January 14, 2020
Scott R. Anderson, Esq.
Chapman and Cutler LLP
111 West Monroe Street
Chicago, IL 60603
Re: SmartTrust 464
File Nos. 333-235543 and 811-21429
Dear Mr. Anderson:
On December 17, 2019, you filed a registration statement on Form S-6
for SmartTrust 464
(Interest Rate Outlook Trust, Series 1) (the "Trust"), a unit investment trust.
We have reviewed
the registration statement, and have provided our comments below. For
convenience, we
generally organized our comments using headings, defined terms, and page
numbers from the
registration statement. Where a comment is made in one location, it is
applicable to all similar
disclosure appearing elsewhere in the registration statement.
PROSPECTUS (PART A)
Investment Summary -- Principal Investment Strategy (Pages A-3 A-4)
1. Please revise this section to only include the principal investment strategy
of Series 1 of the
Trust (e.g., on page A-4, if the series selects securities based on the
sponsor's rising interest
rate outlook, please delete the paragraph entitled "Declining Interest Rate
Outlook Strategy"
and the sentence identifying the sectors the sponsor considers if the
sponsor's interest rate
outlook is declining). Also, please tell us how the sponsor plans to file a
registration statement
to register a future unit investment trust that would implement the interest
rate strategy not
used in Series 1 (e.g., by filing a new registration statement accompanied
by a cover letter
requesting review of the filing and intending to request acceleration of
effectiveness of the
filing). We may have more comments after reviewing your response.
2. The first sentence of the last paragraph on page A-3 refers to "high yield
bond indexes".
Please add a reference to "junk bonds" here.
3. The first sentence of the last paragraph on page A-3 and the first sentence
of the first
paragraph on page A-4 each describe the types of investments in which the
Trust may invest.
Please revise the disclosure to describe more specifically these types of
investments. For
example, the disclosure states "approximately 10% invested in common stock
of one or more
funds with returns that generally correspond to one or more convertible bond
indexes". Please
describe the investments held by these "one or more funds", rather than only
stating that the
Trust invests in funds "with returns that generally correspond to one or
more convertible bond
Scott R. Anderson, Esq.
January 14, 2020
Page 2
indexes". Also, for example, the disclosure states "approximately 5%
invested in common
stock of one or more funds that provide exposure to gold bullion". Please
describe the
investments held by these "one or more funds" (e.g., gold mining stocks and
gold bullion),
rather than only stating that these funds "provide exposure to gold
bullion".
4. On page A-4, the paragraph entitled "Equity Securities" states that, while
the sponsor
considered the sectors identified in the paragraph, the Trust's portfolio
does not necessarily
include securities from each of the sectors. Please revise the disclosure to
only disclose the
sectors in which the Trust's portfolio invests. Please also disclose the
corresponding risks of
each such sector in the Principal Risk Considerations section or explain to
us why adding this
risk disclosure is not appropriate.
5. On page A-4, the paragraph entitled "Convertible Bond Funds" indicates that
the Trust will
invest in funds that invest in convertible securities. If the Trust expects
to invest in funds that
invest in contingent convertible bonds ("CoCos"), please consider what, if
any, disclosure is
appropriate. The type and location of the disclosure will depend on, among
other things, the
extent to which the funds invest in CoCos and the characteristics of the
CoCos (e.g., credit
quality, conversion triggers). If CoCos are part of the Trust's principal
investment strategy
(through the Trust's holdings of convertible bond funds), please provide a
description of
CoCos and appropriate risk disclosure.
6. On page A-4, the paragraphs entitled "Investment Grade Bond Funds" and "High
Yield Bond
Funds" each indicate that the funds in which the Trust invests will hold
bonds issued by
foreign issuers. If the funds will hold bonds issued by emerging market
issuers as part of the
funds' principal investment strategies, please also refer to emerging market
issuers in each
paragraph and disclose the corresponding risks of emerging market
investments in Principal
Risk Considerations, or explain to us why adding this disclosure is not
appropriate. In
addition, please disclose the Trust's maturity policy with respect to
investments in investment
grade bond funds and high yield bond funds.
Principal Risk Considerations (Pages A-5 A-6)
7. The third risk factor on page A-5 describes the risk that there is no
guarantee that interest rates
will rise or fall during the life of the Trust consistent with the sponsor's
outlook. Please revise
this risk factor to reflect the risk of the sponsor's outlook for the
specific series. The risk
disclosure should not discuss an interest rate outlook that is not relevant
to the series. Also,
please enhance the disclosure in this risk factor to indicate that there is
no assurance that the
securities selected by the sponsor will appreciate based on the sponsor's
interest rate outlook.
8. The third sentence of the sixth risk factor on page A-5 states that shares
of closed-end funds
and ETFs could trade at a premium to their net asset value which also
carries risks. Please
identify the risks when closed-end funds and ETFs trade at a premium (e.g.,
the Trust may pay
more than the net asset value for shares of the funds).
9. The first risk factor on page A-6 refers to "senior loans". Disclosure in
the Principal
Investment Strategy section refers to "senior leveraged loans". Please
revise the risk factor to
Scott R. Anderson, Esq.
January 14, 2020
Page 3
refer to "senior leveraged loans" and include the risks of such loans,
rather than only
describing the risks of senior loans. Also, if the funds in which the Trust
will invest hold a
significant amount of covenant-lite loans, please identify covenant-lite
loans in the Principal
Investment Strategy section and revise this risk factor to describe the
heightened risks
associated with covenant-lite loans.
10. The third risk factor on page A-6 describes the risks of derivatives held
by funds in which the
Trust invests. Please describe the funds' derivatives investments in the
Principal Investment
Strategy section or explain to us why adding this disclosure is not
appropriate.
GENERAL COMMENTS
11. Please advise us whether you have submitted or expect to submit any
exemptive applications
or no-action requests in connection with your registration statement.
12. We note that portions of the filing are incomplete. We may have additional
comments on such
portions when you complete them in pre-effective amendments, on disclosures
made in
response to this letter, on information you supply to us, or on exhibits
added in any pre-
effective amendments.
13. Responses to this letter should be set forth in the form of a response
letter as well as in a pre-
effective amendment filed pursuant to Rule 472 under the Securities Act of
1933. Where no
change will be made in the filing in response to a comment, please indicate
this fact in a letter
to us and briefly state the basis for your position.
*******
In closing, we remind you that, since the Trust and its sponsor are in
possession of all facts
relating to the Trust's disclosure, the Trust and its sponsor 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 prior to filing a pre-effective
amendment, please feel free
to contact me at 202-551-6782.
Sincerely,
/s/ Anu Dubey
Anu Dubey
Senior Counsel
CC: Michael Spratt
Michael Shaffer