to whom the Physical Gold is to be transferred; and
|
|
|
(c)
|
all other necessary arrangements for the transfer of Physical Gold to the order of the Fund.
|
|
12.2
|
Term:
This Agreement shall have a fixed term up to and including 4 (four) years and will automatically renew for further successive terms of 1 (one) year thereafter unless terminated by the parties in
accordance with this
clause 12
; provided that
during such periods (i) either the Trust, on behalf of one or more Funds, or the Custodian may terminate this Agreement for any reason or for no reason by giving not less than 90
days’ written notice to the other party and (ii) this Agreement may be terminated immediately upon written notice as follows:
|
15
|
|
(a)
|
by the Trust, if the Custodian ceases to offer the services contemplated by this Agreement to its clients or proposes to withdraw from the gold bullion business;
|
|
|
(b)
|
by the Trust or the Custodian, if it becomes unlawful for the Custodian to be a party to this Agreement or to offer its services to the Trust on the terms contemplated by this Agreement or if it becomes unlawful for a
Fund or the Trust to receive such services or for the Trust to be a party to this Agreement;
|
|
|
(c)
|
by the Custodian, if there is any event which, in the Custodian’s reasonable view, indicates the Trust’s or the Sponsor’s insolvency or impending insolvency;
|
|
|
(d)
|
by the Trust, if there is any event which, in the Sponsor’s reasonable view, indicates the Custodian’s or the Sponsor’s insolvency or impending insolvency;
|
|
|
(e)
|
by the Trust, with respect to one or more Funds if a Fund or the Trust is to be terminated; or
|
|
|
(f)
|
by the Trust or by the Custodian, if the Unallocated Gold Account Agreement ceases to be in full force and effect at any time.
|
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12.3
|
Change in the Sponsor
: If there is any change in the identity of the Sponsor, then the Custodian, the Sponsor and the Trust shall, subject to the last sentence of this
clause 12.3
, execute such documents
and shall take such actions as the new Sponsor and the outgoing Sponsor may reasonably require for the purpose of vesting in the new Sponsor the rights and obligations of the outgoing Sponsor, and releasing the outgoing Sponsor from its future
obligations under this Agreement. The Custodian’s obligations under this
clause 12.3
shall be conditioned on the Custodian having conducted due diligence in accordance with its internal procedures to the Custodian’s reasonable
satisfaction on any such new Sponsor
|
|
12.4
|
Redelivery Arrangements:
If the Trust does not make arrangements acceptable to the Custodian for the delivery of the Physical Gold, the Custodian may continue to maintain the applicable Fund Allocated Account, in
which case the Custodian will continue to charge the fees and expenses payable under
clause 10
. If the Trust has not made arrangements acceptable to the Custodian for the transfer of Physical Gold from a Fund Allocated Account within 6 months
of the date specified in the termination notice as the date on which the termination will take effect, the Custodian will be entitled to close the Fund Allocated Account and sell the Physical Gold (at such time and on such markets as the Custodian
considers appropriate) and account to the Fund for the proceeds.
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|
12.5
|
Effect of Termination; Existing Rights:
Termination of this Agreement with respect to the coverage of any one Fund shall in no way affect the rights and duties under this Agreement with respect to any other Fund.
Termination shall not affect rights and obligations then outstanding under this Agreement which shall continue to be governed by this Agreement until all obligations have been fully performed.
|
16
VAT Inclusive:
All sums payable or other consideration provided to the Custodian
by the Trust or the Sponsor in connection with this Agreement and the Unallocated Gold Account Agreement (including pursuant to the separate agreement referred to in
clause 10.1
of this Agreement) shall be deemed to be inclusive of VAT.
|
14.1
|
Notices:
Except as provided in
clauses 2.4
,
5.2
and
16.5
, any notice or other communication shall be delivered personally or sent by first class post,
pre-paid
recorded delivery (or air mail if overseas), authenticated electronic transmission (including email and SWIFT) or such other electronic transmission as the parties may from time to time agree, to the
party due to receive the notice or communication, at its address, number or destination set out in
clause 14.3
or another address, number or destination specified by that party by written notice to the other.
|
|
14.2
|
Deemed Receipt of Notice:
A notice or other communication under or in connection with
clause 14.1
will be deemed received only if actually received or delivered.
|
|
14.3
|
Contact Information
: The contact information of the parties for the purposes of
clauses 5.2
and
14.1
is:
|
|
|
|
|
|
|
|
The Custodian:
ICBC Standard Bank Plc
20 Gresham Street
London
EC2V 7JE
Attention: Precious Metals Operations
E-mail:
London.PreciousMetalsOperations@icbcstandard.com
and
Bullion.Physical@icbcstandard.com
The Trust:
World Gold Trust
c/o WGC USA Management Company, LLC
685 Third Avenue, 27th Floor
New York, NY 10017
Attention: General Counsel
Facsimile:
212-688-0410
Telephone:
212-317-3800
|
|
|
|
The contact information of the Sponsor for purposes of receiving notices under this Agreement is:
|
|
|
|
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|
|
The Sponsor:
|
17
|
|
|
|
|
|
|
WGC USA Management Company, LLC
685
Third Avenue, 27th Floor
New York, NY 10017
Attention:
Managing Director, Investment
Facsimile:
212-688-0410
Telephone:
212-317-3800
E-Mail:
Greg.Collett@gold.org
|
|
14.4
|
Recording of Calls:
The Custodian and the Trust may each record telephone conversations without use of a warning tone. Such recordings will be the recording party’s sole property and accepted by the other
party hereto as evidence of the orders or instructions that are permitted to be given orally under this Agreement, provided that (i) in case of any dispute or disagreement regarding any conversation so recorded the recording party will promptly
share the recordings with the other party and its representatives and (ii) the recording party will have no obligation to retain any such recordings prior to becoming aware of any such dispute or disagreement.
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|
15.1
|
Amendment of Schedules:
The name of any Fund listed on Schedule A may be changed by the Sponsor without amendment to this Agreement provided that the Trust shall notify the Custodian promptly upon, and provide
the Custodian with documentary evidence of, any such name change. Additional series of the Trust (each a “
New Fund
”) may from time to time become parties to this Agreement by (a) delivery to the Custodian of (i) an
instrument of adherence agreeing to become bound by and party to this Agreement executed by the Trust on behalf of such New Fund, and (ii) an amendment and restatement of Schedule A setting forth the New Fund, and (b) upon receipt of the
foregoing documents, the Custodian may agree in writing to the addition of such New Fund, which agreement shall not be unreasonably withheld.
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|
15.2
|
No Advice:
The Custodian’s duties and obligations under this Agreement do not include providing the other party with investment advice. In asking the Custodian to open and maintain a Fund Allocated Account,
the Trust acknowledges that the Custodian shall not owe to a Fund or the Trust any duty to exercise any judgement on its behalf as to the merits or suitability of any deposits into, or withdrawals from, the Fund Allocated Account.
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|
15.3
|
Rights and Remedies
: The Custodian hereby waives any right it has or may hereafter acquire to combine, consolidate or merge the Metal Accounts with any other account of the Trust or a Fund or to set off any
liabilities of the Trust or a Fund to the Custodian and agrees that it may not set off, transfer or combine or withhold payment of any sum standing to the credit or to be credited to the Metal Accounts in or towards or conditionally upon
satisfaction of any liabilities to it of the Trust or a Fund. Subject thereto, the Custodian’s rights under this Agreement are in addition to, and independent of, any other rights which the Custodian may have at any time in relation to the
Metal Accounts.
|
18
|
15.4
|
Business Day
: If an obligation of a party would otherwise be due to be performed on a day which is not a New York Business Day or a London Business Day, as the case may be, in respect of a Fund Allocated Account,
such obligation shall be due to be performed on the next succeeding New York Business Day or London Business Day, as the case may be, in respect of the Fund Allocated Account.
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|
15.5
|
Assignment:
This Agreement is for the benefit of and binding upon both the Custodian and the Trust and their respective successors and assigns. Save as expressly provided in
clause 12.3
and this
clause
15.5
, no party may assign, transfer or encumber, or purport to assign, transfer or encumber, any right or obligation under this Agreement unless the other party otherwise consents in writing. This clause shall not restrict the Custodian’s
power to merge or consolidate with any party, or to dispose of all or part of its custody business, and further provided that this clause shall not restrict the Trust from assigning its rights hereunder to a Shareholder to the extent required for
the Trust to fulfill its obligations.
|
|
15.6
|
Amendments:
Any amendment to this Agreement must be agreed in writing and be signed by the Trust and the Custodian. Unless otherwise agreed, an amendment will not affect any legal rights or obligations which may
already have arisen.
|
|
15.7
|
Partial Invalidity:
If any of the clauses (or part of a clause) of this Agreement becomes invalid or unenforceable in any way under the Rules or any law, the validity of the remaining clauses (or part of a
clause) will not in any way be affected or impaired.
|
|
15.8
|
Liability:
Nothing in this Agreement shall exclude or limit any liability which cannot lawfully be excluded or limited (e.g. liability for personal injury or death caused by negligence).
|
|
15.9
|
Entire Agreement:
This agreement and the Unallocated Gold Account Agreement represent the entire agreement between the parties in respect of their subject matter. This Agreement and the Unallocated Gold Account
Agreement supersede and replace any prior existing agreement between the parties hereto relating to the same subject matter.
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|
15.10
|
Counterparts:
This Agreement may be executed in any number of counterparts, each of which when executed and delivered is an original, but all the counterparts together constitute the same agreement.
|
|
15.11
|
Compliance with Laws:
Each party undertakes that in the performance of this Agreement and transactions connected with this Agreement it shall comply with all applicable anti-bribery and anti-corruption laws,
sanctions, accounting and anti-money laundering legislation and shall maintain adequate and appropriate policies and procedures designed to ensure and which are reasonably expected to ensure continued compliance with such anti-bribery and
anti-corruption laws, sanctions, accounting and anti-money laundering legislation. Furthermore and in connection with the foregoing, the Trust undertakes to the Custodian that it has conducted appropriate due diligence on any recipient of Gold and
that the Trust will comply with any reasonable requests the Custodian may make from time to time for confirmation and evidence that the Trust has complied with its obligations pursuant to this
clause 15.11
(including in respect of Authorized
Participants, the Sponsor and Shareholders) and acknowledges that should it fail to do so the Custodian may terminate this Agreement immediately in accordance with the provisions of
clause 12.2(ii
) above.
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19
|
16.
|
GOVERNING LAW AND JURISDICTION
|
|
16.1
|
Governing Law:
This Agreement is governed by, and will be construed in accordance with, English law.
|
|
16.2
|
Jurisdiction:
The Trust and the Custodian agree that the courts of the State of New York, in the United States of America, and the United States federal court located in the Borough of Manhattan in such state,
are to have jurisdiction to settle any Disputes which may arise out of or in connection with this Agreement and, for these purposes the Trust and the Custodian irrevocably submits to the
non-exclusive
jurisdiction of such courts, waive any claim of forum non conveniens and any objection to laying of venue, and further waive any personal service.
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|
16.3
|
Waiver of Immunity:
To the extent that a party may in any jurisdiction claim any immunity from suit, judgment, enforcement or otherwise howsoever, such party agrees not to claim, and irrevocably waives, any such
immunity to which it would otherwise be entitled to (whether on grounds of sovereignty or otherwise) to the full extent permitted by the laws of such jurisdiction.
|
|
16.4
|
Third Party Rights:
Except with respect to the Sponsor, which shall be considered a beneficiary (as applicable) of
clauses
2.7, 2.8, 3.2, 4.3, 6.2, 8.1, 11.1, 11.3, 12.3, 14.3
, and
16.4
, the
Custodian does not owe any duty or obligation or have any liability towards any person who is not a party to this Agreement. Except as set forth in this
clause 16.4,
this Agreement does not confer a benefit on any person who is not a party to
it. The parties to this Agreement do not intend that any term of this Agreement shall be enforceable by any person who is not a party to it and do intend that the Contracts (Rights of Third Parties) 1999 Act shall not apply to this Agreement,
provided that the Sponsor may enforce its rights under clauses
2.7, 2.8, 3.2, 4.3, 6.2, 8.1, 11.1, 11.3, 12.3, 14.3
and
16.4
.
|
|
16.5
|
Service of Process:
Process by which any proceedings are begun may be served on a party by being delivered to the party’s address specified below. This does not affect any right to serve process in another
manner permitted by law.
|
|
|
|
|
|
|
|
Custodian’s Address for service of process:
ICBC Standard Bank Plc
20 Gresham Street
London
EC2V 7JE
Attention: The Head of Legal
Trust’s Address for service of process:
World Gold Trust
c/o WGC USA Management Company,
LLC
|
20
|
|
|
|
|
|
|
685 Third Avenue, 27th Floor
New York, NY
10017
Attention: General Counsel
Facsimile:
212-688-0410
Telephone:
212-317-3800
|
[Signature Page Follows]
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set out on the cover page of this
Agreement.
Signed on behalf of
ICBC STANDARD BANK PLC
By its authorized signatories
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Signature
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Signature
|
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|
Name
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|
Name
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|
Title
|
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|
Title
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Date
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Date
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|
Signed on behalf of
WORLD
GOLD TRUST
on behalf of its series set forth on Schedule A
By its authorized signatory
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Signature
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Name
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Title
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Date
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[Signature Page to Allocated Gold Account Agreement]
22
Schedule A
List of Funds
SPDR
®
Gold MiniShares Trust
1
Schedule B
Notices and Reports
The Custodian
shall provide the following notices and reports via email to fundops@gold.org or other electronic delivery as agreed upon:
|
|
(1)
|
For each London Business Day, by no later than 9:00 a.m. NY Time on the following London Business Day:
|
|
|
(a)
|
information (i) showing the increases and decreases to the Physical Gold standing to a Fund’s credit in the Fund’s Allocated Account and identifying separately each transaction and the New York or London
Business Day on which it occurred and (ii) identifying each individual bar of Physical Gold held in a Fund Allocated Account;
|
|
|
(b)
|
a notification of (i) each separate transaction, if any, transferring Gold to a Fund Allocated Account from the corresponding Fund Unallocated Account, (ii) the amount of Gold, if any, transferred from the
Fund Allocated Account to the corresponding Fund Unallocated Account, and (iii) the closing balance of Physical Gold held in a Fund Allocated Account for such London Business Day;
|
|
|
(c)
|
on the Phoenix Portal (or where the Phoenix Portal is not used or not available for any reason whatsoever, a pdf file sent by email), a list of all bars of Physical Gold held in a Fund’s Allocated Account, which
list shall be updated at least daily and include the following information for each bar of Physical Gold: (i) relevant vault location, (ii) gross weight, (iii) fineness, (iv) serial identification number, (v) size, (vi) fine
ounces, and (vii) applicable refinery name; and
|
|
|
(d)
|
such other information about the increases and decreases to the Gold standing to a Fund’s credit in the Fund Allocated Account on a same day basis at such other times and in such other form as the Trust and the
Custodian shall agree.
|
|
|
(2)
|
Written and telephonic notification to the Trust by no later than 2 (two) London Business Days after the Custodian’s discovery (or receipt of notification, as the case may be) of the occurrence of each of the
following events:
|
|
|
(a)
|
an error or reversal of an error in an entry to a Fund Allocated Account, including an error in an entry regarding the fineness or weight of Physical Gold in the Fund Allocated Account;
|
|
|
(b)
|
any failure of Physical Gold held for the benefit of the Trust to be in accordance with current LBMA market practices with regard to weight lists or refiner, assay, serial number and gross and fine weight and by any
other marks required for the identification of a bar of Physical Gold under the Rules, including without limitation the removal of a refiner from LBMA’s Good Delivery List for gold;
|
|
|
(c)
|
in the event any refiner of gold bars is removed from the LBMA’s Good Delivery List of accredited refiners, information regarding Physical Gold produced by such refiner and held for the benefit of the Fund or
Trust:
|
1
|
|
(i)
|
the name of such refiner; and
|
|
|
(ii)
|
information regarding the vault location, gross weight, fineness, serial ID number, size, and fine ounces regarding any such gold bars;
|
|
|
(d)
|
any difficulties or problems existing with respect to a
Sub-Custodian
(where legally permissible for the Custodian to provide such information); and
|
|
|
(e)
|
any failure or delay in the provision by the Custodian of any reports required to be provided by it under this Agreement, the cause for any such failure or delay (where it is legally permissible for it to provide this),
and the date (or, if unknown, the reasonably estimated date) by which any such report will be provided.
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|
|
(3)
|
Notification to the Trust of the following by no later than 2 (two) London Business Days after the occurrence of any of the following:
|
|
|
(a)
|
the name and address of any newly selected
Sub-Custodian
or any
Sub-Custodian
no longer used by the Custodian, in both cases for the
purposes of this Agreement;
|
|
|
(b)
|
the name of any Indirect
Sub-Custodian
newly selected or used, or no longer used, by any
Sub-Custodian,
in both cases for the purposes of
this Agreement; and
|
|
|
(c)
|
the amount of the Trust’s Physical Gold and length of time held at any
Sub-Custodian
required to be reported pursuant to item (a) above.
|
|
|
(4)
|
Within a reasonable time after the end of each calendar month a statement of account for each Fund Allocated Account which shall include the opening and closing monthly balance and all transfers to and from each Fund
Allocated Account, accompanied by one or more weight lists containing information sufficient to identify each bar of Physical Gold held in a Fund Allocated Account as of the last London Business Day of the calendar month and the party having
physical possession thereof, including any
Sub-Custodian
or any Indirect
Sub-Custodian.
|
|
|
(5)
|
Notification to the Trust, by no later than 10 (ten) London Business Days after the end of each calendar quarter and calendar year, stating the following:
|
|
|
(a)
|
the amount of assets held for the Trust by the Custodian and each
Sub-Custodian
or Indirect
Sub-Custodian
as of the end of the respective
calendar quarter; or
|
|
|
(b)
|
that the Trust has no such holdings as of the end of the respective calendar quarter.
|
2
Exhibit 10.2
Dated:
ICBC STANDARD
BANK PLC
and
WORLD GOLD TRUST
on
behalf of its series set forth on Schedule A hereto
FORM OF
UNALLOCATED GOLD ACCOUNT AGREEMENT
1
This
UNALLOCATED GOLD ACCOUNT AGREEMENT
(this “
Agreement
”) is made as of the date set out
on the cover page of this Agreement
BETWEEN
|
(1)
|
ICBC Standard Bank Plc
,
a public limited company incorporated under the laws of England and Wales with its registered office at 20 Gresham Street, London, EC2V 7JE, United Kingdom (the
“
Custodian”
); and
|
|
(2)
|
World Gold Trust,
a Delaware statutory trust organized in series having its principal office and place of business at 685 Third Avenue, 27
th
Floor, New York,
NY 10017 (the “
Trust
”).
|
INTRODUCTION
|
|
(1)
|
The Custodian has agreed to open and maintain an Unallocated Account for each series of the Trust listed on Schedule A hereto (each, a “
Fund
” and collectively, the “
Funds
”) and to
provide other services to the Funds in connection with the Unallocated Accounts.
|
|
|
(2)
|
An Authorized Participant may apply to become a Shareholder of a Fund by: (i) applying for Shares in accordance with an Authorized Participant Agreement and (ii) depositing the relevant amount of Gold into the
Fund Unallocated Account.
|
|
|
(3)
|
The Custodian has agreed to transfer Gold deposited into a Fund Unallocated Account to the corresponding Fund Allocated Account.
|
|
|
(4)
|
In order to effect redemptions of Shares of a Fund for Authorized Participants, Physical Gold must be transferred from the Fund Allocated Account to the Fund Unallocated Account by way of
de-allocation,
and must then be delivered to the AP Account.
|
|
|
(5)
|
The Trust has agreed that each Fund Unallocated Account will be established by the Trust for the account of the applicable Fund, and that the Trust will have the sole right to give instructions for the making of any
payments into or out of a Fund Unallocated Account.
|
IT IS AGREED AS FOLLOWS
|
|
1.1
|
Definitions:
In this Agreement, unless there is anything in the subject or context inconsistent therewith, the following expressions shall have the following meanings.
|
“
Affiliate
”
means an entity that directly or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with the Custodian.
2
“
Allocated Gold Account Agreement
” means the Allocated Gold Account Agreement
of even date herewith between the Trust and the Custodian pursuant to which each Fund’s Allocated Account is established and operated.
“
AP Account
” means a loco London Gold account maintained on an Unallocated Basis by the Custodian or a Gold clearing bank
approved by the LBMA for the Authorized Participant, as specified in the applicable transfer instructions given under
clause 5.2
.
“
AP Application
” means an offer by an Authorized Participant to a Fund (in the form prescribed by the Fund) to subscribe for
Shares, being an offer on terms referred to in the Fund’s Prospectus and in accordance with the provisions of the relevant Authorized Participant Agreement and the Conditions.
“
AP Redemption Form
” means an offer by an Authorized Participant to a Fund (in the form prescribed by the Fund) to redeem
Shares in exchange for Gold, being an offer on terms referred to in the Fund’s Prospectus and in accordance with the provisions of the relevant Authorized Participant Agreement and the Conditions.
“
Authorized Participant
” means a person which, at the time of submitting an order to a Fund for the creation or redemption of
Shares: (a) is a person who (i) is a registered broker-dealer or other securities market participant such as a bank or other financial institution which, but for an exclusion from registration, would be required to register as a
broker-dealer to engage in securities transactions, and (ii) is a participant in The Depository Trust Company or its successors; (b) has in effect a valid Authorized Participant Agreement and (c) has established an AP Account.
“
Authorized Participant Agreement
” means a written agreement between the Trust, the Sponsor and an Authorized Participant in
relation to Shares and, if such agreement is subject to conditions precedent, provided that such conditions have been satisfied.
“
AURUM
” means the electronic matching and settlement system operated by LPMCL.
“
Authorised Representatives
” has the meaning given to that expression in clause 5.1.
“
Availability Date
” means the London Business Day on which a Fund wishes the Custodian to credit to the Fund Unallocated
Account Gold to be transferred to the Fund Unallocated Account on such London Business Day.
3
“
Benchmark Price
” means, as of any day, (i) such day’s LBMA Gold
Price PM or the next most recent LBMA Gold Price PM if such day’s LBMA Gold Price PM is not available; or (ii) such other publicly available price which is reasonably available to the Trust and which the Trust may determine fairly
represents the commercial value of gold held by the Trust.
“
Conditions
” means the terms and conditions on and subject to
which Shares are issued in the form or substantially in the form set out in the Prospectus and the Authorized Participant Agreement.
“
Dispute”
means for the purpose of
clause 15
any disagreement between the Trust and the Custodian which has not been
resolved amicably within a period of fourteen London Business Days after the Trust has received from the Custodian, or the Custodian has received from the Trust, written notification of the disagreement.
“
Fund Allocated Account
” means the loco London Gold account established in the name of a Fund and maintained for the benefit
of the Fund by the Custodian on an allocated basis pursuant to the Allocated Gold Account Agreement.
“
Fund Unallocated
Account
” means the loco London Gold account established in the name of a Fund and maintained for the benefit of the Fund by the Custodian on an Unallocated Basis pursuant to this Agreement.
“
Gold
”
means (i) Physical Gold held by the Custodian or any
sub-custodian
under the Allocated Gold Account Agreement and/or (ii) any credit to an account, including a Fund Unallocated Account, on an Unallocated Basis, as the context requires.
“
LBMA
” means The London Bullion Market Association or its successors.
“
LBMA Gold Price AM
” means the price of a troy ounce of gold as determined by ICE Benchmark Administration, the third party
administrator of the London gold price selected by the LBMA, or any successor administrator of the London gold price, at or about 10:30 a.m. London, England time.
“
LBMA Gold Price PM
” means the price of a troy ounce of gold as determined by ICE Benchmark Administration, the third party
administrator of the London gold price selected by the LBMA, or any successor administrator of the London gold price, at or about 3:00 p.m. London, England time.
“
Loco London
” means with respect to an account holding Gold, the custody, trading or clearing of such Gold in London, United
Kingdom.
4
“
London
Business Day
” means a day (excluding Saturdays, Sundays and
public holidays) on which commercial banks generally are open for business in London and on which the London gold bullion market is open for business.
“
London Good Delivery Standards
” means the specifications for “good delivery” gold bars, including, without
limitation, the specifications for weight, dimensions, fineness (or purity), identifying marks and appearance of gold bars, set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the LBMA.
“
LPMCL
”
means London Precious Metals Clearing Limited or its successors.
“
Metal Accounts
” means a Fund Allocated Account and the corresponding Fund Unallocated Account.
“
New York Business Day
” means a day other than a day on which a Fund’s listing exchange is closed for regular trading.
“
Phoenix Portal
” means the Custodian’s electronic system which allows input of clearing instructions and viewing of
account balances, as it may be updated from time to time.
“
Physical Gold
”
means gold bullion that meets the
London Good Delivery Standards.
“
Prospectus
” means the prospectus constituting a part of the registration statement
filed with respect to a Fund with the Securities Exchange Commission in accordance with the U.S. Securities Act of 1933, as amended, in relation to the Fund’s Shares, as the same may be modified, supplemented or amended from time to time.
“
Rules
” means the rules, regulations, practices, procedures and customs of the LBMA, including the London Good Delivery
Standards, the LPMCL, the Financial Conduct Authority, the Prudential Regulation Authority, the Bank of England and such other regulatory authority or other body, applicable to the activities contemplated by this Agreement.
“
Shareholder
” means the beneficial owner of one or more Shares of a Fund.
“
Shares
” means the units of fractional undivided beneficial interest in a Fund which are issued by the Fund pursuant to its
Prospectus.
“
Sponsor
” means
WGC USA Asset Management Company, LLC
, its successors and assigns and any successor
Sponsor.
5
“
Unallocated Basis
” means, with respect to the holding of gold, that the holder
is entitled to receive delivery of Physical Gold in the amount standing to the credit of the holder’s account, but the holder has no ownership interest in any particular gold that the custodian maintaining that account owns or holds.
“
VAT
” means value added tax as provided for in the Value Added Tax Act 1994 (as amended or
re-enacted
from time to time) and legislation supplemental thereto and any other tax (whether imposed in the United Kingdom in substitution thereof or in addition thereto or elsewhere) of a similar fiscal
nature.
“
Withdrawal Date
” means the London Business Day on which a Fund wishes a withdrawal of Gold from the Fund
Unallocated Account to take place.
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1.2
|
Headings:
The headings in this Agreement do not affect its interpretation.
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1.3
|
Singular and plural:
References to the singular include the plural and vice versa.
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1.4
|
Construction:
The word “including” means “including without limitation”. The word “or” is not exclusive.
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2.1
|
Opening Unallocated Account:
The Custodian shall open and maintain a Fund Unallocated Account for each Fund.
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2.2
|
Denomination of Unallocated Account:
A Fund Unallocated Account will hold deposits of Gold and will be denominated in fine troy ounces (to three decimal places).
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2.3
|
Unallocated Account Reports:
The Custodian shall provide the Notices and Reports set forth on Schedule B hereto.
Such reports also will be made available to the Trust by means of the Phoenix Portal,
provided that, if the Phoenix Portal is unavailable for any reason, the Trust and the Custodian will agree upon a temporary notification system for making such reports available to the Trust. Unallocated holdings are available real time on the
Custodian’s Phoenix Portal.
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2.4
|
Reversal of Entries:
The Custodian shall reverse any provisional or erroneous entries to a Fund Unallocated Account which it discovers or of which it is notified with effect back-valued to the date upon which the
final or correct entry (or no entry) should have been made.
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2.5
|
Provision of Information:
Subject to clause 7.3, the Custodian agrees that it will forthwith notify the Trust in writing of any encumbrance of which it is aware is or is purported to have been
created over or in respect of a Fund Unallocated Account or any of the amounts standing to the credit thereof.
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6
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2.6
|
Access:
The Custodian will allow the Sponsor and the Trust and their identified representatives, independent public accountants and bullion auditors access to its premises, upon reasonable notice during
normal business hours, to examine the Gold and such records, as they may reasonably require to perform their respective duties with regard to investors in a Fund’s Shares. The Trust agrees that any such access shall be subject to execution of a
confidentiality agreement and agreement to the Custodian’s security procedures, and any such audit shall be at the applicable Fund’s expense.
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2.7
|
Regulatory Reporting:
To the extent that the Custodian’s activities under this Agreement are relevant to the preparation of the filings required of the Trust under the securities laws of the United States or
any other jurisdiction, the Custodian will, to the extent permitted by applicable law, the Rules or applicable regulatory authority, cooperate with the Trust and the Sponsor and the Trust’s and the Sponsor’s representatives to provide such
information concerning the Custodian’s activities as may be necessary for such filings to be completed. Additionally, to the extent that the Custodian’s activities or controls in its capacity as custodian of the Trust’s assets are
relevant to the information presented in the financial statements of the Trust, the Custodian will cooperate with the Sponsor and the Trust to assist the Sponsor in providing the required written assurances regarding the reliability of the internal
controls used in the preparation of such financial statements, including by providing the Sponsor’s and the Trust’s external auditors with any necessary information and reports regarding the Custodian’s internal controls over
financial reporting as far as such reporting relates to the scope of the Custodian’s duties.
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3.1
|
Procedure:
The Custodian shall receive deposits of Gold into a Fund Unallocated Account (in the manner and accompanied by such documentation as the Custodian may reasonably require) by:
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(a)
|
de-allocation
of Gold held in the corresponding Fund Allocated Account on redemption of Shares by an Authorized Participant; or
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(b)
|
transfer of Gold from an AP Account relating to the same kind of Gold and having the same denomination as that to which the Fund Unallocated Account relates in connection with an AP Application by an Authorized
Participant for Shares.
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No other methods of deposit are permitted.
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3.2
|
Notice Requirements:
Notice of intended deposit must be received by the Custodian from the Trust (or its
Authorised Representatives) no later than 3:00 p.m. (London time) one London Business Day prior to the Availability Date and specify the weight (in fine troy ounces of gold) to be credited to the applicable Fund Unallocated Account, the Availability
Date, the account from which such deposit will be transferred, and any other information which the Custodian may, with the agreement of the Trust, from time to time require. The Custodian will
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7
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promptly notify the Trust by email upon a deposit of Gold being made into the Fund Unallocated Account pursuant to
clause 3.1(b)
. When, by reference to the Trust’s notifications and
instructions to the Custodian, the Custodian reasonably believes an amount of Gold has been credited to a Fund Unallocated Account in error, the Custodian will notify the Trust promptly and, pending a joint resolution of the error, will treat such
amount as not being subject to the standing instruction in
clause 5.3
below.
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3.3
|
Right to Amend Procedure:
The Custodian may amend the procedure in relation to the deposit of Gold to a Fund Unallocated Account only where such amendment is caused by a change in the Rules, provided that the
Custodian shall, whenever practicable, notify the Trust and the Sponsor within a commercially reasonable time prior to the date on which the Custodian amends its procedures or imposes additional ones in relation to the transfer of Gold into a Fund
Unallocated Account, and in doing so the Custodian will consider the Trust’s needs to communicate any such change to Authorized Participants and others.
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4.1
|
Procedure:
The Trust, on behalf of the applicable Fund, may at any time give instructions to the Custodian for the withdrawal of Gold standing to the credit of a Fund Unallocated Account as provided for in
this Agreement, provided that
a withdrawal may be made only by:
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(a)
|
transfer to an AP Account relating to the same kind of Gold and having the same denomination as that to which the Fund Unallocated Account relates when Shares are to be redeemed by an Authorized Participant;
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(b)
|
transfer of Gold to the corresponding Fund Allocated Account; or
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(c)
|
the collection of Physical Gold from the Custodian at its vault premises, or such other location as the Custodian may direct;
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(d)
|
delivery of Gold to such location as the Trust directs, at the applicable Fund’s expense and risk; or
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(e)
|
transfer to an account maintained by the Custodian or by a third party on an Unallocated Basis in connection with the sale of Gold or other permitted transfers.
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The Trust anticipates exercising its rights under clauses 4.1(c) and (d) on an exceptional basis only. Any
Gold made available to the relevant person (as instructed by the Trust) pursuant to clauses 4.1(c) and (d) will be in a form which complies with the Rules or in such other form as may be agreed between the Trust and the Custodian the combined
fine weight of which will not exceed the number of fine ounces of Gold the Trust has instructed the Custodian to debit. To the extent that the Trust is authorized to sell Gold, the Custodian may, but is not required to, purchase such Gold; provided
that, if the Trust’s instruction to sell Gold is received by the Custodian by 2:00 p.m.
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8
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(London time) on a London Business Day, the purchase price for such Gold shall be that day’s Benchmark Price and, if the Trust’s instruction to sell Gold is received by the Custodian
after 2:00 p.m. (London time) on a London Business Day, the purchase price for such Gold shall be the next Benchmark Price available after that day. The Trust’s instruction to sell Gold may be an instruction to sell such amount of Gold as
necessary to produce a specified amount of United States dollars.
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4.2
|
Notice Requirements:
Any notice from the Trust, on behalf of a Fund, relating to a withdrawal of Gold must be in writing and:
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(a)
|
if it relates to a withdrawal pursuant to
clauses 4.1(a)
, to be in such form as may be agreed by the parties from time to time, and in all cases be received by the Custodian no later than 3:00 p.m. (London time)
on the Withdrawal Date unless otherwise agreed;
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(b)
|
if it relates to a transfer pursuant to
clause 4.1(b)
, be in the form of an AP Application (which shall be sufficient instruction for the purposes of this Agreement) and be received by the Custodian no later than
3:00 p.m. (London time) on the day which is one London Business Day prior to the Withdrawal Date,
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(c)
|
if it relates to a withdrawal pursuant to clause 4.1(c), (d) or (e) (with respect to transfers (other than for sales of Gold), be received by the Custodian no later than 11:30 a.m. (London time) not less than two London
Business Days prior to the Withdrawal Date unless otherwise agreed and specify the name of the person or carrier that will collect the Gold from the Custodian or the identity of the person to whom delivery is to be made, as the case may be;
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and in all cases, specify the weight (in fine troy ounces of gold) of the Gold to be debited from the Fund Unallocated
Account, the Withdrawal Date and any other information which the Custodian may, with the agreement of the Trust, from time to time require.
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4.3
|
Right to Amend Procedure:
The Custodian may amend the procedure for the withdrawal of Gold from a Fund Unallocated Account only where such amendment is caused by a change in the Rules. Any such amendment will be
subject to the notification conditions of
clause 3.3
.
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4.4
|
Allocation:
Without limiting
clause 5.3
, in the case of a transfer under
clause 4.1(b)
and after receipt of notice given in the form prescribed in
clause 4.2(b)
, the Custodian will use its commercially reasonable endeavours to complete the allocation of such deposits of Gold by not later than 3:00 p.m. (London time) on the
Withdrawal Date provided that the Gold referenced in such notice is deposited into a Fund Unallocated Account by 10:00 a.m. (London time) on the
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9
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Withdrawal Date, and the Custodian will promptly notify the Trust by email upon the completion of such allocation. Following the Custodian’s receipt of such notice, the Custodian shall
identify bars of a weight most closely approximating, but not exceeding, the balance in the Fund Unallocated Account and shall transfer such weight from the Fund Unallocated Account to the corresponding Fund Allocated Account. The Trust acknowledges
that the process of allocation of Gold to the Fund Allocated Account from the Fund Unallocated Account may involve minimal adjustments to the weights of Gold to be allocated to adjust such weight to the number of whole bars available.
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5.1
|
Giving of Instructions:
Only the Trust, on behalf of the applicable Fund, acting through its Authorised Representatives, shall have the right to give instructions in respect of a Fund Unallocated Account.
The Trust shall notify the Custodian in writing of the names of the people who are authorised to give instructions on a Fund’s behalf (the “
Authorised Representatives
”). Until the Custodian receives written notice to the
contrary, the Custodian is entitled to assume that any of those people have full and unrestricted power to give instructions on a Fund’s behalf. The Custodian is also entitled to rely on any instructions which are from, or which purport to
emanate from, any person who appears to have such authority. The Custodian reserves the right to obtain further validation of any instructions.
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5.2
|
Transfer Instructions:
All transfers into and out of a Fund Unallocated Account shall be made upon receipt of, and in accordance with, instructions given by the Trust to the Custodian. Such instructions shall be
given through the Phoenix Portal or by authenticated SWIFT message or, if for any reason the SWIFT messaging system is not operational, by such other temporary means as the Trust and the Custodian may agree from time to time. Other information
(which shall not constitute an instruction) related to transfers into and out of a Fund Unallocated Account may be sent between the Trust and the Custodian by email or by such other means as the Trust and the Custodian may agree from time to time.
Any such communication shall be deemed to have been given, made or served upon actual receipt by the recipient.
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5.3
|
Continuous Allocation of Gold:
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(a)
|
Without prejudice to
clause 5.1
, unless otherwise notified by the Trustee in writing, the Custodian shall, at the end of each London Business Day, including when Gold is to be transferred from an AP Account to a
Fund’s Metal Accounts, transfer all of the Gold then standing to the credit of a Fund Unallocated Account (excluding Gold which has been
de-allocated
in order to effect delivery of Gold to a redeeming
Authorized Participant or pursuant to other withdrawal occurring on such day) to the corresponding Fund Allocated Account.
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10
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(b)
|
If the overdraft facility (as defined below) between the Fund and the Custodian is not in effect or available for any reason, the Custodian shall so allocate an amount of Gold such that the amount of Gold that remains
standing to the credit of a Fund in the Fund Unallocated Account does not exceed 430.000 fine ounces at the close of such London Business Day.
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(c)
|
In order to comply with the foregoing instruction, the Custodian shall make available to each Fund an on demand overdraft facility (the “Facility”) and, pursuant thereto, the Custodian shall advance to the
Fund’s Unallocated Account from time to time such number of ounces of Gold as may be needed in order for the Custodian to fully allocate all of the Gold standing to the Fund’s credit in the Fund’s Unallocated Account (after repayment
to the Custodian of any overdraft balance existing prior to such allocation as provided hereafter) to the Fund’s Allocated Account pursuant to the standing instruction set forth above, provided that the maximum amount of Gold that the Custodian
will make available to a Fund pursuant to the Facility is 430 fine ounces.
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(d)
|
The Custodian shall not charge a Fund any fees, interest or costs in connection with the Facility. Any amount of Gold advanced by the Custodian shall not create any right, charge, security interest, lien or claim
against the Gold held in a Fund’s Allocated Account. Without limiting the Custodian’s right to repayment as hereafter provided, the Custodian will not have any right to set off against the Gold held in a Fund’s Allocated Account or
the Gold standing to the Fund’s credit in the Fund’s Unallocated Account any claim or amount related to any amount of Gold advanced by the Custodian.
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(e)
|
The Custodian shall identify on its books and records and in the reports it sends to a Fund any overdraft balance in the Fund’s Unallocated Account as of the date of such reports, which shall be accepted as
conclusive evidence of such balance, save in the case of manifest error. Each Fund agrees that, on each London Business Day, the Custodian may repay itself the amount of any overdraft from, and to the extent of, the positive balance of the
Fund’s Unallocated Account determined taking into account all credits to and debits from the Fund’s Unallocated Account on such London Business Day but prior to its execution of the standing instruction to allocate Gold.
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5.4
|
Account Not to be Overdrawn:
Except as otherwise specifically provided herein, a Fund Unallocated Account may not at any time have a debit balance thereon, and no instruction shall be valid to the
extent that the effect thereof would be for the Fund Unallocated Account to have a debit balance thereon.
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5.5
|
AURUM:
The Trust acknowledges that instructions relating to a counterparty for whom the Custodian does not already provide settlement services will be forwarded by the Custodian to AURUM on the Trustee’s
behalf. The Trust acknowledges that AURUM is operated by a third party and that the Custodian cannot be responsible for any errors, omissions or malfunctions in the systems operated by AURUM. To the extent that AURUM is not available or suffering a
malfunction, the Trust agrees that the Custodian’s obligations under this Agreement shall be postponed during such unavailability or such malfunction.
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11
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|
5.6
|
Amendments:
Once given, instructions continue in full force and effect until they are cancelled, amended or suspended. Any communication that cancels, amends or suspends an instruction shall be valid only after
actual receipt by the Custodian in accordance with
clause 5.2
.
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5.7
|
Unclear or Ambiguous Instructions:
If, in the Custodian’s opinion, any instructions are unclear or ambiguous, the Custodian shall use reasonable endeavours (taking into account any relevant time constraints)
to obtain clarification of those instructions from the Trust and, failing that, the Custodian may in its absolute discretion and without any liability on its part, act upon what the Custodian believes in good faith such instructions to be or refuse
to take any action or execute such instructions until any ambiguity or conflict has been resolved to the Custodian’s reasonable satisfaction.
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5.8
|
Refusal to Execute:
The Custodian may refuse to execute instructions if in its reasonable opinion they are or may be, or require action which is or may be, contrary to the Rules or any applicable law.
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|
6.
|
CONFIDENTIALITY AND DATA SECURITY
|
|
|
6.1
|
Disclosure to Others:
Subject to
clause 6.2
, each party shall respect the confidentiality of information acquired under this Agreement and neither will, without the consent of the other party, disclose to
any other person any transaction or other information acquired about the other party, its business or the Trust under this Agreement, provided that such other party has made clear, at or before the time such information is provided, that such
information is being provided on a confidential basis (hereinafter referred to as “Confidential Information”). Notwithstanding anything to the contrary in this Agreement, to the extent required, a copy of this Agreement may be filed under
the securities laws of the United States or any other jurisdiction in connection with the registration of the public offering of Shares by the Trust.
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6.2
|
Permitted Disclosures
: Each party accepts that from time to time the other party may be required by law or
the Rules, or required or requested by a government department or agency, fiscal body or regulatory or listing authority, required by the LPMCL (e.g., in connection with AURUM), or required as otherwise may be necessary in conducting the
Trust’s business, to disclose this Agreement or Confidential Information acquired under this Agreement. In addition, the disclosure of such information may be required by a party’s auditors, by its legal or other advisors, by a company
which is in the same group of companies as a party (i.e., a subsidiary or holding company of a party) or (in the case of the Trust) by the Sponsor, or any beneficiary of the Trust. Subject to the agreement of the party to which information is
disclosed to maintain it in confidence in accordance with clause
6.1
, each party irrevocably authorizes such persons to make such disclosures without further reference to such party. The obligations of each party under clause
6.1
will
not apply to any Confidential Information that: (a) was known to the receiving party prior to the date of this Agreement other than as a result of disclosure under any other agreement between the parties, (b)
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12
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is or becomes generally available to the public through means other than an unauthorized disclosure by the receiving party, (c) was or subsequently is disclosed to the receiving party by a
third party having a bona fide right to disclose such Confidential Information without breaching any obligation to the disclosing party, or (d) is developed by the receiving party independently of information disclosed by the disclosing party.
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6.3
|
Permitted Disclosures to LPMCL and/or Other Clearing Members:
The Trust acknowledges that, the Custodian is a member of the LPMCL, and that from time to time in carrying out the Custodian’s duties and
obligations under this Agreement, it may be necessary for the Custodian to disclose to LPMCL and/or other clearing members, details of deposits and/or withdrawals undertaken or to be undertaken on behalf of the Trust pursuant to the terms of this
Agreement, the Trust’s account details and certain other information in order to act in accordance with the Trust’s notices hereunder. Such disclosures may be made by the Custodian for the purposes set out in this
clause 6.3
.
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6.4
|
Data Security:
The Custodian shall implement administrative, physical and technical safeguards to protect Confidential Information under this Agreement consistent with applicable industry standards. The Custodian
hereby confirms that the information technology resources used for administering the Unallocated Account are located within the territory of United Kingdom and that it shall seek the prior written consent of the Trust in the event that such
resources are located outside of the United Kingdom or the European Union.
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7.1
|
Appointment:
The Trust hereby appoints the Custodian to act as custodian of the Gold held in a Fund Unallocated Account in accordance with this Agreement and any Rules which apply to the Custodian, and the
Custodian hereby accepts such appointment.
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7.2
|
Safekeeping of Gold:
The Custodian will be responsible for the safekeeping of the Gold on the terms and conditions of this Agreement.
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7.3
|
Ownership of Gold:
The Custodian will identify in its books that the Gold belongs to the applicable Fund. The Custodian shall ensure that the Gold belonging to a Fund shall at all times be free
and clear of all liens and encumbrances and shall not be subject to any right, charge, security interest, lien or claim of any kind, whether arising by operation of law or otherwise, in favor of the Custodian, any
sub-custodian
or any creditor of any of them or any other person. The Custodian shall not loan, hypothecate, pledge or otherwise encumber any Gold held in a Fund Unallocated Account absent the Trust’s
written instructions to the contrary.
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13
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|
8.1
|
Each party represents and warrants to the other party, on the basis that each of its following representations and warranties is deemed repeated each time that a notice is given for the deposit or withdrawal of
Gold under this Agreement, that:
|
|
|
(a)
|
it is duly constituted and validly existing under the laws of its jurisdiction of constitution;
|
|
|
(b)
|
it has all necessary authority, powers, consents, licences and authorizations and has taken all necessary action to enable it lawfully to enter into and perform its duties and obligations under this Agreement;
|
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|
(c)
|
the person or persons entering into this Agreement on its behalf has or have been duly authorized to do so; and
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|
|
(d)
|
this Agreement and the obligations created under it are binding upon it and enforceable against it in accordance with the terms of this Agreement (subject to applicable principles of equity) and do not and will not
violate the terms of the Rules, any applicable laws or any order, charge or agreement by which it is bound.
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|
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8.2
|
The Custodian represents and warrants to the Trust, on the basis that each of its following representations and warranties is deemed repeated each time that a notice is given for the deposit or withdrawal of Gold
under this Agreement, that:
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|
|
(a)
|
it is a bank, duly organized under the laws of its country of organization as set forth above, and is regulated as such by that country’s government or any agency thereof; and
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(b)
|
it is a member of the LBMA.
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|
9.1
|
Fees:
There will be no fees charged directly to the Trust or a Fund by the Custodian for the services provided by it under this Agreement. Payment of such fees will be made by the Sponsor pursuant to the
provisions of the Allocated Gold Account Agreement.
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|
|
9.2
|
Expenses:
Pursuant to a separate agreement between the Sponsor and the Custodian, to which the Custodian
has agreed, the Sponsor shall pay to the Custodian on demand all costs, charges and expenses (excluding (i) any relevant taxes and VAT (if chargeable), duties and other governmental charges, (ii) fees for storage of the Gold, which will be
recovered under the Allocated Gold Account Agreement, and (iii) indemnification obligations of a Fund under
clause 10.5
, which will be paid pursuant to the following sentence) incurred by the Custodian in connection with the performance
of its duties and obligations under
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14
|
|
this Agreement or otherwise in connection with the Gold. A Fund will procure payment on demand, solely from and to the extent of the assets of the Fund, of any other costs, charges and expenses
not assumed by the Sponsor under its agreement with the Custodian referenced in this
clause 9.2
(including any relevant taxes (other than VAT, which is addressed in
clause 12.1
), duties, other governmental charges and indemnification
claims of the Custodian payable by the Fund pursuant to
clause 10.5
, but excluding fees for storage of the Gold, which will be recovered under the Allocated Gold Account Agreement) incurred by the Custodian in connection with the Gold.
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9.3
|
Credit Balances:
No interest or other amount will be paid by the Custodian on any credit balance on a Fund Unallocated Account.
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|
|
9.4
|
No Recovery from a Fund:
Amounts payable pursuant to this
clause 9
(including
clause 9.5
) shall not be debited from a Fund Unallocated Account, but shall be payable, as applicable, by the Sponsor or
the Trust on behalf of the Fund, and the Custodian hereby acknowledges that it will have no recourse against Gold standing to the credit of the Fund Unallocated Account or to the Trust in respect of any such amounts.
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|
|
9.5
|
Default Interest:
If the Trust or the Sponsor, as applicable, fails to procure payment to the Custodian of any amount when it is due, the Custodian reserves the right to charge the relevant party
interest (both before and after any judgment) on any such unpaid amount calculated at a rate equal to 1% above the overnight London Interbank Offered Rate (LIBOR) (or, if LIBOR is discontinued, an industry accepted replacement rate for LIBOR) for
the currency in which the amount is due. Interest will accrue on a daily basis and will be due and payable by the relevant party as a separate debt.
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10.
|
SCOPE OF RESPONSIBILITY
|
|
|
10.1
|
Exclusion of Liability:
The Custodian will use reasonable care in the performance of its duties under this Agreement and will only be responsible for any loss or damage suffered by a Fund as a direct result of
any negligence, fraud or willful default on its part in the performance of its duties, and in which case its liability will not exceed the market value of the Gold credited to the Fund Unallocated Account and the Fund Allocated Account at the time
such negligence, fraud or willful default is either discovered by or notified to the Custodian (such market value calculated using the nearest available LBMA Gold Price PM following the occurrence of such negligence, fraud or willful default),
provided that, in the case of such discovery by or notification to the Custodian, the Custodian notifies the Sponsor and the Trust promptly after any discovery of such negligence, fraud or willful default. If the Custodian delivers from a Fund
Unallocated Account Gold that is not of the fine weight the Custodian has represented to the Fund or that is not in accordance with the Rules, recovery by the Fund, to the extent such recovery is otherwise allowed, shall not be barred by any delay
in asserting a claim because of the failure to discover the corresponding loss or damage regardless of whether such loss or damage could or should have been discovered.
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15
|
|
10.2
|
No Duty or Obligation:
The Custodian is under no duty or obligation to make or take any special arrangements or precautions beyond those required by the Rules or as specifically set forth in this Agreement.
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|
|
10.3
|
Insurance:
The Custodian shall make such insurance arrangements from time to time in connection with the storage of the Trust’s Precious Metal under this Agreement as the Custodian considers appropriate
and will be responsible for all costs, fees and expenses (including any relevant taxes) in relation to such insurance policy or policies. The Custodian shall provide the Trust with evidence of the Custodian’s insurance upon execution of this
Agreement and at the Trust’s request, within 10 Business Days following the end of the calendar year. Additionally, the Custodian will allow the Trust and the Sponsor, upon 10 Business Days’ prior written notice, to review such insurance
in connection with the Trust’s preparation of any registration statement under the United States Securities Act of 1933, as amended, covering any Shares, or any amendment thereto. Any permission to review the Custodian’s insurance is
limited to the term of this Agreement and is conditioned on the reviewing party executing a form of confidentiality agreement provided by the Custodian, or if the confidentiality agreement is already in force, acknowledging that the review is
subject thereto. In the event of a reduction, cancellation or
non-renewal
of the Custodian’s insurance, or a change in the provider of the Custodian’s insurance, the Custodian will give the Trust and
the Sponsor written notice of any such event within no more than 10 Business Days after the date of any such event.
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|
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10.4
|
Force Majeure:
The Custodian shall not be liable for any delay in performance, or for the
non-performance,
of any of its obligations under this Agreement by reason of any
cause beyond the Custodian’s reasonable control. This includes any act of God or war or terrorism, any breakdown, malfunction or failure of, or connected with, any communication, computer, transmission, clearing or settlement facilities,
industrial action, or acts, rules and regulations of any governmental or supra national bodies or authorities or any relevant regulatory or self-regulatory organization.
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10.5
|
Indemnity:
Each Fund, solely from and to the extent of the assets of that Fund, shall indemnify and keep indemnified the Custodian (on an after tax basis) on demand against all costs and expenses, damages,
liabilities and losses (other than VAT, which is addressed in
clause 12.1
and the expenses assumed by the Sponsor under its agreement with the Custodian referenced in
clause 9.2
) which the Custodian may suffer or incur, directly or
indirectly in connection with services provided to the Fund under this Agreement, except to the extent that such sums are due directly to the negligence, willful default or fraud of the Custodian.
|
16
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|
10.6
|
Trust Liability:
This Agreement is executed by or on behalf of the Trust with respect to each of the Funds and the obligations hereunder are not binding upon any of the trustees, officers or shareholders of the
Trust individually. Separate and distinct records are maintained for each Fund and the assets associated with any such Fund are held and accounted for separately from the other assets of the Trust, or any other Fund of the Trust. The Custodian
acknowledges that the Custodian is not entitled to use the assets of a particular Fund to discharge the debts, liabilities, obligations and expenses incurred, contracted for, or otherwise existing with respect to the Trust generally or any other
Fund, and none of the debts, liabilities, obligations and expenses incurred, contracted for, or otherwise existing with respect to the Trust generally or any such other Fund shall be enforceable against the assets of that particular Fund. The
Trust’s Declaration of Trust is on file with the Trust.
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10.7
|
Custodian’s Interests and Affiliates’ Interests:
The Custodian has the right, without notifying the Trustee, to act upon the Trust’s instructions or to take any other action permitted by the terms
of this Agreement where:
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|
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(a)
|
the Custodian, directly or indirectly, has a routine business interest in the consequences of such instruction or action;
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(b)
|
except as otherwise provided in this Agreement, the Custodian processes the Trust’s instructions on an aggregated basis together with similar instructions from other clients; or
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(c)
|
the Custodian, except as otherwise provided in this Agreement, has a relationship with another party which does or may create a conflict with its duty to a Fund or the Trust including (without prejudice) circumstances
where the Custodian or any of its associates may (i) act as financial adviser, banker or otherwise provide services to a contract counterparty of a Fund or the Trust; (ii) act in the same arrangement as agent for more than one client; or
(iii) earn profits from any of the activities listed herein.
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The Custodian or any of its divisions, branches or Affiliates may be in possession of information tending to show that the action required by a Fund’s instructions may not be in the Fund’s best interests, but
shall not have any duty to disclose any such information.
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11.1
|
Notice:
Any termination notice given by the Trust, on behalf of a Fund, under
clause 11.2
must specify:
|
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(a)
|
the date on which the termination will take effect;
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(b)
|
the person to whom the Gold is to be transferred; and
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(c)
|
all other necessary arrangements for the transfer of Gold to the order of the Fund.
|
17
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11.2
|
Term:
This Agreement shall have a fixed term up to and including 4 (four) years and will automatically renew for further successive terms of 1 (one) year thereafter unless terminated by the parties in
accordance with this
clause 11
; provided that
during such periods (i) either the Trust, on behalf of one or more Funds, or the Custodian may terminate this Agreement for any reason or for no reason by giving not less than 90
days’ written notice to the other party and (ii) this Agreement may be terminated immediately upon written notice as follows:
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(a)
|
by the Trust, if the Custodian ceases to offer the services contemplated by this Agreement to its clients or proposes to withdraw from the gold bullion business;
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(b)
|
by the Trust or the Custodian, if it becomes unlawful for the Custodian to be a party to this Agreement or to offer its services to the Trust on the terms contemplated by this Agreement or if it becomes unlawful for a
Fund or the Trust to receive such services or for the Trust to be a party to this Agreement;
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(c)
|
by the Custodian, if there is any event which, in the Custodian’s reasonable view, indicates the Trust’s or the Sponsor’s insolvency or impending insolvency;
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(d)
|
by the Trust, if there is any event which, in the Sponsor’s reasonable view, indicates the Custodian’s or the Sponsor’s insolvency or impending insolvency;
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(e)
|
by the Trust, with respect to one or more Funds if a Fund or the Trust is to be terminated; or
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(f)
|
by the Trust or by the Custodian, if the Allocated Gold Account Agreement ceases to be in full force and effect at any time.
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11.3
|
Change in the Sponsor
: If there is any change in the identity of the Sponsor, then the Custodian, the Sponsor and the Trust shall, subject to the last sentence of this
clause 11.3
, execute such documents
and shall take such actions as the new Sponsor and the outgoing Sponsor may reasonably require for the purpose of vesting in the new Sponsor the rights and obligations of the outgoing Sponsor, and releasing the outgoing Sponsor from its future
obligations under this Agreement. The Custodian’s obligations under this
clause 11.3
shall be conditioned on the Custodian having conducted due diligence in accordance with its internal procedures to the Custodian’s reasonable
satisfaction on any such new Sponsor.
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11.4
|
Redelivery Arrangements:
If the Trust does not make arrangements acceptable to the Custodian for the
delivery of the Gold, the Custodian may continue to maintain the applicable Fund Unallocated Account, in which case the Custodian will continue to charge the fees and expenses payable under
clause 10
of the Allocated Gold Account Agreement.
If the Trust has not made arrangements acceptable to the Custodian for the transfer of Gold from a Fund Unallocated
|
18
|
|
Account within 6 months of the date specified in the termination notice as the date on which the termination will take effect, the Custodian will be entitled to close the Fund Unallocated Account
and sell the Gold (at such time and on such markets as the Custodian considers appropriate) and account to the Fund for the proceeds.
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11.5
|
Effect of Termination; Existing Rights:
Termination of this Agreement with respect to the coverage of any one Fund shall in no way affect the rights and duties under this Agreement with respect to any other Fund.
Termination shall not affect rights and obligations then outstanding under this Agreement which shall continue to be governed by this Agreement until all obligations have been fully performed.
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VAT
|
Inclusive:
All sums payable or other consideration provided to the Custodian by the Trust or the Sponsor in connection with this Agreement and the Allocated Gold Account Agreement (including pursuant to the
separate agreement referred to in
clause 10.1
of the Allocated Gold Account Agreement) shall be deemed to be inclusive of any VAT.
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13.1
|
Notices:
Except as provided in
clauses 2.3, 3.2, 4.6, 5.2
and
15.5
, any notice or other communication shall be delivered personally or sent by first class post,
pre-paid
recorded delivery (or air mail if overseas), authenticated electronic transmission (including email and SWIFT) or such other electronic transmission as the parties may from time to time agree, to the
party due to receive the notice or communication, at its address, number or destination set out in
clause 13.3
or another address, number or destination specified by that party by written notice to the other.
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13.2
|
Deemed Receipt of Notice:
A notice or other communication under or in connection with
clause 13.1
will be deemed received only if actually received or delivered.
|
|
|
13.3
|
Contact Information
: The contact information of the parties for the purposes of
clauses 5.2
and
13.1
is:
|
The Custodian:
ICBC
Standard Bank Plc
20 Gresham Street
London
EC2V 7JE
Attention: Precious Metals Operations
E-mail:
London.PreciousMetalsOperations@icbcstandard.com and
Bullion.Physical@icbcstandard.com
19
The Trust:
World Gold Trust
c/o
WGC USA Management Company, LLC
685 Third Avenue, 27th Floor
New York, NY 10017
Attention:
General Counsel
Facsimile:
212-688-0410
Telephone:
212-317-3800
The contact information of the Sponsor for purposes of receiving notices under this Agreement is:
The Sponsor:
WGC USA
Management Company, LLC
685 Third Avenue, 27th Floor
New York, NY 10017
Attention:
Managing Director, Investment
Facsimile:
212-688-0410
Telephone:
212-317-3800
E-Mail:
Greg.Collett@gold.org
|
|
13.4
|
Recording of Calls:
The Custodian and the Trust may each record telephone conversations without use of a warning tone. Such recordings will be the recording party’s sole property and accepted by the other
party hereto as evidence of the orders or instructions that are permitted to be given orally under this Agreement, provided that (i) in case of any dispute or disagreement regarding any conversation so recorded the recording party will promptly
share the recordings with the other party and its representatives and (ii) the recording party will have no obligation to retain any such recordings prior to becoming aware of any such dispute or disagreement.
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14.1
|
Amendment of Schedules:
The name of any Fund listed on Schedule A may be changed by the Sponsor without amendment to this Agreement provided that the Trust shall notify the Custodian promptly upon, and provide
the Custodian with documentary evidence of, any such name change. Additional series of the Trust (each a “
New Fund
”) may from time to time become parties to this Agreement by (a) delivery to the Custodian of (i) an
instrument of adherence agreeing to become bound by and party to this Agreement executed by the Trust on behalf of such New Fund, and (ii) an amendment and restatement of Schedule A setting forth the New Fund, and (b) upon receipt of the
foregoing documents, the Custodian may agree in writing to the addition of such New Fund, which agreement shall not be unreasonably withheld.
|
20
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|
14.2
|
No Advice:
The Custodian’s duties and obligations under this Agreement do not include providing the other party with investment advice. In asking the Custodian to open and maintain a Fund Unallocated
Account, the Trust acknowledges that the Custodian shall not owe to a Fund or the Trust any duty to exercise any judgement on its behalf as to the merits or suitability of any deposits into, or withdrawals from, a Fund Unallocated Account.
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14.3
|
Rights and Remedies
: The Custodian hereby waives any right it has or may hereafter acquire to combine, consolidate or merge the Metal Accounts with any other account of the Trust or a Fund or to set off any
liabilities of the Trust or a Fund to the Custodian and agrees that it may not set off, transfer or combine or withhold payment of any sum standing to the credit or to be credited to the Metal Accounts in or towards or conditionally upon
satisfaction of any liabilities to it of the Trust or a Fund. Subject thereto, the Custodian’s rights under this Agreement are in addition to, and independent of, any other rights which the Custodian may have at any time in relation to the
Metal Accounts.
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|
14.4
|
Business Day
: If an obligation of a party would otherwise be due to be performed on a day which is not a New York Business Day or a London Business Day, as the case may be, in respect of a Fund Unallocated
Account, such obligation shall be due to be performed on the next succeeding New York Business Day or London Business Day, as the case may be, in respect of the Fund Unallocated Account.
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|
|
14.5
|
Assignment:
This Agreement is for the benefit of and binding upon both the Custodian and the Trust and their respective successors and assigns. Save as expressly provided in
clause 11.3
and this
clause
14.5
, no party may assign, transfer or encumber, or purport to assign, transfer or encumber, any right or obligation under this Agreement unless the other party otherwise consents in writing. This clause shall not restrict the Custodian’s
power to merge or consolidate with any party, or to dispose of all or part of its custody business, and further provided that this clause shall not restrict the Trust from assigning its rights hereunder to a Shareholder to the extent required for
the Trust to fulfill its obligations.
|
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14.6
|
Amendments:
Any amendment to this Agreement must be agreed in writing and be signed by the Trust and the Custodian. Unless otherwise agreed, an amendment will not affect any legal rights or obligations which may
already have arisen.
|
|
|
14.7
|
Partial Invalidity:
If any of the clauses (or part of a clause) of this Agreement becomes invalid or unenforceable in any way under the Rules or any law, the validity of the remaining clauses (or part of a
clause) will not in any way be affected or impaired.
|
21
|
|
14.8
|
Liability:
Nothing in this Agreement shall exclude or limit any liability which cannot lawfully be excluded or limited (e.g. liability for personal injury or death caused by negligence).
|
|
|
14.9
|
Entire Agreement:
This Agreement and the Allocated Gold Account Agreement represent the entire agreement between the parties in respect of their subject matter. This Agreement and the Allocated Gold Account
Agreement supersede and replace any prior existing agreement between the parties hereto relating to the same subject matter.
|
|
|
14.10
|
Counterparts:
This Agreement may be executed in any number of counterparts, each of which when executed and delivered is an original, but all the counterparts together constitute the same agreement.
|
|
|
14.11
|
Compliance with Laws:
Each party undertakes that in the performance of this Agreement and transactions connected with this Agreement it shall comply with all applicable anti-corruption laws, sanctions and
anti-money laundering legislation and shall maintain adequate and appropriate policies and procedures designed to ensure and which are reasonably expected to ensure continued compliance with such anti-corruption laws, sanctions and anti-money
laundering legislation. Furthermore and in connection with the foregoing, the Trust undertakes to the Custodian that it has conducted appropriate due diligence on any recipient of Gold and that the Trust will comply with any reasonable requests the
Custodian may make from time to time for confirmation and evidence that the Trust has complied with its obligations pursuant to this clause 14.11 (including in respect of Authorized Participants, the Sponsor and Shareholders) and acknowledges that
should it fail to do so the Custodian may terminate this Agreement immediately in accordance with the provisions of clause 11.2(ii) above.
|
|
15.
|
GOVERNING LAW AND JURISDICTION
|
|
|
15.1
|
Governing Law:
This Agreement is governed by, and will be construed in accordance with, English law.
|
|
|
15.2
|
Jurisdiction:
The Trust and the Custodian agree that the courts of the State of New York, in the United States of America, and the United States federal court located in the Borough of Manhattan in such state,
are to have jurisdiction to settle any Disputes which may arise out of or in connection with this Agreement and, for these purposes the Trust and the Custodian irrevocably submits to the
non-exclusive
jurisdiction of such courts, waive any claim of forum non conveniens and any objection to laying of venue, and further waive any personal service.
|
22
|
|
15.3
|
Waiver of Immunity:
To the extent that a party may in any jurisdiction claim any immunity from suit, judgment, enforcement or otherwise howsoever, such party agrees not to claim, and irrevocably waives, any such
immunity to which it would otherwise be entitled (whether on grounds of sovereignty or otherwise) to the full extent permitted by the laws of such jurisdiction.
|
|
|
15.4
|
Third Party Rights:
Except with respect to the Sponsor, which shall be considered a beneficiary (as applicable) of
clauses 2.6, 2.7, 3.3, 4.3, 6.2, 10.1, 10.3, 11.3, 13.3
and
15.4
, the Custodian
does not owe any duty or obligation or have any liability towards any person who is not a party to this Agreement. Except as set forth in this
clause 15.4
, this Agreement does not confer a benefit on any person who is not a party to it. The
parties to this Agreement do not intend that any term of this Agreement shall be enforceable by any person who is not a party to it and do intend that the Contracts (Rights of Third Parties) 1999 Act shall not apply to this Agreement, provided that
the Sponsor may enforce its rights under
clauses 2.6, 2.7, 3.3, 4.3, 6.2, 10.1, 10.3, 11.3, 13.3
and
15.4
.
|
|
|
15.5
|
Service of Process:
Process by which any proceedings are begun may be served on a party by being delivered to the party’s address specified below. This does not affect any right to serve process in another
manner permitted by law.
|
Custodian’s Address for service of process:
ICBC Standard Bank Plc
20 Gresham Street
London
EC2V 7JE
Attention: The Head
of Legal
Trust’s Address for service of process:
World Gold Trust
c/o
WGC USA Management Company, LLC
685 Third Avenue, 27th Floor
New York, NY 10017
Attention:
General Counsel
Facsimile:
212-688-0410
Telephone:
212-317-3800
[Signature Page Follows]
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set out on the cover page of this
Agreement.
Signed on behalf of
ICBC STANDARD BANK PLC
By its authorized signatories
|
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Signature
|
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|
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|
Signature
|
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|
Name
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|
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|
Name
|
|
|
|
Title
|
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|
|
|
Title
|
|
|
|
Date
|
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Date
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|
Signed on behalf of
WORLD
GOLD TRUST
on behalf of its series set forth on Schedule A
By its authorized signatory
|
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Signature
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Name
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Title
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Date
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[Signature Page to Unallocated Gold Account Agreement]
24
Schedule A
List of Funds
SPDR
®
Gold MiniShares Trust
25
Schedule B
Notices and Reports
The Custodian
shall provide the following notices and reports via email to fundops@gold.org or other electronic delivery as agreed upon:
|
(1)
|
For each London Business Day, by no later than 9:00 a.m. NY Time on the following London Business Day:
|
|
|
(a)
|
information showing the increases and decreases to the Gold standing to a Fund’s credit in the Fund’s Unallocated Account and identifying separately each transaction and the New York or London Business Day on
which it occurred;
|
|
|
(b)
|
a notification of (i) each separate transaction, if any, transferring Gold to a Fund Unallocated Account, including the amount of Gold transferred to the Fund Unallocated Account and the AP Account from which such
Gold is transferred; (ii) the amount of Gold, if any, transferred from the Fund Unallocated Account to the corresponding Fund Allocated Account or to any AP Account and (iii) the closing balance of Gold credited to the Fund Unallocated
Account for such London Business Day; and
|
|
|
(c)
|
such other information about the increases and decreases to the Gold standing to a Fund’s credit in the Fund Allocated Account on a same day basis at such other times and in such other form as the Trust and the
Custodian shall agree.
|
|
(2)
|
Within a reasonable time after the end of each calendar month, a statement of account for each Fund Unallocated Account which shall include the opening and closing monthly balance and all transfers to and from each Fund
Unallocated Account.
|
26
Exhibit 10.4
FORM OF AMENDMENT TO FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
WHEREAS, World Gold Trust (the “Trust”), a Delaware statutory trust organized in series (each, a “Fund” and collectively,
the “Funds”), and The Bank of New York Mellon, a New York corporation authorized to do a banking business (“BNY Mellon”), have heretofore entered into a Fund Administration and Accounting Agreement (“Agreement”), dated
as of January 5, 2017; and
WHEREAS, the parties hereto desire to amend the Agreement (“Amendment”) to list on Exhibit A
thereto a new series of the Trust.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good
and valuation consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Trust, on behalf of each Fund, and BNY Mellon hereby amend the Agreement and agree as follows:
Exhibit A
.
Exhibit A is hereby amended by listing a new series thereon, with such new series underlined in such amended schedule, as
follows:
“Exhibit A
SPDR
®
Long Dollar Gold Trust
SPDR
®
Euro Gold Trust
SPDR
®
Pound Gold Trust
SPDR
®
Yen Gold Trust
SPDR
®
Gold MiniShares Trust”
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of [•], 2018.
|
|
|
WORLD GOLD TRUST,
|
|
On behalf of each Fund listed on Exhibit A, as amended herein
|
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|
By:
|
|
Name:
*
|
|
Title:
|
|
Date:
|
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*Authorized to sign on behalf of the Trust in this capacity since an officer of the Trust’s sponsor
|
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|
THE BANK OF NEW YORK MELLON
|
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By:
|
|
Name:
|
|
Title:
|
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Date:
|
Exhibit 10.6
FORM OF AMENDMENT TO TRANSFER AGENCY AND SERVICE AGREEMENT
WHEREAS, World Gold Trust (the “Trust”), a Delaware statutory trust organized in series (each, a “Fund” and collectively,
the “Funds”), and The Bank of New York Mellon, a New York corporation authorized to do a banking business (“BNY Mellon”), have heretofore entered into a Transfer Agency and Service Agreement (“Agreement”), dated as of
January 5, 2017; and
WHEREAS, the parties hereto desire to amend the Agreement (“Amendment”) to list on Appendix A thereto
a new series of the Trust.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and
valuation consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Trust, on behalf of each Fund, and BNY Mellon hereby amend the Agreement and agree as follows:
Appendix A
.
Appendix A is hereby amended by listing a new series thereon, with such new series underlined in such amended schedule, as
follows:
“Appendix A
SPDR
®
Long Dollar Gold Trust
SPDR
®
Euro Gold Trust
SPDR
®
Pound Gold Trust
SPDR
®
Yen Gold Trust
SPDR
®
Gold MiniShares Trust”
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of [•], 2018.
|
|
|
WORLD GOLD TRUST,
|
|
On behalf of each Fund listed on Appendix A, as amended herein
|
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By: ________________________________
|
|
Name: _____________________________*
|
|
Title:
|
|
Date:
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|
*Authorized to sign on behalf of the Trust in this capacity since an officer of the Trust’s sponsor
|
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|
THE BANK OF NEW YORK MELLON
|
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By: ________________________________
|
|
Name:
|
|
Title:
|
|
Date:
|
Exhibit 10.9
FORM OF SECOND AMENDMENT TO AMENDED AND RESTATED SPONSOR AGREEMENT
WHEREAS, WGC USA Asset Management Company, LLC, a Delaware limited liability company (“Sponsor”) and World Gold Trust (the
“Trust’), a Delaware statutory trust organized in series (each, a “Fund” and collectively, the “Funds”), have heretofore entered into an Amended and Restated Sponsor Agreement (“Agreement”), dated as of
October 14, 2016 as amended November 28, 2017; and
WHEREAS, the parties hereto desire to amend the Agreement
(“Amendment”) to list on Schedule A thereto a new series of the Trust.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuation consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Sponsor and the Trust, both for itself and on behalf of each Fund set for on Schedule A, hereby
amend the Agreement and agree as follows:
Schedule A
.
Schedule A is hereby amended by listing a new series thereon, with such new
series underlined in such amended schedule, as follows:
“Schedule A
The Trust will pay to the Sponsor as compensation for the Sponsor’s services rendered to each Fund, a fee, computed daily at an annual rate based on the
average daily net assets of each Fund in accordance with the following fee schedule:
|
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|
Fund
|
|
Rate
|
|
|
SPDR
®
Long Dollar Gold Trust
|
|
|
0.33
|
%
|
|
SPDR
®
Gold MiniShares Trust
|
|
|
0.XX
|
%”
|
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of
[•], 2018.
|
|
|
World Gold Trust
|
|
|
|
By: Delaware Trust Company, its Trustee
|
|
|
|
By: ________________________________
|
|
Name: ______________________________
|
|
Title: ______________________________
|
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|
|
WGC USA Asset Management Company, LLC
|
|
|
|
By: ________________________________
|
|
Name: ______________________________
|
|
Title:
|
Exhibit 10.11
FORM OF AMENDMENT TO CUSTODY AGREEMENT (U.S. Dollar Only)
WHEREAS, World Gold Trust (the “Trust”), a Delaware statutory trust organized in series (each, a “Fund and collectively, the
“Funds”), and The Bank of New York Mellon, a New York corporation authorized to do a banking business (“Custodian”), have heretofore entered into a Custody Agreement (U.S. Dollar Only) (“Agreement”), dated as of
January 5, 2017; and
WHEREAS, the parties hereto desire to amend the Agreement (“Amendment”) to list on Schedule II
thereto a new series of the Trust.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good
and valuation consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Trust, on behalf of each Fund, and the Custodian hereby amend the Agreement and agree as follows:
Schedule II
.
Schedule II is hereby amended by listing a new series thereon, with such new series underlined in such amended schedule, as
follows:
“Schedule II
SPDR
®
Long Dollar Gold Trust
SPDR
®
Euro Gold Trust
SPDR
®
Pound Gold Trust
SPDR
®
Yen Gold Trust
SPDR
®
Gold MiniShares Trust”
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of [•], 2018.
|
|
|
WORLD GOLD TRUST,
|
|
On behalf of each Fund listed on Schedule II, as amended herein
|
|
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|
By: ________________________________
|
|
Name: _____________________________*
|
|
Title:
|
|
Date:
|
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|
*Authorized to sign on behalf of the Trust in this capacity since an officer of the Trust’s sponsor
|
|
|
|
THE BANK OF NEW YORK MELLON
|
|
|
|
By: ________________________________
|
|
Name:
|
|
Title:
|
|
Date:
|
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement on Form
S-1
(No.
333-221842)
of SPDR
®
Gold MiniShares Trust (formerly known as The Gold Trust), a series of World Gold Trust (formerly known as World Currency Gold Trust), of
our report dated November 29, 2017, with respect to the statements of financial condition and schedules of investments of World Gold Trust, combined in total and for SPDR
®
Long Dollar Gold Trust (the “Fund”), a series of World Gold Trust, as of September 30, 2017 and the related statements of operations, cash flows and changes in net assets, combined in
total and for the Fund, for the period January 27, 2017 (commencement of operations) to September 30, 2017, which report appears in the September 30, 2017 Annual Report on Form
10-K
of SPDR
®
Long Dollar Gold Trust and World Gold Trust. We also consent to the use of our report dated November 30, 2017, with respect to the statement of financial condition of The Gold Trust, a
series of World Gold Trust, as of September 30, 2017, included in the Registration Statement on Form
S-1
(No.
333-221842)
of SPDR
®
Gold MiniShares Trust, a series of World Gold Trust, and to the reference to our firm under the heading “Experts” in the above noted Registration Statement.
/s/ KPMG LLP
New York, New York
May 4, 2018