REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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(X)
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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(X)
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[X]
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Immediately upon filing pursuant to paragraph (b) of Rule 485
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[ ]
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On (date) pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a)(1) of Rule 485
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On (date) pursuant to paragraph (a)(1) of Rule 485
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75 days after filing pursuant to paragraph (a)(2) of Rule 485
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On (date) pursuant to paragraph (a)(2) of Rule 485
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This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
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Page | |
Fund Summary
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1
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Index/Trademark License/Disclaimers
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5
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Additional Principal Risk Information
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6
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Additional Investment Strategies
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8
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Additional Risks
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8
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Information Regarding the Index
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9
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Portfolio Holdings
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10
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Fund Management
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10
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Portfolio Manager
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11
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Buying and Selling Fund Shares
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11
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Other Considerations
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13
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Dividends, Distributions and Taxes
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13
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Additional Information
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16
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financial highlights
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18
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How to Obtain More Information About the Fund
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back cover
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Management Fee
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0.85%
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Distribution and Service (12b-1) Fees
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0.00%
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Other Expenses
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0.00%
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Total Annual Fund Operating Expenses
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0.85%
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1 Year
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3 Years
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5 Years
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10 Years
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$87
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$271
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$471
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$1,049
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Return
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Quarter/Year
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Highest Return
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5.12%
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06/30/14
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Lowest Return
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-1.19%
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09/30/14
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Forensic Accounting ETF
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1 year
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Since Inception
(1-30-2013) |
Return Before Taxes
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12.16%
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20.74%
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Return After Taxes on Distributions
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11.87%
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18.50%
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Return After Taxes on Distributions and Sale of Fund Shares
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7.09%
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15.06%
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Del Vecchio Earnings Quality Index® (Reflects no deduction for fees, expenses or taxes)
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12.51%
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21.17%
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S&P 500 Index
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13.69%
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20.39%
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· | The Fund will distribute for each year substantially all of its net investment income and net capital gains income. |
· | Dividends and distributions are generally taxable to you whether you receive them in cash or reinvest them in additional Shares. |
· | The income dividends (including distributions from the Fund’s net short-term capital gains) you receive from the Fund will be taxed as either ordinary income or “qualified dividend income.” Dividends that are reported by the Fund as qualified dividend income are generally taxable to noncorporate shareholders at tax rates of up to 20% (lower rates apply to individuals in lower tax brackets). Qualified dividend income generally is income derived from dividends paid to the Fund by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that the Fund receives in respect of stock of certain foreign corporations may be qualified dividend income if that stock is readily tradable on an established U.S. securities market. For dividends to be taxed as qualified dividend income to a noncorporate shareholder, the Fund must satisfy certain holding period requirements with respect to the underlying stock and the noncorporate shareholder must satisfy holding period requirements with respect to his or her ownership of the Fund’s Shares. Holding periods may be suspended for these purposes for stock that is hedged. |
· | Distributions from the Fund’s net capital gain (the excess of the Fund’s net long-term capital gains over its net short-term capital losses) are taxable as long-term capital gains regardless of how long you have owned your Shares. For noncorporate shareholders, long-term capital gains are generally taxable at tax rates of up to 20% (lower rates apply to individuals in lower tax brackets). |
· | U.S. individuals with income exceeding specified thresholds are subject to a 3.8% Medicare contribution tax on all or a portion of their “net investment income,” which includes interest, dividends, and certain capital gains (including certain capital gain distributions and capital gains realized on the sale of Shares of the Fund). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. |
· | Corporate shareholders may be entitled to a dividends-received deduction for the portion of dividends they receive from the Fund that are attributable to dividends received by the Fund from U.S. corporations, subject to certain limitations. |
· | Distributions paid in January but declared by the Fund in October, November or December of the previous year payable to shareholders of record in such a month may be taxable to you in the previous year. |
· | The Fund will inform you of the amount of your ordinary income dividends, qualified dividend income, and net capital gain distributions shortly after the close of each calendar year. |
· | If you hold your Shares in a tax-qualified retirement account, you generally will not be subject to federal taxation on Fund distributions until you begin receiving distributions from your retirement account. You should consult your tax adviser regarding the tax rules that apply to your retirement account. |
2014
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2013
‡
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Net Asset Value, Beginning of Year/Period
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$31.16
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$25.00
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Net Investment Income*
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$0.39
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$0.30
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Net Realized and Unrealized Gain on Investments
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$3.76
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$5.86
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Total from Operations
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$4.15
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$6.16
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Dividends from Net Investment Income
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$(0.56)
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$--
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Distributions from Realized Capital Gains
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$(2.10)
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$--
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Total Dividends and Distributions
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$(2.66)
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$--
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Net Asset Value, End of Year/Period
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$32.65
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$31.16
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Total Return
(1)
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14.45%
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24.64%
(4)
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Net Assets End of Year/Period (000)
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$16,327
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$9,347
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Ratio of Expenses to Average Net Assets
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0.85%
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0.85%
(2)
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Ratio of Investment Income to Average Net Assets
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1.26%
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1.27
(2)
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Portfolio Turnover
(3)
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26%
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154%
(5)
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‡ | Commenced operations on January 30, 2013. |
* | Per share data calculated using average shares method. |
(1) | Total return is based on the change in net asset value of a share during the year or period and assumes reinvestment of dividends and distributions at net asset value. The return shown does not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemption of Fund shares. |
(2) | Annualized. |
(3) | Excludes effect of securities received or delivered from processing creations or redemptions. |
(4) | Total return is for the period indicated and has not been annualized. |
(5) | Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. |
Write:
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Exchange Traded Concepts Trust
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Visit:
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www.flagetf.com
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Page
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Fund Summaries
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Yorkville High Income MLP ETF
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1
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Yorkville High Income Infrastructure MLP ETF
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11
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Summary Information about Purchasing and Selling Shares and Taxes
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21
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Index/Trademark License/Disclaimers
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21
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Additional Information about Principal Investment Strategies
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22
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Additional Risk Information
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23
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Additional Investment Strategies
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32
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Additional Risks
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33
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Information Regarding the Indexes
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34
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Portfolio Holdings
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35
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Fund Management
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35
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Portfolio Manager
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37
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Buying and Selling the Funds
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37
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Other Considerations
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39
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Dividends, Distributions and Taxes
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39
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Additional Information
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43
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Financial Highlights
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45
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How to Obtain More Information About the Funds
|
back cover
|
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Management Fee
|
0.82%
|
Distribution and Service (12b-1) Fees
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0.00%
|
Other Expenses (Deferred Income Tax Expense
1
and Franchise Tax Expense
2
)
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0.01%
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Total Annual Fund Operating Expenses
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0.83%
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1 | The Fund is classified for federal income tax purposes as a taxable regular corporation or Subchapter “C” corporation. As a “C” corporation, the Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments, with certain distributions received by the Fund on equity securities of master limited partnerships (“MLPs”) considered to be return of capital, and with any net operating gains. The Fund’s accrued deferred tax liability, if any, is reflected each day in the Fund’s net asset value per share. The Fund’s current and deferred tax liability, if any, will depend upon income, gains, losses, and deductions the Fund is allocated from its MLP investments and on the Fund’s realized and unrealized gains and losses and therefore may vary greatly from year to year depending on the nature of the Fund’s investments, the performance of those investments and general market conditions. The Fund’s actual income tax expense, if any, may be deferred for many years, concentrated in a small number of years, or spread over many years, depending on if and when investment gains and losses are realized, the then current basis of the Fund’s assets and other factors. Therefore, any estimate of deferred income tax expense/(benefit) cannot be reliably predicted from year to year. For the fiscal year ended November 30, 2014, the Fund had net operating losses of $580,995 and accrued $7,061,535 in net deferred tax benefit primarily related to unrealized appreciation on investments. |
2 | The Fund has accrued a state franchise tax liability for the year ended November 30, 2014. State franchise taxes are separate and distinct from state income taxes. State franchise taxes are imposed on a corporation for the right to conduct business in the state and typically are based off the net worth or capital apportioned to a state. Due to the nature of the Fund's investments, the Fund may be required to file franchise tax returns in several states. |
1 Year
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3 Years
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5 Years
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10 Years
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$ 85
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$265
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$ 460
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$ 1,025
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· | the energy sector is highly regulated. MLPs operating in the energy sector are subject to significant regulation of nearly every aspect of their operations by federal, state and local governmental agencies; |
· | MLPs operating in the energy sector may be affected by fluctuations in the prices of energy commodities, including, for example, natural gas, natural gas liquids, crude oil and coal, in the short- and long-term; |
· | MLPs engaged in the exploration, development, management or production of energy commodities face the risk that commodity reserves are depleted over time, with the potential associated effect of causing the market value of the MLP to decline over time; |
· | MLPs operating in the energy sector could be adversely affected by reductions in the supply of or demand for energy commodities; |
· | extreme weather or other natural disasters could impact the value of MLPs operating in the energy sector; |
· | the abilities of MLPs operating in the energy sector to grow and to increase cash distributions to unitholders can be highly dependent on their ability to make acquisitions that result in an increase in cash flows; |
· | rising interest rates which could adversely impact the financial performance and/or the present value of cash flow of MLPs operating in the energy sector; and |
· | MLPs operating in the energy sector are subject to many dangers inherent in the production, exploration, management, transportation, processing and distribution of natural gas, natural gas liquids, crude oil, refined petroleum and petroleum products and other hydrocarbons. In addition, threats of attack by terrorists on energy assets could impact the market for MLPs operating in the energy sector. |
· | Midstream . Midstream MLPs that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, increasing operating expenses and economic conditions, among others. |
· | Exploration and production. Exploration and production MLPs produce energy resources, including natural gas and crude oil. Exploration and production MLPs that own oil and gas reserves are particularly vulnerable to declines in the demand for and prices of crude oil and natural gas. Substantial downward adjustments in reserve estimates could have a material adverse effect on the value of such reserves and the financial condition of an MLP. Exploration and production MLPs seek to reduce cash flow volatility associated with commodity prices by executing multi-year hedging strategies that fix the price of gas and oil produced. There can be no assurance that the hedging strategies currently employed by these MLPs are currently effective or will remain effective. |
· | Marine shipping . Marine shipping MLPs are primarily marine transporters of natural gas, crude oil or refined petroleum products. Marine shipping companies are exposed to many of the same risks as other energy companies. The highly cyclical nature of the marine transportation industry may lead to volatile changes in charter rates and vessel values, which may adversely affect the revenues, profitability and cash flows of MLPs with marine transportation assets. |
· | Propane. Propane MLPs are distributors of propane to homeowners for space and water heating. MLPs with propane assets are subject to earnings variability based upon weather conditions in the markets they serve, fluctuating commodity prices, customer conservation and increased use of alternative fuels, increased governmental or environmental regulation, and accidents or catastrophic events, among others. |
· | Natural Resource . MLPs with coal, timber, fertilizer and other mineral assets are subject to supply and demand fluctuations in the markets they serve, which will be impacted by a wide range of domestic and foreign factors including fluctuating commodity prices, the level of their customers’ coal stockpiles, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, declines in production, mining accidents or catastrophic events, health claims and economic conditions, among others. |
Return
|
Quarter/Year
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|
Highest Return
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9.26%
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03/31/13
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Lowest Return
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-27.62%
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12/31/14
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Yorkville High Income MLP ETF
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1 Year
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Since Inception
(3-12-2012) |
Return Before Taxes
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-25.57%
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-7.68%
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Return After Taxes on Distributions
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-26.15%
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-9.83%
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Return After Taxes on Distributions and Sale of Fund Shares
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-17.61%
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-6.99%
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Solactive High Income MLP Index (Reflects no deduction for fees, expenses or taxes)
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-24.07%
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-4.33%
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S&P 500 Index
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13.69%
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18.09%
|
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Management Fee
|
0.82%
|
Distribution and Service (12b-1) Fees
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0.00%
|
Other Expenses (Deferred Income Tax Expense
1
and Franchise Tax Expense
2
)
|
5.09%
|
Total Annual Fund Operating Expenses
|
5.91%
|
1 | The Fund is classified for federal income tax purposes as a taxable regular corporation or subchapter “C” corporation. The Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments, with certain distributions received by the Fund on equity securities of master limited partnerships (“MLPs”) considered to be return of capital, and with any net operating gains. The Fund’s accrued deferred tax liability, if any, is reflected each day in the Fund’s net asset value per share. The Fund’s current and deferred tax liability, if any, will depend upon income, gains, losses, and deductions the Fund is allocated from its MLP investments and on the Fund’s realized and unrealized gains and losses and therefore may vary greatly from year to year depending on the nature of the Fund’s investments, the performance of those investments and general market conditions. The Fund’s actual income tax expense, if any, may be deferred for many years, concentrated in a small number of years, or spread over many years, depending on if and when investment gains and losses are realized, the then current basis of the Fund’s assets and other factors. Therefore, any estimate of deferred income tax expense/(benefit) cannot be reliably predicted form year to year. For the fiscal year ended November 30, 2014, the Fund had net operating losses of $212,719 and accrued $1,443,559 in net deferred tax expense primarily related to unrealized appreciation on investments. |
2 | The Fund has accrued a state franchise tax liability for the year ended November 30, 2014. State franchise taxes are separate and distinct from state income taxes. State franchise taxes are imposed on a corporation for the right to conduct business in the state and typically are based off the net worth or capital apportioned to a state. Due to the nature of the Fund's investments, the Fund may be required to file franchise tax returns in several states. |
1 Year
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3 Years
|
5 Years
|
10 Years
|
$588
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$1,749
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$2,889
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$5,648
|
· | transportation, terminaling and storage of refined petroleum products (including gasoline, diesel, jet fuel, kerosene and heating oil); |
· | gathering, compressing, dehydrating, treating, processing, marketing of natural gas, and fractionation of natural gas liquids; |
· | transportation and/or storage of natural gas and natural gas liquids; |
· | transportation of crude oil, refined petroleum products, and/or other liquids; and |
· | operating as the general partner of an MLP which primarily engages in any of the businesses listed above. |
· | the energy sector is highly regulated. MLPs operating in the energy sector are subject to significant regulation of nearly every aspect of their operations by federal, state and local governmental agencies; |
· | MLPs operating in the energy sector may be affected by fluctuations in the prices of energy commodities, including, for example, natural gas, natural gas liquids and crude oil, in the short- and long-term; |
· | MLPs engaged in the transportation or storage of energy commodities face the risk that commodity reserves are depleted over time, with the potential associated effect of causing the market value of the MLP to decline over time; |
· | MLPs operating in the energy sector could be adversely affected by reductions in the supply of or demand for energy commodities; |
· | extreme weather or other natural disasters could impact the value of MLPs operating in the energy sector; |
· | the abilities of MLPs operating in the energy sector to grow and to increase cash distributions to unitholders can be highly dependent on their ability to make acquisitions that result in an increase in cash flows; |
· | rising interest rates which could adversely impact the financial performance and/or the present value of cash flow of MLPs operating in the energy sector; and |
· | MLPs operating in the energy sector are subject to many dangers inherent in the management, transportation, storage, gathering, compressing, treating, processing, marketing and fractionation of natural gas, natural gas liquids, crude oil, refined petroleum and petroleum products and other hydrocarbons. In addition, threats of attack by terrorists on energy assets could impact the market for MLPs operating in the energy sector. |
· | Midstream . Midstream MLPs that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, increasing operating expenses and economic conditions, among others. |
· | Pipeline . Pipeline MLPs are not subject to direct commodity price exposure because they do not own the underlying energy commodity. However, the MLP sector can be hurt by market perception that MLPs’ performance and distributions are directly tied to commodity prices. Also, a significant decrease in the production of natural gas, oil, or other energy commodities, due to a decline in production from existing facilities, import supply disruption, or otherwise, would reduce revenue and operating income of MLPs and, therefore, the ability of MLPs to make distributions to partners. |
Return
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Quarter/Year
|
|
Highest Return
|
9.38%
|
06/30/14
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Lowest Return
|
-7.12%
|
12/31/14
|
Yorkville High Income Infrastructure MLP ETF
|
1 year
|
Since Inception
(2-11-2013) |
|
Return Before Taxes
|
6.00%
|
9.41%
|
|
Return After Taxes on Distributions
|
4.55%
|
7.01%
|
|
Return After Taxes on Distributions and Sale of Fund Shares
|
2.26%
|
5.74%
|
|
Solactive High Income Infrastructure MLP Index (Reflects no deduction for fees, expenses or taxes)
|
9.82%
|
15.53%
|
|
S&P 500 Index
|
13.69%
|
20.09%
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· | Regulatory Risk . The energy sector is highly regulated. MLPs operating in the energy sector are subject to significant regulation of nearly every aspect of their operations by federal, state and local governmental agencies. Such regulation can change rapidly or over time in both scope and intensity. For example, a particular by-product or process, including hydraulic fracturing, may be declared hazardous—sometimes retroactively—by a regulatory agency and unexpectedly increase production costs. Various governmental authorities have the power to enforce compliance with these regulations and the permits issued under them, and violators are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the future which would likely increase compliance costs and may materially adversely affect the financial performance of MLPs operating in the energy sector. There is an inherent risk that MLPs may incur material environmental costs and liabilities due to the nature of their businesses and the substances they handle, including substantial liabilities for environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage, and fines or penalties for related violations of environmental laws or regulations. |
· | Commodity Price Risk . MLPs operating in the energy sector may be affected by fluctuations in the prices of energy commodities, including, for example, natural gas, natural gas liquids, crude oil and coal, in the short- and long-term. Fluctuations in energy commodity prices would impact directly companies that own such energy commodities and could impact indirectly companies that engage in transportation, storage, processing, distribution or marketing of such energy commodities. Fluctuations in energy commodity prices can result from changes in general economic conditions or political circumstances (especially of key energy producing and consuming countries); market conditions; weather patterns; domestic production levels; volume of imports; energy conservation; domestic and foreign governmental regulation; international politics; policies of OPEC; taxation; tariffs; and the availability and costs of local, intrastate and interstate transportation methods. The energy sector as a whole may also be impacted by the perception that the performance of energy sector companies is directly linked to commodity prices. High commodity prices may drive further energy conservation efforts, and a slowing economy may adversely impact energy consumption, which may adversely affect the performance of MLPs and other companies operating in the energy sector. Depressed commodity prices may result in a significant decrease in the production of energy commodities, which would reduce revenue and operating income of MLPs and other companies operating in the energy sector. Greater volatility of energy commodity prices may lead to increased volatility in the prices of equities in the energy infrastructure sector. Recent economic and market events have fueled concerns regarding potential liquidations of commodity futures and options positions. |
· | Depletion Risk . MLPs engaged in the exploration, development, management or production of energy commodities face the risk that commodity reserves are depleted over time, with the potential associated effect of causing the market value of the MLP to decline over time. Such companies seek to increase their reserves through expansion of their current businesses, acquisitions, further development of their existing sources of energy commodities, exploration of new sources of energy commodities or by entering into long-term contracts for additional reserves; however, there are risks associated with each of these potential strategies. If such companies fail to acquire additional reserves in a cost-effective manner and at a rate at least equal to the rate at which their existing reserves decline, their financial performance may suffer. Additionally, failure to replenish reserves could reduce the amount and affect the tax characterization of the distributions paid by such companies. |
· | Supply and Demand Risk . MLPs operating in the energy sector could be adversely affected by reductions in the supply of or demand for energy commodities. The volume of production of energy commodities and the volume of energy commodities available for transportation, storage, processing or distribution could be affected by a variety of factors, including depletion of resources; depressed commodity prices; catastrophic events; labor relations; increased environmental or other governmental regulation; equipment malfunctions and maintenance difficulties; import volumes; international politics, policies of OPEC; and increased competition from alternative energy sources. Alternatively, a decline in demand for energy commodities could result from factors such as adverse economic conditions (especially in key energy-consuming countries); increased taxation; increased environmental or other governmental regulation; increased fuel economy; increased energy conservation or use of alternative energy sources; legislation intended to promote the use of alternative energy sources; or increased commodity prices. |
· | Weather Risks . Weather conditions and the seasonality of weather patterns play a role in the cash flows of certain MLPs operating in the energy sector. MLPs in the propane industry; for example, rely on the winter heating season to generate almost all of their cash flow. In an unusually warm winter season, propane MLPs experience decreased demand for their product. Although most MLPs can reasonably predict seasonal weather demand based on normal weather patterns, extreme weather conditions, such as the hurricanes that severely damaged cities along the U.S. Gulf Coast in recent years, demonstrate that no amount of preparation can protect an MLP from the unpredictability of the weather. The damage done by extreme weather also may serve to increase insurance premiums for energy assets owned by MLPs, could significantly increase the volatility in the supply of energy-related commodities and could adversely affect such companies’ financial condition and ability to pay distributions to shareholders. |
· | Acquisition Risk . The abilities of MLPs operating in the energy sector to grow and to increase cash distributions to unitholders can be highly dependent on their ability to make acquisitions that result in an increase in cash flows. In the event that MLPs are unable to make such accretive acquisitions because they are unable to identify attractive acquisition candidates and negotiate acceptable purchase contracts, because they are unable to raise financing for such acquisitions on economically acceptable terms, or because they are outbid by competitors, their future growth and ability to raise distributions will be limited. Furthermore, even if MLPs do consummate acquisitions that they believe will be accretive, the acquisitions may instead result in a decrease in cash flow. Any acquisition involves risks, including, among other things: mistaken assumptions about revenues and costs, including synergies; the assumption of unknown liabilities; limitations on rights to indemnity from the seller; the diversion of management’s attention from other business concerns; unforeseen difficulties operating in new product or geographic areas; and customer or key employee losses at the acquired businesses. |
· | Interest Rate Risk. Rising interest rates could adversely impact the financial performance and/or the present value of cash flow of MLPs operating in the energy sector by increasing their costs of capital. This may reduce their ability to execute acquisitions or expansion projects in a cost-effective manner. MLP valuations are based on numerous factors, including sector and business fundamentals, management expertise, and expectations of future operating results. However, MLP yields are also susceptible in the short-term to fluctuations in interest rates and the prices of MLP securities may decline when interest rates rise. |
· | Catastrophic Event Risk. MLPs operating in the energy sector are subject to many dangers inherent in the production, exploration, management, transportation, processing and distribution of natural gas, natural gas liquids, crude oil, refined petroleum products and other hydrocarbons. These dangers include leaks, fires, explosions, damage to facilities and equipment resulting from natural disasters, inadvertent damage to facilities and equipment (such as those suffered by BP’s Deepwater Horizon drilling platform in 2010) and terrorist acts. Since the September 11th terrorist attacks, the U.S. government has issued warnings that energy assets, specifically U.S. pipeline infrastructure, may be targeted in future terrorist attacks. These dangers give rise to risks of substantial losses as a result of loss or destruction of reserves; damage to or destruction of property, facilities and equipment; pollution and environmental damage; and personal injury or loss of life. Any occurrence of such catastrophic events could bring about a limitation, suspension or discontinuation of the operations of certain assets owned by such MLP. MLPs operating in the energy sector may not be fully insured against all risks inherent in their business operations and, therefore, accidents and catastrophic events could adversely affect such companies’ financial condition and ability to pay distributions to shareholders. We expect that increased governmental regulation to mitigate such catastrophic risk such as the recent oil spills referred to above, could increase insurance premiums and other operating costs for MLPs. |
· | Midstream . MLPs that operate midstream assets are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, increasing operating expenses and economic conditions, among others. Further, MLPs that operate gathering and processing assets are subject to natural declines in the production of the oil and gas fields they serve. In addition, some gathering and processing contracts subject the owner of such assets to direct commodity price risk. |
· | Exploration and production . Exploration and production MLPs are particularly vulnerable to declines in the demand for and prices of crude oil and natural gas. Reductions in prices for crude oil and natural gas can cause a given reservoir to become uneconomic for continued production earlier than it would if prices were higher, resulting in the plugging and abandonment of, and cessation of production from, that reservoir. In addition, lower commodity prices not only reduce revenues but also can result in substantial downward adjustments in reserve estimates. The accuracy of any reserve estimate is a function of the quality of available data, the accuracy of assumptions regarding future commodity prices and future exploration and development costs and engineering and geological interpretations and judgments. Different reserve engineers may make different estimates of reserve quantities and related revenue based on the same data. Actual oil and gas prices, development expenditures and operating expenses will vary from those assumed in reserve estimates, and these variances may be significant. Any significant variance from the assumptions used could result in the actual quantity of reserves and future net cash flow being materially different from those estimated in reserve reports. In addition, results of drilling, testing and production and changes in prices after the date of reserve estimates may result in downward revisions to such estimates. Substantial downward adjustments in reserve estimates could have a material adverse effect on a given exploration and production company’s financial position and results of operations. In addition, due to natural declines in reserves and production, exploration and production companies must economically find or acquire and develop additional reserves in order to maintain and grow their revenues and distributions. Exploration and production MLPs seek to reduce cash flow volatility associated with commodity prices by executing multi-year hedging strategies that fix the price of gas and oil produced. There can be no assurance that the hedging strategies currently employed by these MLPs are currently effective or will remain effective. |
· | Marine shipping . Marine shipping MLPs are primarily marine transporters of natural gas, crude oil or refined petroleum products. Marine shipping companies are exposed to many of the same risks as other energy companies. In addition, the highly cyclical nature of the marine transportation industry may lead to volatile changes in charter rates and vessel values, which may adversely affect the revenues, profitability and cash flows of such companies. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the supply and demand for certain energy commodities. Changes in demand for transportation of commodities over longer distances and supply of vessels to carry those commodities may materially affect revenues, profitability and cash flows. The value of marine transportation vessels may fluctuate and could adversely affect the value of shipping company securities in a Fund’s portfolio. Declining marine transportation values could affect the ability of shipping companies to raise cash by limiting their ability to refinance their vessels, thereby adversely impacting such company’s liquidity. Shipping company vessels are at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. In addition, changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes, boycotts and government requisitioning of vessels. These sorts of events could interfere with shipping lanes and result in market disruptions and a significant reduction in cash flow for the shipping companies. |
· | Propane. Propane MLPs are distributors of propane to homeowners for space and water heating. MLPs with propane assets are subject to earnings variability based upon weather conditions in the markets they serve, fluctuating commodity prices, customer conservation and increased use of alternative fuels, increased governmental or environmental regulation, and accidents or catastrophic events, among others. |
· | Natural Resource . MLPs with coal, timber, fertilizer and other mineral assets are subject to supply and demand fluctuations in the markets they serve, which will be impacted by a wide range of domestic and foreign factors including fluctuating commodity prices, the level of their customers’ coal stockpiles, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, declines in production, mining accidents or catastrophic events, health claims and economic conditions, among others. In light of increased state and federal regulation, it has been increasingly difficult to obtain and maintain the permits necessary to mine coal. Further, such permits, if obtained, have increasingly contained more stringent, and more difficult and costly to comply with, provisions relating to environmental protection. |
· | Midstream . Midstream MLPs that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, increasing operating expenses and economic conditions, among others. |
· | Pipeline . Pipeline MLPs are not subject to direct commodity price exposure because they do not own the underlying energy commodity. However, the MLP sector can be hurt by market perception that MLPs’ performance and distributions are directly tied to commodity prices. Also, a significant decrease in the production of natural gas, oil, or other energy commodities, due to a decline in production from existing facilities, import supply disruption, or otherwise, would reduce revenue and operating income of MLPs and, therefore, the ability of MLPs to make distributions to partners. |
2014
|
2013
|
2012
(1)(2)
|
|
Net Asset Value, Beginning of Period
|
$17.99
|
$17.87
|
$20.00
|
Net Investment Income (Loss)*
|
$(0.04)
|
$(0.03)
|
$0.03
|
Return of Capital
|
$1.44
|
$1.47
|
$1.13
|
Net Realized and Unrealized Gain (Loss) on Investments
|
$(3.03)
|
$0.32
(7)
|
$(2.08)
|
Total from Operations
|
$(1.63)
|
$1.76
|
$(0.92)
|
Distributions from Investment Income
|
$(0.28)
|
$(0.00)
|
$(0.02)
|
Return of Capital
|
$(1.27)
|
$(1.64)
|
$(1.19)
|
Total Distributions
|
$(1.55)
|
$(1.64)
|
$(1.21)
|
Net Asset Value, End of Period
|
$14.81
|
$17.99
|
$17.87
|
Total Return
(3)
|
(10.17%)
|
9.98%
|
(4.51%)
|
Net Assets, End of Period (000)
|
$285,134
|
$253,705
|
$89,340
|
Ratio of Expenses to Average Net Assets
|
|||
Before Income Tax Expense
|
0.83%
(8)
|
0.82%
|
0.82%
|
Net Income Tax Expense/(Benefit)
(5)
|
(2.17%)
|
3.83%
|
0.00%
|
Total Expenses/(Benefit)
|
(1.34%)
|
4.65%
|
0.82%
|
Ratio of Investment Income/(Loss) to Average Net Assets
|
|||
Before Income Tax Benefit/(Expense)
|
(0.23%)
|
(0.24%)
|
0.25%
|
Tax Benefit/(Expense)
(6)
|
0.04%
|
0.07%
|
(0.00%)
|
Net Investment Income (Loss)
|
(0.19%)
|
(0.17%)
|
0.25%
|
Portfolio Turnover
(3)(4)
|
44%
|
37%
|
2%
|
* | Per share data calculated using average shares method. |
(1) | For the period ended November 30, 2012. All ratios for the period have been annualized. |
(2) | The Fund commenced operations on March 12, 2012. |
(3) | Returns and portfolio turnover rates are for the period indicated and have not been annualized. Returns do not reflect the deduction of taxes the shareholder would pay on fund distributions or redemption of Fund shares. |
(4) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
(5) | Net Income tax expense for the ratio calculation is derived from net investment, and realized and unrealized gains/(losses). |
(6) | Income tax benefit/(expense) for the ratio calculation is derived from net investment income/(loss) only. |
(7) | Realized and unrealized gains and losses per share are balancing amounts necessary to reconcile the change in Net Asset Value for the period, and may not reconcile with the aggregate gains and losses in the Statements of Operations due to share transactions for the period. |
(8) | Includes franchise tax expenses. Without franchise tax expenses, the net expense ratio would be 0.82%. |
2014
|
2013
(1)(2)
|
|
Net Asset Value, Beginning of Period
|
$21.15
|
$20.00
|
Net Investment Income (Loss)*
|
$(0.12)
|
$(0.09)
|
Return of Capital
|
$1.27
|
$1.08
|
Net Realized and Unrealized Gain (Loss) on Investments
|
$1.01
|
$1.15
|
Total from Operations
|
$2.16
|
$2.14
|
Distributions from Investment Income
|
$(0.72)
|
$(0.00)
|
Return of Capital
|
$(0.84)
|
$(0.99)
|
Total Distributions
|
$(1.56)
|
$(0.99)
|
Net Asset Value, End of Period
|
$21.75
|
$21.15
|
Total Return
(3)
|
10.53%
|
11.00%
|
Net Assets, End of Period (000)
|
$46,760
|
$33,841
|
Ratio of Expenses to Average Net Assets
|
||
Before Income Tax Expense
|
0.84
(7)
|
0.82%
|
Net Income Tax Expense/(Benefit)
(5)
|
5.07%
|
6.10%
|
Total Expenses/(Benefit)
|
5.91%
|
6.92%
|
Ratio of Investment Income/(Loss) to Average Net Assets
|
||
Before Income Tax Benefit/(Expense)
|
(0.84%)
|
(0.82%)
|
Tax Benefit/(Expense)
(6)
|
0.30%
|
0.29%
|
Net Investment Income (Loss)
|
(0.54%)
|
(0.53%)
|
Portfolio Turnover
(3)(4)
|
47%
|
0%
|
* | Per share data calculated using average shares method. |
(1) | For the period ended November 30, 2013. All ratios for the period have been annualized. |
(2) | The Fund commenced operations on February 11, 2013. |
(3) | Returns and portfolio turnover rates are for the period indicated and have not been annualized. Returns do not reflect the deduction of taxes the shareholder would pay on fund distributions or redemption of Fund shares. |
(4) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
(5) | Net Income tax expense for the ratio calculation is derived from net investment, and realized and unrealized gains/(losses). |
(6) | Income tax benefit/(expense) for the ratio calculation is derived from net investment income/(loss) only. |
(7) | Includes franchise tax expenses. Without franchise tax expenses, the net expense ratio would be 0.82%. |
Call: | 1-855-YES-YETF |
Write: | Exchange Traded Concepts Trust |
Visit: | www.yetfs.com |
GENERAL INFORMATION ABOUT THE TRUST
|
1
|
ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES, POLICIES AND RELATED RISKS
|
1
|
SPECIAL CONSIDERATIONS AND RISKS
|
8
|
INVESTMENT RESTRICTIONS
|
9
|
EXCHANGE LISTING AND TRADING
|
11
|
MANAGEMENT OF THE TRUST
|
12
|
CODES OF ETHICS
|
19
|
PROXY VOTING POLICIES
|
19
|
INVESTMENT ADVISORY AND OTHER SERVICES
|
19
|
THE PORTFOLIO MANAGER
|
20
|
THE DISTRIBUTOR
|
21
|
THE ADMINISTRATOR
|
23
|
THE CUSTODIAN
|
23
|
THE TRANSFER AGENT
|
24
|
LEGAL COUNSEL
|
24
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
24
|
PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES
|
24
|
DESCRIPTION OF SHARES
|
24
|
LIMITATION OF TRUSTEES’ LIABILITY
|
25
|
BROKERAGE TRANSACTIONS
|
25
|
PORTFOLIO TURNOVER RATE
|
27
|
BOOK ENTRY ONLY SYSTEM
|
28
|
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
|
29
|
PURCHASE AND ISSUANCE OF SHARES IN CREATION UNITS
|
29
|
DETERMINATION OF NET ASSET VALUE
|
36
|
DIVIDENDS AND DISTRIBUTIONS
|
37
|
FEDERAL INCOME TAXES
|
38
|
FINANCIAL STATEMENTS
|
46
|
EXHIBIT A - PROXY VOTING POLICY AND PROCEDURES
|
A-1
|
§ | Factors that directly relate to that company, such as decisions made by its management or lower demand for the company’s products or services; |
§ | Factors affecting an entire industry, such as increases in production costs; and |
§ | Changes in general financial market conditions that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates or inflation rates. |
· | U.S. Treasury Obligations. U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the federal book‑entry system known as Separately Traded Registered Interest and Principal Securities (“STRIPS”) and Treasury Receipts (“TRs”). |
· | Receipts. Interests in separately traded interest and principal component parts of U.S. government obligations that are issued by banks or brokerage firms and are created by depositing U.S. government obligations into a special account at a custodian bank. The custodian holds the interest and principal payments for the benefit of the registered owners of the certificates or receipts. The custodian arranges for the issuance of the certificates or receipts evidencing ownership and maintains the register. TRs and STRIPS are interests in accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon securities. |
· | U.S. Government Zero Coupon Securities. STRIPS and receipts are sold as zero coupon securities, that is, fixed income securities that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to respond to a greater degree to interest rate changes than are non‑zero coupon securities with similar maturity and credit qualities. |
· | U.S. Government Agencies. Some obligations issued or guaranteed by agencies of the U.S. government are supported by the full faith and credit of the U.S. Treasury, others are supported by the right of the issuer to borrow from the U.S. Treasury, while still others are supported only by the credit of the instrumentality. Guarantees of principal by agencies or instrumentalities of the U.S. government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing on the obligation prior to maturity. Guarantees as to the timely payment of principal and interest do not extend to the value or yield of these securities nor to the value of the Fund’s Shares. |
1. | Purchase securities of an issuer that would cause the Fund to fail to satisfy the diversification requirement for a diversified management company under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
2. | Concentrate its investments in an industry or group of industries (i.e., hold 25% or more of its total assets in the stocks of a particular industry or group of industries), except that the Fund will concentrate to approximately the same extent that its underlying index concentrates in the stocks of such particular industry or group of industries. For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities), repurchase agreements collateralized by U.S. government securities and securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry. |
3. | Borrow money or issue senior securities (as defined under the 1940 Act), except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
4. | Make loans, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
5. | Purchase or sell commodities or real estate, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
6. | Underwrite securities issued by other persons, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
1. | The Fund will not hold illiquid assets in excess of 15% of its net assets. An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Fund has valued the investment. |
2. | The Fund will not invest less than 80% of its total assets in securities that comprise its underlying index. |
Name and Age
|
Position(s) Held with the Trust
|
Term of Office
and Length of Time Served
1
|
Principal Occupation(s)
During Past 5 Years
|
Number of Portfolios in Fund Complex Overseen By Trustee
|
Other Directorships held by Trustee
|
Interested Trustee
|
|||||
J. Garrett Stevens
(35 years old)
|
Trustee and President
|
Trustee
(Since 2009); President
(Since 2011)
|
T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer;
Exchange Traded Concepts Trust II, 2012 to present — President.
|
7
|
BritVil Community Food Pantry — Board Member.
|
Independent Trustees
|
|||||
Timothy J. Jacoby
(62 years old)
|
Trustee
|
Since 2014
2
|
Deloitte & Touche LLP, 2000 to 2014─Partner; Longy School of Music of Bard College, 2010 to present — Board of Governors Member; First Parish in Concord, 2011 to present — Trustees of Parish Donations of First Parish in Concord/Chair.
|
10
|
Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
Name and Age
|
Position(s) Held with the Trust
|
Term of Office
and Length of Time Served
|
Principal Occupation(s)
During Past 5 Years
|
Number of Portfolios in Fund Complex Overseen By Trustee
|
Other Directorships held by Trustee
|
David M. Mahle
(70 years old) |
Trustee
|
Since 2011
|
Jones Day, 2012 to present — Consultant; Jones Day, 2008 to 2011 — Of Counsel; Jones Day, 1988 to 2008 — Partner.
|
10
|
Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
Kurt Wolfgruber
(64 years old)
|
Trustee
|
Since 2012
|
Oppenheimer Funds, Inc., 2007 to 2009 — President.
|
10
|
New Mountain Finance Corp. — Director; Group for the East End —Director; Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
Mark Zurack
(57 years old) |
Trustee
|
Since 2011
|
Columbia Business School, 2002 to present — Professor.
|
8
|
Source ETF Trust (1) — Trustee
|
(1) | Each Trustee shall serve during the continued life of the Trust until he or she dies, resigns, is declared bankrupt or incompetent by a court of competent jurisdiction, or is removed. |
(2) | Timothy Jacoby was appointed to serve as an Independent Trustee to the Board effective June 1, 2014. |
Name and Age
|
Position(s) Held
with the Trust
|
Term of Office
and Length of
Time Served
|
Principal Occupation(s)
During Past 5 Years
|
Other Directorships held during the
Past 5 Years
|
J. Garrett Stevens
(35 years old) |
Trustee and President
|
Trustee
(Since 2009), President (Since 2011) |
T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer; and Exchange Traded Concepts Trust II, 2012 to present — President.
|
ETF Series Solutions — Trustee; BritVil Community Food Pantry — Board Member .
|
Name
|
Aggregate Compensation
|
Pension or Retirement Benefits Accrued as Part of Fund Expenses
|
Estimated Annual Benefits Upon Retirement
|
Total Compensation from the Trust
and Fund Complex
1,2
|
Interested Trustee
|
||||
Stevens
|
$0
|
n/a
|
n/a
|
$0 for service on
(1) board
|
Independent Trustees
|
||||
Jacoby
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Wolfgruber
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Mahle
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Zurack
|
$35,000
|
n/a
|
n/a
|
$35,000 for service
on (2) boards
|
1 | Aggregate Compensation is allocated equally between the Trust and Source ETF Trust in the Fund Complex. |
2 | As compensation for service on the Exchange Trade Concepts Trust and Source ETF Trust Boards, the Trustees are entitled to the $35,000 annual base fee, as well as a $2,500 in-person meeting fee or $4,000 per day, whichever is lower. The Trustees also will be paid $1,000 per telephonic meeting. The Audit Committee chair will also receive a $5,000 annual fee. |
3 | Mr. Jacoby, Mr. Wolfgruber and Mr. Mahle each receive $15,000 for their service on the Board of Exchange Traded Concepts Trust II in the Fund Complex. |
Name
|
Dollar Range of Shares
Owned in the Fund
|
Aggregate Dollar
Range of Fund Shares
(Owned in All Funds
in the Fund Complex)
1
|
Interested Trustee
|
||
J. Garrett Stevens
|
None
|
None
|
Independent Trustees
|
||
Timothy J. Jacoby
|
None
|
None
|
David M. Mahle
|
None
|
None
|
Kurt Wolfgruber
|
None
|
None
|
Mark A. Zurack
|
None
|
None
|
1 | Valuation date is December 31, 2014. |
Name
|
Registered Investment Companies*
|
Other Pooled Investment Vehicles*
|
Other Accounts*
|
|||
Number of Accounts
|
Total Assets
($ millions)
|
Number of Accounts
|
Total Assets
($ millions)
|
Number of Accounts
|
Total Assets
($ millions)
|
|
Dustin Lewellyn
|
2
|
$111.5
|
0
|
$0
|
0
|
$0
|
* | None of the accounts managed by Mr. Lewellyn are subject to performance based advisory fees. |
Issuer
|
Market Value of Investment
|
Morgan Stanley
|
$63,746
|
Bank of America
|
$62,588
|
Wells Fargo
|
$32,851
|
Participant Name and Address
|
Percentage of Ownership
|
Charles Schwab & Co., Inc.
2423 East Lincoln Drive
Phoenix, AZ 85016
|
17.57%
|
National Financial Services, LLC
200 Liberty Street
One World Financial Centre
5th Floor
New York, NY 10281-1003
|
13.77%
|
Folio Investing
8180 Greensboro Drive
8th Floor
McLean, VA 22102
|
12.68%
|
TD Ameritrade
200 South 108th Avenue
Omaha, NE 68154-2631
|
9.22%
|
RBC Capital Markets
World Financial Center
200 Vesey Street, 8th Floor
New York, NY 10281
|
8.30%
|
Knight Capital Group
545 Washington Boulevard
Jersey City, NJ 07310
|
5.83%
|
I. | Election of Board of Directors |
· | Exchange Traded Concepts will generally vote in support of management’s nominees for the board of directors; however, Exchange Traded Concepts may choose not to support management’s proposed board if circumstances warrant such consideration. |
II. | Appointment of Independent Auditors |
· | Exchange Traded Concepts will support the recommendation of the respective corporation’s board of directors. |
III. | Issues of Corporate Structure and Shareholder Rights |
· | Proposals may originate from either management or shareholders, and among other things, may request revisions to the corporate bylaws that will affect shareholder ownership rights. Exchange Traded Concepts does not generally support obstacles erected by corporations to prevent mergers or takeovers with the view that such actions may depress the corporation’s marketplace value. |
· | Exchange Traded Concepts supports the following types of corporate structure and shareholder rights proposals: |
o | Management proposals for approval of stock repurchase programs, stock splits (including reverse splits) |
o | Authorization to increase shares outstanding |
o | The ability of shareholders to vote on shareholder rights plans (poison pills) |
o | Shareholder rights to eliminate or remove supermajority provisions |
o | Shareholder rights to call special meetings and to act by written consent |
· | Exchange Traded Concepts votes against management on the following items which have potentially substantial financial or best interest impact: |
o | Capitalization changes that add “blank check” classes of stock or classes that dilute the voting interests of existing shareholders which are contrary to the best interest of existing shareholders, anti-takeover and related provisions that serve to prevent the majority of shareholders from exercising their rights or effectively deter appropriate tender offers and other offers |
o | Amendments to bylaws which would require super-majority shareholder votes to pass or repeal certain provisions |
o | Elimination of shareholders’ right to call special meetings |
o | Establishment of classified boards of directors |
o | Reincorporation in a state which has more stringent anti-takeover and related provisions |
o | Shareholder rights plans that allow the board of directors to block appropriate offers to shareholders or which trigger provisions preventing legitimate offers from proceeding |
o | Excessive compensation |
o | Change-in-control provisions in non-salary compensation plans, employment contracts, and severance agreements which benefit management and would be costly to shareholders if triggered |
o | Adjournment of meeting to solicit additional votes |
o | “Other business as properly comes before the meeting” proposals which extend “blank check” powers to those acting as proxy |
o | Proposals requesting re-election of insiders or affiliated directors who serve on audit, compensation, and nominating committees |
IV. | Mergers and Acquisitions |
· | Against offers with potentially damaging consequences for minority shareholders because of illiquid stock, especially in some non-US markets |
· | For offers that concur with index calculators’ treatment and the ability to meet the clients’ return objectives for passive funds |
· | For proposals to restructure or liquidate closed end investment funds in which the secondary market price is substantially lower than the net asset value |
V. | Executive and Director Equity-Based Compensation |
· | Exchange Traded Concepts is generally in favor of properly constructed equity-based compensation arrangements. Exchange Traded Concepts will support proposals that provide management with the ability to implement compensation arrangements that are both fair and competitive. |
VI. | Corporate Social and Policy Issues |
· | Proposals usually originate from shareholders and may require a revision of certain business practices and policies. |
GENERAL INFORMATION ABOUT THE TRUST
|
3
|
ADDITIONAL INDEX INFORMATION
|
3
|
ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES, POLICIES AND RELATED RISKS
|
6
|
DESCRIPTION OF PERMITTED INVESTMENTS
|
6
|
SPECIAL CONSIDERATIONS AND RISKS
|
17
|
INVESTMENT RESTRICTIONS
|
19
|
EXCHANGE LISTING AND TRADING
|
20
|
MANAGEMENT OF THE TRUST
|
21
|
CODES OF ETHICS
|
29
|
PROXY VOTING POLICIES
|
29
|
INVESTMENT ADVISORY AND OTHER SERVICES
|
29
|
THE PORTFOLIO MANAGER
|
31
|
THE DISTRIBUTOR
|
32
|
THE ADMINISTRATOR
|
34
|
THE CUSTODIAN
|
34
|
THE TRANSFER AGENT
|
34
|
LEGAL COUNSEL
|
34
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
35
|
PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES
|
35
|
DESCRIPTION OF SHARES
|
35
|
LIMITATION OF TRUSTEES’ LIABILITY
|
35
|
BROKERAGE TRANSACTIONS
|
36
|
PORTFOLIO TURNOVER RATE
|
38
|
BOOK ENTRY ONLY SYSTEM
|
39
|
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
|
40
|
PURCHASE AND ISSUANCE OF SHARES IN CREATION UNITS
|
40
|
DETERMINATION OF NET ASSET VALUE
|
48
|
DIVIDENDS AND DISTRIBUTIONS
|
49
|
FEDERAL INCOME TAXES
|
49
|
FINANCIAL STATEMENTS
|
55
|
EXHIBIT A - PROXY VOTING POLICY AND PROCEDURES
|
A-1
|
·
|
A market capitalization of at least $400 million;
|
·
|
An average daily value traded in the last three months of at least $1 million;
|
·
|
Listing on a securities exchange in the United States;
|
·
|
Structured as an MLP;
|
·
|
Classified as a High Income MLP (defined below);
|
·
|
Have a Minimum Quarterly Distribution (“MQD”) (defined below) policy in place; and
|
·
|
At least one distribution has been paid out to shareholders.
|
· | A market capitalization of at least $1 billion; |
· | An average daily value traded in the last three months of at least $4 million; |
· | Listing on a securities exchange in the United States; |
· | Incorporated as an MLP; |
· | Classified as an Infrastructure MLP; and |
· | At least one distribution has been paid out to shareholders. |
§ | Factors that directly relate to that company, such as decisions made by its management or lower demand for the company’s products or services; |
§ | Factors affecting an entire industry, such as increases in production costs; and |
§ | Changes in general financial market conditions that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates or inflation rates. |
· | U.S. Treasury Obligations. U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the federal book‑entry system known as Separately Traded Registered Interest and Principal Securities (“STRIPS”) and Treasury Receipts (“TRs”). |
· | Receipts. Interests in separately traded interest and principal component parts of U.S. government obligations that are issued by banks or brokerage firms and are created by depositing U.S. government obligations into a special account at a custodian bank. The custodian holds the interest and principal payments for the benefit of the registered owners of the certificates or receipts. The custodian arranges for the issuance of the certificates or receipts evidencing ownership and maintains the register. TRs and STRIPS are interests in accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon securities. |
· | U.S. Government Zero Coupon Securities. STRIPS and receipts are sold as zero coupon securities, that is, fixed income securities that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to respond to a greater degree to interest rate changes than are non‑zero coupon securities with similar maturity and credit qualities. |
· | U.S. Government Agencies. Some obligations issued or guaranteed by agencies of the U.S. government are supported by the full faith and credit of the U.S. Treasury, others are supported by the right of the issuer to borrow from the U.S. Treasury, while still others are supported only by the credit of the instrumentality. Guarantees of principal by agencies or instrumentalities of the U.S. government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing on the obligation prior to maturity. Guarantees as to the timely payment of principal and interest do not extend to the value or yield of these securities nor to the value of the Funds’ Shares. |
1. | Concentrate its investments in an industry or group of industries ( i.e. , hold 25% or more of its total assets in the stocks of a particular industry or group of industries), except that the Fund will concentrate to approximately the same extent that its Index concentrates in the stocks of such particular industry or group of industries. For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities), repurchase agreements collateralized by U.S. government securities and securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry. |
2. | Borrow money or issue senior securities (as defined under the 1940 Act), except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
3. | Make loans, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
4. | Purchase or sell commodities or real estate, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
5. | Underwrite securities issued by other persons, except to the extent permitted under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time. |
1. | The Fund will not hold illiquid assets in excess of 15% of its net assets. An illiquid asset is any asset which may not be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Fund has valued the investment. |
2. | Under normal circumstances, the Fund will not invest less than 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities of Master Limited Partnerships (“MLPs”). Prior to any change in this 80% investment policy, the Fund will provide shareholders with 60 days’ written notice. |
Name and Age
|
Position(s) Held
with the Trust
|
Term of Office
and Length of
Time Served
1
|
Principal Occupation(s)
During Past 5 Years
|
Number of Portfolios in Fund Complex Overseen By Trustee
|
Other Directorships held by Trustee
|
Interested Trustee
|
|||||
J. Garrett Stevens
(35 years old)
|
Trustee and President
|
Trustee
(Since 2009); President
(Since 2011)
|
T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer;
Exchange Traded Concepts Trust II, 2012 to present — President.
|
7
|
BritVil Community Food Pantry — Board Member.
|
Independent Trustees
|
|||||
Timothy J. Jacoby
(62 years old)
|
Trustee
|
Since 2014
2
|
Deloitte & Touche LLP, 2000 to 2014─Partner; Longy School of Music of Bard College, 2010 to present — Board of Governors Member; First Parish in Concord, 2011 to present — Trustees of Parish Donations of First Parish in Concord/Chair.
|
10
|
Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
David M. Mahle
(70 years old) |
Trustee
|
Since 2011
|
Jones Day, 2012 to present — Consultant; Jones Day, 2008 to 2011 — Of Counsel; Jones Day, 1988 to 2008 — Partner.
|
10
|
Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
Kurt Wolfgruber
(64 years old)
|
Trustee
|
Since 2012
|
Oppenheimer Funds, Inc., 2007 to 2009 — President.
|
10
|
New Mountain Finance Corp. — Director; Group for the East End —Director; Exchange Traded Concepts Trust II (2) — Trustee; Source ETF Trust (1) — Trustee
|
Mark Zurack
(57 years old) |
Trustee
|
Since 2011
|
Columbia Business School, 2002 to present — Professor.
|
8
|
Source ETF Trust (1) — Trustee
|
(1) | Each Trustee shall serve during the continued life of the Trust until he or she dies, resigns, is declared bankrupt or incompetent by a court of competent jurisdiction, or is removed. |
(2) | Timothy Jacoby was appointed to serve as an Independent Trustee to the Board effective June 1, 2014. |
Name and Age
|
Position(s) Held
with the Trust
|
Term of Office
and Length of
Time Served
|
Principal Occupation(s) During Past 5 Years
|
Other Directorships held during the
Past 5 Years
|
J. Garrett Stevens
(35 years old) |
Trustee and President
|
Trustee
(Since 2009), President (Since 2011) |
T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer; and Exchange Traded Concepts Trust II, 2012 to present — President.
|
ETF Series Solutions — Trustee; BritVil Community Food Pantry — Board Member.
|
Richard Hogan
(53 years old) |
Treasurer and Secretary
|
Since 2011
|
Yorkville ETF Advisors, 2011 to present — Managing Member; Private Investor — 2003 to present; Exchange Traded Concepts Trust, 2011 to present — ETF Advisor; Peconic Land Trust, 2012 to present — Board Member.
|
Trust of Suffolk County, NY; Exchange Traded Concepts Trust II — Trustee, Chairman of Board, Secretary.
|
Peter Rodriguez
(52 years old) |
Assistant
Treasurer |
Since 2011
|
Director, Fund Accounting, SEI Investments Global Funds Services, 2011 to present; Director, Mutual Fund Trading, SEI Private Trust Company, 2009 to 2011; and Director, Asset Data Services, Global Wealth Services, 2006 to 2009.
|
None
|
Eric Kleinschmidt
(46 years old)
|
Assistant Treasurer
|
Since 2013
|
Director, Fund Accounting, SEI Investments Global Funds Services, 2004 to present, Manager, Fund Accounting 1999 to 2004.
|
None
|
Name
|
Aggregate Compensation
|
Pension or Retirement Benefits Accrued as Part of Fund Expenses
|
Estimated Annual Benefits Upon Retirement
|
Total Compensation from the Trust
and Fund Complex
1,2
|
Interested Trustee
|
||||
Stevens
|
$0
|
n/a
|
n/a
|
$0 for service
on (1) board
|
Independent Trustees
|
||||
Jacoby
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Wolfgruber
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Mahle
|
$35,000
|
n/a
|
n/a
|
$50,000 for service
on (3)
3
boards
3
|
Zurack
|
$35,000
|
n/a
|
n/a
|
$35,000 for service
on (2) boards
|
1 | Aggregate Compensation is allocated equally between the Trust and Source ETF Trust in the Fund Complex. |
2 | As compensation for service on the Exchange Trade Concepts Trust and Source ETF Trust Boards, the Trustees are entitled to the $35,000 annual base fee, as well as a $2,500 in-person meeting fee or $4,000 per day, whichever is lower. The Trustees also will be paid $1,000 per telephonic meeting. The Audit Committee chair will also receive a $5,000 annual fee. |
3 | Mr. Jacoby, Mr. Wolfgruber and Mr. Mahle each receive $15,000 for their service on the Board of Exchange Traded Concepts Trust II in the Fund Complex. |
Name
|
Dollar Range of Shares
Owned in the Fund
|
Aggregate Dollar Range of
Fund Shares (Owned in All
Funds in the Fund Complex)
1
|
Interested Trustee
|
||
J. Garrett Stevens
|
None
|
None
|
Independent Trustees
|
||
Timothy J. Jacoby
|
None
|
None
|
David M. Mahle
|
None
|
None
|
Kurt Wolfgruber
|
None
|
None
|
Mark A. Zurack
|
None
|
None
|
1 | Valuation date is December 31, 2014. |
Fund
|
Sub-Adviser
|
Fee Paid
|
||
11/30/12
|
11/30/13
|
11/30/14
|
||
Yorkville High Income MLP ETF
|
Yorkville ETF Advisors, LLC
|
$216,392
|
$1,275,262
|
$2,124,384
|
Index Management Solutions, LLC
|
$20,000
|
$103,860
|
$162,323
|
|
Yorkville High Income Infrastructure MLP ETF
|
Yorkville ETF Advisors, LLC
|
*
|
$97,704
|
$282,989
|
Index Management Solutions, LLC
|
*
|
$10,530
|
$21,637
|
* | The Yorkville High Income Infrastructure MLP ETF commenced operations on February 11, 2013 and, therefore, the Adviser did not pay any sub-advisory fees for the fiscal year ended November 30, 2012. |
Name
|
Dollar Range of Shares Owned in Yorkville High Income MLP ETF
1
|
Dollar Range of Shares Owned
in Yorkville High Income
Infrastructure MLP ETF
1
|
Dustin Lewellyn
|
$1 - $10,000
|
None
|
1 | Valuation date is November 30, 2014. |
Name
|
Registered
Investment Companies*
|
Other Pooled
Investment Vehicles*
|
Other Accounts*
|
|||
Number of Accounts
|
Total Assets
($ millions)
|
Number of Accounts
|
Total Assets
($ millions)
|
Number of Accounts
|
Total Assets
($ millions)
|
|
Dustin Lewellyn
|
2
|
$111.5
|
0
|
$0
|
0
|
$0
|
* | None of the accounts managed by Mr. Lewellyn are subject to performance based advisory fees. |
Fund
|
Portfolio Turnover
|
|
11/30/13
|
11/30/14
|
|
Yorkville High Income MLP ETF
|
37%
|
44%
|
Yorkville High Income Infrastructure MLP ETF
|
0%
|
47%
|
Fund
|
Participant Name and Address
|
Percentage of Ownership
|
Yorkville High Income MLP ETF
|
Raymond James & Associates Inc.
880 Carillon Parkway
St. Petersburg, FL 33716
|
23.87%
|
Charles Schwab & Co., Inc.
2423 East Lincoln Drive
Phoenix, AZ 85016
|
17.83%
|
|
Perishing, LLC
One Pershing Plaza
Grove Street PATH Station
Jersey City, NJ 07399
|
9.89%
|
|
National Financial Services, LLC
200 Liberty Street
One World Financial Centre
5th Floor
New York, NY 10281-1003
|
9.11%
|
|
TD Ameritrade
200 South 108th Avenue
Omaha, NE 68154-2631
|
6.37%
|
|
Advanced Energy Industries, Inc.
1625 Sharp Point Drive
Fort Collins, CO 80525
|
5.51%
|
|
Yorkville High Income Infrastructure MLP ETF
|
Raymond James & Associates Inc.
880 Carillon Parkway
St. Petersburg, FL 33716
|
33.58%
|
Perishing, LLC
One Pershing Plaza
Grove Street PATH Station
Jersey City, NJ 07399
|
23.08%
|
|
Charles Schwab & Co., Inc.
2423 East Lincoln Drive
Phoenix, AZ 85016
|
14.57%
|
|
National Financial Services, LLC
200 Liberty Street
One World Financial Centre
5th Floor
New York, NY 10281-1003
|
7.90%
|
I. | Election of Board of Directors |
· | Exchange Traded Concepts will generally vote in support of management’s nominees for the board of directors; however, Exchange Traded Concepts may choose not to support management’s proposed board if circumstances warrant such consideration. |
II. | Appointment of Independent Auditors |
· | Exchange Traded Concepts will support the recommendation of the respective corporation’s board of directors. |
III. | Issues of Corporate Structure and Shareholder Rights |
· | Proposals may originate from either management or shareholders, and among other things, may request revisions to the corporate bylaws that will affect shareholder ownership rights. Exchange Traded Concepts does not generally support obstacles erected by corporations to prevent mergers or takeovers with the view that such actions may depress the corporation’s marketplace value. |
· | Exchange Traded Concepts supports the following types of corporate structure and shareholder rights proposals: |
o | Management proposals for approval of stock repurchase programs, stock splits (including reverse splits) |
o | Authorization to increase shares outstanding |
o | The ability of shareholders to vote on shareholder rights plans (poison pills) |
o | Shareholder rights to eliminate or remove supermajority provisions |
o | Shareholder rights to call special meetings and to act by written consent |
· | Exchange Traded Concepts votes against management on the following items which have potentially substantial financial or best interest impact: |
o | Capitalization changes that add “blank check” classes of stock or classes that dilute the voting interests of existing shareholders which are contrary to the best interest of existing shareholders, anti-takeover and related provisions that serve to prevent the majority of shareholders from exercising their rights or effectively deter appropriate tender offers and other offers |
o | Amendments to bylaws which would require super-majority shareholder votes to pass or repeal certain provisions |
o | Elimination of shareholders’ right to call special meetings |
o | Establishment of classified boards of directors |
o | Reincorporation in a state which has more stringent anti-takeover and related provisions |
o | Shareholder rights plans that allow the board of directors to block appropriate offers to shareholders or which trigger provisions preventing legitimate offers from proceeding |
o | Excessive compensation |
o | Change-in-control provisions in non-salary compensation plans, employment contracts, and severance agreements which benefit management and would be costly to shareholders if triggered |
o | Adjournment of meeting to solicit additional votes |
o | “Other business as properly comes before the meeting” proposals which extend “blank check” powers to those acting as proxy |
o | Proposals requesting re-election of insiders or affiliated directors who serve on audit, compensation, and nominating committees |
IV. | Mergers and Acquisitions |
· | Against offers with potentially damaging consequences for minority shareholders because of illiquid stock, especially in some non-US markets |
· | For offers that concur with index calculators’ treatment and the ability to meet the clients’ return objectives for passive funds |
· | For proposals to restructure or liquidate closed end investment funds in which the secondary market price is substantially lower than the NAV |
V. | Executive and Director Equity-Based Compensation |
· | Exchange Traded Concepts is generally in favor of properly constructed equity-based compensation arrangements. Exchange Traded Concepts will support proposals that provide management with the ability to implement compensation arrangements that are both fair and competitive. |
VI. | Corporate Social and Policy Issues |
· | Proposals usually originate from shareholders and may require a revision of certain business practices and policies. |
Item 28 . | Exhibits |
(a)(1) | Certificate of Trust dated July 17, 2009 of Exchange Traded Concepts Trust (formerly, FaithShares Trust) (the “Trust” or the “Registrant”) is incorporated herein by reference to Exhibit (a)(1) of Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the U.S. Securities and Exchange Commission (the “SEC”) via EDGAR Accession No. 0000950123-09-023575 on July 20, 2009. |
(a)(2) | Written Instrument, dated July 14, 2011, amending the Registrant’s Certificate of Trust, dated July 17, 2009, is incorporated herein by reference to Exhibit (a)(2) of Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-11-078120 on August 17, 2011. |
(a)(3) | Registrant’s Agreement and Declaration of Trust dated October 13, 2009 is incorporated herein by reference to Exhibit (a)(2) of Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-09-068184 on December 4, 2009. |
(a)(4) | Registrant’s Amended and Restated Agreement and Declaration of Trust, dated as of October 3, 2011, is incorporated herein by reference to Exhibit (a)(4) of Post-Effective Amendment No. 4 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-11-100027 on November 22, 2011. |
(b)(1) | Registrant’s By-Laws dated October 20, 2009 are incorporated herein by reference to Exhibit (b) of Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-09-023575 on July 20, 2009. |
(b)(2) | Registrant’s Amended and Restated By-Laws dated October 3, 2011 are incorporated herein by reference to Exhibit (b)(2) of Post-Effective Amendment No. 4 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-11-100027 on November 22, 2011. |
(c) | Not applicable. |
(d)(1) | Interim Advisory Agreement dated January 16, 2015 by and between the Registrant and Exchange Traded Concepts, LLC is filed herewith. |
(d)(2) | Advisory Agreement between the Registrant and Exchange Traded Concepts, LLC, relating to the Hull Tactical ETF, to be filed by amendment. |
(d)(3) | Advisory Agreement between the Registrant and Exchange Traded Concepts, LLC, relating to the EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(d)(4) | Interim Sub-Advisory Agreement dated January 16, 2015 between Exchange Traded Concepts, LLC and Yorkville ETF Advisors, LLC is filed herewith. |
(d)(5) | Interim Sub-Advisory Agreement dated January 16, 2015 between Exchange Traded Concepts, LLC and Penserra Capital Management LLC is filed herewith. |
(d)(6) | Sub-Advisory Agreement between Exchange Traded Concepts, LLC and HTAA, LLC, with respect to the Hull Tactical US ETF, to be filed by amendment. |
(d)(7) | Sub-Advisory Agreement between Exchange Traded Concepts, LLC and [SUB-ADVISER], with respect to the EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(e)(1) | Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. is incorporated herein by reference to Exhibit (e)(l) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(e)(2) | Amendment No. 2 and revised Schedule A, effective December 6, 2012, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. are incorporated herein by reference to Exhibit (e)(2) of Post-Effective Amendment No. 43 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-15629 and 811-22263), as filed with the SEC on January 29, 2013. |
(e)(3) | Amendment No. 3 and revised Schedule A, effective as of February 28, 2013, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. is incorporated herein by reference to Exhibit (e)(3) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(e)(4) | Amendment No. 4, effective as of November 11, 2013, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co . is incorporated herein by reference to Exhibit (e)(4) of Post-Effective Amendment No. 90 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-14-001917 on March 28, 2014. |
(e)(5) | Amendment No. 5 and revised Schedule A, effective as of October 1, 2013, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. is incorporated herein by reference to Exhibit (e)(4) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(e)(6) | Amendment No. 6 and revised Schedule A, effective February 18, 2014, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. is filed herewith. |
(e)(7) | Amendment No. 7 and revised Schedule A, effective November 11, 2014, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. is filed herewith. |
(e)(8) | Amendment and revised Schedule A to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co., reflecting the addition of the EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(e)(9) | Form of Authorized Participant Agreement is incorporated herein by reference to Exhibit (e)(2) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(f) | Not applicable. |
(g)(1) | Domestic Custody Agreement dated March 2, 2012 between the Registrant and JPMorgan Chase Bank, National Association is incorporated herein by reference to Exhibit (g) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(g)(2) | Joinder and Amendment dated January 31, 2013 to Domestic Custody Agreement dated March 2, 2012 between the Registrant, Yorkville High Income Infrastructure MLP ETF and JPMorgan Chase Bank, National Association, is incorporated herein by reference to Exhibit (g)(2) of Pre-Effective Amendment No. 106 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC on August 28, 2014. |
(g)(3) | Custodian Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is incorporated herein by reference to Exhibit (g) of Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-09-059434 on November 6, 2009. |
(g)(4) | Appendix A, dated as of October 22, 2014, to the Custodian Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is filed herewith. |
(h)(1) | Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services is incorporated herein by reference to Exhibit (h)(l) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012 . |
(h)(2) | New Fund Addendum, dated March 2, 2012, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services, relating to the Yorkville High Income MLP ETF, is incorporated herein by reference to Exhibit (h)(2) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(h)(3) | Amendment and revised Schedule I, effective as of April 19, 2012, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services is incorporated herein by reference to Exhibit (h)(3) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(h)(4) | New Fund Addendum, dated April 19, 2012, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services, relating to the YieldShares High Income ETF (formerly, the Sustainable North American Oil Sands ETF), is incorporated herein by reference to Exhibit (h)(3) of Post-Effective Amendment No. 43 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC on January 29, 2013. |
(h)(5) | Amendment dated March 1, 2013 to the New Fund Addendum dated April 19, 2012 to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services, relating to the YieldShares High Income ETF, is incorporated herein by reference to Exhibit (h)(8) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(h)(6) | Amendment No. 2 and revised Schedule I, effective December 6, 2012, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services are incorporated herein by reference to Exhibit (h)(2) of Post-Effective Amendment No. 43 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC on January 29, 2013. |
(h)(7) | New Fund Addendum, dated January 15, 2013, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services, relating to the Forensic Accounting ETF, is incorporated herein by reference to Exhibit (h)(4) of Post-Effective Amendment No. 43 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC on January 29, 2013. |
(h)(8) | Amendment No. 3 and revised Schedule I, effective as of February 28, 2013, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services is incorporated herein by reference to Exhibit (h)(7) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(h)(9) | Amendment No. 4 and revised Schedule I, effective as of October 1, 2013, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services is incorporated herein by reference to Exhibit (h)(9) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(h)(10) | New Fund Addendum, dated October 1, 2013, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services, relating to the ROBO-STOX TM Global Robotics and Automation Index ETF, is incorporated herein by reference to Exhibit (h)(10) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(h)(11) | Amendment No. 6 and revised Schedule I, effective as of November 11, 2014, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services is filed herewith. |
(h)(12) | New Fund Addendum, dated November 11, 2014, to the Amended and Restated Administration Agreement between the Registrant and SEI Investments Global Funds Services, relating to the EMQQ The Emerging Markets Internet & Ecommerce ETF , is filed herewith. |
(h)(13) | Agency Services Agreement dated March 2, 2012 between the Registrant and JPMorgan Chase Bank, National Association is incorporated herein by reference to Exhibit (h)(2) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(h)(14) | Joinder and Amendment dated January 31, 2013 to Agency Services Agreement dated March 2, 2012 between the Registrant, Yorkville High Income Infrastructure MLP ETF and JPMorgan Chase Bank, National Association, is incorporated herein by reference to Exhibit (h)(12) of Pre-Effective Amendment No. 106 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC on August 28, 2014. |
(h)(15) | Transfer Agency Services Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is incorporated herein by reference to Exhibit (h) of Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-09-059434 on November 6, 2009. |
(h)(16) | Amendment, dated May 17, 2012, to the Transfer Agency Services Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is incorporated herein by reference to Exhibit (h)(4) of Post-Effective Amendment No. 21 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-034055 on June 8, 2012. |
(h)(17) | Revised Schedule, dated October 4, 2013, to the Transfer Agency Services Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is incorporated herein by reference to Exhibit (h)(15) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(h)(18) | Schedule A, dated as of October 23, 2014, to the Transfer Agency Services Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. is filed herewith. |
(i)(1) | Opinion and Consent of Counsel, Bingham McCutchen LLP, relating to the VelocityShares Equal Risk Weighted Large Cap ETF, is incorporated herein by reference to Exhibit (i)(2) of Post-Effective Amendment No. 69 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-003416 on July 26, 2013. |
(i)(2) | Opinion and Consent of Counsel, Bingham McCutchen LLP, relating to the YieldShares High Income ETF, is incorporated herein by reference to Exhibit (i)(3) of Post-Effective Amendment No. 73 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004144 on August 28, 2013. |
(i)(3) | Opinion and Consent of Counsel, Bingham McCutchen LLP, relating to the Robo-Stox TM Global Robotics and Automation Index ETF, is incorporated herein by reference to Exhibit (i)(4) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(i)(4) | Opinion and Consent of Counsel, Bingham McCutchen LLP, relating to the EMQQ The Emerging Markets Internet & Ecommerce ETF, is incorporated herein by reference to Exhibit (i)(5) of Post-Effective Amendment No. 112 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-14-005792 on November 10, 2014. |
(i)(5) | Opinion and Consent of Counsel, Morgan, Lewis & Bockius LLP, relating to the Forensic Accounting ETF, Yorkville High Income MLP ETF and Yorkville High Income Infrastructure MLP ETF, is filed herewith. |
(i)(6) | Opinion and Consent of Counsel, Morgan, Lewis & Bockius LLP, relating to the Hull Tactical US ETF, to be filed by amendment. |
(i)(7) | Opinion and Consent of Counsel, Morgan, Lewis & Bockius LLP, relating to the EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(j) | Consent of independent registered public accountants, Cohen Fund Audit Services, Ltd., is filed herewith. |
(k) | Not applicable. |
(l) | Seed Capital Subscription Agreement between the Registrant and Exchange Traded Concepts, LLC (formerly, FaithShares Advisors, LLC) is incorporated herein by reference to Exhibit (l) of Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0000950123-09-068184 on December 4, 2009. |
(m)(1) | Distribution and Service Plan dated October 20, 2009, as revised, is incorporated herein by reference to Exhibit (m)(1) of Post-Effective Amendment No. 78 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-13-004927 on October 18, 2013. |
(m)(2) | Amended Exhibit A to the Distribution and Service Plan dated October 20, 2009, reflecting the addition of the EMQQ The Emerging Markets Internet & Ecommerce ETF, is filed herewith. |
(m)(3) | Amended Exhibit A to the Distribution and Service Plan dated October 20, 2009, reflecting the addition of the Hull Tactical US ETF and EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(n) | Not applicable. |
(o) | Not applicable. |
(p)(1) | Code of Ethics of the Registrant is incorporated herein by reference to Exhibit (p)(l) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(p)(2) | Code of Ethics of Exchange Traded Concepts, LLC is incorporated herein by reference to Exhibit (p)(2) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(p)(3) | Code of Ethics of Yorkville ETF Advisors, LLC is incorporated herein by reference to Exhibit (p)(5) of Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001144204-12-014210 on March 12, 2012. |
(p)(4) | Code of Ethics of Penserra Capital Management LLC, sub-adviser to the EMQQ The Emerging Markets Internet & Ecommerce ETF , is incorporated herein by reference to Exhibit (p)(6) of Post-Effective Amendment No. 112 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-14-005792 on November 10, 2014. |
(p)(5) | Code of Ethics of HTAA, LLC to be filed by amendment. |
(p)(6) | Code of Ethics of [SUB-ADVISER], sub-adviser to the EVE/S&P Municipal Bond Puerto Rico ETF, to be filed by amendment. |
(q) | Powers of Attorney, dated February 28, 2014 , for Messrs. Richard Hogan, David M. Mahle, Kurt A. Wolfgruber, and Mark A. Zurack are incorporated herein by reference to Exhibit (q) of Post-Effective Amendment No. 90 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-156529 and 811-22263), as filed with the SEC via EDGAR Accession No. 0001398344-14-001917 on March 28, 2014. |
Item 29 . | Persons Controlled by or under Common Control with the Fund |
Item 30 . | Indemnification |
Item 31 . | Business and other Connections of the Investment Adviser |
Name and Position with Adviser
|
Name of Other Company
|
Connection with Other Company
|
J. Garrett Stevens
Chief Executive Officer
|
T.S. Phillips Investments, Inc.
|
Vice President
|
Phillips Capital Advisors, Inc.
|
Vice President
|
|
James J. Baker, Jr.
Member
|
Yorkville ETF Advisors, LLC
|
Managing Partner
|
Name
and Position with Yorkville
|
Name of Other Company
|
Connection
with Other Company
|
James J. Baker, Jr.
Managing Partner
|
Exchange Traded Concepts, LLC
|
Managing Partner
|
Richard Hogan
Director
|
Exchange Traded Concepts Trust
|
Treasurer and Secretary
|
Name and Position with Penserra Capital
|
Name of Other Company
|
Connection with Other Company
|
Dustin Lewellyn, CIO
|
Golden Gate Investment Consulting LLC
|
Founder and President
|
George Madrigal, CEO
|
Penserra Securities LLC
|
Managing Partner and CEO
|
Anthony Castelli, CCO
|
Penserra Securities LLC
|
CCO and COO
|
Name and Position with HTAA
|
Name of Other Company
|
Connection with Other Company
|
Item 32 . | Principal Underwriters |
(a) | Furnish the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the securities of the Registrant also acts as a principal underwriter, distributor or investment adviser. |
SEI Daily Income Trust
|
July 15, 1982
|
SEI Liquid Asset Trust
|
November 29, 1982
|
SEI Tax Exempt Trust
|
December 3, 1982
|
SEI Institutional Managed Trust
|
January 22, 1987
|
SEI Institutional International Trust
|
August 30, 1988
|
The Advisors' Inner Circle Fund
|
November 14, 1991
|
The Advisors' Inner Circle Fund II
|
January 28, 1993
|
Bishop Street Funds
|
January 27, 1995
|
SEI Asset Allocation Trust
|
April 1, 1996
|
SEI Institutional Investments Trust
|
June 14, 1996
|
City National Rochdale Funds (f/k/a CNI Charter Funds)
|
April 1, 1999
|
Causeway Capital Management Trust
|
September 20, 2001
|
ProShares Trust
|
November 14, 2005
|
Community Capital Trust (f/k/a
Community Reinvestment Act Qualified Investment Fund)
|
January 8, 2007
|
TD Asset Management USA Funds
|
July 25, 2007
|
SEI Structured Credit Fund, LP
|
July 31, 2007
|
Wilshire Mutual Funds, Inc.
|
July 12, 2008
|
Wilshire Variable Insurance Trust
|
July 12, 2008
|
Global X Funds
|
October 24, 2008
|
ProShares Trust II
|
November 17, 2008
|
Exchange Traded Concepts Trust (f/k/a FaithShares Trust)
|
August 7, 2009
|
Schwab Strategic Trust
|
October 12, 2009
|
RiverPark Funds Trust
|
September 8, 2010
|
Adviser Managed Trust Fund
|
December 10, 2010
|
Huntington Strategy Shares
|
July 26, 2011
|
New Covenant Funds
|
March 23, 2012
|
Cambria ETF Trust
|
August 30, 2012
|
Highland Funds I (f/k/a Pyxis Funds I)
|
September 25, 2012
|
KraneShares Trust
|
December 18, 2012
|
LocalShares Investment Trust
|
May 6, 2013
|
SEI Insurance Products Trust
|
September 10, 2013
|
KP Funds
|
September 19, 2013
|
The Advisors’ Inner Circle Fund III
|
February 12, 2014
|
J.P. Morgan Exchange-Traded Fund Trust
|
April 1, 2014
|
O’ Connor EQUUS
|
May 15, 2014
|
Winton Series Trust
|
December 11, 2014
|
(b) | Furnish the Information required by the following table with respect to each director, officer or partner of each principal underwriter named in the answer to Item 20 of Part B. Unless otherwise noted, the business address of each director or officer is Oaks, PA 19456. |
Position and Office
|
Positions and Offices
|
|
Name
|
with Underwriter
|
with Registrant
|
William M. Doran
|
Director
|
--
|
Edward D. Loughlin
|
Director
|
--
|
Wayne M. Withrow
|
Director
|
--
|
Kevin P. Barr
|
Director, President & Chief Executive Officer
|
--
|
Maxine J. Chou
|
Chief Financial Officer, Chief Operations
|
--
|
Officer, & Treasurer
|
||
Karen E. LaTourette
|
Chief Compliance Officer, Anti-Money
|
|
Laundering Officer & Assistant Secretary
|
--
|
|
John C. Munch
|
General Counsel & Secretary
|
--
|
Mark J. Held
|
Senior Vice President
|
--
|
John P. Coary
|
Vice President & Assistant Secretary
|
--
|
Lori L. White
|
Vice President & Assistant Secretary
|
--
|
John J. Cronin
|
Vice President
|
--
|
Judith Hirx
|
Vice President
|
--
|
Robert M. Silvestri
|
Vice President
|
--
|
Item 33. | Location of Accounts and Records |
(a)
|
Registrant:
|
|
c/o
Exchange Traded Concepts Trust
|
|
2545 S. Kelly Avenue, Suite C
|
|
Edmond, Oklahoma 73013
|
(b)
|
Adviser:
|
|
Exchange Traded Concepts, LLC
|
|
2545 S. Kelly Avenue, Suite C
|
|
Edmond, Oklahoma 73013
|
(c)
|
Sub-Advisers:
|
Yorkville ETF Advisors, LLC
|
|
353 Central Park West,
|
|
New York, New York 10025
HTAA, LLC
141 W. Jackson Boulevard, Suite 340
Chicago, Illinois 60604
Penserra Capital Management LLC
140 Broadway, 26th Floor
New York, New York 10005
|
(d)
|
Principal Underwriter:
|
|
SEI Investments Distribution Co.
|
|
One Freedom Valley Drive
|
Oaks, Pennsylvania 19456
|
|
(e)
|
Custodians:
|
|
JPMorgan Chase Bank, N.A.
|
|
4 New York Plaza
|
|
New York, New York 10004
|
Brown Brothers Harriman
|
|
40 Water Street
|
|
Boston, Massachusetts 02109
|
|
Item 34 . | Management Services |
Item 35 . | Undertakings |
Exchange Traded Concepts Trust
|
||
/s/ J. Garrett Stevens
|
||
J. Garrett Stevens
|
||
Trustee and President
|
*
/s/ J. Garrett Stevens
|
|
J. Garrett Stevens
|
Exhibit Number | Exhibit Name: |
EX-99.D1 | Interim Advisory Agreement dated January 16, 2015 by and between the Registrant and Exchange Traded Concepts, LLC |
EX-99.D4 | Interim Sub-Advisory Agreement dated January 16, 2015 between Exchange Traded Concepts, LLC and Yorkville ETF Advisors, LLC |
EX-99.D5 | Interim Sub-Advisory Agreement dated January 16, 2015 between Exchange Traded Concepts, LLC and Penserra Capital Management LLC |
EX-99.E6 | Amendment No. 6 and revised Schedule A, effective February 18, 2014, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. |
EX-99.E7 | Amendment No. 7 and revised Schedule A, effective November 11, 2014, to the Amended and Restated Distribution Agreement dated November 10, 2011 between the Registrant and SEI Investments Distribution Co. |
EX-99.G4 | Appendix A, dated as of October 22, 2014, to the Custodian Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. |
EX-99.H11 | Amendment No. 6 and revised Schedule I, effective as of November 11, 2014, to the Amended and Restated Administration Agreement dated November 10, 2011 between the Registrant and SEI Investments Global Funds Services |
EX-99.H12 | New Fund Addendum, dated November 11, 2014, to the Amended and Restated Administration Agreement between the Registrant and SEI Investments Global Funds Services, relating to the EMQQ The Emerging Markets Internet & Ecommerce ETF |
EX-99.H18 | Schedule A, dated as of October 23, 2014, to the Transfer Agency Services Agreement dated September 28, 2009 between the Registrant and Brown Brothers Harriman & Co. |
EX-99.I5 | Opinion and Consent of Counsel, Morgan, Lewis & Bockius LLP, relating to the Forensic Accounting ETF, Yorkville High Income MLP ETF and Yorkville High Income Infrastructure MLP ETF |
EX-99.J | Consent of independent registered public accountants, Cohen Fund Audit Services, Ltd. |
EX-99.M2 | Amended Exhibit A to the Distribution and Service Plan dated October 20, 2009, reflecting the addition of the EMQQ The Emerging Markets Internet & Ecommerce ETF |
EXCHANGE TRADED CONCEPTS TRUST,
|
||
on behalf of each Fund listed on Schedule A | ||
By: /s/ J. Garrett Stevens | ||
Name: J. Garrett Stevens
|
||
Title: President
|
EXCHANGE TRADED CONCEPTS TRUST,
|
||
By: /s/ J. Garrett Stevens | ||
Name: J. Garrett Stevens
|
||
Title: Chief Executive Officer
|
Fund
|
Rate
|
Yorkville High Income MLP ETF
|
82 bps
|
YieldShares High Income ETF (formerly Sustainable North American Oil Sands ETF)
|
50 bps
|
Yorkville High Income Infrastructure MLP ETF
|
82 bps
|
Forensic Accounting ETF
|
85 bps
|
VelocityShares Equal Risk Weighted Large Cap ETF
|
65 bps
|
Robo-Stox
TM
Global Robotics and Automation Index ETF
|
95 bps
|
EMQQ The Emerging Markets Internet & Ecommerce ETF
|
86 bps
|
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and as applicable, and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | Unless responsibility for placing orders with respect to transactions in securities or other assets held or to be acquired by the Funds has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser will place such orders with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Funds’ Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust’s principal underwriter) if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Funds as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(v) | To the extent the Adviser or another sub-adviser is responsible for placing orders with respect to the Funds’ portfolio transactions, the Sub-Adviser shall provide to the Adviser or such other sub-adviser such information concerning the securities or other assets to be purchased or sold on behalf of the Funds reasonably necessary to execute the transactions, including the identity of such security or asset, the number of shares or principal amount to be purchased or sold, and the timing of and restrictions, if any, on the purchase or sale ( e.g. , a market order versus a limit order). |
(vi) | As of the date of this Agreement, the Adviser has entered into a sub-advisory agreement with another sub-adviser pursuant to which that sub-adviser shall be responsible for placing orders with respect to the Funds’ portfolio transactions. During the term of that sub-advisory agreement and, unless and until the Sub-Adviser agrees to assume responsibility for the placement of orders with respect to the Funds’ portfolio transactions, the Sub-Adviser shall have no responsibility or liability for such services, other than the responsibility to provide the information required by subparagraph (c)(v) of this Section 1 . |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Fund’s custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | Unless the responsibility has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by each Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds and subparagraph (c)(v) of this Section 1 . The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of Delaware (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is or, prior to providing services to the Funds pursuant to this Agreement, will be registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will also promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser; |
(c) | The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of Delaware with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; |
(j) | The Sub-Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will also promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser; |
(c) | The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; |
(j) | The Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
9. | Duration and Termination. |
(a) | Duration . This Agreement shall become effective upon (i) the Agreement having been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and (ii) the termination of the investment sub-advisory agreement dated March 7, 2012, as amended October 1, 2013, between the Adviser and Sub-Adviser, with respect to the Funds. This Agreement shall remain in full force and effect continually thereafter for a period of up to 150 days or until the holders of a majority of the Fund’s outstanding voting securities approve an investment sub-advisory agreement with the Sub-Adviser, whichever occurs first. If, however, shareholders of a Fund fail to approve a new investment sub-advisory agreement within 150 days of this Agreement’s effective date, the Sub-Adviser may continue to serve hereunder as to such Fund in a manner consistent with the 1940 Act and the rules and regulations thereunder. |
(b) | Termination . Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | By vote of a majority of the Board, or by vote of a majority of the outstanding voting securities of the Funds, in each case, upon ten (10) days’ written notice to the Sub-Adviser, or by the Adviser upon sixty (60) days’ written notice to the Sub-Adviser; or |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
10. | Compliance Program of the Sub-Adviser. The Sub-Adviser hereby represents and warrants that: |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b) , along with the policies and procedures referred to in Section 10(a) , are referred to herein as the Sub-Adviser’s “Compliance Program”). |
12. | Reporting of Compliance Matters. |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the Sub-Adviser’s investment advisory business and the Sub-Adviser’s responses thereto; provided that the Sub-Adviser may redact from such correspondences client specific confidential information, material subject to the attorney-client privilege, and material non-public information, that the Sub-Adviser reasonably determines should not be disclosed to the Trust’s CCO; |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the “Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the Name. The Sub-Adviser shall (1) only use the Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the Name or any of Adviser’s respective affiliates or clients names without the prior approval of Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Yorkville.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Yorkville” (the “Name”). The foregoing authorization by the Sub-Adviser to the Adviser to use the Name is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Name; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Name. The Adviser shall (1) only use the Name in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use the Name or any of Sub-Adviser’s respective affiliates or clients names without the prior approval of Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Adviser to satisfy the foregoing obligation. |
To the Adviser at:
|
Exchange Traded Concepts, LLC
2545 S. Kelly Ave.
Suite C
Edmond, OK 73013
Attention: J. Garrett Stevens, CEO
|
To the Trust’s CCO at:
|
Cipperman Compliance Services, LLC
500 East Swedesford Rd.
Suite 104
Wayne, PA 19087
Attention: Michael Woodard
|
To the Sub-Adviser at:
|
Yorkville ETF Advisors, LLC
950 Third Avenue, 23rd Floor
New York, New York 10022
|
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||
Exchange Traded Concepts, LLC
|
Yorkville ETF Advisors, LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Richard Hogan
|
||
Name: J. Garrett Stevens
|
Name: Richard Hogan
|
||
Title: Chief Executive Officer
|
Title: Director
|
ADVISER: | SUB-ADVISER: | ||
Exchange Traded Concepts, LLC
|
Yorkville ETF Advisors, LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Richard Hogan
|
||
Name: J. Garrett Stevens
|
Name: Richard Hogan
|
||
Title: Chief Executive Officer
|
Title: Director
|
Fund
|
Rate
|
Yorkville High Income MLP ETF
|
0.62%
|
Yorkville High Income Infrastructure MLP ETF
|
0.62%
|
ADVISER:
|
SUB-ADVISER:
|
||
Exchange Traded Concepts, LLC
|
Yorkville ETF Advisors, LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Richard Hogan
|
||
Name: J. Garrett Stevens
|
Name: Richard Hogan
|
||
Title: Chief Executive Officer
|
Title: Director
|
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and as applicable, and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | The Sub-Adviser will place orders with respect to transactions in securities or other assets held or to be acquired by the Fund with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Funds’ Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust’s principal underwriter) if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Funds as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Fund’s custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | To the extent such authority has been delegated to it by the Adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by each Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of Delaware (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is or, prior to providing services to the Funds pursuant to this Agreement, will be registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will also promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser; |
(c) | The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of New York with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; |
(j) | The Sub-Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will also promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser; |
(c) | The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; |
(j) | The Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | Duration . This Agreement shall become effective upon (i) the Agreement having been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and (ii) the termination of the investment sub-advisory agreement dated November 11, 2014 between the Adviser and Sub-Adviser, with respect to the Funds. This Agreement shall remain in full force and effect continually thereafter for a period of up to 150 days or until the holders of a majority of the Fund’s outstanding voting securities approve an investment sub-advisory agreement with the Sub-Adviser, whichever occurs first. If, however, shareholders of a Fund fail to approve a new investment sub-advisory agreement within 150 days of this Agreement’s effective date, the Sub-Adviser may continue to serve hereunder as to such Fund in a manner consistent with the 1940 Act and the rules and regulations thereunder. |
(b) | Termination . Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | By vote of a majority of the Board, or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days’ written notice to the Sub-Adviser; |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b) , along with the policies and procedures referred to in Section 10(a) , are referred to herein as the Sub-Adviser’s “Compliance Program”). |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the Sub-Adviser’s investment advisory business and the Sub-Adviser’s responses thereto; provided that the Sub-Adviser may redact from such correspondences client specific confidential information, material subject to the attorney-client privilege, and material non-public information, that the Sub-Adviser reasonably determines should not be disclosed to the Trust’s CCO; |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the “Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the Name. The Sub-Adviser shall (1) only use the Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the Name or any of Adviser’s respective affiliates or clients names without the prior approval of Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Penserra Capital Management, LLC.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Penserra Capital Management, LLC” (the “Name”). The foregoing authorization by the Sub-Adviser to the Adviser to use the Name is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Name; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Name. The Adviser shall (1) only use the Name in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use the Name or any of Sub-Adviser’s respective affiliates or clients names without the prior approval of Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Adviser to satisfy the foregoing obligation. |
To the Adviser at:
|
Exchange Traded Concepts, LLC
2545 S. Kelly Ave., Ste. C
Edmond, Oklahoma 73013
Attention: J. Garrett Stevens, CEO
|
To the Trust’s CCO at:
|
Cipperman Compliance Services
500 East Swedesford Road, Suite 104 Wayne, PA 19087 Attention: Michael Woodard |
To the Sub-Adviser at:
|
Penserra Capital Management
4 Orinda Way, Suite 100A
Orinda CA 94563
Attention: Dustin Lewellyn
|
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||
Exchange Traded Concepts, LLC
|
Penserra Capital Management LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Dustin Lewellyn
|
||
Name: J. Garrett Stevens
|
Name: Dustin Lewellyn
|
||
Title: Chief Executive Officer
|
Title: Chief Investment Officer
|
ADVISER: | SUB-ADVISER: | ||
Exchange Traded Concepts, LLC
|
Penserra Capital Management LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Dustin Lewellyn
|
||
Name: J. Garrett Stevens
|
Name: Dustin Lewellyn
|
||
Title: Chief Executive Officer
|
Title: Chief Investment Officer
|
Fund
|
Rate
|
EMQQ The Emerging Markets Internet & Ecommerce ETF
|
The greater of 5 bps or $25,000 annual minimum
|
Yorkville High Income MLP ETF
|
The greater of 5.5 bps or $10,000 annual minimum
|
Yorkville High Income Infrastructure MLP ETF
|
The greater of 5.5 bps or $10,000 annual minimum
|
Forensic Accounting ETF
|
The greater of 4.5 bps or $10,000 annual minimum
|
VelocityShares Equal Risk Weighted Large Cap ETF
|
The greater of 5.5 bps or $10,000 annual minimum
|
YieldShares High Income ETF (formerly Sustainable North American Oil Sands ETF)
|
The greater of 4.5 bps or $10,000 annual minimum
|
Robo-StoxTM Global Robotics and Automation Index ETF
|
The greater of 7.5 bps or $15,000 annual minimum
|
ADVISER: | SUB-ADVISER: | ||
Exchange Traded Concepts, LLC
|
Penserra Capital Management LLC
|
||
By:
/s/ J. Garrett Stevens
|
By:
/s/ Dustin Lewellyn
|
||
Name: J. Garrett Stevens
|
Name: Dustin Lewellyn
|
||
Title: Chief Executive Officer
|
Title: Chief Investment Officer
|
1. | As of November 10, 2011, the Trust and Distributor entered into an Amended and Restated Distribution Agreement, as amended (the “ Agreement ”); |
2. | Capitalized terms used in this Amendment but not defined in this Amendment shall have the meanings ascribed to them in the Agreement; and |
3. | The parties hereto desire to further amend the Agreement on the terms and subject to the conditions provided herein. |
1. | Schedule A (List of Funds) . Schedule A (List of Funds of the Agreement) is hereby deleted in its entirety and replaced as set forth in Schedule A attached hereto and made a part herewith. |
2. | Ratification of Amendment . Except as expressly amended and provided herein, all of the terms and conditions and provisions of the Agreement shall continue in full force and effect. |
3. | Counterparts . This Amendment shall become binding when any one or more counterparts hereof individually or taken together, shall bear the original or facsimile signature of each of the parties hereto. This Amendment may be executed in any number of counterparts, each of which shall be an original against any party whose signature appears thereon, but all of which together shall constitute but one and the same instrument. |
4. | Governing Law . This Amendment shall be construed in accordance with the laws of the State of Delaware and the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control. |
1. | As of November 10, 2011, the Trust and Distributor entered into an Amended and Restated Distribution Agreement, as amended (the “ Agreement ”); |
2. | Capitalized terms used in this Amendment but not defined in this Amendment shall have the meanings ascribed to them in the Agreement; and |
3. | The parties hereto desire to further amend the Agreement on the terms and subject to the conditions provided herein. |
1. | Schedule A (List of Funds) . Schedule A (List of Funds of the Agreement) is hereby deleted in its entirety and replaced as set forth in Schedule A attached hereto and made a part herewith. |
2. | Ratification of Amendment . Except as expressly amended and provided herein, all of the terms and conditions and provisions of the Agreement shall continue in full force and effect. |
3. | Counterparts . This Amendment shall become binding when any one or more counterparts hereof individually or taken together, shall bear the original or facsimile signature of each of the parties hereto. This Amendment may be executed in any number of counterparts, each of which shall be an original against any party whose signature appears thereon, but all of which together shall constitute but one and the same instrument. |
4. | Governing Law . This Amendment shall be construed in accordance with the laws of the State of Delaware and the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control. |
EXCHANGE TRADED CONCEPTS TRUST
|
||
/s/
J. Garrett Stevens
|
||
By:
|
||
Name:
|
J. Garrett Stevens
|
|
Title:
|
President
|
|
SEI INVESTMENTS DISTRIBUTION CO.
|
||
/s/ Maxine J. Chou
|
||
By:
|
||
Name:
|
Maxine J. Chou
|
|
Title:
|
CFO & COO
|
BY:
|
/s/ J. Garrett Stevens
|
|
NAME:
|
J. Garrett Stevens
|
|
TITLE:
|
CEO
|
|
DATE:
|
10/23/14
|
1. | As of November 10, 2011, the Trust and Administrator entered into an Amended and Restated Administration Agreement, as amended (the “ Agreement ”); |
2. | Capitalized terms used in this Amendment but not defined in this Amendment shall have the meanings ascribed to them in the Agreement; and |
3. | The parties hereto desire to further amend the Agreement on the terms and subject to the conditions provided herein. |
1. | Schedule I (List of Funds) . Schedule I (List of Funds of the Agreement) is hereby deleted in its entirety and replaced as set forth in Schedule I attached hereto and made a part herewith. |
2. | Ratification of Amendment . Except as expressly amended and provided herein, all of the terms and conditions and provisions of the Agreement shall continue in full force and effect. |
3. | Counterparts . This Amendment shall become binding when any one or more counterparts hereof individually or taken together, shall bear the original or facsimile signature of each of the parties hereto. This Amendment may be executed in any number of counterparts, each of which shall be an original against any party whose signature appears thereon, but all of which together shall constitute but one and the same instrument. |
4. | Governing Law . This Amendment shall be construed in accordance with the laws of the State of Delaware and the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control. |
EXCHANGE TRADED CONCEPTS TRUST
|
||
/s/ J. Garrett Stevens
|
||
By:
|
||
Name:
|
J. Garrett Stevens
|
|
Title:
|
President
|
|
SEI INVESTMENTS GLOBAL FUNDS SERVICES
|
||
/s/ John Alshefski
|
||
By:
|
||
Name:
|
John Alshefski
|
|
Title:
|
SVP
|
Relationship to Agreement: | Excepted as specifically set forth herein, defined terms used in this New Fund Addendum shall have the meaning set forth in the Agreement. Upon executing this New Fund Addendum, the Series shall be included in the terms and conditions of the Agreement as if the same had been an original party thereto. In the event of a conflict between the terms set forth in this New Fund Addendum and any terms set forth in the Agreement, the terms set forth in this New Fund Addendum shall govern, but solely with respect to the Series described herein. |
Series: | The EMQQ The Emerging Markets Internet & Ecommerce TM ETF. |
Fees: | The following fees are due and payable monthly to the Administrator pursuant to Section 8 of the Agreement out of the assets of the Series, except to the extent the Advisor agrees to pay or reimburse the Series’ expenses, in which case such fees shall be paid by the Advisor. The Series will be charged the greater of its Asset Based Fee or its Annual Minimum Fee, in each case calculated in the manner set forth below. |
Asset Based Fee: | XX basis points. |
Annual Minimum Fee: | The initial Annual Minimum Fee shall be $XXX. |
Out of Pocket Expenses: | All reasonable out of pocket expenses (i.e., blue sky fees, fulfillment charges, pricing service fees, postage, registration fees, facsimile and telephone charges) incurred by the Administrator on behalf of the Series will be billed to the Series quarterly in arrears. |
Annual CPI Increase: | The fees payable hereunder shall be subject to one annual increase at the Administrator’ discretion, equal to the percentage increase in the Philadelphia Consumer Price Index since the Effective Date with respect to the first such increase and since the date of the immediately preceding increase with respect to all subsequent increases; provided, however, that the Administrator shall notify the Advisor of the Series of its intent to effectuate any such increase at least thirty days prior to the effective date of such increase. |
Reorganization Fees: | The Advisor shall pay the Administrator a transaction charge equal to $XXX in connection with each Reorganization Event to which the Series is a party. For purposes of the foregoing, a “ Reorganization Event ” means any material change in the organizational structure of the Series, including, without limitation, any merger, acquisition or divestiture of all or any portion of the assets of the Series as well as any acquisition or merger transaction between the Series and any other fund. |
Operational Automation: | A critical component of the Administrator’s services is fund valuations. Automated trade delivery and receipt between the Advisor and Administrator is critical to high quality service. Accordingly, Administrator and the Advisor of the Series agree to use best efforts to implement automated trade delivery and receipt as soon as practicable after the Series’ establishment in the Trust. |
Term: | The term of this New Fund Addendum shall continue in effect with respect to the Series for a period of three years from and after the date set forth above (the “ Initial Term ”). Following expiration of the Initial Term, this New Fund Addendum shall continue in effect for successive periods of one year (each, a “ Renewal Term ”). |
Termination: | This New Fund Addendum may be terminated only: (a) by either party at the end of the Initial Term or the end of any Renewal Term on one hundred eighty days prior written notice; (b) by either party hereto on such date as is specified in written notice given by the terminating party, in the event of a material breach of this Agreement by the other party, provided the terminating party has notified the other party of such material breach at least ninety days prior to the specified date of termination and the breaching party has not remedied such breach by the specified date; or (c) as to any portfolio, upon forty-five days prior written notice, effective (i) upon the reorganization or merger of a portfolio into another entity, provided that the Administrator or one of its affiliates enters into a written agreement to provide administration services on behalf of such surviving entity, or (ii) upon any “change of control” of the Advisor by sale, merger, reorganization, acquisition or other disposition of substantially all of the assets of the Advisor to a third party, provided that the Administrator or one of its affiliates enters into a written agreement to provide administration services on behalf of the third party or surviving entity. For purposes of this paragraph, the term “change of control” shall mean any transaction that results in the transfer of right, title and ownership of twenty-five (25) percent or more of the equity interests of the Advisor to a third party. |
Early Termination : | Subject to the terms and conditions set forth in this paragraph, the parties may agree to terminate this New Fund Addendum on or before the expiration of the then current term (hereinafter, an “ Early Termination ”). In the event the parties agree to an Early Termination, the parties will agree upon the effective date of such Early Termination and, on or before such effective date, the Series shall (i) not be in material breach of the Agreement (including this New Fund Addendum) and (ii) pay the Buyout Amount to the Administrator in the manner set forth below. As used herein, the term “ Buyout Amount ” shall mean the amount that is equal to (1) the average monthly fee payable by the Series to the Administrator hereunder during the six month period (or such shorter period if fewer than six months have elapsed since the effective date of this New Fund Addendum) immediately preceding the mutual agreement called for in this paragraph multiplied by (2) the number of months remaining in the then current term (including any Renewal Term to which the Series is already committed). The Series shall pay the Buyout Amount to the Administrator on or before the effective date of the Early Termination by means of wire or other immediately available funds. |
Advisor Expense Repayment: | Any and all out of pocket fees, costs, or expenses advanced by the Administrator, in its sole discretion on behalf of the Series or the undersigned Advisor, as a result of any failure to fully satisfy and comply with any and all applicable portfolio expense caps or expense ratio limits, shall be the responsibility of the Advisor and shall be promptly repaid to the Administrator (“ Repayment Obligation ”). Any such Repayment Obligation of the Advisor shall survive: (i) the termination of the Agreement and this New Fund Addendum thereto, (ii) any merger or liquidation of any subject portfolio, unless and until the Repayment Obligation is indefeasibly paid in full. |
Notice to Advisor: |
Name of Party or Parties: Exchange Traded Concepts, LLC
Name of Contact: Garrett Stevens Address: 2545 S. Kelly Avenue, Suite C, Edmond, OK 73013 Telephone No.: 405.778.8377 Facsimile No.: 405.778.8375 Email Address: garrett@exchangetradedconcepts.com |
EXCHANGE TRADED CONCEPTS TRUST
|
||
on behalf of the EMQQ The Emerging Markets Internet & Ecommerce
TM
ETF
|
||
BY:
|
/s/ J. Garrett Stevens
|
|
Name: J. Garrett Stevens
|
||
Title: President
|
||
SEI INVESTMENTS GLOBAL FUNDS SERVICES
|
||
BY:
|
/s/ John Alshefski
|
|
Name: John Alshefski
|
||
Title: SVP
|
||
AGREED TO AND ACCEPTED BY:
|
||
EXCHANGE TRADED CONCEPTS, LLC
|
||
Adviser to the EMQQ The Emerging Markets Internet & Ecommerce
TM
ETF
|
||
BY:
|
/s/ J. Garrett Stevens
|
|
Name: J. Garrett Stevens
|
||
Title: CEO
|
BY:
|
/s/ J. Garrett Stevens
|
|
NAME:
|
J. Garrett Stevens
|
|
TITLE:
|
CEO
|
|
DATE:
|
10/23/14
|
Morgan, Lewis & Bockius
llp
2020 K Street, NW
Washington, District of Columbia 20006-1806
Tel. 202.373.6000
Fax: 202.373.6001
www.morganlewis.com
|
|
Re: | Registration Statement on Form N-1A |
(a) | A certificate of the Secretary of State of the State of Delaware, dated as of a recent date, as to the existence of the Trust; |
(b) | A copy, certified by the Secretary of State of the State of Delaware, of the Trust’s Certificate of Trust dated July 17, 2009, as amended July 14, 2011, filed with the Secretary of State (the “Certificate of Trust”); |
(c) | A certificate executed by the President of the Trust, certifying as to, and attaching copies of, the Trust’s Amended and Restated Agreement and Declaration of Trust (the “Declaration”), the Trust’s Amended and Restated By-Laws dated October 3, 2011, and the resolutions adopted by the Trustees of the Trust authorizing the issuance of the Shares of the Funds (the “Resolutions”); and |
(d) | A printer’s proof of the Registration Statement. |