Form 487 FT 9620
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Registration No. 333-258614
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 9620
B. Name of depositor:
FIRST TRUST PORTFOLIOS L.P.
C. Complete address of depositor's principal executive offices:
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
D. Name and complete address of agents for service:
| Copy to: | |
| JAMES A. BOWEN | ERIC F. FESS |
| c/o First Trust Portfolios L.P. | c/o Chapman and Cutler LLP |
| 120 East Liberty Drive | 111 West Monroe Street |
| Suite 400 | Chicago, Illinois 60603 |
| Wheaton, Illinois 60187 |
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 public:
As soon as practicable after the effective date of the Registration Statement.
| |X| | Check box if it is proposed that this filing will become effective on September 22, 2021 at 2:00 p.m. pursuant to Rule 487. |
________________________________
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
FT 9620 is a series of a unit investment trust, the FT Series. FT 9620
consists of a single portfolio known as Technology Dividend Buy-Write
Portfolio, Series 5 (the "Trust"). The Trust invests in a portfolio of common
stocks ("Common Stocks") and U.S. Treasury securities ("Treasury
Obligations"). The Common Stocks will be subject to Long Term Equity
AnticiPation Securities ("LEAPS(R)" or "Covered Call Options") which give the
option holder the right to buy the Common Stocks from the Trust at a
predetermined price on any business day prior to the LEAPS'(R) expiration
date, which means you give up any increase in the Common Stock above that
price. Collectively, the Common Stocks, Treasury Obligations and LEAPS(R) are
referred to as the "Securities." The Trust seeks income, with capital
appreciation as a secondary objective.
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.
FIRST TRUST(R)
800-621-1675
The date of this prospectus is September 22, 2021
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 10
Portfolio 11
Risk Factors 12
Public Offering 16
Distribution of Units 19
The Sponsor's Profits 20
The Secondary Market 21
How We Purchase Units 21
Expenses and Charges 21
Tax Status 22
Retirement Plans 24
Rights of Unit Holders 24
Income and Capital Distributions 24
Redeeming Your Units 25
Removing Securities from the Trust 26
Amending or Terminating the Indenture 26
Information on the Sponsor, Trustee and Evaluator 27
Other Information 28
Page 2
Summary of Essential Information (Unaudited)
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
At the Opening of Business on the Initial Date of Deposit-September 22, 2021
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
Evaluator: First Trust Advisors L.P.
Initial Number of Units (1) 482,145
Fractional Undivided Interest in the Trust per Unit (1) 1/482,145
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) (.135)
__________
Redemption Price per Unit (5) 9.865
Less Creation and Development Fee per Unit (3) (5) (.050)
Less Organization Costs per Unit (5) (.037)
__________
Net Asset Value per Unit $ 9.778
==========
Cash CUSIP Number 30322C 622
Fee Account Cash CUSIP Number 30322C 630
Pricing Line Product Code 137992
Ticker Symbol FOSTJX
First Settlement Date September 24, 2021
Mandatory Termination Date (6) January 25, 2023
Income Distribution Record Date Tenth day of each June and December, commencing December 10, 2021.
Income Distribution Date (7) Twenty-fifth day of each June and December, commencing December 25, 2021.
_____________
(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 Common Stocks or accrued interest on
the Treasury Obligations. After this date, a pro rata share of any accumulated
dividends on the Common Stocks and accrued interest on the Treasury
Obligations will be included. In calculating the price of a Unit, the value of
the Common Stocks is reduced by the value of the LEAPS(R).
(3) You will pay a maximum sales charge of 1.85% of the Public Offering Price
per Unit (equivalent to 1.85% 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 Common Stock is valued at its last closing sale price at the
Evaluation Time on the business day prior to the Initial Date of Deposit. Each
Treasury Obligation is valued at its last offering price. If a Common Stock is
not listed, or if no closing sale price exists, it is valued at its closing
ask price on such date. LEAPS(R) are valued at their last closing sale price,
or if no closing sale price exists, at their closing bid price. The value of
the LEAPS(R) is then netted against the value of the Common Stocks. 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 and the estimated organization costs per
Unit will be deducted from the assets of the Trust at 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/or Capital Accounts,
as determined at the semi-annual Record Date, semi-annually on the twenty-
fifth day of each June and December to Unit holders of record on the tenth day
of such month if the amount available for distribution equals at least $1.00
per 100 Units. However, the Trustee will make distributions from the Capital
Account prior to a semi-annual distribution date in certain circumstances as
described in "Income and Capital Distributions." In any case, the Trustee will
distribute any funds in the Capital Account in December of each year and as
part of the final liquidation distribution. See "Income and Capital
Distributions."
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 1.5
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 1.35%(b) $.135
Creation and development fee 0.50%(c) $.050
_____ _____
Maximum sales charge (including creation and development fee) 1.85% $.185
===== =====
Organization Costs (as a percentage of public offering price)
Estimated organization costs .370%(d) $.0370
===== ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .079% $.0080
Trustee's fee and other operating expenses .136%(f) $.0138
_____ ______
Total .215% $.0218
===== ======
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 1.5 Years
______ _________
$244 $255
The example will not differ if you hold rather than sell your Units at the end
of each period.
_____________
(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 1.85% 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 $.135 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 January 20, 2022.
(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 within approximately two months after 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 end of the initial offering period. Estimated organization costs are
assessed on a fixed dollar amount per Unit basis which, as a percentage of
average net assets, will vary over time.
(e) Each of the fees listed herein is assessed on a fixed dollar amount per
Unit basis which, as a percentage of average net assets, will vary over time.
(f) Other operating expenses for the Trust do not include brokerage costs and
other portfolio transaction fees for the Trust. In certain circumstances the
Trust may incur additional expenses not set forth above. See "Expenses and
Charges."
Page 4
Report of Independent
Registered Public Accounting Firm
To the Unit Holders and the Sponsor, First Trust Portfolios L.P., of FT 9620
Opinion on the Statement of Net Assets
We have audited the accompanying statement of net assets of FT 9620,
comprising Technology Dividend Buy-Write Portfolio, Series 5 (the "Trust"),
one of the series constituting the FT Series, including the schedule of
investments, as of the opening of business on September 22, 2021 (Initial Date
of Deposit), and the related notes. In our opinion, the statement of net
assets presents fairly, in all material respects, the financial position of
the Trust as of the opening of business on September 22, 2021 (Initial Date of
Deposit), in conformity with accounting principles generally accepted in the
United States of America.
Basis for Opinion
This statement of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net assets based
on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Trust in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement, whether due to error or fraud. The Trust is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audit we are required to obtain an
understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Trust's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material
misstatement of the statement of net assets, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and
disclosures in the statement of net assets. Our audit also included evaluating
the accounting principles used and significant estimates made by the Trust's
Sponsor, as well as evaluating the overall presentation of the statement of
net assets. Our procedures included confirmation of the irrevocable letter of
credit held by The Bank of New York Mellon, the Trustee, and deposited in the
Trust for the purchase of securities, as shown in the statement of net assets,
as of the opening of business on September 22, 2021, by correspondence with
the Trustee. We believe that our audit provides a reasonable basis for our
opinion.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
September 22, 2021
We have served as the auditor of one or more investment companies sponsored by
First Trust Portfolios L.P. since 2001.
Page 5
Statement of Net Assets
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
At the Opening of Business on the Initial Date of Deposit-September 22, 2021
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $5,093,279
Accrued interest on underlying Treasury Obligations (2) (3) 1,708
Less liability for call options written-LEAPS(R) (1) (4) (271,826)
Less distributions payable (3) (1,708)
Less liability for reimbursement to Sponsor for organization costs (5) (17,839)
Less liability for deferred sales charge (6) (65,090)
Less liability for creation and development fee (7) (24,107)
__________
Net assets $4,714,417
==========
Units outstanding 482,145
Net asset value per Unit (8) $ 9.778
ANALYSIS OF NET ASSETS
Cost to investors (9) $4,821,453
Less maximum sales charge (9) (89,197)
Less estimated reimbursement to Sponsor for organization costs (5) (17,839)
__________
Net assets $4,714,417
==========
______________
NOTES TO STATEMENT OF NET ASSETS
The Trust is registered as a unit investment trust under the Investment
Company Act of 1940. The Sponsor is responsible for the preparation of
financial statements in accordance with accounting principles generally
accepted in the United States which require the Sponsor to make estimates and
assumptions that affect amounts reported herein. Actual results could differ
from those estimates. The Trust intends to comply in its initial fiscal year
and thereafter with provisions of the Internal Revenue Code applicable to
regulated investment companies and as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gains) distributed to Unit holders.
(1) The Trust invests in a portfolio of Common Stocks and Treasury Obligations
with the Common Stocks subject to LEAPS(R). Aggregate cost of the Securities
listed under "Schedule of Investments" and the liability for the LEAPS(R) are
based on their aggregate underlying value. The Securities and the LEAPS(R)
were deposited at prices equal to their market value as determined by the
Evaluator. The Trust has a Mandatory Termination Date of January 25, 2023.
(2) An irrevocable letter of credit issued by The Bank of New York Mellon, of
which approximately $5,500,000 will be allocated to the Trust, has been
deposited with the Trustee as collateral, covering the monies necessary to
satisfy the amounts set forth below:
Aggregate Offering Price of
Common Stocks and Treasury Obligations Accrued Interest to Initial Date of Deposit Accrued Interest to Expected Date of Delivery
______________________________________ ___________________________________________ _____________________________________________
$5,093,279 $1,708 $13
(3) The Trustee will advance to the Trust the amount of net interest accrued
to the First Settlement Date which will be distributed to the Sponsor as Unit
holder of record.
(4) The Trust will enter into option contracts which provide the option
purchaser with the right, but not the obligation, to buy a security at a
predetermined exercise price during a defined period. The option purchaser
pays a premium to the option writer for the right to exercise the option. The
option writer is obligated to sell the security underlying the contract at a
set price, if the option purchaser chooses to exercise the option. As a writer
of an option contract, the Trust is not subject to credit risk but is subject
to market risk, since the Trust is obligated to make payments under the terms
of the option contract if exercised. The Trust uses exchange-traded contracts
that have standardized terms and performance mechanics.
(5) 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 $.0370 per Unit. A payment will be
made at 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.
(6) Represents the amount of mandatory deferred sales charge distributions of
$.135 per Unit, payable to the Sponsor in three equal monthly installments
beginning on January 20, 2022 and on the twentieth day of each month
thereafter (or if such date is not a business day, on the preceding business
day) through March 18, 2022. If Unit holders redeem Units before March 18,
2022, they will have to pay the remaining amount of the deferred sales charge
applicable to such Units when they redeem them.
(7) The creation and development fee ($.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.
(8) 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 end of the initial offering period.
(9) The aggregate cost to investors in the Trust includes a maximum sales
charge (comprised of an initial sales charge, a deferred sales charge and the
creation and development fee) computed at the rate of 1.85% of the Public
Offering Price per Unit (equivalent to 1.85% 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."
Page 6
Schedule of Investments
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
At the Opening of Business on the Initial Date of Deposit-September 22, 2021
COMMON STOCKS (100.27%):
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Common Stocks (1)(4) Offering Price Shares per Share the Trust (3)
______________________________________ ______________ ______ _________ _____________
Information Technology (100.27%):
ACN Accenture Plc + 2.75% 400 $ 331.15 $ 132,460
ADI Analog Devices, Inc. 4.25% 1,200 170.57 204,684
AVGO Broadcom Inc. 4.07% 400 490.99 196,396
CSCO Cisco Systems, Inc. 4.13% 3,600 55.26 198,936
CTSH Cognizant Technology Solutions Corporation 4.33% 2,800 74.51 208,628
GLW Corning Incorporated 3.95% 5,100 37.31 190,281
FIS Fidelity National Information Services, Inc. 4.03% 1,600 121.38 194,208
HPE Hewlett Packard Enterprise Company 4.05% 15,000 13.01 195,150
HPQ HP Inc. 3.95% 7,100 26.83 190,493
INTC Intel Corporation 3.95% 3,600 52.87 190,332
IBM International Business Machines Corporation 4.41% 1,600 132.97 212,752
JNPR Juniper Networks, Inc. 4.04% 7,100 27.41 194,611
KLAC KLA Corporation 2.96% 400 356.58 142,632
MCHP Microchip Technology Incorporated 3.91% 1,200 157.29 188,748
MSI Motorola Solutions, Inc. 3.91% 800 235.53 188,424
NTAP NetApp, Inc. 4.38% 2,400 88.09 211,416
NLOK NortonLifeLock Inc. 4.09% 7,900 24.98 197,342
NXPI NXP Semiconductors N.V. + 3.42% 800 206.06 164,848
ORCL Oracle Corporation 4.33% 2,400 86.92 208,608
QCOM QUALCOMM Incorporated 4.37% 1,600 131.75 210,800
STX Seagate Technology Holdings Plc + 4.06% 2,400 81.57 195,768
SWKS Skyworks Solutions, Inc. 4.25% 1,200 170.85 205,020
TSM Taiwan Semiconductor Manufacturing Company Ltd. (ADR) + 3.81% 1,600 114.96 183,936
ERIC Telefonaktiebolaget LM Ericsson (ADR) + 4.07% 17,800 11.02 196,156
TXN Texas Instruments Incorporated 4.80% 1,200 192.96 231,552
_______ __________
Total Common Stocks 100.27% $4,834,181
======= ==========
Page 7
Schedule of Investments (cont'd.)
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
At the Opening of Business on the Initial Date of Deposit-September 22, 2021
TREASURY OBLIGATIONS (5.37%):
Percentage Market Cost of
of Aggregate Value Securities to
Name of Issuer and Title of Treasury Obligation (1) Offering Price Par Value per Share the Trust (3)
___________________________________________________ ______________ _________ _________ _____________
U.S. Treasury Note, 1.625%, due December 31, 2021 1.33% $64,000 N.A. $ 64,278
U.S. Treasury Note, 1.875%, due March 31, 2022 1.34% 64,000 N.A. 64,613
U.S. Treasury Note, 2.125%, due June 30, 2022 1.35% 64,000 N.A. 65,025
U.S. Treasury Note, 1.875%, due September 30, 2022 1.35% 64,000 N.A. 65,182
_____ __________
Total Treasury Securities 5.37% $ 259,098
_______ __________
Total Investment in Securities 105.64% $5,093,279
======= ==========
LONG TERM EQUITY ANTICIPATION SECURITIES ("LEAPS(R)") (-5.64%) (2):
Strike Percentage Number Market Proceeds
Price of Aggregate of Value per to
Description of Call Options (1) per Share Offering Price Contracts (2) Contract the Trust (3)
_______________________________ _________ ______________ _____________ _________ ____________
WRITTEN OPTIONS (-5.64%):
Information Technology (-5.64%):
Accenture Plc $400.00 (0.10)% 4 $ 1,200.00 $ (4,800)
Analog Devices, Inc. 210.00 (0.19)% 12 750.00 (9,000)
Broadcom Inc. 580.00 (0.23)% 4 2,750.00 (11,000)
Cisco Systems, Inc. 65.00 (0.17)% 36 232.00 (8,352)
Cognizant Technology Solutions Corporation 90.00 (0.17)% 28 285.00 (7,980)
Corning Incorporated 45.00 (0.23)% 51 219.00 (11,169)
Fidelity National Information Services, Inc. 145.00 (0.25)% 16 740.00 (11,840)
Hewlett Packard Enterprise Company 17.00 (0.22)% 150 70.00 (10,500)
HP Inc. 35.00 (0.18)% 71 125.00 (8,875)
Intel Corporation 62.50 (0.28)% 36 380.00 (13,680)
International Business Machines Corporation 160.00 (0.15)% 16 450.00 (7,200)
Juniper Networks, Inc. 35.00 (0.18)% 71 123.00 (8,733)
KLA Corporation 420.00 (0.25)% 4 3,070.00 (12,280)
Microchip Technology Incorporated 190.00 (0.28)% 12 1,130.00 (13,560)
Motorola Solutions, Inc. 280.00 (0.15)% 8 880.00 (7,040)
NetApp, Inc. 105.00 (0.25)% 24 510.00 (12,240)
NortonLifeLock Inc. 30.00 (0.22)% 79 135.00 (10,665)
NXP Semiconductors N.V. 250.00 (0.27)% 8 1,650.00 (13,200)
Oracle Corporation 105.00 (0.22)% 24 435.00 (10,440)
QUALCOMM Incorporated 155.00 (0.33)% 16 1,005.00 (16,080)
Seagate Technology Holdings Plc 97.50 (0.33)% 24 660.00 (15,840)
Skyworks Solutions, Inc. 210.00 (0.33)% 12 1,310.00 (15,720)
Taiwan Semiconductor Manufacturing Company Ltd. (ADR) 140.00 (0.26)% 16 775.00 (12,400)
Telefonaktiebolaget LM Ericsson (ADR) 15.00 (0.16)% 178 44.00 (7,832)
Texas Instruments Incorporated 230.00 (0.24)% 12 950.00 (11,400)
______ _________
Total Investment in LEAPS(R) (5.64)% $(271,826)
====== =========
___________
See "Notes to Schedule of Investments" on page 9.
Page 8
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
September 22, 2021. Such purchase contracts are expected to settle within two
business days.
(2) The LEAPS(R) can be exercised on any business day prior to their
expiration on January 20, 2023. Each contract entitles the holder thereof to
purchase 100 shares of common stock at the strike price. The LEAPS(R) call
options are accounted for at market value, and are not accounted for as
hedging instruments. LEAPS(R) call options can be volatile and involve certain
risks. The LEAPS(R) call options could result in a reduction of the total
return of the Trust. The notional value of each LEAPS(R) call option equals
the value of the corresponding common stock.
(3) The cost or proceeds 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 offering side price
of the Treasury Obligations is greater than the bid side price of the Treasury
Obligations which is the basis on which the Redemption Price per Unit will be
determined. The Evaluator valued the LEAPS(R) at their last closing sale price
(or closing bid price if there is no closing sale price) at the Evaluation Time
on the business day preceding the Initial Date of Deposit. The value of the
Securities, based on the bid side price of the Treasury Obligations, the value
of the Common Stocks, net of the value or ask price of the LEAPS(R), is
$4,781,228 (unaudited). 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 ("ASC 820"),
"Fair Value Measurement," fair value is defined as the price that the Trust
would either receive upon selling an investment or pay to transfer an options
liability to an independent buyer in a timely transaction in the principal or
most advantageous market of the investment. ASC 820 established a three-tier
hierarchy to maximize the use of the observable market data and minimize the use
of unobservable inputs and to establish classification of the fair value
measurements for disclosure purposes. Inputs refer broadly to the assumptions
that market participants would use in pricing the asset or liability, including
the technique or pricing model used to measure fair value and the risk inherent
in the inputs to the valuation technique. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions market
participants would use in pricing the asset or liability, developed based on
market data obtained from sources independent of the reporting entity.
Unobservable inputs are inputs that may reflect the reporting entity's own
assumptions about the assumptions market participants would use in pricing the
asset or liability, developed based on the best information available in the
circumstances. The three-tier hierarchy of inputs is summarized in the three
broad levels: Level 1 which represents quoted prices in active markets for
identical investments; Level 2 which represents fair value based on other
significant observable inputs (including, quoted prices for similar investments
in active markets, quoted prices for identical or similar investments in markets
that are non- active, inputs other than quoted prices that are observable for
the investment (for example, interest rates and yield curves observable at
commonly quoted intervals, volatilities, prepayment speeds, loss severities,
credit risks, and default rates) or inputs that are derived from or corroborated
by observable market data by correlation or other means), and Level 3 which
represents fair value based on significant unobservable inputs (including the
Trust's own assumptions in determining the fair value of investments). The
Trust's investments in Common Stocks of $4,834,181 and LEAPS(R) of $(96,088) are
classified as Level 1, which refers to securities traded in an active market.
The Trust's investments in Treasury Obligations of $259,098 and LEAPS(R) of
$(175,738) are classified as Level 2, whose valuations on the date of deposit
were determined by the Evaluator using offering prices provided by third-party
pricing services. The inputs used by these third party pricing services were
based upon significant observable inputs that included, but were not limited to,
the items noted above. The cost of the Securities to the Sponsor, including
accrued interest, and the Sponsor's loss (which is the difference between the
cost of the Securities to the Sponsor and the cost of the Securities to the
Trust) are $4,855,049 and $31,888, respectively.
(4) Common stocks of companies headquartered or incorporated outside the
United States comprise approximately 18.11% of the investments of the Trust
(consisting of Ireland, 6.81%; The Netherlands, 3.42%; Sweden, 4.07% and
Taiwan, 3.81%).
+ This Security represents the common stock of a foreign company which trades
directly or through an American Depositary Receipt/ADR on the over-the-counter
market or on a U.S. national securities exchange.
Page 9
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 9620, consists of a
single portfolio known as Technology Dividend Buy-Write Portfolio, Series 5.
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 Treasury
Obligations and Common Stocks (which Common Stocks are subject to the
LEAPS(R)) (collectively, the "Securities") with the Trustee and, in turn, the
Trustee delivered documents to us representing our ownership of the Trust in
the form of units ("Units"). Because the Common Stocks held by the Trust are
subject to the LEAPS(R), the Common Stocks' upside potential will be limited.
The Securities were deposited at prices equal to their market value as
determined by the Evaluator, which value has been reduced to reflect the
Trust's obligation under the LEAPS(R).
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. Any
additional Common Stocks deposited will be subject to the LEAPS(R) with the
same terms as the LEAPS(R) initially deposited. 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 under "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. Common Stocks may be called pursuant to the LEAPS(R)
prior to the Mandatory Termination Date or 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.
Page 10
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the Securities
initially deposited in the Trust fails, unless we can purchase substitute
Securities ("Replacement Securities") we will refund to you that portion of
the purchase price and transactional sales charge resulting from the failed
contract on the next Income Distribution Date. Any Replacement Security the
Trust acquires will be identical to those from the failed contract.
Portfolio
Objectives.
The Trust seeks income, with capital appreciation as a secondary objective.
The Trust is concentrated (i.e., invests more than 25% of Trust assets) in
stocks of companies within the information technology sector.
Portfolio Selection Process.
Each Common Stock is subject to a contractual right, in the form of LEAPS(R),
which gives the holder of the LEAPS(R) (the "Right Holder") the right to buy
the Common Stock at a predetermined price (the "Strike Price") on any business
day prior to the expiration of the LEAPS(R). Each LEAPS(R) will be issued by
The Options Clearing Corporation ("OCC") in the form of an American style
option, which means that it is exercisable at the Strike Price on any business
day prior to its expiration date. The expiration date for each of the LEAPS(R)
included in the Trust is January 20, 2023. Future series of the Trust may have
different maturity lengths due to the expiration dates of the call options
included therein. As of the close of business on the business day preceding
the Initial Date of Deposit, the Strike Price of the LEAPS(R) in the Trust is
equal to approximately 121.76% of the closing market price on that date of the
Common Stocks deposited in the Trust.
You should be aware that a product which includes writing call options may not
be suitable for all investors. It may not be appropriate for investors seeking
above-average capital appreciation. Before investing, you should make sure you
understand the risks of this type of product, and whether it suits your
current financial objectives.
The Trust is a unit investment trust which invests in a fixed portfolio of
common stocks of dividend-paying technology companies, and simultaneously, the
portfolio sells a LEAPS(R) call option against each position. The writing
(selling) of a call option generates income in the form of a premium paid by
the option buyer. The portfolio invests this income in U.S. Treasury notes and
the interest received from the notes is paid to Unit holders periodically.
Illustrative Market Scenarios.
Stock prices increase above the LEAPS'(R) exercise price: The LEAPS(R) are
exercised and the underlying stock shares are sold at the strike price.
Profits are limited to the premium income received from writing the LEAPS(R),
dividends received from the Common Stocks prior to their sale from the
portfolio, interest received from the U.S. Treasury Obligations, plus the
difference between each Common Stock's initial price and their strike price.
Investors will forgo any dividends paid on the Common Stocks subsequent to
their sale from the portfolio and any gain in the underlying stock price after
the stock is sold. It is important to note that writing covered calls limits
the appreciation potential of the underlying Common Stocks.
Stock prices remain stable: The LEAPS(R) expire worthless and the portfolio
still owns the Common Stock shares. Profits are limited to the premium income
received from writing the LEAPS(R), plus dividends from the Common Stocks, as
well as interest received from the U.S. Treasury Obligations.
Stock prices decrease: The LEAPS(R) expire worthless and the portfolio still
owns the Common Stock shares. The break even on the stocks is lowered by the
premium income received from writing the LEAPS(R). In addition, the portfolio
will receive dividends from the Common Stocks, and interest from the U.S.
Treasury Obligations.
On or before the Initial Date of Deposit, the Sponsor entered into contracts
to buy the Common Stocks. The Sponsor then wrote LEAPS(R) on each of the
Common Stocks and received an option premium therefore. Using the option
premium proceeds, the Sponsor entered into contracts to buy the Treasury
Obligations. On the Initial Date of Deposit, the Sponsor deposited the Common
Stocks subject to the LEAPS(R) and the Treasury Obligations with the Trustee
on behalf of the Trust. At such time the Sponsor also assigned the LEAPS(R) to
the Trust, giving the Right Holders the right to purchase Common Stocks from
the Trust.
Each LEAPS(R) will give the Right Holder the right (but not the obligation) to
purchase Common Stocks from the Trust at the Strike Price on any business day
prior to the LEAPS'(R) expiration. The Strike Price for a Common Stock held by
the Trust will be adjusted downward (but not below zero) upon certain
extraordinary distributions made by the issuers of the Common Stocks to Unit
holders before the LEAPS'(R) expiration triggered by certain corporate events
affecting such Common Stock. See "Risk Factors-LEAPS(R)."
Page 11
In calculating the net asset value of a Unit, the price of a Unit is reduced
by the value of the LEAPS(R).
As of the close of business on the business day preceding the Initial Date of
Deposit, the capital appreciation on the Common Stocks held by the Trust is
limited to a maximum of approximately 21.76%, because of the obligation of the
Trust to the Right Holder with respect to each of the Common Stocks entitling
the Right Holder to purchase the Common Stocks at the Strike Price. The
LEAPS(R) limit your upside potential in the Common Stocks to an amount equal
to the Strike Price. However, as the option premium received in return for
issuing the LEAPS(R) was used to purchase Treasury Obligations, you will
receive interest from the Treasury Obligations until they mature and your pro
rata portion of the principal from the Treasury Obligations shortly after they
mature.
If the market price of a Common Stock held by the Trust is greater than its
Strike Price, the Trust will not participate in any appreciation in that
Common Stock above the Strike Price because it is expected that the holder of
the related LEAPS(R) will exercise its right to purchase that Common Stock
from the Trust at the Strike Price. If the market price of a Common Stock held
by the Trust is less than its Strike Price, it is expected that the LEAPS(R)
will terminate without being exercised, and the Trust, in connection with its
termination, will liquidate or distribute the Common Stock at its then current
market value. To the extent particular Common Stocks held by the Trust decline
in price or fail to appreciate to a price equal to the related Strike Price,
the Trust will not achieve its maximum potential appreciation.
The Treasury Obligations included in the Trust are non-callable debt
obligations that are issued by and backed by the full faith and credit of the
U.S. Government, although Units of the Trust are not so backed. Additionally,
the U.S. Government assures the timely payment of principal and interest on
the underlying Treasury Obligations in the Trust. Of course, this applies only
to the payment of principal and interest on the Treasury Obligations and not
the Units themselves.
Additional Portfolio Contents.
In addition to the investments described above, the Trust has exposure to the
following investments: foreign securities (including American Depositary
Receipts) and companies with various market capitalizations.
As with any similar investment, there can be no guarantee 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 Treasury Obligations, Common Stocks and
LEAPS(R) for each of the Common Stocks. The value of the Trust's Units will
fluctuate with changes in the value of the Treasury Obligations, Common Stocks
and LEAPS(R).
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.
Market Risk. Market risk is the risk that a particular security, or Units of
the Trust in general, may fall in value. Securities are subject to market
fluctuations caused by such factors as economic, political, regulatory or
market developments, changes in interest rates and perceived trends in
securities prices. Units of the Trust could decline in value or underperform
other investments. In addition, local, regional or global events such as war,
acts of terrorism, spread of infectious diseases or other public health
issues, recessions, political turbulence or other events could have a
significant negative impact on the Trust and its investments. Such events may
affect certain geographic regions, countries, sectors and industries more
significantly than others. Such events could adversely affect the prices and
liquidity of the Trust's portfolio securities and could result in disruptions
in the trading markets. Any such circumstances could have a materially
negative impact on the value of the Trust's Units and result in increased
market volatility.
An outbreak of a respiratory disease designated as COVID-19 was first detected
in China in December 2019 and has resulted in a global pandemic and major
disruptions to economies and markets around the world. The transmission of
COVID-19 and efforts to contain its spread have resulted in international
border closings, enhanced health screenings, expanded healthcare services and
expenses, quarantines and other restrictions on business and personal
activities, cancellations, disruptions to supply chains and consumer activity,
as well as general public concern and uncertainty. Financial markets have
experienced extreme volatility and severe losses, negatively impacting global
economic growth prospects. The duration of the COVID-19 outbreak and its
effects cannot be determined with certainty and may exacerbate other pre-
existing political, social and economic risks.
Page 12
Governments and central banks, including the Federal Reserve, have taken
extraordinary and unprecedented actions to support local and global economies
and financial markets. These measures have included, among other policy
responses, a $700 billion quantitative easing program, a reduction of the
Federal funds rate to near-zero, and numerous economic stimulus packages. The
impact of these and additional measures taken in the future, and whether they
will be effective in mitigating economic and market disruptions, including
upward pressure on prices, will not be known for some time. Additionally,
market uncertainty remains high during the expanding roll out of COVID-19
vaccines and treatments in combination with measures taken by the
administration, expectations for additional stimulus packages and as
businesses begin to plan for a transition back to the workplace.
Common Stocks. The Trust invests in shares of Common Stocks. Common stock
prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general condition
of the relevant stock market, such as the current market volatility, or when
political or economic events affecting the issuers occur. In addition, common
stock prices may be particularly sensitive to rising interest rates, as the
cost of capital rises and borrowing costs increase, negatively impacting
issuers.
U.S. Treasury Obligations. The Trust invests in U.S. Treasury obligations.
U.S. Treasury obligations are direct obligations of the United States which
are backed by the full faith and credit of the United States. The value of the
Treasury Obligations will be adversely affected by decreases in bond prices
and increases in interest rates. Certain Treasury Obligations may have been
purchased on the Initial Date of Deposit at prices of less than their par
value at maturity, indicating a market discount. Other Treasury Obligations
may have been purchased on the Initial Date of Deposit at prices greater than
their par value at maturity, indicating a market premium. The coupon interest
rate of Treasury Obligations purchased at a market discount was lower than
current market interest rates of newly issued bonds of comparable rating and
type and the coupon interest rate of Treasury Obligations purchased at a
market premium was higher than current market interest rates of newly issued
bonds of comparable rating and type. Generally, the value of bonds purchased
at a market discount will increase in value faster than bonds purchased at a
market premium if interest rates decrease. Conversely, if interest rates
increase, the value of bonds purchased at a market discount will decrease
faster than bonds purchased at a market premium.
LEAPS(R). The Common Stocks held by the Trust are subject to LEAPS(R). The
value of the LEAPS(R) may be adversely affected if the market for LEAPS(R)
becomes less liquid or smaller. If this occurs, there will likely be a
negative impact on the value of your Units. Although you may redeem your Units
at any time, if you redeem before the LEAPS(R) are exercised or expire, the
value of your Units may be adversely affected by the value of the LEAPS(R).
However, if LEAPS(R) are not exercised and you hold your Units until the
scheduled Termination Date, the LEAPS(R) will have ceased to exist and the
Trust's portfolio will consist of only cash or Securities or a combination of
each.
If you sell or redeem your Units before the LEAPS(R) are exercised, or if the
Trust terminates prior to its scheduled Termination Date and the LEAPS(R) have
not been exercised, you may not realize any appreciation in the value of the
Common Stocks because even if the Common Stocks appreciate in value, that
appreciation may be more than fully, fully or partly offset by an increase in
value in the LEAPS(R). The value of the LEAPS(R) is deducted from the value of
the Trust's assets when determining the value of a Unit. If the Securities
decline in price, your loss may be greater than it would be if there were no
LEAPS(R) because the value of the LEAPS(R) is a reduction to the value of the
Securities when calculating the value of a Unit. An increase in value of the
LEAPS(R), an obligation of the Trust to sell or deliver the Common Stocks at
the Strike Price if the LEAPS(R) are exercised by the Right Holder, will
reduce the value of the Securities in the Trust, below the value of the
Securities that would otherwise be realizable if the Common Stocks were not
subject to the LEAPS(R). You should note that even if the price of a Common
Stock does not change, if the value of a LEAPS(R) increases (for example,
based on increased volatility of a Common Stock) your Unit will lose value.
The value of the LEAPS(R) reduces the value of your Units. As the value of the
LEAPS(R) increases, it has a more negative impact on the value of your Units.
The value of the LEAPS(R) will also be affected by changes in the value and
dividend rates of the Common Stocks, an increase in interest rates, a change
in the actual and perceived volatility of the stock market and the Common
Stocks and the remaining time to expiration. Additionally, the value of a
LEAPS(R) does not increase or decrease at the same rate as the underlying
stock (although they generally move in the same direction). However, as a
Page 13
LEAPS(R) approaches its expiration date, its value increasingly moves with the
price of the Common Stock subject to the LEAPS(R).
The Strike Price for each LEAPS(R) held by the Trust may be adjusted downward
before the LEAPS(R) expiration triggered by certain corporate events affecting
that Common Stock. A downward adjustment to the Strike Price will have the
effect of reducing the equity appreciation that a Unit holder may receive. If
the Strike Price is adjusted downward and the LEAPS(R) is exercised at the
reduced Strike Price, a Unit Holder would lose money if the value of the
Common Stock at the time that the Unit is purchased is greater than the
adjusted Strike Price. Adjustments will be made to the Strike Price of a
Common Stock based on adjustments made by the OCC to options on that security.
The OCC generally does not adjust option strike prices to reflect ordinary
dividends but may adjust option strike prices to reflect certain corporate
events such as extraordinary dividends, stock splits, merger or other
extraordinary distributions or events.
If the value of the underlying Common Stocks exceeds the Strike Price of the
LEAPS(R), it is likely that the Right Holder will exercise their right to
purchase the Equity Security subject to the LEAPS(R) from the Trust. As the
LEAPS(R) may be exercised on any business day prior to their expiration,
Common Stocks may be sold to the Right Holders of the LEAPS(R) prior to the
termination of the Trust. If this occurs, distributions from the Trust will be
reduced by the amount of the dividends which would have been paid by Common
Stocks sold from the Trust. As discussed in "Tax Matters," the sale of Common
Stocks from the Trust will likely result in capital gains to Unit holders,
which may be short-term depending on the holding period of the Common Stocks.
In addition, the sale of Common Stocks may, in certain circumstances, result
in the early termination of the Trust.
Options. The value of an option may be adversely affected if the market for
the option becomes less liquid or smaller, and will be affected by changes in
the value and dividend rates of the Common Stock subject to the option, an
increase in interest rates, a change in the actual and perceived volatility of
the stock market and the Common Stock and the remaining time to expiration.
Additionally, the value of an option does not increase or decrease at the same
rate as the underlying Common Stock (although they generally move in the same
direction). However, as an option approaches its expiration date, its value
increasingly moves with the price of the Common Stock subject to an option.
The strike price for an option may be adjusted downward before an option
expiration triggered by certain corporate events affecting that Common Stock.
A downward adjustment to the strike price will have the effect of reducing the
equity appreciation. Option strike prices may be adjusted to reflect certain
corporate events such as extraordinary dividends, stock splits, merger or
other extraordinary distributions or events. If the value of the underlying
Common Stock exceeds the strike price of an option, it is likely that the
holder of that option will exercise their right to purchase the Common Stock.
Distributions. All of the Common Stocks held by the Trust currently pay
dividends, but there is no guarantee that the issuers of the Common Stocks
will declare dividends in the future or that, if declared, they will either
remain at current levels or increase over time. In addition, there is no
guarantee that the U.S. Government will be able to satisfy its interest
payment obligations to the Trust over the life of the Trust.
Concentration Risk. When at least 25% of a trust's portfolio is invested in
securities issued by companies within a single sector, the trust is considered
to be concentrated in that particular sector. A portfolio concentrated in one
or more sectors may present more risks than a portfolio broadly diversified
over several sectors.
The Trust is concentrated in stocks of companies within the information
technology sector.
Information Technology. Technology companies are generally subject to the
risks of rapidly changing technologies; short product life cycles; fierce
competition; aggressive pricing; frequent introduction of new or enhanced
products; the loss of patent, copyright and trademark protections; cyclical
market patterns; evolving industry standards; and frequent new product
introductions. Technology companies may be smaller and less experienced
companies, with limited product lines, markets or financial resources.
Technology company stocks have experienced extreme price and volume
fluctuations that are often unrelated to their operating performance. Also,
the stocks of many Internet companies have exceptionally high price-to-
earnings ratios with little or no earnings histories.
Foreign Securities. Certain of the Common Stocks 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. 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
Page 14
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 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 dividend payments and/or securities will vary with
fluctuations in foreign exchange rates. Risks associated with investing in
foreign securities may be more pronounced in emerging markets where the
securities markets are substantially smaller, less developed, less liquid,
less regulated, and more volatile than the securities markets of the United
States and developed foreign markets. In addition, less information about
emerging market companies is publicly available due to differences in
regulatory, accounting, audit and financial recordkeeping standards and
information that is available may be unreliable or outdated. Moreover, the
rights and remedies associated with emerging market investment securities may
be different than those available for investments in more developed markets.
American Depositary Receipts/ADRs 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.
Interest Rate Risk. Interest rate risk is the risk that the value of the
Securities held by the Trust will fall if interest rates increase. Bonds
typically fall in value when interest rates rise and rise in value when
interest rates fall. Bonds with longer periods before maturity are often more
sensitive to interest rate changes. Due to the current period of historically
low rates, the bonds held by the Trust may be subject to a greater risk of
rising interest rates than would normally be the case.
Credit Risk. Credit risk is the risk that a security's issuer is unable or
unwilling to make dividend, interest or principal payments when due and the
related risk that the value of a security may decline because of concerns
about the issuer's ability or willingness to make such payments.
Call Risk. Call risk is the risk that the issuer prepays or "calls" a bond
before its stated maturity. An issuer might call a bond if interest rates fall
and the bond pays a higher than market interest rate or if the issuer no
longer needs the money for its original purpose. If an issuer calls a bond,
the Trust will distribute the principal to you but your future interest
distributions will fall. You might not be able to reinvest this principal in
another investment with as high a yield. A bond's call price could be less
than the price the Trust paid for the bond and could be below the bond's par
value. This means you could receive less than the amount you paid for your
Units.
Bond Quality Risk. Bond quality risk is the risk that a bond will fall in
value if a rating agency decreases the bond's rating.
Liquidity Risk. Liquidity risk is the risk that the value of a bond will fall
if trading in the bond is limited or absent. No one can guarantee that a
liquid trading market will exist for any bond because these bonds generally
trade in the over-the-counter market (they are not listed on a securities
exchange).
Extension Risk. If interest rates rise, certain obligations may be paid off by
the obligor at a slower rate than expected, which will cause the value of such
obligations to fall.
Prepayment Risk. Many types of debt instruments are subject to prepayment
risk, which is the risk that the issuer will repay principal prior to the
maturity date. Debt instruments allowing prepayment may offer less potential
for gains during a period of declining interest rates.
Valuation Risk. Unlike publicly traded securities that trade on national
securities exchanges, there is no central place or exchange for trading most
debt securities. Debt securities generally trade on an "over-the-counter"
market. Due to the lack of centralized information and trading, the valuation
of debt securities may carry more uncertainty and risk than that of publicly
traded securities. Accordingly, determinations of the fair value of debt
securities may be based on infrequent and dated information. Also, because the
available information is less reliable and more subjective, elements of
judgment may play a greater role in valuation of debt securities than for
other types of securities.
Market Discount. Certain of the Securities held by the Trust may have current
market values which are below the principal value of such Securities on the
Page 15
Initial Date of Deposit. A primary reason for the market value of such bonds
being less than principal value at maturity is that the interest rate of such
bonds is at lower rates than the current market interest rate for comparably
rated bonds. Bonds selling at market discounts tend to increase in market
value as they approach maturity. Because the Trust is not actively managed,
the Trustee will not sell bonds in response to or in anticipation of market
discounts or fluctuations.
On sale or redemption, Unit holders may receive ordinary income dividends from
the Trust if the Trust sells or redeems bonds that were acquired at a market
discount, or sells bonds at a short-term capital gain. In general, the
Internal Revenue Service will treat bonds as market discount bonds when the
cost of the bond, plus any original issue discount that has not yet accrued,
is less than the amount due to be paid at the maturity of the bond. Any gain
realized that is in excess of the earned portion of original issue discount
will be taxable as capital gain unless the gain is attributable to market
discount in which case the accretion of market discount is taxable as ordinary
income.
Large Capitalization Companies. Certain of the Common Stocks held by the Trust
are issued by large capitalization companies. The return on investment in
stocks of large capitalization companies may be less than the return on
investment in stocks of small and/or mid capitalization companies. Large
capitalization companies may also grow at a slower rate than the overall market.
Small and/or Mid Capitalization Companies. Certain of the Common Stocks held
by the Trust are issued by small and/or mid capitalization companies.
Investing in stocks of such companies may involve greater risk than investing
in larger companies. For example, such companies may have limited product
lines, as well as shorter operating histories, less experienced management and
more limited financial resources than larger companies. Securities of such
companies generally trade in lower volumes and are generally subject to
greater and less predictable changes in price than securities of larger
companies. In addition, small and mid-cap stocks may not be widely followed by
the investment community, which may result in low demand.
Cybersecurity Risk. As the use of Internet technology has become more
prevalent in the course of business, the Trust has become more susceptible to
potential operational risks through breaches in cybersecurity. A breach in
cybersecurity refers to both intentional and unintentional events that may
cause the Trust to lose proprietary information, suffer data corruption or
lose operational capacity. Such events could cause the Sponsor of the Trust to
incur regulatory penalties, reputational damage, additional compliance costs
associated with corrective measures and/or financial loss. Cybersecurity
breaches may involve unauthorized access to digital information systems
utilized by the Trust through "hacking" or malicious software coding, but may
also result from outside attacks such as denial-of-service attacks through
efforts to make network services unavailable to intended users. In addition,
cybersecurity breaches of the Trust's third-party service providers, or
issuers in which the Trust invests, can also subject the Trust to many of the
same risks associated with direct cybersecurity breaches. The Sponsor of, and
third-party service provider to, the Trust have established risk management
systems designed to reduce the risks associated with cybersecurity. However,
there is no guarantee that such efforts will succeed, especially because the
Trust does not directly control the cybersecurity systems of issuers or third-
party service providers.
Legislation/Litigation. From time to time, various legislative initiatives are
proposed in the United States and abroad which may have a negative impact on
certain of the companies represented in the Trust. In addition, litigation
regarding the issuers of the Securities, the industries represented by these
issuers, may negatively impact the value of these Securities. We cannot
predict what impact any pending or proposed legislation or pending or
threatened litigation will have on the value of the Securities.
Public Offering
The Public Offering Price.
Units will be purchased at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Treasury Obligations and the Common
Stocks, less the value of the LEAPS(R);
- The amount of any cash in the Income and Capital Accounts;
- Net interest accrued but unpaid on the Treasury Obligations after the First
Settlement Date to the date of settlement;
- Dividends receivable on the Common Stocks; and
- The maximum sales charge (which combines an initial upfront sales charge, a
deferred sales charge and the creation and development fee).
The price you pay for your Units will differ from the amount stated under
"Summary of Essential Information" due to various factors, including
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fluctuations in the prices of the Securities and LEAPS(R) 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.
The number of Units available may be insufficient to meet demand. This may be
because of the Sponsor's inability to, or decision not to, purchase and
deposit underlying Securities in amounts sufficient to maintain the
proportionate numbers of shares of each Security as required to create
additional Units or because of its inability to sell LEAPS(R).
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the Trust's
organization costs (including costs of preparing the registration statement,
the Indenture and other closing documents, registering Units with the SEC and
states, the initial audit of the Trust's statement of net assets, legal fees
and the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's organization
costs at the end of the initial offering period (a significantly shorter time
period than the life of the Trust). During the initial offering period, there
may be a decrease in the value of the Securities. To the extent the proceeds
from the sale of these Securities are insufficient to repay the Sponsor for
Trust organization costs, the Trustee will sell additional Securities to allow
the Trust to fully reimburse the Sponsor. In that event, the net asset value
per Unit of the Trust will be reduced by the amount of additional Securities
sold. Although the dollar amount of the reimbursement due to the Sponsor will
remain fixed and will never exceed the per Unit amount set forth for the Trust
in "Notes to Statement of Net Assets," this will result in a greater effective
cost per Unit to Unit holders for the reimbursement to the Sponsor. To the
extent actual organization costs are less than the estimated amount, only the
actual organization costs will ultimately be charged to the Trust. When
Securities are sold to reimburse the Sponsor for organization costs, the
Trustee will sell Securities, to the extent practicable, which will maintain
the same proportionate relationship among the Securities contained in the
Trust as existed prior to such sale.
Accrued Interest.
Accrued interest represents unpaid interest on a Treasury Obligation from the
last day it paid interest. Interest on the Treasury Obligations is paid
monthly, although the Trust accrues such interest daily. Because the Trust
always has an amount of interest earned but not yet collected, the Public
Offering Price of Units will have added to it the proportionate share of
accrued interest to the date of settlement. You will receive the amount, if
any, of accrued interest you paid for on the next Distribution Date. In
addition, if you sell or redeem your Units you will be entitled to receive
your proportionate share of the accrued interest from the purchaser of your
Units.
Minimum Purchase.
The minimum amount 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 of 1.85% per Unit 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
1.85% of the Public Offering Price and the sum of the maximum remaining
deferred sales charge and creation and development fee (initially $.185 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 $.045 per Unit will be deducted from the Trust's assets on
approximately the twentieth day of each month from January 20, 2022 through
March 18, 2022. 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
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sales charge on a percentage basis will be more than 1.35% of the Public
Offering Price.
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 1.85% per Unit and the maximum dealer concession
is 1.25% 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 assigned a Fee Account CUSIP Number. Certain Fee Account Unit holders may
be assessed transaction or other account fees on the purchase and/or
redemption of such Units by their registered investment advisor, broker/dealer
or other processing organizations for providing certain transaction or account
activities. Fee Account Units are not available for purchase in the secondary
market. We reserve the right to limit or deny purchases of Units not subject
to the transactional sales charge by investors whose frequent trading activity
we determine to be detrimental to the Trust.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, and dealers and their affiliates will purchase
Units at the Public Offering Price less the applicable dealer concession,
subject to the policies of the related selling firm. Immediate family members
include spouses, or the equivalent if recognized under local law, children or
step-children under the age of 21 living in the same household, parents or
step-parents and trustees, custodians or fiduciaries for the benefit of such
persons. Only employees, officers and directors of companies that allow their
employees to participate in this employee discount program are eligible for
the discounts.
You will be charged the deferred sales charge per Unit regardless of the price
you pay for your Units or whether you are eligible to receive any discounts.
However, if the purchase price of your Units was less than $10.00 per Unit or
if you are eligible to receive a discount such that the maximum sales charge
you must pay is less than the applicable maximum deferred sales charge,
including Fee Account Units, you will be credited additional Units with a
dollar value equal to the difference between your maximum sales charge and the
maximum deferred sales charge at the time you buy your Units. 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
and LEAPS(R) 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 Treasury Obligations in the Trust will
be determined on the basis of current offering prices. The aggregate
underlying value of the Common Stocks in the Trust will be determined as
follows: if the Common Stocks 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 Common Stocks 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 Common Stocks 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
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Evaluator will determine the value of the Common Stocks using the best
information available to the Evaluator, which may include the prior day's
evaluated price. If the Common Stock 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 Common Stocks 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 Common Stocks are not so listed or, if so listed and the
principal market therefore is other than on the Primary Exchange or any
appropriate secondary exchange, the value shall generally be based on the
current ask price on the over-the-counter market (unless the Evaluator deems
such price inappropriate as a basis for evaluation). If current ask prices are
unavailable, the value is generally determined (a) on the basis of current ask
prices for comparable securities, (b) by appraising the value of the Common
Stocks 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
Common Stock shall be converted to U.S. dollars based on current exchange
rates (unless the Evaluator deems such prices inappropriate as a basis for
evaluation). The valuation of LEAPS(R) written by the Trust will be determined
as set forth above for Common Stocks, with the exception that bid prices will
be used instead of ask prices during the initial offering period. 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 or LEAP(R).
After the initial offering period is over, the aggregate underlying value of
the Securities and LEAPS(R) will be determined as set forth above, except that
bid prices are used instead of ask prices when necessary for purposes of
valuing the Common Stocks and Treasury Obligations and ask prices are used
instead of bid prices when necessary for purposes of valuing the LEAPS(R).
The value of the Common Stocks and the value of the LEAPS(R) have an
interrelated effect on the value of a Unit. The value of the LEAPS(R) will be
affected by the value of the Common Stocks, the volatility of the Common
Stocks, the remaining time to the expiration of the LEAPS(R), the level of
interest rates and the dividend yields on the Common Stocks.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states. All
Units will be sold at the then current Public Offering Price.
The Sponsor compensates intermediaries, such as broker/dealers and banks, for
their activities that are intended to result in sales of Units of the Trust.
This compensation includes dealer concessions described in the following
section and may include additional concessions and other compensation and
benefits to broker/dealers and other intermediaries.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which reflect a
concession or agency commission of 1.25% of the Public Offering Price per
Unit, subject to reductions set forth in "Public Offering-Discounts for
Certain Persons."
Eligible dealer firms and other selling agents who, during the previous
consecutive 12-month period through the end of the most recent month, sold
primary market units of unit investment trusts sponsored by us in the dollar
amounts shown below will be entitled to up to the following additional sales
concession on primary market sales of units during the current month of unit
investment trusts sponsored by us:
Total sales Additional
(in millions) Concession
__________________________________________________________
$25 but less than $100 0.035%
$100 but less than $150 0.050%
$150 but less than $250 0.075%
$250 but less than $1,000 0.100%
$1,000 but less than $5,000 0.125%
$5,000 but less than $7,500 0.150%
$7,500 or more 0.175%
Dealers and other selling agents will not receive a concession on the sale of
Units which are not subject to a transactional sales charge, but such Units
will be included in determining whether the above volume sales levels are met.
Eligible dealer firms and other selling agents include clearing firms that
place orders with First Trust and provide First Trust with information with
respect to the representatives who initiated such transactions. Eligible
dealer firms and other selling agents will not include firms that solely
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provide clearing services to other broker/dealer firms or firms who place
orders through clearing firms that are eligible dealers. We reserve the right
to change the amount of concessions or agency commissions from time to time.
Certain commercial banks may be making Units of the Trust available to their
customers on an agency basis. A portion of the transactional sales charge paid
by these customers is kept by or given to the banks in the amounts shown above.
Other Compensation and Benefits to Broker/Dealers.
The Sponsor, at its own expense and out of its own profits, currently provides
additional compensation and benefits to broker/dealers who sell Units of this
Trust and other First Trust products. This compensation is intended to result
in additional sales of First Trust products and/or compensate broker/dealers
and financial advisors for past sales. A number of factors are considered in
determining whether to pay these additional amounts. Such factors may include,
but are not limited to, the level or type of services provided by the
intermediary, the level or expected level of sales of First Trust products by
the intermediary or its agents, the placing of First Trust products on a
preferred or recommended product list, access to an intermediary's personnel,
and other factors. The Sponsor makes these payments for marketing, promotional
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 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 3
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.
Page 20
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.
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 (i.e., participating in litigation concerning a portfolio
security) and the costs of indemnifying the Trustee;
- 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;
Page 21
- Payment for any loss, liability or expenses we incurred without negligence,
bad faith or willful misconduct in acting as Sponsor of the Trust;
- Foreign custodial and transaction fees (which may include compensation paid
to the Trustee or its subsidiaries or affiliates), if any; and/or
- All taxes and other government charges imposed upon the Securities or any
part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on the
Trust. In addition, if there is not enough cash in the Income or Capital
Account, the Trustee has the power to sell Securities to make cash available
to pay these charges which may result in capital gains or losses to you. See
"Tax Status."
Tax Status
Federal Tax Matters.
This section discusses some of the main U.S. federal income tax consequences
of owning Units of the Trust as of the date of this prospectus. Tax laws and
interpretations change frequently, and this summary does not describe all of
the tax consequences to all taxpayers. For example, this summary generally
does not describe your situation if you are a broker/dealer or other investor
with special circumstances. In addition, this section may not describe your
state, local or non-U.S. tax consequences.
This federal income tax summary is based in part on the advice of counsel to
the Sponsor. The Internal Revenue Service ("IRS") could disagree with any
conclusions set forth in this section. In addition, our counsel may not have
been asked to review, and may not have reached a conclusion with respect to
the federal income tax treatment of the assets to be deposited in the Trust.
This summary may not be sufficient for you to use for the purpose of avoiding
penalties under federal tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Trust Status.
Unit investment trusts maintain both Income and Capital Accounts, regardless
of tax structure. Please refer to the "Income and Capital Distributions"
section of the prospectus for more information.
The Trust intends to qualify as a "regulated investment company," commonly
known as a "RIC," under the federal tax laws. If the Trust qualifies as a RIC
and distributes its income as required by the tax law, the Trust generally
will not pay federal income taxes. For federal income tax purposes, you are
treated as the owner of the Trust Units and not of the assets held by the Trust.
Income from the Trust.
Trust distributions are generally taxable. After the end of each year, you
will receive a tax statement that separates the Trust's distributions into
ordinary income dividends, capital gain dividends and return of capital.
Income reported is generally net of expenses (but see "Treatment of Trust
Expenses" below). Ordinary income dividends are generally taxed at your
ordinary income tax rate, however, certain dividends received from the Trust
may be taxed at the capital gains tax rates. Generally, all capital gain
dividends are treated as long-term capital gains regardless of how long you
have owned your Units. In addition, the Trust may make distributions that
represent a return of capital for tax purposes and will generally not be
currently taxable to you, although they generally reduce your tax basis in
your Units and thus increase your taxable gain or decrease your loss when you
dispose of your Units. The tax laws may require you to treat distributions
made to you in January as if you had received them on December 31 of the
previous year.
Some distributions from the Trust may qualify as long-term capital gains,
which, if you are an individual, is generally taxed at a lower rate than your
ordinary income and short-term capital gain income. The distributions from the
Trust that you must take into account for federal income tax purposes are not
reduced by the amount used to pay a deferred sales charge, if any.
Distributions from the Trust, including capital gains, may also be subject to
a "Medicare tax" if your adjusted gross income exceeds certain threshold
amounts.
Certain Stock Dividends.
Ordinary income dividends received by an individual Unit holder from a RIC
such as the Trust are generally taxed at the same rates that apply to long-
term capital gains, provided certain holding period requirements are satisfied
and provided the dividends are attributable to qualifying dividend income
("QDI") received by the Trust itself. Dividends that do not meet these
requirements will generally be taxed at ordinary income tax rates. After the
end of the tax year, the Trust will provide a tax statement to its Unit
holders reporting the amount of any distribution which may be taken into
account as a dividend which is eligible for the capital gains tax rates.
Unit holders that are corporations may be eligible for the dividends received
deduction with respect to certain ordinary income dividends on Units that are
Page 22
attributable to qualifying dividends received by the Trust from certain
corporations.
As part of its investment strategy the Trust has invested in certain
offsetting positions. Such offsetting positions may reduce the amount of
dividends that are eligible for the capital gains tax rates.
Sale of Units.
If you sell your Units (whether to a third party or to the Trust), you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your (adjusted) tax basis in your Units from
the amount you receive from the sale. Your original tax basis in your Units is
generally equal to the cost of your Units, including sales charges. In some
cases, however, you may have to adjust your tax basis after you purchase your
Units, in which case your gain would be calculated using your adjusted basis.
The tax statement you receive in regard to the sale or redemption of your
Units may contain information about your basis in the Units and whether any
gain or loss recognized by you should be considered long-term or short-term
capital gain. The information reported to you is based upon rules that do not
take into consideration all of the facts that may be known to you or to your
advisors. You should consult with your tax advisor about any adjustments that
may need to be made to the information reported to you in determining the
amount of your gain or loss.
Treatment of Trust Expenses.
Expenses incurred and deducted by the Trust will generally not be treated as
income taxable to you. In some cases, however, you may be required to treat
your portion of these Trust expenses as income. You may not be able to take a
deduction for some or all of these expenses even if the cash you receive is
reduced by such expenses.
Investments in Certain Non-U.S. Corporations.
A foreign corporation will generally be treated as a passive foreign
investment company ("PFIC") if 75% or more of its income is passive income or
if 50% or more of its assets are held to produce passive income. If the Trust
holds an equity interest in PFICs, the Trust could be subject to U.S. federal
income tax and additional interest charges on gains and certain distributions
from the PFICs, even if all the income or gain is distributed in a timely
fashion to the Trust Unit holders. The Trust will not be able to pass through
to its Unit holders any credit or deduction for such taxes if the taxes are
imposed at the Trust level. The Trust may be able to make an election that
could limit the tax imposed on the Trust. In this case, the Trust would
recognize as ordinary income any increase in the value of such PFIC shares,
and as ordinary loss any decrease in such value to the extent it did not
exceed prior increases included in income.
Under this election, the Trust might be required to recognize income in excess
of its distributions from the PFICs and its proceeds from dispositions of PFIC
stock during that year, and such income would nevertheless be subject to the
distribution requirement and would be taken into account for purposes of
determining the application of the 4% excise tax imposed on RICs that do not
meet certain distribution thresholds. Dividends paid by PFICs are not treated
as QDI to shareholders of the PFICs.
Non-U.S. Investors.
If you are a non-U.S. investor, distributions from the Trust treated as
dividends will generally be subject to a U.S. withholding tax of 30% of the
distribution. Certain dividends, such as capital gains dividends and short-
term capital gains dividends, may not be subject to U.S. withholding taxes. In
addition, some non-U.S. investors may be eligible for a reduction or
elimination of U.S. withholding taxes under a treaty. However, the
qualification for those exclusions may not be known at the time of the
distribution.
Separately, the United States, pursuant to the Foreign Account Tax Compliance
Act ("FATCA") imposes a 30% tax on certain non-U.S. entities that receive U.S.
source interest or dividends if the non-U.S. entity does not comply with
certain U.S. disclosure and reporting requirements. This FATCA tax also
currently applies to the gross proceeds from the disposition of securities
that produce U.S. source interest or dividends. 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.
You should consult your tax advisor regarding potential foreign, state or
local taxation with respect to your Units.
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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.
By February 15th yearly, the Annual Reports are posted to the Sponsor's
website (www.ftportfolios.com) in the UIT Tax Center and retrievable by CUSIP.
You may also request one be sent to you by calling the Sponsor at 800-621-
1675, dept. code 2. In addition, you may also request from the Trustee copies
of the evaluations of the Securities as prepared by the Evaluator to enable
you to comply with applicable federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you become a
Record Owner. The Trustee will credit dividends and interest received on the
Trust's Securities to the Income Account of the Trust. All other receipts,
such as return of capital or capital gain dividends, are credited to the
Capital Account of the Trust. Dividends received on foreign Securities, if
any, are converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute money from the Income and Capital Accounts, as
determined at the semi-annual Record Date, semi-annually on the twenty-fifth
day of each June and December to Unit holders of record on the tenth day of
such months. However, if the Capital Account contains proceeds from any
matured Securities as of the tenth day of a month, the Trustee will distribute
money in the Capital Account on the twenty-fifth day of such month to Unit
holders of record on the tenth day of such month. In other months, the Trustee
will only distribute money in the Capital Account if the amount available for
distribution from that account equals at least $1.00 per 100 Units. In any
case, the Trustee will distribute any funds in the Capital Account in December
of each year and as part of the final liquidation distribution. See "Summary
of Essential Information." No income distribution will be paid if accrued
expenses of the Trust exceed amounts in the Income Account on the Distribution
Dates. Distribution amounts will vary with changes in the Trust's fees and
expenses, in dividends received and with the sale of Securities. If the
Trustee does not have your taxpayer identification number ("TIN"), it is
required to withhold a certain percentage of your distribution and deliver
such amount to the IRS. You may recover this amount by giving your TIN to the
Page 24
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 to the Sponsor. If not, the Trustee may
sell Securities to meet the shortfall.
Within a reasonable time after the Trust is terminated, you will receive the
pro rata share of the money from the sale of the Securities and amounts in the
Income and Capital Accounts. All Unit holders will receive a pro rata share of
any other assets remaining in the 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.
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."
The Trustee may sell Securities to make funds available for redemption. The
Trustee will purchase the LEAPS(R) which will cancel it and then sell the
underlying Common Stocks. Because of the minimum amounts in which the LEAPS(R)
must be traded, the proceeds of Common Stocks sold subject to the LEAPS(R) may
exceed the amount required at the time to redeem Units. These excess proceeds
will be distributed to Unit holders. 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;
3. dividends receivable on the Securities trading ex-dividend as of the date
of computation; and
4. accrued interest on the Treasury Obligations; and
deducting
1. the aggregate value of the LEAPS(R);
2. any applicable taxes or governmental charges that need to be paid out of
the Trust;
3. any amounts owed to the Trustee for its advances;
4. estimated accrued expenses of the Trust, if any;
5. cash held for distribution to Unit holders of record of the Trust as of the
business day before the evaluation being made;
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6. liquidation costs for foreign Securities, if any; and
7. 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 (and its related
LEAPS(R)) in certain limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect the
payment of dividends, the issuer's credit standing, or otherwise damage the
sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its outstanding
obligations;
- There has been a public tender offer made for a Security or a merger or
acquisition is announced affecting a Security, and that in our opinion the
sale or tender of the Security is in the best interest of Unit holders;
- The sale of Securities is necessary or advisable (i) in order to maintain
the qualification of the Trust as a "regulated investment company" in the case
of the Trust which has elected to qualify as such or (ii) to provide funds to
make any distribution for a taxable year in order to avoid imposition of any
income or excise taxes on undistributed income in the Trust which is a
"regulated investment company";
- The price of the Security has declined to such an extent, or such other
credit factors exist, that in our opinion keeping the Security would be
harmful to the Trust;
- As a result of the ownership of the Security, the Trust or its Unit holders
would be a direct or indirect shareholder of a passive foreign investment
company; or
- The sale of the Security is necessary for the Trust to comply with such
federal and/or state laws, regulations and/or regulatory actions and
interpretations which may be in effect from time to time.
Except for instances in which the Trust acquires Replacement Securities, as
described in "The FT Series," the Trust will generally not acquire any
securities or other property other than the Securities. The Trustee, on behalf
of the Trust and at the direction of the Sponsor, will vote for or against any
offer for new or exchanged securities or property in exchange for a Security,
such as those acquired in a merger or other transaction. If such exchanged
securities or property are acquired by the Trust, at our instruction, they
will either be sold or held in the Trust. In making the determination as to
whether to sell or hold the exchanged securities or property we may get advice
from the Portfolio Supervisor. Any proceeds received from the sale of
Securities, exchanged securities or property will be credited to the Capital
Account of the Trust for distribution to Unit holders or to meet redemption
requests. The Trustee may retain and pay us or an affiliate of ours to act as
agent for the Trust to facilitate selling Securities, exchanged securities or
property from the Trust. If we or our affiliate act in this capacity, we will
be held subject to the restrictions under the 1940 Act. When acting in an
agency capacity, we may select various broker/dealers to execute securities
transactions on behalf of the Trust, which may include broker/dealers who sell
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;
Page 26
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be adverse to your best interests
(as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on the
Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated earlier:
- Upon the consent of 100% of the Unit holders of the Trust;
- If the value of the Securities owned by the Trust as shown by any evaluation
is less than the lower of $2,000,000 or 20% of the total value of Securities
deposited in the Trust during the initial offering period ("Discretionary
Liquidation Amount"); or
- In the event that Units of the Trust not yet sold aggregating more than 60%
of the Units of the Trust are tendered for redemption by underwriters,
including the Sponsor.
If the Trust is terminated due to this last reason, we will refund your entire
sales charge; however, termination of the Trust before the Mandatory
Termination Date for any other stated reason will result in all remaining
unpaid deferred sales charges on your Units being deducted from your
termination proceeds. For various reasons, the Trust may be reduced below the
Discretionary Liquidation Amount and could therefore be terminated before the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning nine
business days prior to, and no later than, the Mandatory Termination Date. We
will determine the manner and timing of the sale of Securities. Because the
Trustee must sell the Securities within a relatively short period of time, the
sale of Securities as part of the termination process may result in a lower
sales price than might otherwise be realized if such sale were not required at
this time.
The scheduled Mandatory Termination Date will be subsequent to the expiration
date of the LEAPS(R). If the LEAPS(R) are exercised prior to their expiration,
the Trust will receive cash; if the LEAPS(R) are not exercised, the Trust will
continue to hold the Common Stocks in the Portfolio. If the Trust is
terminated early, the Trustee will either (a) sell the Common Stocks subject
to the LEAPS(R); or (b) enter into a closing purchase transaction as a result
of which the LEAPS(R) will be canceled and then sell the underlying Common
Stocks.
You will receive a cash distribution from the sale of the remaining
Securities, along with your interest in the Income and Capital Accounts,
within a reasonable time after the Trust is terminated. The Trustee will
deduct from the Trust any accrued costs, expenses, advances or indemnities
provided for by the Indenture, including estimated compensation of the Trustee
and costs of liquidation and any amounts required as a reserve to pay any
taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust" brand
name and other securities. An Illinois limited partnership formed in 1991, we
took over the First Trust product line and act as Sponsor for successive
series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
The First Trust product line commenced with the first insured unit investment
trust in 1974. To date we have deposited more than $500 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, 2020, the total partners' capital of First Trust Portfolios L.P.
was $82,953,781.
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
Page 27
code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is The Bank of New York Mellon, a trust company organized under
the laws of New York. The Bank of New York Mellon has its unit investment
trust division offices at 240 Greenwich Street, New York, New York 10286,
telephone 800-813-3074. If you have questions regarding your account or your
Trust, please contact the Trustee at its unit investment trust division
offices or your financial 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.
The Trustee will not be liable for any taxes or other governmental charges or
interest on the Securities which the Trustee may be required to pay under any
present or future law of the United States or of any other taxing authority
with jurisdiction. Also, the Indenture states other provisions regarding the
liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not able to
act or become bankrupt, or if our affairs are taken over by public
authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more than
that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited partnership
formed in 1991 and an affiliate of the Sponsor. The Evaluator's address is 120
East Liberty Drive, Wheaton, Illinois 60187.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make determinations
in good faith based upon the best available information, but will not be
liable to the Trustee, Sponsor or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago, Illinois
60603. They have passed upon the legality of the Units offered hereby and
certain matters relating to federal tax law. Carter Ledyard & Milburn LLP acts
as the Trustee's counsel.
Experts.
The Trust's statement of net assets, including the schedule of investments, as
of the opening of business on the Initial Date of Deposit included in this
prospectus, has been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their report appearing herein,
and is included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Sponsor, you will receive free of charge supplemental
information about this Series, which has been filed with the SEC and to which
we have referred throughout. This information states more specific details
concerning the nature, structure and risks of this product.
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Page 31
FIRST TRUST(R)
Technology Dividend Buy-Write Portfolio, Series 5
FT 9620
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. 333-258614) 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: [email protected]
September 22, 2021
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 32
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
9620 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 September 22, 2021. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Small and/or Mid Capitalization Companies 2
Concentration
Concentration Risk 2
Information Technology 3
Common Stocks Selected for Technology Dividend Buy-Write
Portfolio, Series 5 4
Risk Factors
Securities. An investment in Units should be made with an understanding of the
risks which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Securities or the general
condition of the relevant stock market may worsen, and the value of the
Securities and therefore the value of the Units may decline. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases of value, as market confidence in and perceptions of
the issuers change. These perceptions are based on unpredictable factors,
including expectations regarding government, economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction, and
global or regional political, economic or banking crises.
Dividends. Shareholders of common stocks have rights to receive payments from
the issuers of those common stocks that are generally subordinate to those of
creditors of, or holders of debt obligations or preferred stocks of, such
issuers. Shareholders of common stocks have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same degree of
protection of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer
upon liquidation or bankruptcy. Cumulative preferred stock dividends must be
paid before common stock dividends, and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders of
cumulative preferred stock. Preferred stockholders are also generally entitled
to rights on liquidation which are senior to those of common stockholders.
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 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
Page 1
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.
Small and/or Mid Capitalization Companies. The following section applies to
individual Trusts which contain Securities issued by, or invest in Securities
that hold securities issued by, small and/or mid capitalization companies.
While historically stocks of small and mid capitalization companies have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Such companies may have limited product
lines, markets or financial resources; may lack management depth or
experience; and may be more vulnerable to adverse general market or economic
developments than large companies. Some of these companies may distribute,
sell or produce products which have recently been brought to market and may be
dependent on key personnel.
The prices of small and mid cap company securities are often more volatile
than prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less publicly
available information. Also, because such companies normally have fewer shares
outstanding and these shares trade less frequently than large companies, it
may be more difficult for the Trusts which contain these Securities to buy and
sell significant amounts of such shares without an unfavorable impact on
prevailing market prices.
Concentration
Concentration Risk. When at least 25% of a trust's portfolio is invested in
securities issued by companies within a single sector, the trust is considered
to be concentrated in that particular sector. A portfolio concentrated in one
or more sectors may present more risks than a portfolio broadly diversified
over several sectors.
Page 2
The Trust is concentrated in stocks of companies within the information
technology sector.
Information Technology. Technology companies generally include companies
involved in the development, design, manufacture and sale of computers and
peripherals, software and services, data networking/communications equipment,
Internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market for
these products, especially those specifically related to the Internet, is
characterized by rapidly changing technology, rapid product obsolescence,
cyclical market patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Securities depends in
substantial part on the timely and successful introduction of new products. An
unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse effect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond in a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements of new
products or development of new technologies and general conditions of the
industry have caused and are likely to cause the market price of high-
technology common stocks to fluctuate substantially. In addition, technology
company stocks have experienced extreme price and volume fluctuations that
often have been unrelated to the operating performance of such companies. This
market volatility may adversely affect the market price of the Securities and
therefore the ability of a Unit holder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the
future suppliers will be able to meet the demand for components in a timely
and cost effective manner. Accordingly, an issuer's operating results and
customer relationships could be adversely affected by either an increase in
price for, or an interruption or reduction in supply of, any key components.
Additionally, many technology issuers are characterized by a highly
concentrated customer base consisting of a limited number of large customers
who may require product vendors to comply with rigorous industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies are
often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance that
these customers will place additional orders, or that an issuer of Securities
will obtain orders of similar magnitude as past orders from other customers.
Similarly, the success of certain technology companies is tied to a relatively
small concentration of products or technologies. Accordingly, a decline in
demand of such products, technologies or from such customers could have a
material adverse impact on issuers of the Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their proprietary
rights in their products and technologies. There can be no assurance that the
steps taken by the issuers of the Securities to protect their proprietary
rights will be adequate to prevent misappropriation of their technology or
that competitors will not independently develop technologies that are
substantially equivalent or superior to such issuers' technology. In addition,
due to the increasing public use of the Internet, it is possible that other
laws and regulations may be adopted to address issues such as privacy,
pricing, characteristics, and quality of Internet products and services. The
adoption of any such laws could have a material adverse impact on the
Securities in the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part, from
weak pricing, persistent overcapacity, slowdown in Asian demand and a shift in
retail personal computer sales toward the low end, or "sub-$1,000" segment.
Industry growth is dependent upon several factors, including: the rate of
global economic expansion; demand for products such as personal computers and
networking and communications equipment; excess productive capacity and the
resultant effect on pricing; and the rate of growth in the market for low-
priced personal computers.
The social media industry is also highly competitive and subject to the risks
involved with information technology companies, namely, short product life
cycles, evolving industry standards, loss of patent protections, rapidly
changing technologies and frequent new product introductions. Additional
risks generally applicable to social media companies include, without
limitation: disruption of services due to internal or external technical
issues; security breaches of private, proprietary and confidential
information; and evolving laws and regulations, foreign or domestic, that
Page 3
could negatively affect operations. Furthermore, the sustainability of the
business models employed by social media companies remain largely unproven.
Common Stocks Selected for Technology Dividend Buy-Write Portfolio, Series 5
Information Technology
______________________
Accenture Plc, headquartered in Dublin, Ireland, is a professional services
company. The company provides management consulting, technology services, and
outsourcing services to clients to improve the client's business performance.
Analog Devices, Inc., headquartered in Wilmington, Massachusetts, designs,
manufactures and sells a broad line of high-performance integrated circuits
for analog and digital signal processing used in various industries worldwide.
Broadcom Inc., headquartered in San Jose, California, is a semiconductor
manufacturer. The company's product portfolio serves multiple applications
within various communication and industrial markets.
Cisco Systems, Inc., headquartered in San Jose, California, is an information
technology company. The company provides networking solutions that connect
computing devices and computer networks for utilities, corporations,
universities, governments and small to medium-size businesses worldwide.
Cognizant Technology Solutions Corporation, headquartered in Teaneck, New
Jersey, provides business and consulting process services and information
technology. The company also offers full life cycle solutions to complex
software development and maintenance problems that companies face as they
transition to e-business.
Corning Incorporated, headquartered in Corning, New York, is a materials
science company. Through its subsidiaries, the company provides products and
services for the following markets: optical communications, mobile consumer
electronics, display technology, automotive emissions control products and
life sciences vessels.
Fidelity National Information Services, Inc., headquartered in Jacksonville,
Florida, provides payment services. Services include credit and debit card
processing, check risk management, check cashing, electronic banking services
and merchant card processing services to merchants and financial institutions.
Hewlett Packard Enterprise Company, headquartered in Houston, Texas, is a
technology solutions provider offering servers, management software, storage
solutions and networking products to business enterprises. The company also
offers consultation, outsourcing and support services.
HP Inc., headquartered in Palo Alto, California, provides products,
technologies, software, solutions and services to individual consumers and
businesses worldwide. The company offers access devices, mobile devices,
personal computers, workstations, laser and inkjet printers, scanners, copiers
and faxes, storage solutions and other computing and printing systems.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and related
products at various levels of integration. The company's principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
International Business Machines Corporation, headquartered in Armonk, New
York, provides customer solutions through the use of advanced information
technologies. The company offers a variety of solutions that include services,
software, systems, products, financing and technologies.
Juniper Networks, Inc., headquartered in Sunnyvale, California, provides
Internet infrastructure solutions for Internet service providers and other
telecommunications service providers. The company delivers next generation
Internet backbone routers that are designed for service provider networks.
KLA Corporation, headquartered in Milpitas, California, designs and
manufactures yield management and process monitoring systems for the
semiconductor industry. The company's systems analyze process and product
quality in the manufacture of circuits to identify fabrication problems,
marketing its systems globally.
Microchip Technology Incorporated, headquartered in Chandler, Arizona,
develops, makes and markets field programmable 8-bit microcontrollers,
application-specific standard products and related specialty memory products
for high-volume embedded control applications in the consumer, automotive,
office automation, communications and industrial markets.
Motorola Solutions, Inc., headquartered in Chicago, Illinois, designs, makes
and sells, mainly under the "Motorola" brand name, two-way land mobile
communication systems, paging and wireless data systems, personal
communications equipment and systems, semiconductors and electronic equipment
for military and aerospace use.
Page 4
NetApp, Inc., headquartered in Sunnyvale, California, designs, makes, markets
and supports high performance network data storage devices which provide fast,
simple, reliable and cost-effective file service for data-intensive network
environments.
NortonLifeLock Inc., headquartered in Tempe, Arizona, develops cyber safety
software for consumer computing. The company's products help consumers protect
their devices, online privacy, identity and home networks.
NXP Semiconductors N.V., headquartered in Eindhoven, the Netherlands, is a
global semiconductor company that designs semiconductors and software for
consumer electronics, mobile communications, in-car entertainment, security
applications and networking.
Oracle Corporation, headquartered in Redwood City, California, is a provider
of software and computer hardware for enterprise information management
systems. The company's products are designed to work in a cloud computing
environment or in the data center, and their application software and hardware
systems are scalable to the customer's requirements.
QUALCOMM Incorporated, headquartered in San Diego, California, designs,
develops, makes, sells, licenses and operates advanced communications systems
and products based on proprietary digital wireless technology. The company's
products include "CDMA" integrated circuits, wireless phones, infrastructure
products, transportation management information systems and ground stations.
Seagate Technology Holdings Plc, headquartered in Dublin, Ireland, is a
computer hardware company. Together with its subsidiaries, the company
provides data storage technology and solutions that are used in enterprise
servers and storage systems and edge compute and non-compute applications in
Singapore, the United States and the Netherlands.
Skyworks Solutions, Inc., headquartered in Irvine, California, is a
semiconductor manufacturer. The company is focused on radio frequency and
complete semiconductor system solutions for mobile communications applications.
Taiwan Semiconductor Manufacturing Company Ltd. (ADR), headquartered in
Hsinchu, Taiwan, manufactures integrated circuits based on its proprietary
designs. The company offers a comprehensive set of integrated circuit
fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-
volatile memory and BiCMOS chips.
Telefonaktiebolaget LM Ericsson (ADR), headquartered in Stockholm, Sweden,
develops, produces and markets telecommunications equipment and services to
mobile and fixed networks worldwide. The company also provides products and
services for radio access solutions, business support systems, television and
media management services, and modems for handset and tablet manufacturers.
Texas Instruments Incorporated, headquartered in Dallas, Texas, provides
semiconductor products and designs and supplies digital signal processing and
analog technologies. The company has worldwide manufacturing and sales
operations.
We have obtained the foregoing company descriptions from third-party sources
we deem reliable.
Page 5
Undertaking
Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section.
CONTENTS OF REGISTRATION STATEMENT
| A. | Bonding Arrangements of Depositor: |
First Trust Portfolios L.P. is covered by a Brokers' Fidelity Bond, in the total amount of $2,000,000, the insurer being National Union Fire Insurance Company of Pittsburgh.
| 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
The Registrant, FT 9620, hereby identifies The First Trust Special Situations Trust, Series 4; The First Trust Special Situations Trust, Series 18; The First Trust Special Situations Trust, Series 69; The First Trust Special Situations Trust, Series 108; The First Trust Special Situations Trust, Series 119; The First Trust Special Situations Trust, Series 190; FT 286; The First Trust Combined Series 272; FT 412; FT 438; FT 556; FT 754; FT 1102; FT 1179; FT 2935; FT 3320; FT 3367; FT 3370; FT 3397; FT 3398; FT 3400; FT 3451; FT 3480; FT 3529; FT 3530; FT 3568; FT 3569; FT 3570; FT 3572; FT 3615; FT 3647; FT 3650; FT 3689; FT 3690; FT 3729; FT 3780; FT 3940; FT 4020; FT 4037; FT 4143; FT 4260; FT 4746; FT 4789; FT 5039; FT 5415; FT 7033; FT 7256; FT 7935; FT 8495; FT 8669; FT 8713; FT 8740; FT 8746; FT 8758; FT 8817; FT 8955; FT 8956; FT 8965; FT 8976; FT 8978; FT 8993; FT 8994; FT 8997; FT 9039; FT 9040; FT 9042; FT 9058; FT 9068; FT 9203; FT 9204; FT 9303; FT 9305; FT 9326; FT 9327; FT 9372; FT 9401; FT 9402; FT 9403; FT 9474; FT 9513 and FT 9630 for purposes of the representations required by Rule 487 and represents the following:
(1) that the portfolio securities deposited in the series with respect to which this Registration Statement is being filed do not differ materially in type or quality from those deposited in such previous series;
(2) that, except to the extent necessary to identify the specific portfolio securities deposited in, and to provide essential financial information for, the series with respect to the securities of which this Registration Statement is being filed, this Registration Statement does not contain disclosures that differ in any material respect from those contained in the registration statements for such previous series as to which the effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant, FT 9620, has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wheaton and State of Illinois on September 22, 2021.
FT 9620
| By: | First Trust Portfolios L.P. Depositor |
| By: | /s/ Elizabeth H. Bull Senior Vice President |
S-2
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following person in the capacity and on the date indicated:
| Name | Title* | Date |
| James A. Bowen | Director of The Charger Corporation, the General Partner of First Trust Portfolios L.P., and Chief Executive Officer of First Trust Portfolios L.P. | ) ) ) )By: /s/ Elizabeth H. Bull ) Attorney-in-Fact** ) September 22, 2021 |
| James M. Dykas | Chief Financial Officer of 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 9301 (File No. 333-253820) 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 is contained in its opinion filed as Exhibit 3.1 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its name in the Prospectus included in the Registration Statement is filed as Exhibit 4.1 to the Registration Statement.
Consent of Independent Registered Public Accounting Firm
The consent of Deloitte & Touche LLP to the use of its name in the Prospectus included in the Registration Statement is filed as Exhibit 4.2 to the Registration Statement.
S-4
EXHIBIT INDEX
| 1.1 | Standard Terms and Conditions of Trust for FT 4484 and certain subsequent Series, effective November 6, 2013 among First Trust Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee, First Trust Advisors L.P., as Evaluator, First Trust Advisors L.P., as 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 | Trust Agreement for FT 9620, effective September 22, 2021 among First Trust Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee, First Trust Advisors L.P., as Evaluator, and First Trust Advisors L.P., as Portfolio Supervisor. |
| 1.2 | 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 | 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 | 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 | 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). |
| 2.2 | Code of Ethics (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-224320] filed on behalf of FT 7359). |
S-5
| 3.1 | Opinion of counsel as to legality of securities being registered. |
| 4.1 | Consent of First Trust Advisors L.P. |
| 4.2 | Consent of Independent Registered Public Accounting Firm. |
| 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. 333-253820] filed on behalf of FT 9301). |
S-6
MEMORANDUM
FT 9620
File No. 333-258614
The Prospectus and the Indenture filed with Amendment No. 1 of the Registration Statement on Form S-6 have been revised to reflect information regarding the execution of the Indenture and the deposit of Securities on September 22, 2021 and to set forth certain statistical data based thereon. In addition, there are a number of other changes described below.
THE PROSPECTUS
| Cover Page | The date of the Trust has been added. |
| Page 3 | The following information for the Trust appears: |
| The Aggregate Value of Securities initially deposited has been added. | |
| The initial number of Units of the Trust | |
| Sales charge | |
| The Public Offering Price per Unit as of the business day before the Initial Date of Deposit | |
| The Mandatory Termination Date has been added. | |
| Page 5 | The Report of Independent Registered Public Accounting Firm has been completed. |
| Page 6 | The Statement of Net Assets has been completed. |
| Pages 7-9 | The Schedule of Investments has been completed. |
| Back Cover | The date of the Prospectus has been included. |
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect the execution thereof.
/s/ CHAPMAN AND CUTLER LLP
September 22, 2021
FT 9620
TRUST AGREEMENT
Dated: September 22, 2021
The Trust Agreement 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, sets forth certain provisions in full and incorporates other provisions by reference to the document entitled "Standard Terms and Conditions of Trust for FT 4484 and certain subsequent Series, Effective: November 6, 2013" as amended by Amendment dated September 5, 2017 (herein called the "Standard Terms and Conditions of Trust"), and such provisions as are incorporated by reference constitute a single instrument. All references herein to Articles and Sections are to Articles and Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein contained, the Depositor, the Trustee, the Evaluator, the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof, all the provisions contained in the Standard Terms and Conditions of Trust are herein incorporated by reference in their entirety and shall be deemed to be a part of this instrument as fully and to the same extent as though said provisions had been set forth in full in this instrument. Facsimile or electronic signatures (including signatures in Portable Document Format (PDF)) to this Trust Agreement shall be acceptable and binding, and this Trust Agreement may be delivered by facsimile or other electronic means (including by electronic mail or a designated document storage website) confirmed by electronic mail.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
TECHNOLOGY DIVIDEND BUY-WRITE PORTFOLIO, SERIES 5
The following special terms and conditions are hereby agreed to:
A. The Securities initially deposited in the Trust pursuant to Section 2.01 of the Standard Terms and Conditions of Trust are set forth in Schedule A hereto.
B. The aggregate number of Units delivered by the Trustee on the Initial Date of Deposit in exchange for the Securities pursuant to Section 2.03 of the Standard Terms and Conditions of Trust and the initial fractional undivided interest in and ownership of the Trust represented by each Unit thereof are set forth in the Prospectus in the section "Summary of Essential Information."
Documentation confirming the ownership of this number of Units for the Trust is being delivered by the Trustee to the Depositor pursuant to Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Record Date shall be as set forth in the Prospectus under "Summary of Essential Information." The Trustee shall pay the amounts specified in Part I of Section 3.05 of the Standard Terms and Conditions of Trust which have accrued as of the last Business Day of each calendar month on or shortly after such Business Day, provided, however, that fees and expenses accrued during the initial offering period, as determined in Section 4.01 of the Indenture (such fees to be computed on the largest number of Units outstanding during the period for which paid) shall be paid as provided in the following sentence. Fees payable pursuant to Section 4.03 shall be paid on, or shortly after, the last Business Day of each calendar month, and fees paid to the Trustee shall be paid on or shortly after the calendar month in which the initial offering period ends, together with any accrual of fees and expenses during such calendar month after the initial offering period ends. Fees accrued during such month after the end of the initial offering period shall be computed on the number of Units outstanding at the opening of business on the Business Day immediately following the date on which the initial offering period ends.
D. The Distribution Date shall be the 25th day of the month in which the related Record Date occurs. Supplementing and superseding Subsection 3.05(II)(c) of the Standard Terms and Conditions of Trust, if on the 10th day of a month the Capital Account contains proceeds from any matured Securities, the Trustee shall on the 25th day of such month distribute to each Unit holder of record at the close of business on such 10th day of a month an amount per Unit equal to such Unit holder’s pro rata share of the balance of the Capital Account (except for monies on deposit therein required to purchase Contract Obligations) computed as of the close of business on the 10th day of such month after deduction of any amounts provided in Subsection 3.05(I) of the Standard Terms and Conditions of Trust.
E. The Mandatory Termination Date for the Trust shall be as set forth in the Prospectus under "Summary of Essential Information."
F. First Trust Advisors L.P.'s compensation as referred to in Section 4.03 of the Standard Terms and Conditions of Trust and shall be an annual fee in the amount of $.0080 per Unit.
G. The Trustee's compensation rate pursuant to Section 6.04 of the Standard Terms and Conditions of Trust shall be an annual fee in the amount of $.0096 per Unit. However, in no event shall the Trustee receive compensation in any one year from any Trust of less than $2,000.
H. The Initial Date of Deposit for the Trust is September 22, 2021.
I. There is no minimum amount of Securities to be sold by the Trustee pursuant to Section 5.02 of the Indenture for the redemption of Units.
J. No Unit holder will be eligible for an in-kind distribution of Securities pursuant to Section 5.02.
K. No Unit holder will be eligible for an in-kind distribution of Securities pursuant to Section 8.02.
PART III
A. The second paragraph of Section 3.02 of the Standard Terms and Conditions of Trust shall be amended to read as follows:
"With respect to any Trust which is a widely held fixed investment trust as defined in Treas. Reg. Section 1.671-5(b)(22), any non-cash distributions received by a Trust shall be sold to the extent they would be treated as dividend or interest income under the Internal Revenue Code and the proceeds shall be credited to the Income Account. Except as provided in the preceding sentence, non-cash distributions received by a Trust (other than a non-taxable distribution of the shares of the distributing corporation which shall be retained by a Trust) shall be dealt with in the manner described in Section 3.11 hereof, and shall be retained or disposed of by such Trust according to those provisions and the proceeds thereof shall be credited to the Capital Account. Neither the Trustee nor the Depositor shall be liable or responsible in any way for depreciation or loss incurred by reason of any such sale."
B. Paragraph (c) of Section 3.05 of the Standard Terms and Conditions of Trust shall be amended to read in its entirety as follows:
"(c) Subject to the provisions of the following sentence, on each Distribution Date, for purposes of Section 3.05(II)(a), the pro-rata share of the Capital Account of each Unit holder of record at the close of business on the Record Date immediately preceding such Distribution Date shall be an amount per Unit equal to such Unit holder's pro rata share of the balance of the Capital Account after deduction of any amounts provided in Subsection 3.05 (I) (except for monies on deposit therein required to purchase Contract Obligations and, with respect to any Trust which is a widely held fixed investment trust as defined in Treas. Reg. Section 1.671-5(b)(22), monies constituting proceeds of pro-rata sales of Trust assets to effect redemptions, which proceeds shall be retained for payment of redemptions) computed as of the close of business on such Record Date. If a Trust contains Securities that are subject to written call options, on each Record Date, the Depositor shall direct the Trustee as to the amount, if any, to be distributed to Unit holders from the Capital Account on the following Distribution Date and the Trustee shall not, in the absence of such direction, make a distribution from the Capital Account. The Depositor’s determination as to the amount to be distributed shall be conclusive on all person interested in the Trust."
C. The final two paragraphs of Section 3.07 of the Standard Terms and Conditions of Trust are restated as follows:
"If a Trust contains Securities that are subject to written call options, to the extent that, prior to the expiration of such call options, such Securities (a) are sold for the purpose of funding the Capital Account for redemption of Units tendered for redemption or (b) are otherwise sold pursuant to the Indenture or are disposed of pursuant to a corporate action, the Trustee shall, as directed by the Depositor, (i) purchase call options of the same type, thereby offsetting the obligation under the written call option or (ii) take such other action, including, without limitation, the reserving or pledging cash or other assets of the Trust to be applied to the settlement of the written call obligation.
The Trustee shall not be liable or responsible in any way for depreciation or loss incurred by reason of any sale, purchase of a call option or other action made or taken, pursuant to any such direction of the Depositor or by reason of the failure of the Depositor to give any such direction, and in the absence of such direction the Trustee shall have no duty to sell or liquidate any Securities, purchase any call option, reserve or pledge cash or take any other action under this Section 3.07 except to the extent otherwise required by Section 3.09 of the Indenture."
D. Paragraph (a) of Section 3.15 is amended to read in its entirety as follows:
"(a) In acquiring or disposing of Securities, including without limitation Additional Securities and New Securities, the Portfolio Supervisor (or the Depositor or Trustee, if, as provided in Section 3.18, the Depositor or Trustee is acquiring or disposing of Securities for the account of the Trust) shall direct transactions to such brokers or dealers as the Portfolio Supervisor selects or, if the Portfolio Supervisor fails so to direct, to such brokers or dealers as the Depositor selects or, if neither the Portfolio Supervisor nor the Depositor is directing the transaction for the Trust, to such brokers or dealers from whom the Trustee expects to obtain the most favorable execution of orders. The Depositor or an affiliate of the Depositor or of the Trustee may act as broker. If the Depositor acts as broker, it shall be entitled to compensation in accordance with applicable law and regulations. Any affiliate of the Trustee acting as broker shall receive such compensation as may be agreed upon with the Depositor (or, if selected by the Trustee, at market commission rates, concessions or markups), without reduction of the compensation payable to the Trustee for its services as such. With the prior consent of the Trustee, such of the Portfolio Supervisor or Depositor which is directing the transaction, is authorized to engage a broker qualified to act as a custodian for the Trust assets pursuant to Rule 17f-4 under the 1940 Act, as amended, to maintain custody of, and otherwise to act as clearing broker with respect to transactions involving, options and other instruments cleared through the Options Clearing Corporation. The Portfolio Supervisor or Depositor, as applicable, is authorized to enter into account agreements on behalf of the Trust with such broker, which agreements may expressly provide that liability thereunder is limited to the assets of the Trust. The Depositor shall take such action, or shall instruct the Portfolio Supervisor to take such action, as the Depositor deems appropriate in the event the Depositor and the Trustee determine that that custody of Trust Securities shall no longer be maintained by a clearing broker, or if the Depositor otherwise determines to engage an alternative clearing broker."
E. Notwithstanding anything to the contrary in the Standard Terms and Conditions of Trust, Section 3.18 shall be replaced with the following:
"Section 3.18. Authority of Portfolio Supervisor to Cause the Purchase or Sale or Depositor to Purchase or Sell Securities for the Account of the Trust. Whenever in the Indenture it is provided that the Trustee or the Depositor shall purchase or sell Securities, the Portfolio Supervisor is authorized to, and shall, cause the Securities to be purchased or sold, for the account of the Trust. Should the Portfolio Supervisor fail to cause such purchase or sale, the Depositor shall effect the purchase or sale, and the Trustee shall purchase or sell Securities only in the event that the Trustee would otherwise be directed to make the purchase or sale pursuant to the provisions of the Indenture and both the Portfolio Supervisor and the Depositor have failed to make or cause such purchase or sale. Neither the Trustee nor the Depositor shall have any responsibility or liability for any purchase or sale of Securities caused by the Portfolio Supervisor and the Trustee shall have no responsibility or liability for any purchase or sale of Securities made by the Depositor or for any failure of the Portfolio Supervisor or Depositor to make, or cause, any purchase or sale required by this Section or otherwise by the Indenture."
F. The following two paragraphs shall be added at the end of Section 8.02 of the Standard Terms and Conditions of Trust:
"If a Trust contains Securities that are subject to written call options, the Depositor shall direct the Trustee as to what amount, if any, shall be added to the Reserve Account to be applied to the settlement of, or any other liability arising from, the written call options.
None of the Trustee, the Depositor or the Portfolio Supervisor shall have any liability to any Unit holder or any other person for the failure to reserve funds for claims which were not reasonably foreseeable based on the facts known to them at the time a Trust terminates. None of the Trustee, the Depositor or the Portfolio Supervisor, or their respective officers, directors, trustees, shareholders, agents, partners or employees, shall be personally liable to any person for liabilities arising from the administration of a Trust or from its assets; for all such liabilities, persons transacting with the Trustee, the Depositor or the Portfolio Supervisor, acting in their fiduciary or other representative capacity for the account of the Trust, shall have recourse solely to the assets of the Trust then in the custody of the Trustee or other custodian of Trust assets."
G. Notwithstanding anything to the contrary in the Standard Terms and Conditions of Trust, Section 3.07(k) shall be replaced with the following:
"(k) that such sale is necessary for the Trust to comply with such federal and/or state laws, regulations and/or regulatory actions and interpretations which may be in effect from time to time."
H. The second sentence of Section 3.06 of the Standard Terms and Conditions of Trust is deleted and replaced by the following:
"Within a reasonable period of time after the last Business Day of each calendar year, the Trustee shall prepare a statement setting forth, with respect to such calendar year and with respect to each Trust in existence during any part of such calendar year, the information specified below. The Depositor will make the statement available at the Depositor’s website (www.ftportfolios.com) in the UIT Tax Center, where it will be retrievable by CUSIP; in addition,the Depositor will mail a copy of the statement to any Unit holder requesting the same in the manner specified in the Trust Prospectus."
IN WITNESS WHEREOF, First Trust Portfolios L.P., The Bank of New York Mellon and First Trust Advisors L.P. have each caused this Trust Agreement to be executed and the respective corporate seal to be hereto affixed and attested (if applicable) by authorized officers; all as of the day, month and year first above written.
FIRST TRUST PORTFOLIOS L.P.,
Depositor
First Trust Advisors L.P.,
Evaluator and Portfolio Supervisor
By /s/ Elizabeth H. Bull
Senior Vice President of:
First Trust Portfolios L.P. and
First Trust Advisors L.P.
THE BANK OF NEW YORK MELLON, Trustee
By /s/ Ann S. Hom
Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 9620
(Note: Incorporated herein and made a part hereof for the Trust is the "Schedule of Investments" for the Trust as set forth in the Prospectus.)
| Chapman and Cutler LLP | 111 West Monroe Street |
| Chicago, Illinois 60603 |
September 22, 2021
First Trust Portfolios L.P.
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
Re: FT 9620
Gentlemen:
We have served as counsel for First Trust Portfolios L.P., as Sponsor and Depositor of FT 9620 in connection with the preparation, execution and delivery of a Trust Agreement dated September 22, 2021 among First Trust Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee, and First Trust Advisors L.P., as Evaluator and Portfolio Supervisor, pursuant to which the Depositor has delivered to and deposited the Securities listed in Schedule A to the Trust Agreement with the Trustee and pursuant to which the Trustee has issued to or on the order of the Depositor units of fractional undivided interest in and ownership of the Fund created under said Trust Agreement.
In connection therewith, we have examined such pertinent records and documents and matters of law as we have deemed necessary in order to enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and the issuance of Units in the Fund have been duly authorized; and
2. the Units in the Fund when duly issued and delivered by the Trustee in accordance with the aforementioned Trust Agreement, will constitute valid and binding obligations of the Fund and the Depositor and such Units, when issued and delivered in accordance with the Trust Agreement against payment of the consideration set forth in the Trust prospectus, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement (File No. 333-258614) relating to the Units referred to above, to the use of our name and to the reference to our firm in said Registration Statement and in the related Prospectus.
Respectfully submitted,
/s/ CHAPMAN AND CUTLER LLP
EFF/mjd
First Trust Advisors L.P.
120 East Liberty Drive
Wheaton, Illinois 60187
September 22, 2021
First Trust Portfolios L.P.
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
Re: FT 9620
Gentlemen:
We have examined the Registration Statement File No. 333-258614 for the above captioned fund. We hereby consent to the use in the Registration Statement of the references to First Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with the Securities and Exchange Commission.
Sincerely,
FIRST TRUST ADVISORS L.P.
/s/ Elizabeth H. Bull
Senior Vice President
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement No. 333-258614 on Form S-6 of our report dated September 22, 2021, relating to the financial statement of FT 9620, comprising Technology Dividend Buy-Write Portfolio, Series 5, appearing in the Prospectus, which is a part of such Registration Statement, and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
September 22, 2021
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