UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-34412

ABERDEEN STANDARD SILVER ETF TRUST

(Exact name of registrant as specified in its charter)



 

New York

26-4586763

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)



 

c/o Aberdeen Standard Investments ETFs Sponsor LLC

 

712 Fifth Avenue, 49 th Floor

 

New York, NY

10 019

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:
( 844 )   383-7289



Securities registered pursuant to Section 12(b) of the Act:



 

 

 

 

 



Title of each class

 

 

Name of each exchange on which registered

 

Aberdeen Standard Physical Silver Shares ETF

NYSE Arca



Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  

Yes No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  

Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data Fi le required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months   (or for such shorter period that the registrant was required to submit such files) .

Yes No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.


 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company , or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company , ” and “emerging growth company” in Rule 12b-2 of the Exchange Act .  



 

 

 

Large accelerated filer

Accelerated filer

Non accelerated filer

Smaller reporting company



 

Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  

Yes No

Aggregate market value of the registrant’s Shares outstanding based upon the closing price of a share on June 29 ,   2018 as reported by the NYSE Arca, Inc. on that date: $ 329,643,000 .  

As of February 25 , 201 9 ,   Aberdeen Standard Silver ETF Trust has 22 , 200 , 000   Aberdeen Standard Physical Silver Shares ETF outstanding.  

DOCUMENTS INCORPORATED BY REFERENCE: None.


 

 

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements usually include the words, “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “understands” and other words suggesting uncertainty. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  

Additional significant uncertainties and other factors affecting forward-looking statements are presented in the Risk Factors section herein.  


 

 

TABLE OF CONTENTS

9

 



 

 PART I

 Item 1. Business

 Trust Objective

 Overview of the Silver Industry  

 Operation of the Silver Bullion Market

 Secondary Market Trading

 Valuation of Silver and Computation of Net Asset Value

 Trust Expenses

 Deposit of Silver; Issuance of Shares

 Withdrawal of Silver; Redemption of Shares

 Creation and Redemption Transaction Fee

10 

 Change in Settlement Cycle

10 

 The Sponsor

10 

 The Trustee

11 

 The Custodian

11 

 Inspection of Silver

11 

 Description of the Shares

12 

 Custody of the Trust’s Silver

13 

 United States Federal Income Tax Consequences

13 

 ERISA and Related Considerations

15 

 Item 1A. Risk Factors

16 

 Item 1B. Unresolved Staff Comments

22 

 Item 2. Properties

22 

 Item 3. Legal Proceedings

22 

 Item 4. Mine Safety Disclosures

22 



 

 PART II

23 

 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

23 

 Item 6. Selected Financial Data

25 

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

25 

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

28 

 Item 8. Financial Statements and Supplementary Data

29 

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

30 

 Item 9A. Controls and Procedures

30 

 Item 9B. Other Information

32 



 

 PART III

33 

 Item 10. Directors, Executive Officers and Corporate Governance

33 

 Item 11. Executive Compensation

33 

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

33 

 Item 13. Certain Relationships and Related Transactions, and Director Independence

33 

 Item 14. Principal Accounting Fees and Services

34 



 

 PART IV

35 

 Item 15. Exhibits, Financial Statement Schedules

35 

 Item 16. Form 10-K Summary

36 









 



 

F- 1


 

 

PART I

Item 1. Business

The purpose of the Aberdeen Standard Silver ETF Trust (the “Trust”), formerly known as ETFS Silver Trust prior to October 1, 2018, is to own silver transferred to the Trust in exchange for shares issued by the Trust (“Shares”). Each Share represents a fractional undivided beneficial interest in and ownership of the Trust. The assets of the Trust consist solely of silver bullion. The Trust was formed on July 20, 2009 when an initial deposit of silver was made in exchange for the issuance of 2 Baskets (a “Basket” consists of 50,000 Shares). The number of shares that constitutes a Basket for the purpose of creations and redemptions was reduced from 100,000 Shares to 50,000 Shares effective on August 11, 2016.

The sponsor of the Trust is Aberdeen Standard Investments ETFs Sponsor LLC (the “Sponsor”) , formerly known as ETF Securities USA LLC prior to October 1, 2018 . The trustee of the Trust is The Bank of New York Mellon (the “Trustee”) and the custodian is HSBC Bank plc (the “Custodian”).

The Trust’s Shares at redeemable value decrease d from $ 351,050,772 at December 31, 2017 to $ 339,734,175 at December 31, 2018 , the Trust’s fiscal year end. Outstanding Shares in the Trust increase d from 21,350,000 Shares at December 31, 2017 to 22,600,000 Shares outstanding at December 31, 2018 .  

The Trust is not managed like a corporation or an active investment vehicle. The Trust has no directors, officers or employees. It does not engage in any activities designed to obtain a profit from or to improve the losses caused by changes in the price of silver. The silver held by the Trust will only be delivered to pay the remuneration due to the Sponsor (the “Sponsor’s Fee”), distributed to Authorized Participants (defined below) in connection with the redemption of Baskets or sold (1) on an as-needed basis to pay Trust expenses not assumed by the Sponsor, (2) in the event the Trust terminates and liquidates its assets, or (3) as otherwise required by law or regulation. The Trust has no fixed termination date.

The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. The Trust does not and will not hold or trade in commodities futures contracts, “commodity interests” or any other instruments regulated by the Commodity Exchange Act (the “CEA”), as administered by the Commodity Futures Trading Commission (the “CFTC”). The Trust is not a commodity pool for purposes of the CEA and the Shares are not “commodity interests”, and neither the Sponsor nor the Trustee is subject to regulation as a commodity pool operator or a commodity trading advisor in connection with the Shares.

The Sponsor of the registrant maintains an Internet website at www. aberdeenstandardetfs.us , through which the registrant’s annual reports on Form 10-K, quarterly reports on Form 10-Q, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are made available free of charge as soon as reasonably practicable after they have been filed or furnished to the Securities and Exchange Commission (the “SEC”). Additional information regarding the Trust may also be found on the SEC’s EDGAR database at www.sec.gov.

Trust Objective  

The investment objective of the Trust is for the Shares to reflect the performance of the price of silver bullion, less the expenses of the Trust’s operations. The Shares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in silver. An investment in physical silver requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal. Traditionally, such expense and complications have resulted in investments in physical silver being efficient only in amounts beyond the reach of many investors.

The Shares provide institutional and retail investors with a simple and cost-efficient means, with minimal credit risk, of gaining investment benefits similar to those of holding silver bullion. The Shares offer an investment that:

Is Easily Accessible . The Shares trade on the NYSE Arca and provide institutional and retail investors with indirect access to the silver market. The Shares are bought and sold on the NYSE Arca like any other exchange-listed securities. The close of the NYSE Arca trading session is 4:00 p.m. New York time.

Is Relatively Cost Effective. The Sponsor expects that, for many investors, costs associated with buying and selling the Shares in the secondary market and the payment of the Trust’s ongoing expenses will be lower than the costs associated with buying and selling silver bullion and storing and insuring silver bullion in a traditional allocated silver bullion account.

Has Minimal Credit Risk . The Shares represent an interest in physical bullion owned by the Trust (other than an amount held in unallocated form which is not sufficient to make up a whole bar or which is held temporarily to effect a creation or redemption of Shares). Physical bullion of the Trust in the Custodian’s possession is not subject to borrowing arrangements with third parties. Other than the silver temporarily being held in an unallocated silver account with the Custodian, the physical bullion of the Trust is not subject to counterparty or credit risks. See “ Risk Factors—Silver held in the Trust’s unallocated silver account and any Authorized Participant’s unallocated silver account is not segregated from the Custodian’s assets... .” These contrasts with most other financial products that gain exposure to bullion through the use of derivatives that are subject to counterparty and credit risks.

1


 

 

Investing in the Shares does not insulate the investor from certain risks, including price volatility. See “ Risk Factors .”

Overview of the Silver Industry

Introduction

This section provides a brief introduction to the silver industry by looking at some of the key participants, detailing the primary sources of demand and supply and outlining the role of the “official” sector (i.e., central banks) in the market.

In this annual report, the term “ounces” refers to troy ounces.

Market Participants

The participants in the world silver market may be classified in the following sectors: the mining and producer sector, the banking sector, the official sector, the investment sector, and the manufacturing sector. A brief description of each follows.

Mining and Producer Sector

This group includes mining companies that specialize in silver and silver production, mining companies that produce silver as a by-product of other production (such as a copper or gold producer), scrap merchants and recyclers.

Banking Sector

Bullion banks provide a variety of services to the silver market and its participants, thereby facilitating interactions between other parties. Services provided by the bullion banking community include traditional banking products as well as mine financing, physical silver purchases and sales, hedging and risk management, inventory management for industrial users and consumers and silver leasing.

The Official Sector

There are no official statistics published by the International Monetary Fund, Bank of International Settlements, or national banks on silver holdings by national governments. The main reason for this is that silver is generally not recognized as a reserve asset. Consequently, there are very limited silver stocks held by governments . According to GFMS Limited in the World Silver Survey 2018, at the end of 2017, government-held silver bullion stocks total 89.1 million ounces.  

The Investment Sector

This sector includes the investment and trading activities of both professional and private investors and speculators. These participants range from large hedge and mutual funds to day-traders on futures exchanges, and retail-level coin collectors.

The Manufacturing Sector

The fabrication and manufacturing sector represents all the commercial and industrial users of silver. Industrial applications comprise the largest use of silver. The jewelry and silverware sector is the second largest, followed by the photographic industry (although the latter has been declining over a number of years as a result of the spread of digital photography).

2


 

 



The following table sets forth a summary of the world silver supply and demand for the period from 2008 to 2017 and is based on information reported by the World Silver Survey 2018, published by GFMS, Thomson Reuters .  





 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

(in millions of ounces)

2008  2009  2010  2011  2012  2013  2014  2015  2016  2017 

Supply

 

 

 

 

 

 

 

 

 

 

Mine Production

684.7  717.3  753.0  758.3  791.7  823.3  867.8  895.1  888.6  852.1 

Net Government Sales

30.5  15.6  44.2  12.0  7.4  7.9 

Scrap

200.7  200.6  227.2  261.2  253.8  191.0  165.4  141.1  139.7  138.1 

Net Hedging Supply

(8.7) (17.4) 50.4  12.2  (47.1) (34.8) 16.8  7.8  (18.9) 1.4 

Total Supply

907.2  916.1  1,074.8  1,043.8  1,005.8  987.4  1,050.0  1,044.0  1,009.4  991.6 



 

 

 

 

 

 

 

 

 

 

Demand

 

 

 

 

 

 

 

 

 

 

Jewelry

177.6  176.9  190.0  191.5  187.4  220.6  226.4  226.7  205.0  209.1 

Coins & Bars

197.9  94.9  150.3  212.7  159.7  241.1  234.1  292.1  207.8  151.1 

Silverware

58.4  53.2  51.9  47.5  43.8  59.3  61.2  63.2  52.4  58.4 

Industrial Fabrication

641.9  528.2  633.8  661.5  600.1  604.6  596.3  583.2  576.8  599.0 

Electrical & Electronics

271.7  227.4  301.2  290.8  266.7  266.0  263.9  246.0  233.9  242.9 

Brazing Alloys & Solders

61.8  53.8  61.2  63.2  61.1  63.7  66.7  61.5  55.3  57.5 

Photography

98.2  76.4  67.5  61.2  54.2  50.5  48.5  46.6  45.2  44.0 

Photovoltaic

75.8  58.2  55.9  51.8  59.2  79.3  94.1 

Ethylene Oxide

7.4  4.8  8.7  6.2  4.7  7.7  5.0  10.2  10.2  6.9 

Other Industrial

202.8  165.8  195.2  164.2  155.1  160.8  160.6  159.8  152.9  153.7 

ETP Inventory Build

101.3  156.9  129.5  (24.0) 55.3  2.5  1.4  (17.8) 49.8  2.4 

Exchange Inventory Build

(7.1) (15.3) (7.4) 12.2  62.2  8.8  (5.3) 12.6  79.8  6.8 

Total Demand

1,170.0  994.8  1,148.1  1,101.4  1,108.5  1,136.9  1,114.1  1,160.0  1,171.6  1,026.8 



 

 

 

 

 

 

 

 

 

 

Net Balance

(262.8) (78.6) (73.2) (57.5) (102.6) (149.5) (64.0) (116.1) (162.1) (35.2)



 

 

 

 

 

 

 

 

 

 

Source: World Silver Survey 2018

The following are some of the main characteristics of the silver market illustrated by the table.

Like gold, silver has also been used as a currency in the past. However, the main difference between gold and silver is that while approximately half of gold demand is used for jewelry, approximately half of silver fabrication demand is used for industrial applications.

New mine production accounts for approximately 86% of total silver supply. Recycled silver accounts for around 14% of total supply. Recycled silver totaled 4,296 tons in 2017, marking the sixth consecutive year of reduced recycling supply. The total of producer hedging, government sales and implied “net disinvestment” has been in decline but together account for the balance of total supply.

Industrial applications and jewelry demand accounted for over 79% of total demand in 2017. Photography has been taking a lower share of overall silver demand falling from 8% in 2008 to 4% in 2017, while photovoltaic demand has risen in recent years accounting for 9% in 2017. Investment in coins and bars have amounted to 15% of demand in 2017.

3


 

 

Historical chart of the price of Silver

The price of silver is volatile and fluctuations are expected to have a direct impact on the value of the Shares. However, movements in the price of silver in the past are not a reliable indicator of future movements. Movements may be influenced by various factors, including announcements from central banks regarding a country’s reserve silver holdings, agreements among central banks, political uncertainties around the world, and economic concerns.

The following chart illustrates the movements in the price of an ounce of silver in dollars from December 2008 to December 2018 and is based on information provided by Bloomberg:

PICTURE 3

Between 2003 and 2011, the price of silver increased due to a number of factors. Among such factors are the decline in the U.S. Dollar against other currencies, a surge in investment demand in commodities as an asset class generally, strength in fabrication demand, and the low level of forward selling by mining companies. Since the global financial crisis that started in 2008, investors have increasingly been using silver as a store of value to counter the effects of an increase in paper money by major reserve currency central banks. However, since 2011, when prices peaked at $48.44 per ounce, prices have trended downwards, albeit with multiple upwards rallies (that have often lasted several months). The rise in the value of the U.S. Dollar, sluggish industrial growth and a tame inflation environment (which has led some investors to revise their expectations of the effects of monetary expansion) are some of the drivers behind the fall in silver prices since 2011.  In 2018 silver prices fell 8.5%, closing at $15.47 per ounce, driven by a stronger dollar and concerns of a global slowdown impacting industrial demand.

4


 

 

Operation of the Silver Bullion Market

The global trade in silver bullion consists of Over-the-Counter (“OTC”) transactions in spot, forwards, and options and other derivatives, together with exchange-traded futures and options.

Global Over-The-Counter Market

The OTC silver market includes spot, forward, and option and other derivative transactions conducted on a principal-to-principal basis. While this is a global, nearly 24-hour per day market, its main centers are London (the biggest venue) and New York. Market makers, as well as others in the OTC market, trade with each other and with their clients on a principal-to-principal basis. All risks and issues of credit are between the parties directly involved in the transaction. Market makers include the market making members of the London Bullion Market Association (“LBMA”), the trade association that acts as the coordinator for activities conducted on behalf of its members and other participants in the London bullion market. The thirteen market-making members of the LBMA are: BNP Paribas SA, Citibank N.A. (through its London Branch), HSBC Bank USA, N.A. (London Branch), Goldman Sachs International, ICBC Standard Bank, JPMorgan Chase Bank, The Bank of Nova Scotia-Scotia Mocatta, Société Générale, Merrill Lynch International Bank Limited, Morgan Stanley & Co. International plc, Standard Chartered Bank, Toronto-Dominion Bank and UBS AG. The OTC market provides a relatively flexible market in terms of quotes, price, size, destinations for delivery and other factors. Bullion dealers customize transactions to meet clients’ requirements. The OTC market has no formal structure and no open outcry meeting place. Mining companies, central banks, manufacturers of jewelry and industrial products, together with investors and speculators, tend to transact their business through one of these market centers. Centers such as Dubai and several cities in the Far East also transact substantial OTC market business, typically involving jewelry and small bars of silver (1 kilogram or less) and will hedge their exposure by selling into one of these main OTC centers. Bullion dealers have offices around the world and most of the world’s major bullion dealers are either members or associate members of the LBMA. There are a further 72 full members, plus a number of associate members around the world. The number of LBMA market-making, clearing and full members reported in this annual report are as of the date of this annual report. These numbers may change from time to time as new members are added and existing members drop out. In the OTC market for silver, the standard size of trades between market makers is 100,000 ounces. Liquidity in the OTC market can vary from time to time during the course of the 24-hour trading day. Fluctuations in liquidity are reflected in adjustments to dealing spreads—the differential between a dealer’s “buy” and “sell” prices. The period of greatest liquidity in the bullion markets generally occurs at the time of day when trading in the European time zones overlaps with trading in the United States, which is when OTC market trading in London, New York, Zurich and other centers coincides with futures and options trading on the Commodity Exchange, Inc. (“COMEX”). This period lasts for approximately four hours each New York business day morning.

The London Silver Bullion Market

Although the market for physical silver is distributed globally, most OTC market trades are cleared through London. In addition to coordinating market activities, the LBMA acts as the principal point of contact between the market and its regulators. A primary function of the LBMA is its involvement in the promotion of refining standards by maintenance of the “London Good Delivery Lists,” which are the lists of LBMA accredited melters and assayers of silver. The LBMA also coordinates market clearing and vaulting, promotes good trading practices and develops standard documentation.

The term “loco London” silver refers to silver physically held in London that meets the specifications for weight, dimensions, fineness (or purity), identifying marks (including the assay stamp of a LBMA acceptable refiner) and appearance set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the LBMA. Silver bars meeting these requirements are described in this prospectus from time to time as “Silver Good Delivery Bars.” The unit of trade in London is the troy ounce, whose conversion between grams is: 1,000 grams equals 32.1507465 troy ounces and 1 troy ounce equals 31.1034768 grams. A Silver Good Delivery Bar is acceptable for delivery in settlement of a transaction on the OTC market. A Silver Good Delivery Bar must contain between 750 troy ounces and 1,100 troy ounces of silver with a minimum fineness (or purity) of 999.0 parts per 1,000. A Silver Good Delivery Bar must also bear the stamp of one of the refiners who are on the LBMA-approved list. Unless otherwise specified, the silver spot price always refers to that of a Silver Good Delivery Bar. Business is generally conducted over the phone and through electronic dealing systems.

On July 14, 2017, the LBMA announced that ICE Benchmark Administration (“IBA”) had been selected to be the third-party administrator for the “LBMA Silver Price”. Effective from October 2, 2017, IBA is providing the auction platform and methodology as well as the overall administration and governance for the LBMA Silver Price benchmark. IBA operates an “equilibrium auction”, which is an electronic, tradable and auditable, over-the-counter auction for LBMA-authorized participating silver bullion banks or market makers and sponsored clients of direct participants (“silver participants”) that establishes a reference silver price for that day’s trading, often referred to as the “LBMA Silver Price”. The LBMA Silver Price equilibrium auction operated by CME Group Inc. and Thomson Reuters prior to October 2, 2017 was selected by the LBMA as the silver valuation replacement for the London silver fix previously determined by the London Silver Market Fixing Ltd. that was discontinued on August 14, 2014. The LBMA Silver Price has become a widely used benchmark for daily silver prices and is quoted by various financial information sources as the London silver fix was previously.

5


 

 

The LBMA Silver Price is the result of an “equilibrium auction” because it establishes a price for a troy ounce of Silver Good Delivery Bars that clears the maximum amount of bids and offers for silver entered by order-submitting silver participants each day. IBA uses ICE’s front-end system, WebICE, as the technology platform that allows direct participants, as well as sponsored clients of direct participants, to manage their orders in the auction in real time via their own desktops. As the IBA electronic silver auction market develops, IBA expects to admit additional silver participants to the order submission process. The benchmark is published when the auction finishes, typically a few minutes after 12:00 noon (London time).

At the opening of each auction, IBA in the role of auction chairman (“Chairman”) announces an opening price (in U.S. Dollars), that takes into account current market conditions and begin s auction rounds, with an expected duration of at least 30 seconds each. During each auction round, participants may enter the volume they wish to buy or sell at that price, and such orders will be part of the price formation. Aggregate bid and offer volume is shown live on WebICE. At the end of each auction round, the total net volume is calculated. If this “imbalance” is larger than the imbalance tolerance ( normally 500,000 oz.) then the Chairman sets a new price (based on the current market conditions, and the direction and magnitude of the imbalance in the round) and begins a new auction round. If the imbalance is less than the tolerance, then the auction is complete with all volume tradeable at that price. The price is then set in U.S. Dollars and also converted into other currencies, including Australian Dollars, British Pounds, Canadian Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Malaysian Ringgit, Russian Rubles, Singapore Dollars, South African Rand, Swiss Francs, New Taiwan Dollars, Thai Baht and Turkish Lira. The auction is run at 12:00 noon (London time).

During the auction, the price at the start of each round, and the volumes at the end of each round are available through major market data vendors. As soon as the auction finishes, the final prices and volumes are available through major market data vendors. IBA also publish es transparency reports, detailing the prices, volumes and times for each round of the auction. These transparency reports are available through major market data vendors and IBA when the auction finishes. The process can also be observed real-time through a WebICE screen. The auction mechanism provide s a complete audit trail.



As of August 1, 2017, there were seven direct participants in the LBMA Silver Price administered by CME Group and Thomson Reuters. As of February 1 1 , 201 9 , there are 10 direct participants participating in the auction process that determines the LBMA Silver Price.



Since April 1, 2015, the LBMA Silver Price has been regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom (“UK”).  IBA is authorized as a regulated benchmark administrator by the FCA. Under the UK benchmark regulation, the governance structure for a regulated benchmark must include an Oversight Committee, made up of market participants, industry bodies, direct participant representatives, infrastructure providers and the administrator (i.e., IBA). Through the Oversight Committee the LBMA continue s to have significant involvement in the oversight of the auction process, including, among other matters, changes to the methodology and accreditation of direct participants. The price discovery process for the LBMA Silver Price is subject to surveillance by IBA. IBA has been formally assessed against the IOSCO Principles for Financial Benchmarks (the “IOSCO Principles”). In order to meet the IOSCO Principles, the price discovery used for the LBMA Silver Price benchmark is auditable and transparent.

The LBMA Silver Price is viewed as a full and fair representation of all market interest at the conclusion of the auction. IBA’s auction process is similar to CME Group’s auction process, which in turn was similar to the non-electronic process previously used to establish the London silver fix where the London silver fix process adjusted the silver price up or down until all the buy and sell orders are matched, at which time the price was declared fixed. Nevertheless, the LBMA Silver Price has several advantages over the previous London silver fix. IBA’s auction process is fully transparent in real-time to direct participants and sponsored clients and, at the close of each auction, to the general public. IBA’s auction process is also fully auditable since an audit trail exists for every change made in the process. Moreover, the audit trail and active surveillance of the auction process by IBA, as well as the FCA’s oversight of IBA, will deter manipulative and abusive conduct in establishing each day’s LBMA Silver Price.

Since August 15, 2014, the Sponsor determined that the London silver fix, which ceased to be published as of that date, would be an inappropriate basis for valuing silver bullion received upon purchase of the Trust’s Shares, delivered upon redemption of the Trust’s Shares and otherwise held by the Trust on a daily basis, and that the LBMA Silver Price is an appropriate alternative for determining the value of the Trust’s silver each trading day.  The Sponsor also determined that the LBMA Silver Price will fairly represent the commercial value of silver bullion held by the Trust and that the “Benchmark Price” (as defined in the Trust Agreement) as of any day will be the LBMA Silver Price for such day.

6


 

 

Futures Exchanges

The most significant silver futures exchanges are the COMEX, a designated contract market with the CME Group, and the Tokyo Commodity Exchange (“TOCOM”). Future exchanges seek to provide a neutral, regulated marketplace for the trading of derivatives contracts for commodities. Future contracts are defined by the exchange for each commodity. For each commodity traded, this contract specifies the precise quality and quantity standards. The contract’s terms and conditions also define the location and timing of physical delivery.

An exchange does not buy or sell those contracts, but seeks to offer a transparent forum where members, on their own behalf or on the behalf of customers, can trade the contracts in a safe, efficient and orderly manner. During regular trading hours at the COMEX, the commodity contracts are traded on CME Globex system, an electronic auction in which all bids, offers and trades must be publicly announced to all members   and upon execution, centrally cleared. Electronic trading is offered by the exchange except for a short break in the evening  almost 24 hours a day, six days a week.

In addition to the public nature of the pricing, futures exchanges in the United States are regulated at two levels: internal and external governmental supervision. The internal is performed through self-regulation and consists of regular monitoring of the following: the central algorithmic matching process to ensure that it is conducted in conformance with all exchange rules; the orderly trading and settlement of futures and options; the financial condition of all exchange member firms to ensure that they continuously mee t financial commitments; and the volume positions of commercial and non-commercial customers to ensure that physical delivery and other commercial commitments can be met, and that pricing is not being improperly affected by the size of any particular customer positions. External governmental oversight is performed by the CFTC, which reviews all the rules and regulations of United States futures exchanges and clearing houses and monitors their enforcement.

Market Regulation

The global silver markets are overseen and regulated by both governmental and self-regulatory organizations. In addition, certain trade associations have established rules and protocols for market practices and participants. In the United Kingdom, responsibility for the regulation of the financial market participants, including the major participating members of the LBMA, falls under the authority of the Financial Conduct Authority (“FCA”) as provided by the Financial Services and Markets Act 2000 (“FSM Act”). Under this act, all UK-based banks, together with other investment firms, are subject to a range of requirements, including fitness and properness, capital adequacy, liquidity, and systems and controls.

The FCA is responsible for regulating investment products, including derivatives, and those who deal in investment products. Regulation of spot, commercial forwards, and deposits of silver not covered by the FSM Act is provided for by The London Code of Conduct for Non-Investment Products, which was established by market participants in conjunction with the Bank of England.

The TOCOM has authority to perform financial and operational surveillance on its members’ trading activities, scrutinize positions held by members and large-scale customers, and monitor the price movements of futures markets by comparing them with cash and other derivative markets’ prices. To act as a Futures Commission Merchant Broker on the TOCOM, a broker must obtain a license from Japan’s Ministry of Economy, Trade and Industry (“METI”), the regulatory authority that oversees the operations of the TOCOM.

The US Commodity Futures Trading Commission (“CFTC”) regulates trading in commodity contracts, such as futures, options and swaps. In addition, under the Commodity Exchange Act of 1936 (“CEA”), the CFTC has jurisdiction to prosecute manipulation and fraud in any commodity (including precious metals) traded in the interstate commerce as spot as well as deliverable forwards.  The CFTC is the exclusive regulator of U.S. commodity exchanges and clearing houses.

Secondary Market Trading

While the Trust’s investment objective is for the Shares to reflect the performance of silver bullion, less the expenses of the Trust, the Shares may trade in the secondary market on the NYSE Arca at prices that are lower or higher relative to their net asset value (the value of the Trust’s assets less its liabilities (“NAV”)) per Share. The amount of the discount or premium in the trading price relative to the NAV per Share may be influenced by non-concurrent trading hours between the NYSE Arca, COMEX and the London bullion markets. While the Shares will trade on the NYSE Arca until 4:00 p.m. New York time, liquidity in the global silver market is reduced after the close of the COMEX at 1:30 p.m. New York time. As a result, during this time, trading spreads, and the resulting premium or discount, on the Shares may widen.

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Valuation of Silver and Computation of Net Asset Value

On each day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m., New York time, on such day (“Evaluation Time”), the Trustee evaluates the silver held by the Trust and determine both the ANAV and the NAV of the Trust.

At the Evaluation Time, the Trustee values the Trust’s silver on the basis of that day’s “ LBMA Silver Price” (the daily price of an ounce of silver determined by an electronic, over-the-counter auction that starts at 12:00 noon London, England time in which LBMA-authorized bullion banks or market makers participate), or, if no LBMA Silver Price is made on such day, the next most recent LBMA Silver Price determined prior to the Evaluation Time will be used, unless the Sponsor determines that such price is inappropriate as a basis for evaluation. In the event the Sponsor determines that the LBMA Silver Price or such other publicly available price as the Sponsor may deem fairly represents the commercial value of the Trust’s silver is not an appropriate basis for evaluation of the Trust’s silver, it shall identify an alternative basis for such evaluation to be employed by the Trustee. Neither the Trustee nor the Sponsor shall be liable to any person for the determination that the LBMA Silver Price or such other publicly available price is not appropriate as a basis for evaluation of the Trust’s silver or for any determination as to the alternative basis for such evaluation provided that such determination is made in good faith. See “ Operation of the Silver Bullion Market–The London Silver Bullion Market ” for a description of the LBMA Silver Price.

Once the value of the silver has been determined, the Trustee subtracts all estimated accrued but unpaid fees (other than the fees accruing for such day on which the valuation takes place that are computed by reference to the value of the Trust or its assets), expenses and other liabilities of the Trust from the total value of the silver and any other assets of the Trust. The resulting figure is the adjusted net asset value (the “ANAV”) of the Trust. The ANAV of the Trust is used to compute the Sponsor’s Fee.

All fees accruing for the day on which the valuation takes place that are computed by reference to the value of the Trust or its assets shall be calculated using the ANAV calculated for such day. The Trustee shall subtract from the ANAV the amount of accrued fees so computed for such day and the resulting figure is the NAV of the Trust. The Trustee also determines the NAV per Share by dividing the NAV of the Trust by the number of the Shares outstanding as of the close of trading on the NYSE Arca (which includes the net number of any Shares created or redeemed on such evaluation day).

The Trustee’s estimation of accrued but unpaid fees, expenses and liabilities is conclusive upon all persons interested in the Trust and no revision or correction in any computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those actually paid.

The Sponsor and the Shareholders may rely on any evaluation furnished by the Trustee, and the Sponsor has no responsibility for the evaluation’s accuracy. The determinations the Trustee makes will be made in good faith upon the basis of, and the Trustee will not be liable for any errors contained in, information reasonably available to it. The Trustee will not be liable to the Sponsor, DTC, Authorized Participants, the Shareholders or any other person for errors in judgment. However, the preceding liability exclusion will not protect the Trustee against any liability resulting from bad faith or gross negligence in the performance of its duties.

Trust Expenses

The Trust’s only ordinary recurring expense is the Sponsor’s Fee. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: the Trustee’s monthly fee and out-of-pocket expenses, the Custodian’s fee and reimbursement of the Custodian’s expenses under the Custody Agreements (defined below), Exchange listing fees, SEC registration fees, printing and mailing costs, audit fees and up to $100,000 per annum in legal expenses. The Sponsor also paid the costs of the Trust’s organization and the initial sale of the Shares, including the applicable SEC registration fees.

The Sponsor’s Fee accrues daily at an annualized rate equal to 0.45% of the ANAV of the Trust and is payable monthly in arrears. The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee at its discretion for a stated period of time. The Sponsor has decided to waive a portion of the Sponsor’s Fee to reduce the Sponsor’s Fee to 0.30%. This fee waiver has been in existence since the Trust was formed. Presently, the Sponsor is continuing to waive a portion of its fee and reduce the Sponsor’s fee to 0.30%. In the future, the Sponsor may continue its fee waiver, waive a larger or smaller portion of its fee or not renew its fee waiver. If, at any point in the future, the Sponsor does not continue its partial fee waiver, the full Sponsor’s Fee will accrue and be paid to the Sponsor for subsequent periods. The Sponsor is under no obligation to continue to waive all or part of the Sponsor’s Fee on an ongoing basis.

The Sponsor’s Fee is paid monthly by delivery of silver to an account maintained by the Custodian for the Sponsor on an unallocated basis. The Trustee will, when directed by the Sponsor, and, in the absence of such direction, may, in its discretion, sell silver in such quantity and at such times as may be necessary to permit payment in cash of Trust expenses not assumed by the Sponsor. The Trustee is authorized to sell silver at such times and in the smallest amounts required to permit such payments as they become due, it being the intention to avoid or minimize the Trust’s holdings of assets other than silver. Accordingly, the amount of silver to be sold will vary from time to time depending on the level of the Trust’s expenses and the market price of silver. The Custodian has agreed to purchase from the Trust, at the request of the Trustee, silver needed to cover Trust expenses not assumed by the Sponsor at a price at least equal to the price used by the Trustee to determine the value of the silver held by the Trust on the date of the sale.

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The Sponsor’s Fee ,   net of waiver, for the year ended December 31, 2018 was $984,811  ( December 31, 2017 :   $1,039,540 ; December 31, 2016: $957,096).

Cash held by the Trustee pending payment of the Trust’s expenses will not bear any interest.

Deposit of Silver ; Issuance of Shares

The Trust creates and redeems Shares from time to time, but only in one or more Baskets of 50,000 Shares. Only registered broker-dealers (or other securities market participants not required to register as broker-dealers such as banks or other financial institutions) who (1) are participants in the DTC and (2) have entered into written agreements with the Sponsor and the Trustee (each, an “Authorized Participant”) can deposit silver and receive Baskets of Shares in exchange. The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of silver represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.

All silver bullion deposited with the Custodian must be of at least a minimum fineness (or purity) of 999.0 parts per 1,000 and otherwise conform to the rules, regulations practices and customs of the LBMA, including the specifications for a London Good Delivery Bar.

Creation and redemption orders are accepted on “business days” the NYSE Arca is open for regular trading. Settlements of such orders requiring receipt or delivery, or confirmation of receipt or delivery, of silver in the United Kingdom when (1) banks in the United Kingdom, and (2) the London silver markets are regularly open for business. If such banks or the London silver markets are not open for regular business for a full day, such a day will only be a “business day” for settlement purposes if the settlement procedures can be completed by the end of such day.

On any business day, an Authorized Participant may place an order with the Trustee to purchase one or more Baskets. Purchase orders must be placed no later than 3:59:59 p.m. on each business day the NYSE Arca is open for regular trading. A purchase order so received is effective on the date it is received in satisfactory form by the Trustee. By placing a purchase order, an Authorized Participant agrees to deposit silver with the Trust, as described below. Prior to the delivery of Baskets for a purchase order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for the purchase order (as explained under Creation and Redemption Transaction Fee” below).

An Authorized Participant who places a purchase order is responsible for crediting its Authorized Participant Unallocated Account with the required silver deposit amount by the second business day in London following the purchase order date. Upon receipt of the silver deposit amount, the Custodian, after receiving appropriate instructions from the Authorized Participant and the Trustee, will transfer on the second business day following the purchase order date the silver deposit amount from the Authorized Participant Unallocated Account to the unallocated silver account of the Trust established with the Custodian by the Unallocated Account Agreement between the Trustee and the Custodian (the “Trust Unallocated Account”) and the Trustee will direct the Depository Trust Company (the “DTC”) to credit the number of Baskets ordered to the Authorized Participant’s DTC account. Acting on standing instructions given by the Trustee, the Custodian will transfer the silver deposit amount from the Trust Unallocated Account to the allocated silver account of the Trust established with the Custodian by the Allocated Account Agreement between the Trustee and the Custodian (the “Trust Allocated Account”) by transferring silver bars from its inventory to the Trust Allocated Account. The Trust’s Unallocated Account Agreement and Allocated Account Agreement are referred to collectively as the “Custody Agreements.”

Withdrawal of Silver; Redemption of Shares

The procedures by which an Authorized Participant can redeem one or more Baskets mirror the procedures for the creation of Baskets. On any business day, an Authorized Participant may place an order with the Trustee to redeem one or more Baskets. Redemption orders must be placed no later than 3:59:59 p.m. on each business day the NYSE Arca is open for regular trading. A redemption order so received is effective on the date it is received in satisfactory form by the Trustee. The redemption procedures allow Authorized Participants to redeem Baskets and do not entitle an individual owner of beneficial interests in the Shares (a “Shareholder”) to redeem any Shares in an amount less than a Basket, or to redeem Baskets other than through an Authorized Participant.

By placing a redemption order, an Authorized Participant agrees to deliver the Baskets to be redeemed through DTC’s book-entry system to the Trust not later than the second business day following the effective date of the redemption order. Prior to the delivery of the redemption distribution for a redemption order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for the redemption order (as explained under Creation and Redemption Transaction Fee” below).

The redemption distribution from the Trust will consist of a credit to the redeeming Authorized Participant’s Authorized Participant Unallocated Account representing the amount of the silver held by the Trust evidenced by the Shares being redeemed. Fractions of a fine ounce of silver included in the redemption distribution smaller than 0.001 of a fine ounce are disregarded. Redemption distributions are subject to the deduction of any applicable tax or other governmental charges which may be due.

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Creation and Redemption Transaction Fee

To compensate the Trustee for services in processing the creation and redemption of Baskets, an Authorized Participant is required to pay a transaction fee to the Trustee of $500 per order to create or redeem Baskets. An order may include multiple Baskets. The transaction fee may be reduced, increased or otherwise changed by the Trustee with the consent of the Sponsor. The Trustee shall notify DTC of any agreement to change the transaction fee and will not implement any increase in the fee for the redemption of Baskets until 30 days after the date of the notice.

Change in Settlement Cycle

Pursuant to an SEC rule amendment adopted in March 2017, the standard settlement cycle for most securities transactions by broker-dealers was shortened from three business days after the trade date (“T+3 Settlement”) to two business days following the trade date (“T+2 Settlement”), effective as of September 5, 2017.  Consistent with the rule amendment, beginning on September 5, 2017, the creation and redemption processes for the Trust changed from T+3 Settlement to T+2 Settlement.  Creation and redemption orders placed before September 5, 2017 were not subject to this change.

The Sponsor

The Sponsor is a Delaware limited liability company. Prior to April 27, 2018, the Sponsor was wholly-owned by ETF Securities Limited, a Jersey, Channel Islands based company. Effective April 27, 2018, ETF Securities Limited sold its membership interest in the Sponsor to Aberdeen Standard Investments Inc. (“ASII”), formerly known as Aberdeen Asset Management Inc. prior to January 1, 2019 , a Delaware corporation. As a result of the sale, ASII became the sole member of the Sponsor. ASII is a wholly-owned indirect subsidiary of Standard Life Aberdeen plc, which together with its affiliates and subsidiaries, is collectively referred to as “Aberdeen.” Aberdeen Standard Investments is a brand of the investment businesses of Standard Life Investments plc, its affiliates and subsidiaries . In the United States, Aberdeen Standard Investments is the marketing name for the following affiliated, registered investment advisers: Aberdeen Standard Investments Inc., Aberdeen Asset Managers Ltd., Aberdeen Standard Investments Australia Ltd., Aberdeen Standard Investments (Asia) Ltd., Aberdeen Capital Management, LLC, Aberdeen Standard Investments ETFs Advisors LLC and Standard Life Investments (Corporate Funds) Ltd.

The Sponsor’s office is located at c/o Aberdeen Standard Investments ETFs Sponsor LLC, 712 Fifth Avenue, 49 th Floor, New York, NY 10019. Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, the sole member of the Sponsor, ASII , is not responsible for the debts, obligations and liabilities of the Sponsor solely by reason of being the sole member of the Sponsor.

Name Changes

Effective October 1, 2018, the name of the Trust changed from the “ETFS Silver Trust” to the “Aberdeen Standard Silver ETF Trust”. In addition, effective October 1, 2018, the name of the Shares changed from “ETFS Physical Silver Shares” to “Aberdeen Standard Physical Silver Shares ETF”, and the name of the Sponsor changed from “ETF Securities USA LLC” to “Aberdeen Standard Investments ETFs Sponsor LLC”.

The Sponsor’s Role  

The Sponsor arranged for the creation of the Trust, the registration of the Shares for their public offering in the United States and the listing of the Shares on the NYSE Arca. The Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: the Trustee’s monthly fee and out-of-pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses under the Custody Agreements, Exchange listing fees, SEC registration fees, printing and mailing costs, audit fees and up to $100,000 per annum in legal expenses. The Sponsor also paid the costs of the Trust’s organization and the initial sale of the Shares, including the applicable SEC registration fees.

The Sponsor does not exercise day-to-day oversight over the Trustee or the Custodian. The Sponsor may remove the Trustee and appoint a successor Trustee (i) if the Trustee ceases to meet certain objective requirements (including the requirement that it have capital, surplus and undivided profits of at least $150 million), (ii) if, having received written notice of a material breach of its obligations under the Trust Agreement, the Trustee has not cured the breach within 30 days, or (iii) if the Trustee refuses to consent to the implementation of an amendment to the Trust’s initial Internal Control Over Financial Reporting. The Sponsor also has the right to replace the Trustee during the 90 days following any merger, consolidation or conversion in which the Trustee is not the surviving entity or, in its discretion, on the fifth anniversary of the creation of the Trust or on any subsequent third anniversary thereafter. The Sponsor also has the right to approve any new or additional custodian that the Trustee may wish to appoint.

The Sponsor or one of its affiliates or agents (1) develops a marketing plan for the Trust on an ongoing basis, (2) prepares marketing materials regarding the Shares, including the content of the Trust’s website and (3) executes the marketing plan for the Trust.







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The Trustee  

The Bank of New York Mellon, a banking corporation organized under the laws of the State of New York with trust powers (“BNYM”), serves as the Trustee. BNYM has a trust office at 2 Hanson Place, Brooklyn, New York 11217. BNYM is subject to supervision by the New York State Financial Services Department and the Board of Governors of the Federal Reserve System. Information regarding creation and redemption Basket composition, NAV of the Trust, transaction fees and the names of the parties that have each executed an Authorized Participant Agreement may be obtained from BNYM. A copy of the Trust Agreement is available for inspection at BNYM’s trust office identified above. Under the Trust Agreement, the Trustee is required to have capital, surplus and undivided profits of at least $150 million. As of December 31, 2018 , the Trustee was in compliance with these conditions.

The Trustee’s Role  

The Trustee is generally responsible for the day-to-day administration of the Trust, including keeping the Trust’s operational records. The Trustee’s principal responsibilities include (1) transferring the Trust’s silver as needed to pay the Sponsor’s Fee in silver (silver transfers are expected to occur approximately monthly in the ordinary course), (2) valuing the Trust’s silver and calculating the NAV of the Trust and the NAV per Share, (3) receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with the Custodian and DTC, (4) selling the Trust’s silver as needed to pay any extraordinary Trust expenses that are not assumed by the Sponsor, (5) when appropriate, making distributions of cash or other property to Shareholders, and (6) receiving and reviewing reports from or on the Custodian’s custody of and transactions in the Trust’s silver. The Trustee shall, with respect to directing the Custodian, act in accordance with the instructions of the Sponsor. If the Custodian resigns, the Trustee shall appoint an additional or replacement Custodian selected by the Sponsor. The Trustee intends to regularly communicate with the Sponsor to monitor the overall performance of the Trust. The Trustee does not monitor the performance of the Custodian or any other sub-custodian other than to review the reports provided by the Custodian pursuant to the Custody Agreements. The Trustee, along with the Sponsor, will liaise with the Trust’s legal, accounting and other professional service providers as needed. The Trustee will assist and support the Sponsor with the preparation of all periodic reports required to be filed with the SEC on behalf of the Trust.

The Trustee’s monthly fees and out-of-pocket expenses are paid by the Sponsor.

Affiliates of the Trustee may from time to time act as Authorized Participants or purchase or sell silver or Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion. Affiliates of the Trustee are subject to the same transaction fee as other Authorized Participants.

The C ustodia n  

HSBC Bank plc (“HSBC”) serves as the Custodian of the Trust’s silver. HSBC is authorized by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the FCA. HSBC’s custodian office is located at 8 Canada Square, London, E14 5HQ, United Kingdom.  The FCA is an independent non-governmental body which exercises statutory regulatory power under the United Kingdom Financial Services and Markets Act 2000 and which regulates the major participating members of the LBMA in the United Kingdom.

The Custodian’s Role  

The Custodian is responsible for safekeeping of the Trust’s silver deposited with it by Authorized Participants in connection with the creation of Baskets. The Custodian is also responsible for selecting sub-custodians, if any. The Custodian facilitates the transfer of silver in and out of the Trust through the unallocated silver accounts it will maintain for each Authorized Participant and the unallocated and allocated silver accounts it will maintain for the Trust. The Custodian holds at its London, England vault premises the Trust’s allocated silver. The Custodian is responsible for allocating specific bars of silver bullion to the Trust Allocated Account. The Custodian provides the Trustee with regular reports detailing the silver transfers in and out of the Trust’s unallocated and allocated silver accounts and identifying the silver bars held in the Trust’s allocated silver account.

The Custodian’s fees and expenses under the Custody Agreements are paid by the Sponsor.

The Custodian and its affiliates may from time to time act as Authorized Participants or purchase or sell silver or Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion. The Custodian and its affiliates are subject to the same transaction fee as other Authorized Participants.

Inspection of Silver

Under the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may, only up to twice a year, visit the premises of the Custodian for the purpose of examining the Trust’s silver and certain related records maintained by the Custodian. The Trustee and the Sponsor have no right to visit the premises of any sub-custodian for the purposes of examining the Trust’s silver or any records maintained by the sub-custodian, and no sub-custodian is obligated to cooperate in any review the Trustee or the Sponsor may wish to conduct of the facilities, procedures, records or creditworthiness of such sub-custodian.

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The Sponsor has exercised its right to visit the Custodian, in order to examine the records maintained by the Custodian. Inspections were conducted by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor, as of May 11, 2018 and December 31, 2018 .



Description of the Shares  

General  

The Trustee is authorized under the Trust Agreement to create and issue an unlimited number of Shares. The Trustee creates Shares only in Baskets (a Basket equals a block of 50,000 Shares) and only upon the order of an Authorized Participant. The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust and have no par value. Any creation and issuance of Shares above the amount registered on the Trust’s then-current and effective registration statement with the SEC will require the registration of such additional Shares.

Description of Limited Rights  

The Shares do not represent a traditional investment and Shareholders should not view them as similar to “shares” of a corporation operating a business enterprise with management and a board of directors. Shareholders do not have the statutory rights normally associated with the ownership of shares of a corporation, including, for example, the right to bring “oppression” or “derivative” actions. All Shares are of the same class with equal rights and privileges. Each Share is transferable, is fully paid and non-assessable and entitles the holder to vote on the limited matters upon which Shareholders may vote under the Trust Agreement. The Shares do not entitle their holders to any conversion or pre-emptive rights, or, except as provided below, any redemption rights or rights to distributions.

Distributions  

If the Trust is terminated and liquidated, the Trustee will distribute to the Shareholders any amounts remaining after the satisfaction of all outstanding liabilities of the Trust and the establishment of such reserves for applicable taxes, other governmental charges and contingent or future liabilities as the Trustee shall determine. Shareholders of record on the record date fixed by the Trustee for a distribution will be entitled to receive their pro rata portion of any distribution.

Voting and Approvals  

Under the Trust Agreement, Shareholders have no voting rights, except in limited circumstances. The Trustee may terminate the Trust upon the agreement of Shareholders owning at least 75% of the outstanding Shares. In addition, certain amendments to the Trust Agreement require advance notice to the Shareholders before the effectiveness of such amendments, but no Shareholder vote or approval is required for any amendment to the Trust Agreement.

Redemption of the Shares  

The Shares may only be redeemed by or through an Authorized Participant and only in Baskets.

Book-Entry Form  

Individual certificates will not be issued for the Shares. Instead, one or more global certificates is deposited by the Trustee with DTC and registered in the name of Cede & Co., as nominee for DTC. The global certificates evidence all of the Shares outstanding at any time. Under the Trust Agreement, Shareholders are limited to (1) participants in DTC such as banks, brokers, dealers and trust companies (“DTC Participants”), (2) those who maintain, either directly or indirectly, a custodial relationship with a DTC Participant (“Indirect Participants”), and (3) those banks, brokers, dealers, trust companies and others who hold interests in the Shares through DTC Participants or Indirect Participants. The Shares are only transferable through the book-entry system of DTC. Shareholders who are not DTC Participants may transfer their Shares through DTC by instructing the DTC Participant holding their Shares (or by instructing the Indirect Participant or other entity through which their Shares are held) to transfer the Shares. Transfers will be made in accordance with standard securities industry practice.

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Custody of the Trust’s Silver  

Custody of the silver bullion deposited with and held by the Trust is provided by the Custodian at its London, England vaults or by sub-custodians selected by the Custodian. The Custodian is a market maker, clearer and approved weigher under the rules of the LBMA.

The Custodian is the custodian of the silver bullion credited to Trust Allocated Account in accordance with the Custody Agreements. The Custodian segregates the silver bullion credited to the Trust Allocated Account from any other precious metal it holds or holds for others by entering appropriate entries in its books and records. Under the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may inspect the vaults of the Custodian.  See “ Inspection of Silver ”.

The Custodian, as instructed by the Trustee on behalf of the Trust, is authorized to accept, on behalf of the Trust, deposits of silver in unallocated form. Acting on standing instructions specified in the Custody Agreements, the Custodian allocates silver deposited in unallocated form with the Trust by selecting bars of silver bullion for deposit to the Trust Allocated Account. All silver bullion allocated to the Trust must conform to the rules, regulations, practices and customs of the LBMA.

The process of withdrawing silver from the Trust for a redemption of a Basket is the same general procedure as for depositing silver with the Trust for a creation of a Basket, only in reverse. Each transfer of silver between the Trust Allocated Account and the Trust Unallocated Account connected with a creation or redemption of a Basket may result in a small amount of silver being held in the Trust Unallocated Account after the completion of the transfer. In making deposits and withdrawals between the Trust Allocated Account and the Trust Unallocated Account, the Custodian will use commercially reasonable efforts to minimize the amount of silver held in the Trust Unallocated Account as of the close of each business day. See “ Deposit of Silver; Issuance of Shares ” and “ Withdrawal of Silver; Redemption of Shares .”

United States Federal Income Tax Consequences

The following discussion of the material US federal income tax consequences that generally applies to the purchase, ownership and disposition of Shares by a US Shareholder (as defined below), and certain US federal income tax consequences that may apply to an investment in Shares by a Non-US Shareholder (as defined below). The discussion is based on the United States Internal Revenue Code of 1986 as amended (the “Code”). The discussion below is based on the Code. United States Treasury Regulations (“Treasury Regulations”) promulgated under the Code and judicial and administrative interpretations of the Code, all as in effect on the date of this annual report and all of which are subject to change either prospectively or retroactively. The tax treatment of Shareholders may vary depending upon their own particular circumstances. Certain Shareholders (including broker-dealers, traders, banks and other financial institutions, insurance companies, real estate investment trusts, tax-exempt entities, Shareholders whose functional currency is not the US Dollar or other investors with special circumstances) may be subject to special rules not discussed below. In addition, the following discussion applies only to investors who hold Shares as “capital assets” within the meaning of Code section 1221 and not as part of a straddle, hedging transaction or a conversion or constructive sale transaction. Moreover, the discussion below does not address the effect of any state, local or foreign tax law or any transfer tax on an owner of Shares. Purchasers of Shares are urged to consult their own tax advisors with respect to all federal, state, local and foreign tax law or any transfer tax considerations potentially applicable to their investment in Shares, including substantial changes to the Code made in the recently enacted Tax Cuts and Jobs Act (P.L. 115-97).

For purposes of this discussion, a “US Shareholder” is a Shareholder that is:

An individual who is treated as a citizen or resident of the United States for US federal income tax purposes:

A corporation (or other entity treated as a corporation for US federal tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof;

An estate, the income of which is includible in gross income for US federal income tax purposes regardless of its source; or

A trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust.

A Shareholder that is not a US Shareholder as defined above (other than a partnership, or an entity treated as a partnership for US federal tax purposes) generally is considered a “Non-US Shareholder” for purposes of this discussion. For US federal income tax purposes, the treatment of any beneficial owner of an interest in a partnership, including any entity treated as a partnership for US federal income tax purposes, generally depends upon the status of the partner and upon the activities of the partnership. Partnerships and partners in partnerships should consult their tax advisors about the US federal income tax consequences of purchasing, owning and disposing of Shares.

Taxation of the Trust  

The Trust is classified as a “grantor trust” for US federal income tax purposes. As a result, the Trust itself is not subject to US federal income tax. Instead, the Trust’s income and expenses “flow through” to the Shareholders, and the Trustee reports the Trust’s income, gains, losses and deductions to the Internal Revenue Service (“IRS”) on that basis.

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Taxation of US Shareholders  

Shareholders generally are treated, for US federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held by the Trust. Shareholders are also treated as if they directly received their respective pro rata share of the Trust’s income, if any, and as if they directly incurred their respective pro rata share of the Trust’s expenses. In the case of a Shareholder that purchases Shares for cash, its initial tax basis in its pro rata share of the assets held by the Trust at the time it acquires its Shares is equal to its cost of acquiring the Shares. In the case of a Shareholder that acquires its Shares as part of a creation of a Basket, the delivery of silver to the Trust in exchange for the Shares is not a taxable event to the Shareholder, and the Shareholder’s tax basis and holding period for the Shares are the same as its tax basis and holding period for the silver delivered in exchange therefore (except to the extent of any cash contributed for such Shares). For purposes of this discussion, it is assumed that all of a Shareholder’s Shares are acquired on the same date and at the same price per Share. Shareholders that hold multiple lots of Shares, or that are contemplating acquiring multiple lots of Shares, should consult their tax advisors.

When the Trust sells or transfers silver, for example to pay expenses, a Shareholder generally will recognize gain or loss in an amount equal to the difference between (1) the Shareholder’s pro rata share of the amount realized by the Trust upon the sale or transfer and (2) the Shareholder’s tax basis for its pro rata share of the silver that was sold or transferred. Such gain or loss will generally be long-term or short-term capital gain or loss, depending upon whether the Shareholder has a holding period in its Shares of longer than one year. A Shareholder’s tax basis for its share of any silver sold by the Trust generally will be determined by multiplying the Shareholder’s total basis for its Shares immediately prior to the sale, by a fraction the numerator of which is the amount of silver sold, and the denominator of which is the total amount of the silver held by the Trust immediately prior to the sale. After any such sale, a Shareholder’s tax basis for its pro rata share of the silver remaining in the Trust will be equal to its tax basis for Shares immediately prior to the sale, less the portion of such basis allocable to its share of the silver that was sold.

Upon a Shareholder’s sale of some or all of its Shares, the Shareholder will be treated as having sold a pro rata share of the silver held in the Trust at the time of the sale. Accordingly, the Shareholder generally will recognize a gain or loss on the sale in an amount equal to the difference between (1) the amount realized pursuant to the sale of the Shares, and (2) the Shareholder’s tax basis for the Shares sold, as determined in the manner described in the preceding paragraph.

A redemption of some or all of a Shareholder’s Shares in exchange for the underlying silver represented by the Shares redeemed generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the silver received in the redemption generally will be the same as the Shareholder’s tax basis for the Shares redeemed. The Shareholder’s holding period with respect to the silver received should include the period during which the Shareholder held the Shares redeemed. A subsequent sale of the silver received by the Shareholder will be a taxable event.

An Authorized Participant and other investors may be able to re-invest, on a tax-deferred basis, in-kind redemption proceeds received from exchange-traded products that are substantially similar to the Trust in the Trust’s Shares. Authorized Participants and other investors should consult their tax advisors as to whether and under what circumstances the reinvestment in the Shares of proceeds from substantially similar exchange-traded products can be accomplished on a tax-deferred basis.

Under current law, gains recognized by individuals, estates or trusts from the sale of “collectibles,” including silver bullion, held for more than one year are taxed at a maximum federal income tax rate of 28%, rather than the 20% rate applicable to most other long-term capital gains. For these purposes, gain recognized by an individual upon the sale of Shares held for more than one year, or attributable to the Trust’s sale of any silver bullion which the Shareholder is treated (through its ownership of Shares) as having held for more than one year, generally will be taxed at a maximum rate of 28%. The tax rates for capital gains recognized upon the sale of assets held by an individual US Shareholder for one year or less or by a corporate taxpayer are generally the same as those at which ordinary income is taxed.

In addition, high-income individuals and certain trusts and estates, are subject to a 3.8% Medicare contribution tax that is imposed on net investment income and gain. Shareholders should consult their tax advisor regarding this tax.

Brokerage Fees and Trust Expenses  

Any brokerage or other transaction fees incurred by a Shareholder in purchasing Shares is treated as part of the Shareholder’s tax basis in the Shares. Similarly, any brokerage fee incurred by a Shareholder in selling Shares reduces the amount realized by the Shareholder with respect to the sale.

Shareholders will be required to recognize gain or loss upon a sale of silver by the Trust (as discussed above), even though some or all of the proceeds of such sale are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective pro rata share of each expense incurred by the Trust to the same extent as if they directly incurred the expense. Shareholders who are individuals, estates or trusts, however, may be required to treat some or all of the expenses of the Trust, to the extent that such expenses may be deducted, as miscellaneous itemized deductions. Under the recently enacted Tax Cuts and Jobs Act (P.L. 115-97), miscellaneous itemized deductions, including expense for the production of income, will not be deductible for either regular federal income tax or alternative minimum tax purposes for taxable years beginning after December 31, 2017 and before January 1, 2026.



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Investment by Regulated Investment Companies  

Mutual funds and other investment vehicles which are “regulated investment companies” within the meaning of Code section 851 should consult with their tax advisors concerning (1) the likelihood that an investment in Shares, although they are a “security” within the meaning of the Investment Company Act of 1940, may be considered an investment in the underlying silver for purposes of Code section 851(b), and (2) the extent to which an investment in Shares might nevertheless be consistent with preservation of their qualification under Code section 851. We note that in recent administrative guidance, the IRS stated that it will no longer issue rulings under Code section 851(b) relating to the determination of whether or not an instrument or position is a “security”, but, instead, intends to defer to guidance from the SEC for such determination.

United States Information Reporting and Backup Withholding Tax for US and Non-US Shareholders  

The Trustee or the appropriate broker will file certain information returns with the IRS, and provides certain tax-related information to Shareholders, in accordance with applicable Treasury Regulations. Each Shareholder will be provided with information regarding its allocable portion of the Trust’s annual income (if any) and expenses.

A US Shareholder may be subject to US backup withholding tax in certain circumstances unless it provides its taxpayer identification number and complies with certain certification procedures. Non-US Shareholders may have to comply with certification procedures to establish that they are not a US person in order to avoid the backup withholding tax.

The amount of any backup withholding will be allowed as a credit against a Shareholder’s US federal income tax liability and may entitle such a Shareholder to a refund, provided that the required information is furnished to the IRS.

Income Taxation of Non-US Shareholders  

The Trust does not expect to generate taxable income except for gain (if any) upon the sale of silver. A Non-US Shareholder generally is not subject to US federal income tax with respect to gain recognized upon the sale or other disposition of Shares, or upon the sale of silver by the Trust, unless (1) the Non-US Shareholder is an individual and is present in the United States for 183 days or more during the taxable year of the sale or other disposition, and the gain is treated as being from United States sources; or (2) the gain is effectively connected with the conduct by the Non-US Shareholder of a trade or business in the United States.

Taxation in Jurisdictions other than the United States  

Prospective purchasers of Shares that are based in or acting out of a jurisdiction other than the United States are advised to consult their own tax advisers as to the tax consequences, under the laws of such jurisdiction (or any other jurisdiction not being the United States to which they are subject), of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other dealing.

ERISA and Related Considerations

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or Code section 4975 impose certain requirements on certain employee benefit plans and certain other plans and arrangements, including individual retirement accounts and annuities, Keogh plans, and certain commingled investment vehicles or insurance company general or separate accounts in which such plans or arrangements are invested (collectively, “Plans”), and on persons who are fiduciaries with respect to the investment of “plan assets” of a Plan. Government plans and some church plans are not subject to the fiduciary responsibility provisions of ERISA or the provisions of section 4975 of the Code, but may be subject to substantially similar rules under other federal law, or under state or local law (“Other Law”).

In contemplating an investment of a portion of Plan assets in Shares, the Plan fiduciary responsible for making such investment should carefully consider, taking into account the facts and circumstances of the Plan and the “ Risk Factors ” discussed above and whether such investment is consistent with its fiduciary responsibilities under ERISA or Other Law, including, but not limited to: (1) whether the investment is permitted under the Plan’s governing documents, (2) whether the fiduciary has the authority to make the investment, (3) whether the investment is consistent with the Plan’s funding objectives, (4) the tax effects of the investment on the Plan, and (5) whether the investment is prudent considering the factors discussed in this report. In addition, ERISA and Code Section 4975 prohibit a broad range of transactions involving assets of a plan and persons who are “parties in interest” under ERISA or “disqualified persons” under Section 4975 of the Code. A violation of these rules may result in the imposition of significant excise taxes and other liabilities. Plans subject to Other Law may be subject to similar restrictions.

It is anticipated that the Shares will constitute “publicly offered securities” as defined in the Department of Labor “Plan Asset Regulations,” §2510.3-101 (b)(2) as modified by section 3(42) of ERISA. Accordingly, pursuant to the Plan Asset Regulations, only Shares purchased by a Plan, and not an interest in the underlying assets held in the Trust, should be treated as assets of the Plan, for purposes of applying the “fiduciary responsibility” rules of ERISA and the “prohibited transaction” rules of ERISA and the Code. Fiduciaries of plans subject to Other Law should consult legal counsel to determine whether there would be a similar result under the Other Law.



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Investment by Certain Retirement Plans  

Code section 408(m) provides that the acquisition of a “collectible” by an individual retirement account (“IRA”) or a participant-directed account maintained under any plan that is tax-qualified under Code section 401(a) (“Tax Qualified Account”) is treated as a taxable distribution from the account to the owner of the IRA, or to the participant for whom the Tax Qualified Account is maintained, of an amount equal to the cost to the account of acquiring the collectible.  The term “collectible” is defined to include, with certain exceptions, “any metal or gem”. The IRS has issued several private letter rulings to the effect that a purchase by an IRA, or by a participant-directed account under a Code section 401(a) plan, of publicly-traded Shares in a trust holding precious metals will not be treated as resulting in a taxable distribution to the IRA owner or Tax Qualified Account participant under Code section 408(m). However the private letter rulings provide that, if any of the Shares so purchased are distributed from the IRA or Tax Qualified Account to the IRA owner or Tax Qualified Account participant, or if any precious metal is received by such IRA or Tax Qualified Account upon the redemption of any of the Shares purchased by it, the Shares or precious metal so distributed will be subject to federal income tax in the year of distribution, to the extent provided under the applicable provisions of Code sections 408(d), 408(m) or 402. Accordingly, potential IRA or Tax Qualified Account investors are urged to consult with their own professional advisors concerning the treatment of an investment in Shares under Code section 408(m).

Item 1A. Risk Factors

Shareholders should consider carefully the risks described below before making an investment decision. Shareholders should also refer to the other information included in the prospectus and this report, including the Trust’s financial statements and the related notes.

The value of the Shares relates directly to the value of the silver held by the Trust and fluctuations in the price of silver could materially adversely affect an investment in the Shares.

The Shares are designed to mirror as closely as possible the performance of the price of silver bullion, and the value of the Shares relates directly to the value of the silver held by the Trust, less the Trust’s liabilities (including estimated accrued but unpaid expenses). The price of silver has fluctuated widely over the past several years. Several factors may affect the price of silver, including:

A change in economic conditions, such as a recession, can adversely affect the price of silver. Silver is used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;

·

Investors’ expectations with respect to the rate of inflation;

·

Currency exchange rates;

·

Interest rates;

·

Investment and trading activities of hedge funds and commodity funds; and

·

Global or regional political, economic or financial events and situations.

In addition, investors should be aware that there is no assurance that silver will maintain its long-term value in terms of purchasing power in the future. In the event that the price of silver declines, the Sponsor expects the value of an investment in the Shares to decline proportionately.

The Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the trading price relative to the NAV per Share may widen as a result of non-concurrent trading hours between the NYSE Arca, London and COMEX.

The Shares may trade at, above or below the NAV per Share. The NAV per Share fluctuates with changes in the market value of the Trust’s assets. The trading price of the Shares fluctuates in accordance with changes in the NAV per Share as well as market supply and demand. The amount of the discount or premium in the trading price relative to the NAV per Share may be influenced by non-concurrent trading hours between the NYSE Arca and the major silver markets. While the Shares trade on the NYSE Arca until 4:00 p.m. New York time, liquidity in the market for silver is reduced after the close of the major world silver markets, including London and the Commodity Exchange, Inc., a subsidiary of New York Mercantile Exchange, Inc. (“COMEX”). As a result, during this time, trading spreads, and the resulting premium or discount on the Shares, may widen.  











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A possible “short squeeze” due to a sudden increase in demand of Shares that largely exceeds supply may lead to price volatility in the Shares.

Investors may purchase Shares to hedge existing silver exposure or to speculate on the price of silver. Speculation on the price of silver may involve long and short exposures. To the extent aggregate short exposure exceeds the number of Shares available for purchase (for example, in the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with short exposure may have to pay a premium to repurchase Shares for delivery to Share lenders. Those repurchases may in turn, dramatically increase the price of the Shares until additional Shares are created through the creation process. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in Shares that are not directly correlated to the price of silver.

Purchasing activity in the silver market associated with the purchase of Baskets from the Trust may cause a temporary increase in the price of silver. This increase may adversely affect an investment in the Shares.

Purchasing activity associated with acquiring the silver required for deposit into the Trust in connection with the creation of Baskets may temporarily increase the market price of silver, which will result in higher prices for the Shares. Temporary increases in the market price of silver may also occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of silver that may result from increased purchasing activity of silver connected with the issuance of Baskets.   Consequently, the market price   of silver may decline immediately after Baskets are created. If the price of silver declines, the trading price of the Shares may also decline.

The Shares and their value could decrease if unanticipated operational or trading problems arise.

There may be unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares that could have a material adverse effect on an investment in the Shares. In addition, although the Trust is not actively “managed” by traditional methods, to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications may not be suitable for solving these problems or issues.

The LBMA Silver Price may prove unreliable.

Since August 15, 2014, the Sponsor has utilized the LBMA Silver Price as the benchmark price for valuing silver held, received or delivered by the Trust.  Prior to August 15, 2014, the Trust utilized the London silver fix as its benchmark for valuation purposes.  The London silver fix, which London Silver Market Fixing Ltd. discontinued on August 14, 2014, was the price of an ounce of silver as set by three market members of the London Bullion Market Association at approximately 12:00 noon, London time, on each   London business   day   and was widely accepted among silver market participants.  The LBMA Silver Price, and the mechanism for its establishment, have a limited operating history and may, among other things:

·

not behave over time like the London Fix has historically;

·

be based on procedures and subject to regulation and oversight significantly different than those applicable to the London Fix;

·

result in delays or errors in the   determination of a   daily   benchmark   price of silver; or

·

otherwise prove unreliable as a benchmark price.

If the LBMA Silver Price is unreliable for any reason, the price of silver and the market price for the Shares may decline or be subject to greater volatility. 

Additionally, any concern about the integrity or reliability of the LBMA Silver Price, even if later shown to be without merit, could disrupt trading in silver and products using the LBMA Silver Price, such as the Shares. This could lead to less liquidity or greater price volatility for silver and products using the LBMA Silver Price, such as the Shares, or otherwise could have an adverse impact on the trading price of the Shares.

If the LBMA Silver Price is unreliable for any reason, the price of silver and the market price for the Shares may decline or be subject to greater volatility. 















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Regulatory activity or lawsuits with respect to the historical methods of setting the prices of gold, silver, platinum and palladium, which were used prior to the adoption of the LBMA PM Gold Price in March 2015, the LBMA Silver Price in August 2014 and the LME PM Fix in December 2014, may impact market confidence in the LBMA PM Gold Price, the LBMA Silver Price or the LME PM Fix.

The historical methods of setting the prices of gold, silver, platinum and palladium have been the subject of litigation and regulatory investigations which remain pending.  Within the last five years, electronic auction methodologies have replaced the historical non-electronic auction methods of setting the prices of gold, silver, platinum and palladium. However, if there is a perception that the price setting mechanisms for gold, silver, platinum or palladium are susceptible to intentional disruption, or if the LBMA PM Gold Price, the LBMA Silver Price or the LME PM Fix are not received with confidence by the markets, the behavior of investors and traders in gold, silver, platinum or palladium may reflect the lack of confidence and it may have an effect on the prices of these metals as reflected by the LBMA PM Gold Price, the LBMA Silver Price or the LME PM Fix (and, consequently, the value of the Shares or their correlation with the prices of these metals), or could lead to less liquidity or greater price volatility for these metals and products that use these benchmark prices, such as the Shares, or otherwise could have an adverse impact on the trading price of the Shares.

If the process of creation and redemption of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions intended to keep the price of the Shares closely linked to the price of silver may not exist and, as a result, the price of the Shares may fall.

If the processes of creation and redemption of Shares (which depend on timely transfers of silver to and by the Custodian) encounter any unanticipated difficulties, potential market participants who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the underlying silver may not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect. If this is the case, the liquidity of Shares may decline and the price of the Shares may fluctuate independently of the price of silver and may fall.   Additionally, redemptions could be suspended for any period during which (1) the NYSE Arca is closed (other than customary weekend or holiday closings) or trading on the NYSE Arca is suspended or restricted, or (2) an emergency exists as a result of which delivery, disposal or evaluation of the silver is not reasonably practicable. 

The liquidity of the Shares may be affected by the withdrawal from participation of one or more Authorized Participants.

In the event that one or more Authorized Participants having substantial interests in Shares or otherwise responsible for a significant portion of the Shares’ daily trading volume on the Exchange withdraw from participation, the liquidity of the Shares will likely decrease which could adversely affect the market price of the Shares and result in Shareholders   incurring a loss on their investment.

Shareholders do not have the protections associated with ownership of   shares   in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the Commodity Exchange Act.

The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Consequently, Shareholders do not have the regulatory protections provided to investors in investment companies. The Trust does   not   and will not hold or trade in commodity futures contracts, “commodity interests” or any other instruments regulated by the Commodity Exchange Act (“CEA”), as administered by the CFTC and the National Futures Association (“NFA”). Furthermore, the Trust is not a commodity pool for purposes of the CEA and the Shares are not “commodity interests”, and neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading advisor in connection with the Trust or the Shares. Consequently, Shareholders do not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools operated by registered commodity pool operators or advised by commodity trading advisors.

The Trust may be required to terminate and liquidate at a time that is disadvantageous to Shareholders.

If the Trust is required to terminate and liquidate, such termination and liquidation could occur at a time which is disadvantageous to Shareholders, such as when silver prices are lower than the silver prices at the time when Shareholders purchased their Shares. In such a case, when the Trust’s silver is sold as part of the Trust’s liquidation, the resulting proceeds distributed to Shareholders will be less than if silver prices were higher at the time of sale.

The lack of an active trading market for the Shares may result in losses on investment at the time of disposition of the Shares.

Although Shares are listed for trading on the NYSE Arca, it cannot be assumed that an active trading market for the Shares will develop or be maintained. If an investor needs to sell Shares at a time when no active market for Shares exists, such lack of an active market will most likely adversely affect the price the investor receives for the Shares (assuming the investor is able to sell them).

Shareholders do not have the rights enjoyed by investors in certain other vehicles.

As interests in an investment trust, the Shares have none of the statutory rights normally associated with the ownership of   shares   of a corporation (including, for example, the right to bring “oppression” or “derivative” actions). In addition, the Shares have limited voting and distribution rights (for example, Shareholders do not have the right to elect directors or approve amendments to the Trust Agreement and do not receive dividends).



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An investment in the Shares may be adversely affected by competition from other methods of investing in silver.

The Trust competes with other financial vehicles, including traditional debt and equity securities issued by companies in the silver industry and other securities backed by or linked to silver, direct investments in silver and investment vehicles similar to the Trust. Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial vehicles or to invest in silver directly, which could limit the market for the Shares and reduce the liquidity of the Shares.

The price of silver may be affected by the sale of ETVs tracking silver markets.

To the extent existing exchange traded vehicles (“ETVs”) tracking silver markets represent a significant proportion of demand for physical silver bullion, large redemptions of the securities of these ETVs could negatively affect physical silver bullion prices and the price and NAV of the Shares.

Crises may motivate large-scale sales of silver which could decrease the price of silver and adversely affect an investment in the Shares.

The possibility of large-scale distress sales of silver in times of crisis may have a short-term negative impact on the price of silver and adversely affect an investment in the Shares. For example, the 2008 financial credit crisis resulted in significantly depressed prices of silver largely due to a slowdown in demand in silver for industrial use and forced sales and deleveraging from institutional investors. Crises in the future may impair silver’s price performance which would, in turn, adversely affect an investment in the Shares.



Several factors may have the effect of causing a decline in the prices of silver and a corresponding decline in the price of Shares. Among them:

·

A significant increase in silver hedging activity by silver producers. Should there be an increase in the level of hedge activity of silver producing companies, it could cause a decline in world silver prices, adversely affecting the price of the Shares.

·

A significant change in the attitude of speculators and investors towards silver. Should the speculative community take a negative view towards silver, it could cause a decline in world silver prices, negatively impacting the price of the Shares.

·

A widening of interest rate differentials between the cost of money and the cost of silver could negatively affect the price of silver which, in turn, could negatively affect the price of the Shares.

·

A combination of rising money interest rates and a continuation of the current low cost of borrowing silver could improve the economics of selling silver forward. This could result in an increase in hedging by silver mining companies and short selling by speculative interests, which would negatively affect the price of silver. Under such circumstances, the price of the Shares would be similarly affected.

The amount of silver represented by each Share will decrease over the life of the Trust due to the recurring deliveries of silver necessary to pay the Sponsor’s Fee in-kind and potential sales of silver to pay in cash the Trust expenses not assumed by the Sponsor.  Without increases in the price of silver sufficient to compensate for that decrease, the price of the Shares will also decline proportionately over the life of the Trust. 

The amount of silver represented by each Share decreases each day by the Sponsor’s Fee.  In addition, although the Sponsor has agreed to assume all organizational and certain administrative and marketing expenses incurred by the Trust, in exceptional cases certain Trust expenses may need to be paid by the Trust.  Because the Trust does not have any income, it must either make payments in-kind by deliveries of silver (as is the case with the Sponsor’s Fee) or it must sell silver to obtain cash (as in the case of any exceptional expenses).  The result of these sales of silver and recurring deliveries of silver to pay the Sponsor’s Fee in-kind is a decrease in the amount of silver represented by each Share.  New deposits of silver, received in exchange for new Baskets issued by the Trust, will not reverse this trend.  

A decrease in the amount of silver represented by each Share results in a decrease in each Share’s price even if the price of silver does not change.  To retain the Share’s original price, the price of silver must increase.  Without that increase, the lesser amount of silver represented by the Share will have a correspondingly lower price.  If this increase does not occur, or is not sufficient to counter the lesser amount of silver represented by each Share, Shareholders will sustain losses on their investment in Shares. 

An increase in Trust expenses not assumed by the Sponsor, or the existence of unexpected liabilities affecting the Trust, will require the Trustee to sell larger amounts of silver, and will result in a more rapid decrease of the amount of silver represented by each Share and corresponding decrease in its value.

The Trust’s silver may be subject to loss, damage, theft or restriction on access.

There is a risk that part or all of the Trust’s silver could be lost, damaged or stolen. Access to the Trust’s silver could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

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The Trust’s lack of insurance protection and the Shareholders’ limited rights of legal recourse against the Trust, the Trustee, the Sponsor, the Custodian and any sub-custodian exposes the Trust and its Shareholders to the risk of loss of the Trust’s silver for which no person is liable.

The Trust does not insure its silver. The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate in connection with its custodial obligations and is responsible for all costs, fees and   expenses arising from the insurance policy or policies. The Trust is not a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore, Shareholders cannot be assured that the Custodian maintains adequate insurance or any insurance with respect to the silver held by the Custodian on behalf of the Trust. In addition, the Custodian and the Trustee do not require any direct or indirect sub-custodians to be insured or bonded with respect to their custodial activities or in respect of the silver held by them on behalf of the Trust. Further, Shareholders’ recourse against the Trust, the Trustee and the Sponsor, under New York law, the Custodian, under English law, and any sub-custodians under the law governing their custody operations is limited. Consequently, a loss may be suffered with respect to the Trust’s silver which is not covered by insurance and for which no person is liable in damages.  

The Custodian’s limited liability under the Custody Agreements and English law may impair the ability of the Trust to recover losses concerning its silver and any recovery may be limited, even in the event of fraud, to the market value of the silver at the time the fraud is discovered.

The liability of the Custodian is limited under the Custody Agreements. Under the Custody Agreements between the Trustee and the Custodian which establish the Trust Unallocated Account and the Trust Allocated Account, the Custodian is only liable for losses that are the direct result of its own negligence, fraud or wilful default in the performance of its duties. Any such liability is further limited to the market value of the silver lost or damaged at the time such negligence, fraud or wilful default is discovered by the Custodian provided the Custodian notifies the Trust and the Trustee promptly after the discovery of the loss or damage. Under each Authorized Participant Unallocated Bullion Account Agreement (between the Custodian and an Authorized Participant), the Custodian is not contractually or otherwise liable for any losses suffered by any Authorized Participant or Shareholder that are not the direct result of its own gross negligence, fraud or wilful default in the performance of its duties under such agreement, and in no event will its liability exceed the market value of the balance in the Authorized Participant Unallocated Account at the time such gross negligence, fraud or wilful default is discovered by the Custodian. In addition, the Custodian will not be liable for any delay in performance or any non-performance of any of its obligations under the Allocated Account Agreement, the Unallocated Account Agreement or the Authorized Participant Unallocated Bullion Account Agreement by reason of any cause beyond its reasonable control, including acts of God, war or terrorism. As a result, the recourse of the Trustee or a Shareholder under English law is limited. Furthermore, under English common law, the Custodian or any sub-custodian will not be liable for any delay in the performance or any non-performance of its custodial obligations by reason of any cause beyond its reasonable control.

The obligations of the Custodian and English sub-custodians are governed by English law, which may frustrate the Trust in attempting to seek legal redress against the Custodian or any sub-custodian concerning its silver.

The obligations of the Custodian under the Custody Agreements and the Authorized Participant Unallocated Bullion Account Agreements are governed by English law. The Custodian may enter into arrangements with English sub-custodians   for the temporary custody or holding of the Trust’s silver, which arrangements may also be governed by English law. The Trust is a New York common law trust. Any United States, New York or other court situated in the United States may have difficulty interpreting English law (which, insofar as it relates to custody arrangements, is largely derived from court rulings rather than statute), LBMA rules or the customs and practices in the London custody market. It may be difficult or impossible for the Trust to sue a sub-custodian in a United States, New York or other court situated in the United States. In addition, it may be difficult, time consuming and/or expensive for the Trust to enforce in a foreign court a judgment rendered by a United States, New York or other court situated in the United States.

The Trust may not have adequate sources of recovery if its silver is lost, damaged, stolen or destroyed.

If the Trust’s silver is lost, damaged, stolen or destroyed under circumstances rendering a party liable to the Trust, the responsible party may not have the financial resources sufficient to satisfy the Trust’s claim. For example, as to a particular event of loss, the only source of recovery for the Trust might be limited to the Custodian or one or more sub-custodians or, to the extent identifiable, other responsible third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim of the Trust.

Shareholders and Authorized Participants lack the right under the Custody Agreements to assert claims directly against the Custodian and any sub-custodian.

Neither the Shareholders nor any Authorized Participant have a right under the Custody Agreements to assert a claim of the Trust against the Custodian or any sub-custodian. Claims under the Custody Agreements may only be asserted by the Trustee on behalf of the Trust.



20


 

 

Because neither the Trustee nor the Custodian oversees or monitors the activities of sub-custodians who may hold the Trust’s silver, failure by the sub-custodians to exercise due care in the safekeeping of the Trust’s silver could result in a loss to the Trust.

Under the Allocated Account Agreement, the Custodian may appoint from time to time one or more sub-custodians to hold the Trust’s silver on a temporary basis pending delivery to the Custodian. The sub-custodians which the Custodian currently uses are LBMA market making members that provide bullion vaulting and clearing services to third parties. The Custodian is required under the Allocated Account Agreement to use reasonable care in appointing its sub-custodians, making the Custodian liable only for negligence or bad faith in the selection of such sub-custodians, and has an obligation to use commercially reasonable efforts to obtain delivery of the Trust’s silver from any sub-custodians appointed by the Custodian. Otherwise, the Custodian is not liable for the acts or omissions of its sub-custodians. These sub-custodians may in turn appoint further sub-custodians, but the Custodian is not responsible for the appointment of these further sub-custodians. The Custodian does not undertake to monitor the performance by sub-custodians of their custody functions or their selection of further sub-custodians. The Trustee does not monitor the performance of the Custodian other than to review the reports provided by the Custodian pursuant to the Custody Agreements and does not undertake to monitor the performance of any sub-custodian.

Furthermore, the Trustee may have no right to visit the premises of any sub-custodian for the purposes of examining the Trust’s silver or any records maintained by the sub-custodian, and no sub-custodian will be obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such sub-custodian. In addition, the ability of the Trustee to monitor the performance of the Custodian may be limited because under the Allocated Account Agreement and the Unallocated Account Agreement the Trustee has only limited rights to visit the premises of the Custodian for the purpose of examining the Trust’s silver and certain related records maintained by the Custodian.

The obligations of any sub-custodian of the Trust’s silver are not determined by contractual arrangements but by LBMA rules and London silver market customs and practices, which may prevent the Trust’s recovery of damages for losses on its silver custodied with sub-custodians.

There are expected to be no written contractual arrangements between sub-custodians that hold the Trust’s silver and the Trustee or the Custodian because traditionally such arrangements are based on the customs and practices of the LBMA and the London bullion market. In the event of a legal dispute with respect to or arising from such arrangements, it may be difficult to define such customs and practices. The customs and practices of the LBMA may be subject to change outside the control of the Trust. Under English law, neither the Trustee nor the Custodian would have a supportable breach of contract claim against a sub-custodian for losses relating to the safekeeping of silver. If the Trust’s silver is lost or damaged while in the custody of a sub-custodian, the Trust may not be able to recover damages from the Custodian or the sub-custodian. Whether a sub-custodian will be liable for the failure of sub-custodians appointed by it to exercise due care in the safekeeping of the Trust’s silver will depend on the facts and circumstances of the particular situation. Shareholders cannot be assured that the Trustee will be able to recover damages from sub-custodians whether appointed by the Custodian or by another sub-custodian for any losses relating to the safekeeping of silver by such sub-custodians.

Silver bullion allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such silver, the Trust may suffer a loss.

Neither the Trustee nor the Custodian independently confirms the fineness of the silver allocated to the Trust in connection with the creation of a Basket. The silver bullion allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for silver bars delivered in settlement of a silver trade (London Good Delivery Standards), the standards required by the Trust. If the Trustee nevertheless issues a Basket against   such silver, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.

Silver held in the Trust’s unallocated silver account and any Authorized Participant’s unallocated silver account is not segregated from the Custodian’s assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant. In addition, in the event of the Custodian’s insolvency, there may be a delay and costs incurred in identifying the bullion held in the Trust’s allocated silver account.

Silver which is part of a deposit for a purchase order or part of a redemption distribution is held for a time in the Trust Unallocated Account and, previously or subsequently in, the Authorized Participant Unallocated Account of the purchasing or redeeming Authorized Participant. During those times, the Trust and the Authorized Participant, as the case may be, have no proprietary rights to any specific bars of silver held by the Custodian   and are each an unsecured creditor of the Custodian with respect to the amount of silver held in such unallocated accounts. In addition, if the Custodian fails to allocate the Trust’s silver in a timely manner, in the proper amounts or otherwise in accordance with the terms of the Unallocated Account Agreement, or if a sub-custodian fails to so segregate silver held by it on behalf of the Trust, unallocated silver will not be segregated from the Custodian’s assets, and the Trust will be an unsecured creditor of the Custodian with respect to the amount so held in the event of the insolvency of the Custodian. In the event the Custodian becomes insolvent, the Custodian’s assets might not be adequate to satisfy a claim by the Trust or the Authorized Participant for the amount of silver held in their respective unallocated silver accounts.



21


 

 

In the case of the insolvency of the Custodian, a liquidator may seek to freeze access to the silver held in all of the accounts held by the Custodian, including the Trust Allocated Account. Although the Trust would be able to claim ownership of properly allocated silver, the Trust could incur expenses in connection with asserting such claims, and the assertion of such a claim by the liquidator could delay creations and redemptions of Baskets.

In issuing Baskets, the Trustee relies on certain information received from the Custodian which is subject to confirmation after the Trustee has relied on the information. If such information turns out to be incorrect, Baskets may be issued in exchange for an amount of silver which is more or less than the amount of silver which is required to be deposited with the Trust.

The Custodian’s definitive records are prepared after the close of its business day. However, when issuing Baskets, the Trustee relies on information reporting the amount of silver credited to the Trust’s accounts which it receives from the Custodian during the business day and which is subject to correction during the preparation of the Custodian’s definitive records after the close of business. If the information relied upon by the Trustee is incorrect, the amount of silver actually received by the Trust may be more or less than the amount required to be deposited for the issuance of Baskets.

The sale of the Trust’s silver to pay expenses not assumed by the Sponsor at a time of low silver prices could adversely affect the value of the Shares.

The Trustee sells silver held by the Trust to pay Trust expenses not assumed by the Sponsor on an as-needed basis irrespective of then-current silver prices. The Trust is not actively managed and no attempt will be made to buy or sell silver to protect against or to take advantage of fluctuations in the price of silver. Consequently, the Trust’s silver may be sold at a time when the silver price is low, resulting in a negative effect on the value of the Shares.

The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement.

Under the Trust Agreement, each of the Sponsor and the Trustee has a right to be indemnified from the Trust for any liability or expense it incurs without gross negligence, bad faith, wilful misconduct, wilful malfeasance or reckless disregard on its part. That means the Sponsor or the Trustee may require the assets of the Trust to be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the NAV of the Trust and the value of the Shares.

The Trust relies on the information and technology systems of the Trustee, the Custodian, the Marketing Agent and, to a lesser degree, the Sponsor, which could be adversely affected by information systems interruptions, cybersecurity attacks or other disruptions which could have a material adverse effect on the Trust’s record keeping and operations.

The Custodian, the Trustee and the Marketing Agent depend upon information technology infrastructure, including network, hardware and software systems to conduct their business as it relates to the Trust. A cybersecurity incident, or a failure to protect their computer systems, networks and information against cybersecurity threats, could result in a loss of information and adversely impact their ability to conduct their business, including their business on behalf of the Trust. Despite implementation of network and other cybersecurity measures, their security measures may not be adequate to protect against all cybersecurity threats.

Uncertainty regarding the effects of Brexit could adversely affect the price of the Shares.

The ongoing negotiations surrounding the United Kingdom’s (“UK”) exit from the European Union (“EU”) (“Brexit”) have yet to provide clarity on what the outcome will be for the UK or Europe. The UK remains a member of the EU until the legally established departure date of March 29, 2019 and, until such date, all existing EU-derived laws and regulations continue to apply in the UK. Those laws may continue to apply for a transitional period, depending on whether a deal is struck and, if so, what that deal is. The unavoidable uncertainties and events related to Brexit could negatively affect taxes and costs of business; cause volatility in currency exchange rates, interest rates, and European, UK or worldwide political, regulatory, economic or market conditions; and contribute to instability in political institutions, regulatory agencies, and financial markets. Brexit could also lead to legal uncertainty and politically divergent national laws and regulations as a new relationship between the UK and EU is defined and the UK determines which EU laws to replace or replicate. Any of these effects of Brexit, and others that cannot be anticipated, could adversely affect the price of the Shares.

Item 1B. Unresolved Staff Comments

None.

Item 2. Propert ies

Not applicable.

Item 3. Legal Proceedings

None.

Item 4 . Mine Safety Disclosures

Not applicable.

22


 

 

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Trust was formed on July 20, 2009 (the “Date of Inception”) following an initial deposit of silver. The Trust’s Shares have been listed on the NYSE Arca under the symbol SIVR since its initial public offering on July 24, 2009. The following tables set out the range of high and low closing prices for the Shares as reported for NYSE Arca transactions for each of the quarters during the fiscal years ended December 31, 2018 and 2017 .



 

 

 

 

 

 



 

 

 

 

 

 

Fiscal Year Ended December 31, 2018: Quarter Ended

 

 

 

 

 

 



 

High

 

Low

March 31, 2018

 

$

17.12 

 

$

15.79 

June 30, 2018

 

$

16.81 

 

$

15.59 

September 30, 2018

 

$

15.69 

 

$

13.70 

December 31, 2018

 

$

15.04 

 

$

13.61 



 

 

 

 

 

 

Fiscal Year Ended December 31, 2017: Quarter Ended

 

 

 

 

 

 



 

High

 

Low

March 31, 2017

 

$

17.99 

 

$

15.94 

June 30, 2017

 

$

18.11 

 

$

15.78 

September 30, 2017

 

$

17.68 

 

$

15.22 

December 31, 2017

 

$

16.97 

 

$

15.34 

The number of outstanding Shares of the Trust as of February 2 , 2019 was 22 , 200 , 000 .  

Monthly Share Price  

The following table sets forth, for each of the most recent six months, the high and low closing prices of the Shares, as reported for NYSE Arca transactions.





 

 

 

 

 

 



 

 

 

 

 

 

Month

 

High

 

Low

August 2018

 

$

15.02 

 

$

14.04 

September 2018

 

$

14.22 

 

$

13.70 

October 2018

 

$

14.34 

 

$

13.90 

November 2018

 

$

14.34 

 

$

13.61 

December 2018

 

$

15.04 

 

$

13.96 

January 2019

 

$

15.61 

 

$

14.88 



23


 

 

Issuer Purchase of Equity Securities

The Trust issues and redeems Shares only with Authorized Participants in exchange for silver, only in aggregations of 50,000 Shares or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee and is included in Item 7 of this report. Although the Trust does not purchase Shares directly from its Shareholders in connection with the redemption of Baskets, the Trust redeemed as follows during the years ended December 31, 2018 and 2017 :  





 

 

 

 



 

 

 

 

Month

 

Total number of Shares redeemed

 

Average ounces of silver per Share

January 2018

 

1,050,000 

 

0.975 

February 2018

 

 -

 

 -

March 2018

 

 -

 

 -

April 2018

 

 -

 

 -

May 2018

 

 -

 

 -

June 2018

 

 -

 

 -

July 2018

 

 -

 

 -

August 2018

 

 -

 

 -

September 2018

 

 -

 

 -

October 2018

 

 -

 

 -

November 2018

 

 -

 

 -

December 2018

 

700,000 

 

0.972 

Total

 

1,750,000 

 

0.974 



 

 

 

 



 

 

 

 

Month

 

Total number of Shares redeemed

 

Average ounces of silver per Share

January 2017

 

 -

 

 -

February 2017

 

400,000 

 

0.978 

March 2017

 

 -

 

 -

April 2017

 

100,000 

 

0.977 

May 2017

 

 -

 

 -

June 2017

 

100,000 

 

0.977 

July 2017

 

 -

 

 -

August 2017

 

400,000 

 

0.976 

September 2017

 

150,000 

 

0.976 

October 2017

 

 -

 

 -

November 2017

 

 -

 

 -

December 2017

 

200,000 

 

0.975 

Total

 

1,350,000 

 

0.976 





24


 

 

Item 6. Selec ted Financial Data

The following selected financial data for the reporting periods should be read in conjunction with the Trust’s financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations.  







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

December 31, 2018

 

December 31, 2017

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

(Amounts in 000's of US$, except for Share and per Share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

339,822 

 

$

351,140 

 

$

311,346 

 

$

248,122 

 

$

293,873 

Total (loss) / gain on silver

 

$

(27,179)

 

$

13,260 

 

$

40,311 

 

$

(37,448)

 

$

(66,749)

Change in net assets from operations

 

$

(28,164)

 

$

12,220 

 

$

39,354 

 

$

(38,302)

 

$

(67,805)

Weighted average number of Shares

 

 

21,487,534 

 

 

20,800,822 

 

 

18,986,339 

 

 

18,462,192 

 

 

18,748,219 

Net (decrease) / increase in net assets per Share

 

$

(1.31)

 

$

0.59 

 

$

2.07 

 

$

(2.07)

 

$

(3.62)

Net cash provided by operating activities

 

$

 

$

 

$

 

$

 

$



Item 7. M anageme nt’s Discussion and Analysis of Financial Condition and Results of Operations

This information should be read in conjunction with the financial statements and notes to the financial statements included with this report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “may,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Introduction.

The Aberdeen Standard Silver ETF Trust (the “Trust”), formerly known as ETFS Silver Trust prior to October 1, 2018, is a trust formed under the laws of the State of New York. The Trust does not have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”) acting as trustee pursuant to the Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and, the sponsor of the Trust , Aberdeen Standard Investments ETFs Sponsor LLC (the “Sponsor”) , formerly known as ETF Securities USA LLC prior to October 1, 2018 . The Trust issues Shares representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist of silver bullion held by a custodian as an agent of the Trust and responsible only to the Trustee.  

The Trust is a passive investment vehicle and the objective of the Trust is for the value of each Share to approximately reflect, at any given time, the price of the silver bullion owned by the Trust, less the Trust’s liabilities (anticipated to be principally for accrued operating expenses), divided by the number of outstanding Shares. The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price of silver.  

The Trust issues and redeems Shares only in exchange for silver, only in aggregations of 50,000 Shares or integral multiples thereof (each, a “Basket”), and only in transactions with registered broker-dealers (or other securities market participants not required to register as broker-dealers such as banks or other financial institutions) who (1) are participants in the DTC and (2) have previously entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the “Authorized Participants”).

As of the date of this annual report the Authorized Participants that have signed an Authorized Participant Agreement with the Trust are Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co. LLC , HSBC Securities (USA) Inc., J.P. Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co. Inc, Scotia Capital (USA) Inc., UBS Securities LLC and Virtu Financial BD, LLC.

Shares of the Trust trade on the NYSE Arca under the symbol “SIVR”.  

25


 

 

Investing in the Shares does not insulate the investor from certain risks, including price volatility. The following table illustrates the movement in the NAV of the Shares against the corresponding silver price (per 1 oz. of silver) since inception:  

NAV per Share vs. Silver Price from July 20, 2009 (the Date of Inception) to December 31, 2018  

PICTURE 6

The divergence of the NAV per Share from the silver price over time reflects the cumulative effect of the Trust expenses that arise if an investment had been held since inception.  

Critical Accounting Policy

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. Below we describe the valuation of silver bullion, a critical accounting policy that we believe is important to understanding our results of operations and financial position. In addition, please refer to Note 2 to the financial statements for further discussion of our accounting policies.

Valuation of Silver

Silver is held by HSBC Bank plc (the “Custodian”) on behalf of the Trust and is   recorded   at fair value.   Since August 15, 2014, an electronic, over-the-counter silver bullion auction has  been conducted in London, England to establish a fixing price for an ounce of silver once each trading day (the “LBMA Silver Price”).  As of the date of filing, the LBMA Silver Price is established by the 10 LBMA-authorized bullion banks and market makers participating in the auction   and disseminated by major market vendors. The LBMA Silver Price was initially operated by CME Group, Inc. until October 2, 2017, at which time the ICE Benchmark Administration (“IBA”) commenced administration of the  LBMA Silver Price.  The “London Metal Price” for silver held by the Trust is the LBMA Silver Price.  Realized gains and losses on transfers of silver, or silver distributed for the redemption of Shares, are calculated as the difference between the fair value and cost of silver transferred.











 

 

 

 

 

 

 

 

 

26


 

 



 

 

 

 

 

 

 

 

 

(Amounts in 000's of US$)

 

December 31, 2018

 

December 31, 2017

 

December 31, 2016

Investment in silver - cost

 

$

402,801 

 

$

391,493 

 

$

367,554 

Unrealized loss on investment in silver

 

 

(62,979)

 

 

(40,353)

 

 

(56,208)

Investment in silver - fair value

 

$

339,822 

 

$

351,140 

 

$

311,346 



Inspection of Silver

Under the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may, only up to twice a year, visit the premises of the Custodian for the purpose of examining the Trust’s silver and certain related records maintained by the Custodian. In addition the Trustee has no right to visit the premises of any sub-custodian for the purposes of examining the Trust’s silver or any records maintained by the sub-custodian, and no sub-custodian is obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such sub-custodian.

The Sponsor has exercised its right to visit the Custodian, in order to examine the records maintained by the Custodian. Inspections were conducted by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor, as of May 11, 2018 and December 31, 2018 .

Liquidity

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. In exchange for a fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s Fee. The Trust’s only source of liquidity is its transfers and sales of silver.  

The Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s silver as necessary to pay the Trust’s expenses not otherwise assumed by the Sponsor. The Trustee will not sell silver to pay the Sponsor’s Fee but will pay the Sponsor’s Fee through in-kind transfers of silver to the Sponsor. At December 31, 2018 and 2017 , the Trust did not have any cash balances.  

Review of Financial Results

Financial Highlights  







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

December 31, 2018

 

December 31, 2017

 

December 31, 2016

(Amounts in 000's of US$)

 

 

 

 

 

 

 

 

 

Total (loss) / gain on silver

 

$

(27,179)

 

$

13,260 

 

$

40,311 

Net (loss) / gain from operations

 

$

(28,164)

 

$

12,220 

 

$

39,354 

Net cash provided by operating activities

 

$

 

$

 

$



The year ended December 31, 2018  

The net asset value (“NAV”) of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the silver owned or receivable by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day.  

The Trust’s NAV decrease d from $ 351,050,772 at December 31, 2017 to $ 339,734,175 at December 31, 2018 , a 3.22%   decrease for the year. The decrease in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 21,350,000 Shares at December 31, 2017 to 22,600,000 Shares at December 31, 2018 , a result of 3,000,000 Shares ( 60 Baskets) being created and 1,750,000 Shares ( 35 Baskets) being redeemed during the year and a decrease in the price per ounce of silver, which fell   8.30% from $ 16.87 at December 31, 2017 to $ 15.47 at December 31, 2018 .

NAV per Share decreased   8.58% from $ 16.44 at December 31, 2017 to $ 15.03 at December 31, 2018 . The Trust’s NAV per Share fell slightly more than the price per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of waiver, which was $ 984,811 for the year, or 0.30% of the Trust’s assets on an annualized basis.  

The NAV per Share of $ 17.08 at January 25, 2018 was the highest during the year, compared with a low of $ 13.58 at November 14, 2018 .  

The decrease   in net assets from operations for the year ended December 31, 2018 was $28,163,930 , result ing from a change in unrealized loss   on investment in silver of $22,626,118 , a realized loss of $178,535 on the transfer of silver to pay expenses, a realized loss of $4,374,466 on silver distributed for the redemption of Shares, and the Sponsor’s Fee, net of waiver, of $984,811 . Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2018 .



27


 

 

The year ended December 31, 201 7    

The net asset value (“NAV”) of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the silver owned or receivable by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day.  

The Trust’s NAV increased from $311,266,689 at December 31, 2016 to $351,050,772 at December 31, 2017, a 12.78% increase for the year. The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 19,600,000 Shares at December 31, 2016 to 21,350,000 Shares at December 31, 2017, a result of 3,100,000 Shares (62 Baskets) being created and 1,350,000 Shares (27 Baskets) being redeemed during the year and an increase in the price per ounce of silver, which rose 3.88% from $16.24 at December 31, 2016 to $16.87 at December 31, 2017.

NAV per Share increased 3.53% from $15.88 at December 31, 2016 to $16.44 at December 31, 2017. The Trust’s NAV per Share rose slightly less than the price per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of waiver, which was $1,039,540 for the year, or 0.30% of the Trust’s assets on an annualized basis.  

The NAV per Share of $18.13 at April 13, 2017 was the highest during the year, compared with a low of $14.86 at July 10, 2017.  

The increase in net assets from operations for the year ended December 31, 2017 was $12,220,462, resulting from a change in unrealized gain on investment in silver of $15,855,611 offset by a realized loss of $119,689 on the transfer of silver to pay expenses, a realized loss of $2,475,920 on silver distributed for the redemption of Shares, and the Sponsor’s Fee, net of waiver, of $1,039,540. Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2017.

The year ended December 31, 201 6

The net asset value (“NAV”) of the Trust is obtained by subtracting the Trust’s liabilities on any day from the value of the silver owned or receivable by the Trust on that day; the NAV per Share is obtained by dividing the NAV of the Trust on a given day by the number of Shares outstanding on that day. 

The Trust’s NAV increased from $248,058,734 at December 31, 2015 to $311,266,689 at December 31, 2016, a 25.48% increase for the year. The increase in the Trust’s NAV resulted primarily from an increase in the price per ounce of silver, which rose 17.51% from $13.82 at December 31, 2015 to $16.24 at December 31, 2016 and an increase in outstanding Shares, which rose from 18,300,000 Shares at December 31, 2015 to 19,600,000 Shares at December 31, 2016, a result of 2,000,000 Shares (40 Baskets) being created and 700,000 Shares (14 Baskets) being redeemed during the year. 

NAV per Share increased 17.11% from $13.56 at December 31, 2015 to $15.88 at December 31, 2016. The Trust’s NAV per Share rose slightly less than the price per ounce of silver on a percentage basis due to the Sponsor’s Fee, net of waiver, which was $957,096 for the year, or 0.30% of the Trust’s assets on an annualized basis. 

The NAV per Share of $20.28 at August 2, 2016 was the highest during the year, compared with a low of $13.32 at January 28, 2016. 

The increase in net assets from operations for the year ended December 31, 2016 was $39,353,707, resulting from a change in unrealized gain on investment in silver of $42,411,681 offset by a realized loss of $127,424 on the transfer of silver to pay expenses, a realized loss of $1,973,454 on silver distributed for the redemption of Shares, and the Sponsor’s Fee, net of waiver, of $957,096. Other than the Sponsor’s Fee, the Trust had no expenses during the year ended December 31, 2016.

Off-Balance Sheet Arrangements

The Trust is not a party to any off-balance sheet arrangements.



Item 7A. Quantita tive and Qualitative Disclosures about Market Risk

The Trust Agreement does not authorize the Trustee to borrow for payment of the Trust’s ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust invests in no derivative financial instruments and has no foreign operations or long-term debt instruments.

28


 

 

Item 8. Financi al Statements and Supplementary Data - unaudited

Quarterly Income Statements





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018



 

Three months ended

 

Year ended

(Amounts in 000's of US$, except for Share and per Share data)

 

March 31

 

June 30

 

September 30

 

December 31

 

December 31

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sponsor's Fee

 

$

371 

 

$

377 

 

$

361 

 

$

368 

 

$

1,477 

Less: Waiver of Sponsor's Fee (Note 2.7)

 

 

(124)

 

 

(125)

 

 

(121)

 

 

(122)

 

 

(492)

Total expenses

 

 

247 

 

 

252 

 

 

240 

 

 

246 

 

 

985 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment loss

 

 

(247)

 

 

(252)

 

 

(240)

 

 

(246)

 

 

(985)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REALIZED AND UNREALIZED GAINS / (LOSSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized loss on silver transferred to pay expenses

 

 

(28)

 

 

(34)

 

 

(46)

 

 

(71)

 

 

(179)

Realized loss on silver distributed for the redemption of Shares

 

 

(1,836)

 

 

 

 

 

 

(2,538)

 

 

(4,374)

Change in unrealized (loss) / gain on investment in silver

 

 

(9,646)

 

 

(5,112)

 

 

(35,816)

 

 

27,948 

 

 

(22,626)

Total (loss) / gain on silver

 

 

(11,510)

 

 

(5,146)

 

 

(35,862)

 

 

25,339 

 

 

(27,179)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets from operations

 

$

(11,757)

 

$

(5,398)

 

$

(36,102)

 

$

25,093 

 

$

(28,164)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease) / increasein net assets per Share

 

$

(0.57)

 

$

(0.26)

 

$

(1.68)

 

$

1.09 

 

$

(1.31)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of Shares

 

 

20,502,222 

 

 

20,975,275 

 

 

21,514,130 

 

 

22,931,522 

 

 

21,487,534 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2017



 

Three months ended

 

Year ended

(Amounts in 000's of US$, except for Share and per Share data)

 

March 31

 

June 30

 

September 30

 

December 31

 

December 31

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sponsor's Fee

 

$

384 

 

$

383 

 

$

395 

 

$

398 

 

$

1,560 

Less: Waiver of Sponsor's Fee (Note 2.7)

 

 

(128)

 

 

(128)

 

 

(131)

 

 

(133)

 

 

(520)

Total expenses

 

 

256 

 

 

255 

 

 

264 

 

 

265 

 

 

1,040 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment loss

 

 

(256)

 

 

(255)

 

 

(264)

 

 

(265)

 

 

(1,040)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REALIZED AND UNREALIZED GAINS / (LOSSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized loss on silver transferred to pay expenses

 

 

(31)

 

 

(24)

 

 

(35)

 

 

(30)

 

 

(120)

Realized loss on silver distributed for the redemption of Shares

 

 

(570)

 

 

(344)

 

 

(1,113)

 

 

(449)

 

 

(2,476)

Change in unrealized gain / (loss) on investment in silver

 

 

36,586 

 

 

(31,284)

 

 

9,775 

 

 

779 

 

 

15,856 

Total gain / (loss) on silver

 

 

35,985 

 

 

(31,652)

 

 

8,627 

 

 

300 

 

 

13,260 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets from operations

 

$

35,729 

 

$

(31,907)

 

$

8,363 

 

$

35 

 

$

12,220 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase / (decrease)in net assets per Share

 

$

1.77 

 

$

(1.55)

 

$

0.39 

 

$

0.00 

 

$

0.59 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of Shares

 

 

20,136,667 

 

 

20,643,956 

 

 

21,215,217 

 

 

21,191,304 

 

 

20,800,822 



Note: Quarterly balances may not add to totals due to independent rounding.

29


 

 

The financial statements required by Regulation S-X, together with the report of the Trust’s independent registered public accounting firm appear on pages F-1 to F-15 of this filing.  

Item 9. Chan ges in and Disagreements with Accountants on Accounting and Financial Disclosure

None.  

Item 9A. C ontrols and Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer of the Sponsor, and to the audit committee, as appropriate, to allow timely decisions regarding required disclosure.  

Under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer of the Sponsor concluded that, as of December 31, 2018 , the Trust’s disclosure controls and procedures were effective.

E ffective April 27, 2018, ETF Securities Limited sold its membership interest in the Sponsor to Aberdeen Standard Investments Inc. (“ASII”), formerly known as Aberdeen Asset Management Inc . While ownership of the Sponsor entity has changed, internal controls over financial reporting have been maintained throughout the Trust’s fiscal year ended December   31 , 2018.  There have been no changes that have materially affected, or are reasonably likely to materially affect, the Trust’s or Sponsor’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

The Sponsor’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). The Trust’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Trust’s assets;  

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Trust’s receipts and expenditures are being made only in accordance with appropriate authorizations; and  

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Trust’s assets that could have a material effect on the financial statements.  

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  

The Chief Executive Officer and Chief Financial Officer of the Sponsor assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2018 . In making this assessment, they used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013) . Their assessment included an evaluation of the design of the Trust’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on their assessment and those criteria, the Chief Executive Officer and Chief Financial Officer of the Sponsor concluded that the Trust maintained effective internal control over financial reporting as of December 31, 2018 .  

KPMG LLP, the independent registered public accounting firm that audited and reported on the financial statements included in this Form 10-K, as stated in their report which is included herein, issued an attestation report on the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2018 .  

30


 

 

R eport   of  I ndependent  R egistered  P ublic  A ccounting  F irm

To the Sponsor, Trustee and Shareholders
Aberdeen Standard Silver ETF Trust (formerly “ETFS Silver Trust”):

Opinion on Internal Control Over Financial Reporting

We have audited Aberdeen Standard Silver ETF Trust’s (the Trust) internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the statement of assets and liabilities of the Trust, including the schedules of investments, as of December 31, 2018 and 2017, the related statements of operations and changes in net assets for each of the years in the three-year period ended December 31, 2018 , and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the three-year period ended December 31, 2018, and our report dated February 2 7 , 2019 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements and financial highlights for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements and financial highlights in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements and financial highlights.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



/s/ KPMG LLP

New York, New York
February 2 7 , 2019



31


 

 

Item 9B. Other Information

Not applicable.



32


 

 

PART III

Item 10. Directors , Executive Officers and Corporate Governance

The Trust has no directors or executive officers.  The biographies of the President and Chief Executive Officer of the Sponsor and the Chief Financial Officer and Treasurer are set out below:

Christopher Demetriou – President and Chief Executive Officer

Mr. Demetriou is Chief Executive Officer – Americas for ASII. Mr. Demetriou is a member of the Group Executive Committee as well as several other committees within the organization. Mr. Demetriou is based in Philadelphia and is responsible for Aberdeen Standard Investments’ operations across North and South America. Mr. Demetriou previously held the position of Deputy Chief Executive Officer – Americas for ASII from December 2016 to April 2018, Chief Financial Officer – Americas from January 2016 to December 2016, and Head of Finance – Americas from June 2014 to January 2016. Mr. Demetriou joined ASII in June 2014, as a result of Aberdeen’s acquisition of SVG, a FTSE 250 private equity investor based in London. While at SVG, from June 2010 to June 2014, Mr. Demetriou was Group Financial Controller and Deputy Head of Strategy. Prior to joining SVG, Mr. Demetriou worked at Ernst and Young, specializing in Asset and Wealth Management audits and transactions. Mr. Demetriou is a Chartered Accountant and has a BA in Politics from the University of York in England.

Andrea Melia – Chief Financial Officer and Treasurer

Ms. Melia is Vice President and Head of Fund Operations, Traditional Assets – Americas for ASII. Ms. Melia has managed the fund administration team since joining ASII in September 2009. Prior to joining ASII, Ms. Melia was Director of fund administration and accounting oversight for Princeton Administrators LLC, a division of BlackRock Inc. and had worked with Princeton Administrators since 1992. Ms. Melia holds a BS in Accounting from University of Scranton and a MBA from Rider University.

As described under Item 1 above, ASII is the parent of the Sponsor.

Item 11. Executive Compensation

The Trust has no directors or executive officers. The only ordinary expense paid by the Trust is the Sponsor’s Fee.  

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

There are no persons known by the Trust to own directly or indirectly beneficially more than 5% of the outstanding Shares of the Trust.  

Security Ownership of Management

Not applicable.

Change in Control

Neither the Sponsor nor the Trustee knows of any arrangements which may subsequently result in a change in control of the Trust.  

Item 13. Certain Relationships and Related Transactions, and Director Independence

The Trust has no directors or executive officers.  



























33


 

 

Item 14. Principal Accounting Fees and Services

Fees for services performed by KPMG LLP and Deloitte & Touche LLP for the   years ended December 31, 2018 and 2017 :  





 

 

 

 

 

 



 

 

 

 

 

 



 

December 31, 2018

 

December 31, 2017



 

 

 

 

 

 

Audit fees - KPMG

 

$

66,500 

 

$

50,160 

Audit related fees - KPMG

 

 

8,000 

 

 

18,000 

Audit related fees - Deloitte

 

 

 

 

6,000 

Total

 

$

74,500 

 

$

74,160 

Audit Fees are fees paid by the Sponsor to KPMG LLP for professional services for the audit of the Trust’s financial statements included in the Form 10-K and review of financial statements included in the Form 10-Qs, and for services that are normally provided by the accountants in connection with regulatory filings or engagements. Audit Related Fees are paid by the Sponsor to KPMG LLP and Deloitte & Touche LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Trust’s financial statements.

Pre-Approval Policies and Procedures

As referenced in Item 10 above, the Trust has no board of directors, and as a result, has no pre-approval policies or procedures with respect to fees paid to KPMG LLP and Deloitte & Touche LLP . Such determinations are made by the Sponsor.  





34


 

 

PART IV

Item 1 5. Exhibits, Financial Statement Schedules

1. Financial Statements

See Index to financial statements on Page F-1 for a list of the financial statements being filed herein.

2. Financial Statement Schedules

Schedules have been omitted since they are either not required, not applicable, or the information has otherwise been included.

3. Exhibits



 



 

Exhibit No.

Description

4.1(a)

Depositary Trust Agreement, incorporated by reference to Exhibit 4.1 filed with Registration Statement No. 333-156307 on July 21, 2009



 

4.1 (b)

Amendment to the D epositary Trust Agreement effective October 1, 2018 , incorporated by reference to Exhibit 4.1 filed with the Trust’s Current Report on Form 8-K on October 5, 2018



 

4.2

Form of Authorized Participant Agreement, effective as of September 5, 2017, incorporated by reference to Exhibit 4.2 filed with the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.



 

4.3

Global Certificate, incorporated by reference to Exhibit 4.3 filed with Registration Statement No. 333-156307 on July 21, 2009



 

10.1(a)

Allocated Account Agreement, incorporated by reference to Exhibit 10.1 filed with Registration Statement No. 333-156307 on July 21, 2009



 

10.1 (b)

A mendment to the A llocated Account Agreement effective October 1, 2018 , incorporated by reference to Exhibit 10.1 filed with the Trust’s Current Report on Form 8-K on October 5, 2018



 

10.2(a)

Unallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with Registration Statement No. 333-156307 on July 21, 2009



 

10.2 (b)

Amendment to the U nallocated Account Agreement, incorporated by reference to Exhibit 10.2 filed with the Trust’s Current Report on Form 8-K on October 5, 2018



 

10. 3

Depository Agreement, incorporated by reference to Exhibit 10.3 filed with Registration Statement No. 333-156307 on July 21, 2009



 

10. 4 (a)

Marketing Agent Agreement, incorporated by reference to Exhibit 10.4 filed with Registration Statement No 333-156307 on July 21, 2009



 

10.4(b)

Novation of and Amendment No. 1 to the Marketing Agent Agreement effective October 1, 2018



 

99.1

Novation Agreement, incorporated by reference to Exhibit 99.1 filed with Commission File No. 001-34412 on December 18, 2014



 

23.1

Consent of KPMG LLP, Independent Registered Public Accounting Firm



 

31.1

Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



 

31.2

Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



 

32.1

Chief Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



 

32.2

Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



 

101.INS

XBRL Instance Document



 

101.SCH

XBRL Taxonomy Extension Schema Document

35


 

 



 

101.CAL

XBRL Taxonomy Extension Calculation Document



 

101.DEF

XBRL Taxonomy Extension Definitions Document



 

101.LAB

XBRL Taxonomy Extension Labels Document



 

101.PRE

XBRL Taxonomy Extension Presentation Document

Item 16. Form 10-K Summary

Not applicable .



 

36


 

 

ABERDEEN STANDARD SILVER ETF TRUST

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018

INDEX



 

 



 

Page



 

 

 Report of Independent Registered Public Accounting Firm

 

F- 2



 

 

 Statements of Assets and Liabilities at December 31, 201 8 and 201 7

 

F- 3



 

 

 Schedules of Investments at December 31, 201 8 and 201 7

 

F- 4



 

 

 Statements of Operations for the years ended December 31, 201 8 , 201 7 and 201 6

 

F- 5



 

 

 Statements of Changes in Net Assets for the years ended December 31, 201 8 , 201 7 and 201 6  

 

F- 6



 

 

 Financial Highlights for the years ended December 31, 201 8 , 201 7 and 201 6

 

F- 7



 

 

 Notes to the Financial Statements

 

F- 8









F- 1


 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Sponsor, Trustee and Shareholders
Aberdeen Standard Silver ETF Trust (formerly “ETFS Silver Trust”):

Opinion on the Financial Statements

We have audited the accompanying statement s of assets and liabilities of Aberdeen Standard Silver ETF Trust (the “Trust”), including the schedules of investments, as of December 31, 2018 and 2017, the related statements of operations and changes in net assets for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the three ‑year period ended December 31, 2018. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Trust as of December 31, 2018 and 2017, and the results of its operations and the changes in its net assets, for each of the years in the three ‑year period ended December 31, 2018, and the financial highlights for each of the years in the three-year period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Trust’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission”, and our report dated February 2 7 , 2019 expressed an unqualified opinion on the effectiveness of the Trust’s internal control over financial reporting.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.



/s/ KPMG LLP

We have served as the Trust’s auditor since 2015.

New York, New York
February 2 7 , 2019



F- 2


 

 

ABERDEEN STANDARD SILVER ETF TRUST

Statements of Ass ets and Liabilities
At December 31, 2018 and 2017  





 

 

 

 

 

 



 

 

 

 

 

 



 

December 31, 2018

 

December 31, 2017

(Amounts in 000's of US$, except for Share and per Share data)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Investment in silver (cost: December 31, 2018: $402,801 ; December 31, 2017: $391,493 )

 

$

339,822 

 

$

351,140 

Total assets

 

 

339,822 

 

 

351,140 



 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Fees payable to Sponsor

 

 

88 

 

 

89 

Total liabilities

 

 

88 

 

 

89 



 

 

 

 

 

 

NET ASSETS (1)

 

$

339,734 

 

$

351,051 



(1) Authorized share capital is unlimited and no par value per share. Shares issued and outstanding at December 31, 2018 were 22,600,000 and at December 31, 2017 were 21,350,000 .  Net asset value per Share at December 31, 2018 was $15.03 and at December 31, 2017 was $16.44 .





See Notes to the Financial Statements.



F- 3


 

 

ABERDEEN STANDARD SILVER ETF TRUST

Schedules of Inv estments
At December 31, 2018 and 2017  





 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

December 31, 2018

Description

 

oz

 

Cost

 

Fair Value

 

% of Net Assets

Investment in silver (in 000's of US$, except for oz and percentage data)

Silver

 

21,973,640.6 

 

$

402,801 

 

$

339,822 

 

100.03% 

Total investment in silver

 

21,973,640.6 

 

$

402,801 

 

$

339,822 

 

100.03% 

Less liabilities

 

 

 

 

 

 

 

(88)

 

(0.03)%

Net assets

 

 

 

 

 

 

$

339,734 

 

100.00% 



 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

December 31, 2017

Description

 

oz

 

Cost

 

Fair Value

 

% of Net Assets

Investment in silver (in 000's of US$, except for oz and percentage data)

Silver

 

20,820,654.4 

 

$

391,493 

 

$

351,140 

 

100.03% 

Total investment in silver

 

20,820,654.4 

 

$

391,493 

 

$

351,140 

 

100.03% 

Less liabilities

 

 

 

 

 

 

 

(89)

 

(0.03)%

Net assets

 

 

 

 

 

 

$

351,051 

 

100.00% 





See Notes to the Financial Statements.





F- 4


 

 

ABERDEEN STANDARD SILVER ETF TRUST

Statements of Operations
For the years ended December 31, 2018, 2017 and 2016  





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Year

 

Year

 

Year



 

Ended

 

Ended

 

Ended



 

December 31, 2018

 

December 31, 2017

 

December 31, 2016

(Amounts in 000's of US$, except for Share and per Share data)

EXPENSES

 

 

 

 

 

 

 

 

 

Sponsor's Fee

 

$

1,477 

 

$

1,560 

 

$

1,436 

Less: Waiver of Sponsor's Fee (Note 2.7)

 

 

(492)

 

 

(520)

 

 

(479)

Total expenses

 

 

985 

 

 

1,040 

 

 

957 



 

 

 

 

 

 

 

 

 

Net investment loss

 

 

(985)

 

 

(1,040)

 

 

(957)



 

 

 

 

 

 

 

 

 

REALIZED AND UNREALIZED GAINS / (LOSSES)

 

 

 

 

 

 

 

 

 

Realized loss on silver transferred to pay expenses

 

 

(179)

 

 

(120)

 

 

(127)

Realized loss on silver distributed for the redemption of Shares

 

 

(4,374)

 

 

(2,476)

 

 

(1,974)

Change in unrealized (loss) / gain on investment in silver

 

 

(22,626)

 

 

15,856 

 

 

42,412 

Total (loss) / gain on investment in silver

 

 

(27,179)

 

 

13,260 

 

 

40,311 



 

 

 

 

 

 

 

 

 

Change in net assets from operations

 

$

(28,164)

 

$

12,220 

 

$

39,354 



 

 

 

 

 

 

 

 

 

Net (decrease) / increase in net assets per Share

 

$

(1.31)

 

$

0.59 

 

$

2.07 



 

 

 

 

 

 

 

 

 

Weighted average number of Shares

 

 

21,487,534 

 

 

20,800,822 

 

 

18,986,339 





See Notes to the Financial Statements.







F- 5


 

 

ABERDEEN STANDARD SILVER ETF TRUST

Statements of Changes in Net Assets

For the years ended December 31, 2018, 2017 and 2016



 

 

 

 

 



 

 

 

 

 



 

December 31, 2018

(Amounts in 000's of US$, except for Share data)

 

Shares

 

Amount

Opening balance at January 1, 2018

 

21,350,000 

 

$

351,051 

Net investment loss

 

 

 

 

(985)

Realized loss on investment in silver

 

 

 

 

(4,553)

Change in unrealized loss on investment in silver

 

 

 

 

(22,626)

Creations

 

3,000,000 

 

 

44,194 

Redemptions

 

(1,750,000)

 

 

(27,347)

Closing balance at December 31, 2018

 

22,600,000 

 

$

339,734 



 

 

 

 

 



 

 

 

 

 



 

December 31, 2017

(Amounts in 000's of US$, except for Share data)

 

Shares

 

Amount

Opening balance at January 1, 2017

 

19,600,000 

 

$

311,267 

Net investment loss

 

 

 

 

(1,040)

Realized loss on investment in silver

 

 

 

 

(2,596)

Change in unrealized gain on investment in silver

 

 

 

 

15,856 

Creations

 

3,100,000 

 

 

50,050 

Redemptions

 

(1,350,000)

 

 

(22,486)

Closing balance at December 31, 2017

 

21,350,000 

 

$

351,051 



 

 

 

 

 



 

 

 

 

 



 

December 31, 2016

(Amounts in 000's of US$, except for Share data)

 

Shares

 

Amount

Opening balance at January 1, 2016

 

18,300,000 

 

$

248,059 

Net investment loss

 

 

 

 

(957)

Realized loss on investment in silver

 

 

 

 

(2,101)

Change in unrealized gain on investment in silver

 

 

 

 

42,412 

Creations

 

2,000,000 

 

 

35,054 

Redemptions

 

(700,000)

 

 

(11,200)

Closing balance at December 31, 2016

 

19,600,000 

 

$

311,267 





See Notes to the Financial Statements.









F- 6


 

 

ABERDEEN STANDARD SILVER ETF TRUST

Financial H ighlights
For the years ended December 31, 2018, 2017 and 2016





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Year

 

Year

 

Year



Ended

 

Ended

 

Ended



December 31, 2018

 

December 31, 2017

 

December 31, 2016

Per Share Performance (for a Share outstanding throughout the entire period)



 

 

 

 

 

 

 

 

Net asset value per Share at beginning of period

$

16.44 

 

$

15.88 

 

$

13.56 

Income from investment operations:

 

 

 

 

 

 

 

 

Net investment loss

 

(0.05)

 

 

(0.05)

 

 

(0.05)

Total realized and unrealized gains or losses on investment in silver

 

(1.36)

 

 

0.61 

 

 

2.37 

Change in net assets from operations

 

(1.41)

 

 

0.56 

 

 

2.32 



 

 

 

 

 

 

 

 

Net asset value per Share at end of period

$

15.03 

 

$

16.44 

 

$

15.88 



 

 

 

 

 

 

 

 

Weighted average number of Shares

 

21,487,534 

 

 

20,800,822 

 

 

18,986,339 



 

 

 

 

 

 

 

 

Expense ratio (1)

 

0.30% 

 

 

0.30% 

 

 

0.30% 



 

 

 

 

 

 

 

 

Net investment loss ratio

 

(0.30)%

 

 

(0.30)%

 

 

(0.30)%



 

 

 

 

 

 

 

 

Total return, at net asset value

 

(8.58)%

 

 

3.53% 

 

 

17.11% 



(1) The Expense ratio is calculated net of the Sponsor’s voluntary fee waiver (refer to Note 2.7).  Exclusive of the Sponsor’s voluntary fee waiver, the gross expense ratio is 0.45% for the years ended December 31, 2018, 2017 and 2016 .





See Notes to the Financial Statements.





 

F- 7


 

ABERDEEN STANDARD SILVER ETF TRUST

Notes to the Financial Statements

1. Organiz ation

The Aberdeen Standard Silver ETF Trust (the “Trust”), formerly known as ETFS Silver Trust prior to October 1, 2018, is an investment trust formed on July 20, 2009 under New York law pursuant to a depositary trust agreement (the “Trust Agreement”) executed by Aberdeen Standard Investments ETFs Sponsor LLC (the “Sponsor”) , formerly known as ETF Securities USA LLC prior to October 1, 2018 and The Bank of New York Mellon as trustee (the “Trustee”) at the time of the Trust’s organization. The Trust holds silver bullion and issues Aberdeen Standard Physical Silver Shares ETF (the “Shares”) , formerly known as ETFS Physical Silver Shares prior to October 1, 2018, (in minimum blocks of 50,000 Shares, also referred to as “Baskets”) in exchange for deposits of silver and distributes silver in connection with redemption of Baskets. Shares represent units of fractional undivided beneficial interest in and ownership of the Trust which are issued by the Trust. The Sponsor is a Del aware limited liability company.  Prior to April 27, 2018, the Sponsor was wholly owned by ETF Securities Limited, a Jersey, Channel Islands based company.  Effective April 27, 2018, ETF Securities Limited sold its membership interest in the Sponsor to Aberdeen Standard Investments Inc. (“ASII”), formerly known as Aberdeen Asset Management Inc. prior to January 1, 2019 , a Delaware corporation.  As a result of the sale, A SI I became the sole member of the Sponsor.  A SI I is a wholly-owned indirect subsidiary of Standard Life Aberdeen plc. The Trust is governed by the Trust Agreement.

The investment objective of the Trust is for the Shares to reflect the performance of the price of silver, less the Trust’s expenses and liabilities. The Trust is designed to provide an individual owner of beneficial interests in the Shares (a “Shareholder”) an opportunity to participate in the silver market through an investment in securities.  



 



F- 8


 

ABERDEEN STANDARD SILVER ETF TRUST

Notes to the Financial Statements

2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust.



2.1. Basis of Accounting

The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)   946,   Financial Services—Investment Companies ,   and has concluded that for reporting purposes, the Trust is classified as an Investment Company.  The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act.



2.2. Valuation of Silver  

The Trust follows the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 provides guidance for determining fair value and requires disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Silver is held by HSBC Bank plc (the “Custodian”) on behalf of the Trust and is recorded at fair value. Since August 15, 2014, an electronic, over-the-counter silver bullion auction has been conducted in London, England to establish a fixing price for an ounce of silver once each trading day (the “ LBMA Silver Price”).  The LBMA Silver Price is established by the 10 London Bullion Market Association (“LBMA”) authorized bullion banks and market makers participating in the auction   and disseminated by major market vendors.  The LBMA Silver Price was initially operated by CME Group, Inc. until October 2, 2017, at which time the ICE Benchmark Administration (“IBA”) commenced administration of the LBMA Silver Price. The London Metal Price for silver held by the Trust is the LBMA Silver Price. Once the value of silver has been determined, the Net Asset Value (the “ NAV ”) is computed by the Trustee by deducting all accrued fees, expenses and other liabilities of the Trust, including the remuneration due to the Sponsor (the “Sponsor’s Fee”), from the fair value of the silver and all other assets held by the Trust.

The Trust recognizes changes in fair value of the investment in silver as changes in unrealized gains or losses on investment in silver through the Statement of Operations.

The per Share amount of silver exchanged for a purchase or redemption is calculated daily by the Trustee, using the LBMA Silver Price to calculate the silver amount in respect of any liabilities for which covering silver sales have not yet been made, and represents the per Share amount of silver held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred.







 

F- 9


 

ABERDEEN STANDARD SILVER ETF TRUST

Notes to the Financial Statements

2. Significant Accounting Policies (Continued)

2.2. Valuation of Silver   (continued)

Fair Value Hierarchy

Generally accepted accounting principles establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:

Level 1.

Unadjusted quoted prices in active markets for identical assets or liabilities that the company has the ability to access.

Level 2.

Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data.

Level 3.

Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the company’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The investment in silver is classified as a level 2 asset, as the Trust’s investment in silver is calculated using primary market pricing sources supported by observable, verifiable inputs.

The categorization of the Trust’s assets is as shown below:





 

 

 

 

 

 



 

 

 

 

 

 

(Amounts in 000's of US$)

 

December 31, 2018

 

December 31, 2017



 

 

 

 

 

 

Level 2

 

 

 

 

 

 

Investment in silver

 

$

339,822 

 

$

351,140 

There were no re-allocations or transfers between levels during the years ended December 31, 2018 and 2017 .



2.3. Silver Receivable and Payable  

Silver receivable or payable represents the quantity of silver covered by contractually binding orders for the creation or redemption of Shares respectively, where the silver has not yet been transferred to or from the Trust’s account. Generally, for all orders accepted prior to September 5, 2017, ownership of the silver was transferred within two three business days of the trade date, and for all orders accepted on or after September 5, 2017, ownership of silver is transferred within two business days of the trade date.  

 

F- 10


 

ABERDEEN STANDARD SILVER ETF TRUST

2. Significant Accounting Policies (continued)

2.4. Creations and Redemptions of Shares  

The Trust expects to create and redeem Shares from time to time, but only in one or more Baskets (a Basket equals a block of 50,000 Shares). The Trust issues Shares in Baskets to Authorized Participants on an ongoing basis. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. An Authorized Participant is a person who (1) is a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) is a participant in The Depository Trust Company, (3) has entered into an Authorized Participant Agreement with the Trustee and the Sponsor and (4) has established an Authorized Participant Unallocated Account with the Custodian or another silver bullion clearing bank to effect transactions in silver bullion. An Authorized Participant Agreement is an agreement entered into by each Authorized Participant, the Sponsor and the Trustee which provides the procedures for the creation and redemption of Baskets and for the delivery of the silver required for such creations and redemptions. An Authorized Participant Unallocated Account is an unallocated silver account established with the Custodian by an Authorized Participant .

The creation and redemption of Baskets is only made in exchange for the delivery to the Trust or the distribution by the Trust of the amount of silver represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed determined on the day the order to create or redeem Baskets is properly received.  

Authorized Participants may, on any business day, place an order with the Trustee to create or redeem one or more Baskets. Effective as of September 5, 2017, the typical settlement period for Shares is two business days. Prior to September 5, 2017, the typical settlement period for Shares was three business days. In the event of a trade date at period end, where a settlement is pending, a respective account receivable and/or payable will be recorded. When silver is exchanged in settlement of redemption, it is considered a sale of silver for financial statement purposes.

The amount of bullion represented by the Baskets created or redeemed can only be settled to the nearest 1/1000 th of an ounce. As a result, the value attributed to the creation or redemption of Shares may differ from the value of bullion to be delivered or distributed by the Trust. In order to ensure that the correct metal is available at all times to back the Shares, the Sponsor accepts an adjustment to its Sponsor’s fee in the event of any shortfall or excess. For each transaction, this amount is not more than 1/1000 th of an ounce.  

As the Shares of the Trust are subject to redemption at the option of Authorized Participants, the Trust has classified the outstanding Shares as Net Assets.  Changes in Shares are presented in the Statement of Changes in Net Assets.



2.5. Income Taxes  

The Trust is classified as a “grantor trust” for US federal income tax purposes. As a result, the Trust itself will not be subject to US federal income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will report the Trust’s proceeds, income, deductions, gains, and losses to the Internal Revenue Service on that basis.

The Trust has adopted FASB ASC 740-10, Income Taxes. The Sponsor has evaluated the application of ASC 740-10 to the Trust, to determine whether or not there are uncertain tax positions in its major jurisdictions that require financial statement recognition. Based on this evaluation, the Sponsor has determined no reserves for uncertain tax positions are required to be recorded as a result of the application of ASC 740-10. As a result, no income tax liability or expense has been recorded in the accompanying financial statements.  

F- 11


 

ABERDEEN STANDARD SILVER ETF TRUST

2. Significant Accounting Policies (continued)



2.6 Investment in Silver  

Changes in ounces of silver and the respective values for the years ended December 31, 2018 and 2017 are set out below:  







 

 

 

 

 

 



 

 

 

 

 

 



 

Year

 

Year



 

Ended

 

Ended

(Amounts in 000's of US$, except for ounces data)

 

December 31, 2018

 

December 31, 2017

Ounces of silver

 

 

 

 

 

 

Opening balance

 

 

20,820,654.4 

 

 

19,171,529.7 

Creations

 

 

2,919,544.9 

 

 

3,027,876.1 

Redemptions

 

 

(1,704,114.0)

 

 

(1,318,192.7)

Transfers of silver to pay expenses

 

 

(62,444.7)

 

 

(60,558.7)

Closing balance

 

 

21,973,640.6 

 

 

20,820,654.4 



 

 

 

 

 

 

Investment in silver

 

 

 

 

 

 

Opening balance

 

$

351,140 

 

$

311,346 

Creations

 

 

44,194 

 

 

50,050 

Redemptions

 

 

(27,347)

 

 

(22,486)

Realized loss on silver distributed for the redemption of Shares

 

 

(4,374)

 

 

(2,476)

Transfers of silver to pay expenses

 

 

(986)

 

 

(1,030)

Realized loss on silver transferred to pay expenses

 

 

(179)

 

 

(120)

Change in unrealized (loss) / gain on investment in silver

 

 

(22,626)

 

 

15,856 

Closing balance

 

$

339,822 

 

$

351,140 



2.7. Expenses / Realized Gains / Losses  

The primary expense of the Trust is the Sponsor’s Fee, which is paid by the Trust through in-kind transfers of silver to the Sponsor.

The Trust will transfer silver to the Sponsor to pay the Sponsor’s Fee that will accrue daily at an annualized rate equal to 0.45% of the adjusted net asset value (“ANAV”) of the Trust, paid monthly in arrears. Presently, the Sponsor is continuing to waive a portion of its fee and reduce the Sponsor’s Fee to 0.30% (which it has done since the Date of Inception).

The Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly fee and out-of-pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing fees, United States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs, audit fees and certain legal expenses.

For the year ended December 31, 2018, the Sponsor’s Fee, net of waiver, was $ 984,811  ( December 31, 2017 :   $ 1,039,540 ;   December 31, 2016 :   $ 957,096 ).  

As a result of the waiver, fees waived for the year ending December 31, 2018 were $ 492,406  ( December 31, 2017 :   $ 519,770 ;   December 31, 2016 :   $ 478,548 ).  

At December 31, 2018, $ 88,176 was acc rued and payable to the Sponsor  ( December 31, 2017 : $ 89,564 ).  

With respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s silver as necessary to pay these expenses. When selling silver to pay expenses, the Trustee will endeavor to sell the smallest amounts of silver needed to pay these expenses in order to minimize the Trust’s holdings of assets other than silver.  Other than the Sponsor’s Fee, the Trust had   no expenses during the   years ended December 31, 2018, 2017 and 2016 .

Unless otherwise directed by the Sponsor, when selling silver the Trustee will endeavor to sell at the price established by the LBMA Silver Price. The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable price and execution of orders. The Custodian may be the purchaser of such silver only if the sale transaction is made at the next LBMA Silver Price, or such other publicly available price that the Sponsor deems fair, in each case as set following the sale order. A gain or loss is recognized based on the difference between the selling price and the cost of the silver sold. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any sale.

F- 12


 

ABERDEEN STANDARD SILVER ETF TRUST

2. Significant Accounting Policies (continued)

Realized gains or losses result   from the transfer of silver for Share redemptions and / or the payment of expenses   and   are recognized on a trade date basis and are determined as the difference between the fair value and cost of silver transferred .



2.8. Subsequent Events  

In accordance with the provisions set forth in FASB ASC 855-10, Subsequent Events , the Trust’s management has evaluated the possibility of subsequent events existing in the Trust’s financial statements through the filing date.

During this period, no other material subsequent events requiring adjustment to or disclosure in the financial statements were identified.

 





 

F- 13


 

ABERDEEN STANDARD SILVER ETF TRUST

3. Related Parties  

The Sponsor and the Trustee are considered to be related parties to the Trust. The Trustee’s and Custodian’s fees are paid by the Sponsor and are not separate expenses of the Trust. The Trustee and the Custodian and their affiliates may from time to time act as Authorized Participants or purchase or sell silver or Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion.  



4. Concentration of Risk  

The Trust’s sole business activity is the investment in silver, and substantially all the Trust’s assets are holdings of silver which creates a concentration risk associated with fluctuations in the price of silver. Several factors could affect the price of silver, including: (i) global silver supply and demand, which is influenced by factors such as forward selling by silver producers, purchases made by silver producers to unwind silver hedge positions, central bank purchases and sales, and production and cost levels in major silver-producing countries; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity funds; and (vi) global or regional political, economic or financial events and situations. In addition, there is no assurance that silver will maintain its long-term value in terms of purchasing power in the future. In the event that the price of silver declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Trust’s financial position and results of operations.  



5. Indemnification  

Under the Trust’s organizational documents, each of the Trustee (and its directors, employees and agents) and the Sponsor (and its members, managers, directors, officers, employees, and affiliates) is indemnified by the Trust against any liability, cost or expense it incurs without gross negligence, bad faith, willful malfeasance or willful misconduct on its part and without reckless disregard on its part of its obligations and duties under the Trust’s organizational documents.  

The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.  



 

F- 14


 

ABERDEEN STANDARD SILVER ETF TRUST 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by th e undersigned in the capacities indicated thereunto duly authorized.  





 



ABERDEEN STANDARD INVESTMENTS ETFs SPONSOR LLC



(FORMERLY, ETF SECURITIES USA LLC)



 



 

Date: February 27 , 201 9

/s/ Christopher Demetriou



Christopher Demetriou *

President and Chief Executive Officer



(Principal Executive Officer)



 



 



 

Date: February 27 , 201 9

/s/ Andrea Melia



Andrea Melia   *



Chief Financial Officer and Treasurer



(Principal Financial Officer and Principal Accounting Officer)



* The Registrant is a trust and the persons are signing in their capacities as officers of Aberdeen Standard Investments ETFs Sponsor LLC, the Sponsor of the Registrant.  





 


Novation of and Amendment No. 1   to Marketing Agent Agreement



This Novation of and Amendment No. 1   to the Marketing Agent Agreement (this “Amendment”) , by and between Aberdeen Standard Investments ETFs (US) LLC (formerly, ETF Securities (US) LLC   and ETFS Marketing , LLC) , a Delaware limited liability company (“ Aberdeen ETFs US”) ,   Aberdeen Standard Investments ETFs Sponsor LLC , a Delaware limited liability company (“Aberdeen ETFs Sponsor ”), and ALPS Distributors, Inc., a Colorado corporation (“ALPS”) ,   is effective as of October 1 , 201 8 (the “Effective Date”).



WHEREAS,   Aberdeen ETFs US and ALPS entered into a Marketing Agent Agreement on behalf of ETFS Silver   Trust (the “Trust”), dated as of July 16, 2009 ,   as amended (the “Agreement”);



WHEREAS,   Aberdeen ETFs US wishes to novate the Agreement to Aberdeen   ETFs Sponsor and Aberdeen   ETFs Sponsor and ALPS wish to accept and approve of such novation; and



WHEREAS,   Aberdeen ETFs US ,   Aberdeen   ETFs Sponsor ,   and ALPS wish to amend the Agreement as set forth herein.



NOW , THEREFORE, the parties hereby agree to amend the Agreement as follows:



1. The Agreement is hereby novated from Aberdeen ETFs US to Aberdeen   ETFs Sponsor and all rights and obligations of Aberdeen ETFs US under the Agreement are hereby transferred to Aberdeen   ETFs Sponsor Aberdeen ETFs US ,   Aberdeen   ETFs Sponsor and ALPS accept and approve of such novation.  

2. All references in the Agreement to “ ETF Securities (US) LLC” , “ETFS Marketing, LLC” or “ETFS Marketing” are hereby replaced with “ Aberdeen Standard Investments ETFs Sponsor LLC   or “ Aberdeen   ETFs Sponsor ”, as applicable.

3. All references in the Agreement to “ ETFS Silver   Trust ” are hereby replaced with Aberdeen Standard Silver   ETF Trust .”

4. All references in the Agreement to “ ETF Securities USA LLC ” are hereby replaced with “ Aberdeen Standard Investments ETFs Sponsor LLC .”

5. T he address for notices required or permitted to be given to the Trust or Aberdeen ETFs Sponsor pursuant to the Agreement is hereby deleted and replaced with the following:

Aberdeen Standard Investments ETFs Sponsor LLC

c/o Aberdeen Standard Investments

712 Fifth Avenue – 49th Floor, New York, NY 10019

Attn: Adam Rezak

Telephone: 844-383-7289

E-Mail:  adam.rezak@aberdeenstandard.com




 

6. Except as specifically set forth herein, all other provisions of the Agreement shall remain in full force and effect.  Any items not herein defined shall have the meaning ascribed to them in the Agreement.



IN WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date.



Aberdeen Standard Investments ETFs Sponsor LLC ALPS Distributors, Inc.

By : Aberdeen Asset Management Inc., its sole

member





By: /s/ Lucia Sitar By: /s/ Steven B. Price

Name:  Lucia Sitar Name: Steven B. Price

Title:  VP of Aberdeen Asset Management Inc. Title: Senior Vice President & Director of

Distribution Services



Aberdeen Standard Investments ETFs (US) LLC

By: Aberdeen Asset Management Inc., its sole

member



By: /s/ Lucia Sitar

Name:  Lucia Sitar

Title:  VP of Aberdeen Asset Management Inc.


EXHIBIT 23.1



Consent of Independent Registered Public Accounting Firm



The Sponsor and Trustee

Aberdeen Standard Silver ETF Trust:



We consent to the incorporation by reference in the registration statement (No. 333 ‑195204) on Form S-3 of Aberdeen Standard Silver ETF Trust (formerly “ETFS Silver Trust”) of our reports dated February 2 7 , 2019, with respect to the statements of assets and liabilities of Aberdeen Standard Silver ETF Trust, including the schedules of investments, as of December 31, 2018 and 2017, and the related statements of operations and changes in net assets for each of the years in the three-year period ended December 31, 2018 and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the three-year period ended December 31, 2018, and the effectiveness of internal control over financial reporting as of December 31, 2018, which reports appear in the December 31, 2018 annual report on Form 10 ‑K of Aberdeen Standard Silver ETF Trust.   We also consent to the reference to our firm under the heading “Experts” in the above noted registration statement.



/s/ KPMG LLP

New York, New York
February 2 7 , 2019




Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher Demetriou , certify that:

1. I have reviewed this Report on Form 10- K of Aberdeen Standard Silver ETF Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

8

 

 



 

 

Date: February 27 , 201 9

/s/ Christopher Demetriou**

 



Christopher Demetriou *

 



President and Chief Executive Officer

 



(Principal Executive Officer)

 



* The Registrant is a trust and Mr. Demetriou is signing in his capacity as an officer of Aberdeen Standard Investments ETFs Sponsor LLC, the Sponsor of the Registrant.

** The original executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.

 



 


Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrea Melia , certify that:

1. I have reviewed this Report on Form 10- K of Aberdeen Standard   Silver ETF Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



 

 



 

 

Date: February 27 , 201 9

/s/ Andrea Melia**

 



Andrea Melia *

 



Chief Financial Officer and Treasurer

 



(Principal Financial Officer and Principal Accounting Officer)

 



* The Registrant is a trust and Ms. Melia is signing in her capacity as an officer of Aberdeen Standard Investments ETFs Sponsor LLC, the Sponsor of the Registrant.

** The original executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.


Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Aberdeen Standard   Silver ETF Trust (the “Company”) on Form 10- K for the year ended December 31 , 201 8 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



 

 



 

 

Date: February 27 , 201 9

/s/ Christopher Demetriou**

 



Christopher Demetriou *

 



President and Chief Executive Officer

 



(Principal Executive Officer)

 



*   The Registrant is a trust and Mr. Demetriou is signing in his capacity as an officer of Aberdeen Standard Investments ETFs Sponsor LLC, the Sponsor of the Registrant.

** The original executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.

 




Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Aberdeen Standard   Silver ETF Trust (the “Company”) on Form 10- K for the year ended December 31 , 201 8 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



 

 



 

 

Date: February 27 , 201 8

/s/ Andrea Melia**

 



Andrea Melia *

 



Chief Financial Officer and Treasurer

 



(Principal Financial Officer and Principal Accounting Officer)

 



* The Registrant is a trust and M s .   Melia is signing in her capacity as an officer of Aberdeen Standard Investments ETFs Sponsor LLC, the Sponsor of the Registrant.

** The original executed copy of this Certification will be maintained at the Sponsor’s offices and will be made available for inspection upon request.