Document/Exhibit Description Pages Size
1: 487 Form S-6 to Effective Amendment 53± 210K
2: EX-99 Memorandum of Changes HTML 8K
4: EX-99.2 OPIN COUNSEL Opinion Regarding Legality HTML 8K
3: EX-99.A1 INDNTR ORGN Trust Agreement HTML 13K
5: EX-99.C2 EVAL CONSNT Consent of Evaluator HTML 6K
Registration No. 333-198959
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 5096
B. Name of depositor:
FIRST TRUST PORTFOLIOS L.P.
C. Complete address of depositor's principal executive offices:
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o First Trust Portfolios L.P. c/o Chapman and Cutler LLP
120 East Liberty Drive 111 West Monroe Street
Wheaton, Illinois 60187 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on October 20, 2014 at 2:00 p.m. pursuant to Rule 487.
________________________________
Equity Closed-End Portfolio, Series 33
FT 5096
FT 5096 is a series of a unit investment trust, the FT Series. FT 5096
consists of a single portfolio known as Equity Closed-End Portfolio,
Series 33 (the "Trust"). The Trust invests in a diversified portfolio of
common stocks ("Securities") issued by closed-end investment companies
("Closed-End Funds"). The Trust seeks high current income, with total
return as a secondary objective.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FIRST TRUST(R)
800-621-1675
The date of this prospectus is October 20, 2014
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Registered Public Accounting Firm 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 9
Portfolio 9
Risk Factors 10
Public Offering 12
Distribution of Units 15
The Sponsor's Profits 17
The Secondary Market 17
How We Purchase Units 17
Expenses and Charges 17
Tax Status 18
Retirement Plans 21
Rights of Unit Holders 21
Income and Capital Distributions 21
Redeeming Your Units 22
Removing Securities from the Trust 23
Amending or Terminating the Indenture 24
Information on the Sponsor, Trustee,
FTPS Unit Servicing Agent and Evaluator 24
Other Information 26
Page 1
Summary of Essential Information (Unaudited)
Equity Closed-End Portfolio, Series 33
FT 5096
At the Opening of Business on the Initial Date of Deposit-October 20, 2014
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Download Table]
Initial Number of Units (1) 16,569
Fractional Undivided Interest in the Trust per Unit (1) 1/16,569
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000
Less Initial Sales Charge per Unit (3) (.100)
__________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900
Less Deferred Sales Charge per Unit (3) (.245)
__________
Redemption Price per Unit (5) 9.655
Less Creation and Development Fee per Unit (3)(5) (.050)
Less Organization Costs per Unit (5) (.031)
__________
Net Asset Value per Unit $ 9.574
==========
Estimated Net Annual Distribution per Unit for the first year (6) $ .8319
Cash CUSIP Number 30285A 555
Reinvestment CUSIP Number 30285A 563
Fee Account Cash CUSIP Number 30285A 571
Fee Account Reinvestment CUSIP Number 30285A 589
FTPS CUSIP Number 30285A 597
Pricing Line Product Code 093658
Ticker Symbol FSISTX
[Enlarge/Download Table]
First Settlement Date October 23, 2014
Mandatory Termination Date (7) October 20, 2016
Income Distribution Record Date Tenth day of each month, commencing November 10, 2014.
Income Distribution Date (6) Twenty-fifth day of each month, commencing November 25, 2014.
_____________
<FN>
(1) As of the Evaluation Time on the Initial Date of Deposit, we may
adjust the number of Units of the Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amount
indicated above.
(2) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the date
you purchase your Units. On the Initial Date of Deposit, the Public
Offering Price per Unit will not include any accumulated dividends on the
Securities. After this date, a pro rata share of any accumulated dividends
on the Securities will be included.
(3) You will pay a maximum sales charge of 3.95% of the Public Offering
Price per Unit (equivalent to 3.99% of the net amount invested) which
consists of an initial sales charge, a deferred sales charge and a
creation and development fee. The sales charges are described in the "Fee
Table."
(4) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(5) The creation and development fee will be deducted from the assets of
the Trust at the end of the initial offering period and the estimated
organization costs per Unit will be deducted from the assets of the Trust
at the earlier of six months after the Initial Date of Deposit or the end
of the initial offering period. If Units are redeemed prior to any such
reduction, these fees will not be deducted from the redemption proceeds.
See "Redeeming Your Units."
(6) The estimated net annual distribution per Unit for subsequent years,
$.8232, is expected to be less than that set forth above for the first
year because a portion of the Securities included in the Trust will be
sold during the first year to pay for organization costs, the deferred
sales charge and the creation and development fee. We base our estimate of
the dividends the Trust will receive from the Securities by annualizing
the most recent dividends declared by the issuers of the Securities (such
figure adjusted to reflect any change in dividend policy announced
subsequent to the most recently declared dividend). There is no guarantee
that the issuers of the Securities will receive consistent distributions
from the underlying securities in which they invest and, therefore, that
they will declare dividends in the future or that if declared they will
either remain at current levels or increase over time. Due to this, and
various other factors, actual dividends received from the Securities may
be less than their most recent annualized dividends. In this case, the
actual net annual distribution you receive will be less than the estimated
amount set forth above. The actual net annual distribution per Unit you
receive will also vary from that set forth above with changes in the
Trust's fees and expenses and with the sale of Securities. See "Fee
Table," "Risk Factors" and "Expenses and Charges." The Trustee will
distribute money from the Capital Account monthly on the twenty-fifth day
of each month to Unit holders of record on the tenth day of each month if
the amount available for distribution equals at least $1.00 per 100 Units.
In any case, the Trustee will distribute any funds in the Capital Account
in December of each year and as part of the final liquidation
distribution. See "Income and Capital Distributions."
(7) See "Amending or Terminating the Indenture."
</FN>
Page 3
Fee Table (Unaudited)
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust. See "Public
Offering" and "Expenses and Charges." Although the Trust has a term of
approximately two years and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
[Enlarge/Download Table]
Amount
per Unit
________
Unit Holder Sales Fees (as a percentage of public offering price)
Maximum Sales Charge
Initial sales charge 1.00%(a) $.100
Deferred sales charge 2.45%(b) $.245
Creation and development fee 0.50%(c) $.050
_____ _____
Maximum sales charge (including creation and development fee) 3.95% $.395
===== =====
Organization Costs (as a percentage of public offering price)
Estimated organization costs .310%(d) $.0310
===== ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative, evaluation
and FTPS Unit servicing fees 0.081% $.0080
Trustee's fee and other operating expenses 0.139%(f) $.0138
Acquired Fund fees and expenses 1.409%(g) $.1394
______ ______
Total 1.629% $.1612
====== ======
Example
This example is intended to help you compare the cost of investing in the
Trust with the cost of investing in other investment products. The example
assumes that you invest $10,000 in the Trust for the periods shown. The
example also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. The example does not take into
consideration transaction fees which may be charged by certain
broker/dealers for processing redemption requests. Although your actual
costs may vary, based on these assumptions your costs, assuming you sell
or redeem your Units at the end of each period, would be:
1 Year 2 Years
______ _______
$589 $750
The example will not differ if you hold rather than sell your Units at the
end of each period.
______________
<FN>
(a) The combination of the initial and deferred sales charge comprises what
we refer to as the "transactional sales charge." The initial sales charge
is actually equal to the difference between the maximum sales charge of
3.95% and the sum of any remaining deferred sales charge and creation and
development fee.
(b) The deferred sales charge is a fixed dollar amount equal to $.245 per
Unit which, as a percentage of the Public Offering Price, will vary over
time. The deferred sales charge will be deducted in three monthly
installments commencing January 20, 2015.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trust. The creation and development fee is a charge of
$.050 per Unit collected at the end of the initial offering period, which
is expected to be approximately three months from the Initial Date of
Deposit. If the price you pay for your Units exceeds $10 per Unit, the
creation and development fee will be less than 0.50%; if the price you pay
for your Units is less than $10 per Unit, the creation and development fee
will exceed 0.50%.
(d) Estimated organization costs will be deducted from the assets of the
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period. Estimated organization costs are
assessed on a fixed dollar amount per Unit basis which, as a percentage of
average net assets, will vary over time.
(e) With the exception of the underlying Closed-End Fund expenses, each of
the fees listed herein is assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time.
(f) Other operating expenses do not include brokerage costs and other
portfolio transaction fees. In certain circumstances the Trust may incur
additional expenses not set forth above. See "Expenses and Charges."
(g) Although not an actual Trust operating expense, the Trust, and
therefore Unit holders, will indirectly bear similar operating expenses of
the Closed-End Funds in which the Trust invests in the estimated amounts
set forth in the table. These expenses are estimated based on the actual
Closed-End Fund expenses disclosed in a fund's most recent Securities and
Exchange Commission filing but are subject to change in the future. An
investor in the Trust will therefore indirectly pay higher expenses than
if the underlying Closed-End Fund shares were held directly.
</FN>
Page 4
Report of Independent
Registered Public Accounting Firm
The Sponsor, First Trust Portfolios L.P., and Unit Holders
FT 5096
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 5096, comprising Equity Closed-End
Portfolio, Series 33 (the "Trust"), as of the opening of business on
October 20, 2014 (Initial Date of Deposit). This statement of net assets
is the responsibility of the Trust's Sponsor. Our responsibility is to
express an opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the statement of net assets is free of material
misstatement. The Trust is not required to have, nor were we engaged to
perform, an audit of the Trust's internal control over financial
reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the statement of net assets, assessing the accounting
principles used and significant estimates made by the Trust's Sponsor, as
well as evaluating the overall presentation of the statement of net
assets. Our procedures included confirmation of the irrevocable letter of
credit held by The Bank of New York Mellon, the Trustee, and deposited in
the Trust for the purchase of securities, as shown in the statement of net
assets, as of the opening of business on October 20, 2014, by
correspondence with the Trustee. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 5096,
comprising Equity Closed-End Portfolio, Series 33, as of the opening of
business on October 20, 2014 (Initial Date of Deposit), in conformity with
accounting principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
October 20, 2014
Page 5
Statement of Net Assets
Equity Closed-End Portfolio, Series 33
FT 5096
At the Opening of Business on the Initial Date of Deposit-October 20, 2014
[Enlarge/Download Table]
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $164,032
Less liability for reimbursement to Sponsor for organization costs (3) (514)
Less liability for deferred sales charge (4) (4,059)
Less liability for creation and development fee (5) (828)
________
Net assets $158,631
========
Units outstanding 16,569
Net asset value per Unit (6) $ 9.574
ANALYSIS OF NET ASSETS
Cost to investors (7) $165,690
Less maximum sales charge (7) (6,545)
Less estimated reimbursement to Sponsor for organization costs (3) (514)
________
Net assets $158,631
========
______________
<FN>
NOTES TO STATEMENT OF NET ASSETS
The Trust is registered as a unit investment trust under the Investment
Company Act of 1940. The Sponsor is responsible for the preparation of
financial statements in accordance with accounting principles generally
accepted in the United States which require the Sponsor to make estimates
and assumptions that affect amounts reported herein. Actual results could
differ from those estimates. The Trust intends to comply in its initial
fiscal year and thereafter with provisions of the Internal Revenue Code
applicable to regulated investment companies and as such, will not be
subject to federal income taxes on otherwise taxable income (including net
realized capital gains) distributed to Unit holders.
(1) The Trust invests in a portfolio of Closed-End Funds. Aggregate cost
of the Securities listed under "Schedule of Investments" is based on their
aggregate underlying value. The Trust has a Mandatory Termination Date of
October 20, 2016.
(2) An irrevocable letter of credit issued by The Bank of New York Mellon,
of which approximately $200,000 has been allocated to the Trust, has been
deposited with the Trustee as collateral, covering the monies necessary
for the purchase of the Securities according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trust. These costs have been estimated at $.0310 per
Unit. A payment will be made at the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period to an
account maintained by the Trustee from which the obligation of the
investors to the Sponsor will be satisfied. To the extent that actual
organization costs are greater than the estimated amount, only the
estimated organization costs added to the Public Offering Price will be
reimbursed to the Sponsor and deducted from the assets of the Trust.
(4) Represents the amount of mandatory deferred sales charge distributions
of $.245 per Unit, payable to the Sponsor in three approximately equal
monthly installments beginning on January 20, 2015 and on the twentieth
day of each month thereafter (or if such date is not a business day, on
the preceding business day) through March 20, 2015. If Unit holders redeem
Units before March 20, 2015, they will have to pay the remaining amount of
the deferred sales charge applicable to such Units when they redeem them.
(5) The creation and development fee ($.050 per Unit) is payable by the
Trust on behalf of Unit holders out of assets of the Trust at the end of
the initial offering period. If Units are redeemed prior to the close of
the initial offering period, the fee will not be deducted from the proceeds.
(6) Net asset value per Unit is calculated by dividing the Trust's net
assets by the number of Units outstanding. This figure includes
organization costs and the creation and development fee, which will only
be assessed to Units outstanding at the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period in the
case of organization costs or the close of the initial offering period in
the case of the creation and development fee.
(7) The aggregate cost to investors in the Trust includes a maximum sales
charge (comprised of an initial sales charge, a deferred sales charge and
the creation and development fee) computed at the rate of 3.95% of the
Public Offering Price per Unit (equivalent to 3.99% of the net amount
invested, exclusive of the deferred sales charge and the creation and
development fee), assuming no reduction of the maximum sales charge as set
forth under "Public Offering."
</FN>
Page 6
Schedule of Investments
Equity Closed-End Portfolio, Series 33
FT 5096
At the Opening of Business on the
Initial Date of Deposit-October 20, 2014
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1) Offering Price Shares per Share the Trust (2)
________________________________ ______________ ______ _________ _____________
CLOSED-END FUNDS (100%):
General Equity Funds (28%):
NFJ AllianzGI NFJ Dividend, Interest & Premium Strategy Fund 4% 391 $ 16.78 $ 6,561
GAB Gabelli Equity Trust, Inc. 4% 1,088 6.03 6,561
GEQ Guggenheim Equal Weight Enhanced Equity Income Fund 4% 360 18.22 6,559
USA Liberty All-Star Equity Fund 4% 1,189 5.52 6,563
JCE Nuveen Core Equity Alpha Fund 4% 402 16.33 6,565
RVT Royce Value Trust, Inc. 4% 464 14.14 6,561
ZF Zweig Fund, Inc. 4% 467 14.05 6,561
Specialized Equity Funds (40%):
STK Columbia Seligman Premium Technology Growth Fund Inc. 4% 409 16.04 6,560
DPG Duff & Phelps Global Utility Income Fund Inc. 4% 317 20.69 6,559
ETJ Eaton Vance Risk-Managed Diversified Equity Income Fund 4% 590 11.12 6,561
GGT Gabelli Multimedia Trust, Inc. 4% 752 8.72 6,557
JMF Nuveen Energy MLP Total Return Fund 4% 319 20.57 6,562
JRS Nuveen Real Estate Income Fund 4% 616 10.65 6,560
PGZ Principal Real Estate Income Fund 4% 353 18.60 6,566
HQL Tekla Life Sciences Investors 4% 302 21.71 6,556
IAE Voya Asia Pacific High Dividend Equity Income Fund 4% 551 11.91 6,562
EOD Wells Fargo Advantage Global Dividend Opportunity Fund 4% 871 7.53 6,559
World Equity Funds (32%):
AGD Alpine Global Dynamic Dividend Fund 4% 709 9.26 6,565
AOD Alpine Total Dynamic Dividend Fund 4% 817 8.03 6,561
CHW Calamos Global Dynamic Income Fund 4% 775 8.47 6,564
CGO Calamos Global Total Return Fund 4% 512 12.82 6,564
ETO Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund 4% 285 23.03 6,564
EXG Eaton Vance Tax-Managed Global Diversified Equity Income Fund 4% 689 9.52 6,559
LGI Lazard Global Total Return and Income Fund Inc. 4% 417 15.74 6,564
IDE Voya Infrastructure, Industrials and Materials Fund 4% 422 15.54 6,558
____ ________
Total Investments 100% $164,032
==== ========
___________
<FN>
See "Notes to Schedule of Investments" on page 8.
Page 7
NOTES TO SCHEDULE OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. The Sponsor entered into purchase contracts
for the Securities on October 20, 2014. Such purchase contracts are
expected to settle within three business days.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the ask
prices of over-the-counter traded Securities at the Evaluation Time on the
business day prior to the Initial Date of Deposit). The valuation of the
Securities has been determined by the Evaluator, an affiliate of the
Sponsor. In accordance with Financial Accounting Standards Board
Accounting Standards Codification 820, "Fair Value Measurement," the
Trust's investments are classified as Level 1, which refers to securities
traded in an active market. The cost of the Securities to the Sponsor and
the Sponsor's loss (which is the difference between the cost of
the Securities to the Sponsor and the cost of the Securities to the Trust)
are $164,440 and $408, respectively.
</FN>
Page 8
The FT Series
The FT Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have named
the FT Series. The series to which this prospectus relates, FT 5096,
consists of a single portfolio known as Equity Closed-End Portfolio,
Series 33.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This
agreement, entered into among First Trust Portfolios L.P., as Sponsor, The
Bank of New York Mellon as Trustee, FTP Services LLC ("FTPS") as FTPS Unit
Servicing Agent and First Trust Advisors L.P. as Portfolio Supervisor and
Evaluator, governs the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
SPONSOR AT 800-621-1675, DEPT. CODE 2.
How We Created the Trust.
On the Initial Date of Deposit, we deposited a portfolio of Closed-End
Funds with the Trustee and, in turn, the Trustee delivered documents to us
representing our ownership of the Trust, in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities in
the Trust, or cash (including a letter of credit or the equivalent) with
instructions to buy more Securities, in order to create new Units for
sale. If we create additional Units, we will attempt, to the extent
practicable, to maintain the percentage relationship established among the
Securities on the Initial Date of Deposit (as set forth in "Schedule of
Investments"), adjusted to reflect the sale, redemption or liquidation of
any of the Securities or any stock split or a merger or other similar
event affecting the issuer of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change daily.
The portion of Securities represented by each Unit will not change as a
result of the deposit of additional Securities or cash in the Trust. If we
deposit cash, you and new investors may experience a dilution of your
investment. This is because prices of Securities will fluctuate between
the time of the cash deposit and the purchase of the Securities, and
because the Trust pays the associated brokerage fees. To reduce this
dilution, the Trust will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible. In
addition, because the Trust pays the brokerage fees associated with the
creation of new Units and with the sale of Securities to meet redemption
and exchange requests, frequent redemption and exchange activity will
likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trust to buy Securities. If we or an affiliate of ours act as agent to the
Trust we will be subject to the restrictions under the Investment Company
Act of 1940, as amended (the "1940 Act").
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities may be periodically sold
under certain circumstances to satisfy Trust obligations, to meet
redemption requests and, as described in "Removing Securities from the
Trust," to maintain the sound investment character of the Trust, and the
proceeds received by the Trust will be used to meet Trust obligations or
distributed to Unit holders, but will not be reinvested. However,
Securities will not be sold to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation, or if they
no longer meet the criteria by which they were selected. You will not be
able to dispose of or vote any of the Securities in the Trust. As the
holder of the Securities, the Trustee will vote the Securities and will
endeavor to vote the Securities such that the Securities are voted as
closely as possible in the same manner and the same general proportion as
are the Securities held by owners other than such Trust.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and transactional sales charge
resulting from the failed contract on the next Income Distribution Date.
Any Replacement Security the Trust acquires will be identical to those
from the failed contract.
Portfolio
Objectives.
The Trust seeks high current income, with total return as a secondary
objective by investing in a well-diversified pool of closed-end funds that
invest in dividend-paying equity securities.
When it comes to investing for income, investors have several choices.
Even with all the options, there are those investors who do not want to
give up the growth potential offered by stocks in order to earn a high
rate of current income. The Trust has been developed to address this need.
Page 9
The Trust is a unit investment trust that is comprised of a pool of closed-
end funds which invest in dividend-paying equity securities.
The Importance of Dividends.
Corporations are not obligated to share their earnings with stockholders
so, in our opinion, dividends may be viewed as a sign of a company's
profitability as well as management's assessment of the future.
Dividends have also had a significant impact on stock performance.
Consider the historical effect dividends have had on companies in the S&P
500 Index. According to Ibbotson Associates, dividends have provided
approximately 42% of the 10.08% average annual total return on the S&P 500
Index, from 1926 through 2013. The S&P 500 Index is an unmanaged index of
500 stocks used to measure large-cap U.S. stock market performance. The
index cannot be purchased directly by investors. You should be aware that
there is no guarantee that the issuers of the Securities included in the
portfolio will declare dividends in the future or that, if declared, they
will either remain at current levels or increase over time.
Why Closed-End Funds?
Since closed-end funds maintain a relatively fixed pool of investment
capital, portfolio managers are better able to adhere to their investment
philosophies through greater flexibility and control. In addition, closed-
end funds don't have to manage fund liquidity to meet potentially large
redemptions.
Because they are not subjected to cash inflows and outflows, which can
dilute distributions over time, closed-end funds can generally provide a
more stable income stream than other managed investment products. However,
stable income cannot be assured.
Closed-End Fund Selection.
The Closed-End Funds were selected by our research department based on a
number of factors including, but not limited to, the size and liquidity of
the Closed-End Fund, the current dividend yield of the Closed-End Fund,
the quality and character of the securities held by the Closed-End Fund,
and the expense ratio of the Closed-End Fund, while attempting to limit
the overlap of the securities held by the Closed-End Funds.
You should be aware that predictions stated herein may not be realized. Of
course, as with any similar investment, there can be no guarantee that the
objectives of the Trust will be achieved. See "Risk Factors" for a
discussion of the risks of investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of Closed-End Funds.
The value of the Trust's Units will fluctuate with changes in the value of
these common stocks.
Because the Trust is not managed, the Trustee will not sell Securities in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that the
performance of the Trust will be positive over any period of time, or that
you won't lose money. Units of the Trust are not deposits of any bank and
are not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency.
Current Economic Conditions. The global economy continues to experience
subdued growth. Most developed and developing economies are continuing to
struggle against the lingering effects of the financial crisis which began
in 2007, grappling in particular with the challenges of taking appropriate
fiscal and monetary policy actions. Inflation remains tame worldwide,
partly reflecting output gaps, high unemployment and a continued financial
deleveraging in major developed economies. The global employment situation
remains challenging, as long-lasting effects from the financial crisis
continue to weigh on labor markets in many countries and regions. Prices
of most primary commodities, a driving force behind many emerging market
economies, have declined moderately in recent years, mainly driven by
generally weak global demand as global economic growth remains anemic.
The financial crisis began with problems in the U.S. housing and credit
markets, many of which were caused by defaults on "subprime" mortgages and
mortgage-backed securities, eventually leading to the failures of some
large financial institutions and has negatively impacted most sectors of
the global economy. Due to the current state of uncertainty in the
economy, the value of the Securities held by the Trust may be subject to
steep declines or increased volatility due to changes in performance or
perception of the issuers. To combat the financial crisis, central banks
in the United States, Europe and Asia have held interest rates at
historically low levels for several years. However, there is no assurance
that this will continue in the future and no way to predict how quickly
interest rates will rise once central banks change their current position.
In addition, other extraordinary steps have been taken by the governments
of several leading economic countries to combat the financial crisis;
however, the impact of these measures has been mixed and in certain
instances has produced unintended consequences.
Page 10
Distributions. As stated under "Summary of Essential Information," the
Trust will generally make monthly distributions of income. The Closed-End
Funds make distributions on a monthly or quarterly basis. As a result of
changing interest rates, refundings, sales or defaults on the underlying
securities held by the Closed-End Funds, and other factors, there is no
guarantee that distributions will either remain at current levels or
increase over time.
Closed-End Funds. Closed-end funds are actively managed investment
companies which invest in various types of securities. Closed-end funds
issue shares of common stock that are traded on a securities exchange.
Closed-end funds are subject to various risks, including management's
ability to meet the closed-end fund's investment objective, and to manage
the closed-end fund portfolio when the underlying securities are redeemed
or sold, during periods of market turmoil and as investors' perceptions
regarding closed-end funds or their underlying investments change.
Shares of closed-end funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct
from the risk that the net asset value of closed-end fund shares may
decrease. The amount of such discount from net asset value is subject to
change from time to time in response to various factors.
Certain of the Closed-End Funds included in the Trust may employ the use
of leverage in their portfolios through borrowings or the issuance of
preferred stock. While leverage often serves to increase the yield of a
closed-end fund, this leverage also subjects the closed-end fund to
increased risks, including the likelihood of increased volatility and the
possibility that the closed-end fund's common share income will fall if
the dividend rate on the preferred shares or the interest rate on any
borrowings rises.
Common Stocks. All of the Closed-End Funds held by the Trust invest in
common stocks. Common stocks represent a proportional share of ownership
in a company. Common stock prices fluctuate for several reasons including
changes in investors' perceptions of the financial condition of an issuer
or the general condition of the relevant stock market, such as the market
volatility recently exhibited, or when political or economic events
affecting the issuers occur. Common stock prices may also be particularly
sensitive to rising interest rates, as the cost of capital rises and
borrowing costs increase.
Options. Certain of the Closed-End Funds in the Trust invest in call options.
The value of an option may be adversely affected if the market for the option
becomes less liquid or smaller, and will be affected by changes in the
value and dividend rates of the stock subject to the option, an increase
in interest rates, a change in the actual and perceived volatility of the
stock market and the common stock and the remaining time to expiration.
Additionally, the value of an option does not increase or decrease at the
same rate as the underlying stock (although they generally move in the
same direction). However, as an option approaches its expiration date, its
value increasingly moves with the price of the stock subject to an option.
The strike price for an option may be adjusted downward before an option
expiration triggered by certain corporate events affecting that stock. A
downward adjustment to the strike price will have the effect of reducing
the equity appreciation. Option strike prices may be adjusted to reflect
certain corporate events such as extraordinary dividends, stock splits,
merger or other extraordinary distributions or events. If the value of the
underlying stock exceeds the strike price of an option, it is likely that
the holder of that option will exercise their right to purchase the stock.
Master Limited Partnerships ("MLPs"). Certain of the Closed-End Funds held
by the Trust invest in MLPs. MLPs are limited partnerships or limited
liability companies that are taxed as partnerships and whose interests
(limited partnership units or limited liability company units) are traded
on securities exchanges like shares of common stock. An MLP consists of a
general partner and limited partners. The general partner manages the
partnership, has an ownership stake in the partnership and is eligible to
receive an incentive distribution. The limited partners provide capital to
the partnership, have a limited (if any) role in the operation and
management of the partnership and receive cash distributions. The Trust's
investment in Closed-End Funds that hold MLPs, which are required to
distribute substantially all of their income to investors in order to not
be subject to entity level taxation, often offers a yield advantage over
other types of securities. Currently, most MLPs operate in the energy,
natural resources or real estate sectors. Investments in MLP interests are
subject to the risks generally applicable to companies in the energy and
natural resources sectors, including commodity pricing risk, supply and
demand risk, depletion risk and exploration risk. There are certain tax
risks associated with MLPs in which the Closed-End Funds in the Trust may
invest, including the risk that U.S. taxing authorities could challenge
the Trust's treatment for federal income tax purposes of the MLPs in which
the Closed-End Funds in the Trust invest. These tax risks, and any adverse
determination with respect thereto, could have a negative impact on the
after-tax income available for distribution by the MLPs and/or the value
of the Trust's investments.
Page 11
Real Estate Investment Trusts ("REITs"). Certain of the Closed-End Funds
held by the Trust invest in REITs. REITs are financial vehicles that pool
investors' capital to purchase or finance real estate. REITs may
concentrate their investments in specific geographic areas or in specific
property types, i.e., hotels, shopping malls, residential complexes,
office buildings and timberlands. The value of REITs and the ability of
REITs to distribute income may be adversely affected by several factors,
including rising interest rates, changes in the national, state and local
economic climate and real estate conditions, perceptions of prospective
tenants of the safety, convenience and attractiveness of the properties,
the ability of the owner to provide adequate management, maintenance and
insurance, the cost of complying with the Americans with Disabilities Act,
increased competition from new properties, the impact of present or future
environmental legislation and compliance with environmental laws, changes
in real estate taxes and other operating expenses, adverse changes in
governmental rules and fiscal policies, adverse changes in zoning laws,
and other factors beyond the control of the issuers of REITs.
Foreign Securities. Certain of the Closed-End Funds in the Trust invest in
securities issued by foreign entities, which makes the Trust subject to
more risks than if it only invested in Closed-End Funds which invest
solely in domestic securities. Risks of foreign securities include higher
brokerage costs; different accounting standards; expropriation,
nationalization or other adverse political or economic developments;
currency devaluations, blockages or transfer restrictions; restrictions on
foreign investments and exchange of securities; inadequate financial
information; lack of liquidity of certain foreign markets; and less
government supervision and regulation of exchanges, brokers, and issuers
in foreign countries. Political and/or economic turmoil in certain regions
or countries and certain natural disasters may increase the volatility of
certain foreign markets. Investments in debt securities of foreign
governments present special risks, including the fact that issuers may be
unable or unwilling to repay principal and/or interest when due in
accordance with the terms of such debt, or may be unable to make such
repayments when due in the currency required under the terms of the debt.
Political, economic and social events also may have a greater impact on
the price of debt securities issued by foreign governments than on the
price of U.S. securities.
Emerging Markets. Certain of the Closed-End Funds in the Trust invest in
Securities issued by companies headquartered in countries considered to be
emerging markets. Risks of investing in developing or emerging countries
are even greater than the risks associated with foreign investments in
general. These increased risks include, among other risks, the possibility
of investment and trading limitations, greater liquidity concerns, higher
price volatility, greater delays and disruptions in settlement
transactions, greater political uncertainties and greater dependence on
international trade or development assistance. In addition, emerging
market countries may be subject to overburdened infrastructures, obsolete
financial systems and environmental problems. For these reasons,
investments in emerging markets are often considered speculative.
Legislation/Litigation. From time to time, various legislative initiatives
are proposed which may have a negative impact on the prices of certain of
the Closed-End Funds represented in the Trust or certain of the securities
held by the Closed-End Funds. In addition, litigation regarding any of the
issuers of the securities owned by such Closed-End Funds or any of the
industries represented by these issuers, may negatively impact the value
of these securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the value of
the Closed-End Funds or on the issuers of the securities in which they
invest.
Public Offering
The Public Offering Price.
Units will be purchased at the Public Offering Price, the price per Unit
of which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The maximum sales charge (which combines an initial upfront sales
charge, a deferred sales charge and the creation and development fee).
The price you pay for your Units will differ from the amount stated under
"Summary of Essential Information" due to various factors, including
fluctuations in the prices of the Securities and changes in the value of
the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units before
the date of settlement, we may use your payment during this time and it
Page 12
may be considered a benefit to us, subject to the limitations of the
Securities Exchange Act of 1934, as amended.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the
Trust's organization costs (including costs of preparing the registration
statement, the Indenture and other closing documents, registering Units
with the Securities and Exchange Commission ("SEC") and states, the
initial audit of the Trust's statement of net assets, legal fees and the
initial fees and expenses of the Trustee) will be purchased in the same
proportionate relationship as all the Securities contained in the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's
organization costs at the earlier of six months after the Initial Date of
Deposit or the end of the initial offering period (a significantly shorter
time period than the life of the Trust). During the period ending with the
earlier of six months after the Initial Date of Deposit or the end of the
initial offering period, there may be a decrease in the value of the
Securities. To the extent the proceeds from the sale of these Securities
are insufficient to repay the Sponsor for Trust organization costs, the
Trustee will sell additional Securities to allow the Trust to fully
reimburse the Sponsor. In that event, the net asset value per Unit of the
Trust will be reduced by the amount of additional Securities sold.
Although the dollar amount of the reimbursement due to the Sponsor will
remain fixed and will never exceed the per Unit amount set forth for the
Trust in "Notes to Statement of Net Assets," this will result in a greater
effective cost per Unit to Unit holders for the reimbursement to the
Sponsor. To the extent actual organization costs are less than the
estimated amount, only the actual organization costs will ultimately be
charged to the Trust. When Securities are sold to reimburse the Sponsor
for organization costs, the Trustee will sell Securities, to the extent
practicable, which will maintain the same proportionate relationship among
the Securities contained in the Trust as existed prior to such sale.
Minimum Purchase.
The minimum amount per account you can purchase of the Trust is generally
$1,000 worth of Units ($500 if you are purchasing Units for your
Individual Retirement Account or any other qualified retirement plan), but
such amounts may vary depending on your selling firm.
Maximum Sales Charge.
The maximum sales charge is comprised of a transactional sales charge and
a creation and development fee. After the initial offering period the
maximum sales charge will be reduced by 0.50%, to reflect the amount of
the previously charged creation and development fee.
Transactional Sales Charge.
The transactional sales charge you will pay has both an initial and
deferred component.
Initial Sales Charge. The initial sales charge, which you will pay at the
time of purchase, is equal to the difference between the maximum sales
charge of 3.95% of the Public Offering Price and the sum of the maximum
remaining deferred sales charge and creation and development fee
(initially $.295 per Unit). On the Initial Date of Deposit, the initial
sales charge is equal to approximately 1.00% of the Public Offering Price
of a Unit. Thereafter, it will vary from 1.00% depending on the purchase
price of your Units and as deferred sales charge and creation and
development fee payments are made. When the Public Offering Price exceeds
$10.00 per Unit, the initial sales charge will exceed 1.00% of the Public
Offering Price.
Monthly Deferred Sales Charge. In addition, three monthly deferred sales
charges of approximately $.0817 per Unit will be deducted from the Trust's
assets on approximately the twentieth day of each month from January 20,
2015 through March 20, 2015. If you buy Units at a price of less than
$10.00 per Unit, the dollar amount of the deferred sales charge will not
change, but the deferred sales charge on a percentage basis will be more
than 2.45% of the Public Offering Price.
If you purchase Units after the last deferred sales charge payment has
been assessed, your transactional sales charge will consist of a one-time
initial sales charge of 3.45% of the Public Offering Price (equivalent to
3.573% of the net amount invested). The transactional sales charge will be
reduced by 1/2 of 1% on each subsequent October 31, commencing October 31,
2015, to a minimum transactional sales charge of 3.00%.
Creation and Development Fee.
As Sponsor, we will also receive, and the Unit holders will pay, a
creation and development fee. See "Expenses and Charges" for a description
of the services provided for this fee. The creation and development fee is
a charge of $.050 per Unit collected at the end of the initial offering
period. If you buy Units at a price of less than $10.00 per Unit, the
dollar amount of the creation and development fee will not change, but the
creation and development fee on a percentage basis will be more than 0.50%
of the Public Offering Price.
Discounts for Certain Persons.
The maximum sales charge is 3.95% per Unit and the maximum dealer
concession is 3.15% per Unit. However, if you invest at least $50,000
including any proceeds as described below (except if you are purchasing
for "Fee Accounts" as described below), the maximum sales charge for the
Page 13
amount of the investment eligible to receive the reduced sales charge is
reduced as follows:
Your maximum Dealer
If you invest sales charge concession
(in thousands):* will be: will be:
___________________________________________________________
$50 but less than $100 3.70% 2.90%
$100 but less than $250 3.45% 2.65%
$250 but less than $500 3.10% 2.35%
$500 but less than $1,000 2.95% 2.25%
$1,000 or more 2.45% 1.80%
* The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases not eligible for the redemption or termination proceeds discount
set forth below made by the same person on any one day from any one
dealer. To help you reach the above levels, you can combine the Units you
purchase of the Trust with any other same day purchases of other trusts
for which we are Principal Underwriter and are currently in the initial
offering period. In addition, we will also consider Units you purchase in
the name of your spouse, or the equivalent if recognized under local law,
or child (including step-children) under the age of 21 living in the same
household to be purchases by you. The reduced sales charges will also
apply to a trustee or other fiduciary purchasing Units for a single trust
estate or single fiduciary account including pension, profit sharing or
employee benefit plans, as well as multiple-employee benefit plans of a
single employer or affiliated employers (provided they are not aggregated
with personal accounts). You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge.
You are entitled to use your redemption or termination proceeds from any
unit investment trust (regardless of who was sponsor) to purchase Units of
the Trust during the initial offering period at the Public Offering Price
less 1.00% (for purchases of $1,000,000 or more, the maximum sales charge
will be limited to 2.45% of the Public Offering Price), but you will not
be eligible to receive the reduced sales charges described in the above
table with respect to such proceeds. Please note that if you purchase
Units of the Trust in this manner using redemption proceeds from trusts
which assess the amount of any remaining deferred sales charge at
redemption, you should be aware that any deferred sales charge remaining
on these units will be deducted from those redemption proceeds. In order
to be eligible to receive the reduced sales charge described in this
paragraph, the trade date of the redemption or termination resulting in
the receipt of such proceeds must have occurred within 30 calendar days
prior to your Unit purchase. In addition, this program will only be
available for investors that utilize the same broker/dealer (or a
different broker/dealer with appropriate notification) for both the Unit
purchase and the transaction resulting in the receipt of the termination
or redemption proceeds used for the Unit purchase and such transaction
must be from the same account. You may be required to provide appropriate
documentation or other information to your broker/dealer to evidence your
eligibility for this reduced sales charge program.
If you are purchasing Units for an investment account, the terms of which
provide that your registered investment advisor or registered
broker/dealer (a) charges periodic fees in lieu of commissions; (b)
charges for financial planning, investment advisory or asset management
services; or (c) charges a comprehensive "wrap fee" or similar fee for
these or comparable services ("Fee Accounts"), you will not be assessed
the transactional sales charge described in this section on such
purchases. These Units will be designated as Fee Account Units and,
depending upon the purchase instructions we receive, assigned either a Fee
Account Cash CUSIP Number, if you elect to have distributions paid to you,
or a Fee Account Reinvestment CUSIP Number, if you elect to have
distributions reinvested into additional Units of the Trust. Certain Fee
Account Unit holders may be assessed transaction or other account fees on
the purchase and/or redemption of such Units by their registered
investment advisor, broker/dealer or other processing organizations for
providing certain transaction or account activities. Fee Account Units are
not available for purchase in the secondary market. We reserve the right
to limit or deny purchases of Units not subject to the transactional sales
charge by investors whose frequent trading activity we determine to be
detrimental to the Trust.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, and dealers and their affiliates will
purchase Units at the Public Offering Price less the applicable dealer
concession, subject to the policies of the related selling firm. Immediate
family members include spouses, or the equivalent if recognized under
local law, children or step-children under the age of 21 living in the
same household, parents or step-parents and trustees, custodians or
fiduciaries for the benefit of such persons. Only employees, officers and
directors of companies that allow their employees to participate in this
employee discount program are eligible for the discounts.
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable maximum
deferred sales charge, including Fee Account Units, you will be credited
additional Units with a dollar value equal to the difference between your
Page 14
maximum sales charge and the maximum deferred sales charge at the time you
buy your Units. If you elect to have distributions reinvested into
additional Units of the Trust, in addition to the reinvestment Units you
receive you will also be credited additional Units with a dollar value at
the time of reinvestment sufficient to cover the amount of any remaining
deferred sales charge and creation and development fee to be collected on
such reinvestment Units. The dollar value of these additional credited
Units (as with all Units) will fluctuate over time, and may be less on the
dates deferred sales charges or the creation and development fee are
collected than their value at the time they were issued.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in the Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the Trustee
receive orders for purchases, sales or redemptions after that time, or on
a day which is not a business day, they will be held until the next
determination of price. The term "business day" as used in this prospectus
shall mean any day on which the NYSE is open.
The aggregate underlying value of the Securities in the Trust will be
determined as follows: if the Securities are listed on a national or
foreign securities exchange or The NASDAQ Stock Market(R), their value
shall generally be based on the closing sale price on the exchange or
system which is the principal market therefore ("Primary Exchange"), which
shall be deemed to be the NYSE if the Securities are listed thereon
(unless the Evaluator deems such price inappropriate as the basis for
evaluation). In the event a closing sale price on the Primary Exchange is
not published, the Securities will be valued based on the last trade price
on the Primary Exchange. If no trades occur on the Primary Exchange for a
specific trade date, the value will be based on the closing sale price
from, in the opinion of the Evaluator, an appropriate secondary exchange,
if any. If no trades occur on the Primary Exchange or any appropriate
secondary exchange on a specific trade date, the Evaluator will determine
the value of the Securities using the best information available to the
Evaluator, which may include the prior day's evaluated price. If the
Security is an American Depositary Receipt ("ADR"), Global Depositary
Receipt ("GDR") or other similar security in which no trade occurs on the
Primary Exchange or any appropriate secondary exchange on a specific trade
date, the value will be based on the evaluated price of the underlying
security, determined as set forth above, after applying the appropriate
ADR/GDR ratio, the exchange rate and such other information which the
Evaluator deems appropriate. For purposes of valuing Securities traded on
The NASDAQ Stock Market(R), closing sale price shall mean the NASDAQ(R)
Official Closing Price as determined by The NASDAQ Stock Market LLC. If
the Securities are not so listed or, if so listed and the principal market
therefore is other than on the Primary Exchange or any appropriate
secondary exchange, the value shall generally be based on the current ask
price on the over-the-counter market (unless the Evaluator deems such
price inappropriate as a basis for evaluation). If current ask prices are
unavailable, the value is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value of the
Securities on the ask side of the market, or (c) any combination of the
above. If such prices are in a currency other than U.S. dollars, the value
of such Security shall be converted to U.S. dollars based on current
exchange rates (unless the Evaluator deems such prices inappropriate as a
basis for evaluation). If the Evaluator deems a price determined as set
forth above to be inappropriate as the basis for evaluation, the Evaluator
shall use such other information available to the Evaluator which it deems
appropriate as the basis for determining the value of a Security.
After the initial offering period is over, the aggregate underlying value
of the Securities will be determined as set forth above, except that bid
prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
The Sponsor compensates intermediaries, such as broker/dealers and banks,
for their activities that are intended to result in sales of Units of the
Trust. This compensation includes dealer concessions described in the
following section and may include additional concessions and other
compensation and benefits to broker/dealers and other intermediaries.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 3.15% of the Public
Offering Price per Unit (or 65% of the maximum transactional sales charge
for secondary market sales), subject to the reduced concession applicable
to volume purchases as set forth in "Public Offering-Discounts for Certain
Persons." However, for Units subject to a transactional sales charge which
are purchased with redemption or termination proceeds, this amount will be
reduced to 2.15% of the sales price of these Units (1.80% for purchases of
$1,000,000 or more).
Page 15
Eligible dealer firms and other selling agents who, during the previous
consecutive 12-month period through the end of the most recent month, sold
primary market units of unit investment trusts sponsored by us in the
dollar amounts shown below will be entitled to the following additional
sales concession on primary market sales of units during the current month
of unit investment trusts sponsored by us:
Total sales Additional
(in millions) Concession
________________________________________________________
$25 but less than $100 0.050%
$100 but less than $150 0.075%
$150 but less than $250 0.100%
$250 but less than $500 0.115%
$500 but less than $750 0.125%
$750 but less than $1,000 0.130%
$1,000 but less than $1,500 0.135%
$1,500 but less than $2,000 0.140%
$2,000 but less than $3,000 0.150%
$3,000 but less than $4,000 0.160%
$4,000 but less than $5,000 0.170%
$5,000 or more 0.175%
Dealers and other selling agents will not receive a concession on the sale
of Units which are not subject to a transactional sales charge, but such
Units will be included in determining whether the above volume sales
levels are met. Eligible dealer firms and other selling agents include
clearing firms that place orders with First Trust and provide First Trust
with information with respect to the representatives who initiated such
transactions. Eligible dealer firms and other selling agents will not
include firms that solely provide clearing services to other broker/dealer
firms or firms who place orders through clearing firms that are eligible
dealers. We reserve the right to change the amount of concessions or
agency commissions from time to time. Certain commercial banks may be
making Units of the Trust available to their customers on an agency basis.
A portion of the transactional sales charge paid by these customers is
kept by or given to the banks in the amounts shown above.
Other Compensation and Benefits to Broker/Dealers.
The Sponsor, at its own expense and out of its own profits, currently
provides additional compensation and benefits to broker/dealers who sell
Units of this Trust and other First Trust products. This compensation is
intended to result in additional sales of First Trust products and/or
compensate broker/dealers and financial advisors for past sales. A number
of factors are considered in determining whether to pay these additional
amounts. Such factors may include, but are not limited to, the level or
type of services provided by the intermediary, the level or expected level
of sales of First Trust products by the intermediary or its agents, the
placing of First Trust products on a preferred or recommended product
list, access to an intermediary's personnel, and other factors. The
Sponsor makes these payments for marketing, promotional or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisors, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker/dealer firms and similar activities designed to promote the sale of
the Sponsor's products. The Sponsor makes such payments to a substantial
majority of intermediaries that sell First Trust products. The Sponsor may
also make certain payments to, or on behalf of, intermediaries to defray a
portion of their costs incurred for the purpose of facilitating Unit
sales, such as the costs of developing or purchasing trading systems to
process Unit trades. Payments of such additional compensation described in
this and the preceding paragraph, some of which may be characterized as
"revenue sharing," may create an incentive for financial intermediaries
and their agents to sell or recommend a First Trust product, including the
Trust, over products offered by other sponsors or fund companies. These
arrangements will not change the price you pay for your Units.
Advertising and Investment Comparisons.
Advertising materials regarding the Trust may discuss several topics,
including: developing a long-term financial plan; working with your
financial professional; the nature and risks of various investment
strategies and unit investment trusts that could help you reach your
financial goals; the importance of discipline; how the Trust operates; how
securities are selected; various unit investment trust features such as
convenience and costs; and options available for certain types of unit
investment trusts. These materials may include descriptions of the
principal businesses of the companies represented in the Trust, research
analysis of why they were selected and information relating to the
qualifications of the persons or entities providing the research analysis.
In addition, they may include research opinions on the economy and
industry sectors included and a list of investment products generally
appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust (which
may show performance net of the expenses and charges the Trust would have
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on other
taxable investments such as the common stocks comprising various market
Page 16
indexes, corporate or U.S. Government bonds, bank CDs and money market
accounts or funds, (2) performance data from Morningstar Publications,
Inc. or (3) information from publications such as Money, The New York
Times, U.S. News and World Report, Bloomberg Businessweek, Forbes or
Fortune. The investment characteristics of the Trust differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of the Trust's future performance. We
may also, from time to time, use advertising which classifies trusts or
portfolio securities according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum
transactional sales charge per Unit of the Trust less any reduction as
stated in "Public Offering." We will also receive the amount of any
collected creation and development fee. Also, any difference between our
cost to purchase the Securities and the price at which we sell them to the
Trust is considered a profit or loss (see Note 2 of "Notes to Schedule of
Investments"). During the initial offering period, dealers and others may
also realize profits or sustain losses as a result of fluctuations in the
Public Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them will
be a profit or loss to us.
The Secondary Market
Although not obligated, we may maintain a market for the Units after the
initial offering period and continuously offer to purchase Units at prices
based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE (OR THE FTPS UNIT
SERVICING AGENT IN THE CASE OF FTPS UNITS). If you sell or redeem your
Units before you have paid the total deferred sales charge on your Units,
you will have to pay the remainder at that time.
How We Purchase Units
The Trustee (or the FTPS Unit Servicing Agent in the case of FTPS Units)
will notify us of any tender of Units for redemption. If our bid at that
time is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no later
than if they were redeemed by the Trustee. We may tender Units we hold to
the Trustee for redemption as any other Units. If we elect not to purchase
Units, the Trustee (or the FTPS Unit Servicing Agent in the case of FTPS
Units) may sell tendered Units in the over-the-counter market, if any.
However, the amount you will receive is the same as you would have
received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess.
The Trustee will pay operating expenses of the Trust from the Income
Account if funds are available, and then from the Capital Account. The
Income and Capital Accounts are non-interest-bearing to Unit holders, so
the Trustee may earn interest on these funds, thus benefiting from their
use. In addition, investors will also indirectly pay a portion of the
expenses of the underlying Closed-End Funds.
First Trust Advisors L.P., an affiliate of ours, acts as Portfolio
Supervisor and Evaluator and will be compensated for providing portfolio
supervisory services and evaluation services as well as bookkeeping and
other administrative services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor may purchase research
services from a number of sources, which may include underwriters or
dealers of the Trust. As Sponsor, we will receive brokerage fees when the
Trust uses us (or an affiliate of ours) as agent in buying or selling
Securities. As authorized by the Indenture, the Trustee may employ a
subsidiary or affiliate of the Trustee to act as broker to execute certain
transactions for the Trust. The Trust will pay for such services at
standard commission rates.
FTP Services LLC, an affiliate of ours, acts as FTPS Unit Servicing Agent
to the Trust with respect to the Trust's FTPS Units. FTPS Units are Units
which are purchased and sold through the Fund/SERV(R) trading system or on
a manual basis through FTP Services LLC. In all other respects, FTPS Units
are identical to other Units. FTP Services LLC will be compensated for
providing shareholder services to the FTPS Units.
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The fees payable to First Trust Advisors L.P., FTP Services LLC and the
Trustee are based on the largest aggregate number of Units of the Trust
outstanding at any time during the calendar year, except during the
initial offering period, in which case these fees are calculated based on
the largest number of Units outstanding during the period for which
compensation is paid. These fees may be adjusted for inflation without
Unit holders' approval, but in no case will the annual fee paid to us or
our affiliates for providing services to all unit investment trusts be
more than the actual cost of providing such services in such year.
As Sponsor, we will receive a fee from the Trust for creating and
developing the Trust, including determining the Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is a charge of
$.050 per Unit outstanding at the end of the initial offering period. The
Trustee will deduct this amount from the Trust's assets as of the close of
the initial offering period. We do not use this fee to pay distribution
expenses or as compensation for sales efforts. This fee will not be
deducted from your proceeds if you sell or redeem your Units before the
end of the initial offering period.
In addition to the Trust's operating expenses, and those fees described
above, the Trust may also incur the following charges:
- All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- The expenses and costs incurred by the Trustee to protect the Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred without
negligence, bad faith or willful misconduct on its part, in connection
with its acceptance or administration of the Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Sponsor of the
Trust;
- Foreign custodial and transaction fees (which may include compensation
paid to the Trustee or its subsidiaries or affiliates), if any; and/or
- All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trust. In addition, if there is not enough cash in the Income or
Capital Account, the Trustee has the power to sell Securities to make cash
available to pay these charges which may result in capital gains or losses
to you. See "Tax Status."
Tax Status
Federal Tax Matters.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, except as specifically
provided below, these summaries generally do not describe your situation
if you are a corporation, a non-U.S. person, a broker/dealer, or other
investor with special circumstances. In addition, this section may not
describe your state, local or foreign tax consequences.
This federal income tax summary is based in part on the advice of counsel
to the Sponsor. The Internal Revenue Service ("IRS") could disagree with
any conclusions set forth in this section. In addition, our counsel was
not asked to review, and has not reached a conclusion with respect to the
federal income tax treatment of the assets to be deposited in the Trust.
This may not be sufficient for you to use for the purpose of avoiding
penalties under federal tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Trust Status.
The Trust intends to qualify as a "regulated investment company," commonly
known as a "RIC," under the federal tax laws. If the Trust qualifies as a
RIC and distributes its income as required by the tax law, the Trust
generally will not pay federal income taxes.
For federal income tax purposes, you are treated as the owner of Trust
Units and not of the assets held by the Trust. Taxability issues are taken
into account at the trust level. Your federal income tax treatment of
income from the Trust is based on the distributions paid by the Trust.
Income From the Trust.
Trust distributions are generally taxable. After the end of each year, you
will receive a tax statement that separates the Trust's distributions into
ordinary dividends, capital gains dividends and returns of capital. Income
reported is generally net of expenses (but see Deductibility of Trust
Expenses, below). Ordinary income distributions are generally taxed at
your ordinary tax rate, however, as further discussed below, certain
ordinary income distributions received from the Trust may be taxed at the
capital gains tax rates. Generally, you will treat all capital gains
Page 18
dividends as long-term capital gains regardless of how long you have owned
your Units. To determine your actual tax liability for your capital gains
dividends, you must calculate your total net capital gain or loss for the
tax year after considering all of your other taxable transactions, as
described below. In addition, the Trust may make distributions that
represent a return of capital for tax purposes and thus will generally not
be taxable to you. The tax status of your distributions from the Trust is
not affected by whether you reinvest your distributions in additional
Units or receive them in cash. The income from the Trust that you must
take into account for federal income tax purposes is not reduced by
amounts used to pay a deferred sales charge, if any. The tax laws may
require you to treat distributions made to you in January as if you had
received them on December 31 of the previous year.
Under the "Health Care and Education Reconciliation Act of 2010," income
from the Trust may also be subject to a new 3.8% "Medicare tax" imposed
for taxable years beginning after 2012. This tax will generally apply to
your net investment income if your adjusted gross income exceeds certain
threshold amounts, which are $250,000 in the case of married couples
filing joint returns and $200,000 in the case of single individuals.
Distributions with Respect to Certain Stock Dividends.
Ordinary income dividends received by an individual Unit holder from a
regulated investment company such as the Trust are generally taxed at the
same rates that apply to net capital gain, as discussed below, provided
certain holding period requirements are satisfied and provided the
dividends are attributable to qualifying dividends received by the Trust
itself. Dividends that do not meet these requirements will generally be
taxed at ordinary income rates. The Trust will provide notice to its Unit
holders of the amount of any distribution which may be taken into account
as a dividend which is eligible for the capital gains tax rates.
Dividends Received Deduction.
A corporation that owns Units generally will not be entitled to the
dividends received deduction with respect to many dividends received from
the Trust because the dividends received deduction is generally not
available for distributions from regulated investment companies. However,
certain ordinary income dividends on Units that are attributable to
qualifying dividends received by the Trust from certain corporations may
be reported by the Trust as being eligible for the dividends received
deduction.
Sale or Redemption of Units.
If you sell or redeem your Units, you will generally recognize a taxable
gain or loss. To determine the amount of this gain or loss, you must
subtract your tax basis in your Units from the amount you receive in the
transaction. Your tax basis in your Units is generally equal to the cost
of your Units, generally including sales charges. In some cases, however,
you may have to adjust your tax basis after you purchase your Units.
The information statement you receive in regard to the sale or redemption
of your Units may contain information about your basis in the Units and
whether any gain or loss recognized by you should be considered long-term
or short-term capital gain. The information reported to you is based upon
rules that do not take into consideration all facts that may be known to
you or your advisors. You should consult with your tax advisors about any
adjustments that may need to be made to the information reported to you.
Capital Gains and Losses.
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (0% for certain taxpayers in the 10% or 15%
tax brackets). An additional 3.8% "Medicare tax" may also apply to gain
from the sale or redemption of Units of the Trust, subject to the income
thresholds as described above.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if
the holding period for the asset is more than one year and is short-term
if the holding period for the asset is one year or less. You must exclude
the date you purchase your Units to determine your holding period.
However, if you receive a capital gain dividend from the Trust and sell
your Units at a loss after holding it for six months or less, the loss
will be recharacterized as long-term capital loss to the extent of the
capital gain dividend received. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The Internal Revenue Code treats certain capital gains as
ordinary income in special situations.
Capital gain received from assets held for more than one year that is
considered "unrecaptured section 1250 gain" is taxed at a maximum stated
tax rate of 25%. In the case of capital gains dividends, the determination
of which portion of the capital gains dividend, if any, is subject to the
25% tax rate, will be made based on rules prescribed by the United States
Treasury.
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In-Kind Distributions.
Under certain circumstances as described in this prospectus, you may
request an In-Kind Distribution of Trust assets when you redeem your Units
at any time prior to 10 business days before the Trust's Mandatory
Termination Date. By electing to receive an In-Kind Distribution, you will
receive Trust assets plus, possibly, cash. THIS DISTRIBUTION IS SUBJECT
TO TAXATION, AND YOU WILL GENERALLY RECOGNIZE GAIN OR LOSS, GENERALLY
BASED ON THE VALUE AT THAT TIME OF THE SECURITIES AND THE AMOUNT OF CASH
RECEIVED. The IRS could, however, assert that a loss could not be
currently deducted.
Deductibility of Trust Expenses.
Expenses incurred and deducted by the Trust will generally not be treated
as income taxable to you. In some cases, however, you may be required to
treat your portion of these Trust expenses as income. In these cases you
may be able to take a deduction for these expenses. However, certain
miscellaneous itemized deductions, such as investment expenses, may be
deducted by individuals only to the extent that all of these deductions
exceed 2% of the individual's adjusted gross income. Also, certain
individuals may also be subject to a phase-out of the deductibility of
itemized deductions based upon their income.
Investments in Certain Foreign Corporations.
If the Trust holds an equity interest in any "passive foreign investment
companies" ("PFICs"), which are generally certain foreign corporations
that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, certain rents and royalties or
capital gains) or that hold at least 50% of their assets in investments
producing such passive income, the Trust could be subject to U.S. federal
income tax and additional interest charges on gains and certain
distributions with respect to those equity interests, even if all the
income or gain is timely distributed to its Unit holders. Similarly, if
the Trust invests in a fund (a "Portfolio Fund") that invests in PFICs,
the Portfolio Fund may be subject to such taxes. The Trust will not be
able to pass through to its Unit holders any credit or deduction for such
taxes whenever the taxes are imposed at the Trust level or on a Portfolio
Fund. The Trust (or the Portfolio Fund) may be able to make an election
that could ameliorate these adverse tax consequences. In this case, the
Trust (or the Portfolio Fund) would recognize as ordinary income any
increase in the value of such PFIC shares, and as ordinary loss any
decrease in such value to the extent it did not exceed prior increases
included in income. Under this election, the Trust (or the Portfolio Fund)
might be required to recognize in a year income in excess of its
distributions from PFICs and its proceeds from dispositions of PFIC stock
during that year, and such income would nevertheless be subject to the
distribution requirement and would be taken into account for purposes of
the 4% excise tax. Dividends paid by PFICs will not be treated as
qualified dividend income.
Foreign Investors.
If you are a foreign investor (i.e., an investor other than a U.S. citizen
or resident or a U.S. corporation, partnership, estate or trust), you
should be aware that, generally, subject to applicable tax treaties,
distributions from the Trust will be characterized as dividends for
federal income tax purposes (other than dividends which the Trust properly
reports as capital gain dividends) and will be subject to U.S. income
taxes, including withholding taxes, subject to certain exceptions
described below. However, except as described below, distributions
received by a foreign investor from the Trust that are properly reported
by such Trust as capital gain dividends may not be subject to U.S. federal
income taxes, including withholding taxes, provided that the Trust makes
certain elections and certain other conditions are met.
Distributions may be subject to a U.S. withholding tax of 30% in the case
of distributions to or dispositions by (i) certain non-U.S. financial
institutions that have not entered into an agreement with the U.S.
Treasury to collect and disclose certain information and are not resident
in a jurisdiction that has entered into such an agreement with the U.S.
Treasury and (ii) certain other non-U.S. entities that do not provide
certain certifications and information about the entity's U.S. owners.
Dispositions of Units by such persons may be subject to such withholding
after December 31, 2016.
Foreign Tax Credit.
If at least 50% of the value of the total assets of the Trust (at the
close of the taxable year) is represented by foreign securities or at
least 50% of the value of the total assets of the Trust (at the close of
each quarter of the taxable year) is represented by interests in other
RICs, the tax statement that you receive may include an item showing
foreign taxes the Trust paid to other countries. In this case, dividends
taxed to you will include your share of the taxes the Trust paid to other
countries. You may be able to deduct or receive a tax credit for your
share of these taxes.
Page 20
You should consult your tax advisor regarding potential foreign, state or
local taxation with respect to your Units.
Retirement Plans
You may purchase Units of the Trust for:
- Individual Retirement Accounts,
- Keogh Plans,
- Pension funds, and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received in
each of the above plans is deferred until you receive distributions. These
distributions are generally treated as ordinary income but may, in some
cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review the
tax laws regarding these plans and consult your attorney or tax advisor.
Brokerage firms and other financial institutions offer these plans with
varying fees and charges.
Rights of Unit Holders
Unit Ownership.
Ownership of Units will not be evidenced by certificates. If you purchase
or hold Units through a broker/dealer or bank, your ownership of Units
will be recorded in book-entry form at the Depository Trust Company
("DTC") and credited on its records to your broker/dealer's or bank's DTC
account. If you purchase or hold FTPS Units, your ownership of FTPS Units
will be recorded in book-entry form on the register of Unit holdings
maintained by the FTPS Unit Servicing Agent. Transfer of Units will be
accomplished by book entries made by DTC and its participants if the Units
are registered to DTC or its nominee, Cede & Co., or otherwise will be
accomplished by book entries made by the FTPS Unit Servicing Agent, with
respect to FTPS Units. DTC will forward all notices and credit all
payments received in respect of the Units held by the DTC participants.
You will receive written confirmation of your purchases and sales of Units
from the broker/dealer or bank through which you made the transaction or
from the FTPS Unit Servicing Agent if you purchased and hold FTPS Units.
You may transfer your Units by contacting the broker/dealer or bank
through which you hold your Units, or the FTPS Unit Servicing Agent, if
you hold FTPS Units.
Unit Holder Reports.
The Trustee will prepare a statement detailing the per Unit amounts (if
any) distributed from the Income Account and Capital Account in connection
with each distribution. In addition, at the end of each calendar year, the
Trustee will prepare a statement which contains the following information:
- A summary of transactions in the Trust for the year;
- A list of any Securities sold during the year and the Securities held at
the end of that year by the Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
It is the responsibility of the entity through which you hold your Units
to distribute these statements to you. In addition, you may also request
from the Trustee copies of the evaluations of the Securities as prepared
by the Evaluator to enable you to comply with applicable federal and state
tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you become
a Record Owner. The Trustee will credit any dividends received on the
Trust's Securities to the Income Account. All other receipts, such as
return of capital or capital gain dividends, are credited to the Capital
Account.
The Trustee will make distributions on or near the Income Distribution
Dates to Unit holders of record on the preceding Income Distribution
Record Date. Distributions will consist of an amount substantially equal
to the Unit holder's pro rata share of the balance of the Income Account
calculated on the basis of one-twelfth of the estimated annual dividend
distributions (reset on a quarterly basis) in the Income Account after
deducting estimated expenses. See "Summary of Essential Information." The
amount of the initial distribution from the Income Account will be
prorated based on the number of days in the first payment period. No
income distribution will be paid if accrued expenses of the Trust exceed
amounts in the Income Account on the Distribution Dates. Distribution
amounts will vary with changes in the Trust's fees and expenses, in
dividends received and with the sale of Securities. The Trustee will
distribute amounts in the Capital Account, net of amounts designated to
meet redemptions, pay the deferred sales charge and creation and
development fee or pay expenses on the twenty-fifth day of each month to
Page 21
Unit holders of record on the tenth day of each month provided the amount
equals at least $1.00 per 100 Units. In any case, the Trustee will
distribute any funds in the Capital Account in December of each year and
as part of the final liquidation distribution. If the Trustee does not
have your TIN, it is required to withhold a certain percentage of your
distribution and deliver such amount to the IRS. You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
the Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after the Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities. All Unit
holders will receive a pro rata share of any other assets remaining in the
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of the Trust.
Distribution Reinvestment Option. You may elect to have each distribution
of income and/or capital reinvested into additional Units of the Trust by
notifying your broker/dealer or bank (or the FTPS Unit Servicing Agent
with respect to FTPS Units) within the time period required by such
entities so that they can notify the Trustee of your election at least 10
days before any Record Date. Each later distribution of income and/or
capital on your Units will be reinvested by the Trustee into additional
Units of such Trust. There is no sales charge on Units acquired through
the Distribution Reinvestment Option, as discussed under "Public
Offering." This option may not be available in all states. Each
reinvestment plan is subject to availability or limitation by the Sponsor
and each broker/dealer or selling firm. The Sponsor or broker/dealers may
suspend or terminate the offering of a reinvestment plan at any time.
Because the Trust may begin selling Securities nine business days prior to
the Mandatory Termination Date, reinvestment is not available during this
period. Please contact your financial professional for additional
information. PLEASE NOTE THAT EVEN IF YOU REINVEST DISTRIBUTIONS, THEY
ARE STILL CONSIDERED DISTRIBUTIONS FOR INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending a
request for redemption to your broker/dealer or bank through which you
hold your Units or to the FTPS Unit Servicing Agent, if you hold FTPS
Units. No redemption fee will be charged, but you are responsible for any
governmental charges that apply. Certain broker/dealers may charge a
transaction fee for processing redemption requests. Three business days
after the day you tender your Units (the "Date of Tender") you will
receive cash in an amount for each Unit equal to the Redemption Price per
Unit calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which your redemption
request is received by the Trustee from the broker/dealer or bank through
which you hold your Units, or, if you hold FTPS Units, the date the
redemption request is received by the FTPS Unit Servicing Agent (if such
day is a day the NYSE is open for trading). However, if the redemption
request is received after 4:00 p.m. Eastern time (or after any earlier
closing time on a day on which the NYSE is scheduled in advance to close
at such earlier time), the Date of Tender is the next day the NYSE is open
for trading.
Any amounts paid on redemption representing income will be withdrawn from
the Income Account if funds are available for that purpose, or from the
Capital Account. All other amounts paid on redemption will be taken from
the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee does not have your TIN
as generally discussed under "Income and Capital Distributions."
If you tender for redemption at least 2,500 Units, or such larger amount
as required by your broker/dealer or bank, rather than receiving cash, you
may elect to receive an In-Kind Distribution in an amount equal to the
Redemption Price per Unit by making this request to your broker/dealer or
bank at the time of tender. However, to be eligible to participate in the
In-Kind Distribution option at redemption, Unit holders must hold their
Units through the end of the initial offering period. The In-Kind
Distribution option is generally not available to FTPS Unit holders. No In-
Kind Distribution requests submitted during the 10 business days prior to
the Trust's Mandatory Termination Date will be honored. Where possible,
the Trustee will make an In-Kind Distribution by distributing each of the
Securities in book-entry form to your bank's or broker/dealer's account at
DTC. This option is generally eligible only for stocks traded and held in
the United States, thus excluding most foreign Securities. The Trustee
will subtract any customary transfer and registration charges from your In-
Page 22
Kind Distribution. As a tendering Unit holder, you will receive your pro
rata number of whole shares of the eligible Securities that make up the
portfolio, and cash from the Capital Account equal to the non-eligible
Securities and fractional shares to which you are entitled.
If you elect to receive an In-Kind Distribution of Securities, you should
be aware that it will be considered a taxable event at the time you
receive the Securities. See "Tax Status" for additional information.
The Trustee may sell Securities to make funds available for redemption. If
Securities are sold, the size and diversification of the Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive payment)
may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that an
emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts not designated to purchase
Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Any remaining deferred sales charge on the Units when you redeem them will
be deducted from your redemption proceeds. In addition, until they are
collected, the Redemption Price per Unit will include estimated
organization costs as set forth under "Fee Table."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its outstanding
obligations;
- There has been a public tender offer made for a Security or a merger or
acquisition is announced affecting a Security, and that in our opinion the
sale or tender of the Security is in the best interest of Unit holders;
- The sale of Securities is necessary or advisable (i) in order to
maintain the qualification of the Trust as a "regulated investment
company" or (ii) to provide funds to make any distribution for a taxable
year in order to avoid imposition of any income or excise taxes on
undistributed income in the Trust;
- The price of the Security has declined to such an extent, or such other
credit factors exist, that in our opinion keeping the Security would be
harmful to the Trust;
- As a result of the ownership of the Security, the Trust or its Unit
holders would be a direct or indirect shareholder of a passive foreign
investment company; or
- The sale of the Security is necessary for the Trust to comply with such
federal and/or state securities laws, regulations and/or regulatory
actions and interpretations which may be in effect from time to time.
Page 23
Except for instances in which the Trust acquires Replacement Securities,
as described in "The FT Series," the Trust will generally not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trust and at the direction of the Sponsor, will vote for or
against any offer for new or exchanged securities or property in exchange
for a Security, such as those acquired in a merger or other transaction.
If such exchanged securities or property are acquired by the Trust, at our
instruction, they will either be sold or held in the Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account of the Trust for distribution to
Unit holders or to meet redemption requests. The Trustee may retain and
pay us or an affiliate of ours to act as agent for the Trust to facilitate
selling Securities, exchanged securities or property from the Trust. If we
or our affiliate act in this capacity, we will be held subject to the
restrictions under the 1940 Act. As authorized by the Indenture, the
Trustee may also employ a subsidiary or affiliate of the Trustee to act as
broker in selling such Securities or property. The Trust will pay for
these brokerage services at standard commission rates.
The Trustee may sell Securities designated by us; or, absent our
direction, at its own discretion, in order to meet redemption requests or
pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of the Trust may be
changed.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be adverse to your best
interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on the
Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated earlier:
- Upon the consent of 100% of the Unit holders of the Trust;
- If the value of the Securities owned by the Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total value
of Securities deposited in the Trust during the initial offering period
("Discretionary Liquidation Amount"); or
- In the event that Units of the Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
If the Trust is terminated due to this last reason, we will refund your
entire sales charge; however, termination of the Trust before the
Mandatory Termination Date for any other stated reason will result in all
remaining unpaid deferred sales charges on your Units being deducted from
your termination proceeds. For various reasons, the Trust may be reduced
below the Discretionary Liquidation Amount and could therefore be
terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory Termination
Date. We will determine the manner and timing of the sale of Securities.
Because the Trustee must sell the Securities within a relatively short
period of time, the sale of Securities as part of the termination process
may result in a lower sales price than might otherwise be realized if such
sale were not required at this time.
You will receive a cash distribution from the sale of the remaining
Securities, along with your interest in the Income and Capital Accounts,
within a reasonable time after the Trust is terminated. The Trustee will
deduct from the Trust any accrued costs, expenses, advances or indemnities
provided for by the Indenture, including estimated compensation of the
Trustee and costs of liquidation and any amounts required as a reserve to
pay any taxes or other governmental charges.
Information on the Sponsor, Trustee,
FTPS Unit Servicing Agent and Evaluator
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading
and wholesale distribution of unit investment trusts under the "First
Trust" brand name and other securities. An Illinois limited partnership
formed in 1991, we took over the First Trust product line and act as
Sponsor for successive series of:
Page 24
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
The First Trust product line commenced with the first insured unit
investment trust in 1974. To date we have deposited more than $235 billion
in First Trust unit investment trusts. Our employees include a team of
professionals with many years of experience in the unit investment trust
industry.
We are a member of FINRA and SIPC. Our principal offices are at 120 East
Liberty Drive, Wheaton, Illinois 60187; telephone number 800-621-1675. As
of December 31, 2013, the total consolidated partners' capital of First
Trust Portfolios L.P. and subsidiaries was $56,474,953 (audited).
This information refers only to the Sponsor and not to the Trust or to any
series of the Trust or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on Trust
transactions to report personal securities transactions. The purpose of
the code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is The Bank of New York Mellon, a trust company organized
under the laws of New York. The Bank of New York Mellon has its unit
investment trust division offices at 101 Barclay Street, New York, New
York 10286, telephone 800-813-3074. If you have questions regarding your
account or your Trust, please contact the Trustee at its unit investment
trust division offices or your financial advisor. The Sponsor does not
have access to individual account information. The Bank of New York Mellon
is subject to supervision and examination by the Superintendent of the New
York State Department of Financial Services and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
The FTPS Unit Servicing Agent.
The FTPS Unit Servicing Agent is FTP Services LLC, an Illinois limited
liability company formed in 2005 and an affiliate of the Sponsor. FTP
Services LLC acts as record keeper, shareholder servicing agent and
distribution agent for Units which are purchased and sold through the
Fund/SERV(R) trading system or on a manual basis through FTP Services LLC.
FTP Services LLC provides FTPS Units with administrative and distribution
related services as described in this prospectus. The FTPS Unit Servicing
Agent's address is 120 East Liberty Drive, Wheaton, Illinois 60187. If you
have questions regarding the FTPS Units, you may call the FTPS Unit
Servicing Agent at 800-621-1675, dept. code 1. The FTPS Unit Servicing
Agent has not participated in selecting the Securities; it only provides
administrative services to the FTPS Units. Fund/SERV(R) is a service of
National Securities Clearing Corporation, a subsidiary of The Depository
Trust & Clearing Corporation.
Limitations of Liabilities of Sponsor, FTPS Unit Servicing Agent and
Trustee.
Neither we, the FTPS Unit Servicing Agent nor the Trustee will be liable
for taking any action or for not taking any action in good faith according
to the Indenture. We will also not be accountable for errors in judgment.
We will only be liable for our own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the FTPS Unit Servicing Agent and
Trustee's case) or reckless disregard of our obligations and duties. The
Trustee is not liable for any loss or depreciation when the Securities are
sold. If we fail to act under the Indenture, the Trustee may do so, and
the Trustee will not be liable for any action it takes in good faith under
the Indenture.
The Trustee will not be liable for any taxes or other governmental charges
or interest on the Securities which the Trustee may be required to pay
under any present or future law of the United States or of any other
taxing authority with jurisdiction. Also, the Indenture states other
provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not able
to act or become bankrupt, or if our affairs are taken over by public
authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- Terminate the Indenture and liquidate the Trust, or
- Continue to act as Trustee without terminating the Indenture.
Page 25
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 120 East Liberty Drive, Wheaton, Illinois 60187.
The Trustee, Sponsor, FTPS Unit Servicing Agent and Unit holders may rely
on the accuracy of any evaluation prepared by the Evaluator. The Evaluator
will make determinations in good faith based upon the best available
information, but will not be liable to the Trustee, Sponsor, FTPS Unit
Servicing Agent or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago,
Illinois 60603. They have passed upon the legality of the Units offered
hereby and certain matters relating to federal tax law. Carter Ledyard &
Milburn LLP acts as the Trustee's counsel.
Experts.
The Trust's statement of net assets, including the schedule of
investments, as of the opening of business on the Initial Date of Deposit
included in this prospectus, has been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report
appearing herein, and is included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Sponsor, you will receive free of charge
supplemental information about this Series, which has been filed with the
SEC and to which we have referred throughout. This information states more
specific details concerning the nature, structure and risks of this product.
Page 26
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Page 27
First Trust(R)
Equity Closed-End Portfolio, Series 33
FT 5096
Sponsor:
First Trust Portfolios L.P.
Member SIPC o Member FINRA
120 East Liberty Drive
Wheaton, Illinois 60187
800-621-1675
FTPS Unit Servicing Agent: Trustee:
FTP Services LLC The Bank of New York Mellon
120 East Liberty Drive 101 Barclay Street
Wheaton, Illinois 60187 New York, New York 10286
800-621-1675, dept. code 1 800-813-3074
24-Hour Pricing Line:
800-446-0132
Please refer to the "Summary of Essential
Information" for the Product Code.
________________________
When Units of the Trust are no longer available, this prospectus may be
used as a preliminary prospectus
for a future series, in which case you should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES UNTIL
THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned unit
investment trust, but does not contain all of the information about this
investment company as filed with the SEC in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-198959) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, can be reviewed
and copied at the SEC's Public Reference Room in Washington D.C.
Information regarding the operation of the SEC's Public Reference Room may
be obtained by calling the SEC at 202-942-8090.
Information about the Trust is available on the EDGAR Database on the
SEC's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the SEC
100 F Street, N.E.
Washington, D.C. 20549
e-mail address: publicinfo@sec.gov
October 20, 2014
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning the
structure, operations and risks of the unit investment trust contained in
FT 5096 not found in the prospectus for the Trust. This Information
Supplement is not a prospectus and does not include all of the information
you should consider before investing in the Trust. This Information
Supplement should be read in conjunction with the prospectus for the Trust.
This Information Supplement is dated October 20, 2014. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Common Stocks 2
REITs 2
Foreign Issuers 3
Emerging Markets 4
Risk Factors
Securities. The Securities in the Trust represent shares of closed-end
mutual funds. As such, an investment in Units of the Trust should be made
with an understanding of the risks of investing in closed-end fund shares.
Closed-end mutual funds' portfolios are managed and their shares are
generally listed on a securities exchange. The net asset value of closed-
end fund shares will fluctuate with changes in the value of the underlying
securities which the closed-end fund owns. In addition, for various
reasons closed-end fund shares frequently trade at a discount from their
net asset value in the secondary market. The amount of such discount from
net asset value is subject to change from time to time in response to
various factors. Closed-end funds' articles of incorporation may contain
certain anti-takeover provisions that may have the effect of inhibiting a
fund's possible conversion to open-end status and limiting the ability of
other persons to acquire control of a fund. In certain circumstances,
these provisions might also inhibit the ability of stockholders (including
the Trust) to sell their shares at a premium over prevailing market
prices. This characteristic is a risk separate and distinct from the risk
that a fund's net asset value will decrease. In particular, this
characteristic would increase the loss or reduce the return on the sale of
those closed-end fund shares which were purchased by the Trust at a
premium. In the unlikely event that a closed-end fund converts to open-end
status at a time when its shares are trading at a premium there would be
an immediate loss in value to the Trust since shares of open-end funds
trade at net asset value. Certain closed-end funds may have in place or
may put in place in the future plans pursuant to which the fund may
repurchase its own shares in the marketplace. Typically, these plans are
put in place in an attempt by a fund's board of directors to reduce a
discount on its share price. To the extent such a plan was implemented and
shares owned by the Trust are repurchased by a fund, the Trust's position
in that fund would be reduced and the cash would be distributed.
The Trust is prohibited from subscribing to a rights offering for shares
of any of the closed-end funds in which they invest. In the event of a
rights offering for additional shares of a fund, Unit holders should
expect that the Trust will, at the completion of the offer, own a smaller
proportional interest in such fund that would otherwise be the case. It is
not possible to determine the extent of this dilution in share ownership
without knowing what proportion of the shares in a rights offering will be
subscribed. This may be particularly serious when the subscription price
per share for the offer is less than the fund's net asset value per share.
Assuming that all rights are exercised and there is no change in the net
asset value per share, the aggregate net asset value of each shareholder's
shares of common stock should decrease as a result of the offer. If a
fund's subscription price per share is below that fund's net asset value
per share at the expiration of the offer, shareholders would experience an
immediate dilution of the aggregate net asset value of their shares of
common stock as a result of the offer, which could be substantial.
Closed-end funds may utilize leveraging in their portfolios. Leveraging
can be expected to cause increased price volatility for those fund's
shares, and as a result, increased volatility for the price of the Units
of the Trust. There can be no assurance that a leveraging strategy will be
successful during any period in which it is employed.
Page 1
Common Stocks. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the common stocks or
the general condition of the relevant stock market may worsen, and the
value of the common stocks and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value, as market
confidence in and perceptions of the issuers change. These perceptions are
based on unpredictable factors, including expectations regarding
government, economic, monetary and fiscal policies, inflation and interest
rates, economic expansion or contraction, and global or regional
political, economic or banking crises. Both U.S. and foreign markets have
experienced substantial volatility and significant declines recently as a
result of certain or all of these factors.
REITs. An investment in Units of the Trust should be made with an
understanding of risks inherent in an investment in REITs specifically and
real estate generally (in addition to securities market risks). Generally,
these include economic recession, the cyclical nature of real estate
markets, competitive overbuilding, unusually adverse weather conditions,
changing demographics, changes in governmental regulations (including tax
laws and environmental, building, zoning and sales regulations), increases
in real estate taxes or costs of material and labor, the inability to
secure performance guarantees or insurance as required, the unavailability
of investment capital and the inability to obtain construction financing
or mortgage loans at rates acceptable to builders and purchasers of real
estate. Additional risks include an inability to reduce expenditures
associated with a property (such as mortgage payments and property taxes)
when rental revenue declines, and possible loss upon foreclosure of
mortgaged properties if mortgage payments are not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
Equity REITs emphasize direct property investment, holding their invested
assets primarily in the ownership of real estate or other equity
interests. REITs obtain capital funds for investment in underlying real
estate assets by selling debt or equity securities in the public or
institutional capital markets or by bank borrowing. Thus, the returns on
common equities of REITs will be significantly affected by changes in
costs of capital and, particularly in the case of highly "leveraged" REITs
(i.e., those with large amounts of borrowings outstanding), by changes in
the level of interest rates. The objective of an equity REIT is to
purchase income-producing real estate properties in order to generate high
levels of cash flow from rental income and a gradual asset appreciation,
and they typically invest in properties such as office, retail,
industrial, hotel and apartment buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests for
tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest substantially
all of its capital in real estate related assets and derive substantially
all of its gross income from real estate related assets and (vi)
distributed at least 95% of its taxable income to its shareholders each
year. If a REIT should fail to qualify for such tax status, the related
shareholders (including such Trust) could be adversely affected by the
resulting tax consequences.
The underlying value of the Securities and a Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties, obsolescence
of property, changes in the availability, cost and terms of mortgage
funds, the impact of present or future environmental legislation and
compliance with environmental laws, the ongoing need for capital
improvements, particularly in older properties, changes in real estate tax
rates and other operating expenses, regulatory and economic impediments to
raising rents, adverse changes in governmental rules and fiscal policies,
dependency on management skill, civil unrest, acts of God, including
earthquakes, fires and other natural disasters (which may result in
uninsured losses), acts of war, adverse changes in zoning laws, and other
factors which are beyond the control of the issuers of REITs. The value of
REITs may at times be particularly sensitive to devaluation in the event
of rising interest rates.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes, office buildings and timberlands. The impact of economic
conditions on REITs can also be expected to vary with geographic location
Page 2
and property type. Investors should be aware that REITs may not be
diversified and are subject to the risks of financing projects. REITs are
also subject to defaults by borrowers, self-liquidation, the market's
perception of the REIT industry generally, and the possibility of failing
to qualify for pass-through of income under the Internal Revenue Code, and
to maintain exemption from the Investment Company Act of 1940. A default
by a borrower or lessee may cause a REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related to
protecting its investments. In addition, because real estate generally is
subject to real property taxes, REITs may be adversely affected by
increases or decreases in property tax rates and assessments or
reassessments of the properties underlying REITs by taxing authorities.
Furthermore, because real estate is relatively illiquid, the ability of
REITs to vary their portfolios in response to changes in economic and
other conditions may be limited and may adversely affect the value of the
Units. There can be no assurance that any REIT will be able to dispose of
its underlying real estate assets when advantageous or necessary.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets, including
liability, fire and extended coverage. However, certain types of losses
may be uninsurable or not be economically insurable as to which the
underlying properties are at risk in their particular locales. There can
be no assurance that insurance coverage will be sufficient to pay the full
current market value or current replacement cost of any lost investment.
Various factors might make it impracticable to use insurance proceeds to
replace a facility after it has been damaged or destroyed. Under such
circumstances, the insurance proceeds received by a REIT might not be
adequate to restore its economic position with respect to such property.
Under various environmental laws, a current or previous owner or operator
of real property may be liable for the costs of removal or remediation of
hazardous or toxic substances on, under or in such property. Such laws
often impose liability whether or not the owner or operator caused or knew
of the presence of such hazardous or toxic substances and whether or not
the storage of such substances was in violation of a tenant's lease. In
addition, the presence of hazardous or toxic substances, or the failure to
remediate such property properly, may adversely affect the owner's ability
to borrow using such real property as collateral. No assurance can be
given that REITs may not be presently liable or potentially liable for any
such costs in connection with real estate assets they presently own or
subsequently acquire.
Foreign Issuers. The following section applies to individual Trusts which
contain Securities issued by, or invest in securities issued by, foreign
entities. Since certain of the Securities in the Trust consist of, or
invest in, securities issued by foreign entities, an investment in the
Trust involves certain investment risks that are different in some
respects from an investment in a trust which invests solely in the
securities of domestic entities. These investment risks include future
political or governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the Securities
may become impaired or that the general condition of the relevant stock
market may worsen (both of which would contribute directly to a decrease
in the value of the Securities and thus in the value of the Units), the
limited liquidity and relatively small market capitalization of the
relevant securities market, expropriation or confiscatory taxation,
economic uncertainties and foreign currency devaluations and fluctuations.
In addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, there may
be less publicly available information than is available from a domestic
issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. The
securities of many foreign issuers are less liquid and their prices more
volatile than securities of comparable domestic issuers. In addition,
fixed brokerage commissions and other transaction costs on foreign
securities exchanges are generally higher than in the United States and
there is generally less government supervision and regulation of
exchanges, brokers and issuers in foreign countries than there is in the
United States. However, due to the nature of the issuers of the Securities
selected for the Trust, the Sponsor believes that adequate information
will be available to allow the Supervisor to provide portfolio
surveillance for the Trust.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates for
the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trust are subject to exchange
control restrictions under existing law which would materially interfere
with payment to the Trust of dividends due on, or proceeds from the sale
of, the Securities. However, there can be no assurance that exchange
control regulations might not be adopted in the future which might
adversely affect payment to the Trust. The adoption of exchange control
Page 3
regulations and other legal restrictions could have an adverse impact on
the marketability of international securities in the Trust and on the
ability of the Trust to satisfy its obligation to redeem Units tendered to
the Trustee for redemption. In addition, restrictions on the settlement of
transactions on either the purchase or sale side, or both, could cause
delays or increase the costs associated with the purchase and sale of the
foreign Securities and correspondingly could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any Security,
and restrictions applicable to the Trust relating to the purchase of a
Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities
Act of 1933 and may not be exempt from the registration requirements of
such Act. Sales of non-exempt Securities by the Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Securities by the Trust will
generally be effected only in foreign securities markets. Although the
Sponsor does not believe that the Trust will encounter obstacles in
disposing of the Securities, investors should realize that the Securities
may be traded in foreign countries where the securities markets are not as
developed or efficient and may not be as liquid as those in the United
States. The value of the Securities will be adversely affected if trading
markets for the Securities are limited or absent.
Emerging Markets. An investment in Units of the Trust should be made with
an understanding of the risks inherent with investing in certain smaller
and emerging markets. Compared to more mature markets, some emerging
markets may have a low level of regulation, enforcement of regulations and
monitoring of investors' activities. Those activities may include
practices such as trading on material non-public information. The
securities markets of developing countries are not as large as the more
established securities markets and have substantially less trading volume,
resulting in a lack of liquidity and high price volatility. There may be a
high concentration of market capitalization and trading volume in a small
number of issuers representing a limited number of industries as well as a
high concentration of investors and financial intermediaries. These
factors may adversely affect the timing and pricing of the acquisition or
disposal of securities.
In certain emerging markets, registrars are not subject to effective
government supervision nor are they always independent from issuers. The
possibility of fraud, negligence, undue influence being exerted by the
issuer or refusal to recognize ownership exists, which, along with other
factors, could result in the registration of a shareholding being
completely lost. Investors should therefore be aware that the Trust could
suffer loss arising from these registration problems. In addition, the
legal remedies in emerging markets are often more limited than the
remedies available in the United States.
Practices pertaining to the settlement of securities transactions in
emerging markets involve higher risks than those in developed markets, in
large part because of the need to use brokers and counterparties who are
less well capitalized, and custody and registration of assets in some
countries may be unreliable. As a result, brokerage commissions and other
fees are generally higher in emerging markets and the procedures and rules
governing foreign transactions and custody may involve delays in payment,
delivery or recovery of money or investments. Delays in settlement could
result in investment opportunities being missed if the trust is unable to
acquire or dispose of a security. Certain foreign investments may also be
less liquid and more volatile than U.S. investments, which may mean at
times that such investments are unable to be sold at desirable prices.
Political and economic structures in emerging markets often change
rapidly, which may cause instability. In adverse social and political
circumstances, governments have been involved in policies of
expropriation, confiscatory taxation, nationalization, intervention in the
securities market and trade settlement, and imposition of foreign
investment restrictions and exchange controls, and these could be repeated
in the future. In addition to withholding taxes on investment income, some
governments in emerging markets may impose different capital gains taxes
on foreign investors. Foreign investments may also be subject to the risks
of seizure by a foreign government and the imposition of restrictions on
the exchange or export of foreign currency. Additionally, some governments
exercise substantial influence over the private economic sector and the
political and social uncertainties that exist for many developing
countries are considerable.
Another risk common to most developing countries is that the economy is
heavily export oriented and, accordingly, is dependent upon international
trade. The existence of overburdened infrastructures and obsolete
financial systems also presents risks in certain countries, as do
environmental problems. Certain economies also depend to a large degree
upon exports of primary commodities and, therefore, are vulnerable to
changes in commodity prices which, in turn, may be affected by a variety
of factors.
Page 4
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
First Trust Portfolios L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $2,000,000, the insurer being National Union
Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 5096, hereby identifies The First Trust Special
Situations Trust, Series 4; The First Trust Special Situations Trust, Series 18;
The First Trust Special Situations Trust, Series 69; The First Trust Special
Situations Trust, Series 108; The First Trust Special Situations Trust, Series
119; The First Trust Special Situations Trust, Series 190; FT 286; The First
Trust Combined Series 272; FT 412; FT 438; FT 556; FT 754; FT 1102; FT 1179; FT
2935; FT 3320; FT 3367; FT 3370; FT 3397; FT 3398; FT 3400; FT 3451; FT 3480; FT
3529; FT 3530; FT 3568; FT 3569; FT 3570; FT 3572; FT 3615; FT 3647; FT 3650; FT
3689; FT 3690; FT 3729; FT 3780; FT 3940; FT 4020; FT 4037; FT 4143; FT 4260; FT
4746; FT 4789 and FT 5039 for purposes of the representations required by Rule
487 and represents the following:
(1) that the portfolio securities deposited in the series with respect to
which this Registration Statement is being filed do not differ materially in
type or quality from those deposited in such previous series;
(2) that, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the series with respect to the securities of which this
Registration Statement is being filed, this Registration Statement does not
contain disclosures that differ in any material respect from those contained in
the registration statements for such previous series as to which the effective
date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, FT 5096, has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wheaton and State of Illinois on October 20, 2014.
FT 5096
By FIRST TRUST PORTFOLIOS L.P.
Depositor
By Elizabeth H. Bull
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
Name Title* Date
James A. Bowen Director of The Charger Corporation, ) October 20, 2014
the General Partner of First Trust )
Portfolios L.P. )
)
)
) Elizabeth H. Bull
) Attorney-in-Fact**
* The title of the person named herein represents his capacity in and
relationship to First Trust Portfolios L.P., the Depositor.
** An executed copy of the related power of attorney was filed with the
Securities and Exchange Commission in connection with the Amendment No. 2
to Form S-6 of FT 2669 (File No. 333-169625) and the same is hereby
incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Amendment No. 2 to Registration Statement
No. 333-198959 on Form S-6 of our report dated October 20, 2014, relating to the
financial statement of FT 5096, comprising Equity Closed-End Portfolio, Series
33, appearing in the Prospectus, which is a part of such Registration Statement,
and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
October 20, 2014
S-4
CONSENT OF COUNSEL
The consent of counsel to the use of its name in the Prospectus included
in this Registration Statement will be contained in its opinion to be filed as
Exhibit 3.1 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its name in the
Prospectus included in the Registration Statement will be filed as Exhibit 4.1
to the Registration Statement.
S-5
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for FT 4484 and certain
subsequent Series, effective November 6, 2013 among First Trust
Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee,
First Trust Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor and FTP Services LLC, as FTPS Unit Servicing Agent
(incorporated by reference to Amendment No. 1 to Form S-6 [File No.
333-191558] filed on behalf of FT 4484).
1.1.1 Form of Trust Agreement for FT 5096 and certain subsequent Series,
effective October 20, 2014 among First Trust Portfolios L.P., as
Depositor, The Bank of New York Mellon, as Trustee, First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as Portfolio
Supervisor, and FTP Services LLC, as FTPS Unit Servicing Agent.
1.2 Copy of Certificate of Limited Partnership of First Trust Portfolios
L.P. (incorporated by reference to Amendment No. 1 to Form S-6 [File
No. 33-42683] filed on behalf of The First Trust Special Situations
Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership Agreement of First
Trust Portfolios L.P. (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of The Charger Corporation, the
general partner of First Trust Portfolios L.P., Depositor (incorporated
by reference to Amendment No. 1 to Form S-6 [File No. 33-42683] filed
on behalf of The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of The Charger Corporation, the general partner of
First Trust Portfolios L.P., Depositor (incorporated by reference to
Amendment No. 2 to Form S-6 [File No. 333-169625] filed on behalf of FT
2669).
1.6 Underwriter Agreement (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 33-42755] filed on behalf of The First Trust Special
Situations Trust, Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1 filed
herewith on page 2 and incorporated herein by reference).
S-6
2.2 Copy of Code of Ethics (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 333-156964] filed on behalf of FT 1987).
3.1 Opinion of counsel as to legality of securities being registered.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other related
information (incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
7.1 Power of Attorney executed by the Director listed on page S-3 of this
Registration Statement (incorporated by reference to Amendment No. 2 to
Form S-6 [File No. 333-169625] filed on behalf of FT 2669).
S-7
Dates Referenced Herein and Documents Incorporated by Reference
This ‘487’ Filing | | Date | | Other Filings |
---|
| | |
| | 12/31/16 | | None on these Dates |
| | 10/20/16 |
| | 10/31/15 |
| | 3/20/15 |
| | 1/20/15 |
| | 11/25/14 |
| | 11/10/14 |
| | 10/23/14 |
Filed on / Effective on: | | 10/20/14 |
| | 12/31/13 |
| | 11/6/13 |
| List all Filings |
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