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Chestnut Street Exchange Fund – ‘POS AMI’ on 4/18/24

On:  Thursday, 4/18/24, at 4:54pm ET   ·   Accession #:  1398344-24-7346   ·   File #:  811-02631

Previous ‘POS AMI’:  ‘POS AMI’ on 4/27/23   ·   Latest ‘POS AMI’:  This Filing   ·   6 References:   To:  Chestnut Street Exchange Fund – ‘N-CSR’ on 3/7/24 for 12/31/23 To:  Chestnut Street Exchange Fund – ‘POS AMI’ on 4/21/22 To:  Chestnut Street Exchange Fund – ‘POS AMI’ on 4/27/20 To:  Chestnut Street Exchange Fund – ‘POS AMI’ on 4/27/17 To:  Chestnut Street Exchange Fund – ‘POS AMI’ on 4/22/98 To:  Chestnut Street Exchange Fund – ‘POS AMI’ on 4/26/96 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/18/24  Chestnut Street Exchange Fund     POS AMI                3:265K                                   FilePoint/FA
          → Chestnut Street Exchange Fund ⇒ CHNTX

Document/Exhibit                   Description                      Pages   Size 

 1: POS AMI     Post-Effective Amendment of a Registration          HTML    249K 
                Statement by an Investment Company                               
 2: EX-99.28    Miscellaneous Exhibit                               HTML      5K 
 3: EX-99.28    Miscellaneous Exhibit                               HTML      5K 

As filed with the Securities and

Exchange Commission on April 18, 2024

File No. 811-02631

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]

OF 1940

AMENDMENT No. 47

CHESTNUT STREET EXCHANGE FUND

(Exact Name of the Registrant as Specified in Charter)

c/o Vigilant Compliance, LLC

223 Wilmington West Chester Pike, Suite 216

Chadds Ford, PA 19137

(Address of Principal Executive Offices)

The Registrant’s Telephone Number: 610-558-1750

Frederick C. Teufel, Jr.

Chestnut Street Exchange Fund

c/o Vigilant Compliance, LLC

223 Wilmington West Chester Pike, Suite 216

Chadds Ford, PA 19137

(Name and Address of Agent for Service)

Copy to:

Michael P. Malloy, Esq.

Faegre Drinker Biddle & Reath LLP

One Logan Square, Ste. 2000

Philadelphia, Pennsylvania 19103-6996 

TABLE OF CONTENTS

PART A.         INFORMATION REQUIRED IN A PROSPECTUS

Inapplicable.

Inapplicable.

Inapplicable.

Inapplicable.

(a) Mitchell Sinkler & Starr, Inc. (“MSS” or the “Adviser”) is the Fund’s investment adviser.

(b) W. Gregory Richardson, CFA, President, Principal, and Portfolio Manager has managed the Fund since June 28, 2021. Peter T. Toscani, CFA, CFP^®, Vice President, Director of Research, Principal, and Portfolio Manager has managed the Fund since June 28, 2021.

(a) Inapplicable.

(b) Shares may be redeemed at the option of the investor at any time without charge at their net asset value next computed after receipt by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent and dividend disbursing agent (the “Transfer Agent”), of a written request for redemption. The request must be accompanied by certificates (if issued).

Distributions by the Fund as a regulated investment company (“RIC”) that are attributable to ordinary income and short-term capital gains of the Fund will generally be taxable as ordinary income in determining a partner’s gross income for tax purposes, regardless whether the partner receives these distributions in cash or shares. Distributions to the Limited Partners will be reported on IRS Form 1099, annually. The Fund currently intends to retain all of its net realized long-term capital gains and pay the tax on the gain at the required corporate rate and excise tax on undistributed capital gains. The Fund may decide to distribute up to all of its long-term capital gains in the future. 

Inapplicable

Up to 10% of the value of the Fund’s total assets may be invested in securities which are subject to legal or contractual restrictions on resale and which the Fund reasonably believes will be saleable after a two-year holding period pursuant to Rule 144 under the Securities Act of 1933, as amended.

The Fund may lend portfolio securities.

Limited Partners generally are not personally liable for liabilities of the Fund. However, if the Fund were unable to pay its liabilities, recipients of distributions from the Fund could be liable to creditors of the Fund to the extent of such distributions, plus interest.

A Limited Partner has no right to take any part in the control of the Partnership business, and the exercise of such control would subject a Limited Partner to the personal liability of a General Partner for obligations of the Fund. It is possible that the existence or exercise by the Limited Partners of the voting rights provided in the Fund’s Restated Certificate and Agreement of Limited Partnership (“Partnership Agreement”) might subject the Limited Partners to liability as General Partners under the laws of California and other states. In the event that a Limited Partner should be found to be liable as a General Partner, then, to the extent the assets and insurance of the Fund and of the General Partners were insufficient to reimburse a Limited Partner, he would be required to personally satisfy claims of creditors against the Fund.

The net asset value of the Fund’s shares on redemption or repurchase may be more or less than the purchase price of the shares depending upon the market value of the Fund’s portfolio securities at the time of redemption or repurchase.

Subject to the supervision of the Fund’s Managing General Partners, MSS manages the Fund’s portfolio and is responsible for, makes decisions with respect to, and places orders for, all purchases and sales of the Fund’s portfolio securities.

The Advisory Agreement also provides that, subject to the supervision of the Fund’s Managing General Partners, MSS will provide a continuous investment program for the Fund’s portfolio, including investment research and management with respect to all securities and investments and cash and cash equivalents in the portfolio. MSS will determine from time to time what securities and other investments will be purchased, retained or sold by the Fund, and what portion of its assets will be invested or held uninvested in cash or cash equivalents. Further, it is the responsibility of MSS to: place orders pursuant to its investment determinations for the Fund either directly with the issuer or with any broker or dealer; conform with all applicable laws, rules and regulations; and not invest its assets or the assets of any accounts advised by it in shares of the Fund, make loans for the purpose of purchasing or carrying shares, or make loans to the Fund.

For the services provided by MSS, and the expenses assumed by it under the Advisory Agreement, the Fund has agreed to pay a fee, computed daily and payable monthly, based on the Fund’s average net assets. For the fiscal year ended December 31, 2023, the Fund paid an investment advisory fee aggregating 0.10% of its average daily net assets.

Mr. Richardson joined MSS in 2005. Mr. Richardson is President of MSS and a Portfolio Manager.

Mr. Toscani joined MSS in 2019. Mr. Toscani is a Vice President and the Director of Research at MSS. Prior to joining MSS, Mr. Toscani was a Portfolio Analyst with Chartwell Investment Partners.

Part B, the Statement of Additional Information, provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Fund.

Under the 1940 Act, the Fund may suspend the right of redemption or postpone the date of payment upon redemption for any period during which the New York Stock Exchange is closed, other than customary weekend and holiday closings, or during which (as determined by the Securities and Exchange Commission (the “SEC”) trading on said Exchange is restricted, or during which (as determined by the SEC) an emergency exists as a result of which disposal or valuation of portfolio securities is not reasonably practicable, or during which it is otherwise not reasonably practical for the Fund to fairly determine the value of its net assets, or during such other periods as the SEC may permit. (The Fund may also suspend or postpone the recordation of the transfer of its shares upon the occurrence of any of the foregoing conditions.)

Except to the extent shares are redeemed for cash pursuant to the Systematic Withdrawal Plan (the “Plan”), the Fund intends to distribute upon redemption securities from its portfolio in-kind, valued at the same value used for purposes of next determining the Fund’s net asset value after the receipt of the request for redemption in proper form. The Fund may in its discretion pay part or all of redemption proceeds in cash. The Fund has used redemptions in kind and in cash regularly and in stressed market conditions. When received by the shareholder, the value of the securities from the portfolio may be greater or lesser than the value used in pricing the redemption and will be subject to market risk. In addition, the shareholder may incur brokerage fees and other expenses upon the sale of these securities. When the Fund makes redemptions in cash, it utilizes cash balances.

The proceeds of redemption will be paid as soon as possible but not later than seven days after the request for redemption is received with the required documentation. The Fund or the SEC may suspend the right of redemption or delay payment during any period when the New York Stock Exchange is closed (other than customary weekend and holiday closings); when trading on that exchange is restricted or an emergency exists which makes disposal or valuation of portfolio securities not reasonably practicable; or during such other period as the SEC may by order permit.

Investors may, by notice in writing to the transfer agent, elect to participate in the Plan. Participants in the Plan may elect to receive quarterly in cash as a partial redemption of their shares up to 3/4 of 1% of the net asset value of their shares as of the close of trading on the New York Stock Exchange on the last trading day of each calendar quarter. The Fund does not intend to impose a charge upon investors for participating in the Plan. Participants may withdraw from the Plan at any time by written notice to the Transfer Agent.

The net asset value of the Fund’s shares on redemption or repurchase may be more or less than the purchase price of the shares depending upon the market value of the Fund’s portfolio securities at the time of redemption or repurchase.

A Limited Partner may assign the whole or any portion of such Limited Partner’s Fund shares by a written instrument of assignment in form satisfactory to the Board. Any Limited Partner who assigns Fund Shares, and any assignee of such shares who subsequently assigns such shares, by virtue of an assignment made in accordance with the provisions of the Partnership Agreement, confers upon his assignee the right to be substituted as a Limited Partner, and the assignee shall become a Limited Partner upon being entered into the records of the Fund as a Limited Partner.

Distributions by the Fund as a RIC that are attributable to ordinary income and short-term capital gains of the Fund will generally be taxable as ordinary income in determining a partner’s gross income for federal income tax purposes, regardless of whether the partner receives these distributions in cash or shares. The Fund currently intends to retain all of its net realized long-term capital gains and pay the tax on the gain at the required corporate rate. Each partner will be required to report his allocable portion of the Fund’s gain, but each partner will also receive a tax credit for his allocable portion of the tax paid by the Fund. In addition, any retained capital gains, net of tax, will generally increase a partner’s investment (and tax basis) in the Fund. The Fund will inform each partner as to the amount and nature of such income or gains. The Fund may change this policy at any time and decide to distribute up to all of its net long-term gains in the future. Ordinarily, shareholders are required to take distributions by the Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year.

Because the Fund is not continuously offered pursuant to a public offering, is not regularly traded on an established securities market, and does not have at least 500 partners at all times during the taxable year, certain expenses incurred by the Fund that if paid by an individual would be deductible only as “miscellaneous itemized deductions” are generally not deductible by the Fund. Instead, each partner will be treated as if it received a dividend in an amount equal to its allocable share of such expenses of the Fund and then having paid such expenses itself. For non-corporate taxpayers, such expenses will generally be itemized deductions and treated as “miscellaneous itemized deductions”.  Under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017 and before January 1, 2026, miscellaneous itemized deductions will no longer be deductible. Absent a legislative change, after December 31, 2026, miscellaneous itemized deductions will be subject to limitations on deductibility. The Fund will provide the partners information on the expenses that are passed through to the partners.

Under the Code, the current maximum long-term capital gain tax rate applicable to individuals, estates, and trusts is 20%. In addition, individuals, trusts and estates with income above certain thresholds are subject to a Medicare contribution tax on net investment income at the rate of 3.8%. Investment income includes dividends, interest and capital gains. Fund distributions to individual partners attributable to dividends received by the Fund from U.S. and certain “qualified” foreign corporations will generally be taxed at the long-term capital gain rate, as long as certain other requirements are met. For these lower rates to apply, the individual partners must have owned their Fund shares for at least 61 days during the 121-day period beginning on the date that is 60 days before the Fund’s ex-dividend date (and the Fund will need to have met a similar holding period requirement with respect to the shares of the corporation paying the qualifying dividend). The amount of the Fund’s distributions that qualify for this favorable tax treatment may be reduced as a result of the Fund’s securities lending activities (if any), a high portfolio turnover rate or investments in debt securities or “non-qualified” foreign corporations.

Partners will generally recognize taxable gain or loss on a sale, exchange or redemption of their shares based on the difference between their tax basis in the shares and the amount received for them. Generally, partners recognize long-term capital gain or loss if they have held their Fund shares for over twelve months at the time they dispose of them. (To aid in computing the tax basis in the shares, partners generally should retain their account statements for the period during which they have held shares.) Any loss realized on shares held for six months or less will be treated as a long-term capital loss to the extent of any capital gain dividends that were received on the shares. Additionally, any loss realized on a disposition of shares of the Fund may be disallowed under “wash sale” rules to the extent the shares disposed of are replaced with other shares of the Fund within a period of 61 days beginning 30 days before and ending 30 days after the shares are disposed of, such as pursuant to a dividend reinvestment in shares of the Fund. If disallowed, the loss will be reflected in an upward adjustment to the basis of the shares acquired.

For shares acquired through reinvestment of dividends or after January 1, 2012, the Fund (or relevant broker or financial advisor) is required to compute and report to the Internal Revenue Service (“IRS”) and furnish to partners cost basis information when such shares are sold or exchanged. The Fund has elected to use the First-In, First-Out method, unless you instruct the Fund to use a different IRS-accepted cost basis method, or choose to specifically identify your shares at the time of each sale or exchange. If your account is held by your broker or other financial advisor, they may select a different cost basis method. In these cases, please contact your broker or other financial advisor to obtain information. You should carefully review the cost basis information provided by the Fund and make any additional basis, holding period or other adjustments that are required when reporting these amounts on your federal and state income tax returns. Partners should consult with their tax advisors to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how the new cost basis reporting requirements apply to them.

The one major exception to these tax principles is that distributions on, and sales, exchanges and redemptions of, shares held in an IRA (or other tax-qualified plan) will not be currently taxable.

The above federal income tax discussion relates only to partners who are individual U.S. citizens or residents. Each partner should consult with his tax adviser for further information regarding federal, state, local and foreign tax consequences relevant to his specific tax situation.

Inapplicable.

Inapplicable.

Chestnut Street Exchange Fund – CHNTX

The Fund is a limited partnership organized as of March 23, 1976 under the Uniform Limited Partnership Act of California. In 1997, the Fund elected to be governed by the California Revised Limited Partnership Act as enacted by the State of California and hereafter amended, set forth presently at the Uniformed Limited Partnership Act of 2008 Sections 15900 and following, of the Corporations Code of the State of California.

The Fund’s fundamental policies which may not be changed without the approval of a majority of the Fund’s outstanding voting securities are as follows:

Any investment policy or restriction in these policies (1)-(9) that involves a maximum percentage of securities or assets, with the exception of liquidity and borrowing determinations, shall not be considered to be violated unless an excess over the percentage occurs immediately after an acquisition of securities or utilization of assets and results therefrom.

The Fund’s investment policies which are not deemed fundamental and may be changed without shareholder approval are as follows:

The Fund does not intend to engage in any significant degree in short-term trading. Portfolio turnover is not expected to exceed 15%, although the Fund reserves the right to exceed this turnover rate. The tax consequences of a sale of portfolio securities will be considered prior to a sale, but sales will be effected when the investment adviser believes a sale would be in the best interests of the Fund’s shareholders even though capital gains will be realized.

The Fund will not sell securities covered by outstanding options and will endeavor to liquidate its position as an option writer in a closing purchase transaction rather than by delivering portfolio securities upon exercise of the option.

In connection with policy (5) above, the Securities and Exchange Commission (the “SEC”) considers a concentration to mean 25% or more in any one industry and the ability of the Fund to concentrate its investments up to 25% of the value of its assets in any one industry means up to, but not including 25%.

The Fund will not invest more than 15% of its net assets in investments that are illiquid. Illiquid investments are any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment (including repurchase agreements in excess of seven days).

The Board performs its risk oversight function for the Fund through a combination of direct oversight by the Board as a whole and its audit committee and indirectly through the Adviser, USBGFS, Fund officers, the Fund’s CCO and other service providers. The Fund is subject to a number of risks, including investment, compliance, operational and valuation risks, among others. Day-to-day risk management functions are within the responsibilities of the Adviser and USBGFS to carry out the Fund’s investment management and business affairs, respectively. The Board provides risk oversight through: receiving and reviewing on a regular basis reports from the Adviser and USBGFS; receiving, reviewing and approving compliance policies and procedures; periodic meetings with the Fund’s portfolio manager to review investment policies, strategies and risks; and meeting regularly with the Fund’s CCO to discuss compliance findings and issues. The Board also relies on the Adviser and USBGFS, with respect to day-to-day operations and activities of the Fund, to create and maintain processes and controls to minimize risk and the likelihood of adverse effects on the Fund’s business and reputation.

The Board has delegated the responsibility of voting proxies with respect to the portfolio securities purchased and/or held by the Fund to the Adviser, subject to the Board’s continuing oversight. In exercising its voting obligations, the Adviser is guided by its general fiduciary duty to act prudently and in the interest of the Fund. The Adviser will consider factors affecting the value of the Fund’s investments and the rights of shareholders in its determination on voting portfolio securities.

The Adviser has adopted proxy voting procedures with respect to voting proxies relating to portfolio securities held by the Fund. The Adviser employs a third-party service provider to assist in the voting of proxies. These procedures have been provided to the service provider, who analyzes the proxies and makes recommendations, based on the Adviser’s policy, as to how to vote such proxies. A summary of the Adviser’s Proxy Voting Policies and Procedures is attached as Appendix A to this SAI.

The Fund is required to file annually its proxy voting record on Form N-PX with the SEC. Information regarding how the Fund voted proxies, if any, relating to portfolio securities held in the Fund’s portfolio for the most recent 12-month period ended June 30 is available, without charge, upon request, by calling (866-311-7541) or by visiting the SEC’s website at sec.gov. Amendments to Form N-PX will also require the Fund to make available its proxy voting record on the Fund’s website after the Fund’s N-PX filing with the SEC, with the first filings subject to the amendments due by the end of August 2024.

 * Indicates beneficial ownership.

For the services provided by MSS and the expenses assumed by it under the Advisory Agreement, the Fund pays MSS a fee, computed daily and paid monthly at the annual rate of 0.10% of the average daily net assets.

Prior to June 28, 2021, BlackRock Capital Management, Inc. served as the Fund’s investment adviser. The Fund paid MSS and/or the Fund’s prior investment advisory firm $389,610, $183,014, and $163,182 for investment advisory services for the fiscal years ended December 31, 2021, 2022, and 2023, respectively.

The Fund paid USBGFS $204,360, $190,517 and $183,500 for administration and accounting services for the fiscal years ended December 31, 2021, 2022, and 2023, respectively.

U.S. Bank National Association is the custodian of the Fund’s assets (the “Custodian”) pursuant to a custody agreement (“Custodian Agreement”). The Custodian is located at U.S. Bank Tower, 425 Walnut Street, Cincinnati, OH 45202. The Custodian (a) maintains a separate account or accounts in the name of the Fund; (b) holds and transfers portfolio securities on account of the Fund; (c) accepts receipts and makes disbursements of money on behalf of the Fund; (d) collects and receives all income and other payments and distributions on account of the Fund’s portfolio securities; and (e) makes periodic reports to the Board concerning the Fund’s operations.

USBGFS serves as the Fund’s transfer agent and dividend disbursing agent (the “Transfer Agent”) pursuant to a transfer agent servicing agreement. The Transfer Agent is located at U.S. Bank Global Fund Services, LLC, 615 East Michigan Street, WI 53202.

The Fund’s independent registered public accounting firm is Cohen & Company, Ltd., located at 1835 Market Street, Suite 310, Philadelphia, Pennsylvania 19103. The following is a general description of the services performed by Cohen & Company, Ltd.: auditing and reporting upon financial statements; and reporting on internal control structure for inclusion in Form N-CEN. BBD, LLP served as the Fund’s independent registered public accounting firm prior to the acquisition of its Investment Management Group by Cohen & Company, Ltd. in 2023.

Other Accounts Managed by the Portfolio Managers

As of December 31, 2023, W. Gregory Richardson and Peter T. Toscani managed or were members of the management team for the following client accounts:

Portfolio Managers’ Potential Material Conflicts of Interest

MSS’s approach involves no incentive-based commissions with a deep belief in fiduciary responsibility to clients serving their interests alone. MSS has adopted policies and procedures that address conflicts of interest that may arise between a portfolio manager’s management of the Fund and their management of other accounts.  Potential areas of conflict could involve allocation of investment opportunities and trades among accounts, use of information regarding the timing of the fund’s trades, personal investing activities, and a portfolio manager’s compensation structure.  The Adviser has adopted policies and procedures that it believes are reasonably designed to address these conflicts.  However, there is no guarantee that such policies and procedures will be effective or that the Adviser will anticipate all potential conflicts of interest.

Portfolio Managers Compensation Overview

The discussion below describes the portfolio managers’ compensation as of December 31, 2023.

MSS portfolio managers are paid a salary and bonus commensurate with the profitability of the overall firm and the individual portfolio manager’s contribution.

Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation. Portfolio managers may be eligible for bonuses which are based on the overall profitability of the firm and the aggregate contribution of the individual employee.

Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers are eligible for the Adviser’s Profit Sharing Plan based on the overall profitability of the firm.

Securities Ownership of the Portfolio Managers

As of December 31, 2023, the dollar range of securities beneficially owned by the portfolio managers in the Fund is shown below:

The Fund is a limited partnership formed under The California Revised Limited Partnership Act, and hereafter amended, set forth presently at the Uniformed Limited Partnership Act of 2008 Sections 15900 and following, of the Corporations Code of the State of California. Limited Partners generally are not personally liable for liabilities of the Fund. However, it is possible that the existence or exercise by the Limited Partners of the voting rights provided in the Partnership Agreement might subject the Limited Partners to liability as General Partners under the laws of California or other states. If the Fund were unable to pay its liabilities, recipients of distributions from the Fund could be liable to certain creditors of the Fund to the extent of such distributions, plus interest. The Fund believes that, because of the nature of the Fund’s business, the assets and insurance of the Fund and of the General Partners, and the Fund’s ability to contract with third parties to prevent recourse by the party against a Limited Partner, it is unlikely that Limited Partners will receive distributions which have to be returned or that they will be subject to liability as General Partners. In the event that a Limited Partner should be found to be liable as a General Partner, then, to the extent the assets and insurance of the Fund and of the General Partners were insufficient to reimburse a Limited Partner, he would be required to personally satisfy claims of creditors against the Fund. The rights of the holders of Shares may not be modified otherwise than by the vote of a majority of outstanding shares.

The U.S. Federal income tax considerations generally affecting the Partners are described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Fund, and the discussion in the Prospectus is not intended as a substitute for careful tax planning, and does not address special rules applicable to certain classes of investors, such as tax-exempt entities, insurance companies, financial institutions and foreign investors. Each prospective partner is urged to consult his or her own tax adviser with respect to the specific federal, state, local and foreign tax consequences of investing in the Fund. Future legislative or administrative changes or court decisions may significantly alter these tax consequences, and any such changes or decisions may be retroactive.

The Fund has elected and intends to continue to qualify as a regulated investment company (“RIC”). To qualify for treatment as a RIC, the Fund must meet three important tests each year.

First, the Fund must derive with respect to each taxable year at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, other income derived with respect to its business of investing in such stock, securities, or currencies, and net income derived from interests in qualified publicly traded partnerships.

Second, generally, at the close of each quarter its taxable year, at least 50% of the value of the Fund’s assets must consist of cash and cash items, U.S. government securities, securities of other regulated investment companies and securities of other issuers (as to which the Fund has not invested more than 5% of the value of its total assets in securities of any such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of any such issuer); and no more than 25% of the value of each Fund’s total assets may be invested in the securities of (1) any one issuer (other than U.S. government securities and securities of other regulated investment companies); (2) two or more issuers that the Fund controls and which are engaged in the same or similar trades or businesses; or (3) one or more qualified publicly-traded partnerships.

Third, the Fund must distribute an amount equal to at least the sum of 90% of its investment company taxable income (net investment income and the excess of net short-term capital gain over net long-term capital loss) and 90% of its tax-exempt income, if any, for the year. The Fund intends to comply with these requirements. If the Fund were to fail to make sufficient distributions, it could be liable for corporate income tax and for excise tax in respect of the shortfall or if the shortfall is large enough, the Fund could be disqualified as a RIC.

If for any taxable year the Fund were not to qualify as a RIC, all its taxable income would be subject to tax at regular corporate rates without any deduction for distributions to shareholders. In that event, shareholders would recognize dividend income on distributions to the extent of the Fund’s current and accumulated earnings and profits, and corporate shareholders could be eligible for the dividends-received deduction.

The Internal Revenue Code of 1986, as amended, imposes a nondeductible 4% excise tax on regulated investment companies that fail to distribute each year an amount equal to specified percentages of their ordinary taxable income and capital gain net income (excess of capital gains over capital losses). The Fund does not intend to make sufficient capital gain distributions each year to avoid liability for this excise tax.

For federal income tax purposes, under current law, the Fund is permitted to carry forward a net capital loss in any year to offset its own capital gains, if any, indefinitely.

As of December 31, 2023, the Fund had no capital loss carryforwards for federal income tax purposes.

Although the Fund is a corporation for federal income tax purposes and has elected to be taxed as a regulated investment company, the Fund expects that it will continue to be organized for all other purposes as a California limited partnership.

Inapplicable.

Inapplicable.

The audited financial statements, notes and related report of Cohen & Company, Ltd., the Fund’s independent registered public accounting firm, contained in the Annual Report to partners for the fiscal year ended December 31, 2023, are incorporated herein by reference. Prior fiscal years were audited by BBD, LLP, the Fund’s prior independent registered public accounting firm. No other parts of the Fund’s Annual Report are incorporated herein by reference. The financial statements and notes thereto included in the Fund’s Annual Report have been incorporated herein in reliance upon the reports of Cohen & Company, Ltd. and BBD, LLP given on the authority of said firms as experts in accounting and auditing. A copy of the Fund’s Annual Report may be obtained by writing to the Fund, by calling 866-311-7541 or by following the following hyperlink: sec.gov/Archives/edgar/data/19780/000089418924001618/csef_ncsr.htm .

APPENDIX A

STATEMENT OF

PROXY VOTING POLICY AND PROCEDURES

Introduction

The Securities and Exchange Commission has adopted Rule 204(4)-6, requiring written policies and procedures for voting proxies, and amended Rule 204-2, which defines requirements for recordkeeping, for investment advisors that have authority to vote proxies for their clients. Consistent with these rules, this document summarizes the proxy voting methodology employed by Mitchell Sinkler & Starr.

The rules indicate that effective proxy voting policies and procedures of an advisor should identify personnel responsible for monitoring corporate actions, making voting decisions and insuring that proxies are submitted in a timely manner. They should further describe the basis on which decisions are made to vote proxies, procedures for filing proxy information, and the way clients may access this information. Mitchell Sinkler & Starr has named a “Proxy Officer” for this purpose.

Proxy Voting Procedures

Mitchell Sinkler & Starr votes proxies for all clients unless the client specifically requests, in writing, to vote their own proxies. Mitchell Sinkler & Starr has streamlined the proxy-voting process by enrolling, through its sub-custodian, SEI, in ProxyEdge. ProxyEdge is an internet-based proxy management system which allows clients to vote proxies electronically. Mitchell Sinkler & Starr is notified via e-mail when proxies are available for on-line voting. Mitchell Sinkler & Starr has also elected to receive, for informational purposes, one set of materials by mail for each company. ProxyEdge maintains reports for all voting activity, which are archived online at the ProxyEdge website. These online records are maintained for a minimum of five years.

The proxy officer reviews each proxy, highlights any unusual or controversial issues, and votes the proxy consistent with the agreed proxy voting policy. Any new or unusual issues are reviewed by the firm’s portfolio managers prior to a final vote.

Disclosure of Information to Clients

Mitchell Sinkler & Starr provides a copy of this Proxy Voting Policy to its clients annually. Clients can, at any time, request a copy of Mitchell Sinkler & Starr’s Proxy Voting Policy and Procedures as well as a record of specific proxy votes to holders of those shares.

Proxy Voting Policy

This statement must include a description of the means by which Mitchell Sinkler & Starr addresses material conflicts between its own interests and the interests of its clients. Should any such conflict of interest arise, our Proxy Voting Committee will convene to determine the appropriate action. It is the policy of the firm to provide the pertinent clients with a full description of the nature of the conflict and to allow the clients to vote their proxies entirely in accordance with their own preferences. In the history of the firm, there has never been such a conflict of interest, and it is expected that any such occurrence in the future would be exceedingly rare. 

It is the overriding principle at Mitchell Sinkler & Starr to vote proxies solely in the interest of the shareholders, and for the exclusive purpose of insuring long-term economic benefit to them. Certain proxy items involve routine matters and these might include election of directors, appointment of auditors, stock splits, changes in date or time of annual meetings, limiting liability of directors, and amendments of articles of incorporation or by-laws to coincide with changes in federal or state regulations. Other proxy matters are more complicated and may require analysis or subjective judgments to determine what would be in the best interests of clients.

Although it is not possible to set firm guidelines for voting every issue, there are certain categories of proxy matters which would normally be beneficial to shareholders and which Mitchell Sinkler & Starr would expect to support. These would include:

Certain other proxy matters are frequently not in the best interests of shareholder, and, subject to further review, would normally be opposed by Mitchell Sinkler & Starr. These would include:

Other matters might be given individualized attention, as the beneficial effects, or lack thereof, on stockholders cannot be generalized. These could include:

While some of these issues may seem non-controversial, Mitchell Sinkler & Starr reserves the right and understands the obligation to examine every proposal in light of its wording and the company to which it pertains, so that a judgment is made in the best economic interests of our clients.

This policy will be reviewed at least annually by the Proxy Voting Officer, Chief Compliance Officer and at least one Principal, prior to the following year’s proxy voting season, to ensure proper implementation and to determine if changes to the policy or procedures are necessary.

January 31, 2008

Revised 3/8/13

Revised 7/24/13

Revised 11/12/14

Revised 2/27/15

Revised 2/26/15

Revised 3/11/19

Revised 2/11/21

PART C.     OTHER INFORMATION

Inapplicable.

Indemnification of the Fund’s Custodian against certain stated liabilities is provided for in Article X of the Custody Agreement which is incorporated herein by reference to Exhibit (g)(2) of Amendment No. 43.

Indemnification of the Fund’s Transfer Agent against certain stated liabilities is provided for in Section 7 of the Transfer Agent Servicing Agreement which is incorporated herein by reference to Exhibit (h)(4) of Amendment No. 43.

Indemnification of the Fund’s Administrator against certain stated liabilities is provided for in Section 6 of the Fund Administration Servicing Agreement which is incorporated herein by reference to Exhibit (h)(9) of Amendment No. 43.

Indemnification of the Fund’s Accountant against certain stated liabilities is provided for in Section 9 of the Fund Accounting Servicing Agreement which is incorporated herein by reference to Exhibit (h)(10) of Amendment No. 43.

The Fund has obtained from a major insurance carrier a director’s and officers’ liability policy covering certain types of errors and omissions.

Section 3.6 of Article III of the Fund’s Amended and Restated Certificate and Agreement of Limited Partnership, which is incorporated herein by reference to Exhibit No. 1 of Amendment No. 21, and Section 3.13 of Article III of the Fund’s Code of Regulations, which is incorporated herein by reference to Exhibit No. 2(a) of Amendment No. 19, each provide for the indemnification of the Fund’s Managing General Partners and officers.

The information required by this Item 31 with respect to each director, officer and partner of Mitchell Sinkler & Starr, Inc. (“MSS”) is incorporated by reference to Schedules A and D of Form ADV filed by MSS with the SEC pursuant to the Investment Advisers Act of 1940, as amended (SEC File No. 801-8445).

Inapplicable.

Inapplicable.

Inapplicable.

Inapplicable. 

SIGNATURE

Pursuant to the requirements of the Investment Company Act of 1940, the Chestnut Street Exchange Fund has duly caused this Amendment No. 47 to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Wilmington, and State of Delaware, on the 18th day of April, 2024.

EXHIBIT INDEX

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘POS AMI’ Filing		Date		Other Filings
		12/31/26
		1/1/26
Filed on:		4/18/24
		4/1/24
		12/31/23		N-CEN,  N-CSR,  NPORT-P
		12/31/22		N-CEN,  N-CSR,  NPORT-P
		12/31/21		N-CEN,  N-CSR,  NPORT-P
		6/28/21
		12/31/17		N-CSR,  NSAR-B
		1/1/12
		1/31/08
		1/1/98
				List all Filings

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6 Previous Filings that this Filing References

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 3/07/24 Chestnut Street Exchange Fund N-CSR 12/31/23 4:489K US Bancorp Fund Svcs LLC 4/21/22 Chestnut Street Exchange Fund POS AMI 4:495K FilePoint/FA 4/27/20 Chestnut Street Exchange Fund POS AMI 8:1.3M FilePoint/FA 4/27/17 Chestnut Street Exchange Fund POS AMI 3:664K FilePoint/FA 4/22/98 Chestnut Street Exchange Fund POS AMI 6:278K Bowne - Bop/FA 4/26/96 Chestnut Street Exchange Fund POS AMI 17:762K Bowne - Bop/FA

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Filing Submission 0001398344-24-007346   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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