[ | Preliminary Proxy Statement | |||
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
[ | Definitive Proxy Statement | |||
[ ] | Definitive Additional Materials | |||
[ ] | Soliciting Material Under Rule 14a-12 | |||
EXCHANGE TRADED CONCEPTS TRUST EXCHANGE TRADED CONCEPTS TRUST II | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
Payment of Filing Fee (Check the appropriate box): | ||||
[X] | No fee required. | |||
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
1) | Title of each class of securities to which transaction applies: | |||
2) | Aggregate number of securities to which transaction applies: | |||
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
4) | Proposed maximum aggregate value of transaction: | |||
5) | Total fee paid: | |||
[ ] | Fee paid previously with preliminary materials. | |||
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
1) | Amount Previously Paid: | |||
2) | Form, Schedule or Registration Statement No.: | |||
3) | Filing Party: | |||
4) | Date Filed: |
· | By mail with the enclosed proxy |
· | Through the website listed on the proxy voting instructions enclosed; |
· | By telephone using the toll-free number listed in the proxy voting instructions; or |
· | In person at the shareholder meeting on May |
Proposal | Shareholders Solicited to Vote | |
1A. | To approve a new investment advisory agreement between Exchange Traded Concepts Trust and Exchange Traded Concepts, LLC (the “Adviser”). | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF EMQQ The Emerging Markets Internet & Ecommerce ETF Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
1B. | To approve a new investment advisory agreement between Exchange Traded Concepts Trust II and the Adviser. | Horizons S&P 500® Covered Call ETF |
2A. | To approve a new sub-advisory agreement between the Adviser and Vident Investment Advisory LLC. | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF |
2B. | To approve a new sub-advisory agreement between the Adviser and Penserra Capital Management LLC. | EMQQ The Emerging Markets Internet & Ecommerce ETF Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
Proposal | Shareholders Solicited to Vote | |
2C. | To approve a new sub-advisory agreement between the Adviser and Yorkville ETF Advisors, LLC. | Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
2D. | To approve a new sub-advisory agreement between the Adviser and Horizons ETFs Management (USA) LLC. | Horizons S&P 500® Covered Call ETF |
3. | To approve a “manager of managers” arrangement that would grant the Fund and the Adviser greater flexibility to change sub-advisory arrangements without shareholder approval, subject to prior approval by the Board of Trustees. | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF Horizons S&P 500® Covered Call ETF |
4. | To elect Timothy J. Jacoby as a Trustee of each Trust. | All Funds |
5. | To transact such other business as may properly come before the Meeting. | All Funds |
By Order of the Boards of Trustees, J. Garrett Stevens President |
Proposal | Shareholders Solicited to Vote | |
1A. | To approve a new investment advisory agreement between Exchange Traded Concepts Trust and Exchange Traded Concepts, LLC (the “Adviser”). | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF EMQQ The Emerging Markets Internet & Ecommerce ETF Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
1B. | To approve a new investment advisory agreement between Exchange Traded Concepts Trust II and the Adviser. | Horizons S&P 500® Covered Call ETF |
2A. | To approve a new sub-advisory agreement between the Adviser and Vident Investment Advisory LLC. | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF |
2B. | To approve a new sub-advisory agreement between the Adviser and Penserra Capital Management LLC. | EMQQ The Emerging Markets Internet & Ecommerce ETF Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
2C. | To approve a new sub-advisory agreement between the Adviser and Yorkville ETF Advisors, LLC. | Yorkville High Income MLP ETF Yorkville High Income Infrastructure MLP ETF |
2D. | To approve a new sub-advisory agreement between the Adviser and Horizons ETFs Management (USA) LLC. | Horizons S&P 500® Covered Call ETF |
3. | To approve a “manager of managers” arrangement that would grant the Fund and the Adviser greater flexibility to change sub-advisory arrangements without shareholder approval, subject to prior approval by the Board of Trustees. | Forensic Accounting ETF ROBO-STOXTM Global Robotics and Automation Index ETF Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) YieldShares High Income ETF Horizons S&P 500® Covered Call ETF |
Proposal | Shareholders Solicited to Vote | |
4. | To elect Timothy J. Jacoby as a Trustee of each Trust. | All Funds |
5. | To transact such other business as may properly come before the Meeting. | All Funds |
Proposal 1: Approval of New Investment Advisory Agreements | 12 |
Background | 12 |
Information Relating to Proposal 1A | 14 |
Information Relating to Proposal 1B | 21 |
Proposal 2: Approval of New Sub-Advisory Agreements | 28 |
Background | 28 |
Information Relating to Proposal 2A | 31 |
Information Relating to Proposal 2B | 39 |
Information Relating to Proposal 2C | 46 |
Information Relating to Proposal 2D | 52 |
Proposal 3: Approval of a “Manager of Managers” Arrangement | 58 |
Background | 58 |
Benefit to the Funds | 58 |
Effect on Fees and Quality of Advisory Services | 59 |
Conditions for Establishing a Manager of Managers Arrangement | 59 |
Required Vote | 60 |
Proposal 4: Election of a Trustee to the Board of Trustees of | |
Exchange Traded Concepts Trust and Exchange Traded Concepts Trust II | 61 |
Background | 61 |
Information Relating to Proposals 4A and 4B | 61 |
Information Relating to Proposal 4A | 65 |
Information Relating to Proposal 4B | 70 |
Other Business | 75 |
Appendix A - Executive Officers and Directors of the Adviser | 78 |
Exhibit A: Form of Proposed Advisory Agreement between Exchange Traded Concepts Trust and Exchange Traded Concepts, LLC | 79 |
Exhibit B: Form of Proposed Advisory Agreement between Exchange Traded Concepts Trust II and Exchange Traded Concepts, LLC | 90 |
Exhibit C: Form of Proposed Sub-Advisory Agreement between Exchange Traded Concepts, LLC and Vident Investment Advisory LLC | |
Exhibit D: Form of Proposed Sub-Advisory Agreement between Exchange Traded Concepts, LLC and Penserra Capital Management LLC | 116 |
Exhibit E: Form of Proposed Sub-Advisory Agreement between Exchange Traded Concepts, LLC and Yorkville ETF Advisors, LLC | 130 |
Exhibit F: Form of Proposed Sub-Advisory Agreement between Exchange Traded Concepts, LLC and Horizons ETFs Management (USA) LLC | 145 |
Exhibit G: | 160 |
Exhibit H: Nominating Committee Charter of Exchange Traded Concepts Trust | 162 |
Exhibit I: Nominating Committee Charter of Exchange Traded Concepts Trust II | 166 |
Exhibit J: Information Concerning Auditors and Audit Committees of Exchange Traded Concepts Trust and Exchange Traded Concepts Trust II | |
Exhibit K: Outstanding Shares | 181 |
Exhibit L: | 182 |
Fund | Shareholder Approval Date |
Forensic Accounting ETF | January 30, 2013 |
ROBO-STOXTM Global Robotics and Automation Index ETF | October 16, 2013 |
Janus Equal Risk Weighted Large Cap ETF | July 28, 2013 |
YieldShares High Income ETF | June 11, 2012 |
EMQQ The Emerging Markets Internet & Ecommerce ETF | November 11, 2014 |
Yorkville High Income MLP ETF | March 1, 2012 |
Yorkville High Income Infrastructure MLP ETF | February 11, 2013 |
Fund | Advisory Fee Rate | Aggregate Amount of Advisory Fees Paid to the Adviser by the Fund |
Forensic Accounting ETF | 85 bps | $101,0751 |
Robo-StoxTM Global Robotics and Automation Index ETF | 95 bps | $320,7812 |
Janus Equal Risk Weighted Large Cap ETF | 65 bps | $110,9053 |
YieldShares High Income ETF | 50 bps | $277,7544 |
EMQQ The Emerging Markets Internet & Ecommerce ETF | 86 bps | $05 |
Yorkville High Income MLP ETF | 82 bps | $2,419,5161 |
Yorkville High Income Infrastructure MLP ETF | 82 bps | $322,2931 |
1 | For the fiscal year ended November 30, 2014. |
2 | For the fiscal period beginning October 21, 2013 (commencement of operations) through April 30, 2014. |
3 | For the fiscal period beginning July 29, 2013 (commencement of operations) through April 30, 2014. |
4 | For the fiscal year ended December 31, 2014. |
5 | The Fund was not in operation during the fiscal year ended August 31, 2014. |
Fund | Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Horizons S&P 500 Covered Call ETF | 65 bps | $32,022,219 | S&P 500 Stock Covered Call Index1 |
Source EURO STOXX 50 ETF | The greater of a minimum fee of $250,000, or 4 bps on the first $1.5 billion; 2 bps on the next $2.5 billion; and 1.5 bps on assets over $4 billion.4 | $38,404,956 | EURO STOXX 50 Net Return Index (USD)3 |
AlphaClone Alternative Alpha ETF | 95 bps | $88,872,433 | AlphaClone Hedge Fund Long/Short Index5 |
Vident International Equity Fund | 75 bps | $696,516,034 | Vident International Equity Index6 |
Vident Core U.S. Equity Fund | 55 bps | $297,573,181 | Vident Core U.S. Equity Index7 |
Deep Value ETF | 80 bps | $214,550,445 | Tiedemann Wealth Management Deep Value Index8 |
Falah Russell-IdealRatings U.S. Large Cap ETF | 70 bps | $1,288,874 | Russell-IdealRatings Islamic U.S. Large Cap Total Return Index9 |
Vident Core U.S. Bond Strategy ETF | 45 bps | $367,471,656 | Vident Core U.S. Bond Strategy Index10 |
Fund | Advisory Fee Rate | Aggregate Amount of Advisory Fees Paid to the Adviser by the Fund |
Horizons S&P 500® Covered Call ETF | 65 bps | $103,3481 |
1 | For the fiscal period beginning June 24, 2013 (commencement of operations) through April 30, 2014. |
Fund | Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Forensic Accounting ETF | 85 bps | $16,398,955 | Del Vecchio Earnings Quality Index1 |
Robo-StoxTM Global Robotics and Automation Index ETF | 95 bps | $104,570,189 | The Robo-STOX Global Robotics and Automation Index2 |
Janus Equal Risk Weighted Large Cap ETF | 65 bps | $2,634,728 | Janus Equal Risk Weighted Large Cap Index3 |
YieldShares High Income ETF | 50 bps | $80,393,531 | ISE High IncomeTM Index4 |
EMQQ The Emerging Markets Internet & Ecommerce ETF | 86 bps | $4,531,185 | EMQQ The Emerging Markets Internet & Ecommerce IndexTM 5 |
Yorkville High Income MLP ETF | 82 bps | $239,629,946 | Solactive High Income MLP Index6 |
Yorkville High Income Infrastructure MLP ETF | 82 bps | $58,794,698 | Solactive High Income Infrastructure MLP Index7 |
Fund | Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Source EURO STOXX 50 ETF | The greater of a minimum fee of $250,000, or 4 bps on the first $1.5 billion; 2 bps on the next $2.5 billion; and 1.5 bps on assets over $4 billion.9 | $38,404,955 | EURO STOXX 50 Net Return Index (USD)8 |
AlphaClone Alternative Alpha ETF | 95 bps | $88,872,433 | AlphaClone Hedge Fund Long/Short Index10 |
Vident International Equity Fund | 75 bps | $696,516,034 | Vident International Equity Index11 |
Vident Core U.S. Equity Fund | 55 bps | $297,573,181 | Vident Core U.S. Equity Index12 |
Deep Value ETF | 80 bps | $214,550,445 | Tiedemann Wealth Management Deep Value Index13 |
Falah Russell-IdealRatings U.S. Large Cap ETF | 70 bps | $1,288,873 | Russell-IdealRatings Islamic U.S. Large Cap Index14 |
Vident Core U.S. Bond Strategy ETF | 45 bps | $367,471,656 | Vident Core U.S. Bond Strategy Index15 |
Fund | Sub-Adviser(s) under Old Sub-Advisory Agreement | Sub-Adviser(s) under Interim Sub-Advisory Agreement | Sub-Adviser(s) under Proposed Sub-Advisory Agreement |
Forensic Accounting ETF | Index Management Solutions LLC | Penserra Capital Management LLC | Vident Investment Advisory LLC |
ROBO-STOXTM Global Robotics and Automation Index ETF | Index Management Solutions LLC | Penserra Capital Management LLC | Vident Investment Advisory LLC |
Janus Equal Risk Weighted Large Cap ETF | Index Management Solutions LLC | Penserra Capital Management LLC | Vident Investment Advisory LLC |
YieldShares High Income ETF | Index Management Solutions LLC | Penserra Capital Management LLC | Vident Investment Advisory LLC |
EMQQ The Emerging Markets Internet & Ecommerce ETF | Penserra Capital Management LLC | Penserra Capital Management LLC | Penserra Capital Management LLC |
Yorkville High Income MLP ETF | Yorkville ETF Advisors, LLC Index Management Solutions LLC | Yorkville ETF Advisors, LLC Penserra Capital Management LLC | Yorkville ETF Advisors, LLC Penserra Capital Management LLC |
Yorkville High Income Infrastructure MLP ETF | Yorkville ETF Advisors, LLC Index Management Solutions LLC | Yorkville ETF Advisors, LLC Penserra Capital Management LLC | Yorkville ETF Advisors, LLC Penserra Capital Management LLC |
Fund | Sub-Adviser under Old Sub-Advisory Agreement | Sub-Adviser under Interim Sub-Advisory Agreement | Sub-Adviser under Proposed Sub-Advisory Agreement |
Horizons S&P 500® Covered Call ETF | Horizons ETFs Management (USA) LLC | Horizons ETFs Management (USA) LLC | Horizons ETFs Management (USA) LLC |
Fund | Shareholder Approval Date |
Forensic Accounting ETF | January 30, 2013 |
ROBO-STOXTM Global Robotics and Automation Index ETF | October 16, 2013 |
Janus Equal Risk Weighted Large Cap ETF | July 28, 2013 |
YieldShares High Income ETF | June 11, 2012 |
Fund | (i) Sub-Advisory Fee Rate under the Old Sub-Advisory Agreement | (ii) Aggregate Amount of Sub-Advisory Fees Paid to the Sub-Adviser by the Adviser | (iii) Sub-Advisory Fee Rate under the Proposed Sub-Advisory Agreement | (iv) Aggregate Amount of Sub-Advisory Fees That Would Have Been Paid to the Sub-Adviser by the Adviser under the Proposed Sub-Advisory Agreement | (v) Difference between (ii) and (iv) as a percentage of (ii) |
Forensic Accounting ETF | The greater of 4.5 bps or $10,000 annual minimum | $10,0001 | The greater of 5 bps or $15,000 annual minimum | $15,0001 | 50% |
Robo-StoxTM Global Robotics and Automation Index ETF | The greater of 7.5 bps or $15,000 annual minimum | $20,9112 | The greater of 4 bps or $20,000 annual minimum | $17,3202 | (17%) |
Janus Equal Risk Weighted Large Cap ETF | The greater of 5.5 bps or $10,000 annual minimum | $7,5003 | The greater of 5 bps or $15,000 annual minimum | $11,2503 | 50% |
YieldShares High Income ETF | The greater of 4.5 bps or $10,000 annual minimum | $30,6454 | The greater of 3 bps or $20,000 annual minimum | $21,3734 | (30%) |
1 | For the fiscal year ended November 30, 2014. |
2 | For the fiscal period beginning October 21, 2013 (commencement of operations) through April 30, 2014. |
3 | For the fiscal period beginning July 29, 2013 (commencement of operations) through April 30, 2014. |
4 | For the fiscal year ended December 31, 2014. |
Name | Position with Sub-Adviser | |
Nicholas A. Stonestreet | Chief Executive Officer | |
Andrew T. Schmuhl | Chief Compliance Officer | |
Denise M. Krisko | President |
Fund | Sub-Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Vident Core U.S. Equity Fund | The greater of 2.75 bps or $10,000 annual minimum | $297,573,181 | Vident Core U.S. Equity Index1 |
Name of the Fund | (i) Sub-Advisory Fee Rate under the Old Sub-Advisory Agreement | (ii) Aggregate Amount of Sub-Advisory Fees Paid to the Sub-Adviser by the Adviser | (iii) Sub-Advisory Fee Rate under the Proposed Sub-Advisory Agreement | (iv) Aggregate Amount of Sub-Advisory Fees That Would Have Been Paid to the Sub-Adviser by the Adviser under the Proposed Sub-Advisory Agreement | (v) Difference between (ii) and (iv) as a percentage of (ii) |
Yorkville High Income MLP ETF | The greater of 5.5 bps or $10,000 annual minimum | $162,3232 | The greater of 5 bps or $25,000 annual minimum | $161,1522 | (.5%) |
Yorkville High Income Infrastructure MLP ETF | The greater of 5.5 bps or $10,000 annual minimum | $21,6372 | The greater of 5 bps or $25,000 annual minimum | $25,0292 | 16% |
1 | The Fund was not in operation during the fiscal year ended August 31, 2014. |
2 | For the fiscal year ended November 30, 2014. |
Name | Position with Sub-Adviser | |
George Madrigal | President and Chief Executive Officer | |
Anthony Castelli | Chief Compliance Officer and Risk Manager | |
Dustin Lewellyn | Managing Director |
Fund | Sub-Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Purefunds ISE Cyber Security ETF | The greater of 5 bps or $20,000 annual minimum | $448,000,000 | ISE Cyber Security Index1 |
Forensic Accounting ETF | The greater of 4.5 bps or $10,000 annual minimum | $16,398,955 | Del Vecchio Earnings Quality Index2 |
ROBO-STOXTM Global Robotics and Automation Index ETF | The greater of 7.5 bps or $15,000 annual minimum | $104,570,189 | The ROBO-STOX Global Robotics and Automation Index3 |
Janus Equal Risk Weighted Large Cap ETF | The greater of 5.5 bps or $10,000 annual minimum | $2,634,728 | Janus Equal Risk Weighted Large Cap Index4 |
YieldShares High Income ETF | The greater of 4.5 bps or $10,000 annual minimum | $80,393,531 | ISE High IncomeTM Index5 |
Name of the Fund | Sub-Advisory Fee Rate | Aggregate Amount of Sub-Advisory Fees Paid to the Sub-Adviser by the Adviser |
Yorkville High Income MLP ETF | 62 bps | $1,829,2531 |
Yorkville High Income Infrastructure MLP ETF | 62 bps | $243,6851 |
1 | For the fiscal year ended November 30, 2014. |
Name | Position with Sub-Adviser | |
Richard Hogan | Member | |
James Baker | Member | |
Michael Woodward | Chief Compliance Officer |
Name of the Fund | Sub-Advisory Fee Rate1 | Aggregate Amount of Sub-Advisory Fees Paid to the Sub-Adviser by the Adviser |
Horizons S&P 500® Covered Call ETF | 0.55% of the first $500 million; 0.57% of the next $3.5 billion; 0.60% of the next $6 billion; 0.62% of assets above $10 billion | $106,5802 |
1 | The sub-advisory fee rate is based on the combined net assets of the Fund and Horizons S&P Financial Select Sector Covered Call ETF, which |
2 | For the fiscal period from June 24, 2013 (commencement of operations) through April 30, 2014. |
Name | Position with Sub-Adviser | |
Robert Earl Shea | Director & Chief Financial Officer | |
Taeyong Lee | Managing Director | |
Thomas Jefferson Park | Director | |
Howard J. Atkinson | Managing Director | |
Thomas N. Calabria | Chief Compliance Officer |
Fund | Advisory Fee Rate | Assets of 12/31/14 | Underlying Index |
Horizons Korea KOSPI 200 ETF | 38 bps | $43,420,000 | KOSPI 200 Index1 |
Name and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships held by Trustee |
Interested Trustee | |||||
J. Garrett Stevens (35 years old) | Trustee and President | Trustee (Since 2009); President (Since 2011) | T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer; Exchange Traded Concepts Trust II, 2012 to present — President. | 7 | None |
Independent Trustees | |||||
Timothy J. Jacoby (62 years old) | Trustee | Since 2014 | Deloitte & Touche LLP 2000 to 2014─Partner | Exchange Traded Concepts Trust II | |
David M. Mahle (70 years old) | Trustee | Since 2011 | Jones Day, 2012 to present — Consultant; Jones Day, 2008 to 2011 — Of Counsel; Jones Day, 1988 to 2008 — Partner. | Exchange Traded Concepts Trust II | |
Kurt Wolfgruber (64 years old) | Trustee | Since 2012 | Oppenheimer Funds, Inc., 2007 to 2009 — President. | New Mountain Finance Corp. — Director; Exchange Traded Concepts Trust II | |
Mark Zurack (57 years old) | Trustee | Since 2011 | Columbia Business School, 2002 to present — Professor. | 8 | Source ETF Trust (1 Fund) |
Name and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years |
J. Garrett Stevens (35 years old) | Trustee and President | Trustee (Since 2009), President (Since 2011) | T.S. Phillips Investments, Inc., 2000 to present— Investment Adviser/Vice President; Exchange Traded Concepts Trust, 2009 to 2011 — Chief Executive Officer and Secretary, 2011 to present — President; Exchange Traded Concepts, LLC, 2009 to present — Chief Executive Officer; and Exchange Traded Concepts Trust II, 2012 to present — President. |
Richard Hogan (52 years old) | Treasurer and Secretary | Since 2011 | Yorkville ETF Advisors, 2011 to present — Managing Member; Private Investor — 2003 to present; Exchange Traded Concepts Trust, 2011 to present — ETF Advisor. |
Peter Rodriguez (51 years old) | Assistant Treasurer | Since 2011 | Director, Fund Accounting, SEI Investments Global Funds Services, 2011 to present; Director, Mutual Fund Trading, SEI Private Trust Company, 2009 to 2011; and Director, Asset Data Services, Global Wealth Services, 2006 to 2009. |
Eric Kleinschmidt (45 years old) | Assistant Treasurer | Since 2013 | Director, Fund Accounting, SEI Investments Global Funds Services, 2004 to present, Manager, Fund Accounting 1999 to 2004. |
Name | Aggregate Compensation | Pension or Retirement Benefits Accrued as Part of Fund Expenses | Estimated Annual Benefits Upon Retirement | Total Compensation from the Trust and Fund Complex1,2 |
Interested Trustee | ||||
Stevens | $0 | n/a | n/a | $0 for service on (1) board |
Independent Trustees | ||||
Jacoby | $35,000 | n/a | n/a | $50,000 for service on (3) boards3 |
Wolfgruber | $35,000 | n/a | n/a | $50,000 for service on (3) boards3 |
Mahle | $35,000 | n/a | n/a | $50,000 for service on (3) boards3 |
Zurack | $35,000 | n/a | n/a | $35,000 for service on (2) boards |
Name and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships held by Trustee in the Past 5 Years |
Interested Trustee | |||||
Richard Hogan (52 years old) | Trustee and Secretary | Since 2012 | Principal, Yorkville ETF Advisors 2011-present; Treasurer and Secretary, Exchange Traded Concepts Trust 2011-present, Private Investor, 2003-present | 2 | Board Member of Peconic Land Trust of Suffolk County, NY |
Independent Trustees | |||||
Timothy J. Jacoby (62 years old) | Trustee | Since 2014 | Senior Partner, Deloitte & Touche LLP, Private Equity/Hedge Fund/Mutual Fund Services Practice — 2000-2014 | 10 | Exchange Traded Concepts Trust (7 Funds); Source ETF Trust (1 Fund) |
David M. Mahle (70 years old) | Trustee | Since 2012 | Consultant, Jones Day 2012- present; Of Counsel, Jones Day 2008-2011; Partner, Jones Day 1988-2008 | 10 | Exchange Traded Concepts Trust (7 Funds); Source ETF Trust (1 Fund) |
Kurt Wolfgruber (63 years old) | Trustee | Since 2012 | President, OppenheimerFunds, Inc. 2007-2009 | 10 | Director, New Mountain Finance Corp.; Exchange Traded Concepts Trust (7 Funds); Source ETF Trust (1 Fund) |
Name, Address and Age | Position(s) Held with the Trust | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years |
J. Garrett Stevens 2545 S. Kelly Ave., Suite C, Edmond, OK 73013 (35 years old) | President | Since 2012 | Investment Advisor/Vice President, T.S. Phillips Investments, Inc. 2000 -2011; Chief Executive Officer and Secretary. Exchange Traded Concepts Trust 2009 - 2011; Chief Executive Officer, Exchange Traded Concepts, LLC 2009-present; President, Exchange Traded Concepts Trust 2011-present |
Richard Hogan 2545 S. Kelly Ave., Suite C, Edmond, OK 73013 (52 years old) | Trustee and Secretary | Since 2012 | Managing Member, Yorkville ETF Advisors 2011-present; Treasurer and Secretary, Exchange Traded Concepts Trust, 2011-present, Private Investor, 2002-2011 |
Christopher W. Roleke 10 High Street Boston, MA 02110 (42 years old) | Treasurer | Since 2012 | Director/Fund Principal Financial Officer, Foreside Management Services, LLC 2011-Present; Assistant Vice President, JPMorgan Investor Services Co. 2006 – 2011. |
Ioannis Tzouganatos 100 Summer Street, Suite 1500 Boston, MA 02110 (38 years old) | Assistant Secretary | Since 2012 | Vice President, Citi Fund Services Ohio, Inc. 2008-present. |
Joel Engle 3435 Stelzer Road, Columbus, OH 43219 (48 years old) | Assistant Treasurer | Since 2012 | Senior Vice President of Citi Fund Services Ohio, Inc. 2007-present |
Ann Edgeworth 10 High Street Suite 302 Boston, MA 02110 (52 years old) | Chief Compliance Officer | Since 2012 | Director, Foreside Compliance Services, LLC 2010-present; Vice President, State Street 2007-2010. |
Trustees | Horizons S&P 500® Covered Call ETF | Horizons S&P Financial Select Sector Covered Call ETF | Aggregate Dollar Range of Equity Securities In All Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
Independent Trustees | |||
Timothy J. Jacoby | None | None | None |
David M. Mahle | None | None | None |
Kurt Wolfgruber | None | None | None |
Interested Trustee | |||
Richard Hogan | None | None | Over $100,000 |
Name | Aggregate Compensation1 | Pension or Retirement Benefits Accrued as Part of Fund Expenses | Estimated Annual Benefits Upon Retirement | Total Compensation from the Trust and Fund Complex1,2 |
Interested Trustee | ||||
Richard Hogan | $0 | n/a | n/a | $0 for service on (1) board |
Independent Trustees | ||||
Timothy J. Jacoby | $15,000 | n/a | n/a | $50,000 for service on (3) boards |
David M. Mahle | $15,000 | n/a | n/a | $50,000 for service on (3) boards |
Kurt Wolfgruber | $15,000 | n/a | n/a | $50,000 for service on (3) boards |
By Order of the Boards of Trustees, J. Garrett Stevens President |
Name | Position with Adviser | |
J. Garrett Stevens | Chief Executive Officer and Chief Financial Officer | |
Richard Hogan | Officer | |
James Baker | Officer | |
Michael E. Woodard | Chief Compliance Officer |
EXCHANGE TRADED CONCEPTS TRUST, on behalf of each Fund listed on Schedule A | |||
By: | |||
Name: | J. Garrett Stevens | ||
Title: | President | ||
EXCHANGE TRADED CONCEPTS, LLC | |||
By: | |||
Name: | J. Garrett Stevens | ||
Title: | Chief Executive Officer |
Fund | Rate |
Yorkville High Income MLP ETF | 82 bps |
YieldShares High Income ETF | 50 bps |
Yorkville High Income Infrastructure MLP ETF | 82 bps |
Forensic Accounting ETF | 85 bps |
65 bps | |
Robo-StoxTM Global Robotics and Automation Index ETF | 95 bps |
EMQQ The Emerging Markets Internet & Ecommerce ETF | 86 bps |
EXCHANGE TRADED CONCEPTS TRUST II, | |||
on behalf of each Fund listed on Schedule A | |||
By: | |||
Name: | J. Garrett Stevens | ||
Title: | President | ||
EXCHANGE TRADED CONCEPTS, LLC | |||
By: | |||
Name: | J. Garrett Stevens | ||
Title: | Chief Executive Officer |
Fund | Rate |
(HSPX) Horizons S&P | 65 bps |
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | The Sub-Adviser will place orders with respect to transactions in securities or other assets held or to be acquired by each Fund with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Fund’s Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, the Sub-Adviser or the Trust’s principal underwriter) if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, the Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of the Trust, the Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(v) | The Sub-Adviser shall provide to the Adviser such information and reports regarding the Funds’ investments that the Adviser deems appropriate or may reasonably request. |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Funds required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Funds’ custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | To the extent such authority has been delegated to it by the Adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by the Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust's Agreement and Declaration of Trust (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser. The Sub-Adviser will also promptly notify the Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
(c) | The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of Delaware with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Sub-Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser. The Adviser will also promptly notify the Sub-Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
(c) | The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | Duration. This Agreement shall become effective upon the date first above written, provided that this Agreement shall not take effect with respect to a Fund unless it has first been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and by vote of a majority of the Fund’s outstanding securities. This Agreement shall continue in effect for a period of two years from the date hereof, subject thereafter to being continued in force and effect from year to year if specifically approved each year by the Board or by the vote of a majority of the Fund’s outstanding voting securities. In addition to the foregoing, each renewal of this Agreement must be approved by the vote of a majority of the Board who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Prior to voting on the renewal of this Agreement, the Board may request and evaluate, and the Sub-Adviser shall furnish, such information as may reasonably be necessary to enable the Board to evaluate the terms of this Agreement. |
(b) | Termination. Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | (i) By vote of a majority of the Board or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days’ written notice to the Sub-Adviser; |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b), along with the policies and procedures referred to in Section 10(a), are referred to herein as the Sub-Adviser’s “Compliance Program”). |
12. | Reporting of Compliance Matters. |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the Sub-Adviser’s investment advisory business and the Sub-Adviser’s responses thereto; provided that the Sub-Adviser may redact from such correspondences client specific confidential information, material subject to the attorney-client privilege, and material non-public information, that the Sub-Adviser reasonably determines should not be disclosed to the Trust’s CCO; |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
12. | Names. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the ETC Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the ETC Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the ETC Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the ETC Name. The Sub-Adviser shall only use the ETC Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the ETC Name or any of Adviser’s respective affiliates or clients names without the prior approval of Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Vident Investment Advisory LLC.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Vident Investment Advisory LLC” (the “Vident Name”). The foregoing authorization by the Sub-Adviser to the Adviser to use the Vident Name is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Vident Name; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Vident Name. The Adviser shall only use the Vident Name in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use the Vident Name or any of the Sub-Adviser’s respective affiliates or clients names without the prior approval of the Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Adviser to satisfy the foregoing obligation. |
To the Adviser at: | Exchange Traded Concepts, LLC 2545 South Kelly Avenue, Suite C Edmond, Oklahoma 73013 Attention: J. Garrett Stevens, CEO |
To the Trust’s CCO at: | Cipperman Compliance Services, LLC 500 East Swedesford Road, Suite 104 Wayne, Pennsylvania 19087 Attention: Michael Woodard |
To the Sub-Adviser at: | Vident Investment Advisory LLC 300 Colonial Center Parkway, Suite 330 Roswell, Georgia 30076 Attention: [Andrew Schmuhl] |
20. | Miscellaneous. |
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Vident Investment Advisory LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | |||
Title: | Chief Executive Officer | Title: |
Fund | Rate |
Forensic Accounting ETF | The greater of 5 bps or $15,000 annual minimum |
ROBO-STOXTM Global Robotics and Automatic Index ETF | The greater of 4 bps or $20,000 annual minimum |
Janus Equal Risk Weighted Large Cap ETF | The greater of 5 bps or $15,000 annual minimum |
YieldShares High Income ETF | The greater of 3 bps or $20,000 annual minimum |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Vident Investment Advisory LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | |||
Title: | Chief Executive Officer | Title: |
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | The Sub-Adviser will place orders with respect to transactions in securities or other assets held or to be acquired by each Fund with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Fund’s Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, the Sub-Adviser or the Trust’s principal underwriter) if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, the Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of the Trust, the Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Funds required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Funds’ custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | To the extent such authority has been delegated to it by the Adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by the Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust's Agreement and Declaration of Trust (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser. The Sub-Adviser will also promptly notify the Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of New York with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Sub-Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser. The Adviser will also promptly notify the Sub-Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | Duration. This Agreement shall become effective upon the date first above written, provided that this Agreement shall not take effect with respect to a Fund unless it has first been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and by vote of a majority of the Fund’s outstanding securities. This Agreement shall continue in effect for a period of two years from the date hereof, subject thereafter to being continued in force and effect from year to year if specifically approved each year by the Board or by the vote of a majority of the Fund’s outstanding voting securities. In addition to the foregoing, each renewal of this Agreement must be approved by the vote of a majority of the Board who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Prior to voting on the renewal of this Agreement, the Board may request and evaluate, and the Sub-Adviser shall furnish, such information as may reasonably be necessary to enable the Board to evaluate the terms of this Agreement. |
(b) | Termination. Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | By vote of a majority of the Board or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days’ written notice to the Sub-Adviser; |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b), along with the policies and procedures referred to in Section 10(a), are referred to herein as the Sub-Adviser’s “Compliance Program”). |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the Sub-Adviser’s investment advisory business and the Sub-Adviser’s responses thereto; provided that the Sub-Adviser may redact from such correspondences client specific confidential information, material subject to the attorney-client privilege, and material non-public information, that the Sub-Adviser reasonably determines should not be disclosed to the Trust’s CCO; |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the “ETC Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the ETC Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the ETC Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the ETC Name. The Sub-Adviser shall only use the ETC Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the ETC Name or any of the Adviser’s respective affiliates or clients names without the prior approval of the Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Penserra Capital Management, LLC.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Penserra Capital Management, LLC” (the “Penserra Name”). The foregoing authorization by the Sub-Adviser to the Adviser to use the Penserra Name is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Penserra Name; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Penserra Name. The Adviser shall only use the Penserra Name in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use |
To the Adviser at: | Exchange Traded Concepts, LLC 2545 South Kelly Avenue, Suite C Edmond, Oklahoma 73013 Attention: J. Garrett Stevens, CEO |
To the Trust’s CCO at: | Cipperman Compliance Services, LLC 500 East Swedesford Road, Suite 104 Wayne, Pennsylvania 19087 Attention: Michael Woodard |
To the Sub-Adviser at: | Penserra Capital Management LLC 4 Orinda Way, Suite 100A Orinda, California 94563 Attention: Dustin Lewellyn |
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Penserra Capital Management LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | Dustin Lewellyn | ||
Title: | Chief Executive Officer | Title: | Chief Investment Officer |
Fund | Rate |
EMQQ The Emerging Markets Internet & Ecommerce ETF | The greater of 5 bps or $25,000 annual minimum |
Yorkville High Income MLP ETF | The greater of 5 bps or $25,000 annual minimum |
Yorkville High Income Infrastructure MLP ETF | The greater of 5 bps or $25,000 annual minimum |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Penserra Capital Management LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | Dustin Lewellyn | ||
Title: | Chief Executive Officer | Title: | Chief Investment Officer |
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | Unless responsibility for placing orders with respect to transactions in securities or other assets held or to be acquired by the Funds has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser will place such orders with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Funds’ Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, the Sub-Adviser or the Trust’s principal underwriter) if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, the Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of the Trust, the Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(v) | To the extent the Adviser or another sub-adviser is responsible for placing orders with respect to a Fund’s portfolio transactions, the Sub-Adviser shall provide to the Adviser or such other sub-adviser such information concerning the securities or other assets to be purchased or sold on behalf of the Fund reasonably necessary to execute the transactions, including the identity of such security or asset, the number of shares or principal amount to be purchased or sold, and the timing of and restrictions, if any, on the purchase or sale (e.g., a market order versus a limit order). |
(vi) | As of the date of this Agreement, the Adviser has entered into a sub-advisory agreement with another sub-adviser pursuant to which that sub-adviser shall be responsible for placing orders with respect to the Funds’ portfolio transactions. During the term of that sub-advisory agreement and, unless and until the Sub-Adviser agrees to assume responsibility for the placement of orders with respect to the Funds’ portfolio transactions, the Sub-Adviser shall have no responsibility or liability for such services, other than the responsibility to provide the information required by subparagraph (c)(v) of this Section 1. |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Funds required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Funds’ custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | Unless the responsibility has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by each Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds and subparagraph (c)(v) of this Section 1. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust’s Agreement and Declaration of Trust (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser. The Sub-Adviser will also promptly notify the Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of Delaware with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Sub-Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser. The Adviser will also promptly notify the Sub-Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
(e) | The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Adviser agrees to maintain an appropriate level of errors and omissions and professional liability insurance coverage. |
(a) | Duration. This Agreement shall become effective upon the date first above written, provided that this Agreement shall not take effect with respect to a Fund unless it has first been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and by vote of a majority of the Fund’s outstanding securities. This Agreement shall continue in effect for a period of two years from the date hereof, subject thereafter to being continued in force and effect from year to year if specifically approved each year by the Board or by the vote of a majority of the Fund’s outstanding voting securities. In addition to the foregoing, each renewal of this Agreement must be approved by the vote of a majority of the Board who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Prior to voting on the renewal of this Agreement, the Board may request and evaluate, and the Sub-Adviser shall furnish, such information as may reasonably be necessary to enable the Board to evaluate the terms of this Agreement. |
(b) | Termination. Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | By vote of a majority of the Board or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days’ written notice to the Sub-Adviser; |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b), along with the policies and procedures referred to in Section 10(a), are referred to herein as the Sub-Adviser’s “Compliance Program”). |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the “ETC Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the ETC Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the ETC Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the ETC Name. The Sub-Adviser shall only use the ETC Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the ETC Name or any of the Adviser’s respective affiliates or clients names without the prior approval of the Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Yorkville.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Yorkville” (the Yorkville Name”). The foregoing authorization by the Sub-Adviser to the Adviser to use the Yorkville Name is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Yorkville Name; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Yorkville Name. The Adviser shall only use the Yorkville Name in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use the Yorkville Name or any of the Sub-Adviser’s respective affiliates or clients names without the prior approval of the Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Adviser to satisfy the foregoing obligation. |
To the Adviser at: | Exchange Traded Concepts, LLC 2545 South Kelly Avenue Suite C Edmond, Oklahoma 73013 Attention: J. Garrett Stevens, CEO |
To the Trust’s CCO at: | Cipperman Compliance Services, LLC 500 East Swedesford Road Suite 104 Wayne, Pennsylvania 19087 Attention: Michael Woodard |
To the Sub-Adviser at: | Yorkville ETF Advisors, LLC 950 Third Avenue 23rd Floor New York, New York 10022 Attn: |
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Yorkville ETF Advisors, LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | |||
Title: | Chief Executive Officer | Title: |
Fund | Rate |
Yorkville High Income MLP ETF | 0.62% |
Yorkville High Income Infrastructure MLP ETF | 0.62% |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Yorkville ETF Advisors, LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | |||
Title: | Chief Executive Officer | Title: |
(a) | The Sub-Adviser shall, subject to subparagraph (b) of this Section 1, determine from time to time what Assets will be purchased, retained or sold by the Funds, and what portion of the Assets will be invested or held uninvested in cash. |
(b) | In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), as may be modified, amended or supplemented from time to time, the By-Laws of the Trust, as may be modified, amended or supplemented from time to time, the Prospectus, the instructions and directions of the Adviser and of the Board, the terms and conditions of exemptive and no-action relief granted to the Trust as amended from time to time and the Trust’s policies and procedures and will conform to and comply in all material respects with the requirements of the 1940 Act, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and all other applicable federal and state laws and regulations, as each is amended from time to time. |
(c) | Unless responsibility for placing orders with respect to transactions in securities or other assets held or to be acquired by the Funds has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser will place such orders with or through such persons, brokers or dealers chosen by the Sub-Adviser to carry out the policy with respect to brokerage set forth in the Funds’ Prospectus or as the Board or the Adviser may direct in writing from time to time, in conformity with all federal securities laws and subject to the following: |
(i) | In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. |
(ii) | In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for a Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. |
(iii) | The Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers, including brokers and dealers that are affiliated with the Adviser, the Sub-Adviser, the Trust’s principal underwriter, or other Trust service providers, if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Assets be purchased from or sold to the Adviser, the Sub-Adviser, the Trust’s principal underwriter, or any affiliated person of the Trust, the Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act. |
(iv) | When the Sub-Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Sub-Adviser will allocate securities so purchased or sold, as well as the expenses incurred in the transaction, in a manner the Sub-Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. |
(v) | To the extent the Adviser or another sub-adviser is responsible for placing orders with respect to a Fund’s portfolio transactions, the Sub-Adviser shall provide to the Adviser or such other sub-adviser such information concerning the securities or other assets to be purchased or sold on behalf of the Fund reasonably necessary to execute the transactions, including the identity of such security or asset, the number of shares or principal amount to be purchased or sold, and the timing of and restrictions, if any, on the purchase or sale (e.g., a market order versus a limit order). |
(d) | The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(1), (5), (6), (7), (8), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Funds required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records that it maintains on behalf of a Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund’s request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). |
(e) | The Sub-Adviser shall provide the Funds’ custodian on each business day with information relating to all transactions concerning the Assets and shall provide the Adviser with such information upon request of the Adviser and shall otherwise cooperate with and provide reasonable assistance to the Adviser, the Trust’s administrator, the Trust’s custodian and foreign custodians, the Trust’s transfer agent and pricing agents and all other agents and representatives of the Trust. |
(f) | The Adviser acknowledges that the Sub-Adviser performs investment advisory services for various other clients in addition to the Funds and, to the extent it is consistent with applicable law and the Sub-Adviser’s fiduciary obligations, the Sub-Adviser may give advice and take action with respect to any of those other clients which may differ from the advice given or the timing or nature of action taken for a particular Fund. |
(g) | The Sub-Adviser shall promptly notify the Adviser of any financial condition that is reasonably and foreseeably likely to impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement. |
(h) | Unless the responsibility has been retained by the Adviser or delegated by the Adviser to another sub-adviser, the Sub-Adviser shall, unless and until otherwise directed by the Adviser or the Board and consistent with the best interests of each Fund, be responsible for exercising (or not exercising in its discretion) all rights of security holders with respect to securities held by each Fund, including but not limited to: reviewing proxy solicitation materials, voting and handling proxies and converting, tendering exchanging or redeeming securities. |
(i) | In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Funds or a sub-adviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds and subparagraph (c)(v) of this Section 1. The Sub-Adviser shall not provide investment advice to any assets of the Funds other than the Assets. |
(j) | The Sub-Adviser shall maintain books and records with respect to the Funds’ securities transactions and keep the Board and the Adviser fully informed on an ongoing basis as agreed by the Adviser and the Sub-Adviser of all material facts concerning the Sub-Adviser and its key investment personnel providing services with respect to the Funds and the investment and the reinvestment of the Assets of the Funds. The Sub-Adviser shall furnish to the Adviser or the Board such reasonably requested regular, periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board may reasonably request and the Sub-Adviser will attend meetings with the Adviser and/or the Trustees, as reasonably requested, to discuss the foregoing. Upon the request of the Adviser, the Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. |
(k) | The Sub-Adviser shall, in accordance with procedures and methods established by the Board, which may be amended from time to time, and in conjunction with the Adviser, promptly notify the Adviser and the Trust’s administrator/fund accountant of securities in a Fund which the Sub-Adviser believes should be fair valued in accordance with the Trust’s Valuation Procedures. Such fair valuation may be required when the Sub-Adviser becomes aware of significant events that may affect the pricing of all or a portion of a Fund’s portfolio. The Sub-Adviser will provide reasonable assistance in determining the fair value of the Assets, as necessary, and use reasonable efforts to arrange for the provision of valuation information or a price(s) from a party(ies) independent of the Sub-Adviser for which market prices are not readily available, it being understood that the Sub-Adviser will not be responsible for determining the value of any such security. |
(a) | The Trust's Agreement and Declaration of Trust (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”); |
(b) | By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “By-Laws”); |
(c) | Prospectus of the Funds; |
(d) | Resolutions of the Board approving the engagement of the Sub-Adviser as a sub-adviser to the Funds; |
(e) | Resolutions, policies and procedures adopted by the Board with respect to the Assets to the extent such resolutions, policies and procedures may affect the duties of the Sub-Adviser hereunder; and |
(f) | A list of the Trust’s principal underwriter and each affiliated person of the Adviser, the Trust or the principal underwriter. |
(a) | The Sub-Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would substantially impair the Sub-Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Sub-Adviser will promptly notify the Funds and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Sub-Adviser. The Sub-Adviser will also promptly notify the Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
The Sub-Adviser will notify the Adviser immediately upon detection of (a) any material failure to manage the Fund(s) in accordance with the Fund(s)’ stated investment objectives and policies or any applicable law; or (b) any material breach of any of the Fund(s)’ or the Sub-Adviser’s policies, guidelines or procedures; |
(d) | The Sub-Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Sub-Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Sub-Adviser is a limited liability company duly organized and validly existing under the laws of the state of Delaware with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; |
(g) | This Agreement is a valid and binding agreement of the Sub-Adviser; |
(h) | The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Sub-Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Sub-Adviser agrees to maintain errors and omissions and professional liability insurance coverage. |
(a) | The Adviser is registered as an investment adviser under the Advisers Act and will continue to be so registered so long as this Agreement remains in effect; |
(b) | The Adviser will immediately notify the Sub-Adviser of the occurrence of any event that would substantially impair the Adviser’s ability to fulfill its commitment under this Agreement or disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act. The Adviser will promptly notify the Funds and the Sub-Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, self-regulatory organization, public board or body, involving the affairs of the Funds or the Adviser. The Adviser will also promptly notify the Sub-Adviser if it is dissolved or becomes bankrupt or insolvent as defined under the provisions of title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended, modified or supplemented from time to time; |
(f) | The Adviser will notify the Sub-Adviser immediately upon detection of any material breach of any of the Fund(s)’ or the Adviser’s policies, guidelines or procedures; |
(d) | The Adviser is fully authorized under all applicable law to enter into this Agreement and serve as Adviser to the Funds and to perform the services described under this Agreement; |
(e) | The Adviser is a limited liability company duly organized and validly existing under the laws of the state of Oklahoma with the power to own and possess its assets and carry on its business as it is now being conducted; |
(f) | The execution, delivery and performance by the Adviser of this Agreement are within the Adviser’s powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser’s governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; |
(g) | This Agreement is a valid and binding agreement of the Adviser; |
(h) | The Form ADV of the Adviser previously provided to the Sub-Adviser is a true and complete copy of the form filed with the SEC and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; |
(i) | The Adviser shall not divert any Fund’s portfolio securities transactions to a broker or dealer in consideration of such broker or dealer’s promotion or sales of shares of the Fund, any other series of the Trust, or any other registered investment company; and |
(j) | The Adviser agrees to maintain errors and omissions and professional liability insurance coverage. |
(a) | Duration. This Agreement shall become effective upon the date first above written, provided that this Agreement shall not take effect with respect to a Fund unless it has first been approved by a vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval and by vote of a majority of the Fund’s outstanding securities. This Agreement shall continue in effect for a period of two years from the date hereof, subject thereafter to being continued in force and effect from year to year if specifically approved each year by the Board or by the vote of a majority of the Fund’s outstanding voting securities. In addition to the foregoing, each renewal of this Agreement must be approved by the vote of a majority of the Board who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Prior to voting on the renewal of this Agreement, the Board may request and evaluate, and the Sub-Adviser shall furnish, such information as may reasonably be necessary to enable the Board to evaluate the terms of this Agreement. |
(b) | Termination. Notwithstanding whatever may be provided herein to the contrary, this Agreement may be terminated at any time, without payment of any penalty: |
(i) | By vote of a majority of the Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Funds, or by the Adviser, in each case, upon sixty (60) days’ written notice to the Sub-Adviser; |
(ii) | By the Sub-Adviser upon sixty (60) days’ written notice to the Adviser and the Board. |
(a) | in accordance with Rule 206(4)-7 under the Advisers Act, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Sub-Adviser and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and |
(b) | to the extent that the Sub-Adviser’s activities or services could affect the Funds, the Sub-Adviser has adopted and implemented and will maintain written policies and procedures that the Trust’s chief compliance officer determines are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the 1940 Act) by the Funds and the Sub-Adviser (the policies and procedures referred to in this Section 10(b), along with the policies and procedures referred to in Section 10(a), are referred to herein as the Sub-Adviser’s “Compliance Program”). |
(a) | The Sub-Adviser shall promptly provide to the Trust’s Chief Compliance Officer (“CCO”) the following documents: |
(i) | reasonable access, at the Sub-Adviser’s principal office or such other place as may be mutually agreed to by the parties, to all SEC examination correspondences, including correspondences regarding books and records examinations and “sweep” examinations, issued during the term of this Agreement, in which the SEC identified any concerns, issues or matters (such correspondences are commonly referred to as “deficiency letters”) relating to any aspect of the Sub-Adviser’s investment advisory business and the Sub-Adviser’s responses thereto; provided that the Sub-Adviser may redact from such correspondences client specific confidential information, material subject to the attorney-client privilege, and material non-public information, that the Sub-Adviser reasonably determines should not be disclosed to the Trust’s CCO; |
(ii) | a report of any material violations of the Sub-Adviser’s Compliance Program or any “material compliance matters” (as such term is defined in Rule 38a-1 under the 1940 Act) that have occurred with respect to the Sub-Adviser’s Compliance Program; |
(iii) | on a quarterly basis, a report of any material changes to the policies and procedures that compose the Sub-Adviser’s Compliance Program; |
(iv) | a copy of the Sub-Adviser’s chief compliance officer’s report (or similar document(s) which serve the same purpose) regarding his or her annual review of the Sub-Adviser’s Compliance Program, as required by Rule 206(4)-7 under the Advisers Act; and |
(v) | an annual (or more frequently as the Trust’s CCO may reasonably request) representation regarding the Sub-Adviser’s compliance with Section 7 and Section 10 of this Agreement. |
(b) | The Sub-Adviser shall also provide the Trust’s CCO with reasonable access, during normal business hours, to the Sub-Adviser’s facilities for the purpose of conducting pre-arranged on-site compliance related due diligence meetings with personnel of the Sub-Adviser. |
(a) | The Name “Exchange Traded Concepts.” The Adviser grants to the Sub-Adviser a sublicense to use the name “Exchange Traded Concepts” (the “ETC Name”). The foregoing authorization by the Adviser to the Sub-Adviser to use the ETC Name is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the ETC Name; the Sub-Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Adviser has the right to use, or authorize others to use, the ETC Name. The Sub-Adviser shall only use the ETC Name in a manner consistent with uses approved by the Adviser. Notwithstanding the foregoing, neither the Sub-Adviser nor any affiliate or agent of it shall make reference to or use the ETC Name or any of the Adviser’s respective affiliates or clients names without the prior approval of the Adviser, which approval shall not be unreasonably withheld or delayed. The Sub-Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Sub-Adviser to satisfy the foregoing obligation. |
(b) | The Name “Horizons.” The Sub-Adviser grants to the Adviser a sublicense to use the name “Horizons ETFs Management (USA) LLC,” and “Horizons” (the “Horizons Names”). If the Adviser needs to use the name of any of the Sub-Adviser’s affiliates, it must receive permission from the Sub-Adviser, which would not be unreasonably withheld. The foregoing authorization by the Sub-Adviser to the Adviser to use the Horizons Names is not exclusive of the right of the Sub-Adviser itself to use, or to authorize others to use, the Horizons Names; the Adviser acknowledges and agrees that, as between the Sub-Adviser and the Adviser, the Sub-Adviser has the right to use, or authorize others to use, the Horizons Names. The Adviser shall only use the Horizons Names in a manner consistent with uses approved by the Sub-Adviser. Notwithstanding the foregoing, neither the Adviser nor any affiliate or agent of it shall make reference to or use the Horizons Names or any of the Sub-Adviser’s respective affiliates or clients names without the prior approval of the Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make all reasonable efforts to cause any affiliate or agent of the Adviser to satisfy the foregoing obligation. |
To the Adviser at: | Exchange Traded Concepts, LLC 2545 South Kelly Avenue, Suite C Edmond, Oklahoma 73013 Attention: J. Garrett Stevens, CEO |
To the Trust’s CCO at: | Foreside Fund Compliance Services, LLC 10 High Street, Suite 302 Boston, Massachusetts 02110 Attn: Ann Edgeworth |
To the Sub-Adviser at: | Horizons ETFs Management (USA) LLC One Bryant Park, 39th Floor New York, New York 10036 Attn: Thomas Calabria, CCO |
With a copy to: | |
Horizons ETFs Management Canada Inc. 26 Wellington Street, East, Suite 700 Toronto, Ontario M5E 1S2 Attn: Steve Hawkins, Co-CEO & CIO |
(a) | A copy of the Certificate of Trust is on file with the Secretary of State of Delaware, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. |
(b) | Where the effect of a requirement of the 1940 Act or Advisers Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Horizons ETFs Management (USA) LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | Robert Shea | ||
Title: | Chief Executive Officer | Title: | Executive Vice President, CFO |
Fund | Rate* |
Horizons S&P 500 Covered Call ETF | 0.55% of the first $500,000,000 0.57% of the next $3,500,000,000 0.60% of the next $6,000,000,000 0.62% of assets above $10,000,000,000 |
* | The sub-advisory fee rates for each Fund set forth above are based on the combined net assets of all Funds identified in the schedule. |
ADVISER: | SUB-ADVISER: | ||||
Exchange Traded Concepts, LLC | Horizons ETFs Management (USA) LLC | ||||
By: | By: | ||||
Name: | J. Garrett Stevens | Name: | Robert Shea | ||
Title: | Chief Executive Officer | Title: | Executive Vice President, CFO |
I. | Nominating Committee: Membership |
II. | Board: Selection and Tenure |
A. | The Committee shall periodically review the composition of the Board, including its size and the balance of its members’ skills, experience and background. |
B. | The Committee shall periodically review and make recommendations with regard to the tenure of the Independent Trustees, including term limits and/or age limits. |
C. | The Committee shall periodically review and make recommendations with respect to adoption of and administration of any policy for retirement from Board membership. |
III. | Board: Nominations and Functions |
A. | The Committee shall select and nominate all persons to serve as Independent Trustees. The Committee shall evaluate candidates’ qualifications for Board membership and the independence of such candidates from the investment advisers and other principal service providers for the funds of the Trusts. Persons selected must be independent in terms of both the letter and the spirit of the 1940 Act. The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence, e.g., business, financial or family relationships with investment advisers or service providers. |
B. | The Committee also shall consider proposals of and make recommendations for “interested” Trustee candidates to the Board. |
C. | The Committee may adopt from time to time specific, minimum qualifications that the Committee believes a candidate must meet before being considered as a candidate for Board membership and shall comply with any rules adopted from time to time by the U.S. Securities and Exchange Commission regarding investment company nominating committees and the nomination of persons to be considered as candidates for Board membership. |
D. | The Committee shall review shareholder recommendations for nominations to fill vacancies on the Board if such recommendations are submitted in writing and addressed to the Committee at the applicable Trust’s offices. The Committee shall adopt, by resolution, a policy regarding its procedures for considering candidates for the Board, including any recommended by shareholders. |
IV. | Committees: Selection and Review |
A. | The Committee shall periodically review committee assignments and make nominations for Independent Trustee membership on all committees. |
B. | The Committee shall periodically review and make recommendations to the full Board regarding the responsibilities and charters of any committees (other than the Audit Committee) of the Board, whether there is a continuing need for each committee, whether there is a need for additional committees, and whether committees should be combined or reorganized. |
V. | Board: Education and Operations |
A. | The Committee shall periodically review and make recommendations about ongoing education for incumbent Independent Trustees and about appropriate orientation for new Trustees. |
B. | The Committee shall periodically review and make recommendations about the organization of board meetings, including the frequency, timing and agendas of the meetings. |
C. | The Committee shall conduct a self-assessment and coordinate evaluation of the performance of the Board (and, in particular, the Independent Trustees) as a whole, at least annually, with a view towards enhancing its effectiveness. |
D. | The Committee shall periodically, with the assistance of its counsel, define and clarify the duties and responsibilities of Board members. Included among these shall be legal and fiduciary duties, expectations regarding preparation, attendance, participation at meetings, fund ownership and limitations on investments. |
VI. | Governance Committee: Operations |
A. | The Committee shall meet at the direction of its Chair as often as appropriate to accomplish its purpose. In any event, the Committee shall meet at least once each year and shall conduct at least one meeting in person. |
B. | A majority of the members of the Committee shall constitute a quorum for the transaction of business at any meeting of the Committee. The action of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the action of the Committee. The Committee may meet in person or by telephone, and the Committee may act by written consent, to the extent permitted by law and by the applicable Trust’s by-laws. In the event of any inconsistency between this Charter and a Trust’s organizational documents, the provisions of the Trust’s organizational documents shall govern. |
C. | The Committee shall submit minutes of its meeting on a regular basis and shall regularly report to the full Board no later than the next regularly scheduled Board meeting. |
D. | The Committee shall review the Committee charter at least annually and recommend appropriate changes. |
E. | The Committee shall have the resources and authority to discharge its responsibilities, including authority to retain special counsel and other experts or consultants at the expense of the appropriate Fund(s) or Trust. |
VII. | Other Powers and Responsibilities |
A. | The Committee shall monitor the performance of legal counsel for the Independent Trustees, and any other service providers (other than the independent auditors, which are monitored by the Audit Committee) that are chosen by the Independent Trustees, and shall supervise counsel for the Independent Trustees. |
B. | The Committee shall periodically review and make recommendations about any appropriate changes to director compensation to the full Board. |
C. | The Committee has the authority to review and make recommendations to the Board concerning all other matters not listed above pertaining to the functioning of the Board and committees of the Board and pertaining generally to the governance of the Trusts, including the adequacy and appropriateness of insurance coverage and the review and evaluation of possible conflicts of interest. |
Adopted: | October 20, 2009 |
Amended: | February 23, 2012 |
Adopted: | October 20, 2009 |
Amended: | February 23, 2012 |
Audit Fees(1) | Audit Related Fees(2) | Tax Fees(3) | All Other Fees(4) | |||||||||||||||||||||||||||||||
Fiscal Year End | Fiscal Year Ended 2013 | Fiscal Year Ended 2014 | Fiscal Year Ended 2013 | Fiscal Year Ended 2014 | Fiscal Year Ended 2013 | Fiscal Year Ended 2014 | Fiscal Year Ended 2013 | Fiscal Year Ended 2014 | ||||||||||||||||||||||||||
Exchange Traded Concepts Trust | 12/31 | $ | 15,100 | $ | 14,000 | $ | 0 | $ | 0 | $ | 3,500 | $ | 3,500 | $ | 0 | $ | 0 | |||||||||||||||||
Exchange Traded Concepts Trust II | 4/30 | $ | 0 | $ | 17,500 | $ | 0 | $ | 6,000 | $ | 0 | $ | 19,000 | $ | 0 | $ | 0 |
(1) | “Audit Fees” are the aggregate fees billed for professional services for the audit of the Fund’s annual financial statements and services provided in connection with statutory and regulatory filings or engagements. |
(2) | “Audit Related Fees” are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements that are not reported under “Audit Fees”. These fees include offerings related to the Fund’s common shares and leverage. |
(3) | “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. The Tax Fees for the Funds relate to the preparation of the Fund’s income and excise tax returns and the review of the Fund’s annual excise tax distribution calculations. All of such Tax Fees were required to be pre-approved, and were pre-approved, by the Audit Committee. |
(4) | “All Other Fees” are the aggregate fees billed for products and services other than “Audit Fees”, “Audit-Related Fees” and “Tax Fees”. These fees represent all “Agreed-Upon Procedures” engagements pertaining to the Fund’s use of leverage. |
3 | A “Service Affiliate” includes: (1) the Trust’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and (2) any entity controlling, controlled by, or under comment control with the investment adviser that provides ongoing services to the Trust. |
(1) | the engagement letter shall be in writing and signed by the independent auditor or its authorized representative; |
(2) | the engagement letter shall set forth the particular services to be provided by the independent auditor which shall be within the categories of pre-approved services described in Appendix A, B, C or D hereto; and |
(3) | the engagement letter shall set forth the total fees to be paid to the independent auditor for the services (or the manner of their determination), which shall not exceed the limitations on fees set forth in Appendix A, B, C or D hereto (for purposes of determining whether such fees would exceed such limitations, fees to be paid in currencies other than U.S. dollars shall be converted to and estimated in U.S. dollars at the then current exchange rate). |
Service | Maximum Fee Per Engagement Not to Exceed |
Statutory audits or financial audits for affiliates of the Funds (Not included in the annual engagement letter) | $0 |
Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents, security counts), and assistance in responding to SEC comment letters | $5,000.00 |
Consultations by the Funds’ management as to the accounting or disclosure treatment of transactions or events and/or the actual impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies | $5,000.00 |
Service | Maximum Fee Per Engagement Not to Exceed |
Reviews of internal controls over financial activities and reporting requirements, including SAS 70, SSAE 16 and similar international reports | $5,000.00 |
Consultations by the Funds’ management as to the accounting or disclosure treatment of potential transactions or events and/or the potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies | $5,000.00 |
Attestation and agreed-upon procedures engagements regarding financial data as requested by parties such as customers, underwriters, counterparties or regulators | $5,000.00 |
Service | Maximum Fee Per Engagement Not to Exceed |
U.S. federal, state, local and international tax planning and advice regarding the tax consequences of proposed or actual transactions or the operation of fund programs | $5,000.00 |
Preparation or review of federal, state, local and international income, franchise, and other tax returns | $5,000.00 |
Service | Maximum Fee Per Engagement Not to Exceed |
Attestation or review of the Funds or affiliates policies and procedures pursuant to regulatory pronouncements such as the USA PATRIOT Act, Rule 38a-1 or Rule 206(4)-7. | $5,000.00 |
· | Bookkeeping or other services related to the accounting records or financial statements of the audit client |
· | Financial information systems design and implementation |
· | Appraisal or valuation services, fairness opinions or contribution-in-kind reports |
· | Actuarial services |
· | Internal audit outsourcing services |
· | Management functions |
· | Human resources |
· | Broker-dealer, investment adviser or investment banking services |
· | Legal services |
· | Expert services unrelated to the audit |
Fund | Outstanding Shares |
Forensic Accounting ETF | 500,000 |
ROBO-STOXTM Global Robotics and Automation Index ETF | 4,450,000 |
Janus Equal Risk Weighted Large Cap ETF (formerly, VelocityShares Equal Risk Weighted Large Cap ETF) | 50,000 |
YieldShares High Income ETF | 4,250,000 |
EMQQ The Emerging Markets Internet & Ecommerce ETF | 350,000 |
Yorkville High Income MLP ETF | 20,550,000 |
Yorkville High Income Infrastructure MLP ETF | 3,000,000 |
Horizons S&P 500® Covered Call ETF | 1,700,000 |
Participant Name and Address | Percentage of Ownership |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 17.56% |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 13.64% |
Folio Investing 8180 Greensboro Drive 8th Floor McLean, VA 22102 | 12.71% |
TD Ameritrade 200 South 108th Avenue Omaha, NE 68154-2631 | 9.22% |
RBC Capital Markets World Financial Center 200 Vesey Street, 8th Floor New York, NY 10281 | 8.34% |
Knight Capital Group 545 Washington Boulevard Jersey City, NJ 07310 | 5.72% |
Participant Name and Address | Percentage of Ownership |
Brown Brothers Harriman & Co. Brown Brothers Harriman Trust Company, N. A 50 Post Office Square Boston, MA 02110-1548 | 15.68% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 14.94% |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 12.54% |
BNY Mellon One Wall Street New York, NY 10286 | 8.97% |
Pershing, LLC One Pershing Plaza Grove Street PATH Station Jersey City, NJ 07399 | 5.63% |
Participant Name and Address | Percentage of Ownership |
Citigroup Inc. 399 Park Avenue New York, NY 10022 | 51.00% |
SG America Securities, LLC 1221 Avenue of the Americas 6th Floor New York, NY 10020 | 25.62% |
Morgan Stanley Smith Barney LLC 1585 Broadway New York, NY 10036 | 5.17% |
Participant Name and Address | Percentage of Ownership |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 26.28% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 18.46% |
Pershing, LLC One Pershing Plaza Grove Street PATH Station Jersey City, NJ 07399 | 12.84% |
TD Ameritrade 200 South 108th Avenue Omaha, NE 68154-2631 | 6.99% |
Participant Name and Address | Percentage of Ownership |
TD Ameritrade 200 South 108th Avenue Omaha, NE 68154-2631 | 40.54% |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 15.71% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 10.06% |
J.P. Morgan Clearing Corp. 3 Chase Metrotech Center 7th Floor Brooklyn, NY 11245 | 7.17% |
Participant Name and Address | Percentage of Ownership |
Raymond James & Associates Inc. 880 Carillon Parkway St. Petersburg, FL 33716 | 23.77% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 17.67% |
Pershing, LLC One Pershing Plaza Grove Street PATH Station Jersey City, NJ 07399 | 9.77% |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 8.92% |
TD Ameritrade 200 South 108th Avenue Omaha, NE 68154-2631 | 6.29% |
Advanced Energy Industries, Inc. 1625 Sharp Point Drive Fort Collins, CO 80525 | 5.36% |
Participant Name and Address | Percentage of Ownership |
Raymond James & Associates Inc. 880 Carillon Parkway St. Petersburg, FL 33716 | 33.82% |
Pershing, LLC One Pershing Plaza Grove Street PATH Station Jersey City, NJ 07399 | 23.07% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 14.62% |
National Financial Services, LLC 200 Liberty Street One World Financial Centre 5th Floor New York, NY 10281-1003 | 7.77% |
Participant Name and Address | Percentage of Ownership |
Citibank, N.A. 399 Park Avenue New York, NY 10022 | 61.33% |
Charles Schwab & Co., Inc. 2423 East Lincoln Drive Phoenix, AZ 85016 | 10.67% |