1933 Act File No.: 333-210905
1940 Act File No.: 811-21056
CIK No.: 1662283
Securities and Exchange Commission
Washington, D.C. 20549
AMENDMENT NO. 5 TO REGISTRATION STATEMENT ON Form S-6
For Registration under the Securities Act
of 1933 of Securities of Unit Investment
Trusts Registered on Form N-8B-2
A. | Exact name of trust: | Advisors Disciplined Trust 1682 |
B. | Name of depositor: | Advisors Asset Management, Inc. |
C. | Complete address of depositor’s principal executive offices: |
18925 Base Camp Road
Monument, Colorado 80132
D. | Name and complete address of agent for service: |
With a copy to: | |
Scott Colyer | Scott R. Anderson |
Advisors Asset Management, Inc. | Chapman and Cutler LLP |
18925 Base Camp Road | 111 West Monroe Street |
Monument, Colorado 80132 | Chicago, Illinois 60603-4080 |
E. | Title of securities being registered: Units of undivided beneficial interest |
F. | Approximate date of proposed public offering: |
As Soon As Practicable After The Effective Date Of The Registration Statement
☐ | Check box if it is proposed that this filing will become effective on _______________ at ______ pursuant to Rule 487. |
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine.
Subject to Completion
![]() | A portfolio of exchange listed options seeking to provide enhanced returns based on the price performance of shares of the SPDR® S&P 500® ETF Trust with a buffer, subject to a capped amount Prospectus __________, 2019 |
![]() | As with any investment, the Securities and Exchange Commission has not approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any contrary representation is a criminal offense. |
INVESTMENT SUMMARY |
* | “AAM,” “we” and related terms mean Advisors Asset Management, Inc., the trust sponsor, unless the context clearly suggests otherwise. |
• | If at the close of the New York Stock Exchange on the Option Expiration Date the price of the Market Reference (the “Market Reference Level”) is greater than or equal to $___ (___% of the Initial Market Reference Level) (the “Cap”), the proceeds from the Options are intended to be approximately $___ per unit. This equates to a return of approximately ___% on an investment at the Initial Unit Price or ___% on an investment at the Fee Account Initial Unit Price, which represents a maximum capped return. |
• | If at the close of the New York Stock Exchange on the Option Expiration Date the Market Reference Level is between $___ and $___ (___% to ___% of the Initial Market Reference Level), the proceeds from the Options are intended to be between approximately $___ and $___ per unit. This equates to a return of approximately ___% to ___% on an investment at the Initial Unit Price or 0% to ___% on an investment at the Fee Account Initial Unit Price. |
• | If at the close of the New York Stock Exchange on the Option Expiration Date the Market Reference Level is between $___ and $___ (___% to 100% of the Initial Market Reference Level), the proceeds from the Options are intended to be approximately $___ per unit. This equates to a return of approximately ___% on an investment at the Initial Unit Price or 0% on an investment at the Fee Account Initial Unit Price. |
• | If at the close of the New York Stock Exchange on the Option Expiration Date the Market Reference Level is less than $___ (___% of the Initial Market Reference Level) the proceeds from the Options over the life of the trust are intended to be between approximately $___ and $___ per unit. This equates to a return of approximately between ___% (i.e. a loss of ___%) and ___% on an investment at the Initial Unit Price or between ___% (i.e. a loss of ___%) and 0% on an investment at the Fee Account Initial Unit Price. |
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• | want to own securities representing interests in written and purchased option contracts in a single investment. |
• | seek the potential for buffered returns subject to a capped amount at termination based on the price performance of the Market Reference. |
• | are uncomfortable with the risks of an unmanaged investment in written and purchased option contracts. |
• | are uncomfortable with exposure to the risks associated with the Options. |
• | are uncomfortable with exposure to the price performance of the Market Reference. |
• | are seeking unlimited capital appreciation potential and do not want potential returns capped. |
ESSENTIAL INFORMATION | ||||||||
Public Offering Price per | ||||||||
Unit at Inception* | $_____ | |||||||
Fee Account Public Offering Price per Unit at Inception* | $10.000 | |||||||
Initial Net Asset Value per Unit at Inception*† | $_____ | |||||||
Inception date | _________, 2019 | |||||||
Mandatory Termination Date | _________, ____ | |||||||
Distribution dates | 25th day of December | |||||||
Record dates | 10th day of December | |||||||
Initial distribution date | _________25, 2019 | |||||||
Initial record date | _________10, 2019 | |||||||
CUSIP Numbers | ||||||||
Standard Accounts | _________ | |||||||
Fee Based Accounts | _________ | |||||||
Ticker Symbol | _______ | |||||||
Minimum investment | $1,000/100 units | |||||||
Tax Structure | Regulated Investment Company |
* As of ____________, 2019 and may vary thereafter.
† Investors will not purchase units at the net asset value per unit.
Sales Fee | As a % of $1,000 Invested | | Amount per 100 Units | |||||||
Transactional sales fee | ____% | $ | ____ | |||||||
Creation & development fee | ____ | ____ | ||||||||
Maximum sales fee | ____% | $ | ____ | |||||||
Organization Costs | ____% | $ | ____ |
Annual operating expenses | As a % of Net Assets | | Amount per 100 Units | |||||||
Trustee fee & expenses | _.__% | $ | _____ | |||||||
Supervisory, evaluation and administration fees | _.__ | _____ | ||||||||
Total | _.__% | $ | _____ |
1 year | $ | _____ | ||||
__ years (approximate life of trust) | $ | _____ |
• | The trust’s investment strategy is designed to achieve its investment objective over the life of the trust. The trust’s investment strategy has not been designed to achieve its objective if units are bought after the trust’s inception date or redeemed prior to the trust’s mandatory termination date. |
• | Security prices will fluctuate. The value of your investment may fall over time. An investment in units represents an indirect investment in the Options. Amounts available to distribute to unitholders at termination will depend primarily on the performance of the Options and are not guaranteed. The units, upon termination of the trust and at any other point in time, may be worth less than the original investment. |
• | The trust is subject to market risk related to the Market Reference, the Underlying Index and securities in the Underlying Index held by the Market Reference. The Options represent indirect positions in the Market Reference and are subject to risks associated with changes in value as the Market Reference Level rises or falls. The investment in the Options includes the risk that their value may be adversely affected by various factors affecting the Market Reference, the Underlying Index and the value of the securities in the Underlying Index held by the Market Reference. The Market Reference is an exchange-traded fund that seeks to track the performance of the Underlying Index which consists of common stock of 500 leading companies in leading industries of the U.S. economy. Stocks are subject to the risk that their prices will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. The Underlying Index tracks a subset of the U.S. stock market, which could cause the Underlying Index and Market Reference to perform differently from the overall stock market. In addition, the Underlying Index and Market Reference may, at times, become focused in stocks of a particular market sector, which would subject the Market Reference and the trust to proportionately higher exposure to the risks of that sector. Although common stocks have historically generated higher average returns than fixed-income securities over the long term, common stocks also have experienced significantly more volatile returns. Common stocks are structurally subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure, and represent a residual claim on the issuer’s assets that have no value unless such assets are sufficient to cover all other claims. The value of the Options is based on the value of the Market Reference Level as of the close of the market on the Option Expiration Date only, and will be substantially determined by market conditions as of such time. |
• | The trust seeks to provide returns related to the price performance of the Market Reference only, which does not include returns from dividends paid by the Market Reference. The Options reference the price of shares of the Market Reference only and not dividend payments paid by the Market Reference. |
• | The trust return is subject to a capped upside. The intended return for units purchased on the trust’s inception date and held for the life of the trust is based on the Market Reference Level and the value of the Options on the Option Expiration Date and is subject to a capped amount of $____ per trust unit and may represent a return that is worse than the performance of the Market Reference. Even if there are significant increases in the Market Reference Level, the |
amount you may receive is capped at $ per trust unit. |
• | You may lose all or a portion of your investment. The trust does not provide principal protection and you may not receive a return of the capital you invest. |
• | You may experience significant losses on your investment up to an almost total loss on your investment if the price of the Market Reference decreases by greater than % from the Initial Market Reference Level. You may realize a return (including a loss) that is higher or lower than the intended returns as a result of redeeming units prior to the trust’s mandatory termination date and in various circumstances including where Options are liquidated by the trust prior to their expiration, if the trust is unable to maintain the proportional relationship of the Options based on the number of Option contracts in the trust’s portfolio, or increases in potential tax-related and other expenses of the trust above estimated levels. |
• | The written Options create an obligation for the trust. As a result, after the premium is received on the written Options, the written Options will reduce the value of your units. |
• | The values of the Options do not increase or decrease at the same rate as changes in the price of the Market Reference or the Underlying Index. The Options are all European style options, which means that they will be exercisable at the strike price only on the Option Expiration Date. Prior to their expiration on the Option Expiration Date, the value of the Options is determined based upon market quotations, the last asked or bid price in the over-the-counter market or using other recognized pricing methods. The value of the Options prior to their expiration on the Option Expiration Date may vary because of factors other than the price of the Market Reference. Factors that may influence the value of the Options include interest rate changes, implied volatility levels of the Market Reference, the Underlying Index and securities comprising the Underlying Index and implied dividend levels of the Market Reference, the Underlying Index and securities comprising the Underlying Index, among others. The value of the Market Reference may not increase or decrease at the same rate as the Underlying Index due to “tracking error” described below. |
• | Certain features of the Market Reference, which is an exchange-traded fund, will impact the value of the units. The value of the Market Reference is subject to factors such as the following: |
o | Passive Investment Risk. The Market Reference is not actively managed and attempts to track the performance of an unmanaged index of securities. This differs from an actively managed fund, which typically seeks to outperform a benchmark index. As a result, the Market Reference will hold constituent securities of the Underlying Index regardless of the current or projected performance on a specific security or particular industry or market sector. Maintaining investments in the securities regardless of market conditions of the performance of individual securities could cause the Market Reference’s returns to be lower than if it employed an active strategy. |
o | Index Tracking Risk. While the Market Reference is intended to track the performance of the Underlying Index, the Market Reference’s returns may not match or achieve a high degree of correlation with the return of the Underlying Index due to expenses and transaction costs. In addition, it is possible that the Market Reference may not always fully replicate the performance of the Underlying Index. |
• | The trust may experience substantial downside from the Options and option contract positions may expire worthless. |
• | Credit risk is the risk an issuer, guarantor or counterparty of a security in the trust is unable or unwilling to meet its obligation on the security. The OCC acts as guarantor and central counter-party with respect to the Options. As a result, the ability of the trust to meet its objective depends on the OCC being able to meet its obligations. |
• | Liquidity risk is the risk that the value of a security will fall in value if trading in the security is limited or absent. The Options are listed on the CBOE; however, no one can guarantee that a liquid secondary trading market will exist for the Options. Trading in the Options may be less deep and liquid than certain other securities. The Options may be less liquid than certain non-customized options. In a less liquid market for the Options, liquidating the Options may require the payment of a premium (for written Options) or acceptance of a discounted price (for purchased Options) and may take longer to complete. In a less liquid market for the Options, the liquidation of a large number of options may more significantly impact the price. A less liquid trading market may adversely impact the value of the Options and your units and result in the trust being unable to achieve its investment objective. |
• | The trust might not achieve its objective in certain circumstances. Certain circumstances under which the trust might not achieve its objective include if the trust disposes of Options early, if the trust is unable to maintain the proportional relationship among the Options in the trust’s portfolio or due to adverse tax law or other changes affecting treatment of the Options. |
• | The cash deposited may be insufficient to meet the expenses of the trust. If the cash balances in the trust’s accounts are insufficient to provide for expenses and other amounts payable by the trust, the trust may sell trust property to pay such amounts. These sales may result in losses to unitholders and the inability of the trust to meet its investment objective. There is no assurance that your investment will maintain its size or composition. |
• | The trustee has the power to terminate your trust early in limited cases as described under “Understanding Your Investment—How Your Trust Works—Termination of Your Trust” including if the value of the trust is less than 40% of the original value of the securities in the trust at the time of deposit. If the trust terminates early, the trust may suffer losses and be unable to achieve its investment objective. This could result in a reduction in the value of units and result in a significant loss to investors. |
• | An investment in the trust is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. |
• | We do not actively manage the portfolio. Except in limited circumstances, the trust will hold, and continue to buy interests in the same securities even if their market value declines. |
ACE MLTSM, Buffered Portfolio Series 2019-1
(Advisors Disciplined Trust 1682)
Portfolio — As of the Initial Date of Deposit, ____________, 2019
Description of Options(1)(4) | | Strike Price | | Strike Price as a Percentage of the Initial Market Reference Level | | Number of Option Contracts(4) | | Market Value per Option(2) | | Percentage of Aggregate Offering Price | | Cost of Securities to Trust(2) | |||||||||||||||
OPTIONS — ______% | |||||||||||||||||||||||||||
Purchased Options — ______% | |||||||||||||||||||||||||||
Purchased Call Options on the SPDR® S&P 500® ETF Trust, Expiring ____________, 2020 (3) | |||||||||||||||||||||||||||
Purchased Put Options on the SPDR® S&P 500® ETF Trust, Expiring ____________, 2020 (3) | |||||||||||||||||||||||||||
Written Options — ______% | |||||||||||||||||||||||||||
Written Call Options on the SPDR® S&P 500® ETF Trust, Expiring ____________, 2020 (3) | |||||||||||||||||||||||||||
Written Put Options on the SPDR® S&P 500® ETF Trust, Expiring ____________, 2020 (3) | |||||||||||||||||||||||||||
TOTAL | __.__% | $ | ______ | ||||||||||||||||||||||||
See “Notes to Portfolio” |
(1) | Securities are represented by contracts to purchase such securities. |
(2) | Advisors Asset Management, Inc. is the evaluator of the trust. Capelogic, Inc., an independent pricing service, determined the initial prices of the securities shown in this prospectus at the close of regular trading on the New York Stock Exchange on the business day before the date of this prospectus. The value of Options is based on the last quoted sale price for the Options (bid-side for the purchased Options and ask-side for the written Options). Accounting Standards Codification 820, “Fair Value Measurements” establishes a framework for measuring fair value and expands disclosure about fair value measurements in financial statements for the trust. The framework under the standard is comprised of a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: |
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the trust has the ability to access as of the measurement date. |
Level 2: Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. |
Level 3: Significant unobservable inputs that reflect a trust’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
The cost of the securities to the sponsor and the sponsor’s profit or (loss) (which is the difference between the cost of the securities to the sponsor and the cost of the securities to the trust) are $__________ and $__________, respectively. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing those securities. Changes in valuation techniques may result in transfers in or out of an investment’s assigned level as described above. The following table summarizes the trust’s investments as of ____________, 2019, based on inputs used to value them: |
| Level 1 | | Level 2 | | Level 3 | |||||||||
Purchased Options | $ | $ | $ | |||||||||||
Written Options | ||||||||||||||
Total | $ | $ | $ |
(3) | This is a non-income producing security. |
(4) | Each Option contract entitles the holder thereof (i.e. the purchaser) to purchase (for the call options) or sell (for the put options) 100 shares of the Market Reference on the Option Expiration Date at the Option’s strike price multiplied by 100. |
UNDERSTANDING YOUR INVESTMENT |
PRINCIPAL INVESTMENT STRATEGY
Level). If the Market Reference Level is less than or equal to the strike price at the close of the New York Stock Exchange on the Option Expiration Date, the ITM Purchased Call Options will expire without net proceeds being payable to the trust (i.e. the ITM Purchased Call Options will expire worthless). If the Market Reference Level is greater than the strike price at the close of the New York Stock Exchange on the Option Expiration Date, then the ITM Purchased Call Options are intended to collectively provide for per unit dollar amount proceeds of $___ multiplied by ((the Market Reference Level at the close of the New York Stock Exchange on the Option Expiration Date divided by the Initial Market Reference Level) minus ___%) to the trust on the Option Expiration Date.
report) to obtain an understanding of the issuer’s business and financial prospects. The summary information contained below is not designed to be, and should not be interpreted as, an effort to present information regarding the financial prospects of any issuer or any trends, events or other factors that may have a positive or negative influence on those prospects or as an endorsement of any particular issuer or exchange-traded fund. We have not undertaken any independent review or due diligence of the SEC filings of the issuer of the Market Reference or of any other publicly available information regarding such issuer.
disclosures relating to the trust or the Options. SPDR® S&P 500® ETF Trust, PDR Services, LLC and S&P Dow Jones Indices LLC make no representations or warranties, express or implied, regarding the advisability of investing in the trust or the Options or results to be obtained by the trust or the Options, unitholders or any other person or entity from use of the Market Reference. SPDR® S&P 500® ETF Trust, PDR Services, LLC and S&P Dow Jones Indices LLC have no liability in connection with the management, administration, marketing or trading of the trust or the Options.
does not represent the price any unitholder will pay for units or the returns any unitholders will receive. The “Hypothetical Returns” based on the “Initial Unit Price” represents the percentage return an investor would receive if they bought units at the Initial Unit Price and received the amount shown under “Hypothetical Total Amount for Trust” on such units. The “Hypothetical Returns” based on the “Fee Account Initial Unit Price” represents the percentage return an investor would receive if they bought units at the Fee Account Initial Unit Price and received the amount shown under “Hypothetical Total Amount for Trust” on such units.
Hypothetical Examples
Hypothetical Market Reference Level | Hypothetical Option Proceeds (per Unit) | Hypothetical Returns | |||||||||||||||
Percentage Change | Market Reference Level | ITM Purchased Call Options | OTM Written Call Options | ATM Purchased Put Options | OTM Written Put Options | Hypothetical Total Amount for Trust | Initial NAV ( $_____) | Initial Unit Price ( $10) | Fee Account Initial Unit Price ($______) | ||||||||
35% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
30% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
25% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
20% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
15% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
10% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
5% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
3% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
0% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-3% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-5% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-10% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-15% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-20% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-25% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-30% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-35% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-40% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-45% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-50% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-55% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-60% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-65% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-70% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-75% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-80% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-85% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-90% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-95% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% | ||
-100% | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | $ | ____ | ____% | ____% | ____% |
• | the trust receiving $___ per unit on the ITM Purchased Call Options; |
• | the trust paying $___ per unit on the OTM Written Call Options; and |
• | no amounts being paid on the OTM Written Put Options or ATM Purchased Put Options (i.e. expiring worthless). |
• | the trust receiving $___ per unit on the ITM Purchased Call Options; and |
• | no amounts being paid on the OTM Written Call Options, OTM Written Put Options or ATM Purchased Put Options (i.e. expiring worthless). |
• | the trust receiving a payment of $___ per unit on the ITM Purchased Call Options; and |
• | no payments being made on the OTM Written Call Options, the OTM Written Put Options or the ATM Purchased Put Options (i.e. expiring worthless). |
• | the trust receiving $___ per unit on the ITM Purchased Call Options; |
• | the trust receiving $___ per unit on the ATM Purchased Put Options; and |
• | no amounts being paid on the OTM Written Call Options or the OTM Written Put Options (i.e. expiring worthless). |
• | the trust receiving $___ per unit on the ITM Purchased Call Options; |
• | the trust paying $___ per unit on the OTM Written Put Options; |
• | the trust receiving $___ per unit on the ATM Purchased Put Options; |
• | no amounts being paid on the OTM Written Call Options (i.e. expiring worthless). |
• | the net asset value per unit plus |
• | cash to pay organization costs plus |
• | the sales fee. |
Transactional sales fee | 0.00% | |||||
Creation and development fee | ____% | |||||
Total sales fee | ____% |
certain transaction or account activities. We reserve the right to limit or deny purchases of units in Fee Accounts by investors or selling firms whose frequent trading activity is determined to be detrimental to the trust.
documentation (this will usually only take two business days). The only time the trustee can delay your payment is if the New York Stock Exchange is closed (other than weekends or holidays), the Securities and Exchange Commission determines that trading on that exchange is restricted or an emergency exists making sale or evaluation of the securities not reasonably practicable, and for any other period that the Securities and Exchange Commission permits.
your units will also fall. We cannot guarantee that your trust will achieve its objective or that your investment return will be positive over any period.
there are significant increases in the Market Reference Level, the amount you may receive is capped at $___ per trust unit. You may experience significant losses on your investment if the value of the Market Reference declines. You may realize a return (including a loss) that is higher or lower than the intended returns as a result of redeeming units prior to the trust’s mandatory termination date and in various circumstances including where Options are otherwise liquidated by the trust prior to their expiration or maturity, if the trust is unable to maintain the proportional relationship of the Options based on the number of Option contracts in the trust’s portfolio or increases in potential expenses of the trust above estimated levels.
Insurance Corporation or any other government agency.
• | to pay expenses, |
• | to issue additional units or redeem units, |
• | in limited circumstances to protect the trust, |
• | to make required distributions or avoid imposition of taxes on the trust, or |
• | as permitted by the trust agreement. |
“Investment Summary” section of this prospectus or upon the earlier maturity, payment, redemption, sale or other liquidation of all of the securities in the portfolio. The trustee may terminate your trust early if the value of the trust is less than 40% of the original value of the securities in the trust at the time of deposit. At this size, the expenses of your trust may create an undue burden on your investment. The trustee may terminate your trust is it fails to qualify as a “regulated investment company” for tax purposes. Investors owning two-thirds of the units in your trust may also vote to terminate the trust early. The trustee will liquidate the trust in the event that a sufficient number of units not yet sold to the public are tendered for redemption so that the net worth of a trust would be reduced to less than 40% of the value of the securities at the time they were deposited in a trust. If this happens, we will refund any sales charge that you paid.
of the sales fee when they sell units. During the initial offering period, the broker-dealer concession or agency commission for broker-dealers and other firms is ____% of the public offering price per unit at the time of the transaction. After the initial offering period, the broker-dealer concession or agency commission for secondary market transactions is equal to ___% of the public offering price per unit at the time of the transaction. No broker-deal concession or agency commission is paid to broker-dealers, investment advisers or other selling firms in connection with unit sales in Fee Accounts subject to a Wrap Fee.
Initial Offering Period Sales In Preceding 12 Months | Volume Concession | |||||
$25,000,000 but less than $100,000,000 | 0.035 | % | ||||
$100,000,000 but less than $150,000,000 | 0.050 | |||||
$150,000,000 but less than $250,000,000 | 0.075 | |||||
$250,000,000 but less than $1,000,000,000 | 0.100 | |||||
$1,000,000,000 but less than $5,000,000,000 | 0.125 | |||||
$5,000,000,000 but less than $7,500,000,000 | 0.150 | |||||
$7,500,000,000 or more | 0.175 |
by the intermediary, the level or expected level of sales of our products by the intermediary or its agents, the placing of our products on a preferred or recommended product list and access to an intermediary’s personnel. We may make these payments for marketing, promotional or related expenses, including, but not limited to, expenses of entertaining retail customers and financial advisors, advertising, sponsorship of events or seminars, obtaining information about the breakdown of unit sales among an intermediary’s representatives or offices, obtaining shelf space in broker-dealer firms and similar activities designed to promote the sale of our products. We make such payments to a substantial majority of intermediaries that sell our products. We may also make certain payments to, or on behalf of, intermediaries to defray a portion of their costs incurred for the purpose of facilitating unit sales, such as the costs of developing or purchasing trading systems to process unit trades. Payments of such additional compensation described in this paragraph and the volume concessions described above, some of which may be characterized as “revenue sharing,” may create an incentive for financial intermediaries and their agents to sell or recommend our products, including your trust, over other products. These arrangements will not change the price you pay for your units.
long-term capital gains regardless of how long you have owned your units. To determine your actual tax liability for your capital gains dividends, you must calculate your total net capital gain or loss for the tax year after considering all of your other taxable transactions, as described below. In addition, the trust may make distributions that represent a return of capital for tax purposes and thus will generally not be taxable to you. The tax status of your distributions from your trust is not affected by whether you reinvest your distributions in additional units or receive them in cash. The income from your trust that you must take into account for federal income tax purposes is not reduced by amounts used to pay a deferred sales fee, if any. The tax laws may require you to treat distributions made to you in January as if you had received them on December 31 of the previous year. Under the “Health Care and Education Reconciliation Act of 2010,” income from the trust may also be subject to a 3.8 percent “medicare tax”. This tax will generally apply to your net investment income if your adjusted gross income exceeds certain threshold amounts, which are $250,000 in the case of married couples filing joint returns and $200,000 in the case of single individuals.
trust would have recognized had the trust held the underlying referenced securities, all or a portion of the capital gain recognized by the trust may be recharacterized as ordinary income. In certain circumstances, an interest charge may also be applied.
subject to the distribution requirement and would be taken into account for purposes of the 4% excise tax. Dividends paid by PFICs are not treated as qualified dividend income.
Advisors Disciplined Trust 1682
_______, 2019
Advisors Disciplined Trust 1682 Statement of Financial Condition as of _________, 2019 | | | | |||||||||||
Investment in securities | ||||||||||||||
Contracts to purchase purchased Options (1)(2) | $ | |||||||||||||
Cash (3)(4) | ||||||||||||||
Total | $ | |||||||||||||
Liabilities and interest of investors | ||||||||||||||
Liabilities: | ||||||||||||||
Value of written Options (1) | �� | |||||||||||||
Organization costs (3) | ||||||||||||||
Creation and development fee (4) | ||||||||||||||
Interest of investors: | ||||||||||||||
Cost to investors (5) | ||||||||||||||
Less: sales fee (4)(5) | ||||||||||||||
Less: organization costs and creation and development fee (3)(4)(5) | ||||||||||||||
Net interest of investors | ||||||||||||||
Total | $ | |||||||||||||
Number of units | ||||||||||||||
Net asset value per unit | $ |
(1) | The trust invests in a portfolio of Options. Aggregate cost of the securities is listed under the “Portfolio” and is based on their underlying value. |
(2) | Cash or an irrevocable letter of credit has been deposited with the trustee covering the funds necessary for the purchase of securities in the trust represented by purchase contracts. |
(3) | A portion of the public offering price represents an amount of cash sufficient to pay for all or a portion of the costs incurred in establishing the trust. These costs have been estimated at $_____ per unit for the trust. A distribution will be made as of the earlier of the close of the initial offering period or six months following the trust’s inception date to an account maintained by the trustee from which this obligation of the investors will be satisfied. To the extent the actual organization costs are greater than the estimated amount, only the estimated organization costs added to the public offering price will be reimbursed to the sponsor and deducted from the assets of the trust. |
(4) | The total sales fee consists of a transactional sales fee and a creation and development fee. The transactional sales fee is equal to the difference between the maximum sales fee and the creation and development fee. The maximum sales fee is equal to ___% of the public offering price. The creation and development fee is equal to $___ per unit. A portion of the public offering price per unit consists of an amount of cash to pay this fee. |
(5) | The aggregate cost to investors includes the applicable sales fee assuming no reduction of sales fees. |
Investment Summary | ||||||||
A concise description of essential information about the portfolio | 2 Market Linked Trusts 2 Investment Objective 2 Principal Investment Strategy 4 Graph of Hypothetical Total Amount for Trust 5 Who Should Invest 5 Essential Information 5 Fees and Expenses 6 Principal Risks 9 Portfolio |
Understanding Your Investment | ||||||||
Detailed information to help you understand your investment | 11 Additional Information about the Principal Investment Strategy 14 Hypothetical Examples 19 How to Buy Units 21 How to Sell Your Units 22 Distributions 22 Investment Risks 25 How Your Trust Works 28 Taxes 31 Expenses 32 Experts 32 Additional Information 33 Report of Independent Registered Public Accounting Firm 34 Statement of Financial Condition |
Where to Learn More | ||||||||
You can contact us for free information about this and other investments, including the Information Supplement | Visit us on the Internet http://www.AAMlive.com Call Advisors Asset Management, Inc. (877) 858-1773 Call The Bank of New York Mellon (800) 848-6468 |
Additional Information | ||||||||
This prospectus does not contain all information filed with the Securities and Exchange Commission. To obtain or copy this information including the Information Supplement (a duplication fee may be required): |
E-mail: | publicinfo@sec.gov | ||||||
Write: | Public Reference Section Washington, D.C. 20549 | ||||||
Visit: | http://www.sec.gov (EDGAR Database) | ||||||
Call: | 1-202-551-8090 (only for information on the operation of the Public Reference Section) | ||||||
Refer to: | |||||||
Advisors Disciplined Trust 1682 | |||||||
Securities Act file number: 333-210905 | |||||||
Investment Company Act file number: 811-21056 |
BUFFERED PORTFOLIO,
SERIES 2019-1
![](https://capedge.com/proxy/S-6A/0000891092-19-008952/aam.jpg)
Advisors Disciplined Trust 1682
ACE MLTSM, Buffered Portfolio Series 2019-1
Information Supplement
This Information Supplement provides additional information concerning each trust described in the prospectus for the Advisors Disciplined Trust series identified above. This Information Supplement should be read in conjunction with the prospectus. It is not a prospectus. It does not include all of the information that an investor should consider before investing in a trust. It may not be used to offer or sell units of a trust without the prospectus. This Information Supplement is incorporated into the prospectus by reference and has been filed as part of the registration statement with the Securities and Exchange Commission for each applicable trust. Investors should obtain and read the prospectus prior to purchasing units of a trust. You can obtain the prospectus without charge at www.aamlive.com or by contacting your financial professional or by contacting the unit investment trust division of Advisors Asset Management, Inc. at 18925 Base Camp Road, Suite 203, Monument, Colorado 80132 or at 8100 East 22nd Street North, Building 800, Suite 102, Wichita, Kansas 67226 or by calling (877) 858-1773. This Information Supplement is dated as of the date of the prospectus.
Contents
General Information | 2 |
Investment Objective and Policies | 3 |
Risk Factors | 5 |
Administration of the Trust | 10 |
Portfolio Transactions and Brokerage Allocation | 19 |
Purchase, Redemption and Pricing of Units | 19 |
Performance Information | 27 |
General Information
Each trust is one of a series of separate unit investment trusts (“UITs”) created under the name Advisors Disciplined Trust and registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Each trust was created as a common law trust on the initial date of deposit set forth in the prospectus for such trust under the laws of the state of New York. Each trust was created under a trust agreement among Advisors Asset Management, Inc. (as sponsor/depositor, evaluator and supervisor) and The Bank of New York Mellon (as trustee).
When a trust was created, the sponsor delivered to the trustee securities or contracts for the purchase thereof for deposit in the trust and the trustee delivered to the sponsor documentation evidencing the ownership of units of the trust. At the close of the New York Stock Exchange on a trust’s initial date of deposit or the first day units are offered to the public, the number of units may be adjusted so that the public offering price per unit equals $10. The number of units, fractional interest of each unit in a trust will increase or decrease to the extent of any adjustment. Additional units of a trust may be issued from time to time by depositing in the trust additional securities (or contracts for the purchase thereof together with cash or irrevocable letters of credit) or cash (including a letter of credit or the equivalent) with instructions to purchase additional securities. As additional units are issued by a trust, the aggregate value of the securities in the trust will be increased and the fractional undivided interest in the trust represented by each unit will be decreased. The sponsor may continue to make additional deposits of securities into a trust, provided that such additional deposits will be in amounts which will generally maintain the existing relationship among the number of options contracts in such trust. Thus, although additional units will be issued, each unit will generally continue to represent the approximately same number of contracts of each option. If the sponsor deposits cash to purchase additional securities, existing and new investors may experience a dilution of their investments and a reduction in their anticipated income because of fluctuations in the prices of the securities between the time of the deposit and the purchase of the securities and because a trust will pay any associated brokerage fees.
Neither the sponsor nor the trustee shall be liable in any way for any failure in any of the securities. However, should any contract for the purchase of any of the securities initially deposited in a trust fail, the sponsor will, unless substantially all of the moneys held in the trust to cover such purchase are reinvested in substitute securities in accordance with the trust agreement, refund the cash and sales charge attributable to such failed contract to all unitholders on the next distribution date.
Investment Objective and Policies
The trust seeks to provide enhanced returns based on the performance of the SPDR® S&P 500® ETF Trust (the “Market Reference”) with a buffer, subject to a capped amount. The prospectus provides additional information regarding the trust’s objective and investment strategy.
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The trust is a UIT and is not an “actively managed” fund. Traditional methods of investment management for a managed fund typically involve frequent changes in a portfolio of securities on the basis of economic, financial and market analysis. The portfolio of a trust, however, will not be actively managed and therefore the adverse financial condition of an issuer will not necessarily require the sale of its securities from a portfolio.
The sponsor may not alter the portfolio of a trust by the purchase, sale or substitution of securities, except in special circumstances as provided in the applicable trust agreement. Thus, the assets of a trust will generally remain unchanged under normal circumstances. Each trust agreement provides that the sponsor may direct the trustee to sell, liquidate or otherwise dispose of securities in the trust at such price and time and in such manner as shall be determined by the sponsor, provided that the supervisor has determined, if appropriate, that any one or more of the following conditions exist with respect to such securities: (i) that there has been a default in the payment of dividends, interest, principal or other payments, after declared and when due and payable; (ii) that any action or proceeding has been instituted at law or equity seeking to restrain or enjoin the payment of dividends, interest, principal or other payments on securities after declared and when due and payable, or that there exists any legal question or impediment affecting such securities or the payment of dividends, interest, principal or other payments from the same; (iii) that there has occurred any breach of covenant or warranty in any document relating to the issuer of the securities which would adversely affect either immediately or contingently the payment of dividends, interest, principal or other payments on the securities, or the general credit standing of the issuer or otherwise impair the sound investment character of such securities; (iv) that there has been a default in the payment of dividends, interest, principal, income, premium or other similar payments, if any, on any other outstanding obligations of the issuer of such securities; (v) that the price of the security has declined to such an extent or other such credit factors exist so that in the opinion of the supervisor, as evidenced in writing to the trustee, the retention of such securities would be detrimental to the trust and to the interest of the unitholders; (vi) that all of the securities in the trust will be sold pursuant to termination of the trust; (vii) that such sale is required due to units tendered for redemption; (viii) that there has been a public tender offer made for a security or a merger or acquisition is announced affecting a security, and that in the opinion of the supervisor the sale or tender of the security is in the best interest of the unitholders; (ix) if the trust is designed to be a grantor trust for tax purposes, that the sale of such securities is required in order to prevent the trust from being deemed an association taxable as a corporation for federal income tax purposes; (x) if the trust has elected to be a regulated investment company (a “RIC”) for tax purposes, that such sale is necessary or advisable (a) to maintain the qualification of the trust as a RIC or (b) to provide funds to make any distribution for a taxable year in order to avoid imposition of any income or excise taxes on the trust or on undistributed income in the trust; (xi) that as result of the ownership of the security, the trust or its unitholders would be a direct or indirect shareholder of a passive foreign investment company as defined in section 1297(a) of the Internal Revenue Code; or (xii) that such sale is necessary for the trust to comply with such federal and/or state securities laws, regulations and/or regulatory actions and interpretations which may be in effect from time to time. The trustee may also sell securities, designated by the supervisor, from a trust for the purpose of the payment of expenses. In the event a security is sold as a direct result of serious adverse credit factors affecting the issuer of such security and a trust is a RIC for tax purposes, then the sponsor may, if permitted by applicable law, but is not obligated, to direct the
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reinvestment of the proceeds of the sale of such security in any other securities which meet the criteria necessary for inclusion in such trust on the initial date of deposit.
If the trustee is notified at any time of any action to be taken or proposed to be taken by holders of the portfolio securities, the trustee will notify the sponsor and will take such action or refrain from taking any action as the sponsor directs and, if the sponsor does not within five business days of the giving of such notice direct the trustee to take or refrain from taking any action, the trustee will take such reasonable action or refrain from taking any action so that the
securities are voted as closely as possible in the same manner and the same general proportion, with respect to all issues, as are shares of such securities that are held by owners other than the trust. Notwithstanding the foregoing, in the event that the trustee shall have been notified at any time of any action to be taken or proposed to be taken by holders of shares of any registered investment company, the trustee will thereupon take such reasonable action or refrain from taking any action with respect to the fund shares so that the fund shares are voted as closely as possible in the same manner and the same general proportion, with respect to all issues, as are shares of such fund shares that are held by owners other than the related trust.
In the event that an offer by the issuer of any of the securities or any other party is made to issue new securities, or to exchange securities, for trust portfolio securities, the trustee will reject such offer, provided that in the case of a trust that is a RIC for tax purposes, if an offer by the issuer of any of the securities or any other party is made to issue new securities, or to exchange securities, for trust portfolio securities, the trustee will at the direction of the sponsor, vote for or against, or accept or reject, any offer for new or exchanged securities or property in exchange for a trust portfolio security. If any such issuance, exchange or substitution occurs (regardless of any action or rejection by a trust), any securities, cash and/or property received will be deposited into the trust and will be promptly sold, if securities or property, by the trustee pursuant to the sponsor’s direction, unless the sponsor advises the trustee to keep such securities, cash or property. The sponsor may rely on the supervisor in so advising the trustee.
Proceeds from the sale of securities (or any securities or other property received by a trust in exchange for securities) are credited to the Capital Account of the trust for distribution to unitholders or to meet redemptions. Except for failed securities and as provided herein, in a prospectus or in a trust agreement, the acquisition by a trust of any securities other than the portfolio securities is prohibited.
Because certain of the securities in certain of the trusts may from time to time under certain circumstances be sold or otherwise liquidated and because the proceeds from such events will be distributed to unitholders and will not be reinvested, no assurance can be given that a trust will retain for any length of time its present size and composition. Neither the sponsor nor the trustee shall be liable in any way for any default, failure or defect in any security. In the event of a failure to deliver any security that has been purchased for a trust under a contract (“Failed Securities”), the sponsor is authorized under the trust agreement to direct the trustee to acquire other securities (“Replacement Securities”) to make up the original corpus of such trust.
The Replacement Securities must be securities as originally selected for deposit in a trust or, in the case of a trust that is a RIC for tax purposes, securities which the sponsor determines to
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be similar in character as the securities originally selected for deposit in the trust and the purchase of the Replacement Securities may not adversely affect the federal income tax status of the trust. The Replacement Securities must be purchased within thirty days after the deposit of the Failed Security. Whenever a Replacement Security is acquired for a trust, the trustee shall notify all unitholders of the trust of the acquisition of the Replacement Security and shall, on the next monthly distribution date which is more than thirty days thereafter, make a pro rata distribution of the amount, if any, by which the cost to the trust of the Failed Security exceeded the cost of the Replacement Security. The trustee will not be liable or responsible in any way for depreciation or loss incurred by reason of any purchase made pursuant to, or any failure to make any purchase of Replacement Securities. The sponsor will not be liable for any failure to instruct the trustee to purchase any Replacement Securities, nor shall the trustee or sponsor be liable for errors of judgment in connection with Failed Securities or Replacement Securities.
If the right of limited substitution described in the preceding paragraphs is not utilized to acquire Replacement Securities in the event of a failed contract, the sponsor will refund the sales charge attributable to such Failed Securities to all unitholders of the related trust and the trustee will distribute the cash attributable to such Failed Securities not more than thirty days after the date on which the trustee would have been required to purchase a Replacement Security. In addition, unitholders should be aware that, at the time of receipt of such cash, they may not be able to reinvest such proceeds in other securities at a return equal to or in excess of the return which such proceeds would have earned for unitholders of a trust. In the event that a Replacement Security is not acquired by a trust, the income for such trust may be reduced.
Risk Factors
Market Risk. Market risk is the risk that the value of the securities in your trust will fluctuate. This could cause the value of your units to fall below your original purchase price. Market values fluctuate in response to various factors. These can include factors such as changes in interest rates, inflation, the financial condition of a security’s issuer, perceptions of the issuer, or ratings on a security. While the Options are individually related to the Market Reference Level, the return on the Options depends on the Market Reference Level at the close of the New York Stock Exchange on the Option Expiration Date. Even though we supervise your portfolio, you should remember that we do not manage your portfolio. Your trust will not liquidate an asset solely because the market value falls as is possible in a managed fund.
Options Risk. The value of the Options will be affected by changes in the value of the Market Reference, the Underlying Index and its underlying securities, changes in interest rates, changes in the actual and perceived volatility of the stock market, the Market Reference, the Underlying Index and its underlying securities, and the remaining time to the Option Expiration Date, among other things. The value of the Options does not increase and decrease at the same rate as the Market Reference Level. However, as an option approaches its expiration date, its value is expected to increasingly move with the applicable reference. The written Options create an obligation for the trust. As a result, after the premium is received on the written Options, the written Options will reduce the value of your units. The trust may experience substantial downside from specific option contracts positions and option contract positions may expire worthless. The Options are intended to be liquidated on the Option Expiration Date, rather than
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be exercised, in order to avoid having the trust receive shares of the Market Reference Asset or be obligated to deliver shares of the Market Reference. As a result, the return actually realized on the Options upon liquidation could vary from the returns that would be realized if the Options were exercised based on the price of shares of the Market Reference as of the close of the market on the Option Expiration Date.
Market Reference Performance and Equity Risk. The Options contracts represent indirect positions in the Market Reference and are subject to changes in value as the Market Reference Level rises or falls. The anticipated proceeds from of the Options is based on the Market Reference Level at the close of the New York Stock Exchange on the Option Expiration Date, and will be substantially determined by market conditions and the Market Reference Level and the value of the securities comprising the Market Reference as of such time. The Market Reference Level will fluctuate over time based on changes in the value of the Underlying Index and securities represented by the Market Reference which are subject to risks associated with investments in equity securities including changes in general economic conditions, expectations for future economic growth and corporate profits, interest rates and the supply and demand for securities.
Potential for Loss of Some or All of Your Investment. Your investment in the trust may result in a significant loss including the possibility of the loss of all of your initial investment.
Credit Risk. An issuer, guarantor or counterparty of a security in the trust is unable or unwilling to meet its obligation on the security. The OCC is guarantor and central counterparty with respect to the Options. As a result, the ability of the trust to meet its objective depends on the OCC being able to meet its obligations.
Capped Upside. The intended returns for units purchased on the trust’s inception date and held for the life of the trust is based on the performance of the Market Reference and is subject to a capped amount of $____ per trust unit and may represent a return that is worse than the performance of the Market Reference. Even if there are significant increases in the Market Reference Level, the amount you may receive is capped at $___ per trust unit. You may experience significant losses on your investment if the value of the Market Reference declines. You may realize a return (including a loss) that is higher or lower than the intended returns as a result of redeeming units prior to the trust’s mandatory termination date and in various circumstances including where Options are otherwise liquidated by the trust prior to their expiration or maturity, if the trust is unable to maintain the proportional relationship of the Options based on the number of Option contracts in the trust’s portfolio or increases in potential expenses of the trust above estimated levels.
Legislation Risk. Tax legislation proposed by the President or Congress, tax regulations proposed by the U.S. Treasury or positions taken by the Internal Revenue Service could affect the value of the trust by changing the taxation or tax characterizations of the portfolio securities, or dividends and other income paid by or related to such securities. Congress has considered such proposals in the past and may do so in the future. Various legislative initiatives will be proposed from time to time in the United States and abroad which may have a negative impact on certain of the companies represented in the trust. In addition, litigation regarding any of the issuers of the
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securities or of the industries represented by these issuers may negatively impact the share prices of these securities. No one can predict whether any legislation will be proposed, adopted or amended by Congress and no one can predict the impact that any other legislation might have on the trust or its portfolio securities.
Tax Risk. The trust must satisfy certain diversification tests based on the value of its investments in order to continue to qualify as a regulated investment company and have special tax treatment, as detailed in the “Understanding Your Investment—Taxes” section of this prospectus.
Implied Volatility Risk. This is the risk that the value of the Options may change with the implied volatility of the Market Reference and the securities comprising the Market Reference. No one can predict whether implied volatility will rise or fall in the future.
Liquidity Risk. This is the risk that the value of a security will fall if trading in the security is limited or absent. No one can guarantee that a liquid secondary trading market will exist for the securities. Trading in the Options may be less deep and liquid than certain other securities. The Options may be less liquid than certain noncustomized options. In a less liquid market for the Options, liquidating the Options may require the payment of a premium or acceptance of a discounted price and may take longer to complete. In a less liquid market for the Options, the liquidation of a large number of options may more significantly impact the price. A less liquid trading market may adversely impact the value of the Options and your units.
Early Trust Termination. The trustee has the power to terminate your trust early in limited cases as described under “Understanding Your Investment—How Your Trust Works—Termination of Your Trust” including if the value of the trust is less than 40% of the original value of the securities in the trust at the time of deposit. If the trust terminates early, the trust may suffer losses and be unable to achieve its investment objective. This could result in a reduction in the value of units and result in a significant loss to investors.
Sale of Trust Property to Pay Trust Expenses. Cash deposited in the trust may be insufficient to satisfy the fees and expenses of the trust. If the cash balances are insufficient to provide for fees, expenses and other amounts payable by the trust, the trust may sell trust property to pay such amounts. These sales may result in losses to unitholders and the inability of the trust to meet its investment objective.
No FDIC guarantee. An investment in the trust is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Additional Deposits. The trust agreement authorizes the sponsor to increase the size of a trust and the number of units thereof by the deposit of additional securities, or cash (including a letter of credit or the equivalent) with instructions to purchase additional securities, in such trust and the issuance of a corresponding number of additional units. In connection with these deposits, existing and new investors may experience a dilution of their investments and a reduction in their anticipated income because of fluctuations in the prices of the securities
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between the time of the deposit and the purchase of the securities and because a trust will pay the associated brokerage fees and other acquisition costs.
Administration of the Trust
Distributions to Unitholders. Income received by a trust, if any is credited by the trustee to the Income Account for the trust. All other receipts are credited by the trustee to a separate Capital Account for the trust. The trustee will normally distribute any income received by a trust on each distribution date or shortly thereafter to unitholders of record on the preceding record date. A trust will also generally make required distributions or distributions to avoid imposition of tax at the end of each year if it has elected to be taxed as a RIC for federal tax purposes. Unitholders will receive an amount substantially equal to their pro rata share of the available balance of the Income Account of the related trust. All distributions will be net of applicable expenses. There is no assurance that any actual distributions will be made since all dividends received may be used to pay expenses. In addition, excess amounts from the Capital Account of a trust, if any, will be distributed on each distribution date or shortly thereafter to unitholders of record on the preceding record date, provided that the trustee is not required to make a distribution from the Capital Account unless the amount available for distribution is at least $1.00 per 100 units. Proceeds received from the disposition of any of the securities after a record date and prior to the following distribution date will be held in the Capital Account and not distributed until the next distribution date applicable to the Capital Account. Notwithstanding the foregoing, if a trust is designed to be a grantor trust for tax purposes, the trustee is not required to make a distribution from the Income Account or the Capital Account unless the total cash held for distribution equals at least 0.1% of the trust’s net asset value as determined under the trust agreement, provided that the trustee is required to distribute the balance of the Income Account and Capital Account on the distribution date occurring in December of each year. The trustee is not required to pay interest on funds held in the Capital or Income Accounts (but may itself earn interest thereon and therefore benefits from the use of such funds).
The distribution to the unitholders of a trust as of each record date will be made on the following distribution date or shortly thereafter and shall consist of an amount substantially equal to the unitholders’ pro rata share of the available balance of the Income Account of the trust after deducting estimated expenses. Because dividends are not received by a trust at a constant rate throughout the year, such distributions to unitholders are expected to fluctuate.
Persons who purchase units will commence receiving distributions only after such person becomes a record owner. A person will become the owner of units, and thereby a unitholder of record, on the date of settlement provided payment has been received. Notification to the trustee of the transfer of units is the responsibility of the purchaser, but in the normal course of business the selling broker-dealer provides such notice.
The trustee will periodically deduct from the Income Account of a trust and, to the extent funds are not sufficient therein, from the Capital Account of the trust amounts necessary to pay the expenses of the trust. The trustee also may withdraw from said accounts such amounts, if any, as it deems necessary to establish a reserve for any governmental charges payable out of a trust. Amounts so withdrawn shall not be considered a part of the related trust’s assets until such time
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as the trustee shall return all or any part of such amounts to the appropriate accounts. In addition, the trustee may withdraw from the Income and Capital Accounts of a trust such amounts as may be necessary to cover redemptions of units.
Statements to Unitholders. With each distribution, the trustee will furnish to each unitholder a statement of the amount of income and the amount of other receipts, if any, which are being distributed, expressed in each case as a dollar amount per unit.
The accounts of a trust are required to be audited annually, at the related trust’s expense, by independent public accountants designated by the sponsor, unless the sponsor determines that such an audit is not required. The accountants’ report for any audit will be furnished by the trustee to any unitholder upon written request. Within a reasonable period of time after the last business day of each calendar year, the trustee shall furnish to each person who at any time during such calendar year was a unitholder of a trust a statement, covering such calendar year, setting forth for such trust:
(A) As to the Income Account:
(1) | the amount of income received on the securities (including income received as a portion of the proceeds of any disposition of securities); |
(2) | the amounts paid for purchases of replacement securities or for purchases of securities otherwise pursuant to the applicable trust agreement, if any, and for redemptions; |
(3) | the deductions, if any, from the Income Account for payment into the Reserve Account; |
(4) | the deductions for applicable taxes and fees and expenses of the trustee, the sponsor, the evaluator, the supervisor, counsel, auditors and any other expenses paid by the trust; |
(5) | the amounts reserved for purchases of contract securities, for purchases made pursuant to replace failed contract securities or for purchases of securities otherwise pursuant to the applicable trust agreement, if any; |
(6) | the deductions for payment of the sponsor’s expenses of maintaining the registration of the trust units, if any; |
(7) | the aggregate distributions to unitholders; and |
(8) | the balance remaining after such deductions and distributions, expressed both as a total dollar amount and as a dollar amount per unit outstanding on the last business day of such calendar year; |
(B) As to the Capital Account:
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(1) | the net proceeds received due to sale, maturity, redemption, liquidation or disposition of any of the securities, excluding any portion thereof credited to the Income Account; |
(2) | the amount paid for purchases of replacement securities or for purchases of securities otherwise pursuant to the applicable trust agreement, if any, and for redemptions; |
(3) | the deductions, if any, from the Capital Account for payments into the Reserve Account; |
(4) | the deductions for payment of applicable taxes and fees and expenses of the trustee, the sponsor, the evaluator, the supervisor, counsel, auditors and any other expenses paid by the trust; |
(5) | the deductions for payment of the sponsor’s expenses of organizing the trust; |
(6) | the amounts reserved for purchases of contract securities, for purchases made pursuant to replace failed contract securities or for purchases of securities otherwise pursuant to the trust agreement, if any; |
(7) | the deductions for payment of deferred sales charge and creation and development fee, if any; |
(8) | the deductions for payment of the sponsor’s expenses of maintaining the registration of the trust units, if any; |
(9) | the aggregate distributions to unitholders; and |
(10) | the balance remaining after such distributions and deductions, expressed both as a total dollar amount and as a dollar amount per unit outstanding on the last business day of such calendar year; and |
(C) The following information:
(1) | a list of the securities held as of the last business day of such calendar year and a list which identifies all securities sold or other securities acquired during such calendar year, if any; |
(2) | the number of units outstanding on the last business day of such calendar year; |
(3) | the unit value based on the last trust evaluation of such trust made during such calendar year; and |
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(4) | the amounts actually distributed during such calendar year from the Income and Capital Accounts, separately stated, expressed both as total dollar amounts and as dollar amounts per unit outstanding on the record dates for such distributions. |
Rights of Unitholders. The death or incapacity of any unitholder will not operate to terminate a trust nor entitle legal representatives or heirs to claim an accounting or to bring any action or proceeding in any court for partition or winding up of the trust, nor otherwise affect the rights, obligations and liabilities of the parties to the applicable trust agreement. No unitholder shall have the right to control the operation and management of a trust in any manner, except to vote with respect to the amendment of the related trust agreement or termination of the trust.
Amendment. Each trust agreement may be amended from time to time by the sponsor and trustee or their respective successors, without the consent of any of the unitholders, (i) to cure any ambiguity or to correct or supplement any provision which may be defective or inconsistent with any other provision contained in the trust agreement, (ii) to change any provision required by the SEC or any successor governmental agency, (iii) to make such other provision in regard to matters or questions arising under the trust agreement as shall not materially adversely affect the interests of the unitholders or (iv) to make such amendments as may be necessary (a) for a trust to continue to qualify as a RIC for federal income tax purposes if the trust has elected to be taxed as such under the United States Internal Revenue Code of 1986, as amended, or (b) to prevent a trust from being deemed an association taxable as a corporation for federal income tax purposes if the trust has not elected to be taxed as a RIC under the United States Internal Revenue Code of 1986, as amended. A trust agreement may not be amended, however, without the consent of all unitholders of the related trust then outstanding, so as (1) to permit, except in accordance with the terms and conditions thereof, the acquisition thereunder of any securities other than those specified in the schedules to the trust agreement or (2) to reduce the percentage of units the holders of which are required to consent to certain of such amendments. A trust agreement may not be amended so as to reduce the interest in the trust represented by units without the consent of all affected unitholders.
Except for the amendments, changes or modifications described above, neither the sponsor nor the trustee nor their respective successors may consent to any other amendment, change or modification of a trust agreement without the giving of notice and the obtaining of the approval or consent of unitholders representing at least 66 2/3% of the units then outstanding of the affected trust. No amendment may reduce the aggregate percentage of units the holders of which are required to consent to any amendment, change or modification of a trust agreement without the consent of the unitholders of all of the units then outstanding of the affected trust and in no event may any amendment be made which would (1) alter the rights to the unitholders of the trust as against each other, (2) provide the trustee with the power to engage in business or investment activities other than as specifically provided in the trust agreement, (3) adversely
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affect the tax status of the related trust for federal income tax purposes or result in the units being deemed to be sold or exchanged for federal income tax purposes or (4) unless a trust has elected to be taxed as a RIC for federal income tax purposes, result in a variation of the investment of unitholders in the trust. The trustee will notify unitholders of a trust of the substance of any such amendment to the trust agreement for such trust.
Termination. Each trust agreement provides that the related trust shall terminate upon the maturity, redemption, sale or other disposition of the last of the securities held in the trust but in no event is it to continue beyond the trust’s mandatory termination date. If the value of a trust shall be less than 40% of the total value of securities deposited in the trust during the initial offering period, the trustee may, in its discretion, and shall, when so directed by the sponsor, terminate the trust. A trust may be terminated at any time by the holders of units representing 66 2/3% of the units thereof then outstanding. A trust will be liquidated by the trustee in the event that a sufficient number of units of the trust not yet sold are tendered for redemption by the sponsor, so that the net worth of the trust would be reduced to less than 40% of the value of the securities at the time they were deposited in the trust. If a trust is liquidated because of the redemption of unsold units by the sponsor, the sponsor will refund to each purchaser of units of the trust the entire sales charge paid by such purchaser.
Beginning nine business days prior to, but no later than, the scheduled termination date described in the prospectus for a trust, the trustee may begin to sell all of the remaining underlying securities on behalf of unitholders in connection with the termination of the trust. The sponsor may assist the trustee in these sales and receive compensation to the extent permitted by applicable law. The sale proceeds will be net of any incidental expenses involved in the sales.
The sponsor will generally instruct the trustee to sell the securities as quickly as practicable during the termination proceedings without in its judgment materially adversely affecting the market price of the securities, but it is expected that all of the securities will in any event be disposed of within a reasonable time after a trust’s termination. The sponsor does not anticipate that the period will be longer than one month, and it could be as short as one day, depending on the liquidity of the securities being sold. The liquidity of any security depends on the daily trading volume of the security and the amount that the sponsor has available for sale on any particular day. Of course, no assurances can be given that the market value of the securities will not be adversely affected during the termination proceedings.
Not less than thirty days prior to termination of a trust, the trustee will notify unitholders thereof of the termination and provide a form allowing qualifying unitholders to elect an in kind distribution, if applicable. If applicable, a unitholder who owns the minimum number of units described in the prospectus may request an in kind distribution from the trustee instead of cash. To the extent possible, the trustee will make an in kind distribution through the distribution of each of the securities of a trust in book entry form to the account of the unitholder’s bank or broker-dealer at Depository Trust Company. The unitholder will be entitled to receive whole shares of each of the securities comprising the portfolio of the related trust and cash from the Income and Capital Account equal to the fractional shares to which the unitholder is entitled. The trustee may adjust the number of shares of any security included in a unitholder’s in kind distribution to facilitate the distribution of whole shares. The sponsor may terminate the in kind
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distribution option at any time upon sixty days written notice to the unitholders. Special federal income tax consequences will result if a unitholder requests an in kind distribution.
Within a reasonable period after termination, the trustee will sell any securities remaining in a trust not segregated for in kind distribution. After paying all expenses and charges incurred by a trust, the trustee will distribute to unitholders thereof their pro rata share of the balances remaining in the Income and Capital Accounts of the trust.
The sponsor may, but is not obligated to, offer for sale units of a subsequent series of a trust at approximately the time of the mandatory termination date. If the sponsor does offer such units for sale, unitholders may be given the opportunity to purchase such units at a public offering price. There is, however, no assurance that units of any new series of a trust will be offered for sale at that time, or if offered, that there will be sufficient units available for sale to meet the requests of any or all unitholders.
The Trustee. The trustee is The Bank of New York Mellon, a trust company organized under the laws of New York. The Bank of New York Mellon has its principal unit investment trust division offices at 2 Hanson Place, 12th Floor, Brooklyn, New York 11217, (800) 848-6468. The Bank of New York Mellon is subject to supervision and examination by the Superintendent of Banks of the State of New York and the Board of Governors of the Federal Reserve System, and its deposits are insured by the Federal Deposit Insurance Corporation to the extent permitted by law.
Under each trust agreement, the trustee or any successor trustee may resign and be discharged of the trust created by the trust agreement by executing an instrument in writing and filing the same with the sponsor. If the trustee merges or is consolidated with another entity, the resulting entity shall be the successor trustee without the execution or filing of any paper instrument or further act.
The trustee or successor trustee must deliver a copy of the notice of resignation to all unitholders then of record, not less than sixty days before the date specified in such notice when such resignation is to take effect. The sponsor upon receiving notice of such resignation is obligated to appoint a successor trustee promptly. If, upon such resignation, no successor trustee has been appointed and has accepted the appointment within thirty days after notification, the retiring trustee may apply to a court of competent jurisdiction for the appointment of a successor. In case at any time the trustee shall not meet the requirements set forth in the trust agreement, or shall become incapable of acting, or if a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the trustee in an involuntary case, or the trustee shall commence a voluntary case, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) for the trustee or for any substantial part of its property shall be appointed, or the trustee shall generally fail to pay its debts as they become due, or shall fail to meet such written standards for the trustee’s performance as shall be established from time to time by the sponsor, or if the sponsor determines in good faith that there has occurred either (1) a material deterioration in the creditworthiness of the trustee or (2) one or more grossly negligent acts on the part of the trustee with respect to a trust, the sponsor, upon sixty days’ prior written notice,
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may remove the trustee and appoint a successor trustee by written instrument, in duplicate, one copy of which shall be delivered to the trustee so removed and one copy to the successor trustee. Notice of such removal and appointment shall be delivered to each unitholder by the successor trustee. Upon execution of a written acceptance of such appointment by such successor trustee, all the rights, powers, duties and obligations of the original trustee shall vest in the successor. The trustee must be a corporation organized under the laws of the United States, or any state thereof, be authorized under such laws to exercise trust powers and have at all times an aggregate capital, surplus and undivided profits of not less than $5,000,000.
The Sponsor. The sponsor of each trust is Advisors Asset Management, Inc. The sponsor is a broker-dealer specializing in providing services to broker-dealers, registered representatives, investment advisers and other financial professionals. The sponsor’s headquarters are located at 18925 Base Camp Road, Monument, Colorado 80132. You can contact Advisors Asset Management, Inc. at 8100 East 22nd Street North, Building 800, Suite 102, Wichita, Kansas 67226 or by using the contacts listed on the back cover of the prospectus. The sponsor is a registered broker-dealer and investment adviser and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”), and a registrant of the Municipal Securities Rulemaking Board (“MSRB”).
Under each trust agreement, the sponsor may resign and be discharged of the trust created by the trust agreement by executing an instrument in writing and filing the same with the trustee. If the sponsor merges or is consolidated with another entity, the resulting entity shall be the successor sponsor without the execution or filing of any paper instrument or further act.
If at any time the sponsor shall resign or fail to undertake or perform any of the duties which by the terms of a trust agreement are required by it to be undertaken or performed, or the sponsor shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the sponsor or of its property shall be appointed, or any public officer shall take charge or control of the sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the trustee may (a) appoint a successor sponsor at rates of compensation deemed by the trustee to be reasonable and not exceeding such reasonable amounts as may be prescribed by the SEC, (b) terminate the trust agreement and liquidate the related trust as provided therein, or (c) continue to act as trustee without appointing a successor sponsor and receive additional compensation deemed by the trustee to be reasonable and not exceeding such reasonable amounts as may be prescribed by the SEC.
The Evaluator and Supervisor. Advisors Asset Management, Inc., the sponsor, also serves as evaluator and supervisor. The evaluator and supervisor may resign or be removed by the sponsor and trustee in which event the sponsor or trustee may appoint a successor having qualifications and at a rate of compensation satisfactory to the sponsor or, if the appointment is made by the trustee, the trustee. Such resignation or removal shall become effective upon acceptance of appointment by the successor evaluator. If upon resignation of the evaluator no successor has accepted appointment within thirty days after notice of resignation, the evaluator may apply to a court of competent jurisdiction for the appointment of a successor. Notice of such resignation or removal and appointment shall be delivered by the trustee to each unitholder.
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Limitations on Liability. The sponsor, evaluator, and supervisor are liable for the performance of their obligations arising from their responsibilities under the trust agreement but will be under no liability to any trust or unitholders for taking any action or refraining from any action in good faith pursuant to the trust agreement or for errors in judgment, or for depreciation or loss incurred by reason of the purchase or sale of securities, provided, however, that such parties will not be protected against any liability to which they would otherwise be subjected by reason of their own willful misfeasance, bad faith or gross negligence in the performance of their duties or its reckless disregard for their duties under the trust agreement. Each trust will indemnify, defend and hold harmless each of the sponsor, supervisor and evaluator from and against any loss, liability or expense incurred in acting in such capacity (including the cost and expenses of the defense against such loss, liability or expense) other than by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the applicable trust agreement. Such parties are not under any obligation to appear in, prosecute or defend any legal action which in their opinion may involve them in any expense or liability. The trustee will be indemnified by each trust and held harmless against any loss or liability accruing to it without gross negligence, bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust, including the costs and expenses (including counsel fees) of defending itself against any claim of liability in the premises.
The trust agreement provides that the trustee shall be under no liability for any action taken in good faith in reliance upon prima facie properly executed documents or for the disposition of moneys, securities or certificates except by reason of its own gross negligence, bad faith or willful misconduct, nor shall the trustee be liable or responsible in any way for depreciation or loss incurred by reason of the sale by the trustee of any securities. In the event that the sponsor shall fail to act, the trustee may act and shall not be liable for any such action taken by it in good faith. The trustee shall not be personally liable for any taxes or other governmental charges imposed upon or in respect of the securities or upon the interest thereof. In addition, the trust agreement contains other customary provisions limiting the liability of the trustee.
Expenses of the Trust. The sponsor may receive a fee from your trust for creating and developing the trust, including determining the trust’s objectives, policies, composition and size, selecting service providers and information services and for providing other similar administrative and ministerial functions. The amount of this “creation and development fee” is set forth in the prospectus. The trustee will deduct this amount from your trust’s assets as of the close of the initial offering period. No portion of this fee is applied to the payment of distribution expenses or as compensation for sales efforts. This fee will not be deducted from proceeds received upon a repurchase, redemption or exchange of units before the close of the initial public offering period.
For services performed under a trust’s trust agreement the trustee shall be paid a fee at an annual rate in the amount per unit set forth in such trust agreement. The trustee shall charge a pro-rated portion of its annual fee at the times specified in such trust agreement, which pro-rated portion shall be calculated on the basis of the largest number of units in such trust at any time during the primary offering period. After the primary offering period has terminated, the fee shall
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accrue daily and be based on the number of units outstanding on the first business day of each calendar year in which the fee is calculated or the number of units outstanding at the end of the primary offering period, as appropriate. The annual trustee fee shall be prorated for any calendar year in which the trustee provides services during less than the whole of such year. The trustee may from time to time adjust its compensation as set forth in the trust agreement provided that total adjustment upward does not, at the time of such adjustment, exceed the percentage of the total increase in consumer prices for services as measured by the United States Department of Labor Consumer Price Index entitled “All Services Less Rent of Shelter” or similar index, if such index should no longer be published. The consent or concurrence of any unitholder shall not be required for any such adjustment or increase. Such compensation shall be calculated and paid in installments by the trustee against the Income and Capital Accounts of each trust; provided, however, that such compensation shall be deemed to provide only for the usual, normal and proper functions undertaken as trustee pursuant to the trust agreement. The trustee shall also charge the Income and Capital Accounts of each trust for any and all expenses and disbursements incurred as provided in the trust agreement.
As compensation for portfolio supervisory services in its capacity as supervisor, evaluation services in its capacity as evaluator and for providing bookkeeping and other administrative services of a character described in Section 26(a)(2)(C) of the Investment Company Act, the sponsor shall be paid an annual fee in the amount per unit set forth in the trust agreement for a trust. The sponsor shall receive a pro-rated portion of its annual fee from the trustee upon receipt of an invoice by the trustee from the sponsor, upon which, as to the cost incurred by the sponsor of providing such services the trustee may rely. Such fee shall be calculated on the basis of the largest number of units in such trust at any time during the primary offering period. After the primary offering period has terminated, the fee shall accrue daily and be based on the number of units outstanding on the first business day of each calendar year in which the fee is calculated or the number of units outstanding at the end of the primary offering period, as appropriate. Such annual fee shall be prorated for any calendar year in which the sponsor provides services during less than the whole of such year, but in no event shall such compensation when combined with all compensation received from a trust for providing such services in any calendar year exceed the aggregate cost to the sponsor for providing such services, in the aggregate. Such compensation may, from time to time, be adjusted provided that the total adjustment upward does not, at the time of such adjustment, exceed the percentage of the total increase in consumer prices for services as measured by the United States Department of Labor Consumer Price Index entitled “All Services Less Rent of Shelter” or similar index, if such index should no longer be published. The consent or concurrence of any unitholder shall not be required for any such adjustment or increase. Such compensation shall be charged against the Income and/or Capital Accounts of a trust.
The following additional charges are or may be incurred by a trust in addition to any other fees, expenses or charges described in the prospectus: (a) fees for the trustee’s extraordinary services; (b) expenses of the trustee (including legal and auditing expenses and reimbursement of the cost of advances to the trust for payment of expenses and distributions, but not including any fees and expenses charged by an agent for custody and safeguarding of securities) and of counsel, if any; (c) various governmental charges; (d) expenses and costs of any action taken by the trustee to protect the trust or the rights and interests of the unitholders; (e) indemnification of the
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trustee for any loss or liability accruing to it without gross negligence, bad faith or willful misconduct on its part arising out of or in connection with the acceptance or administration of the trust; (f) indemnification of the sponsor for any loss, liability or expense incurred in acting in that capacity other than by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or its reckless disregard of its obligations and duties under the trust agreement; (g) indemnification of the supervisor for any loss, liability or expense incurred in acting as supervisor of the trust other than by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the trust agreement; (h) indemnification of the evaluator for any loss, liability or expense incurred in acting as evaluator of the trust other than by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the trust agreement; (i) expenditures incurred in contacting unitholders upon termination of the trust; and (j) license fees for the right to use trademarks and trade names, intellectual property rights or for the use of databases and research owned by third-party licensors. The sponsor is authorized to obtain from Mutual Fund Quotation Service (or similar service operated by The Nasdaq Stock Market, Inc. or its successor) a UIT ticker symbol for each trust and to contract for the dissemination of the unit prices through that service. A trust will bear any cost or expense incurred in connection with the obtaining of the ticker symbol and the dissemination of unit prices. A trust may pay the costs of updating its registration statement each year. All fees and expenses are payable out of a trust and, when owing to the trustee, are secured by a lien on the trust. If the balances in the Income and Capital Accounts are insufficient to provide for amounts payable by the trust, the trustee has the power to sell securities to pay such amounts. These sales may result in capital gains or losses to unitholders.
Each trust will pay the costs of organizing the trust. These costs may include, but are not limited to, the cost of the initial preparation and typesetting of the registration statement, prospectuses (including preliminary prospectuses), the trust agreement and other documents relating to the applicable trust, SEC and state blue sky registration fees, the costs of the initial valuation of the portfolio and audit of a trust, the costs of a portfolio consultant, if any, one-time license fees, if any, the initial fees and expenses of the trustee, and legal and other out-of-pocket expenses related thereto but not including the expenses incurred in the printing of prospectuses (including preliminary prospectuses), expenses incurred in the preparation and printing of brochures and other advertising materials and any other selling expenses. A trust may sell securities to reimburse the sponsor for these costs at the end of the initial offering period or after six months, if earlier. The value of the units will decline when a trust pays these costs.
Portfolio Transactions and Brokerage Allocation. When a trust sells securities, the composition and diversity of the securities in the trust may be altered. In order to obtain the best price for a trust, it may be necessary for the sponsor to specify minimum amounts in which blocks of securities are to be sold. In effecting purchases and sales of a trust’s portfolio securities, the sponsor may direct that orders be placed with and brokerage commissions be paid to brokers, including the sponsor or brokers which may be affiliated with the trust, the sponsor, the trustee or dealers participating in the offering of units.
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Contents of Registration Statement
This Amendment to the Registration Statement comprises the following:
The facing sheet
The prospectus and information supplement
The signatures
The consents of evaluator, independent auditors and legal counsel
The following exhibits:
1.1 | Trust Agreement (to be filed by amendment). |
1.1.1 | Standard Terms and Conditions of Trust (to be filed by amendment). |
1.2 | Certificate of Amendment of Certificate of Incorporation and Certificate of Merger of Advisors Asset Management, Inc. Reference is made to Exhibit 1.2 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 647 (File No. 333-171079) as filed on January 6, 2011. |
1.3 | Bylaws of Advisors Asset Management, Inc. Reference is made to Exhibit 1.3 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 647 (File No. 333-171079) as filed on January 6, 2011. |
1.5 | Form of Dealer Agreement. Reference is made to Exhibit 1.5 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 262 (File No. 333-150575) as filed of June 17, 2008. |
2.2 | Form of Code of Ethics. Reference is made to Exhibit 2.2 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 1853 (File No. 333-221628) as filed on February 21, 2018. |
3.1 | Opinion of counsel as to legality of securities being registered (to be filed by amendment). |
3.3 | Opinion of counsel as to the Trustee and the Trust (to be filed by amendment). |
4.1 | Consent of evaluator (to be filed by amendment). |
4.2 | Consent of independent auditors (to be filed by amendment). |
6.1 | Directors and Officers of Advisors Asset Management, Inc. Reference is made to Exhibit 6.1 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 1911 (File No. 333-227343) as filed on November 9, 2018. |
7.1 | Power of Attorney. Reference is made to Exhibit 7.1 to the Registration Statement on Form S-6 for Advisors Disciplined Trust 1485 (File No. 333-203629) as filed on May 15, 2015. |
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant, Advisors Disciplined Trust 1682 has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wichita and State of Kansas on August 28, 2019.
Advisors Disciplined Trust 1682 | |
By Advisors Asset Management, Inc., Depositor | |
By | /s/ ALEX R. MEITZNER |
Alex R. Meitzner | |
Senior Vice President |
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below on August 28, 2019 by the following persons in the capacities indicated.
SIGNATURE | TITLE | |
Scott I. Colyer | Director of Advisors Asset | ) |
Management, Inc. | ) | |
Lisa A. Colyer | Director of Advisors Asset | ) |
Management, Inc. | ) | |
James R. Costas | Director of Advisors Asset | ) |
Management, Inc. | ) | |
Christopher T. Genovese | Director of Advisors Asset | ) |
Management, Inc. | ) | |
Randy J. Pegg | Director of Advisors Asset | ) |
Management, Inc. | ) | |
Jack Simkin | Director of Advisors Asset | ) |
Management, Inc. | ) | |
Bart P. Daniel | Director of Advisors Asset | ) |
Management, Inc. | ) |
By | /s/ ALEX R. MEITZNER |
Alex R. Meitzner | |
Attorney-in-Fact* |
*An executed copy of each of the related powers of attorney is filed herewith or incorporated herein by reference as Exhibit 7.1.