SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 320
B. Name of Depositor: NIKE SECURITIES 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: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
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 DECEMBER 23, 1998
CLOSED-END TRUST SERIES
FT 320
FT 320 includes the unit investment trust described above (the "Trust").
The Trust consists of a diversified portfolio of publicly traded common
stocks issued by closed-end investment companies, the portfolios of
which are concentrated in tax-exempt municipal bonds (the "Securities").
The Trust seeks to provide interest income which is generally exempt
from Federal income tax under existing law and to preserve capital.
Units of the Trust are not deposits or obligations of any bank or
government agency. The Units are not guaranteed and involve investment
risk.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
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(registered trademark)
1-800-621-1675
The date of this Prospectus is _______, 1999
Page 1
Table of Contents
Page Number
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 9
Risk Factors 9
Portfolio Securities Descriptions 10
Public Offering 11
Distribution of Units 14
The Sponsor's Profits 15
The Secondary Market 15
How We Purchase Units 15
Expenses and Charges 16
Tax Status 17
Retirement Plans 20
Rights of Unit Holders 20
Income and Capital Distribution 21
Redeeming Your Units 22
Removing Securities from the Trust 24
Amending or Terminating the Indenture 25
Information on the Sponsor, Trustee and Evaluator 26
Other Information 27
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- _______, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
Closed-End
Trust Series
____________
General Information
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of
Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Securities per Unit $ 9.900
Maximum Sales Charge 4.50% of the Public Offering Price
per Unit (4.545% of the net amount invested, exclusive of
the deferred sales charge) (3) $ .450
Less Deferred Sales Charge per Unit $ (.350)
Public Offering Price per Unit (3) $10.000
Sponsor's Initial Repurchase Price per Unit (4) $ 9.550
Redemption Price per Unit (based on aggregate underlying
value of Securities less the deferred sales charge) (4) $ 9.550
Estimated Net Annual Distributions (5) $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
First Settlement Date _______, 1998
Mandatory Termination Date
Discretionary Liquidation Amount The Trust may be terminated if the value of the Securities is less
than the lower of $2,000,000 or 20% of the total value of Securities
deposited in the Trust during the initial offering period.
Income Distribution Record Date Fifteenth day of June and December, commencing _______, 1998.
Income Distribution Date (6) Last day of June and December, commencing _______, 1998.
______________
<FN>
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) Each listed Security is valued at the last closing sale price, or if
no such price exists or if the Security is not so listed, at the closing
ask price thereof. Evaluations for purposes of sale, purchase or
redemption of Units are made as of the close of trading (generally 4:00
p.m. Eastern time) on the New York Stock Exchange on each day on which
it is open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering" for
additional information regarding these charges. On the Initial Date of
Deposit there will be no cash in the Income Account. Anyone ordering
Units after such date will pay a pro rata share of any cash in such
Income Account. The Public Offering Price as shown reflects the value of
the Securities on the business day prior to the Initial Date of Deposit
and establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Securities may be deposited during the day of the
Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(4) The Sponsor's Initial Repurchase Price per Unit and the Redemption
Price per Unit set forth above and until the earlier of six months after
the Initial Date of Deposit or the initial offering period include
estimated organizational and offering costs per Unit. After the initial
offering period, the Sponsor's Repurchase Price and Redemption Price per
Unit will not include such estimated organizational and offering costs.
See "Redeeming Your Units."
(5) The actual net annual distributions you receive will vary from that
set forth above with changes in the Trust's fees and expenses, in
dividends received and with the sale of Securities. See "Fee Table" and
"Expenses and Charges."
(6) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
</FN>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may pay if you
buy and hold Units of the Trust. See "Public Offering" and "Expenses and
Charges." Although the Trust has a term of approximately five years and
is a unit investment trust rather than a mutual fund, this information
shows you a comparison of fees.
Closed-End
Trust Series
____________
Amount
per Unit
________
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $.100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $.450
======== ========
Maximum sales charge imposed on reinvested dividends
3.50%(c) $.350
Organizational and Offering Costs
Estimated Organizational and Offering Costs
(as a percentage of public offering price) %(d) $
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, % $
administrative and evaluation fees
Trustee's fee and other operating expenses %
________ ________
Total % $
======== ========
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. Although your actual costs may
vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years
______ _______ _______
You will pay the following expenses if you do not sell your Units at the
end of each period:
1 Year 3 Years 5 Years
______ _______ _______
The example does not reflect sales charges on reinvested dividends and
other distributions. If these sales charges were included, your costs
would be higher.
________________
<FN>
(a) The initial sales charge would exceed 1.00% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $ per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period. If the Unit price
exceeds $10.00 per Unit, the deferred sales charge will be less than
3.5%. If the Unit price is less than $10.00 per Unit, the deferred sales
charge will exceed 3.5%. Units purchased subsequent to the initial
deferred sales charge payment will be subject to the initial sales
charge and to the remaining deferred sales charge payments.
(c) Reinvested dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "Income and Capital
Distribution."
(d) You will bear all or a portion of the costs incurred in organizing
the Trust (including costs of preparing the registration statement, the
trust indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the
Trust portfolio, legal fees and the initial fees and expenses of the
Trustee). Estimated organizational and offering costs are included in
the Public Offering Price per Unit and 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.
</FN>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 320
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 320, comprised of Closed-End Trust
Series, as of the opening of business on _______, 1999. 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 generally accepted auditing
standards. 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 letter of
credit held by the Trustee and deposited in the Trust on _______, 1999.
An audit also includes assessing the accounting principles used and
significant estimates made by the 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 320,
comprised of the Trust listed above, at the opening of business on
_______, 1999 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
_______, 1999
Page 5
Statement of Net Assets
FT 320
At the Opening of Business on the
Initial Date of Deposit-_______, 1999
Closed-End
Trust Series
_____________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $
Less accrued organizational
and offering costs (3) ( )
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less sales charge (5) ( )
Less estimated organizational and ( )
offering costs (3)
________
Net assets $
========
<FN>
NOTES TO STATEMENTS 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 totaling $ issued by The Chase
Manhattan Bank, has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Securities
according to purchase contracts for such Securities.
(3) A portion of the Public Offering Price consists of Securities in an
amount sufficient to pay for all or a portion of the costs incurred in
establishing the Trust. These costs have been estimated at $.0200 per
Unit, based upon the expected number of Units to be created. A
distribution will be made at the earlier of six months after the Initial
Date of Deposit or the end of the initial offering period to an account
maintained by the Trustee from which your organizational and offering
cost obligation to us will be paid. To the extent the number of Units
issued is larger or smaller than the estimate, the actual distribution
per Unit at the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period may differ from that set forth
above.
(4) Represents the amount of mandatory deferred sales charge
distributions from the Trust ($ per Unit), payable in ten equal monthly
installments beginning on , 1998 and on the twentieth day
of each month thereafter (or if such date is not a business day, on the
preceding business day) through , 1999. If you redeem Units
before , 1999 you will have to pay the remaining amount of
the deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors in the Trust includes a maximum
total sales charge computed at the rate of 4.50% of the Public Offering
Price (equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering."
</FN>
Page 6
Schedule of Investments
Closed-End Trust Series
FT 320
At the Opening of Business on the
Initial Date of Deposit-_______, 1999
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Securities (1) Price Share to Trust (2)
_________ ________________________________ ____________ ______ _____________
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
__________
<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 contracts to purchase
Securities were entered into by the Sponsor on _______, 1999.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last sale prices of the listed Securities and the ask
prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Securities on the Initial Date of
Deposit was $ . Cost and loss to Sponsor relating to the Securities sold
to the Trust were $ and $ , respectively.
</FN>
Page 7
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created a series of
similar yet separate investment companies which we have named The FT
Series. We designate each FT Series with a different series number.
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.
What We Call the Trust.
This FT Series contains the following unit investment trust: Closed-End
Trust Series.
Mandatory Termination Date.
The Trust will terminate on the Mandatory Termination Date. The
Mandatory Termination Date for this Trust is approximately five years
from the date of this Prospectus. This date is shown in "Summary of
Essential Information." 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 between Nike
Securities L.P., as Sponsor, The Chase Manhattan Bank as Trustee and
First Trust Advisors L.P. as Portfolio Supervisor and Evaluator, governs
the operation of the Trust.
How We Created the Trust.
On the Initial Date of Deposit, we deposited contracts to buy the
Securities with the Trustee, backed by an irrevocable letter of credit
of a financial institution in an amount sufficient to purchase these
Securities. In return for depositing the Securities, the Trustee
delivered documents to us representing our ownership of the Trust, in
the form of units ("the Units").
With the deposit of the contracts to buy Securities on the Initial Date
of Deposit we established a percentage relationship between the
Securities in the Trust's portfolio, as stated under "Schedule of
Investments." After the Initial Date of Deposit, we may deposit
additional Securities in the Trust, or cash (including a letter of
credit) with instructions to buy more Securities, in order to create new
Units for sale. If we create additional Units we will attempt, to the
extent practicable, to maintain the original percentage relationship
established among the Securities on the Initial Date of Deposit, and not
the actual percentage relationship existing on the day we are creating
Units, since the two may differ. This difference may be due to the sale,
redemption or liquidation of any of the Securities deposited in the
Trust on the Initial, or any subsequent, Date of Deposit. See "Removing
Securities from the Trust."
Since the prices of the underlying 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 if we create additional Units. If we deposit cash in the
Trust to create new Units, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trust will pay brokerage fees to buy
Securities. To reduce this dilution, the Trust will try to buy the
Securities as close to the evaluation time and as close to the
evaluation price as possible.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or an affiliate) to
act as agent for the Trust to buy Securities. If we or an affiliate of
ours act as agent to the Trust we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities may be sold under certain
Page 8
circumstances from time to time, and the proceeds from these sales will
be used to meet Trust obligations or distributed to Unit holders, but
will not be reinvested. The Trust will not, however, sell Securities 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 has the right to vote all of Securities
and will do so as we instruct.
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 replacement Securities we will refund to you that portion of
the purchase price and sales charge resulting from the failed contract
on the next Income Distribution Date. Any replacement Security the Trust
acquires will be identical to those from the failed contract. The
Trustee must purchase the replacement Securities within 20 days after it
receives notice of a failed contract, and the purchase price may not be
more than the amount of funds reserved for the purchase of the failed
contract.
Portfolio
Objectives
The objective of the Trust is to provide investors with interest income
which is generally exempt from regular Federal income tax under existing
law and to preserve capital. The Trust seeks to achieve its objective by
investing in a portfolio of common stocks of closed-end investment
companies, the portfolios of which are concentrated in tax-exempt
municipal bonds. (Discuss Selection Process)
Risk Factors
Price Volatility. The Trust invests in common stocks of closed-end
investment companies. The value of the Units of a Trust will fluctuate
with changes in the value of the underlying Securities. The market value
of common stocks is constantly changing due to various factors including
shifting perceptions regarding the financial condition of the issuers,
the general condition of the relevant stock market or political and
economic events on a regional or global level. In this regard, common
stocks may move up or down rapidly and unpredictably and the value of
your Units may be more or less than the price you originally paid. As
the Securities are shares of closed-end funds you should note that
shares of closed-end funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct
from the risk that the net asset value of closed-end fund shares may
decrease. The amount of such discount from net asset value is subject to
change from time to time in response to various factors. Because the
Trust is not managed, the Trustee will not sell stocks in response to or
in anticipation of market fluctuations, as is common in managed
investments. As with any investment, we cannot guarantee that the
performance of a Trust will be positive over any period of time.
Municipal Bonds. Each of the closed-end funds held by the Trust invests
in municipal bonds. Municipal bonds are debt obligations issued by
states or political subdivisions or authorities of states. Municipal
bonds are generally designated as general obligation bonds, which are
general obligations of a governmental entity that are backed by the
taxing power of such entity, or revenue bonds, which are payable from
the income of a specific project or authority and are not supported by
the issuer's power to levy taxes. Municipal bonds are long-term fixed
Page 9
rate debt obligations that generally decline in value with increases in
interest rates, when an issuer's financial condition worsens or when the
bond rating on a Security is decreased. Many municipal bonds may be
called or redeemed prior to their stated maturity, an event which is
more likely to occur when interest rates rise. In such an occurrence, a
closed-end investment company may not be able to reinvest the money it
receives at as high a yield or as long a maturity. Many municipal bonds
are subject to continuing requirements such as the actual use of the
bond proceeds or manner of operation of the project financed from bond
proceeds that may affect the exemption of interest on such bonds from
Federal income taxation. The market for municipal bonds is generally
less liquid than for other securities and therefore the price of
municipal bonds may be more volatile and subject to greater price
fluctuations than securities with greater liquidity. In addition, income
distributions on municipal bonds generally depends on the issuer's
ability to make these distributions which depends on several factors
including the financial condition of the issuer and general economic
conditions. Any of these factors may negatively impact the price of
municipal bonds held by a closed-end fund and would therefore impact the
price of both the Securities and the Units.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed which may have a negative impact on the prices
of certain of the municipal bonds owned by the closed-end funds
represented in the Trust. In addition, litigation regarding any of the
issuers of the municipal bonds owned by such closed-end funds or of the
industries represented by such issuers, such as litigation affecting the
validity of certain municipal bonds or the tax-free nature of the
interest thereon, 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 share
prices of the Securities.
Year 2000 Problem. Like other investment companies, financial and
business organizations and individuals around the world, the Trust could
be adversely affected if the computer systems we use, as well as that
used by the Evaluator, Portfolio Supervisor, Trustee or other service
providers to the Trust do not properly process and calculate date-
related information and data involving dates of January 1, 2000 and
thereafter. This is commonly known as the "Year 2000 Problem." Each of
these parties is taking steps that we believe will address this problem.
The Year 2000 Problem is expected to impact corporations, which may
include issuers of the Securities contained in the Trust, to varying
degrees based upon various factors, including, but not limited to, their
industry sector and degree of technological sophistication. We are
unable to predict what impact, if any, the Year 2000 Problem will have
on the Trust or on the issuers of Securities contained therein.
Portfolio Securities Descriptions
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We have obtained the foregoing descriptions from sources we deem
Page 10
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price. The Public Offering
Price per Unit is comprised of the following:
- - the aggregate underlying value of the Securities;
- - the amount of any cash in the Income and Capital Accounts; and
- - the total sales charge (which combines an initial up-front sales
charge and a deferred sales charge).
A portion of the Public Offering Price per Unit during the initial
offering period consists of Securities in an amount sufficient to pay
for all or a portion of the costs incurred in establishing the Trust.
The organizational and offering costs will be deducted from the assets
of the Trust as of the earlier of six months after the Initial Date of
Deposit or the end of the initial offering period.
Although you are not required to pay for your Units until three business
days following the order for purchase (the "date of settlement"), you
may pay before then. You will become the owner of Units 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.
Minimum Purchase and Sales Charges.
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 Charges.
The sales charge you will pay has both an initial and deferred
component. The initial sales charge, which you will pay at the time of
purchase, is equal to approximately 1% of the Public Offering Price of a
Unit. This initial sales charge is actually equal to the difference
between the maximum total sales charge of 4.50% and the maximum
remaining deferred sales charge (initially $.350 per Unit) and will vary
from 1% with changes in the aggregate underlying value of the
Securities, changes in the Income and Capital Accounts and as deferred
sales charge payments are made. In addition, ten monthly deferred sales
charges of $.035 per Unit will be deducted from the Trust's assets on
approximately the twentieth day of each month from _____, 1998 through
______, 1999. The total maximum sales charge during the initial offering
period will be 4.50% of the Public Offering Price per Unit (equivalent
to 4.545% of the net amount invested, exclusive of the deferred sales
charge).
After the initial offering period, if you purchase Units after the last
deferred sales charge payment has been assessed your sales charge will
consist of a one-time initial sales charge of 4.50% of the Public
Offering Price (equivalent to 4.712% of the net amount invested), which
will be reduced by 1/2 of 1% on each subsequent _______, commencing
_______, 1999 to a minimum sales charge of 3.0%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Page 11
Your maximum
If you invest sales charge
(in thousands):* will be:
______________ ____________
$50 but less than $100 4.25%
$100 but less than $150 4.00%
$150 but less than $500 3.50%
$500 or more 2.50%
<FN>
*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.
</FN>
To qualify for the reduced sales charges described above, you can
combine your same-day purchase of Units of the Trust with any other
purchases you make of other trusts which we sponsor and act as Principal
Underwriter which are currently in the initial offering period. 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. However, we
will consider Units you purchase in the name of your spouse or your
child under 21 years of age to be purchases by you for determining the
reduced sales charge. 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.
If you own units of any other unit investment trusts sponsored by us,
you may use your redemption or termination proceeds from these trusts to
purchase Units of the Trust subject only to any remaining deferred sales
charge to be collected on the Units of the Trust you purchase. If you
redeem units of one of the trusts we sponsor which has a deferred sales
charge to buy Units of the Trust you should note that you will be
charged the amount of any deferred sales charge on the units you redeem.
The following persons may purchase Units at the Public Offering Price
less the applicable dealer concession:
- - Employees, officers and directors of the Sponsor, our related
companies, dealers and their affiliates, and vendors providing services
to us.
- - Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons).
If you purchase Units through registered broker/dealers who charge
periodic fees for financial planning, investment advisory or asset
management services or provide these services as part of an investment
account where a comprehensive "wrap fee" charge is imposed, you may
purchase Units in the primary or secondary market at the Public Offering
Price, less the concession we would typically allow such broker/dealer.
See "Distribution of Units-Dealer Concessions."
Every investor will be charged the deferred sales charge per Unit
regardless of any discounts. However, if you are eligible to receive a
discount such that the maximum sales charge you must pay is less than
the applicable maximum deferred sales charge, you will be credited the
difference between your maximum sales charge and the maximum deferred
sales charge at the time you buy your Units.
Letter of Intent.
You are eligible to purchase Units at a reduced sales charge if you have
executed a letter of intent indicating your intention to purchase a
specific dollar amount of units of any unit investment trust containing
equity securities of which we act as Principal Underwriter from any
broker/dealer during the initial offering period. You will receive a
reduced sales charge as set forth in the above table based on the amount
of your intended purchase. The letter of intent will specify the amount
of intended aggregate purchases which you agree to purchase over a 13-
Page 12
month period. Your initial purchase made pursuant to a letter of intent
must equal at least 5% of the amount of intended aggregate purchases and
units purchased with rollover proceeds, reinvested dividends, redemption
or termination proceeds from other unit investment trust or other
similar transactions will not be counted to reach the amount of intended
aggregate purchases. In the event that your total purchases pursuant to
a letter of intent over the 13-month period are less than the amount
specified in the letter of intent, the selling broker/dealer shall take
such action as is necessary to receive from you the difference between
the amounts you paid for units pursuant to the letter of intent and the
amounts which you would have paid if the higher sales charge had been
applied. It is the responsibility of the selling broker/dealer to notify
us of each sale made pursuant to a letter of intent.
Changes in the Public Offering Price.
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 prices of the Securities; and
- - changes in the value of the Income and/or Capital Accounts.
The Value of the Securities.
The aggregate underlying value of the Securities in the Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, this evaluation is generally based
on the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, the evaluation is based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, the evaluation will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for evaluation). If current ask prices are unavailable, the
evaluation is generally determined:
a) on the basis of current ask prices for comparable securities,
b) by appraising the value of the Securities on the ask side of the
market, or
c) by any combination of the above.
The Evaluator on each business day will appraise the value of the
underlying Securities in the Trust as of the Evaluation Time 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 the following holidays as
observed by the NYSE, Inc.: New Year's Day, Martin Luther King's
Birthday, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas Day.
After the initial offering period is over, the secondary market Public
Offering Price will be determined based on the aggregate underlying
value of the Securities in the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. We calculate the aggregate underlying value of the Securities
during the secondary market the same way as described above for sales
made during the initial offering period, except that bid prices are used
instead of ask prices when necessary.
Page 13
Distribution of Units
During the initial offering period, Units will be sold at the current
Public Offering Price. When the initial offering period ends, Units we
have reacquired may be offered by this prospectus at the secondary
market Public Offering Price (see "The Secondary Market").
Dealer Concessions.
We intend to qualify Units of the Trust for sale in a number of states.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 3.2% of the Public
Offering Price per Unit (or 65% of the maximum sales charge after _____,
1999). However, on the sale of Units subject only to any remaining
deferred sales charges, dealers and selling agents will receive a concession
equal to 63% of the then current maximum remaining deferred sales charge.
Dealers and selling agents will receive an additional volume concession or
agency commission of 0.30% of the Public Offering Price if they purchase
at least $100,000 worth of Units on the Initial Date of Deposit or
$250,000 on any day thereafter or if they were entitled to receive a
substantially similar concession on sales of Units of any unit
investment trust of which we act as Principal Underwriter and are
currently in the initial offering period.
Dealers and other selling agents who sell Units of the Trust during the
initial offering period in the dollar amounts below will be entitled to
the following additional sales concessions as a percentage of the Public
Offering Price:
Total Sales per Trust Additional
(in millions) Concession
_____________________ __________
$1 but less than $2 .10%
$2 but less than $3 .15%
$3 but less than $10 .20%
$10 or more .30%
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Units from brokers, dealers and others while a market is being
maintained for such Units, such entities agree to repay to us
immediately any concession or agency commission relating to the
reacquired Units. 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. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units. However, the Glass-Steagall
Act does allow certain agency transactions and these appear to be
permitted under the Act. In Texas and in certain other states, any banks
making Units available must be registered as broker/dealers under state
law.
Award Programs.
From time to time we may sponsor programs which award our dealers'
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, if a dealer sponsors sales contests or
recognition programs that conform to criteria we establish, or
participates in sales programs we sponsor, we will reallow to that
dealer an amount equal to no more than the total applicable sales
charges on the sales generated by such person at the Public Offering
Price during such programs. We make these payments out of our own
assets, and not out of the Trust's assets. These programs will not
change the price you pay for your Units or the amount that the Trust
will receive from the Units sold.
Investment Comparisons.
We may from time to time compare the then current estimated returns of
the Trust (which may show performance net of the expenses and charges
Page 14
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 the DJIA, S&P 500 Index, Ibbotson Small-Cap Index, the S&P
Industrial Index, other investment indices, corporate or U.S. Government
bonds, bank CDs and money market accounts or money market funds, (2)
performance data from Morningstar Publications, Inc. or (3) information
from publishers such as Money, the New York Times, U.S. News and World
Report, Business Week, Forbes or Fortune. The investment characteristics
of each Trust, which are described more fully elsewhere in this
Prospectus, differ from other comparative investments. For example,
common stock indexes have much greater diversifications than the Trust;
U.S. Government bonds are backed by the full faith and credit of the
U.S. Government; and bank CDs are insured by an agency of the federal
government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. You should not assume that
these performance comparisons will be representative of the Trust's
future relative performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit for the Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price we sell them to the Trust (which is based on
the Evaluator's determination of the aggregate underlying value of the
Securities) 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
after the Date of Deposit in the Public Offering Price received by those
dealers and others when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which Units are purchased and the price at which they are sold (which
includes a maximum sales charge for the Trust) or redeemed will be a
profit or loss to us. The secondary market public offering price of
Units may be more or less than the cost of those Units to us.
The Secondary Market
Although we are not obligated to, 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 and Trustee costs to transfer and record the ownership of
Units. 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. If you sell Units
subject to a deferred sales charge or tender them for redemption before
you have paid the total deferred sales charge on your Units, you will
have to pay the remainder of the deferred sales charge at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive the proceeds from the
sale of Units we purchase no later than if they were redeemed by the
Trustee. Units that we hold may be tendered to the Trustee for
Page 15
redemption as any other Units. If we elect not to purchase Units, the
Trustee may sell Units tendered for redemption 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.
The Public Offering Price of any Units we acquire will be consistent
with the Public Offering Price described in the then effective
prospectus. Any profit or loss from the resale or redemption of such
Units will belong to us.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will absorb the
excess. The Trustee will pay expenses of the Trust from the Income
Account of the Trust if funds are available, and then from the Capital
Account. The Income and Capital Accounts are noninterest-bearing to Unit
holders, so the Trustee benefits from the use of these funds. Investors
will pay indirectly a portion of the expenses of the underlying funds.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trust, and will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of the
Sponsor, acts as both Portfolio Supervisor and Evaluator to the Trust
and will receive the fees set forth under "Fee Table" for providing
portfolio supervisory and evaluation services to the Trust. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase
research services from a number of sources, which may include
underwriters or dealers of 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 the Sponsor and
our affiliate for providing services to all unit investment trusts for
which they provide such services be more than the actual cost of
providing such services in such year. Because these fees are generally
calculated based on the largest aggregate number of Units outstanding
during a calendar year, the per Unit amounts will be higher during any
year in which redemptions of Units occur.
The Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to
its responsibilities under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
the rights and interests of the Unit holders;
- - 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;
- - Any offering costs incurred after the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust;
- - Foreign custodial and transaction fees, if any;
- - All taxes and other government charges imposed upon the Securities or
any part of the Trust. (No such taxes or charges are now in place or
planned as far as we know.)
The above expenses and the Trustee's annual fee (when paid or owing to
the Trustee) are secured by a lien on the Trust. In addition, the
Trustee has the power to sell Securities in the Trust to make cash
Page 16
available to pay these charges, if there is not enough cash in the
Income or Capital Accounts of the Trust. Since the Securities are all
common stocks and dividend income is unpredictable, we cannot guarantee
that dividends will be sufficient to meet any or all expenses of the
Trust. These sales may result in capital gains or losses to the Unit
holders. See "Tax Status."
The Trust will be audited on an annual basis. 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 $0.0050 per Unit. Otherwise, the Trust
will pay for the audit. You can receive a copy of the audited financial
statements by notifying the Trustee.
Tax Status
This is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended (the
"Code"). Please note that the following discussion is a summary of the
Federal income tax rules that are generally applicable to most Unit
holders. Different rules will apply in specific situations to some Unit
holders, and not all of the Federal income tax consequences of ownership
of the Units that may be applicable to certain Unit holders are
discussed. Except as specifically discussed below, this discussion
relates only to Unit holders that are U.S. Unit holders, which generally
includes only Unit holders that are (i) for United States Federal income
tax purposes a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source.
The following discussion is based on the Federal income tax law and
interpretations of Federal income tax law that exist on the date of this
Prospectus. These laws and interpretations, of course, frequently
change. Such changes could change the Federal income tax rules that
apply to you. For these reasons, you should consult your own tax
advisors regarding the specific Federal income tax rules that apply to
you. Further, you should consult your tax advisor with respect to
foreign, state and local tax consequences of the purchase, ownership and
disposition of Units.
For purposes of the following discussion and opinions, it is assumed
that each Security is equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for Federal
income tax purposes; you will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the
income of the Trust will be treated as income of the Unit holders
thereof under the Code. You will be considered to have received your pro
rata share of the income derived from each Security when such income is
considered to be received by the Trust.
2. You will be considered to have received all of the dividends paid on
your pro rata portion of each Security when such dividends are
considered to be received by the Trust regardless of whether such
dividends are used to pay a portion of the deferred sales charge. Unit
holders will be taxed in this manner regardless of whether distributions
from such Trust are actually received by the Unit holder.
3. You will have a taxable event when the Trust disposes of a Security
(whether by sale, taxable exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unit holder
Page 17
(except to the extent an In-Kind distribution of stocks is received by
such Unit holder as described below). The price you pay for your Units,
generally including sales charges, is allocated among your pro rata
portion of each Security held by the Trust (in proportion to the fair
market values on the valuation date closest to the date you purchase
your Units) in order to determine the tax basis for your pro rata
portion of each Security held by the Trust. For Federal income tax
purposes, your pro rata portion of dividends, as defined by Section 316
of the Code, paid by a corporation with respect to a Security held by
the Trust is taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." Your pro
rata portion of dividends paid on such Security which exceed such
current and accumulated earnings and profits will first reduce your tax
basis in such Security, and to the extent that such dividends exceed
your tax basis in such Security shall generally be treated as capital
gain. In general, the holding period for such capital gain will be
determined by the period of time you have held your Units.
4. A Unit holder's portion of gain, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain (except in the case of a dealer
or a financial institution). A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital loss (except in
the case of a dealer or a financial institution).
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. In any
case, the income (or proceeds from redemption) a Unit holder must take
into account for Federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge.
Your Limitations on Deductibility of the Trust's Expenses. Your pro rata
share of each expense paid by the Trust is deductible by you to the same
extent as though you had paid the expense directly. Please note,
however, that certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business
expenses are deductible by an individual only to the extent they exceed
2% of such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, you may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if
you dispose of a Unit. If you dispose of a Unit, you are considered to
have disposed of your entire pro rata interest in all assets of the
Trust involved including your pro rata portion of all the Securities
represented by the Unit. Recent legislation provides that for taxpayers
other than corporations, net capital gain (which is defined as net long-
term capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is subject to a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in
the lowest tax bracket). Capital gain or loss is long-term if the
holding period for the asset is more than one year, and is short-term if
the holding period for the asset is one year or less. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes of
determining the holding period of the Unit. The legislation is generally
effective retroactively for amounts properly taken into account on or
after January 1, 1998. Capital gains realized from assets held for one
year or less are taxed at the same rates as ordinary income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
Page 18
considered "conversion transactions."
Recent legislation also includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, off-setting notional
principal contracts, futures or forward contracts, or similar
transactions) as constructive sales for purposes of recognition of gain
(but not loss) and for purposes of determining the holding period.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units or Termination of the Trust. As discussed in "Redeeming Your
Units," under certain circumstances if you own at least 1,000 Units of
the Trust you may request an In-Kind Distribution upon the redemption of
Units or the termination of the Trust. However, you will be liable for
related expenses (the "Distribution Expenses") and the amount of the In-
Kind Distribution will be reduced by the amount of the Distribution
Expenses. As previously discussed, prior to the redemption of Units or
the termination of the Trust, you are considered to own a pro rata
portion of each of the Trust's assets for Federal income tax purposes.
The receipt of an In-Kind Distribution will result in your receiving an
undivided interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution with respect to each Security owned by the Trust will
depend on whether or not you receive cash in addition to Securities. You
will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion in the Securities held by the Trust.
However, if you receive cash in exchange for a fractional share of an
Security held by the Trust, you will generally recognize gain or loss
based upon the difference between the amount of cash you receive and
your tax basis in the fractional share of a Security held by the Trust.
Because the Trust will own many Securities, if you request an In-Kind
Distribution, you will have to analyze the tax consequences with respect
to each Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the
gain (or loss) you will recognize under the rules described above with
respect to each Security owned by the Trust.
Computing Your Tax Basis. Initially, your tax basis in your Units will
generally equal the price you paid for your Units. The cost of the Units
is allocated among the Securities held in the Trust in accordance with
the proportion of the fair market values of such Securities as of the
valuation date nearest the date the Units are purchased in order to
determine your tax basis for your pro rata portion of each Security.
Your tax basis in your Units and your pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with
respect to such Security are received by the Trust which are not taxable
as ordinary income as described above.
General. You will be requested to provide your taxpayer identification
number to the Trustee and to certify that you have not been notified
that payments to you are subject to back-up withholding. If the proper
taxpayer identification number and appropriate certification are not
provided when requested, distributions by the Trust to you (including
amounts received upon the redemption of Units) will be subject to back-
up withholding. Distributions by the Trust (other than those that are
not treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other non-United States persons.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unit holders and derived from dividends of foreign corporations will not
be subject to U.S. withholding tax provided that less than 25 percent of
Page 19
the gross income of the foreign corporation for a three-year period
ending with the close of its taxable year preceding payment was not
effectively connected to the conduct of a trade or business within the
United States. In addition, such earnings may be exempt from U.S.
withholding pursuant to a specific treaty between the United States and
a foreign country. Non-U.S. Unit holders should consult their own tax
advisors regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes. Any dividends withheld as a result thereof will
nevertheless be treated as income to you. Because, under the grantor
trust rules, you are considered to have paid directly your share of
foreign taxes that have been paid or accrued, if any, you may be
entitled to a foreign tax credit or deduction for United States purposes
with respect to such taxes. There is a required holding period for such
credits.
At the termination of the Trust, the Trustee will provide you with a
statement containing information relating to the dividends received by
the Trust on the Securities, the gross proceeds received by the Trust
from the disposition of any Security (resulting from redemption or the
sale of any Security) and the fees and expenses paid by the Trust. The
Trustee will also furnish annual information returns to Unit holders and
to the Internal Revenue Service.
If you wish to purchase Units for tax-deferred plans and IRAs, you
should consult your broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Retirement Plans."
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of such Trusts will be treated as the income
of the Unit holders thereof.
Retirement Plans
Units of the Trust are eligible for purchase by:
- - 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
some cases, be eligible for special averaging or tax-deferred rollover
treatment. If you are considering participating in a plan like this, you
should review the tax laws regarding these plans and consult your
attorney or tax adviser. 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 that person registered
as such on its books. If you request certificates representing the Units
you ordered for purchase they will be delivered three business days
after your order or shortly thereafter. You may transfer or redeem Units
represented by a certificate by endorsing it and surrendering it to the
Trustee, along with a written instrument(s) of transfer. You must sign
Page 20
exactly as your name appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation such as trust instruments,
death certificates, appointments as executor or administrator, or
certificates of corporate authority.
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, numbered serially for identification purposes.
You may also choose to hold your Units in uncertificated form. If you
choose this option, the Trustee will keep an account for you and will
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 to you, as the registered
owner of Units:
- - a written initial transaction statement containing a description of
your Trust;
- - the number of Units issued or transferred;
- - your name, address and taxpayer identification number;
- - 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.
As a Unit holder, 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.
However, the Trustee does not require such charge now, nor are they
currently contemplating doing so. 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.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per-Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
1. a summary of transactions in the Trust for the year;
2. any Securities sold during the year and the Securities held at the
end of that year by the Trust;
3. the Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
4. amounts of income and capital distributed during the year.
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.
Income and Capital Distribution
You will begin receiving distributions from your Units only after you
become a Record Owner. It is your responsibility to notify the Trustee
when you become Record Owner of the Units, but normally your
broker/dealer provides this notice. The Trustee will credit any
dividends received on the Trust's Securities to the Income Account of
the Trust. All other receipts, such as return of capital, are credited
to the Capital Account of the Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." The Trustee will distribute amounts in the Capital Account
on the last day of each month to Unit holders of record on the fifteenth
Page 21
day of each month provided the amount equals at least $1.00 per 100
Units. However, amounts in the Capital Account from the sale of
Securities designated to meet redemptions of Units, to pay the deferred
sales charge or to pay expenses will not be distributed. The Trustee is
not required to pay interest on funds held in the Income or Capital
Accounts of the Trust. However, the Trustee may earn interest on these
funds, thus benefiting from the use of such funds.
We anticipate that the deferred sales charge will be collected from the
Capital Account of the Trust and that the money in the Capital Account
will be sufficient to cover the cost of the deferred sales charge. If
there is not enough money in the Capital Account to pay the deferred
sales charge, the Trustee may sell Securities to meet the shortfall. We
will designate an account where distributions will be made to pay the
deferred sales charge.
The Trustee is required by the Internal Revenue Service to withhold a
certain percentage of any distribution the Trust makes and deliver such
amount to the Internal Revenue Service if the Trustee does not have your
tax identification number. You may recover this amount by giving your
tax identification number to the Trustee, or when you file a tax return.
Normally, the selling broker provides the Trustee your tax
identification number. However, you should check your statements from
the Trustee to make sure they have the number to avoid this "back-up
withholding." If the Trustee does not have one, you should provide it to
the Trustee as soon as possible.
Within a reasonable time after the Trust is terminated you will receive
the pro rata share of the money from the disposition of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
All Unit holders will receive a pro rata share of any other assets
remaining in the Trust, excluding any unpaid expenses of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for any state and local taxes and any governmental charges to be
paid out of the Trust.
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 you send to the Trustee 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. 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 New York Stock Exchange (the "Exchange") 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 Exchange is scheduled in advance to close at such earlier
time), the Date of Tender is the next day the Exchange is open for
trading. Redeemed Units will then be cancelled.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of the Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
Page 22
redemption will be taken from the Capital Account of the Trust.
If you are tendering 1,000 Units or more for redemption, rather than
receiving cash, you may elect to receive a distribution of shares of
Securities (an "In-Kind Distribution") in an amount and value equal to
the Redemption Price per Unit by making this request in writing to the
Trustee at the time of tender. However, no In-Kind Distribution requests
submitted during the nine business days prior to the Trust's Mandatory
Termination Date will be honored. Where possible, the Trustee will make
an In-Kind Distribution by distributing each of the Securities in book-
entry form to your bank account or broker/dealer at the Depository Trust
Company. The Trustee will subtract from your In-Kind Distribution any
customary transfer and registration charges. As a tendering Unit holder,
you will receive your pro rata number of whole shares of the Securities
that make up the portfolio, and cash from the Capital Account equal to
the fractional shares to which you are entitled. The Trustee may adjust
the number of shares of any Security included in your In-Kind
Distribution to make distribution of whole shares easier. This
adjustment will be made based on the value of the Securities on the Date
of Tender. If there is not enough money in the Capital Account to pay
the required cash distribution, the Trustee may sell Securities as
described above.
The Internal Revenue Service will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee has not previously
been provided your Taxpayer Identification Number. For more information
about this withholding, see "Income and Capital Distribution." If the
Trustee does not have your Taxpayer Identification Number, you must
provide it at the time of the redemption request.
The Trustee may sell Securities in the Trust to make funds available for
redemption. If Securities are sold, the size and diversity 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:
1. if the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
2. if the Securities and Exchange Commission ("SEC") determines that
trading on the New York Stock Exchange is restricted or that an
emergency exists making sale or evaluation of the Securities not
reasonably practical; and
3. 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.
We will determine the Redemption Price per Unit during the secondary
market based on the aggregate underlying value of the Securities in the
Trust plus or minus cash, if any, in the Income and Capital Accounts of
the Trust. The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Trust not designated to purchase Securities;
2. the aggregate value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation.
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, including, but not limited
to, fees and expenses of the Trustee (including legal fees), and the
Evaluator and supervisory fees, if any;
Page 23
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;
dividing
the result by the number of outstanding Units of the Trust.
If there is any remaining deferred sales charge on the Units when you
redeem them, the amount of this remaining deferred sales charge will be
deducted from your redemption proceeds. In addition, 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 organizational and offering costs as set forth under "Summary
of Essential Information."
The aggregate underlying value of the Securities for purposes of
calculating the Redemption Price during the secondary market is
determined in the same manner as that used to calculate the Secondary
Market Public Offering Price as discussed in "Public Offering-The Value
of the Securities."
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. These circumstances include, but are not limited
to, situations in which:
- - the issuer of the Security defaults in the payment of a declared
dividend;
- - any action or proceeding prevents the payment of dividends;
- - there is any legal question or impediment affecting the Security;
- - the issuer of the Security has breached a covenant which would affect
the payment of dividends or the issuer's credit standing, or otherwise
damage the sound investment character of the Security; or
- - the issuer has defaulted on the payment on any other of its
outstanding obligations to such an extent or other such credit factors
exist so that, in our opinion, keeping the Security would be harmful to
the Trust.
Except in the limited instance in which the Trust may acquire
replacement Securities to replace failed contracts to purchase
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, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by the Trust, at our instruction,
they will either be sold or held in the Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account of the Trust for distributions
to Unit holders or to meet redemption requests. 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 also sell Securities that we designate; or, without our
direction, in its own discretion, in order to meet redemption requests
or pay expenses.
In designating which Securities should be sold, we will try to maintain
the proportionate relationship among the Securities. If this is not
possible, the composition and diversity of the Securities in the Trust
may be changed. To get the best price for the Trust we may have to
specify minimum amounts (generally 100 shares) in which blocks of
Page 24
Securities are to 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.
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 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 the lower of $2,000,000 or 20% of the total
value of Securities deposited in the Trust during the initial offering
period; 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.
In the event of termination, the Trustee will send prior written notice
thereof to all Unit holders which will specify how you should tender
your certificates, if any, to the Trustee. If the Trust is terminated
due to this last reason, we will refund to each purchaser of Units of
such Trust the entire sales charge paid by such purchaser; however,
termination of the Trust prior to the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. 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 a 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.
If you own at least 1,000 Units of the Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive shares of Securities included in the Trust
(reduced by customary transfer and registration charges) rather than the
typical cash distribution representing your pro rata interest in the
Trust. You must notify the Trustee at least ten business days prior to
the Mandatory Termination Date if you elect this In-Kind Distribution
option. If you do not elect to participate in the In-Kind Distribution
Page 25
option for eligible Unit holders you will receive a cash distribution
from the sale of the remaining Securities, along with your interest in
the Income and Capital Accounts of the Trust, 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.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities 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 $20 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, 1997, the total partners' capital of
Nike Securities L.P. was $11,724,071 (audited).
This information refers only to the Sponsor 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.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. 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.
The Sponsor and the Trustee will not be liable to Unit holders 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:
Page 26
- - appoint a successor Sponsor, paying them a reasonable rate not more
than that stated by the Securities and Exchange Commission,
- - terminate the Indenture and liquidate the Trust, or
- - continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
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, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to Federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trust.
Auditors.
Ernst & Young LLP, independent auditors, has audited the statement of
net assets, including the schedule of investments, of the Trust at the
opening of business on the Initial Date of Deposit appearing elsewhere
herein, and in the Registration Statement.
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 Securities and Exchange Commission and to which we have referred
throughout. This information states more specific risk information about
the Trust.
Page 27
FIRST TRUST (registered trademark)
Closed-End Trust Series
FT 320
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
24-Hour Pricing Line:
1-800-446-0132
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
This Prospectus is not an offer to sell, or a solicitation of an offer
to buy, securities in any jurisdiction or to any person to whom it is
not lawful to make such offer.
There is additional information in the registration statements and
related exhibits. The Fund has filed these with the Securities and
Exchange Commission, Washington, D.C. under the Securities Act of 1933
and the Investment Company Act of 1940.
_______, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust (registered trademark)
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 320 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information that a prospective investor should consider before
investing in the Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing ("Prospectus"). Copies of the Prospectus can be
obtained by calling or writing the Trustee at the telephone number and
address indicated in the Prospectus. The Information Supplement has been
created to supplement information contained in the Prospectus.
This Information Supplement is dated _______, 1999. Capitalized terms
have been defined in the Prospectus.
Table of Contents
Risk Factors
Securities 1
Discount Bonds 1
Original Issue Discount Bonds 2
Zero Coupon Bonds 2
Premium Bonds 2
General Obligation Bonds 2
Healthcare Revenue Bonds 3
Single Family Mortgage Revenue Bonds 3
Multi-Family Mortgage Revenue Bonds 3
Water and Sewerage Revenue Bonds 4
Electric Utility Revenue Bonds 4
Lease Obligation Revenue Bonds 4
Industrial Revenue Bonds 4
Transportation Facility Revenue Bonds 5
Educational Obligation Revenue Bonds 5
Resource Recovery Facility Revenue Bonds 5
Bonds of Issuers Located in the Commonwealth of Puerto Rico 6
Risk Factors
Securities. The Securities in the Trust represent shares of closed-end
mutual funds which invest in tax-exempt municipal bonds. As such, an
investment in Units of the Trust should be made with an understanding of
the risks of investing in both closed-end fund shares and municipal
bonds.
Closed-end fund shares are generally listed on a securities exchange.
The net asset value of closed-end fund shares will fluctuate with
changes in the value of the underlying securities which the closed-end
fund owns. In addition, for various reasons closed-end fund shares
frequently trade at a discount from their net asset value in the
secondary market. The amount of such discount from net asset value is
subject to change from time to time in response to various factors.
The following is a discussion of certain of the risks associated with
specific types of municipal bonds.
Discount Bonds. Certain of the bonds held by the closed-end funds may
have been acquired at a market discount from par value at maturity. The
coupon interest rates on the discount bonds at the time they were
Page 1
purchased and deposited in the funds were lower than the current market
interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued comparable bonds increase, the
market discount of previously issued bonds will become greater, and if
such interest rates for newly issued comparable bonds decline, the
market discount of previously issued bonds will be reduced, other things
being equal. Investors should also note that the value of bonds
purchased at a market discount will increase in value faster than bonds
purchased at a market premium if interest rates decrease. Conversely, if
interest rates increase, the value of bonds purchased at a market
discount will decrease faster than bonds purchased at a market premium.
In addition, if interest rates rise, the prepayment risk of higher
yielding, premium bonds and the prepayment benefit for lower yielding,
discount bonds will be reduced. A discount bond held to maturity will
have a larger portion of its total return in the form of taxable income
and capital gain and less in the form of tax-exempt interest income than
a comparable bond newly issued at current market rates. See "What is the
Federal Tax Status of Unit Holders?" 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 bonds.
Original Issue Discount Bonds. Certain of the bonds held by the closed-
end funds may be original issue discount bonds. Under current law, the
original issue discount, which is the difference between the stated
redemption price at maturity and the issue price of the bonds, is deemed
to accrue on a daily basis and the accrued portion is treated as tax-
exempt 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 "What is the Federal Tax
Status of Unit Holders?" The current value of an original issue discount
bond reflects the present value of its stated redemption price at
maturity. The market value tends to increase in greater increments as
the bonds approach maturity.
Zero Coupon Bonds. Certain of the original issue discount bonds may be
zero coupon bonds (including bonds known as multiplier bonds, money
multiplier bonds, capital appreciation bonds, capital accumulator bonds,
compound interest bonds and money discount maturity payment bonds). Zero
coupon bonds do not provide for the payment of any current interest and
generally provide for payment at maturity at face value unless sooner
sold or redeemed. Zero coupon bonds may be subject to more price
volatility than conventional bonds. While some types of zero coupon
bonds, such as multipliers and capital appreciation bonds, define par as
the initial offering price rather than the maturity value, they share
the basic zero coupon bond features of (1) not paying interest on a semi-
annual basis and (2) providing for the reinvestment of the bond's semi-
annual earnings at the bond's stated yield to maturity. While zero
coupon bonds are frequently marketed on the basis that their fixed rate
of return minimizes reinvestment risk, this benefit can be negated in
large part by weak call protection, i.e., a bond's provision for
redemption at only a modest premium over the accreted value of the bond.
Premium Bonds. Certain of the bonds held by the closed-end funds may
have been acquired at a market premium from par value at maturity. The
coupon interest rates on the premium bonds at the time they were
purchased by the fund were higher than the current market interest rates
for newly issued bonds of comparable rating and type. If such interest
rates for newly issued and otherwise comparable bonds decrease, the
market premium of previously issued bonds will be increased, and if such
interest rates for newly issued comparable bonds increase, the market
premium of previously issued bonds will be reduced, other things being
equal. The current returns of bonds trading at a market premium are
initially higher than the current returns of comparable bonds of a
similar type issued at currently prevailing interest rates because
premium bonds 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 bond 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 bonds have an offering
side valuation which represents a premium over par or for original issue
discount bonds a premium over the accreted value.
General Obligation Bonds. Certain of the bonds in the closed-end funds
may be general obligations of a governmental entity that are backed by
the taxing power of such entity. Other bonds in the funds may be revenue
bonds payable from the income of a specific project or authority and are
Page 2
not supported by the issuer's power to levy taxes. General obligation
bonds are secured by the issuer's pledge of its faith, credit and taxing
power for the payment of principal and interest. Revenue bonds, on the
other hand, are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of
a special excise tax or other specific revenue source. There are, of
course, variations in the security of the different bonds in the funds,
both within a particular classification and between classifications,
depending on numerous factors.
Healthcare Revenue Bonds. Certain of the bonds in the closed-end funds
may be health care revenue bonds. Ratings of bonds issued for health
care facilities are sometimes based on feasibility studies that contain
projections of occupancy levels, revenues and expenses. A facility's
gross receipts and net income available for debt service may be affected
by future events and conditions including among other things, demand for
services, the ability of the facility to provide the services required,
physicians' confidence in the facility, management capabilities,
competition with other hospitals, efforts by insurers and governmental
agencies to limit rates, legislation establishing state rate-setting
agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that
associated with Medicare, Medicaid and other similar third party payor
programs. Pursuant to recent Federal legislation, Medicare
reimbursements are currently calculated on a prospective basis utilizing
a single nationwide schedule of rates. Prior to such legislation
Medicare reimbursements were based on the actual costs incurred by the
health facility. The current legislation may adversely affect
reimbursements to hospitals and other facilities for services provided
under the Medicare program.
Single Family Mortgage Revenue Bonds. Certain of the bonds in the closed-
end funds may be single family mortgage revenue bonds, which are issued
for the purpose of acquiring from originating financial institutions
notes secured by mortgages on residences located within the issuer's
boundaries and owned by persons of low or moderate income. Mortgage
loans are generally partially or completely prepaid prior to their final
maturities as a result of events such as sale of the mortgaged premises,
default, condemnation or casualty loss. Because these bonds are subject
to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will
probably be redeemed prior to their scheduled maturities or even prior
to their ordinary call dates. The redemption price of such issues may be
more or less than the offering price of such bonds. Extraordinary
mandatory redemption without premium could also result from the failure
of the originating financial institutions to make mortgage loans in
sufficient amounts within a specified time period or, in some cases,
from the sale by the bond issuer of the mortgage loans. Failure of the
originating financial institutions to make mortgage loans would be due
principally to the interest rates on mortgage loans funded from other
sources becoming competitive with the interest rates on the mortgage
loans funded with the proceeds of the single family mortgage revenue
bonds. Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of
principal of or interest on such mortgage revenue bonds. Single family
mortgage revenue bonds issued after December 31, 1980 were issued under
Section 103A of the Internal Revenue Code, which Section contains
certain ongoing requirements relating to the use of the proceeds of such
bonds in order for the interest on such bonds to retain its tax-exempt
status. In each case, the issuer of the bonds has covenanted to comply
with applicable ongoing requirements and bond counsel to such issuer has
issued an opinion that the interest on the bonds is exempt from Federal
income tax under existing laws and regulations. There can be no
assurances that the ongoing requirements will be met. The failure to
meet these requirements could cause the interest on the bonds to become
taxable, possibly retroactively from the date of issuance.
Multi-Family Mortgage Revenue Bonds. Certain of the bonds held by the
closed-end funds may be obligations of issuers whose revenues are
primarily derived from mortgage loans to housing projects for low to
moderate income families. The ability of such issuers to make debt
service payments will be affected by events and conditions affecting
financed projects, including, among other things, the achievement and
maintenance of sufficient occupancy levels and adequate rental income,
increases in taxes, employment and income conditions prevailing in local
labor markets, utility costs and other operating expenses, the
managerial ability of project managers, changes in laws and governmental
regulations, the appropriation of subsidies and social and economic
Page 3
trends affecting the localities in which the projects are located. The
occupancy of housing projects may be adversely affected by high rent
levels and income limitations imposed under Federal and state programs.
Like single family mortgage revenue bonds, multi-family mortgage revenue
bonds are subject to redemption and call features, including
extraordinary mandatory redemption features, upon prepayment, sale or
non-origination of mortgage loans as well as upon the occurrence of
other events. Certain issuers of single or multi-family housing bonds
have considered various ways to redeem bonds they have issued prior to
the stated first redemption dates for such bonds. In one situation the
New York City Housing Development Corporation, in reliance on its
interpretation of certain language in the indenture under which one of
its bond issues was created, redeemed all of such issue at par in spite
of the fact that such indenture provided that the first optional
redemption was to include a premium over par and could not occur prior
to 1992. There can be no assurance that an issuer of a bond in a closed-
end fund will not attempt to redeem a bond in a fund.
Water and Sewerage Revenue Bonds. Certain of the bonds in the funds may
be obligations of issuers whose revenues are derived from the sale of
water and/or sewerage services. Water and sewerage bonds are generally
payable from user fees. Problems faced by such issuers include the
ability to obtain timely and adequate rate increases, population decline
resulting in decreased user fees, the difficulty of financing large
construction programs, the limitations on operations and increased costs
and delays attributable to environmental considerations, the increasing
difficulty of obtaining or discovering new supplies of fresh water, the
effect of conservation programs and the impact of "no-growth" zoning
ordinances. All of such issuers have been experiencing certain of these
problems in varying degrees.
Electric Utility Revenue Bonds. Certain of the bonds in the closed-end
funds may be obligations of issuers whose revenues are primarily derived
from the sale of electric energy. Utilities are generally subject to
extensive regulation by state utility commissions which, among other
things, establish the rates which may be charged and the appropriate
rate of return on an approved asset base. The problems faced by such
issuers include the difficulty in obtaining approval for timely and
adequate rate increases from the governing public utility commission,
the difficulty in financing large construction programs, the limitations
on operations and increased costs and delays attributable to
environmental considerations, increased competition, recent reductions
in estimates of future demand for electricity in certain areas of the
country, the difficulty of the capital market in absorbing utility debt,
the difficulty in obtaining fuel at reasonable prices and the effect of
energy conservation. All of such issuers have been experiencing certain
of these problems in varying degrees. In addition, Federal, state and
municipal governmental authorities may from time to time review existing
and impose additional regulations governing the licensing, construction
and operation of nuclear power plants, which may adversely affect the
ability of the issuers of such bonds to make payments of principal
and/or interest on such bonds.
Lease Obligation Revenue Bonds. Certain of the bonds in the closed-end
funds may be lease obligations issued for the most part by governmental
authorities that have no taxing power or other means of directly raising
revenues. Rather, the governmental authorities are financing vehicles
created solely for the construction of buildings (schools,
administrative offices, convention centers and prisons, for example) or
the purchase of equipment (police cars and computer systems, for
example) that will be used by a state or local government (the
"lessee"). Thus, these obligations are subject to the ability and
willingness of the lessee government to meet its lease rental payments
which include debt service on the obligations. Lease obligations are
subject, in almost all cases, to the annual appropriation risk, i.e.,
the lessee government is not legally obligated to budget and appropriate
for the rental payments beyond the current fiscal year. These
obligations are also subject to construction and abatement risk in many
states-rental obligations cease in the event that delays in building,
damage, destruction or condemnation of the project prevents its use by
the lessee. In these cases, insurance provisions designed to alleviate
this risk become important credit factors. In the event of default by
the lessee government, there may be significant legal and/or practical
difficulties involved in the re-letting or sale of the project. Some of
these issues, particularly those for equipment purchase, contain the so-
called "substitution safeguard," which bars the lessee government, in
the event it defaults on its rental payments, from the purchase or use
of similar equipment for a certain period of time. This safeguard is
designed to insure that the lessee government will appropriate, even
though it is not legally obligated to do so, but its legality remains
untested in most, if not all, states.
Industrial Revenue Bonds. Certain of the bonds in the funds may be
industrial revenue bonds ("IRBs"), including pollution control revenue
Page 4
bonds, which are tax-exempt securities issued by states, municipalities,
public authorities or similar entities to finance the cost of acquiring,
constructing or improving various industrial projects. These projects
are usually operated by corporate entities. Issuers are obligated only
to pay amounts due on the IRBs to the extent that funds are available
from the unexpended proceeds of the IRBs or receipts or revenues of the
issuer under an arrangement between the issuer and the corporate
operator of a project. The arrangement may be in the form of a lease,
installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed to
be sufficient to meet the payments of amounts due on the IRBs.
Regardless of the structure, payment of IRBs is solely dependent upon
the creditworthiness of the corporate operator of the project or
corporate guarantor. Corporate operators or guarantors may be affected
by many factors which may have an adverse impact on the credit quality
of the particular company or industry. These include cyclicality of
revenues and earnings, regulatory and environmental restrictions,
litigation resulting from accidents or environmentally-caused illnesses,
extensive competition and financial deterioration resulting from a
complete restructuring pursuant to a leveraged buy-out, takeover or
otherwise. Such a restructuring may result in the operator of a project
becoming highly leveraged which may impact on such operator's
creditworthiness, which in turn would have an adverse impact on the
rating and/or market value of such bonds. Further, the possibility of
such a restructuring may have an adverse impact on the market for and
consequently the value of such bonds, even though no actual takeover or
other action is ever contemplated or affected. The IRBs in a fund may be
subject to special or extraordinary redemption provisions which may
provide for redemption at par or, with respect to original issue
discount bonds, at issue price plus the amount of original issue
discount accreted to the redemption date plus, if applicable, a premium.
The Sponsor cannot predict the causes or likelihood of the redemption of
IRBs or other bonds in the funds prior to the stated maturity of such
bonds.
Transportation Facility Revenue Bonds. Certain of the bonds in the funds
may be obligations which are payable from and secured by revenues
derived from the ownership and operation of facilities such as airports,
bridges, turnpikes, port authorities, convention centers and arenas. The
major portion of an airport's gross operating income is generally
derived from fees received from signatory airlines pursuant to use
agreements which consist of annual payments for leases, occupancy of
certain terminal space and service fees. Airport operating income may
therefore be affected by the ability of the airlines to meet their
obligations under the use agreements. The air transport industry is
experiencing significant variations in earnings and traffic, due to
increased competition, excess capacity, increased costs, deregulation,
traffic constraints and other factors, and several airlines are
experiencing severe financial difficulties. The Sponsor cannot predict
what effect these industry conditions may have on airport revenues which
are dependent for payment on the financial condition of the airlines and
their usage of the particular airport facility. Similarly, payment on
bonds related to other facilities is dependent on revenues from the
projects, such as user fees from ports, tolls on turnpikes and bridges
and rents from buildings. Therefore, payment may be adversely affected
by reduction in revenues due to such factors as increased cost of
maintenance, decreased use of a facility, lower cost of alternative
modes of transportation, scarcity of fuel and reduction or loss of rents.
Educational Obligation Revenue Bonds. Certain of the bonds in the funds
may be obligations of issuers which are, or which govern the operation
of, schools, colleges and universities and whose revenues are derived
mainly from ad valorem taxes, or for higher education systems, from
tuition, dormitory revenues, grants and endowments. General problems
relating to school bonds include litigation contesting the state
constitutionality of financing public education in part from ad valorem
taxes, thereby creating a disparity in educational funds available to
schools in wealthy areas and schools in poor areas. Litigation or
legislation on this issue may affect the sources of funds available for
the payment of school bonds in the funds. General problems relating to
college and university obligations would include the prospect of a
declining percentage of the population consisting of "college" age
individuals, possible inability to raise tuitions and fees sufficiently
to cover increased operating costs, the uncertainty of continued receipt
of Federal grants and state funding and new government legislation or
regulations which may adversely affect the revenues or costs of such
issuers. All of such issuers have been experiencing certain of these
problems in varying degrees.
Resource Recovery Facility Revenue Bonds. Certain of the bonds in the
closed-end funds may be obligations which are payable from and secured
by revenues derived from the operation of resource recovery facilities.
Resource recovery facilities are designed to process solid waste,
Page 5
generate steam and convert steam to electricity. Resource recovery bonds
may be subject to extraordinary optional redemption at par upon the
occurrence of certain circumstances, including but not limited to:
destruction or condemnation of a project; contracts relating to a
project becoming void, unenforceable or impossible to perform; changes
in the economic availability of raw materials, operating supplies or
facilities necessary for the operation of a project or technological or
other unavoidable changes adversely affecting the operation of a
project; administrative or judicial actions which render contracts
relating to the projects void, unenforceable or impossible to perform;
or impose unreasonable burdens or excessive liabilities. The Sponsor
cannot predict the causes or likelihood of the redemption of resource
recovery bonds in the funds prior to the stated maturity of the Bonds.
Bonds of Issuers Located in the Commonwealth of Puerto Rico. Certain
funds may contain bonds of issuers located in the Commonwealth of Puerto
Rico or issuers which will be affected by general economic conditions of
Puerto Rico. Puerto Rico's unemployment rate remains significantly
higher than the U.S. unemployment rate. Furthermore, the economy is
largely dependent for its development upon U.S. policies and programs
that are being reviewed and may be eliminated.
The Puerto Rican economy consists principally of manufacturing
(pharmaceuticals, scientific instruments, computers, microprocessors,
medical products, textiles and petrochemicals), agriculture (largely
sugar) and tourism. Most of the island's manufacturing output is shipped
to the mainland United States, which is also the chief source of semi-
finished manufactured articles on which further manufacturing operations
are performed in Puerto Rico. Since World War II the economic importance
of agriculture for Puerto Rico, particularly in the dominance of sugar
production, has declined. Nevertheless, the Commonwealth-controlled
sugar monopoly remains an important economic factor and is largely
dependent upon Federal maintenance of sugar prices, the discontinuation
of which could severely affect Puerto Rico sugar production. The level
of tourism is affected by various factors including the strength of the
U.S. dollar. During periods when the dollar is strong, tourism in
foreign countries becomes relatively more attractive.
The Puerto Rican economy is affected by a number of Commonwealth and
Federal investment incentive programs. For example, Section 936 of the
Internal Revenue Code provides for a credit against Federal income taxes
for U.S. companies operating on the island if certain requirements are
met. The Omnibus Budget Reconciliation Act of 1993 imposes limits on
such credit, effective for tax years beginning after 1993. In addition,
from time to time proposals are introduced in Congress which, if enacted
into law, would eliminate some or all of the benefits of Section 936.
Although no assessment can be made at this time of the precise effect of
such limitation, it is expected that the limitation of Section 936
credits would have a negative impact on Puerto Rico's economy.
Aid for Puerto Rico's economy has traditionally depended heavily on
Federal programs, and current Federal budgetary policies suggest that an
expansion of aid to Puerto Rico is unlikely. An adverse effect on the
Puerto Rican economy could result from other U.S. policies, including a
reduction of tax benefits for distilled products, further reduction in
transfer payment programs such as food stamps, curtailment of military
spending and policies which could lead to a stronger dollar.
In a plebiscite held in November 1993, the Puerto Rican electorate chose
to continue Puerto Rico's Commonwealth status. Previously proposed
legislation, which was not enacted, would have preserved the federal tax
exempt status of the outstanding debts of Puerto Rico and its public
corporations regardless of the outcome of the referendum, to the extent
that similar obligations issued by the states are so treated and subject
to the provisions of the Internal Revenue Code currently in effect.
There can be no assurance that any pending or future legislation finally
enacted will include the same or a similar protection against loss of
tax exemption. The November 1993 plebiscite can be expected to have both
direct and indirect consequences on such matters as the basic
characteristics of future Puerto Rico debt obligations, the markets for
these obligations, and the types, levels and quality of revenue sources
pledged for the payment of existing and future debt obligations. Such
possible consequences include, without limitation, legislative proposals
seeking restoration of the status of Section 936 benefits otherwise
subject to the limitations discussed above. However, no assessment can
be made at this time of the economic and other effects of a change in
federal laws affecting Puerto Rico as a result of the November 1993
plebiscite.
The foregoing information constitutes only a brief summary of some of
the financial difficulties which may impact certain issuers of bonds
Page 6
held in the closed-end funds and does not purport to be a complete or
exhaustive description of all adverse conditions to which the issuers of
the bonds are subject. Additionally, many factors including national
economic, social and environmental policies and conditions, which are
not within the control of the issuers of bonds, could affect or could
have an adverse impact on the financial condition of Puerto Rico and
various agencies and political subdivisions located in Puerto Rico. The
Sponsor is unable to predict whether or to what extent such factors or
other factors may affect the issuers of bonds, the market value or
marketability of the bonds or the ability of the respective issuers of
the bonds acquired by the funds to pay interest on or principal of the
bonds.
Page 7
MEMORANDUM
Re: FT 320
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between FT
314, which is the current fund, and FT 320, 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 314 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 bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, 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 320 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on December 23, 1998.
FT 320
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities December 23, 1998
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of
Nike Securities
Corporation, the
General Partner of
Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
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, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young 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-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 24 and
certain subsequent Series, effective January 23, 1992
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. 33-45093] filed on behalf of The First Trust
Special Situations Trust, Series 24).
1.1.1* Form of Trust Agreement for Series 320 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee and First Trust Advisors L.P., as Evaluator
and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities 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 Nike Securities 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 Nike Securities
Corporation, the general partner of Nike Securities 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 Nike Securities Corporation, the
general partner of Nike Securities 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).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
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 Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5