October 16, 2019
VIA E-mail
Stacy L. Fuller, Esq.
K&L Gates LLP
1601 K Street, N.W.
Washington, DC 20006
Re: wicShares Trust
File Nos. 333-233772; 811-23475
Dear Ms. Fuller:
On September 13, 2019, you filed a registration statement on Form N-1A
on behalf of
wicShares Trust (the "Trust") in connection with the wicShares Merger Arbitrage
ETF (the
"Fund"). We reviewed the registration statement and provide our comments below.
Where a
comment is made with regard to disclosure in one location, it is applicable to
all similar
disclosures appearing elsewhere in the registration statement. All capitalized
terms not
otherwise defined herein have the meaning given to them in the registration
statement.
Prospectus
Fee Table - Page 1
1. Please provide a completed fee table.
2. Please confirm supplementally that, in accordance with Item 3, Instr.
3(f), if "acquired
fund fees and expenses" (AFFE) exceed 0.01% of the average net assets of
the Fund, the
Fund will include a line item in the Fee Table for AFFE.
3. Please move the information from Footnote 1 of the Fee Table to Item 12,
as all 12b-1
plan details should be addressed in the Fund's Item 12 (Distribution
Arrangements)
disclosures in the statutory prospectus.
Principal Investment Strategies - Pages 2-3
4. Please supplementally explain why the Fund believes that its name does
not require an
80% policy for the terms "Merger Arbitrage" pursuant to Section 35(d) of
the Investment
Company Act of 1940 and Rule 35d-1 thereunder.
Stacy L. Fuller, Esq.
wicShares Trust
Page 2
5. In the second sentence of the first paragraph, the Principal Investment
Strategy states the
Fund will invest in target companies involved in a "merger or
acquisition." The draft
index methodology provided by the Fund identifies "mergers,
acquisitions, tender offers,
leveraged buy-outs, and private equity takeovers" as eligible
transaction types. Please
reconcile if all of the events referenced by the draft index methodology
are captured
within the Fund's Principal Strategies.
6. In the last sentence of the first paragraph, the disclosure states the
index mythology
"employs rules to identify Targets for inclusion in the Underlying
Index..." Please
describe in plain English the rules to identify (and exclude) potential
targets.
7. In the same sentence, please describe in plain English how the index
methodology
defines and determines the "implied probability" of a transaction
closing successfully.
8. In the first sentence of the second paragraph, please confirm that the
Fund reconstitutes
and rebalances on the same schedule as the Underlying Index.
9. In the last sentence of the second paragraph, the disclosure states the
Underlying Index
may buy short positions in shares of an Acquirer's stock. Please
supplementally confirm
if short selling is a principal strategy of the Fund. If so, please
disclose that expenses
(such as dividends on stocks sold short) are included in the "other
expenses" line item in
the fee table (or show as a separate line item).
10. In the last sentence of the fourth paragraph, please clarify that any
allocation to cash-like
instruments will only continue until the Underlying Index reconstitutes
and applies such
allocation to new targets.
11. In the last sentence of the fifth paragraph, the prospectus states the
Fund may invest in
financial instruments, "including swap agreements, futures contracts,
ETFs and options
on a security or equity securities indices." Please revise this
disclosure to list all of the
types of derivatives in which the Fund expects it will principally
invest (rather than
"including"), as well as the relevant risks for such derivatives. See
Letter from Barry
Miller, Associate Director, Division of Investment Management to Karrie
McMillan,
General Counsel, ICI (July 30, 2010).
12. In the sixth paragraph, please disclose any industries in which the
Fund expects the
Underlying Index to be concentrated. Please also add corresponding
principal risk
disclosure.
13. In the final paragraph, the Fund provides the name of the Index
Provider. Please
specifically disclose here that the Index Provider is an affiliate, in
addition to noting that
it is a wholly-owned subsidiary.
Stacy L. Fuller, Esq.
wicShares Trust
Page 3
Principal Investment Risks - Pages 3-6
14. Please consider adding an Equities Risk given the Fund's principal
investment strategies.
15. The disclosure currently identifies a Small and Medium Capitalization
Securities risk. If
investing in small and medium capitalization companies will be a
principal risk, please
reflect this in the Fund's principal investment strategies.
Additional Information about the Fund's Investment Strategies and Risks - Page
8
16. The Fund's Item 9 disclosure of its principal strategies is identical
to the disclosure
included in response to Item 4. However, the disclosure in response to
Item 4 is intended
to be a summary of the more fulsome disclosure required by Item 9. See
Form N-1A
Item 4 and Item 9. See also IM Guidance Update 2014-08. Please revise
to more fully
disclose the Fund's principal investment strategies in response to Item
9(b), including
how the investment adviser chooses which securities to buy and sell.
17. Pursuant to Item 9(a) of Form N-1A, please state whether the Fund's
investment
objective may be changed without shareholder approval, if applicable.
18. Pursuant to Item 9(b)(1), Instruction 7 of Form N-1A, please disclose
the tax implications
of the Fund's active and frequent trading of portfolio securities.
Index Provider - Page 16
19. The first sentence of this paragraph appears to imply that Solactive AG
is the Index
Provider for the Fund, while the second sentence states that Solactive
AG is the Index
Calculation Agent. The Item 4 disclosure states that Water Island
Indices is the Index
Provider. Please reconcile the disclosure throughout the document to
identify the
responsibilities of Water Island Indices and of Solactive AG.
Statement of Additional Information
Investment Policies and Restrictions - Page 3
20. With regard to Fundamental Investment Policy (4), please note that a
fund and its adviser
may not ignore the investments of affiliated and unaffiliated
underlying investment
companies when determining whether the fund is in compliance with its
concentration
policies. Please add disclosure to clarify that the Fund will consider
the investments of
its underlying investment companies when determining the fund's
compliance with its
concentration policies.
Geographic Focus - Page 19
21. In the section titled "Geographic Focus," the disclosure states, "[s]et
forth below for
certain markets in which the Fund may invest are brief descriptions of
some of the
Stacy L. Fuller, Esq.
wicShares Trust
Page 4
conditions and risks in each such market." However, there appears to be
no additional
disclosure regarding any specific geographic region. Please clarify,
provide this
information, or remove this section.
Management of the Fund - Page 31
22. In the table of information regarding the Fund's officers, directors,
and board members,
please also disclose each person's address in the first column with
their name and age as
required by Item 17(a)(1) of Form N-1A.
Compensation of Trustees [Table] - Page 33
23. Please include the information in the table as specified by Item 17(c)
of Form N-1A.
Please reconcile the Fund's presentation of the current compensation
table with Item
17(c) Instructions 3-4.
Redemptions of Creation Units - Page 49
24. In this section, please reference the Fund's exemptive relief from
Section 17 of the
Investment Company Act.
Taxation - Page 61
25. Pursuant to Item 24(a), please specifically state that Subchapter M of
the Internal
Revenue Code is the provision which dictates requirements to qualify as
a "RIC."
Part C Other Information
Item 28. Exhibits
26. Please provide actual, rather than "form of" agreements, for agreements
provided in this
section.
27. Include the index license or sublicense agreement to which the Fund is
a party as an
exhibit to the registration statement, if applicable, as it is
considered an "other material
contract" pursuant to Item 28(h) of Form N-1A.
Closing
We note that portions of the filing are incomplete. We may have
additional comments on
such portions when you complete them in a pre-effective amendment, on
disclosures made in
response to this letter, on information supplied in your response letter, or on
exhibits added in
any pre-effective amendments.
A response to this letter should be in the form of a pre-effective
amendment filed pursuant
to Rule 472 under the Securities Act. The pre-effective amendment filing should
be
accompanied by a supplemental letter that includes your responses to each of
these comments.
Stacy L. Fuller, Esq.
wicShares Trust
Page 5
Where no change will be made in the filing in response to a comment, please
indicate this fact in
your supplemental letter and briefly state the basis for your position.
We remind you that the Trust and its management are responsible for the
accuracy and
adequacy of their disclosures, notwithstanding any review, comments, action, or
absence of
action by the staff.
Should you have any questions regarding this letter, please contact
me at (202) 551-
7565.
Sincerely,
/s/ Elena Stojic
Staff Attorney
cc: Marianne Dobelbower, Branch Chief
Christian Sandoe, Assistant Director