United States securities and exchange commission logo
May 20, 2021
Craig S. Tyle
General Counsel
Franklin Holdings, LLC
One Franklin Parkway
San Mateo, CA 94403-1906
Re: Franklin Holdings
Trust
Draft Registration
Statement on Form S-1
Submitted April 23,
2021
CIK No. 0001858258
Dear Mr. Tyle:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Cover Page
1. Please disclose the
termination date of the offering.
2. We note your disclosure
on the cover page that the Trust seeks to reflect the performance
of the price of gold
bullion, less the Fund's expenses. Please clarify here that the Trust
is not a proxy for
investing in gold.
Risk Factors, page 9
3. Please add a risk
factor that addresses the risks related to the Sponsor's and Trustee's
ability to amend the
Trust Agreement without shareholder consent.
Craig S. Tyle
FirstName LastNameCraig
Franklin Holdings, LLC S. Tyle
Comapany
May NameFranklin Holdings, LLC
20, 2021
May 20,
Page 2 2021 Page 2
FirstName LastName
4. Add a separately captioned risk factor addressing any limitations and
weaknesses of
the LBMA mandatory Responsible Sourcing Programme. For example,
discuss whether
there are points in the supply chain that make it more difficult to
trace the provenance of
gold and verify the ultimate source, because of the use of recycled
gold or otherwise. To
the extent that this is material to an understanding of your strategy
or the fund objective,
revise your discussions of your strategy or the fund objective to
address this. If this is not
applicable to your facts and the LBMA mandatory Responsible Sourcing
Programme, please explain.
Loss of intellectual property rights related to the Fund, page 16
5. Please clarify what intellectual property rights the Fund holds.
Overview of the Gold Industry, page 16
6. Provide a discussion comparing the size of the market that conforms to
the mandatory
Responsible Sourcing Programme, as compared to other gold markets. In
addition discuss
what responsible sourcing requirements are found in other major gold
markets. This
disclosure will help investors better understand how your product
differs from other
available gold products.
Potential conflicts of interest may arise among the Sponsor or its affiliates
and the Fund, page 16
7. So that investors understand the potential for conflicts of interest
with the Sponsor, please
disclose all of the Sponsor's investment funds that may result in a
conflict of interest.
Gold Supply and Demand, page 17
8. We note your disclosure that "the above-ground stock of gold increased
by approximately
2,368 tonnes ... through 2019." Please disclose the beginning of the
time period for this
increase.
Objective of the Fund
Strategy Behind the Shares, page 21
9. We note your disclosure that you offer investors "an opportunity to
participate in the
responsibly sourced gold market" and a short description about what
"responsibly
sourced" means. Please expand your disclosure related to responsible
sourcing to address
the following:
explain whether the sourcing of the gold bullion that you will
hold will in any way
diverge from the LBMA mandatory Responsible Sourcing Programme;
provide a separately captioned section describing the LBMA s
mandatory
Responsible Sourcing Programme in greater detail, including
sourcing practices,
recycling requirements, refiner requirements, environmental,
social, and governance
metric adherence, audit process, and how compliance with each of
these matters is
enforced;
Craig S. Tyle
FirstName LastNameCraig
Franklin Holdings, LLC S. Tyle
Comapany
May NameFranklin Holdings, LLC
20, 2021
May 20,
Page 3 2021 Page 3
FirstName LastName
explain the relationship between the LBMA mandatory Responsible
Sourcing
Programme and the Responsible Gold Guidance; and
clarify whether any decision or assessment related to gold
sourcing will be based on
the subjective judgment of the Sponsor.
Description of the Trust, page 22
10. We note your disclosure on page 23 that the Sponsor can waive the
transaction fee on the
creation or redemption of Creation Units in its sole discretion.
Please describe the
circumstances under which the Sponsor would consider waiving the fee.
11. Please provide further description of the "Gold Bullion receivables"
that you may hold as
an asset.
The Custodian, page 25
12. Please state whether your auditor will audit the assets of the fund in
accordance with
PCAOB standards.
Description of the Shares
Voting and Approvals, page 28
13. We note your disclosure that under the Declaration of Trust,
shareholders have limited
voting rights. Please describe here the shareholders' voting rights
pursuant to the Trust
Agreement and summarize the shareholder voting rights in the
prospectus summary. In
addition, disclose the limited voting rights on the cover page of the
prospectus and add
risk factor disclosure relating to the limited voting rights.
Part II
Signatures, page 50
14. Please revise your signature pages to include the second signature
block required by Form
S-1, showing signatures in individual capacities.
Financial Statements, page F-1
15. We note your disclosure on page 9 that you have not commenced
operations and have no
assets or liabilities. Please tell us how you are capitalized and
provide the audited financial
statements required by Item 11(e) of Form S-1 or tell us why such
financial statements are
not required. In your response, also tell us whether you have
appointed an independent
registered public accounting firm and, if so, tell us the name of the
firm.
Exhibits
16. Please file your material contracts as exhibits to the registration
statement and describe
their material terms or advise why you are not required to do so. In
this regard, we note
your references to the following agreements in the prospectus:
Craig S. Tyle
FirstName LastNameCraig
Franklin Holdings, LLC S. Tyle
Comapany
May NameFranklin Holdings, LLC
20, 2021
May 20,
Page 4 2021 Page 4
FirstName LastName
the sponsor agreement on page 9;
the marketing agreement signed with your sponsor on page 27;
the administration agreement on page 24;
the transfer agency and service agreement on page 24; and
the seed capital investor agreement on page 37.
In addition, ensure that the prospectus contains a description of the
material terms of each
of these agreements.
17. Based on your disclosure in the Legal Matters section on page 38 it
appears that you are
planning to file an opinion of tax counsel. However, a tax opinion is
not listed in the
exhibit index. Please advise.
General
18. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact Tonya K. Aldave at (202) 551-3601 to
discuss how to
submit the materials, if any, to us for our review.
19. You state that the shares of the Trust will trade on the NYSE Arca.
Please tell us the
status of the application for listing the Trust's shares on the
exchange. Also tell us the
status of the exchange's listing standard application under Rule
19b-4.
20. To the extent you intend to use a fact sheet, please provide us a copy
for our review.
21. Based on your disclosure that "an officer of an affiliate of the
Sponsor" serves as your
Trustee on page 23 and that the marketing agent with whom you signed
the Marketing
Agreement is an affiliate of the Sponsor on page 27, please tell us
why you are not
required to provide disclosure pursuant to Item 404 of Regulation S-K.
22. Please revise your disclosure to identify the Seed Capital Investor on
the cover page and
in other sections of the registration statement and specify the
relationship between the
Seed Capital Investor and the Sponsor. Refer to Item 508 of Regulation
S-K.
Additionally, we note your disclosure that the Seed Capital Investor
will not act as an
Authorized Participant with respect to the Seed Creation Units. Please
revise to clarify
how its activities with respect to the Seed Creation Units will be
distinct from those of an
Authorized Participant. Tell us if the Seed Capital Investor is a
registered broker-dealer.
Please also clarify whether the Seed Capital Investor may act as an
Authorized Participant
to purchase Creation Units in the future.
23. State whether the LBMA Gold Price materially differs from other
reported gold prices
because of any premium or additional costs related to the Responsible
Sourcing
Programme. To the extent that there is such a price difference, revise
discussions of your
fund objective and Net Asset Value to address this. If the difference
in price could impact
the return on an investment when compared to other gold products,
please add appropriate
Craig S. Tyle
Franklin Holdings, LLC
May 20, 2021
Page 5
risk factor disclosure.
You may contact David Irving at 202-551-3321 or Sharon Blume at
202-551-3474 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Tonya Aldave at 202-551-3601 or John Dana Brown at 202-551-3859 with
any other
questions.
FirstName LastNameCraig S. Tyle Sincerely,
Comapany NameFranklin Holdings, LLC
Division of Corporation
Finance
May 20, 2021 Page 5 Office of Finance
FirstName LastName