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 8669
B. Name of Depositor: FIRST TRUST PORTFOLIOS L.P.
C. Complete Address of Depositor's 120 East Liberty Drive
Principal Executive Offices: Suite 400
Wheaton, Illinois 60187
D. Name and Complete Address of
Agents for Service: FIRST TRUST PORTFOLIOS L.P.
Attention: James A. Bowen
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
CHAPMAN & CUTLER LLP
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title and Amount 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 MARCH 20, 2020
American Recovery Portfolio Series
FT 8669
FT 8669 is a series of a unit investment trust, the FT Series. FT 8669
consists of a single portfolio known as American Recovery Portfolio Series
(the "Trust"). The Trust invests in a diversified portfolio of common stocks
("Securities"). The Trust seeks above-average capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
FIRST TRUST(R)
800-621-1675
The date of this prospectus is April __, 2020
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Registered Public Accounting Firm 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 9
Portfolio 10
Risk Factors 10
Public Offering 12
Distribution of Units 15
The Sponsor's Profits 16
The Secondary Market 16
How We Purchase Units 17
Expenses and Charges 17
Tax Status 17
Retirement Plans 19
Rights of Unit Holders 20
Income and Capital Distributions 20
Redeeming Your Units 21
Removing Securities from the Trust 22
Amending or Terminating the Indenture 23
Information on the Sponsor, Trustee and Evaluator 23
Other Information 24
Page 2
Summary of Essential Information (Unaudited)
American Recovery Portfolio Series
FT 8669
At the Opening of Business on the Initial Date of Deposit-April __, 2020
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
Evaluator: First Trust Advisors L.P.
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000
Less Initial Sales Charge per Unit (3) (.000)
__________
Aggregate Offering Price Evaluation of Securities per Unit (4) 10.000
Less Deferred Sales Charge per Unit (3) (.225)
__________
Redemption Price per Unit (5) 9.775
Less Creation and Development Fee per Unit (3)(5) (.050)
Less Organization Costs per Unit (5) (.034)
__________
Net Asset Value per Unit $ 9.691
==========
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Account Cash CUSIP Number
Fee Account Reinvestment CUSIP Number
Pricing Line Product Code
Ticker Symbol
First Settlement Date April __, 2020
Mandatory Termination Date (6) April 21, 2022
Income Distribution Record Date Tenth day of each June and December, commencing June 10, 2020.
Income Distribution Date (7) Twenty-fifth day of each June and December, commencing June 25, 2020.
_____________
<FN>
(1) As of the Evaluation Time on the Initial Date of Deposit, we may adjust
the number of Units of the Trust so that the Public Offering Price per Unit
will equal approximately $10.00. If we make such an adjustment, the fractional
undivided interest per Unit will vary from the amount indicated above.
(2) The Public Offering Price shown above reflects the value of the Securities
on the business day prior to the Initial Date of Deposit. No investor will
purchase Units at this price. The price you pay for your Units will be based
on their valuation at the Evaluation Time on the date you purchase your Units.
On the Initial Date of Deposit, the Public Offering Price per Unit will not
include any accumulated dividends on the Securities. After this date, a pro
rata share of any accumulated dividends on the Securities will be included.
(3) You will pay a maximum sales charge of 2.75% of the Public Offering Price
per Unit (equivalent to 2.75% of the net amount invested) which consists of an
initial sales charge, a deferred sales charge and a creation and development
fee. The sales charges are described in the "Fee Table."
(4) Each listed Security is valued at its last closing sale price at the
Evaluation Time on the business day prior to the Initial Date of Deposit. If a
Security is not listed, or if no closing sale price exists, it is valued at
its closing ask price on such date. See "Public Offering-The Value of the
Securities." Evaluations for purposes of determining the purchase, sale or
redemption price of Units are made as of the close of trading on the New York
Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day on
which it is open (the "Evaluation Time").
(5) The creation and development fee will be deducted from the assets of the
Trust at the end of the initial offering period and the estimated organization
costs per Unit 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. If Units are redeemed prior to any such reduction, these fees
will not be deducted from the redemption proceeds. See "Redeeming Your Units."
(6) See "Amending or Terminating the Indenture."
(7) The Trustee will distribute money from the Income and Capital Accounts, as
determined at the semi-annual Record Date, semi-annually on the twenty-fifth
day of each June and December to Unit holders of record on the tenth day of
such months. However, the Trustee will only distribute money in the Capital
Account if the amount available for distribution from that account equals at
least $1.00 per 100 Units. In any case, the Trustee will distribute any funds
in the Capital Account in December of each year and as part of the final
liquidation distribution. See "Income and Capital Distributions."
</FN>
Page 3
Fee Table (Unaudited)
This Fee Table describes the fees and expenses that you may, directly or
indirectly, 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 two
years and is a unit investment trust rather than a mutual fund, this
information allows you to compare fees.
Amount
per Unit
________
Unit Holder Sales Fees (as a percentage of public offering price)
Maximum Sales Charge
Initial sales charge 0.00%(a) $.000
Deferred sales charge 2.25%(b) $.225
Creation and development fee 0.50%(c) $.050
_____ _____
Maximum sales charge (including creation and development fee) 2.75% $.275
===== =====
Organization Costs (as a percentage of public offering price)
Estimated organization costs .340%(d) $.0340
===== ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee and other operating expenses %(f) $
_____ ______
Total % $
===== ======
Example
This example is intended to help you compare the cost of investing in the
Trust with the cost of investing in other investment products. The example
assumes that you invest $10,000 in the Trust for the periods shown. The
example also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. The example does not take into
consideration transaction fees which may be charged by certain broker/dealers
for processing redemption requests. Although your actual costs may vary, based
on these assumptions your costs, assuming you sell or redeem your Units at the
end of each period, would be:
1 Year 2 Years
______ _______
$ $
The example will not differ if you hold rather than sell your Units at the end
of each period.
_____________
<FN>
(a) The combination of the initial and deferred sales charge comprises what we
refer to as the "transactional sales charge." The initial sales charge is
actually equal to the difference between the maximum sales charge of 2.75% and
the sum of any remaining deferred sales charge and creation and development
fee. When the Public Offering Price per Unit equals $10, there is no initial
sales charge. If the price you pay for your Units exceeds $10 per Unit, you
will pay an initial sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.225 per Unit
which, as a percentage of the Public Offering Price, will vary over time. The
deferred sales charge will be deducted in three monthly installments
commencing August 20, 2020.
(c) The creation and development fee compensates the Sponsor for creating and
developing the Trust. The creation and development fee is a charge of $.050
per Unit collected at the end of the initial offering period, which is
expected to be approximately three months from the Initial Date of Deposit. If
the price you pay for your Units exceeds $10 per Unit, the creation and
development fee will be less than 0.50%; if the price you pay for your Units
is less than $10 per Unit, the creation and development fee will exceed 0.50%.
If you purchase Units after the initial offering period, you will not be
assessed the creation and development fee.
(d) Estimated organization costs will be deducted from the assets of the Trust
at the earlier of six months after the Initial Date of Deposit or the end of
the initial offering period. Estimated organization costs are assessed on a
fixed dollar amount per Unit basis which, as a percentage of average net
assets, will vary over time.
(e) Each of the fees listed herein is assessed on a fixed dollar amount per
Unit basis which, as a percentage of average net assets, will vary over time.
(f) Other operating expenses for the Trust do not include brokerage costs and
other portfolio transaction fees for the Trust. In certain circumstances the
Trust may incur additional expenses not set forth above. See "Expenses and
Charges."
</FN>
Page 4
Report of Independent
Registered Public Accounting Firm
Page 5
Statement of Net Assets
American Recovery Portfolio Series
FT 8669
At the Opening of Business on the Initial Date of Deposit-April __, 2020
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $
Less liability for reimbursement to Sponsor for organization costs (3) ( )
Less liability for deferred sales charge (4) ( )
Less liability for creation and development fee (5) ( )
_________
Net assets $
=========
Units outstanding
Net asset value per Unit (6) $ 9.691
ANALYSIS OF NET ASSETS
Cost to investors (7) $
Less maximum sales charge (7) ( )
Less estimated reimbursement to Sponsor for organization costs (3) ( )
_________
Net assets $
=========
______________
<FN>
NOTES TO STATEMENT OF NET ASSETS
The Trust is registered as a unit investment trust under the Investment
Company Act of 1940. The Sponsor is responsible for the preparation of
financial statements in accordance with accounting principles generally
accepted in the United States which require the Sponsor to make estimates and
assumptions that affect amounts reported herein. Actual results could differ
from those estimates. The Trust intends to comply in its initial fiscal year
and thereafter with provisions of the Internal Revenue Code applicable to
regulated investment companies and as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gains) distributed to Unit holders.
(1) The Trust invests in a diversified portfolio of common stocks. Aggregate
cost of the Securities listed under "Schedule of Investments" is based on
their aggregate underlying value. The Trust has a Mandatory Termination Date
of April 21, 2022.
(2) An irrevocable letter of credit issued by The Bank of New York Mellon, of
which approximately $200,000 has been allocated to the Trust, has been
deposited with the Trustee as collateral, covering the monies necessary for
the purchase of the Securities according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount sufficient to
reimburse the Sponsor for all or a portion of the costs of establishing the
Trust. These costs have been estimated at $.0340 per Unit. A payment 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 the obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs of the Trust are greater than the
estimated amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the assets
of the Trust.
(4) Represents the amount of mandatory deferred sales charge distributions of
$.225 per Unit, payable to the Sponsor in three equal monthly installments
beginning on August 20, 2020 and on the twentieth day of each month thereafter
(or if such date is not a business day, on the preceding business day) through
October 20, 2020. If Unit holders redeem Units before October 20, 2020, they
will have to pay the remaining amount of the deferred sales charge applicable
to such Units when they redeem them.
(5) The creation and development fee ($.050 per Unit) is payable by the Trust
on behalf of Unit holders out of assets of the Trust at the end of the initial
offering period. If Units are redeemed prior to the close of the initial
offering period, the fee will not be deducted from the proceeds.
(6) Net asset value per Unit is calculated by dividing the Trust's net assets
by the number of Units outstanding. This figure includes organization costs
and the creation and development fee, which will only be assessed to Units
outstanding at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period in the case of organization costs or
the close of the initial offering period in the case of the creation and
development fee.
(7) The aggregate cost to investors in the Trust includes a maximum sales
charge (comprised of an initial and a deferred sales charge and the creation
and development fee) computed at the rate of 2.75% of the Public Offering
Price (equivalent to 2.75% of the net amount invested, exclusive of the
deferred sales charge and the creation and development fee), assuming no
reduction of the maximum sales charge as set forth under "Public Offering."
</FN>
Page 6
Schedule of Investments
American Recovery Portfolio Series
FT 8669
At the Opening of Business on the
Initial Date of Deposit-April __, 2020
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
__________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
Page 7
Schedule of Investments (cont'd.)
American Recovery Portfolio Series
FT 8669
At the Opening of Business on the
Initial Date of Deposit-April __, 2020
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ___________ _______ _________ _____________
% $ $
%
%
%
%
%
_______ ________
Total Investments 100.00% $
======= ========
_____________
<FN>
(1) All Securities are represented by regular way contracts to purchase such
Securities which are backed by an irrevocable letter of credit deposited with
the Trustee. The Sponsor entered into purchase contracts for the Securities on
April __, 2020. Such purchase contracts are expected to settle within two
business days.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally determined
by the closing sale prices of the listed Securities and the ask prices of over-
the-counter traded Securities at the Evaluation Time on the business day prior
to the Initial Date of Deposit). The cost of Securities to the Trust may not
compute due to rounding the market value per share. The valuation of the
Securities has been determined by the Evaluator, an affiliate of the Sponsor.
In accordance with Financial Accounting Standards Board Accounting Standards
Codification 820, "Fair Value Measurement," the Trust's investments are
classified as Level 1, which refers to securities traded in an active market.
The cost of the Securities to the Sponsor and the Sponsor's profit or loss
(which is the difference between the cost of the Securities to the Sponsor and
the cost of the Securities to the Trust) are $______ and $_____, respectively.
</FN>
Page 8
The FT Series
The FT Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have named the
FT Series. The series to which this prospectus relates, FT 8669, consists of a
single portfolio known as American Recovery Portfolio Series.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This agreement,
entered into among First Trust Portfolios L.P., as Sponsor, The Bank of New
York Mellon as Trustee and First Trust Advisors L.P. as Portfolio Supervisor
and Evaluator, governs the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND RISKS
OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE SPONSOR AT 800-
621-1675, DEPT. CODE 2.
How We Created the Trust.
On the Initial Date of Deposit, we deposited a portfolio of common stocks with
the Trustee and, in turn, the Trustee delivered documents to us representing
our ownership of the Trust in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities in the
Trust, or cash (including a letter of credit or the equivalent) with
instructions to buy more Securities, to create new Units for sale. If we
create additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on the
Initial Date of Deposit (as set forth in "Schedule of Investments"), adjusted
to reflect the sale, redemption or liquidation of any of the Securities or any
stock split or a merger or other similar event affecting the issuer of the
Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change daily. The
portion of Securities represented by each Unit will not change as a result of
the deposit of additional Securities or cash in the Trust. If we deposit cash,
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 pays the
associated brokerage fees. 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. In addition, because the Trust pays the brokerage fees
associated with the creation of new Units and with the sale of Securities to
meet redemption and exchange requests, frequent redemption and exchange
activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the Trustee
may retain and pay us (or our 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 (the "1940 Act"). When acting in an agency capacity, we may select
various broker/dealers to execute securities transactions on behalf of the
Trust, which may include broker/dealers who sell Units of the Trust. We do not
consider sales of Units of the Trust or any other products sponsored by First
Trust as a factor in selecting such broker/dealers.
We cannot guarantee that the Trust will keep its present size and composition
for any length of time. Securities may be periodically sold under certain
circumstances to satisfy Trust obligations, to meet redemption requests and,
as described in "Removing Securities from the Trust," to maintain the sound
investment character of the Trust, and the proceeds received by the Trust will
be used to meet Trust obligations or distributed to Unit holders, but will not
be reinvested. However, Securities will not be sold to take advantage of
market fluctuations or changes in anticipated rates of appreciation or
depreciation, or if they no longer meet the criteria by which they were
selected. You will not be able to dispose of or vote any of the Securities in
the Trust. As the holder of the Securities, the Trustee will vote the
Securities and, except as described in "Removing Securities from the Trust,"
will endeavor to vote the Securities such that the Securities are voted as
closely as possible in the same manner and the same general proportion as are
the Securities held by owners other than such Trust.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the Securities
initially deposited in the Trust fails, unless we can purchase substitute
Securities ("Replacement Securities") we will refund to you that portion of
the purchase price and transactional 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.
Page 9
Portfolio
Objective.
The Trust seeks above-average capital appreciation. Under normal
circumstances, the Trust will invest at least 80% of its assets in U.S.
companies.
Portfolio Selection Process.
The Trust is a unit investment trust that invests in common stocks across the
following sectors: communication services, consumer discretionary, health
care, industrials and information technology. Our goal with this portfolio is
to choose well-capitalized companies with strong market positions.
Through our selection process, we seek to find companies with the following
qualities:
- Well-capitalized with strong balance sheets;
- Skilled management;
- High liquidity;
- Ability to generate earnings growth; and
- Record of financial strength and profit growth.
Portfolio Contents.
Expanding on the disclosure above, the Trust has exposure to the following
investments: companies with various market capitalizations.
Of course, as with any similar investments, there can be no assurance that the
objective of the Trust will be achieved. See "Risk Factors" for a discussion
of the risks of investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks. The value of the Trust's
Units will fluctuate with changes in the value of these common stocks. Common
stock prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general condition
of the relevant stock market, such as the current market volatility, or when
political or economic events affecting the issuers occur. In addition, common
stock prices may be particularly sensitive to rising interest rates, as the
cost of capital rises and borrowing costs increase.
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 the Trust will be positive over any period of time, or that you won't lose
money. Units of the Trust are not deposits of any bank and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Current Economic Conditions. The global economy continues to experience
moderate growth. At the same time developed and developing economies outside
the United States are broadly experiencing economic recoveries on a regional
and global perspective. Worldwide, central bank monetary policy is trending
towards policies of interest rate normalization though at different levels of
commitment and in varying degrees of progress. The global economic impact of
the COVID-19 outbreak is impossible to predict but is expected to disrupt
manufacturing, supply chains and sales in affected areas and negatively impact
global economic growth prospects.
As economies around the world have begun to reflate, inflation has trended
modestly higher but so far not to worrisome levels. Inflation remains
relatively tame worldwide, partly reflecting unemployment rates, worker
participation rates and a continuation of the process of financial
deleveraging in major developed economies. The global employment situation has
improved but upside to wage growth remains challenged, as the effects of
globalization and technology continue to weigh on labor markets in many
countries and regions. Prices of most primary commodities, a driving force
behind some emerging market economies, have come off their highs recently due
to a number of factors including regional economic slowdowns and concerns tied
to trade skirmish/war risk. Recent strength of the U.S. dollar against a
number of foreign currencies has negatively impacted sentiment towards foreign
assets and attracted investors to U.S. assets. Concern about the continued
strength in the price of oil would appear somewhat overstated considering the
effects of technology on production, distribution and usage, which are counter-
inflationary over the intermediate to long term.
Monetary risk remains a concern should central banks raise their benchmark
rates suddenly at a quicker pace and to unexpectedly higher levels.
Tax reform in the United States, in the form of tax cuts and opportunity for
repatriation of earnings for corporations, could provide liquidity as the
Federal Reserve removes stimulus via the process of normalization. In effect,
this could enable companies to navigate the process of interest rate
normalization without as much disruption as some expect.
Tariff risk could possibly recede quickly should resolution appear on the
horizon. For now, fundamentals stateside (economic and corporate revenue and
Page 10
earnings) do not appear to be showing signs of deterioration but rather look
to have further room for improvement.
Due to the current state of uncertainty in the economy, the value of the
Securities held by the Trust may be subject to steep declines or increased
volatility due to changes in performance or perception of the issuers.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that, if declared, they will either remain
at current levels or increase over time.
Communication Services. The Trust invests in communication services companies.
General risks of communication services companies include rapidly changing
technology, rapid product obsolescence, loss of patent protection, cyclical
market patterns, evolving industry standards and frequent new product
introductions. Certain communication companies are subject to substantial
governmental regulation, which among other things, regulates permitted rates
of return and the kinds of services that a company may offer. Media and
entertainment companies are subject to changing demographics, consumer
preferences and changes in the way people communicate and access information
and entertainment content. Certain of these companies may be particularly
susceptible to cybersecurity threats, which could have an adverse effect on
their business. Companies in this sector are subject to fierce competition for
market share from existing competitors and new market entrants. Such
competitive pressures are intense and communication stocks can experience
extreme volatility.
Companies in the communication sector may encounter distressed cash flows and
heavy debt burdens due to the need to commit substantial capital to meet
increasing competition and research and development costs. Technological
innovations may also make the existing products and services of communication
companies obsolete. In addition, companies in this sector can be impacted by a
lack of investor or consumer acceptance of new products, changing consumer
preferences and lack of standardization or compatibility with existing
technologies making implementation of new products more difficult.
Consumer Products. The Trust invests in consumer products companies.
Collectively, consumer discretionary companies and consumer staples companies
are categorized as consumer product companies. General risks of these
companies include cyclicality of revenues and earnings, economic recession,
currency fluctuations, changing consumer tastes, extensive competition,
product liability litigation and increased governmental regulation. Generally,
spending on consumer products is affected by the economic health of consumers.
A weak economy and its effect on consumer spending would adversely affect
consumer product companies.
Health Care. The Trust invests in health care companies. General risks of
health care companies involve extensive competition, generic drug sales, the
loss of patent protection, product liability litigation and evolving
government regulation. For example, the Health Care and Education
Affordability Reconciliation Act of 2010 (the "Act"), passed into law in March
2010, has had and will continue to have a significant impact on the health
care sector. The goal of the legislation is to provide health insurance
coverage for those who do not have it. The measure requires most Americans to
purchase health insurance coverage; will add approximately 16 million people
to the Medicaid rolls; and will subsidize private coverage for low- and middle-
income people. The Act also regulates private insurers more closely, banning
practices such as denial of care for pre-existing conditions. The
implementation of the Act's provisions will continue to take place over the
next several years and has initially been met with significant setbacks.
Implementation of the Act could cause a decrease in the profitability of
companies in the health care sector through increased costs and possible
downward pressure on prices charged. However, in May 2017, the U.S. House of
Representatives passed legislation known as the American Health Care Act,
which, if enacted would amend or repeal significant portions of the Act. The
long-term effects of the Act and any other legislative proposals on the health
care sector remain uncertain and cannot be predicted. Research and development
costs of bringing new drugs to market are substantial, and there is no
guarantee that a product will ever come to market. Health care facility
operators may be affected by the demand for services, efforts by government or
insurers to limit rates, restriction of government financial assistance and
competition from other providers.
Industrials. The Trust invests in industrial companies. General risks of
industrial companies include the general state of the economy, intense
competition, consolidation, domestic and international politics, excess
capacity and consumer spending trends. In addition, they may also be
significantly affected by overall capital spending levels, economic cycles,
technical obsolescence, delays in modernization, labor relations, government
regulations and e-commerce initiatives.
Industrial companies may also be affected by factors more specific to their
individual industries. Industrial machinery manufacturers may be subject to
Page 11
declines in consumer demand and the need for modernization. Aerospace and
defense companies may be influenced by decreased demand for new equipment,
aircraft order cancellations, changes in aircraft-leasing contracts and
cutbacks in profitable business travel. Agricultural equipment businesses may
be influenced by fluctuations in farm income, farm commodity prices,
government subsidies and weather conditions. The number of housing starts,
levels of public and non-residential construction including weakening demand
for new office and retail space, and overall construction spending may
adversely affect construction equipment manufacturers, while overproduction,
consolidation and weakening global economies may lead to deteriorating sales
for auto and truck makers and their suppliers.
Information Technology. The Trust invests in information technology companies.
Technology companies are generally subject to the risks of rapidly changing
technologies; short product life cycles; fierce competition; aggressive
pricing; frequent introduction of new or enhanced products; the loss of
patent, copyright and trademark protections; cyclical market patterns;
evolving industry standards; and frequent new product introductions.
Technology companies may be smaller and less experienced companies, with
limited product lines, markets or financial resources. Technology company
stocks have experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Also, the stocks of many Internet
companies have exceptionally high price-to-earnings ratios with little or no
earnings histories.
Small and/or Mid Capitalization Companies. Certain of the Securities held by
the Trust are issued by small and/or mid capitalization companies. Investing
in stocks of such companies may involve greater risk than investing in larger
companies. For example, such companies may have limited product lines, as well
as shorter operating histories, less experienced management and more limited
financial resources than larger companies. Securities of such companies
generally trade in lower volumes and are generally subject to greater and less
predictable changes in price than securities of larger companies. In addition,
small and mid-cap stocks may not be widely followed by the investment
community, which may result in low demand.
Cybersecurity Risk. As the use of Internet technology has become more
prevalent in the course of business, the Trust has become more susceptible to
potential operational risks through breaches in cybersecurity. A breach in
cybersecurity refers to both intentional and unintentional events that may
cause the Trust to lose proprietary information, suffer data corruption or
lose operational capacity. Such events could cause the Sponsor of the Trust to
incur regulatory penalties, reputational damage, additional compliance costs
associated with corrective measures and/or financial loss. Cybersecurity
breaches may involve unauthorized access to digital information systems
utilized by the Trust through "hacking" or malicious software coding, but may
also result from outside attacks such as denial-of-service attacks through
efforts to make network services unavailable to intended users. In addition,
cybersecurity breaches of the Trust's third-party service providers, or
issuers in which the Trust invests, can also subject the Trust to many of the
same risks associated with direct cybersecurity breaches. The Sponsor of, and
third-party service provider to, the Trust have established risk management
systems designed to reduce the risks associated with cybersecurity. However,
there is no guarantee that such efforts will succeed, especially because the
Trust does not directly control the cybersecurity systems of issuers or third-
party service providers.
Legislation/Litigation. From time to time, various legislative initiatives are
proposed in the United States and abroad which may have a negative impact on
certain of the companies represented in the Trust. In addition, litigation
regarding any of the issuers of the Securities, or the industries represented
by these issuers, may negatively impact the value of these Securities. We
cannot predict what impact any pending or proposed legislation or pending or
threatened litigation will have on the value of the Securities.
Public Offering
The Public Offering Price.
Units will be purchased at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The maximum sales charge (which combines an initial upfront sales charge, a
deferred sales charge and the creation and development fee).
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.
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Although you are not required to pay for your Units until two business days
following your order (the "date of settlement"), you may pay before then. You
will become the owner of Units ("Record Owner") on the date of settlement if
payment has been received. If you pay for your Units before the date of
settlement, we may use your payment during this time and it may be considered
a benefit to us, subject to the limitations of the Securities Exchange Act of
1934, as amended.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the Trust's
organization costs (including costs of preparing the registration statement,
the Indenture and other closing documents, registering Units with the SEC and
states, the initial audit of the Trust's statement of net assets, legal fees
and the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's organization
costs at the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period (a significantly shorter time period than
the life of the Trust). During the period ending with the earlier of six
months after the Initial Date of Deposit or the end of the initial offering
period, there may be a decrease in the value of the Securities. To the extent
the proceeds from the sale of these Securities are insufficient to repay the
Sponsor for Trust organization costs, the Trustee will sell additional
Securities to allow the Trust to fully reimburse the Sponsor. In that event,
the net asset value per Unit of the Trust will be reduced by the amount of
additional Securities sold. Although the dollar amount of the reimbursement
due to the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for the Trust in "Notes to Statement of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs are less
than the estimated amount, only the actual organization costs will ultimately
be charged to the Trust. When Securities are sold to reimburse the Sponsor for
organization costs, the Trustee will sell Securities, to the extent
practicable, which will maintain the same proportionate relationship among the
Securities contained in the Trust as existed prior to such sale.
Minimum Purchase.
The minimum amount per account you can purchase of the Trust is generally
$1,000 worth of Units ($500 if you are purchasing Units for your Individual
Retirement Account or any other qualified retirement plan), but such amounts
may vary depending on your selling firm.
Maximum Sales Charge.
The maximum sales charge is comprised of a transactional sales charge and a
creation and development fee. After the initial offering period the maximum
sales charge will be reduced by 0.50%, to reflect the amount of the previously
charged creation and development fee.
Transactional Sales Charge.
The transactional sales charge you will pay has both an initial and a deferred
component.
Initial Sales Charge. The initial sales charge, which you will pay at the time
of purchase, is equal to the difference between the maximum sales charge of
2.75% of the Public Offering Price and the sum of the maximum remaining
deferred sales charge and creation and development fee (initially $.275 per
Unit). On the Initial Date of Deposit, and any other day the Public Offering
Price per Unit equals $10.00, there is no initial sales charge. Thereafter,
you will pay an initial sales charge when the Public Offering Price per Unit
exceeds $10.00 and as deferred sales charge and creation and development fee
payments are made.
Monthly Deferred Sales Charge. In addition, three monthly deferred sales
charges of $.075 per Unit will be deducted from the Trust's assets on
approximately the twentieth day of each month from August 20, 2020 through
October 20, 2020. If you buy Units at a price of less than $10.00 per Unit,
the dollar amount of the deferred sales charge will not change, but the
deferred sales charge on a percentage basis will be more than 2.25% of the
Public Offering Price.
If you purchase Units after the last deferred sales charge payment has been
assessed, your transactional sales charge will consist of a one-time initial
sales charge of 2.25% of the Public Offering Price (equivalent to 2.302% of
the net amount invested).
Creation and Development Fee.
As Sponsor, we will also receive, and the Unit holders will pay, a creation
and development fee. See "Expenses and Charges" for a description of the
services provided for this fee. The creation and development fee is a charge
of $.050 per Unit collected at the end of the initial offering period. If you
buy Units at a price of less than $10.00 per Unit, the dollar amount of the
creation and development fee will not change, but the creation and development
fee on a percentage basis will be more than 0.50% of the Public Offering Price.
Discounts for Certain Persons.
The maximum sales charge is 2.75% per Unit and the maximum dealer concession
is 2.00% per Unit.
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If you are purchasing Units for an investment account, the terms of which
provide that your registered investment advisor or registered broker/dealer
(a) charges periodic fees in lieu of commissions; (b) charges for financial
planning, investment advisory or asset management services; or (c) charges a
comprehensive "wrap fee" or similar fee for these or comparable services ("Fee
Accounts"), you will not be assessed the transactional sales charge described
above on such purchases. These Units will be designated as Fee Account Units
and, depending upon the purchase instructions we receive, assigned either a
Fee Account Cash CUSIP Number, if you elect to have distributions paid to you,
or a Fee Account Reinvestment CUSIP Number, if you elect to have distributions
reinvested into additional Units of the Trust. Certain Fee Account Unit
holders may be assessed transaction or other account fees on the purchase
and/or redemption of such Units by their registered investment advisor,
broker/dealer or other processing organizations for providing certain
transaction or account activities. Fee Account Units are not available for
purchase in the secondary market. We reserve the right to limit or deny
purchases of Units not subject to the transactional sales charge by investors
whose frequent trading activity we determine to be detrimental to the Trust.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, and dealers and their affiliates will purchase
Units at the Public Offering Price less the applicable dealer concession,
subject to the policies of the related selling firm. Immediate family members
include spouses, or the equivalent if recognized under local law, children or
step-children under the age of 21 living in the same household, parents or
step-parents and trustees, custodians or fiduciaries for the benefit of such
persons. Only employees, officers and directors of companies that allow their
employees to participate in this employee discount program are eligible for
the discounts.
You will be charged the deferred sales charge per Unit regardless of the price
you pay for your Units or whether you are eligible to receive any discounts.
However, if the purchase price of your Units was less than $10.00 per Unit or
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,
including Fee Account Units, you will be credited additional Units with a
dollar value equal to the difference between your maximum sales charge and the
maximum deferred sales charge at the time you buy your Units. If you elect to
have distributions reinvested into additional Units of the Trust, in addition
to the reinvestment Units you receive you will also be credited additional
Units with a dollar value at the time of reinvestment sufficient to cover the
amount of any remaining deferred sales charge and creation and development fee
to be collected on such reinvestment Units. The dollar value of these
additional credited Units (as with all Units) will fluctuate over time, and
may be less on the dates deferred sales charges or the creation and
development fee are collected than their value at the time they were issued.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the Securities
in the Trust as of the Evaluation Time on each business day and will adjust
the Public Offering Price of the Units according to this valuation. This
Public Offering Price will be effective for all orders received before the
Evaluation Time on each such day. If we or the Trustee receive orders for
purchases, sales or redemptions after that time, or on a day which is not a
business day, they will be held until the next determination of price. The
term "business day" as used in this prospectus shall mean any day on which the
NYSE is open. For purposes of Securities and Unit settlement, the term
business day does not include days on which U.S. financial institutions are
closed.
The aggregate underlying value of the Securities in the Trust will be
determined as follows: if the Securities are listed on a national or foreign
securities exchange or The NASDAQ Stock Market, LLC(R), their value shall
generally be based on the closing sale price on the exchange or system which
is the principal market therefore ("Primary Exchange"), which shall be deemed
to be the NYSE if the Securities are listed thereon (unless the Evaluator
deems such price inappropriate as the basis for evaluation). In the event a
closing sale price on the Primary Exchange is not published, the Securities
will be valued based on the last trade price on the Primary Exchange. If no
trades occur on the Primary Exchange for a specific trade date, the value will
be based on the closing sale price from, in the opinion of the Evaluator, an
appropriate secondary exchange, if any. If no trades occur on the Primary
Exchange or any appropriate secondary exchange on a specific trade date, the
Evaluator will determine the value of the Securities using the best
information available to the Evaluator, which may include the prior day's
evaluated price. If the Security is an American Depositary Receipt/ADR, Global
Depositary Receipt/GDR or other similar security in which no trade occurs on
the Primary Exchange or any appropriate secondary exchange on a specific trade
date, the value will be based on the evaluated price of the underlying
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security, determined as set forth above, after applying the appropriate
ADR/GDR ratio, the exchange rate and such other information which the
Evaluator deems appropriate. For purposes of valuing Securities traded on The
NASDAQ Stock Market, LLC(R), closing sale price shall mean the Nasdaq(R)
Official Closing Price as determined by The NASDAQ Stock Market, LLC(R). If
the Securities are not so listed or, if so listed and the principal market
therefore is other than on the Primary Exchange or any appropriate secondary
exchange, the value shall generally be based on the current ask price on the
over-the-counter market (unless the Evaluator deems such price inappropriate
as a basis for evaluation). If current ask prices are unavailable, the value
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) any combination of the above. If such prices are in a
currency other than U.S. dollars, the value of such Security shall be
converted to U.S. dollars based on current exchange rates (unless the
Evaluator deems such prices inappropriate as a basis for evaluation). If the
Evaluator deems a price determined as set forth above to be inappropriate as
the basis for evaluation, the Evaluator shall use such other information
available to the Evaluator which it deems appropriate as the basis for
determining the value of a Security.
After the initial offering period is over, the aggregate underlying value of
the Securities will be determined as set forth above, except that bid prices
are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states. All
Units will be sold at the then current Public Offering Price.
The Sponsor compensates intermediaries, such as broker/dealers and banks, for
their activities that are intended to result in sales of Units of the Trust.
This compensation includes dealer concessions described in the following
section and may include additional concessions and other compensation and
benefits to broker/dealers and other intermediaries.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which represent
a concession or agency commission of 2.00% of the Public Offering Price per
Unit, subject to reductions set forth in "Public Offering-Discounts for
Certain Persons."
Eligible dealer firms and other selling agents who, during the previous
consecutive 12-month period through the end of the most recent month, sold
primary market units of unit investment trusts sponsored by us in the dollar
amounts shown below will be entitled to up to the following additional sales
concession on primary market sales of units during the current month of unit
investment trusts sponsored by us:
Total sales Additional
(in millions) Concession
__________________________________________________________
$25 but less than $100 0.035%
$100 but less than $150 0.050%
$150 but less than $250 0.075%
$250 but less than $1,000 0.100%
$1,000 but less than $5,000 0.125%
$5,000 but less than $7,500 0.150%
$7,500 or more 0.175%
Dealers and other selling agents will not receive a concession on the sale of
Units which are not subject to a transactional sales charge, but such Units
will be included in determining whether the above volume sales levels are met.
Eligible dealer firms and other selling agents include clearing firms that
place orders with First Trust and provide First Trust with information with
respect to the representatives who initiated such transactions. Eligible
dealer firms and other selling agents will not include firms that solely
provide clearing services to other broker/dealer firms or firms who place
orders through clearing firms that are eligible dealers. We reserve the right
to change the amount of concessions or agency commissions from time to time.
Certain commercial banks may be making Units of the Trust available to their
customers on an agency basis. A portion of the transactional sales charge paid
by these customers is kept by or given to the banks in the amounts shown above.
Other Compensation and Benefits to Broker/Dealers.
The Sponsor, at its own expense and out of its own profits, currently provides
additional compensation and benefits to broker/dealers who sell Units of this
Trust and other First Trust products. This compensation is intended to result
in additional sales of First Trust products and/or compensate broker/dealers
and financial advisors for past sales. A number of factors are considered in
determining whether to pay these additional amounts. Such factors may include,
but are not limited to, the level or type of services provided by the
intermediary, the level or expected level of sales of First Trust products by
the intermediary or its agents, the placing of First Trust products on a
preferred or recommended product list, access to an intermediary's personnel,
and other factors. The Sponsor makes these payments for marketing, promotional
Page 15
or related expenses, including, but not limited to, expenses of entertaining
retail customers and financial advisers, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker/dealer firms and similar activities designed to promote the sale of the
Sponsor's products. The Sponsor makes such payments to a substantial majority
of intermediaries that sell First Trust products. The Sponsor may also make
certain payments to, or on behalf of, intermediaries to defray a portion of
their costs incurred for the purpose of facilitating Unit sales, such as the
costs of developing or purchasing trading systems to process Unit trades.
Payments of such additional compensation described in this and the preceding
paragraph, some of which may be characterized as "revenue sharing," create a
conflict of interest by influencing financial intermediaries and their agents
to sell or recommend a First Trust product, including the Trust, over products
offered by other sponsors or fund companies. These arrangements will not
change the price you pay for your Units.
Advertising and Investment Comparisons.
Advertising materials regarding the Trust may discuss several topics,
including: developing a long-term financial plan; working with your financial
professional; the nature and risks of various investment strategies and unit
investment trusts that could help you reach your financial goals; the
importance of discipline; how the Trust operates; how securities are selected;
various unit investment trust features such as convenience and costs; and
options available for certain types of unit investment trusts. These materials
may include descriptions of the principal businesses of the companies
represented in the Trust, research analysis of why they were selected and
information relating to the qualifications of the persons or entities
providing the research analysis. In addition, they may include research
opinions on the economy and industry sectors included and a list of investment
products generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust (which may
show performance net of the expenses and charges the Trust would have
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on other
taxable investments such as the common stocks comprising various market
indexes, corporate or U.S. Government bonds, bank CDs and money market
accounts or funds, (2) performance data from Morningstar, Inc. or (3)
information from publications such as Money, The New York Times, U.S. News and
World Report, Bloomberg Businessweek, Forbes or Fortune. The investment
characteristics of the Trust differ from other comparative investments. You
should not assume that these performance comparisons will be representative of
the Trust's future performance. We may also, from time to time, use
advertising which classifies trusts or portfolio securities according to
capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum transactional
sales charge per Unit for the Trust less any reduction as stated in "Public
Offering." We will also receive the amount of any collected creation and
development fee. Also, any difference between our cost to purchase the
Securities and the price at which we sell them to the Trust is considered a
profit or loss (see Note 2 of "Schedule of Investments"). During the initial
offering period, dealers and others may also realize profits or sustain losses
as a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them will be
a profit or loss to us.
The Secondary Market
Although not obligated, we may 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 or redeem your Units before you
have paid the total deferred sales charge on your Units, you will have to pay
the remainder at that time.
Page 16
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 your proceeds from the sale no later than
if they were redeemed by the Trustee. We may tender Units that we hold to the
Trustee for redemption as any other Units. If we elect not to purchase Units,
the Trustee may sell tendered Units in the over-the-counter market, if any.
However, the amount you will receive is the same as you would have received on
redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table." If
actual expenses of the Trust exceed the estimate, the Trust will bear the
excess. The Trustee will pay operating 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 non-interest-bearing to Unit
holders, so the Trustee may earn interest on these funds, thus benefiting from
their use.
First Trust Advisors L.P., an affiliate of ours, acts as Portfolio Supervisor
and Evaluator and will be compensated for providing portfolio supervisory
services and evaluation services as well as bookkeeping and other
administrative 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. As
Sponsor, we will receive brokerage fees when the Trust uses us (or an
affiliate of ours) as agent in buying or selling Securities. As authorized by
the Indenture, the Trustee may employ a subsidiary or affiliate of the Trustee
to act as broker to execute certain transactions for the Trust. The Trust will
pay for such services at standard commission rates.
The fees payable to First Trust Advisors L.P. and the Trustee are based on the
largest aggregate number of Units of the Trust outstanding at any time during
the calendar year, except during the initial offering period, in which case
these fees are calculated based on the largest number of Units outstanding
during the period for which compensation is paid. These fees may be adjusted
for inflation without Unit holders' approval, but in no case will the annual
fees paid to us or our affiliates for providing services to all unit
investment trusts be more than the actual cost of providing such services in
such year.
As Sponsor, we will receive a fee from the Trust for creating and developing
the Trust, including determining the Trust's objectives, policies, composition
and size, selecting service providers and information services and for
providing other similar administrative and ministerial functions. The
"creation and development fee" is a charge of $.050 per Unit outstanding at
the end of the initial offering period. The Trustee will deduct this amount
from the Trust's assets as of the close of the initial offering period. We do
not use this fee to pay distribution expenses or as compensation for sales
efforts. This fee will not be deducted from your proceeds if you sell or
redeem your Units before the end of the initial offering period.
In addition to the Trust's operating expenses and those fees described above,
the Trust may also incur the following charges:
- All legal expenses of the Trustee according to its responsibilities under
the Indenture;
- The expenses and costs incurred by the Trustee to protect the Trust and your
rights and interests;
- Fees for any extraordinary services the Trustee performed under the Indenture;
- Payment for any loss, liability or expense the Trustee incurred without
negligence, bad faith or willful misconduct on its part, in connection with
its acceptance or administration of the Trust;
- Payment for any loss, liability or expenses we incurred without negligence,
bad faith or willful misconduct in acting as Sponsor of the Trust;
- Foreign custodial and transaction fees (which may include compensation paid
to the Trustee or its subsidiaries or affiliates), if any; and/or
- All taxes and other government charges imposed upon the Securities or any
part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on the
Trust. In addition, if there is not enough cash in the Income or Capital
Account, the Trustee has the power to sell Securities to make cash available
to pay these charges which may result in capital gains or losses to you. See
"Tax Status."
Tax Status
Federal Tax Matters.
This section discusses some of the main U.S. federal income tax consequences
of owning Units of the Trust as of the date of this prospectus. Tax laws and
interpretations change frequently, and this summary does not describe all of
Page 17
the tax consequences to all taxpayers. For example, this summary generally
does not describe your situation if you are a broker/dealer or other investor
with special circumstances. In addition, this section may not describe your
state, local or non-U.S. tax consequences.
This federal income tax summary is based in part on the advice of counsel to
the Sponsor. The Internal Revenue Service ("IRS") could disagree with any
conclusions set forth in this section. In addition, our counsel may not have
been asked to review, and may not have reached a conclusion with respect to
the federal income tax treatment of the assets to be deposited in the Trust.
This summary may not be sufficient for you to use for the purpose of avoiding
penalties under federal tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Trust Status.
Unit investment trusts maintain both Income and Capital Accounts, regardless
of tax structure. Please refer to the "Income and Capital Distributions"
section of the prospectus for more information.
The Trust intends to qualify as a "regulated investment company," commonly
known as a "RIC," under the federal tax laws. If the Trust qualifies as a RIC
and distributes its income as required by the tax law, the Trust generally
will not pay federal income taxes. For federal income tax purposes, you are
treated as the owner of the Trust Units and not of the assets held by the
Trust.
Income from the Trust.
Trust distributions are generally taxable. After the end of each year, you
will receive a tax statement that separates the Trust's distributions into
ordinary income dividends, capital gain dividends and return of capital.
Income reported is generally net of expenses (but see "Treatment of Trust
Expenses" below). Ordinary income dividends are generally taxed at your
ordinary income tax rate, however, certain dividends received from the Trust
may be taxed at the capital gains tax rates. Generally, all capital gain
dividends are treated as long-term capital gains regardless of how long you
have owned your Units. In addition, the Trust may make distributions that
represent a return of capital for tax purposes and will generally not be
currently taxable to you, although they generally reduce your tax basis in
your Units and thus increase your taxable gain or decrease your loss when you
dispose of your Units. The tax laws may require you to treat distributions
made to you in January as if you had received them on December 31 of the
previous year.
Some distributions from the Trust may qualify as long-term capital gains,
which, if you are an individual, is generally taxed at a lower rate than your
ordinary income and short-term capital gain income. The distributions from the
Trust that you must take into account for federal income tax purposes are not
reduced by the amount used to pay a deferred sales charge, if any.
Distributions from the Trust, including capital gains, may also be subject to
a "Medicare tax" if your adjusted gross income exceeds certain threshold
amounts.
Certain Stock Dividends.
Ordinary income dividends received by an individual Unit holder from a RIC
such as the Trust are generally taxed at the same rates that apply to long-
term capital gains, provided certain holding period requirements are satisfied
and provided the dividends are attributable to qualifying dividend income
("QDI") received by the Trust itself. Dividends that do not meet these
requirements will generally be taxed at ordinary income tax rates. After the
end of the tax year, the Trust will provide a tax statement to its Unit
holders reporting the amount of any distribution which may be taken into
account as a dividend which is eligible for the capital gains tax rates.
Unit holders that are corporations may be eligible for the dividends received
deduction with respect to certain ordinary income dividends on Units that are
attributable to qualifying dividends received by the Trust from certain
corporations.
Sale of Units.
If you sell your Units (whether to a third party or to the Trust), you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your (adjusted) tax basis in your Units from
the amount you receive from the sale. Your original tax basis in your Units is
generally equal to the cost of your Units, including sales charges. In some
cases, however, you may have to adjust your tax basis after you purchase your
Units, in which case your gain would be calculated using your adjusted basis.
The tax statement you receive in regard to the sale or redemption of your
Units may contain information about your basis in the Units and whether any
gain or loss recognized by you should be considered long-term or short-term
capital gain. The information reported to you is based upon rules that do not
take into consideration all of the facts that may be known to you or to your
advisors. You should consult with your tax advisor about any adjustments that
Page 18
may need to be made to the information reported to you in determining the
amount of your gain or loss.
Distribution Reinvestment Option.
If you elect to reinvest your distributions into additional Units, you will be
treated as if you have received your distribution in an amount equal to the
distribution you are entitled to. Your tax liability will be the same as if
you received the distribution in cash. Also, the reinvestment would generally
be considered a purchase of new Units for federal income tax purposes.
Treatment of Trust Expenses.
Expenses incurred and deducted by the Trust will generally not be treated as
income taxable to you. In some cases, however, you may be required to treat
your portion of these Trust expenses as income. You may not be able to take a
deduction for some or all of these expenses even if the cash you receive is
reduced by such expenses.
Investments in Certain Non-U.S. Corporations.
A foreign corporation will generally be treated as a passive foreign
investment company ("PFIC") if 75% or more of its income is passive income or
if 50% or more of its assets are held to produce passive income. If the Trust
holds an equity interest in PFICs, the Trust could be subject to U.S. federal
income tax and additional interest charges on gains and certain distributions
from the PFICs, even if all the income or gain is distributed in a timely
fashion to the Trust Unit holders. The Trust will not be able to pass through
to its Unit holders any credit or deduction for such taxes if the taxes are
imposed at the Trust level. The Trust may be able to make an election that
could limit the tax imposed on the Trust. In this case, the Trust would
recognize as ordinary income any increase in the value of such PFIC shares,
and as ordinary loss any decrease in such value to the extent it did not
exceed prior increases included in income.
Under this election, the Trust might be required to recognize income in excess
of its distributions from the PFICs and its proceeds from dispositions of PFIC
stock during that year, and such income would nevertheless be subject to the
distribution requirement and would be taken into account for purposes of
determining the application of the 4% excise tax imposed on RICs that do not
meet certain distribution thresholds. Dividends paid by PFICs are not treated
as QDI to shareholders of the PFICs.
Non-U.S. Investors.
If you are a non-U.S. investor, distributions from the Trust treated as
dividends will generally be subject to a U.S. withholding tax of 30% of the
distribution. Certain dividends, such as capital gains dividends and short-
term capital gains dividends, may not be subject to U.S. withholding taxes. In
addition, some non-U.S. investors may be eligible for a reduction or
elimination of U.S. withholding taxes under a treaty. However, the
qualification for those exclusions may not be known at the time of the
distribution.
Separately, the United States, pursuant to the Foreign Account Tax Compliance
Act ("FATCA") imposes a 30% tax on certain non-U.S. entities that receive U.S.
source interest or dividends if the non-U.S. entity does not comply with
certain U.S. disclosure and reporting requirements. This FATCA tax also
applies to the gross proceeds from the disposition of securities that produce
U.S. source interest or dividends after December 31, 2018. However, proposed
regulations may eliminate the requirement to withhold on payments of gross
proceeds from dispositions.
It is the responsibility of the entity through which you hold your Units to
determine the applicable withholding.
Foreign Tax Credit.
If the Trust directly or indirectly invests in non-U.S. stocks, the tax
statement that you receive may include an item showing foreign taxes the Trust
paid to other countries. You may be able to deduct or receive a tax credit for
your share of these taxes. The Trust would have to meet certain IRS
requirements in order to pass through credits to you.
In-Kind Distributions.
If permitted by this prospectus, as described in "Redeeming Your Units," you
may request an In-Kind Distribution of Trust assets when you redeem your
Units. This distribution is subject to tax, and you will generally recognize
gain or loss, generally based on the value at that time of the securities and
the amount of cash received.
You should consult your tax advisor regarding potential foreign, state or
local taxation with respect to your Units.
Retirement Plans
You may purchase Units of the Trust for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
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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. Before
participating in a plan like this, you should review the tax laws regarding
these plans and consult your attorney or tax advisor. Brokerage firms and
other financial institutions offer these plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
Ownership of Units will not be evidenced by certificates. If you purchase or
hold Units through a broker/dealer or bank, your ownership of Units will be
recorded in book-entry form at the Depository Trust Company ("DTC") and
credited on its records to your broker/dealer's or bank's DTC account.
Transfer of Units will be accomplished by book entries made by DTC and its
participants if the Units are registered to DTC or its nominee, Cede & Co. DTC
will forward all notices and credit all payments received in respect of the
Units held by the DTC participants. You will receive written confirmation of
your purchases and sales of Units from the broker/dealer or bank through which
you made the transaction. You may transfer your Units by contacting the
broker/dealer or bank through which you hold your Units.
Unit Holder Reports.
The Trustee will prepare a statement detailing the per Unit amounts (if any)
distributed from the Income Account and Capital Account in connection with
each distribution. In addition, at the end of each calendar year, the Trustee
will prepare a statement which contains the following information:
- A summary of transactions in the Trust for the year;
- A list of any Securities sold during the year and the Securities held at the
end of that year by the Trust;
- The Redemption Price per Unit, computed on the 31st day of December of such
year (or the last business day before); and
- Amounts of income and capital distributed during the year.
It is the responsibility of the entity through which you hold your Units to
distribute these statements to you. In addition, you may also request from the
Trustee copies of the evaluations of the Securities as prepared by the
Evaluator to enable you to comply with applicable federal and state tax
reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you become a
Record Owner. The Trustee will credit dividends received on the Trust's
Securities to the Income Account of the Trust. All other receipts, such as
return of capital or capital gain dividends, are credited to the Capital
Account of the Trust. Dividends received on foreign Securities, if any, are
converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute money from the Income and Capital Accounts, as
determined at the semi-annual Record Date, semi-annually on the twenty-fifth
day of each June and December to Unit holders of record on the tenth day of
such months. However, the Trustee will only distribute money in the Capital
Account if the amount available for distribution from that account equals at
least $1.00 per 100 Units. In any case, the Trustee will distribute any funds
in the Capital Account in December of each year and as part of the final
liquidation distribution. See "Summary of Essential Information." No income
distribution will be paid if accrued expenses of the Trust exceed amounts in
the Income Account on the Distribution Dates. Distribution amounts will vary
with changes in the Trust's fees and expenses, in dividends received and with
the sale of Securities. If the Trustee does not have your taxpayer
identification number ("TIN"), it is required to withhold a certain percentage
of your distribution and deliver such amount to the IRS. You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has your
TIN to avoid this "back-up withholding."
If an Income or Capital Account distribution date is a day on which the NYSE
is closed, the distribution will be made on the next day the stock exchange is
open. Distributions are paid to Unit holders of record determined as of the
close of business on the Record Date for that distribution or, if the Record
Date is a day on which the NYSE is closed, the first preceding day on which
the exchange is open.
We anticipate that there will be enough money in the Capital Account of the
Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after the Trust is terminated, you will receive a pro
rata share of the money from the sale of the Securities and amounts in the
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Income and Capital Accounts. All Unit holders will receive a pro rata share of
any other assets remaining in your Trust, after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within the Trust to
cover anticipated state and local taxes or any governmental charges to be paid
out of the Trust.
Distribution Reinvestment Option. You may elect to have each distribution of
income and/or capital reinvested into additional Units of the Trust by
notifying your broker/dealer or bank within the time period required by such
entities so that they can notify the Trustee of your election at least 10 days
before any Record Date. Each later distribution of income and/or capital on
your Units will be reinvested by the Trustee into additional Units of such
Trust. There is no sales charge on Units acquired through the Distribution
Reinvestment Option, as discussed under "Public Offering." This option may not
be available in all states. Each reinvestment plan is subject to availability
or limitation by the Sponsor and each broker/dealer or selling firm. The
Sponsor or broker/dealers may suspend or terminate the offering of a
reinvestment plan at any time. Because the Trust may begin selling Securities
nine business days prior to the Mandatory Termination Date, reinvestment is
not available during this period. Please contact your financial professional
for additional information. PLEASE NOTE THAT EVEN IF YOU REINVEST
DISTRIBUTIONS, THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending a request
for redemption to your broker/dealer or bank through which you hold your
Units. No redemption fee will be charged, but you are responsible for any
governmental charges that apply. Certain broker/dealers may charge a
transaction fee for processing redemption requests. Two 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 your redemption
request is received by the Trustee from the broker/dealer or bank through
which you hold your Units (if such day is a day the NYSE is open for trading).
However, if the redemption request is received after 4:00 p.m. Eastern time
(or after any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next day the
NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn from the
Income Account if funds are available for that purpose, or from the Capital
Account. All other amounts paid on redemption will be taken from the Capital
Account. The IRS will require the Trustee to withhold a portion of your
redemption proceeds if the Trustee does not have your TIN as generally
discussed under "Income and Capital Distributions."
If you tender for redemption at least 2,500 Units, or such larger amount as
required by your broker/dealer or bank, rather than receiving cash, you may
elect to receive an In-Kind Distribution in an amount equal to the Redemption
Price per Unit by making this request to your broker/dealer or bank at the
time of tender. However, to be eligible to participate in the In-Kind
Distribution option at redemption, Unit holders must hold their Units through
the end of the initial offering period. No In-Kind Distribution requests
submitted during the 10 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's or broker/dealer's account at DTC. The Trustee will subtract any
customary transfer and registration charges from your In-Kind Distribution. As
a tendering Unit holder, you will receive your pro rata number of whole shares
of Securities that make up the portfolio, and cash from the Capital Account
equal to the fractional shares to which you are entitled.
If you elect to receive an In-Kind Distribution of Securities, you should be
aware that it will be considered a taxable event at the time you receive the
Securities. See "Tax Status" for additional information.
The Trustee may sell Securities to make funds available for redemption. If
Securities are sold, the size and diversification of the Trust will be
reduced. These sales may result in lower prices than if the Securities were
sold at a different time.
Your right to redeem Units (and therefore, your right to receive payment) may
be delayed:
- If the NYSE is closed (other than customary weekend and holiday closings);
- If the SEC determines that trading on the NYSE is restricted or that an
emergency exists making sale or evaluation of the Securities not reasonably
practical; or
- For any other period permitted by SEC order.
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The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of the Trust not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the date
of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out of
the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as of the
business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Any remaining deferred sales charge on the Units when you redeem them will be
deducted from your redemption proceeds. In addition, until they are collected,
the Redemption Price per Unit will include estimated organization costs as set
forth under "Fee Table."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain limited
circumstances, including situations in which:
- The issuer of the Security 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, the issuer's credit standing, or otherwise damage the
sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its outstanding
obligations;
- There has been a public tender offer made for a Security or a merger or
acquisition is announced affecting a Security, and that in our opinion the
sale or tender of the Security is in the best interest of Unit holders;
- The sale of Securities is necessary or advisable (i) in order to maintain
the qualification of the Trust as a "regulated investment company" in the case
of the Trust which has elected to qualify as such or (ii) to provide funds to
make any distribution for a taxable year in order to avoid imposition of any
income or excise taxes on undistributed income in the Trust which is a
"regulated investment company";
- The price of the Security has declined to such an extent, or such other
credit factors exist, that in our opinion keeping the Security would be
harmful to the Trust;
- As a result of the ownership of the Security, the Trust or its Unit holders
would be a direct or indirect shareholder of a passive foreign investment
company; or
- The sale of the Security is necessary for the Trust to comply with such
federal and/or state securities laws, regulations and/or regulatory actions
and interpretations which may be in effect from time to time.
Except for instances in which the Trust acquires Replacement Securities, as
described in "The FT Series," the Trust will generally not acquire any
securities or other property other than the Securities. The Trustee, on behalf
of the Trust and at the direction of the Sponsor, will vote for or against 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 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 distribution 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 1940 Act. When acting in an
agency capacity, we may select various broker/dealers to execute securities
transactions on behalf of the Trust, which may include broker/dealers who sell
Page 22
Units of the Trust. We do not consider sales of Units of the Trust or any
other products sponsored by First Trust as a factor in selecting such
broker/dealers. As authorized by the Indenture, the Trustee may also employ a
subsidiary or affiliate of the Trustee to act as broker in selling such
Securities or property. The Trust will pay for these brokerage services at
standard commission rates.
The Trustee may sell Securities designated by us, or, absent our direction, at
its own discretion, in order to meet redemption requests or pay expenses. In
designating Securities to be sold, we will try to maintain the proportionate
relationship among the Securities. If this is not possible, the composition
and diversification of the Trust may be changed.
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 adverse to your best interests
(as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on the
Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated earlier:
- Upon the consent of 100% of the Unit holders of the Trust;
- 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 ("Discretionary
Liquidation Amount"); or
- In the event that Units of the Trust not yet sold aggregating more than 60%
of the Units of the Trust are tendered for redemption by underwriters,
including the Sponsor.
If the Trust is terminated due to this last reason, we will refund your entire
sales charge; however, termination of the Trust before 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 before the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning nine
business days prior to, and no later than, the Mandatory Termination Date. We
will determine the manner and timing of the sale of Securities. 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
sales price than might otherwise be realized if such sale were not required at
this time.
You will receive a cash distribution from the sale of the remaining
Securities, along with your interest in the Income and Capital Accounts,
within a reasonable time after the Trust is terminated. The Trustee will
deduct from the Trust any accrued costs, expenses, advances or indemnities
provided for 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, First Trust Portfolios L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust" brand
name and other securities. An Illinois limited partnership formed in 1991, we
took over the First Trust product line and 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
The First Trust product line commenced with the first insured unit investment
trust in 1974. To date we have deposited more than $425 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 FINRA and SIPC. Our principal offices are at 120 East
Liberty Drive, Wheaton, Illinois 60187; telephone number 800-621-1675. As of
December 31, 2018, the total partners' capital of First Trust Portfolios L.P.
was $44,255,416.
Page 23
This information refers only to us and not to the Trust or to any series of
the Trust or to any other dealer. We are including this information only to
inform you of our financial responsibility and our ability to carry out our
contractual obligations. We will provide more detailed financial information
on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on Trust
transactions to report personal securities transactions. The purpose of the
code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is The Bank of New York Mellon, a trust company organized under
the laws of New York. The Bank of New York Mellon has its unit investment
trust division offices at 240 Greenwich Street, New York, New York 10286,
telephone 800-813-3074. If you have questions regarding your account or your
Trust, please contact the Trustee at its unit investment trust division
offices or your financial adviser. The Sponsor does not have access to
individual account information. The Bank of New York Mellon is subject to
supervision and examination by the Superintendent of the New York State
Department of Financial Services and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The Trustee has not participated in selecting the Securities; it only provides
administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for not
taking any action in good faith according to the Indenture. We will also not
be accountable for errors in judgment. We will only be liable for our own
willful misfeasance, bad faith, gross negligence (ordinary negligence in the
Trustee's case) or reckless disregard of our obligations and duties. The
Trustee is not liable for any loss or depreciation when the Securities are
sold. If we fail to act under the Indenture, the Trustee may do so, and the
Trustee will not be liable for any action it takes in good faith under the
Indenture.
The Trustee will not be liable for any taxes or other governmental charges or
interest on the Securities which the Trustee may be required to pay under any
present or future law of the United States or of any other taxing authority
with jurisdiction. Also, the Indenture states other provisions regarding the
liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not able to
act or become bankrupt, or if our affairs are taken over by public
authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more than
that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited partnership
formed in 1991 and an affiliate of the Sponsor. The Evaluator's address is 120
East Liberty Drive, Wheaton, Illinois 60187.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make determinations
in good faith based upon the best available information, but will not be
liable to the Trustee, Sponsor or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago, Illinois
60603. They have passed upon the legality of the Units offered hereby and
certain matters relating to federal tax law. Carter Ledyard & Milburn LLP acts
as the Trustee's counsel.
Experts.
The Trust's statement of net assets, including the schedule of investments, as
of the opening of business on the Initial Date of Deposit included in this
prospectus, has been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their report appearing herein,
and is included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Sponsor, you will receive free of charge supplemental
information about this Series, which has been filed with the SEC and to which
we have referred throughout. This information states more specific details
concerning the nature, structure and risks of this product.
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Page 27
First Trust(R)
American Recovery Portfolio Series
FT 8669
Sponsor:
First Trust Portfolios L.P.
Member SIPC o Member FINRA
120 East Liberty Drive
Wheaton, Illinois 60187
800-621-1675
Trustee:
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
800-813-3074
24-Hour Pricing Line:
800-446-0132
Please refer to the "Summary of Essential Information" for the Product Code.
________________________
When Units of the Trust are no longer available, this prospectus may be used
as a preliminary prospectus
for a future series, in which case you should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES UNTIL THAT
SERIES HAS BECOME EFFECTIVE WITH THE SEC. NO SECURITIES CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned unit
investment trust, but does not contain all of the information about this
investment company as filed with the SEC in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-______) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, can be reviewed and
copied at the SEC's Public Reference Room in Washington, D.C. Information
regarding the operation of the SEC's Public Reference Room may be obtained by
calling the SEC at 202-942-8090.
Information about the Trust is available on the EDGAR Database on the SEC's
Internet site at www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the SEC
100 F Street, N.E.
Washington, D.C. 20549
e-mail address: publicinfo@sec.gov
April __, 2020
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning the
structure, operations and risks of the unit investment trust contained in FT
8669 not found in the prospectus for the Trust. This Information Supplement is
not a prospectus and does not include all of the information you should
consider before investing in the Trust. This Information Supplement should be
read in conjunction with the prospectus for the Trust in which you are
considering investing.
This Information Supplement is dated April __, 2020. Capitalized terms have
been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Communication Services 1
Consumer Products 2
Health Care 2
Industrials 3
Information Technology 3
Small and/or Mid Capitalization Companies 4
Securities Selected for American Recovery Portfolio Series 4
Risk Factors
Securities. An investment in Units should be made with an understanding of the
risks which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Securities or the general
condition of the relevant stock market may worsen, and the value of the
Securities and therefore the value of the Units may decline. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases of value, as market confidence in and perceptions of
the issuers change. These perceptions are based on unpredictable factors,
including expectations regarding government, economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction, and
global or regional political, economic or banking crises.
Dividends. Shareholders of common stocks have rights to receive payments from
the issuers of those common stocks that are generally subordinate to those of
creditors of, or holders of debt obligations or preferred stocks of, such
issuers. Shareholders of common stocks have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. Cumulative preferred stock dividends must be
paid before common stock dividends, and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders of
cumulative preferred stock. Preferred stockholders are also generally entitled
to rights on liquidation which are senior to those of common stockholders.
Communication Services. General risks of communication services companies
include rapidly changing technology, rapid product obsolescence, loss of
patent protection, cyclical market patterns, evolving industry standards and
frequent new product introductions. Certain communication companies are
subject to substantial governmental regulation, which among other things,
regulates permitted rates of return and the kinds of services that a company
may offer. Media and entertainment companies are subject to changing
demographics, consumer preferences and changes in the way people communicate
Page 1
and access information and entertainment content. Certain of these companies
may be particularly susceptible to cybersecurity threats, which could have an
adverse effect on their business. Companies in this sector are subject to
fierce competition for market share from existing competitors and new market
entrants. Such competitive pressures are intense and communication stocks can
experience extreme volatility.
Companies in the communication sector may encounter distressed cash flows and
heavy debt burdens due to the need to commit substantial capital to meet
increasing competition and research and development costs. Technological
innovations may also make the existing products and services of communication
companies obsolete. In addition, companies in this sector can be impacted by a
lack of investor or consumer acceptance of new products, changing consumer
preferences and lack of standardization or compatibility with existing
technologies making implementation of new products more difficult.
Consumer Products. Risks inherent in an investment in the consumer products
sector include the cyclicality of revenues and earnings, changing consumer
demands, regulatory restrictions, product liability litigation and other
litigation resulting from accidents, extensive competition (including that of
low-cost foreign competition), unfunded pension fund liabilities and employee
and retiree benefit costs and financial deterioration resulting from leveraged
buy-outs, takeovers or acquisitions. In general, expenditures on consumer
products will be affected by the economic health of consumers. A weak economy
with its consequent effect on consumer spending would have an adverse effect
on consumer products companies. Other factors of particular relevance to the
profitability of the sector are the effects of increasing environmental
regulation on packaging and on waste disposal, the continuing need to conform
with foreign regulations governing packaging and the environment, the outcome
of trade negotiations and the effect on foreign subsidies and tariffs, foreign
exchange rates, the price of oil and its effect on energy costs, inventory
cutbacks by retailers, transportation and distribution costs, health concerns
relating to the consumption of certain products, the effect of demographics on
consumer demand, the availability and cost of raw materials and the ongoing
need to develop new products and to improve productivity.
Health Care. Health care companies include those involved in health
care/managed care, hospital management/health services, the creation and
development of drugs and biotechnology, and the development of advanced
medical devices, instruments and other supplies, all of which have unique
potential risks. These companies are subject to governmental regulation of
their products and services, a factor which could have a significant and
unfavorable effect on the price and availability of such products or services.
Furthermore, such companies face the risk of increasing competition from new
products or services, generic drug sales, the termination of patent protection
for drug or medical supply products and the risk that technological advances
will render their products obsolete. The research and development costs of
bringing a drug to market are substantial, and include lengthy governmental
review processes with no guarantee that the product will ever come to market.
Many of these companies may have operating losses and may not offer certain
products for several years. Such companies may also have persistent losses
during a new product's transition from development to production, and revenue
patterns may be erratic. On a worldwide basis, such companies are involved in
the development and distributions of drugs, vaccines, medical products and
medical services.
As the number of older people in the United States increases, the health care
system is increasingly burdened by the costs related to chronic illnesses,
injuries, disabilities, nursing home care and home health care. These costs
may be exaggerated for health care facility operators who may already be
burdened by events and conditions including fluctuating 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
programs. The challenges presented by an increase in the elderly population
may require an increase in spending to improve and expand the health care
infrastructure as well as overall reform to the entire health care system.
Legislative proposals concerning health care are proposed in Congress from
time to time. These proposals span a wide range of topics, including cost and
price controls (which may include a freeze on the prices of prescription
drugs), national health insurance, incentives for competition in the provision
of health care services, tax incentives and penalties related to health care
insurance premiums and promotion of pre-paid health care plans. The long-term
effects of any such proposals on the health care sector remain uncertain and
cannot be predicted.
Page 2
Industrials. The profitability of industrial companies will be affected by
various factors including the general state of the economy, intense
competition, domestic and international politics, excess capacity and spending
trends. The Internet may also influence the industrial market. Customers'
desire for better pricing and convenience, as well as manufacturers' desire to
boost profitability by finding new avenues of sales growth and productivity
gains, may drive many industrial manufacturers to invest heavily in Internet
hardware and software. Because the Internet allows manufacturers to take
orders directly from customers, thus eliminating the middlemen from both
supply chains and distributors, industrial makers may no longer need
traditional third-party outfits to distribute their products. In addition, the
Internet may also allow industrial manufacturers to cut inventory levels, by
enabling customers to tailor their orders to their specific needs.
Industrial companies may also be affected by factors more specific to their
individual industries. Industrial machinery manufacturers may be subject to
declines in consumer demand and the need for modernization. Agricultural
equipment businesses may be influenced by fluctuations in farm income, farm
commodity prices, government subsidies and weather conditions. The number of
housing starts, levels of public and non-residential construction including
weakening demand for new office and retail space, and overall construction
spending may adversely affect construction equipment manufacturers, while
overproduction, consolidation and weakening global economies may lead to
deteriorating sales for truck makers.
Information Technology. Technology companies generally include companies
involved in the development, design, manufacture and sale of computers and
peripherals, software and services, data networking/communications equipment,
Internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market for
these products, especially those specifically related to the Internet, is
characterized by rapidly changing technology, rapid product obsolescence,
cyclical market patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Securities depends in
substantial part on the timely and successful introduction of new products. An
unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse effect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond in a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements of new
products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of high-
technology common stocks to fluctuate substantially. In addition, technology
company stocks have experienced extreme price and volume fluctuations that
often have been unrelated to the operating performance of such companies. This
market volatility may adversely affect the market price of the Securities and
therefore the ability of a Unit holder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely
and cost effective manner. Accordingly, an issuer's operating results and
customer relationships could be adversely affected by either an increase in
price for, or an interruption or reduction in supply of, any key components.
Additionally, many technology issuers are characterized by a highly
concentrated customer base consisting of a limited number of large customers
who may require product vendors to comply with rigorous industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies are
often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance that
these customers will place additional orders, or that an issuer of Securities
will obtain orders of similar magnitude as past orders from other customers.
Similarly, the success of certain technology companies is tied to a relatively
small concentration of products or technologies. Accordingly, a decline in
demand of such products, technologies or from such customers could have a
material adverse impact on issuers of the Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the Securities to protect their proprietary
rights will be adequate to prevent misappropriation of their technology or
that competitors will not independently develop technologies that are
substantially equivalent or superior to such issuers' technology. In addition,
due to the increasing public use of the Internet, it is possible that other
laws and regulations may be adopted to address issues such as privacy,
pricing, characteristics, and quality of Internet products and services. The
adoption of any such laws could have a material adverse impact on the
Securities in the Trust.
Page 3
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part, from
weak pricing, persistent overcapacity, slowdown in Asian demand and a shift in
retail personal computer sales toward the low end, or "sub-$1,000" segment.
Industry growth is dependent upon several factors, including: the rate of
global economic expansion; demand for products such as personal computers and
networking and communications equipment; excess productive capacity and the
resultant effect on pricing; and the rate of growth in the market for low-
priced personal computers.
The social media industry is also highly competitive and subject to the risks
involved with information technology companies, namely, short product life
cycles, evolving industry standards, loss of patent protections, rapidly
changing technologies and frequent new product introductions. Additional
risks generally applicable to social media companies include, without
limitation: disruption of services due to internal or external technical
issues; security breaches of private, proprietary and confidential
information; and evolving laws and regulations, foreign or domestic, that
could negatively affect operations. Furthermore, the sustainability of the
business models employed by social media companies remain largely unproven.
Small and/or Mid Capitalization Companies. The following section applies to
individual Trusts which contain Securities issued by, or invest in Securities
that hold securities issued by, small and/or mid capitalization companies.
While historically stocks of small and mid capitalization companies have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Such companies may have limited product
lines, markets or financial resources; may lack management depth or
experience; and may be more vulnerable to adverse general market or economic
developments than large companies. Some of these companies may distribute,
sell or produce products which have recently been brought to market and may be
dependent on key personnel.
The prices of small and mid cap company securities are often more volatile
than prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less publicly
available information. Also, because such companies normally have fewer shares
outstanding and these shares trade less frequently than large companies, it
may be more difficult for the Trusts which contain these Securities to buy and
sell significant amounts of such shares without an unfavorable impact on
prevailing market prices.
Securities Selected for American Recovery Portfolio Series
, headquartered in
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Page 4
, headquartered in
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Page 5
, headquartered in
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Page 6
, headquartered in
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We have obtained the foregoing company descriptions from third-party sources
we deem reliable.
Page 7
UNDERTAKINGS
1. Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to
file with the Securities and Exchange Commission such supplementary and
periodic information, documents, and reports as may be prescribed by any
rule or regulation of the Commission heretofore or hereafter duly adopted
pursuant to authority conferred in that section.
2. Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers
and controlling persons of the registrant pursuant to Rule 484 under the
Securities Act, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
First Trust Portfolios L.P. is covered by a Broker's Fidelity Bond,
in the total amount of $2,000,000, the insurer being National Union
Fire Insurance Company of Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the following papers
and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, FT 8669 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Wheaton
and State of Illinois on March 20, 2020.
FT 8669
(Registrant)
By: FIRST TRUST PORTFOLIOS L.P.
---------------------------
Depositor
By: /s/ Elizabeth H. Bull
---------------------
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
Name Title* Date
---- ----- ----
James A. Bowen Director of The Charger Corporation, )
the General Partner of First Trust )
Portfolios L.P., and Chief Executive )
Officer of First Trust Portfolios )By: /s/ Elizabeth H. Bull
L.P. ) ---------------------
) Attorney-in-Fact**
James M. Dykas Chief Financial Officer of First ) March 20, 2020
Trust Portfolios L.P. )
)
Christina Knierim Controller of First Trust Portfolios )
L.P. )
* The title of the person named herein represents his or her capacity in
and relationship to First Trust Portfolios L.P., the Depositor.
** Executed copies of the related powers of attorney were filed with the
Securities and Exchange Commission in connection with the Amendment No. 1
to Form S-6 of FT 8556 (File No. 333-236093) and the same is hereby
incorporated herein by this reference.
S-3
CONSENT OF COUNSEL
The consent of counsel to the use of its name in the Prospectus included
in this Registration Statement will be contained in its respective opinion to be
filed as Exhibit 3.1 of the Registration Statement.
CONSENT OF DELOITTE & TOUCHE LLP
The consent of Deloitte & Touche LLP to the use of its name and to the
reference to such firm in the Prospectus included in this Registration Statement
will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its name in the
Prospectus included in the Registration Statement will be filed as Exhibit 4.1
to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for FT 4484 and certain
subsequent Series among First Trust Portfolios L.P., as Depositor, The
Bank of New York Mellon, as Trustee, First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor and FTP Services LLC, as FTPS Unit
Servicing Agent (incorporated by reference to Amendment No. 1 to Form
S-6 [File No. 333-191558] filed on behalf of FT 4484).
1.1.1* Form of Trust Agreement for FT 8669 among First Trust Portfolios L.P.,
as Depositor, The Bank of New York Mellon, as Trustee, First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike Securities, L.P.,
predecessor of First Trust Portfolios L.P. (incorporated by reference
to Amendment No. 1 to Form S-6 [File No. 333-230481] filed on behalf of
FT 8001).
1.3 Copy of Amended and Restated Limited Partnership Agreement of Nike
Securities, L.P., predecessor of First Trust Portfolios L.P.
(incorporated by reference to Amendment No. 1 to Form S-6 [File No.
333-230481] filed on behalf of FT 8001).
1.4 Copy of Articles of Incorporation of Nike Securities Corporation,
predecessor to The Charger Corporation, the general partner of First
Trust Portfolios L.P., Depositor (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 333-230481] filed on behalf of FT
8001).
1.5 Copy of By-Laws of The Charger Corporation, the general partner of
First Trust Portfolios L.P., Depositor (incorporated by reference to
Amendment No. 2 to Form S-6 [File No. 333-169625] filed on behalf of FT
2669).
1.6 Underwriter Agreement (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42755] filed on behalf of The First Trust
Special Situations Trust, Series 19).
S-5
2.2 Copy of Code of Ethics (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 333-224320] filed on behalf of FT 7359).
3.1* Opinion of counsel as to legality of securities being registered.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Principal Officers of the Depositor (incorporated by reference
to Amendment No. 1 to Form S-6 [File No. 333-236093] filed on behalf of
FT 8556).
7.1 Powers of Attorney executed by the Officers listed on page S-3 of this
Registration Statement (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 333-236093] filed on behalf of FT 8556).
___________________________________
* To be filed by amendment.
S-6