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 8620
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.
FT 8620
The final Prospectus for one or more prior Series of the Fund, as
referenced below, in connection with the Registration Statement transmitted
herewith are hereby used as a preliminary Prospectus for the above stated
Series. The narrative information and structure of the referenced final
Prospectus or Prospectuses will be substantially the same as that of the final
Prospectus for this Series. Information with respect to pricing, the number of
Units, dates and summary information regarding the characteristics of securities
to be deposited in this Series is not now available and will be different since
each Series has a unique Portfolio. Accordingly the information contained herein
with regard to the previous Series should be considered as being included for
informational purposes only. Ratings, if any, of the securities in this Series
are expected to be comparable to those of the securities deposited in the
previous Series.
A registration statement relating to the units of this Series will be
filed with the Securities and Exchange Commission but has not yet become
effective. Information contained herein is subject to completion or amendment.
Such Units may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the Units in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such state. (Incorporated herein by reference is the
final prospectus for FT 7320 (Registration No. 333-223761) as filed April 18,
2018 which shall be used in connection with the Registration Statement
transmitted herewith as the preliminary Prospectus for the current series of the
Fund.)
SUBJECT TO COMPLETION, DATED MARCH 20, 2020
Dividend Growth Portfolio, April 2020 Series
FT 8620
FT 8620 is a series of a unit investment trust, the FT Series. FT 8620
consists of a single portfolio known as Dividend Growth Portfolio, April
2020 Series (the "Trust"). The Trust invests in a diversified portfolio of
common stocks ("Securities"). The Trust seeks dividend income with 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 20
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 RBC Capital Markets, LLC and RBC
Wealth Management, the Sponsor, Trustee and Evaluator 24
Other Information 25
Page 2
Summary of Essential Information (Unaudited)
Dividend Growth Portfolio, April 2020 Series
FT 8620
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) (.032)
_________
Net Asset Value per Unit $ 9.693
=========
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 20, 2022
Distribution Record Date Tenth day of each month, commencing May 10, 2020.
Distribution Date (7) Twenty-fifth day of each month, commencing May 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
generally 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 monthly Record Date, monthly on the twenty-
fifth day of each month to Unit holders of record on the tenth day of such
month provided the aggregate amount, exclusive of sale proceeds, in the
Income and Capital Accounts available for distribution equals at least
0.1% of the net asset value of the Trust. Undistributed money in the
Income and Capital Accounts will be distributed in the next month in which
the aggregate amount available for distribution, exclusive of sale
proceeds, equals or exceeds 0.1% of the net asset value of the Trust.
Distributions of sale proceeds from the Capital Account will be made
monthly on the twenty-fifth day of the month to Unit holders of record on
the tenth day of such month if the amount available for distribution
equals at least $1.00 per 100 Units. 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 .320%(d) $.0320
===== ======
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 July 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 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
Dividend Growth Portfolio, April 2020 Series
FT 8620
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) $ 9.693
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 as a grantor trust under federal tax laws. In grantor trusts,
investors are deemed for federal tax purposes, to own the underlying
assets of the trust directly. All taxability issues are taken into account
at the Unit holder level. Income passes through to Unit holders as
realized by the Trust.
(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 20, 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 $.0320 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 $.225 per Unit, payable to the Sponsor in three equal monthly
installments beginning on July 20, 2020 and on the twentieth day of each
month thereafter (or if such date is not a business day, on the preceding
business day) through September 18, 2020. If Unit holders redeem Units
before September 18, 2020, they will have to pay the remaining amount of
the deferred sales charge applicable to such Units when they redeem them.
(5) The creation and development fee ($.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
Dividend Growth Portfolio, April 2020 Series
FT 8620
At the Opening of Business on the
Initial Date of Deposit-April __, 2020
Percentage Unaudited
of Aggregate Number Market Cost of Disclosure of
Ticker Symbol and Offering of Value per Securities to RBC Capital
Name of Issuer of Securities (1) (3) Price Shares Share the Trust (2) Markets
____________________________________ ____________ ______ _________ _____________ _____________
COMMON STOCKS (100.00%):
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ ________
Total Investments 100.00% $
======= ========
_____________
<FN>
See "Notes to Schedule of Investments" on page 8.
Page 7
NOTES TO SCHEDULE OF INVESTMENTS
(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.
(3) Common stocks of companies headquartered or incorporated outside the
United States comprise approximately ___% of the investments of the Trust
(consisting of ______, ___% and ______, ___%).
+ This Security represents the common stock of a company headquartered or
incorporated outside the United States which trades directly or through an
American Depositary Receipt/ADR on the over-the-counter market or on a
U.S. national securities exchange.
============================================================================================================================
RBC Capital Markets, LLC ("RBC Capital Markets") or its affiliates, in their general securities businesses, act as agent or
principal in connection with buying and selling stocks, including the Securities. The following unaudited information
details RBC Capital Markets and its affiliates' investment banking relationships related to the Securities. This
information has been provided by RBC Capital Markets and its affiliates, who are solely responsible for its content.
A RBC Capital Markets or one of its affiliates received compensation for investment banking services from this company
in the past 12 months.
B RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for this company
in the past 12 months.
C RBC Capital Markets or one of its affiliates is currently providing this company with non-investment banking services.
D RBC Capital Markets or one of its affiliates has provided this company with investment banking services in the past
12 months.
E RBC Capital Markets or one of its affiliates has provided this company with non-investment banking services in the
past 12 months.
F RBC Capital Markets or one of its affiliates is currently providing this company with non-securities services.
G RBC Capital Markets or one of its affiliates makes a market in the securities of this company.
H RBC Capital Markets or one of its affiliates received compensation for products or services other than investment
banking services from this company during the past 12 months. During this time, RBC Capital Markets or one of its
affiliates provided non-investment banking securities-related services to this company.
I RBC Capital Markets or one of its affiliates received compensation for products or services other than investment
banking services from this company during the past 12 months. During this time, RBC Capital Markets or one of its
affiliates provided non-securities services to this company.
J RBC Capital Markets' parent company, Royal Bank of Canada, together with its affiliates, beneficially owns 1% or more
of a class of common equity securities of this company.
K RBC Capital Markets or one of its affiliates expects to receive or intends to seek compensation for investment
banking services from this company in the next three months.
L RBC Capital Markets or one of its affiliates is currently providing this company with investment banking services.
============================================================================================================================
</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 8620,
consists of a single portfolio known as Dividend Growth Portfolio, April
2020 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 Distribution Date. Any
Replacement Security the Trust acquires will be identical to those from
the failed contract.
Page 9
Portfolio
Objectives.
The Trust seeks dividend income with capital appreciation. Under normal
circumstances, the Trust will invest at least 80% of its assets in
dividend-paying securities.
Portfolio Selection Process.
The universe of companies from which this portfolio was selected encompass
the stocks subject to fundamental research by RBC Capital Markets and its
third-party providers of research. The portfolio is limited to 20 stocks,
with no greater than 25% of the portfolio invested in any one of Standard
& Poor's major industry sectors. For purposes of this restriction,
consumer discretionary and consumer staples are considered separate
sectors. Generally, the Investment Committee seeks companies it believes
to be of the highest quality and potential in order to meet this
portfolio's investment objectives.
Companies chosen for inclusion in the portfolio were evaluated with
emphasis placed on balance sheet strength, low business risk, strong
dividend coverage, industry average or lower dividend payout ratios and an
investment-grade debt rating.
The Investment Committee selected companies which it believes have a
strong dividend-paying track record. "Strong" by definition may include
some, but not necessarily all, of the following:
- historical track record of dividend increases for at least five years;
- current inclusion in the S&P Dividend Aristocrat List;
- companies with a free cash flow yield above the current dividend level,
plus demonstrated evidence that the management team is committed to
returning a meaningful portion of its cash flow to investors through
dividends; or
- renewed commitment by management to a consistent dividend policy.
One should keep in mind, however, that any of the companies selected for
the Trust may, for a variety of reasons, elect to reduce or eliminate
dividend payments in the future, and there can be no assurance that
portfolio objectives will be met.
Based on the composition of the portfolio on the Initial Date of Deposit,
the Trust is considered to be a __________ Trust.
From time to time in the prospectus or in marketing materials we may
identify a portfolio's style and capitalization characteristics to
describe a trust. These characteristics are designed to help you better
understand how the Trust may fit into your overall investment plan. These
characteristics are determined by the Sponsor as of the Initial Date of
Deposit and, due to changes in the value of the Securities, may vary
thereafter. In addition, from time to time, analysts and research
professionals may apply different criteria to determine a Security's style
and capitalization characteristics, which may result in designations which
differ from those arrived at by the Sponsor. In general, growth stocks are
those with high relative price-to-book ratios while value stocks are those
with low relative price-to-book ratios. At least 65% of the stocks in a
trust on the trust's initial date of deposit must fall into either the
growth or value category for a trust itself to receive the designation.
Trusts that do not meet this criteria are designated as blend trusts. In
determining market capitalization characteristics, we analyze the market
capitalizations of the 3,000 largest stocks in the United States
(excluding foreign securities, American Depositary Receipts/ADRs, limited
partnerships and regulated investment companies). Companies with market
capitalization among the largest 10% are considered Large-Cap securities,
the next 20% are considered Mid-Cap securities and the remaining
securities are considered Small-Cap securities. Both the weighted average
market capitalization of a trust and at least half of the Securities in a
trust must be classified as either Large-Cap, Mid-Cap or Small-Cap in
order for a trust to be designated as such. Trusts, however, may contain
individual stocks that do not fall into its stated style or market
capitalization designation.
Portfolio Contents.
Expanding on the disclosure above, the Trust has exposure to the following
investments: foreign securities (including American Depositary Receipts).
Of course, as with any similar investments, there can be no assurance that
the objectives 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
Page 10
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.
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 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.
Foreign Securities. Certain of the Securities held by the Trust are issued
by foreign entities, which makes the Trust subject to more risks than if
it invested solely in domestic securities. A foreign Security held by the
Trust is either directly listed on a U.S. securities exchange, is in the
form of an American Depositary Receipt/ADR or a Global Depositary
Receipt/GDR which trades on the over-the-counter market or is listed on a
U.S. or foreign securities exchange, or is directly listed on a foreign
securities exchange. Risks of foreign securities include higher brokerage
costs; different accounting standards; expropriation, nationalization or
other adverse political or economic developments; currency devaluations,
blockages or transfer restrictions; restrictions on foreign investments
and exchange of securities; inadequate financial information; lack of
liquidity of certain foreign markets; and less government supervision and
regulation of exchanges, brokers, and issuers in foreign countries.
Certain foreign markets have experienced heightened volatility due to
recent negative political or economic developments or natural disasters.
Securities issued by non-U.S. issuers may pay interest and/or dividends in
foreign currencies and may be principally traded in foreign currencies.
Therefore, there is a risk that the U.S. dollar value of these interest
and/or dividend payments and/or securities will vary with fluctuations in
foreign exchange rates. Investments in debt securities of foreign
governments present special risks, including the fact that issuers may be
unable or unwilling to repay principal and/or interest when due in
accordance with the terms of such debt, or may be unable to make such
repayments when due in the currency required under the terms of the debt.
Political, economic and social events also may have a greater impact on
the price of debt securities issued by foreign governments than on the
price of U.S. securities.
Page 11
American Depositary Receipts/ADRs, Global Depositary Receipts/GDRs and
similarly structured securities may be less liquid than the underlying
shares in their primary trading market. Any distributions paid to the
holders of depositary receipts are usually subject to a fee charged by the
depositary. Issuers of depositary receipts are not obligated to disclose
information that is considered material in the United States. As a result,
there may be less information available regarding such issuers. Holders of
depositary receipts may have limited voting rights, and investment
restrictions in certain countries may adversely impact the value of
depositary receipts because such restrictions may limit the ability to
convert shares into depositary receipts and vice versa. Such restrictions
may cause shares of the underlying issuer to trade at a discount or
premium to the market price of the depositary receipts.
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.
Securities Selection. While RBC Capital Markets has carefully evaluated
and approved the Securities in the Trust for this purpose, it may choose
for any reason not to recommend any or all of the Securities for another
purpose or at a later date. This may affect the value of your Units. In
addition, RBC Capital Markets in its general securities business acts as
agent or principal in connection with buying and selling stocks, including
the Securities, and may have bought the Securities for the Trust, thereby
benefiting. See the "Schedule of Investments" for specific information
concerning RBC Capital Markets' investment banking relationships and role
as market-maker for certain of the Securities. In the future, RBC Capital
Markets may seek to provide investment banking or other services to any of
the issuers 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 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.
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
Page 12
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 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 July 20, 2020 through
September 18, 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.
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
Page 13
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
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
Page 14
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.
Units are available through RBC Wealth Management, introducing broker-
dealers for whom RBC Capital Markets acts as clearing broker pursuant to a
fully disclosed clearing agreement, and investment advisors for whom RBC
Capital Markets provides custody and execution services pursuant to an
investment advisor service agreement. 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 sell at least
$10,000,000 of Trust Units during the initial offering period will be
entitled to up to the following additional sales concessions with respect
to total sales:
Total Sales Additional
(in millions) Concession
____________________________________________________
$10 or more 0.125%
In addition, 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
Page 15
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 or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisors, 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 "Notes to 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.
In the opinion of Chapman and Cutler LLP, 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
Page 17
frequently, and this summary does not describe all of 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 grantor trust under the federal tax
laws. If the Trust qualifies as a grantor trust, the Trust will not be
taxed as a corporation for federal income tax purposes and will not pay
federal income taxes. For federal income tax purposes, in grantor trusts
you are deemed to own a pro rata portion of the underlying assets of the
Trust directly, and as such you will be considered to have received a pro
rata share of income. All taxability issues are taken into account at the
Unit holder level.
Income from the Trust.
Income realized by the Trust passes through and is treated as income of
the Unit holders. Income is reported without any deduction for expenses.
Expenses are separately reported. Generally, the income paid to Unit
holders is net the expenses of the Trust, but the income reportable by
Unit holders is gross the expenses of the Trust.
You may be required to recognize income for federal income tax purposes in
one year even if you do not receive a corresponding distribution from the
Trust, or do not receive the corresponding distribution from the Trust
until a later year. This is true even if you elect to have your
distributions reinvested into additional Units. In addition, the income
that you must take into account for federal income tax purposes is not
reduced by amounts used to pay sales charges or Trust expenses.
Some income from the Trust assets may have been received 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.
Income from the Trust assets (including capital gain income) may also be
subject to a "Medicare tax" if your adjusted gross income exceeds certain
threshold amounts.
Certain Stock Dividends.
Ordinary income dividends paid on certain stock held by 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. Ordinary income 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 on 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
Trust assets from the amount you receive from the sale. You can generally
determine your original tax basis in each Trust asset by apportioning the
cost of your Units, including sales charges, among the Trust assets
ratably according to their values on the date you acquire your Units. In
certain circumstances, however, you may have to use information provided
by the Trustee to adjust your tax basis after you acquire your Units (for
example, in the case of certain corporate events affecting an issuer, such
as stock splits or mergers, or in the case of certain dividends that
exceed a corporation's accumulated earnings and profits).
The tax statement you receive may contain information to allow you to
calculate and adjust your basis in Trust assets and determine whether any
gain or loss recognized by you should be considered long-term capital
gain, short-term capital gain or return of capital. The information
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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 may need to be
made to the information reported to you in determining the amount of your
gain or loss.
Under the wash sale rules, all or a portion of any loss you may recognize
on a disposition of your Units or on a disposition of assets by the Trust
may be disallowed if you purchase stocks or other assets that are the same
as or substantially identical to any of the assets held directly or
indirectly through the Trust within 30 days of the disposition.
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.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of your Trust's income, even if some of that
income is used to pay Trust expenses. 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 purchases shares in PFICs, you may be subject to U.S. federal income
tax on a portion of certain distributions from the PFICs or on gains from
the disposition of such PFIC shares at tax rates that were applicable in
prior years and any gain may be recharacterized as ordinary income that is
not eligible for the lower net capital gains tax rate. Additional charges
in the form of interest may also be imposed on you. Certain elections may
be available with respect to PFICs that would limit these consequences.
However, these elections would require you to include certain income of
the PFICs in your taxable income even if not distributed to the Trust or
to you, or require you to annually recognize as ordinary income any
increase in the value of the shares of the PFICs, thus requiring you to
recognize income for federal income tax purposes in excess of your actual
distributions from PFICs and proceeds from dispositions of PFIC stock
during a particular year. Dividends paid by PFICs are not treated as QDI
to shareholders of the PFICs.
Non-U.S. Financial Accounts.
The Trust may directly or indirectly hold financial accounts outside of
the United States. You may have certain reporting obligations to the
United States Treasury Department under its rules relating to the
reporting of foreign bank and financial accounts (commonly known as
"FBAR"). You should consult with your tax advisor as to any reporting
obligations that you may have as a result of your investment in the Trust.
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,
short-term capital gains dividends, and distributions that are
attributable to exempt-interest income or certain other interest income,
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 at any time prior to 30 business days before the Trust's
Mandatory Termination Date. However, this ability to request an In-Kind
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Distribution will terminate at any time that the number of outstanding
Units has been reduced to 10% or less of the highest number of Units
issued by the Trust. You will not recognize gain or loss if you only
receive whole Trust assets in exchange for the identical amount of your
pro rata portion of the same Trust assets held by your Trust. However, if
you also receive cash in exchange for a Trust asset or a fractional
portion of a Trust asset, you will generally recognize gain or loss based
on the difference between the amount of cash you receive and your tax
basis in such Trust asset or fractional portion.
State and Local Taxes.
Based on the advice of Carter Ledyard & Milburn, LLP, special counsel to
the Trust for New York tax matters, under the existing income tax laws of
the State and City of New York, assuming that the Trust is not treated as
a corporation for federal income tax purposes, the Trust will not be taxed
as a corporation for New York State and New York City purposes and the
income of the Trust will be treated as the income of the Unit holders in
the same manner as for federal income tax purposes.
You should consult your tax advisor regarding potential foreign, state or
local taxation with respect to your Units.
Retirement Plans
You may purchase Units of the Trust for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received in
each of the above plans is deferred until you receive distributions. These
distributions are generally treated as ordinary income but may, in 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 any 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
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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 monthly Record Date, monthly on the twenty-fifth day of
each month to Unit holders of record on the tenth day of such month
provided the aggregate amount, exclusive of sale proceeds, available for
distribution in the Income and Capital Accounts equals at least 0.1% of
the net asset value of the Trust. Undistributed money in the Income and
Capital Accounts will be distributed in the next month in which the
aggregate amount available for distribution, exclusive of sale proceeds,
equals or exceeds 0.1% of the net asset value of the Trust. 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. The Trustee will distribute sale proceeds in the Capital
Account, net of amounts designated to meet redemptions, pay the deferred
sales charge and creation and development fee or pay expenses, on the
twenty-fifth day of each month to Unit holders of record on the tenth day
of such month provided the amount equals at least $1.00 per 100 Units. 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 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."
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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 30 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.
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.
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;
Page 22
- The sale of Securities is necessary or advisable 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 in the limited instances in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trust, will reject any offer for new or exchanged securities
or property in exchange for a Security, such as those acquired in a merger
or other transaction. If such exchanged securities or property are
nevertheless acquired by the Trust, at our instruction they will either be
sold or held in the Trust. In making the determination as to whether to
sell or hold the exchanged securities or property we may get advice from
the Portfolio Supervisor. Any proceeds received from the sale of
Securities, exchanged securities or property will be credited to the
Capital Account of the Trust for 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 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
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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 RBC Capital Markets, LLC and RBC Wealth
Management, the Sponsor, Trustee and Evaluator
RBC Capital Markets, LLC and RBC Wealth Management.
RBC Wealth Management, a division of RBC Capital Markets, LLC, is one of
the largest full-service investment, advisory and wealth management firms
in the United States.
RBC Capital Markets is a wholly owned subsidiary of Royal Bank of Canada
(RBC), one of the world's largest financial institutions with a
significant presence in North America.
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.
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 800-621-1675, dept. code 1. If you have questions
regarding your account or your Trust, please contact the Trustee at its
unit investment trust division offices or your financial advisor. 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.
Page 24
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, as well as special New York tax
counsel for the Trust.
Experts.
The Trust's statement of net assets, including the schedule of
investments, as of the opening of business on the Initial Date of Deposit
included in this prospectus, 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)
Dividend Growth Portfolio, April 2020 Series
FT 8620
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 8620 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
Foreign Issuers 1
Securities Selected for Dividend Growth Portfolio,
April 2020 Series 2
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.
Foreign Issuers. The following section applies to individual Trusts which
contain Securities issued by, or invest in securities issued by, foreign
entities. Since certain of the Securities held by the Trust consist of, or
invest in, securities issued by foreign entities, an investment in the
Trust involves certain investment risks that are different in some
respects from an investment in a trust which invests solely in the
securities of domestic entities. These investment risks include future
political or governmental restrictions which might adversely affect the
Page 1
payment or receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the Securities
may become impaired or that the general condition of the relevant stock
market may worsen (both of which would contribute directly to a decrease
in the value of the Securities and thus in the value of the Units), the
limited liquidity and relatively small market capitalization of the
relevant securities market, expropriation or confiscatory taxation,
economic uncertainties and foreign currency devaluations and fluctuations.
In addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, there may
be less publicly available information than is available from a domestic
issuer. Also, foreign issuers are not necessarily subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. The
securities of many foreign issuers are less liquid and their prices more
volatile than securities of comparable domestic issuers. In addition,
fixed brokerage commissions and other transaction costs on foreign
securities exchanges are generally higher than in the United States and
there is generally less government supervision and regulation of
exchanges, brokers and issuers in foreign countries than there is in the
United States. However, due to the nature of the issuers of the Securities
selected for the Trust, the Sponsor believes that adequate information
will be available to allow the Supervisor to provide portfolio
surveillance for the Trust.
Securities issued by non-U.S. issuers may pay interest and/or dividends in
foreign currencies and may be principally traded in foreign currencies.
Therefore, there is a risk that the U.S. dollar value of these interest
and/or dividend payments and/or securities will vary with fluctuations in
foreign exchange rates.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trust are subject to exchange
control restrictions under existing law which would materially interfere
with payment to the Trust of dividends due on, or proceeds from the sale
of, the Securities. However, there can be no assurance that exchange
control regulations might not be adopted in the future which might
adversely affect payment to the Trust. The adoption of exchange control
regulations and other legal restrictions could have an adverse impact on
the marketability of international securities in the Trust and on the
ability of the Trust to satisfy its obligation to redeem Units tendered to
the Trustee for redemption. In addition, restrictions on the settlement of
transactions on either the purchase or sale side, or both, could cause
delays or increase the costs associated with the purchase and sale of the
foreign Securities and correspondingly could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any Security,
and restrictions applicable to the Trust relating to the purchase of a
Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities
Act of 1933 and may not be exempt from the registration requirements of
such Act. Sales of non-exempt Securities by the Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Securities by the Trust will
generally be effected only in foreign securities markets. Although the
Sponsor does not believe that the Trust will encounter obstacles in
disposing of the Securities, investors should realize that the Securities
may be traded in foreign countries where the securities markets are not as
developed or efficient and may not be as liquid as those in the United
States. The value of the Securities will be adversely affected if trading
markets for the Securities are limited or absent.
Securities Selected for Dividend Growth Portfolio, April 2020 Series
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 2
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 3
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 4
, headquartered in
We have obtained the foregoing company descriptions from third-party
sources we deem reliable.
Page 5
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 8620 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 8620
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 )By: /s/ Elizabeth H. Bull
Trust Portfolios L.P. ) ---------------------
) Attorney-in-Fact**
James M. Dykas Chief Financial Officer of ) March 20, 2020
First 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 Exhibits 3.1, 3.2 and 3.3 of the Registration Statement.
CONSENT OF DELOITTE & TOUCHE LLP
The consent of Deloitte & Touche LLP to the use of its name and to the
reference to such firm in the Prospectus included in this Registration Statement
will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its name in the
Prospectus included in the Registration Statement 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 8620 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.
3.2* Opinion of counsel as to Federal income tax status of securities
being registered.
3.3* Opinion of counsel as to New York (city and state) tax status 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