SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1 to
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: FT 753
B. Name of Depositor: FIRST TRUST PORTFOLIOS L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: FIRST TRUST PORTFOLIOS L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER LLP
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
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, DATED AUGUST 22, 2003
Advisor's Disciplined Income Trust, Global Sovereign Debt Income Portfolio,
Series 2003-11
FT 753
FT 753 is a series of a unit investment trust, the FT Series. FT 753
consists of a single portfolio known as Advisor's Disciplined Income
Trust, Global Sovereign Debt Income Portfolio, Series 2003-11 (the "Trust").
The Trust invests in a portfolio of sovereign debt obligations (the
"Securities"). The Trust seeks to provide current income and the
potential for capital preservation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
FIRST TRUST (R)
1-800-621-9533
The date of this prospectus is August __, 2003
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 8
Portfolio 8
Estimated Returns 9
Risk Factors 9
Public Offering 12
Distribution of Units 14
The Sponsor's Profits 15
The Secondary Market 15
How We Purchase Units 15
Expenses and Charges 15
Tax Status 16
Retirement Plans 17
Rights of Unit Holders 18
Distributions 18
Redeeming Your Units 19
Removing Securities from the Trust 20
Amending or Terminating the Indenture 21
Description of Bond Ratings 21
Information on the Sponsor, Trustee and Evaluator 24
Other Information 24
Page 2
Summary of Essential Information
ADVISOR'S DISCIPLINED INCOME TRUST, GLOBAL SOVEREIGN DEBT INCOME PORTFOLIO,
SERIES 2003-11
FT 753
At the Opening of Business on the
Initial Date of Deposit-August __, 2003
Sponsor: First Trust Portfolios L.P.
Trustee: JPMorgan Chase Bank
Evaluator: Securities Evaluation Service, Inc.
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Principal Amount (Par Value) of Securities per Unit (1) $
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 960.58
Maximum Sales Charge of 3.95% of the Public Offering Price per Unit (4.104% of the net amount
invested) (3) $ 39.42
Public Offering Price per Unit (4) $ 1,000.00
Sponsor's Initial Repurchase Price per Unit (5) $ 960.58
Redemption Price per Unit (based on aggregate underlying value of Securities) (5) $
Weighted Average Maturity of the Securities years
First Settlement Date August __, 2003
Mandatory Termination Date (6) _________, 20__
Ticker Symbol
Distributions (7):
Estimated Net Annual Interest Income per Unit $
Initial Distribution per Unit $
Partial Distribution per Unit $ N.A.
Estimated Regular Distribution per Unit $
Estimated Current Return (8) %
Estimated Long-Term Return (8) %
Cash CUSIP
Security Code
____________
<FN>
(1) Because certain of the Securities may, in certain circumstances, be
sold, redeemed or mature in accordance with their terms, the Unit value
at the Mandatory Termination Date may not equal the Principal Amount
(Par Value) of Securities per Unit stated above.
(2) Each Security is valued at its aggregate offering price. Evaluations
for purposes of determining the purchase, sale or redemption price of
Units are made as of the close of trading on the New York Stock Exchange
("NYSE") (generally 4:00 p.m. Eastern time) on each day on which it is
open (the "Evaluation Time").
(3) Investors will not be assessed a sales charge on the portion of their
Units represented by cash deposited to pay the Trust's organization costs.
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date your purchase your Units. On the Initial Date of Deposit, the
Public Offering Price per Unit will not include any accrued interest on
the Securities. After this date, a pro rata share of any accrued
interest on the Securities will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions will be paid on the last business day of each month
("Distribution Date") to Unit holders or record on the fifteenth day of
such month ("Distribution Record Date"). The amount of the Estimated
Regular Distributions per Unit was calculated on the basis of the
Estimated Net Annual Interest Income per Unit less the estimated annual
expenses and divided by twelve. The Initial and Partial Distributions
per Unit differ from estimated regular distributions because they do not
represent a full month. Each Unit holder will receive the Initial
Distribution per Unit on September 30, 2003. Estimated Regular
Distributions per Unit will occur monthly, beginning October 31, 2003.
The actual distribution you receive will vary from that set forth above
with changes in the Trust's fees and expenses and with the sale,
maturity or redemption of Securities. See "Fee Table" and "Expenses and
Charges." Distributions from the Principal Account will be made monthly
if the amount available for distribution equals at least $1.00 per Unit.
Notwithstanding, distributions of funds in the Principal Account, if
any, will be made in December of each year and as part of the final
liquidation distribution.
(8) Estimated Current Return is calculated by dividing Estimated Net
Annual Interest Income per Unit by the Public Offering Price. Estimated
Long-Term Return is calculated using a formula which (1) factors in the
relative weightings of the market values, yields (which take into
account the amortization of premiums and the accretion of discounts) and
estimated retirements of the Securities; and (2) takes into account a
compounding factor, the sales charge and expenses. There is no assurance
that the Estimated Current and Long-Term Returns set forth above will be
realized in the future because the various components used to calculate
these figures, such as Trust expenses, market values and estimated
retirements of the Securities, will change. In addition, neither rate
reflects the true return you will receive, which will be lower, because
neither includes the effect of certain delays in distributions.
</FN>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust and receive
distributions either monthly or semi-annually. See "Public Offering" and
"Expenses and Charges." Although the Trust has a term of approximately
__ years, and is a unit investment trust rather than a mutual fund, this
information allows you to compare fees.
Amount
per Unit
________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge imposed on purchase 3.95%(a) $
======== ========
Organization Costs
(as a percentage of public offering price)
Estimated organization costs %(b) $2.00
======== ========
Estimated Annual Trust Operating Expenses(c)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee and other operating expenses %(d) $
________ ________
Total % $
======== ========
Example
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and sell all your Units at the end of those periods. The example
also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. The example does not take into
consideration transaction fees which may be charged by certain
broker/dealers for processing redemption requests. Although your actual
costs may vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
$ $ $ $
The example will not differ if you hold rather than sell your Units at
the end of each period.
________________
<FN>
(a) The maximum sales charge consists entirely of an initial sales
charge, deducted at the time of purchase. Investors will not be assessed
a sales charge on the portion of their Units represented by cash
deposited to pay the Trust's organization costs.
(b) Estimated organization costs will be deducted from the assets of the
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(c) Each of the fees listed herein is assessed on a fixed dollar amount
per Unit basis which, as a percentage of average net assets, will vary
over time.
(d) Other operating expenses include the costs incurred by the Trust for
annually updating the Trust's registration statement. Other operating
expenses do not, however, include brokerage costs and other portfolio
transaction fees. In certain circumstances, the Trust may incur
additional expenses not set forth above. See "Expenses and Charges."
</FN>
Page 4
Report of Independent Auditors
The Sponsor, First Trust Portfolios L.P., and Unit Holders
FT 753
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 753, comprising Advisor's Disciplined
Income Trust, Global Sovereign Debt Income Portfolio, Series 2003-11 (the
"Trust"), as of the opening of business on August __, 2003 (Initial Date
of Deposit). This statement of net assets is the responsibility of the
Trust's Sponsor. Our responsibility is to express an opinion on this
statement of net assets based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the statement of net assets is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statement of net assets. Our procedures
included confirmation of the irrevocable letter of credit held by
JPMorgan Chase Bank, the Trustee, and deposited in the Trust for the
purchase of Securities, as shown in the statement of net assets, as of
the opening of business on August __, 2003, by correspondence with the
Trustee. An audit also includes assessing the accounting principles used
and significant estimates made by the Trust's Sponsor, as well as
evaluating the overall presentation of the statement of net assets. We
believe that our audit of the statement of net assets provides a
reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 753,
comprising Advisor's Disciplined Income Trust, Global Sovereign Debt Income
Portfolio, Series 2003-11, at the opening of business on August __, 2003
(Initial Date of Deposit) in conformity with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
August __, 2003
Page 5
Statement of Net Assets
ADVISOR'S DISCIPLINED INCOME TRUST, GLOBAL SOVEREIGN DEBT INCOME PORTFOLIO,
SERIES 2003-11
FT 753
At the Opening of Business on the
Initial Date of Deposit-August __, 2003
NET ASSETS
Investments in Securities represented by purchase contracts (1)(2) $
Accrued interest on underlying Securities (2)(3)
Cash
________
Less liability for reimbursement to Sponsor for organization costs (4) ( )
Less distributions payable (3) ( )
_________
Net assets $
=========
Outstanding units
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less maximum sales charge (5) ( )
Less estimated reimbursement to Sponsor for organization costs (4) ( )
_________
Net assets $
=========
________________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by JPMorgan Chase Bank, of
which $ will be allocated to the Trust, has been deposited with the
Trustee as collateral, covering the monies necessary for the purchase of
the Securities according to their purchase contracts ($ ), accrued
interest to the Initial Date of Deposit ($ ) and accrued interest from
the Initial Date of Deposit to the expected dates of delivery of the
Securities ($ ).
(3) The Trustee will advance to the Trust the amount of net interest
accrued to the First Settlement Date which will be distributed to the
Sponsor as Unit holder of record.
(4) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trust. These costs have been estimated at $2.00 per
Unit. A payment will be made as of the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period to an
account maintained by the Trustee from which the obligation of the
investors to the Sponsor will be satisfied. To the extent that 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.
(5) The aggregate cost to investors in the Trust, excluding the amount
held in cash, includes a maximum sales charge computed at the rate of
3.95% of the Public Offering Price per Unit (equivalent to 4.104% of the
net amount invested), assuming no reduction of sales charge as set forth
under "Public Offering."
</FN>
Page 6
Schedule of Investments
ADVISOR'S DISCIPLINED INCOME TRUST, GLOBAL SOVEREIGN DEBT INCOME PORTFOLIO,
SERIES 2003-11
FT 753
At the Opening of Business on the Initial Date of Deposit-August __, 2003
Cost of
Securities
Aggregate Issue Represented by S&P Moody's to the
Principal Sponsor's Contracts to Purchase Securities (1)(4) Rating (3) Rating (3) Trust (2)
________ _________________________________________ _____ _____ _________
$ $
_________ _________
$ $
========= =========
__________
<FN>
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. The Sponsor entered into
purchase contracts for the Securities on August __, 2003 and expects
that they will all settle on or prior to August __, 2003.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the aggregate offering price of the Securities on the
business day before the Initial Date of Deposit). The valuation of the
Securities has been determined by the Evaluator, certain shareholders of
which are officers of the Sponsor. 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. In addition,
the aggregate bid price of the Securities on the business day before the
Initial Date of Deposit and the annual interest income to the Trust were
$ and $ , respectively.
(3) The ratings are by Standard & Poor's and Moody's and are unaudited.
For a brief description of the rating symbols and their related
meanings, see "Description of Bond Ratings." Such ratings were obtained
from an information reporting service other than Standard & Poor's or
Moody's.
(4) Certain Securities may be redeemed in whole or in part before their
stated maturity under certain circumstances detailed in the instruments
creating them. Such redemption provisions may result in a redemption
price less than the value of the Securities on the Initial Date of
Deposit. To the extent that Securities were deposited in the Trust at a
price higher than the price at which they are redeemed, this will
represent a loss of capital when compared with the original Public
Offering Price of the Units. Distributions will generally be reduced by
the amount of the income which would otherwise have been paid with
respect to redeemed Securities and Unit holders will receive a
distribution of the principal amount and any premium received on such
redemption (except to the extent the proceeds of the redeemed Securities
are used to pay for Unit redemptions). Estimated Current Return and
Estimated Long-Term Return may also be affected by such redemptions.
</FN>
Page 7
The FT Series
The FT Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds
of similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
753, consists of a single portfolio known as Advisor's Disciplined
Income Trust, Global Sovereign Debt Income Portfolio, Series 2003-11.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This
agreement, entered into among First Trust Portfolios L.P., as Sponsor,
JPMorgan Chase Bank as Trustee, First Trust Advisors L.P. as Portfolio
Supervisor and Securities Evaluation Service, Inc. as Evaluator, governs
the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS ON SOME OF THE INFORMATION IN THIS
PROSPECTUS IN AN "INFORMATION SUPPLEMENT" BY CALLING THE TRUSTEE AT 1-
800-682-7520.
How We Created the Trust.
On the Initial Date of Deposit, we deposited U.S. dollar-denominated
sovereign debt obligations with the Trustee and in turn, the Trustee
delivered documents to us representing our ownership of the Trust, in
the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trust in order to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"),
and not the actual percentage relationship existing on the day we are
creating new Units, since the two may differ. This difference may be due
to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities in the Trust.
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities will mature or may
periodically be redeemed or sold under certain circumstances, and the
proceeds from these events will be used to meet Trust obligations or
distributed to Unit holders, but will not be reinvested. However,
Securities will not be sold to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation, or if the
Securities no longer meet the criteria by which they were selected. You
will not be able to dispose of any of the Securities in the Trust or
vote the Securities. As the holder of the Securities, the Trustee will
vote all of the Securities and will do so based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities") we will refund
to you that portion of the purchase price and sales charge resulting
from the failed contract on the next Distribution Date. Any Replacement
Security the Trust acquires will be identical to those from the failed
contract.
Portfolio
Objectives.
The Trust's objective is to provide investors with current income and
the potential for capital preservation.
While stocks have shown signs of life lately, many income investors have
been rewarded by investing in Government Securities of foreign
countries, also referred to as sovereign debt. For example, instead of
investing in notes issued by the U.S. government, an investment in
sovereign debt could consist of notes issued by the Republic of Italy.
The portfolio of the Global Sovereign Debt Income Portfolio will consist
of U.S. dollar-denominated sovereign debt from around the globe,
providing diversification within this portfolio and adding a level of
diversification to your overall portfolio.
The Global Sovereign Debt Income Portfolio seeks to provide high income
and capital preservation potential. This portfolio seeks to meet its
objective by investing in the debt of sovereign states with high coupons
and with prospects for total return, in our opinion. However, there can
be no assurance that the objective will be achieved. The portfolio will
be diversified among various global issuers, most of which are
considered to be of the emerging market asset class. The majority of
these securities are considered "high-yield" or "junk" bonds, an
investment in which involves greater risks, including default risk, than
those associated with investment grade securities.
Favorable Conditions.
The Market in General. For the past couple years, investors'
dissatisfaction with stocks has led to a spike in demand for fixed-
Page 8
income securities. But sovereign debt has been particularly attractive,
in our opinion, and overlooked by many U.S. investors. Yields on U.S.
Treasury bonds have been at 40-year lows recently, so income-seeking
investors have not only invested heavily in U.S. high-yield corporate
bonds, but have also found higher yields abroad.
Although the weakening U.S. dollar doesn't have a direct benefit because
all of the sovereign debt in this portfolio is U.S. dollar-denominated,
the dollar's weakness may help in a less obvious way. Foreign
governments which pay interest on their obligations in U.S. dollars
benefit from a decline in the value of the U.S. dollar as compared to
such government's local currency, which effectively reduces their cost
of borrowing. There is, however, no assurance that the U.S. dollar will
not appreciate in value relative to other currencies, which would
negatively impact issuers of U.S. dollar-denominated sovereign debt.
Improving Fundamentals. We believe improving issuer fundamentals make
these securities more attractive. Structural changes are at the core of
those improvements. Consider, for example, the anticipated expansion of
the European Union (EU) to include several countries, like Poland, from
Eastern and Central Europe. It suggests that these countries have made
progress on the structural and economic reforms required to join the EU.
And with some of the highest-profile emerging market countries, such as
Russia and Brazil, there's clearly been progress made toward sounder
economic policy and stability over the last several years (according to
the Organization for Economic Co-operation and Development). There is,
however, no assurance that the structural or economic improvements made
by these countries will be effective over the long-term or that they
won't be dismantled in the future.
Credit Quality and Greater Diversification. Progress has been reflected
in the generally increased creditworthiness of sovereign debt, in our
opinion. Currently, emerging markets' bonds yield, on average,
approximately 5.2 percentage points above comparable U.S. Treasury
securities [Merrill Lynch High Yield & Emerging Markets Sovereign Index,
August 6, 2003]. Fewer than 10% of all emerging market countries carried
investment grade credit ratings in 1998. Today, 45% of them do [USA
TODAY, July 11, 2003].
The Global Sovereign Debt Income Portfolio is comprised of bonds issued
by countries within six continents.
Estimated Returns
The Current and Long-Term Returns set forth in the "Summary of Essential
Information" are estimates and are designed to be comparative rather
than predictive. We cannot predict your actual return, which will vary
with Unit price, how long you hold your investment and with changes in
the portfolio, interest income and expenses. In addition, neither rate
reflects the true return you will receive, which will be lower, because
neither includes the effect of certain delays in distributions.
Estimated Current Return equals the estimated annual interest income to
be received from the Securities less estimated annual Trust expenses,
divided by the Public Offering Price per Unit (which includes the sales
charge). Estimated Long-Term Return is a measure of the estimated return
over the estimated average life of the Trust and is calculated using a
formula which (1) factors in the market values, yields (which take into
account the amortization of premiums and the accretion of discounts) and
estimated retirements of the Securities, and (2) takes into account a
compounding factor, the sales charge and expenses. Unlike Estimated
Current Return, Estimated Long-Term Return reflects maturities,
discounts and premiums of the Securities in the Trust. We will provide
you with estimated cash flows for the Trust at no charge upon your
request.
Risk Factors
All investments involve risk. This section describes the main risks that
can impact the value of the Securities in the Trust. You should
understand these risks before you invest. If the value of the Securities
falls, the value of your Units will also fall. As with any investment,
we cannot guarantee that the performance of the Trust will be positive
over any period of time or that you won't lose money. Units of the Trust
are not deposits of any bank and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Sovereign Debt Obligations. The bonds held by the Trust are issued by
foreign governments, which makes the Trust subject to more risks than if
it only invested in domestic bonds. Investments in debt securities of
foreign governments present special risks, including the fact that
issuers may be unable or unwilling to repay principal and/or interest
when due in accordance with the terms of such debt, or may be unable to
make such repayments when due in the currency required under the terms
Page 9
of the debt. Political, economic and social events also may have a
greater impact on the price of debt securities issued by foreign
governments than on the price of U.S. securities. In addition, brokerage
and other transaction costs on foreign securities exchanges are often
higher than in the United States and there is generally less government
supervision and regulation of exchanges, brokers and issuers in foreign
countries.
A sovereign government's willingness to pay its debt obligations is a
qualitative issue that distinguishes sovereigns from most other types of
issuers. A government may default selectively on its obligations, even
when it possesses the financial capacity for timely debt service. A
wide range of political, social and economic factors influence
government policy and the willingness to pay.
The stability and predictability of a country's political institutions
including the presence of adversarial politics and frequent changes in
government may have an influence on a sovereign's ability to repay
obligations. Public and national security, relations with neighboring
countries, and military action may all place significant burdens on
fiscal policy, thereby reducing the flow of potential investment, and
putting the balance of payments under stress. Internal divisions along
racial or economic lines, political, social or diplomatic events may
also disrupt economic policy. Risks associated with investing in foreign
securities may be more pronounced in emerging markets where the
securities markets are substantially smaller, less developed, less
liquid, less regulated, and more volatile that the securities markets of
the U.S. and developed foreign markets.
Weak domestic capital markets, high debt to gross domestic product
ratios, poor or stagnant economies, low levels of economic development,
inability to raise revenue and higher and more variable debt-servicing
burdens may prevent countries from being able to support high debt
levels and withstand unexpected economic shocks and thus may make those
countries more likely to default on their obligations. In addition, weak
or less-developed financial systems, wide income disparities, highly
leveraged or undeveloped private sectors and large and somewhat
inefficient public sectors may have an impact on a sovereign's
willingness and/or ability to repay its obligations. The extent to which
a sovereign is able or willing to repay its debt may also be influenced
by the issuer's balance of payments, including export performance, its
access to international credits and investments, the extent of its
foreign reserves, overall governmental debt, changes in government
balances, revenues, expenditures, and monetary stability.
High-Yield Bonds. Because more than 25% of the Trust is invested in high-
yield bonds, the Trust is considered to be concentrated in high-yield
bonds. A portfolio concentrated in a single bond type may present more
risks than a portfolio which is broadly diversified over several bond
types. High-yield, high risk bonds are subject to greater market
fluctuations and risk of loss than bonds with higher investment ratings.
The value of these bonds will decline significantly with increases in
interest rates, not only because increases in rates generally decrease
values, but also because increased rates may indicate an economic
slowdown. An economic slowdown, or a reduction in an issuer's
creditworthiness, may result in the issuer being unable to maintain
earnings at a level sufficient to maintain interest and principal
payments.
High-yield or "junk" bonds, the generic names for bonds rated below
"Triple B" by Standard & Poor's or Moody's, should be considered
speculative as these ratings indicate a quality of less than investment
grade. Because high-yield bonds are perceived by investors to be riskier
than higher rated bonds, their prices tend to fluctuate more than higher
rated bonds and are affected by short-term credit developments to a
greater degree.
The market for high-yield bonds is smaller and less liquid than that for
investment grade bonds. Due to the smaller, less liquid market for high-
yield bonds, the bid-offer spread on such bonds is generally greater
than it is for investment grade bonds and the purchase or sale of such
bonds may take longer to complete.
Investment Grade Bonds. Investment grade bonds are subject to various
risks described below. The value of these bonds will decline with
increases in interest rates, not only because increases in rates
generally decrease values, but also because increased rates may indicate
an economic slowdown. An economic slowdown, or a reduction in an
issuer's creditworthiness, may result in the issuer being unable to
maintain earnings at a level sufficient to maintain interest and
principal payments on its bonds.
Emerging Markets. Approximately ____% of the portfolio consists of
Securities issued by countries which are considered to be emerging
markets. Of these Securities, more than 25% of the portfolio are issued
by Latin American governments. Because more than 25% of the Trust is
invested in bonds issued by governments in Latin America, the Trust is
also considered to be concentrated in Latin America. A portfolio
concentrated in a single geographic area may present more risks than a
portfolio which is broadly diversified over several geographical areas.
An emerging market country is any country determined to have an emerging
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markets economy, considering factors such as whether the country has a
low-to-middle income economy according to the World Bank or its related
organizations, the country's credit rating, its political and economic
stability and the development of its financial and capital markets.
These countries generally include countries located in Latin America,
the Caribbean, Asia, Africa, the Middle East, and Eastern and Central
Europe. The extent of economic development, political stability and
market depth of emerging market countries varies and investments in
bonds issued by such countries typically involve greater potential gain
or loss than investments in bonds issued by governments of more
developed countries. Emerging market countries tend to have economic
structures that are less diverse and mature and political systems that
are less stable than those of more developed markets. Emerging market
countries may also be more likely to experience political turmoil or
rapid changes in economic conditions than more developed markets, and
the financial condition of issuers in emerging market countries may be
more precarious than in more developed countries. Certain countries
depend to a larger degree upon international trade or development
assistance and, therefore, are vulnerable to changes in trade or
assistance which, in turn, may be affected by a variety of factors. The
Trust may be particularly sensitive to changes in the economies of
certain countries resulting from any reversal of economic
liberalization, political unrest or the imposition of sanctions by the
United States or other countries.
Certain emerging market countries, particularly those in Latin America,
have experienced currency devaluations and substantial (and, in some
cases, extremely high) rates of inflation, which have had a negative
effect on the economies and securities markets of such countries.
Economies in emerging market countries often are dependent heavily upon
commodity prices and international trade and, accordingly, have been and
may continue to be affected adversely by the economies of their trading
partners, trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures negotiated by
the countries with which they trade.
The securities markets of emerging market countries are substantially
smaller, less liquid and more volatile than the major securities markets
in the United States. In addition, securities in emerging market
countries are less developed than U.S. securities markets. Disclosure
and regulatory standards are in many respects less stringent than U.S.
standards. Furthermore, there is a lower level of monitoring and
regulation of the markets and the activities of investors in such
markets, and enforcement of existing regulations has been extremely
limited. Consequently, the prices at which the Trust may acquire
investments may be affected by other market participants' anticipation
of the Trust's investing, by trading by persons with material non-public
information and by securities transactions by brokers in anticipation of
transactions by the Trust in particular securities.
Emerging market debt securities generally are rated in the lower rating
categories of recognized credit rating agencies or are unrated and
considered to be of comparable quality to lower rated debt securities.
Market Risk. Market risk is the risk that the value of the Securities in
the Trust will fluctuate. Market value fluctuates in response to various
factors. These can include changes in interest rates, inflation, the
financial condition of a Securities' issuer, perceptions of the issuer,
ratings on a bond, or political or economic events affecting the issuer.
Because the Trust is not managed, the Trustee will not sell Securities
in response to or in anticipation of market fluctuations, as is common
in managed investments.
Interest Rate Risk. Interest rate risk is the risk that the value of the
Securities will fall if interest rates increase. Bonds typically fall in
value when interest rates rise and rise in value when interest rates
fall. Bonds with longer period before maturity are often more sensitive
to interest rate changes.
Credit Risk. Credit risk is the risk that a bond's issuer is unable to
meet its obligation to pay principal or interest on the bond.
Call Risk. Call risk is the risk that the issuer prepays or "calls" a
bond before its stated maturity. An issuer might call a bond if interest
rates fall and the bond pays a higher than market interest rate or if
the issuer no longer needs the money for its original purpose. If an
issuer calls a bond, the Trust will distribute the principal to you but
your future interest distributions will fall. You might not be able to
reinvest this principal in another investment with as high a yield. A
bond's call price could be less than the price the Trust paid for the
bond and could be below the bond's par value. This means you could
receive less than the amount you paid for your Units. If enough bonds in
the Trust are called, the Trust could terminate early. Bond call dates
are listed in the "Schedule of Investments."
Bond Quality Risk. Bond quality risk is the risk that a bond will fall
in value if a rating agency decreases the bond's rating.
Liquidity Risk. Liquidity risk is the risk that the value of a bond will
fall if trading in the bond is limited or absent. No one can guarantee
Page 11
that a liquid trading market will exist for any bond because these bonds
generally trade in the over-the-counter market (they are not listed on a
securities exchange).
Legislation/Litigation Risk. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on the Securities. In addition, litigation regarding
the Securities may negatively impact the share prices of these
Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the value
of the Securities.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Interest and Principal Accounts;
- - Net interest accrued but unpaid on the Securities after the First
Settlement Date to the date of settlement; and
- - The sales charge.
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the offering prices of the Securities, changes
in the value of the Interest and/or Principal Accounts and as interest
on the Securities accrues.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Cash which comprises the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of the Trust's statement of net assets,
legal fees and the initial fees and expenses of the Trustee) has been
included in the Trust. The Sponsor will be reimbursed for the Trust's
organization costs at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trust). To the extent actual
organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of the Trust.
Accrued Interest.
Accrued interest represents unpaid interest on a bond from the last day
it paid interest. Interest on the Securities generally is paid semi-
annually, although the Trust accrues such interest daily. Because the
Trust always has an amount of interest earned but not yet collected, the
Public Offering Price of Units will have added to it the proportionate
share of accrued interest to the date of settlement. You will receive
the amount, if any, of accrued interest included in your purchase price
on the next distribution date. In addition, if you sell or redeem your
Units you will be entitled to receive your proportionate share of the
accrued interest from the purchaser of your Units.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of
Units ($500 if you are purchasing Units for your Individual Retirement
Account or any other qualified retirement plan).
Sales Charge.
Initial Offering Period. The maximum sales charge during the initial
offering period equals 3.95% of the Public Offering Price (equivalent to
4.104% of the net amount invested).
Secondary Market. The maximum sales charge during the secondary market
is determined based upon the number of years remaining to the maturity
of each Security in the Trust, but in no event will the secondary market
sales charge exceed 5.00% of the Public Offering Price (equivalent to
5.263% of the net amount invested). For purposes of computation,
Securities will be deemed to mature either on their expressed maturity
dates, or an earlier date if: (a) they have been called for redemption
or funds have been placed in escrow to redeem them on an earlier call
date; or (b) such Securities are subject to a "mandatory tender." The
effect of this method of sales charge computation will be that different
sales charge rates will be applied to each of the Securities, in
accordance with the following schedule:
Page 12
Secondary Market
Years to Maturity Sales Charge
_________________ ________________
Less than 1 1.00%
1 but less than 2 1.50%
2 but less than 3 2.00%
3 but less than 4 2.50%
4 but less than 5 3.00%
5 but less than 6 3.50%
6 but less than 7 4.00%
7 but less than 8 4.50%
8 or more 5.00%
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum sales charge is reduced, as
follows:
If you Invest Your Maximum Sales
(in thousands):* Charge will be:
_________________ ________________
$50 but less than $100 3.70%
$100 but less than $250 3.45%
$250 but less than $500 2.95%
$500 but or more 1.95%
*The breakpoint sales charges are also applied on a Unit basis utilizing
a breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trust in this prospectus with any other same day purchases of
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the party
making the sale.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts"),
may purchase Units at the Public Offering Price less 2.50%. See
"Distribution of Units-Dealer Concessions."
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, dealers and their affiliates, and
vendors providing services to us may purchase Units at the Public
Offering Price less the applicable dealer concession. Immediate family
members include spouses, children, grandchildren, parents, grandparents,
siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law and sisters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons.
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
the Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in the Trust as of the Evaluation Time on each business day
and will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain holidays on which
the NYSE is closed.
The aggregate underlying value of the Securities in the Trust will be
determined by the Evaluator as follows:
a) On the basis of current market offering prices for the Securities
obtained from dealers or brokers who customarily deal in bonds
comparable to those held by the Trust;
b) If such prices are not available for any of the Securities, on the
basis of current market offering prices of comparable bonds;
c) By determining the value of the Securities on the offering side of
the market by appraisal; or
d) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities in the Trust will be determined as set forth
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above, except that bid prices are used instead of offering prices when
necessary. The offering price of the Securities may be expected to be
greater than the bid price by approximately 1-3% of the aggregate
principal amount of such Securities.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
FIS can purchase Units at prices which represent a concession or agency
commission of 3.45% of the Public Offering Price per Unit (or 65% of the
maximum sales charge for secondary market sales). Dealers and other
selling agents selling Units pursuant to a selling agreement with FIS
can purchase Units from FIS at prices which reflect a concession or
agency commission of 2.70% of the Public Offering Price per Unit (or 65%
of the maximum sales charge for secondary market sales). Other dealers
and selling agents can purchase Units from FIS at prices which reflect a
concession or agency commission of 2.50% of the Public Offering Price
per Unit (or 60% of the maximum sales charge for secondary market sales).
In addition, all eligible dealer firms and other selling agents who
sell Units of the Trust during the initial offering period in the dollar
amounts shown below will be entitled to the following additional sales
concessions as a percentage of the Public Offering Price:
Total Sales Additional
(in millions) Concession
_____________________ __________
$15 but less than $20 0.025%
$20 or more 0.050%
Dealers and other selling agents (other than FIS) will not receive an
additional concession on the sale of Fee Accounts Units, but such Units
will be included in determining whether the above volume sales levels
are met. Eligible dealer firms and other selling agents include entities
that are providing marketing support for First Trust unit investment
trusts by distributing or permitting the distribution of marketing
materials and other product information. Eligible dealer firms and other
selling agents will not include firms that solely provide clearing
services to other broker/dealer firms. In addition, dealers and other
selling agents who, during any consecutive 12-month period, sell at
least $250 million or $500 million worth of primary market units of unit
investment trusts sponsored by us will receive a concession of $2,500 or
$5,000, respectively, in the month following the achievement of this
level.
We reserve the right to change the amount of concessions or agency
commissions from time to time. Certain commercial banks may be making
Units of the Trust available to their customers on an agency basis. A
portion of the sales charge paid by these customers is kept by or given
to the banks in the amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's or selling agent's registered representatives who have sold a
minimum number of Units during a specified time period. We may also pay
fees to qualifying dealers for services or activities which are meant to
result in sales of Units of the Trust. In addition, we will pay to
dealers who sponsor sales contests or recognition programs that conform
to our criteria, or participate in our sales programs, amounts equal to
no more than the total applicable sales charges on Units sold by such
person during such programs. We make these payments out of our own
assets, and not out of Trust assets. These programs will not change the
price you pay for your Units.
Advertising and Investment Comparisons.
Advertising materials regarding the Trust may discuss several topics,
including: developing a long-term financial plan; working with your
financial professional; the nature and risks of various investment
strategies and unit investment trusts that could help you reach your
financial goals; the importance of discipline; how the Trust operates;
how securities are selected; various unit investment trust features such
as convenience and costs; and options available for certain types of
unit investment trusts. These materials may include descriptions of the
principal businesses of the companies represented in the Trust, research
analysis of why they were selected and information relating to the
qualifications of the persons or entities providing the research
analysis. In addition, they may include research opinions on the economy
and industry sectors included and a list of investment products
generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust
(which may show performance net of the expenses and charges the Trust
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
Page 14
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of the Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of the Trust's future
performance. We may also, from time to time, use advertising which
classifies trusts according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit less any reduction as stated in "Public Offering." Also,
any difference between our cost to purchase the Securities and the price
at which we sell them to the Trust is considered a profit or loss (see
Note 2 of "Schedule of Investments"). During the initial offering
period, dealers and others may also realize profits or sustain losses as
a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and costs incurred in annually updating the Trust's registration
statement. We may discontinue purchases of Units at any time. IF YOU
WISH TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess,
other than for excess annual audit costs. The Trustee will pay operating
expenses of the Trust from the Interest Account of such Trust if funds
are available, and then from the Principal Account. The Interest and
Principal Accounts are noninterest-bearing to Unit holders, so the
Trustee may earn interest on these funds, thus benefiting from their use.
First Trust Advisors L.P., an affiliate of ours, acts as Portfolio
Supervisor and will be compensated for providing portfolio supervisory
services as well as bookkeeping and other administrative services to the
Trust. In providing portfolio supervisory services, the Portfolio
Supervisor will purchase research services from FIS for a fee not to
exceed $.0025 per Unit sold. As Sponsor, we will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. Legal and regulatory filing fees and expenses
associated with updating the Trust's registration statement yearly are
also chargeable to the Trust.
The fees payable to the Portfolio Supervisor, Evaluator and Trustee are
based on the largest aggregate number of Units of the Trust outstanding
at any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing services to all unit investment trusts be more
than the actual cost of providing such services in such year.
In addition to the Trust's operating expenses, and those fees described
above, the Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to
its responsibilities under the Indenture;
Page 15
- - The expenses and costs incurred by the Trustee to protect the Trust
and your rights and interests;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of the Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trust. In addition, if there is not enough cash in the Interest or
Principal Accounts of the Trust, the Trustee has the power to sell
Securities to make cash available to pay these charges, which may result
in capital gains or losses to you. See "Tax Status."
The Trust will be audited annually, so long as we are making a secondary
market for Units. We will bear the cost of these annual audits to the
extent the cost exceeds $0.50 per Unit. Otherwise, the Trust will pay
for the audit. You may request a copy of the audited financial
statements from the Trustee.
Tax Status
Federal Tax Status.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a corporation, a non-U.S. person,
a broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences. In addition, the Internal Revenue Service
issued new withholding and reporting regulations effective January 1,
2001. Foreign investors should consult their own tax advisors regarding
the tax consequences of these regulations.
Trust Assets.
The Trust will hold various debt obligations (the "Securities"). All of
the assets of the Trust constitute the "Trust Assets." For purposes of
this federal tax discussion, it is assumed that all the Securities
constitute debt for federal income tax purposes.
Trust Status.
The Trust will not be taxed as a corporation for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Trust Assets and other assets held by the Trust, and
as such you will be considered to have received a pro rata share of
income (e.g., interest, accruals of original issue discount and market
discount, and capital gains, if any) from the Trust Assets when such
income would be considered to be received by you if you directly owned
the Trust Assets. This is true even if you elect to have your
distributions automatically reinvested into additional Units. In
addition, the income from the Trust Assets which you must take into
account for federal income tax purposes is not reduced by amounts used
to pay Trust expenses.
Your Tax Basis and Income or Loss upon Disposition.
If the Trust disposes of Trust Assets, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related Trust
Asset from your share of the total proceeds received in the transaction.
You can generally determine your initial tax basis in each Trust Asset
by apportioning the cost of your Units, generally including sales
charges, among each Trust Asset ratably according to their value on the
date you acquire your Units. In certain circumstances, however, you may
have to adjust your tax basis after you acquire your Units (for example,
in the case of original issue discount, market discount, premium and
accrued interest, as discussed below).
Under the recently enacted "Jobs and Growth Tax Relief Reconciliation
Act of 2003" (the "Tax Act"), if you are an individual, the maximum
marginal federal tax rate for net capital gain is generally 15%
(generally 5% for certain taxpayers in the 10% and 15% tax brackets).
These new capital gains rates are generally effective for taxable years
ending on or after May 6, 2003 and beginning before January 1, 2009.
However, special effective date provisions are set forth in the Tax Act.
For example, there are special transition rules provided with respect to
gain properly taken into account for the portion of the taxable year
before May 6, 2003.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if
the holding period for the asset is more than one year and is short-term
Page 16
if the holding period for the asset is one year or less. You must
exclude the date you purchase your Units to determine the holding
period. The tax rates for capital gains realized from assets held for
one year or less are generally the same as for ordinary income. The
Internal Revenue Code may, however, treat certain capital gains as
ordinary income in special situations.
Discount, Accrued Interest and Premium.
Some Securities may have been sold with original issue discount. This
generally means that the Securities were originally issued at a price
below their face (or par) value. Original issue discount accrues on a
daily basis and generally is treated as interest income for federal
income tax purposes. The basis of your Units and of each Security which
was issued with original issue discount must be increased as original
issue discount accrues.
Some Securities may have been purchased at a market discount. Market
discount is generally the excess of the stated redemption price at
maturity for the Security over the purchase price of the Security.
Market discount can arise based on the price the Trust pays for a
Security or on the price you pay for your Units. Market discount is
taxed as ordinary income. You will recognize this income when the Trust
receives principal payments on the Security, when the Security is sold
or redeemed, or when you sell or redeem your Units. Alternatively, you
may elect to include market discount in taxable income as it accrues.
Whether or not you make this election will affect how you calculate your
basis and the timing of certain interest expense deductions.
Alternatively, some Securities may have been purchased by you or the
Trust at a premium. Generally, if the tax basis of your pro rata portion
of any Security, generally including sales charges, exceeds the amount
payable at maturity, such excess is considered premium. You may elect to
amortize bond premium. If you make this election, you may reduce your
interest income received on the Security by the amount of the premium
that is amortized and your tax basis will be reduced.
If the price of your Units included accrued interest on a Security, you
must include the accrued interest in your tax basis in that Security.
When the Trust receives this accrued interest, you must treat it as a
return of capital and reduce your tax basis in the Security.
This discussion provides only the general rules with respect to the tax
treatment of original issue discount, market discount and premium. The
rules, however, are complex and special rules apply in certain
circumstances. For example, the accrual of market discount or premium
may differ from the discussion set forth above in the case of Securities
that were issued with original issue discount.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of the Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by the Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some amounts received by the Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by your Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
If you are a foreign investor (i.e., an investor other than a U.S.
citizen or resident or a U.S. corporation, partnership, estate or
trust), you will not be subject to U.S. federal income taxes, including
withholding taxes, on some of the income from the Trust or on any gain
from the sale or redemption of your Units, provided that certain
conditions are met. You should consult your tax advisor with respect to
the conditions you must meet in order to be exempt for U.S. tax purposes.
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as a corporation, and the income of the
Trust will be treated as the income of the Unit holders in the same
manner as for Federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
Retirement Plans
You may purchase Units of the Trust for:
- - Individual Retirement Accounts,
- - Keogh Plans,
- - Pension funds, and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
Page 17
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in these plans, you should consult your
attorney or tax advisor. Brokerage firms and other financial
institutions offer these plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- - A written initial transaction statement containing a description of
the Trust;
- - A list of the number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of interest (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- - The amount of interest received by the Trust less deductions for
payment of applicable taxes, fees and Trust expenses, redemption of
Units and the balance remaining on the last business day of the calendar
year;
- - The dates Securities were sold and the net proceeds received from
such sales less deduction for payment of applicable taxes, fees and
Trust expenses, redemption of Units and the balance remaining on the
last business day of the calendar year;
- - The Securities held and the number of Units outstanding on the last
business day of the calendar year;
- - The Redemption Price per Unit on the last business day of the
calendar year; and
- - The amounts actually distributed during the calendar year from the
Interest and Principal Accounts, separately stated.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit any interest received on
the Trust's Securities to the Interest Account of such Trust. All other
receipts, such as return of capital, are credited to the Principal
Account of such Trust.
After deducting the amount of accrued interest the Trustee advanced to
us as Unit holder of record as of the First Settlement Date, the Trustee
will distribute an amount substantially equal to your pro rata share of
the balance of the Interest Account calculated on the basis of one-
twelfth (one-half in the case of Unit holders electing semi-annual
distributions) of the estimated annual amount of interest received in
the Income Account after deducting estimated expenses on or near the
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Distribution Dates to Unit holders of record on the preceding
Distribution Record Date. See "Summary of Essential Information."
However, the Initial Distribution per Unit (and Partial Distribution per
Unit in the case of Unit holders electing semi-annual distributions)
differ from estimated regular distributions because they do not
represent a full month or six-month period. Because interest is not
received by the Trust at a constant rate throughout the year, the
distributions you receive may be more or less than the amount credited
to the Interest Account as of the Distribution Record Date. In order to
minimize fluctuations in distributions, the Trustee is authorized to
advance such amounts as may be necessary to provide distributions of
approximately equal amounts. The Trustee will be reimbursed, without
interest, for any such advances from funds in the Interest Account at
the next Distribution Record Date. The Trustee will distribute amounts
in the Principal Account on the last day of each month to Unit holders
of record on the fifteenth day of each month provided the amount equals
at least $1.00 per Unit. However, amounts in the Principal Account from
the sale of Securities designated to meet redemptions of Units or to pay
expenses will not be distributed. If the Trustee does not have your TIN,
it is required to withhold a certain percentage of your distribution and
deliver such amount to the Internal Revenue Service ("IRS"). You may
recover this amount by giving your TIN to the Trustee, or when you file
a tax return. However, you should check your statements to make sure the
Trustee has your TIN to avoid this "back-up withholding."
You will receive interest distributions monthly unless you elect to
receive them semi-annually. Your plan of distribution will remain in
effect until changed. During May of each year the Trustee will provide
you with information on how to change your distribution election.
Within a reasonable time after the Trust is terminated you will receive
the pro rata share of the money from the sale of the Securities.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Universal Distribution Option. You may elect to have your principal and
interest distributions automatically distributed to any other investment
vehicle of which you have an existing account. If you elect this option,
the Trustee will notify you of each distribution made pursuant to this
option. You may elect to terminate your participation at any time by
notifying the Trustee in writing.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are held in
uncertificated form, you need only to deliver a request for redemption
to the Trustee. In either case, the certificates or the redemption
request must be properly endorsed with proper instruments of transfer
and signature guarantees as explained in "Rights of Unit Holders-Unit
Ownership" (or by providing satisfactory indemnity if the certificates
were lost, stolen, or destroyed). No redemption fee will be charged, but
you are responsible for any governmental charges that apply. Certain
broker/dealers may charge a transaction fee for processing redemption
requests. Units redeemed directly through the Trustee are not subject to
such transaction fees. Three business days after the day you tender your
Units (the "Date of Tender") you will receive cash in an amount for each
Unit equal to the Redemption Price per Unit calculated at the Evaluation
Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing interest will be withdrawn
from the Interest Account of the Trust if funds are available for that
purpose, or from the Principal Account. All other amounts paid on
redemption will be taken from the Principal Account. The IRS will
require the Trustee to withhold a portion of your redemption proceeds if
the Trustee does not have your TIN, as generally discussed under
"Distributions."
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of the Trust will
be reduced. These sales may result in lower prices than if the
Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
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an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Interest and Principal Accounts not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. accrued interest on the Securities.
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made; and
5. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Until the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period, the Redemption Price per Unit will
include estimated organization costs as set forth under "Fee Table."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security has defaulted in the payment of principal
or interest on the Securities;
- - Any action or proceeding seeking to restrain or enjoin the payment of
principal or interest on the Securities has been instituted;
- - The issuer of the Security has breached a covenant which would affect
the payment of principal or interest on the Security, the issuer's
credit standing, or otherwise damage the sound investment character of
the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations;
- - Such Securities are the subject of an advanced refunding;
- - Such factors arise which, in our opinion, adversely affect the tax or
exchange control status of the Securities; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to the Trust.
If a Security defaults in the payment of principal or interest and no
provision for payment is made, the Trustee must notify us of this fact
within 30 days. If we fail to instruct the Trustee whether to sell or
hold the Security within 30 days of our being notified, the Trustee may,
in its discretion, sell any defaulted Securities and will not be liable
for any depreciation or loss incurred thereby.
Except in the limited instance in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the Trust, will reject any offer for new or exchanged
securities or property in exchange for a Security, except that we may
instruct the Trustee to accept such an offer or to take any other action
with respect thereto as we may deem proper if the issuer is in default
with respect to such Securities or in our written opinion the issuer
will likely default in respect to such Securities in the foreseeable
future. Any obligations received in exchange or substitution will be
held by the Trustee subject to the terms and conditions in the Indenture
to the same extent as Securities originally deposited in the Trust. We
may get advice from the Portfolio Supervisor before reaching a decision
regarding the receipt of new or exchanged securities or property. The
Trustee may retain and pay us or an affiliate of ours to act as agent
for the Trust to facilitate selling Securities, exchanged securities or
property from the Trust. If we or our affiliate act in this capacity, we
will be held subject to the restrictions under the Investment Company
Act of 1940, as amended.
The Trustee may sell Securities that we designate; or, without our
direction, in its own discretion, in order to meet redemption requests
or pay expenses. We will maintain a list with the Trustee of which
Securities should be sold. We may consider sales of units of unit
investment trusts which we sponsor in making recommendations to the
Trustee on the selection of broker/dealers to execute the Trust's
portfolio transactions, or when acting as agent for the Trust in
acquiring or selling Securities on behalf of the Trust.
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Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated prior to the Mandatory
Termination Date:
- - Upon the consent of 100% of the Unit holders;
- - If the value of the Securities owned by the Trust as shown by any
evaluation is less than 20% of the aggregate principal amount of
Securities deposited in such Trust during the initial offering period
(the "Discretionary Liquidation Amount"); or
- - In the event that Units of the Trust not yet sold aggregating more
than 60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to registered
account holders which will specify how certificates, if any, should be
tendered to the Trustee. If the Trust is terminated due to this last
reason, we will refund your entire sales charge. For various reasons,
the Trust may be reduced below the Discretionary Liquidation Amount and
could therefore be terminated prior to the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner, timing and execution of
the sale of Securities as part of the termination of the Trust. Because
the Trustee must sell the Securities within a relatively short period of
time, the sale of Securities as part of the termination process may
result in a lower amount than might otherwise be realized if such sale
were not required at this time.
You will receive a cash distribution from the sale of the remaining
Securities, along with your interest in the Interest and Principal
Accounts, within a reasonable time after the Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from
the Trust any accrued costs, expenses, advances or indemnities provide
by the Indenture, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to pay any
taxes or other governmental charges.
Description of Bond Ratings*
*As published by the rating companies.
Standard & Poor's.
A brief description of the applicable Standard & Poor's rating symbols
and their meanings follows:
Standard & Poor's sovereign credit ratings are an assessment of each
government's ability and willingness to service its debt in full and on
time. A rating is a forward-looking estimate of default probability.
Sovereign ratings are not "country ratings," an important and often
misunderstood distinction. Sovereign ratings address the credit risk of
national governments, but not the specific default risk of other
issuers. Ratings assigned to entities in each country are, most
frequently, the same as the sovereign's or lower, but may be higher.
Foreign currency ratings may be higher whenever the entity has stronger
credit characteristics than the sovereign and the risk of the imposition
of debt service-limiting foreign exchange controls is less than the risk
of sovereign default. Among the examples of this case are where there is
a monetary union with a higher-rated central bank or where the issuer
has a significant percentage of assets and business offshore or a very
supportive offshore parent. Similarly, an issue benefiting from specific
structural enhancements can be rated above the sovereign.
AAA - An obligor rated `AAA' has EXTREMELY STRONG capacity to meet its
financial commitments. `AAA' is the highest Issuer Credit Rating
assigned by Standard & Poor's.
AA - An obligor rated `AA' has VERY STRONG capacity to meet its
financial commitments. It differs from the highest rated obligors only
in small degree.
A - An obligor rated `A' has STRONG capacity to meet its financial
commitments but is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligors in higher-
rated categories.
BBB - An obligor rated `BBB' has ADEQUATE capacity to meet its financial
commitments. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the
obligor to meet its financial commitments.
Obligors rated `BB', `B', `CCC', and `CC' are regarded as having
significant speculative characteristics. `BB' indicates the least degree
of speculation and `CC' the highest. While such obligors will likely
have some quality and protective characteristics, these may be
outweighed by large uncertainties or major exposures to adverse
conditions.
BB - An obligor rated `BB' is LESS VULNERABLE in the near term than
other lower-rated obligors. However, it faces major ongoing
uncertainties and exposure to adverse business, financial, or economic
conditions which could lead to the obligor's inadequate capacity to meet
its financial commitments.
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B - An obligor rated `B' is MORE VULNERABLE than the obligors rated
`BB', but the obligor currently has the capacity to meet its financial
commitments. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its
financial commitments.
B - An obligation rated `B' is more vulnerable to nonpayment than
obligations rated `BB', but the obligor currently has the capacity to
meet its financial commitment on the obligation. Adverse business,
financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the
obligation.
CCC - An obligor rated `CCC' is CURRENTLY VULNERABLE, and is dependent
upon favorable business, financial, and economic conditions to meet its
financial commitments.
CC - An obligor rated `CC' is CURRENTLY HIGHLY-VULNERABLE.
C - A subordinated debt or preferred stock obligation rated `C' is
CURRENTLY HIGHLY VULNERABLE to nonpayment. The `C' rating may be used to
cover a situation where a bankruptcy petition has been filed or similar
action taken, but payments on this obligation are being continued. A `C'
also will be assigned to a preferred stock issue in arrears on dividends
or sinking fund payments, but that is currently paying.
R - An obligor rated `R' is under regulatory supervision owing to its
financial condition. During the pendency of the regulatory supervision
the regulators may have the power to favor one class of obligations over
others or pay some obligations and not others. Please see Standard &
Poor's issue credit ratings for a more detailed description of the
effects of regulatory supervision on specific issues or classes of
obligations.
SD and D - An obligor rated `SD' (Selective Default) or `D' has failed
to pay one or more of its financial obligations (rated or unrated) when
it came due. A `D' rating is assigned when Standard & Poor's believes
that the default will be a general default and that the obligor will
fail to pay all or substantially all of its obligations as they come
due. An `SD' rating is assigned when Standard & Poor's believes that the
obligor has selectively defaulted on a specific issue or class of
obligations but it will continue to meet its payment obligations on
other issues or classes of obligations in a timely manner. Please see
Standard & Poor's issue credit ratings for a more detailed description
of the effects of a default on specific issues or classes of obligations.
N.R. - An issuer designated N.R. is not rated.
Public Information Ratings - Ratings with a "pi" subscript are based on
an analysis of an issuer's published financial information, as well as
additional information in the public domain. They do not, however,
reflect in-depth meetings with an issuer's management and are therefore
based on less comprehensive information than ratings without a "pi"
subscript. Ratings with a "pi" subscript are reviewed annually based on
a new year's financial statements, but may be reviewed on an interim
basis if a major event occurs that may affect the issuer's credit quality.
Outlooks are not provided for ratings with a `pi' subscript, nor are
they subject to potential CreditWatch listings. Ratings with a `pi'
subscript generally are not modified with `+' or ` -' designations.
However, such designations may be assigned when the issuer's credit
rating is constrained by sovereign risk or the credit quality of a
parent company or affiliated group.
Plus (+) or minus(-) - The ratings from `AA' to `CCC' may be modified by
the addition of a plus or minus sign to show relative standing within
the major rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of
the project being financed by the bonds being rated and indicates that
payment of debt service requirements is largely or entirely dependent
upon the successful and timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the
project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion. The investor should exercise his/her
own judgment with respect to such likelihood and risk.
Credit Watch: Credit Watch highlights potential changes in ratings of
bonds and other fixed income securities. It focuses on events and trends
which place companies and government units under special surveillance by
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S&P's 180-member analytical staff. These may include mergers, voter
referendums, actions by regulatory authorities, or developments gleaned
from analytical reviews. Unless otherwise noted, a rating decision will
be made within 90 days. Issues appear on Credit Watch where an event,
situation, or deviation from trends occurred and needs to be evaluated
as to its impact on credit ratings. A listing, however, does not mean a
rating change is inevitable. Since S&P continuously monitors all of its
ratings, Credit Watch is not intended to include all issues under
review. Thus, rating changes will occur without issues appearing on
Credit Watch.
Moody's Investors Services.
A brief description of the applicable Moody's rating symbols and their
meanings follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues. Their safety is so absolute that with the occasional
exception of oversupply in a few specific instances, characteristically,
their market value is affected solely by money market fluctuations.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long term risks
appear somewhat larger than in Aaa securities. Their market value is
virtually immune to all but money market influences, with the occasional
exception of oversupply in a few specific instances.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future. The market value of A-rated bonds may be
influenced to some degree by economic performance during a sustained
period of depressed business conditions, but, during periods of
normalcy, A-rated bonds frequently move in parallel with Aaa and Aa
obligations, with the occasional exception of oversupply in a few
specific instances.
A1 and Baa1 - Bonds which are rated A1 and Baa1 offer the maximum in
security within their quality group, can be bought for possible
upgrading in quality, and additionally, afford the investor an
opportunity to gauge more precisely the relative attractiveness of
offerings in the market place.
Baa - Bonds which are rated Baa are considered as medium grade
obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well. The market value of Baa-rated bonds is more
sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa
market valuations will move in parallel with Aaa, Aa, and A obligations
during periods of economic normalcy, except in instances of oversupply.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at
the high end of its category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
Con.(- - -) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation
experience, (c) rentals which begin when facilities are completed, or
(d) payments to which some other limiting condition attaches.
Parenthetical rating denotes probable credit stature upon completion of
construction or elimination of basis of condition.
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Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading
and wholesale distribution of unit investment trusts under the "First
Trust" brand name and other securities. An Illinois limited partnership
formed in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $43 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 2002, the total consolidated
partners' capital of Trust Portfolios L.P. and subsidiary was
$15,580,362 (audited).
This information refers only to us and not to the Trust or to any series
of the Trust or to any other dealer. We are including this information
only to inform you of our financial responsibility and our ability to
carry out our contractual obligations. We will provide more detailed
financial information on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is JPMorgan Chase Bank, with its principal executive office
located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 Chase MetroTech Center, 3rd Floor,
Brooklyn, New York 11245. If you have questions regarding the Trust, you
may call the Customer Service Help Line at 1-800-682-7520. The Trustee
is supervised by the Superintendent of Banks of the State of New York,
the Federal Deposit Insurance Corporation and the Board of Governors of
the Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trust, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is Securities Evaluation Service, Inc. The Evaluator's
address is 531 East Roosevelt Road, Wheaton, Illinois 60187.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
However, the Evaluator will not be liable to the Trustee, Sponsor or
Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago,
Illinois, 60603. They have passed upon the legality of the Units offered
Page 24
hereby and certain matters relating to federal tax law. Carter, Ledyard
& Milburn LLP acts as the Trustee's counsel, as well as special New York
tax counsel for the Trust.
Experts.
The Trust's statement of net assets, including the schedule of
investments, as of the opening of business on the Initial Date of
Deposit included in this prospectus, which is part of such registration
statement, has been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and is included in
reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific risk information about the Trust.
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First Trust(R)
Advisor's Disciplined Income Trust, Global Sovereign Debt Income
Portfolio, Series 2003-11
FT 753
Sponsor:
FIRST TRUST PORTFOLIOS L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
JPMORGAN CHASE BANK
4 Chase MetroTech Center, 3rd floor
Brooklyn, New York 11245
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
Advisor's Asset Management Group, principal distributor of the Trust,
can be reached at:
1-888-969-2663
This prospectus contains information relating to Advisor's Disciplined
Income Trust, Global Sovereign Debt Income Portfolio, Series 2003-11,
but does not contain all of the information about this investment
company as filed with the Securities and Exchange Commission in
Washington, D.C. under the:
- - Securities Act of 1933 (file no. 333-107989) and
- - Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at
1-202-942-8090.
Information about the Trust is available on the EDGAR Database on the
Commission's Internet site at http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: publicinfo@sec.gov
August __, 2003
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 753 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing.
This Information Supplement is dated August __, 2003. Capitalized terms
have been defined in the Prospectus.
Table of Contents
Risk Factors
General 1
Foreign Issuers 2
Risk Factors
General. The Trust may consist of Securities which, in many cases, do
not have the benefit of covenants which would prevent the issuer from
engaging in capital restructurings or borrowing transactions in
connection with corporate acquisitions, leveraged buyouts or
restructurings which could have the effect of reducing the ability of
the issuer to meet its debt obligations and might result in the ratings
of the Securities and the value of the underlying Trust portfolio being
reduced.
Certain of the Securities in the Trust may have been acquired at a
market discount from par value at maturity. The coupon interest rates on
the discount Securities at the time they were purchased and deposited in
the Trust were lower than the current market interest rates for newly
issued Securities of comparable rating and type. If such interest rates
for newly issued comparable Securities increase, the market discount of
previously issued Securities will become greater, and if such interest
rates for newly issued comparable Securities decline, the market
discount of previously issued Securities will be reduced, other things
being equal. Investors should also note that the value of Securities
purchased at a market discount will increase in value faster than
Securities purchased at a market premium if interest rates decrease.
Conversely, if interest rates increase, the value of Securities
purchased at a market discount will decrease faster than Securities
purchased at a market premium. In addition, if interest rates rise, the
prepayment risk of higher yielding, premium Securities and the
prepayment benefit for lower yielding, discount Securities will be
reduced. A discount Security held to maturity will have a larger portion
of its total return in the form of capital gain and less in the form of
interest income than a comparable Security newly issued at current
market rates. Market discount attributable to interest changes does not
indicate a lack of market confidence in the issue. Neither the Sponsor
nor the Trustee shall be liable in any way for any default, failure or
defect in any of the Securities.
Certain of the Securities in the Trust may be original issue discount
Securities or zero coupon Securities. Under current law, the original
issue discount, which is the difference between the stated redemption
price at maturity and the issue price of the Securities, is deemed to
accrue on a daily basis and the accrued portion is treated as interest
income for Federal income tax purposes. On sale or redemption, any gain
realized that is in excess of the earned portion of original issue
discount will be taxable as capital gain unless the gain is attributable
to market discount in which case the accretion of market discount is
taxable as ordinary income. See "Tax Status" in the prospectus. The
current value of an original discount Security reflects the present
value of its stated redemption price at maturity. The market value tends
to increase in greater increments as the Securities approach maturity.
The effect of owning deep discount zero coupon Securities which do not
make current interest payments is that a fixed yield is earned not only
on the original investment, but also, in effect, on all earnings during
the life of the discount obligation. This implicit reinvestment of
earnings at the same rate eliminates the risk of being unable to
reinvest the income on such obligations at a rate as high as the
implicit yield on the discount obligation, but at the same time
eliminates the holder's ability to reinvest at higher rates in the
future. For this reason, the zero coupon Securities are subject to
substantially greater price fluctuations during periods of changing
interest rates than are securities of comparable quality which make
regular interest payments.
Certain of the Securities in the Trust may have been acquired at a
market premium from par value at maturity. The coupon interest rates on
the premium Securities at the time they were purchased and deposited in
the Trust were higher than the current market interest rates for newly
issued Securities of comparable rating and type. If such interest rates
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for newly issued and otherwise comparable Securities decrease, the
market premium of previously issued Securities will be increased, and if
such interest rates for newly issued comparable Securities increase, the
market premium of previously issued Securities will be reduced, other
things being equal. The current returns of Securities trading at a
market premium are initially higher than the current returns of
comparable Securities of a similar type issued at currently prevailing
interest rates because premium Securities tend to decrease in market
value as they approach maturity when the face amount becomes payable.
Because part of the purchase price is thus returned not at maturity but
through current income payments, early redemption of a premium Security
at par or early prepayments of principal will result in a reduction in
yield. Redemption pursuant to call provisions generally will, and
redemption pursuant to sinking fund provisions may, occur at times when
the redeemed Securities have an offering side valuation which represents
a premium over par or for original issue discount Securities a premium
over the accreted value. To the extent that the Securities were
deposited in the Trust at a price higher than the price at which they
are redeemed, this will represent a loss of capital when compared to the
original Public Offering Price of the Units. Because premium Securities
generally pay a higher rate of interest than Securities priced at or
below par, the effect of the redemption of premium Securities would be
to reduce Estimated Net Annual Unit Income by a greater percentage than
the par amount of such Securities bears to the total par amount of
Securities in the Trust. Although the actual impact of any such
redemptions that may occur will depend upon the specific Securities that
are redeemed, it can be anticipated that the Estimated Net Annual Unit
Income will be significantly reduced after the dates on which such
Securities are eligible for redemption.
Because certain of the Securities may from time to time under certain
circumstances be sold or redeemed or will mature in accordance with
their terms and because the proceeds from such events will be
distributed to Unit holders and will not be reinvested, no assurance can
be given that the 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.
Certain of the Securities contained in the Trust may be subject to being
called or redeemed in whole or in part prior to their stated maturities
pursuant to optional redemption provisions, sinking fund provisions or
otherwise. A Security subject to optional call is one which is subject
to redemption or refunding prior to maturity at the option of the
issuer. A refunding is a method by which a Security issue is redeemed,
at or before maturity, by the proceeds of a new Security issue. A
Security subject to sinking fund redemption is one which is subject to
partial call from time to time at par or from a fund accumulated for the
scheduled retirement of a portion of an issue prior to maturity. The
exercise of redemption or call provisions will (except to the extent the
proceeds of the called Securities are used to pay for Unit redemptions)
result in the distribution of principal and may result in a reduction in
the amount of subsequent interest distributions; it may also affect the
Estimated Long-Term Return and the Estimated Current Return on Units of
the Trust. Redemption pursuant to call provisions is more likely to
occur, and redemption pursuant to sinking fund provisions may occur,
when the Securities have an offering side valuation which represents a
premium over par or for original issue discount Securities a premium
over the accreted value. Unit holders may recognize capital gain or loss
upon any redemption or call.
The contracts to purchase Securities delivered to the Trustee represent
obligations by issuers or dealers to deliver Securities to the Sponsor
for deposit in the Trust. Contracts are typically settled and the
Securities delivered within a few business days subsequent to the
Initial Date of Deposit. The percentage of the aggregate principal
amount of the Securities of the Trust relating to "when, as and if
issued" Securities or other Securities with delivery dates after the
date of settlement for a purchase made on the Initial Date of Deposit,
if any, is indicated in the section entitled "Schedule of Investments"
in the prospectus. Interest on "when, as and if issued" and delayed
delivery Securities begins accruing to the benefit of Unit holders on
their dates of delivery. Because "when, as and if issued" Securities
have not yet been issued, as of the Initial Date of Deposit the Trust
are subject to the risk that the issuers thereof might decide not to
proceed with the offering of such Securities or that the delivery of
such Securities or the delayed delivery Securities may be delayed. If
such Securities or replacement Securities are not acquired by the Trust
or if their delivery is delayed, the Estimated Long-Term Return and the
Estimated Current Return shown in the prospectus may be reduced.
Foreign Issuers. Since all of the Securities included in the Trust
consist of securities of foreign issuers, an investment in the Trust
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
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available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trust, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trust.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trust are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trust of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trust. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trust and on the ability of the Trust to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trust relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by the Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the Trust will encounter
obstacles in disposing of the Securities, investors should realize that
the Securities may be traded in foreign countries where the securities
markets are not as developed or efficient and may not be as liquid as
those in the United States. The value of the Securities will be
adversely affected if trading markets for the Securities are limited or
absent.
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MEMORANDUM
Re: FT 753
The only difference of consequence (except as described
below) between FT 731, which is the current fund, and FT 753, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 731 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
First Trust Portfolios, L.P. is covered by a Broker's
Fidelity Bond, in the total amount of $2,000,000, the
insurer being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 753 has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on August 22, 2003.
FT 753
(Registrant)
By: FIRST TRUST PORTFOLIOS, L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
David J. Allen Director )
of The Charger )
Corporation, the ) August 22, 2003
General Partner of )
First Trust )
Portfolios, L.P. )
Judith M. Van Kampen Director )
of The Charger ) Robert M. Porcellino
Corporation, the ) Attorney-in-Fact**
General Partner of )
First Trust )
Portfolios, L.P. )
Karla M. Van Kampen-Pierre Director )
of The Charger )
Corporation, the )
General Partner of )
First Trust )
Portfolios, L.P. )
David G. Wisen Director )
of The Charger )
Corporation, the )
General Partner of )
First Trust )
Portfolios, L.P. )
* The title of the person named herein represents his
or her capacity in and relationship to First Trust
Portfolios, L.P., Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of FT 597
(File No. 333-76518) and the same is hereby incorporated
herein by this reference.
S-3
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, and 3.3 of the Registration Statement.
CONSENT OF DELOITTE & TOUCHE LLP
The consent of Deloitte & Touche LLP to the use of its name
and to the reference to such firm in the Prospectus included in
this Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities, L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22). Effective June 27,
2002, Nike Securities changed its name to First Trust
Portfolios, L.P.
1.1.1* Form of Trust Agreement for FT 753 among First Trust
Portfolios, L.P., as Depositor, JPMorgan Chase Bank, as
Trustee and First Trust Advisors L.P., as Evaluator and
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of First Trust
Portfolios, L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of First Trust Portfolios, L.P. (incorporated
by reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of The Charger
Corporation, the general partner of First Trust
Portfolios, L.P., Depositor (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.5 Copy of By-Laws of The Charger Corporation, the general
partner of First Trust Portfolios, L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed on behalf
of FT 415).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-5
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Directors listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
333-76518] filed on behalf of FT 597).
___________________________________
* To be filed by amendment.
S-6