SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 503
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION DATED JANUARY 12, 2001
BANDWIDTH SOLUTIONS SELECT PORTFOLIO, SERIES 5
BIOTECHNOLOGY SELECT PORTFOLIO, SERIES 5
E-BUSINESS SELECT PORTFOLIO, SERIES 5
E-INFRASTRUCTURE SELECT PORTFOLIO, SERIES 4
FIBER OPTICS SELECT PORTFOLIO, SERIES 4
GENOMICS & PROTEOMICS SELECT PORTFOLIO, SERIES 4
GLOBAL TECHNOLOGY SELECT PORTFOLIO, SERIES 3
SEMICONDUCTOR SELECT PORTFOLIO, SERIES 6
SOFTWARE INNOVATIONS 2001 SELECT PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS SELECT PORTFOLIO, SERIES 4
BANDWIDTH SOLUTIONS PORTFOLIO, SERIES 5
BIOTECHNOLOGY PORTFOLIO, SERIES 5
E-BUSINESS PORTFOLIO, SERIES 5
E-INFRASTRUCTURE PORTFOLIO, SERIES 4
FIBER OPTICS PORTFOLIO, SERIES 4
GENOMICS & PROTEOMICS PORTFOLIO, SERIES 4
GLOBAL TECHNOLOGY PORTFOLIO, SERIES 3
SEMICONDUCTOR PORTFOLIO, SERIES 6
SOFTWARE INNOVATIONS 2001 PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS PORTFOLIO, SERIES 4
FT 503
FT 503 is a series of a unit investment trust, the FT Series. FT 503
consists of 20 separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a diversified
portfolio of common stocks ("Securities") issued by companies in the
industry sector or investment focus for which each Trust is named. The
objective of each Trust is to provide above-average capital
appreciation. Each Select Portfolio Series has an expected maturity of
approximately 18 months. Each Portfolio Series has an expected maturity
of approximately five and one-half years.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
First Trust (R)
1-800-621-9533
The date of this prospectus is January __, 2001
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 9
Report of Independent Auditors 10
Statements of Net Assets 11
Schedules of Investments 17
The FT Series 38
Portfolios 39
Risk Factors 45
Public Offering 46
Distribution of Units 49
The Sponsor's Profits 50
The Secondary Market 50
How We Purchase Units 51
Expenses and Charges 51
Tax Status 52
Retirement Plans 53
Rights of Unit Holders 53
Income and Capital Distributions 54
Redeeming Your Units 55
Removing Securities from a Trust 56
Amending or Terminating the Indenture 56
Information on the Sponsor, Trustee and Evaluator 57
Other Information 58
Page 2
Summary of Essential Information
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Bandwidth
Solutions Biotechnology e-Business
Select Select Select e-Infrastructure
Portfolio Portfolio Portfolio Select Portfolio
Series 5 Series 5 Series 5 Series 4
__________ __________ _________ __________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the
Public Offering Price per Unit ( % of the net
amount
invested, exclusive of the deferred sales $ $ $ $
charge) (3)
Less Deferred Sales Charge per Unit $( ) $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $ $
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Fiber Optics Genomics & Global
Optics Proteomics Technology
Select Select Select
Portfolio Portfolio Portfolio
Series 4 Series 4 Series 3
__________ __________ _________
<S> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the Public Offering
Price per Unit ( % of the net amount invested, exclusive of the
deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit
(based on aggregate underlying value of Securities
less deferred sales charge) (5) $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Software
Innovations World Wide
Semiconductor 2001 Wireless
Select Select Select
Portfolio Portfolio Portfolio
Series 6 Series 5 Series 4
__________ __________ _________
<S> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the Public Offering
Price per Unit ( % of the net amount invested, exclusive of the
deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit
(based on aggregate underlying value of Securities
less deferred sales charge) (5) $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
</TABLE>
Page 5
Summary of Essential Information
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Bandwidth
Solutions Biotechnology e-Business e-Infrastructure
Portfolio Portfolio Portfolio Portfolio
Series 5 Series 5 Series 5 Series 4
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the Public
Offering Price per Unit ( % of the net amount
invested, exclusive of the deferred sales charge) (3)$ $ $ $
Less Deferred Sales Charge per Unit $( ) $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $ $
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2006
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
</TABLE>
Page 6
Summary of Essential Information
FT 503
At the Opening of Business on the Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Genomics & Global
Fiber Optics Proteomics Technology
Portfolio Portfolio Portfolio
Series 4 Series 4 Series 3
___________ ___________ ___________
<S> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the Public
Offering Price per Unit ( % of the net amount
invested, exclusive of the deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2006
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
______________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
</TABLE>
Page 7
Summary of Essential Information
FT 503
At the Opening of Business on the Initial Date of Deposit-January __, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Software
Innovations World Wide
Semiconductor 2001 Wireless
Portfolio Portfolio Portfolio
Series 6 Series 5 Series 4
___________ ___________ ___________
<S> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of % of the Public
Offering Price per Unit ( % of the net amount
invested, exclusive of the deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $( ) $( ) $( )
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ $ $
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Fee Accounts Cash CUSIP Number
Fee Accounts Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January __, 2001
Mandatory Termination Date (6) ________, 2006
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
______________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum transactional sales charge consists of an initial sales
charge and a deferred sales charge, but does not include the creation
and development fee. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly 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. In any case, we will distribute any funds in the
Capital Account in December of each year.
</FN>
</TABLE>
Page 8
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although each Select Portfolio
Series has a term of approximately 18 months, each Portfolio Series has
a term of approximately five and one-half years, and each is a unit
investment trust rather than a mutual fund, this information allows you
to compare fees.
<TABLE>
<CAPTION>
Select
Portfolio Series Portfolio Series
_____________________ ______________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
Unit Holder Sales Fees (as a percentage of public offering price)
Maximum Sales Charge
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 2.25%(b) $.225 3.40%(b) $.340
Creation and development fee cap over the life of the Trust 0.50%(c) $.050 1.55%(c) $.155
_______ _______ _______ _______
(the annual creation and development fee is .35% and .31% of average
daily net assets for the Select Portfolio Series and Portfolio Series,
respectively, and is only charged while a Unit holder remains invested)
Maximum Sales Charges (including creation and development fee cap
over the life of the Trust) (c) 3.75% $.375 5.95% $.595
======= ======= ======= =======
Organization Costs (as a percentage of public offering price)
Estimated organization costs .260%(d) $.0260 .225%(d) $.0225
======= ======= ======= =======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .081% $.0080 .100% $.0098
Trustee's fee and other operating expenses .119%(f) $.0118 .153%(f) $.0150
_______ _______ _______ _______
Total .200% $.0198 .253% $.0248
======= ======= ======= =======
</TABLE>
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 18 Months(g) 3 Years 5 Years 5-1/2 Years
______ __________ _______ _______ __________
<S> <C> <C> <C> <C> <C>
Select Portfolio Series $ $ $ $ $
Portfolio Series
The example will not differ if you hold rather than sell your Units at
the end of each period.
_____________
<FN>
(a) The combination of the initial and deferred sales charge comprises
what we refer to as the "transactional sales charge." The initial sales
charge is actually equal to the difference between the maximum
transactional sales charge (3.25% for each Select Portfolio Series and
4.40% for each Portfolio Series) and any remaining deferred sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.225
per Unit for each Select Portfolio Series and $.340 per Unit for each
Portfolio Series which, as a percentage of the Public Offering Price,
will vary over time. The deferred sales charge will be deducted in five
monthly installments commencing ________, 2001.
(c)The creation and development fee compensates the Sponsor for creating
and developing the Trusts. For as long as you own Units, this fee will
be accrued daily based on each Trust's net asset value at the annual
rate of .35% for each Select Portfolio Series or .31% for each Portfolio
Series. You will only be charged the creation and development fee while
you own Units. Each Trust pays the amount of any accrued creation and
development fee to the Sponsor monthly from such Trust's assets. Because
the creation and development fee is accrued daily on the basis of the
Trust's current net asset value, if the value of your Units increases,
the annual creation and development fee as a percentage of your initial
investment will be greater than .35% or .31% for each Select Portfolio
Series or Portfolio Series, respectively. However, in no event will we
collect over the life of a Trust more than 0.50% for each Select
Portfolio Series or more than 1.55% for each Portfolio Series of your
initial investment.
(d) Estimated organization costs will be deducted from the assets of a
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(e)Each of the fees listed herein is assessed on a fixed dollar amount
per Unit basis which, as a percentage of average net assets, will vary
over time.
(f) For each Portfolio Series, other operating expenses include the
costs incurred by each Portfolio Series for annually updating such
Trust's registration statements. Historically, we paid these costs.
Other operating expenses, however, do not include brokerage costs and
other portfolio transaction fees for any of the Trusts. In certain
circumstances the Trusts may incur additional expenses not set forth
above. See "Expenses and Charges."
(g) For each Select Portfolio Series, the example represents the
estimated costs incurred through each Trust's approximate 18-month life.
</FN>
</TABLE>
Page 9
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 503
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 503, comprised of the Bandwidth
Solutions Select Portfolio, Series 5; Biotechnology Select Portfolio,
Series 5; e-Business Select Portfolio, Series 5; e-Infrastructure Select
Portfolio, Series 4; Fiber Optics Select Portfolio, Series 4; Genomics &
Proteomics Select Portfolio, Series 4; Global Technology Select
Portfolio, Series 3; Semiconductor Select Portfolio, Series 6; Software
Innovations 2001 Select Portfolio, Series 5; World Wide Wireless Select
Portfolio, Series 4; Bandwidth Solutions Portfolio, Series 5;
Biotechnology Portfolio, Series 5; e-Business Portfolio, Series 5; e-
Infrastructure Portfolio, Series 4; Fiber Optics Portfolio, Series 4;
Genomics & Proteomics Portfolio, Series 4; Global Technology Portfolio,
Series 3; Semiconductor Portfolio, Series 6; Software Innovations 2001
Portfolio, Series 5 and World Wide Wireless Portfolio, Series 4 as of
the opening of business on January __, 2001. 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 auditing standards generally
accepted in the United States. 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 letter of credit allocated among the Trusts on
January __, 2001. 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 FT 503,
comprised of the Bandwidth Solutions Select Portfolio, Series 5;
Biotechnology Select Portfolio, Series 5; e-Business Select Portfolio,
Series 5; e-Infrastructure Select Portfolio, Series 4; Fiber Optics
Select Portfolio, Series 4; Genomics & Proteomics Select Portfolio,
Series 4; Global Technology Select Portfolio, Series 3; Semiconductor
Select Portfolio, Series 6; Software Innovations 2001 Select Portfolio,
Series 5; World Wide Wireless Select Portfolio, Series 4; Bandwidth
Solutions Portfolio, Series 5; Biotechnology Portfolio, Series 5; e-
Business Portfolio, Series 5; e-Infrastructure Portfolio, Series 4;
Fiber Optics Portfolio, Series 4; Genomics & Proteomics Portfolio,
Series 4; Global Technology Portfolio, Series 3; Semiconductor
Portfolio, Series 6; Software Innovations 2001 Portfolio, Series 5 and
World Wide Wireless Portfolio, Series 4, at the opening of business on
January __, 2001 in conformity with accounting principles generally
accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
January __, 2001
Page 10
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Bandwidth
Solutions Biotechnology e-Business e-Infrastructure
Select Select Select Select
Portfolio Portfolio Portfolio Portfolio
Series 5 Series 5 Series 5 Series 4
____________ ______________ ___________ ________________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 16.
</FN>
</TABLE>
Page 11
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Fiber Optics Genomics & Global
Select Proteomics Technology
Portfolio Select Portfolio Select Portfolio
Series 4 Series 3 Series 4
__________ ____________ _________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 16.
</FN>
</TABLE>
Page 12
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Software World Wide
Semiconductor Innovations 2001 Wireless
Select Select Select
Portfolio Portfolio Portfolio
Series 6 Series 5 Series 4
_________ _________________ _____________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 16.
</FN>
</TABLE>
Page 13
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Bandwidth
Solutions Biotechnology e-Business e-Infrastructure
Portfolio Portfolio Portfolio Portfolio
Series 5 Series 5 Series 5 Series 4
__________ ___________ __________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 16.
</FN>
</TABLE>
Page 14
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Genomics & Global
Fiber Optics Proteomics Technology
Portfolio Portfolio Portfolio
Series 4 Series43 Series 3
__________ ____________ __________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
_____________
<FN>
See "Notes to Statements of Net Assets" on page 16.
</FN>
</TABLE>
Page 15
Statements of Net Assets
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Software World Wide
Semiconductor Innovations 2001 Wireless
Portfolio Portfolio Portfolio
Series 6 Series 5 Series 4
__________ ____________ __________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less maximum transactional sales charge (5) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
_____________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $4,000,000 will be allocated among each of the 15 Trusts in FT
503, has been deposited with the Trustee as collateral, covering the
monies necessary for the purchase of the Securities according to their
purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $ per Unit
for each Select Portfolio Series and $ per Unit for each Portfolio
Series. A payment will be made at the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period to an
account maintained by the Trustee from which the obligation of the
investors to the Sponsor will be satisfied. To the extent that actual
organization costs of a Trust are greater than the estimated amount,
only the estimated organization costs added to the Public Offering Price
will be reimbursed to the Sponsor and deducted from the assets of such
Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions of $ per Unit for each Select Portfolio Series, or $
per Unit for each Portfolio Series, payable to us in five equal monthly
installments beginning on ________, 2001 and on the twentieth day of
each month thereafter (or if such date is not a business day, on the
preceding business day) through ________, 2001. If you redeem your Units
before ________, 2001 you will have to pay the remaining amount of the
deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors includes a maximum transactional
sales charge (comprised of an initial sales charge and a deferred sales
charge) computed at the rate of % of the Public Offering Price per
Unit for each Select Portfolio Series (equivalent to % of the net
amount invested, exclusive of the deferred sales charge) or % of the
Public Offering Price per Unit for each Portfolio Series (equivalent to
% of the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of the transactional sales charge as set forth
under "Public Offering."
</FN>
</TABLE>
Page 16
Schedule of Investments
Bandwidth Solutions Select Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
$ $
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 17
Schedule of Investments
Biotechnology Select Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 18
Schedule of Investments
e-Business Select Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 19
Schedule of Investments
e-Infrastructure Select Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 20
Schedule of Investments
Fiber Optics Select Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 21
Schedule of Investments
Genomics & Proteomics Select Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 22
Schedule of Investments
Global Technology Select Portfolio, Series 3
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 23
Schedule of Investments
Semiconductor Select Portfolio, Series 6
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 24
Schedule of Investments
Software Innovations 2001 Select Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 25
Schedule of Investments
World Wide Wireless Select Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 26
Schedule of Investments
Bandwidth Solutions Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 27
Schedule of Investments
Biotechnology Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) (4) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 28
Schedule of Investments
e-Business Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 29
Schedule of Investments
e-Infrastructure Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 30
Schedule of Investments
Fiber Optics Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 31
Schedule of Investments
Genomics & Proteomics Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 32
Schedule of Investments
Global Technology Portfolio, Series 3
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 33
Schedule of Investments
Semiconductor Portfolio, Series 6
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 34
Schedule of Investments
Software Innovations 2001 Portfolio, Series 5
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
</FN>
</TABLE>
Page 35
Schedule of Investments
World Wide Wireless Portfolio, Series 4
FT 503
At the Opening of Business on the
Initial Date of Deposit-January __, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
_______ _______
Total Investments 100% $
====== ======
_____________
<FN>
See "Notes to Schedules of Investments" on page 37.
Page 36
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on January __, 2001. Each Select Portfolio Series has a
Mandatory Termination Date of ________, 2002. Each Portfolio Series has
a Mandatory Termination Date of ________, 2006.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of ours. The cost of the Securities to us and our profit or
loss (which is the difference between the cost of the Securities to us
and the cost of the Securities to a Trust) are set forth below:
Cost of
Securities Profit
to Sponsor (Loss)
_________ _______
Bandwidth Solutions Select Portfolio, Series 5 $ $
Biotechnology Select Portfolio, Series 5
e-Business Select Portfolio, Series 5
e-Infrastructure Select Portfolio, Series 4
Fiber Optics Select Portfolio, Series 4
Genomics & Proteomics Select Portfolio, Series 4
Global Technology Select Portfolio, Series 3
Semiconductor Select Portfolio, Series 6
Software Innovations Select Portfolio, Series 5
World Wide Wireless Select Portfolio, Series 4
Bandwidth Solutions Portfolio, Series 5
Biotechnology Portfolio, Series 5
e-Business Portfolio, Series 5
e-Infrastructure Portfolio, Series 4
Fiber Optics Portfolio, Series 4
Genomics & Proteomics Portfolio, Series 4
Global Technology Portfolio, Series 3
Semiconductor Portfolio, Series 6
Software Innovations Portfolio, Series 5
World Wide Wireless Portfolio, Series 4
</FN>
</TABLE>
Page 37
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
503, consists of 20 separate portfolios set forth below:
- Bandwidth Solutions Select Portfolio, Series 5
- Biotechnology Select Portfolio, Series 5
- e-Business Select Portfolio, Series 5
- e-Infrastructure Select Portfolio, Series 4
- Fiber Optics Select Portfolio, Series 4
- Genomics & Proteomics Select Portfolio, Series 4
- Global Technology Select Portfolio, Series 3
- Semiconductor Select Portfolio, Series 6
- Software Innovations Select Portfolio, Series 5
- World Wide Wireless Select Portfolio, Series 4
- Bandwidth Solutions Portfolio, Series 5
- Biotechnology Portfolio, Series 5
- e-Business Portfolio, Series 5
- e-Infrastructure Portfolio, Series 4
- Fiber Optics Portfolio, Series 4
- Genomics & Proteomics Portfolio, Series 4
- Global Technology Portfolio, Series 3
- Semiconductor Portfolio, Series 6
- Software Innovations Portfolio, Series 5
- World Wide Wireless Portfolio, Series 4
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited portfolios of common stocks
with the Trustee and in turn, the Trustee delivered documents to us
representing our ownership of the Trusts in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trusts, or cash (including a letter of credit) with instructions
to buy more Securities, to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"
for each Trust), and not the percentage relationship existing on the day
we are creating new Units, since the two may differ. This difference may
be due to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trusts, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in a
Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts pay the associated brokerage fees. To
reduce this dilution, the Trusts will try to buy the Securities as close
to the Evaluation Time and as close to the evaluation price as possible.
In addition, because the Trusts pay the brokerage fees associated with
the creation of new Units and with the sale of Securities to meet
redemption and exchange requests, frequent redemption and exchange
activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trusts to buy Securities. If we or an affiliate of ours act as agent to
the Trusts, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Page 38
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities"), we will refund to you
that portion of the purchase price and transactional sales charge
resulting from the failed contract on the next Income Distribution Date.
Any Replacement Security a Trust acquires will be identical to those
from the failed contract.
Portfolios
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the sector or
investment focus for which the Trust is named. A diversified portfolio
helps to offset the risks normally associated with such an investment,
although it does not eliminate them entirely. The companies selected for
the Trusts have been researched and evaluated using database screening
techniques, fundamental analysis, and the judgment of the Sponsor's
research analysts. Each Select Portfolio Series has an expected maturity
of approximately 18 months whereas each Portfolio Series has an expected
maturity of approximately five and one-half years.
Bandwidth Solutions Select Portfolio, Series 5 and Bandwidth Solutions
Portfolio, Series 5 each consist of a portfolio of common stocks of
telecommunications companies which are focusing on bandwidth
technologies. The term bandwidth refers to the amount of information
that can be transmitted from one user to another in a given amount of
time. The speed at which these signals travel is often as important to
the end-user as the information that is being transmitted. The growing
demand for bandwidth is being driven by the surge in the volume and
complexity of data communications on the Internet.
We believe the demand for bandwidth should continue to grow as more
people access the Web worldwide and as telecommunications service
providers begin to mass market their newer and faster broadband systems.
Broadband Systems. The future of high-speed access to the Internet lies
in Digital Subscriber Lines (DSL) and cable modems. A new DSL technology
standard, known as the G.Lite, will allow for high-speed Internet access
concurrent with normal telephone service.
Communications Equipment. We believe that the demand for value-added
services like high-speed Internet access should continue to fuel demand
for more bandwidth and communications equipment. With new carriers
emerging and the large incumbents pressured by fierce competition,
spending on equipment for both wireline and wireless networks is likely
to remain strong.
Deregulation. The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment.
Internet Access Revenues. By 2002, it is forecasted that there will be a
shift in Internet access revenues from independent Internet service
providers to telecom and cable companies. In 1997, telecom and cable
companies accounted for less than one quarter of Internet access
revenues, while it is estimated that by 2002, they will account for more
than half. [The Industry Standard]
Consider the following factors:
- By some accounts, data traffic is growing by over 500% annually,
versus more modest single-digit growth for voice traffic. In response,
equipment vendors have poured research and development dollars into
projects geared towards increasing bandwidth. [Standard & Poor's
Industry Surveys]
- Wireless communications is among the fastest growing segments of the
communications equipment market. We believe that the demand for wireless
products and services should continue to grow as analog networks are
upgraded to digital systems. Digital signals will accommodate wireless
data communications and potentially increase demand for bandwidth.
- The transition from copper wiring to fiber optics is occurring at a
brisk pace. It is estimated that over 50 million miles of fiber cables
were installed around the world in 2000. [The Industry Standard]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Bandwidth Solutions Portfolios are considered ________
trusts.
Page 39
Biotechnology Select Portfolio, Series 5 and Biotechnology Portfolio,
Series 5 each consist of a portfolio of common stocks of biotechnology
companies. The biotechnology industry was founded in the decade of the
seventies and successfully launched its first products in the early
eighties. At the onset of the nineties, many in the investment community
believed that biotechnology was on the verge of becoming a revolutionary
growth industry, somewhat like the Internet. In the end, the demand for
biotech stocks diminished for various reasons, including a limited
supply of products.
As the nineties came to a close, the interest in biotechnology was
reignited thanks to a strong pipeline of promising new medicines. There
are currently over 350 products in the late stages of clinical trials as
compared to only 30 back in 1991. According to the Pharmaceutical
Research and Manufacturers of America, the average approval time by the
FDA has decreased from approximately 33 months in 1987, to approximately
13 months in 1999. The reduction in approval time has led to an increase
in new drugs coming to market from approximately 21 in 1987 to
approximately 35 in 1999. A faster FDA approval process coupled with an
increase in patent protection, from 17 to 20 years, are two positive
changes instituted to help biotech and pharmaceutical companies grow
their businesses.
The essence of biotechnology lies in research and development ("R&D").
Since the first biotech breakthrough in 1982, which involved genetically
engineered human insulin, nearly 100 products have come to market. The
recent advances in computer science technology, which enable scientists
to analyze data quickly, have the potential to expedite the process of
moving medicines through the pipeline. The costs associated with
developing and launching new products can range from $200-500 million
per drug. The leading biotechnology companies commit 15% to 50% of total
revenues to R&D.
Such excessive costs have inspired many biotech firms to seek capital
investment from pharmaceutical companies through licensing agreements
and other collaborations. The excitement created by the biotechnology
industry in the early nineties may have been a precursor to the
potential growth opportunities awaiting this expansive pipeline of new
medicines.
Consider the following factors:
- Currently about a third of the more than 1,000 medicines in human
clinical testing are cutting-edge biotechnology treatments. These new
biotech medicines target over 200 diseases. [Standard & Poor's Industry
Surveys]
- The biotechnology industry is projected to have generated over $26
billion in revenues in 2000, for an increase of approximately 20% over
1999. [Pharmaceutical Research and Manufacturers of America]
- The mapping of the human genome is estimated to have increased the
number of targets for new drug interventions from 500 distinct targets
to between 3,000 and 10,000. [Pharmaceutical Research and Manufacturers
of America]
- We believe the future growth prospects for the industry are bright due
to the potential for an increased demand from an aging population that
is facing longer life expectancies.
- The most recent Pharmaceutical Research and Manufacturers of America
survey found projected R&D expenditures for 2000 of $26.4 billion. This
figure represents a 10.1% increase over 1999 R&D expenditures of $24
billion.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Biotechnology Portfolios are considered ________ trusts.
e-Business Select Portfolio, Series 5 and e-Business Portfolio, Series 5
each consist of a portfolio of companies that are either marketing their
goods and services on the Internet or selling their products and
services to those companies transacting business on the Web. The e-
Business Portfolios seek to capitalize on the continued growth in
business-to-business e-commerce.
Until recently, the media has focused its attention primarily on
companies that are engaging in business-to-consumer e-commerce. It is
now, however, becoming apparent that business-to-business e-commerce is
growing at a much faster rate than the more consumer driven market.
A New Marketplace. One of the major catalysts in the surge in B2B e-
commerce is the development of the electronic marketplace. An "e-
marketplace" is an Internet-based network of business-to-business buyers
and sellers within a particular industry or geographic region. According
to Gartner Group, by 2004, e-marketplaces could possibly facilitate
approximately $2.7 trillion in transactions in the United States. This
figure represents approximately 37% of the estimated overall B2B market,
Page 40
and approximately 2.6% of forecast worldwide sales transactions.
Worldwide Business to Business E-Commerce. According to Gartner Group,
it is projected that there will be an estimated $7.2 trillion in
business-to-business e-commerce worldwide by 2004 compared with less
than $1 trillion in 1999.
No Boundaries. The motivation behind the business-to-business sales
model is to transact business faster, better, and cheaper, but it
accomplishes much more. By conducting business online, companies are not
only removing domestic geographical boundaries, but global boundaries as
well.
We believe that technology-based companies, especially those involved in
creating the Internet infrastructure and those that provide access to
the Internet, are in an ideal position to capitalize on the potential
growth of business-to-business e-commerce.
Consider the following factors:
- Giga Information Group estimates that corporations around the world
have the potential to experience an aggregate cost savings in excess of
one trillion dollars over the next several years by transacting business
via the Internet.
- With most businesses preparing to leverage the Internet by buying and
selling online, Forrester Research Inc. predicts that e-marketplaces
will spring up within most industries over the next two years.
- Forrester Research Inc. predicts that e-marketplaces in the United
States will capture approximately 50% of all online sales by 2004,
compared with an estimated 13% in 2000. [Standard & Poor's Industry
Surveys]
Based on the composition of the portfolios on the Initial Date of
Deposit, the e-Business Portfolios are considered ________ trusts.
e-Infrastructure Select Portfolio, Series 4 and e-Infrastructure
Portfolio, Series 4 each consist of a portfolio of common stocks of
technology companies which provide the infrastructure which helped build
the Internet.
As you probably know by now, the Internet has evolved into much more
than just the "information superhighway." It is also a place where
individuals and companies can transact business. In fact, some companies
believe so strongly in the future of e-commerce that they have abandoned
the more traditional business models that favor bricks-and-mortar selling.
The good news for investors is that the Internet's infrastructure is
supported by a relatively small universe of high-tech companies
representing the following industries: computer hardware, software,
networking and telecom services. These companies are responsible for
providing the kind of cutting-edge technology needed to deliver such
popular Internet services as high-speed access, video downloads, and e-
mail.
The anticipated growth in e-commerce has the potential to continue
fueling the need for more technological innovation as businesses of all
sizes embrace the concept of transacting business online. When you
consider that there are over 300 million people connected to the Web
worldwide, it only makes sense to consider investing in the companies
that make it all possible.
Equipment Spending. Information Technology (IT) equipment spending
continues to be the largest category of industrial spending for all
types of capital equipment. According to the Bureau of Economic
Analysis, between 1994 and 1999, on an inflation adjusted basis, IT
equipment spending accounted for more than half of the growth in
equipment spending.
Consider the following factors:
- Internet commerce and spending on the business and technical
infrastructure to support Internet-based applications is forecast to
grow significantly over the next several years. [The Industry Standard]
- Forrester Research predicts that the global Internet economy will see
substantial growth in revenue by 2004.
- As the Internet grows, the demand for servers has the potential to
grow as well. Standard & Poor's reported that only 5% of the servers
expected to be needed for the Internet's infrastructure by 2003 are in
place today.
- By some accounts, data traffic is growing by over 500% annually,
versus more modest single-digit growth for voice traffic. In response,
equipment vendors have poured research and development dollars into
projects geared towards increasing bandwidth. [Standard & Poor's
Industry Surveys]
Based on the composition of the portfolios on the Initial Date of
Deposit, the e-Infrastructure Portfolios are considered ________ trusts.
Page 41
Fiber Optics Select Portfolio, Series 4 and Fiber Optics Portfolio,
Series 4 each consist of a portfolio of telecommunications companies
focusing on the use of fiber optic technology.The first full service
fiber optic telephone system became operational in Chicago in 1977.
Since then, the communications industry has undergone a major
transformation, driven both by demand and technological innovation. In
1999, the optical networking industry became one of the fastest growing
areas within the communications equipment industry. Optical equipment
converts electronic signals into light pulses that can be transmitted
through fiber optic cables. We believe the demand for this type of
equipment has grown because of the enormous data carrying-capacity
offered by fiber optics. In our opinion, the impact that fiber optic
technology has had on the telephone industry is astounding. Compared to
a conventional three-inch copper wire that can transmit approximately
14,000 phone calls, a half-inch fiber optic cable can transmit over 3
million calls. With more markets opening around the world because of
deregulation, service providers have begun relying on the most advanced
technologies available to improve the quality of their offerings in an
effort to gain market share.
In our opinion, virtually all telephone companies have realized that
fiber optics represent an opportunity for them to meet the demands for
greater bandwidth that are required by new technologies and ultimately
win customers.
According to the Telecommunications Industry Association, spending on
fiber optic equipment is expected to grow from approximately $4.75
billion in 1990 to an estimated $25 billion in 2002.
Consider the following factors:
- According to telecommunications researcher TeleGeography, at the end
of 1999 approximately 106,000 miles of major submarine cables carried
voice and data traffic to the continents. In 2000, more than 112,000
miles of new major submarine cable was deployed, which is enough to
circle the globe 4.5 times.
- Demand for bandwidth has increased due to the growing popularity of
the Internet. Advanced technologies like high-speed digital systems
using fiber optic cables are one means being utilized to satisfy this
demand.
- The MultiMedia Telecommunications Association projects that spending
on fiber optics equipment will rise from $12.2 billion in 1999 to
approximately $28 billion in 2003.
- A single fiber optic strand can transmit ten thousand times more
information today than it could in 1988.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Fiber Optics Portfolios are considered ________ trusts.
Genomics & Proteomics Select Portfolio, Series 4 and Genomics &
Proteomics Portfolio, Series 4 each consist of a portfolio of common
stocks of biotechnology companies and pharmaceutical companies that are
actively participating in genomics and proteomics research.
Biotechnology companies are continually trying to understand the cause
of diseases in order to find appropriate treatments or even cures. Two
of the more prominent methods used to increase the speed and accuracy of
drug discovery and development are genomics and proteomics. The Genomics
& Proteomics Portfolios seek to provide the potential for above-average
capital appreciation by investing in biotechnology companies that are
actively involved in genomic and proteomic research.
Genomics: Genomics refers to the study of the entire collection of human
genes. By deciphering the human genetic code, researchers hope to expose
the genes that are responsible for the disease they are targeting.
Advances in this area allow researchers to develop starting points to
treat the causes of the targeted disease.
Proteomics: Proteomics is the link between genes, proteins and disease.
Protein mediators control the gene's actions and are responsible for
normal biological functions and disease mechanisms. Many of the top
sellers in drugs either target proteins or are proteins. We expect data
obtained from proteomic and protein expression profiles to provide an
important level of information in contributing to the search for new
disease targets and an understanding of the biological basis of disease.
Development in this area should help to identify how the diseases start
and how they progress.
Research & Development. The essence of biotechnology lies in R&D. Since
the first biotech breakthrough in 1982, which involved genetically
engineered human insulin, nearly 100 products have come to market. The
recent advances in computer science technology have the potential to
expedite the process of moving medicines through the pipeline.
Consider the following factors:
Page 42
- The mapping of the human genome is estimated to have increased the
number of targets for new drug interventions from 500 distinct targets
to over 3000. [Pharmaceutical Research and Manufacturers of America]
- The Biotechnology Industry Organization estimates that more than 200
million people worldwide have been helped by over 90 biotechnology
products and vaccines.
- We believe the future growth prospects for the industry are bright due
to the potential for an increased demand from an aging population that
is facing longer life expectancies.
- There are currently over 350 products in the late stages of clinical
trials as compared to only 30 back in 1991. [Standard & Poor's Industry
Surveys]
- Biotechnology made great strides in 2000. The industry delivered on
its promise of more drugs and vaccines. Roughly 12 more approvals,
including those for new uses of products already sold, added to the
tally of more than 90 drugs and vaccines approved since 1995. [Wall
Street Journal]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Genomics & Proteomics Portfolios are considered ________
trusts.
Global Technology Select Portfolio, Series 3 and Global Technology
Portfolio, Series 3 each consist of a portfolio of common stocks of
technology companies which are working to meet the potential increase in
worldwide demand for telecommunications and technology that is being
created by the e-revolution.
Although the Internet has made an astounding impact in the United
States, many other countries have been slow to embrace its potential.
Industry experts believe that this trend is about to change. According
to the Computer Industry Almanac, it is estimated that by the year 2005
the number of Internet users will have grown at such a rapid pace
outside of North America that they believe Europe will represent the
leading market for Internet users. Other regions are anticipated to show
strong growth as well, with the Asia-Pacific region leading the way.
Much of this anticipated potential growth is being attributed to easier
access to the Internet through low cost PC's, Web-ready phones, and
information appliances, along with more affordable service. The Global
Technology Portfolios invest in companies that are working to meet the
potential increase in worldwide demand for telecommunications and
technology that is being created by the e-revolution.
A Wireless World. We expect much of the future growth in the wireless
industry to come from developing countries and remote rural villages.
Wireless technology is a far more viable means of communication for
these areas because it offers significant cost savings over the more
traditional wireline services. In fact, some European countries already
use wireless technology as their primary communication source. For
instance, in Scandinavia almost half of the population uses wireless
phones.
B2B Boom. Until recently, the media has focused its attention primarily
on companies that are engaging in business to consumer e-commerce. In
our opinion, it is now becoming apparent that business-to-business e-
commerce is growing at a much faster rate than the more consumer driven
market. By conducting business online, companies are not only removing
domestic geographical boundaries, but global boundaries as well.
Internet Infrastructure. The anticipated growth in e-commerce has the
potential to continue fueling the need for more technological innovation
as businesses of all sizes embrace the concept of transacting business
online. When you consider that there are currently approximately 300
million people connected to the Web worldwide, it only makes sense to
consider investing in the companies that make it all possible. According
to the Computer Industry Almanac, worldwide Internet use has more than
doubled since 1995 and it is expected that by 2005, there will be
approximately 700 million Internet users worldwide.
Consider the following factors:
- Forrester Research predicts that global online advertising spending
has the potential to increase nearly 10 fold by 2004, with an increasing
portion of the spending occurring outside of the United States.
- According to Visa International, the B2B e-commerce growth rate of
most European countries is anticipated to outpace their GDP growth rate
significantly over the next several years.
- Giga Information Group estimates that corporations around the world
have the potential to experience an aggregate cost savings in excess of
one trillion dollars over the next several years by transacting business
via the Internet.
- It is estimated that the number of global wireless subscriptions has
Page 43
grown to approximately 470 million, making it one of the fastest growing
segments of the telecommunications industry. [The Industry Standard]
- Forrester Research predicts that the global Internet economy has the
potential to exceed $6 trillion in revenue by 2004.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Global Technology Portfolios are considered ________ trusts.
Semiconductor Select Portfolio, Series 6 and Semiconductor Portfolio,
Series 6 each consist of a portfolio of common stocks of technology
companies in the semiconductor industry.
Personal computer sales drove the last big upturn in the semiconductor
industry. Although the PC market is maturing, growth is still positive.
Current growth is also being driven in large part by the surge in
wireless, wired and information appliances, such as handheld computers,
Internet-enabled TV's and smart phones, as well as the infrastructure
necessary to support them.
Cellular Growth. One of the major drivers of semiconductor industry
growth continues to be cellular phones. It is anticipated that new
features such as links to laptop computers, e-mail, voice mail, good
audio quality, Internet functionality and perhaps even video will all be
offered on next generation phones. Increased demand from next generation
phones has the potential to become a significant factor in growing
semiconductor sales.
The Internet and Consumer Electronics. As Internet usage rises, we
expect the supply of chips used for Internet infrastructure to tighten,
which may potentially lead to rising profits for chip makers if
alternative sources do not become available-a simple case of supply and
demand.
Additionally, a vast new infrastructure of telecommunications networks
is needed for communications devices like MP3 players, digital cameras,
modems and personal digital assistants. In our opinion, the build-out of
this network infrastructure, the proliferation of the Internet and
wireless devices, and the digitalization of consumer electronics are all
positive signals of strong future demand for semiconductors.
Consider the following factors:
- Worldwide semiconductor sales rose to $18.28 billion in November 2000,
the third highest monthly sales number in the history of the
semiconductor industry. [Semiconductor Industry Association]
- The Semiconductor Industry Association reported that worldwide sales
of chips were expected to top over $200 billion in 2000, marking the
first time that annual industry sales reached that level.
- Sales to Japan and the Asia/Pacific region declined by 19.2% and 4.4%
respectively in 1998, as both regions' financial crises reduced the
demand for semiconductor-rich electronics. However, these two regions
have been leading the global semiconductor recovery, with chip sales up
20.9% in the Asia/Pacific region and 38.9% in Japan in 2000.
[Semiconductor Industry Association]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Semiconductor Portfolios are considered ________ trusts.
Software Innovations Select Portfolio, Series 5 and Software Innovations
Portfolio, Series 5 each consist of a portfolio of common stocks of
companies that provide software products and services to address a wide
variety of business needs, including networking, e-commerce, supply
chain management and financial reporting.
The computer software industry has come a long way since the
introduction of the first operating system. The software industry has
helped fuel an information revolution, changing the way we live and
work. Today, one of the biggest challenges for software developers is to
market products and services that are not only compatible with hardware,
but improve its functionality.
The companies included in the Software Innovations Portfolios provide
products and services to address a wide variety of business needs
including networking, e-commerce, supply chain management, data storage,
security management, and financial reporting.
The growing popularity of computer networking in the business community,
coupled with the anticipated growth of e-commerce on the Internet, has
boosted demand for software that can increase efficiency and productivity.
Businesses have embraced software as a way to create innovative, real
life solutions that have the potential to impact their bottom line. For
instance, they could utilize enterprise resource planning software
applications designed to automate back-office operations for
administrative purposes; implement supply chain software to help
Page 44
forecast demand, shorten product life cycles, and reduce inventories; or
apply customer relationship management software to automate sales,
marketing, call center, and field service operations.
Software companies have traditionally marketed products that addressed
back-office operations. Now that the Internet infrastructure is in
place, we believe the focus of technology is shifting to e-commerce.
E-commerce represents a new opportunity and new challenges in the areas
of front-office and customer service management.
Consider the following factors:
- Now that corporate budgets have been freed from Y2K-related spending,
we believe that companies will refocus their information technology
spending on productivity enhancing technology such as software.
- According to International Data Corp., Internet commerce is
anticipated to grow rapidly during the next few years [Standard & Poor's
Industry Surveys]. In light of the potential magnitude of online
commerce, we believe that commerce software providers and computer data
security software providers stand to benefit from this potential increase.
- As more handheld devices such as smart phones and personal digital
assistants (PDAs) are used to access the Web, we believe the demand for
software that increases their functionality has the potential to grow as
well.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Software Innovations Portfolios are considered ________
trusts.
World Wide Wireless Select Portfolio, Series 4 and World Wide Wireless
Portfolio, Series 4 each consist of a portfolio of common stocks of
telecommunications companies which provide products and/or services used
in wireless communications.
It is easy to see that the "Information Age" is transforming the way we
work, the way we do business, and the way we live. However, the one
technology that may have the greatest impact on our lives is one that we
cannot see-wireless communications. Wireless devices are enabling us to
exchange information in ways and places we once could only dream of. The
implementation of new technologies, combined with lower prices for
wireless service, has made wireless communication possible for more
people. Much of the future growth in the wireless industry is expected
to come from developing countries and remote rural villages. Wireless
technology is a far more viable means of communication for these areas
because it offers significant cost savings over the more traditional
wireline services. In fact, some European countries already use wireless
technology as their primary communication source. For instance, in
Scandinavia almost half of the population uses wireless phones.
If you take a closer look at the wireless industry, it becomes apparent
that it is truly a global industry. With the World Trade Organization's
recent agreement to open the markets of its 72 member governments to
foreign companies, there are abundant opportunities for expansion in
this industry.
Just as its wireline counterparts did previously, we expect that the
wireless industry will use mergers and acquisitions as a means of
attaining new technologies, forging strategic alliances, and reaching
more consumers.
According to the Cellular Telecommunications Industry Association,
annual service revenues have risen from approximately $1 billion in
1985, to approximately $45 billion in 2000.
Consider the following factors:
- It is estimated that there are approximately 470 million wireless
subscribers worldwide. [The Industry Standard]
- Revenues for wireless e-commerce services are anticipated to increase
significantly over the next several years. [The Industry Standard]
- The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment.
- It is estimated that one-fourth of wireless subscribers globally could
use a wireless link to the Internet by 2004. [The Industry Standard]
- The number of wireless subscribers worldwide has nearly tripled over
the last three years. [Standard & Poor's Industry Surveys]
Based on the composition of the portfolios on the Initial Date of
Deposit, the World Wide Wireless Portfolios are considered ________
trusts.
The style and capitalization characteristics used to describe each Trust
are designed to help you better understand how a Trust fits into your
Page 45
overall investment plan. These characteristics are determined as of the
Initial Date of Deposit and may vary thereafter. In general, growth
portfolios include stocks with high relative price-to-book ratios while
value portfolios include stocks with low relative price-to-book ratios.
Both the weighted average market capitalization of a Trust and at least
half of the Securities in the Trust must fall into the following ranges
to determine its market capitalization designation: Small-Cap-less than
$2 billion; Mid-Cap-$2 billion to $10 billion; Large-Cap-over $10
billion. A Trust, however, may contain individual stocks that do not
fall into its stated market capitalization designation.
You should be aware that predictions stated herein for the above
industries or sectors may not be realized. In addition, the Securities
contained in each Trust are not intended to be representative of the
selected industry or sector as a whole and the performance of each Trust
is expected to differ from that of its comparative industry or sector.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S. and, for
certain Trusts, foreign companies. The value of a Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur. In addition, common stock prices may
be particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
especially the relatively short 18-month life of each Select Portfolio
Series, or that you won't lose money. Units of the Trusts are not
deposits of any bank and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Certain of the Securities in certain of the Trusts may be issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies as a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Bandwidth/Communications Industry. Because more than 25% of each of the
Bandwidth Solutions Portfolios, the Fiber Optics Portfolios and the
World Wide Wireless Portfolios are invested in telecommunications
companies, these Trusts are considered to be concentrated in the
communications industry. A portfolio concentrated in a single industry
may present more risks than a portfolio which is broadly diversified
over several industries. The market for high technology communications
products and services is characterized by rapidly changing technology,
rapid product obsolescence or loss of patent protection, cyclical market
patterns, evolving industry standards and frequent new product
introductions. Certain communications/bandwidth companies are subject to
substantial governmental regulation, which among other things, regulates
permitted rates of return and the kinds of services that a company may
offer. The communications industry has experienced substantial
deregulation in recent years. Deregulation may lead to fierce
competition for market share and can have a negative impact on certain
companies. Competitive pressures are intense and communications stocks
can experience rapid volatility.
Biotechnology/Pharmaceutical Industries. The Biotechnology Portfolios
and the Genomics & Proteomics Portfolios are considered to be
concentrated in the biotechnology and pharmaceutical industries.
Biotechnology and pharmaceutical companies are subject to changing
government regulation, including price controls, national health
insurance, managed care regulation and tax incentives or penalties
related to medical insurance premiums, which could have a negative
effect on the price and availability of their products and services. In
addition, such companies face increasing competition from generic drug
sales, the termination of their patent protection for certain drugs and
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technological advances which render their products or services obsolete.
The research and development costs required to bring a drug to market
are substantial and may include a lengthy review by the government, with
no guarantee that the product will ever go to market or show a profit.
In addition, the potential for an increased amount of required
disclosure of proprietary scientific information could negatively impact
the competitive position of these companies. Many of these companies may
not offer certain drugs or products for several years, and as a result,
may have significant losses of revenue and earnings.
e-Commerce Industry. The e-Business Portfolios are considered to be
concentrated in the e-commerce industry which includes companies
involved with business-to-business online selling, including companies
who are marketing goods and services or transacting business online.
General risks for these companies include the state of the worldwide
economy, intense global competition, and rapid obsolescence of the
utilized technologies and their related systems, products and services.
While business-to-business e-commerce is evolving rapidly, future demand
for individual products and services is impossible to predict.
Technology Industry. The e-Infrastructure Portfolios, the Global
Technology Portfolios, the Semiconductor Portfolios and the Software
Innovations Portfolios are considered to be concentrated in the
technology industry. Technology companies are generally subject to the
risks of rapidly changing technologies; short product life cycles;
fierce competition; aggressive pricing and reduced profit margins; the
loss of patent, copyright and trademark protections; cyclical market
patterns; evolving industry standards and frequent new product
introductions. Technology companies may be smaller and less experienced
companies, with limited product lines, markets or financial resources
and fewer experienced management or marketing personnel. Technology
company stocks, especially those which are Internet-related, have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Also, the stocks of many
Internet companies have exceptionally high price-to-earnings ratios with
little or no earnings histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, or of the industries
represented by such issuers may negatively impact the share prices of
these Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the share
prices of the Securities.
Foreign Stocks. Certain of the Securities in certain of the Trusts are
issued by foreign companies, which makes the Trusts subject to more
risks than if they invested solely in domestic common stocks. These
Securities are either directly listed on a U.S. securities exchange or
are in the form of American Depositary Receipts ("ADRs") which are
listed on a U.S. securities exchange. Risks of foreign common stocks
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The maximum transactional sales charge (which combines an initial
upfront sales charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
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before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust portfolio, legal fees and
the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in a
Trust. Securities will be sold to reimburse the Sponsor for a Trust's
organization costs at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trusts). During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
a Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of a Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for a Trust in "Notes to Statements of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs
are less than the estimated amount, only the actual organization costs
will be deducted from the assets of a Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in a Trust as
existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Transactional Sales Charge.
The transactional sales charge you will pay has both an initial and a
deferred component. The initial sales charge, which you will pay at the
time of purchase, is equal to the difference between the maximum
transactional sales charge ( % of the Public Offering Price for each
Select Portfolio Series and % of the Public Offering Price for each
Portfolio Series) and the maximum remaining deferred sales charge
(initially equal to $ per Unit for each Select Portfolio Series and $
per Unit for each Portfolio Series). This initial sales charge is
initially equal to approximately 1.00% of the Public Offering Price of a
Unit, but will vary from 1.00% depending on the purchase price of your
Units and as deferred sales charge payments are made. When the Public
Offering Price exceeds $10.00 per Unit, the initial sales charge will
exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, five monthly deferred sales
charge payments of $ per Unit for each Select Portfolio Series or $
per Unit for each Portfolio Series will be deducted from a Trust's
assets on approximately the 20th day of each month from ________, 2001
through ________, 2001. If you buy Units at a price of less than $10.00
per Unit, the dollar amount of the deferred sales charge will not
change, but the deferred sales charge on a percentage basis will be more
than % of the Public Offering Price for each Select Portfolio Series
or more than % of the Public Offering Price for each Portfolio Series.
If you purchase Units after the last deferred sales charge payment has
been assessed, your transactional sales charge will consist of a one-
time initial sales charge of % of the Public Offering Price per Unit
(equivalent to % of the net amount invested) for each Select Portfolio
Series and % of the Public Offering Price per Unit (equivalent to %
of the net amount invested) for each Portfolio Series. For each
Portfolio Series, the transactional sales charge will be reduced by 1/2
of 1% on each subsequent ________, commencing ________, 2002, to a
minimum transactional sales charge of 3.00%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum transactional sales charge is
reduced as described below:
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For each Select Portfolio Series:
Your maximum
If you invest transactional
If you invest sales charge
(in thousands):* will be:
_________________ _____________
$ but less than $ %
$ but less than $ %
$ but less than $ %
$ but less than $ %
$ or more %
For each Portfolio Series:
Your maximum
If you invest transactional
If you invest sales charge
(in thousands):* will be:
_________________ _____________
$ but less than $ %
$ but less than $ %
$ but less than $ %
$ but less than $ %
$ or more %
* Breakpoint transactional sales charges are also applied on a Unit
basis utilizing a breakpoint equivalent in the above table of $10 per
Unit and will be applied on whichever basis is more favorable to the
investor. The breakpoints will be adjusted to take into consideration
purchase orders stated in dollars which cannot be completely fulfilled
due to the requirement that only whole Units be issued.
The reduced transactional sales charge for quantity purchases will apply
only to purchases made by the same person on any one day from any one
dealer. To help you reach the above levels, you can combine the Units
you purchase of the Trusts in this prospectus with any other same day
purchases of other trusts for which we are Principal Underwriter and are
currently in the initial offering period. In addition, we will also
consider Units you purchase in the name of your spouse or child under 21
years of age to be purchases by you. The reduced transactional sales
charge will also apply to a trustee or other fiduciary purchasing Units
for a single trust estate or single fiduciary account. You must inform
your dealer of any combined purchases before the sale in order to be
eligible for the reduced transactional sales charge. Broker/dealers will
receive a concession of 1.00% of the Public Offering Price on Portfolio
Series' Units sold subject to the transactional sales charge reduction
for purchases of $1 million or more. In all other instances, any reduced
transactional sales charge is the responsibility of the party making the
sale.
You may use redemption or termination proceeds from any unit investment
trust we sponsor to purchase Units of the Trusts during the initial
offering period at the Public Offering Price less 1.00%. Please note
that any deferred sales charge remaining on units you redeem to buy
Units of the Trusts will be deducted from those redemption proceeds.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts")
will not be assessed the transactional sales charge described in this
section on the purchase of Units. We reserve the right to limit or deny
purchases of Units not subject to the transactional sales charge by
investors whose frequent trading activity we determine to be detrimental
to the Trusts.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, dealers and their affiliates, and
vendors providing services to us may purchase Units at the Public
Offering Price less the applicable dealer concession. Immediate family
members include spouses, children, grandchildren, parents, grandparents,
siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law and sisters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons.
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum transactional sales charge you must pay is less than the
applicable maximum deferred sales charge, including Fee Accounts Units,
you will be credited the difference between your maximum transactional
sales charge and the maximum deferred sales charge at the time you buy
your Units. If you elect to have distributions reinvested into
additional Units of your Trust, in addition to the reinvestment Units
you receive you will also be credited additional Units with a dollar
value at the time of reinvestment sufficient to cover the amount of any
remaining deferred sales charge to be collected on such reinvestment
Units. The dollar value of these additional credited Units (as with all
Page 49
Units) will fluctuate over time, and may be less on the dates deferred
sales charges are collected than their value at the time they were issued.
As Sponsor, we will also receive a creation and development fee. See
"Expenses and Charges" for a description of the services provided for
this fee.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
For each Select Portfolio Series, dealers and other selling agents can
purchase Units at prices which reflect a concession or agency commission
of ____% of the Public Offering Price per Unit. However, for Units
subject to a transactional sales charge which are purchased using
redemption or termination proceeds, this amount will be reduced to ____%
of the sales price of these Units.
For each Portfolio Series, dealers and other selling agents can purchase
Units at prices which reflect a concession or agency commission of ___%
of the Public Offering Price per Unit (or 65% of the maximum
transactional sales charge after ________, 2002). However, for Units
subject to a transactional sales charge which are purchased using
redemption or termination proceeds, this amount will be reduced to ____%
of the sales price of these Units. Dealers and other selling agents will
receive an additional volume concession or agency commission on all
Portfolio Series Units they sell equal to .30% of the Public Offering
Price if they purchase at least $100,000 worth of Units of the Trusts on
the Initial Date of Deposit or $250,000 on any day thereafter or if they
were eligible to receive a similar concession in connection with sales
of similarly structured trusts sponsored by us which are currently in
the initial offering period.
Dealers and other selling agents who sell Units of a Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales per Trust Additional
(in millions): Concession:
_________________ ___________
$1 but less than $10 %
$10 or more %
Dealers and other selling agents can combine Units of a Select Portfolio
Series and its related Portfolio Series they sell for purposes of
reaching the additional concessions levels set forth in the above table.
In addition, dealers and other selling agents will not receive a
Page 50
concession on the sale of Units which are not subject to a transactional
sales charge, but such Units will be included in determining whether the
above volume sales levels are met. For all Trusts, dealers and other
selling agents who, during any consecutive 12-month period, sell at
least $1.75 billion worth of primary market units of unit investment
trusts sponsored by us will receive a concession of $30,000 in the month
following the achievement of this level. We reserve the right to change
the amount of concessions or agency commissions from time to time.
Certain commercial banks may be making Units of the Trusts available to
their customers on an agency basis. A portion of the transactional sales
charge paid by these customers is kept by or given to the banks in the
amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable transactional sales charge on Units sold by such
persons during such programs. We make these payments out of our own
assets and not out of Trust assets. These programs will not change the
price you pay for your Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum
transactional sales charge per Unit of a Trust less any reduction as
stated in "Public Offering." We will also receive the amount of any
accrued and collected creation and development fee. Also, any difference
between our cost to purchase the Securities and the price at which we
sell them to a Trust is considered a profit or loss (see Note 2 of
"Notes to Schedules of Investments"). During the initial offering
period, dealers and others may also realize profits or sustain losses as
a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and in the case of each Portfolio Series, costs incurred in
annually updating each Portfolio Series' registration statements. We may
discontinue purchases of Units at any time. IF YOU WISH TO DISPOSE OF
YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES BEFORE
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or redeem
your Units before you have paid the total deferred sales charge on your
Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Page 51
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. For each Portfolio Series, legal, typesetting,
electronic filing and regulatory filing fees and expenses associated
with updating those Trusts' registration statements yearly are also now
chargeable to such Trusts. Historically, we paid these fees and
expenses. There are no such fees and expenses that will be charged to
each Select Portfolio Series. First Trust Advisors L.P., an affiliate of
ours, acts as both Portfolio Supervisor and Evaluator to the Trusts and
will receive the fees set forth under "Fee Table" for providing
portfolio supervisory and evaluation services to the Trusts. In
providing portfolio supervisory services, the Portfolio Supervisor may
purchase research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of each Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in a Trust's net asset value, is determined by
multiplying the net asset value of the Trust on that day by 1/365 of the
annual creation and development fee of ___% for each Select Portfolio
Series or ___% for each Portfolio Series. The total amount of any
accrued but unpaid creation and development fee is paid to the Sponsor
on a monthly basis from the assets of your Trust. If you redeem your
Units, you will only be responsible for any accrued and unpaid creation
and development fee through the date of redemption. In connection with
the creation and development fee, in no event will the Sponsor collect
more than ____% for each Select Portfolio Series and ____% for each
Portfolio Series of a Unit holder's initial investment. We do not use
this fee to pay distribution expenses or as compensation for sales
efforts.
In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
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The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities in a Trust to make cash available to pay these
charges which may result in capital gains or losses to you. See "Tax
Status."
Each Portfolio Series will be audited annually. So long as we are making
a secondary market for Units, we will bear the cost of these annual
audits to the extent the costs exceed $0.0050 per Unit. Otherwise, each
Portfolio Series will pay for the audit. You can request a copy of the
audited financial statements from the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay Trust expenses (including the deferred
sales charge, if any).
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units
among each Security or other Trust asset ratably according to their
value on the date you purchase your Units. In certain circumstances,
however, you may have to adjust your tax basis after you purchase your
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). For tax years beginning after December 31, 2000, the 20%
rate is reduced to 18% and the 10% rate is reduced to 8% for long-term
gains from most property held for more than five years. Because each
Select Portfolio Series has a maturity of approximately 18 months, the
reduction in the capital gains rate for property held for more than five
years could only possibly apply to your interest in those securities if
you are eligible for and elect to receive an in-kind distribution at
redemption or termination. Net capital gain equals net long-term capital
gain minus net short-term capital loss for the taxable year. Capital
gain or loss is long-term if the holding period for the asset is more
than one year and is short-term if the holding period for the asset is
one year or less. You must exclude the date you purchase your Units to
determine the holding period of your Units. The tax rates for capital
gains realized from assets held for one year or less are generally the
same as for ordinary income. The tax code may, however, treat certain
capital gains as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") when you redeem your Units
(except for Fee Accounts) or at a Trust's termination. If you request an
In-Kind Distribution you will be responsible for any expenses related to
Page 53
this distribution. By electing to receive an In-Kind Distribution, you
will receive whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trusts as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. 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. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
Page 54
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
the Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. There is no transactional sales charge on Units acquired through
the Distribution Reinvestment Option, as discussed under "Public
Offering." This option may not be available in all states.PLEASE NOTE
THAT EVEN IF YOU REINVEST DISTRIBUTIONS, THEY ARE STILL CONSIDERED
DISTRIBUTIONS FOR INCOME TAX PURPOSES.
Page 55
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
If you tender 1,000 Units or more for redemption (except for Fee
Accounts), rather than receiving cash, you may elect to receive an In-
Kind Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to a Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Page 56
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trusts, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by a Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from each Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account for distribution to Unit holders
or to meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for a Trust to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information" for each Trust. The Trusts may be terminated earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
Page 57
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire transactional sales charge; however,
termination of a Trust before the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, a Trust may be reduced below the Discretionary
Liquidation Amount and could therefore be terminated before the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of a Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges and subject to any additional
restrictions imposed on Fee Accounts Units by "wrap fee" plans) rather
than the typical cash distribution. See "Tax Status" for additional
information. You must notify the Trustee at least ten business days
prior to the Mandatory Termination Date if you elect this In-Kind
Distribution option. If you do not elect to participate in the In-Kind
Distribution option, you will receive a cash distribution from the sale
of the remaining Securities, along with your interest in the Income and
Capital Accounts, within a reasonable time after such Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the Trusts any accrued costs, expenses, advances or
indemnities provided for by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
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
Page 58
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 59
FIRST TRUST (R)
BANDWIDTH SOLUTIONS SELECT PORTFOLIO, SERIES 5
BIOTECHNOLOGY SELECT PORTFOLIO, SERIES 5
E-BUSINESS SELECT PORTFOLIO, SERIES 5
E-INFRASTRUCTURE SELECT PORTFOLIO, SERIES 4
FIBER OPTICS SELECT PORTFOLIO, SERIES 4
GENOMICS & PROTEOMICS SELECT PORTFOLIO, SERIES 4
GLOBAL TECHNOLOGY SELECT PORTFOLIO, SERIES 3
SEMICONDUCTOR SELECT PORTFOLIO, SERIES 6
SOFTWARE INNOVATIONS SELECT PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS SELECT PORTFOLIO, SERIES 4
BANDWIDTH SOLUTIONS PORTFOLIO, SERIES 5
BIOTECHNOLOGY PORTFOLIO, SERIES 5
E-BUSINESS PORTFOLIO, SERIES 5
E-INFRASTRUCTURE PORTFOLIO, SERIES 4
FIBER OPTICS PORTFOLIO, SERIES 4
GENOMICS & PROTEOMICS PORTFOLIO, SERIES 4
GLOBAL TECHNOLOGY PORTFOLIO, SERIES 3
SEMICONDUCTOR PORTFOLIO, SERIES 6
SOFTWARE INNOVATIONS PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS PORTFOLIO, SERIES 4
FT 503
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-_____) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts, including their Codes of Ethics, is
available on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.; Washington, D.C. 20549-0102
e-mail address: [email protected]
January __, 2001
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 60
First Trust (R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in FT 503 not found in the prospectus for the Trusts. This
Information Supplement is not a prospectus and does not include all of
the information that a prospective investor should consider before
investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing.
This Information Supplement is dated January __, 2001. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Litigation
Microsoft Corporation 2
Concentrations
Bandwidth/Communications 2
Biotechnology/Pharmaceutical 3
Electronic Commerce 3
Technology 4
Portfolios
Bandwidth 5
Biotechnology 5
e-Business 6
e-Infrastructure 6
Fiber Optics 7
Genomics & Proteomics 7
Global Technology 8
Semiconductor 9
Software Innovations 9
Word Wide Wireless 10
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. 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.
Foreign Issuers. Since certain of the Securities included in certain
Trusts consist of securities of foreign issuers, an investment in the
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 Securities,
the possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
Page 1
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
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 U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts 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 Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. 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 the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Litigation
Microsoft Corporation. Microsoft Corporation is currently engaged in
litigation with Sun Microsystems, Inc., the U.S. Department of Justice
and several state Attorneys General. The complaints against Microsoft
include copyright infringement, unfair competition and anti-trust
violations. The claims seek injunctive relief and monetary damages. The
District Court handling the antitrust case recently held that Microsoft
exercised monopoly power in violation of the Sherman Antitrust Act and
various state antitrust laws. The court entered into a final judgment on
June 7, 2000 in which it called for Microsoft to be broken up into two
separate companies, one composed of the company's operating systems and
the other containing its applications software business. The court also
called for significant operating restrictions to be placed on the
company until such time as the separation was completed. Microsoft has
stated that it will appeal the rulings against it after the penalty
phase and final decree. It is impossible to predict what impact the
penalties will have on Microsoft or the value of its stock.
Page 2
Concentrations
Bandwidth/Communications. An investment in Units of the Bandwidth
Solutions Portfolios, Fiber Optics Portfolios and the World Wide
Wireless Portfolios should be made with an understanding of the problems
and risks such an investment may entail. The market for high-technology
communications products and services is characterized by rapidly
changing technology, rapid product obsolescence, cyclical market
patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Securities depends in
substantial part on the timely and successful introduction of new
products and services. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of a Trust's Units. For example, while telephone companies in the United
States are subject to both state and federal regulations affecting
permitted rates of returns and the kinds of services that may be
offered, the prohibition against phone companies delivering video
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in a Trust's portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology.
Biotechnology/Pharmaceutical. An investment in Units of the
Biotechnology and Genomics & Proteomics Portfolios should be made with
an understanding of the problems and risks such an investment may
entail. Companies involved in advanced medical devices and instruments,
drugs and biotech have potential risks unique to their sector of the
healthcare field. These companies are subject to governmental regulation
of their products and services, a factor which could have a significant
and possibly unfavorable effect on the price and availability of such
products or services. Furthermore, such companies face the risk of
increasing competition from new products or services, generic drug
sales, the termination of patent protection for drug or medical supply
products and the risk that technological advances will render their
products obsolete. The research and development costs of bringing a drug
to market are substantial, and include lengthy governmental review
processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and may not offer certain
products for several years. Such companies may also have persistent
losses during a new product's transition from development to production,
and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the
biotechnology/pharmaceuticals sector very attractive for investors
seeking the potential for growth in their investment portfolio. However,
there are no assurances that the Trusts' objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs). The Sponsor is unable to predict the
effect of any of these proposals, if enacted, on the issuers of
Securities in the Trusts.
Electronic Commerce. An investment in Units of the e-Business Portfolios
should be made with an understanding of the characteristics of the
problems and risks such an investment may entail. These portfolios
consist of common stocks of retailers that market their goods and
services on the Internet and technology companies that create the tools
to make it possible. The profitability of companies engaged in the
retail industry will be affected by various factors including the
general state of the economy and consumer spending trends. Recently,
there have been major changes in the retail environment due to the
declaration of bankruptcy by some of the major corporations involved in
the retail industry, particularly the department store segment. The
continued viability of the retail industry will depend on the industry's
ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance
expansion. Weakness in the banking or real estate industry, a
recessionary economic climate with the consequent slowdown in employment
growth, less favorable trends in unemployment or a marked deceleration
in real disposable personal income growth could result in significant
pressure on both consumer wealth and consumer confidence, adversely
affecting consumer spending habits. In addition, competitiveness of the
retail industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Page 3
Retailers who sell their products over the Internet have the potential
to access more consumers, but will require the capital to acquire and
maintain sophisticated technology. E-commerce company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Many such companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. In addition, numerous e-commerce companies have only recently
begun operations, and may have limited product lines, markets or
financial resources, as well as fewer experienced management personnel.
Finally, the lack of barriers to entry suggests a future of intense
competition for online retailers.
See "Technology" below, for additional information concerning the risks
of companies engaged in the technology industry.
Technology. An investment in Units of the e-Infrastructure Portfolios,
the Global Technology Portfolios, Semiconductor Portfolios and the
Software Solutions 2001 Portfolios should be made with an understanding
of the characteristics of the problems and risks such an investment may
entail. Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trusts.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 4
Portfolios
Equity Securities Selected for Bandwidth Solutions Select Portfolio,
Series 5 and Bandwidth Solutions Portfolio, Series 5
Both the Bandwidth Solutions Select Portfolio, Series 5 and the
Bandwidth Solutions Portfolio, Series 5 contain common stocks of the
following companies:
, headquartered in
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Page 5
Equity Securities Selected for Biotechnology Select Portfolio, Series 5
and Biotechnology Portfolio, Series 5
Both the Biotechnology Select Portfolio, Series 5 and the Biotechnology
Portfolio, Series 5 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
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Equity Securities Selected for e-Business Select Portfolio, Series 5 and
e-Business Portfolio, Series 5
Both the e-Business Select Portfolio, Series 5 and the e-Business
Portfolio, Series 5 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 6
Equity Securities Selected for e-Infrastructure Select Portfolio, Series
4 and e-Infrastructure Portfolio, Series 4
Both the e-Infrastructure Select Portfolio, Series 4 and the e-
Infrastructure Portfolio, Series 4 contain common stocks of the
following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
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, headquartered in
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, headquartered in
, headquartered in
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, headquartered in
Equity Securities Selected for Fiber Optics Select Portfolio, Series 4
and Fiber Optics Portfolio, Series 4
Both the Fiber Optics Select Portfolio, Series 4 and the Fiber Optics
Portfolio, Series 4 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 7
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
, headquartered in
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, headquartered in
Equity Securities Selected for Genomics & Proteomics Select Portfolio,
Series 4 and Genomics & Proteomics Portfolio, Series 4
Both the Genomics & Proteomics Select Portfolio, Series 4 and the
Genomics & Proteomics Portfolio, Series 4 contain common stocks of the
following companies:
, headquartered in
, headquartered in
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, headquartered in
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, headquartered in
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, headquartered in
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, headquartered in
Equity Securities Selected for Global Technology Select Portfolio,
Series 3 and Global Technology Portfolio, Series 3
Both the Global Technology Select Portfolio, Series 3 and the Global
Technology Portfolio, Series 3 contain common stocks of the following
companies:
, headquartered in
, headquartered in
, headquartered in
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Page 8
, headquartered in
, headquartered in
, headquartered in
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Equity Securities Selected for Semiconductor Select Portfolio, Series 6
and Semiconductor Portfolio, Series 6
Both the Semiconductor Select Portfolio, Series 6 and the Semiconductor
Portfolio, Series 6 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 9
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for Software Innovations Select Portfolio,
Series 5 and Software Innovations Portfolio, Series 5
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Equity Securities Selected for World Wide Wireless Select Portfolio,
Series 4 and World Wide Wireless Portfolio, Series 4
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 10
, headquartered in
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We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 11
MEMORANDUM
Re: FT 503
The only difference of consequence (except as described
below) between FT 451, which is the current fund, and FT 503, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 451 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 503 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on January 12, 2001.
FT 503
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
David J. Allen Sole Director of
Nike Securities January 12, 2001
Corporation, the
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., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 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 Nike
Financial Advisory Services 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 FT 503 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as Trustee
and First Trust Advisors L.P., as Evaluator and Portfolio
Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed on behalf
of FT 415).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-4
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).
___________________________________
* To be filed by amendment.
S-5
