Registration No. 333-08595
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:
The First Trust Special Situations Trust, Series 155
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on September 4, 1996 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 155
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's securities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
periodic payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors
Statement of Net
Assets
* Inapplicable, answer negative or not required.
First Trust (registered trademark)
INTERNATIONAL TARGET 5 TRUSTS
United Kingdom Trust, September 1996 Series
Hong Kong Trust, September 1996 Series
(The First Trust (registered trademark) Special Situations Trust, Series 155)
THIS PART I OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED
BY THE PART II OF THE PROSPECTUS DATED SEPTEMBER 4, 1996. BOTH PARTS I
AND II OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
The Trusts. The First Trust Special Situations Trust, Series 155
consists of the underlying separate unit investment trusts set forth
above. The various trusts are sometimes collectively referred to herein
as the "Trusts" and each as a "Trust." Each Trust consists of a
portfolio containing common stocks issued by companies which provide
income and are considered to have potential for capital appreciation
(the "Equity Securities").
The United Kingdom Trust, September 1996 Series (the "United Kingdom
Trust") consists of common stock of the five companies with the lowest
per share stock price of the ten companies in the Financial Times
Industrial Ordinary Share Index (the "FT Index") that have the highest
dividend yield as of the close of business three business days prior to
the date of this Prospectus. The Hong Kong Trust, September 1996 Series
(the "Hong Kong Trust") consists of common stock of the five companies
with the lowest per share stock price of the ten companies in the Hang
Seng Index that have the highest dividend yield as of the close of
business three business days prior to the date of this Prospectus. See
"Schedule of Investments" for each Trust. The objective of each Trust is
to provide an above-average total return through a combination of
dividend income and capital appreciation. Units of the United Kingdom
Trust and the Hong Kong Trust are not designed for their prices to
parallel or correlate with movements in the FT Index or Hang Seng Index,
respectively, and it is expected that their prices will not do so.
Investors should note that an investment in a portfolio which contains
foreign equity securities, such as a Trust, involves risks in addition
to those normally associated with an investment in a portfolio of
domestic equity securities. Also, the reversion of Hong Kong to Chinese
control on July 1, 1997 may adversely affect the Hong Kong Trust. See
"Risk Factors." Each Trust has a mandatory termination date (the "Manda-
tory Termination Date") of approximately one year from the date of this
Prospectus as set forth under "Summary of Essential Information." There
is, of course, no guarantee that the objective of either Trust will be
achieved.
The publishers of the FT Index and the Hang Seng Index are not
affiliated with the Sponsor, and these publishers have not granted the
Trusts or the Sponsor a license to use these indexes, have not
participated in the creation of the Trusts or in the selection of stocks
therein, and have not approved any information herein related thereto.
Each Unit of a Trust represents an undivided interest in all Equity
Securities deposited therein. The Sponsor may deposit additional Equity
Securities or cash in a Trust to create new Units after the Initial Date
of Deposit in the manner described in "What is the First Trust Special
Situations Trust?" in Part II of this Prospectus.
Unless otherwise indicated, all amounts herein are stated in U.S.
dollars. In the case of the United Kingdom Trust and the Hong Kong
Trust, these amounts are computed on the basis of the exchange rate for
British pounds sterling or Hong Kong dollars, as applicable, on the
business day prior to the Initial Date of Deposit.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is September 4, 1996
Page 1
Public Offering Price. The Public Offering Price per Unit of each Trust
is equal to the aggregate underlying value of the Equity Securities in
such Trust (generally determined by their closing sale prices) plus or
minus a pro rata share of cash, if any, in the Capital and Income
Accounts of such Trust, plus an initial sales charge for each Trust
equal to the difference between the maximum sales charge for each Trust
(2.70% of the Public Offering Price) and the maximum remaining deferred
sales charge (initially $.1900 per Unit for each Trust). Subsequent to
the Initial Date of Deposit, the amount of the initial sales charge will
vary with changes in the aggregate value of the Equity Securities.
Commencing November 29, 1996, and on the last business day of each month
thereafter, through August 29, 1997, a deferred sales charge of $.019
also will be assessed per Unit. Units purchased subsequent to the
initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments. The
deferred sales charge will be paid from funds in the Capital Account, if
sufficient, or from the periodic sale of Equity Securities. The total
maximum sales charge assessed to Unit holders on a per Unit basis will
be 2.70% of the Public Offering Price (equivalent to 2.721% of the net
amount invested, exclusive of the deferred sales charge). A pro rata
share of accumulated dividends, if any, in the Income Account is
included in the Public Offering Price. For each Trust, the Public
Offering Price per Unit is based on the aggregate value of the Equity
Securities computed on the basis of the offering side value of the
relevant currency exchange rate expressed in U.S. dollars during the
initial offering period and on the bid side value for the secondary
market transactions and includes the liquidation costs associated with
selling the Equity Securities of the Trusts to meet redemptions or upon
a Trust's termination. The minimum purchase for each Trust is $1,000 ($250
for an Individual Retirement Account or other retirement plans). The
sales charge for each Trust is reduced on a graduated scale for sales
involving at least $50,000. See "How is the Public Offering Price
Determined?" in Part II of this Prospectus.
Estimated Net Annual Distributions. The estimated net annual dividend
distributions to Unit holders (based on the most recent interim and final
ordinary dividend declared with respect to the Equity Securities in each
Trust and converted into U.S. dollars at the offer side of the exchange
rate at the Evaluation Time) on the business day prior to the Initial
Date of Deposit for the United Kingdom Trust was $.6910 per Unit, and
for the Hong Kong Trust was $.5133 per Unit. These estimates will vary
with changes in a Trust's fees and expenses, in dividends received, in
currency exchange rates, and with the sale of Equity Securities. There
is no assurance that the estimated net annual dividend distributions
will be realized in the future.
Dividend and Capital Distributions. Cash dividends received by a Trust
will be paid on December 31, 1996 and June 30, 1997 to Unit holders of
record on December 15, 1996 and June 15, 1997, respectively, and again
as part of the final liquidation distribution. Distributions of funds in
the Capital Account, if any, will be made as part of the final
liquidation distribution, and in certain circumstances, earlier. Any
distribution of income and/or capital will be net of expenses of a
Trust. See "What is the Federal Tax Status of Unit Holders?" in Part II
of this Prospectus. Additionally, upon termination of a Trust, the
Trustee will distribute, upon surrender of Units, to each remaining Unit
holder (other than a Rollover Unit holder as defined below) his pro rata
share of such Trust's assets, less expenses, in the manner set forth
under "Rights of Unit Holders-How are Income and Capital Distributed?"
in Part II of this Prospectus. For distributions to Rollover Unit
holders, see "Special Redemption, Liquidation and Investment in New
Trusts." Any Unit holder may elect to have each distribution of income
or capital on his Units, other than the final liquidating distribution,
automatically reinvested in additional Units of such Trust subject only
to remaining deferred sales charge payments. See "Rights of Unit Holders-
How are Income and Capital Distributed?" in Part II of this Prospectus.
Foreign Investors. If you are not a United States citizen or resident,
distributions from the Trusts will generally not be subject to U.S.
federal withholding tax. See "What is the Federal Tax Status of Unit
Holders?" in Part II of this Prospectus. Such investors should consult
their tax adviser regarding the imposition of U.S. withholding on
distributions.
Secondary Market for Units. Although not obligated to do so, the Sponsor
may maintain a market for Units and offer to repurchase the Units at
prices based on the aggregate value of the Equity Securities, plus or
minus cash, if any, in the Capital and Income Accounts of such Trust. If
a secondary market is not maintained, a Unit holder may still redeem his
Units through the Trustee. See "Will There be a Secondary Market?" and
"How May Units be Redeemed?" in Part II of this Prospectus. Any deferred
sales charge remaining on Units at the time of their sale or redemption
will be collected at that time.
Page 2
Special Redemption, Liquidation and Investment in New Trusts. The
Sponsor intends to create a separate 1997 trust (the "New Trust") in
conjunction with the termination of each Trust. The portfolio of the New
Trust for the United Kingdom Trust will contain the common stock of the
five companies with the lowest per share stock price of the ten
companies in the FT Index that have the highest dividend yield as of
three business days prior to the Initial Date of Deposit of such New
Trust. The portfolio of the New Trust for the Hong Kong Trust will
contain the common stock of the five companies with the lowest per share
stock price of the ten companies in the Hang Seng Index that have the
highest dividend yield as of three business days prior to the Initial
Date of Deposit of such New Trust. Unit holders who hold their Units in
book entry form may specify by September 1, 1997 to have their Units
redeemed in-kind, the distributed securities sold, and the proceeds
invested in a New Trust or a trust with a similar investment strategy at
a reduced sales charge, provided such New Trusts or other similar trusts
are offered and Units are available. Cash not invested in a New Trust or
such other trusts will be distributed. (Such Unit holders are "Rollover
Unit holders"). Rollover Unit holders therefore will not receive a final
liquidation distribution, but will receive Units in a New Trust or other
eligible trust. This exchange option may be modified, terminated or
suspended. See "Special Redemption, Liquidation and Investment in a New
Trust" in Part II of this Prospectus.
Termination. Commencing on the Mandatory Termination Date, the Equity
Securities will begin to be sold as prescribed by the Sponsor. The
Trustee will provide written notice of the termination to Unit holders
which will specify when certificates may be surrendered. Unit holders
not electing the "Rollover Option" will receive a cash distribution
within a reasonable time after such Trust's termination. See "How are
Income and Capital Distributed?" and "Other Information" in Part II of
this Prospectus.
Risk Factors. An investment in a Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers or the general condition of the applicable stock market,
governmental, political, economic and fiscal policies of the represent-
ative countries (especially Hong Kong following the July 1, 1997 rever-
sion to Chinese control), volatile interest rates, economic recession, the
lack of adequate financial information concerning an issuer and exchange
control restrictions impacting foreign issuers. An investment in a Trust
will also be subject to the risks of currency fluctuations associated with
investments in international equities trading in non-U.S. currencies. In
addition, an investment in a Trust may subject a Unit holder to
additional risk due to the relative lack of diversity in its respective
portfolio since each portfolio contains only five stocks; accordingly,
an investment in a Trust should not constitute a complete investment
program. Therefore, Units of a Trust may be subject to greater market
risks than other trusts which contain a more diversified portfolio of
securities. Each Trust is not actively managed and Equity Securities
will not be sold to take advantage of market fluctuations or changes in
anticipated rates of appreciation. See "What are Some Additional
Considerations for Investors?-Risk Factors" in Part II of this Prospectus.
Page 3
Summary of Essential Information
At the Close of Business on September 3, 1996,
the Business Day Prior to the
Initial Date of Deposit of the Equity Securities
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
United Kingdom Trust
September 1996 Series
_____________________
<S> <C>
General Information
Initial Number of Units (1) 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 148,635
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.9090
Maximum Sales Charge 2.70% of the Public Offering Price per Unit
(2.721% of the net amount invested, exclusive of the deferred sales charge) (3) $ .2697
Less Deferred Sales Charge per Unit $ (.1900)
Public Offering Price per Unit (3) $ 9.9887
Sponsor's Initial Repurchase Price per Unit $ 9.7190
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.6904
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Cash CUSIP Number 33718R 583
Reinvestment CUSIP Number 33718R 633
Initial Date of Deposit September 4, 1996
First Settlement Date September 9, 1996
Rollover Notification Date September 1, 1997
Special Redemption and Liquidation
Period September 15, 1997 to October 3, 1997
Mandatory Termination Date October 3, 1997
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is less than
the lower of $2,000,000 or 20% of the total value of Equity Securities
deposited in a Trust during the primary offering period.
Trustee's Annual Fee $.0090 per Unit outstanding.
Evaluator's Annual Fee $.0025 per Unit outstanding.
Supervisory Fee (5) Maximum of $.0025 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Income Distribution Record Date Fifteenth day of each June and December commencing December 15, 1996.
Income Distribution Date (6) Last day of each June and December commencing December 31, 1996.
Evaluation Time Evaluations for purposes of sale, purchase or redemption of Units are made as
of the close of trading (generally 11:30 a.m. Eastern time) on the London
Stock Exchange on each day on which it is open.
</TABLE>
[FN]
______________
(1) As of the close of business on the business day prior to the Initial
Date of Deposit, the number of Units of the Trust may be adjusted so
that the Public Offering Price per Unit will equal approximately $10.00.
Therefore, to the extent of any such adjustment, the fractional
undivided interest per Unit will increase or decrease accordingly, from
the amounts indicated above.
(2) Each Equity Security listed on a securities exchange is valued at the
last closing sale price on the relevant stock exchange, or if no such
price exists at the closing ask price thereof. The aggregate value of
the Equity Securities in the United Kingdom Trust represents the U.S.
dollar value based on the offering side value of the currency exchange
rate for the British pound sterling at the relevant Evaluation Time on
the business day prior to the Initial Date of Deposit.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" contained herein and "Public
Offering" in Part II of this Prospectus for additional information
regarding these charges. On the business day prior to the Initial Date
of Deposit there will be no accumulated dividends in the Income Account.
Anyone ordering Units after such date will pay a pro rata share of any
accumulated dividends in such Income Account. The Public Offering Price
per Unit is based on the aggregate value of the Equity Securities
computed on the basis of the offering side value of the relevant
currency exchange rate expressed in U.S. dollars. The Public Offering
Price as shown reflects the value of the Equity Securities at the
Evaluation Time on the business day prior to the Initial Date of Deposit
and establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued generally as of 11:30
a.m. Eastern time the following day and sold to investors at a Public
Offering Price per Unit based on this valuation.
(4) The Redemption Price per Unit is based on the aggregate value of the
Equity Securities computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars and includes
the United Kingdom Trust's estimated costs of liquidating Equity
Securities to meet redemptions (approximately $.0248 per Unit). See "How
May Units be Redeemed?" in Part II of this Prospectus.
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per
Unit.
(6) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
Distributions from the Capital Account will be made monthly payable on
the last day of the month to Unit holders of record on the fifteenth day
of such month if the amount available for distribution equals at least
$1.00 per 100 Units. Notwithstanding, distributions of funds in the
Capital Account, if any, will be made as part of the final liquidation
distribution.
Page 4
Summary of Essential Information
At the Close of Business on September 3, 1996,
the Business Day Prior to the
Initial Date of Deposit of the Equity Securities
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Hong Kong Trust
September 1996 Series
_____________________
General Information
<S> <C>
Initial Number of Units (1) 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 146,012
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.7341
Maximum Sales Charge 2.70% of the Public Offering Price per Unit
(2.721% of the net amount invested, exclusive of the deferred sales charge) (3) $ .2649
Less Deferred Sales Charge per Unit $ (.1900)
Public Offering Price per Unit (3) $ 9.8090
Sponsor's Initial Repurchase Price per Unit $ 9.5441
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.4796
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Cash CUSIP Number 33718R 591
Reinvestment CUSIP Number 33718R 641
Initial Date of Deposit September 4, 1996
First Settlement Date September 9, 1996
Rollover Notification Date September 1, 1997
Special Redemption and Liquidation
Period September 15, 1997 to October 3, 1997
Mandatory Termination Date October 3, 1997
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is less than
the lower of $2,000,000 or 20% of the total value of Equity Securities
deposited in a Trust during the primary offering period.
Trustee's Annual Fee $.0090 per Unit outstanding.
Evaluator's Annual Fee $.0025 per Unit outstanding.
Supervisory Fee (5) Maximum of $.0025 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Income Distribution Record Date Fifteenth day of each June and December commencing December 15, 1996.
Income Distribution Date (6) Last day of each June and December commencing December 31, 1996.
Evaluation Time Evaluations for purposes of sale, purchase or redemption of Units are made as
of the close of trading (generally 3:30 a.m. Eastern time) on the Hong Kong
Stock Exchange on each day on which it is open.
</TABLE>
[FN]
______________
(1) As of the close of business on the business day prior to the Initial
Date of Deposit, the number of Units of the Trust may be adjusted so
that the Public Offering Price per Unit will equal approximately $10.00.
Therefore, to the extent of any such adjustment, the fractional
undivided interest per Unit will increase or decrease accordingly, from
the amounts indicated above.
(2) Each Equity Security listed on a securities exchange is valued at the
last closing sale price on the relevant stock exchange, or if no such
price exists at the closing ask price thereof. The aggregate value of
the Equity Securities in the Hong Kong Trust represents the U.S. dollar
value based on the offering side value of the currency exchange rate for
the Hong Kong dollar at the relevant Evaluation Time on the business day
prior to the Initial Date of Deposit.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" contained herein and "Public
Offering" in Part II of this Prospectus for additional information
regarding these charges. On the business day prior to the Initial Date
of Deposit there will be no accumulated dividends in the Income Account.
Anyone ordering Units after such date will pay a pro rata share of any
accumulated dividends in such Income Account. The Public Offering Price
per Unit is based on the aggregate value of the Equity Securities
computed on the basis of the offering side value of the relevant
currency exchange rate expressed in U.S. dollars. The Public Offering
Price as shown reflects the value of the Equity Securities at the
Evaluation Time on the business day prior to the Initial Date of Deposit
and establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued generally as of 3:30
a.m. Eastern time the following day and sold to investors at a Public
Offering Price per Unit based on this valuation.
(4) The Redemption Price per Unit is based on the aggregate value of the
Equity Securities computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars and includes
the Hong Kong Trust's estimated costs of liquidating Equity Securities
to meet redemptions (approximately $.0645 per Unit). See "How May Units
be Redeemed?" in Part II of this Prospectus.
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per
Unit.
(6) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
Distributions from the Capital Account will be made monthly payable on
the last day of the month to Unit holders of record on the fifteenth day
of such month if the amount available for distribution equals at least
$1.00 per 100 Units. Notwithstanding, distributions of funds in the
Capital Account, if any, will be made as part of the final liquidation
distribution.
Page 5
EQUITIES SELECTED FOR INTERNATIONAL TARGET 5 TRUSTS
United Kingdom Trust, September 1996 Series
BICC Plc manufactures cables and provides construction and
engineering services. The company's construction and engineering
activities are primarily located in North America and Asia-Pacific while
the cable business is managed through regional operations based in
Europe, North America, Australia and Asia-Pacific. BICC serves the
power, communications, transport and building sectors.
BTR Plc is a holding company with subsidiaries in industrial,
transportation, construction, control systems and electrical and
consumer-related divisions. The company produces and sells building
products, agricultural equipment and aircraft equipment and distributes
electrical, healthcare, environmental control and paper and printing
products.
British Gas Plc buys, transmits and distributes gas. The company
supplies gas and services to customers in Great Britain and markets gas
appliances. British Gas also explores for and produces oil and gas in
the United Kingdom and overseas.
British Telecom Plc provides local and long-distance telephone call
products and services in the United Kingdom, telephone exchange lines to
homes and businesses, international telephone calls to and from the
United Kingdom and telecommunications equipment for customers' premises.
British Telecom has operations throughout the world.
Hanson Plc is an industrial management company with operations in the
United Kingdom, the United States and to a lesser extent in Australia,
South Africa and other regions of the world. The company's business
activities include the manufacture and sale of chemicals, building
materials and consumer and recreational products, the mining of coal,
house building and the sale and distribution of propane.
Hong Kong Trust, September 1996 Series
Amoy Properties Ltd. is a property investment company and a
subsidiary of Hang Lung Development Company Ltd. The company invests in
commercial, office, residential and industrial properties in Hong Kong.
The company is also involved in car park management and property
management.
Henderson Investment Ltd., a partially-owned subsidiary of Henderson
Land Development Co., is a holding company with interests in property
development and investment and utilities. Its property portfolio is
composed of residential, commercial and industrial properties on Hong
Kong Island and in Kowloon and the New Territories.
Hong Kong Telecommunications Ltd. provides telecommunications,
computer, engineering and other services. The company also sells and
rents telecommunications equipment. The principal activities of the
company are conducted in Hong Kong.
Shun Tak Holdings Ltd. is involved in shipping, property,
restaurants, air transportation and hotels in the Asia-Pacific region.
The company operates jet-foil services, develops residential and
commercial properties in Hong Kong, Macau and Australia, has interests
in 3 restaurants and 5 hotels and operates air cargo services to 9
destinations in Europe and Asia.
South China Morning Post (Holdings) Ltd. publishes, prints and
distributes the "South China Morning Post", "South China Sunday Morning
Post" and "Wah Kiu Yat Po". The company also has operations in book
selling, magazine publishing and distribution. All of their activities
are based in Hong Kong, with 90% of the Group's turnover resulting from
publishing and printing of newspaper.
Page 6
FEE TABLE-United Kingdom Trust, September 1996 Series
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" in Part II of this
Prospectus. Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 0.80%(a) $.080
Deferred sales charge
(as a percentage of original purchase price) 1.90%(b) .190
________ ________
2.70% $.270
======== ========
Maximum Sales Charge per year imposed on
Reinvested Dividends 1.90%(c) .190
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .091% $.0090
Portfolio supervision, bookkeeping, administrative and
evaluation fees .060% .0060
Other operating expenses .148% .0147
________ ________
Total .299% $.0297
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
____________________________________
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the United Kingdom Trust, September
1996 Series estimated operating expense ratio of .299% and
a 5% annual return on the investment throughout the periods $31 $75 $123 $256
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
______________
(a) The Initial Sales Charge would exceed 0.80% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $.019 per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period for each one-year
Trust. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.90% for the Trust. If the Unit price is less
than $10.00 per Unit, the deferred sales charge will exceed 1.90% for
the Trust. Units purchased subsequent to the initial deferred sales
charge payment will also be subject to the remaining deferred sales
charge payments.
(c) Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "How are Income and
Capital Distributed" in Part II of this Prospectus.
Page 7
FEE TABLE-Hong Kong Trust, September 1996 Series
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" in Part II of this
Prospectus. Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 0.76%(a) $ .075
Deferred sales charge
(as a percentage of original purchase price) 1.94%(b) .190
________ ________
2.70% $ .265
======== ========
Maximum Sales Charge per year imposed on
Reinvested Dividends 1.90%(c) .190
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .092% $.0090
Portfolio supervision, bookkeeping, administrative and
evaluation fees .062% .0060
Other operating expenses .170% .0165
________ ________
Total .324% $.0315
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
____________________________________
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Hong Kong Trust, September 1996
Series estimated operating expense ratio of .324% and a 5%
annual return on the investment throughout the periods $30 $75 $124 $257
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
______________
(a) The Initial Sales Charge would exceed 0.80% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $.019 per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period for each one-year
Trust. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.90% for the Trust. If the Unit price is less
than $10.00 per Unit, the deferred sales charge will exceed 1.90% for
the Trust. Units purchased subsequent to the initial deferred sales
charge payment will also be subject to the remaining deferred sales
charge payments.
(c) Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "How are Income and
Capital Distributed" in Part II of this Prospectus.
Page 8
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 155
We have audited the accompanying statements of net assets, including the
schedules of investments, of The First Trust Special Situations Trust,
Series 155, comprised of United Kingdom Trust, September 1996 Series and
Hong Kong Trust, September 1996 Series, as of the opening of business on
September 4, 1996. These statements of net assets are the responsibility of
the Trusts' Sponsor. Our responsibility is to express an opinion on these
statements of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letters of credit held by the Trustee and deposited in the Trusts on
September 4, 1996. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well
as evaluating the overall presentation of the statements of net assets.
We believe that our audit of the statements of net assets provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 155, comprised of United Kingdom
Trust, September 1996 Series and Hong Kong Trust, September 1996 Series,
at the opening of business on September 4, 1996 in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
September 4, 1996
Page 9
Statement of Net Assets
UNITED KINGDOM TRUST, SEPTEMBER 1996 SERIES
The First Trust Special Situations Trust, Series 155
At the Opening of Business on
September 4, 1996, the Initial Date of Deposit
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $148,635
Less liability for deferred sales charge (3) (2,850)
________
Net assets $145,785
========
Units outstanding 15,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $149,830
Less sales charge (4) (4,045)
________
Net assets $145,785
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value at the close
of business on September 3, 1996, the business day prior to the
Initial Date of Deposit.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) Represents the amount of mandatory distributions from the Trust
($.190 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on November 29, 1996 and on the last business day
of each month thereafter through August 29, 1997. If Units are redeemed
prior to August 29, 1997, the remaining amount of the deferred sales
charge applicable to such Units will be payable at the time of redemption.
(4) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.70% of the Public Offering Price (equivalent
to 2.721% of the net amount invested, exclusive of the deferred sales
charge), assuming no reduction of sales charge for quantity purchases.
Page 10
Statement of Net Assets
HONG KONG TRUST, SEPTEMBER 1996 SERIES
The First Trust Special Situations Trust, Series 155
At the Opening of Business on
September 4, 1996, the Initial Date of Deposit
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $146,012
Less liability for deferred sales charge (3) (2,850)
________
Net assets $143,162
========
Units outstanding 15,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $147,135
Less sales charge (4) (3,973)
________
Net assets $143,162
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value at the close
of business on September 3, 1996, the business day prior to the
Initial Date of Deposit.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) Represents the amount of mandatory distributions from the Trust
($.190 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on November 29, 1996 and on the last business day
of each month thereafter through August 29, 1997. If Units are redeemed
prior to August 29, 1997, the remaining amount of the deferred sales
charge applicable to such Units will be payable at the time of redemption.
(4) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.70% of the Public Offering Price (equivalent
to 2.721% of the net amount invested, exclusive of the deferred sales
charge), assuming no reduction of sales charge for quantity purchases.
Page 11
Schedule of Investments
UNITED KINGDOM TRUST, SEPTEMBER 1996 SERIES
The First Trust Special Situations Trust, Series 155
At the Opening of Business on
September 4, 1996, the Initial Date of Deposit
<TABLE>
<CAPTION>
Percentage Market Cost of
Number of Aggregate Value Equity Current
of Offering per Securities to Dividend
Shares Name of Issuer of Equity Securities (1) Price Share Trust (2) Yield (3)
_______ _______________________________________ ____________ _____ _____________ _________
<C> <S> <C> <C> <C> <C>
5,625 BICC Plc 20% $5.225 $ 29,392 4.69%
7,350 BTR Plc 20% 4.035 29,654 7.13%
9,300 British Gas Plc 20% 3.220 29,944 8.82%
5,025 British Telecom Plc 20% 5.883 29,564 6.23%
12,075 Hanson Plc 20% 2.491 30,081 9.43%
_____ _________
Total Investments 100% $148,635
===== =========
</TABLE>
[FN]
____________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
purchase contracts for the Equity Securities were entered into by the
Sponsor on September 3, 1996. The Trust has a mandatory termination date
of October 3, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired-generally determined by the closing sale prices of the Equity
Securities on the applicable exchange (converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the
close of business on September 3, 1996, the business day prior to the
Initial Date of Deposit. The valuation of the Equity Securities has been
determined by the Evaluator, an affiliate of the Sponsor. Such aggregate
underlying value of the Equity Securities on the business day prior to
the Initial Date of Deposit was $148,635. Cost and loss to Sponsor
relating to the Equity Securities sold to the Trust were $148,894 and $259,
respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
adding together the most recent interim and final ordinary dividends
declared on that Equity Security in the period and dividing the result
by that Equity Security's closing sale price on the business day prior
to the Initial Date of Deposit. Generally, United Kingdom companies pay
one interim and one final dividend per fiscal year.
Page 12
Schedule of Investments
HONG KONG TRUST, SEPTEMBER 1996 SERIES
The First Trust Special Situations Trust, Series 155
At the Opening of Business on
September 4, 1996, the Initial Date of Deposit
<TABLE>
<CAPTION>
Percentage Market Cost of
of Aggregate Value Equity Current
Number Offering per Securities to Dividend
of Shares Name of Issuer of Equity Securities (1) Price Share Trust (2) Yield (3)
_________ _______________________________________ ____________ _____ _____________ _________
<C> <S> <C> <C> <C> <C>
26,000 Amoy Properties Ltd. 20% $1.112 $ 28,911 5.00%
28,000 Henderson Investment Ltd. 20% 1.060 29,687 4.63%
18,000 Hong Kong Telecommunications Ltd. 20% 1.642 29,558 5.34%
51,000 Shun Tak Holdings Ltd. 20% 0.575 29,345 7.30%
42,000 South China Morning Post (Holdings) Ltd. 20% 0.679 28,511 5.71%
_____ _________
Total Investments 100% $146,012
===== =========
</TABLE>
[FN]
____________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
purchase contracts for the Equity Securities were entered into by the
Sponsor on September 3 and 4, 1996. The Trust has a mandatory
termination date of October 3, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired-generally determined by the closing sale prices of the Equity
Securities on the applicable exchange (converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the close
of business on September 3, 1996, the business day prior to the Initial
Date of Deposit. The valuation of the Equity Securities has been
determined by the Evaluator, an affiliate of the Sponsor. Such aggregate
underlying value of the Equity Securities on the business day prior to
the Initial Date of Deposit was $146,012. Cost and loss to Sponsor
relating to the Equity Securities sold to the Trust were $147,475 and
$1,463, respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
adding together the most recent interim and final ordinary dividends
declared on that Equity Security in the period and dividing the result
by that Equity Security's closing sale price on the business day prior
to the Initial Date of Deposit. Generally, Hong Kong companies pay one
interim and one final dividend per fiscal year.
Page 13
This page is intentionally left blank.
Page 14
This page is intentionally left blank.
Page 15
FIRST TRUST (registered trademark)
INTERNATIONAL TARGET 5 TRUSTS
UNITED KINGDOM TRUST
SEPTEMBER 1996 SERIES
HONG KONG TRUST
SEPTEMBER 1996 SERIES
Prospectus
Part I
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
1-800-682-7520
This Part One Must Be
Accompanied by Part Two.
September 4, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 16
First Trust (registered trademark)
International Target 5 Trusts
UNITED KINGDOM TRUST SERIES
HONG KONG TRUST SERIES
The First Trust (registered trademark) Special Situations Trust Series
Prospectus Part II
Dated September 4, 1996
THIS PART II OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED
BY PART I. BOTH PARTS OF THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE
REFERENCE.
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust Series is one of a series of
investment companies created by the Sponsor, all of which are generally
similar, but each of which is separate and is designated by a different
series number. This Series consists of underlying separate unit
investment trusts set forth in Part I of this Prospectus. These
underlying trusts are designated herein as the "United Kingdom Trust"
and "Hong Kong Trust" and may sometimes be referred to individually as a
"Trust" and collectively as the "Trusts." Each Trust was created under
the laws of the State of New York pursuant to a Trust Agreement (the
"Indenture"), dated the Initial Date of Deposit, with Nike Securities
L.P., as Sponsor, The Chase Manhattan Bank, as Trustee and First Trust
Advisors L.P., as Portfolio Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks issued by
companies which provide income and are considered to have the potential
for capital appreciation (the "Equity Securities"), together with an
irrevocable letter or letters of credit of a financial institution in an
amount at least equal to the purchase price of such Equity Securities.
In exchange for the deposit of securities or contracts to purchase
securities in a Trust, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of such Trust.
The objective of the United Kingdom Trust is to provide an above-average
total return through a combination of dividend income and capital
appreciation by investing in global-based Equity Securities of the five
companies with the lowest per share stock price of the ten companies in
the Financial Times Industrial Ordinary Share Index ("FT Index") that
have the highest dividend yield as of the close of business three
business days prior to the date of Part I of this Prospectus.
The objective of the Hong Kong Trust is to provide an above-average
total return through a combination of dividend income and capital
appreciation by investing in global-based Equity Securities of the five
companies with the lowest per share stock price of the ten companies in
the Hang Seng Index that have the highest dividend yield as of the close
of business three business days prior to the date of Part I of this
Prospectus. The publishers of the FT Index and the Hang Seng Index are
not affiliated with the Sponsor. There is, of course, no guarantee that
the objective of either Trust will be achieved.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
Page 1
Today's global equities marketplace offers a compelling investment
opportunity. Many countries, including Hong Kong and the United Kingdom,
follow the United States in economic activity, altogether accounting for
a significant portion of the world's economic activity.
Additionally, international equity markets offer attractive growth
potential, which can help investors diversify their portfolios globally
and give them above-average capital appreciation potential. Equities, as
most investors know, have historically outperformed bonds and other
fixed-income securities and have outpaced the inflation rate over the
long term. The Hong Kong Trust and United Kingdom Trust allows investors
to make an investment in global-based companies in Hong Kong and the
United Kingdom, respectively.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in a Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Equity Securities in a Trust or cash
(including a letter of credit) with instructions to purchase additional
Equity Securities in a Trust. Units may be continuously offered for sale to
the public by means of this Prospectus, resulting in a potential increase in
the outstanding number of Units of such Trust. Any deposit by the
Sponsor of additional Equity Securities or the purchase of additional
Equity Securities pursuant to a cash deposit will duplicate, as nearly
as is practicable, the original proportionate relationship and not the
actual proportionate relationship on the subsequent date of deposit,
since the two may differ. Any such difference may be due to the sale,
redemption or liquidation of any of the Equity Securities deposited in a
Trust on the Initial, or any subsequent, Date of Deposit. See "How May
Equity Securities be Removed from a Trust?" The original percentage
relationship of each Equity Security to a Trust is set forth in Part I
of this Prospectus under "Schedule of Investments" for such Trust. Since
the prices of the underlying Equity Securities will fluctuate daily, the
ratio, on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as a result
of the deposit of additional Equity Securities in a Trust. If the
Sponsor deposits cash, however, existing and new investors may
experience a dilution of their investment and a reduction in their
anticipated income because of fluctuations in the prices of the Equity
Securities between the time of the cash deposit and the purchase of the
Equity Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Equity Securities as close to the evaluation time or as close to the
evaluation price as possible. An affiliate of the Trustee may receive these
brokerage fees or the Trustee may, from time to time, retain and pay compen-
sation to the Sponsor (or an affiliate of the Sponsor) to act as agent for
the Trust with respect to acquiring Equity Securities for the Trust. In
acting in such capacity, the Sponsor will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
On the Initial Date of Deposit, each Unit of a Trust represented the
undivided fractional interest in the Equity Securities deposited in such
Trust, as set forth under "Summary of Essential Information" appearing
in Part I of this Prospectus. To the extent that Units of a Trust are
redeemed, the aggregate value of the Equity Securities in such Trust
will be reduced, and the undivided fractional interest represented by
each outstanding Unit of such Trust will increase. However, if
additional Units are issued by a Trust in connection with the deposit of
additional Equity Securities or cash by the Sponsor, the aggregate value
of the Equity Securities in such Trust will be increased by amounts
allocable to additional Units, and the fractional undivided interest
represented by each Unit of such Trust will be decreased
proportionately. See "How May Units be Redeemed?" Each Trust has a
Mandatory Termination Date as set forth under "Summary of Essential
Information" for such Trust in Part I of this Prospectus.
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trusts, for which the Sponsor will be reimbursed from
each Trust in amounts as set forth under such Trust's "Summary of
Essential Information" in Part I of this Prospectus, the Sponsor will
not receive any fees in connection with its activities relating to the
Trusts. Such bookkeeping and administrative charges may be increased
without approval of the Unit holders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States
Department of Labor. The fees payable to the Sponsor for such services
Page 2
may exceed the actual costs of providing such services for these Trusts,
but at no time will the total amount received for such services rendered
to all unit investment trusts of which Nike Securities L.P. is the
Sponsor in any calendar year exceed the actual cost to the Sponsor of
supplying such services in such year. First Trust Advisors L.P. will
receive an annual supervisory fee from each Trust, which is not to
exceed the amount set forth under such Trust's "Summary of Essential
Information" in Part I of this Prospectus, for providing portfolio
supervisory services for the Trusts. Such fee is based on the number of
Units outstanding in a Trust on January 1 of each year, except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. This fee may exceed the actual costs of providing
such supervisory services for these Trusts, but at no time will the
total amount received for portfolio supervisory services rendered to all
unit investment trusts of which Nike Securities L.P. is the Sponsor in
any calendar year exceed the aggregate cost to First Trust Advisors L.P.
of supplying such services in such year. In providing such supervisory
services, the Portfolio Supervisor may purchase research services from a
variety of sources which may include underwriters or dealers of the
Trusts.
Subsequent to the initial offering period, First Trust Advisors L.P.,
the Evaluator and an affiliate of the Sponsor, will receive a fee as
indicated in the "Summary of Essential Information" in Part I of this
Prospectus. The fee may exceed the actual costs of providing such
evaluation services for these Trusts, but at no time will the total
amount received for evaluation services rendered to all unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar year
exceed the aggregate cost to First Trust Advisors L.P. of supplying such
services in such year. The Trustee pays certain expenses of a Trust for
which it is reimbursed by such Trust. The Trustee will receive for its
ordinary recurring services to a Trust an annual fee as indicated in the
Trust's "Summary of Essential Information" in Part I of this Prospectus.
The fee is computed per Unit in such Trust outstanding based upon the
largest aggregate number of Units of such Trust outstanding at any time
during the calendar year. For a discussion of the services performed by
the Trustee pursuant to its obligations under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee's and Evaluator's fees are payable from the Income Account
of a Trust to the extent funds are available, and then from the Capital
Account of such Trust. Since the Trustee has the use of the funds being
held in the Capital and Income Accounts for payment of expenses and
redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to a Trust is expected to result from the
use of these funds. However, the Trustee may bear from its own resources
certain expenses relating to the Trust, including organization costs and
brokerage commissions. The Trustee's and Evaluator's fees may be
increased without approval of the Unit holders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States
Department of Labor.
The following additional charges are or may be incurred by a Trust: all
legal expenses of the Trustee incurred by or in connection with its
responsibilities under the Indenture; the expenses and costs of any
action undertaken by the Trustee to protect such Trust and the rights
and interests of the Unit holders; fees of the Trustee for any
extraordinary services performed under the Indenture; indemnification of
the Trustee for any loss, liability or expense incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with its acceptance or administration of such Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of such Trust; foreign custodial and transaction
fees; and all taxes and other government charges imposed upon the
Securities or any part of such Trust (no such taxes or charges are being
levied or made or, to the knowledge of the Sponsor, contemplated). The
above expenses and the Trustee's annual fee, when paid or owing to the
Trustee, are secured by a lien on a Trust. In addition, the Trustee is
empowered to sell Equity Securities in a Trust in order to make funds
available to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of such Trust. Since the Equity
Securities are all common stocks and the income stream produced by
dividend payments is unpredictable, the Sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all expenses
of a Trust. As described above, if dividends are insufficient to cover
expenses, it is likely that Equity Securities will have to be sold to
Page 3
meet Trust expenses. These sales may result in capital gains or losses
to Unit holders. See "What is the Federal Tax Status of Unit Holders?"
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the
"Code"). Unit holders should consult their tax advisers in determining
the Federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in a Trust. The United
Kingdom Trust will report as gross income earned by U.S. Unit holders
their pro rata share of dividends received by the Trust as well as their
pro rata share of the associated Tax Credit Amount (as defined in
"United Kingdom Taxation" below), notwithstanding that it is not certain
that U.S. Unit holders will receive any refund of U.K. taxes. Although a
U.S. Unit holder is unlikely to be able to directly obtain Treaty
Payments (as defined in "United Kingdom Taxation" below) under the U.S.-
U.K. Treaty, the U.K. Inland Revenue operates a special procedure under
which trustees of funds such as the Trust may be entitled to claim
Treaty Payments on behalf of investors. The Trustee intends to apply to
the U.K. Inland Revenue for their approval for such a procedure to apply
in respect of the United Kingdom Trust. If such approval is given, the
amount of any Treaty Payment to be obtained with respect to a dividend
will be reflected in the net asset value of the Trust and will be
distributed to investors on the first Distribution Date after the
dividend is received by the Trust. Those U.S. Unit holders who hold
Units on the relevant record date for dividends on the underlying
Securities held by the United Kingdom Trust should be entitled, subject
to applicable limitations, to either a credit or a deduction for foreign
taxes payable with respect to such dividend payments. In addition, IRAs
and other plans addressed below under "Why are Investments in the Trusts
Suitable for Retirement Plans?" should note that they are not eligible
to claim any Treaty Payment (as defined below under "United Kingdom
Taxation").
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of the assets of a Trust under the Code; and
the income of such Trust will be treated as income of the Unit holders
thereof under the Code. Each Unit holder will be considered to have
received his pro rata share of the income derived from each Equity
Security when such income is considered to be received by a Trust.
2. A Unit holder will be considered to have received all of the
dividends paid on his or her pro rata portion of each Equity Security
when such dividends are received by a Trust regardless of whether such
dividends are used to pay a portion of the deferred sales charge. Unit
holders will be taxed in this manner regardless of whether distributions
from a Trust are actually received by the Unit holder or are
automatically reinvested. See "How are Income and Capital Distributed?-
Distribution Reinvestment Option."
3. Each Unit holder will have a taxable event when a Trust disposes
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder. The price a Unit holder pays for his or her Units,
generally including sales charges, is allocated among his or her pro
rata portion of each Equity Security held by a Trust (in proportion to
the fair market values thereof on the valuation date closest to the date
the Unit holder purchases his or her Units) in order to determine his or
her tax basis for his or her pro rata portion of each Equity Security
held by such Trust. For Federal income tax purposes, a Unit holder's pro
rata portion of dividends, as defined by Section 316 of the Code, paid
by a corporation with respect to an Equity Security held by a Trust is
taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits." A Unit holder's pro rata portion
of dividends paid on such Equity Security which exceeds such current and
accumulated earnings and profits will first reduce a Unit holder's tax
basis in such Equity Security, and to the extent that such dividends
Page 4
exceed a Unit holder's tax basis in such Equity Security shall generally
be treated as capital gain. In general, any such capital gain will be
short-term unless a Unit holder has held his or her Units for more than
one year.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by a
Trust will generally be considered a capital gain (except in the case of
a dealer or a financial institution) and will generally be long-term if
the Unit holder has held his or her Units for more than one year (the
date on which the Units are acquired (i.e., the "trade date") is
excluded for purposes of determining whether the Units have been held
for more than one year). A Unit holder's portion of loss, if any, upon
the sale or redemption of Units or the disposition of Equity Securities
held by a Trust will generally be considered a capital loss (except in
the case of a dealer or a financial institution) and, in general, will
be long-term if the Unit holder has held his or her Units for more than
one year. Unit holders should consult their tax advisers regarding the
recognition of gains and losses for federal income tax purposes. In
particular, a Rollover Unit holder should be aware that a Rollover Unit
holder's loss, if any, incurred in connection with the exchange of Units
for Units in the next new series of the United Kingdom Trust or Hong
Kong Trust (the "New Trusts"), (the Sponsor intends to create a separate
New Trust in conjunction with the termination of each of the Trusts)
will generally be disallowed with respect to the disposition of any
Equity Securities pursuant to such exchange to the extent that such Unit
holder is considered the owner of substantially identical securities
under the wash sale provisions of the Code taking into account such Unit
holder's deemed ownership of the securities underlying the Units in a
New Trust in the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before and
ending 30 days after such disposition. However, any gains incurred in
connection with such an exchange by a Rollover Unit holder would be
recognized.
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge is deferred. It is possible that for federal income
tax purposes, a portion of the deferred sales charge may be treated as
interest which would be deductible by a Unit holder subject to
limitations on the deduction of investment interest. In such case, the
non-interest portion of the deferred sales charge would be added to the
Unit holder's tax basis in his or her Units. The deferred sales charge
could cause the Unit holder's Units to be considered to be debt-financed
under Section 264A of the Code which would result in a small reduction
of the dividends-received deduction. In any case, the income (or
proceeds from redemption) a Unit holder must take into account for
federal income tax purposes is not reduced by amounts deducted to pay
the deferred sales charge. Unit holders should consult their own tax
advisers as to the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by a Trust
(to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have recently been issued which
address special rules that must be considered in determining whether the
46-day holding period requirement is met. Moreover, the allowable
percentage of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is directly
attributable to indebtedness incurred by such corporation. It should be
noted that various legislative proposals that would affect the dividends
received deduction have been introduced. Unit holders should consult
with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
To the extent dividends received by a Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
Page 5
dividends received deduction with respect to its pro rata portion of
such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unit holders. Each
Unit holder's pro rata share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by him or her. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by a Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). For taxpayers other than corporations, net capital
gains are subject to a maximum marginal stated tax rate of 28%. However,
it should be noted that legislative proposals are introduced from time
to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to a 28%
maximum stated rate for taxpayers other than corporations. Because some
or all capital gains are taxed at a comparatively lower rate under the
Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of
the Trust involved including his or her pro rata portion of all the
Equity Securities represented by the Unit.
Special Tax Consequences of Termination of a Trust and of Investment in
a New Trust. As discussed in "Rights of Unit Holders-Special Redemption,
Liquidation and Investment in a New Trust," a Unit holder may elect to
become a Rollover Unit holder. To the extent a Rollover Unit holder
exchanges his or her Units for Units of either New Trust in a taxable
transaction, such Unit holder will recognize gains, if any, but
generally will not be entitled to a deduction for any losses recognized
upon the disposition of any Equity Securities pursuant to such exchange
to the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions of the
Code taking into account such Unit holder's deemed ownership of the
securities underlying the Units in such New Trust in the manner
described above, if such substantially identical securities were
acquired within a period beginning 30 days before and ending 30 days
after such disposition under the wash sale provisions contained in
Section 1091 of the Code. In the event a loss is disallowed under the
wash sale provisions, special rules contained in Section 1091(d) of the
Code apply to determine the Unit holder's tax basis in the securities
acquired. Rollover Unit holders are advised to consult their tax advisers.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in the Trust in accordance
with the proportion of the fair market values of such Equity Securities
on the valuation date nearest the date the Units are purchased in order
to determine such Unit holder's tax basis for his or her pro rata
portion of each Equity Security.
A Unit holder's tax basis in his or her Units and his or her pro rata
portion of an Equity Security held by a Trust will be reduced to the
extent dividends paid with respect to such Equity Security are received
by a Trust which are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by a Trust to such Unit holder (including amounts received
Page 6
upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust (other than those that are not treated as
United States source income, if any) will generally be subject to United
States income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unit holders and derived from dividends of foreign corporations will not
be subject to U.S. withholding tax provided that less than 25 percent of
the gross income of the foreign corporation for a three-year period
ending with the close of its taxable year preceding payment was not
effectively connected to the conduct of a trade or business within the
United States. In addition, such earnings may be exempt from U.S.
withholding pursuant to a specific treaty between the United States and
a foreign country. Non-U.S. Unit holders should consult their own tax
advisers regarding the imposition of U.S. withholding on distributions
from a Trust.
It should be noted that payments to the Trusts of dividends on Equity
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unit holders should consult their tax
advisers regarding the potential tax consequences relating to the
payment of any such withholding taxes by the Trusts. Any dividends
withheld as a result thereof will nevertheless be treated as income to
the Unit holders. Because, under the grantor trust rules, an investor is
deemed to have paid directly his share of foreign taxes that have been
paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States purposes with respect to such
taxes. Investors should consult their tax advisers with respect to
foreign withholding taxes and foreign tax credits.
Unit holders will be notified annually of the amounts of income and
dividends includable in the Unit holder's gross income and amounts of
Trust expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trusts Suitable for
Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trusts for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of each Trust will be treated as the income
of the Unit holders thereof.
The foregoing discussion relates only to the tax treatment of U.S. Unit
holders ("U.S. Unit holders") with regard to federal and certain aspects
of New York State and City income taxes. Unit holders may be subject to
taxation in New York or in other jurisdictions and should consult their
own tax advisers in this regard. As used herein, the term "U.S. Unit
holder" means an owner of a Unit in one of the Trusts that (a) is (i)
for United States federal income tax purposes a citizen or resident of
the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of
its source or (b) does not qualify as a U.S. Unit holder in paragraph
(a) but whose income from a Unit is effectively connected with such Unit
holder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and
gain on the Units will be taxable.
United Kingdom Taxation
Tax Consequences of Ownership of Ordinary Shares. In the opinion of
Linklaters & Paines, United Kingdom special counsel to the Sponsor,
based on the terms of the United Kingdom Trust as described in the
Prospectus and on certain representations made by special U.S. counsel
to the Sponsor, the following summary accurately describes the U.K. tax
consequences to certain U.S. Unit holders who beneficially hold Units in
the United Kingdom Trust as capital assets. This summary is based upon
current U.S. law, U.K. taxation law and Inland Revenue practice in the
U.K., the U.S./U.K. convention relating to income and capital gains (the
"Treaty") and the U.S./U.K. convention relating to estate and gift taxes
(the "Estate Tax Treaty"). The summary is a general guide only and is
subject to any changes in U.K. or U.S. law, or the practice relating
thereto and in the Treaty or Estate Tax Treaty occurring after the date
of this Prospectus which may affect (including possibly on a retroactive
basis) the tax consequences described herein. Accordingly, Unit holders
should consult their own tax advisers as to the U.K. tax consequences
Page 7
applicable to their particular circumstances of ownership of the Units
in the United Kingdom Trust.
Taxation of Dividends. Where a U.K. resident receives a dividend from a
U.K. company (other than a foreign income dividend (see below)), such
resident is generally entitled to a tax credit, which may be offset
against such resident's U.K. taxes, or, in certain circumstances,
repaid. Under the Treaty, a U.S. Unit holder, who is resident in the
U.S. for the purposes of the Treaty, may, in appropriate circumstances,
be entitled to a repayment of that tax credit, but any such repayment is
subject to U.K. withholding tax at the rate of 15% of the sum of the
dividend and the credit. The tax credit, before such withholding, is
equal to one quarter of the dividend (the "Tax Credit Amount"). Although
such a U.S. Unit holder who held shares directly in a company resident
in the U.K. for the purposes of the Treaty, could generally claim a
refund of a portion of the Tax Credit Amount attributable to the
dividend (a "Treaty Payment") pursuant to the terms of the Treaty, the
ability of such a U.S. Unit holder who holds Units in the United Kingdom
Trust to claim such a Treaty Payment is unclear where dividend payments
are made directly to an entity such as the United Kingdom Trust. Any
claim for such a Treaty Payment would have to be supported by evidence
of such U.S. Unit holder's entitlement to the relevant dividend. There
is no established procedure for proving such entitlement where the U.K.
company pays the dividend to an entity such as the United Kingdom Trust
unless a specific procedure is negotiated in advance with the U.K.
Inland Revenue (see "What is the Federal Tax Status of Unit Holders?").
In the absence of agreeing to such a special procedure, U.S. Unit
holders should note that they may not in practice be able to claim a
Treaty Payment from the U.K. Inland Revenue.
A U.K. company may elect to pay a dividend as a foreign income dividend
rather than an ordinary dividend. If a company, the shares of which are
held in the United Kingdom Trust, pays a foreign income dividend, no tax
credit will be attributable to such dividend. Accordingly, a U.S. Unit
holder would not be entitled to any repayment of a tax credit under the
Treaty.
Taxation of Capital Gains. U.S. Unit holders who are not resident nor
ordinarily resident for tax purposes in the U.K. will not be liable for
U.K. tax on capital gains realized on the disposal of their Units unless
such Units are used, held or acquired for the purposes of a trade,
profession or vocation carried on in the U.K. through a branch or agency
or for the purposes of such branch or agency.
U.K. Inheritance Tax. An individual Unit holder who is domiciled in the
U.S. for the purposes of the Estate Tax Treaty and who is not a national
of the U.K. for the purposes of the Estate Tax Treaty will generally not
be subject to U.K. inheritance tax in respect of Units in the United
Kingdom Trust on the individual's death or on a gift or other non-arm's
length transfer of such Units during the individual's lifetime provided
that any applicable U.S. federal gift or estate tax liability is paid,
unless the Units are part of the business property of a permanent
establishment of the individual in the U.K. or pertain to a fixed base
in the U.K. used by the individual for the performance of independent
personal services. Where the Units have been placed in trust by a
settlor, the Units will generally not be subject to U.K. inheritance tax
if the settlor, at the time of settlement, was domiciled in the U.S. for
the purposes of the Estate Tax Treaty and was not a U.K. national,
provided that any applicable U.S. federal gift or estate tax liability
is paid. In the exceptional case where the Units are subject both to
U.K. inheritance tax and to U.S. federal gift or estate tax, the Estate
Tax Treaty generally provides for the tax paid in the U.K. to be
credited against tax paid in the U.S. or for tax paid in the U.S. to be
credited against tax payable in the U.K. based on priority rules set out
in that Treaty.
Stamp Tax. In connection with a transfer of Equity Securities in the
United Kingdom Trust, there is generally imposed a U.K. stamp duty or
stamp duty reserve tax payable upon transfer, which tax is usually
imposed on the purchaser of such Equity Securities. Upon acquisition of
the Equity Securities in the United Kingdom Trust, the Trust paid such
tax. It is anticipated that upon the sale of such Equity Securities such
tax will be paid by the purchaser thereof and not by the United Kingdom
Trust.
Hong Kong Taxation
The following summary describes the Hong Kong tax consequences under exist-
ing law to U.S. Unit holders of Units of the Hong Kong Trust. This discuss-
ion is for general purposes only and assumes that such Unit holder is not
carrying on a trade, profession or business in Hong Kong and has no profits
sourced in Hong Kong arising from the carrying on of such trade, profession
or business. Unit holders should consult their tax advisers as to the Hong
Kong tax consequences of ownership of the Units of the Hong Kong Trust
applicable to their particular circumstances.
Page 8
Taxation of Dividends. Amounts in respect of dividends paid to Unit
holders of the Hong Kong Trust are not taxable and therefore will not be
subject to the deduction of any withholding tax.
Profits Tax. A Unit holder of the Hong Kong Trust (other than a person
carrying on a trade, profession or business in Hong Kong) will not be
subject to profits tax on any gain or profits made on the realization or
other disposal of his Units.
Hong Kong Estate Duty. Units of the Hong Kong Trust will not give rise
to a liability to Hong Kong estate duty.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
The United Kingdom Trust consists of the five companies with the lowest
per share stock price of the ten companies in the FT Index that have the
highest dividend yield as of the close of business three business days
prior to the date of Part I of this Prospectus. The Hong Kong Trust
consists of the five companies with the lowest per share stock price of
the ten companies in the Hang Seng Index that have the highest dividend
yield as of the close of business three business days prior to the date
of Part I of this Prospectus. The yield for each Equity Security was
calculated by adding together the most recent interim and final dividend
declared and dividing the result by the market value of the Equity
Security as of the close of business three business days prior to the
date of Part I of this Prospectus (the "Stock Selection Date"). An
investment in a Trust involves the purchase of a quality portfolio of
attractive equities with high dividend yields in one convenient
purchase. Investing in the stocks of the FT Index or the Hang Seng Index
with the highest dividend yields may be effective in achieving the
corresponding Trust's investment objectives, because regular dividends
are common for established companies, and dividends have accounted for a
substantial portion of the total return on stocks of each Index as a
group. Due to the short duration of the Trusts, there is no guarantee
that either Trust's objective will be achieved or that the Trust will
provide for capital appreciation in excess of the Trust's expenses.
The FT Index is comprised of 30 common stocks chosen by the editors of
The Financial Times as representative of the British industry and
commerce. This index is an unweighted average of the share prices of
selected companies, which are highly capitalized, major factors in their
industries and their stocks are widely held by individuals and
institutional investors. Changes in the components of the FT Index are
made entirely by the editors of The Financial Times without consultation
with the companies, the stock exchange or any official agency. For the
sake of continuity, changes are made rarely. Most substitutions have
been the result of mergers or because of poor share performance, but
from time to time, changes may be made to achieve a better
representation. The components of the FT Index may be changed at any
time for any reason. Any changes in the components of the FT Index made
after the Stock Selection Date will not cause a change in the identity
of the common stocks included in the United Kingdom Trust, including any
additional Equity Securities deposited thereafter.
The Hang Seng Index consists of 33 of the stocks currently listed on the
Stock Exchange of Hong Kong Ltd. (the "Hong Kong Stock Exchange"), and
includes companies intended to represent four major market sectors:
commerce and industry, finance, properties and utilities. The Hang Seng
Index is a recognized indicator of stock market performance in Hong
Kong. It is computed on an arithmetic basis, weighted by market
capitalization, and is therefore strongly influenced by stocks with
large market capitalizations. The Hang Seng Index represents
Page 9
approximately 70% of the total market capitalization of the stocks
listed on the Hong Kong Stock Exchange. Any changes in the components in
the Hang Seng Index made after the Stock Selection Date will not cause a
change in the identity of the common stocks included in the Hong Kong
Trust, including any additional Equity Securities deposited thereafter.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust Portfolios as of the
Stock Selection Date. Since the Sponsor may deposit additional Equity
Securities which were originally selected through this process, the
Sponsor may continue to sell Units of the Trusts even though the yields
on these Equity Securities may have changed subsequent to the Initial
Date of Deposit. These Equity Securities may no longer be included in
the respective Index, or may not currently meet a Trust's selection
criteria, and therefore, such Equity Securities would no longer be
chosen for deposit into the Trusts if the selection process was to be
performed again at a later time.
United Kingdom Trust
The Financial Times Industrial Ordinary Share Index. The FT Index began
as the Financial News Industrial Ordinary Share Index in London in 1935
and became the Financial Times Industrial Ordinary Share Index in 1947.
The following stocks are currently represented in the FT Index:
ASDA Group Glaxo Wellcome Plc
Allied Domecq Plc Grand Metropolitan
BICC Plc Guest Keen & Nettlefolds (GKN) Plc
BOC Group Guinness
BTR Plc Hanson Plc
Blue Circle Industries Plc Imperial Chemical Industries Plc
Boots Co Lucas Industries Plc
British Airways Marks & Spencer
British Gas Plc National Westminster Bank
British Petroleum Peninsular & Oriental Steam Navigation
Company
British Telecom Plc Reuters Holdings
Cadbury Schweppes Royal Insurance Holdings
Courtaulds Plc SmithKline Beecham
EMI Group Plc Tate & Lyle
General Electric Plc Vodaphone Plc
The publishers of the FT Index have not granted to the United Kingdom
Trust or the Sponsor a license to use the FT Index. Units of the United
Kingdom Trust are not designed so that their prices will parallel or
correlate with movements in the FT Index and it is expected that their
prices will not parallel or correlate with such movements. The
publishers of the FT Index have not participated in any way in the
creation of the United Kingdom Trust or in the selection of stocks in
such Trust and have not approved any information related thereto.
The following table compares the actual performance of the FT Index and
approximately equal values of the five lowest priced stocks of the ten
stocks in the FT Index having the highest dividend yield (the "Five
Lowest Priced Stocks of the Ten Highest Yielding FT Index Stocks") in
each of the 20 years listed below, as of December 31 in each of those
years.
Page 10
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN*
Five Lowest Priced Stocks of the Financial Times Industrial Ordinary
Ten Highest Yielding FT Index Stocks (1)* Share Index (FT Index)*
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
____ ________________ ________ __________ ________________ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1976 -21.48% 7.64% -13.84% -35.57% 4.07% -31.50%
1977 78.32% 9.45% 87.77% 72.95% 9.53% 82.48%
1978 0.00% 10.27% 10.27% 10.30% 6.76% 17.06%
1979 -0.15% 12.43% 12.28% 4.39% 8.18% 12.57%
1980 41.44% 10.86% 52.30% 31.99% 9.91% 41.90%
1981 -8.44% 5.97% -2.47% -28.15% 4.06% -24.09%
1982 -12.24% 6.38% -5.86% -19.24% 4.08% -15.16%
1983 20.89% 4.63% 25.52% 4.60% 4.79% 9.39%
1984 11.71% 4.95% 16.66% -22.02% 3.52% -18.50%
1985 70.85% 7.39% 78.24% 84.99% 8.10% 93.09%
1986 17.07% 4.96% 22.03% 22.23% 5.36% 27.59%
1987 40.81% 6.57% 47.38% 69.16% 7.66% 76.82%
1988 15.98% 5.19% 21.17% -2.42% 4.92% 2.50%
1989 20.10% 4.61% 24.71% 4.68% 4.66% 9.34%
1990 12.93% 7.32% 20.25% 24.85% 7.16% 32.01%
1991 19.48% 6.30% 25.78% 6.00% 5.13% 11.13%
1992 -3.21% 4.09% 0.88% -24.37% 3.23% -21.14%
1993 39.62% 4.02% 43.64% 11.74% 4.07% 15.81%
1994 1.63% 5.16% 6.79% 3.33% 4.57% 7.90%
1995 5.02% 5.78% 10.80% 11.98% 4.52% 16.50%
*Source: Datastream International, Inc. The Sponsor has not independently verified this data but has no reason to believe that
this data is incorrect in any material respect. Reasonable assumptions were relied on where data was either unavailable or only
partially available and these assumptions could have a material impact on the historical performance calculations. The annual
figures in the charts have been adjusted to take into account the effect of currency exchange rate fluctuations against the
U.S. dollar.
</TABLE>
[FN]
______________
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding FT Index
Stocks (the "Stocks") for any given period were selected by ranking the
dividend yields for each of the stocks in the FT Index, as of the
beginning of the period, by adding together the interim and final
dividends declared in the prior period and dividing by that stock's
market value on the first trading day on the London Stock Exchange in
the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market
value of the Stocks as of the first trading day on the London Stock
Exchange in that period from the market value of the Stocks as of the
last trading day in that period, and dividing that result by the market
value of the Stocks as of the first trading day in that period.
Appreciation for the FT Index is calculated by subtracting the opening
value of the FT Index as of the first trading day in the period from the
closing value of the FT Index as of the last trading day in that period,
and dividing that result by the opening value of the FT Index as of the
first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding together
the interim and final dividends received on the Stocks in a given period
and dividing the result by the market value of the Stocks as of the
first trading day in that period. Actual Dividend Yield for the FT Index
is calculated by taking the total dividends credited to the FT Index and
dividing the result by the opening value of the FT Index as of the first
trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend
Yield. Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 20 years listed above, the
Stocks achieved an average annual total return of 21.79%, as compared to
the average annual total return of all of the stocks in the FT Index,
which was 12.76%. The Stocks also had a higher average dividend yield in
13 of the above 20 years and outperformed the FT Index in 12 of these
years. Although the Trust seeks to achieve a better performance than the
FT Index, there can be no assurance that the Trust will outperform the
FT Index over its one-year life or over consecutive rollover periods, if
available.
Page 11
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The chart above represents past performance of the FT Index and the Five
Lowest Priced Stocks of the Ten Highest Yielding FT Index Stocks (but
not the United Kingdom Trust) and should not be considered indicative of
future results. Further, these results are hypothetical. The chart
assumes that all dividends during a year are reinvested at the end of
that year and does not reflect sales charges, commissions, expenses or
taxes. The annual figures in the chart have been adjusted to take into
account the effect of currency exchange rate fluctuations of the U.S.
dollar as described in the footnote below*. There can be no
assurance that the United Kingdom Trust will outperform the FT Index
over its one-year life or over consecutive rollover periods, if available.
______________
* The $10,000 initial investment was converted into British pounds
sterling using the opening exchange rate at the beginning of each
period. The year-end total in British pounds sterling was converted
into U.S. dollars using the ending exchange rate. This amount was then
converted back into British pounds sterling using the opening exchange
rate at the beginning of the next period.
Page 12
Hong Kong Trust
The Hang Seng Index. The Hang Seng Index was first published in 1969 and
consists of 33 of the 358 stocks currently listed on the Hong Kong Stock
Exchange. The Hang Seng Index is comprised of the following companies:
Amoy Properties Ltd. Hong Kong Telecommunications Ltd.
Bank of East Asia Hopewell Holdings
Cathay Pacific Airways Hutchison Whampoa
Cheung Kong Hysan Development Company Ltd.
China Light & Power Johnson Electric Holdings
Citic Pacific New World Development Co. Ltd.
First Pacific Company Ltd. Oriental Press Group
Great Eagle Holdings Shangri-La Asia Ltd.
Guangdong Investment Shun Tak Holdings Ltd.
HSBC Holdings Plc Sino Land Co. Ltd.
Hang Lung Development Company South China Morning Post (Holdings) Ltd.
Hang Seng Bank Sun Hung Kai Properties Ltd.
Henderson Investment Ltd. Swire Pacific (A)
Henderson Land Development Television Broadcasts
Co. Ltd.
Hong Kong and China Gas Wharf Holdings
Hong Kong Electric Holdings Ltd. Wheelock & Co.
Hong Kong and Shanghai Hotels
The publishers of the Hang Seng Index have not granted the Hong Kong
Trust or the Sponsor a license to use the Hang Seng Index. Units of the
Hong Kong Trust are not designed so that prices will parallel or
correlate with movements in the Hang Seng Index and it is expected that
their prices will not parallel or correlate with such movements. The
publishers of the Hang Seng Index have not participated in any way in
the creation of the Hong Kong Trust or in the selection of stocks in
such Trust and have not approved any information related thereto.
The following table compares the actual performance of the Hang Seng
Index and approximately equal values of the five companies with the
lowest per share stock price of the ten companies in the Hang Seng Index
having the highest dividend yield (the "Five Lowest Priced Stocks of the
Ten Highest Yielding Hang Seng Index Stocks") in each of the 20 years
listed below, as of December 31 in each of those years.
Page 13
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN*
Five Lowest Priced Stocks of the
Ten Highest Yielding Hang Seng Index Stocks (1)* Hang Seng Index
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
____ ________________ ________ __________ _______________ ________ __________
<S> <C> <C> <C> <C> <C> <C>
1976 27.19% 8.54% 35.73% 37.05% 5.67% 42.72%
1977 -16.00% 7.18% -8.82% -8.63% 4.60% -4.03%
1978 -2.70% 6.86% 4.16% 17.65% 5.45% 23.10%
1979 103.02% 8.89% 111.91% 72.11% 5.88% 77.99%
1980 57.18% 7.52% 64.70% 61.40% 4.07% 65.47%
1981 -8.09% 7.01% -1.08% -14.73% 2.40% -12.33%
1982 -51.53% 7.18% -44.35% -51.04% 3.03% -48.01%
1983 -20.43% 5.62% -14.81% -7.06% 5.02% -2.04%
1984 50.54% 11.55% 62.09% 36.55% 6.06% 42.61%
1985 40.38% 5.70% 46.08% 46.18% 4.78% 50.95%
1986 56.41% 5.58% 61.99% 46.89% 4.27% 51.16%
1987 -6.90% 5.58% -1.32% -10.02% 3.34% -6.68%
1988 42.05% 6.81% 48.86% 16.05% 4.50% 20.55%
1989 1.98% 7.05% 9.03% 5.53% 4.64% 10.17%
1990 0.88% 7.80% 8.68% 6.74% 5.29% 12.03%
1991 48.40% 7.35% 55.75% 42.46% 5.86% 48.32%
1992 18.99% 6.22% 25.21% 28.89% 4.78% 33.67%
1993 108.80% 6.43% 115.23% 116.24% 4.98% 121.22%
1994 -31.83% 3.28% -28.55% -31.23% 2.39% -28.84%
1995 -1.16% 5.68% 4.52% 23.06% 3.92% 26.98%
*Source: Datastream International, Inc. and The Hong Kong Stock Exchange. The Sponsor has not independently verified this data
but has no reason to believe that this data is incorrect in any material respect. Reasonable assumptions were relied on where
data was either unavailable or only partially available and these assumptions could have a material impact on the historical
performance calculations. The annual figures in the charts have been adjusted to take into account the effect of currency
exchange rate fluctuations against the U.S. dollar.
</TABLE>
[FN]
______________
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding Hang Seng
Index Stocks (the "Stocks") for any given period were selected by
ranking the dividend yields for each of the stocks in the Hang Seng
Index, as of the beginning of the period, by adding together the interim
and final dividends declared in the prior period and dividing the result
by that stock's market value on the first trading day on the Hong Kong
Stock Exchange in the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market
value of the Stocks as of the first trading day on the Hong Kong Stock
Exchange in a given period from the market value of the Stocks as of the
last trading day in that period, and dividing the result by the market
value of the Stocks as of the first trading day in that period.
Appreciation for the Hang Seng Index is calculated by subtracting the
opening value of the Hang Seng Index as of the first trading day in a
given period from the closing value of the Hang Seng Index as of the
last trading day in that period, and dividing that result by the opening
value of the Hang Seng Index as of the first trading day in that period.
(3) Actual Dividend Yield for the Stocks is calculated by adding together
the interim and final dividends received on the Stocks in a given period
and dividing the result by the market value of the Stocks as of the
first trading day in that period. Actual Dividend Yield for the Hang
Seng Index is calculated by taking the total dividends credited to the
Hang Seng Index and dividing the result by the opening value of the Hang
Seng Index as of the first trading day of the period.
(4) Total Return represents the sum of Appreciation and Actual Dividend
Yield. Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 20 years listed above, the
Stocks achieved an average annual total return of 20.85%, as compared to
the average annual total return of all of the stocks in the Hang Seng
Index, which was 20.21%. The Stocks also had a higher average dividend
yield in 20 of the above 20 years and outperformed the Hang Seng Index
in 9 of these years. Although the Trust seeks to achieve a better
performance than the Hang Seng Index, there can be no assurance that the
Trust will outperform the Hang Seng Index over its one-year life or over
consecutive rollover periods, if available.
Page 14
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The chart above represents past performance of the Hang Seng Index and
the Five Lowest Priced Stocks of the Ten Highest Yielding Hang Seng
Index Stocks (but not the Hong Kong Trust) and should not be considered
indicative of future results. Further, these results are hypothetical.
The chart assumes that all dividends during a year are reinvested at the
end of that year and does not reflect sales charges, commissions,
expenses or taxes. The annual figures in the chart have been adjusted to
take into account the effect of currency exchange rate fluctuations of
the U.S. dollar as described in the footnote below*. There can be
no assurance that the Hong Kong Trust will outperform the Hang Seng
Index over its one-year life or over consecutive rollover periods, if
available.
______________
* The $10,000 initial investment was converted into Hong Kong
dollars using the opening exchange rate at the beginning of each
period. The year-end total in Hong Kong dollars was converted into
U.S. dollars using the ending exchange rate. This amount was then
converted back into Hong Kong dollars using the opening exchange rate
at the beginning of the next period.
Page 15
The returns shown above are not guarantees of future performance and
should not be used as a predictor of returns to be expected in
connection with a Trust Portfolio. Both stock prices (which may
appreciate or depreciate) and dividends (which may be increased, reduced
or eliminated) will affect the returns. As indicated in the previous
tables, the Five Lowest Priced of the Ten Highest Yielding FT Index
Stocks and the Five Lowest Priced of the Ten Highest Yielding Hang Seng
Index Stocks, underperformed the FT Index and the Hang Seng Index,
respectively, in certain years. Accordingly, there can be no assurance
that a Trust's Portfolio will outperform the respective Index over the
life of a Trust or over consecutive rollover periods, if available. A
Holder of Units in a Trust would not necessarily realize as high a Total
Return on an investment in the stocks upon which the returns shown above
are based. The Total Return figures shown above do not reflect sales
charges, commissions, Trust expenses or taxes, and a Trust may not be
fully invested at all times.
What are Some Additional Considerations for Investors?
The Trusts consist of different issues of Equity Securities, all of
which are listed on a foreign securities exchange. In addition, each of
the companies whose Equity Securities are included in a portfolio are
actively traded, well established corporations.
A Trust consists of such of the Equity Securities listed under the
Trust's "Schedule of Investments" appearing in Part I of this Prospectus
as may continue to be held from time to time in such Trust and any
additional Equity Securities acquired and held by such Trust pursuant to
the provisions of the Trust Agreement, together with cash held in the
Income and Capital Accounts. Neither the Sponsor nor the Trustee shall
be liable in any way for any failure in any of the Equity Securities.
However, should any contract for the purchase of any of the Equity
Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in a Trust to cover such purchase
are reinvested in substitute Equity Securities in accordance with the
Trust Agreement, refund the cash and sales charge attributable to such
failed contract to all Unit holders on the next distribution date.
Risk Factors. Because certain of the Equity Securities from time to time
may be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders and
will not be reinvested, no assurance can be given that a Trust will
retain for any length of time its present size and composition. Although
the Portfolios are not managed, the Sponsor may instruct the Trustee to
sell Equity Securities under certain limited circumstances. Pursuant to
the Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities,
such as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities or
property are nonetheless acquired by a Trust, they may be accepted for
deposit in such Trust and either sold by the Trustee or held in such
Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities be
Removed from a Trust?" Equity Securities, however, will not be sold by a
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation or if the Equity Securities are no
longer among the five lowest priced of the ten common stocks in the
respective Index with the highest dividend yield.
Whether or not the Equity Securities are listed on a foreign securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, a Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions and the value of a Trust will
be adversely affected if trading markets for the Equity Securities are
limited or absent.
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 Equity Securities or the
general condition of the relevant stock market may worsen, and the value
of the Equity Securities and therefore the value of the Units may
Page 16
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. 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 of the type held by the Trusts 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.
Unit holders will be unable to dispose of any of the Equity Securities
in a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in a Trust and will vote
such stocks in accordance with the instructions of the Sponsor.
Investors should be aware of certain other considerations before making
a decision to invest in a Trust. The value of common stocks is subject
to market fluctuations for as long as the common stocks remain
outstanding, and thus, the value of the Equity Securities will fluctuate
over the life of a Trust and may be more or less than the price at which
they were deposited in such Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the primary offering period of Units of a Trust and
during the Special Redemption and Liquidation Period) and other factors.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Equity Security. In the event of a
notice that any Equity Security will not be delivered ("Failed Contract
Obligations") to a Trust, the Sponsor is authorized under the Indenture
to direct the Trustee to acquire other Equity Securities ("Replacement
Securities"). Any Replacement Security will be identical to those which
were the subject of the failed contract. The Replacement Securities must
be purchased within 20 days after delivery of the notice of a failed
contract, and the purchase price may not exceed the amount of funds
reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
a Trust, and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in such Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size of a
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in such Trust and
the issuance of a corresponding number of additional Units. If the
Sponsor deposits cash, existing and new investors could experience a
dilution of their investments and a reduction in anticipated income
because of fluctuations in the prices of the Equity Securities between
Page 17
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trust will pay the brokerage fees associated
therewith.
Once all of the Equity Securities in a Trust are acquired, the Trustee
will have no power to vary the investments of such Trust, i.e., the
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, but may dispose of
Equity Securities only under limited circumstances. See "How May Equity
Securities be Removed from a Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
which might reasonably be expected to have a material adverse effect on
the Trusts. At any time after the Initial Date of Deposit, litigation
may be instituted on a variety of grounds with respect to the Equity
Securities. The Sponsor is unable to predict whether any such litigation
will be instituted, or if instituted, whether such litigation might have
a material adverse effect on the Trusts.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisers. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Equity Securities in the Trusts or the issuers of
the Equity Securities. Changing approaches to regulation may have a
negative impact on certain companies represented in the Trusts. There
can be no assurance that future legislation, regulation or deregulation
will not have a material adverse effect on the Trusts or will not impair
the ability of the issuers of the Equity Securities to achieve their
business goals.
Foreign Issuers. Since the Equity Securities included in the United
Kingdom Trust and the Hong Kong Trust consist of securities of foreign
issuers, an investment in these Trusts involves certain investment risks
that are different in some respects from an investment in a trust which
invests entirely in the securities of domestic issuers. These investment
risks include future political or governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Equity Securities, the possibility that the financial condition
of the issuers of the Equity Securities may become impaired or that the
general condition of the relevant stock market may worsen (both of which
would contribute directly to a decrease in the value of the Equity
Securities and thus in the value of the Units), the limited liquidity
and relatively small market capitalization of the relevant securities
market, expropriation or confiscatory taxation, economic uncertainties
and foreign currency devaluations and fluctuations. In addition, for
foreign issuers that are not subject to the reporting requirements of
the Securities Exchange Act of 1934, there may be less publicly
available information than is 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 Equity Securities
selected for the Trusts, the Sponsor believes that adequate information
will be available to allow the Supervisor to provide portfolio
surveillance for each Trust.
Equity securities issued by non-U.S. issuers generally pay dividends in
foreign currencies and are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the U.S. dollar foreign
exchange rates for the various Equity Securities. See "Exchange Rate"
below.
On the basis of the best information available to the Sponsor at the
present time, none of the Equity Securities in either the United Kingdom
Trust or the Hong Kong Trust are subject to exchange control
restrictions under existing law which would materially interfere with
payment to the Trusts of dividends due on, or proceeds from the sale of,
the Equity Securities. However, there can be no assurance that exchange
control regulations might not be adopted in the future which might
adversely affect payment to either Trust. In addition, the adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of such Trusts to satisfy their obligation to
redeem Units tendered to the Trustee for redemption.
Page 18
Investors should be aware that it may not be possible to buy all Equity
Securities at the same time because of the unavailability of any Equity
Security, and restrictions applicable to the Trusts relating to the
purchase of an Equity 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 Equity Securities by a
Trust in the United States securities markets are subject to severe
restrictions and may not be practicable. Accordingly, sales of these
Equity Securities by a Trust will generally be effected only in foreign
securities markets. Although the Sponsor does not believe that a Trust
will encounter obstacles in disposing of the Equity Securities,
investors should realize that the Equity 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 Equity Securities will be adversely affected if trading
markets for the Equity Securities are limited or absent.
Foreign Trust Information. The information provided below details
certain important factors which impact the economies of both the United
Kingdom Trust and Hong Kong Trust. This information has been extracted
from various governmental and private publications, but no
representation can be made as to its accuracy; furthermore, no
representation is made that any correlation exists between the economies
of the United Kingdom Trust and Hong Kong Trust and the value of the
Equity Securities held by the United Kingdom Trust and Hong Kong Trust,
respectively.
United Kingdom Trust. The emphasis of the United Kingdom's economy is in
the private services sector, which includes the wholesale and retail
sector, banking, finance, insurance and tourism. Services as a whole
account for a majority of the United Kingdom's gross national product
and makes a significant contribution to the country's balance of
payments. The United Kingdom experienced a recovery of output in 1993-
1994 accompanied by falling rates of inflation despite expectations to
the contrary. Quarterly changes in real gross domestic product ("GDP")
in the United Kingdom grew moderately during 1994 and 1995 with an
approximate .5% increase in the last quarter of 1995 over the previous
quarter. The average quarterly rate of GDP growth in the United Kingdom
(as well as in Europe generally) has been decelerating since 1994. The
United Kingdom is a member of the European Union (the "EU"), formerly
known as the European Economic Community (the "EEC"). The EU was created
through the formation of the Maastricht Treaty on European Union in late
1993. It is expected that the Treaty will have the effect of eliminating
most remaining trade barriers between the 15 member nations and make
Europe one of the largest common markets in the world. The EU has the
potential to become a powerful trade bloc with a population of over 350
million people and an annual gross national product of more than $4
trillion. However, the effective implementation of the Treaty provisions
and the rate at which trade barriers are eliminated is uncertain at this
time. Furthermore, the recent rapid political and social change
throughout Europe make the extent and nature of future economic
development in the United Kingdom and Europe and the impact of such
development upon the value of the Equity Securities in the United
Kingdom Trust impossible to predict. Volatility in oil prices could slow
economic development throughout Western Europe. Moreover, it is not
possible to accurately predict the effect of the current political and
economic situation upon long-term inflation and balance of trade cycles
and how these changes would affect the currency exchange rate between
the U.S. dollar and the British pound sterling.
Hong Kong Trust. Hong Kong, established as a British colony in the
1840's, is currently ruled by the British Government through an
appointed Governor. Hong Kong will revert to Chinese sovereignty
effective July 1, 1997 with Hong Kong becoming a Special Administrative
Region ("SAR") of China. Hong Kong's new constitution will be the Basic
Law (promulgated by China in 1990), which will take effect upon the
resumption of Chinese sovereignty. The current Hong Kong government
generally follows a laissez-faire policy toward industry. There are no
major import, export or foreign exchange restrictions. At the present
time, regulation of business is generally minimal with certain
exceptions, including regulated entry into certain sectors of the
economy and a fixed exchange rate regime by which the Hong Kong dollar
has been pegged to the U.S. dollar. Over the ten year period between
1983 and 1993, real gross domestic product increased at an average
annual rate of approximately 6%.
Page 19
Although China has committed by treaty to preserve for 50 years the
economic and social freedoms currently enjoyed in Hong Kong, the
continuation of the economic system in Hong Kong after the reversion
will be dependent on the Chinese government, and there can be no
assurances that the commitment made by China regarding Hong Kong will be
maintained. Legislation has been enacted in Hong Kong that will extend
democratic voting procedures for Hong Kong's legislature. China has
expressed disagreement with this legislation, which it states is in
contravention of the principles evidenced in the Basic Law of the Hong
Kong SAR. The National Peoples' Congress of China has passed a
resolution to the effect that the Legislative Council and certain other
councils and boards of the Hong Kong Government will be terminated on
June 30, 1997. It is expected that such bodies will be subsequently
reconstituted in accordance with China's interpretation of the Basic
Law. China and Great Britain have also yet to resolve their differences
or other issues relating to the reversion to sovereignty. Any increase
in uncertainty as to the future economic and political status of Hong
Kong could have a materially adverse effect on the value of the Hong
Kong Trust.
It should be noted by investors that the Hong Kong Trust terminates
after the July 1, 1997 reversion to the sovereignty of China. The
Sponsor is unable to predict the level of market liquidity or volatility
which may occur after the reversion to sovereignty, both of which may
negatively impact the Hong Kong Trust and the value of the Units.
China currently enjoys a most favored nation status ("MFN Status") with
the United States. MFN Status is subject to annual review by the
President of the United States. President Clinton recently signed an
executive order renewing China's MFN Status for another year, which
Congress must review. Revocation of the MFN Status would have a severe
effect on China's trade and thus could have a materially adverse effect
on the value of the Hong Kong Trust. The performance of certain
companies listed on the Hong Kong Stock Exchange is linked to the
economic climate of China. For example, between 1985 and 1990, Hong Kong
businesses invested $20 billion in the nearby Chinese province of
Guangdong to take advantage of the lower property and labor costs than
were available in Hong Kong. Recently, however, high economic growth in
this area (industrial production grew at an annual rate of about 20% in
1991, 24% in 1992, and 36.5% in 1993) has been associated with rising
inflation and concerns about the devaluation of the Chinese currency.
Any downturn in economic growth or increase in the rate of inflation in
China could have a materially adverse effect on the value of the Hong
Kong Trust.
Securities prices on the Hong Kong Stock Exchange, and specifically the
Hang Seng Index, can be highly volatile and are sensitive to
developments in Hong Kong and China, as well as other world markets. For
example, in 1989, the Hang Seng Index dropped 1,216 points
(approximately 58%) in early June following the events at Tiananmen
Square. The Hang Seng Index gradually climbed in subsequent months but
fell by 181 points on October 13, 1989 (approximately 6.5%) following a
substantial fall in the U.S. stock markets. During 1994, the Hang Seng
Index lost approximately 31% of its value. The Hang Seng Index is
subject to change, and delisting of any issues may have an adverse
impact on the performance of the Hong Kong Trust, although delisting
would not necessarily result in the disposal of the stock of these
companies, nor would it prevent the Hong Kong Trust from purchasing
additional Equity Securities. In recent years, a number of companies,
comprising approximately 10% of the total capitalization of the Hang
Seng Index, have delisted. The Hong Kong Trust is considered to be
concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sale and other related
activities. Investment in securities issued by these real estate
companies should be made with an understanding of the many factors which
may have an adverse impact on the equity securities of a particular
company or industry. Generally, these include economic recession, the
cyclical nature of real estate markets, competitive overbuilding,
unusually adverse weather conditions, changing demographics, changes in
governmental regulations (including tax laws and environmental,
building, zoning and sales regulation), increases in real estate taxes
or costs of material and labor, the inability to secure performance
guarantees or insurance as required, the unavailability of investment
capital and the inability to obtain construction financing or mortgage
loans at rates acceptable to builders and purchasers of real estate.
With recent Chinese economic development and reform, certain Hong Kong
real estate companies and other investors began purchasing and
developing real estate in southern China. By 1992, however, southern
China began to experience a rise in real estate prices and construction
costs; a growing supply of real estate and worsening of these conditions
Page 20
could affect the profitability and financial condition of Hong Kong real
estate companies and could have a materially adverse effect on the value
of the Hong Kong Trust.
Exchange Rate. The Trusts are comprised of Equity Securities that are
principally traded in foreign currencies and as such involve investment
risks that are substantially different from an investment in a fund
which invests in securities that are principally traded in United States
dollars. The United States dollar value of a portfolio (and hence of the
Units) and of the distributions from the portfolio will vary with
fluctuations in the United States dollar foreign exchange rates for the
relevant currencies. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including
supply and demand of the respective currency, the rate of inflation in
the respective economies compared to the United States, the impact of
interest rate differentials between different currencies on the movement
of foreign currency rates, the balance of imports and exports goods and
services, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and
other countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of
fixed exchange rates and the convertibility of the United States dollar
into gold through foreign central banks. Starting in 1971, growing
volatility in the foreign exchange markets caused the United States to
abandon gold convertibility and to effect a small devaluation of the
United States dollar. In 1973, the system of fixed exchange rates
between a number of the most important industrial countries of the
world, among them the United States and most Western European countries,
was completely abandoned. Subsequently, major industrialized countries
have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have
continued to "peg" their currencies to the United States dollar although
there has been some interest in recent years in "pegging" currencies to
"baskets" of other currencies or to a Special Drawing Right administered
by the International Monetary Fund. Since 1983, the Hong Kong dollar has
been pegged to the U.S. dollar. In Europe, a European Currency Unit
("ECU") has been developed. Currencies are generally traded by leading
international commercial banks and institutional investors (including
corporate treasurers, money managers, pension funds and insurance
companies). From time to time, central banks in a number of countries
also are major buyers and sellers of foreign currencies, mostly for the
purpose of preventing or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling and the Hong Kong dollar:
Page 21
<TABLE>
<CAPTION>
Foreign Exchange Rates
Range of Fluctuations in Foreign Currencies
United Kingdom
Annual Pound Sterling/ Hong Kong/
Period U.S. Dollar U.S. Dollar
______ _______________ ___________
<S> <C> <C>
1983 0.616-0.707 6.480-8.700
1984 0.670-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.499-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763
</TABLE>
Source: Bloomberg L.P.
Page 22
<TABLE>
<CAPTION>
End of Month Exchange Rates
for Foreign Currencies
_____________________________
United Kingdom Hong
Pound Sterling/ Kong/U.S.
Monthly Period U.S. Dollar Dollar
____________ ___________ _________
<S> <C> <C>
1992:
January .559 7.762
February .569 7.761
March .576 7.740
April .563 7.757
May .546 7.749
June .525 7.731
July .519 7.732
August .503 7.729
September .563 7.724
October .641 7.736
November .659 7.742
December .662 7.744
1993:
January .673 7.734
February .701 7.734
March .660 7.731
April .635 7.730
May .640 7.724
June .671 7.743
July .674 7.761
August .670 7.755
September .668 7.734
October .676 7.733
November .673 7.725
December .677 7.723
1994:
January .664 7.724
February .673 7.727
April .659 7.725
May .662 7.726
June .648 7.730
July .648 7.725
August .652 7.728
September .634 7.727
October .611 7.724
November .639 7.731
December .639 7.738
1995:
January .633 7.732
February .631 7.730
March .617 7.733
April .620 7.742
May .630 7.735
June .627 7.736
July .626 7.738
August .645 7.741
September .631 7.732
October .633 7.727
November .652 7.731
December .645 7.733
1996:
January .661 7.728
February .653 7.731
March .655 7.734
April .664 7.735
May .645 7.736
June .644 7.741
July .642 7.735
August .639 7.733
</TABLE>
Source: Bloomberg L.P.
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars a Trust
would receive had the Trustee sold any particular currency in the
market. The foreign exchange transactions of a Trust will be conducted
by the Trustee with foreign exchange dealers acting as principals on a
spot (i.e., cash) buying basis. Although foreign exchange dealers trade
on a net basis, they do realize a profit based upon the difference
between the price at which they are willing to buy a particular currency
(bid price) and the price at which they are willing to sell the currency
(offer price).
Page 23
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based on the
aggregate underlying U.S. dollar value of the Equity Securities in the
United Kingdom Trust and the Hong Kong Trust, respectively, plus or
minus cash, if any, in the Income and Capital Accounts of such Trust,
plus an initial sales charge with respect to each Trust equal to the
difference between the maximum sales charge for each Trust (2.70% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.190 per Unit for each Trust) divided by the amount of Units
of such Trust outstanding. A deferred sales charge of $.019 will also be
assessed per Unit per month on the dates set forth under "Public
Offering Price" in Part I of this Prospectus. Units purchased subsequent
to the initial deferred sales charge payment will be subject to the
initial sales charge and the remaining deferred sales charge payments.
For each Trust, the deferred sales charge will be paid from funds in the
Capital Account, if sufficient, or from the periodic sale of Equity
Securities. The total maximum sales charge assessed to Unit holders on a
per Unit basis will be 2.70% of the Public Offering Price for each Trust.
During the initial period, the Sponsor's Repurchase Price is based on
the aggregate underlying U.S. dollar value of the Equity Securities in a
Trust, plus or minus cash, if any, in the Income and Capital Accounts of
such Trust divided by the number of Units of such Trust outstanding.
The aggregate U.S. dollar value of the Equity Securities will be
computed on the basis of the offering side value of the relevant
exchange rate as of the Evaluation Time during the initial offering
period and on the bid side value for secondary market transactions.
The minimum purchase of each Trust is $1,000 ($250 for an Individual
Retirement Account or other retirement plans), except for Rollover Unit
holders who are not subject to a minimum purchase amount.
The sales charge of each Trust for primary market sales is reduced by a
discount as indicated below for volume purchases as a percentage of the
Public Offering Price (except for sales made pursuant to a "wrap fee
account" or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Dollar Amount of Maximum
Transaction at Sales Net Dealer
Public Offering Price Discount Charge Concession
__________________ _________ ________ ____________
<S> <C> <C> <C>
$ 50,000 but less than $100,000 0.25% 2.45% 1.65%
$100,000 but less than $150,000 0.60% 2.10% 1.30%
$150,000 or more No upfront load 1.90% 1.10%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
dealer. An investor may aggregate purchases of Units of the United
Kingdom Trust, Hong Kong Trust, Target 5 Trust, Target 10 Trust or the
Global Target 15 Trust for purposes of qualifying for volume purchase
discounts listed above. The aggregate amount of Units of all Trusts
purchased will be used to determine the applicable sales charge to be
imposed on the purchase of Units of each Trust. The sales charge
reduction for quantity purchases will not apply to Rollover Unit
holders. The reduced sales charge structure will apply on all purchases
of Units in a Trust by the same person on any one day from any one
dealer. Additionally, Units purchased in the name of the spouse of a
purchaser or in the name of a child of such purchaser under 21 years of
age will be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the dealer of any such combined
purchase prior to the sale in order to obtain the indicated discount. In
addition, Unit holders of other unit investment trusts having a similar
strategy as the Trusts may utilize their termination proceeds to
purchase Units of the Trusts subject to a deferred sales charge of $.019
per Unit per month to be collected on each of the remaining deferred
sales charge payment dates as provided herein. Employees, officers and
Page 24
directors (including their immediate family members, defined as spouses,
children, grandchildren, parents, grandparents, siblings, mothers-in-
law, fathers-in-law, sons-in-law and daughters-in-law, and trustees,
custodians or fiduciaries for the benefit of such persons) of the
Sponsor, dealers and their affiliates, will be able to purchase Units at
the Public Offering Price less the applicable dealer concession.
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or
asset management services, or provide such services in connection with
the establishment of an investment account for which a comprehensive
"wrap fee" charge is imposed may purchase Units in the primary market,
subject only to the deferred portion of the sales charge, or during the
secondary market at the Public Offering Price less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
Had the Units of the Trusts been available for sale at the close of the
relevant stock market on the business day prior to the Initial Date of
Deposit, the Public Offering Price would have been as indicated in
"Summary of Essential Information" appearing in Part I of this
Prospectus. The Public Offering Price of Units on the date of the
prospectus or during the initial offering period may vary from the
amount stated under "Summary of Essential Information" in accordance
with fluctuations in the local currency prices of the underlying Equity
Securities, changes in relevant currency exchange rates and changes in
applicable commissions, stamp taxes, custodial fees and other costs
associated with foreign trading. During the initial offering period, the
aggregate value of the Units of a Trust shall be determined on the basis
of the aggregate underlying U.S. dollar value of the Equity Securities
therein plus or minus cash, if any, in the Income and Capital Accounts
of such Trust. The aggregate underlying value of the Equity Securities
will be determined in the following manner: if the Equity Securities are
listed on a securities exchange, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is
no closing sale price on that exchange, at the closing ask prices. If
the Equity Securities are not so listed or, if so listed and the
principal market therefor is other than on the exchange, the evaluation
shall generally be based on the current ask prices on the over-the-
counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above. The aggregate value of the Equity
Securities during the initial offering period is computed on the basis
of the offering side value of the relevant currency exchange rate
expressed in U.S. dollars as of the Evaluation Time.
The Evaluator on each business day will appraise or cause to be
appraised the value of the underlying Equity Securities in the
applicable Trust as of the relevant Evaluation Time and will adjust the
Public Offering Price of the Units commensurate with such valuation.
Such Public Offering Price will be effective for all orders received
prior to the Evaluation Time on each such day. Orders received by the
Trustee or Sponsor for purchases, sales or redemptions after that time,
or on a day which is not a business day for the related Trust, will be
held until the next determination of price. The term "business day", as
used herein and under "How May Units be Redeemed?", shall exclude
Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange, Inc.: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas
Day. In addition, for the United Kingdom Trust, "business day" shall
exclude the following U.K. holidays: Easter Monday, May Day, Spring Bank
Holiday, Summer Bank Holiday and Boxing Day; and for the Hong Kong
Trust, "business day" shall exclude the following Hong Kong holidays:
Lunar New Year's Day and the two following days, Ching Ming Festival,
Easter Monday, Queen's Birthday and the following Monday, the first and
second days of July, Tuen Ng Festival, Summer Bank Holiday, Sino-
Japanese War Victory Day, National Day and the following Monday, Chinese
Mid-Autumn Festival and the following day, Chung Yeung Festival,
Christmas Day and the following weekday and if Christmas Day is a
Sunday, the second weekday following Christmas Day.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
U.S. dollar value of the Equity Securities therein, plus or minus cash,
if any, in the Income and Capital Accounts of a Trust plus the
applicable sales charge.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
Page 25
thereto. A person will become owner of Units on the date of settlement
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of
1934. Delivery of Certificates representing Units so ordered will be
made three business days following such order or shortly thereafter. See
"Rights of Unit Holders-How May Units be Redeemed?" for information
regarding the ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the Initial
Date of Deposit and (ii) for additional Units issued after such date as
additional Equity Securities or cash are deposited by the Sponsor, Units
will be distributed to the public at the then current Public Offering
Price. During such period, the Sponsor may deposit additional Equity
Securities or cash in a Trust and create additional Units. Units
reacquired by the Sponsor during the initial offering period may be
resold at the then current Public Offering Price. Upon the termination
of the initial offering period, unsold Units created or reacquired
during the initial offering period will be sold or resold at the then
current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trusts for
sale in a number of states. Sales will be made to dealers and others at
prices which represent a concession or agency commission of 1.80% of the
Public Offering Price for primary and secondary market sales. Dealers
and others will receive a concession or agency commission of $0.10 per
Unit on purchases by Rollover Unit holders. However, resales of Units of
the Trusts by such dealers and others to the public will be made at the
Public Offering Price described in the prospectus. Notwithstanding the
foregoing, with respect to sales of Units of a Trust with total assets
which equal or exceed $30 million, dealers and others who sell over $10
million in Units will receive a total concession of 2.00% of the Public
Offering ($.120 per Unit for Rollover Units) while dealers and others
who sell over $20 million in Units will receive a total concession of
2.15% of the Public Offering Price ($.135 per Unit for Rollover Units).
With respect to sales of Units of a Trust with total assets of less than
$30 million, dealers and others who sell over $10 million in Units will
receive a total concession of 1.90% of the Public Offering Price ($.110
per Unit for Rollover Units) while dealers and others who sell over $20
million in Units will receive a total concession of 2.00% of the Public
Offering Price ($.190 per Unit for Rollover Units). The Sponsor reserves
the right to change the amount of the concession or agency commission
from time to time. In the event the Sponsor reacquires, or the Trustee
redeems, Units from brokers, dealers and others while a market is being
maintained for such Units, such entities agree to repay immediately to
the Sponsor any such concession or agency commission relating to such
reacquired Units. Certain commercial banks may be making Units of the
Trusts available to their customers on an agency basis. A portion of the
sales charge paid by these customers is retained by or remitted to the
banks in the amounts indicated above. Under the Glass-Steagall Act,
banks are prohibited from underwriting Trust Units; however, the Glass-
Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions
are not permitted under such Act. In Texas and in certain other states,
any banks making Units available must be registered as broker/dealers
under state law. The Sponsor expects to recoup the foregoing payments
from the deferred sales charge payments related to such Trusts.
From time to time the Sponsor may implement programs under which dealers
of a Trust may receive nominal awards from the Sponsor for each of their
registered representatives who have sold a minimum number of UIT Units
during a specified time period. In addition, at various times the
Sponsor may implement other programs under which the sales force of a
dealer may be eligible to win other nominal awards for certain sales
efforts, or under which the Sponsor will reallow to any such dealer that
sponsors sales contests or recognition programs conforming to criteria
established by the Sponsor, or participates in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales
Page 26
charges on the sales generated by such person at the public offering
price during such programs. Also, the Sponsor in its discretion may from
time to time pursuant to objective criteria established by the Sponsor
pay fees to qualifying dealers for certain services or activities which
are primarily intended to result in sales of Units of the Trusts. Such
payments are made by the Sponsor out of its own assets, and not out of
the assets of a Trust. These programs will not change the price Unit
holders pay for their Units or the amount that a Trust will receive from
the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on a Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as the common stocks
comprising the Dow Jones Industrial Average ("DJIA"), corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trusts. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of each Trust are
described more fully elsewhere in this Prospectus.
Advertisements and other sales material for the Trusts may also show the
total returns (price changes plus dividends received, divided by the
maximum public offering price) of each completed prior series and the
total and average annualized return of all series in the same quarterly
cycle, assuming the holder rolled over at the termination of each prior
series. These returns will reflect all applicable sales charges and
expenses.
Trust performance may be compared to performance on a total return basis
of the DJIA, the Standard & Poor's 500 Composite Stock Price Index, or
performance data from Lipper Analytical Services, Inc. and Morningstar
Publications, Inc. or from publications such as Money, The New York
Times, U.S. News and World Report, Business Week, Forbes or Fortune. As
with other performance data, performance comparisons should not be
considered representative of a Trust's relative performance for any
future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal to
a maximum of 2.70% of the Public Offering Price of the Units, less any
reduced sales charge for quantity purchases as described under "Public
Offering-How is the Public Offering Price Determined?" In addition, the
Sponsor may be considered to have realized a profit or to have sustained
a loss, as the case may be, in the amount of any difference between the
cost of the Equity Securities to a Trust (which is based on the
Evaluator's determination of the aggregate offering price of the
underlying Equity Securities of such Trust on the Initial Date of
Deposit) and the cost of such Equity Securities to the Sponsor. See Note
(2) of each "Schedule of Investments" appearing in Part I of this
Prospectus. During the initial offering period, the dealers and others
also may realize profits or sustain losses as a result of fluctuations
after the Date of Deposit in the Public Offering Price received by such
dealers and others upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a maximum sales charge of 2.70%) or
redeemed. The secondary market public offering price of Units may be
greater or less than the cost of such Units to the Sponsor. The Sponsor
may also realize profits or sustain losses in connection with the
creation of additional Units for the Distribution Reinvestment Option.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to maintain a market for the Units and
continuously offer to purchase Units at prices, subject to change at any
time, based upon the aggregate underlying value of the Equity Securities
in a Trust plus or minus cash, if any, in the Income and Capital
Accounts of such Trust. The aggregate underlying value of the Equity
Securities is computed on the basis of the bid side value of the
relevant currency exchange rate (offer side during the initial offering
Page 27
period) expressed in U.S. dollars. All expenses incurred in maintaining
a secondary market, other than the fees of the Evaluator and the costs
of the Trustee in transferring and recording the ownership of Units,
will be borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases of
Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS,
HE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Units subject to a
deferred sales charge which are sold or tendered for redemption prior to
such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales
charge at the time of sale or redemption.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable or may be redeemed by presentation and surrender to the
Trustee properly endorsed or accompanied by a written instrument or
instruments of transfer. A Unit holder must sign exactly as his name
appears on the face of the certificate with signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority. Record
ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. Only
Unit holders who elect to hold Units in uncertificated form are eligible
to participate as a Rollover Unit holder. The Trustee will maintain an
account for each such Unit holder and will credit each such account with
the number of Units purchased by that Unit holder. Within two business
days of the issuance or transfer of Units held in uncertificated form,
the Trustee will send to the registered owner of Units a written initial
transaction statement containing a description of a Trust; the number of
Units issued or transferred; the name, address and taxpayer
identification number, if any, of the new registered owner; a notation
of any liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there are no
such liens, restrictions or adverse claims; and the date the transfer
was registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee and
no certificate will be issued upon the transfer unless requested by the
Unit holder. A Unit holder may at any time request the Trustee to issue
certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in a Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See each
"Summary of Essential Information" in Part I of this Prospectus. Persons
who purchase Units will commence receiving distributions only after such
person becomes a Record Owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling
broker/dealer. Proceeds received on the sale of any Equity Securities in
Page 28
a Trust, to the extent not used to meet redemptions of Units, pay the
deferred sales charge or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals at
least $1.00 per 100 Units. The Trustee is not required to pay interest
on funds held in the Capital Account of a Trust (but may itself earn
interest thereon and therefore benefit from the use of such funds).
Notwithstanding, distributions of funds in the Capital Account, if any,
will be made as part of the final liquidation distribution, and in
certain circumstances, earlier. See "What is the Federal Tax Status of
Unit Holders?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. To the extent
that amounts in the Capital Account are insufficient to satisfy the then
current deferred sales charge obligation, Equity Securities may be sold
to meet such shortfall. Distributions of amounts necessary to pay the
deferred portion of the sales charge will be made to an account
designated by the Sponsor for purposes of satisfying Unit holders'
deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
a Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable only
when filing a tax return. Under normal circumstances the Trustee obtains
the Unit holder's tax identification number from the selling broker.
However, a Unit holder should examine his or her statements from the
Trustee to make sure that the Trustee has been provided a certified tax
identification number in order to avoid this possible "back-up
withholding. In the event the Trustee has not been previously provided
such number, one should be provided as soon as possible.
Not less than 30 days prior to the Mandatory Termination Date of a Trust
the Trustee will provide written notice thereof to all Unit holders.
Within a reasonable time after a Trust is terminated, each Unit holder
who is not a Rollover Unit holder will, upon surrender of his Units for
redemption, receive (i) the pro rata share of the amounts realized upon
the disposition of Equity Securities, and (ii) a pro rata share of any
other assets of such Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.,
return of capital, etc.) are credited to the Capital Account of a Trust.
Dividends received with respect to the Equity Securities are converted
into U.S. dollars at the applicable exchange rate.
The Trustee may establish reserves (the "Reserve Account") within a
Trust for state and local taxes, if any, and any governmental charges
payable out of such Trust.
Distribution Reinvestment Option. Any Unit holder may elect to have each
distribution of income or capital on his Units, other than the final
liquidating distribution in connection with the termination of a Trust,
automatically reinvested in additional Units of such Trust. Each person
who purchases Units of a Trust may elect to become a participant in the
Distribution Reinvestment Option by notifying the Trustee of their
election. The Distribution Reinvestment Option may not be available in
all states. In order to enable a Unit holder to participate in the
Distribution Reinvestment Option with respect to a particular
distribution on his Units, the Unit holder must inform the Trustee of
their election within 10 days prior to the Record Date for such
distribution. Each subsequent distribution of income or capital on the
participant's Units will be automatically applied by the Trustee to
purchase additional Units of a Trust. The remaining deferred sales
charge payments will be assessed on Units acquired pursuant to the
Distributions Reinvestment Option. IT SHOULD BE REMEMBERED THAT EVEN IF
DISTRIBUTIONS ARE REINVESTED, THEY ARE STILL TREATED AS DISTRIBUTIONS
FOR INCOME TAX PURPOSES.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
Page 29
each person who at any time during the calendar year was a Unit holder
of a Trust the following information in reasonable detail: (1) a summary
of transactions in such Trust for such year; (2) any Equity Securities
sold during the year and the Equity Securities held at the end of such
year by such Trust; (3) the redemption price per Unit based upon a
computation thereof on the 31st day of December of such year (or the
last business day prior thereto); and (4) amounts of income and capital
distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in a Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its corporate trust office in the City of New York of the
certificates representing the Units to be redeemed, or in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units and converted into U.S. dollars as
of the Evaluation Time set forth under the respective Trust's "Summary
of Essential Information" in Part I of this Prospectus. The "date of
tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the applicable
Evaluation Time (or as of any earlier closing time on a day on which the
applicable securities exchange is scheduled in advance to close at such
earlier time), or on a day which is not a business day, as defined under
"How is the Public Offering Price Determined?", the date of tender is
the next business day and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption
price computed on that day. The London Stock Exchange and the Hong Kong
Stock Exchange are open for trading on certain days which are U.S.
holidays on which the Trusts will not transact business. The Equity
Securities will continue to trade on those days and thus the value of
the United Kingdom Trust and Hong Kong Trust may be significantly
affected on days when a Unit holder cannot sell or redeem his Units.
Units so redeemed shall be cancelled. Units tendered for redemption
prior to such time as the entire deferred sales charge on such Units has
been collected will be assessed the amount of the remaining deferred
sales charge at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. For further information regarding this withholding, see
"How are Income and Capital Distributed?" In the event the Trustee has
not been previously provided such number, one must be provided at the
time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of a Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of a Trust.
The Trustee is empowered to sell Equity Securities of a Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of a Trust will be reduced.
Such sales may be required at a time when Equity Securities would not
otherwise be sold and might result in lower prices than might otherwise
be realized.
The Redemption Price per Unit and the secondary market Public Offering
Price will be determined on the basis of the aggregate underlying value
of the Equity Securities in a Trust, plus or minus cash, if any, in the
Income and Capital Accounts of such Trust (net of applicable liquidation
costs). The Redemption Price per Unit is the pro rata share of each
Unit determined by the Trustee by adding: (1) the cash on hand in a
Trust other than cash deposited in the Trust to purchase Equity
Securities not applied to the purchase of such Equity Securities; (2)
the aggregate value of the Equity Securities (including "when issued"
contracts, if any) held in such Trust, as determined by the Evaluator on
the basis of the aggregate underlying value of the Equity Securities in
Page 30
such Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation; and
deducting therefrom: (1) amounts representing any applicable taxes or
governmental charges payable out of such Trust; (2) any amounts owing to
the Trustee for its advances; (3) an amount representing estimated
accrued expenses of such Trust, including but not limited to fees and
expenses of the Trustee (including legal fees), the Evaluator and
supervisory fees, if any; (4) cash held for distribution to Unit holders
of record of such Trust as of the business day prior to the evaluation
being made; and (5) other liabilities incurred by such Trust; and
finally dividing the results of such computation by the number of Units
of such Trust outstanding as of the date thereof. The redemption price
per Unit will be assessed the amount, if any, of the remaining deferred
sales charge at the time of redemption.
The aggregate value of the Equity Securities for purposes of the
Redemption Price and Secondary Market Public Offering Price will be
determined in the following manner: if the Equity Securities are listed
on a securities exchange, this evaluation is generally based on the
closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange, at the closing bid prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefore is other than on the exchange, the evaluation shall
generally be based on the current bid prices on the over-the-counter
market (unless these prices are inappropriate as a basis for
evaluation). If current bid prices are unavailable, the evaluation is
generally determined (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Equity
Securities on the bid side of the market or (c) by any combination of
the above. The value of the Equity Securities is converted to their U.S.
dollar equivalent by computing the aggregate value on the basis of the
bid side value of the relevant currency exchange as of the Evaluation
Time and includes the applicable liquidation costs associated with the
sales of the Equity Securities.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will be made of
all Units of the Trusts held by any Unit holder (a "Rollover Unit
holder") who affirmatively notifies the Trustee in writing that he so
desires by the Rollover Notification Date specified in the respective
Trust's "Summary of Essential Information" appearing in Part I of this
Prospectus.
All Units of Rollover Unit holders will be redeemed in-kind during the
Special Redemption and Liquidation Period and the underlying Equity
Securities will be distributed to the Trustee, acting in its capacity as
Distribution Agent, on behalf of the Rollover Unit holders. During the
Special Redemption and Liquidation Period (as set forth in each "Summary
of Essential Information" in Part I of this Prospectus), the
Distribution Agent will be required to sell all of the underlying Equity
Securities on behalf of Rollover Unit holders. The sales proceeds will
be net of brokerage fees, governmental charges or any expenses involved
in the sales.
The Distribution Agent will engage an affiliate of the Trustee as its
agent to sell the distributed Equity Securities. The Sponsor will
attempt to sell the Equity Securities as quickly as is practicable
during the Special Redemption and Liquidation Period. The Sponsor does
not anticipate that the period will be longer than one day, given that
the Equity Securities are usually highly liquid. However, certain of the
factors discussed under "Risk Factors" could affect the ability of the
Sponsor to sell the Equity Securities of the Trusts and thereby affect
the length of the sale period somewhat. The liquidity of any Equity
Security depends on the daily trading volume of the Equity Security and
the amount that the Sponsor has available for sale on any particular day.
Page 31
Pursuant to an exemptive order from the Securities and Exchange
Commission, each terminating Trust (and the Distribution Agent on behalf
of Rollover Unit holders) may sell Equity Securities to the New Trusts
if those Equity Securities continue to meet the Trust's strategy by
remaining among the five lowest priced of the ten highest dividend-
yielding securities in the respective Index. The exemption will enable
each Trust to eliminate commission costs on these transactions. The
price for those Equity Securities will be the closing sale price on the
sale date on the exchange where the Equity Securities are principally
traded, as certified by the Sponsor and confirmed by the Trustee of each
Trust.
The Sponsor intends to create a separate New Trust for both the United
Kingdom Trust and the Hong Kong Trust. The Rollover Unit holders'
proceeds will be invested in either New Trust or a trust with a similar
investment strategy (as selected by the Unit holder), if then registered
in such state and being offered. The portfolio of a New Trust will
contain, in the case of the United Kingdom Trust, common stock of the
five companies with the lowest per share stock price of the ten highest
dividend yielding stocks in the FT Index as of three business days prior
to the Initial Date of Deposit, and in the case of the Hong Kong Trust,
common stock of the five companies with the lowest per share stock price
of the ten highest dividend yielding stocks in the Hang Seng Index as of
three business days prior to the Initial Date of Deposit. The proceeds
of redemption will be used to buy Units of a New Trust or similar trust
as the proceeds become available. Any Rollover Unit holder may thus be
redeemed out of a Trust and become a holder of an entirely different
Trust, with a different portfolio of Equity Securities. In accordance
with the Rollover Unit holders' offer to purchase the Units of a New
Trust or similar trust, the proceeds of the sales (and any other cash
distributed upon redemption) will be invested in a New Trust or similar
trust, at the public offering price, including the applicable maximum
sales charge per Unit (which for Rollover Unit holders is currently
expected to be $.190 per Unit for the New Series of the United Kingdom
Trust and the Hong Kong Trust, all of which will be deferred as provided
herein).
The Sponsor intends to create New Trust Units as quickly as possible,
dependent upon the availability and reasonably favorable prices of the
Equity Securities included in a New Trust portfolio, and it is intended
that Rollover Unit holders will be given first priority to purchase the
New Trust Units. There can be no assurance, however, as to the exact
timing of the creation of the New Trust Units or the aggregate number of
New Trust Units which the Sponsor will create. The Sponsor may, in its
sole discretion, stop creating new Units (whether permanently or
temporarily) at any time it chooses, regardless of whether all proceeds
of the Special Redemption and Liquidation have been invested on behalf
of Rollover Unit holders. Cash which has not been invested on behalf of
the Rollover Unit holders in Units of a New Trust or other similar trust
will be distributed within a reasonable time after such occurrence.
However, since the Sponsor can create Units, the Sponsor anticipates
that sufficient Units can be created, although moneys in a New Trust may
not be fully invested on the next business day.
The process of redemption, liquidation, and investment in a New Trust is
intended to allow for the fact that the portfolios selected by the
Sponsor are chosen on the basis of growth and income potential only for
a year, at which point a new portfolio is chosen. It is contemplated
that a similar process of redemption, liquidation and investment in a
New Trust will be available as each Series of the United Kingdom Trust
and Hong Kong Trust terminates.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in a New Trust
or other similar trust, no cash would be distributed at that time to pay
any taxes. Included in the cash for the Special Redemption and
Liquidation will be an amount of cash attributable to the second semi-
annual distribution of dividend income; accordingly, Rollover Unit
holders also will not have cash from this source distributed to pay any
taxes. See "What is the Federal Tax Status of Unit holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a period as they can without
materially adversely affecting the price of the Equity Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated ("Remaining Unit holders")
will not realize capital gains or losses due to the Special Redemption
and Liquidation, and will not be charged any additional sales charge.
Page 32
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the New Trusts or any subsequent series of the Trusts, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before the Special
Redemption and Liquidation Period would have commenced. All Unit holders
will then be remaining Unit holders, with rights to ordinary redemption
as before. See "How May Units be Redeemed?" The Sponsor may modify the
terms of the New Trusts or any subsequent series of the Trusts. The
Sponsor may also modify, suspend or terminate the Rollover Option upon
notice to the Unit holders of such amendment at least 60 days prior to
the effective date of such amendment.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unit
holder not later than the day on which the Units would otherwise have
been redeemed by the Trustee. Units held by the Sponsor may be tendered
to the Trustee for redemption as any other Units. In the event the
Sponsor does not purchase Units, the Trustee may sell Units tendered for
redemption in the over-the-counter market, if any, as long as the amount
to be received by the Unit holder is equal to the amount he would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Equity Securities be Removed from a Trust?
The Portfolios of the Trusts are not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to a Trust.
Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by a Trust of any securities or other property other than the Equity
Securities is prohibited. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by a Trust, they may be accepted for deposit in a Trust and
either sold by the Trustee or held in a Trust pursuant to the direction
of the Sponsor (who may rely on the advice of the Portfolio Supervisor).
Proceeds from the sale of Equity Securities by the Trustee are credited
to the Capital Account of a Trust for distribution to Unit holders or to
meet redemptions.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of
expenses. The Trustee may, from time to time, retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for the Trust with respect to selling Equity Securities for the
Trust. In acting in such capacity, the Sponsor will be held subject to
the restrictions under the Investment Company Act of 1940, as amended.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for a Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
Page 33
shares) in which blocks of Equity Securities are to be sold.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds, The
First Trust GNMA, Templeton Growth and Treasury Trust, Templeton Foreign
Fund & U.S. Treasury Securities Trust and The Advantage Growth and
Treasury Securities Trust. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (630) 241-4141. As of
December 31, 1995, the total partners' capital of Nike Securities L.P.
was $9,033,760 (audited). (This paragraph relates only to the Sponsor
and not to the Trusts or to any series thereof or to any other
Underwriter. The information is included herein only for the purpose of
informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 770 Broadway, New York, New York 10003. Unit
holders who have questions regarding the Trusts may call the Customer
Service Help Line at 1-800-682-7520. The Trustee is subject to
supervision by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Equity Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Page 34
Trustee of any of the Equity Securities. In the event of the failure of
the Sponsor to act under the Indenture, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under
the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor and the Trustee,
in which event the Sponsor and the Trustee are to use their best efforts
to appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the Mandatory
Termination Date indicated herein under the Trust's "Summary of
Essential Information" in Part I of this Prospectus. The Trust may be
liquidated at any time by consent of 100% of the Unit holders of a Trust
or by the Trustee when the value of the Equity Securities owned by such
Trust as shown by any evaluation, is less than the lower of $2,000,000
or 20% of the total value of Equity Securities deposited in such Trust
during the primary offering period, or in the event that Units of such
Trust not yet sold aggregating more than 60% of the Units of such Trust
are tendered for redemption by the Underwriter, including the Sponsor.
If a Trust is liquidated because of the redemption of unsold Units of
such Trust by the Underwriter, the Sponsor will refund to each purchaser
of Units of such Trust the entire sales charge paid by such purchaser.
In the event of termination, written notice thereof will be sent by the
Trustee to all Unit holders of a Trust. Within a reasonable period after
termination, the Trustee will follow the procedures set forth under "How
are Income and Capital Distributed?" Also, because of the Special
Redemption and Liquidation in a New Trust, there is a possibility that a
Trust may be reduced below the Discretionary Liquidation Amount and that
a Trust could therefore be terminated at that time before the Mandatory
Termination Date of the Fund.
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of a Trust. The
Page 35
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of a Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his address appearing on the registration books of such Trust
maintained by the Trustee. Not less than 30 days prior to the Mandatory
Termination Date of the Trust, the Trustee will provide written notice
thereof to all Unit holders. Unit holders who do not elect the Rollover
Option will receive a cash distribution from the sale of the remaining
Equity Securities within a reasonable time after a Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from
the funds of a Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Equity Securities in a Trust
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. The Trustee will
then distribute to each Unit holder his pro rata share of the balance of
the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
United States Federal tax law have been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for the
Trustee and as special New York tax counsel for the Trust.
Experts
The statements of net assets, including the schedules of investments, of
the Trusts at the opening of business on the Initial Date of Deposit
appearing in Part I of this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon appearing in Part I of this Prospectus and in
the Registration Statement, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
Page 36
This page is intentionally left blank.
Page 37
This page is intentionally left blank.
Page 38
This page is intentionally left blank.
Page 39
CONTENTS:
The First Trust Special Situations Trust Series:
What is The First Trust Special Situations Trust? 1
What are the Expenses and Charges? 2
What is the Federal Tax Status of Unit Holders? 4
United Kingdom Taxation 7
Hong Kong Taxation 8
Why are Investments in the Trusts Suitable for
Retirement Plans? 9
Portfolio:
What are Equity Securities? 9
United Kingdom Trust 10
Hong Kong Trust 13
What are Some Additional Considerations
for Investors? 16
Risk Factors 16
Legislation 18
Foreign Issuers 18
Foreign Trust Information 19
United Kingdom Trust 19
Hong Kong Trust 19
Exchange Rate 21
Public Offering:
How is the Public Offering Price Determined? 24
How are Units Distributed? 26
What are the Sponsor's Profits? 27
Will There be a Secondary Market? 27
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 28
How are Income and Capital Distributed? 28
What Reports will Unit Holders Receive? 29
How May Units be Redeemed? 30
Special Redemption, Liquidation and
Investment in a New Trust 31
How May Units be Purchased by the Sponsor? 33
How May Equity Securities be Removed
from a Trust? 33
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 34
Who is the Trustee? 34
Limitations on Liabilities of Sponsor and Trustee 34
Who is the Evaluator? 35
Other Information:
How May the Indenture be Amended
or Terminated? 35
Legal Opinions 36
Experts 36
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
INTERNATIONAL TARGET 5 TRUSTS
UNITED KINGDOM TRUST
HONG KONG TRUST
Prospectus
Part II
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 40
-APPENDIX-
The graph which appears on page 12 of Part II of the Prospectus
represents a comparison between a $10,000 investment made on January 1,
1976 in those stocks which comprise the FT Index and the common stock of
the five companies with the lowest per share stock price of the ten
companies in the FT Index having the highest dividend yield as of
December 31 of each respective year. The chart indicates that $10,000
invested on January 1, 1976 in the stocks which comprise the FT Index
would on December 31, 1995 be worth $110,339 and $515,331 had the
$10,000 been invested in the five lowest priced stocks of the ten common
stocks in the FT Index having the highest dividend yield as of December
31 of each respective year. Each figure assumes that dividends received
during each year will be reinvested at year end and sales charges,
commissions, expenses and taxes were not considered in determining total
returns. The figures have been adjusted to take into account currency
exchange rate fluctuations in the U.S. dollar.
The graph which appears on page 15 of Part II of the Prospectus
represents a comparison between a $10,000 investment made on January 1,
1976 in those stocks which comprise the Hang Seng Index and the common
stock of the five companies with the lowest per share stock price of the
ten companies in the Hang Seng Index having the highest dividend yield
as of December 31 of each respective year. The chart indicates that
$10,000 invested on January 1, 1976 in the stocks which comprise the
Hang Seng Index would on December 31, 1995 be worth $396,945 and
$441,640 had the $10,000 been invested in the five lowest priced of the
ten common stocks in the Hang Seng Index having the highest dividend
yield as of December 31 of each respective year. Each figure assumes
that dividends received during each year will be reinvested at year end
and sales charges, commissions, expenses and taxes were not considered
in determining total returns. The figures have been adjusted to take
into account currency exchange rate fluctuations in the U.S. dollar.
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, 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 Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 155, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1,
The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, The First Trust
Special Situations Trust, Series 69 Target Equity Trust Value Ten
Series, The First Trust Special Situations Trust, Series 108 and
The First Trust Special Situations Trust, Series 119 Target 5
Trust, Series 2 Target 10 Trust, Series 8, for purposes of the
representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of 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, The First Trust Special Situations Trust, Series
155, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
September 4, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 155
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
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
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) September 4, 1996
General Partner of )
Nike Securities L.P.)
)
)
) Robert M. Porcellino
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated September 4, 1996 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-08595) and related Prospectus of The First Trust Special
Situations Trust, Series 155.
ERNST & YOUNG LLP
Chicago, Illinois
September 4, 1996
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 155 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
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).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 155
TRUST AGREEMENT
Dated: September 4, 1996
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank, as Trustee and 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 The First Trust Special Situations Trust, Series 22
and certain subsequent Series, Effective November 20, 1991"
(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 and 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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR UNITED KINGDOM TRUST, SEPTEMBER 1996 SERIES
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 the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
20% BICC Plc, 20% BTR Plc, 20% British Gas Plc,
20% British Telecom Plc, 20% Hanson Plc.
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0025 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0090 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05. However, in
no event, except as may otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive
compensation in any one year from any Trust of less than $2,000
for such annual compensation.
I. The Initial Date of Deposit for the Trust is
September 4, 1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR HONG KONG TRUST, SEPTEMBER 1996 SERIES
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 the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
20% Amoy Properties Ltd., 20% Henderson Investment
Ltd., 20% Hong Kong Telecommunications Ltd., 20%
Shun Tak Holdings Ltd., 20% South China Morning Post
(Holdings) Ltd.
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0025 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0090 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05. However, in
no event, except as may otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive
compensation in any one year from any Trust of less than $2,000
for such annual compensation.
I. The Initial Date of Deposit for the Trust is
September 4, 1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
B. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
C. Section 1.01(27) shall be added to read as follows:
"(27) The "Rollover Notification Date" shall be
defined as set forth in the Prospectus under "Summary of
Essential Information."
D. Section 1.01(28) shall be added to read as follows:
"(28) The term "Rollover Distribution" shall be
defined as set forth in Section 5.05, herein."
E. Section 1.01(29) shall be added to read as follows:
"(29) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.02 herein."
F. Section 1.01(30) shall be added to read as follows:
"(30) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information."
G. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
H. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur with 20 days from the date of a failure
occurring within such initial 90-day period) shall maintain
exactly the Percentage Ratio existing immediately prior to
such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit. Cash represented by foreign currency shall be
replicated in such currency or, if the Trustee has entered
into a contract for the conversion thereof, in U.S. dollars
in an amount replicating the dollars to be received on such
conversion."
I. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligation requires settlement in a
foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of
the Contract Obligation and cash or a Letter of Credit in
U.S. dollars sufficient to perform such foreign exchange
contract."
J. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. 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."
K. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Principal Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
L. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Principal
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Principal Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
M. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
N. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure 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.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Principal Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall, within five days thereafter, mail to all Unit
holders of such Trust notices of such acquisition unless
legal counsel for such Trust determines that such notice is
not required by The Investment Company Act of 1940, as
amended."
O. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Principal Account and pay to the Depositor the
amount that it is entitled to receive pursuant to Section
3.14.
P. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in
'26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount which shall not exceed that amount set forth in
the Prospectus times the number of Units outstanding as of
January 1 of such year except for a year or years in which
an initial offering period as determined by Section 4.01 of
this Indenture occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such
month (such annual fee to be pro rated for any calendar year
in which the Depositor provides service during less than the
whole of such year), but in no event shall such compensation
when combined with all compensation received from other unit
investment trusts for which the Depositor hereunder is
acting as Depositor for providing such bookkeeping and
administrative services in any calendar year exceed the
aggregate cost to the Depositor providing services to such
unit investment trusts. Such compensation may, from time to
time, be adjusted provided that the total adjustment upward
does not, at the time of such adjustment, exceed the
percentage of the total increase, after the date hereof, in
consumer prices for services as measured by the United
States Department of Labor Consumer Price Index entitled
"All Services Less Rent of Shelter" or similar index, if
such index should no longer be published. The consent or
concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such
compensation shall be paid by the Trustee, upon receipt of
invoice therefor from the Depositor, upon which, as to the
cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against
the Interest and Principal Accounts on or before the
Distribution Date following the Monthly Record Date on which
such period terminates. The Trustee shall have no liability
to any Certificateholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Interest and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.14, the Trustee shall
have the power to sell (i) Securities from the current list
of Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
Q. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus, withdraw from the Capital
Account, an amount per Unit specified in such Prospectus and
credit such amount to a special non-Trust account designated
by the Depositor out of which the deferred sales charge will
be distributed to the Depositor (the "Deferred Sales Charge
Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. If a Unit
holder redeems Units prior to full payment of the deferred
sales charge, the Trustee shall, if so provided in the
related Prospectus, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g)(ii), the Trustee shall, if so
provided in the related Prospectus, on the termination of
the Trust, withhold from the proceeds payable to Unit
holders an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to the
Deferred Sales Charge Account. If the Trust is terminated
pursuant to Section 6.01(g)(ii), the Trustee shall not
withhold from the proceeds payable to Unit holders any
amounts of unpaid deferred sales charges. If pursuant to
Section 5.02 hereof, the Depositor shall purchase a Unit
tendered for redemption prior to the payment in full of the
deferred sales charge due on the tendered Unit, the
Depositor shall pay to the Unit holder the amount specified
under Section 5.02 less the unpaid portion of the deferred
sales charge. All advances made by the Trustee pursuant to
this Section shall be secured by a lien on the Trust prior
to the interest of the Unit holders."
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.16:
"Section 3.16. Foreign Currency Exchange. Unless the
Depositor shall otherwise direct, whenever funds are
received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in
respect of a sale of Securities, concurrently with the
contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Trustee shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars
pursuant to the instruction of the Depositor. The Trustee
shall have no liability for any loss or depreciation
resulting from action taken pursuant to such instruction."
S. Article IV, Section 4.01 of the Standard Terms and
Conditions of Trust is hereby amended in the following manner:
1. Section 4.01(b) is hereby amended by deleting that
portion of the first sentence appearing after the colon and
the entire second sentence and replacing them in their
entirety with the following:
if the Securities are listed on a national or
foreign securities exchange or the NASDAQ National
Market System, such Evaluation shall generally be
based on the closing sale price on the exchange or
system which is the principal market therefor,
which shall be deemed to be the New York Stock
Exchange if the Securities are listed thereon
(unless the Evaluator deems such price
inappropriate as a basis for evaluation), or if
there is no closing sale price on such exchange or
system, at the closing ask prices. If the
Securities are not so listed or, if so listed and
the principal market therefor is other than on an
exchange, the evaluation shall generally be based
on the current ask price on the over-the-counter
market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If
current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of
current ask prices for comparable securities, (b)
by appraising the value of the Securities on the
ask side of the market or (c) any combination of
the above. If such prices are in a currency
other than U.S. dollars, the Evaluation of such
Security shall be converted to U.S. dollars
based on current offering side exchange rates,
unless the Security is in the form of an
American Depositary Share or Receipt, in which
case the Evaluations shall be based upon the
U.S. dollar prices in the market for American
Depositary Shares or Receipts (unless the
Evaluator deems such prices inappropriate as a
basis for valuation). As used herein, the
closing sale price is deemed to mean the most
recent closing sale price on the relevant
securities exchange immediately prior to the
Evaluation time."
2. Section 4.01(c) is hereby deleted and
replaced in its entirety with the following:
"(c) After the initial offering period and
both during and after the initial offering period,
for purposes of the Trust Fund Evaluations
required by Section 5.01 in determining Redemption
Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section
4.01(b), on the basis of the current bid prices for
Zero Coupon Obligations (if any), bid side value of the
relevant currency exchange rate expressed in U.S.
dollars and, except in those cases in which the
Equity Securities are listed on a national or
foreign securities exchange or the NASDAQ National
Market System and the closing sale prices are
utilized, on the basis of the current bid prices
of the Equity Securities. In addition, the
Evaluator shall reduce the Evaluation of each
Security by the amount of any liquidation costs
(other than brokerage costs incurred on any
national securities exchange) and any capital
gains or other taxes which would be incurred by
the Trust upon the sale of such Security, such
taxes being computed as if the Security were sold
on the date of the Evaluation."
T. Section 5.01 is hereby amended to add the following at
the conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in foreign currency
shall be reported to the Evaluator who shall convert the
same to U.S. dollars based on current exchange rates, in the
same manner as provided in Section 4.01(b) or 4.01(c), as
applicable, for the conversion of the valuation of foreign
Equity Securities, and the Evaluator shall report such
conversion with each Evaluation made pursuant to Section
4.01."
U. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Unit holders may redeem 2,500 Units or more of a Trust
and request a distribution in kind of (i) such Unit holder's
pro rata portion of each of the Securities in such Trust, in
whole shares, and (ii) cash equal to such Unit holder's
pro rata portion of the Income and Principal Accounts as
follows: (x) a pro rata portion of the net proceeds of sale
of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Principal Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, to the extent possible, distributions of Securities
pursuant to an in kind redemption of Units shall be made by
the Trustee through the distribution of each of the
Securities in book-entry form to the account of the Unit
holder's bank or broker-dealer at the Depository Trust
Company. Any distribution in kind will be reduced by
customary transfer and registration charges."
V. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of Target Equity
Trust, Value Ten Series or Target Equity Trust, Value Five
Series (individually, each a "New Series" and collectively,
the "New Series"), the Trustee shall, at the Depositor's
sole cost and expense, include in the notice sent to Unit
holders specified in Section 8.02 a form of election whereby
Unit holders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Units(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included
in the redemption distribution sold, and the cash proceeds
applied by the Distribution Agent to purchase Units of a New
Series, all as hereinafter provided. The Trustee shall
honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption
request with respect to uncertificated Units, by its close
of business on the Rollover Notification Date.
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled on the
Rollover Notification Date. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
Rollover Notification Date of the net asset value
(determined on the basis of the Trust Fund Evaluation as of
the Rollover Notification Date in accordance with
Section 4.01) multiplied by the number of Units being
redeemed (herein called the "Rollover Distribution"). Any
Securities that are made part of the Rollover Distribution
shall be valued for purposes of the redemption distribution
as of the Rollover Notification Date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent during
the Special Redemption and Liquidation Period specified in
the Prospectus pursuant to the Depositor's direction, and
the Distribution Agent shall employ the Depositor as broker
in connection with such sales. For such brokerage services,
the Depositor shall be entitled to compensation at its
customary rates, provided however, that its compensation
shall not exceed the amount authorized by applicable
Securities laws and regulations. The Depositor shall direct
that sales be made in accordance with the guidelines set
forth in the Prospectus under the heading "Special
Redemption, Liquidation and Investment in New Trusts."
Should the Depositor fail to provide direction, the
Distribution Agent shall sell the Securities in the manner
provided in the prospectus for " less liquid Equity
Securities." The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon each trade date for sales of Securities included
in the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of a New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such Trust. Such contract shall
provide for purchase of the maximum number of Units of a New
Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of a New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of a New Series
will be uncertificated unless and until the Rollover Unit
holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation
resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in
the event the Depositor does not make Units available for
purchase.
(b) Notwithstanding the foregoing, the Depositor may,
in their discretion at any time, decide not to offer Trust
Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is
permitted reimbursement hereunder."
W. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the evaluation of the
Trust made on the last day of the initial offering period,
or (ii)"
X. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
Y. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
Z. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not exceed
that amount as set forth in the Prospectus per Unit
outstanding as of January 1 of such year except for a Trust
during the year or years in which an initial offering period
as determined in Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Portfolio
Supervisor provides services during less than the whole of
such year), but in no event shall such compensation when
combined with all compensation received from other series of
the Trust for providing such supervisory services in any
calendar year exceed the aggregate cost to the Portfolio
Supervisor for the cost of providing such services."
AA. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
BB. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute any
Letter(s) of Credit deposited with the Trustee in connection
with the deposits described in Section 2.01(a) and (b) with
cash in an amount sufficient to satisfy the obligations to
which the Letter(s) of Credit relates. Any substituted
Letter(s) of Credit shall be released by the Trustee."
CC. Paragraph (e) of Section 6.01 of Article VI of the
Standard Terms and Conditions of Trust is amended to read as
follows:
"(e) (I) Subject to the provisions of subparagraphs
(II) and (III) of this paragraph, the Trustee may employ
agents, sub-custodians, attorneys, accountants and auditors
and shall not be answerable for the default or misconduct of
any such agents, sub-custodians, attorneys, accountants or
auditors if such agents, sub-custodians, attorneys,
accountants or auditors shall have been selected with
reasonable care. The Trustee shall be fully protected in
respect of any action under this Indenture taken or suffered
in good faith by the Trustee in accordance with the opinion
of counsel, which may be counsel to the Depositor acceptable
to the Trustee, provided, however, that this disclaimer of
liability shall not (i) excuse the Trustee from the
responsibilities specified in subparagraph II below or
(ii) limit the obligation of the Trustee to indemnify the
Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the
Trust reimbursable from the Income and Capital Accounts of
the affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of
an eligible foreign custodian (which is employed by the
Trustee as a sub-custodian as contemplated by subparagraph
(I) of this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership interest) the Trust's foreign
securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign securities
transactions, provided that the Trustee hereby agrees to
perform all the duties assigned by rule 17f-5, as now in
effect or as it may be amended in the future, to the boards
of management investment companies. The Trustee's duties
under the preceding sentence will not be delegated.
As used in this subparagraph (II),
(1) "foreign securities" include: securities
issued and sold primarily outside the United States by a
foreign government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the government of the United States or by
any state or any political subdivision thereof or by any
agency thereof or by any entity organized under the laws of
the United States or of any state thereof which have been
issued and sold primarily outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for
the central handling of securities or equivalent book
entries which, by appropriate exemptive order issued by the
Securities and Exchange Commission, have been qualified as
eligible foreign custodians for the Trust but only for so
long as such exemptive order continues in effect: Morgan
Guaranty Trust Company of New York, Brussels, Belgium, in
its capacity as operator of the Euroclear System
("Euroclear"), and Central de Livraison de Valeurs
Mobilires, S.A. ("CEDEL").
(b) Any other entity that shall have been
qualified as an eligible foreign custodian for the foreign
securities of the Trust by the Securities and Exchange
Commission by exemptive order, rule or other appropriate
action, commencing on such date as it shall have been so
qualified but only for so long as such exemptive order, rule
or other appropriate action continues in effect.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss occurring as a
result of an eligible foreign custodian's willful
misfeasance, reckless disregard, bad faith, or gross
negligence in performing custodial duties."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank 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.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Thomas Porrazzo
Vice President
[SEAL]
ATTEST:
Rosalia A. Raviele
Second Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 155
(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
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 4, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 155
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 155 in connection with the preparation, execution
and delivery of a Trust Agreement dated September 4, 1996 among
Nike Securities L.P., as Depositor, The Chase Manhattan Bank, 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 a certificate or
certificates representing 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 execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-08595)
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,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
September 4, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 155
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 155 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trusts of said Fund (the "Trusts" and
each a "Trust"), under a Trust Agreement, dated September 4, 1996
(the "Indenture"), among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by the Trusts from proceeds of subsequent deposits,
if any, will be made, in accordance with the terms of the
Indenture. The Trusts holds Equity Securities as such term is
defined in the Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of a Trust under the Internal Revenue Code of 1986 (the
"Code"); the income of such Trust will be treated as income of
the Unit holders thereof under the Code; and an item of Trust
income will have the same character in the hands of a Unit holder
as it would have in the hands of the Trustee. Each Unit holder
will be considered to have received his pro rata share of income
derived from each Trust asset when such income is received by the
Trust.
II. Each Unit holder will have a taxable event when a Trust
disposes of an Equity Security (whether by sale, exchange,
liquidation, redemption, or otherwise) or upon the sale or
redemption of Units by such Unit holder. The price a Unit holder
pays for his Units is allocated among his pro rata portion of
each Equity Security held by such Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases
his Units) in order to determine his tax basis for his pro rata
portion of each Equity Security held by such Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a
corporation with respect to an Equity Security held by a Trust
are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." A
Unit holder's pro rata portion of dividends paid on such Equity
Security which exceeds such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such
Equity Security, and to the extent that such dividends exceed a
Unit holder's tax basis in such Equity Security shall be treated
as capital gain. In general, any such capital gain will be short
term unless a Unit holder has held his Units for more than one
year.
III. A Unit holder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Equity Securities
held by a Trust will generally be considered a capital gain
except in the case of a dealer or a financial institution and
will be generally long-term if the Unit holder has held his Units
for more than one year. A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of Equity
Securities held by a Trust will generally be considered a capital
loss (except in the case of a dealer or a financial institution)
and will be generally long-term if the Unit holder has held his
Units for more than one year. Unit holders should consult their
tax advisers regarding the recognition of gains and losses for
Federal Income tax purposes. In particular, a Rollover Unit
holder should be aware that a Rollover Unit holder's loss, if
any, incurred in connection with the exchange of Units for Units
in the next new series of the Target Equity Trust, Value Ten
Series or Target Equity Trust, Value Five Series (the "1997
Trusts") will generally be disallowed with respect to the
disposition of any Equity Securities pursuant to such exchange to
the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions
of the Code taking into account such Unit holder's deemed
ownership of securities underlying the Units in a 1997 Trust in
the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before
and ending 30 days after such disposition. However, any gains
incurred in connection with such an exchange by a Rollover Unit
holder would be recognized.
Each Unit holder's pro rata share of each expense paid by a
Trust is deductible by the Unit holder to the same extent as
though the expense had been paid directly by him, subject to the
following limitation. It should be noted that as a result of the
Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation
fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's
adjusted gross income. Unit holders may be required to treat
some or all of the expenses of the Trust as miscellaneous
itemized deductions subject to this limitation.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-08595)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
September 4, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 155
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 155
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
155 (each, a "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated November 20, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator, First
Trust Advisors L.P., as Portfolio Supervisor, and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the
terms of the Indenture, units of fractional undivided interest in
the Trust (the "Units") will be issued in the aggregate number
set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-08595) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit-holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
September 4, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 155
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 155
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor; and Chase, as Trustee (the "Trustee"),
establishing The First Trust Special Situations Trust, Series 155
(each, a "Trust"), and the execution by Chase, as Trustee under
the Indenture, of a certificate or certificates evidencing
ownership of units (such certificate or certificates and such
aggregate units being herein called "Certificates" and "Units"),
each of which represents an undivided interest in the respective
Trust which consists of common stocks (including confirmations of
contracts for the purchase of certain stocks and bonds not
delivered and cash, cash equivalents or an irrevocable letter of
credit or a combination thereof, in the amount required for such
purchase upon the receipt of such stocks and bonds), such stocks
and bonds being defined in the Indenture as Securities and listed
in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a trust company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has duly executed and delivered to
or upon the order of the Depositor a Certificate or Certificates
evidencing ownership of the Units, registered in the name of the
Depositor. Upon receipt of confirmation of the effectiveness of
the registration statement for the sale of the Units filed with
the Securities and Exchange Commission under the Securities Act
of 1933, the Trustee may deliver such other Certificates, in such
names and denominations as the Depositor may request, to or upon
the order of the Depositor as provided in the Closing Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and may be
reimbursed, without interest, for any such advances from funds in
the interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
September 4, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 155
Gentlemen:
We have examined the Registration Statement File No.
333-08595 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.
Robert M. Porcellino
Vice President
LINKLATERS & PAINES (NEW YORK)
885 THIRD AVENUE, SUITE 2600
NEW YORK, NEW YORK 100221
FAX (212) 751-9335
TELEX 127812
September 4, 1996
Nike Securities L.P.
1001 Warrenville Road
Suite 300
Lisle
Illinois 60532
Dear Sirs
SPECIAL SITUATIONS TRUST SERIES 155 FIRST TRUST
INTERNATIONAL TARGET 5 TRUSTS (THE "FUND")
1. We have acted as special United Kingdom ("UK") taxation
advisers in connection with the issue of units
("Units") in the above Fund on the basis of directions
given to us by Chapman and Cutler, counsel to
yourselves.
2. This opinion is limited to UK taxation law as applied
in practice on the date hereof by the Inland Revenue
and is given on the basis that it will be governed by
and construed in accordance with English law as
enacted.
3. For the purpose of this opinion, the only documentation
which we have examined is a draft prospectus for the
Fund dated August 22, 1996 (the "Prospectus"). We have
been advised by Chapman and Cutler that there will be
no material differences between the Prospectus and the
final prospectus to be issued for the Fund.
4. We have assumed for the purposes of this opinion that:
4.1. a holder of Units ("Unit holder") is, under the
terms of the Trust Agreement governing the United
Kingdom Trust, September Series (the "Trust") of
the Fund, entitled to have paid to him (subject to
a deduction for annual expenses, including total
applicable custodial fees and certain other costs
associated with foreign trading and annual
Trustee's, Sponsor's, portfolio supervisory,
evaluation and administrative fees and expenses)
his pro rata share of all the income which arises
to the Trust from the investments in the Trust,
and that, under the governing law of the Trust
Agreement, this is a right as against the assets
of the Trust rather than a right enforceable in
damages only against the Trustee;
4.2. subject as provided in paragraph 10 below, for
taxation purposes the Trustee is not a UK resident
and is a US resident;
4.3. the general administration of the Fund will be
carried out only in the US;
4.4. no Units are registered in a register kept in the
UK by or on behalf of the Trustee;
4.5. the Trust is not treated as a corporation for US
tax purposes;
4.6. the structure, including the investment strategy
of the Fund, will be substantially the same as
that set out in the Prospectus; and
4.7. each Unit holder is neither resident nor
ordinarily resident in the UK, nor is any such
Unit holder carrying on a trade in the UK through
a branch or agent.
5. We understand that the Fund will consist of two unit
investment trusts: the Trust and the Hong Kong Trust;
that the Trust will contain the common stock of the
five companies with the lowest per share stock price of
the ten companies in the Financial Times Industrial
Ordinary Share Index having the highest dividend yield
as at the close of business three days prior to the
date of the final prospectus to be issued for the Fund;
and that the Trust will hold such UK common stocks for
a period of approximately one year, after which time
the Trust will terminate and the stocks will be sold.
We address UK tax issues in relation only to the Trust.
6. Where a dividend which carries a tax credit, as
distinct from a foreign income dividend (in relation to
which see 7 below), is paid by a UK resident company to
a qualifying US resident which (either alone or
together with one or more associated corporations)
controls directly or indirectly less than 10 percent of
the voting stock of that UK company, the qualifying US
resident is entitled, on making a claim to the UK
Inland Revenue, to a payment of a tax credit currently
equal to a quarter of the dividend less a withholding
tax of 15 percent of the aggregate amount of the tax
credit and the dividend. Thus, on payment by a UK
company of a dividend of 80 pounds, a tax credit of 20
pounds arises and so a qualifying US resident will be
entitled, on making such a claim, to a payment from the
UK Inland Revenue of 5 pounds (being 20 pounds less 15
percent of (20 pounds + 80 pounds)).
A person will be a qualifying US resident for these
purposes if:
6.1. that person is a resident of the US for the
purposes of the double tax treaty between the US
and the UK (the "Treaty").
The Trustee (in its capacity as recipient of the
dividend on behalf of the Trust) will be a
resident of the US for these purposes if it is
resident in the US for the purposes of US tax.
However, it will only be a resident of the US for
Treaty purposes to the extent that the income
derived by the Trust is subject to US tax as the
income of a US resident, either in the hands of
the Trust itself or in the hands of its
beneficiaries.
We have assumed that the Trust will not be subject
to US tax on its income and that such income will
be treated as income of the beneficiaries of the
Trust for US purposes. Accordingly, the Trust
would be a US resident for the purposes of the
Treaty only to the extent that the beneficiaries
would be taxable in the US on such income or
treated as so taxable by agreement between the
relevant authorities. The provisions of the
Treaty have been extended to grant resident status
to tax-exempt charitable trusts and pension funds.
We understand that this is confirmed on the US
Treasury side by its "Technical Explanation" of
the Treaty issued on March 9, 1977;
6.2. the dividend is paid to that person.
We believe that the payment of a dividend to the
Trustee and onward payment by the Trustee to a
Unit holder should qualify as the payment of the
dividend to the Unit holder for these purposes.
The position is however not completely free from
doubt, but this appears to be present Inland
Revenue practice;
6.3. the beneficial owner of the dividend is a resident
of the US for the purposes of the Treaty.
The Trust will not be the beneficial owner of any
dividend for these purposes. Whether a Unit
holder is a beneficial owner will depend upon the
circumstances of his ownership of the Units; and
6.4. that person satisfies the other requirements of
the Treaty including the following:
6.4.1.the dividend is not received in connection
with a UK permanent establishment or fixed
base of that person;
6.4.2.subject to certain exemptions, that person
is not a US corporation (a) 25 percent or
more of whose capital is owned directly or
indirectly by persons who are not
individual residents or nationals of the
US; and (b) which either (i) suffers US tax
on the dividend at a rate substantially
less than that which is generally imposed
on corporate profits or (ii) is an 80:20
corporation for the purposes of the US
Internal Revenue Code of 1954, section 861;
6.5. that person is not a corporation resident in both
the US and the UK; and
6.6. that person is not exempt from US tax in a case
where (a) that person's interest in the UK company
is not acquired for bona fide commercial reasons
and (b) if the recipient of the dividend were a
resident of the UK and exempt from UK tax, the UK
exemption would be limited or removed.
Therefore, although the position is not free from
doubt, a Unit holder, where the requirements set
out above are satisfied, should, on making an
appropriate claim, be entitled to repayment of
part of the UK tax credit. However, since the UK
Inland Revenue normally require claims to be made
by the beneficial owner of a dividend, the Trustee
will not, in the absence of arrangements with the
UK Inland Revenue and the Unit holders, be able to
claim any such repayment.
Moreover, in order to make a claim for repayment,
the Unit holder will need to produce evidence of
the payment of the dividend and of his interest in
it. Normally this is achieved by submitting to
the UK Inland Revenue tax vouchers which are
derived directly from the UK company paying a
dividend, or which are prepared by the Trustee and
evidence to the satisfaction of the Inland Revenue
the entitlement of the Unit holder to that
dividend. Where the Trustee provides neither of
these, it will in practice be difficult for the
Unit holder to establish his beneficial interest
in any dividend payment and accordingly his
entitlement to any tax credit.
7. Since July 1, 1994, it is possible for a UK resident
company to elect to treat a cash dividend paid by it as
a "foreign income dividend" ("FID"). If a company
makes an effective election to pay a FID in respect of
shares which are held in the Trust, there will be no
entitlement to a refundable tax credit in respect of
that FID, notwithstanding 6 above.
8. The Trust may be held to be trading in stock rather
than holding stock for investment purposes by virtue,
inter alia, of the length of the time for which the
stock is held. If the stock is purchased through a UK
resident agent, then, if the Trust is held to be
trading in such stock, profits made on its subsequent
disposal may, subject to 9 below, be liable to United
Kingdom tax on income.
9. Under current law, the Trust's liability to tax on such
profits will be limited to the amount of tax (if any)
withheld from the Trust's income provided such profits
derive from transactions carried out on behalf of the
Trust by a UK agent where the following conditions are
satisfied:
9.1. the transactions from which the profits are
derived are investment transactions;
9.2. the agent carries on a business of providing
investment management services;
9.3. the transactions are carried out by the agent on
behalf of the Trust in the ordinary course of that
business;
9.4. the remuneration received by the agent is at a
customary rate for the type of business concerned;
9.5. the agent acts for the Trust in an independent
capacity.
The agent will act in an independent capacity if
the relationship between the agent and the Trust,
taking account of its legal, financial and
commercial characteristics, is one which would
exist between independent persons dealing at arm's
length. This will be regarded as the case by the
UK Inland Revenue if, for example, the provision
of services by the agent to the Trust (and any
connected person) does not form a substantial part
of the agent's business (namely where it does not
exceed 70 percent of the agent's business, by
reference to fees or some other measure if
appropriate).
In addition, this condition will be regarded as
satisfied by the UK Inland Revenue if interests in
the Trust, a collective fund, are freely marketed;
9.6. the agent (and persons connected with the agent)
do not have a beneficial interest in more than 20
percent of the Trust's income derived from the
investment transactions (excluding reasonable
management fees paid to the agent); and
9.7. the agent acts in no other capacity in the UK for
the Trust.
Further, where stock is purchased and sold through
a UK broker in the ordinary course of a brokerage
business carried on in the UK by that broker, and
the remuneration which the broker receives for the
transactions is at a rate which is no less than
that which is customary for that class of business
and the broker acts in no other capacity for the
Trust in the UK, profits arising from transactions
carried out through that broker will not be liable
to UK tax.
Accordingly, unless a Unit holder is UK resident
or, being non-UK resident, has a presence in the
UK (other than through an agent or a broker acting
in the manner described above) in connection with
which the Units are held, the Unit holder will not
be charged to UK tax on such profits.
10. If the Trustee has a presence in the UK, then it is
technically possible that income or gains of the Fund
could be assessed upon the Trustee, whether arising
from securities (which includes stock) or from dealings
in those securities. We understand that the Trustee
has a branch in the UK. However, we consider that any
such risk should be remote provided that:
10.1. any income derived by the Trustee will be
derived by it (see 6.1 above) as a resident of the
US for the purposes of the Treaty; and
10.2. the UK branch of the Trustee will not have
any involvement with establishing or managing the
Fund or its assets nor derive income or gains from
the Fund or its assets.
11. Where the Trustee makes capital gains on the disposal
of shares in the UK companies in which the Trust
invests, a Unit holder will not be liable to UK capital
gains tax on those gains.
12. UK stamp duty will generally be payable at the rate of
50p per 100 pounds of the consideration (or any part)
in respect of a transfer of the shares in UK
incorporated companies or in respect of transfers to be
effected on a UK share register. UK stamp duty reserve
tax will generally be payable on the entering into of
an unconditional agreement to transfer such shares, or
on a conditional agreement to transfer such shares
becoming unconditional, at the rate of 0.5 percent of
the consideration to be provided. The tax will
generally be paid by the purchaser of such shares.
12 No UK stamp duty or stamp duty reserve tax should be
payable on an agreement to transfer nor a transfer of
Units, provided that such transfer is neither executed
in nor brought into the UK.
14. In our opinion, the taxation paragraphs contained on
pages 7 to 8 of the Prospectus under the heading
"United Kingdom Taxation," which are to be contained in
the final prospectus to be issued for the Fund,
represent a fair summary of material UK taxation
consequences for a US resident Unit holder.
15. This opinion is addressed to you on the understanding
that you (and only you) may rely upon it in connection
with the issue and sale of the Units (and for no other
purpose). This opinion may not be quoted or referred
to in any public document or filed with any
governmental agency or other person without our written
consent. We consent however to the reference which is
to be made in the prospectus to be issued for the Fund
to our opinion as to the UK tax consequences to US
persons holding Units in the Trust.
Yours faithfully
Linklaters & Paines
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted
from Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> United Kingdom Trust, September 1996
Series
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> SEP-04-1996
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-04-1996
<INVESTMENTS-AT-COST> 148,635
<INVESTMENTS-AT-VALUE> 148,635
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 148,635
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 148,635
<SHARES-COMMON-STOCK> 15,000
<SHARES-COMMON-PRIOR> 15,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 148,635
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted
from Amendment number 1 to form S-6 and is qualified in its entirety
by reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> Hong Kong Trust, September 1996 Series
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> SEP-04-1996
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-04-1996
<INVESTMENTS-AT-COST> 146,012
<INVESTMENTS-AT-VALUE> 146,012
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 146,012
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 146,012
<SHARES-COMMON-STOCK> 15,000
<SHARES-COMMON-PRIOR> 15,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 146,012
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
