Barclays Bank PLC (“Barclays”) announced today that four
Barclays exchange-traded notes will become subject, on January 1,
2020, to new regulations issued by the Internal Revenue Service
requiring U.S. federal income tax withholding on “dividend
equivalent” payments made to non-U.S. beneficial owners (“Section
871(m) withholding”). The affected exchange-traded notes (the
“Covered Securities”) are:
- The Barclays ETN+ FI Enhanced Global
High Yield ETN;
- The Barclays ETN+ Shiller CAPE™ Index
ETNs;
- The Barclays Return on Disability ETN;
and
- The Barclays Women in Leadership
ETN.
The new regulations apply only to non-U.S. beneficial owners, so
the tax treatment of U.S. beneficial owners of Covered Securities
is generally not altered by the new regulations.
As a general matter, the new regulations take effect on January
1, 2017 and provide that “dividend equivalent” payments made to a
non-U.S. beneficial owner, on instruments that are issued (or
deemed issued) on or after January 1, 2017, will be subject to a
30% withholding tax (subject to reduction under an applicable
treaty). However, the effective date of these rules for certain
notes, including the Covered Securities, was postponed until
January 1, 2020 by an official notice issued by the Internal
Revenue Service (Notice 2016-76).
Notwithstanding the delayed effective date, it is expected that
Covered Securities issued on or after January 1, 2017 will be
subject to Section 871(m) withholding tax starting in 2020. There
are significant uncertainties regarding how the new regulations
will apply to the Covered Securities at such time. Barclays may
make further announcements if there are further developments
regarding how the new regulations will ultimately apply to the
Covered Securities.
As noted above, the new regulations apply only to Covered
Securities that are issued (or deemed issued) on or after January
1, 2017. However, Covered Securities that are issued on or after
January 1, 2017 will have the same CUSIP and ISIN number as Covered
Securities that were issued before that date, and accordingly there
is unlikely to be a practical way to distinguish among Covered
Securities that are subject to withholding under this regime and
those that are not. As a result, non-U.S. holders of Covered
Securities (including holders of Covered Securities that were
purchased on or before December 31, 2016) may not be able to
establish to the satisfaction of their custodians or other
withholding agents that their Covered Securities are exempt from
the new regulations. Accordingly, holders of Covered Securities may
therefore find it prudent to assume that their ETNs will be subject
to the new regulations starting on January 1, 2020.
Holders of Covered Securities are also urged to consult their
tax advisors and their custodians about how the new regulations may
affect their positions.
The ETNs are riskier than ordinary unsecured debt securities and
have no principal protection. The ETNs are unsecured debt
obligations of the issuer, Barclays Bank PLC, and are not, either
directly or indirectly, an obligation of or guaranteed by any third
party. An investment in the ETNs involves significant risks,
including possible loss of principal, and may not be suitable for
all investors. For more information on risks associated with the
ETNs, please see "Selected Risk Considerations" below and the risk
factors included in the relevant prospectus.
The prospectus relating to the relevant series of ETNs can be
found on EDGAR, the SEC website, at: www.sec.gov. The prospectus is
also available on the product website at www.etnplus.com.
For further information, please instruct your
broker/advisor/custodian to email us at etndesk@barclays.com or
alternatively, your broker/custodian can call us at:
1-212-528-7990.
Selected Risk Considerations
An investment in the Barclays ETNs described herein involves
risks. Selected risks are summarized here, but we urge you to read
the more detailed explanation of risks described under “Risk
Factors” in the applicable prospectus supplement and pricing
supplement.
You May Lose Some or All of Your Principal: The ETNs are
exposed to any change in the level of the underlying index, or the
Volume Weighted Average Price (“VWAP”) level, in the case of
MLP-linked ETNs, between the inception date and the applicable
valuation date. Additionally, if the level of the underlying index
or the VWAP level, is insufficient to offset the negative effect of
the investor fee and other applicable costs, you will lose some or
all of your investment at maturity or upon redemption, even if the
value of such index or the VWAP level has increased or decreased,
as the case may be. Because the ETNs are subject to an investor fee
and other applicable costs, the return on the ETNs will always be
lower than the total return on a direct investment in the index
components. The ETNs are riskier than ordinary unsecured debt
securities and have no principal protection.
Credit of Barclays Bank PLC: The ETNs are unsecured debt
obligations of the issuer, Barclays Bank PLC, and are not, either
directly or indirectly, an obligation of or guaranteed by any third
party. Any payment to be made on the ETNs, including any payment at
maturity or upon redemption, depends on the ability of Barclays
Bank PLC to satisfy its obligations as they come due and is subject
to the exercise of any U.K. Bail-In Power by the relevant U.K.
resolution authority under the U.K. Banking Act 2009, as amended
and the Financial Services and Markets Act 2000. As a result, the
actual and perceived creditworthiness of Barclays Bank PLC will
affect the market value, if any, of the ETNs prior to maturity or
redemption. In addition, in the event Barclays Bank PLC were to
default on its obligations of become subject to the exercise of any
U.K. Bail-In Power (or any other resolution measure) by the
relevant U.K. resolution authority, you may not receive any amounts
owed to you under the terms of the ETNs.
A Trading Market for the ETNs May Not Develop: Although
the ETNs are listed on a U.S. national securities exchange, a
trading market for the ETNs may not develop and the liquidity of
the ETNs may be limited, as we are not required to maintain any
listing of the ETNs.
No Interest Payments from the ETNs: You may not receive
any interest payments on the ETNs.
Restrictions on the Minimum Number of ETNs and Date
Restrictions for Redemptions: Except in the circumstances
described above, you must redeem at least 50,000 ETNs of the same
issue at one time in order to exercise your right to redeem your
ETNs on any redemption date. You may only redeem your ETNs on a
redemption date if we receive a notice of redemption from you by
certain dates and times as set forth in the pricing supplement.
Uncertain Tax Treatment: Significant aspects of the tax
treatment of the ETNs are uncertain. You should consult your own
tax advisor about your own tax situation.
Barclays Bank PLC has filed a registration statement
(including a prospectus) with the SEC for the offering to which
this communication relates. Before you invest, you should
read the prospectus and other documents Barclays Bank PLC has filed
with the SEC for more complete information about the issuer and
this offering. You may get these documents for free by
visiting www.ipathetn.com or www.etnplus.com or EDGAR
on the SEC website at www.sec.gov. Alternatively,
Barclays Bank PLC will arrange for Barclays Capital Inc. to
send you the prospectus if you request it by calling 212-528-7990,
or you may request a copy from any other dealer
participating in the offering.
The ETNs may be sold throughout the day on the exchange through
any brokerage account. There are restrictions on the minimum number
of ETNs you may redeem directly with the issuer as specified in the
applicable prospectus. Commissions may apply and there are tax
consequences in the event of sale, redemption or maturity of ETNs.
Sales in the secondary market may result in significant
losses.
© 2016 Barclays Bank PLC. All rights reserved. iPath, iPath ETNs
and the iPath logo are registered trademarks of Barclays Bank PLC.
All other trademarks, servicemarks or registered trademarks are the
property, and used with the permission, of their respective
owners.
NOT FDIC INSURED · NO BANK GUARANTEE · MAY
LOSE VALUE
Barclays is a transatlantic consumer, corporate and
investment bank offering products and services across personal,
corporate and investment banking, credit cards and wealth
management, with a strong presence in our two home markets of the
UK and the US. With over 325 years of history and expertise in
banking, Barclays operates in over 40 countries and employs
approximately 130,000 people. Barclays moves, lends, invests and
protects money for customers and clients worldwide. For further
information about Barclays, please visit our website
home.barclays
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version on businesswire.com: http://www.businesswire.com/news/home/20161230005290/en/
Press:BarclaysAndrew Smith, +1 212 412
7521andrew.x.smith@barclays.com
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